ECS Holdings Limited Annual Report 2013

aCreating Maximum Bandwidth

Read all about ECS Holdings Limited’s highlights of the year on Pg 21.

Syncing with the Future Delivering High-Definition Performance

ECS HOLDINGS LIMITED ANNUAL REPORT 2013 Issue No.: 2013

1b

• To be the preferred supplier of choice for ICT products and value-added services by building strong customer relationships.

• To sustain our entrepreneurial growth by seeking new markets & businesses.

• To bring the best-of-breed ICT products and services to enhance the competitiveness of our customers’ businesses.

To be a Premier Asia-Pacific ICT Company that thinks globally but acts locally, excelling in all our business segments to deliver optimal value to our stakeholders.

VISION

MISSION

CORPORaTE PROFILE

ECS is a well-recognised provider of ICT products and services with

three main businesses, namely Enterprise Systems, IT Services and

Distribution. With a network of more than 23,000 active channel

partners across China, Thailand, Malaysia, Singapore, Indonesia and the

Philippines, ECS is well-positioned to be a regional partner of choice

suitable for any global-leading ICT brand vendor tapping Asia Pacific’s

ICT spending growth.

Leading global brand names like Hewlett-Packard (“HP”), Apple, Dell,

Lenovo, Microsoft, IBM, Oracle and EMC leverage on ECS’ extensive

channel partner network to distribute their products across the region.

The Group’s Enterprise Systems business aims to give MNCs, local

government and domestic companies a competitive edge over their

peers by designing, installing and implementing IT infrastructure. ECS’

IT Services business provides a comprehensive range of professional,

technical support and training services.

ECS’ Distribution business leverages on a well-established and highly-

efficient logistical and IT infrastructure to distribute fast-moving

products in the most efficient manner.

The Group has a consistent track record of profitability and a

management that is focused on operational excellence to achieve

sustainable profit growth and to enhance shareholder returns.

Vision and Mission 1

Chairman’s and

CEO’s Statement 2

Board of Directors 5

Senior Management 8

Corporate Executives 11

Corporate Information 14

Group Structure 16

Strategic Partners 17

Regional Network 18

Business Model 20

Financial Highlights 21

2013 Awards 22

2013 Milestones 24

Corporate Governance

Statement 25

Financial Contents 39

Shareholdings Statistics 105

abOUT US HIGHLIGHTS FINaNCIaL STaTEMENT

Contents

32

Vision and Mission

Chairman’s and

CEO’s Statement

Board of Directors

Senior Management

Corporate Executives


Financial and Operations Review

In the financial year under review, the Group’s revenue increased 15.3% to $4.20 billion as compared to $3.64 billion in FY2012. In passing the $4-billion annual revenue mark, ECS has crossed a significant milestone just four years after we hit $3 billion in sales in FY2009.

Review by Geographical Markets:

Geographically, both North Asia and South EastAsia performed well in FY2013.

- North Asia: In FY2013, North Asia revenue increased

by 14.9% to $2.51 billion, contributing 59.7% of the total Group revenue in FY2013. The growth was mainly from increased sales of servers, mobility devices, networking hardware and software products.

- South East Asia: South East Asia revenue increased by 15.9%

to $1.69 billion, contributing 40.3% of total Group revenue in FY2013. The growth was driven by higher sales of mobility devices, networking hardware and desktop PCs.

Review by Business Segments:

With the transformation in the IT landscape, we are expanding our product portfolio to adapt to these changes and offer a wider range of products to our customers. We are increasing our exposure to mobility devices, in line with the global shift towards adoption of such devices. We are also building our Enterprise Systems, which offers higher margins. Both strategies were reflected in our FY2013 results.

- Distribution Segment: Revenue from the Distribution segment

increased by 14.6% to $2.86 billion, contributing 68.2% of the total FY2013 revenue. The increase was mainly due to higher sales of mobility devices from both South East Asia and North Asia.

- Enterprise Systems Segment: Revenue from the Enterprise Systems

segment increased by 17.5% to $1.30 billion, contributing 31.0% of total revenue in FY2013. The increase was mainly driven by higher sales of servers, networking hardware and software products.

ECS’ FY2013 net profit increased 16.1% to $34.4 million from $29.6 million for FY2012 with gross profit of $156.6 million compared to $143.8 million, respectively. Gross profit margin narrowed to 3.7% from 3.9% over the comparative periods due to pressure from price competition.

Cash and bank balances increased by $12.7 million to $120.9 million as at 31 December 2013, mainly due to the net positive cash generated from operations of $18.9 million. Bank borrowings increased by $16.2 million to $259.2 million, mainly due to higher utilisation of bank facilities to support the growth of our business in FY2013. Net gearing improved to 0.37 times as at 31 December 2013 from 0.40 times as at 31 December 2012.

Earnings per share (“EPS”) improved to 9.41 cents in FY2013 from 8.10 cents in FY2012 while net asset value (“NAV”) per share increased to 101.59 cents as at 31 December 2013 from 92.83 cents a year earlier.

Dear Shareholders,

We are pleased to present the results for the financial year ended 31 December 2013 (“FY2013”). This has been an exceptional year during which we crossed the $4-billion revenue mark. This healthy performance underscores our determination and ability to ride out uncertainties of the global economy and sweeping changes in the IT landscape. ECS has worked relentlessly to adapt to changing trends towards mobility, and increased focus on Enterprise Systems. We endeavour to continue to drive operational and financial efficiencies.

CHaIRMaN’S aND CEO’S STaTEMENT

54

Vision and Mission

Chairman’s and

CEO’s Statement

Board of Directors

Senior Management



Dividend

The Board of Directors has proposed a first and final dividend of 2.2 cents per ordinary share, representing 23.4% of the FY2013 profit attributable to shareholders.

Our Strategies To Stay Relevant In The IT Landscape

Traditional roles have changed in the IT landscape, brought about by the dynamic shift towards mobility, cloud computing and lifestyle trends. Technology is moving quickly, and in so many directions, changing the way we live and work.

While the earlier shifts were about creating efficiency and improvements in how products were manufactured, the current ICT revolution redefines critical business assets, creating new economic models and transforming businesses in the process.

With these in mind, ECS’ business has adapted and remained relevant. In fact, we believe this offers opportunities for ECS, leveraging on our strong relationships with principals, our sizeable regional network, rigorous internal processes and strong management team. Even as the industry evolves, we intend to deepen our market share in emerging markets such Indonesia and China, as well as enhance our participation in Enterprise Systems.

Outlook

ECS will continue to play an important role as distributor and IT provider even as the IT ecosystem continues to undergo significant transformation.

Our strategy remains unwavering amidst the winds of change: We constantly redefine our value proposition as a trusted partner with strong relationships and deep understanding of our customers’ needs. Strategically, we will continue to expand in China and Indonesia. At the same time, we work actively to improve internal operational and financial efficiencies to improve margins, an endeavour which will also see a growing emphasis on Enterprise Systems. We will also continue to expand our business into mobility and cloud computing.

With our experienced and dedicated management team, we are confident that we will be able to overcome any obstacles ahead.

