Business Overview

DISCLAIMER: THE FOLLOWING INFORMATION IS TAKEN FROM VITROX IPO PROSPECTUS DATED ON 16 AUGUST 2005. SOME INFORMATION MAY BE OUTDATED OR NO LONGER RELEVANT.
BUSINESS OVERVIEW
1. PRODUCTS. SERVICES AND OPERATIONS 
The ViTrox Group offers a wide range of machine vision solutions to its customers. with a current focus on the design and production of automated machine vision inspection system for the back-end semiconductor processes. The array of products produced by the Group ranges from low cost machine vision inspection system to perform simple presence and absence check to high end and high accuracy 3D lead and package vision inspection systems. In addition, the Group also provides value added services and after-sale supports to OEMs and MNCs to resolve their equipment or manufacturing process problems such as upgrades of their existing machine vision system, cameras and light sources.
A typical ViTrox’s machine vision inspection system can be depicted as follows:
1.1 Standard End of Lille (“EOL”) Machine Vision Inspection Systems 
The Group’s machine vision inspection systems are designed and developed specifically for inspection work in the EOL production process of the semiconductor industry. Specifically, the Company’s machine vision systems are used in the following areas of the EOL production process:
(i) 2D and 3D lead, pad and ball inspection
The measurement of the position of the contact leads, pads or balls in 2D or 3D dimensions; this inspection detect malformed, bent leads or damaged leads, incorrect located pads or balls. 3D inspection is critically important because the device may not be able to connect properly to printed circuit board if the contacts are not on the same horizontal plane. resulting in defective electronics devices. Typically this vision system inspects for the lead length, lead pitch, lead width, lead offset, lead co-planarity, body stand-off of various semiconductor packages including SOT, SC70, SC79, SOIC, DPAK, PREDIP and QFP. The diagram below illustrates the inspected criteria for 2D and 3D lead inspection.
Inspection Criteria for 2D and 3D Lead Inspection System
(ii) Mark inspection
The inspection of the ink or laser marks which arc inscribed on the IC packages. These inscriptions contain information such as part number, company logo, etc. These systems inspects missing mark, mixed mark, angled mark, mis-aligned mark, wrong oriented mark, broken mark and extra ink. The diagram below illustrates the inspected criteria of mark vision inspection system:
Inspection Criteria for Mark Inspection System
(iii) Package inspection
The inspection on the IC packages for scratches, contamination, incomplete molding, incomplete plating, mold chipped-offs, cracks and exposed wires as shown in the diagram below:
Inspection Criteria for Package Inspection
(iv) Orientation inspection
The inspection of the orientation of the object by using either pattern matching techniques or edge finding techniques. After the orientation of the object is determined, the machine vision system provides orientation information feedbacks to the machine for further action, such as to rotate the object to certain angle prior to the insertion of the said object into a shipping medium or test station.
In addressing the semiconductor industry’s needs for the types of inspections as highlighted previously, ViTrox Group has developed innovative machine vision solutions to complement the EOL manufacturing processes. The array of machine vision inspection systems developed by the ViTrox Group is as follows:
ViTrox Machine Vision Products Product
All the products listed above will have the capabilities of inspecting IC packages which are different in sizes, pitch, height etc. The machine vision systems can be customised to meet the demands of the various packages and tolerance level specified by the customers.
1.2 Integrated Macbine Vision Inspection Systems 
ViTrox’s systems are capable of inspecting a wide range of IC packages including leadframe packages such as SOT, SC70, SC79, SOIC, DPAK, QFP, MLP and QFN as well as advanced packages such as BGA and Chip Scale Package (CSP). ViTrox’s machine vision inspection systems are available as standard generic units or can be customised to cater to the customers’ specifications. In its pioneer effort in 2001, ViTrox developed an innovative “integrated system” that is capable of supporting up to four (4) applications such as integration of orientation vision system, mark vision system, lead vision system and in-pocket inspection system which is named the 4-in-l Integrated Vision Inspection System. Such integrated systems are beneficial to the customers as they provide cost-savings solutions in terms of floor space, maintenance, cabling and licensing.
