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SECURITIES AND EXCHANGE COMMISSION
UNDER
THE SECURITIES ACT OF 1933
Delaware | 3672 | 91-1033443 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Michael L. Kaplan, Esq. Brian H. Blaney, Esq. Brian R. Buckham, Esq. Greenberg Traurig, LLP 2375 East Camelback Road, Suite 700 Phoenix, Arizona 85016 (602) 445-8000 (phone) (602) 445-8100 (facsimile) | Jonathan Stone, Esq. Skadden, Arps, Slate, Meagher & Flom LLP c/o 42/F Edinburgh Tower, The Landmark 15 Queen’s Road Central Hong Kong +852-3740-4703 (phone) +852-3740-4727 (facsimile) |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||||||||||
Title of Each Class of | Amount to be | Offering | Aggregate | Registration | ||||||||||||||||
Securities to be Registered | Registered(1) | Price per Share(2) | Offering Price(2) | Fee | ||||||||||||||||
Common Stock, $0.001 par value per share | 36,334,000 | $ | 11.86 | $ | 430,921,240 | $ | 30,725 | |||||||||||||
(1) | Represents the maximum number of shares of TTM common stock, $0.001 par value per share, issuable upon consummation of the purchase of shares of the subsidiaries of MTG Investment (BVI) Limited engaged in the printed circuit board business. | |
(2) | Pursuant to paragraph (c) of Rule 457 of the Securities Act of 1933, as amended, and estimated based on the average of the high and low prices reported on the NASDAQ Global Select Market on December 21, 2009, solely for purposes of calculation of the registration fee. |
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The information in this proxy statement/prospectus is not complete and may be changed. We may not sell the securities offered by this proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer, solicitation, or sale is not permitted. |
• | create a leading global PCB company with high-technology capabilities and a highly diversified revenue mix by geography and end-market; | |
• | result in a one stop global solution from quick-turn through volume production and a focused facility specialization strategy; |
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• | create an opportunity for us to capture significant incremental volume business from existing and new customers in North America, Europe, the Middle East, and Africa; | |
• | position us to serve the growing Asian market demand; | |
• | result in a global sales force and manufacturing platform; | |
• | create a combination of entities with complementary footprints, customers, and end-markets; | |
• | further diversify our end-market exposure and customer base; | |
• | result in the creation of operational efficiencies; and | |
• | combine deep, talented management teams with leading expertise in the U.S. and the People’s Republic of China, or PRC. |
our stockholders and Meadville shareholders on or about [ • ], 2010.
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TO BE HELD ON [ • ], 2010
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EX-23.2 | ||||||||
EX-23.3 | ||||||||
EX-99.1 |
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• | the common stock will have voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such stock; or | |
• | the number of shares of common stock issued will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of such stock. |
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• | antitrust and other regulatory approvals; | |
• | completion of a review or investigation by the Committee on Foreign Investment in the United States, or CFIUS; | |
• | effectiveness of our registration statement relating to the shares of our common stock issuable in the PCB Combination; | |
• | receipt of requisite approvals by our stockholders and Meadville’s shareholders; | |
• | the absence of any suit, action, or proceeding by any government entity seeking to restrain or prohibit the consummation of the PCB Combination, and the absence of laws enjoining certain aspects of the PCB Combination; | |
• | Meadville’s separate sale of its laminate business; | |
• | execution and effectiveness of the credit agreement for the PCB Subsidiaries; | |
• | execution of two separate registration rights agreements; | |
• | the absence of certain change of control arrangements relating to Meadville, MTG, or us; | |
• | the accuracy of representations and warranties made by the parties in the stock purchase agreement; | |
• | compliance with various obligations under the stock purchase agreement; | |
• | the absence of certain material adverse events affecting the parties to the stock purchase agreement; | |
• | the execution and effectiveness of all agreements ancillary to the stock purchase agreement; and | |
• | the receipt by us and Meadville from each other of certificates representing that certain conditions to the PCB Combination have been satisfied or waived. |
• | if the conditions to the transaction have not been satisfied or waived on or before May 31, 2010 and the party requesting the termination has not willfully breached a covenant in the stock purchase agreement, provided that either party may extend the termination date to June 30, 2010 if certain of the conditions have not been satisfied or waived before May 31, 2010; | |
• | if any law has been enacted or enforced in a manner to prohibit the completion of the transaction, provided that such party has used its reasonable efforts to remove or have vacated such law; | |
• | with respect to each party, if the other party shall have failed to comply with any obligation or covenant in the stock purchase agreement or breached any representation or warranty, such breach or failure prevents completion of the transaction, and such breach or failure to comply is not capable of being remedied or, if capable of being remedied, is not remedied by the earlier of the date which is 30 days following the date of delivery of a written notice of such breach to the other party or the date of termination of the stock purchase agreement; | |
• | if an event having a material adverse effect as to a party has occurred and is not capable of being remedied or, if capable of being remedied, is not remedied by the earlier of the date which is 30 days following the date of delivery of a written notice of such breach to the other party or the date of termination of the stock purchase agreement; and |
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• | if the requisite approvals from the stockholders of our company and the shareholders of Meadville in respect of the PCB Combination have not been obtained. |
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Nine Months Ended | ||||||||||||||||||||||||||||
Years Ended December 31, | Sept. 28, | Sept. 29, | ||||||||||||||||||||||||||
2008(1) | 2007 | 2006(2) | 2005 | 2004 | 2009(3) | 2008 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||||||||
Consolidated Statement of Operations Data: | ||||||||||||||||||||||||||||
Net sales | $ | 681.0 | $ | 669.5 | $ | 369.3 | $ | 240.2 | $ | 240.7 | $ | 432.5 | $ | 516.1 | ||||||||||||||
Operating (loss) income | (49.9 | ) | 63.6 | 55.0 | 26.4 | 41.2 | 11.8 | 59.0 | ||||||||||||||||||||
Net (loss) income | (36.9 | ) | 34.7 | 35.0 | 30.8 | 28.3 | 2.5 | 32.3 | ||||||||||||||||||||
Earnings (loss) per common share: | ||||||||||||||||||||||||||||
Basic | (0.86 | ) | 0.82 | 0.84 | 0.75 | 0.69 | 0.06 | 0.76 | ||||||||||||||||||||
Diluted | (0.86 | ) | 0.81 | 0.83 | 0.74 | 0.68 | 0.06 | 0.75 | ||||||||||||||||||||
Weighted average common shares: | ||||||||||||||||||||||||||||
Basic | 42.7 | 42.2 | 41.7 | 41.2 | 40.8 | 43.0 | 42.6 | |||||||||||||||||||||
Diluted | 42.7 | 42.6 | 42.3 | 41.8 | 41.9 | 43.5 | 43.0 |
As of December 31, | As of Sept. 28, | |||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | 2009 | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Consolidated Balance Sheet Data: | ||||||||||||||||||||||||
Working capital | $ | 280.4 | $ | 98.8 | $ | 127.4 | $ | 111.2 | $ | 82.6 | 319.1 | |||||||||||||
Total assets | 540.2 | 498.8 | 537.7 | 273.1 | 235.8 | 542.9 | ||||||||||||||||||
Convertible senior notes, net | 134.9 | — | — | — | — | 138.6 | ||||||||||||||||||
Long-term debt, including current maturities | — | 85.0 | 200.7 | — | — | — | ||||||||||||||||||
Stockholders’ equity | 330.0 | 328.6 | 287.3 | 244.0 | 211.6 | 336.8 |
(1) | We recorded an impairment of goodwill and long-lived assets in 2008 as a result of our annual goodwill impairment test and the write-down of certain long-lived assets associated with specific plant facilities and assets held for sale. | |
(2) | Our results for the year ended December 31, 2006 include 65 days of activity of PCG, which we acquired on October 27, 2006. | |
(3) | We recorded impairment of long-lived assets and restructuring charges related to the closure of our Redmond, Washington, and Los Angeles and Hayward, California facilities. |
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Nine Months Ended | ||||||||||||||||||||
Years Ended December 31, | September 30, | |||||||||||||||||||
2008 | 2007 | 2006 | 2009 | 2008 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In millions of HK$) | ||||||||||||||||||||
(HKFRS) | ||||||||||||||||||||
Combined Statement of Operations Data: | ||||||||||||||||||||
Revenue | $ | 5,212.4 | $ | 4,108.6 | $ | 2,838.8 | $ | 3,505.4 | $ | 3,930.2 | ||||||||||
Operating profit | 668.5 | 492.9 | 416.2 | 302.2 | 570.8 | |||||||||||||||
Profits for the year/period | 483.7 | 352.9 | 302.6 | 198.7 | 412.4 | |||||||||||||||
of which, attributable to shareholders in Meadville | 376.1 | 246.1 | 239.8 | 127.3 | 336.3 | |||||||||||||||
of which, attributable to minority interests | 107.6 | 106.8 | 62.8 | 71.4 | 76.1 |
As of | ||||||||||||||||
As of December 31, | September 30, | |||||||||||||||
2008 | 2007 | 2006 | 2009 | |||||||||||||
(In millions of HK$) | ||||||||||||||||
(HKFRS) | ||||||||||||||||
Combined Balance Sheet Data: | ||||||||||||||||
Current assets | $ | 2,798.1 | $ | 2,609.1 | $ | 1,547.6 | $ | 2,428.4 | ||||||||
Total assets | 8,003.5 | 6,757.7 | 3,547.0 | 7,527.5 | ||||||||||||
Current liabilities, excluding current portion of borrowings | 2,318.0 | 1,865.0 | 1,343.1 | 1,373.7 | ||||||||||||
Borrowings, including current portion | 3,586.2 | 2,587.4 | 1,572.8 | 3,564.5 | ||||||||||||
Equity attributable to shareholders | 1,371.2 | 1,524.3 | 433.6 | 1,779.3 | ||||||||||||
Total shareholders’ equity | 1,776.6 | 1,860.1 | 631.1 | 2,313.9 |
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Nine Months Ended | ||||||||||||||||
Years Ended December 31, | September 30, | |||||||||||||||
2008 | 2007 | 2009 | 2008 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In millions of HK$) | ||||||||||||||||
(U.S. GAAP)(1) | ||||||||||||||||
Combined Statement of Operations Data: | ||||||||||||||||
Revenue | $ | 5,212.4 | $ | 4,108.6 | $ | 3,505.4 | $ | 3,930.2 | ||||||||
Operating profit | 662.4 | 493.3 | 314.7 | 573.9 | ||||||||||||
Profits for the year/period | 491.5 | 353.2 | 217.0 | 428.9 |
As of | As of | |||||||||||
December 31, | September 30, | |||||||||||
2008 | 2007 | 2009 | ||||||||||
(In millions of HK$) | ||||||||||||
(U.S. GAAP)(1) | ||||||||||||
Combined Balance Sheet Data: | ||||||||||||
Current assets | $ | 2,798.1 | $ | 2,609.1 | $ | 2,428.4 | ||||||
Total assets | 7,964.5 | 6,606.3 | 7,494.9 | |||||||||
Current liabilities, excluding current portion of borrowings | 2,318.0 | 1,865.0 | 1,373.7 | |||||||||
Borrowings, including current portion | 3,586.2 | 2,587,4 | 3,564.5 | |||||||||
Equity attributable to shareholders | 1,352.1 | 1,519.4 | 1,768.5 | |||||||||
Total shareholders’ equity | 1,903.6 | 1,988.8 | 2,457.0 |
(1) | For further details, see Note 35 in the audited combined financial statements of the PCB Business. |
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Nine Months | ||||||||
Ended | Year Ended | |||||||
September 28, | December 31, | |||||||
2009 | 2008 | |||||||
(In millions, except per share data) | ||||||||
Statements of Operations Data: | ||||||||
Net sales | $ | 884.7 | $ | 1,350.4 | ||||
Operating income | 64.1 | 27.4 | ||||||
Net income | 36.7 | 34.6 | ||||||
Net income attributable to noncontrolling interests | 7.6 | 12.8 | ||||||
Net income attributable to stockholders | 29.1 | 21.8 | ||||||
Net income per common share attributable to stockholders: | ||||||||
Basic | $ | 0.37 | $ | 0.28 | ||||
Diluted | $ | 0.36 | $ | 0.28 | ||||
September 28, | ||||
2009 | ||||
(In millions) | ||||
Balance Sheet Data: | ||||
Current assets | $ | 566.5 | ||
Total assets | 1,695.6 | |||
Current liabilities | 309.1 | |||
Long-term liabilities | 555.2 | |||
Stockholders’ equity | 831.3 |
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Period-End | Average | |||||||||||||||
Rate(1) | Rate(2) | High | Low | |||||||||||||
Recent Monthly Data | ||||||||||||||||
November 2009 | 7.7501 | 7.7501 | 7.7503 | 7.7500 | ||||||||||||
October 2009 | 7.7502 | 7.7501 | 7.7503 | 7.7500 | ||||||||||||
September 2009 | 7.7500 | 7.7504 | 7.7512 | 7.7500 | ||||||||||||
August 2009 | 7.7507 | 7.7507 | 7.7517 | 7.7500 | ||||||||||||
July 2009 | 7.7500 | 7.7501 | 7.7506 | 7.7500 | ||||||||||||
June 2009 | 7.7501 | 7.7507 | 7.7522 | 7.7500 | ||||||||||||
May 2009 | 7.7522 | 7.7513 | 7.7535 | 7.7500 | ||||||||||||
April 2009 | 7.7501 | 7.7501 | 7.7504 | 7.7500 | ||||||||||||
March 2009 | 7.7503 | 7.7531 | 7.7592 | 7.7500 | ||||||||||||
February 2009 | 7.7552 | 7.7536 | 7.7557 | 7.7518 | ||||||||||||
January 2009 | 7.7545 | 7.7562 | 7.7600 | 7.7502 | ||||||||||||
December 2008 | 7.7499 | 7.7504 | 7.7522 | 7.7497 | ||||||||||||
Interim Period Data | ||||||||||||||||
Three months ended September 28, 2009 | 7.7502 | 7.7504 | 7.7517 | 7.7500 | ||||||||||||
Three months ended September 29, 2008 | 7.7629 | 7.7982 | 7.8142 | 7.7582 | ||||||||||||
Six months ended September 28, 2009 | 7.7502 | 7.7506 | 7.7535 | 7.7500 | ||||||||||||
Six months ended September 29, 2008 | 7.7629 | 7.7986 | 7.8159 | 7.7582 | ||||||||||||
Nine months ended September 28, 2009 | 7.7502 | 7.7518 | 7.7600 | 7.7500 | ||||||||||||
Nine months ended September 29, 2008 | 7.7629 | 7.7971 | 7.8159 | 7.7582 | ||||||||||||
Annual Data (Year ended December 31,) | ||||||||||||||||
2008 | 7.7499 | 7.7862 | 7.8159 | 7.7497 | ||||||||||||
2007 | 7.7984 | 7.8019 | 7.8289 | 7.7497 | ||||||||||||
2006 | 7.7771 | 7.7681 | 7.7928 | 7.7506 | ||||||||||||
2005 | 7.7533 | 7.7775 | 7.7999 | 7.7514 | ||||||||||||
2004 | 7.7723 | 7.7891 | 7.8010 | 7.7632 |
(1) | The period-end rate was the exchange rate on the last business day of the applicable period. | |
(2) | The average rates for the monthly, interim, and annual periods were calculated by taking the simple average of daily rates in the period. |
• | our audited basic and diluted earnings per share and unaudited cash dividends per share for the year ended December 31, 2008, unaudited basic and diluted earnings and cash dividends per share for the nine months ended September 28, 2009, and unaudited net book value per share as of December 31, 2008 and September 28, 2009 on a historical basis; and | |
• | unaudited basic and diluted earnings per share data for the year ended December 31, 2008, unaudited basic and diluted earnings per share and cash dividends for the nine months ended September 28, 2009, and unaudited net book value per share as of September 28, 2009 of the combined company on a pro forma basis. |
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As of and for the | ||||||||
Year Ended | Nine Months Ended | |||||||
December 31, 2008 | September 28, 2009 | |||||||
(U.S. GAAP) | ||||||||
Basic earnings (loss) per share | $ | (0.86 | ) | $ | 0.06 | |||
Diluted earnings (loss) per share | $ | (0.86 | ) | $ | 0.06 | |||
Cash dividends per share | — | — | ||||||
Net book value per share | $ | 7.71 | $ | 7.80 |
As of and for the | ||||||||
Year Ended | Nine Months Ended | |||||||
December 31, 2008 | September 28, 2009 | |||||||
(U.S. GAAP) | ||||||||
Basic earnings per share | $ | 0.28 | $ | 0.37 | ||||
Diluted earnings per share | $ | 0.28 | $ | 0.36 | ||||
Cash dividends per share | — | — | ||||||
Net book value per share | $ | 10.16 |
TTM Common Stock | Meadville Shares | |||||||
(US$) | (US$) | |||||||
October 29, 2009 | $ | 10.79 | $ | 0.36 | ||||
November 13, 2009 | $ | 11.21 | No trading | |||||
[ • ], 2010 | $ | [ • ] | $ | [ • ] |
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• | we and Meadville would not realize the potential benefits of the PCB Combination, including the potentially enhanced financial and competitive position of the combined company; | |
• | our and Meadville’s management’s attention fromday-to-day business may be diverted, we and Meadville may lose key employees, and our and Meadville’s relationships with our respective customers and partners may be disrupted as a result of uncertainties with regard to our and Meadville’s business and prospects; and | |
• | we and Meadville will each incur and must pay significant costs and expenses related to the PCB Combination, such as legal, accounting, and advisory fees. |
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• | market reaction to the announcement and pendency of the PCB Combination and market assessment of the merits and risks of the PCB Combination and the likelihood of the PCB Combination being consummated; | |
• | changes in the respective businesses, operations, or prospects of our or Meadville’s PCB business; | |
• | governmental or litigation developments or regulatory considerations affecting us or the electronics industry; | |
• | general business, market, industry, or economic conditions; | |
• | the worldwide supply/demand balance for products in the PCB and electronics industry; and | |
• | other factors beyond the control of us or Meadville, including those described elsewhere in this “Risk Factors” section. |
• | integrating the operations and technologies of the companies; | |
• | implementing of disclosure controls, internal controls, and financial reporting systems to comply with the requirements of U.S. GAAP and U.S. securities laws and regulations required as a result of integration of the PCB Subsidiaries as part of a consolidated reporting company under the Exchange Act; | |
• | retaining and assimilating the key personnel of each company; | |
• | resolving possible inconsistencies in operating and product standards, internal controls, procedures and policies, business cultures, corporate governance and reporting practices, and compensation methodologies between the companies; | |
• | retaining existing vendors and customers of the companies and attracting additional customers; |
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• | retaining strategic partners of each company and attracting new strategic partners; and | |
• | creating uniform business standards, procedures, policies, and information systems. |
• | potential disruption of ongoing business operations and distraction of the management of the combined company; | |
• | potential strain on financial and managerial controls and reporting systems and procedures of the combined company; | |
• | unanticipated expenses and potential delays related to integration of the operations, technology, and other resources of the companies; | |
• | potential impairment of relationships with employees, suppliers, and customers as a result of the inclusion and integration of management personnel; | |
• | greater than anticipated costs and expenses related to the PCB Combination or the integration of the respective businesses of us and the PCB Subsidiaries following the PCB Combination; | |
• | the difficulty of complying with government-imposed regulations in both the U.S. and the PRC, which may in many ways be materially different from one another; and | |
• | potential unknown liabilities associated with the PCB Combination and the combined operations. |
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• | stock-based compensation; | |
• | accounting for uncertain tax positions; | |
• | accounting for goodwill and other intangible assets; and | |
• | accounting issues related to certain features of contingently convertible debt instruments and their effect on diluted earnings per share. |
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• | increasing the combined company’s vulnerability to general adverse economic and industry conditions; | |
• | limiting the combined company’s ability to obtain additional financing; | |
• | requiring the use of a substantial portion of any cash flow from operations to service indebtedness, thereby reducing the amount of cash flow available for other purposes, including capital expenditures; | |
• | limiting the combined company’s flexibility in planning for, or reacting to, changes in the combined company’s business and the industry in which it competes, including by virtue of the requirement that the combined company remain in compliance with certain financial covenants included in the credit arrangements under which the combined company will be obligated; and | |
• | placing the combined company at a possible competitive disadvantage to less leveraged competitors and competitors that are larger and may have better access to capital resources. |
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• | the potential inability to successfully integrate acquired operations and businesses or to realize anticipated synergies, economies of scale, or other expected value; | |
• | diversion of management’s attention from normal daily operations of existing business to focus on integration of the newly acquired business; | |
• | unforeseen expenses associated with the integration of the newly acquired business; | |
• | difficulties in managing production and coordinating operations at new sites; | |
• | the potential loss of key employees of acquired operations; | |
• | the potential inability to retain existing customers of acquired companies when we desire to do so; | |
• | insufficient revenues to offset increased expenses associated with acquisitions; | |
• | the potential decrease in overall gross margins associated with acquiring a business with a different product mix; | |
• | the inability to identify certain unrecorded liabilities; | |
• | the potential need to restructure, modify, or terminate customer relationships of the acquired company; | |
• | an increased concentration of business from existing or new customers; and | |
• | the potential inability to identify assets best suited to our business plan. |
• | enter lines of businessand/or markets in which we and the PCB Subsidiaries have limited or no prior experience; | |
• | issue debt and be required to abide by stringent loan covenants; | |
• | assume liabilities; | |
• | record goodwill and indefinite-lived intangible assets that would be subject to impairment testing and potential periodic impairment charges; | |
• | become subject to litigation and environmental issues; | |
• | incur unanticipated costs; | |
• | incur large and immediate write-offs; | |
• | issue common stock that would dilute our current stockholders’ percentage ownership; and | |
• | incur substantial transaction-related costs, whether or not a proposed acquisition is consummated. |
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• | the future results of operations, financial condition, and cash flows of the combined company; | |
• | the condition of the global economy generally and the demand for the products of the combined company, specifically; and | |
• | the cost of financing and the condition of financial markets. |
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• | greater financial and manufacturing resources that can be devoted to the development, production, and sale of their products; | |
• | more established and broader sales and marketing channels; | |
• | more manufacturing facilities worldwide, some of which are closer in proximity to OEMs; | |
• | more manufacturing facilities that are located in countries with lower production costs; | |
• | lower capacity utilization, which in peak market conditions can result in shorter lead times to customers; | |
• | ability to add additional capacity faster or more efficiently; | |
• | preferred vendor status with existing and potential customers; | |
• | greater name recognition; and | |
• | larger customer bases. |
• | timing of orders from and shipments to major customers; | |
• | the levels at which they utilize manufacturing capacity; | |
• | price competition; | |
• | changes in the mix of revenues generated from quick-turn versus standard delivery time services; | |
• | expenditures, charges, or write-offs, including those related to acquisitions, facility restructurings, or asset impairments; and | |
• | expenses relating to expanding existing manufacturing facilities. |
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• | customer attempts to manage inventory; | |
• | changes in customers’ manufacturing strategies, such as a decision by a customer to either diversify or consolidate the number of PCB manufacturers or backplane assembly service providers used or to manufacture or assemble its own products internally; | |
• | variation in demand for its customers’ products; and | |
• | changes in new product introductions. |
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• | managing international operations; | |
• | export license requirements; |
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• | fluctuations in the value of local currencies; | |
• | labor unrest and difficulties in staffing; | |
• | government or political unrest; | |
• | longer payment cycles; | |
• | language and communication barriers as well as time zone differences; | |
• | cultural differences; | |
• | increases in duties and taxation levied on their products; | |
• | imposition of restrictions on currency conversion or the transfer of funds; | |
• | limitations on imports or exports of their product offering; | |
• | travel restrictions; | |
• | expropriation of private enterprises; and | |
• | the potential reversal of current favorable policies encouraging foreign investment and trade. |
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• | variations in our and the combined company’s quarterly results; | |
• | announcements of technological innovations by us and the combined company or by our competitors; | |
• | introductions of new products or new pricing policies by us and the combined company or by our competitors; | |
• | acquisitions or strategic alliances by us and the combined company or by our competitors; |
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• | recruitment or departure of key personnel; | |
• | the gain or loss of significant orders; | |
• | the gain or loss of significant customers; | |
• | changes in the estimates of operating performance or changes in recommendations by any securities analysts that follow our stock; and | |
• | market conditions in our and the combined company’s industry, the industries of their customers, and the economy as a whole. |
• | in electronic form; | |
• | by providing details of such holder’s U.S. securities account to enable the shares of our common stock to be transferred directly to such U.S. securities account; or | |
• | by providing instructions to Meadville to sell the shares of our common stock that they would otherwise have been entitled to receive through a “dealing facility” established by Meadville and to remit the net cash proceeds from the sale to them. |
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• | authorize our board of directors to issue one or more classes or series of preferred stock and to determine, with respect to any series of preferred stock, the designations, preferences, voting powers, qualifications, special or relative rights, and privileges without any further vote or action by our stockholders; | |
• | provide that directors may be removed by stockholders only for cause upon the affirmative vote of stockholders holding not less than a majority of the shares entitled to vote; | |
• | provide that special meetings of stockholders may be called by the chairman of the board of directors, our chief executive officer, a majority of the board of directors, our Secretary, or at the written demand of our stockholders holding at least a majority of all the shares entitled to vote on the proposed issues; | |
• | establish an advance notice procedure for stockholder proposals to be brought before any annual or special meeting of stockholders and for nominations by stockholders of candidates for election as directors at an annual meeting or a special meeting at which directors are to be elected; and | |
• | provide that provisions of our Certificate of Incorporation and Bylaws, including certain provisions related to directors, annual and special meetings of stockholders, special stockholder notice provisions, and special stockholder voting requirements, may be amended only by the holders of at least 80% of the shares entitled to vote at an annual or special meeting of stockholders. |
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• | prior to such time, the board of directors of the corporation approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder; | |
• | upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding certain shares); or | |
• | at or subsequent to such time, the business combination is approved by the board of directors of the corporation and by the affirmative vote of at least 662/3% of the outstanding voting stock that is not owned by the interested shareholder. |
• | any person that is the owner of 15% or more of the outstanding voting stock of the corporation, or is an affiliate or associate of the corporation and was the owner of 15% of more of the outstanding voting stock of the corporation at any time within three years immediately prior to the relevant date; and | |
• | the affiliates and associates of any such person. |
• | any merger or consolidation of the corporation or any majority-owned subsidiary with the interested shareholder, or with any other corporation, partnership, unincorporated association, or other entity if the merger or consolidation is caused by the interested shareholder and as a result of the merger or consolidation the foregoing rules under Section 203 do not apply to the surviving entity; | |
• | any sale, lease, exchange, mortgage, pledge, transfer, or other disposition of 10% or more of the assets of the corporation with or to an interested shareholder; | |
• | certain transactions resulting in the issuance or transfer to the interested shareholder of any stock of the corporation or its subsidiaries; | |
• | certain transactions that would result in increasing the proportionate share of the stock of the corporation or its subsidiaries owned by the interested shareholders; and | |
• | receipt by the interested shareholder of the benefit, except proportionately as a shareholder, of any loans, advances, guarantees, pledges, or other financial benefits. |
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• | the effects of economic cycles and fluctuations in the worldwide demand for electronic products; | |
• | our ability to successfully integrate our acquisitions; | |
• | our ability to repay our debt obligations as they come due; and | |
• | our reliance on a relatively small number of OEMs for a large portion of our net sales. |
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TTM | ||||||||||||||||
Meadville Shares (HK$) | Common Stock (US$) | |||||||||||||||
High | Low | High | Low | |||||||||||||
2005 | ||||||||||||||||
First Quarter | — | — | $ | 11.90 | $ | 8.81 | ||||||||||
Second Quarter | — | — | 10.63 | 7.20 | ||||||||||||
Third Quarter | — | — | 8.40 | 6.20 | ||||||||||||
Fourth Quarter | — | — | 9.98 | 6.70 | ||||||||||||
2006 | ||||||||||||||||
First Quarter | — | — | $ | 15.45 | $ | 9.34 | ||||||||||
Second Quarter | — | — | 17.50 | 12.42 | ||||||||||||
Third Quarter | — | — | 14.62 | 8.47 | ||||||||||||
Fourth Quarter | — | — | 13.34 | 11.20 | ||||||||||||
2007 | ||||||||||||||||
First Quarter(1) | $ | 2.40 | $ | 1.60 | $ | 12.23 | $ | 9.15 | ||||||||
Second Quarter | 2.22 | 1.69 | 13.64 | 8.93 | ||||||||||||
Third Quarter | 2.26 | 1.59 | 14.24 | 9.75 | ||||||||||||
Fourth Quarter | 2.27 | 1.80 | 14.61 | 10.90 | ||||||||||||
2008 | ||||||||||||||||
First Quarter | $ | 2.23 | $ | 1.66 | $ | 11.99 | $ | 7.83 | ||||||||
Second Quarter | 2.23 | 1.80 | 15.76 | 11.43 | ||||||||||||
Third Quarter | 1.97 | 1.41 | 14.11 | 9.81 | ||||||||||||
Fourth Quarter | 1.72 | 0.76 | 10.11 | 3.76 | ||||||||||||
2009 | ||||||||||||||||
First Quarter | $ | 0.93 | $ | 0.63 | $ | 6.70 | $ | 3.87 | ||||||||
Second Quarter | 1.75 | 0.84 | 9.76 | 5.40 | ||||||||||||
Third Quarter | 2.11 | 1.43 | 11.99 | 7.85 | ||||||||||||
Fourth Quarter | [ • ] | [ • ] | [ • ] | [ • ] | ||||||||||||
2010 | ||||||||||||||||
First Quarter (through [ • ], 2010) | $ | [ • ] | $ | [ • ] | $ | [ • ] | $ | [ • ] |
(1) | With respect to Meadville, the share price amounts are for dates on and after February 2, 2007, the effective date of the initial public offering of Meadville’s shares. |
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TTM | ||||||||
Common | Meadville | |||||||
Stock | Shares | |||||||
(US$) | (US$) | |||||||
October 29, 2009 | $ | 10.79 | $0.36 | |||||
November 13, 2009 | $ | 11.21 | No trading | |||||
[ • ], 2010 | $ | [ • ] | $[ • ] |
Amount per Share | Date | |
HK$0.020 (US$0.003) | September 28, 2007 | |
HK$0.040 (US$0.005) | July 2, 2008 | |
HK$0.028 (US$0.004) | September 26, 2008 | |
HK$0.014 (US$0.002) | July 2, 2009 | |
HK$0.015 (US$0.002) | October 6, 2009 |
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TTM COMMON STOCK AT THE SPECIAL MEETING