Appreciation and Acknowledgement

On behalf of our fellow Directors, we wish to thank our customers, channel partners, vendors, technology partners, banks, business associates and shareholders for their constant support, and our management and staff for their hard work. We would not have achieved a new and significant revenue milestone without your support.

Mr Tay Eng HoeExecutive Chairman

Mr Ong Wei HiamGroup Chief Executive Officer

Vision and Mission

Chairman’s and

CEO’s Statement

Board of Directors

Senior Management



board of Directors

From left to right: Mr Tan Hup Foi, Mr Foo Sen Chin, Mr Narong Intanate,

Mr Tay Eng Hoe, Mr Ong Wei Hiam, Mr Koh Soo Keong and Dr Leong Horn Kee

76

MR TaY ENG HOE was appointed as Executive Chairman of the Group on 1 January 2013. He was the founder of ECS Holdings Limited and also formerly the Group Chief Executive Officer. Mr Tay has been a Director of the Group since 1 April 2001. He brings with him more than 28 years of experience in the IT industry. Mr Tay was also formerly the Non-Executive Chairman of VST Holdings Limited, the parent company of ECS Holdings Limited, an appointment he held from 1 November 2012 to 17 November 2013. In August 2005, he was conferred the Public Service Medal by the President of the Republic of Singapore in recognition for his public service to the country. Mr Tay holds a Bachelor of Science (Honours) degree from the LaTrobe University and a Master of Business Administration from the University of Melbourne.

MR ONG WEI HIaM was appointed the Group Chief Executive Officer of ECS Holdings Limited on 1 January 2013 and was appointed as an Executive Director of the Company on 16 April 2012. Mr Ong is concurrently the Group Chief Financial Officer and Executive Director of VST Holdings Limited, the

parent company of ECS Holdings Limited. Mr Ong holds a Bachelor degree in Economics from University College London and a Master Degree in Analysis, Design & Management of Information Systems from the London School of Economics and Political Science. He is a Fellow of the Institute of Chartered Accountants in England and Wales, and Fellow of the Hong Kong Institute of Certified Public Accountants.

MR NaRONG INTaNaTE was appointed as Executive Director of ECS Holdings Limited on 15 December 2000 and subsequently served as the Group Chief Executive Officer of ECS Group to focus on overall business growth opportunities from 1 July 2010 to 31 December 2012. With effect from 1 January 2013, following his retirement as Group CEO, Mr Intanate was redesignated as a Non-Executive Director of ECS Holdings Limited. He is the Founder and Executive Chairman of The Value Systems Co., Ltd., a subsidiary of ECS Holdings Limited since 1988. He is also the Founder and Chairman of Vnet Capital Co., Ltd., a leading private equity and venture capital firm in Thailand. Mr Intanate holds a Bachelor of Science in Business Administration and a Master of

Business Administration from California State University. He is currently an advisor of the Hatyai University, and also the Board of Governors of The Bangkok Club. Prior to forming The Value Systems Co., Ltd., he was the Marketing Manager of Sahaviriya Infortech Computers Co., Ltd. from 1982 to 1983 and the Marketing Director of Sahaviriya OA from 1983 to 1988.

MR FOO SEN CHIN was appointed as a Director on 15 December 2000 and is concurrently the Advisor to Group Human Resources of the Company. He is also the Managing Director and founder of ECS ICT Berhad, our associate company which is listed on the Main Board of Bursa Malaysia Securities Berhad. Mr Foo plays a pivotal role in steering the strategic direction of ECS ICT Berhad. His responsibilities include the development of its long term business goals, overall operation and management of ECS ICT Berhad. Prior to joining our Group, he was the General Manager of a computer bureau services company in Kuala Lumpur before forming ECS KU Sdn Bhd (formerly known as K.U. Sistems Sdn Bhd) in 1985. Mr Foo is an advisor to the current Council of PIKOM, Association of Computer and Multimedia Industry of Malaysia. He has a Bachelor of

Vision and MissionChairman’s and

CEO’s StatementBoard of Directors

Senior ManagementCorporate Executives


Science degree in Electrical and Electronic Engineering from the University of Birmingham, UK and he also holds a Master’s degree in Business Administration from the Cranfield School of Management in the United Kingdom.

DR LEONG HORN KEE was appointed as an Independent Director on 15 December 2000, and currently serves as the Chairman of the Audit Committee and a member of the Nominating and Compensation Committees. On 1 January 2013, he was appointed Lead Independent Director. He is currently the Chairman of CapitalCorp Partners Pte Ltd. Dr Leong was a Member of Parliament for 22 years and Singapore’s Non-Resident Ambassador to Mexico for 6 years. He has wide work experience in the public sector in the Ministries of Finance and Trade & Industry, and in the private sector in venture capital, merchant banking, corporate investments, hotels and property development. Dr Leong is currently a member of the Securities Industry Council and the Non-resident High Commissioner to Cyprus (designate). He holds a degree (Honours) in Production Engineering from Loughborough University, UK; a

degree (Honours) in Economics from the University of London, UK; a degree in Chinese Language and Literature from Beijing Normal University, China; an MBA degree from Insead, France; and a Master in Business Research and a Doctorate of Business Administration from the University of Western Australia.

MR TaN HUP FOI was appointed as an Independent Director on 7 February 2006, and currently serves as Chairman of the Nominating Committee and a member of the Audit and Compensation Committees. He was the Chief Executive of Trans-Island Bus Services Ltd from 1994 to 2005 and also the Deputy President of SMRT Corporation Ltd from 2003 to 2005. He was also the Chairman of Ngee Ann Polytechnic Council from 2004 to 2011. Mr Tan is known internationally as the Honorary Vice President of the International Association of Public Transport (UITP) and Honorary Chairman of UITP Asia-Pacific Division. He was awarded the Bintang Bakti Masyarakat (Public Service Star) in 2008 and the Pingat Bakti Masyarakat (Public Service Medal) in 1996 by the President of Singapore. Mr Tan graduated from Monash University in Australia with a First Class Honours degree

in Mechanical Engineering in 1974 and he obtained a Master of Science (Industrial Engineering) degree from University of Singapore in 1979.

MR KOH SOO KEONG was appointed as an Independent Director on 11 February 2008, and currently serves as Chairman of the Compensation Committee and a member of the Audit and Nominating Committees. Mr Koh was, until April 2007, the Chief Executive Officer and President of Toll Asia Pte Ltd, formerly SembCorp Logistics Ltd (SembLog) which was acquired by Toll in May 2006. With over 20 years of experience in the logistics industry, he had helmed SembLog and its preceding companies since 1986. He is currently the Managing Director of EcoSave Pte Ltd. He is also the Chairman of the Agri-Food & Veterinary Authority of Singapore and Ascendas Funds Management (S) Ltd (managing Ascendas-REITs). He is a board member of two other publicly listed companies. He holds a Bachelor of Engineering (Honours), a Master of Business Administration and a Postgraduate Diploma in Business Law from the National University of Singapore.

98

Vision and Mission

Chairman’s and

CEO’s Statement

Board of Directors

Senior Management



Senior Management

From left to right: Mr Somsak Pejthaveeporndej, Ms Chow Ying Chi, Mr Lim Tow Cheng, Mr Foo Sen Chin,

Mr Ong Wei Hiam, Mr Eddie Foo, Mr Sebastian Chong and Mr Jimmy Go

MR ONG WEI HIaM was

appointed the Group Chief

Executive Officer of ECS

Holdings Limited on 1 January

2013 and was appointed as

an Executive Director of the

Company on 16 April 2012.

