EXHIBIT 2

GLOBAL-TECH APPLIANCES INC.
Quarterly Report for the Three and Nine Months ended December 31, 2002

- -------------------------------------------------------------------------------
Except for historical information, certain statements contained herein are
forward-looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
or variations of such words and similar expressions are intended to identify
such forward looking statements. These forward looking statements are subject
to risks and uncertainties, including but not limited to, the impact of
competitive products and pricing, the financial condition of the Company's
customers, product demand and market acceptance, the success of new product
development, reliance on material customers and key strategic alliances,
availability and cost of raw materials, the timing and proper execution of
certain business plans, including the plan to diversify and transform a portion
of manufacturing capacity to higher-value, technology-oriented products,
currency fluctuations, uncertainties associated with investments, the regulatory
environment, fluctuations in operating results, the impact of changing global,
political and economic conditions and other risks detailed from time to time in
the Company's filings with the Securities and Exchange Commission, including its
most recent Report on Form 20-F.
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GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts expressed in United States dollars)

December March 31,
31,2002 2002
------------ -----------
(unaudited) (audited)
(in thousands)

ASSETS
Current assets:
Cash and cash equivalents $ 25,130 $ 48,589
Short-term investments 39,442 8,678
Accounts receivable, net 9,858 12,318
Deposits, prepayments & other assets 2,490 2,158
Inventories, net 8,149 9,646
------------ -----------
Total current assets 85,069 81,389
Property, plant and equipment 32,580 34,198
Land use rights 1,964 2,002
License 3,792 4,317
Patents 248 286
Promissory note receivable 728 775
Loan to a director 230 306
------------ -----------
Total assets $ 124,611 $ 123,273
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings $ -- $ 76
Current portion of long-term bank loans 582 715
Accounts payable 5,539 6,238
Amount due to a director -- 180
Fees payable for license -- 1,800
Fees payable for land use rights 275 275
Salaries and allowance payable 908 541
Advance payments from customers 9 43
Accrued expenses 1,195 1,961
Investment in a joint venture -- 246
Income tax provision 3,691 4,384
------------ -----------
Total current liabilities 12,199 16,459
Long-term bank loans 386 271
Deferred tax liabilities, net 43 43
------------ -----------
Total liabilities 12,628 16,773
------------ -----------
Shareholders' equity:
Preferred stock, par value $0.01; 1,000,000 shares
authorized, no shares issued -- --
Common stock, par value $0.01; 50,000,000 shares
authorized; 12,830,000 shares issued as of December 31,
2002 and March 31, 2002 128 128
Additional paid-in capital 81,753 81,753
Retained earnings 34,763 29,416
Accumulated other comprehensive deficit (61) (197)
Less: Treasury stock, at cost, 689,147 shares as of
December 31, 2002 and March 31, 2002 (4,600) (4,600)
------------ -----------
Total shareholders' equity 111,983 106,500
------------ -----------
Total liabilities and shareholders' equity $ 124,611 $ 123,273
============ ===========

GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Amounts expressed in United States dollars)

Three Months Ended Nine Months Ended
December 31, December 31,
-------------------------- --------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
(in thousands, except per share data)

Net sales ......................................... $ 16,544 $ 19,470 $ 61,403 $ 67,536
Cost of goods sold ................................ (12,418) (14,774) (44,836) (51,491)
----------- ----------- ----------- -----------
Gross profit ...................................... 4,126 4,696 16,567 16,045
Selling, general and administrative expenses ...... (3,487) (3,301) (11,034) (10,686)
----------- ----------- ----------- -----------
Operating income .................................. 639 1,395 5,533 5,359
Other income, net ................................. 413 194 1,172 1,630
----------- ----------- ----------- -----------
Income from continuing operations before
income taxes ................................... 1,052 1,589 6,705 6,989
Provision for income taxes ........................ (110) (93) (546) (397)
----------- ----------- ----------- -----------
Income from continuing operations ................. 942 1,496 6,159 6,592
Discontinued operations
Loss from operations of discontinued TFEL business
(including gain on disposal of US$29,000) ... (175) (606) (812) (1,397)
----------- ----------- ----------- -----------
Income before minority interests .................. 767 890 5,347 5,195
Minority interests ................................ -- 150 -- 336
----------- ----------- ----------- -----------
Net income ........................................ $ 767 $ 1,040 $ 5,347 $ 5,531
=========== =========== =========== ===========
Basic and diluted earnings per common share ....... $ 0.06 $ 0.09 $ 0.44 $ 0.46
=========== =========== =========== ===========
Basic and diluted weighted average number of shares
outstanding .................................... 12,141 12,138 12,141 12,138
=========== =========== =========== ===========

Note: On November 1, 2002, we announced that our subsidiary, Global Lite Array
(BVI) Limited, entered into an agreement to sell Lite Array's thin-film
electroluminescent ("TFEL") display business, including the interest that Lite
Array owns in a joint venture manufacturing facility in Jiangmen, China, to the
former management of Lite Array. As a result of this agreement, the results of
operations for Lite Array's TFEL display business have been reported as
discontinued operations and previously reported financial statements have been
restated to conform to the current operating structure.

