table of contents chairman s message 2 selected consolidated financial data 4 management discussion and analysis condition results operations 6 report independent registered public accountant firm 19 balance sheets 20 statements 21 cash flows 22 shareholders equity 24 notes to 25 stock market information 44 the creative network 46 corporate directory 48 1 dear fiscal 2006 was a dif cult challenging year for however we continued realize signi cant achievements on product technology fronts most high pro le which i believe award us patent user interface portable media players refer as zen then scored major success with payment 100 million from apple part our recent settlement includes license use in august 2005 an important milestone research development efforts particularly personal digital entertainment products it recognized early innovation