Mr Ong is concurrently the

Group Chief Financial Officer

and Executive Director of

VST Holdings Limited, the

parent company of ECS

Holdings Limited. Mr Ong

holds a Bachelor degree in

Economics from University

College London and a Master

Degree in Analysis, Design &

Management of Information

Systems from the London

School of Economics and

Political Science. He is a

Fellow of the Institute of

Chartered Accountants in

England and Wales, and

Fellow of the Hong Kong

Institute of Certified Public

Accountants.

MR EDDIE FOO is the

Group Chief Financial

Officer of the Company and

is concurrently the Group

Company Secretary. Mr Foo

is responsible for the Group’s

overall financial strategy

and management, corporate

finance and treasury

management, tax, and

investor relations of ECS

Holdings, and is also a director

on the boards of various ECS

companies. Mr Foo has several

years of financial management

and audit experience in

multinational companies and

public accounting firms. Prior

to serving as Group Chief

Financial Officer, Mr Foo was

the Group Financial Controller

of the Company. Mr Foo

holds a Bachelor degree

in Accountancy from the

Nanyang Technological

University and is a member

of the Institute of Singapore

Chartered Accountants.

MR LIM TOW CHENG was

appointed as the Executive

Vice President, Group Business

Development on 18 October

2005. Mr Lim is responsible

for managing the regional

expansion strategy and for

identifying new business

opportunities for the Group.

He has more than 20 years

of experience in senior

management positions in the

IT industry. Prior to joining the

Group, Mr Lim was the Director

for South Asia of Western Digital

and has previously worked with

Digiland International Limited

for more than 8 years, holding

several senior management

positions, including as Chief

Executive Officer. Mr Lim

has an Honours degree in

Economics from the National

University of Singapore.

MS CHOW YING CHI was

appointed the Acting CEO

of ECS Technology (China)

Limited on 1 April 2013. She

is also the Executive Director

of ECS Technology (China)

Limited, and concurrently,

the Group Chief Operating

Officer and Executive Director

of VST Holdings Limited (“VST

Holdings”), the Hong Kong

Stock Exchange-listed parent

company of ECS. Ms Chow

has worked at VST Holdings

for 16 years, and has held

appointments ranging from

business development for East

and North China to Operations

Director. She holds a Bachelor

of Arts (Honours) Degree in

International Business from the

University of Huddersfield in

the United Kingdom.

MR SOMSaK PEJTHaVEEPORNDEJ was

appointed as the President

of The Value Systems Co.,

Ltd., our wholly-owned

subsidiary on 1 February

2009. He is responsible for the

overall management of The

Value Systems and has been

with our Group since 1988.

Mr Pethaveeporndej was

formerly responsible for

managing the Enterprise

Systems & ICT Services

Division of The Values

Systems. He has more than

1110

20 years experience in the IT

industry. Prior to joining our

Group, he was employed as

a technical manager by Sun

Shine Co., Ltd. from 1981 to

1984, followed by Sahaviriya

Telecom Co., Ltd. from 1984

to 1988. He holds a Bachelor

of Science degree majoring in

electronics from Rajamangala

University of Technology

Krungthep, Thailand, and a

Mini MBA from The Faculty of

Commerce and Accountancy,

Chulalongkorn University.

Mr Pejthaveeporndej is also

the President of the Parent’s

and Teacher’s Association of

Srinakharinwirot University

Secondary Demonstration

School, an appointment held

since August 2012.

MR FOO SEN CHIN was

appointed as a Director on

15 December 2000 and is

concurrently the Advisor to

Group Human Resources

of the Company. He is also

the Managing Director and

founder of ECS ICT Berhad,

our associate company which

is listed on the Main Board

of Bursa Malaysia Securities

Berhad. Mr Foo plays a pivotal

role in steering the strategic

direction of ECS ICT Berhad.

His responsibilities include

the development of its long

term business goals, overall

operation and management

of ECS ICT Berhad. Prior to

joining our Group, he was

the General Manager of a

computer bureau services

company in Kuala Lumpur

before forming ECS KU Sdn

Bhd (formerly known as K.U.

Sistems Sdn Bhd) in 1985.

Mr Foo is an advisor to the

current Council of PIKOM,

Association of Computer

and Multimedia Industry of

Malaysia. He has a Bachelor of

Science degree in Electrical

and Electronic Engineering

from the University of

Birmingham, UK and he also

holds a Master’s degree in

Business Administration from

the Cranfield School

of Management in the

United Kingdom.

MR SEbaSTIaN CHONG is the President of ECS

Computers (Asia) Pte Ltd,

the wholly-owned Singapore

subsidiary of ECS Holdings

Limited. He is also concurrently

the President of PT ECS

Indo Jaya. Mr Chong joined

ECS in 1990 and has over 20

years of experience in the IT

industry. He is responsible

for strategic direction, overall

management, including the

sales and operations of the

commercial, consumer and

retail segments of both ECS

Singapore and ECS Indonesia.

Mr Chong is also responsible

for business development,

business strategy and building

of long term relationships

with vendors, channels and

partners.

MR JIMMY GO is the founder

and President of MSI-ECS

Phils., Inc., our associate

company. He has more than

30 years of experience

in the IT industry in the

Philippines. Mr Go started in

the IT industry way back in

1982 after graduating from

college selling Fujitsu & Apple

computers. He currently

holds a Bachelor degree in

Electronics & Communication

Engineering from De La Salle

University with an award of

Magna Cum Laude and Post

Graduate degree of Masters

in Business Administration in

Ateneo de Manila University.

Mr. Go was also the past

President of COMDDAP

(Computer Manufacturers,

Distributors & Dealers

Association of the Philippines).

In 1998, Mr Go was named

President and CEO of MSI-

Digiland. He was instrumental

in growing the business of

MSI in the Philippines, making

it one of the biggest IT

distributors in the country in

less than 5 years.

Vision and Mission

Chairman’s and

CEO’s Statement

Board of Directors

Senior Management



Vision and Mission

Chairman’s and

CEO’s Statement

Board of Directors

Senior Management




From left to right: Mr Paul Chong, Ms Lim Yok Yen, Mr Eugene Tan and Mr Newman Li

1312

MR EUGENE TaN is the Senior Vice President, Group Finance of ECS Holdings Limited since 1 March 2008. He is responsible for the financial management of the Group, which covers accounting, treasury, tax, financial control and reporting. Prior to his current appointment, Mr Tan was the Vice President, Finance of ECS Computers (Asia) Pte Ltd, the wholly-owned Singapore subsidiary of ECS Holdings Limited. Prior to joining the Group, Mr Tan worked for KPMG Singapore as a senior auditor. Mr Tan holds a Bachelor degree in Accountancy & Economics from the University of Reading.