The summarized results of discontinued operations are as follows:

Three Months Ended Nine Months Ended
December 31, December 31,
-------------------------- -------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
(in thousands)

Net sales .................................. $ 115 $ 18 $ 599 $ 42
Cost of goods sold ......................... (96) (10) (507) (25)
----------- ----------- ----------- -----------
Gross profit ............................... 19 8 92 17
Loss in a joint venture .................... (56) (540) (325) (741)
Selling, general and administrative
expenses ................................ (167) (74) (608) (673)
----------- ----------- ----------- -----------
Operating loss ............................. (204) (606) (841) (1,397)
Gain on sales on discontinued
TFEL business ........................... 29 0.0 29 0.0
----------- ----------- ----------- -----------
Loss from operations of discontinued TFEL
business ................................ $ (175) $ (606) $ (812) $ (1,397)
=========== =========== =========== ===========

GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts expressed in United States dollars)

Nine Months Nine Months
Ended Ended
December December
31, 2002 31, 2001
----------- -----------
(unaudited) (unaudited)
(in thousands)

Cash flows from operating activities
Income before minority interest 5,347 5,195
Adjustments to reconcile net income before minority interest to
net cash provided by operating activities:
Depreciation and amortization 3,942 3,465
Gain on disposal of short-term investments -- (107)
Gain on disposal of TFEL business (29) --
Loss on disposal of property, plant and equipment 38 --
Provision for promissory note receivable 47 --
Decrease/(increase) in accounts receivable, net 2,343 (1,667)
Increase in deposits, prepayments and other assets (368) (538)
Decrease in inventories, net 1,497 3,935
Increase in intangible assets -- (817)
Decrease in accounts payable (699) (9,128)
Decrease in advance payments from customers (34) (8)
Decrease in accrued expenses (2,300) (162)
Decrease/(increase) in income tax provision (693) 394
----------- -----------
Net cash provided by operating activities 9,091 562
----------- -----------

Cash flows from investing activities:
Purchase of short-term investments (34,281) (9,724)
Proceeds from disposal of short-term investments 3,653 33,927
Proceeds from disposal of TFEL business 100 --
Decrease/(increase) in interests in joint venture 13 (884)
Purchase of property, plant and equipment (2,093) (1,720)
Decrease in loan to a director 76 77
Net cash outflow in respect of the acquisition of
subsidiary -- (1)
----------- -----------
Net cash provided by investing activities (32,532) 21,675
----------- -----------
Cash flows from financing activities:
Addition of long-term bank loans 691 --
Issuance of treasury stock to employees -- 6
Repayment in short-term bank borrowings -- (802)
Repayment of long-term bank loans (709) (849)
----------- -----------
Net cash used in financing activities (18) (1,645)
----------- -----------

Net increase (decrease) in cash and cash equivalents (23,459) 20,592
Cash and cash equivalents at beginning of year/period 48,589 28,489
----------- -----------
25,130 49,081
=========== ===========

GLOBAL-TECH APPLIANCES INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- UNAUDITED

(Amounts expressed in United States dollars unless otherwise stated)

Note 1 -- GENERAL

The accompanying unaudited consolidated financial statements of Global-Tech
Appliances Inc. ("Global-Tech") have been prepared as of December 31, 2002 and
for the nine-month period then ended. The interim financial statements should
be read in conjunction with the annual financial statements as of March 31,
2002. These statements reflect all adjustments which are, in the opinion of
management, necessary to fairly present Global-Tech's financial position as of
December 31, 2002 and its results of operations and cash flows for the nine
months ended December 31, 2002. The results of operations for the nine months
ended December 31, 2002 should not be considered indicative of the results
expected for the year ending March 31, 2003.

Global-Tech is incorporated in the British Virgin Islands and is a holding
company that does not engage in daily business operations. Global-Tech and its
subsidiaries are collectively referred to as the "Company." The Company is a
designer and manufacturer of a wide range of small household appliances. The
Company's main manufacturing and warehousing operations are located in Dongguan
and Shenzhen, the People's Republic of China ("China"). The Company's products
are sold to customers primarily in the United States and Europe.

On April 14, 1998, the Company issued 4,200,000 common shares, par value $0.01
per share, in connection with the initial public offering of its common shares
(the "IPO"). On May 7, 1998, the Company issued an additional 630,000 common
shares to the underwriters of the IPO pursuant to their exercise in full of the
over-allotment option granted to them by the Company.

