Argox celebrated the end of 2003 with a splendid year-end party.

All of our employees, suppliers and customers were invited to enjoy a festive get together at the local Taipei Hooters! Conga line dancing, a hula hoop competition, musical chairs, and a Limbo contest were accompanied by non-stop beers served by the beautiful and talented restaurant staff.

A prize drawing was the main event with winners receiving DVD players, vacuum cleaners, and lots of red envelopes with prize money. The grand prize of about US$2,000 and was picked up by a lucky Argox employee.

To top it all off, Argox CEO Mars Lu announced that every employee would receive an extra year end bonus equivalent to the grand prize! There's no better way to end the year than to hear the cheers of our friends and colleagues at Argox.

As Argox looks forward to the challenges of the upcoming year, it is also a good time to reflect on milestones reached during 2003.

In 2003 Argox experienced respectable revenue growth as well as several firsts. Argox became Asia's first one-stop AIDC solution provider; we entered India's market with our first distributor
meeting in New Delhi; and held our first show in Eastern Europe.

We initially forecast 42% revenue growth at the beginning of 2003. However, last year our actual revenue growth only reached 33.5%.
This lower than anticipated, but still respectable figure was due
to a few OEM orders that did not come through and the general
effect of SARS on the economy in the second quarter.

In 2003 Argox became Asia's first comprehensive AIDC solution provider offering one-stop shopping for all barcode devices to our customers. The introduction of our new portable data terminals provides system products in addition to our full line of barcode scanners and barcode printers. This new total solution capability allows us to deliver the benefits of greater integration convenience, single window support and service, and lower logistical costs to our customers.

In October Argox exhibited for the first time in Eastern Europe. The show was the Invex trade fair held in Brno, Czech Republic. Our goals were to get a first hand look at the market, to raise awareness of Argox products, and to begin to develop an Eastern Europe customer base. The emerging Eastern European market holds much promise for barcode products and Argox plans to attend annually and develop this growing market.

In December Argox held our first distributor meeting in India. The meeting coincided with the AIDC Expo 2003 in New Delhi. This emerging market already shows strong demand for barcode products and we see great potential. Argox products such as the OS-214, X-1000, and X-2000 printers, as well as the AS-8150 scanner are generating much interest, and we predict rapid growth in this market.

Argox expects the Year of the Monkey to be another good one. For 2004 we forecast 55% revenue growth based on several new products that we will announce in the first quarter of the year, an enhanced service and support system, and an expanded sales team.