1.3 Customisation Services 
In line with the aim of providing total machine vision solutions to its customers, the ViTrox Group provides software and hardware customisation services as a value added service which complements its provision of standard machine vision systems. These customisation services include providing leadframe inspection for machine vision inspection systcm, keypad inspection, LCD inspection, connector dimension inspection, providing customisation on standard machine vision system in area such as machine I/O interface, special user interface, reporting format and other specific inspection requirements.
The Group is committed in providing quality machine vision solutions that consistently meet or exceed customer requirements through the continual improvement of its products and services, prevention of non-conformity and its strict quality management system (“QMS”) that complies with the international standard ISO9001:2000. In May 2004, the Group has been awarded the coveted ISO9001:2000 certification. In order to be ISO9001 :2000 certified, ViTrox has established the required QMS and demonstrated its ability to consistently provide products that meet customer specifications and applicable regulatory requirements, and aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer specifications and applicable regulatory requirements.
The Group is aware that quality control is essential to ensure customer satisfaction. Stringent quality control standards and procedures arc developed and applied throughout the entire production process under the supervision of qualified technical engineers. The Group aspires to become a leading-edge machine vision inspection systems provider, offering high quality products and services to its customers throughout the Asian region as well as the US and European Union countries.
2 COMPETITION AND COMPETITIVE ADVANTAGES 
The Malaysian machine vision industry is an emerging industry and most players are involved in a wide spectrum of manufacturing non-specialised factory automation and tests equipments for the semiconductor and electronics industry. ViTrox Group is one of the few leading pure-play machine vision solutions providers in Malaysia and thus allowing the Group the advantage of full resources commitment and the pioneer market advantage.
In the international market, there arc two prominent players namely ICOS Vision System Corporation (Belgium) and Cognex Corporation (US), which arc the leading developer and supplier of machine vision inspection equipment primarily for use in the backend semiconductor manufacturing. The strong earnings of both companies in the recent years indicate the continued potentials in the international market for machine vision systems. In competing with these established players, ViTrox Group believes that it would have the distinct advantage of lower cost structure and thus, a competitive pricing capability, in addition to its ISO 9001:2000 certified products and services.
In Asia (ex-Japan), the machine vision industry is estimated to be worth between US$l.0 billion and US$1.2 billion in 2003 which is a very large industry for the local machine vision players to explore. The growth potential in countries like China, Taiwan and South East Asia is very promising. Compared to international companies in USA or Europe, Malaysian companies have the distinct advantage in penetrating this region due to cultural and language similarities.
2.1 Competitive Advantages of ViTrox Group 
High Performance/Accuracy, Low Cost and Complete Support Services 
The machine vision system from ViTrox are more price competitive as compared to a system from overseas which could cost three times more, for similar product. In addition ViTrox not only intends to compete in pricing alone but also on quality and the level of support which can be provided by its team of technical support staff. ViTrox is able to provide high performance and high accuracy machine vision systems for its customer. For example) ViTrox’s machine vision system is able to achieve high accuracy measurements of 7.5 microns or less. ViTrox’s success in the provision of high performance and high accuracy machine vision systems is evidenced by the shipment of its machine vision systems to companies in Japan which have very stringent requirements in the semiconductor industry.
In addition. it has been able to provide complete support service either by itself or through its network of sales agents/representatives. As at 31 July 2005, the Group has a team of 48 staff consisting engineers, production staff and service staff. This suggests the level of commitment that the Group is willing to contribute to the sales of its products to ensure timely response to its customers’ needs regardless of where they arc located.
Customised Services and In-House R&D Team
One of ViTrox other competitive advantage is in its ability 10 provide customised services in terms of software as well as hardware. Presently the customisation services are provided as a complementary service to its machine vision systems. The R&D team will be able to customise all the machine vision systems developed by ViTrox. In addition with ViTrox’s in-house R&D team, it will be able to conduct continuous R&D activities to improve on its products in order to comply with the latest types of Ie packages and increased standards in terms of accuracy and speed.