Note 2 -- SUBSIDIARIES

Details of the Company's principal subsidiaries as of December 31, 2002 were as
follows:

Name Country Ownership
- ------------------------------------------- ---------------------- ---------
Wing Shing Products (BVI) Company Limited ... British Virgin Islands 100.0%
Wing Shing Overseas Limited ................. British Virgin Islands 100.0
Pentalpha Enterprises Limited ............... Hong Kong 100.0
Pentalpha Hong Kong Limited ................. Hong Kong 100.0
Kwong Lee Shun Trading Company Limited ...... Hong Kong 100.0
Dongguan Wing Shing Electrical Products
Factory Company Limited .................. China 100.0
Global-Tech USA, Inc. ....................... United States 100.0
Pentalpha Macau Commercial Offshore Limited . Macau 100.0
Global Lite Array (BVI) Limited ............. British Virgin Islands 76.8
Lite Array (BVI) Company Limited ............ British Virgin Islands 76.8
Lite Array, Inc. ............................ United States 76.8

Global-Tech Appliances Inc. is a holding company of the above subsidiaries. Wing
Shing Products (BVI) Company Limited is primarily engaged in selling finished
goods to the Company's customers. Wing Shing Overseas Limited, Pentalpha
Enterprises Limited and Pentalpha Hong Kong Limited are primarily engaged in
buying raw materials and selling finished goods to the Company's customers.
Kwong Lee Shun Trading Company Limited is a service company that provides
management services to the Company. Dongguan Wing Shing Electrical Products
Factory Company Limited is the Company's manufacturing facility located in
Dongguan, China. Global-Tech USA, Inc. provides investor relations and
consulting services to the Company. Pentalpha Macau Commercial Offshore Limited
is a newly incorporated subsidiary primarily engaged in selling finished goods
to the Company's customers. Global Lite Array (BVI) Limited is an investment
holding company. Lite Array (BVI) Company Limited is a newly incorporated
subsidiary of Global Lite Array (BVI) Limited primarily engaged in buying raw
materials and selling solid state flat-panel displays to the Company's
customers. Lite Array, Inc. is primarily engaged in research and development of
organic light emitting diode solid state flat-panel displays. These products are
in the development stage and consequently no sales have been made to customers.

Note 3 -- SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed in the preparation of these
statements are identical to those applied in preparing the latest annual
financial statements. A summary of those significant accounting policies can be
found in the Company's fiscal 2002 Annual Report on Form 20-F, filed on October
15, 2002, in the Notes to the Consolidated Financial Statements, Note 3, and
under "Item 5.E--Operating and Financial Results and Prospects--Application of
Critical Accounting Policies."

GLOBAL-TECH APPLIANCES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE QUARTER ENDED December 31, 2002

General

We design, manufacture and sell a wide range of small household
appliances to brand marketers in developed countries. Our products, all of which
are manufactured in China, are marketed by our customers under brand names such
as Black & Decker(R), DeLonghi(R), Dirt Devil(R), Eureka(R), Hamilton Beach(R),
Krups(R), Morphy Richards(R), Mr. Coffee(R), Proctor-Silex(R), Sunbeam(R) and
West Bend(R). We manufacture over 100 different models, primarily in four
product categories:

. kitchen appliances, such as coffeemakers and indoor grills;

. garment care products, such as steam irons;

. travel products and accessories, such as travel irons; and

. floor care products, such as upright vacuum cleaners and hand-held
steam vacuum cleaners.

We were founded in 1963 and, for most of our history, operated as a
contract manufacturer of products developed by our customers. In recent years,
however, we have emphasized original design manufacturing. As an original design
manufacturer, or ODM, we design and develop proprietary new products which we
manufacture for our customers. This shift in emphasis was made possible by our
forming a product design and development team consisting of engineers who focus
on the development of new products. Net sales of our ODM products represented
48.3% and 54.3% of our net sales during the three months ended December 31, 2001
and December 31, 2002, respectively, and 50.7% and 46.3% of our net sales during
the nine months ended December 31, 2001 and 2002, respectively, with the
remaining sales generated by our contract manufacturing activities. Sales of ODM
products have increased as a percentage of net sales in the 2003 quarterly
period mainly due to a decline in sales to one of our major contract
manufacturing customers, Royal Appliance Mfg. Co. Sales of ODM products had been
declining as a percentage of net sales over the last several years. This trend
is expected to continue in the near term due to an anticipated increase in sales
of new floor care products, which are primarily contract manufactured products.
We expect to continue to emphasize our ODM strategy to the greatest extent
possible, however, as ODM products generally have higher profit margins.

We also are continuing to acquire new technologies in an effort to
expand our capabilities in manufacturing finished products. These transactions
are part of our long-term business strategy to gradually diversify and transform
a portion of our manufacturing facility to higher-value, technology-oriented
products that we believe will allow us to leverage our existing research and
development and technical management staff in Hong Kong, as well as our
manufacturing infrastructure in China. Our long-term strategic focus is to
de-emphasize component manufacturing, as component manufacturing does not offer
value-added opportunities on a consistent basis.

Since most of our purchases and sales are denominated in U.S. dollars,
our financial statements are presented in U.S. dollars, our functional currency.
Our financial statements are prepared in accordance with U.S. generally accepted
accounting principles. References to an interim period refers to the nine month
period ended; for example, "2003 interim period" refers to the nine month period
ended December 31, 2002.