MR NEWMaN LI is the Vice President, Group Internal Audit of the Company. He is responsible to provide independent assurance that the Group’s risk management, governance and internal control processes are operating effectively. Mr Li is a member of CPA China and has more than 10 years of financial and audit experience. Prior to joining the Group, he worked for Foshan Power Construction Group Co. Ltd in 1998 and Guangdong Telecom in 2004. Mr Li

holds a Bachelor degree in Accountancy from the Tianjin University of Commerce and was appointed to his current position since May 2008.

MS LIM YOK YEN is the Vice President, Group Finance of ECS Holdings Limited. She is responsible for financial planning and analysis, budgeting, forecasting as well as working with partners and management to support the Group’s business growth strategy. Ms Lim is also responsible for all channel finance activities including credit management, working capital requirements and planning with vendor finance teams and internal business units. Prior to joining ECS in April 2008, she was a Group Accountant in a public-listed company in Singapore where she handled Group reporting and treasury planning. Ms Lim has more than 13 years of experience in financial accounting and group reporting in the freight forwarding industry and companies listed on Singapore Exchange. Ms Lim is a Chartered Accountant and also a member of Association of Chartered Certified Accountants (ACCA) since 2001.

MR PaUL CHONG is the Assistant Vice President, Group Public Relations of ECS Holdings Limited and concurrently, the Vice President, Marketing of ECS Computers (Asia) Pte Ltd, the Group’s wholly-owned Singapore subsidiary. In his role for Group Public Relations, Mr Chong is responsible for the Group’s branding and communication programs, publicity, corporate affairs and internal communication between management and employees. As Vice President, Marketing, he is responsible for providing comprehensive marketing communications solutions such as direct marketing programs, promotions, events, seminars, tradeshows and advertising. Prior to joining the ECS Group in 1997, Mr Chong worked for 6 years in the public sector of Singapore handling national IT initiatives and training and development programs. Mr Chong holds a Bachelor degree in Business Administration from the National University of Singapore and a Master of Business Administration degree from the University of Western Australia.

Vision and Mission

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CEO’s Statement

Board of Directors

Senior Management



Pg 22

1514


bOaRD OF DIRECTORS Mr Tay Eng Hoe (Executive Chairman)

Mr Ong Wei Hiam (Executive Director)

Mr Narong Intanate (Non-Executive Director)

Mr Foo Sen Chin (Non-Executive Director)

Dr Leong Horn Kee (Lead Independent Director)

Mr Tan Hup Foi (Independent Director)

Mr Koh Soo Keong (Independent Director)

aUDIT COMMITTEEDr Leong Horn Kee (Chairman)

Mr Tan Hup Foi

Mr Koh Soo Keong

COMPENSaTION COMMITTEEMr Koh Soo Keong (Chairman)

Dr Leong Horn Kee

Mr Tan Hup Foi

NOMINaTING COMMITTEEMr Tan Hup Foi (Chairman)

Dr Leong Horn Kee

Mr Koh Soo Keong

Mr Tay Eng Hoe

INVESTMENT COMMITTEEDr Leong Horn Kee (Chairman)

Mr Foo Sen Chin

Mr Tan Hup Foi

Mr Ong Wei Hiam

SENIOR MaNaGEMENT aTECS HOLDINGS LIMITED:Mr Ong Wei Hiam

Group Chief Executive Officer

Mr Eddie Foo Toon Ee

Group Chief Financial Officer

Mr Lim Tow Cheng

Executive Vice President, Group Business

Development

SENIOR MaNaGEMENT aT ECS HOLDINGSLIMITED’S SUbSIDIaRIES aND aSSOCIaTECOMPaNIES:Ms Chow Ying Chi

Acting CEO

ECS Technology (China) Limited

Mr Somsak Pejthaveeporndej

President

The Value Systems Co., Ltd.

Mr Foo Sen Chin

Managing Director

ECS ICT Berhad

Mr Sebastian Chong

President

ECS Computers (Asia) Pte Ltd

and PT ECS Indo Jaya

Mr Jimmy Go

President

MSI-ECS Phils., Inc.

CORPORaTE EXECUTIVES:Mr Eugene Tan (Senior Vice President, Group Finance)

Mr Newman Li (Vice President, Group Internal Audit)

Ms Lim Yok Yen (Vice President, Group Finance)

Mr Paul Chong (Assistant Vice President,

Group Public Relations)

aUDITORSKPMG

Certified Public Accountants

16 Raffles Quay #22-00

Hong Leong Building

Singapore 048581

Partner-in-charge: Ms Chu Sook Fun

(Since FY2011)

REGISTRaRM&C Services Private Limited

112 Robinson Road #05-01

Singapore 068902

Corporate InformationREGISTERED OFFICE8 Temasek Boulevard

#34-02 Suntec Tower Three

Singapore 038988

PRINCIPaL baNKERSANZ Bank

Citibank, N.A.

DBS Bank Ltd

KBC Bank N.V.

Oversea-Chinese Banking Corporation

Standard Chartered Bank

Sumitomo Mitsui Banking Corporation

United Overseas Bank Limited

COMPaNY SECRETaRYEddie Foo Toon Ee, CA (Singapore)

ECS OFFICESECS Holdings Limited

8 Temasek Boulevard


Singapore 038988

Website: www.ecs.com.sg

ECS Technology (China) Limited

6/7F Wanliuyicheng Building

No. 11 Changchunqiao Road, Haidian District

Beijing P.R.C. (100089)

Offices in Beijing, Changchun, Changsha, Chengdu,

Chongqing, Dalian, Fuzhou, Guangzhou, Guiyang,

Harbin, Hefei, Hong Kong, Huhehaote, Jinan,

Kunming, Lanzhou, Nanchang, Nanjing, Nanning,

Ningbo, Qingdao, Shanghai, Shenzhen, Shenyang,

Shijiazhuang, Taiyuan, Tianjin, Urumqi, Wuhan,

Xiamen, Xi’an, Zhengzhou

Website: www.ecschina.com

The Value Systems Co., Ltd.

21st Floor, Serm-Mit Tower

159/35 Sukhumvit 21 Road (Asok)

North Klongtoey, Wattana

Bangkok 10110, Thailand

Offices in Bangkok, Chiang Mai, Songkhla (Hat

Yai), Khon Kaen, Nakhon Ratchasima, Nongkhai,

Phitsanulok, Phuket, Rayong, Surat Thani

Website: www.value.co.th

ECS ICT Berhad

Lot 3, Jalan Teknologi 3/5

Taman Sains Selangor

Kota Damansara

47810 Petaling Jaya

Selangor, Malaysia

Offices in Johor Bahru, Kota Kinabalu, Kuantan,

Kuching, Penang, Petaling Jaya

Websites: www.ecsm.com.my


19 Kallang Avenue

#07-153

Singapore 339410

Website : www.ecs.com.sg

PT ECS Indo Jaya

Komplek Mangga Dua Square

Blok E 34-37 Jl. Gunung Sahari Raya No.1 Jakarta

Utara 14420, Indonesia

Offices in Bandung, Jakarta, Makassar, Medan,

Semarang, Surabaya, Yogyakarta

Website : www.ecsindo.com

MSI-ECS Phils., Inc.