Proprietary Technology 
As part of ViTrox’s sttategy to be a total machine vision solutions provider, its R&D team has developed four (4) proprietary technologies namely the ViTrox Standard Component Library (VSCU), ViTrox Illumination System, 3D Optical Design and Integrated Vision System. VSCU is a Windows­based proprietary image-processing platform comprises a comprehensive suite of functions for image acquisition, enhancement, segmentation, processing, feature extraction, analysis and standard user interface. This technology also provides a distinct advantage to ViTrox as it reduces the cost of future product development, shorten the product development cycle, and standardization of all its vision systems. The ViTrox U1umination System includes light source controller and various light sources. The light source controller is an embedded electronics device which controls light uniformity and intensity. This controlled light is critical to cnsure that appearance of the object is visually enhanced before image of the object is captured and processed. ViTrox’s proprietary 3D Optical Design enables its vision systems to achieve high accuracy measurements of 7.5 microns or less in 3D lead or ball vision inspection system. The ViTrox Integrated Vision System provides a cost effective and uscr­friendly machine vision system for end-user that required multiple vision inspection capability. The integrated vision system is built on top of a centralized control panel that monitor and control all I/O communication between vision systems and external device as well as to display overall inspection result and yield in a single screen panel.
6.2.2 Barriers To Entry in the Machine Vision Industry
Requirement for High Technical Knowledge
The machine vision system requires a combination of highly sophisticated hardware and software as well as in-depth technical knowledge of the various components within the system. The challenge in producing a machine vision system lies in the combining the in-depth technical knowledge of components with the experience in developing an optimal solution that conforms 10 customers’ requirements and exceed their expectations. ViTrox Group relics on its experienced staff headed by its Executive ChairmanJManaging Director, Mr. Cbu to ensure that the design of the systems arc robust enough to withstand the strenuous environment of the rc fabrication process while maintaining its sensitivity in detecting the various defects. The design of a machine vision system requires high technical knowledge in optical technology, software design and hardware configurations. This technical knowledge would have been acquired through many years of exposure to the machine vision system industry. Although the industry is relatively new, the technology has been moving very fast thus will be very challenging for the new entrants to learn on the job.
High R&D investment 
The industry requires high initial capital outlay in capital expenditure and continuous investments into R&D in order to be able to introduce new. improved and innovative products within a short period of time. Due to the rapid advancement of technology, there are many innovative IC packages which are getting smaller, requiring more precise visual inspcction machines. Companies like the ViTrox Group needs to invest continuously into R&D activities in order to compete with many foreign companies. For new entrants, the ability to provide for investments in terms of both capital expenditures and R&D activities will be very taxing on resources. New entrants will also need to have ample resources to ride through the gestation period while the company concentrates on R&D activities before production of the machines. Both this issues will be a barrier of entry to new comers to the industry.
Established Network of Clientele Base 
The long period of time required in establishing a strong track record in terms of building up relationships with clients, especially with MNCs and established machine makers, can prove daunting to newcomers. It is mutually beneficial for both customers and suppliers to form long-standing relationships once the quality of services are accepted and recognised. As the consumers of the semiconductor industry demand for higher quality end products, semiconductor manufacturers arc more incline to lurn to machine vision system to deliver tbe level of quality control to their assembly
process. However, with time being the essence for many semiconductor manufacturers, they will prefer to look for machine vision systems which have a proven record. AI the same time, ViTrox is slowly building up its end-user clientele in the overseas market.
PRINCIPAL MARKETS AND MODES OF MARKETING 
The major customers of the ViTrox Group arc categorised into OEMs being the machine makers; end­users being the semiconductor manufacturers and direct sales agents/representatives (“SAR”). In line with the norms of the machine vision industry and similar to many of its competitors, ViTrox Group’s business which complements those of the machine makers, is primarily derived from the OEMs. For the financial year ended 31 December 2004 and five (S) months financial period ended 31 May 200S, the Group exported 31.8% and 16.1% of its products, respectively. Further details on the revenue breakdown of the ViTrox Group arc set out in Section 10.2.1 of this Prospectus.