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• | will create a leading global PCB company with high-technology capabilities and a highly diversified revenue mix by geography and end-market; | |
• | will result in a one stop global solution from quick-turn through volume production and a focused facility specialization strategy; |
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• | will create an opportunity to capture significant incremental volume business from existing and new customers in North America, Europe, the Middle East, and Africa; | |
• | positions us to serve the growing Asian market demand; | |
• | results in a global sales force and manufacturing platform; | |
• | is a combination of entities with complementary footprints, customers, and end-markets; | |
• | further diversifies our end-market exposure and customer base; | |
• | results in the creation of operational efficiencies; and | |
• | combines deep, talented management teams with leading expertise in the U.S. and in the PRC. |
• | reviewed certain publicly available business and financial information relating to the PCB Subsidiaries and our company; | |
• | reviewed certain internal financial data and other data relating to the PCB Subsidiaries and their financial prospects that were provided to UBS by our management and not publicly available, including financial forecasts and estimates for the PCB Subsidiaries prepared by our management that our board of directors directed UBS to utilize for purposes of its analysis; | |
• | reviewed certain internal financial and other information relating to the business and financial prospects of our company that were provided to UBS by our management and not publicly available, including financial forecasts and estimates prepared by our management that our board of directors directed UBS to utilize for purposes of its analysis; | |
• | conducted discussions with members of the senior managements of Meadville and our company concerning the business and financial prospects of the PCB Subsidiaries and our company; | |
• | reviewed publicly available financial and stock market data with respect to certain other companies UBS believed to be generally relevant; |
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• | compared the financial terms of the PCB Combination with the publicly available financial terms of certain other transactions UBS believed to be generally relevant; | |
• | reviewed current and historical market prices of our common stock; | |
• | considered certain pro forma effects of the PCB Combination on our financial statements; | |
• | reviewed a draft, dated November 15, 2009, of the stock purchase agreement; and | |
• | conducted such other financial studies, analyses, and investigations, and considered such other information, as UBS deemed necessary or appropriate. |
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• | Austria Technologie & Systemtechnik AG | |
• | Compeq Manufacturing Co. Ltd. | |
• | Elec & Eltek International Co. Ltd. | |
• | Gold Circuit Ltd. | |
• | Meadville Holdings Limited | |
• | Multi-Fineline Electronix Inc. | |
• | TTM Technologies, Inc. | |
• | Tripod Technology Corp. | |
• | Unimicron Technology Corp. |
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Implied | Implied | |||||||||||||||||||||||||||
Multiples for | Multiples for | |||||||||||||||||||||||||||
Company | Company | Implied | ||||||||||||||||||||||||||
Based on | Based on | Multiples for PCB | ||||||||||||||||||||||||||
“GAAP” | “Non-GAAP” | Subsidiaries | ||||||||||||||||||||||||||
Projections | Projections | Based on | ||||||||||||||||||||||||||
Implied Multiples for | and Closing | and Closing | Implied | |||||||||||||||||||||||||
Selected Companies | Stock Price on | Stock Price on | Value of | |||||||||||||||||||||||||
High | Median | Mean | Low | November 13, 2009 | November 13, 2009 | Consideration | ||||||||||||||||||||||
Enterprise Value as Multiple of Revenue: | ||||||||||||||||||||||||||||
2009E | 1.3 | x | 0.9 | x | 0.9 | x | 0.7 | x | 0.8 | x | 0.8 | x | 1.6 | x | ||||||||||||||
2010E | 1.1 | x | 0.8 | x | 0.8 | x | 0.5 | x | 0.9 | x | 0.9 | x | 1.4 | x | ||||||||||||||
Enterprise Value as Multiple of EBITDA: | ||||||||||||||||||||||||||||
2009E | 6.9 | x | 5.5 | x | 5.6 | x | 4.4 | x | 7.3 | x | 7.3 | x | 7.4 | x | ||||||||||||||
2010E | 5.2 | x | 4.8 | x | 4.7 | x | 3.8 | x | 5.6 | x | 5.6 | x | 5.8 | x | ||||||||||||||
Price per share as Multiple of EPS: | ||||||||||||||||||||||||||||
2009E | 19.8 | x | 13.9 | x | 13.8 | x | 8.3 | x | 52.2 | x | 18.2 | x | 13.1 | x | ||||||||||||||
2010E | 14.5 | x | 11.4 | x | 11.3 | x | 6.9 | x | 14.8 | x | 11.9 | x | 8.5x |
Announcement Date | Acquiror | Target | ||
August 2, 2006 | TTM Technologies, Inc. | Tyco Printed Circuit Group | ||
October 10, 2005 | Amphenol Corp. | Teradyne TCS Division | ||
April 14, 2005 | Merix Corp. | Eastern Pacific Circuits Ltd. | ||
December 9, 2004 | Merix Corp. | Data Circuit Systems Inc. | ||
October 13, 2004 | Kingboard Chemical Holdings Ltd. | Elec and Eltek International Holdings Ltd. | ||
June 28, 2004 | Sanmina-SCI Corp. | Pentex-Schweizer Circuits Ltd. |
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Implied Multiples for PCB | ||||||||||||||||||||
Subsidiaries | ||||||||||||||||||||
Implied Multiples for | Based on | |||||||||||||||||||
Selected Transactions | Implied Value of | |||||||||||||||||||
High | Median | Mean | Low | Consideration | ||||||||||||||||
Transaction Value as Multiple of: | ||||||||||||||||||||
Latest 12 Months Revenue | 1.6 | x | 1.2 | x | 1.1 | x | 0.6 | x | 1.6 | x | ||||||||||
Latest 12 Months EBITDA | 12.2 | x | 8.1 | x | 8.8 | x | 7.2 | x | 8.5 | x | ||||||||||
Equity Value as Multiple of: | ||||||||||||||||||||
Latest 12 Months Net Income | 73.3 | x | 19.0 | x | 36.1 | x | 15.9 | x | 16.9 | x |
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• | the risks and costs to us if the PCB Combination is not completed, including the potential diversion of management and employee attention, potential employee attrition, and the potential effect on business and customer relationships; | |
• | the risk that holders of shares of our common stock may fail to approve the PCB Combination or that Meadville’s shareholders may fail to approve the PCB Combination; | |
• | the fact that the cash and stock consideration is a fixed amount, and will not adjust as a result of pre-closing fluctuations in the trading price of our common stock or Meadville’s shares; | |
• | the fact that we are subject to the remedies of damages and specific performance should we fail to complete the PCB Combination and are in breach of the stock purchase agreement; | |
• | that the restrictions imposed by the stock purchase agreement on the conduct of our business prior to completion of the PCB Combination, requiring us to conduct our business only in the ordinary course and imposing additional specific restrictions, may delay, limit, or prevent us from undertaking business opportunities that may arise during that period; | |
• | the risk that applicable regulatory bodies would not approve the PCB Combination; and | |
• | the fees and expenses associated with completing the PCB Combination. |
• | the waiting period applicable to the transactions under theHart-Scott-Rodino Act and applicable foreign antitrust regulations shall have expired or been terminated, and all other approvals, clearances, filings, or waiting periods or consents of government entities (including the applicable governmental entities of the PRC) required under antitrust laws shall have expired or been made or received; |
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• | either (i) CFIUS shall have provided notice to the effect that review or investigation of the purchase and the other transactions contemplated by the stock purchase agreement and the ancillary agreements has concluded, and that a determination has been made that there are no issues of national security of the United States sufficient to warrant further investigation, or (ii) the President of the United States shall not have taken action to block or prevent the consummation of the acquisition and the other transactions contemplated by the stock purchase agreement and the ancillary agreements and the applicable period of time for the President of the United States to take such action shall have expired; | |
• | our registration statement onForm S-4 registering the sale of our shares of common stock to be issued in the PCB Combination, of which this proxy statement/prospectus is a part, shall have become and remain effective under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order; | |
• | we and Meadville shall have each received the requisite approvals of our respective shareholders; | |
• | there shall not have been overtly threatened or pending any suit, action, or proceeding by any government entity seeking to restrain or prohibit the consummation of the PCB Combination; | |
• | all conditions to the separate sale by Meadville of its laminate business shall have occurred, other than (i) the condition that the closing of the PCB Combination shall have become unconditional, and (ii) any condition which can only be satisfied on the closing of the sale of Meadville’s laminate business; | |
• | the credit agreement shall have been executed and effective, and all conditions relating to the drawdown under the credit agreement that are capable of being satisfied or fulfilled prior to the closing of the PCB Combination shall have been duly performed or waived, and all conditions precedent relating to the drawdown to be fulfilled after the closing of the PCB Combination must remain capable of being fulfilled; | |
• | we shall have entered into the registration rights agreement relating to the shares of our stock issuable in the PCB Combination and the sell-down in the dealing facility of certain of our shares issued in the PCB Combination within four weeks following the execution of the stock purchase agreement, in a form reasonably satisfactory to Meadville; | |
• | we shall have entered into a registration rights agreement with the Principal Shareholders on or prior to the closing of the PCB Combination granting them certain rights to require us to register our shares of common stock issued in the PCB Combination and distributed to them, in a form reasonably satisfactory to Meadville; | |
• | no law enjoining the transaction or prohibiting or limiting the ownership of the PCB Subsidiaries shall be in effect; | |
• | there shall not have occurred, since the date of the stock purchase agreement, and neither the board of directors of Meadville, MTG, nor we shall have approved or recommended, any offer or proposal contemplating, and neither Meadville, MTG, nor us shall have entered into any agreement providing for, certain change of control transactions involving Meadville, MTG, or us; | |
• | each party’s representations and warranties shall be accurate, subject to certain qualifications and exceptions; | |
• | each party shall be in compliance in all material respects with its undertakings, covenants, and contractual obligations under the stock purchase agreement; and | |
• | there shall not have occurred any change, event, occurrence, or state of facts since the date of the stock purchase agreement that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the other party. |
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• | the organization and qualification of Meadville and MTG under applicable corporate and related laws; | |
• | the ownership of the capital stock of the subsidiaries of each of Meadville and MTG; | |
• | the corporate authority of Meadville and MTG to enter into the stock purchase agreement and each of the agreements ancillary to the stock purchase agreement; | |
• | the binding nature of the stock purchase agreement as to Meadville and MTG; | |
• | the consents and approvals that Meadvilleand/or MTG must obtain in connection with the proposed transaction, and any waivers that are required in connection therewith; | |
• | any conflicts that may result from Meadvilleand/or MTG entering into the stock purchase agreement and any ancillary agreements; | |
• | the finders’ fees payable by Meadvilleand/or MTG in connection with the transaction; | |
• | matters pertaining to theHart-Scott-Rodino Act; | |
• | any outstanding litigation relating to Meadville and MTG that would prevent the consummation of the transactions contemplated by the stock purchase agreement and any agreements ancillary to the stock purchase agreement; | |
• | compliance of Meadville’s public filings with Meadville’s governing instruments and applicable law; | |
• | the accuracy of information provided by Meadville, MTG, the Principal Shareholders, the Tang Siblings, or any of their respective affiliates, to us; and | |
• | the accuracy of information provided by Meadville, MTG, the Principal Shareholders, the Tang Siblings, or any of their respective affiliates in any filings with governmental entities. |
• | the organization and qualification of the PCB Subsidiaries under applicable corporate and related laws; | |
• | the capitalization of the PCB Subsidiaries, and any special rights relating to outstanding equity securities, such as rights of first refusal, put and call options, repurchase rights, and other characteristics of the equity interests of the PCB Subsidiaries; | |
• | the consents and approvals that the PCB Subsidiaries must obtain in connection with the proposed transaction, any waivers that are required, and board and shareholder approval requirements for the transaction; |
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• | any conflicts that may result from the PCB Subsidiaries entering into the stock purchase agreement and any ancillary agreements; | |
• | the accuracy of financial statements delivered to us and their basis of presentation, the standard of maintenance of books and records maintained by the PCB Subsidiaries, and the PCB Subsidiaries’ internal controls over financial reporting; | |
• | outstanding litigation relating to the PCB Subsidiaries; | |
• | certain matters relating to taxes prepared and filed by the PCB Subsidiaries; | |
• | employee benefits provided to employees of the PCB Subsidiaries, labor agreements, and other labor and labor compliance related matters; | |
• | permits and licenses that the PCB Subsidiaries may be required to maintain under applicable laws; | |
• | environmental matters; | |
• | the ownership of intellectual property by the PCB Subsidiaries, and certain matters relating to infringement, misappropriation, and other aspects of intellectual property ownership, licensing, or use; | |
• | contracts to which the PCB Subsidiaries are a party, and the effectiveness of those contracts; | |
• | the absence of the occurrence of certain events with respect to the business of the PCB Subsidiaries since the date of the most recent financial statements of the PCB Subsidiaries delivered to us prior to execution of the stock purchase agreement, and the absence of certain liabilities of the PCB Subsidiaries other than those included in those financial statements; | |
• | certain matters related to real property owned or leased by the PCB Subsidiaries; | |
• | the sufficiency of assets owned or used by the PCB Subsidiaries in the operation of their businesses; | |
• | compliance by the PCB Subsidiaries with applicable law; | |
• | insurance maintained by the PCB Subsidiaries; | |
• | approval by the board of directors and shareholders of Meadville and MTG, as applicable; | |
• | the existence of finders’ fees payable by the PCB Subsidiaries in connection with the transaction; | |
• | arrangements that exist between the PCB Subsidiaries and any affiliates of the PCB Subsidiaries, MTG, and Meadville; and | |
• | the customers and suppliers of the PCB Subsidiaries. |
• | the organization and qualification of us and each of our controlled affiliates under applicable corporate and related laws; | |
• | our ownership of the capital stock of our subsidiaries; | |
• | our corporate authority and the corporate authority of TTM International and TTM Hong Kong to enter into the stock purchase agreement and each of the agreements ancillary to the stock purchase agreement; | |
• | any conflicts that may result from us, TTM International, and TTM Hong Kong entering into the stock purchase agreement and any ancillary agreements; | |
• | the binding nature of the stock purchase agreement as to us, TTM International, and TTM Hong Kong; |
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• | the consents and approvals that we, TTM International, and TTM Hong Kong must obtain in connection with the PCB Combination, and any waivers that are required in connection therewith; | |
• | the due and valid authorization of the issuance of the shares of our common stock to be issued pursuant to the stock purchase agreement, and valid issuance of and title to those shares when issued; | |
• | the accuracy of the reports and other filings made by us with the SEC, and the accuracy of the information to be included in this proxy statement/prospectus, the information provided by us for incorporation into Meadville’s Circular, or to be filed with any government entity; | |
• | the absence of the occurrence of certain events with respect to our and our subsidiaries’ businesses since the date of our most recent financial statements we delivered to Meadville prior to execution of the stock purchase agreement, and the absence of certain liabilities other than those included in those financial statements; | |
• | our financial capability to fund the cash purchase price and to pay all fees and expenses required to be paid by us under the stock purchase agreement; | |
• | our acknowledgement that the certificates of the equity interest in the PCB Subsidiaries will contain legends stating that such equity interests have not been registered under the Securities Act and may not be transferred by us without an effective registration or pursuant to an exemption under the Securities Act; | |
• | legends that may be included on the stock certificates representing equity interests in the PCB Subsidiaries; | |
• | the accuracy of information we provide to Meadville for inclusion in its Circular; | |
• | the accuracy of information we supply for inclusion in any filing with any governmental entity; | |
• | the existence of finders’ fees payable by us, TTM International, and TTM Hong Kong in connection with the PCB Combination; | |
• | outstanding, pending, or threatened litigation relating to us or any of our controlled affiliates; | |
• | permits and licenses that we and our controlled affiliates may be required to maintain under applicable laws; | |
• | certain environmental matters; | |
• | the ownership of intellectual property by us and our controlled affiliates, and certain matters relating to infringement, misappropriation, and other aspects of intellectual property ownership, licensing, or use; | |
• | compliance by us and our controlled affiliates with applicable law; | |
• | certain matters relating to taxes prepared and filed by us and our controlled affiliates; | |
• | employee benefits provided to our employees and the employees of our controlled affiliates, labor agreements, and other labor and labor compliance related matters; | |
• | contracts to which we or any of our controlled affiliates are a party, and the effectiveness of those contracts; | |
• | certain matters related to real property owned or leased by us and our controlled affiliates, and the sufficiency of assets owned or used by us and our controlled affiliates in the operation of our businesses; | |
• | insurance maintained by us or our controlled affiliates; | |
• | any arrangements that exist between us or any of our affiliates; and | |
• | our and our controlled affiliates’ customers and suppliers. |
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• | acquire any business that would be included in the PCB Subsidiaries by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a transaction or series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to the foregoing or, with respect to any PCB Subsidiary, adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, or other reorganization; | |
• | take any action or enter into any agreement or transaction, or cause any person or entity to, directly or indirectly, take any action or enter into any agreement or transaction, that would prevent, materially delay, or impair the consummation of the transactions contemplated by the stock purchase agreement or any of the shareholders agreement, registration rights agreement, sell-down registration rights agreement, or other agreements ancillary to the PCB Combination; | |
• | sell, lease, license (other than ordinary course intellectual property licenses), transfer, pledge, charge, convey, assign, mortgage, or otherwise dispose of any material properties or assets, tangible or intangible, of any PCB Subsidiary, other than inventory in the ordinary course of business and obsolete or non-used assets or rights or with a fair market value not in excess of $10,000,000 in the aggregate, subject to certain exceptions; | |
• | other than transactions between or among the PCB Subsidiaries or between or among Meadville or MTG and any PCB Subsidiary or any of their respective subsidiaries, issue, sell, deliver, pledge, charge, transfer, dispose of, or encumber (i) any capital stock of any PCB Subsidiary, or (ii) any equity rights in respect of, security convertible into, exchangeable for, or evidencing the right to subscribe for or acquire either any securities convertible into or exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the capital stock of any PCB Subsidiary; | |
• | amend, cancel, waive, modify, or otherwise dispose of or permit to lapse any rights in any material intellectual property used in connection with the business of the PCB Subsidiaries, other than such intellectual property that is no longer used in connection with the business of the PCB Subsidiaries; | |
• | except as required by the terms of any benefit and compensation arrangement in effect as of the date of the stock purchase agreement and disclosed to us, (i) hire any person to become an employee or individual independent contractor of the PCB Subsidiaries with annual compensation in excess of $250,000, (ii) terminate, adopt, or amend any benefit and compensation arrangement, (other than any amendment, termination, or adoption that does not materially impact any of the employees of the PCB Subsidiaries), (iii) terminate any employee with annual compensation in excess of $250,000 (except for cause), or (iv) grant or agree to grant or accelerate the time of vesting or payment of awards held by any of the employees under any benefit and compensation arrangement, and, with respect to clauses (i) through (ii) of the foregoing, except in the ordinary course of business consistent with past practices; |
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• | pay, discharge, settle, or satisfy any claims, actions, arbitrations, disputes, or other proceedings (absolute, accrued, asserted or unasserted, contingent, or otherwise) that would result in any PCB Subsidiary being enjoined, except as would not, individually or in the aggregate, have a material adverse effect; | |
• | except as contemplated by the stock purchase agreement or the agreements ancillary to the stock purchase agreement, amend in any material respect any provision of the organizational documents of any PCB Subsidiary or of any term of any outstanding security issued by any PCB Subsidiary; | |
• | with respect to indebtedness that will remain outstanding following the closing of the PCB Combination, incur, assume, or guarantee (including by way of any agreement to “keep well” or of any similar arrangement) or cancel or waive any claims under any indebtedness or other claims or rights of substantial value or amend or modify the terms relating to any such indebtedness, claims, or rights, except for any such incurrences, assumptions, or guarantee of indebtedness or amendments of the terms of such indebtedness in the ordinary course of business consistent with past practices involving an aggregate amount not exceeding $10,000,000; | |
• | make any distribution (whether in cash, stock, equity rights, or property) or declare, pay, or set aside any dividend with respect to, or split, combine, redeem, reclassify, purchase, or otherwise acquire, directly or indirectly, any capital stock of any of the PCB Subsidiaries or make any other changes in the capital structure of any of the PCB Subsidiaries; or | |
• | authorize or enter into any contract or commitment with respect to any of the foregoing items. |
• | acquire any business by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a transaction or series of related transactions, or enter into any contract, letter of intent, or similar arrangement (whether or not enforceable) with respect to the foregoing, or (ii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, or other reorganization; | |
• | take any action or enter into any agreement or transaction, or cause any person or entity to, directly or indirectly, take any action or enter into any agreement or transaction, that would prevent, materially delay, or impair the consummation of the transactions contemplated by the stock purchase agreement or any of the shareholders agreement, registration rights agreement, sell-down registration rights agreement, or other agreements ancillary to the PCB Combination; | |
• | sell, lease, license (other than ordinary course intellectual property licenses), transfer, pledge, charge, convey, assign, mortgage, or otherwise dispose of any material properties or assets, tangible or intangible, of us or any of our subsidiaries, other than inventory in the ordinary course of business and obsolete or non-used assets or rights or with a fair market value not in excess of $10,000,000 in the aggregate, subject to certain exceptions, provided, however, that we and our subsidiaries are permitted to sell our Redmond, Washington; Dallas, Oregon; Hayward, California; and Los Angeles, California production facilities; | |
• | other than (i) transactions between or among us or any of our subsidiaries, (ii) issuance of equity rights relating to 1,000,000 shares of our common stock to our employees under any of our benefit and compensation arrangements in the ordinary course of business consistent with past practice, (iii) issuance of our common stock in the ordinary course of business consistent with past practice, upon the exercise of equity rights issued to our employees under any of our benefit and compensation arrangements on their normal vesting date and in accordance with the terms of ordinary issuance (and not as a result of any |
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acceleration or vesting thereof), (iv) issuance of our capital stock upon the conversion of our convertible indebtedness outstanding as of the date of the stock purchase agreement and pursuant to and in accordance with their existing terms as set forth in reports we have filed with the SEC, and (v) issuance of our capital stock with the prior approval of Meadville (such approval not to be unreasonably withheld or delayed; provided, however, that in no circumstances shall we be obligated to approve any issuance of capital stock at below market value), issue, sell, deliver, pledge, charge, transfer, dispose of, or encumber (x) any of our capital stock or any capital stock of our controlled affiliates, or (y) any equity rights in respect of, security convertible into, exchangeable for, or evidencing the right to subscribe for or acquire either any securities convertible into or exchangeable for, or evidencing the right to subscribe for or acquire, any shares of our capital stock or the capital stock of any of our controlled affiliates; |
• | amend, cancel, waive, modify, or otherwise dispose of or permit to lapse any rights in any material intellectual property held by us or any of our controlled affiliates; | |
• | except as required by the terms of any of our benefit and compensation arrangements in effect as of the date of the stock purchase agreement and disclosed to Meadville, (i) hire any person to become an employee or individual independent contractor of ours or any of our subsidiaries with annual compensation in excess of $250,000, (ii) terminate, adopt, or amend any benefit and compensation arrangement, (iii) terminate any employee with annual compensation in excess of $250,000 (except for cause), or (iv) grant or agree to grant or accelerate, or cause an acceleration of, through the time of vesting or payment of awards held by any of our employees under any of our benefit and compensation arrangements, and, with respect to clauses (i) through (ii) of the foregoing, except in the ordinary course of business consistent with past practices; | |
• | pay, discharge, settle, or satisfy any claims, actions, arbitrations, disputes, or other proceedings (absolute, accrued, asserted or unasserted, contingent or otherwise) resulting in any of our or any of our controlled affiliates being enjoined, except as would not, individually or in the aggregate, have a material adverse effect; | |
• | except as contemplated by the stock purchase agreement or any agreements ancillary to the stock purchase agreement, or as required by any agreement or measure required to obtain approvals from government entities, amend in any material respect any provision of any organizational document of our or any of our any of our controlled affiliates or of any term of any outstanding security issued by us or any of our controlled affiliates; | |
• | with respect to indebtedness, incur, assume, or guarantee (including by way of any agreement to “keep well” or of any similar arrangement) or cancel or waive any claims under any indebtedness or other claims or rights of substantial value or amend or modify the terms relating to any such indebtedness, claims, or rights, except for any such incurrences, assumptions, or guarantee of indebtedness or amendments of the terms of such indebtedness in the ordinary course of business consistent with past practices involving an aggregate amount not exceeding $10,000,000; | |
• | make any distribution (whether in cash, stock, equity rights, or property) or declare, pay, or set aside any dividend with respect to, or split, combine, redeem, reclassify, purchase, or otherwise acquire directly, or indirectly, any of our capital stock or make any other changes in our capital structure; or | |
• | authorize or enter into any contract or commitment with respect to any of the foregoing items. |
• | subject to certain confidentiality obligations, the provision of access to relevant information, including books and records of the parties; | |
• | preparation and filing of applicable tax returns; |
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• | allocation of the purchase price delivered by us in the PCB Combination among the PCB Subsidiaries in the manner specified in the stock purchase agreement; | |
• | execution and delivery by the parties of each of the shareholders agreement, registration rights agreement, sell-down registration rights agreement, or other agreements ancillary to the PCB Combination; | |
• | preparation of Meadville’s Circular, submission of the Circular to appropriate governmental authorities, delivery of the Circular, and holding of Meadville’s special meeting of its shareholders; | |
• | preparation of our registration statement onForm S-4, of which this proxy statement/prospectus is a part, filing of theForm S-4 with the SEC, and holding of a special meeting of our stockholders; | |
• | the parties’ maintenance of the confidentiality of the information obtained from other parties to the transaction; | |
• | the settlement and payment of certain forms of account, note, or loan payables, advances, and other extensions of credit that are receivable by Meadville or any of its subsidiaries from the PCB Subsidiaries; | |
• | notification of communications from third parties alleging that the consent, approval, or waiver of such third party is or may be required in connection with the PCB Combination; | |
• | the provision of financial statements and other financial information by the parties as necessary to prepare relevant disclosure documents and filings, including our registration statement onForm S-4, of which this proxy statement/prospectus is a part, and the Circular; | |
• | our obligation to use reasonable best efforts to cause the shares we will issue to Meadville in the PCB Combination to be approved for quotation on the NASDAQ Global Select Market on the closing date of the PCB Combination; | |
• | non-acceleration of vesting of our or our controlled affiliates’ outstanding equity awards held by employees; | |
• | an obligation on our part not to solicit employees of Meadville and its subsidiaries, for varying periods of time and subject to various exceptions; | |
• | an obligation on the part of Meadville to cause to be distributed by dividend to Meadville’s shareholders the net amount of the cash purchase price and our shares of common stock delivered to Meadville as consideration in connection with the PCB Combination; | |
• | an obligation on our part to use our reasonable efforts to amend our organizational documents and the organizational documents of TTM Hong Kong and the PCB Subsidiaries (other than PCB Subsidiaries organized under the laws of the PRC) as may be required to conform such organizational documents with the provisions of the shareholders agreement and to obtain all requisite approvals from government entities that may be required to effect such amendments; and | |