Topy II Bldg, #3 Economia St.,

Libis, Quezon City,

Philippines 1110

Branches in Cebu, Davao, Manila, Taguig

Website : www.msi-ecs.com.ph

1716

abOUT US abOUT USHIGHLIGHTS HIGHLIGHTSFINaNCIaL STaTEMENT FINaNCIaL STaTEMENT

Group Structure

Strategic Partners

Regional Network

Business Model

Group Structure Strategic Partners

PHILIPPINES VIETNAMINDONESIASINGAPOREMALAYSIATHAILANDCHINA

ECSTechnology(China)Limited100%

ECS BeijingChuang YueTechnologyCo., Ltd100%

ECS (Shanghai)ManagementCo., Ltd100%

ECS ChinaTechnology(Shanghai)Co., Ltd100%

ECS Technology(Guangzhou)Co., Ltd100%

ECS TechnologyCo., Ltd100%

EIT info-techLimited100%

ECS Technology(HK) Co., Limited100%

ECS ChongqingMarketing &Payment Co., Ltd100%

ECS ICTBerhad41%

ECS KU Sdn Bhd100%

ECS Astar SdnBhd100%

ECS KUSH SdnBhd100%

ECS PericompSdn Bhd100%

ECSComputers(Asia) Pte Ltd100%

Pacific City (AsiaPacific) Pte Ltd100%

ECS EnterpriseSolutions Pte Ltd100%

ECS IndoPte Ltd100%

PT ECS Indo Jaya100%

ECS Infocom(Phils)Pte. Ltd.100%

MSI-ECS Phils., Inc.49.99%

ECS VietnamCompanyLimited100%

The ValueSystemsCo., Ltd.100%

Group Structure

Strategic Partners

Regional Network

Business Model

1918

Group Structure

Strategic Partners

Regional Network

Business Model


01. CHINaOffices: 33

Cities: Beijing (2 Offices), Changchun, Changsha, Chengdu,

Chongqing, Dalian, Fuzhou, Guangzhou, Guiyang, Harbin, Hefei,

Hong Kong, Huhehaote, Jinan, Kunming, Lanzhou, Nanchang,

Nanjing, Nanning, Ningbo, Qingdao, Shanghai, Shenzhen,

Shenyang, Shijiazhuang, Taiyuan, Tianjin, Urumqi, Wuhan,

Xiamen, Xi’an, Zhengzhou

02. THaILaNDOffices: 12

Cities: Bangkok (3 offices), Chiang Mai, Hat

Yai, Khon-Kaen, Nakhon Ratchasima, Nongkai, Phitsanulok,

Phuket, Rayong, Surat Thani

03. MaLaYSIaOffices: 6

Cities: Johor Bahru, Kota Kinabalu, Kuantan,

Kuching, Penang, Petaling Jaya

04. SINGaPORE (HQ)Offices: 2

05. INDONESIaOffices: 7

Cities: Bandung, Jakarta, Makassar, Medan, Semarang,

Surabaya, Yogyakarta

06. PHILIPPINESOffices: 4

Cities: Cebu, Davao, Manila, Taguig

TOTaL OFFICES: 64

Regional Network

2120

Group Structure

Strategic Partners

Regional Network

Business Model

abOUT US abOUT USHIGHLIGHTS HIGHLIGHTSFINaNCIaL STaTEMENT FINaNCIaL STaTEMENT

Financial Highlights

2013 Awards

2013 Milestones


Financial Highlightsbusiness Model

ICT VENDORS

VaLUE PRODUCTS• Servers

• Storage

• Application

Software &

Middleware

• Networking &

Communication

VOLUME PRODUCTS• Notebooks

• Desktops

• Printers & Imaging

Devices

• Mobility Devices

• Printing Supplies

• Accessories &

Options

• Productivity Software

ECS

• Aggregator of Best-of-Breed

IT Products: Convenient

One-Stop Supplier

• Channel Development

and Management

• Volume Aggregator

• Efficient Inventory

Management to

ensure timely

delivery

• Financial Credit

Support to Resellers /

IT Partners

• Consultancy /

Implementation

• Managed Services

• Post-Sales / Maintenance

Support

• Professional Services

• Training / Certification

• Logistical Services

CHaNNEL PaRTNERS

• Corporate Resellers

• System Integrators

• Application Providers

• Retailers

• ISVs

• Superstores

• Developers

END USERS

Economies of Scale

for Better Pricing

and Aggregation

Single Source

Supplier

After Sales

Support

CompleteSolution

• Corporates

• Manufacturing

Industry

• Government

• Service Industry

• Telcos & Service

Providers

• Emerging Industry

• SME

• Home / SOHO

• Consumer & Lifestyle

PROFITabILITY60

50

40

30

20

10

0FY09 FY10 FY11 FY12 FY13

38.234.4

(S$ million)

29.6

39.2

53.0

REVENUE

3,252.0

FY09 FY10 FY11 FY12 FY13

4,201.1

(S$ million)

3,643.73,607.23,085.4

5,0004,5004,0003,5003,0002,5002,0001,5001,000

5000

5,0004,5004,0003,5003,0002,5002,0001,5001,000

5000

DIVIDENDS PER SHaRE4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0FY09 FY10 FY11 FY12 FY13

3.0

2.2

(cents)

2.22.2

3.6

RETURN ON CaPITaL EMPLOYED


12.2

9.6

(%)

9.2

13.815.3

25

20

15

10

5

0

RETURN ON EQUITY25

20

15

10

5

0

15.4


9.7

(%)

8.9

12.6

19.1

(S$ million)REVENUE bY bUSINESS SEGMENT

1,187.9 1,132.5 916.0 1,106.9 1,300.7

2,034.21,928.4

2,663.0 2,500.52,864.7

29.924.5

28.2 36.335.7

3,252.0 3,085.4 3,607.2 3,643.2 4,201.1FY09 FY10 FY11 FY12 FY13

SHaREHOLDER’S EQUITY400

350

300

250

200

150

100

50

0

259.5


371.7

(S$ million)

339.7326.5296.6

Enterprise Systems

Distribution

IT Services

REVENUE bY GEOGRaPHICaL SEGMENT(S$ million)

North Asia 2,509.2

Southeast Asia

1,691.9

2322

abOUT US CORPORaTE INFORMaTION FINaNCIaL STaTEMENT

Group Structure

Strategic Partners

Regional Network

Business Model


2013 Awards

2013 Milestones


2013 awardsCOUNTRY aWaRDED bY aWaRD

ECS Holdings DP Information Ranked 19th for Top Public-Listed Company Ranked by Sales Turnover ECS Holdings Oracle Oracle Excellance Award 2013 (APAC)ECS Holdings Singapore Ranked 16th for Top Companies Ranked by Overseas Sales International 100 Turnover ECS Holdings Singapore Ranked 1st for Top Companies Ranked by Overseas Sales Turnover International 100 (North Asia) ECS Holdings Singapore Ranked 8th for Top Companies Ranked by Overseas Sales Turnover International 100 (South East Asia) ECS China HDS Best Distributor Award 2013ECS China HPTS OJ Pro Outstanding Contribution Award 2013ECS China HPTS Best Distributor Award 2013ECS China VMware Partner Network Award 2013 - Authorized Training CentreECS China ZTE Best Partner Award 2013