References to a quarterly period refer to our fiscal quarter ended on December
31; for example, "2003 quarterly period" refers to the fiscal quarter ended
December 31, 2002.

Results of Operations

The following table sets forth certain statement of income data as a
percentage of net sales for the periods indicated:

Three Months Ended Nine Months Ended
December 31, December 31,
----------------------- ---------------------
2002 2001 2002 2001
---------- --------- --------- ----------

Net sales ............................................ 100.0% 100.0% 100.0% 100.0%
Cost of goods sold ................................... 75.1 75.9 73.0 76.2
---------- --------- --------- ----------
Gross profit ......................................... 24.9 24.1 27.0 23.8
Selling, general and administrative expenses ......... 21.1 16.9 18.0 15.8
---------- --------- --------- ----------
Operating income ..................................... 3.8 7.2 9.0 8.0
Other income, net .................................... 2.5 1.0 1.9 2.4
---------- --------- --------- ----------
Income from continuing operations before income taxes. 6.3 8.2 10.9 10.4
Provision for income taxes ........................... 0.7 0.5 0.9 0.6
---------- --------- --------- ----------
Income from continuing operations .................... 5.6 7.7 10.0 9.8
Discontinued operations:
Loss from operations of discontinued TFEL business
(including gain on disposal of US$29,000) ......... 1.1 3.1 1.3 2.1
---------- --------- --------- ----------
Income before minority interests ..................... 4.5 4.6 8.7 7.7
Minority interests ................................... -- 0.8 -- 0.5
---------- --------- --------- ----------
Net income ........................................... 4.5% 5.4% 8.7% 8.2%
========== ========= ========= ==========

Note: On November 1, 2002, we announced that our subsidiary, Global Lite Array
(BVI) Limited, entered into an agreement to sell Lite Array's TFEL display
business, including the interest that Lite Array owns in a joint venture
manufacturing facility in Jiangmen, China, to the former management of Lite
Array. As a result of this agreement, the results of operations for Lite Array's
TFEL display business have been reported as discontinued operations and
previously reported financial statements have been restated to conform to the
current operating structure.

Nine Months ended December 31, 2002 Compared with Nine Months ended December 31,
2001

Net sales. Our net sales consist of our gross invoiced sales less
discounts and returns. Net sales for the 2003 interim period were $61.4 million
as compared to $67.5 million in the 2002 interim period. The decrease in net
sales was mainly attributable to the decrease in kitchen appliance and garment
care product sales, which was partially offset by an increase in sales of floor
care products. In the 2003 interim period, sales of floor care products
increased approximately 27.5% over the 2002 interim period.

On December 17, 2002, Techtronic Industries Company Limited ("TTI") and
Royal Appliance jointly announced that they have entered into a definitive
agreement for TTI to acquire Royal Appliance. Royal Appliance is one of our
largest customers, representing 42.2% of our net sales for the fiscal year ended
March 31, 2002 and 42.8% of our net sales for the 2003 interim period. Royal
Appliance is not contractually obligated to purchase floor care products from
us, as we only sell to them on the basis of

purchase orders. TTI is a Hong Kong-based manufacturer and marketer of home
improvement products, floor care appliances and electronic measuring devices.
There can be no assurance that after acquiring Royal Appliance, TTI will not
begin to manufacture the floor care products we currently supply to Royal
Appliance or that TTI will not utilize another sub-contractor to manufacture
these products and purchase such products from them. If TTI does manufacture
these products itself or purchase them from another sub-contractor, it could
have a material adverse affect on our business, financial condition and results
of operations.

Net sales consist primarily of sales in our four major product
categories: kitchen appliances, garment care products, travel products and
accessories and floor care products. Sales in each product category for the 2003
interim period as compared to the 2002 interim period were as follows:

. Sales of kitchen appliances decreased to $22.6 million, or 36.7% of
net sales, from $30.6 million, or 45.3% of net sales, primarily due
to decreased sales of breadmakers, food steamers, food processors
and electric knives. These products were once in high demand and
comprised a significant portion of our revenues in the past. More
recently, however, demand has waned for these products, and due to
continued pressure from our customers to reduce prices on these
products, we have decided to discontinue manufacturing certain of
these products.

. Sales of garment care products decreased to $947,000, or 1.5% of net
sales, from $6.2 million, or 9.2% of net sales. The decrease in sales
in this product category in Europe has been significant due to
decreased sales of steam irons to a major European customer because
of decreased demand for this product and also the bankruptcy of
Moulinex S.A., another major European customer which purchased these
products from us.

. Sales of travel products increased to $1.4 million, or 2.4% of net
sales, from $1.1 million, or 1.7% of net sales, primarily due to
increased sales of garment steamers which were partially offset by
the decreased sales of travel irons and travel sets.

. Sales of floor care products increased to $33.5 million, or 54.6% of
net sales, from $26.3 million, or 38.9% of net sales, primarily due
to sales of carpet shampooers and steam vacuums to new customers and
a marginal sales increase of floor care products to Royal Appliance.

