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Sept 2012May 2013

About the VTech Group

22Shenzhen 2008QingYuan 2005LiaoBu 1997HouJie 1985

• Headquartered in HKG since 1976• Listed in HKG (HKSE:303) & USA (via ADR: VTKHY)• Factories in HouJie, LiaoBu & QingYuan, R&D Center in SZ• Operations in 11 countries and regions

Locations

Employees

• 30,000 Employees Worldwide• 1,300 R&D Professionals & Engineers

Financials

• Financially Strong & Reputation for High Quality• 3 Divisions : Phones, Electronic Learning Products & CMS• Innovation and Engineering Driven

VTech’s Financial Performance

The Group Turnover in the Past 5 Years (US$M )

1448 1532 1713 1784 1858

0500

100015002000

FY09 FY10 FY11 FY12 FY13

a

Key Financial Data (US$M)

FY11 FY12 FY13

• Revenue : 1,712.8 1,784.5 1,858.0

• Operating Profit : 218.7 209.5 224.7

• Profit before Tax 220.3 211.6 226.4

• R&D Expenditure : 56.8 57.2 57.1

• Dividend/Share (Cents) 78.0 77.0 80.0

33

Geographic Sales Distribution FY13

41.4%

5.4%

50.2%

3.0%

Europe

Asia Pacific

N. America

Others

0

100

200

300

400

500

600

700

800

Sales By Companies US$M

Phone 742.3 727.5 706.3 666.4

ELP 508.7 594.9 657.1 731.3

CMS 281.3 390.4 421.1 460.3

FY10 FY11 FY12 FY13

VTech Corporate Structure

44

CMS Sales Distribution – FY13

55

97128

159

233 240 261 281

390421

460

0

100

200

300

400

500

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Sales ($Million)Sales History For Past 10 Years

0

5

10

15

20

25

30

35

40

FY12 39 16 10 13 7 4 4 6 1

FY13 37 16 9 17 9 4 2 5 1

Pro AudioPowerSupply

LED Wireless IndustrialHomeApp.

TelecomMedical &

HealthOthers

Sales By Market (%)

CMS MANUFACTURING

66

CMS

• 650K Sq. Ft. manufacturing areas• SMT, Thru-Hole, RoHS, REACH, • ISO9001, ISO14001, ISO13485, TS16949, ISO18001, SA8000• ANSI ESD S20.20 for all production floors

Manufacturing Capabilities

• 19 Fuji SMT Lines, State-of-the-Art Equipment• ICT, AOI, ATE, FAT• Chip on Board in Class 1,000 Clean Room• Class 10,000 Clean Room for precise products• Burn-in Chambers, X-Ray Inspection, Automation process

Plastics in VTech

Special Processes & Testing

• Conformal Coating, Burn-In• Reliability life tests e.g. drop test, high/low temp cycle

• In-House Mfg. and Tooling• 400 Injection Molding Stations, Up to 850 Tons• Over-Molding, Mechanical

CMS TEAM

77

CMS Business Strategies

• Organic Growth

• Focus on Medium Size Customers

• Flexible and Quality Management Services with Design Support

• Customer Focus and Support

R&D Support and Design Support

88

Our Support Includes:

• Product Design, ID Support, Cost-Down Re-design• Electronics including Hardware & Software Design• Mechanical, Structural & Assembly Design• PCB Re-design, Upgrades and Re-spin• Convert a Conceptual Product into Volume Production

Typical Applications and Competence

• HW & SW developments for MCU, MPU, ARM processors, etc.• Drivers and Embedded System Development• RF, Wireless, Audio, Consumer Electronics, Medical, Telecom,

Energy-Star & Saving• Convert an Electronic Schematic to PCB Gerber Data

Resources

NPI

• Design for Manufacturability (DFM)• Sample Production and Design Verification & Validation• Next Generation Design, Cost Reduction, Spec Upgrades

• Design Awarded R&D Group located in Shenzhen• Professional Audio Test Lab• Effective & Accurate Design Simulation Software• Approx. 40 Engineers & Technicians support design professionally

99

Outgoing

Quality

Assurance

System and Process auditSystem and Process audit

Vendor Rating System &

Improvement Program

Vendor Rating System &

Improvement Program

Material

planning

(MRP) &

PO release

Material

planning

(MRP) &

PO release

Customer

request &

PO review

Customer

request &

PO review

Manufacturing Process

control

Manufacturing Process

controlMaterial

received

Material

received

VendorsVendors

Quality & Environment SystemQuality & Environment System

ISO9001 ISO14001 ANSI/ESD S20.20 TS16949

In-process

Quality

Control

IQC

Outgoing

Quality

Assurance

VTech Tracking SystemIdentification & Traceability

VTech Tracking SystemIdentification & Traceability

Product

barcode

system

Material

barcode

systemCustomer

ISO13485

Statistical

Techniques

Statistical

TechniquesEquipment

Control

Equipment

ControlCustomer

ISO18001

Storage,

Packaging

& Delivery

Storage,

Packaging

& DeliveryProduction

Inspection & Test

Quality Management System – Quality System Model

SA8000

Protecting Our Client’s Patents and IP

1010

IP as the most valuable Asset

• We fully recognize the importance of the IP & Patent Protection• VTech VTE & ELP have the same IP Protection Interest• See our Web Site Statement and Details

Our Procedures to protect IP

• NDA or General Confidentiality Agreement• Tightly Controlled Documentation and Copying of Doc’s• Access on an “As needed Basis”• Continuous Training of our Employees• Return of all files after the completion of a Project

History and Forward Looking

The Result

• Our Customers and potential Clients are fully protected• Our four Buildings as Technology Protection in Projects

• No History of any IP Violation since our Existence• Ongoing IP & Patent Awareness Training

Corporate Social Responsibility –Management Policy

1111

Our CSR Management Methodology

• Maintain the VTech Brand Name & Reputation• Increase the Operational Efficiency• Improve the Customer Satisfaction

Employees & Management

• We care about Employees • We maintain and improve the good Relationship• Operational Efficiency & Staff Motivation, Community Relationship

Corporate & Business Ethics

Health, Safety & Environment

• Safe Work Environment• Protect the Health of our Employees

• Ensure that the CMS Group works at their Highest Standards• Demonstrate an Ethical Conduct, internal as well as external

Success with VTech CMS

1212

Pro Audio / MI

LED Telecom

Medical & Health Power Supply

UKAustria US USUK

US Japan US US US

USJapan Norway Norway

Denmark

1313