The Group has adopted a two-pronged marketing strategy, separately targeting the domestic and international market place. Domestically, the Group sources for new clientele Ihrough the deployment of its internal sales force as well as organisation of road shows for the Group’s products and services. At the same time, the Group plans to speed up the development of its overseas sales through the establishment regional offices. In addition, ViTrox has been using a network of SAR to penetrate overseas market such as China and Taiwan. ViTrox will continue to deploy its network of SAR to make in·roads into new markets like in Europe and expand existing international markets in China, Taiwan, Japan, US and South East Asia.
ViTrox has been a constant participant of the annual semiconductor exhibitions and has participated in numerous local and overseas trade shows organised annually, especially in Singapore and China. These trade shows serves as an important marketing avenue for ViTrox to establish its overseas clientele, historically and in the future.
6.4 MAJOR CUSTOMERS
The details on the ViTrox Group’s top ten (10) customers based December 2004 are as follow:
CustomerNo. SRMTech1. 2. Tripod Technology Corporation 3. Innovator Electronic Engineering Arthur Corporation 4. Aetrium Incorporated S. Rcncsas Semiconductor (Kedah) Sdn Bhd 6. Daitron (Malaysia) Sdn Bhd 7. 8. Silitech Technology Corporation Sowa Mechatronics Corporation 9. 10. Carsem (Malaysia) Sdn Bhd Country Malaysia Taiwan Hong Kong Japan US Malaysia Malaysia Malaysia Japan Malaysia TOTAL on Ihe financial year ended 31 % oftbe Lengtb of Group’s FYE Relationsbip (Years)2004 Revenue 61.9 S 14.8 2 9.3 2 3.8 S 3.3 2 2.2 S 0.9 3 0.6 3 0.6 2 O.S S 98.4 The details on the possible risk of dependency on SRM Tech, being the historical major customer of the Group, are set out in Section 3.1,2 of this Prospectus.
6.5 MAJOR SUPPLIERS 
The Group sources ilS components in the production of its machine vision products from local agents as well as overseas, primarily from Belgium and Japan. The following are the details on the ViTrox Group’s top ten (10) suppliers based on the Group’s total purchases for the financial year ended 31 December 2004. No.  Name of Supplier  Country  % of Group’s Total FYE 2004 Purcbase  Length of Relationsbip (Years}  1. 2. 3. 4. 5. 6. 7. 8. 9. 10.  MID Mechatronic Sdn Bhd Euresys S.A. Western Dynamics Resources Co. Gaotec Sdn Bhd Planet Technology (M) Sdn Bhd Kyoto Denkiki Co., Ltd Dell Asia Paeific Sdn Advance Vltravision Sdn Bhd Wen Yi Enterprise General Computers (M) Sdn Bhd  Malaysia Belgium Malaysia Malaysia Malaysia Japan Malaysia Malaysia Malaysia Malaysia  17.4 14.2 11.6 11.1 8.4 4.3 2.8 2.4 2.4 2.2  3 5 3 5 3 5 3 5 2 4  TOTAL  76.8
These components arc easily available from numerous suppliers locally and globally. Hence, the Group is not dependent on a single supplier and the management of ViTrox believes that it will not face difficulty in sourcing for those components.