ECS Thailand Brother Strategic Partner & Growth Award ECS Thailand Brother ASC Top Improvement Award ECS Thailand Cisco Distributor of the Year ECS Thailand Dell Dell Best of the Best Award - Dell Channel Partner Award 2013ECS Thailand EMC Best Growth Achievement Partner Award 2013ECS Thailand Fujitsu Best SELECT Distributor Award ECS Thailand HP ‘Technology Support’ Award, Best Distributor, Enterprise Group ECS Thailand HP ‘Overall HP Enterprise Performance’ Award, Best Distributor, Enterprise Group ECS Thailand HP ‘Outstanding Enterprise Product Selling’ Award, Best Distributor, Enterprise Group ECS Thailand HP Best Performance Distributor of the Year 2013: ‘ONE HP’ AwardECS Thailand HP Best Performance Distributor of the Year 2013: ‘Overall Performance-Enterprise Group’ AwardECS Thailand HP Best Performance Distributor of the Year 2013: ‘Enterprise Group- Valued Products’ AwardECS Thailand HP Best Performance Distributor of the Year 2013: ‘Print Graphic’ Award ECS Thailand HP Best Performance Distributor of the Year 2013: ‘Personal Computer- Base Business’ Award ECS Thailand HP Best Performance Distributor of the Year 2013: ‘HP Technology Services’ AwardECS Thailand Huawei Best Distributor 2013ECS Thailand Intel 1H2013 Top Distributor in Ramping TabletECS Thailand Intermec Distributor of the Year ECS Thailand Microsoft Partner of the Year 2013 - OEM

COUNTRY aWaRDED bY aWaRD

ECS Malaysia Asus Distributor of the Year 2013ECS Malaysia Blue Coat Distributor of the Year 2013ECS Malaysia HP Preferred Partner Category Quota Achiever for HP Software, FY 1H2013 & Q42013ECS Malaysia HP Top Distributor for Accessories Performance 2013ECS Malaysia HP Top Distributor for Consumer Desktop 2013ECS Malaysia HP Top Distributor for Commercial Notebook 2013ECS Malaysia HP Top Distributor for Consumer Notebook 2013ECS Malaysia Intel Top Distributor in Ramping UltrabookECS Malaysia Intel Intel Authorized Distributor Award – Ultrabook Business (Intel Ultrabook Volume), Q4’12 & Q1’13ECS Malaysia Intel Intel Authorized Distributor Award (Notebook Business-Intel Notebook Volume Q2’13 & Q3’13)ECS Malaysia Intel Intel Authorized Distributor Award (Tablet Business-Intel Tablet Volume Q2’13 & Q3’13)

ECS Singapore EMC VSPEX Partner of the YearECS Singapore HP Best SMB-Led Business (Distributor) FY13ECS Singapore IBM IBM Software Achiever – Best Support & Renewal Rate AwardECS Singapore Lenovo Top DistributorECS Singapore Lenovo Top Services DistributorECS Singapore Oracle Excellence Award – Specialized Partner of the Year: VAD – ASEAN (2013)ECS Singapore Quantum Top Distributor Award 2013

ECS Indonesia Dell Dell Best Growth Performance Revenue AwardECS Indonesia Fujitsu Best Select Distributor – 2013ECS Indonesia Microsoft Microsoft Best DistributorECS Indonesia Microsoft Microsoft Golden Partner

ECS Philippines Acer ePinnacle Master Service Excellence AwardECS Philippines Acer ePinnacle Commercial Product Manager of the Year AwardECS Philippines Acer ePinnacle Commercial Distributor of the Year AwardECS Philippines Acer ePinnacle Marketing Innovation AwardECS Philippines Acer ePinnacle Tablet Distributor of the Year AwardECS Philippines EMC Distributor of the Year 2013ECS Philippines Fortinet Fastest Growing Distributor in the PhilippinesECS Philippines HP Commercial Distributor of the YearECS Philippines HP Printer Hardware & Distributor of the YearECS Philippines Lenovo Top SMB Distributor of the YearECS Philippines Oracle Oracle Value Added Distributor of the Year for FY2013ECS Philippines VMware Distributor of the Year 2013

25


Group Structure

Strategic Partners

Regional Network

Business Model


2013 Awards

2013 Milestones


2013 MilestonesCOUNTRY MONTH DESCRIPTION OF MILESTONE

ECS China Jan - Mar 13 Appointed as Zebra Authorised DistributorECS China Apr - Jun 13 Appointed as LSI Authorised DistributorECS China Jul - Sep 13 Appointed as FLUKE Authorised Distributor for South of China ECS China Jul - Sep 13 Appointed as HP ISS Authorised Distributor ECS China Jul - Sep 13 Appointed as Huawei Datacom Distributor ECS China Oct- Dec 13 Appointed as Sony Mobile Distributor ECS China Oct - Dec 13 Appointed as Aerohive Distributor ECS China Oct - Dec 13 Appointed as Honeywell Platinum Distributor ECS China Oct - Dec 13 Appointed as APC Distributor

ECS Thailand Jan - Mar 13 Appointed as BenQ Authorised DistributorECS Thailand Apr - Jun 13 The Value Systems established the Corporate Social Responsibility Campaign of “7th Fairy Tale Library Project” at Chumchon Wat Yai Phohak School, Bang Pae District, Ratchaburi ProvinceECS Thailand Apr - Jun 13 Appointed as Fuji Xerox Printers Authorized Distributor, FY2013ECS Thailand Apr - Jun 13 Appointed as Official Distributor, FortiPartner Program, FY2013ECS Thailand Apr - Jun 13 Appointed as VMware Authorized Distributor, FY2013-2014ECS Thailand Apr - Jun 13 Appointed as NetScout Systems, Inc. Master Reseller Thailand, FY2014ECS Thailand Apr - Jun 13 Qualified as an HP ServiceOne Distributor 2013ECS Thailand Jul - Sep 13 Appointed as EMC Distributor Velocity Solution Provider, FY 2013

ECS Malaysia Jan - Mar 13 Appointed as Distributor for CA Management ECS Malaysia Jan - Mar 13 Appointed as Distributor for Socomec ECS Malaysia Apr - Jun 13 Appointed as Distributor for Aerohive Networks ECS Malaysia Apr - Jun 13 Appointed as Distributor for Barracuda Networks

ECS Singapore Apr - Jun 13 Appointed as Distributor for Barracuda Networks

ECS Indonesia Jul - Sep 13 Appointed as Distributor for Norton by SymantecECS Indonesia Oct - Dec 13 Appointed as Distributor for ZebraECS Indonesia Oct - Dec 13 Appointed as Distributor for Quantum

ECS Philippines Oct-Dec 13 Appointed as Distributor for BeatsECS Philippines Oct-Dec 13 Appointed as Distributor for Avaya


Group Structure

Strategic Partners

Regional Network

Business Model


2013 Awards

2013 Milestones


Corporate Governance StatementECS Holdings Limited (the “Company”) is committed to comply with the Code of Corporate Governance

2005 issued by the Corporate Governance Committee. It believes in maintaining a high standard

of corporate governance and has put in place policies and practices that will help to protect its

shareholders’ interest and enhance long term shareholder value. This report describes the main corporate

governance practices that are adopted by the Company.