• | an obligations on the part of us and TTM Hong Kong to execute and deliver all documents required to be delivered by us and TTM Hong Kong under the credit agreement, including the guarantee and share pledges to be entered into in connection with the credit agreement. |
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• | the representations and warranties of Meadville, MTG, and the PCB Subsidiaries must be true and correct on the closing date, and each of the covenants to be performed by them shall have been performed, except to the extent the failure of any such representations and warranties to be true and correct would not, individually or in the aggregate, result in a material adverse effect on Meadville, MTG, or the PCB Subsidiaries; |
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• | there shall not have occurred an event that would have a material adverse effect as to Meadville, MTG, or the PCB Subsidiaries; | |
• | no law shall be in effect (i) enjoining the closing of the PCB Combination or enjoining the acquisition by us or any of our controlled affiliates of any of the PCB Subsidiaries, restraining or prohibiting the consummation of the transactions contemplated by the stock purchase agreement, placing limitations on the ownership of shares of capital stock of any of the PCB Subsidiaries by us or our controlled affiliates; or (ii) prohibiting or limiting the ownership of the PCB Subsidiaries by us or any of our controlled affiliates or the operation by the PCB Subsidiaries or us or any of our controlled affiliates of any portion of any business or of any assets of the PCB Subsidiaries, other than in any such case any law of any such jurisdiction, the violation of which would not have a material adverse effect on the business, assets, results of operations, or condition of us or the PCB Subsidiaries; | |
• | Meadville, MTG, and the Principal Shareholders shall have delivered the ancillary agreements to which they are parties, and those agreements shall be in full force and effect; and | |
• | There shall not have occurred, since the date of the stock purchase agreement, and neither the board of directors of Meadville nor MTG shall have approved or recommended, any offer or proposal contemplating, and neither Meadville nor MTG shall have entered into any agreement providing for, certain forms of changes of control of Meadville or MTG. |
• | the representations and warranties of us, TTM International, and TTM Hong Kong must be true and correct on the closing date, and each of the covenants to be performed by them shall have been performed, except to the extent the failure of any such representations and warranties to be true and correct would not, individually or in the aggregate, result in a material adverse effect on us, TTM International, or TTM Hong Kong; | |
• | there shall not have occurred an event having a material adverse effect on us, TTM International, or TTM Hong Kong; | |
• | no law shall be in effect (i) enjoining the closing of the PCB Combination or enjoining the acquisition by Meadville of any of our shares of common stock issuable in the PCB Combination, restraining or prohibiting the consummation of the transactions contemplated by the stock purchase agreement, other than in any such case any law of any such jurisdiction, the violation of which would not have a material adverse effect on the business, assets, results of operations, or condition of Meadville and its affiliates taken as a whole or Meadville’s laminate subsidiary, MTG Laminate (BVI) Limited, and its affiliates, taken as a whole, or (ii) placing limitations on the ownership of our shares of common stock issuable in the PCB Combination or prohibiting or limiting the ownership of the our shares of common stock issuable in the PCB Combination; | |
• | we, TTM International, and TTM Hong Kong shall have delivered the ancillary agreements to which we and they are parties, and those agreements shall be in full force and effect; and | |
• | there shall not have occurred, since the date of the stock purchase agreement, and our board of directors shall not have approved or recommended, any offer or proposal contemplating, or have entered into any agreement providing for, certain forms of changes of control of our company. |
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• | if the conditions of the transaction have not been satisfied or waived on or before May 31, 2010 and the party requesting the termination has not willfully breached a covenant in the stock purchase agreement, provided that either party may extend the termination date to June 30, 2010 if certain of the conditions (relating to government or legal approvals) have not been satisfied or waived before May 31, 2010; | |
• | if any law has been enacted or enforced in a manner to prohibit the completion of the transaction, provided that such party has used its reasonable efforts to remove or have vacated such law; | |
• | with respect to each party, if the other party shall have failed to comply with any obligation or covenant in the stock purchase agreement or breached any representation or warranty, the breach or failure to comply of which prevents completion of the transaction, and such breach or failure to comply is not capable of being remedied or, if capable of being remedied, not remedied by the earlier of the date which is 30 days following the date of delivery of a written notice of such breach to the other party or the date of termination of the stock purchase agreement; | |
• | if an event having a material adverse effect as to a party has occurred and is not capable of being remedied or, if capable of being remedied, is not remedied by the earlier of the date which is 30 days following the date of delivery of a written notice of such breach to the other party or the date of termination of the stock purchase agreement; and | |
• | if the requisite approvals from our stockholders shareholders and Meadville’s shareholders in respect of the PCB Combination have not been obtained. |
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• | increase their aggregate percentage beneficial ownership of our common stock above 33%, or under certain circumstances above 39%, of our then outstanding common stock, except where such increase results from us engaging in an open market share repurchase program or a similar transaction, or through distribution of securities or issuances in connection with stockholder rights plans or other rights offerings to our stockholders; or | |
• | acquire beneficial ownership of any shares of our capital stock that does not constitute common stock. |
• | except as otherwise expressly permitted or required by the shareholders agreement, solicit proxies or consents (or induce any other person to do so) with respect to voting of our voting securities, or advise, encourage, or influence any other person with respect to voting of our voting securities; | |
• | except where the Principal Shareholders are permitted to vote on an amendment of our Certificate of Incorporation or Bylaws relating to certain “anti-takeover” matters approved by our board of directors (which matters are enumerated on a schedule to the shareholders agreement), as described below under “Voting Arrangements,” vote on any proposal made by any person that relates to the adoption, modification, or repeal of any such anti-takeover matter; |
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• | submit to us or our board of directors any proposal or offer (or induce any other person to do so) relating to a “business combination” (as defined in the shareholders agreement), to the extent made public by the Principal Shareholders or Tang Siblings or required to be made public under applicable law; | |
• | except where the Principal Shareholders are permitted to vote on a business combination that is approved or recommended by our board of directors, as described below under “Voting Arrangements,” vote with respect to any business combination; | |
• | with the exception of voting with respect to their own nominee to our board of directors, vote in the election of any director of our company or seek or vote to remove any of our directors; or | |
• | (i) form, join, or participate in any group for the purposes of, (ii) enter into any arrangements with any person to take any of the actions matter referred to, or vote for any of, or (iii) publicly announce or disclose any expression of interest, offer, or proposal relating to, any of the matters referred to above. |
• | any business combination involving us or any of our affiliates that has been approved or recommended by our board of directors; | |
• | any transaction that would involve changing the nature of our business as currently conducted; | |
• | any increase in authorized capital stock in our Certificate of Incorporation or the creation of a new class or series of capital stock requiring stockholder approval, to the extent relating to a business combination or antitakeover matter approved by our board of directors; |
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• | any issuance of equity securities requiring stockholder approval, to the extent relating to a business combination or antitakeover matter approved by our board of directors; and | |
• | any amendment of our Certificate of Incorporation or Bylaws relating to certain anti-takeover matters that is either proposed or recommended by our board of directors, including the following matters: |
• | the size and composition of our board of directors, and matters relating to the staggered election of board of directors; | |
• | director qualifications, nomination, and election standards and requirements and resignation standards and requirements; | |
• | opting into and out of state anti-takeover lawsand/or supermajority voting provisions; | |
• | the ability of our stockholders to call meetings and the location and time of meetings; | |
• | the ability of our stockholders to act by written consent in lieu of meetings; | |
• | voting, cumulative voting, removal of directors, and filling of board vacancies (other than with respect to the Principal Shareholders’ and Tang Siblings’ nominee and certain board seats of the PCB Subsidiaries or TTM Hong Kong); | |
• | requirements to amend and modify our Certificate of Incorporation or Bylaws; | |
• | golden parachutes and executivechange-in-control severance agreements and arrangements existing on the date of the stock purchase agreement; | |
• | stockholder rights plans and poison pills (and the creation and authorization of new classes and series of capital stock in connection therewith); | |
• | “advance notice” provisions for stockholder nominations (regarding director election) and proposals (regarding all other matters); and | |
• | changing our jurisdiction of incorporation and reincorporation, to the extent the laws of such new jurisdiction materially weakens the anti-takeover protections of our company. |
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• | approval of the annual budget and business plans, including annual capital expenditures and compensation programs, including, without limitation, base salary and incentive compensation levels for any key employee; | |
• | the hiring, promotion, and termination of employment of any key employees; | |
• | any merger, consolidation, reorganization, recapitalization, or restructuring or similar business combination; | |
• | any sale of assets in aggregate value of over $30,000,000, excluding sales (including sales of inventory) in the ordinary course of business; | |
• | any strategic alliance, joint venture, or other similar transaction; | |
• | the pursuit of a line of business that is materially different from the lines of business that such entity is engaged in immediately prior to the closing date; | |
• | any material restatement, modification, or amendment of the organizational documents; | |
• | any financing transactions (whether debt or equity) of a value over $30,000,000, any incurrence, assumption, or guarantee, or any cancellation of any indebtedness of a value over $30,000,000, or the declaration of any dividends or other distributions; | |
• | actions that would relate to our public reporting requirements under federal securities laws, and reporting requirements under applicable rules and regulations of the United States Department of Defense, the Sarbanes-Oxley Act of 2002, and any national securities exchange on which our common stock is then listed for trading or quoted; | |
• | any filing of a voluntary petition seeking liquidation, reorganization, arrangement, or readjustment, in any form, of its debts under any insolvency law, or the making of any general assignment for the benefit of its creditors of all or substantially all of such entity’s assets; | |
• | the making of any (i) payment, discharge, settlement, or satisfaction of any claims, actions, litigations, arbitrations, disputes, or other proceedings (absolute, accrued, asserted, contingent, or otherwise), in each case in an amount over $5,000,000, or (ii) the commencement of any claims, actions, litigations, arbitrations, disputes, or other proceedings where the amount in dispute is over $5,000,000, in each case excluding actions taken in the ordinary course of business; and | |
• | the making of any material changes relating to any taxes, tax returns, or method of accounting or accounting practices or tax accounting. |
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• | to other Principal Shareholders or Tang Siblings, or their affiliates, or to a Principal Shareholders’ or Tang Siblings’ estate or a trust (provided such affiliate or the trustee of such trust or executor of such estate, as applicable, signs and becomes a party to the shareholders agreement); | |
• | pursuant to a Recommended Proposal; | |
• | to us or any of our subsidiaries, including pursuant to an open market share repurchase program or issuer self-tender offer; or | |
• | pursuant to transactions approved in advance by our board of directors. |
• | to any person or group of related persons, unless they have actual knowledge that the transfer or disposition of such shares of common stock will result in such person or group of related persons holding more than 9.9% of the then outstanding shares of our common stock; or | |
• | pursuant to any of the permitted transfers they may make during theLock-Up Period set forth above. |
• | solicit or recruit for employment any management level employees of the PCB Subsidiaries designated as a manager on the closing date of the PCB Combination; | |
• | hire or assist any other person in hiring such management employees; or | |
• | solicit or encourage any such management employees to leave their employment; |
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• | owning any equity interest in any person that engages in a Competing Activity as a result of or otherwise in connection with (i) any acquisition by any Principal Shareholder or Tang Sibling of one or more businesses engaged in any activity in addition to the Competing Activity, provided that the Competing Activity is less than 25% in value of the business being acquired, or (ii) an enforcement of a security interest held as a result of engaging in an otherwise permissible activity, provided that such business be divested as soon as reasonably practicable; | |
• | engaging or owning an interest in any type of business other than the Competing Activity that any of the Principal Shareholders, Tang Siblings, Meadville, or MTG, or any of their respective controlled affiliates, is engaged in as at the date of the stock purchase agreement; and | |
• | owning any capital stock in any person that engages in the Competing Activity in the ordinary course of business, provided that such capital stock constitutes less than 5% of the capital stock of such person and such capital stock is listed on a national securities exchange and such ownership provides no right to control such person. |
• | upon the unanimous written consent of the parties; | |
• | upon our dissolution; or | |
• | automatically on the earlier of (a) the 181st day next following the time when the Principal Shareholders, Tang Siblings, and their affiliates (or any group containing one or more of them) collectively beneficially own shares of our common stock representing less than 9.9% of the total voting power of our outstanding voting securities, or (b) the occurrence of certain change of control events set forth in the shareholders agreement to the extent that CFIUS shall not have objected to or taken any action to block or enjoin such termination. |
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• | all shares of our common stock held from time to time by the Principal Shareholders will be deemed “Registrable Securities”; | |
• | following the date that is eighteen months after the closing date of the transaction, the Principal Shareholders will have the right to require us to use reasonable efforts to effect the registration of their Registrable Securities under the Securities Act as follows: (i) up to three registrations upon their demand (subject to certain limitations) during the first five year period following the date of the registration rights agreement, and thereafter, (ii) up to such number of registrations upon demand equal to four minus the number of demand registrations effected in accordance with the registration rights agreement during the first five year period. A registration will count for this purpose only if the registration of all Registrable Securities requested to be registered is declared effective and remains effective for a period of 90 days and not subject to any stop order or injunction and closed or withdrawn at the request of the Principal Shareholders; | |
• | we will have the right to delay the filing or effectiveness of a registration statement during no more than two periods, aggregating to not more than 120 days in any twelve month period, in customary “black out” circumstances; | |
• | the Principal Shareholders will be entitled to customary “piggyback” registration rights on customary types of registration statements that we file with the SEC, meaning if we propose to file on our behalfand/or on behalf of any holder of our securities (other than a holder of Registrable Securities) a registration statement under the Securities Act, we agree to include Registrable Securities held by the Principal Shareholder in that registration statement, subject to certain exceptions; | |
• | in the event that we limit the number of shares that may be included on any particular registration statement in which the Principal Shareholders elect to include Registrable Securities, the Registrable Securities are to |
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be (i) the last shares “cut-back” on any demand registrations, and (ii) “cut-back” before any shares we include, but after other selling stockholders (other than the Principal Shareholders) for any piggy-back registrations; |
• | all registration expenses will be borne by us, except for (i) stock transfer taxes and underwriting discounts and commissions, which will be paid by us with respect to shares being sold by us and by the selling stockholders with respect to shares being sold by them, and (ii) fees for legal counsel for the selling stockholders, which will be paid by the selling stockholders in proportion to the proceeds received by Principal Shareholders and all other selling stockholders; | |
• | we will provide customary covenants for assistance on the offerings of the Registrable Securities (including underwritten offerings), and will provide customary indemnification to the Principal Shareholders, the underwriters, and all of their respective affiliates; and | |
• | in addition to the customarylock-up required of us under any underwriting agreement, the Principal Shareholders will agree, to the extent required by the underwriters in an underwritten offering, to a customarylock-up that prohibits certain transactions in our capital stock by the Principal Shareholders for a period of up to 90 days. |
• | we will file a registration statement to register all shares of our common stock to be sold in the dealing facility, which we refer to as the Sell-Down Shares, as soon as practicable, and use our reasonable efforts to have such registration statement declared effective as soon as possible after the closing date of the PCB Combination, but in no event later than 5 days after the closing date; | |
• | we will make such amendments and supplements to the registration statement as necessary to keep the registration statement effective until the earlier of the disposition of all Sell-Down Shares or 90 days; | |
• | we will provide customary covenants (including entering into underwriting agreements if the method of distribution is by means of an underwritten offering, including customary representations, warranties, and indemnities) and shall take such other actions (including roadshow presentations) as are reasonably required to facilitate the disposition of the Sell-Down Shares; | |
• | all registration expenses will be borne by us, except for stock transfer taxes and underwriting discounts and commissions, each of which will be netted against the proceeds distributable to the shareholders of Meadville who elect to receive the special dividend in cash in lieu of our shares; and | |
• | we will provide all other assistance as may be reasonably required for the sell-down under the dealing facility and will provide customary indemnification to Meadville, MTG, the underwriters involved in the dealing facility, and all of their respective affiliates. |
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• | any breach of their duty of loyalty to our company and its stockholders; | |
• | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; | |
• | any transaction from which a director derives an improper personal benefit; and | |
• | any unlawful payment of dividends or unlawful stock purchase or redemption. |
• | conducted himself or herself in good faith; and | |
• | reasonably believed that |
• | his or her conduct was in, or not opposed to, the corporation’s best interests, and | |
• | in the case of any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. |
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• | the board of directors adopts a resolution setting forth the proposed amendment, declares the advisability of the amendment and directs that it be submitted to a vote at a meeting of stockholders, or calls a special meeting of stockholders entitled to vote in respect thereof; and | |
• | the holders of not less than a majority of shares of stock entitled to vote on the matter, and a majority of the outstanding stock of each class entitled to vote thereon as a class, approve the amendment, unless the certificate of incorporation requires the vote of a greater number of shares. |
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• | increase in Meadville’s share capital; | |
• | consolidate and divide all or any of the share capital into shares of larger or smaller amount than its existing shares; | |
• | divide its unissued shares into several classes and attach thereto any rights or conditions; | |
• | by subdivision of its extending shares or any of them, divide the whole or any part of its share capital into shares of smaller amount than is fixed by Meadville’s Articles; | |
• | cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled; | |
• | make provision for the issue and allotment of shares which do not carry voting rights; | |
• | change the denomination and currency of its share capital; and | |
• | reduce its share premium account in any manner authorized, subject to any conditions prescribed by law. |
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• | require stockholders to provide advance notice of stockholder proposals of business or director nominations at an annual meeting, which notice must be delivered to the secretary of our company not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting, subject to certain conditions; | |
• | clarify the requirements for stockholder notices relating to proposals of business and director nominations, and the conduct of business at a special meeting of stockholders (where such special meeting has been properly called); | |
• | provide that the procedures and requirements set forth in the advance notice provisions are the exclusive means for a stockholder to propose business and nominate director candidates at a stockholder meeting, except for business proposed by stockholders in accordance withRule 14a-8 of the Securities Exchange Act of 1934, as amended; and | |
• | require stockholders nominating directors to disclose, among other things, any agreement, arrangement, understanding, or commitment (i) governing how a nominee, if elected as a director, would act or vote on any issue or question, (ii) under which such nominee would receive compensation for service as a director, or (iii) giving such nominee an economic right or interest in any of our securities. |
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• | before the shareholder became interested, the board of directors approved either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder; | |
• | upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or | |
• | at or after the time the shareholder became interested, the business combination was approved by the board of directors of the corporation and authorized at an annual or special meeting of the shareholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested shareholder. |
• | the corporation’s shares are listed on a national securities exchange or held of record by more than 2,000 stockholders; or | |
• | the corporation will be the surviving corporation of the merger, and no vote of its stockholders is required to approve the merger. |
• | shares of stock of the corporation surviving or resulting from the merger or consolidation; or | |
• | shares of stock of any other corporation that on the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 stockholders. |
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• | realized and unrealized profits; | |
• | “share premium accounts,” which represents the excess of the price paid to Meadville on issue of its shares over the par or “nominal” value of those shares, which is similar to the U.S. concept of additional paid in capital; or | |
• | any other account permitted by the Companies Law. |
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Cayman Islands | Delaware | |
Shareholder Meetings | ||
May be held at a time and place as designated in the memorandum and articles of association | May be held at such time or place as designated in the certificate of incorporation or the bylaws, or if not so designated, as determined by the board of directors | |
May be held within or outside the Cayman Islands | May be held within or outside Delaware | |
Notice of shareholder meetings will be given personally by mail or by electronic means as designated in the memorandum and articles of association or by any other means authorized in writing by the shareholder | Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any, by which stockholders may be deemed to be present and vote at such meeting | |
Written notice shall be given to the shareholders not less than 10 nor more than 60 days before the meeting | ||
Shareholder’s Voting Rights | ||
Any shareholder entitled to attend and vote at a meeting may authorize another person or persons to act for the shareholder by proxy as provided in the articles of association | Any person authorized to vote may authorize another person or persons to act for such person by proxy | |
The memorandum and articles of association may provide for cumulative voting | The certificate of incorporation may provide for cumulative voting | |
The quorum is as designated in the memorandum and articles of association | The certificate of incorporation or bylaws may specify the number of shares necessary to constitute a quorum, but in no event shall a quorum consist of less than one-third of the shares entitled to vote at the meeting. In the absence of such specifications, a majority of shares entitled to vote at the meeting shall constitute a quorum | |
Limits on Rights of Non-Resident or Foreign Shareholders to Hold or Exercise Voting Rights | ||
There are no limits on the rights of non-resident or foreign shareholders to hold or exercise voting rights | There are no limits on the rights of non-resident or foreign stockholders to hold or exercise voting rights | |
Right to Inspect Corporate Books | ||
As provided by the articles of association. Meadville’s memorandum and articles of association state that the directors shall determine whether and to what extent and at what time and place the accounts and books of Meadville shall be open to shareholder inspection and no shareholder has any right of inspection except as conferred by the Companies Law or authorized by the directors or by Meadville in a general meeting | The Delaware General Corporation Law allows any stockholder the right: (a) to inspect the corporation’s stock ledger, a list of its stockholders, and its other books and records; and (b) to make copies or extracts of those materials during normal business hours; provided that the stockholder makes a written request under oath stating that the purpose of the inspection is for a purpose reasonably related to the person’s interest as a stockholder. |
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Cayman Islands | Delaware | |
Duties of Directors and Officers | ||
In summary, directors and officers owe the following fiduciary duties: (i) duty to act in good faith in what the directors believe to be in the best interests of the corporation as a whole; | Directors owe a duty of care and a duty of loyalty to the corporation and have a duty to act in good faith. Directors and officers must act in good faith, with the care of a prudent person, and in the best interest of the corporation | |
(ii) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; | Directors and officers must refrain from self-dealing, usurping corporate opportunities, and receiving improper personal benefits | |
(iii) duty to should not fetter the exercise of future discretion; (iv) duty to exercise powers fairly as between different sections of shareholders; (v) duty not to put themselves in a position in which there is a conflict between their duty to the corporation and their personal interests; and | Decisions made by directors and officers on an informed basis, in good faith, and in the honest belief that the action was taken in the best interest of the corporation may be protected by the “business judgment rule” | |
(vi) duty to exercise independent judgment. In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as “a reasonably diligent person having both: | ||
(i) the general knowledge, skill, and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the corporation; and | ||
(ii) the general knowledge skill and experience which that director has. | ||
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the memorandum and articles of association or alternatively by shareholder approval at general meetings. |
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Cayman Islands | Delaware | |
Shareholder’s Derivative Actions | ||
A minority shareholder aggrieved by the actions of a director or the company has a limited number of remedies. In principle, the corporation itself will normally be the proper plaintiff and a claim against (for example) its officers or directors usually may not be brought by a shareholder. However, based on English authorities, which may be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which: (i) a company is acting or proposing to act illegally or beyond the scope of its authority; (ii) the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or (iii) those who control the company are perpetrating a “fraud on the minority.” A shareholder may have a direct right of action against a company where the individual rights of that shareholder have been infringed or are about to be infringed. | Under the Delaware General Corporation law, a stockholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation. An individual also may commence a class action suit on behalf of himself or herself and other similarly situated stockholder where the requirements for maintaining a class action under the Delaware General Corporation Law have been met. A person may institute and maintain such a suit only if such person was a stockholder at the time of the transaction suit or his or her shares thereafter devolved upon him or her by operation of law. Additionally, under Delaware case law, the plaintiff generally must be a stockholder not only at the time of the transaction which is the subject of the suit, but also through the duration of the derivative suit. The Delaware General Corporation Law also requires that the derivative plaintiff make a demand on the directors of the corporation to assert the corporate claim before the suit may be prosecuted by the derivative plaintiff, unless such demand would be futile. | |
Class Actions | ||
Cayman Islands law does not prohibit class action suits in the Cayman Islands | Rule 23 of the Delaware Chancery Court Rules allows for class action suits in Delaware and is modeled on the federal rule, F.R.C.P. Rule 23 |