6.6 LOCATIONS OF OPERATIONS
The ViTrox Group’s operations is currently located in No.5, Lintang Bayan Lcpas 2, Bayan Lcpas Industrial Park, Phase 4, 11900 Bayan upas, Penang with a total land area of approximately 1,533 sq. metres and a built-up area of 544 sq. metres whereby the production area occupies approximately 57.6 sq. metres. The Group plans to shift to its proposed new three douhle-storey officc-cum-factory buildings located within the Bayan I.cpas Industrial Zone with a total land area of approximately 12,152 sq. metres with an initial planned built-up area of 2,787 sq. metres. About half of the total land area will be reserved for future expansion. The proposed office-cum-factory is expected to be completed by the first quarter of 2006. The office-cum-factory expansion is necessitated by the Group’s current operating constraints whereby shortage of space has limited R&D activities on new products and shall expand the production capacity of the Group in line with business expansion plan of the Group.
6.7 TECHNOLOGY AND PATENT AND TRADEMARKS
6.7.1 Technology 
Machine vision is a multi-disciplinary technology. Multi-disciplinary knowledge and technical expertise are required to design these components to form a complete, effective machine vision inspection system that best suits the needs of the application. Over the years, the Group has built up the capabilities to design and develop critical components of machine vision system such as the proprietary light source, proprietary optical module, programmable light source controller, imaging software, and electronics controlled and triggering devices for high speed application, as summarized in the followings paragraphs.
Artificial Intelligence (AI) 
AI is one of the key technologies which is incorpotated into ViTrox’s products. This technology involves the development of algorithms that enable machine vision systems to make intelligent decisions, or act as if possessing intelligence of a human capacity. AI is used to analyse scenes by computing a symbolic representation of the scene contents after the images have been processed to obtain features. Machine vision is often considered a subfield of AI. An AI based machine vision system is a system which has decision-making capabilities which incorporate fuzzy logics or neural network. Fuzzy logic is a type of logic that recognises more than simple true and false values while a neural network is a processing function which can be executed through specific algorithms in embedded hardware or computer which has “training” rules. Machine vision systems with AI will include functions which will enable the system to acquire the ability to learn based on samples of variation and make accurate judgement.
ViTrox Standard Component Library (VSCL2) 
ViTrox’s R&D team has developed a Windows-based proprietary VISion software platform that comprises a comprehensive suite of functions for image acquisition, segmentation, processing, feature extraction, analysis and standard user interface and reporting features, networking modules and ua interface module, motion control modules and light SOurCe controlled modules as well as multi­application controlled modules. VSCL2 has the advantage of being flexible thus enabling a next generation development platform for various machine vision applications -a platform consists of modules like user interface module e.g. Human Machine Interface (HMI), ua communication module, image processing modules, reporting module (which consist of a summary of statistical inspection results), user manager modules, oo-line help module/interactive help module, networking modules, video signal acquisition module, lighting control and triggering modules.
The platform utilises Inline assembly codes, Multimedia Extension (MMX) and HyperThreading (HI) technology from Pentium IV and above to improve the processing speed of various computational intensive image processing algorithms. In addition, the VSCL2 wiJl also utilised the .NET technology from Microsoft to shorten the development cycle of vision application and library and also to ensure that the codes can be maintained and expanded in the future. By developing its own in-house library, ViTrox will have the flexibility to enhance and customise various image processing functions to suit various application needs. In the long run, the Group will be able to save on monetary resources for the procurement of off-the-shelf imaging libraries. In addition, it will reduce dependency on off-the-shelf imaging library which require frequent updates from the software developers. VSCL2 is also the standard machine vision software platform which can be leveraged upon for future development of machine vision systems thus shortening the development cycle of ViTrox’s new products.
Very high-speed hardware Description Language (VHDL) 
VHDL is the IEEE standard hardware description programming language downloaded into an IC chip to carry out certain tasks such as describing digital electronic systems to address issues. This language is currently being used in the development of the light source control, and has potential to be used in a smart camera in the future (where a frame grabber and PC are not required for image processing). VHDL is not just a description language, but also a design methodology and environment. It is intended to provide a tool that can he used by the digital systems community to distribute their designs in a standard format, thus establishing uniformity and standards
Human Machine Interface (HMl) 
Human machine interface has become an integral component of many, if not all. of the machine vision inspection systems as it is built around knowledge representation and interactive visualization software. It allows operators to interact with the machine vision system by presenting vast quantities of data in formats that make sense to humans. In this aspect, the HMI development also includes all kind of reporting formats, user manager development as well as the image layout organisation and planning for the entire software platform.