Gross profit. Gross profit consists of net sales less cost of goods
sold, which includes the costs of raw materials, production materials, labor,
transportation, depreciation and factory overhead. Gross profit in the 2003
interim period was $16.6 million, or 27.0% of net sales, as compared to $16.0
million, or 23.8% of net sales, in the 2002 interim period. Gross profit as a
percentage of net sales increased in the 2003 interim period primarily because
of a change in product mix and our ability to reduce expenses over the prior
period at a more accelerated rate than net sales decreased. Cost of goods sold
decreased approximately $6.7 million in the 2003 interim period due to decreases
in raw material costs ($5.6 million decrease over the comparable period), direct
and indirect labor costs ($551,000 decrease over the comparable period) and the
cost of fuel, water and electricity ($240,000 decrease over the comparable
period) and other overheads. We plan to continue to retain tight control of
manufacturing overhead such as labor and consumables. Profit margins are
expected to remain relatively stable for the remainder of fiscal 2003. We are,
however, in the process of developing new products and expect to incur
additional overhead and raw material costs in the early production stages that
may offset any further decreases in cost of goods sold.

Selling, general and administrative expenses. The primary components of
our selling, general and administrative ("SG&A") expenses include expenses
related to product design and development, transportation of finished goods,
salaries for our marketing and administrative personnel, professional fees

and utilities. We have completed the sale of Lite Array's TFEL business to the
former management of Lite Array. Excluding the SG&A expenses incurred by Lite
Array's TFEL business, SG&A expenses in the 2003 interim period increased to
$11.0 million, or 18.0% of net sales, from $10.7 million, or 15.8% of net sales,
in the 2002 interim period. SG&A expenses attributable to Lite Array's TFEL
business were approximately $608,000 and $673,000 in the 2003 and 2002 interim
periods, respectively. The increase in SG&A expenses was primarily due to the
fees paid to consultants working on new product development and higher
amortization charges, which were partially offset by the decrease in legal and
professional fees, management-related expenses and salaries and wages paid to
administrative staff. We expect SG&A expenses to remain at their current level
for the balance of fiscal 2003.

The primary components of our design and development expenses included
in SG&A expenses include sample design fees, patent fees, testing charges,
inspection fees and salaries for our engineers and designers. Design and
development expenses in the 2003 interim period were approximately $1.0 million
compared to $1.2 million in the 2002 interim period. The decrease in design and
development expenses was due to a reduction in the number of engineers and
designers responsible for certain discontinued products and a reduction in
testing expenses. We plan to continue to recruit new R&D personnel for new
development programs.

Operating income. During the 2003 interim period, operating income was
approximately $5.5 million as compared to $5.4 million in the 2002 interim
period, an increase of 3.2% over the prior-year period. The primary reasons for
the increase in operating income was higher gross profit, which was partially
offset by the higher SG&A expenses over the comparable period.

Interest expense and other income, net. Interest expense consists of
interest on our short- and long-term bank credit facilities. Interest expense
was approximately $48,000 in the 2003 interim period as compared to $112,000 in
the 2002 interim period. The decrease in interest expense was due to decreased
borrowing requirements. Other income, net includes tooling income, interest
income and non-recurring income. Other income, net was $1.2 million in the 2003
interim period as compared to $1.6 million in the 2002 interim period. The
decrease in other income, net was primarily attributable to a decrease in
interest income during the 2003 interim period as interest rates continued to
drop to 1.8% from over 3.0% in the prior period.

Income tax. We had taxable income in Hong Kong in the 2003 and 2002
interim periods. The financial statements include provisions for Hong Kong
profits tax of approximately $546,000 and $397,000 in the 2003 and 2002 interim
periods, respectively. We do not believe that our current method of operations
subjects us to U.S. taxes because we do not have income effectively connected
with a trade or business in the United States. No income tax was payable by us
in China during this period because our subsidiary in China had accumulated tax
losses during these periods.

Discontinued operations. We recognized a profit of $29,000 on the sale
of Lite Array's TFEL business. The operating results of this business are
reflected as losses incurred of approximately $1.4 million and $812,000 in the
2002 and 2003 interim periods, respectively.

Minority interests. During the 2002 interim period, minority
shareholders absorbed approximately $336,000 in losses from the operations of
Global Lite Array (BVI) Ltd. during that period. Due to accumulated losses in
Global Lite Array (BVI), there was no minority interest in the 2003 interim
period.

Net income. Net income for the 2003 interim period was $5.3 million, or
$0.44 per share, as compared to $5.5 million, or $0.46 per share, for the 2002
interim period.