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• | the accompanying notes to the unaudited pro forma condensed combined financial statements; | |
• | the separate audited historical consolidated financial statements of TTM for the fiscal year ended December 31, 2008 incorporated by reference into this proxy statement/prospectus; | |
• | the separate audited historical combined financial statements of the PCB Business for the fiscal year ended December 31, 2008 included elsewhere in this proxy statement/prospectus; | |
• | the separate unaudited historical consolidated financial statements of TTM as of and for the nine months ended September 28, 2009 incorporated by reference into this proxy statement/prospectus; and | |
• | the PCB Business’ audited historical combined financial statements as of and for the nine months ended September 30, 2009 included elsewhere in this proxy statement/prospectus. |
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As of September 28, 2009
Pro | Pro | |||||||||||||||||||
PCB | Forma | Forma | ||||||||||||||||||
TTM | Business | Adjustments | Note | Combined | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 199.3 | $ | 108.5 | $ | (114.0 | ) | (a | ) | $ | 163.8 | |||||||||
459.9 | (b | ) | ||||||||||||||||||
(459.9 | ) | (c | ) | |||||||||||||||||
(30.0 | ) | (i | ) | |||||||||||||||||
Restricted cash | — | 1.1 | 1.1 | |||||||||||||||||
Short-term investments | 1.4 | — | 1.4 | |||||||||||||||||
Accounts receivable, net | 95.9 | 123.7 | 219.6 | |||||||||||||||||
Inventories | 61.7 | 59.0 | 15.0 | (d | ) | 135.7 | ||||||||||||||
Prepaid expenses and other current assets | 2.4 | 16.2 | 18.6 | |||||||||||||||||
Related party receivables | — | 1.8 | 1.8 | |||||||||||||||||
Income taxes receivable | 5.0 | 3.1 | 8.1 | |||||||||||||||||
Assets held for sale | 10.0 | — | 10.0 | |||||||||||||||||
Deferred income taxes | 6.4 | — | 6.4 | |||||||||||||||||
Total current assets | 382.1 | 313.4 | (129.0 | ) | 566.5 | |||||||||||||||
Property, plant and equipment, net | 89.3 | 635.9 | (45.9 | ) | (f | ) | 679.3 | |||||||||||||
Debt issuance costs, net | 3.7 | — | 4.8 | (i | ) | 8.5 | ||||||||||||||
Deferred income taxes | 34.6 | 5.5 | 40.1 | |||||||||||||||||
Goodwill | 14.1 | — | 293.7 | (g | ) | 307.8 | ||||||||||||||
Definite-lived intangibles, net | 16.0 | 5.4 | 62.0 | (h | ) | 83.4 | ||||||||||||||
Long-term related party receivables | — | 1.3 | 1.3 | |||||||||||||||||
Deposits and other non-current assets | 3.1 | 5.6 | 8.7 | |||||||||||||||||
Total assets | $ | 542.9 | $ | 967.1 | $ | 185.6 | $ | 1,695.6 | ||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 37.4 | $ | 73.8 | $ | 111.2 | ||||||||||||||
Current portion of borrowings | — | 78.7 | $ | (78.7 | ) | (c | ) | 64.9 | ||||||||||||
64.9 | (b | ) | ||||||||||||||||||
Related party payables | — | 37.2 | 37.2 | |||||||||||||||||
Accrued expenses and other current liabilities | 25.6 | 66.3 | 3.9 | (e | ) | 95.8 | ||||||||||||||
Total current liabilities | 63.0 | 256.0 | (9.9 | ) | 309.1 | |||||||||||||||
Convertible senior notes, net | 138.6 | — | 138.6 | |||||||||||||||||
Other long-term borrowings | — | 381.2 | (381.2 | ) | (c | ) | 395.0 | |||||||||||||
395.0 | (b | ) | ||||||||||||||||||
Deferred tax liability | — | 7.9 | 4.2 | (e | ) | 12.1 | ||||||||||||||
Other long-term liabilities | 4.5 | 5.0 | 9.5 | |||||||||||||||||
Total long-term liabilities | 143.1 | 394.1 | 18.0 | 555.2 | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||
Common stock | 0.1 | — | — | (j | ) | 0.1 | ||||||||||||||
Additionalpaid-in-capital | 213.7 | — | 430.9 | (j | ) | 644.6 | ||||||||||||||
Noncontrolling interest | — | 88.8 | 88.8 | |||||||||||||||||
Retained earnings | 119.9 | 20.2 | (20.2 | ) | (k | ) | 94.7 | |||||||||||||
(25.2 | ) | (i | ) | |||||||||||||||||
Other equity reserves | — | 49.6 | (49.6 | ) | (k | ) | — | |||||||||||||
Capital reserves | — | 158.4 | (158.4 | ) | (k | ) | — | |||||||||||||
Accumulated other comprehensive income | 3.1 | — | 3.1 | |||||||||||||||||
Total stockholders’ equity | 336.8 | 317.0 | 177.5 | 831.3 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 542.9 | $ | 967.1 | $ | 185.6 | $ | 1,695.6 | ||||||||||||
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Pro | Pro | |||||||||||||||||||
PCB | Forma | Forma | ||||||||||||||||||
TTM | Business | Adjustments | Note | Combined | ||||||||||||||||
(In millions, except per share amount) | ||||||||||||||||||||
Net sales | $ | 432.5 | $ | 452.2 | $ | 884.7 | ||||||||||||||
Cost of goods sold | 357.0 | 363.6 | $ | (17.3 | ) | (l | ) | 703.3 | ||||||||||||
Gross profit | 75.5 | 88.6 | 17.3 | 181.4 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling and marketing | 20.0 | 13.4 | (0.2 | ) | (l | ) | 33.2 | |||||||||||||
General and administrative | 25.5 | 33.1 | (1.0 | ) | (l | ) | 57.6 | |||||||||||||
Amortization of definite-lived intangibles | 2.6 | 0.1 | 7.5 | (m | ) | 10.2 | ||||||||||||||
Restructuring charges | 5.0 | — | 5.0 | |||||||||||||||||
Impairment of long-lived assets | 10.6 | 0.7 | �� | 11.3 | ||||||||||||||||
Total operating expenses | 63.7 | 47.3 | 6.3 | 117.3 | ||||||||||||||||
Operating income | 11.8 | 41.3 | 11.0 | 64.1 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest expense | (8.4 | ) | (7.4 | ) | (2.6 | ) | (n | ) | (18.4 | ) | ||||||||||
Interest income | 0.4 | 0.7 | 1.1 | |||||||||||||||||
Other, net | 0.1 | (0.7 | ) | (0.6 | ) | |||||||||||||||
Total other expense, net | (7.9 | ) | (7.4 | ) | (2.6 | ) | (17.9 | ) | ||||||||||||
Income before income tax | 3.9 | 33.9 | 8.4 | 46.2 | ||||||||||||||||
Income tax provision | (1.4 | ) | (5.9 | ) | (2.2 | ) | (o | ) | (9.5 | ) | ||||||||||
Net income | 2.5 | 28.0 | 6.2 | 36.7 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | 7.6 | 7.6 | |||||||||||||||||
Net income attributable to stockholders | $ | 2.5 | $ | 20.4 | $ | 6.2 | $ | 29.1 | ||||||||||||
Earnings per share attributable to stockholders: | ||||||||||||||||||||
Basic earnings per share | $ | 0.06 | (p | ) | $ | 0.37 | ||||||||||||||
Diluted earnings per share | $ | 0.06 | (p | ) | $ | 0.36 | ||||||||||||||
Weighted average common shares outstanding for earnings per share: | ||||||||||||||||||||
Basic | 43.0 | 36.3 | (p | ) | 79.3 | |||||||||||||||
Diluted | 43.5 | 36.3 | (p | ) | 79.8 |
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For the year ended December 31, 2008
Pro | Pro | |||||||||||||||||||
PCB | Forma | Forma | ||||||||||||||||||
TTM | Business | Adjustments | Note | Combined | ||||||||||||||||
(In millions, except per share amount) | ||||||||||||||||||||
Net sales | $ | 681.0 | $ | 669.4 | $ | 1,350.4 | ||||||||||||||
Cost of goods sold | 544.0 | 532.6 | $ | (15.2 | ) | (l | ) | 1,061.4 | ||||||||||||
Gross profit | 137.0 | 136.8 | 15.2 | 289.0 | ||||||||||||||||
Operating (income) expenses: | ||||||||||||||||||||
Selling and marketing | 30.5 | 17.2 | (0.1 | ) | (l | ) | 47.6 | |||||||||||||
General and administrative | 33.0 | 50.4 | (0.9 | ) | (l | ) | 82.5 | |||||||||||||
Amortization of definite-lived intangibles | 3.8 | 0.4 | 5.7 | (m | ) | 9.9 | ||||||||||||||
Impairment of goodwill and long-lived assets | 123.3 | 2.0 | 125.3 | |||||||||||||||||
Metal reclamation | (3.7 | ) | — | (3.7 | ) | |||||||||||||||
Total operating expenses | 186.9 | 70.0 | 4.7 | 261.6 | ||||||||||||||||
Operating (loss) income | (49.9 | ) | 66.8 | 10.5 | 27.4 | |||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest expense | (11.1 | ) | (14.6 | ) | 1.0 | (n | ) | (24.7 | ) | |||||||||||
Interest income | 1.4 | 2.2 | 3.6 | |||||||||||||||||
Other, net | (1.8 | ) | 18.2 | 16.4 | ||||||||||||||||
Total other expense, net | (11.5 | ) | 5.8 | 1.0 | (4.7 | ) | ||||||||||||||
(Loss) income before income tax | (61.4 | ) | 72.6 | 11.5 | 22.7 | |||||||||||||||
Income tax benefit (provision) | 24.5 | (9.6 | ) | (3.0 | ) | (o | ) | 11.9 | ||||||||||||
Net (loss) income | (36.9 | ) | 63.0 | 8.5 | 34.6 | |||||||||||||||
Net income attributable to noncontrolling interests | — | 12.8 | 12.8 | |||||||||||||||||
Net (loss) income attributable to stockholders | $ | (36.9 | ) | $ | 50.2 | $ | 8.5 | $ | 21.8 | |||||||||||
Earnings per share attributable to stockholders: | ||||||||||||||||||||
Basic (loss) earnings per share | $ | (0.86 | ) | (p | ) | $ | 0.28 | |||||||||||||
Diluted (loss) earnings per share | $ | (0.86 | ) | (p | ) | $ | 0.28 | |||||||||||||
Weighted average common shares outstanding for earnings per share: | ||||||||||||||||||||
Basic | 42.7 | 36.3 | (p | ) | 79.0 | |||||||||||||||
Diluted | 42.7 | 36.3 | (p | ) | 79.0 |
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Note 1. | Basis of Presentation |
Value of TTM shares to be issued | $ | 430.9 | ||
Cash consideration | 114.0 | |||
Assumption of PCB Subsidiaries outstanding debt | 459.9 | |||
Total | $ | 1,004.8 | ||
Current assets | $ | 328.3 | ||
Property, plant, and equipment | 590.0 | |||
Identifiable intangible assets (including customer relationships of $56.8 million, trade name of $10.3 million, and order backlog of $0.3 million) | 67.4 | |||
Goodwill | 293.7 | |||
Other assets | 12.4 | |||
Current liabilities | (181.2 | ) | ||
Noncontrolling interest | (88.8 | ) | ||
Other liabilities | (17.0 | ) | ||
Total | $ | 1,004.8 | ||
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Note 2. | Pro Forma Adjustments |
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Nine Months Ended | Year Ended | |||||||
September 28, | December 31, | |||||||
Basic | 2009 | 2008 | ||||||
Shares used to calculate TTM’s historical basic earnings per share | 43.0 | 42.7 | ||||||
Shares issued in connection with the acquisition of the PCB Subsidiaries | 36.3 | 36.3 | ||||||
Shares used to calculate pro forma basic earnings per share | 79.3 | 79.0 | ||||||
Nine Months Ended | Year Ended | |||||||
September 28, | December 31, | |||||||
Diluted | 2009 | 2008 | ||||||
Shares used to calculate TTM’s historical diluted earnings per share | 43.5 | 42.7 | ||||||
Shares issued in connection with the acquisition of the PCB Subsidiaries | 36.3 | 36.3 | ||||||
Shares used to calculate pro forma diluted earnings per share | 79.8 | 79.0 | ||||||
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Products/Services | Specifications | Major Applications | ||
PCB Products | ||||
Conventional PCBs | Production of conventional PCBs with layers ranging from 2 layers to 56 layers | Electronic products for the communications, computer and computer peripherals, consumer electronics, automotive components, industrial and medical equipment end markets | ||
HDI PCBs | Production of HDI PCB ranging from 4 layers to 20 layers | Hand-held consumer electronic devices, cellular phones, and hand- held medical equipment | ||
Rigid-flex PCBs | Production of 2 to 4 layer flexible circuit boards, and rigid flex circuit boards up to 10 layers | Electronic products for consumer, medical, telecommunications, cellular phone, and data storage applications | ||
IC substrates | Production of IC substrates including CSP, BOC, MCM and SiP using laser technology and ultra fine line processes to meet semiconductor standards | All semiconductor applications, including memory applications, wireless communications and broadband devices, networking and computing equipment, and automotive components | ||
Value-added services | ||||
QTA services | Production of PCBs within a reduced timeframe to meet customers’ time-to-market requirements | QTA services are often used in prototype production and at the new product introduction stage to reduce the time to market of a product | ||
Design and engineering services | Design and engineering services such as PCB and IC substrate layout design and signal integrity simulation | Design and engineering services are provided in the early stages of product development | ||
Drilling and routing | High-speed mechanical drills and routers to drill and route PCBs and IC substrates. Manufacture spare parts for PCB manufacturing equipment | Drilling and routing are manufacturing procedures necessary for the production of PCBs |
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• | Chip Scale Package or CSP— Semiconductor packages with an area of no more than 1.2 times the size of the semiconductor die. Typically, CSPs are used in applications where package thickness, size, and weight must be minimized, such as cellular phones, digital cameras, PDAs, notebook computers, and wearable medical devices. |
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• | Board On Chip or BOC— BOC packages are a specialized CSP type used for advanced high speed memory chips, where electrical resistance must be minimized to ensure high-speed transmission for use in high-speed applications. To achieve this, chips are mounted face-down, with fine-pitch wires passing through a slot in the substrate to connect the chip and substrate with wires of minimum length. | |
• | Multi-Chip Modules or MCM— An MCM is a package consisting of two or more ICs electrically connected to a common circuit base and interconnected by conductors in that base. MCMs combine several semiconductor die and passive components to form a small system, an example of which is a GPS module. It is more reliable than other available technologies and is mainly used in automotive components, GPS navigators, and engine controls. | |
• | System-in-a-Package or SiP— A SiP is a number of integrated circuits enclosed in a single package or module. It is more than an IC package containing multiple die. SiP products are fully functional systems orsub-systems in an IC package format. SiP may contain one or more IC chips (wirebonded or flip-chip) plus other components that are traditionally found on the system mother board. Existing market uses for SiP include RF and wireless devices (such as power amplifiers, GPS modules, cellular, and Bluetooth® solutions), Netbooks, digital baseband solutions for the wireless markets, and controllers for hard drives in the storage market. |
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Layer | ||||||||||||||||||||||
Count | Maximum | Available | ||||||||||||||||||||
Site | Range | Capacity | Capacity | Utilization | ||||||||||||||||||
Plant | Location | Area (sq. ft) | Products | Capability | (sq. ft)(1) | (sq. ft)(2) | Rate(3)(4) | |||||||||||||||
OPCM | Hong Kong | 86,982 | HDI (one-plus layer), conventional PCBs, and IC substrates | 2 layer to 44 layer | 561,600 | 348,000 | 93 | % | ||||||||||||||
SYE | Dongguan, PRC | 494,731 | HDI, conventional PCBs | 2 layer to 56 layer | 6,360,000 | 5,640,000 | 100 | % | ||||||||||||||
DMC | Dongguan, PRC | 1,322,803 | HDI, conventional PCBs | 2 layer to 40 layer | 12,000,000 | 10,320,000 | 97 | % | ||||||||||||||
SME | Shanghai, PRC | 416,761 | HDI (one to four-plus layer), conventional and Rigid-Flexible PCBs | 2 layer to 22 layer | 5,160,000 | 5,040,000 | 92 | % | ||||||||||||||
GME | Guangzhou, PRC | 968,028 | HDI (one and two-plus layer), conventional and Rigid-Flexible PCBs | 2 layer to 12 layer | 3,600,000 | 3,600,000 | 103 | % | ||||||||||||||
MAS | Suzhou, PRC | 1,129,690 | HDI (one and two-plus layer) and conventional PCBs | 2 layer to 20 layer | 3,600,000 | 1,800,000 | 95 | % | ||||||||||||||
SMST | Shanghai, PRC | 521,257 | IC substrates | 2 layer to 6 layer | 1,080,000 | 1,080,000 | 95 | % | ||||||||||||||
SKE | Shanghai, PRC | 135,207 | PCB drilling and routing service | N/A | N/A | N/A | N/A |
(1) | “Maximum capacity” equals Meadville’s largest estimated available monthly capacity from January 1, 2009 through September 30, 2009 multiplied by twelve. Meadville has estimated its available monthly capacity based on certain assumptions, including hours worked, planned product mix, and expected bottlenecks in the production process. | |
(2) | “Available capacity” is the estimated available capacity as of September 30, 2009 multiplied by twelve. Meadville estimates its available capacity at the beginning of each month based on certain assumptions, including hours worked, planned product mix, and expected bottlenecks in the production process. | |
(3) | “Utilization rate” is calculated by dividing the actual square footage of PCB product output in the period from January 1, 2009 through September 30, 2009 by the “available capacity.” | |
(4) | Meadville’s capacity measurements are derived from certain estimates and assumptions that are based on our PCB manufacturing experience. These estimates may not be accurate and therefore Meadville’s actual PCB production capacity in any month or for any other period may differ materially from the estimated available capacity. |
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OEM Customers by Industry Sector | Major End-Products of Meadville’s OEM Customers | |
Communications equipment | Base stations, routers, switches, wired and wireless equipment, and microwave antenna | |
Cellular phones | Cellular phones and accessories | |
Computers and computer peripherals | PC motherboards, notebook computers, hard-disk drives, printers, cable TV set-top peripherals boxes, and network servers | |
High-end consumer electronics | Plasma TVs, LCD TVs, DVD recorders, MP3 players, gaming consoles and digital cameras | |
Industrial and medical equipment | X-ray scans, ultrasound scans, CT scans, MR scans | |
Automotive components | Car audio, GPS navigator components, and engine control units |
Nine Months Ended | ||||||||||||||||||||
For the Year Ended December 31, | September 30, | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
(In millions of HK$) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
PCB Revenue by Application | ||||||||||||||||||||
Sales and Other Operating Revenues | ||||||||||||||||||||
Automotive | $ | 34 | $ | 35 | $ | 53 | $ | 47 | $ | 41 | ||||||||||
Cellular phone | 528 | 1,012 | 1,256 | 968 | 780 | |||||||||||||||
Communication | 842 | 1,268 | 1,725 | 1,286 | 1,345 | |||||||||||||||
Computer | 549 | 643 | 1,015 | 803 | 745 | |||||||||||||||
Consumer | 458 | 568 | 496 | 319 | 236 | |||||||||||||||
Industrial and medical | 168 | 188 | 224 | 169 | 123 | |||||||||||||||
Other | 260 | 395 | 443 | 338 | 235 |
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Nine Months Ended | ||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
(In millions of HK$) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
PCB Revenue by Layer Count | ||||||||||||||||||||
Sales and Other Operating Revenues | ||||||||||||||||||||
2, 4, and 6 layers | $ | 714 | $ | 1,009 | $ | 922 | $ | 693 | $ | 491 | ||||||||||
8, 10, and 12 layers | 952 | 1,336 | 1,768 | 1,394 | 1,219 | |||||||||||||||
14, 16, and 18 layers | 261 | 311 | 438 | 326 | 358 | |||||||||||||||
20 layers and above | 55 | 64 | 110 | 80 | 109 | |||||||||||||||
IC substrates | 70 | 130 | 171 | 139 | 70 | |||||||||||||||
HDI PCBs | 748 | 1,145 | 1,540 | 1,137 | 1,094 | |||||||||||||||
Rigid-flex PCBs | — | — | 74 | 15 | 37 | |||||||||||||||
Value-added services | 39 | 114 | 189 | 146 | 127 |
Year Ended | ||||||||||||||||||||
December 31, | Nine Months Ended September 30, | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
(In millions of HK$) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
PCB Revenue by Geographic Location (the final destination to where the final PCB products of Meadville are delivered) | ||||||||||||||||||||
Sales and Other Operating Revenues | ||||||||||||||||||||
Mainland China | $ | 1,752 | $ | 2,748 | $ | 3,342 | $ | 2,476 | $ | 2,509 | ||||||||||
Europe | 224 | 308 | 468 | 376 | 285 | |||||||||||||||
Hong Kong | 92 | 320 | 325 | 263 | 157 | |||||||||||||||
North Asia | 448 | 278 | 270 | 213 | 118 | |||||||||||||||
Southeast Asia | 140 | 231 | 405 | 282 | 282 | |||||||||||||||
North America | 183 | 224 | 402 | 320 | 154 |
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• | development of semi-additive mSAP3 fine line technology (line/space < 50µm) to be used in HDI PCBs; | |
• | development of semi-additive SAP3 fine line technology (line/space < 20µm) to be used for IC substrates; | |
• | development of a copper additive system for viafilling for Meadville’s pattern plating process; | |
• | development of panel/pattern plating additive system for high aspect ratio through hole and laser micro via plating processes; | |
• | development of manufacturing technology (DALi) to enable production of PCBs of any layer, including very thin plated layers using conventional PCB production machines; | |
• | development of through-hole filling process for any layer structure using resin plugging process; and | |
• | development of mechanical drilling capability for high aspect ratio products. |
• | development of ultra thick PCBs Z-axis interconnection technology to fulfill customers’ future requirements; | |
• | development of board level optical interconnection technology for future high speed product applications; | |
• | development of embedded passive technology including capacitors, resistors, and inductors; | |
• | development of high aspect ratio product capability according to customers’ future requirements, including both plated through-holes and laser microvias; | |
• | development of super copper foil (SCF) technology for fine line patterning according to next generation product requirements; and | |
• | development of rigid-flex and semi-flex technology according to customers’ future requirements. |
• | development of its PCB material portfolio to produce high transmission speed PCB products; | |
• | assessing the impact of lead-free assemblies on PCBs and their thermal resistance, including the reliability assessments for different PCB applications; and | |
• | development of the qualification system to standardize the PCB material qualification. |
• | development of a recycling system for etchant, including both process and equipment development; and | |
• | further development of its mechanical deflection system according to customer and regulatory requirements. |
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Plant | Certification | Year Obtained | ||
OPCM | ISO 9001(1) AS9100(2) | 1995 2009 | ||
SYE | ISO 9001 TS16949(3) | 2002 2006 | ||
DMC | ISO 9001(1) | 2005 | ||
GME | ISO 9001 | 2008 | ||
SME | ISO 9001 TS16949 | 1998 2007 | ||
SMST | ISO 9001 TS16949 | 2003 2005 | ||
SKE | ISO 9001 | 2005 | ||
MAS | ISO 9001 TS16949 | 2001 2003 |
(1) | ISO 9001 relates to the implementation of a quality management system for product quality assurance. | |
(2) | AS9100 relates to the implementation of a quality management system for product quality assurance in the aerospace industry. | |
(3) | TS 16949 relates to the implementation of a quality management system for product quality assurance in the automotive industry. |
• | Purchasing control— many of Meadville’s suppliers are ISO 9001 approved and undergo a supplier evaluation process before being admitted to its approved vendor list; raw materials may also be physically inspected by quality assurance staff. | |
• | Production control— each production plant operates under controlled conditions, including controls over the key aspects of manpower, machinery, materials, method, and environment. Each of these involve a number of considerations, such as a maintenance program, a procedure for the identification and traceability of products throughout the production process, and protection of products during transportation, packing, storage, and delivery. | |
• | Statistical process control (“SPC”)— all key processes are monitored and improved using SPC to maintain process stability. SPC is also used to control key product parameters. | |
• | 100% reliability testing — each finished product is tested at a number of points during the production process for defects, reliability, and compliance with customer requirements. External laboratories are also used to verify product reliability and conformity with customer requirements. Certain of Meadville’s products are certified by UL, at the request of its customers, for which UL conducts independent testing. |
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Regular | Temporary | |||||||||||
Employees | Employees | Total | ||||||||||
As of December 31, | ||||||||||||
2006 | 7,669 | — | 7,669 | |||||||||
2007 | 11,112 | — | 11,112 | |||||||||
2008 | 9,760 | — | 9,760 | |||||||||
As of September 30, | ||||||||||||
2009 | 11,233 | 1,458 | 12,691 |
Function | Regular | Temporary | Total | |||||||||
Finance/Legal/Secretarial | 132 | — | 132 | |||||||||
General Management | 31 | — | 31 | |||||||||
Human Resource/Administration | 538 | — | 538 | |||||||||
Information Technology | 61 | — | 61 | |||||||||
Logistics/Production Planning/Store | 510 | — | 510 | |||||||||
Engineering | 1,424 | — | 1,424 | |||||||||
Procurement | 38 | — | 38 | |||||||||
Production | 5,979 | 1,458 | 7,437 | |||||||||
Quality Assurance/Quality Control | 2,159 | — | 2,159 | |||||||||
Research & Development | 125 | — | 125 | |||||||||
Sales & Marketing | 224 | — | 224 | |||||||||
System & Process Assurance | 12 | — | 12 | |||||||||
Total | 11,233 | 1,458 | 12,691 | |||||||||
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Percentage of | ||||||||
Effective Ownership | ||||||||
Place of | by Meadville’s PCB | |||||||
Company | Incorporation | Business Activity | Business | |||||
ACP Electronics Co., Ltd.(2) | Mainland China | Manufacturing and sales of high precision PCB | 80 | % | ||||
Dongguan Meadville Circuits Limited(2) | Mainland China | Manufacturing of PCB | 80 | % | ||||
Dongguan Shengyi Electronics Ltd.(2) | Mainland China | Manufacturing, sales and distribution of PCB | 70.2 | % | ||||
Guangzhou Meadville Electronics Co., Ltd.(2) | Mainland China | Manufacturing of PCB | 100 | % | ||||
OPC Manufacturing Limited | Hong Kong | Manufacturing of PCB | 100 | % | ||||
Meadville Innovations (Shanghai) Co., Ltd.(2) | Mainland China | Provision of PCB design services | 100 | % | ||||
Meadville International Trading (Shanghai) Co., Ltd.(2) | Mainland China | Trading of PCB and liaison office | 100 | % | ||||
Meadville Enterprises (HK) Limited | Hong Kong | Administration and treasury | 100 | % | ||||
Mica-Ava China Limited | Hong Kong | Investment holding | 100 | % | ||||
Meadville Aspocomp Limited | Hong Kong | Sales and distribution of PCB | 80 | % | ||||
MTG Investment (BVI) Limited(1) | British Virgin Islands | Investment holding | 100 | % | ||||
MTG PCB (BVI) Limited | British Virgin Islands | Investment holding | 100 | % | ||||
MTG (PCB) No. 2 (BVI) Limited | British Virgin Islands | Investment holding | 100 | % | ||||
Oriental Printed Circuits Limited | Hong Kong | Sales and distribution of PCB | 100 | % | ||||
Shanghai Kaiser Electronics Co., Ltd.(2) | Mainland China | Provision of PCB drilling service | 100 | % | ||||
Shanghai Meadville Electronics Co., Ltd.(2) | Mainland China | Manufacturing of PCB | 100 | % | ||||
Shanghai Meadville Science and Technology Co., Ltd.(2) | Mainland China | Research and development of high-end multi-layer PCB | 100 | % |
(1) | Direct subsidiary. | |
(2) | Foreign investment enterprise in the PRC. |
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Year Ended December 31, | Nine Months Ended Sept. 30, | |||||||||||||||||||
2008 | 2007 | 2006 | 2009 | 2008 | ||||||||||||||||
(In millions of HK$) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(HKFRS) | ||||||||||||||||||||
Combined Statement of Operations Data: | ||||||||||||||||||||
Revenue | $ | 5,212.4 | $ | 4,108.6 | $ | 2,838.8 | $ | 3,505.4 | $ | 3,930.2 | ||||||||||
Cost of sales | (4,205.0 | ) | (3,150.2 | ) | (2,261.4 | ) | (2,844.5 | ) | (3,156.8 | ) | ||||||||||
Gross profit | 1,007.4 | 958.4 | 577.4 | 660.9 | 773.4 | |||||||||||||||
Other income | 158.8 | 161.3 | 87.2 | 91.7 | 125.2 | |||||||||||||||
Selling and distribution expenses | (227.4 | ) | (199.8 | ) | (118.9 | ) | (164.2 | ) | (179.1 | ) | ||||||||||
General and administrative expenses | (259.7 | ) | (200.9 | ) | (129.5 | ) | (276.3 | ) | (140.3 | ) | ||||||||||
Share award expenses | (10.6 | ) | (226.1 | ) | — | (9.9 | ) | (8.4 | ) | |||||||||||
Operating profit | 668.5 | 492.9 | 416.2 | 302.2 | 570.8 | |||||||||||||||
Interest income | 17.4 | 28.5 | 5.9 | 5.2 | 13.0 | |||||||||||||||
Finance costs | (129.4 | ) | (104.3 | ) | (78.0 | ) | (63.8 | ) | (94.5 | ) | ||||||||||
Profit before income tax | 556.5 | 417.1 | 344.1 | 243.6 | 489.3 | |||||||||||||||
Income tax expense | (72.9 | ) | (64.2 | ) | (41.6 | ) | (45.0 | ) | (76.9 | ) | ||||||||||
Profit for the year/period | $ | 483.6 | $ | 352.9 | $ | 302.5 | $ | 198.6 | $ | 412.4 | ||||||||||
of which, attributable to shareholders of Meadville | $ | 376.0 | $ | 246.0 | $ | 239.7 | $ | 127.2 | $ | 336.3 | ||||||||||
of which, attributable to minority interests | $ | 107.6 | $ | 106.9 | $ | 62.8 | $ | 71.4 | $ | 76.1 | ||||||||||
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As of | ||||||||||||||||
As of December 31, | September 30, | |||||||||||||||
2008 | 2007 | 2006 | 2009 | |||||||||||||
(In millions of HK$) | ||||||||||||||||
(HKFRS) | ||||||||||||||||
Combined Balance Sheet Data: | ||||||||||||||||
Inventories | $ | 427.0 | $ | 398.4 | $ | 266.6 | $ | 457.6 | ||||||||
Debtors and prepayments | 1,163.7 | 1,480.9 | 1,114.9 | 1,083.8 | ||||||||||||
Other current assets | 19.3 | 3.5 | 1.1 | 24.1 | ||||||||||||
Amounts due from related parties | 390.2 | 284.4 | — | 13.9 | ||||||||||||
Amount due from a minority shareholder | — | 39.1 | — | — | ||||||||||||
Cash and bank balances | 797.9 | 402.8 | 165.0 | 849.0 | ||||||||||||
Current assets | 2,798.1 | 2,609.1 | 1,547.6 | 2,428.4 | ||||||||||||
Property, plant and equipment | 4,941.8 | 3,821.4 | 1,893.7 | 4,840.6 | ||||||||||||
Leasehold land and land use rights | 147.3 | 143.0 | 83.0 | 144.6 | ||||||||||||
Intangible assets | 22.2 | 149.9 | 22.6 | 21.3 | ||||||||||||
Other non-current assets | 94.1 | 34.3 | 0.1 | 92.6 | ||||||||||||
Total assets | $ | 8,003.5 | $ | 6,757.7 | $ | 3,547.0 | $ | 7,527.5 | ||||||||
Creditors and accruals | $ | 1,388.4 | $ | 1,270.8 | $ | 711.3 | $ | 1,060.4 | ||||||||
Borrowings | 823.0 | 908.3 | 905.2 | 609.8 | ||||||||||||
Amounts due to associated companies and related parties | 744.8 | 394.9 | 495.0 | 165.7 | ||||||||||||
Amount due to a minority shareholder | 169.7 | 173.7 | 119.9 | 122.3 | ||||||||||||
Other current liabilities | 15.1 | 25.6 | 16.9 | 25.3 | ||||||||||||
Current liabilities | 3,141.0 | 2,773.3 | 2,248.3 | 1,983.5 | ||||||||||||
Borrowings | 2,763.2 | 1,679.1 | 667.6 | 2,954.7 | ||||||||||||
Other non-current liabilities | 322.7 | 445.2 | — | 275.4 | ||||||||||||
Equity attributable to shareholders | 1,371.2 | 1,524.3 | 433.6 | 1,779.3 | ||||||||||||
Total shareholders’ equity | $ | 1,776.6 | $ | 1,860.1 | $ | 631.1 | $ | 2,313.9 | ||||||||
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Nine Months Ended | ||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||
2008 | 2007 | 2009 | 2008 | |||||||||||||
(In millions of HK$) | ||||||||||||||||
(U.S. GAAP)(1) | ||||||||||||||||
Combined Statement of Operations Data: | ||||||||||||||||
Revenue | $ | 5,212.4 | $ | 4,108.6 | $ | 3,505.4 | $ | 3,930.2 | ||||||||
Operating expenses | (4,550.0 | ) | (3,615.3 | ) | (3,190.7 | ) | (3,356.3 | ) | ||||||||
Operating profit | 662.4 | 493.3 | 314.7 | 573.9 | ||||||||||||
Profit for the year/period | 491.5 | 353.2 | 217.0 | 428.9 | ||||||||||||
Profit attributable to shareholders | 391.9 | 246.6 | 157.9 | 354.4 | ||||||||||||
Profit attributable to minority interests | 99.6 | 106.6 | 59.1 | 74.5 |
As of | ||||||||||||
As of December 31, | September 30, | |||||||||||
2008 | 2007 | 2009 | ||||||||||
(In millions of HK$) | ||||||||||||
(U.S. GAAP)(1) | ||||||||||||
Combined Balance Sheet Data: | ||||||||||||
Current assets | $ | 2,798.1 | $ | 2,609.1 | $ | 2,428.4 | ||||||
Property, plant and equipment | 4,889.0 | 3,768.4 | 4,791.1 | |||||||||
Total assets | 7,964.5 | 6,606.3 | 7,494.9 | |||||||||
Current liabilities, excluding current portion of borrowings | 2,318.0 | 1,865.0 | 1,373.7 | |||||||||
Borrowings | 3,586.2 | 2,587.4 | 3,564.5 | |||||||||
Equity attributable to shareholders | 1,352.1 | 1,519.4 | 1,768.5 | |||||||||
Total shareholders’ equity | 1,903.6 | 1,988.8 | 2,457.0 |
(1) | For further details, see Note 35 in the audited combined financial statements of the PCB Business. |
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AND RESULTS OF OPERATIONS OF THE PCB BUSINESS OF MEADVILLE
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• | their future results of operations, financial condition and cash flows; | |
• | the condition of the global economy generally and the markets for their products, specifically; and | |
• | the cost of financing and the condition of financial markets. |
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Buildings | 22 to 25 years | |
Leasehold improvements | 22 to 25 years | |
Furniture and equipment | 5 to 6 years | |
Plant, machinery and equipment | 10 to 12 years | |
Motor vehicles | 5 to 6 years |
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• | assets and liabilities for each statement of financial position presented are translated at the closing rate at the end of each reporting period; | |
• | income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and | |
• | all resulting exchange differences are recognized as a separate component of equity. |
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Year Ended | Nine Months Ended | |||||||||||||||||||
December 31, | September 30, | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
(In millions of HK$) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(HKFRS) | ||||||||||||||||||||
PCB Revenue by application | ||||||||||||||||||||
Sales and Other Operating Revenues | ||||||||||||||||||||
Automotive | $ | 34 | $ | 35 | $ | 53 | $ | 47 | $ | 41 | ||||||||||