Hardware 
The 2D and 3D vision inspection systems utilize In-house proprietary lighting/illumination techniques, which were customized to suite specific application needs, to minimize unwanted reflection (noise) from captured images. The purpose of having controlled illumination is to ensure that the object is illuminated at the right direction and with the right amount of intensity, in which the object of interest is visually enhanced. As a result, it’s flaws, defects, and other features can be highlighted for identification and classification by the vision system. Good image quality is the combined result of proper illumination. lens selection, camera and lens placement and Object positioning.
In addition, the use of high-speed cameras with high-speed frame grabbers can also reduce inspection cycle time. Some of the factors to be considered when selecting these devices include pixel jitter, video bandwidth, data bits, light sensitivity and signal to noise ratio (SNR). The optimal frame grabber with the lowest pixel jitter and most accurate digitisation of images plus a camera that sends a pixel clock to the frame grabber will usually give the best results. Pixel clock indicates the time taken for frame grabber to clock in pixels. With the advancement in camera technology, machine vision system is now evolved to be faster and more accuracy.
In order to increase the processing power of the PC, technologies such as Multimedia Extension (MMX) and HyperThreading (HT) from Intel are being used. MMX allows bytes of data, or instructions, to be packcd together into a single register and operated as one set of data, therefore reducing the amount of work that the chip bas to do and allowing it to do more. HT technology enables the multi-tasking in computers to be a lot easier and faster. In addition, dedicated DSP boards can be used to improve the processing speed of machine vision systems when required. The Microsoft .NET platform provides a common and powerful platform for software development that is very efficient and easy to be adopted by most programmers in tbe region.
6.7.2 Patent and Trademarks 
Currently, the Group docs not have any trademark or patent with the Malaysian authorities. Nevertheless, processes undertaken by the Group, such as proprietary lighting source controller and customization of softwares arc not easily replicable. The Group relics upon a combination of trade secrets, non-disclosure and other contractual agreements to attempt to protect its proprietary rights. The ViTrox Group is also protected by the general copyright laws in Malaysia for its proprietary processes and know-how. Going forward, the Group intends to protect its intellectual property rights by registering trademarks over some of its products and solutions it has developed and patenting some of its aforementioned proprietary technologies.
6.8 RESEARCH AND DEVELOPMENT 
6.8.1 R&D Policy and Process 
The R&D objectives that the Group intends to achieve for all its future R&D into machine vision applications are summarised into the focus areas as follows:
i) High Accuracy Vision The Company will continue to develop high accuracy 3D measurement vision systems (6 microns or less). This translates to better performance systems to exceed customers’ stringent product ion needs.
ii) High Speed Vision The Group will continue to conduct R&D to incorporate the latest hardware technologies and image processing algorithms to develop high-speed vision inspection systems. This will enable ViTrox Group’s customers to have a high throughput system, thus ensuring rapid profitability to their investments.
iii) Integrated Systems The Group will continue to produce innovative and fully integrated machine vision inspection systems to allow maximum cost-savings in terms of maintenance, floor space, cabling and licensing. All applications will run simultaneously on one controller in a multi-tasking manner, giving ViTrox Group’s customers unprecedented cost-savings and user-friendliness for multiple vision system implementation.
iv) Technology Forefront The Group will continue to develop systems that operate on the proven and industrial-standard Windows NT/XP platform hence providing ViTrox Group’s customers with a stable and robust operating environment, ensuring no system downtime caused by operating platform instability. Furthermore, this platform assures continuity in support. thus minimising platform obsolescence; protecting the customers’ valuable investment.