Three Months ended December 31, 2002 Compared with Three Months ended December
31, 2001

Net sales. Net sales for the 2003 quarterly period decreased
approximately 15.0% to $16.5 million from $19.5 million in the 2002 quarterly
period. The decrease in net sales was primarily attributable to a decrease in
sales of floor care products, kitchen appliances and garment care products. The
decrease in floor care product sales was attributable to a decrease in sales to
Royal Appliance, which was only partially offset by

an approximate $1.0 million increase in sales to new floor care customers. Sales
to Royal Appliance fell due to increased competition based upon price. To help
retain Royal Appliance as a major customer, we recently entered into new
arrangements with Royal Appliance to produce the products we manufacture for
Royal at a lower cost in an attempt to secure additional business in the near
future. These new arrangements may have a negative impact on our profit margins.
While we believe that the additional sales volume from these new arrangements
will make up for any negative impact on our profit margins, Royal Appliance has
no contractual obligation to continue to purchase floor care products from us
and the likelihood of Royal placing additional orders with us is based upon our
ability to compete with the other floor care product manufacturers. Based upon
the new arrangements, we expect sales to Royal Appliance to remain stable
through the fourth quarter of fiscal 2003.

Sales in each product category for the 2003 quarterly period as
compared to the 2002 quarterly period were as follows:

. Sales of kitchen appliances decreased to $7.4 million, or 44.6% of
net sales, from $8.4 million, or 43.1% of net sales, primarily due to
decreased sales of breadmakers, food steamers, electric knives and
food processors. Sales of these products decreased due to significant
price competition in this product category. Due to overcapacity in
the business, sales of kitchen appliances are expected to continue to
decline.

. Sales of garment care products decreased to $329,000, or 2.0% of net
sales, from $1.3 million, or 6.7% of net sales, primarily due to
decreased sales of steam irons to a major European customer.

. Sales of travel products increased to $245,000, or 1.5% of net sales,
from $239,000, or 1.2% of net sales, primarily due to increased sales
in garment steamers partially offset by decreased sales in travel
irons and iron sets.

. Sales of floor care products decreased to $7.3 million, or 44.3% of
net sales, from $8.5 million, or 43.8% of net sales, primarily due to
decreased sales to Royal Appliance in the 2003 quarterly period.

Gross profit. Gross profit in the 2003 quarterly period was $4.1
million, or 24.9% of net sales, as compared to $4.7 million, or 24.1% of net
sales, in the 2002 quarterly period. Gross profit as a percentage of net sales
increased in the 2003 quarterly period primarily because cost of goods sold
decreased over the prior period at a more accelerated rate than net sales
decreased. Cost of goods sold decreased $2.4 million in the 2003 quarterly
period due to decreases in raw material costs ($2.0 million decrease over the
comparable period) and decreased manufacturing overhead, including direct and
indirect labor costs and the cost of fuel, water and electricity and other
overhead. We plan to continue to retain tight control of manufacturing overhead
such as labor and consumables. We anticipate that gross profit margins will
remain at current levels for the remainder of fiscal 2003. We are, however, in
the process of developing new products, and we expect to incur additional
overhead and raw material costs in the early production stages that may offset
any further decreases in cost of goods sold.

Selling, general and administrative expenses. SG&A expenses in the 2003
quarterly period were $3.5 million, or 21.1% of net sales, as compared to $3.3
million, or 16.9% of net sales, in the 2002 quarterly period. The increase was
primarily due to an increase in consultancy fees for new product development and
amortization charges over the comparable quarterly period, which was partially
offset by a decrease in legal and professional fees, management-related expenses
and salaries and wages paid to administrative staff. We have completed the sale
of Lite Array's TFEL business to the former

management of Lite Array. SG&A expenses attributable to Lite Array's TFEL
business were approximately $167,000 and $74,000 in the 2003 and 2002 quarterly
periods, respectively.

Design and development expenses in the 2003 quarterly period were
$330,000 as compared to $384,000 in the 2002 quarterly period. The decrease in
design and development expenses was due to decreased sample design fees, testing
charges and salaries and wages paid to the design and engineering staff
responsible for certain discontinued products. We plan to continue to recruit
new R&D personnel for new development programs.

Operating income. During 2003 quarterly period, operating income was
approximately $640,000 as compared to $1.4 million in the 2002 quarterly period,
a decrease of 54.2% over the prior-year period. The primary reasons for the
decrease were decreased sales of floor care, garment care and kitchen appliance
products and higher SG&A expenses over the comparable period.

Interest expense and other income, net. Interest expense was $15,400 in
the 2003 quarterly period as compared to $19,300 in the 2002 quarterly period.
The decrease in interest expense was due to decreased borrowings. Other income,
net was $413,000 in the 2003 quarterly period as compared to $194,000 in the
2002 quarterly period. The increase in other income, net was primarily
attributable to an increase in tooling payments from our customers.

Income tax. We had taxable income in Hong Kong in the 2003 and 2002
quarterly periods. The financial statements include provisions for Hong Kong
profits tax of approximately $110,000 and $93,000 in the 2003 and 2002 quarterly
periods, respectively. We do not believe that our current method of operations
subject us to U.S. taxes because we do not have income effectively connected
with a trade or business in the United States. No income tax was payable by us
in China during this period because our subsidiary in China had accumulated tax
losses during these periods.