Cellular phone | 528 | 1,012 | 1,256 | 968 | 780 | |||||||||||||||
Communication | 842 | 1,268 | 1,725 | 1,286 | 1,345 | |||||||||||||||
Computer | 549 | 643 | 1,015 | 803 | 745 | |||||||||||||||
Consumer | 458 | 568 | 496 | 319 | 236 | |||||||||||||||
Industrial and medical | 168 | 188 | 224 | 169 | 123 | |||||||||||||||
Other | 260 | 395 | 443 | 338 | 235 |
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Year Ended | Nine Months Ended | |||||||||||||||||||
December 31, | September 30, | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
(In millions of HK$) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(HKFRS) | ||||||||||||||||||||
PCB Revenue by geographical locations (the final destination to where the final products are delivered) | ||||||||||||||||||||
Sales and Other Operating Revenues | ||||||||||||||||||||
Mainland China | $ | 1,752 | $ | 2,748 | $ | 3,342 | $ | 2,476 | $ | 2,509 | ||||||||||
Europe | 224 | 308 | 468 | 376 | 285 | |||||||||||||||
Hong Kong | 92 | 320 | 325 | 263 | 157 | |||||||||||||||
North Asia | 448 | 278 | 270 | 213 | 118 | |||||||||||||||
Southeast Asia | 140 | 231 | 405 | 282 | 282 | |||||||||||||||
North America | 183 | 224 | 402 | 320 | 154 |
• | sales of scrap such as copper foil, plated scrap boards, gold solution, and other unusable raw materials; | |
• | investment tax credits; and | |
• | tooling charges related to PCB engineering and testing services and the production of PCB moulds. |
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Year Ended December 31, | Nine Months Ended September 30, | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
(In thousands of HK$) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Net cash inflow from operating activities | $ | 339,389 | $ | 1,102,251 | $ | 1,391,372 | $ | 713,537 | $ | 307,046 | ||||||||||
Net cash outflow from investing activities | (665,482 | ) | (1,930,754 | ) | (1,344,974 | ) | (1,054,617 | ) | (264,174 | ) | ||||||||||
Net cash inflow from financing activities | 298,550 | 1,138,308 | 332,008 | 310,187 | 31,825 | |||||||||||||||
Net (decrease)/increase in cash and cash equivalents | $ | (27,543 | ) | $ | 309,805 | $ | 378,406 | $ | (30,893 | ) | $ | 74,697 | ||||||||
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As of | ||||||||||||||||
As of December 31, | September 30, | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
(In thousands of HK$) | ||||||||||||||||
Non-Current | $ | 667,600 | $ | 1,679,147 | $ | 2,763,230 | $ | 2,954,662 | ||||||||
Current | 905,236 | 908,288 | 823,013 | 609,794 | ||||||||||||
Total | $ | 1,572,836 | $ | 2,587,435 | $ | 3,586,243 | $ | 3,564,456 | ||||||||
As of | ||||||||||||||||
As of December 31, | September 30, | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
(In thousands of HK$) | ||||||||||||||||
Secured | $ | — | $ | — | $ | — | $ | — | ||||||||
Unsecured | 1,572,836 | 2,587,435 | 3,586,243 | 3,564,456 | ||||||||||||
Total | $ | 1,572,836 | $ | 2,587,435 | $ | 3,586,243 | $ | 3,564,456 | ||||||||
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As of | ||||||||||||||||
As of December 31, | September 30, | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
(In thousands of HK$) | ||||||||||||||||
Raw materials | $ | 81,982 | $ | 121,233 | $ | 150,286 | $ | 159,529 | ||||||||
Work in progress | 77,617 | 114,755 | 101,448 | 132,171 | ||||||||||||
Finished goods | 103,841 | 161,860 | 173,315 | 161,230 | ||||||||||||
Consumable stock | 3,125 | 572 | 2,004 | 4,639 | ||||||||||||
Total | $ | 266,565 | $ | 398,420 | $ | 427,053 | $ | 457,569 | ||||||||
Inventory turnover days | 38 | 39 | 36 | 42 | ||||||||||||
Note: | The number of days of inventory turnover is equal to the average inventory (being the inventory balance at the beginning of the year or period plus the inventory balance at the end of the year or period, divided by 2) divided by the cost of sales for the corresponding year or period and then multiplied by 365 for each of the three years ended December 31, 2006, 2007, and 2008 or 273 for the nine months ended September 30, 2009. |
Nine Months Ended | ||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
(In thousands of HK$) | ||||||||||||||||||||
Cost of inventories | $ | 2,249,110 | $ | 3,137,705 | $ | 4,198,374 | $ | 3,151,242 | $ | 2,846,842 | ||||||||||
As of | ||||||||||||||||
As of December 31, | September 30, | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
(In thousands of HK$) | ||||||||||||||||
Debtors | $ | 1,019,129 | $ | 1,368,801 | $ | 986,983 | $ | 958,917 | ||||||||
Prepayments and other receivables | 95,781 | 112,052 | 176,689 | 124,842 | ||||||||||||
Total | $ | 1,114,910 | $ | 1,480,853 | $ | 1,163,672 | $ | 1,083,759 | ||||||||
Debtors turnover days | 118 | 106 | 82 | 76 | ||||||||||||
Note: | The number of days of debtors turnover is equal to the average debtor balance (being the debtor balance at the beginning of the year or period plus the debtor balance at the end of the year or period, divided by 2) divided by the revenue for the corresponding year or period and then multiplied by 365 for each of the three years ended December 31, 2006, 2007, and 2008 or 273 for the nine months ended September 30, 2009. |
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As of December 31, | As of September 30, | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
(In thousands of HK$) | ||||||||||||||||
Creditors | $ | 329,574 | $ | 598,331 | $ | 667,797 | $ | 571,752 | ||||||||
Accruals | 381,683 | 672,426 | 720,622 | 488,643 | ||||||||||||
Total | $ | 711,257 | $ | 1,270,757 | $ | 1,388,419 | $ | 1,060,395 | ||||||||
Creditors turnover days | 53 | 54 | 55 | 59 | ||||||||||||
Note: | The number of days of creditors turnover is equal to the average creditor balance (being the creditor balance at the beginning of the year or period plus the creditor balance at the end of the year or period, divided by 2) divided by the cost of sales for the corresponding year or period and then multiplied by 365 for each of the three years ended December 31, 2006, 2007, and 2008 or 273 for the nine months ended September 30, 2009. |
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As of | ||||||||||||||||
As of December 31, | September 30, | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
(In thousands of HK$) | ||||||||||||||||
Current assets | $ | 1,547,568 | $ | 2,609,123 | $ | 2,798,110 | $ | 2,428,419 | ||||||||
Current liabilities | (2,248,305 | ) | (2,773,252 | ) | (3,140,986 | ) | (1,983,451 | ) | ||||||||
Net current (liabilities)/assets | $ | (700,737 | ) | $ | (164,129 | ) | $ | (342,876 | ) | $ | 444,968 | |||||
Quick ratio | 0.57 | 0.80 | 0.75 | 0.99 | ||||||||||||
Note: | Quick ratio is equal to current assets (net of inventories) divided by current liabilities. |
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Less than | More than | |||||||||||||||||||
Total | 1 Year | 1 - 3 Years | 3 - 5 Years | 5 Years | ||||||||||||||||
(In thousands of HK$) | ||||||||||||||||||||
Long-term debt obligations | $ | 3,122,212 | $ | 358,982 | $ | 1,448,099 | $ | 1,315,131 | $ | — | ||||||||||
Interest on long-term debt obligations(1) | 108,474 | 42,570 | 58,670 | 7,234 | — | |||||||||||||||
Operating leases | 24,078 | 2,391 | 1,468 | 1,524 | 18,695 | |||||||||||||||
Capital commitment in respect of property, plant and equipment | 332,771 | 332,611 | 160 | — | — | |||||||||||||||
Other long-term liabilities reflected on the balance sheet under HKFRS | 243,184 | — | 55,354 | 187,830 | — | |||||||||||||||
Interest on other long-term liabilities reflected on the balance sheet under HKFRS(1) | 42,444 | 9,289 | 21,844 | 11,311 | — | |||||||||||||||
Total contractual obligations | $ | 3,873,163 | $ | 745,843 | $ | 1,585,595 | $ | 1,523,030 | $ | 18,695 | ||||||||||
(1) | The respective interest payments are estimated based on the liabilities outstanding and the applicable interest rates as of December 31, 2008. |
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As of September 30, 2009 | ||||||||
Average | ||||||||
Notional | Contract Rate or | |||||||
Amount | Strike Amount | |||||||
(In thousands of US$) | ||||||||
Receive foreign currency/pay US$ | ||||||||
Euro | 22,695 | 1.30 | ||||||
Japanese Yen | 485 | 0.01 | ||||||
Total | 23,180 | |||||||
Estimated Fair Value | 2,941 | |||||||
As of December 31, 2008 | ||||||||||||||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||||||||||
Maturing in | Fair Market | Interest | ||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | Value | Rate | ||||||||||||||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||||||||||||||||||
Variable Rate: | ||||||||||||||||||||||||||||||||||||
US$ | $ | 32,435 | $ | 33,876 | $ | 84,864 | $ | 149,925 | $ | 6,350 | — | $ | 307,450 | $ | 341,397 | 4.31% | ||||||||||||||||||||
HK$ | 12,721 | 31,208 | 34,218 | 13,421 | — | — | 91,568 | 95,889 | 4.16% | |||||||||||||||||||||||||||
RMB | 56,359 | 2,688 | — | — | — | — | 59,047 | 59,147 | 5.85% | |||||||||||||||||||||||||||
Total Variable Rate | 101,515 | 67,772 | 119,082 | 163,346 | 6,350 | — | 458,065 | 496,433 | ||||||||||||||||||||||||||||
Fixed Rate: | ||||||||||||||||||||||||||||||||||||
RMB | 4,682 | — | — | — | — | — | 4,682 | 4,682 | 6.57% | |||||||||||||||||||||||||||
Total Fixed Rate | 4,682 | — | — | — | — | — | 4,682 | 4,682 | ||||||||||||||||||||||||||||
Total | $ | 106,197 | $ | 67,772 | $ | 119,082 | $ | 163,346 | $ | 6,350 | — | $ | 462,747 | $ | 501,115 | |||||||||||||||||||||
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As of September 30, 2009 | ||||||||||||||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||||||||||
Maturing in | Fair Market | Interest | ||||||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | Value | Rate | ||||||||||||||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||||||||||||||||||
Variable Rate: | ||||||||||||||||||||||||||||||||||||
US$ | $ | 7,892 | $ | 34,872 | $ | 109,482 | $ | 177,195 | $ | 7,587 | — | $ | 337,028 | $ | 337,288 | 1.48% | ||||||||||||||||||||
HK$ | 4,359 | 31,526 | 37,051 | 16,406 | 1,323 | — | 90,665 | 90,725 | 0.97% | |||||||||||||||||||||||||||
RMB | 15,372 | — | 10,248 | 3,660 | — | — | 29,280 | 29,827 | 4.94% | |||||||||||||||||||||||||||
Total Variable Rate | 27,623 | 66,398 | 156,781 | 197,261 | 8,910 | — | 456,973 | 457,840 | ||||||||||||||||||||||||||||
Fixed Rate: | ||||||||||||||||||||||||||||||||||||
RMB | 2,928 | — | — | — | — | — | 2,928 | 2,928 | 5.30% | |||||||||||||||||||||||||||
Total Fixed Rate | 2,928 | — | — | — | — | — | 2,928 | 2,928 | ||||||||||||||||||||||||||||
Total | $ | 30,551 | $ | 66,398 | $ | 156,781 | $ | 197,261 | $ | 8,910 | — | $ | 459,901 | $ | 460,768 | |||||||||||||||||||||
As of December 31, 2008 | Fair | |||||||||||||||||||
2009 | 2010 | 2011 | 2012 | Value | ||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||
Average interest payout rate | 3.07 | % | 3.43 | % | 3.43 | % | 3.43 | % | ||||||||||||
Interest payout amount | (2,816 | ) | (1,372 | ) | (1,066 | ) | (345 | ) | ||||||||||||
Average interest receive rate | 1.34 | % | 1.34 | % | 1.34 | % | 1.34 | % | ||||||||||||
Interest receive amount | 1,244 | 534 | 415 | 134 | ||||||||||||||||
Fair value loss at December 31, 2008 | (3,273 | ) |
As of September 30, 2009 | Fair | |||||||||||||||||||
2009 | 2010 | 2011 | 2012 | Value | ||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||
Average interest payout rate | 3.15 | % | 3.43 | % | 3.43 | % | 3.43 | % | ||||||||||||
Interest payout amount | (569 | ) | (1,372 | ) | (1,066 | ) | (345 | ) | ||||||||||||
Average interest receive rate | 1.15 | % | 1.15 | % | 1.15 | % | 1.15 | % | ||||||||||||
Interest receive amount | 210 | 458 | 356 | 115 | ||||||||||||||||
Fair value loss at September 30, 2009 | (2,060 | ) |
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• | a sale to one or more underwriters for resale to the public or to institutional investors in one or more transactions; | |
• | a block trade, in which Meadville or a broker or dealer attempts to sell the TTM shares as agent but may position and resell a portion of the TTM shares as principal to facilitate the transaction; | |
• | purchases by a broker or dealer as principal and the subsequent sale by such broker or dealer for its account pursuant to this prospectus; | |
• | ordinary brokerage transactions (which may include long or short sales) and transactions in which the broker solicits purchasers; | |
• | the writing (sale) of put or call options on the TTM shares; | |
• | the pledging of the TTM shares as collateral to secure loans, credit, or other financing arrangements and subsequent foreclosure, and the disposition of the TTM shares by the lender thereunder; | |
• | an exchange distribution in accordance with the rules of the applicable stock exchange; | |
• | privately negotiated transactions; | |
• | settlement of short sales entered into after the date of this prospectus; | |
• | a combination of any such methods of sale; and | |
• | any other legally available means. |
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164
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• | Annual Report onForm 10-K for the year ended December 31, 2008 filed with the SEC on March 16, 2009. | |
• | Quarterly Report onForm 10-Q for the quarter ended March 30, 2009 filed with the SEC on May 11, 2009. | |
• | Quarterly Report onForm 10-Q for the quarter ended June 29, 2009 filed with the SEC on August 7, 2009. | |
• | Quarterly Report onForm 10-Q for the quarter ended September 28, 2009, filed with the SEC on November 6, 2009. | |
• | Current Reports onForm 8-K filed with the SEC on January 16, 2009, February 19, 2009, April 28, 2009, September 4, 2009, November 16, 2009, December 15, 2009, and December 23, 2009. | |
• | The description of our common stock contained in our registration statement on Form8-A (RegistrationNo. 000-31285) filed on August 8, 2000, as amended byForm 8-A/A filed on August 31, 2005, including any amendments or reports filed for the purpose of updating that description. | |
• | All documents filed by us under Section 13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of this proxy statement/prospectus and before the termination of this offering. |
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OF THE PRINTED CIRCUIT BOARD BUSINESS
OF MEADVILLE HOLDINGS LIMITED
Page No. | ||
F-2 | ||
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 | ||
F-10 |
F-1
Table of Contents
F-2
Table of Contents
Nine Months Ended | ||||||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||||||
Note | 2006 | 2007 | 2008 | 2008 | 2009 | |||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Revenue | 5 | 2,838,773 | 4,108,638 | 5,212,437 | 3,930,212 | 3,505,389 | ||||||||||||||||||
Cost of sales | 9 | (2,261,374 | ) | (3,150,277 | ) | (4,205,020 | ) | (3,156,792 | ) | (2,844,527 | ) | |||||||||||||
Gross profit | 577,399 | 958,361 | 1,007,417 | 773,420 | 660,862 | |||||||||||||||||||
Other income | 6 | 87,226 | 161,330 | 158,810 | 125,233 | 91,733 | ||||||||||||||||||
Selling and distribution expenses | 9 | (118,899 | ) | (199,790 | ) | (227,397 | ) | (179,097 | ) | (164,209 | ) | |||||||||||||
General and administrative expenses | 9 | (129,493 | ) | (200,869 | ) | (259,762 | ) | (140,314 | ) | (276,255 | ) | |||||||||||||
Share award expenses | 7, 9 | — | (226,097 | ) | (10,601 | ) | (8,404 | ) | (9,897 | ) | ||||||||||||||
Operating profit | 416,233 | 492,935 | 668,467 | 570,838 | 302,234 | |||||||||||||||||||
Interest income | 10 | 5,871 | 28,507 | 17,440 | 13,010 | 5,192 | ||||||||||||||||||
Finance costs | 11 | (77,974 | ) | (104,311 | ) | (129,359 | ) | (94,503 | ) | (63,759 | ) | |||||||||||||
Profit before income tax | 344,130 | 417,131 | 556,548 | 489,345 | 243,667 | |||||||||||||||||||
Income tax expense | 12 | (41,577 | ) | (64,193 | ) | (72,895 | ) | (76,927 | ) | (45,002 | ) | |||||||||||||
Profit for the year/period | 302,553 | 352,938 | 483,653 | 412,418 | 198,665 | |||||||||||||||||||
Attributable to: | ||||||||||||||||||||||||
Equity holders of the PCB Business | 239,762 | 246,094 | 376,071 | 336,258 | 127,245 | |||||||||||||||||||
Minority interests | 62,791 | 106,844 | 107,582 | 76,160 | 71,420 | |||||||||||||||||||
302,553 | 352,938 | 483,653 | 412,418 | 198,665 | ||||||||||||||||||||
F-3
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Profit for the year/period | 302,553 | 352,938 | 483,653 | 412,418 | 198,665 | |||||||||||||||
Other comprehensive income | ||||||||||||||||||||
Exchange differences | 43,235 | 100,657 | 82,304 | 107,037 | 2,736 | |||||||||||||||
Fair value (loss)/gain ofavailable-for-sale financial asset | — | — | (454 | ) | 3,564 | (2,921 | ) | |||||||||||||
Cash flow hedge | ||||||||||||||||||||
— change in fair value of hedging instruments | — | — | — | — | 22,796 | |||||||||||||||
— transfer to income statement upon change in fair value of hedged items | — | — | — | — | (17,226 | ) | ||||||||||||||
— transfer to property, plant and equipment | — | — | — | — | (178 | ) | ||||||||||||||
Other comprehensive income for the year/period, net of tax | 43,235 | 100,657 | 81,850 | 110,601 | 5,207 | |||||||||||||||
Total comprehensive income for the year/period | 345,788 | 453,595 | 565,503 | 523,019 | 203,872 | |||||||||||||||
Total comprehensive income attributable to: | ||||||||||||||||||||
Equity holders of the PCB Business | 276,899 | 327,997 | 436,370 | 422,897 | 132,083 | |||||||||||||||
Minority interests | 68,889 | 125,598 | 129,133 | 100,122 | 71,789 | |||||||||||||||
345,788 | 453,595 | 565,503 | 523,019 | 203,872 | ||||||||||||||||
F-4
Table of Contents
At | ||||||||||||||||||||
At 31 December | 30 September | |||||||||||||||||||
Note | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||||
ASSETS | ||||||||||||||||||||
Non-current assets | ||||||||||||||||||||
Property, plant and equipment | 14 | 1,893,672 | 3,821,412 | 4,941,778 | 4,840,601 | |||||||||||||||
Leasehold land and land use rights | 15 | 83,045 | 143,042 | 147,256 | 144,567 | |||||||||||||||
Intangible assets | 16 | 22,561 | 149,899 | 22,159 | 21,292 | |||||||||||||||
Available-for-sale financial asset | 17 | — | 21,089 | 20,635 | 17,714 | |||||||||||||||
Derivative financial instruments | 24 | — | — | — | 22,358 | |||||||||||||||
Deferred tax assets | 25 | 155 | 13,124 | 32,517 | 42,437 | |||||||||||||||
Loan to a fellow subsidiary | 30 | — | — | 41,074 | 10,076 | |||||||||||||||
1,999,433 | 4,148,566 | 5,205,419 | 5,099,045 | |||||||||||||||||
Current assets | ||||||||||||||||||||
Inventories | 18 | 266,565 | 398,420 | 427,053 | 457,569 | |||||||||||||||
Debtors and prepayments | 19 | 1,114,910 | 1,480,853 | 1,163,672 | 1,083,759 | |||||||||||||||
Derivative financial instruments | 24 | — | — | — | 438 | |||||||||||||||
Amounts due from fellow subsidiaries | 30 | — | 244,296 | 390,242 | 13,889 | |||||||||||||||
Amount due from intermediate holding company | 31 | — | 40,177 | — | — | |||||||||||||||
Amount due from a minority shareholder | 29 | — | 39,055 | — | — | |||||||||||||||
Taxation recoverable | 1,129 | 3,500 | 19,269 | 23,752 | ||||||||||||||||
Cash and bank balances | 21 | 164,964 | 402,822 | 797,874 | 849,012 | |||||||||||||||
1,547,568 | 2,609,123 | 2,798,110 | 2,428,419 | |||||||||||||||||
Total assets | 3,547,001 | 6,757,689 | 8,003,529 | 7,527,464 | ||||||||||||||||
Equity | ||||||||||||||||||||
Capital and reserves | 22 | 433,621 | 1,524,327 | 1,371,198 | 1,779,298 | |||||||||||||||
Minority interests in equity | 197,475 | 335,728 | 405,411 | 534,598 | ||||||||||||||||
Total equity | 631,096 | 1,860,055 | 1,776,609 | 2,313,896 | ||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||
Borrowings | 23 | 667,600 | 1,679,147 | 2,763,230 | 2,954,662 | |||||||||||||||
Derivative financial instruments | 24 | — | — | 17,350 | 13,944 | |||||||||||||||
Deferred tax liabilities | 25 | — | 65,183 | 79,520 | 74,779 | |||||||||||||||
Financial liabilities | 26 | — | 264,394 | 151,270 | 161,758 | |||||||||||||||
Long-term other payables | 27 | — | 115,658 | 74,564 | 24,974 | |||||||||||||||
667,600 | 2,124,382 | 3,085,934 | 3,230,117 | |||||||||||||||||
Current liabilities | ||||||||||||||||||||
Creditors and accruals | 28 | 711,257 | 1,270,757 | 1,388,419 | 1,060,395 | |||||||||||||||
Amounts due to fellow subsidiaries | 30 | 66,454 | 99,838 | 88,481 | 97,952 | |||||||||||||||
Amount due to immediate holding company | 31 | — | 290,000 | 643,961 | 49,492 | |||||||||||||||
Amount due to a related party | 20 | 417,859 | — | — | — | |||||||||||||||
Amount due to a minority shareholder | 29 | 119,918 | 173,677 | 169,659 | 122,334 | |||||||||||||||
Amount due to a subsidiary of a minority shareholder | 29 | 10,716 | 5,040 | 12,338 | 18,251 | |||||||||||||||
Borrowings | 23 | 905,236 | 908,288 | 823,013 | 609,794 | |||||||||||||||
Derivative financial instruments | 24 | — | — | 8,015 | 2,023 | |||||||||||||||
Taxation payable | 16,865 | 25,652 | 7,100 | 23,210 | ||||||||||||||||
2,248,305 | 2,773,252 | 3,140,986 | 1,983,451 | |||||||||||||||||
Total liabilities | 2,915,905 | 4,897,634 | 6,226,920 | 5,213,568 | ||||||||||||||||
Total equity and liabilities | 3,547,001 | 6,757,689 | 8,003,529 | 7,527,464 | ||||||||||||||||
Net current (liabilities)/assets | (700,737 | ) | (164,129 | ) | (342,876 | ) | 444,968 | |||||||||||||
Total assets less current liabilities | 1,298,696 | 3,984,437 | 4,862,543 | 5,544,013 | ||||||||||||||||
F-5
Table of Contents
Nine Months Ended | ||||||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||||||
Note | 2006 | 2007 | 2008 | 2008 | 2009 | |||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||||||
Profit before income tax | 344,130 | 417,131 | 556,548 | 489,345 | 243,667 | |||||||||||||||||||
Adjustments for: | ||||||||||||||||||||||||
— Finance costs | 77,974 | 104,311 | 129,359 | 94,503 | 63,759 | |||||||||||||||||||
— Interest income | (5,871 | ) | (28,507 | ) | (17,440 | ) | (13,010 | ) | (5,192 | ) | ||||||||||||||
— Impairment of intangible assets | 55 | — | 19,860 | — | — | |||||||||||||||||||
— Impairment of property, plant and equipment | — | 10,612 | — | — | 5,419 | |||||||||||||||||||
— Amortisation of intangible assets | 1,170 | 1,337 | 2,991 | 2,513 | 878 | |||||||||||||||||||
— Amortisation of leasehold land and land use rights | 1,876 | 2,167 | 3,600 | 2,688 | 2,730 | |||||||||||||||||||
— Depreciation of property, plant and equipment | 200,264 | 278,664 | 420,885 | 309,313 | 363,980 | |||||||||||||||||||
— Dividend income fromavailable-for-sale financial asset | — | — | — | — | (1,971 | ) | ||||||||||||||||||
— Negative goodwill from acquisition of minority interest in a subsidiary | 33 | (a) | (1,108 | ) | — | — | — | — | ||||||||||||||||
— (Gain)/loss on disposal of property, plant and equipment | (780 | ) | 2,563 | 19,493 | 6,540 | 735 | ||||||||||||||||||
— Gain on adjustment for contingent consideration in relation to business combination | — | — | (13,933 | ) | — | (13,425 | ) | |||||||||||||||||
— Net exchange differences | (7,849 | ) | (48,270 | ) | (138,453 | ) | (139,271 | ) | 74 | |||||||||||||||
— Share award expenses | — | 226,097 | 10,601 | 8,404 | 9,897 | |||||||||||||||||||
Operating profit before working capital changes | 609,861 | 966,105 | 993,511 | 761,025 | 670,551 | |||||||||||||||||||
Changes in: | ||||||||||||||||||||||||
Inventories | (56,692 | ) | (104,073 | ) | (28,633 | ) | (136,445 | ) | (30,516 | ) | ||||||||||||||
Debtors and prepayments | (235,328 | ) | (149,822 | ) | 317,181 | (135,694 | ) | 79,913 | ||||||||||||||||
Restricted bank balances | 12,075 | (2,477 | ) | (1,972 | ) | 2,719 | (2,524 | ) | ||||||||||||||||
Creditors and accruals | 202,160 | 387,728 | 117,662 | 167,349 | (328,024 | ) | ||||||||||||||||||
Long-term other payables | — | 115,658 | (41,094 | ) | (16,266 | ) | (49,590 | ) | ||||||||||||||||
Amounts due from/(to) fellow subsidiaries | 33 | (d) | (53,667 | ) | (210,912 | ) | (157,303 | ) | (153,013 | ) | 112,359 | |||||||||||||
Amount due from intermediate holding company | — | (40,177 | ) | 40,177 | 40,177 | — | ||||||||||||||||||
Amount due to immediate holding company | 33 | (d) | — | 290,000 | 353,961 | 353,187 | (54,884 | ) | ||||||||||||||||
Amount due to a related party | (26,340 | ) | (7,859 | ) | — | — | — | |||||||||||||||||
Amounts due from/(to) minority shareholders | (3,240 | ) | 14,704 | (25,429 | ) | (17,499 | ) | 13,141 | ||||||||||||||||
Amount due to a subsidiary of a minority shareholder | 1,686 | (5,676 | ) | 7,298 | 3,968 | 5,913 | ||||||||||||||||||
Cash generated from operating activities | 450,515 | 1,253,199 | 1,575,359 | 869,508 | 416,339 | |||||||||||||||||||
Interest received | 5,871 | 28,507 | 17,440 | 13,010 | 5,192 | |||||||||||||||||||
Interest paid | (77,974 | ) | (104,311 | ) | (88,118 | ) | (80,365 | ) | (66,470 | ) | ||||||||||||||
Hong Kong profits tax paid | (2,627 | ) | (4,451 | ) | (3,226 | ) | (3,275 | ) | — | |||||||||||||||
Overseas tax paid | (36,396 | ) | (70,693 | ) | (110,083 | ) | (85,341 | ) | (48,015 | ) | ||||||||||||||
Net cash generated from operating activities | 339,389 | 1,102,251 | 1,391,372 | 713,537 | 307,046 | |||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Purchase of property, plant and equipment | (643,282 | ) | (1,218,320 | ) | (1,347,624 | ) | (1,058,114 | ) | (269,023 | ) | ||||||||||||||
Purchase of leasehold land and land use rights | (22,473 | ) | — | — | — | — | ||||||||||||||||||
Proceeds from sale of property, plant and equipment | 6,627 | 3,370 | 2,650 | 3,497 | 2,878 | |||||||||||||||||||
Acquisition of minority interest in a subsidiary | 33 | (a) | (6,354 | ) | — | — | — | — | ||||||||||||||||
Acquisition of a subsidiary, net of bank balances and cash acquired | 33 | (b) | — | (694,715 | ) | — | — | — | ||||||||||||||||
Purchase ofavailable-for-sale financial asset | — | (21,089 | ) | — | — | — | ||||||||||||||||||
Dividends received fromavailable-for-sale financial asset | — | — | — | — | 1,971 | |||||||||||||||||||
Net cash used in investing activities | (665,482 | ) | (1,930,754 | ) | (1,344,974 | ) | (1,054,617 | ) | (264,174 | ) | ||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
New borrowings | 1,743,682 | 3,030,033 | 3,355,784 | 2,965,040 | 1,086,128 | |||||||||||||||||||
Repayment of borrowings | (1,433,973 | ) | (2,030,992 | ) | (2,382,602 | ) | (2,013,526 | ) | (1,082,289 | ) | ||||||||||||||
Capital contribution from immediate holding company | — | 826,612 | — | — | — | |||||||||||||||||||
Loan to a fellow subsidiary | — | — | (41,074 | ) | (41,227 | ) | — | |||||||||||||||||
Repayment of loan to a fellow subsidiary | — | — | — | — | 30,998 | |||||||||||||||||||
Dividend paid to shareholders | — | (290,000 | ) | (600,100 | ) | (600,100 | ) | — | ||||||||||||||||
Dividend paid to a minority shareholder | (29,227 | ) | (101,630 | ) | — | — | (91,361 | ) | ||||||||||||||||
Capital contribution by a minority shareholder | 18,068 | 114,285 | — | — | 88,349 | |||||||||||||||||||
Distribution to a shareholder | — | (410,000 | ) | — | — | — | ||||||||||||||||||
Net cash generated from financing activities | 298,550 | 1,138,308 | 332,008 | 310,187 | 31,825 | |||||||||||||||||||
Net (decrease)/increase in cash and cash equivalents | (27,543 | ) | 309,805 | 378,406 | (30,893 | ) | 74,697 | |||||||||||||||||
Exchange differences on cash and cash equivalents | (8,229 | ) | (32,767 | ) | (10,952 | ) | (13,123 | ) | (457 | ) | ||||||||||||||
Cash and cash equivalents at beginning of the year/period | 157,655 | 121,883 | 398,921 | 398,921 | 766,375 | |||||||||||||||||||
Cash and cash equivalents at end of the year/period | 33 | (c) | 121,883 | 398,921 | 766,375 | 354,905 | 840,615 | |||||||||||||||||
F-6
Table of Contents
Attributable to the Equity Holders of the PCB Business | ||||||||||||||||||||||||||||||||||||||||
Available- | Employee | |||||||||||||||||||||||||||||||||||||||
for-Sale | Share- | |||||||||||||||||||||||||||||||||||||||
Financial | Based | |||||||||||||||||||||||||||||||||||||||
Capital | Asset | Compensation | Hedging | General | Exchange | Retained | Minority | Total | ||||||||||||||||||||||||||||||||
Reserve | Reserve | Reserve | Reserve | Reserve | Reserve | Earnings | Total | Interests | Equity | |||||||||||||||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||||||||||||||||||
At 1 January 2006 | 134,811 | — | — | — | 68,286 | 16,889 | 346,736 | 566,722 | 147,207 | 713,929 | ||||||||||||||||||||||||||||||
Profit for the year | — | — | — | — | — | — | 239,762 | 239,762 | 62,791 | 302,553 | ||||||||||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
— Exchange differences | — | — | — | — | 336 | 36,801 | — | 37,137 | 6,098 | 43,235 | ||||||||||||||||||||||||||||||
Total comprehensive income for the year ended 31 December 2006 | — | — | — | — | 336 | 36,801 | 239,762 | 276,899 | 68,889 | 345,788 | ||||||||||||||||||||||||||||||
Transactions with equity holders: | ||||||||||||||||||||||||||||||||||||||||
Capital contribution by a minority shareholder | — | — | — | — | — | — | — | — | 18,068 | 18,068 | ||||||||||||||||||||||||||||||
Dividend | — | — | — | — | — | — | — | — | (29,227 | ) | (29,227 | ) | ||||||||||||||||||||||||||||
Distribution to a shareholder | — | — | — | — | — | — | (410,000 | ) | (410,000 | ) | — | (410,000 | ) | |||||||||||||||||||||||||||
Acquisition of minority interest in a subsidiary | — | — | — | — | — | — | — | — | (7,462 | ) | (7,462 | ) | ||||||||||||||||||||||||||||
Transfer | — | — | — | — | 12,773 | — | (12,773 | ) | — | — | — | |||||||||||||||||||||||||||||
— | — | — | — | 12,773 | — | (422,773 | ) | (410,000 | ) | (18,621 | ) | (428,621 | ) | |||||||||||||||||||||||||||
At 31 December 2006 | 134,811 | — | — | — | 81,395 | 53,690 | 163,725 | 433,621 | 197,475 | 631,096 | ||||||||||||||||||||||||||||||
At 1 January 2007 | 134,811 | — | — | — | 81,395 | 53,690 | 163,725 | 433,621 | 197,475 | 631,096 | ||||||||||||||||||||||||||||||
Profit for the year | — | — | — | — | — | — | 246,094 | 246,094 | 106,844 | 352,938 | ||||||||||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
— Exchange differences | — | — | — | — | 713 | 81,190 | — | 81,903 | 18,754 | 100,657 | ||||||||||||||||||||||||||||||
Total comprehensive income for the year ended 31 December 2007 | — | — | — | — | 713 | 81,190 | 246,094 | 327,997 | 125,598 | 453,595 | ||||||||||||||||||||||||||||||
Transactions with equity holders: | ||||||||||||||||||||||||||||||||||||||||
Capital contribution by a minority shareholder | — | — | — | — | — | — | — | — | 114,285 | 114,285 | ||||||||||||||||||||||||||||||
Capital contribution from immediate holding company | 826,612 | — | — | — | — | — | — | 826,612 | — | 826,612 | ||||||||||||||||||||||||||||||
Shares award expenses (Note 7) | — | — | 226,097 | — | — | — | — | 226,097 | — | 226,097 | ||||||||||||||||||||||||||||||
Dividend (Note 13) | — | — | (226,097 | ) | — | — | — | (63,903 | ) | (290,000 | ) | (101,630 | ) | (391,630 | ) | |||||||||||||||||||||||||
Transfer | — | — | — | — | 48,461 | — | (48,461 | ) | — | — | — | |||||||||||||||||||||||||||||
826,612 | — | — | — | 48,461 | — | (112,364 | ) | 762,709 | 12,655 | 775,364 | ||||||||||||||||||||||||||||||
At 31 December 2007 | 961,423 | — | — | — | 130,569 | 134,880 | 297,455 | 1,524,327 | 335,728 | 1,860,055 | ||||||||||||||||||||||||||||||
F-7
Table of Contents
Attributable to the Equity Holders of the PCB Business | ||||||||||||||||||||||||||||||||||||||||
Available- | Employee | |||||||||||||||||||||||||||||||||||||||
for-Sale | Share- | |||||||||||||||||||||||||||||||||||||||
Financial | Based | |||||||||||||||||||||||||||||||||||||||
Capital | Asset | Compensation | Hedging | General | Exchange | Retained | Minority | Total | ||||||||||||||||||||||||||||||||
Reserve | Reserve | Reserve | Reserve | Reserve | Reserve | Earnings | Total | Interests | Equity | |||||||||||||||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||||||||||||||||||
At 1 January 2008 | 961,423 | — | — | — | 130,569 | 134,880 | 297,455 | 1,524,327 | 335,728 | 1,860,055 | ||||||||||||||||||||||||||||||
Profit for the year | — | — | — | — | — | — | 376,071 | 376,071 | 107,582 | 483,653 | ||||||||||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
— Exchange differences | — | — | — | — | 649 | 60,104 | — | 60,753 | 21,551 | 82,304 | ||||||||||||||||||||||||||||||
— Change in fair value ofavailable-for-sale financial asset | — | (454 | ) | — | — | — | — | — | (454 | ) | — | (454 | ) | |||||||||||||||||||||||||||
Total comprehensive income for the year ended 31 December 2008 | — | (454 | ) | — | — | 649 | 60,104 | 376,071 | 436,370 | 129,133 | 565,503 | |||||||||||||||||||||||||||||
Transactions with equity holders: | ||||||||||||||||||||||||||||||||||||||||
Shares award expenses (Note 7) | — | — | 10,601 | — | — | — | — | 10,601 | — | 10,601 | ||||||||||||||||||||||||||||||
Dividend (Note 13) | — | — | (8,404 | ) | — | — | — | (591,696 | ) | (600,100 | ) | (59,450 | ) | (659,550 | ) | |||||||||||||||||||||||||
Transfer | — | — | — | — | 35,388 | — | (35,388 | ) | — | — | — | |||||||||||||||||||||||||||||
— | — | 2,197 | — | 35,388 | — | (627,084 | ) | (589,499 | ) | (59,450 | ) | (648,949 | ) | |||||||||||||||||||||||||||
At 31 December 2008 | 961,423 | (454 | ) | 2,197 | — | 166,606 | 194,984 | 46,442 | 1,371,198 | 405,411 | 1,776,609 | |||||||||||||||||||||||||||||
At 1 January 2009 | 961,423 | (454 | ) | 2,197 | — | 166,606 | 194,984 | 46,442 | 1,371,198 | 405,411 | 1,776,609 | |||||||||||||||||||||||||||||
Profit for the period | — | — | — | — | — | — | 127,245 | 127,245 | 71,420 | 198,665 | ||||||||||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
— Exchange differences | — | — | — | — | 8 | 2,359 | — | 2,367 | 369 | 2,736 | ||||||||||||||||||||||||||||||