The R&D team of ViTrox Group undertakes R&D. engineering, product testing and software development activities guided by the R&D process as follows:
6.8.2 R&D Personnel and Facilities 
As at 31 July 2005, the ViTrox Group’s R&D and technical team comprises twenty nine (29) personnel, headed by Mr. Chu Jenn Weng and assisted by Mr. Yeoh Shih Hoong and is supported by a team of specialists and senior engineers. The R&D facilities of the Group are housed in the Group’s headquarters at Bayan Lepas Industrial Park, Penang, where all the operations and employees of the Group are currently based.
6.8.3 R&D Expenditure 
The R&D expenditure incurred by the Group on over the last three (3) financial years ended 31 December 2004 is as follows: Financial Year Ended 31 December  2002  2003  2004 462 3.4%  R&D Expenditure (RM’OOO)  317  279  R&D Expenditure as a percentage of revenue  7.9%  4.2%
6.8.4 Achievements in R&D
The road map of achievements in R&D attained by the ViTrox Group to date are as follows:­_y.=-ea=r 2000  -=T..:ec=hnology/Product IC Mark Lead  2001  IC Co-Planarity 4-in-l Integrated Vision OTF Hi-Speed Inspection  2002  SOT-3D Vision  2003  MLP -5S Vision QFP 3D Lead  Light Source Controller  Cosmetic Inspection  2004  Line-Scan Capability VSCL-2 Platform  Optics Developmeot  Digitallmagiog  Imaging Library
Description
Fi”‘t generation of 2D Mark Lead Vision Inspeetion System Fi”,t generalion of 3D Lead Vision Inspection System Integration of 2D and 3D Vision inspcction for IC ‘On-the-f1y’ high speed vision system for 2D and 3D
vision inspcction system. Designed based on latest CCD
(Coupled Charged Device) technologies. 2nd Geoeration of true backlit 3D Vision Inspection System for IC packages (Better accuracy and reliability as compared to the 1″ generation)
3D Vision inspection system for leadless packages
3D Vision inspection for high lead count packages such as QFP and BGA Designed and built in-house SOC technology for software
controllahle light source.
Package inspection capability for alllC packages (lead and leadIess packages) Prototyping on line scan technology Developed more user friendly and highly modular platform
for vision applications. Further improve 3D optical design capability for all IC packages Successfully developed the first digital imaging system using ‘camera link’ technology, which provide higher image quality and speed. Successfully develop in-house imaging library to replace off-the-shelf image library.
 YearTechnology/Product Description——–“”’———,—-‘—–­2004 (Cont’d) 2005 ughl Source Controller Vs Series for Mark Vision, 3D Lead Vision, Pad Vision, 5S Vision and In-pocket Vision Systems MLP 5S Vision Inspection Syslem (Vs Series) Line Scan Mark Vision System High-Speed Une-Scan Vision System 2″ generation light source controller with multi-level triggering and low cost Built based on VSCL2 platform with betler uscr­friendliness and performance that run on Windows 2000 and XP 3D pad and package vision inspection system that is capable 10 detect defects up 10 15um accuracy On-the-fly mark inspection syslem on tray On-Ihe-fly inspection for cireuils defect delection
6.8.5 Present Status of R&D 
The R&D team of ViTrox Group is currently conducting R&D in the following areas:
Estimated Year of No. Details Completion (i) Ultra high speed inspection system using advanced digital 2005-2006 technologies for Ie mark, lead, pad and package checking. The new platform is eapablc to perform inspection on handler running up to 50,000 unils per hour (UPB) as compared with thc current prcvailing throughput of up to 30,000 UPH;
(ii) On-the-fly line scanning system for tray mark and package 2006 inspection. This new producl will able to perform inspection on multiple ICs in single scan; and
(iii) Next generation 3D LeadIPad vision inspection system that utilises 2006 high accuracy optical design and robust algorithms Ihat catcrs for different IC package Iype and size. The new system will be able to minimise conversion lime belween Ie types and hence improve machine Ihroughput.