Discontinued operations. The operating results of Lite Array's TFEL
business are reflected as losses incurred of approximately $606,000 and $175,000
in the 2002 and 2003 quarterly periods, respectively.

Minority interests. During the 2002 quarterly period, minority
shareholders absorbed approximately $150,000 in losses from the operations of
Global Lite Array (BVI) Ltd. during that period. Due to accumulated losses in
Global Lite Array (BVI), there was no minority interest in the 2003 quarterly
period.

Net income. Net income for the 2003 quarterly period was $767,000, or
$0.06 per share, as compared to $1.0 million, or $0.09 per share, in the 2002
quarterly period.

Liquidity and Capital Resources

Our primary sources of financing have been cash from operating
activities and borrowings under credit agreements with various banks. Net cash
provided by operating activities during the 2003 interim period was $9.1 million
as compared to approximately $562,000 in the 2002 interim period. During the
2002 interim period, the increase in net cash provided by operating activities
was mainly due to the decrease in accounts receivable over the comparable period
and a reduction in the rate of decrease of accounts payable over the comparable
period. The shift in current asset balances since March 31, 2002 from cash and
cash equivalents to short-term investments reflects our estimated cash reserve
being adequate to meet current liabilities.

At December 31, 2002, accounts receivable were $9.9 million as compared
to $12.3 million at March 31, 2002 as a result of the decrease in sales during
the 2003 interim period. Receivables at December 31, 2002 represented 44.2 days
of sales as compared to 62.0 days of sales at March 31, 2002. The decrease in
days of sales was caused by the recent decrease in sales to one of our largest
customers, Royal Appliance. We have continued to extend the payment terms for
this customer.

At December 31, 2002, inventories were $8.1 million as compared to $9.6
million at March 31, 2002. Our inventories consist primarily of raw materials
needed for future production. The decrease was mainly due to our use of raw
materials for the production of floor care products, which were heavily stocked
for the peak production season in the first and second quarters, and the
decreased sales in the 2003 interim period.

At December 31, 2002, accounts payable were approximately $5.5 million
as compared to $6.2 million at March 31, 2002. The decrease was mainly due to
our payment for raw materials for the production of floor care products, which
were heavily stocked during the peak production period in the first and second
quarters, and the decreased sales in the 2003 interim period. Working capital
increased from $64.9 million at March 31, 2002 to $72.9 million at December 31,
2002 due primarily to an increase in short-term investments, which was partially
offset by a decrease in cash and cash equivalents, and a decrease in accounts
payable.

In October 1998, we made a loan to a start-up U.S. corporation wholly
owned by the spouse of a corporate executive in the original principal amount of
$1.0 million, bearing interest at a fixed annual rate of 7.0% and payable in
quarterly installments of approximately $81,000 commencing October 28, 2003,
with any remaining balance due in full on October 28, 2008. As of December 31,
2002, accrued interest on the loan was approximately $340,467. We have reserved
fully against the interest due. As this company is currently in the development
stage, there can be no assurance that the loan will be repaid on a timely basis,
if at all.

In October 1999, we made a loan to a director for the purchase of a
residence. The loan is in the original principal amount of $460,000, bearing
interest at a fixed annual rate of 6.02%, and is secured by a mortgage on the
property. The loan is payable in six years with annual installments of
approximately $77,000 of principal together with interest on the unpaid
principal balance, commencing October 21, 2000. Payments on the loan will be
forgiven in arrears, however, on each payment due date in consideration for the
director's continued service to us.

Our aggregate capital expenditures during the 2003 and 2002 interim
periods were approximately $2.0 million and $1.7 million, respectively. During
the 2003 interim period, capital expenditures were mainly incurred for the
acquisition of equipment. Our outstanding capital commitments as of December 31,
2002 were approximately $500,000, primarily for the acquisition of tooling and
purchase of machinery and equipment. We expect to incur an aggregate of
approximately $1.4 million in capital expenses for the expansion of the Dongguan
facility in fiscal 2003 to support our OLED display program. We have commenced
the initial phase of the expansion, involving building a prototype assembly line
incorporating one evaporator which we plan to complete before year end. We
intend to produce samples from this line to determine whether there is
sufficient market interest to support of our plan of building a full scale pilot
line.

Our revolving credit facilities with Standard Chartered Bank,
HongkongBank and Citibank, N.A. have an aggregate facilities limit of
approximately $35.7 million as of December 31, 2002, bearing interest at
floating commercial bank lending rates in Hong Kong, which ranged from 6.0% to
6.125% per annum as of December 31, 2002. The amounts payable each month on the
revolving credit facilities varies depending upon the amounts drawn at the time
and was $79,000 in December 2002. Our outstanding borrowings vary according to
our seasonal working capital requirements. As of December 31, 2002, the amount
utilized for

overdrafts, bank loans, guarantees and letters of credit under our bank
facilities was approximately $1.3 million.