— Change in fair value ofavailable-for-sale financial asset | — | (2,921 | ) | — | — | — | — | — | (2,921 | ) | — | (2,921 | ) | |||||||||||||||||||||||||||
— Cash flow hedge | ||||||||||||||||||||||||||||||||||||||||
— change in fair value of hedging instruments | — | — | — | 22,796 | — | — | 22,796 | — | 22,796 | |||||||||||||||||||||||||||||||
— transfer to income statement upon change in fair value of hedged items | — | — | — | (17,226 | ) | — | — | — | (17,226 | ) | — | (17,226 | ) | |||||||||||||||||||||||||||
— transfer to property, plant and equipment | — | — | — | (178 | ) | — | — | — | (178 | ) | — | (178 | ) | |||||||||||||||||||||||||||
Total comprehensive income for the nine months ended 30 September 2009 | — | (2,921 | ) | — | 5,392 | 8 | 2,359 | 127,245 | 132,083 | 71,789 | 203,872 | |||||||||||||||||||||||||||||
Transactions with equity holders: | ||||||||||||||||||||||||||||||||||||||||
Capital contribution by a minority shareholder | — | — | — | — | — | — | — | — | 88,349 | 88,349 | ||||||||||||||||||||||||||||||
Capital contribution from immediate holding company (Note 33(d)) | 266,120 | — | — | — | — | — | — | 266,120 | — | 266,120 | ||||||||||||||||||||||||||||||
Shares award expenses (Note 7) | — | — | 9,897 | — | — | — | — | 9,897 | — | 9,897 | ||||||||||||||||||||||||||||||
Dividend | — | — | — | — | — | — | — | — | (30,951 | ) | (30,951 | ) | ||||||||||||||||||||||||||||
Transfer | — | — | — | — | 28,183 | — | (28,183 | ) | — | — | — | |||||||||||||||||||||||||||||
266,120 | — | 9,897 | — | 28,183 | — | (28,183 | ) | 276,017 | 57,398 | 333,415 | ||||||||||||||||||||||||||||||
At 30 September 2009 | 1,227,543 | (3,375 | ) | 12,094 | 5,392 | 194,797 | 197,343 | 145,504 | 1,779,298 | 534,598 | 2,313,896 | |||||||||||||||||||||||||||||
F-8
Table of Contents
Attributable to the equity holders of the PCB Business | ||||||||||||||||||||||||||||||||||||||||
Available- | Employee | |||||||||||||||||||||||||||||||||||||||
for-Sale | Share- | |||||||||||||||||||||||||||||||||||||||
Financial | Based | |||||||||||||||||||||||||||||||||||||||
Capital | Asset | Compensation | Hedging | General | Exchange | Retained | Minority | Total | ||||||||||||||||||||||||||||||||
Reserve | Reserve | Reserve | Reserve | Reserve | Reserve | Earnings | Total | Interests | Equity | |||||||||||||||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||||||||||||||||||
At 1 January 2008 | 961,423 | — | — | — | 130,569 | 134,880 | 297,455 | 1,524,327 | 335,728 | 1,860,055 | ||||||||||||||||||||||||||||||
Profit for the period | — | — | — | — | — | — | 336,258 | 336,258 | 76,160 | 412,418 | ||||||||||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||||||||||||||
— Exchange differences | — | — | — | — | 717 | 82,358 | — | 83,075 | 23,962 | 107,037 | ||||||||||||||||||||||||||||||
— Change in fair value ofavailable-for-sale financial asset | — | 3,564 | — | — | — | — | — | 3,564 | — | 3,564 | ||||||||||||||||||||||||||||||
Total comprehensive income for the nine months ended 30 September 2008 | — | 3,564 | — | — | 717 | 82,358 | 336,258 | 422,897 | 100,122 | 523,019 | ||||||||||||||||||||||||||||||
Transactions with equity holders: | ||||||||||||||||||||||||||||||||||||||||
Shares award expenses (Note 7) | — | — | 8,404 | — | — | — | — | 8,404 | — | 8,404 | ||||||||||||||||||||||||||||||
Dividend (Note 13) | — | — | (8,404 | ) | — | — | — | (591,696 | ) | (600,100 | ) | (35,480 | ) | (635,580 | ) | |||||||||||||||||||||||||
Transfer | — | — | — | — | 13,229 | — | (13,229 | ) | — | — | — | |||||||||||||||||||||||||||||
— | — | — | — | 13,229 | — | (604,925 | ) | (591,696 | ) | (35,480 | ) | (627,176 | ) | |||||||||||||||||||||||||||
At 30 September 2008 | 961,423 | 3,564 | — | — | 144,515 | 217,238 | 28,788 | 1,355,528 | 400,370 | 1,755,898 | ||||||||||||||||||||||||||||||
F-9
Table of Contents
(a) | General information |
(b) | Basis of preparation |
F-10
Table of Contents
Effective for | ||||
Accounting | ||||
Periods | ||||
Beginning on | ||||
or after | ||||
HKAS 1 (Revised) | Presentation of financial statements | 1 January 2009 | ||
HKAS 23 (Revised) | Borrowing costs | 1 January 2009 | ||
HKAS 32 and HKAS 1 (Amendments) | Puttable financial instruments and obligations arising on liquidation | 1 January 2009 | ||
HKFRS 1 and HKAS 27 (Amendments) | Cost of an investment in a subsidiary, jointly controlled entity or associate | 1 January 2009 | ||
HKFRS 2 (Amendment) | Share-based payment — Vesting conditions and cancellations | 1 January 2009 | ||
HKFRS 7 (Amendments) | Financial instruments: Disclosures | 1 January 2009 | ||
HKFRS 8 | Operating segments | 1 January 2009 | ||
HK(IFRIC) — Int 13 | Customer loyalty programmes | 1 July 2008 | ||
HK(IFRIC) — Int 15 | Agreements for construction of real estates | 1 January 2009 | ||
HK(IFRIC) — Int 16 | Hedges of a net investment in a foreign operation | 1 October 2008 |
F-11
Table of Contents
Effective for | ||||
Accounting | ||||
Periods | ||||
Beginning on | ||||
or after | ||||
HKAS 24 (Revised) | Related party disclosures | 1 January 2011 | ||
HKAS 27 (Revised) | Consolidated and separate financial statements | 1 July 2009 | ||
HKAS 39 (Amendment) | Eligible hedged items | 1 July 2009 | ||
HKFRS 3 (Revised) | Business combinations | 1 July 2009 | ||
HKFRS 9 | Financial instruments | 1 January 2013 | ||
HK(IFRIC) — Int 9 and HKAS 39 (Amendments) | Reassessment of embedded derivatives | 30 June 2009 | ||
HK(IFRIC) — Int 17 | Distributions of non-cash assets to owners | 1 July 2009 | ||
HK(IFRIC) — Int 19 | Extinguishing financial liabilities with equity instruments | 1 July 2010 |
Effective for | ||||
Accounting | ||||
Periods | ||||
Beginning on | ||||
or after | ||||
HKAS 32 (Amendment) | Classification of right issues | 1 February 2010 | ||
HKFRS 1 (Revised) | First-time adoption of Hong Kong Financial Reporting Standards | 1 July 2009 | ||
HKFRS 1 (Amendment) | Additional exemptions for first-time adopters | 1 January 2010 | ||
HKFRS 2 (Amendment) | Group cash-settled share-based payment transactions | 1 January 2010 | ||
HK(IFRIC) — Int 14 (Amendment) | Prepayments of a minimum funding requirement | 1 January 2011 |
F-12
Table of Contents
�� | ||||||
Effective for | ||||||
Accounting | ||||||
Periods | ||||||
Beginning on | ||||||
or after | ||||||
HKFRS 5 | Non-current assets held for sale and discontinued operations (and consequential amendment to HKFRS 1, First-time adoption of Hong Kong Financial Reporting Standards) | 1 July 2009 |
Effective for | ||||
Accounting | ||||
Periods | ||||
Beginning on | ||||
or after | ||||
HKAS 1 (Revised) | Presentation of financial statements | 1 January 2010 | ||
HKAS 7 | Statement of cash flows | 1 January 2010 | ||
HKAS 17 | Leases | 1 January 2010 | ||
HKAS 18 | Revenue | 1 January 2010 | ||
HKAS 36 | Impairment of assets | 1 January 2010 | ||
HKAS 38 | Intangible assets | 1 July 2009 | ||
HKAS 39 | Financial instruments: Recognition and measurement | 1 January 2010 | ||
HKFRS 2 | Share-based payment — Scope of HKFRS 2 and HKFRS 3 (Revised) | 1 July 2009 | ||
HKFRS 5 | Non-current assets held for sale and discontinued operations | 1 January 2010 | ||
HKFRS 8 | Operating segments | 1 January 2010 | ||
HK(IFRIC) — Int 9 | Reassessment of embedded derivatives | 1 July 2009 | ||
HK(IFRIC) — Int 16 | Hedges of a net investment in a foreign operation | 1 July 2009 |
F-13
Table of Contents
(a) | Consolidation |
(b) | Property, plant and equipment |
F-14
Table of Contents
Buildings | 22 - 25 years | |
Leasehold improvements | 22 - 25 years | |
Furniture and equipment | 5 - 6 years | |
Plant, machinery and equipment | 10 - 12 years | |
Motor vehicles | 5 - 6 years |
(c) | Intangible assets |
F-15
Table of Contents
(d) | Trade and other receivables |
(e) | Impairment of non-financial assets |
(f) | Available-for-sale financial assets |
F-16
Table of Contents
(g) | Inventories |
(h) | Operating leases |
(i) | Borrowings |
(j) | Derivative financial instruments and hedging activities |
F-17
Table of Contents
(k) | Current and deferred income tax |
F-18
Table of Contents
(l) | Cash and cash equivalents |
(m) | Trade payables |
(n) | Provisions |
(o) | Employee benefits |
F-19
Table of Contents
(p) | Government grants |
(q) | Financial liabilities — put option |
(r) | Revenue recognition |
(s) | Interest income |
F-20
Table of Contents
(t) | Foreign currency translation |
F-21
Table of Contents
(u) | Dividend distribution |
(a) | Financial risk factors |
F-22
Table of Contents
At | ||||||||||||||||||
At 31 December | 30 September | |||||||||||||||||
Counterparty | Rating(i) | 2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||
Bank 1 | Aa1 | 45,354 | 142,397 | 243,428 | 194,832 | |||||||||||||
Bank 2 | Aa3 | 2,659 | 5,675 | 145,230 | 113,020 | |||||||||||||
Bank 3 | A1 | 66,902 | 106,732 | 144,979 | 184,715 | |||||||||||||
Bank 4 | A1 | 19,941 | 53,555 | 137,950 | 137,158 | |||||||||||||
Bank 5 | Baa1 | — | — | — | 82,654 | |||||||||||||
Bank 6 | A1 | 10,771 | 76,187 | 104,461 | — | |||||||||||||
145,627 | 384,546 | 776,048 | 712,379 | |||||||||||||||
Note (i): | The source of current credit rating is from Moody’s. |
F-23
Table of Contents
Between | Between | |||||||||||||||||||
Within 1 | 1 and 2 | 2 and | Over | |||||||||||||||||
Year | Years | 5 Years | 5 Years | Total | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
At 30 September 2009 | ||||||||||||||||||||
Loan to a fellow subsidiary | — | 10,076 | — | — | 10,076 | |||||||||||||||
Amounts due from fellow subsidiaries | 13,889 | — | — | — | 13,889 | |||||||||||||||
Debtors | 958,917 | — | — | — | 958,917 | |||||||||||||||
Cash and bank balances | 840,615 | — | — | — | 840,615 | |||||||||||||||
1,813,421 | 10,076 | — | — | 1,823,497 | ||||||||||||||||
Between | Between | |||||||||||||||||||
Within 1 | 1 and 2 | 2 and | Over | |||||||||||||||||
Year | Years | 5 Years | 5 Years | Total | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
At 31 December 2006 | ||||||||||||||||||||
Creditors and accruals | 711,257 | — | — | — | 711,257 | |||||||||||||||
Amounts due to fellow subsidiaries | 66,454 | — | — | — | 66,454 | |||||||||||||||
Amount due to a related party | 417,859 | — | — | — | 417,859 | |||||||||||||||
Amount due to a minority shareholder | 119,918 | — | — | — | 119,918 | |||||||||||||||
Amount due to a subsidiary of a minority shareholder | 10,716 | — | — | — | 10,716 | |||||||||||||||
Borrowings | 966,642 | 275,241 | 456,377 | — | 1,698,260 | |||||||||||||||
2,292,846 | 275,241 | 456,377 | — | 3,024,464 | ||||||||||||||||
At 31 December 2007 | ||||||||||||||||||||
Creditors and accruals | 1,270,757 | — | — | — | 1,270,757 | |||||||||||||||
Amounts due to fellow subsidiaries | 99,838 | — | — | — | 99,838 | |||||||||||||||
Amount due to immediate holding company | 290,000 | — | — | — | 290,000 | |||||||||||||||
Amount due to a minority shareholder | 173,677 | — | — | — | 173,677 | |||||||||||||||
Amount due to a subsidiary of a minority shareholder | 5,040 | — | — | — | 5,040 | |||||||||||||||
Borrowings | 1,000,902 | 510,385 | 1,292,972 | — | 2,804,259 | |||||||||||||||
Financial liabilities | — | — | — | 393,823 | 393,823 | |||||||||||||||
Long-term other payables | 2,482 | 6,081 | 124,020 | — | 132,583 | |||||||||||||||
2,842,696 | 516,466 | 1,416,992 | 393,823 | 5,169,977 | ||||||||||||||||
F-24
Table of Contents
Between | Between | |||||||||||||||||||
Within 1 | 1 and 2 | 2 and | Over | |||||||||||||||||
Year | Years | 5 Years | 5 Years | Total | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
At 31 December 2008 | ||||||||||||||||||||
Creditors and accruals | 1,388,419 | — | — | — | 1,388,419 | |||||||||||||||
Amounts due to fellow subsidiaries | 88,481 | — | — | — | 88,481 | |||||||||||||||
Amount due to immediate holding company | 643,961 | — | — | — | 643,961 | |||||||||||||||
Amount due to a minority shareholder | 169,659 | — | — | — | 169,659 | |||||||||||||||
Amount due to a subsidiary of a minority shareholder | 12,338 | — | — | — | 12,338 | |||||||||||||||
Borrowings | 876,300 | 560,727 | 2,268,407 | — | 3,705,434 | |||||||||||||||
Derivative financial instruments | 12,185 | 6,491 | 6,675 | — | 25,351 | |||||||||||||||
Financial liabilities | — | — | 190,587 | — | 190,587 | |||||||||||||||
Long-term other payables | 810 | 15,817 | 61,064 | — | 77,691 | |||||||||||||||
3,192,153 | 583,035 | 2,526,733 | — | 6,301,921 | ||||||||||||||||
At 30 September 2009 | ||||||||||||||||||||
Creditors and accruals | 1,060,395 | — | — | — | 1,060,395 | |||||||||||||||
Amounts due to fellow subsidiaries | 97,952 | — | — | — | 97,952 | |||||||||||||||
Amount due to immediate holding company | 49,492 | — | — | — | 49,492 | |||||||||||||||
Amount due to a minority shareholder | 122,334 | — | — | — | 122,334 | |||||||||||||||
Amount due to a subsidiary of a minority shareholder | 18,251 | — | — | — | 18,251 | |||||||||||||||
Borrowings | 690,166 | 1,242,236 | 1,797,541 | — | 3,729,943 | |||||||||||||||
Derivative financial instruments | 8,084 | 6,126 | 2,938 | — | 17,148 | |||||||||||||||
Financial liabilities | — | — | 196,806 | — | 196,806 | |||||||||||||||
Long-term other payables | 21 | 23,267 | 1,780 | — | 25,068 | |||||||||||||||
2,046,695 | 1,271,629 | 1,999,065 | — | 5,317,389 | ||||||||||||||||
Between | Between | |||||||||||||||||||
1 and 2 | 2 and | Over | ||||||||||||||||||
Within 1 Year | Years | 5 Years | 5 Years | Total | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
At 30 September 2009 | ||||||||||||||||||||
Forward foreign exchange contracts — cash flow hedges: | ||||||||||||||||||||
Outflow | (5,114 | ) | — | (174,541 | ) | — | (179,655 | ) | ||||||||||||
Inflow | 5,517 | — | 196,794 | — | 202,311 | |||||||||||||||
F-25
Table of Contents
(b) | Capital risk management |
At 30 | ||||||||||||||||
At 31 December | September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Total borrowings | 1,572,836 | 2,587,435 | 3,586,243 | 3,564,456 | ||||||||||||
Less: cash and bank balances (Note 21) | (164,964 | ) | (402,822 | ) | (797,874 | ) | (849,012 | ) | ||||||||
Net debt | 1,407,872 | 2,184,613 | 2,788,369 | 2,715,444 | ||||||||||||
Total capital | 631,096 | 1,860,055 | 1,776,609 | 2,313,896 | ||||||||||||
Gearing ratio | 223 | % | 117 | % | 157 | % | 117 | % |
F-26
Table of Contents
(c) | Fair value estimation |
• | Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). | |
• | Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). | |
• | Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). |
At | ||||
30 September | ||||
2009 | ||||
HK$’000 | ||||
Assets | ||||
Level 2 | ||||
— Derivatives financial instruments | 22,796 | |||
Level 3 | ||||
— Available-for-sale financial asset | 17,714 | |||
Total assets | 40,510 | |||
Liabilities | ||||
Level 2 | ||||
— Derivatives financial instruments | 15,967 | |||
F-27
Table of Contents
(a) | Useful lives of property, plant and equipment |
(b) | Impairment of non-financial assets |
(c) | Provision for impairment of trade and other receivables |
F-28
Table of Contents
(d) | Net realisable values of inventories |
(e) | Present value of financial liabilities |
(f) | Allocation of corporate expenses and income |
F-29
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Sales of scrap | 61,837 | 119,967 | 153,508 | 121,689 | 84,076 | |||||||||||||||
Investment tax credits | 8,054 | 29,518 | — | — | — | |||||||||||||||
Dividend income fromavailable-for-sale financial asset | — | — | — | — | 1,971 | |||||||||||||||
Tooling charges | 10,146 | 5,757 | — | — | — | |||||||||||||||
Rental income from fellow subsidiaries | 2,605 | 959 | 1,282 | 719 | 508 | |||||||||||||||
Negative goodwill from acquisition of minority interest in a subsidiary (Note 33(a)) | 1,108 | — | — | — | — | |||||||||||||||
Sundries | 3,476 | 5,129 | 4,020 | 2,825 | 5,178 | |||||||||||||||
87,226 | 161,330 | 158,810 | 125,233 | 91,733 | ||||||||||||||||
F-30
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Wages and salaries | 362,590 | 532,879 | 691,296 | 516,392 | 515,640 | |||||||||||||||
Share award expenses (Note 7) | — | 226,097 | 10,601 | 8,404 | 9,897 | |||||||||||||||
Retirement benefit costs | 16,556 | 19,420 | 27,860 | 20,036 | 18,295 | |||||||||||||||
379,146 | 778,396 | 729,757 | 544,832 | 543,832 | ||||||||||||||||
F-31
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Raw materials and consumables used | 1,398,859 | 2,049,998 | 2,600,715 | 2,001,482 | 1,747,408 | |||||||||||||||
Employee benefit expenses (Note 8) | 379,146 | 778,396 | 729,757 | 544,832 | 543,832 | |||||||||||||||
Amortisation of intangible assets | 1,170 | 1,337 | 2,991 | 2,513 | 878 | |||||||||||||||
Amortisation of leasehold land and land use rights | 1,876 | 2,167 | 3,600 | 2,688 | 2,730 | |||||||||||||||
Depreciation of property, plant and equipment | 200,264 | 278,664 | 420,885 | 309,313 | 363,980 | |||||||||||||||
Impairment of property, plant and equipment | — | 10,612 | — | — | 5,419 | |||||||||||||||
Impairment of intangible assets | 55 | — | 19,860 | — | — | |||||||||||||||
(Gain)/loss on disposal of property, plant and equipment | (780 | ) | 2,563 | 19,493 | 6,540 | 735 | ||||||||||||||
Provision for/(written-back of) bad and doubtful debts | 15,818 | 6,590 | (1,659 | ) | 2,754 | 2,253 | ||||||||||||||
Provision for/(written-back of) inventories | 12,264 | 12,572 | 6,646 | 5,550 | (2,315 | ) | ||||||||||||||
Management fee expense to a related party (Note 34(g)) | 5,000 | — | — | — | — | |||||||||||||||
Sales commission | 12,113 | 12,890 | 17,038 | 15,324 | 6,189 | |||||||||||||||
Subcontracting expenses | 79,688 | 82,568 | 98,987 | 77,515 | 27,413 | |||||||||||||||
Auditor’s remuneration | 2,439 | 4,024 | 4,843 | 3,255 | 3,299 | |||||||||||||||
Operating lease rental expense — Land and buildings | 3,005 | 4,645 | 6,036 | 4,438 | 3,708 | |||||||||||||||
Net exchange (gain)/loss | (18,964 | ) | (68,349 | ) | (152,479 | ) | (154,049 | ) | 11,014 | |||||||||||
Others | 417,813 | 598,356 | 926,067 | 662,452 | 578,345 | |||||||||||||||
Total cost of sales, selling and distribution expenses, general and administrative expenses and share award expenses | 2,509,766 | 3,777,033 | 4,702,780 | 3,484,607 | 3,294,888 | |||||||||||||||
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Interest income from banks | 2,128 | 9,786 | 4,780 | 3,509 | 1,269 | |||||||||||||||
Interest income from fellow subsidiaries | — | 6,683 | 12,660 | 9,501 | 3,923 | |||||||||||||||
Interest income from related parties | 3,743 | — | — | — | — | |||||||||||||||
Interest income from deposits relating to share subscription during the Listing | — | 12,038 | — | — | — | |||||||||||||||
5,871 | 28,507 | 17,440 | 13,010 | 5,192 | ||||||||||||||||
F-32
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Interest expenses on bank loans, overdrafts and other short-term loans wholly repayable within five years | 77,776 | 104,311 | 138,260 | 97,732 | 69,346 | |||||||||||||||
Less: amounts capitalised in property, plant and equipment (Note) | — | — | (24,777 | ) | (17,367 | ) | (12,274 | ) | ||||||||||||
77,776 | 104,311 | 113,483 | 80,365 | 57,072 | ||||||||||||||||
Interest expense to a fellow subsidiary | 198 | — | — | — | — | |||||||||||||||
Interests on accretion of discount of financial liabilities | — | — | 15,876 | 14,138 | 6,687 | |||||||||||||||
77,974 | 104,311 | 129,359 | 94,503 | 63,759 | ||||||||||||||||
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Current income tax | ||||||||||||||||||||
— Hong Kong profits tax | 3,456 | (139 | ) | 138 | 1,160 | — | ||||||||||||||
— Overseas taxation | 44,875 | 73,472 | 78,676 | 89,706 | 59,658 | |||||||||||||||
Deferred income tax (Note 25) | (6,754 | ) | (9,140 | ) | (5,919 | ) | (13,939 | ) | (14,656 | ) | ||||||||||
41,577 | 64,193 | 72,895 | 76,927 | 45,002 | ||||||||||||||||
F-33
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Profit before income tax | 344,130 | 417,131 | 556,548 | 489,345 | 243,667 | |||||||||||||||
Tax calculated at domestic applicable tax rate | 117,565 | 166,417 | 134,385 | 118,105 | 63,866 | |||||||||||||||
Effect of change in tax rate | — | (10,940 | ) | (14,200 | ) | (157 | ) | — | ||||||||||||
Effect of relief on income tax | (87,636 | ) | (136,263 | ) | (40,090 | ) | (45,866 | ) | (59,090 | ) | ||||||||||
Expenses not deductible for taxation purposes | 42,209 | 51,338 | 40,228 | 39,496 | 30,806 | |||||||||||||||
Income not subject to taxation | (33,511 | ) | (27,645 | ) | (51,196 | ) | (43,442 | ) | (10,518 | ) | ||||||||||
Unrecognised tax loss utilised during the year/period | — | (2,128 | ) | (1,086 | ) | (4,678 | ) | (3,379 | ) | |||||||||||
Tax losses for which no deferred tax recognised | 2,950 | 23,414 | 4,854 | 13,469 | 23,317 | |||||||||||||||
Income tax expense | 41,577 | 64,193 | 72,895 | 76,927 | 45,002 | |||||||||||||||
Weighted average domestic applicable tax rate | 34.2 | % | 39.9 | % | 24.1 | % | 24.1 | % | 26.2 | % | ||||||||||
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Dividend paid | — | 290,000 | 600,100 | 600,100 | — | |||||||||||||||
F-34
Table of Contents
Furniture | Plant, | |||||||||||||||||||||||||||
Leasehold | and | Machinery and | Motor | Construction in | ||||||||||||||||||||||||
Buildings | Improvements | Equipment | Equipment | Vehicles | Progress | Total | ||||||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||||||||
At 1 January 2006 | ||||||||||||||||||||||||||||
Cost | 481,039 | 15,413 | 80,810 | 1,518,764 | 17,197 | 83,461 | 2,196,684 | |||||||||||||||||||||
Accumulated depreciation and accumulated impairment | (91,345 | ) | (7,096 | ) | (39,813 | ) | (646,840 | ) | (11,489 | ) | — | (796,583 | ) | |||||||||||||||
Net book amount | 389,694 | 8,317 | 40,997 | 871,924 | 5,708 | 83,461 | 1,400,101 | |||||||||||||||||||||
Year ended 31 December 2006 | ||||||||||||||||||||||||||||
Opening net book amount | 389,694 | 8,317 | 40,997 | 871,924 | 5,708 | 83,461 | 1,400,101 | |||||||||||||||||||||
Exchange differences | 13,055 | — | 1,063 | 38,848 | 179 | 3,255 | 56,400 | |||||||||||||||||||||
Additions | 9,166 | 411 | 15,811 | 220,148 | 2,933 | 394,813 | 643,282 | |||||||||||||||||||||
Disposals | (823 | ) | (1,913 | ) | (222 | ) | (2,862 | ) | (25 | ) | (2 | ) | (5,847 | ) | ||||||||||||||
Depreciation | (24,683 | ) | (1,151 | ) | (11,881 | ) | (160,328 | ) | (2,221 | ) | — | (200,264 | ) | |||||||||||||||
Reclassification | 12,873 | — | 6,733 | 349,587 | — | (369,193 | ) | — | ||||||||||||||||||||
Closing net book amount | 399,282 | 5,664 | 52,501 | 1,317,317 | 6,574 | 112,334 | 1,893,672 | |||||||||||||||||||||
At 31 December 2006 | ||||||||||||||||||||||||||||
Cost | 517,253 | 10,298 | 100,302 | 2,081,859 | 18,801 | 112,334 | 2,840,847 | |||||||||||||||||||||
Accumulated depreciation and accumulated impairment | (117,971 | ) | (4,634 | ) | (47,801 | ) | (764,542 | ) | (12,227 | ) | — | (947,175 | ) | |||||||||||||||
Net book amount | 399,282 | 5,664 | 52,501 | 1,317,317 | 6,574 | 112,334 | 1,893,672 | |||||||||||||||||||||
Year ended 31 December 2007 | ||||||||||||||||||||||||||||
Opening net book amount | 399,282 | 5,664 | 52,501 | 1,317,317 | 6,574 | 112,334 | 1,893,672 | |||||||||||||||||||||
Exchange differences | 30,448 | — | 4,422 | 106,264 | 393 | 36,852 | 178,379 | |||||||||||||||||||||
Additions | 8,276 | 91 | 20,762 | 292,816 | 4,024 | 892,351 | 1,218,320 | |||||||||||||||||||||
Addition through business combinations | 160,233 | — | 4,998 | 298,651 | 127 | 362,241 | 826,250 | |||||||||||||||||||||
Disposals | (164 | ) | — | (129 | ) | (5,027 | ) | — | (613 | ) | (5,933 | ) | ||||||||||||||||
Depreciation | (29,551 | ) | (92 | ) | (28,273 | ) | (217,959 | ) | (2,789 | ) | — | (278,664 | ) | |||||||||||||||
Reclassification | 28,338 | 562 | 49,845 | 156,052 | — | (234,797 | ) | — | ||||||||||||||||||||
Impairment | — | — | (579 | ) | (10,033 | ) | — | — | (10,612 | ) | ||||||||||||||||||
Closing net book value | 596,862 | 6,225 | 103,547 | 1,938,081 | 8,329 | 1,168,368 | 3,821,412 | |||||||||||||||||||||
F-35
Table of Contents
Furniture | Plant, | |||||||||||||||||||||||||||
Leasehold | and | Machinery and | Motor | Construction in | ||||||||||||||||||||||||
Buildings | Improvements | Equipment | Equipment | Vehicles | Progress | Total | ||||||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||||||||
At 31 December 2007 | ||||||||||||||||||||||||||||
Cost | 752,116 | 10,937 | 221,491 | 2,901,088 | 21,590 | 1,168,368 | 5,075,590 | |||||||||||||||||||||
Accumulated depreciation and accumulated impairment | (155,254 | ) | (4,712 | ) | (117,944 | ) | (963,007 | ) | (13,261 | ) | — | (1,254,178 | ) | |||||||||||||||
Net book amount | 596,862 | 6,225 | 103,547 | 1,938,081 | 8,329 | 1,168,368 | 3,821,412 | |||||||||||||||||||||
Year ended 31 December 2008 | ||||||||||||||||||||||||||||
Opening net book amount | 596,862 | 6,225 | 103,547 | 1,938,081 | 8,329 | 1,168,368 | 3,821,412 | |||||||||||||||||||||
Exchange differences | 41,027 | — | 5,245 | 122,414 | 353 | 46,731 | 215,770 | |||||||||||||||||||||
Additions | 6,323 | 85 | 17,640 | 59,314 | 3,406 | 1,260,856 | 1,347,624 | |||||||||||||||||||||
Disposals | (19,054 | ) | — | (116 | ) | (1,385 | ) | (118 | ) | (1,470 | ) | (22,143 | ) | |||||||||||||||
Depreciation | (41,354 | ) | (140 | ) | (35,787 | ) | (340,399 | ) | (3,205 | ) | — | (420,885 | ) | |||||||||||||||
Reclassification | 436,130 | — | 17,721 | 750,000 | — | (1,203,851 | ) | — | ||||||||||||||||||||
Closing net book amount | 1,019,934 | 6,170 | 108,250 | 2,528,025 | 8,765 | 1,270,634 | 4,941,778 | |||||||||||||||||||||
At 31 December 2008 | ||||||||||||||||||||||||||||
Cost | 1,217,579 | 11,022 | 263,912 | 3,850,084 | 25,424 | 1,270,634 | 6,638,655 | |||||||||||||||||||||
Accumulated depreciation and accumulated impairment | (197,645 | ) | (4,852 | ) | (155,662 | ) | (1,322,059 | ) | (16,659 | ) | — | (1,696,877 | ) | |||||||||||||||
Net book amount | 1,019,934 | 6,170 | 108,250 | 2,528,025 | 8,765 | 1,270,634 | 4,941,778 | |||||||||||||||||||||
Nine months ended 30 September 2009 | ||||||||||||||||||||||||||||
Opening net book amount | 1,019,934 | 6,170 | 108,250 | 2,528,025 | 8,765 | 1,270,634 | 4,941,778 | |||||||||||||||||||||
Exchange differences | 590 | — | 20 | 1,701 | 2 | 499 | 2,812 | |||||||||||||||||||||
Additions | 3,866 | 5 | 20,650 | 8,410 | 446 | 235,646 | 269,023 | |||||||||||||||||||||
Disposals | — | — | (239 | ) | (186 | ) | (2,680 | ) | (508 | ) | (3,613 | ) | ||||||||||||||||
Depreciation | (44,664 | ) | (116 | ) | (31,081 | ) | (285,680 | ) | (2,439 | ) | — | (363,980 | ) | |||||||||||||||
Reclassification | 95,272 | — | 8,869 | 208,930 | — | (313,071 | ) | — | ||||||||||||||||||||
Impairment | — | — | — | — | — | (5,419 | ) | (5,419 | ) | |||||||||||||||||||
Closing net book value | 1,074,998 | 6,059 | 106,469 | 2,461,200 | 4,094 | 1,187,781 | 4,840,601 | |||||||||||||||||||||
At 30 September 2009 | ||||||||||||||||||||||||||||
Cost | 1,317,440 | 11,027 | 292,383 | 4,068,360 | 21,491 | 1,193,200 | 6,903,901 | |||||||||||||||||||||
Accumulated depreciation and accumulated impairment | (242,442 | ) | (4,968 | ) | (185,914 | ) | (1,607,160 | ) | (17,397 | ) | (5,419 | ) | (2,063,300 | ) | ||||||||||||||
Net book amount | 1,074,998 | 6,059 | 106,469 | 2,461,200 | 4,094 | 1,187,781 | 4,840,601 | |||||||||||||||||||||
F-36
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Cost of sales | 186,799 | 261,906 | 397,621 | 294,655 | 329,683 | |||||||||||||||
Selling and distribution expenses | 3,472 | 3,550 | 3,678 | 2,750 | 2,981 | |||||||||||||||
General and administrative expenses | 9,993 | 13,208 | 19,586 | 11,908 | 31,316 | |||||||||||||||
200,264 | 278,664 | 420,885 | 309,313 | 363,980 | ||||||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Beginning of the year/period | ||||||||||||||||
Cost | 66,825 | 91,856 | 154,548 | 162,933 | ||||||||||||
Accumulated amortisation | (6,750 | ) | (8,811 | ) | (11,506 | ) | (15,677 | ) | ||||||||
Net book amount | 60,075 | 83,045 | 143,042 | 147,256 | ||||||||||||
Opening net book amount | 60,075 | 83,045 | 143,042 | 147,256 | ||||||||||||
Exchange differences | 2,373 | 6,271 | 7,814 | 41 | ||||||||||||
Additions | 22,473 | — | — | — | ||||||||||||
Acquisition through business combination (Note 33(b)) | — | 55,893 | — | — | ||||||||||||
Amortisation | (1,876 | ) | (2,167 | ) | (3,600 | ) | (2,730 | ) | ||||||||
Closing net book amount | 83,045 | 143,042 | 147,256 | 144,567 | ||||||||||||
End of the year/period | ||||||||||||||||
Cost | 91,856 | 154,548 | 162,933 | 162,981 | ||||||||||||
Accumulated amortisation | (8,811 | ) | (11,506 | ) | (15,677 | ) | (18,414 | ) | ||||||||
Net book amount | 83,045 | 143,042 | 147,256 | 144,567 | ||||||||||||
F-37
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Cost of sales | 157 | 157 | 157 | 118 | 118 | |||||||||||||||
General and administrative expenses | 1,719 | 2,010 | 3,443 | 2,570 | 2,612 | |||||||||||||||
1,876 | 2,167 | 3,600 | 2,688 | 2,730 | ||||||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
In Hong Kong held on: | ||||||||||||||||
Leases of leasehold land between 10 to 50 years | 6,371 | 6,213 | 6,056 | 5,938 | ||||||||||||
In mainland China held on: | ||||||||||||||||
Leases of land use rights between 10 to 50 years | 76,674 | 130,673 | 135,325 | 132,851 | ||||||||||||
In India held on: | ||||||||||||||||
Leases of land use rights between 10 to 50 years | — | 6,156 | 5,875 | 5,778 | ||||||||||||
83,045 | 143,042 | 147,256 | 144,567 | |||||||||||||
F-38
Table of Contents
Technologies | Customer | |||||||||||||||||||
Goodwill | Fee | Relationship | Others | Total | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Note (i)) | ||||||||||||||||||||
At 1 January 2006 | ||||||||||||||||||||
Cost | 33,779 | 11,700 | — | 800 | 46,279 | |||||||||||||||
Accumulated amortisation and accumulated impairment | (19,724 | ) | (2,925 | ) | — | (321 | ) | (22,970 | ) | |||||||||||
Net book amount | 14,055 | 8,775 | — | 479 | 23,309 | |||||||||||||||
Year ended 31 December 2006 | ||||||||||||||||||||
Opening net book amount | 14,055 | 8,775 | — | 479 | 23,309 | |||||||||||||||
Exchange differences | 477 | — | — | — | 477 | |||||||||||||||
Impairment | (55 | ) | — | — | — | (55 | ) | |||||||||||||
Amortisation | — | (1,170 | ) | — | — | (1,170 | ) | |||||||||||||
Closing net book amount | 14,477 | 7,605 | — | 479 | 22,561 | |||||||||||||||
At 31 December 2006 | ||||||||||||||||||||
Cost | 34,201 | 11,700 | — | 800 | 46,701 | |||||||||||||||
Accumulated amortisation and accumulated impairment | (19,724 | ) | (4,095 | ) | — | (321 | ) | (24,140 | ) | |||||||||||
Net book amount | 14,477 | 7,605 | — | 479 | 22,561 | |||||||||||||||
Year ended 31 December 2007 | ||||||||||||||||||||
Opening net book amount | 14,477 | 7,605 | — | 479 | 22,561 | |||||||||||||||
Exchange differences | 1,014 | — | 294 | — | 1,308 | |||||||||||||||
Acquisition through business combination (Note 33(b)) | 106,738 | — | 20,629 | — | 127,367 | |||||||||||||||
Amortisation | — | (1,170 | ) | (167 | ) | — | (1,337 | ) | ||||||||||||
Closing net book amount | 122,229 | 6,435 | 20,756 | 479 | 149,899 | |||||||||||||||
At 31 December 2007 | ||||||||||||||||||||
Cost | 141,953 | 11,700 | 20,931 | 800 | 175,384 | |||||||||||||||
Accumulated amortisation and accumulated impairment | (19,724 | ) | (5,265 | ) | (175 | ) | (321 | ) | (25,485 | ) | ||||||||||
Net book amount | 122,229 | 6,435 | 20,756 | 479 | 149,899 | |||||||||||||||
F-39
Table of Contents
Technologies | Customer | |||||||||||||||||||
Goodwill | Fee | Relationship | Others | Total | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Note (i)) | ||||||||||||||||||||
Year ended 31 December 2008 | ||||||||||||||||||||
Opening net book amount | 122,229 | 6,435 | 20,756 | 479 | 149,899 | |||||||||||||||
Exchange differences | 9,253 | — | 925 | — | 10,178 | |||||||||||||||
Impairment | — | — | (19,860 | ) | — | (19,860 | ) | |||||||||||||
Adjustment for change in estimate of contingent consideration (Note (ii)) | (115,067 | ) | — | — | — | (115,067 | ) | |||||||||||||
Amortisation | — | (1,170 | ) | (1,821 | ) | — | (2,991 | ) | ||||||||||||
Closing net book amount | 16,415 | 5,265 | — | 479 | 22,159 | |||||||||||||||
At 31 December 2008 | ||||||||||||||||||||
Cost | 36,139 | 11,700 | 22,260 | 800 | 70,899 | |||||||||||||||
Accumulated amortisation and accumulated impairment | (19,724 | ) | (6,435 | ) | (22,260 | ) | (321 | ) | (48,740 | ) | ||||||||||
Net book amount | 16,415 | 5,265 | — | 479 | 22,159 | |||||||||||||||
Nine months ended 30 September 2009 | ||||||||||||||||||||
Opening net book amount | 16,415 | 5,265 | — | 479 | 22,159 | |||||||||||||||
Exchange differences | 11 | — | — | — | 11 | |||||||||||||||
Amortisation | — | (878 | ) | — | — | (878 | ) | |||||||||||||
Closing net book amount | 16,426 | 4,387 | — | 479 | 21,292 | |||||||||||||||
At 30 September 2009 | ||||||||||||||||||||
Cost | 36,150 | 11,700 | 22,260 | 800 | 70,910 | |||||||||||||||
Accumulated amortisation and accumulated impairment | (19,724 | ) | (7,313 | ) | (22,260 | ) | (321 | ) | (49,618 | ) | ||||||||||
Net book amount | 16,426 | 4,387 | — | 479 | 21,292 | |||||||||||||||
F-40
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Mainland China | 14,477 | 122,229 | 16,415 | 16,426 | ||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
Gross margin | 21.0 | % | 23.0 | % | 19.2 | % | 19.7 | % | ||||||||
Growth rate | 16.8 | % | 20.0 | % | 10.0 | % | 10.0 | % | ||||||||
Discount rate | 10.0 | % | 8.3 | % | 6.1 | % | 6.1 | % | ||||||||
F-41
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Unlisted equity security | ||||||||||||||||
Beginning of the year/period | — | — | 21,089 | 20,635 | ||||||||||||
Addition | — | 21,089 | — | — | ||||||||||||
Less: fair value loss recognised directly inavailable-for-sale financial asset reserve | — | — | (454 | ) | (2,921 | ) | ||||||||||