6.9 EMPLOYEES 
As of 31 July 2005, the Group has a total of full-time forty eight (48) employees (including three (3) Executive Directors) that make up those of managerial positions as well as skilled employees. A breakdown of the employees is depicted as follows:
The ViTrox Group promotes empowerment within its employees in order to create a conducive environment for creativity and product innovation. The employees of the ViTrox Group are not members of any trade union. There has not been any material dispute to date between management and these employees. In addition, the present staff force enjoys a cordial relationship with the management of the ViTrox Group.
It is also the intention of the ViTrox Group to recruit additional employees, particularly business development and R&D activities in line with its business expansion.
The Group provides a series of continuous training and development programmes for its employees, which includes in-house workshops to update all the employees on the new developments in the Group. The employees receive technical and production training from the Group’s in-house and external experts. The main objective of its training and development programme is to keep its staff informed about recent developments in the machine vision and semiconductor industries, and to further encourage overall efficiency and productivity.
In addition, the Group also engages external training centers and associations to conduct seminars and workshops to identify, evaluate and manage risks, to enhance management quality and increase the competency level of its employees. The types of external programmes that the staff will participate includes management courses, engineering courses, information technology courses, language classes and sales marketing courses.
6.10 INTERRUPTIONS TO BUSINESS DURING THE PAST TWELVE (12) MONTHS 
There has nol been any material interruption to the businesses of the ViTrox Group during the twelve (12) months preceding the date of this Prospectus. 6.
6.11 DEVELOPMENT MILESTONES 
The significant milestones for the Group are as described below:­Year Events June 2000 September 2000
March 2001 May 2001 May 2002 June 2002 November 2002
December 2002
March 2003
March 2003
June 2003
July-November 2003 December 2003 January 2004
May 2004 August 2004 September 2004
October 2004
First Generation of 2D Mark Lead Visinn Inspection System
VTSB was awarded Pioneer Status by Malaysian Industry Development Authority (MIDA) Moved to existing factory in Penang Free Trade Zone Phase 4 4-in-l Integrated Systems for 20 and 30 vision inspection for IC Participated for the first time in the Semicon Show in Singapore Participated for the first time in Nepeon Show in Penang, Malaysia Obtained License Manufacturing Warehouse status from the Royal Malaysian
Customs
2″ Generation of true backlit 3D Vision Inspection System for IC packages (Breakthrough in system accuracy and reliability) 3D Vision inspection system for leadless packages and high lead count IC Participated for the first time in the Semicon Show in China Designed and built in-house System-On-Chip devices for software controllable
light source. Made first breakthrough into the China, Taiwan and USA market
Package inspoction capability for all IC packages (lead and leadless packages)
First prototype of high resolution (8,000 pixels) and digital imaging vision system using line scan technology Obtained approval for the ISO 9001:2000 certification by SIRIM Granted the MSC status from MOC Awarded the Top Ten of the Malaysia 100 Outstanding Small & Medium Enterprises under the Golden Bull Award 2004 (4″ Place) as organised by Nanyang Siang Pau and Ernst & Young Awarded the Enterprise 50 Award (2″ Place) by Small and Medium Industries Development Corporation (SMIDEg and Accenture. The award recognises the achievements of Malaysia’s enterprising homegrown companies, which are well positioned for the future Awarded the Best of Industrial Application Award and the Prime Minister’s “Best of the Best”Award (Overall Winner) by MDC under the MSC-Asia Pacific ICT Awards (MSC-APICTA) 2004 6. BUSINESS OVERVIEW (Conl’d) Year Eveots October 2004 December 2004 January 2005 The founder of the Group, Mr. Chu Jenn Wcng, was awarded the Young Most Promising Entrepreneur Award under the Business Excellence Award 2004 by the Malaysian Canadian Business Council Awarded the SMI Best Overall Award 2004 by SM] Association of Malaysia Awarded the Best of Industrial Application award in the APleTA International 2004 (Hong Kong) Awarded the Deloitte Technology Fast 500 Asia Pacific Award Awarded the Global Golden Rim Award 2005 by thc Chinese Enterprise Development Association of Taiwan

 

 

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