As of December 31, 2002, our long-term debt consisted of four term
loans with an aggregate outstanding amount of $968,000 (including the current
portion of long-term debt), all of which was provided by Standard Chartered Bank
under the revolving credit facility to finance the purchase of machinery,
equipment and motor vehicles. These loans bear interest at rates per annum
currently ranging from 2.65% to 6.0% and mature on various dates through the
year 2004. All of such loans are payable in monthly installments which were
approximately $79,000 as of December 31, 2002.

We anticipate that cash generated from operating activities should be
adequate to satisfy our capital requirements for at least 18 to 24 months. We
have in the past considered potential acquisitions of complimentary businesses.
Although we have not reached an agreement for such an acquisition, we plan to
continue to pursue selected acquisitions of complementary businesses. In the
event that we should consummate such an acquisition, our capital requirements
could increase.

Our acquisition of Lite Array, Inc. was completed in May 2001. The
acquisition was accomplished through a newly-formed subsidiary, Global Lite
Array (BVI) Limited, into which we contributed our convertible bond investment
in Lite Array plus $3.8 million of cash. In turn, the former common shareholders
of Lite Array contributed their Lite Array shares into Global Lite Array in
exchange for 9.2% of the outstanding shares of Global Lite Array, and the
holders of Lite Array debt exchanged $4.0 million in Lite Array debt in exchange
for 14.0% of the outstanding shares of Global Lite Array. Lite Array is a
California-based company involved extensively in the research, development and
pre-production of inorganic and organic solid state flat-panel displays. Lite
Array also operates a joint venture manufacturing plant in Jiangmen, China.
Total consideration for our investment in Lite Array was approximately $9.6
million, of which approximately $3.8 million was settled in cash and we took
responsibility for paying for the balance due on a license of $1.8 million. The
remaining portion of the consideration was satisfied in exchange of convertible
notes issued by Lite Array in fiscal 2001.

As part of our analysis of the potential for Lite Array's TFEL display
business and its joint venture operation, we determined that the long-term
prospects were limited. Global Lite Array's Board of directors decided, at a
June 10, 2002 board meeting, to discontinue the production of TFEL displays and
cease funding the joint venture in China as of September 30, 2002. A
presentation was made regarding this matter to our Board of Directors on June
30, 2002 and a decision was made to write off the value of Lite Array's
investment in the joint venture, the goodwill associated with the TFEL display
business and certain TFEL production equipment owned by us.

On November 1, 2002, we announced that our subsidiary, Global Lite
Array (BVI) Limited, entered into an agreement to sell Lite Array's TFEL display
business, including the interest that Lite Array owns in a joint venture
manufacturing facility in Jiangmen, China, to the former management of Lite
Array. The net gain on disposal was immaterial.

The balance due on the small molecule OLED license we assumed as a
result of our acquisition of Lite Array has been paid in full as of December 31,
2002. Payments totaling $1.8 million were made on this license during the 2003
interim period. Pursuant to the license arrangement, Lite Array must pay
royalties of a fixed percentage of the net sales of OLED display products that
are produced by using the licensed know-how and sold by Lite Array and its
subsidiaries before January 1, 2004. Lite Array also must pay royalties of the
greater of a fixed amount or a fixed percentage of the net sales of OLED display
products that are produced by using the licensed know-how and sold by Lite Array
and its subsidiaries after January 1, 2004. The license expires in 2023 and may
be terminated at any time by us after January 1, 2004.

On October 18, 2002, we announced that our Lite Array subsidiary had
acquired a license from Luxell Technologies Inc. of Toronto, Ontario, Canada to
incorporate Luxell's proprietary Black Layer(R) technology in the production of
OLED displays. We believe this technology should further accelerate and support
our recent announcement to concentrate Lite Array's research and development
efforts on OLED displays and our plans to set up a pilot production line for
developing and producing OLED displays.

Inflation. From 1996 through 2001 and the first eleven months of 2002,
the rate of inflation in Hong Kong has ranged from approximately -6.2% to 6.8%
(approximately -1.7% during 2001) and the average rate of inflation in China has
ranged from approximately -2.1% to 17.0% (approximately -0.4% during 2001). As a
general matter, the effect of this inflation on us is primarily limited to labor
costs, which represent a small component of our total expenses. As we purchase
most of our raw materials outside China, inflation in China does not have a
significant effect on our overall costs.

Currency and exchange rates. Our functional currency is the U.S. dollar.
Nearly all of our sales are denominated in U.S. dollars. The majority of our
expenses, including wages and other production and administrative costs are
denominated in Hong Kong dollars and Chinese Renminbi. Certain raw materials and
other expenses are purchased using a variety of currencies including the U.S.
dollar, Chinese Renminbi, Japanese yen and German mark. The majority of raw
materials are purchased using Hong Kong dollars. The Hong Kong dollar is pegged
to the U.S. dollar. We have not been significantly affected by exchange rate
fluctuations and therefore have not needed to hedge our positions.