End of the year/period | — | 21,089 | 20,635 | 17,714 | ||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Raw materials | 81,982 | 121,233 | 150,286 | 159,529 | ||||||||||||
Work in progress | 77,617 | 114,755 | 101,448 | 132,171 | ||||||||||||
Finished goods | 103,841 | 161,860 | 173,315 | 161,230 | ||||||||||||
Consumable stocks | 3,125 | 572 | 2,004 | 4,639 | ||||||||||||
266,565 | 398,420 | 427,053 | 457,569 | |||||||||||||
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Cost of inventories | 2,249,110 | 3,137,705 | 4,198,374 | 3,151,242 | 2,846,842 | |||||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Debtors | 1,019,129 | 1,368,801 | 986,983 | 958,917 | ||||||||||||
Prepayments and other receivables | 95,781 | 112,052 | 176,689 | 124,842 | ||||||||||||
1,114,910 | 1,480,853 | 1,163,672 | 1,083,759 | |||||||||||||
F-42
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Within credit period | 753,440 | 906,067 | 718,206 | 786,698 | ||||||||||||
0 - 30 days | 150,923 | 206,755 | 171,635 | 91,201 | ||||||||||||
31 - 60 days | 58,959 | 135,678 | 36,756 | 40,489 | ||||||||||||
61 - 90 days | 25,101 | 73,682 | 40,565 | 23,233 | ||||||||||||
Over 90 days | 30,706 | 46,619 | 19,821 | 17,296 | ||||||||||||
1,019,129 | 1,368,801 | 986,983 | 958,917 | |||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
0 - 30 days | 150,923 | 206,755 | 171,635 | 91,201 | ||||||||||||
31 - 60 days | 58,959 | 135,678 | 36,756 | 40,489 | ||||||||||||
61 - 90 days | 13,387 | 68,528 | 21,096 | 22,554 | ||||||||||||
Over 90 days | 17,960 | 44,424 | 13,587 | 15,040 | ||||||||||||
241,229 | 455,385 | 243,074 | 169,284 | |||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
HK$ | 15,837 | 20,481 | 16,521 | 15,067 | ||||||||||||
US$ | 466,518 | 680,210 | 559,317 | 633,400 | ||||||||||||
RMB | 629,256 | 775,858 | 566,283 | 395,482 | ||||||||||||
EUR | 2,866 | 2,257 | 21,540 | 32,565 | ||||||||||||
Other currencies | 433 | 2,047 | 11 | 7,245 | ||||||||||||
1,114,910 | 1,480,853 | 1,163,672 | 1,083,759 | |||||||||||||
F-43
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Beginning of the year/period | 35,535 | 34,855 | 24,596 | 14,792 | ||||||||||||
Exchange differences | 773 | 999 | 484 | 10 | ||||||||||||
Provision for impairment of receivables | 16,935 | 12,060 | 7,318 | 5,125 | ||||||||||||
Receivables written off during the year/period as uncollectible | (17,271 | ) | (17,848 | ) | (8,629 | ) | (4,753 | ) | ||||||||
Unused amounts reversed | (1,117 | ) | (5,470 | ) | (8,977 | ) | (2,872 | ) | ||||||||
End of the year/period | 34,855 | 24,596 | 14,792 | 12,302 | ||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Cash in hand | 1,955 | 376 | 406 | 320 | ||||||||||||
Bank balances | 163,009 | 402,446 | 797,468 | 848,692 | ||||||||||||
164,964 | 402,822 | 797,874 | 849,012 | |||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
HK$ | 5,138 | 19,215 | 20,765 | 25,612 | ||||||||||||
RMB | 73,309 | 196,140 | 351,062 | 526,167 | ||||||||||||
US$ | 73,759 | 133,129 | 382,772 | 270,747 | ||||||||||||
Other currencies | 12,758 | 54,338 | 43,275 | 26,486 | ||||||||||||
164,964 | 402,822 | 797,874 | 849,012 | |||||||||||||
F-44
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Restricted bank balances | 1,424 | 3,901 | 5,873 | 8,397 | ||||||||||||
Available- | Employee | |||||||||||||||||||||||||||||||
for-Sale | Share- | |||||||||||||||||||||||||||||||
Financial | Based | |||||||||||||||||||||||||||||||
Capital | Asset | Compensation | Hedging | General | Exchange | Retained | ||||||||||||||||||||||||||
Reserve | Reserve | Reserve | Reserve | Reserve | Reserve | Earnings | Total | |||||||||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||||||||||||
Note (i) | Note (ii) | |||||||||||||||||||||||||||||||
At 1 January 2006 | 134,811 | — | — | — | 68,286 | 16,889 | 346,736 | 566,722 | ||||||||||||||||||||||||
Exchange differences | — | — | — | — | 336 | 36,801 | — | 37,137 | ||||||||||||||||||||||||
Profit for the year | — | — | — | — | — | — | 239,762 | 239,762 | ||||||||||||||||||||||||
Distribution to a shareholder | — | — | — | — | — | — | (410,000 | ) | (410,000 | ) | ||||||||||||||||||||||
Transfer | — | — | — | — | 12,773 | — | (12,773 | ) | — | |||||||||||||||||||||||
At 31 December 2006 | 134,811 | — | — | — | 81,395 | 53,690 | 163,725 | 433,621 | ||||||||||||||||||||||||
Exchange differences | — | — | — | — | 713 | 81,190 | — | 81,903 | ||||||||||||||||||||||||
Profit for the year | — | — | — | — | — | — | 246,094 | 246,094 | ||||||||||||||||||||||||
Capital contribution from immediate holding company | 826,612 | — | — | — | — | — | — | 826,612 | ||||||||||||||||||||||||
Shares award expenses (Note 7) | — | — | 226,097 | — | — | — | — | 226,097 | ||||||||||||||||||||||||
Dividend (Note 13) | — | — | (226,097 | ) | — | — | — | (63,903 | ) | (290,000 | ) | |||||||||||||||||||||
Transfer | — | — | — | — | 48,461 | — | (48,461 | ) | — | |||||||||||||||||||||||
At 31 December 2007 | 961,423 | — | — | — | 130,569 | 134,880 | 297,455 | 1,524,327 | ||||||||||||||||||||||||
Exchange differences | — | — | — | — | 649 | 60,104 | — | 60,753 | ||||||||||||||||||||||||
Change in fair value ofavailable-for-sale financial asset | — | (454 | ) | — | — | — | — | — | (454 | ) | ||||||||||||||||||||||
Profit for the year | — | — | — | — | — | — | 376,071 | 376,071 | ||||||||||||||||||||||||
Shares award expenses (Note 7) | — | — | 10,601 | — | — | — | — | 10,601 | ||||||||||||||||||||||||
Dividend (Note 13) | — | — | (8,404 | ) | — | — | — | (591,696 | ) | (600,100 | ) | |||||||||||||||||||||
Transfer | — | — | — | — | 35,388 | — | (35,388 | ) | — | |||||||||||||||||||||||
At 31 December 2008 | 961,423 | (454 | ) | 2,197 | — | 166,606 | 194,984 | 46,442 | 1,371,198 | |||||||||||||||||||||||
Exchange differences | — | — | — | — | 8 | 2,359 | — | 2,367 | ||||||||||||||||||||||||
Change in fair value ofavailable-for-sale financial asset | — | (2,921 | ) | — | — | — | — | — | (2,921 | ) | ||||||||||||||||||||||
Cash flow hedge | ||||||||||||||||||||||||||||||||
— Change in fair value of hedging instruments | — | — | — | 22,796 | — | — | — | 22,796 | ||||||||||||||||||||||||
— Transfer to income statement upon change in fair value of hedged items | — | — | — | (17,226 | ) | — | — | — | (17,226 | ) | ||||||||||||||||||||||
— Transfer to property, plant and equipment | — | — | — | (178 | ) | — | — | — | (178 | ) | ||||||||||||||||||||||
Profit for the period | — | — | — | — | — | — | 127,245 | 127,245 | ||||||||||||||||||||||||
Capital contribution from immediate holding company (Note 33(d)) | 266,120 | — | — | — | — | — | — | 266,120 | ||||||||||||||||||||||||
Shares award expenses (Note 7) | — | — | 9,897 | — | — | — | — | 9,897 | ||||||||||||||||||||||||
Transfer | — | — | — | — | 28,183 | — | (28,183 | ) | — | |||||||||||||||||||||||
At 30 September 2009 | 1,227,543 | (3,375 | ) | 12,094 | 5,392 | 194,797 | 197,343 | 145,504 | 1,779,298 | |||||||||||||||||||||||
F-45
Table of Contents
Available- | Employee | |||||||||||||||||||||||||||||||
for-Sale | Share- | |||||||||||||||||||||||||||||||
Financial | Based | |||||||||||||||||||||||||||||||
Capital | Asset | Compensation | Hedging | General | Exchange | Retained | ||||||||||||||||||||||||||
Reserve | Reserve | Reserve | Reserve | Reserve | Reserve | Earnings | Total | |||||||||||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||||||||||||
Note (i) | Note (ii) | |||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||
At 1 January 2008 | 961,423 | — | — | — | 130,569 | 134,880 | 297,455 | 1,524,327 | ||||||||||||||||||||||||
Exchange differences | — | — | — | — | 717 | 82,358 | — | 83,075 | ||||||||||||||||||||||||
Change in fair value ofavailable-for-sale financial asset | — | 3,564 | — | — | — | — | — | 3,564 | ||||||||||||||||||||||||
Profit for the period | — | — | — | — | — | — | 336,258 | 336,258 | ||||||||||||||||||||||||
Shares award expenses (Note 7) | — | — | 8,404 | — | — | — | — | 8,404 | ||||||||||||||||||||||||
Dividend (Note 13) | — | — | (8,404 | ) | — | — | — | (591,696 | ) | (600,100 | ) | |||||||||||||||||||||
Transfer | — | — | — | — | 13,229 | — | (13,229 | ) | — | |||||||||||||||||||||||
At 30 September 2008 | 961,423 | 3,564 | — | — | 144,515 | 217,238 | 28,788 | 1,355,528 | ||||||||||||||||||||||||
(i) | The employee share-based compensation reserve relates to the share award expenses, details of which are described in Note 7. |
(ii) | As stipulated by regulations in mainland China, subsidiaries established and operated in mainland China are required to appropriate a portion of their after-tax profit (after offsetting prior year losses) to the general reserve, at rates determined by their respective boards of directors. The general reserve can be utilised to offset prior year losses or be utilised for the issuance of bonus shares. During the years ended 31 December 2006, 2007 and 2008 and nine months ended 30 September 2008 and 2009, the boards of directors of certain of the PCB Business’ entities established in mainland China appropriated an aggregate amount of approximately HK$12,773,000, HK$48,461,000, HK$35,388,000, HK$13,229,000 (unaudited) and HK$28,183,000 to the general reserve respectively. |
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Non-current | ||||||||||||||||
Long-term bank loans (Note(a)) | 667,600 | 1,679,147 | 2,763,230 | 2,954,662 | ||||||||||||
Current | ||||||||||||||||
Current portion of long-term bank loans (Note(a)) | 136,160 | 379,294 | 358,982 | 467,956 | ||||||||||||
Short-term bank loans (Note(b)) | 727,419 | 528,994 | 438,405 | 141,838 | ||||||||||||
Bank overdrafts (Note(b)) | 41,657 | — | 25,626 | — | ||||||||||||
905,236 | 908,288 | 823,013 | 609,794 | |||||||||||||
F-46
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Long-term bank loans | 803,760 | 2,058,441 | 3,122,212 | 3,422,618 | ||||||||||||
Less: current portion included under current liabilities | (136,160 | ) | (379,294 | ) | (358,982 | ) | (467,956 | ) | ||||||||
Long-term portion under non-current liabilities | 667,600 | 1,679,147 | 2,763,230 | 2,954,662 | ||||||||||||
All long-term bank loans are unsecured and are repayable in equal quarterly or semi-annual instalments up to 2013. The long-term bank loans carry interests that were above Hong Kong Interbank Offered Rate, London Interbank Offered Rate or Singapore Interbank Offered Rate in the range of 0.88% — 1.20%, 0.67% — 1.20%, 0.65% — 1.50% and 0.67% — 2.00% for the years ended 31 December 2006, 2007, 2008 and for the nine months ended 30 September 2009, respectively. |
(a) | The carrying amounts and fair values of the long-term bank loans are as follows: |
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Long-term bank loans | ||||||||||||||||
Carrying amounts | 803,760 | 2,058,441 | 3,122,212 | 3,422,618 | ||||||||||||
Fair values | 813,018 | 2,116,387 | 3,419,564 | 3,429,346 | ||||||||||||
The fair values of non-current borrowings are estimated based on discounted cash flow approach using the prevailing market rates of interest available to the PCB Business of 5.26%, 4.11%, 0.5% and 2.06% for financial instruments with substantially the same terms and characteristics for the years ended 31 December 2006, 2007, 2008 and for the nine months ended 30 September 2009 respectively, depending on the types and currencies of borrowings. | ||
(b) | The carrying amounts of the short-term bank loans and bank overdrafts approximate their fair values. All short-term bank loans are unsecured. | |
(c) | The carrying amounts of bank borrowings are denominated in the following currencies: |
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
RMB | 593,846 | 570,494 | 493,893 | 249,634 | ||||||||||||
HK$ | 437,553 | 1,019,000 | 709,644 | 702,693 | ||||||||||||
US$ | 541,437 | 952,223 | 2,382,706 | 2,612,129 | ||||||||||||
EUR | — | 45,718 | — | — | ||||||||||||
1,572,836 | 2,587,435 | 3,586,243 | 3,564,456 | |||||||||||||
F-47
Table of Contents
(d) | The effective interest rates (per annum) at the end of reporting periods are as follows: |
At 31 December 2006 | ||||||||||||||||
RMB | HK$ | US$ | EUR | |||||||||||||
Long-term loans | 5.58 | % | 5.03 | % | 6.51 | % | — | |||||||||
Short-term loans | 5.09 | % | 4.94 | % | 6.32 | % | — | |||||||||
Bank overdrafts | 5.58 | % | 7.75 | % | — | — | ||||||||||
At 31 December 2007 | ||||||||||||||||
RMB | HK$ | US$ | EUR | |||||||||||||
Long-term loans | 5.73 | % | 4.19 | % | 6.23 | % | — | |||||||||
Short-term loans | 6.34 | % | 4.35 | % | 6.02 | % | 5.43 | % | ||||||||
At 31 December 2008 | ||||||||||||||||
RMB | HK$ | US$ | EUR | |||||||||||||
Long-term loans | 6.36 | % | 4.16 | % | 4.33 | % | — | |||||||||
Short-term loans | 5.79 | % | — | 3.79 | % | — | ||||||||||
Bank overdrafts | 5.10 | % | — | — | — | |||||||||||
At 30 September 2009 | ||||||||||||||||
RMB | HK$ | US$ | EUR | |||||||||||||
Long-term loans | 5.06 | % | 0.97 | % | 1.48 | % | — | |||||||||
Short-term loans | 4.90 | % | — | — | — | |||||||||||
(e) | All short-term bank loans and bank overdrafts will mature within one year. The maturity of long-term bank loans is as follows: |
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Within one year | 136,160 | 379,294 | 358,982 | 467,956 | ||||||||||||
Between one and two years | 241,195 | 451,185 | 525,225 | 1,185,760 | ||||||||||||
Between two and five years | 426,405 | 1,227,962 | 2,238,005 | 1,768,902 | ||||||||||||
803,760 | 2,058,441 | 3,122,212 | 3,422,618 | |||||||||||||
(f) | The exposure of the PCB Business’ borrowings to interest rate changes and the contractual repricing dates at the end of reporting periods are as follows: |
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Changes in interest rates | ||||||||||||||||
— 6 months or less | 703,576 | 562,322 | 1,329,429 | 384,889 | ||||||||||||
— over 6 months and up to 12 months | 869,260 | 2,025,113 | 2,256,814 | 3,179,567 | ||||||||||||
1,572,836 | 2,587,435 | 3,586,243 | 3,564,456 | |||||||||||||
F-48
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Assets | ||||||||||||||||
Forward foreign exchange contracts (Note(i)) | — | — | — | 22,796 | ||||||||||||
Less: current portion included under current assets | — | — | — | (438 | ) | |||||||||||
Long-term portion under non-current assets | — | — | — | 22,358 | ||||||||||||
Liabilities | ||||||||||||||||
Interest rate swap contracts (Note(ii)) | — | — | 25,365 | 15,967 | ||||||||||||
Less: current portion included under current liabilities | — | — | (8,015 | ) | (2,023 | ) | ||||||||||
Long-term portion under non-current liabilities | — | — | 17,350 | 13,944 | ||||||||||||
(i) | At 30 September 2009, the PCB Business entered into certain foreign exchange contracts to buy EUR17,523,720 and JPY48,000,000 (equivalent to approximately HK$202,311,000) in total and to sell US$23,179,838 (equivalent to approximately HK$179,655,000). These outstanding forward foreign exchange contracts were mainly entered into to hedge against the foreign exchange risk in relation to the financial liabilities denominated in EUR which will mature in 2013 and payables denominated in EUR and JPY for property, plant and equipment which will mature within twelve months from date of end of reporting period. | |
(ii) | As at 31 December 2008 and 30 September 2009, the aggregate notional principal amounts of the outstanding swap contracts were HK$774,990,000 and HK$775,050,000 respectively, of which the PCB Business pays fixed interest at 2.72% or 3.43% per annum and receives variable rates to hedge against interest rate risk of the bank borrowings and will mature between 19 November 2009 and 30 July 2012. |
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Deferred tax assets: | ||||||||||||||||
— Deferred tax assets to be recovered after more than 12 months | (155 | ) | (13,124 | ) | (32,517 | ) | (42,437 | ) | ||||||||
Deferred tax liabilities: | ||||||||||||||||
— Deferred tax liabilities to be settled after more than 12 months | — | 65,183 | 79,520 | 74,779 | ||||||||||||
Deferred tax (assets)/liabilities — net | (155 | ) | 52,059 | 47,003 | 32,342 | |||||||||||
F-49
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Beginning of the year/period | 6,599 | (155 | ) | 52,059 | 47,003 | |||||||||||
Exchange differences | — | (58 | ) | 863 | (5 | ) | ||||||||||
Recognised in the combined income statement (Note 12) | (6,754 | ) | (9,140 | ) | (5,919 | ) | (14,656 | ) | ||||||||
Acquisition through business combination (Note 33(b)) | — | 61,412 | — | — | ||||||||||||
End of the year/period | (155 | ) | 52,059 | 47,003 | 32,342 | |||||||||||
Representing: | ||||||||||||||||
Accelerated tax depreciation | 9,955 | 12,474 | 17,948 | 17,104 | ||||||||||||
Tax losses | (10,110 | ) | (9,726 | ) | (11,034 | ) | (18,376 | ) | ||||||||
Valuation adjustment resulting from acquisition of a subsidiary | — | 78,203 | 67,633 | 62,104 | ||||||||||||
Decelerated tax depreciation | — | (27,210 | ) | (38,043 | ) | (43,031 | ) | |||||||||
Others | — | (1,682 | ) | 10,499 | 14,541 | |||||||||||
(155 | ) | 52,059 | 47,003 | 32,342 | ||||||||||||
Decelerated | ||||||||||||||||
Tax | ||||||||||||||||
Depreciation | Tax Losses | Others | Total | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
At 1 January 2006 | — | 4,902 | — | 4,902 | ||||||||||||
Recognised in the combined income statement | — | 5,208 | — | 5,208 | ||||||||||||
At 31 December 2006 | — | 10,110 | — | 10,110 | ||||||||||||
Exchange differences | 754 | — | 4 | 758 | ||||||||||||
Recognised in the combined income statement | 12,360 | (384 | ) | (700 | ) | 11,276 | ||||||||||
Acquisition through business combination (Note 33(b)) | 14,096 | — | 2,378 | 16,474 | ||||||||||||
At 31 December 2007 | 27,210 | 9,726 | 1,682 | 38,618 | ||||||||||||
Exchange differences | 1,806 | — | 134 | 1,940 | ||||||||||||
Recognised in the combined income statement | 9,027 | 1,308 | 4,049 | 14,384 | ||||||||||||
At 31 December 2008 | 38,043 | 11,034 | 5,865 | 54,942 | ||||||||||||
Exchange differences | 27 | 1 | 5 | 33 | ||||||||||||
Recognised in the combined income statement | 4,961 | 7,341 | 168 | 12,470 | ||||||||||||
At 30 September 2009 | 43,031 | 18,376 | 6,038 | 67,445 | ||||||||||||
F-50
Table of Contents
Valuation | ||||||||||||||||
Adjustment | ||||||||||||||||
Resulting | ||||||||||||||||
from | ||||||||||||||||
Acquisition | Accelerated | |||||||||||||||
of a | Tax | |||||||||||||||
Subsidiary | Depreciation | Others | Total | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
At 1 January 2006 | — | 11,501 | — | 11,501 | ||||||||||||
Recognised in the combined income statement | — | (1,546 | ) | — | (1,546 | ) | ||||||||||
At 31 December 2006 | — | 9,955 | — | 9,955 | ||||||||||||
Exchange differences | 700 | — | — | 700 | ||||||||||||
Recognised in the combined income statement | (383 | ) | 2,519 | — | 2,136 | |||||||||||
Acquisition through business combination (Note 33(b)) | 77,886 | — | — | 77,886 | ||||||||||||
At 31 December 2007 | 78,203 | 12,474 | — | 90,677 | ||||||||||||
Exchange differences | 2,801 | — | 2 | 2,803 | ||||||||||||
Recognised in the combined income statement | (13,371 | ) | 5,474 | 16,362 | 8,465 | |||||||||||
At 31 December 2008 | 67,633 | 17,948 | 16,364 | 101,945 | ||||||||||||
Exchange differences | 20 | 1 | 7 | 28 | ||||||||||||
Recognised in the combined income statement | (5,549 | ) | (845 | ) | 4,208 | (2,186 | ) | |||||||||
At 30 September 2009 | 62,104 | 17,104 | 20,579 | 99,787 | ||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Put option | — | 264,394 | 151,270 | 161,758 | ||||||||||||
F-51
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
Gross margin | — | 17.8 | % | 19.2 | % | 19.7 | % | |||||||||
Growth rate | — | 25.0 | % | 10.0 | % | 10.0 | % | |||||||||
Discount rate | — | 8.3 | % | 6.1 | % | 6.1 | % | |||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
US$ | — | 87,862 | 44,349 | 23,717 | ||||||||||||
JPY | — | 26,272 | 13,039 | — | ||||||||||||
EUR | — | 1,524 | 17,176 | — | ||||||||||||
HK$ | — | — | — | 1,257 | ||||||||||||
— | 115,658 | 74,564 | 24,974 | |||||||||||||
F-52
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Creditors | 329,574 | 598,331 | 667,797 | 571,752 | ||||||||||||
Accruals | 381,683 | 672,426 | 720,622 | 488,643 | ||||||||||||
711,257 | 1,270,757 | 1,388,419 | 1,060,395 | |||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Within credit period | 243,467 | 368,096 | 408,312 | 418,407 | ||||||||||||
0 — 30 days | 52,727 | 127,096 | 181,909 | 102,321 | ||||||||||||
31 — 60 days | 17,338 | 58,889 | 55,412 | 34,673 | ||||||||||||
61 — 90 days | 9,594 | 25,078 | 10,287 | 5,408 | ||||||||||||
Over 90 days | 6,448 | 19,172 | 11,877 | 10,943 | ||||||||||||
329,574 | 598,331 | 667,797 | 571,752 | |||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
HK$ | 188,475 | 170,923 | 160,345 | 132,789 | ||||||||||||
RMB | 356,422 | 652,364 | 775,854 | 710,993 | ||||||||||||
US$ | 152,599 | 289,491 | 405,821 | 168,983 | ||||||||||||
EUR | 3,338 | 90,991 | 39,963 | 33,233 | ||||||||||||
JPY | 9,082 | 46,470 | 6,197 | 13,238 | ||||||||||||
Other currencies | 1,341 | 20,518 | 239 | 1,159 | ||||||||||||
711,257 | 1,270,757 | 1,388,419 | 1,060,395 | |||||||||||||
F-53
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
US$ | — | 2,529 | — | — | ||||||||||||
EUR | — | 36,526 | — | — | ||||||||||||
— | 39,055 | — | — | |||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
US$ | 96,841 | 165,969 | 77,898 | 62,978 | ||||||||||||
RMB | 23,077 | 7,708 | 91,761 | 59,356 | ||||||||||||
119,918 | 173,677 | 169,659 | 122,334 | |||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
US$ | — | — | — | 5,188 | ||||||||||||
RMB | 10,716 | 5,040 | 12,338 | 13,063 | ||||||||||||
10,716 | 5,040 | 12,338 | 18,251 | |||||||||||||
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
HK$ | — | 244,296 | 388,330 | 13,889 | ||||||||||||
RMB | — | — | 1,348 | — | ||||||||||||
US$ | — | — | 564 | — | ||||||||||||
— | 244,296 | 390,242 | 13,889 | |||||||||||||
F-54
Table of Contents
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
HK$ | — | (6,562 | ) | — | — | |||||||||||
RMB | — | — | (41,719 | ) | (67,207 | ) | ||||||||||
US$ | (66,454 | ) | (93,276 | ) | (46,762 | ) | (30,745 | ) | ||||||||
(66,454 | ) | (99,838 | ) | (88,481 | ) | (97,952 | ) | |||||||||
(a) | Capital commitments |
At | ||||||||||||||||
As 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Contracted but not provided for | 184,217 | 615,276 | 332,771 | 274,105 | ||||||||||||
Authorised but not contracted for | 6,446 | 101,379 | 3,342 | 2,173 | ||||||||||||
190,663 | 716,655 | 336,113 | 276,278 | |||||||||||||
(b) | Operating lease commitments |
At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||
Within one year | 3,387 | 3,055 | 2,391 | 3,682 | ||||||||||||
One to five years | 2,035 | 3,908 | 2,992 | 3,902 | ||||||||||||
More than five years | 5,027 | 18,956 | 18,695 | 18,507 | ||||||||||||
10,449 | 25,919 | 24,078 | 26,091 | |||||||||||||
F-55
Table of Contents
(a) | Acquisition of minority interest in a subsidiary |
Acquiree’s | ||||
Carrying | ||||
Amount | ||||
2006 | ||||
HK$’000 | ||||
Net assets acquired comprised of: | ||||
Property, plant and equipment | 69,646 | |||
Land use right | 2,242 | |||
Inventories | 857 | |||
Debtors and prepayments | 9,283 | |||
Cash and bank balances | 5,237 | |||
Creditors and accruals | (10,187 | ) | ||
Balances with group companies | (2,461 | ) | ||
Net assets value | 74,617 | |||
Additional share of net assets value (10%) | 7,462 | |||
Less: Consideration paid | (6,354 | ) | ||
Negative goodwill credited to combined income statement (Note) | 1,108 | |||
(b) | Acquisition of a subsidiary through business combination |
HK$’000 | ||||
Purchase consideration: | ||||
— Cash paid | 707,666 | |||
— Financial liabilities — put option (Note 26) | 264,394 | |||
— Direct costs relating to the acquisition | 16,500 | |||
Total purchase consideration | 988,560 | |||
Fair value of net assets acquired — shown as below | (881,822 | ) | ||
Goodwill (Note 16) | 106,738 | |||
F-56
Table of Contents
Acquiree’s | ||||||||||||
Carrying | ||||||||||||
Amount | Acquiree’s | |||||||||||
Before | Fair Value | Fair Value | ||||||||||
Acquisition | Adjustment | Amount | ||||||||||
HK$’000 | HK$’000 | HK$’000 | ||||||||||
Net assets acquired comprised of: | ||||||||||||
Property, plant and equipment | 568,776 | 257,474 | 826,250 | |||||||||
Leasehold land and land use rights | 21,099 | 34,794 | 55,893 | |||||||||
Intangible assets | — | 20,629 | 20,629 | |||||||||
Inventories | 27,782 | — | 27,782 | |||||||||
Debtors and prepayments | 216,121 | — | 216,121 | |||||||||
Deferred tax assets | 16,474 | — | 16,474 | |||||||||
Cash and bank balances | 29,451 | — | 29,451 | |||||||||
Creditors and accruals | (171,772 | ) | — | (171,772 | ) | |||||||
Taxation payable | (3,905 | ) | — | (3,905 | ) | |||||||
Borrowings | (57,215 | ) | — | (57,215 | ) | |||||||
Deferred tax liabilities | — | (77,886 | ) | (77,886 | ) | |||||||
646,811 | 235,011 | 881,822 | ||||||||||
Goodwill (Note 16) | 106,738 | |||||||||||
988,560 | ||||||||||||
Satisfied by: | ||||||||||||
Cash consideration | 724,166 | |||||||||||
Financial liabilities (Note 26) | 264,394 | |||||||||||
988,560 | ||||||||||||
Net cash outflow arising on acquisition | ||||||||||||
Cash consideration | 724,166 | |||||||||||
Bank balances and cash acquired | (29,451 | ) | ||||||||||
Net outflow of cash and cash equivalents in respect of the acquisition of a subsidiary | 694,715 | |||||||||||
F-57
Table of Contents
(c) | Analysis of cash and cash equivalents |
At 31 December | At 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Cash and bank balances (Note 21) | 164,964 | 402,822 | 797,874 | 381,870 | 849,012 | |||||||||||||||
Bank overdrafts (Note 23) | (41,657 | ) | — | (25,626 | ) | (25,782 | ) | — | ||||||||||||
123,307 | 402,822 | 772,248 | 356,088 | 849,012 | ||||||||||||||||
Less: restricted bank balances (Note 21) | (1,424 | ) | (3,901 | ) | (5,873 | ) | (1,183 | ) | (8,397 | ) | ||||||||||
Cash and cash equivalents | 121,883 | 398,921 | 766,375 | 354,905 | 840,615 | |||||||||||||||
(d) | Major non-cash transactions |
(a) | Purchases of raw materials (Note i) |
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
A minority shareholder | 301,348 | 418,501 | 401,531 | 335,316 | 225,280 | |||||||||||||||
A subsidiary of a minority shareholder | 34,280 | 37,272 | 30,047 | 17,690 | 42,498 | |||||||||||||||
Fellow subsidiaries | 210,841 | 281,974 | 345,288 | 264,909 | 279,524 | |||||||||||||||
(b) | Rental expense (Note ii) |
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
A fellow subsidiary | 448 | 503 | 503 | 377 | 377 | |||||||||||||||
F-58
Table of Contents
(c) | Interest expense (Note iii) |
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
A fellow subsidiary | 198 | — | — | — | — | |||||||||||||||
(d) | Commission on purchase of machineries (Note iv) |
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
A fellow subsidiary | 189 | — | — | — | — | |||||||||||||||
(e) | Rental income (Note ii) |
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Fellow subsidiaries | 2,605 | 959 | 1,282 | 719 | 508 | |||||||||||||||
(f) | Interest income (Note iii) |
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Related parties | ||||||||||||||||||||
— Companies being controlled by directors of the Company | 1,989 | — | — | — | — | |||||||||||||||
— A director | 1,754 | — | — | — | — | |||||||||||||||
3,743 | — | — | — | — | ||||||||||||||||
Fellow subsidiaries | — | 6,683 | 12,660 | 9,501 | 3,923 | |||||||||||||||
(g) | Management fee (Note v) |
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
A related party | ||||||||||||||||||||
— A company being controlled by directors of the Company | 5,000 | — | — | — | — | |||||||||||||||
F-59
Table of Contents
(h) | Amounts due from/(to) related parties |
At | ||||||||||||||||||||
At 31 December | 30 September | |||||||||||||||||||
Note | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||||
Non-trade balance | ||||||||||||||||||||
Intermediate holding company | 31 | — | 40,177 | — | — | |||||||||||||||
Non-trade balance | ||||||||||||||||||||
Immediate holding company | 31 | — | (290,000 | ) | (643,961 | ) | (49,492 | ) | ||||||||||||
Non-trade balance | ||||||||||||||||||||
Fellow subsidiaries | 30 | — | 244,296 | 390,242 | 13,889 | |||||||||||||||
Non-trade balance | ||||||||||||||||||||
Fellow subsidiaries | (2,926 | ) | (14,363 | ) | — | (1,580 | ) | |||||||||||||
Trade balance | ||||||||||||||||||||
Fellow subsidiaries | (63,528 | ) | (85,475 | ) | (88,481 | ) | (96,372 | ) | ||||||||||||
30 | (66,454 | ) | (99,838 | ) | (88,481 | ) | (97,952 | ) | ||||||||||||
Loan to a fellow subsidiary | 30 | — | — | 41,074 | 10,076 | |||||||||||||||
Non-trade balance | ||||||||||||||||||||
A minority shareholder | 29 | — | 39,055 | — | — | |||||||||||||||
Non-trade balance | ||||||||||||||||||||
A related party | ||||||||||||||||||||
— A company being controlled by directors of the Company | 20 | (417,859 | ) | — | — | — | ||||||||||||||
Dividend payable | ||||||||||||||||||||
A minority shareholder | — | (343 | ) | (60,466 | ) | — | ||||||||||||||
Trade balance | ||||||||||||||||||||
A minority shareholder | (119,918 | ) | (173,334 | ) | (109,193 | ) | (122,334 | ) | ||||||||||||
29 | (119,918 | ) | (173,677 | ) | (169,659 | ) | (122,334 | ) | ||||||||||||
Trade balance | ||||||||||||||||||||
A subsidiary of a minority shareholder | 29 | (10,716 | ) | (5,040 | ) | (12,338 | ) | (18,251 | ) | |||||||||||
(i) | Purchases of raw materials from a minority shareholder, a subsidiary of a minority shareholder and fellow subsidiaries are made at prices and terms comparable to those charged by and contracted with other third party suppliers of the PCB Business. | |
(ii) | Rental income/expenses were based on underlying rental agreements which are renewed annually. | |
(iii) | Interest expenses/income were calculated at 6.00% per annum or prime rate, 5.50%, 4.00% and 1.54% per annum on the outstanding amounts for the years ended 31 December 2006, 2007 and 2008 and nine months ended 30 September 2008 and 2009 respectively. | |
(iv) | Commission on purchases of machineries were based on mutual agreement entered into by the parties. |
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(v) | Management fee is subject to contract terms as signed by the parties involved, which is at a fixed monthly fee for the provision of management services and consultancy services to the entities of the PCB Business. |
(i) | Key management compensation |
Nine Months Ended | ||||||||||||||||||||
Year Ended 31 December | 30 September | |||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | HK$’000 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Basic salaries, allowances and benefits in kind | 27,530 | 34,777 | 45,720 | 30,090 | 30,916 | |||||||||||||||
Share award expenses (Note 7) | — | 150,326 | 4,018 | 3,018 | 3,024 | |||||||||||||||
Bonuses | 5,510 | 11,022 | 12,929 | 12,003 | 6,584 | |||||||||||||||
33,040 | 196,125 | 62,667 | 45,111 | 40,524 | ||||||||||||||||
Year Ended | Nine Months Ended | |||||||||||||||||||
31 December | 30 September | |||||||||||||||||||
Note | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||
HK$’000 | HK$’000 | HK$’000 | HK$’000 | |||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Profit for the year/period under HKFRS | 352,938 | 483,653 | 412,418 | 198,665 | ||||||||||||||||
US GAAP adjustments: | ||||||||||||||||||||
Acquisition of non-controlling interest (“NCI”) | (a | ) | 108 | 108 | 81 | 81 | ||||||||||||||
Reversal of amortisation of goodwill | (b | ) | — | — | — | — | ||||||||||||||
Put and call options on NCI: | ||||||||||||||||||||
— Fair valuestep-up | (c1 | ) | 217 | 7,777 | 3,010 | 3,455 | ||||||||||||||
— Accretion of NCI to redemption value | (c2 | ) | — | 1,942 | 14,138 | (6,738 | ) | |||||||||||||
Derivatives | (d | ) | — | — | — | 22,358 | ||||||||||||||
Available-for-sale financial asset | (e | ) | — | — | — | — | ||||||||||||||
Deferred income taxes | (f | ) | (54 | ) | (1,944 | ) | (744 | ) | (863 | ) | ||||||||||
Profit for the year/period under US GAAP | (g | ) | 353,209 | 491,536 | 428,903 | 216,958 | ||||||||||||||
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At | ||||||||||||||||
At 31 December | 30 September | |||||||||||||||
Note | 2007 | 2008 | 2009 | |||||||||||||
HK$’000 | HK$’000 | HK$’000 | ||||||||||||||
Total equity under HKFRS | 1,860,055 | 1,776,609 | 2,313,896 | |||||||||||||
US GAAP adjustments: | ||||||||||||||||
Acquisition of NCI | (a | ) | (946 | ) | (838 | ) | (757 | ) | ||||||||
Reversal of amortisation of goodwill | (b | ) | 535 | 535 | 535 | |||||||||||
Put and call options on NCI: | ||||||||||||||||
— Fair valuestep-up | (c1 | ) | (2,082 | ) | (5,280 | ) | (1,955 | ) | ||||||||
— Accretion of NCI to redemption value | (c2 | ) | 131,255 | 134,153 | 144,753 | |||||||||||
Available-for-sale financial asset | (e | ) | — | 454 | 3,375 | |||||||||||
Deferred income taxes | (f | ) | (56 | ) | (2,021 | ) | (2,885 | ) | ||||||||
Total equity under US GAAP | (g | ) | 1,988,761 | 1,903,612 | 2,456,962 | |||||||||||
(a) | Acquisition of non-controlling interests |
(b) | Amortisation of goodwill |
(c) | Put and call options on non-controlling interests |
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(d) | Derivatives |
(e) | Available-for-sale financial asset |
(f) | Deferred income tax |
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(g) | Presentation of minority interests |
(h) | Cumulative translation adjustment |
36 | Events after the end of the reporting period |
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by and among
MEADVILLE HOLDINGS LIMITED,
MTG INVESTMENT (BVI) LIMITED,
TTM TECHNOLOGIES, INC.,
TTM TECHNOLOGIES INTERNATIONAL, INC.