(A) BOARD MATTERS

The Board’s Conduct of its Affairs

Principle 1 : Every company should be headed by an effective Board to lead and control the

company. The Board is collectively responsible for the long-term success of the

company. The Board works with management to achieve this objective and the

management remains accountable to the Board.

The Board’s role is to:

a) provide entrepreneurial leadership, set strategic aims, and ensure that the necessary financial

and human resources are in place for the company to meet its objectives;

b) establish a framework of prudent and effective controls which enables risks to be assessed and

managed, including safeguarding of shareholders’ interests and the company’s assets;

c) review management performance;

d) identify the key stakeholder groups and recognise that their perceptions affect the company’s

reputation;

e) set the company’s values and standards, and ensure that obligations to shareholders and other

stakeholders are understood and met; and

f) consider sustainability issues, e.g. environmental and social factors, as part of its strategic

formulation.

24


2726

The Board meets to consider the following, without limitation, corporate events and/or actions:

a) approval of quarterly results announcements;

b) approval of annual report and accounts;

c) declaration of interim dividend and proposal of final dividends;

d) approval of corporate strategy;

e) authorisation of major transactions;

f) review and approval of annual budgets;

g) compensation of senior management personnel; and

h) convening of shareholders’ meetings.

All directors must objectively take decisions in the interests of the Company.

The Board has delegated the day-to-day management and running of the Company to the management

headed by our Group Chief Executive Officer (“Group CEO”), while reserving certain key issues and

policies for its approval. Additionally, to facilitate effective management, certain functions have been

delegated to the following sub-committees, each of which has its own written terms of reference:

a) the Nominating Committee;

b) the Compensation Committee;

c) the Audit Committee;

d) the Investment Committee; and

e) the Risk Management Committee.

Newly-appointed directors are given briefings by the management on the Group’s activities and its

strategic directions. Changes to regulations and accounting standards are monitored closely by

management. To keep pace with regulatory changes, where these changes have an important bearing

on the Company’s or directors’ disclosure obligations, directors are briefed either during Board

meetings or at specially convened sessions conducted by professionals.

The Board intends to hold four meetings each year and shall also hold informal meetings as and

when necessary. The Company’s Articles of Association provide for telephonic and videoconference

meetings. The number of Board meetings held since the date of the last annual report, as well as the

attendance of every Board member at those meetings is as follows:

DIRECTORS’ ATTENDANCE AT BOARD MEETINGS

BoardBoard Member No. Of Meetings AttendedTay Eng Hoe 5 5

Narong Intanate 5 5

Foo Sen Chin 5 5

Leong Horn Kee 5 5

Koh Soo Keong 5 5

Tan Hup Foi 5 5

Ong Wei Hiam 5 5

Board Composition and Guidance

Principle 2 : There should be a strong and independent element on the Board, which is able

to exercise objective judgement on corporate affairs independently, in particular,

from management and substantial shareholders. No individual or small group of

individuals should be allowed to dominate the Board’s decision making.

The Board comprises seven directors of which five are non-executive directors (including three

independent directors) and two executive directors. The Company places great importance on the

quality of its Board of Directors. The Group achieves this by appointing to its Board highly respected

individuals and prominent leaders in their respective professions. The Board comprises individuals with

proven track records in the public and/or corporate sector, and each is a highly respected member of

the business community. As a group, they provide core competencies such as accounting or finance,

business or management experience, industry knowledge, strategic planning and customer-based

experience or knowledge. Key information regarding the directors is given in the Board of Directors

section on pages 5 to 7 of the annual report.

Executive Chairman and Chief Executive Officer

Principle 3 : There should be a clear division of responsibilities between the leadership of the Board

and the executives responsible for managing the company’s business. No one individual

should represent a considerable concentration of power.

Mr Tay Eng Hoe was appointed as Executive Chairman of the Company on 1 January 2013. Mr Ong Wei

Hiam was appointed as Group CEO with effect from 1 January 2013. The Executive Chairman and the

Group CEO each perform separate functions to ensure that there is an appropriate balance of power

and authority, and that accountability and independent decision-making are not compromised. The

Executive Chairman plays an instrumental role in providing the Company with strong leadership and

vision, assisting the Board to develop policies and strategies, and ensuring that these are implemented

effectively. As Chairman of the Board, he bears primary responsibility for the workings of the Board, by

ensuring effectiveness on all aspects of its role including setting agenda for Board meeting with input

from management, and exercising control over the quality, quantity and timeliness of information flow

between the Board and management. At annual general meetings and other shareholders’ meetings,

he plays a pivotal role in fostering constructive dialogue between shareholders, the Board and

management. As Executive Chairman, he is the most senior executive in the Company and bears

executive responsibility for the Group’s business.

Corporate Governance Statement


2928

The Group CEO has full executive responsibilities over the running of the Group’s business, the

business direction and operational decisions of the Group. No individual or small group of individuals

dominate the Board’s decision making process.

Lead Independent Director

In line with the recommendation in Guideline 3.3 of the Code of Corporate Governance 2012, the

Board has appointed Dr Leong Horn Kee as Lead Independent Director (“Lead ID”) on 1 January 2013.

The role of the Lead ID is set out under the written terms of reference of the Lead ID, which has been

approved by the Board.

Board Membership & Board Performance

Principle 4 : There should be a formal and transparent process for the appointment and re-election

of directors to the Board.

Principle 5 : There should be a formal annual assessment of the effectiveness of the Board as a

whole and its committees and the contribution by each director to the effectiveness

of the Board.

The Nominating Committee was formed on 6 January 2003 and comprises four directors, including

three independent directors, Mr Tan Hup Foi, Dr Leong Horn Kee, Mr Koh Soo Keong and one executive

director, Mr Tay Eng Hoe. Mr Tan Hup Foi is the Chairman of the Nominating Committee.

The role of the Nominating Committee is to perform the following functions:

a) identifies and reviews all nominations for Board appointments and re-nominations of directors;

b) assesses the effectiveness of the Board as a whole and the contribution by each individual

director to the effectiveness of the Board;

c) determine whether or not a director is independent;

d) review of board succession plans for directors, in particular, the Chairman and for the CEO;

e) the development of a process for evaluation of the performance of the Board, its committees

and directors;

f) the review of training programs for the Board; and

g) the appointment and re-election of directors.

In accordance with the Company’s Articles of Association, at each Annual General Meeting, one-third

of the Board shall retire from office by rotation provided that no director holding office as Managing

or Joint Managing Director shall be subject to retirement by rotation or be taken into account in

determining the number of directors to retire.

Board Assessment & Evaluation Processes

Each board member is required to complete a Board Evaluation Questionnaire and send the

Questionnaire directly to the Company Secretary. Based on the returns from each of the directors,

the Company Secretary prepares a consolidated report and briefs the Chairman of the Nominating

Committee on the report. The Company Secretary will thereafter present the report to the Board

together with the recommendations of the Nominating Committee for discussion on the changes

which should be made to help the Board discharge its duties more effectively.

Access to Information

Principle 6 : In order to fulfil their responsibilities, Board members should be provided with complete,

adequate and timely information prior to Board meetings and on an on-going basis

so as to enable them to make informed decisions to discharge their duties and

responsibilities as directors.