and
TTM HONG KONG LIMITED
Dated as of November 16, 2009
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ARTICLE I DEFINITIONS AND TERMS | A-1 | |||||
Section 1.1 | Certain Definitions | A-1 | ||||
Section 1.2 | Other Terms | A-13 | ||||
Section 1.3 | Other Definitional Provisions | A-13 | ||||
ARTICLE II PURCHASE AND SALE OF THE TRANSFERRED EQUITY INTERESTS | A-13 | |||||
Section 2.1 | Purchase and Sale | A-13 | ||||
Section 2.2 | Purchase Price | A-13 | ||||
Section 2.3 | Closing | A-13 | ||||
Section 2.4 | Deliveries by the Buyer Parties | A-14 | ||||
Section 2.5 | Deliveries by Seller Parties | A-14 | ||||
Section 2.6 | Certain Adjustments | A-14 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES RELATING TO SELLER PARTIES | A-15 | |||||
Section 3.1 | Organization and Qualification; Residency | A-15 | ||||
Section 3.2 | Ownership | A-15 | ||||
Section 3.3 | Corporate Authority | A-15 | ||||
Section 3.4 | Binding Effect | A-16 | ||||
Section 3.5 | Consents and Approvals | A-16 | ||||
Section 3.6 | Non-Contravention | A-16 | ||||
Section 3.7 | Finders’ Fees | A-17 | ||||
Section 3.8 | Litigation | A-17 | ||||
Section 3.9 | HSR Act | A-17 | ||||
Section 3.10 | Seller Parent Public Reports | A-17 | ||||
Section 3.11 | Information in Circular | A-17 | ||||
Section 3.12 | Information inForm S-4 and Proxy Statement | A-17 | ||||
Section 3.13 | Filings | A-17 | ||||
Section 3.14 | No Other Representations or Warranties | A-18 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATING TO THE TRANSFERRED ENTITIES AND THE PCB BUSINESS | A-18 | |||||
Section 4.1 | Organization and Qualification | A-18 | ||||
Section 4.2 | Capitalization | A-18 | ||||
Section 4.3 | Consents and Approvals | A-19 | ||||
Section 4.4 | Non-Contravention | A-19 | ||||
Section 4.5 | Financial Information | A-20 | ||||
Section 4.6 | Litigation and Claims | A-20 | ||||
Section 4.7 | Taxes | A-20 | ||||
Section 4.8 | Employee Benefits | A-21 | ||||
Section 4.9 | Permits | A-22 | ||||
Section 4.10 | Environmental Matters | A-23 | ||||
Section 4.11 | Intellectual Property | A-23 | ||||
Section 4.12 | Labor | A-24 | ||||
Section 4.13 | Contracts | A-24 | ||||
Section 4.14 | Absence of Changes | A-25 | ||||
Section 4.15 | Absence of Undisclosed Liabilities | A-26 | ||||
Section 4.16 | Real Property | A-26 | ||||
Section 4.17 | Entire and Sole Business; Sufficiency of Assets | A-26 | ||||
Section 4.18 | Compliance With Laws | A-27 |
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Section 4.19 | Insurance | A-27 | ||||
Section 4.20 | Board and Shareholder Approval | A-27 | ||||
Section 4.21 | Finders’ Fees | A-28 | ||||
Section 4.22 | Affiliate Arrangements | A-28 | ||||
Section 4.23 | Customers and Suppliers | A-28 | ||||
Section 4.24 | No Other Representations or Warranties | A-28 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES RELATING TO BUYER PARTIES | A-29 | |||||
Section 5.1 | Organization and Qualification | A-29 | ||||
Section 5.2 | Capitalization | A-29 | ||||
Section 5.3 | Corporate Authorization | A-30 | ||||
Section 5.4 | Consents and Approvals | A-30 | ||||
Section 5.5 | Non-Contravention | A-31 | ||||
Section 5.6 | Binding Effect | A-31 | ||||
Section 5.7 | Equity Consideration | A-31 | ||||
Section 5.8 | SEC Matters | A-31 | ||||
Section 5.9 | Absence of Undisclosed Liabilities | A-32 | ||||
Section 5.10 | Absence of Certain Changes | A-32 | ||||
Section 5.11 | Financial Capability | A-32 | ||||
Section 5.12 | Investment Purpose | A-32 | ||||
Section 5.13 | Legends | A-33 | ||||
Section 5.14 | Information inForm S-4 and Proxy Statement | A-33 | ||||
Section 5.15 | Information in Circular | A-33 | ||||
Section 5.16 | Filings | A-33 | ||||
Section 5.17 | Finders’ Fees | A-33 | ||||
Section 5.18 | Litigation and Claims | A-33 | ||||
Section 5.19 | Permits | A-34 | ||||
Section 5.20 | Environmental Matters | A-34 | ||||
Section 5.21 | Intellectual Property | A-34 | ||||
Section 5.22 | Compliance With Laws | A-35 | ||||
Section 5.23 | Taxes | A-36 | ||||
Section 5.24 | Employee Benefits | A-37 | ||||
Section 5.25 | Labor | A-38 | ||||
Section 5.26 | Contracts | A-39 | ||||
Section 5.27 | Real Property | A-40 | ||||
Section 5.28 | Sufficiency of Assets | A-40 | ||||
Section 5.29 | Insurance | A-41 | ||||
Section 5.30 | Affiliate Arrangements | A-41 | ||||
Section 5.31 | Customers and Suppliers | A-41 | ||||
Section 5.32 | No Other Representations or Warranties | A-41 | ||||
ARTICLE VI COVENANTS | A-42 | |||||
Section 6.1 | Access and Information | A-42 | ||||
Section 6.2 | Conduct of Business of the Transferred Entities | A-44 | ||||
Section 6.3 | Conduct of Business of Buyer Ultimate Parent | A-45 | ||||
Section 6.4 | Reasonable Best Efforts | A-47 | ||||
Section 6.5 | Tax Matters | A-48 | ||||
Section 6.6 | Ancillary Agreements | A-51 | ||||
Section 6.7 | Insurance | A-51 |
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Section 6.8 | Seller Parent Shareholder Approval | A-51 | ||||
Section 6.9 | Buyer Ultimate Parent Special Meeting;Form S-4; Proxy Statement | A-52 | ||||
Section 6.10 | Confidentiality | A-54 | ||||
Section 6.11 | Intercompany Items | A-55 | ||||
Section 6.12 | Notification of Certain Matters | A-55 | ||||
Section 6.13 | Financial Statements | A-55 | ||||
Section 6.14 | Listing | A-57 | ||||
Section 6.15 | Further Assurances | A-57 | ||||
Section 6.16 | Accelerated Vesting of Equity Awards | A-58 | ||||
Section 6.17 | Non-Solicitation | A-58 | ||||
Section 6.18 | Equity Consideration | A-58 | ||||
Section 6.19 | Post-Closing Restructuring | A-59 | ||||
Section 6.20 | Amendment of Organizational Documents | A-59 | ||||
Section 6.21 | Credit Agreement Deliverables | A-59 | ||||
Section 6.22 | Registration Rights Agreement and Sell-Down Registration Rights Agreement | A-59 | ||||
ARTICLE VII CONDITIONS TO THE CLOSING | A-59 | |||||
Section 7.1 | Conditions to the Obligations of the Parties with respect to the Closing | A-59 | ||||
Section 7.2 | Conditions to the Obligation of Buyer Parties with respect to the Closing | A-60 | ||||
Section 7.3 | Conditions to the Obligation of Seller Parties with respect to the Closing | A-61 | ||||
Section 7.4 | Frustration of Closing Conditions | A-61 | ||||
ARTICLE VIII TERMINATION | A-62 | |||||
Section 8.1 | Termination | A-62 | ||||
Section 8.2 | Effect of Termination | A-63 | ||||
ARTICLE IX MISCELLANEOUS | A-63 | |||||
Section 9.1 | Nonsurvival of Representations and Warranties and Certain Covenants | A-63 | ||||
Section 9.2 | Notices | A-63 | ||||
Section 9.3 | Amendment; Waiver | A-65 | ||||
Section 9.4 | No Assignment or Benefit to Third Parties | A-65 | ||||
Section 9.5 | Entire Agreement | A-65 | ||||
Section 9.6 | Fulfillment of Obligations | A-65 | ||||
Section 9.7 | Public Disclosure | A-65 | ||||
Section 9.8 | Expenses | A-65 | ||||
Section 9.9 | Schedules | A-66 | ||||
Section 9.10 | Governing Law; Consent to Jurisdiction | A-66 | ||||
Section 9.11 | Counterparts | A-67 | ||||
Section 9.12 | Headings | A-67 | ||||
Section 9.13 | Severability | A-67 | ||||
Section 9.14 | Joint Negotiation | A-67 | ||||
Section 9.15 | No Set-Off | A-67 |
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2630 South Harbor Blvd.
Santa Ana, California 92704
Telephone:(714) 327-3048
Telecopy:(714) 432-7234
Email: kalder@ttmtech.com
Attention: Kent Alder
A-63
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2375 East Camelback Road
Suite 700
Phoenix, Arizona 85016
Telephone:(602) 445-8000
Telecopy:(602) 445-8100
E-mail: kaplanm@gtlaw.com
Attention: Michael L. Kaplan, Esq.
The MetLife Building
200 Park Avenue
New York, New York 10166
Telephone:(212) 801-9200
Telecopy:(212) 801-6400
E-mail: | neimethc@gtlaw.com marsicoa@gtlaw.com |
Attention: | Clifford E. Neimeth, Esq. Anthony J. Marsico, Esq. |
No. 4 Dai Shun Street,
Tai Po Industrial Estate,
Tai Po, New Territories,
Hong Kong
Telephone: +852-2660-3120
Telecopy: +852-2660-1908
E-mail: canice.chung@meadvillegroup.com
Attention: Canice Chung
Telecopy: +852-2660-1908
E-mail: | tom.tang@meadvillegroup.com mai.tang@meadvillegroup.com |
Attention: | Mr. Tang Chung Yen, Tom Ms. Tang Ying Ming, Mai |
42/F, Edinburgh Tower, The Landmark
15 Queen’s Road Central
Hong Kong
Telephone: +852-3740-4700
Telecopy: +852-3740-4727
E-mail: Jonathan.stone@skadden.com
Attention: Jonathan Stone
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By: | /s/ Tang Chung Yen, Tom |
Title: | Executive Chairman and Group Managing Director |
By: | /s/ Tang Ying Ming, Mai |
Title: | Director |
By: | /s/ Kenton K. Alder |
Title: | Chief Executive Officer and President |
By: | /s/ Kenton K. Alder |
Title: | Chief Executive Officer and President |
By: | /s/ Kenton K. Alder |
Title: | Director |
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Page | ||||||||
ARTICLE I DEFINITIONS | B-2 | |||||||
Section 1.1. | Certain Defined Terms | B-2 | ||||||
Section 1.2. | Other Defined Terms | B-6 | ||||||
Section 1.3. | Other Definitional Provisions | B-6 | ||||||
ARTICLE II SHARE OWNERSHIP | B-7 | |||||||
Section 2.1. | Acquisition of Additional Securities | B-7 | ||||||
Section 2.2. | Prohibition of Certain Actions | B-8 | ||||||
ARTICLE III TRANSFER RESTRICTIONS | B-10 | |||||||
Section 3.1. | General Transfer Restrictions | B-10 | ||||||
Section 3.2. | Specific Restrictions on Transfer | B-10 | ||||||
Section 3.3. | Other Capital Stock | B-11 | ||||||
Section 3.4. | Distribution of Company Common Stock | B-11 | ||||||
ARTICLE IV CORPORATE GOVERNANCE | B-12 | |||||||
Section 4.1. | Company Board Representation | B-12 | ||||||
Section 4.2. | Company Board Committee Representation | B-14 | ||||||
Section 4.3. | Board Representation of Asian Holdco and Asian PCB Entities; Governance | B-14 | ||||||
Section 4.4. | Vote Required for Board Action; Board Quorum | B-16 | ||||||
Section 4.5. | Voting Arrangements | B-17 | ||||||
ARTICLE V MISCELLANEOUS | B-18 | |||||||
Section 5.1. | Non-Contravention | B-18 | ||||||
Section 5.2. | Non-Compete | B-18 | ||||||
Section 5.3. | Non-Solicitation | B-19 | ||||||
Section 5.4. | Termination | B-19 | ||||||
Section 5.5. | Representations of the Company | B-20 | ||||||
Section 5.6. | Representations of the Principal Shareholders | B-20 | ||||||
Section 5.7. | Representations of Mr. Tang | B-20 | ||||||
Section 5.8. | Ownership Information | B-20 | ||||||
Section 5.9. | Savings Clause | B-20 | ||||||
Section 5.10. | Amendment and Waiver | B-20 | ||||||
Section 5.11. | Severability | B-20 | ||||||
Section 5.12. | Entire Agreement | B-21 | ||||||
Section 5.13. | Successors and Assigns | B-21 | ||||||
Section 5.14. | Counterparts | B-21 | ||||||
Section 5.15. | Remedies | B-21 | ||||||
Section 5.16. | Notices | B-21 | ||||||
Section 5.17. | Governing Law | B-23 | ||||||
Section 5.18. | Consent to Jurisdiction | B-23 | ||||||
Section 5.19. | Shareholder Capacity | B-24 | ||||||
Section 5.20. | Methodology for Calculations | B-24 | ||||||
Section 5.21. | Further Assurances | B-24 |
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Term | Section | |
Acquire | Section 2.1(a) | |
Asian Holdco | Preamble | |
Asian PCB Nominee | Section 4.3(b) | |
Asian PCB Nominees | Section 4.3(b) | |
Board Asian Holdco Nominee | Section 4.3(a) | |
Board Asian Holdco Nominees | Section 4.3(a) | |
Buyer | Preamble | |
Closing Date | Preamble | |
Company | Preamble | |
Competing Activity | Section 5.2 | |
Effective Date | Preamble | |
Equity Awards | Section 2.1(e) | |
Equity Consideration | Preamble | |
Key Employees | Section 4.3(g)(i) | |
Mai Tang | Preamble | |
Manager | Section 5.3 | |
Mr. Tang | Preamble | |
Post-Closing Dividends | Section 2.1(f) | |
Prohibited Actions | Section 2.2(a) | |
Sell-Down | Preamble | |
Seller | Preamble | |
Seller Parent | Preamble | |
Seller Party Group | Section 5.2(a) | |
Shareholder Asian Holdco Nominee | Section 4.3(a) | |
Shareholder Asian Holdco Nominees | Section 4.3(a) | |
Shareholder Nominee | Section 4.1(a) | |
SSL | Preamble | |
Stock Purchase Agreement | Preamble | |
Tang Siblings | Preamble | |
Tom Tang | Preamble | |
Transferred Entities | Preamble | |
Transferred Entity | Preamble |
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2630 South Harbor Blvd.
Santa Ana, California 92704
Telephone:(714) 327-3048
Facsimile:(714) 432-7234
Email: kalder@ttmtech.com
Attention: Kent Alder
B-21
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2375 East Camelback Road
Suite 700
Phoenix, Arizona 85016
Telephone:(602) 445-8000
Facsimile:(602) 445-8100
E-mail: kaplanm@gtlaw.com
Attention: Michael L. Kaplan, Esq.
The MetLife Building
200 Park Avenue
New York, New York 10166
Telephone:(212) 801-9200
Facsimile:(212) 801-6400
E-mail: neimethc@gtlaw.com
marsicoa@gtlaw.com
Attention: Clifford E. Neimeth, Esq.
Anthony J. Marsico, Esq.
Flat B, 6th Floor,
20 Fa Po Street,
Yau Yat Chuen, Kowloon,
Hong Kong
Telecopy: +852-2660-1908
Email: vivien.lee@meadvillegroup.com
42/F, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
Telephone: +852-3740-4703
Facsimile: +852-3740-4727
E-mail: jonathan.stone@skadden.com
Attention: Jonathan Stone, Esq.
House 58, Sunderland,
1 Hereford Road,
Kowloon Tong, Kowloon,
Hong Kong
Telecopy: +852-2660-1908
E-mail: tom.tang@meadvillegroup.com
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Flat B, 6th Floor, 20 Fa Po Street,
Yau Yat Chuen, Kowloon,
Hong Kong
Telecopy: +852-2660-1908
E-mail: mai.tang@meadvillegroup.com
42/F, Edinburgh Tower
The Landmark
15 Queen’s Road Central
Hong Kong
Telephone: +852-3740-4703
Facsimile: +852-3740-4727
E-mail: jonathan.stone@skadden.com
Attention: Jonathan Stone, Esq.
B-23
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By: |
By: |
By: |
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The Board of Directors TTM Technologies, Inc. November 15, 2009 Page 2 |
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The Board of Directors TTM Technologies, Inc. November 15, 2009 Page 3 |
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Item 20. | Indemnification of Directors and Officers. |
• | any breach of their duty of loyalty to our company and its stockholders; | |
• | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; | |
• | any transaction from which a director derives an improper personal benefit; and | |
• | any unlawful payment of dividend or unlawful stock purchase or redemption. |
• | conducted himself or herself in good faith; and | |
• | reasonably believed that |
• | his or her conduct was in, or not opposed to, the corporation’s best interests, or | |
• | in the case of any criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful. |
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Item 21. | Exhibits and Financial Statement Schedules. |
Exhibit | ||||
Number | Exhibit | |||
2 | .1 | Form of Plan of Reorganization(1) | ||
2 | .2 | Stock and Asset Purchase Agreement by and among Tyco Printed Circuit Group LP, Tyco Electronics Corporation, Raychem International, Tyco Kappa Limited, Tyco Electronics Logistics AG, and TTM (Ozarks) Acquisition, Inc. dated as of August 1, 2006(2) | ||
2 | .3 | Stock Purchase Agreement, dated November 16, 2009, by and among Meadville Holdings Limited, MTG Investment (BVI) Limited, TTM Technologies, Inc., TTM Technologies International, Inc., and TTM Hong Kong Limited(3) | ||
3 | .1 | Certificate of Incorporation of TTM Technologies, Inc.(4) | ||
3 | .2 | Second Amended and Restated Bylaws of TTM Technologies, Inc.(5) | ||
4 | .1 | Form of Registrant’s common stock certificate(4) | ||
4 | .2 | Indenture, dated as of May 14, 2008, between TTM Technologies, Inc. and American Stock Transfer and Trust Company(6) | ||
4 | .3 | Supplemental Indenture, dated as of May 14, 2008, between TTM Technologies, Inc. and American Stock Transfer and Trust Company(6) | ||
4 | .4 | Sell-Down Registration Rights Agreement, dated December 23, 2009, between TTM Technologies, Inc., Meadville Holdings Limited, and MTG Investment (BVI) Limited(7) | ||
5 | .1 | Opinion of Greenberg Traurig, LLP regarding legality of securities being registered | ||
21 | .1 | Subsidiaries of the Registrant | ||
23 | .1 | Consent of KPMG LLP, independent registered public accounting firm | ||
23 | .2 | Consent of PricewaterhouseCoopers, independent accountants | ||
23 | .3 | Consent of UBS Securities LLC | ||
23 | .4 | Consent of Greenberg Traurig, LLP (included in Exhibit 5.1) | ||
24 | .1 | Power of Attorney of Directors and Executive Officers (included on the Signature Page of the Registration Statement) | ||
99 | .1 | Form of Proxy Card for holders of TTM Technologies, Inc. common stock |
(1) | Incorporated by reference to the Registration Statement onForm S-1 (Registration No.333-39906) declared effective September 20, 2000. | |
(2) | Incorporated by reference to the Registrant’sForm 10-Q as filed with the Commission on August 14, 2006. | |
(3) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on November 16, 2009. | |
(4) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on August 30, 2005. | |
(5) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on February 19, 2009. | |
(6) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on May 14, 2008. | |
(7) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on December 23, 2009. |
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Item 22. | Undertakings. |
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By: | /s/ Kenton K. Alder |
Signature | Capacity | Date | ||||
/s/ Kenton K. Alder Kenton K. Alder | President, Chief Executive Officer (Principal Executive Officer), and Director | December 24, 2009 | ||||
/s/ Steven W. Richards Steven W. Richards | Executive Vice President, Chief Financial Officer and Secretary (Principal Financial Officer and Principal Accounting Officer) | December 24, 2009 | ||||
/s/ Robert E. Klatell Robert E. Klatell | Chairman of the Board | December 24, 2009 | ||||
/s/ Thomas T. Edman Thomas T. Edman | Director | December 24, 2009 | ||||
/s/ James K. Bass James K. Bass | Director | December 24, 2009 | ||||
/s/ Richard P. Beck Richard P. Beck | Director | December 24, 2009 | ||||
/s/ John G. Mayer John G. Mayer | Director | December 24, 2009 |
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Exhibit | ||||
Number | Exhibit | |||
2 | .1 | Form of Plan of Reorganization(1) | ||
2 | .2 | Stock and Asset Purchase Agreement by and among Tyco Printed Circuit Group LP, Tyco Electronics Corporation, Raychem International, Tyco Kappa Limited, Tyco Electronics Logistics AG, and TTM (Ozarks) Acquisition, Inc. dated as of August 1, 2006(2) | ||
2 | .3 | Stock Purchase Agreement, dated November 16, 2009, by and among Meadville Holdings Limited, MTG Investment (BVI) Limited, TTM Technologies, Inc., TTM Technologies International, Inc., and TTM Hong Kong Limited(3) | ||
3 | .1 | Certificate of Incorporation of TTM Technologies, Inc.(4) | ||
3 | .2 | Second Amended and Restated Bylaws of TTM Technologies, Inc.(5) | ||
4 | .1 | Form of Registrant’s common stock certificate(4) | ||
4 | .2 | Indenture, dated as of May 14, 2008, between TTM Technologies, Inc. and American Stock Transfer and Trust Company(6) | ||
4 | .3 | Supplemental Indenture, dated as of May 14, 2008, between TTM Technologies, Inc. and American Stock Transfer and Trust Company(6) | ||
4 | .4 | Sell-Down Registration Rights Agreement, dated December 23, 2009, between TTM Technologies, Inc., Meadville Holdings Limited, and MTG Investment (BVI) Limited(7) | ||
5 | .1 | Opinion of Greenberg Traurig, LLP regarding legality of securities being registered | ||
21 | .1 | Subsidiaries of the Registrant | ||
23 | .1 | Consent of KPMG LLP, independent registered public accounting firm | ||
23 | .2 | Consent of PricewaterhouseCoopers, independent accountants | ||
23 | .3 | Consent of UBS Securities LLC | ||
23 | .4 | Consent of Greenberg Traurig, LLP (included in Exhibit 5.1) | ||
24 | .1 | Power of Attorney of Directors and Executive Officers (included on the Signature Page of the Registration Statement) | ||
99 | .1 | Form of Proxy Card for holders of TTM Technologies, Inc. common stock |
(1) | Incorporated by reference to the Registration Statement onForm S-1 (Registration No.333-39906) declared effective September 20, 2000. | |
(2) | Incorporated by reference to the Registrant’sForm 10-Q as filed with the Commission on August 14, 2006. | |
(3) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on November 16, 2009. | |
(4) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on August 30, 2005. | |
(5) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on February 19, 2009. | |
(6) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on May 14, 2008. | |
(7) | Incorporated by reference to the Registrant’sForm 8-K as filed with the Commission on December 23, 2009. |