All directors are provided with complete, adequate and timely information prior to meetings and on a

regular basis to enable them to perform their roles properly. Directors are entitled to request additional

information as needed to make informed decisions. All directors have separate and independent access

to senior management and the Company Secretary. The Company Secretary has defined roles and

responsibilities and attends all Board and sub-committee meetings of the Company. Should directors,

whether as a group or individually, need independent professional advice in the furtherance of their

duties, the cost of such professional advice will be borne by the Company.

(B) REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 7 : There should be a formal and transparent procedure for fixing the remuneration

packages of individual directors. No director should be involved in deciding his or

her own remuneration.

The Compensation Committee oversees the general compensation of employees of our Group with

a goal to motivate, recruit and retain employees and directors through competitive compensation

and progressive policies. In particular, the Compensation Committee is responsible for overseeing

our employee profit sharing scheme as well as the share incentives, including the ECS Share Option

Scheme I, ECS Share Option Scheme II and ECS Performance Shares Scheme. The Compensation

Committee of the Board comprises Mr Koh Soo Keong, Dr Leong Horn Kee, and Mr Tan Hup Foi.

Mr Koh Soo Keong is the Chairman of the Compensation Committee.

Level and Mix of Remuneration; Disclosure of Remuneration

Principle 8 : The level and structure of remuneration should be aligned with the long-term interest

and risk policies of the company, and should be appropriate to attract, retain and

motivate the (a) directors to provide good stewardship of company, and (b) key

management personnel to successfully manage the company. However, companies

should avoid paying more than is necessary for this purpose.



3130


Principle 9 : Every company should provide clear disclosure of its remuneration policy, level

and mix of remuneration, and the procedure for setting remuneration, in the company’s

annual report. It should also provide disclosure in relation to its remuneration policies

to enable investors to understand the link between remuneration paid to directors

and key management personnel, and performance.

The Group’s remuneration policy is to provide a competitive remuneration package so as to attract,

retain and motivate directors and senior management with the required experience and expertise

to run the Group successfully. In setting remuneration packages for executive directors and senior

management of the Group, the pay and employment conditions within the industry and in comparable

companies are taken into consideration.

The compensation package of the Group’s executive directors including its Executive Chairman,

Group CEO and senior management consists of salary, allowances, share options and bonuses which

are conditional upon meeting certain performance targets.

Non-executive directors have remuneration packages which consist of a directors’ fee component

and a share option component pursuant to the Company’s Share Option Scheme. The directors’ fee

policy is based on a scale of fees divided into basic retainer fees as a director and additional fees for

serving on board committees. Directors’ fees for non-executive directors are subject to the approval

of shareholders at the Annual General Meeting. The report on directors’ remuneration is given below:

SUMMARY COMPENSATION TABLE FOR THE YEAR ENDED 31 DECEMBER 2013

Name of DirectorSalary

%Bonus

%Fees

%

Allowancesand other

Benefits%

Total%

$1,250,000 to below $1,500,000Narong Intanate 23 70 - 7 100

$500,000 to below $1,250,000Nil - - - - -

$250,000 to below $500,000Tay Eng HoeOng Wei Hiam

8475

-21

144

2-

100100

Below $250,000Foo Sen ChinLeong Horn KeeTan Hup FoiKoh Soo Keong

----

----

100100100100

----

100100100100

Executives’ Remuneration

Rather than setting out the names of the top five key executives who are not also directors of the

Company, we have shown a Group-wide cross-section of executive remuneration by number of

employees earning $100,000 upwards in bands of $250,000 below. This should give a macro view of

the remuneration pattern in the Group, while maintaining confidentiality of staff remuneration matters.

NO. OF EXECUTIVES IN REMUNERATION BANDS

Total Compensation (S$) No. of Employees

(Note 1)

Total FixedCompensation

(Note 2)

Total Variable Compensation

(Note 3)

Total Remuneration

$100,000 to $249,999 13 $1,633,103 $559,024 $2,192,127

$250,000 to $499,999 3 $686,220 $407,630 $1,093,850

$500,000 to $749,999 5 $1,379,865 $1,693,787 $3,073,652

Total 21 $3,699,188 $2,660,441 $6,359,629

Notes :

1. Including employees in local and overseas subsidiaries.

2. Inclusive salaries, AWS, related CPF and other statutory contributions, allowances and fringe-

benefits.

3. Sales commission, bonus and other statutory contributions.

There are no employees in the Group who are immediate family members of a director or the Group CEO.

(C) ACCOUNTABILITY AND AUDIT

Accountability

Principle 10 : The Board should present a balanced and understandable assessment of the company’s

performance, position and prospects.

In presenting the annual financial statements and quarterly announcements to shareholders, it is the

aim of the Board to provide the shareholders with a detailed analysis, explanation and assessment

of the Group’s financial position and prospects. On a quarterly basis, Board members are provided

with business and financial reports comparing actual performance with budget and with prior year

comparisons with highlights on key business indicators and any significant business development. In

addition, the Group CEO communicates regularly with Board members through informal meetings

and phone calls with appropriate updates on Company developments.

The heads of all business and support units provide a quarterly certification to the Group CEO and the

Group Chief Financial Officer (“Group CFO”) stating, inter alia, that the head of such business or support

unit is not aware of any circumstances not otherwise dealt with in the financial statements that would

render any amount stated in the financial records misleading. The Group CEO and Group CFO in turn

provide a Letter of Representation on a quarterly basis to the Audit Committee and the external auditors,

KPMG LLP(“KPMG”), confirming that the financial statements have been properly drawn up.


3332

Risk Management and Internal Controls

Principle 11 : The Board is responsible for the governance of risk. The Board should ensure that the

management maintains a sound system of risk management and internal controls to

safeguard the shareholders’ interests and the company’s assets, and should determine

the nature and extent of the significant risks which the Board is willing to take in

achieving its strategic objectives.

The Company currently has a Risk Management Committee and it has established a risk identification

and management framework. In the Company, risks are identified and addressed, with the Board

and senior management personnel of the Group and its subsidiaries taking ownership of these risks.

In addition, the internal auditors reviewed the policies and procedures as well as key controls and

highlighted issues to the directors and the Audit Committee. Furthermore, in performing their audit

of the financial statements, the external auditors performed tests over operating effectiveness of

certain controls that the auditors intended to rely on that are relevant to the Group’s preparation of

its financial statements. The external auditors also reported any performance improvement points

in such internal controls to the directors and the Audit Committee. Action plans to manage the

risks are continuously being monitored and refined by management and the Board. Any material

non-compliance or lapses in internal controls together with corrective measures are reported to the

directors and the Audit Committee.

Based on the framework established, the Board opines, with the concurrence of the Audit Committee,

that there are adequate internal controls in place within the Group addressing significant and critical

financial, operational and compliance risks. The Board, together with the Audit Committee and

management, will continue to enhance and improve the existing internal control framework to identify

and mitigate these risks.

Audit Committee

Principle 12 : The Board should establish an Audit Committee with written terms of reference which

clearly set out its authority and duties.

The Audit Committee comprises three members, of which all members, including the Chairman, are

independent. The members of the Audit Committee at the date of this report are:

Leong Horn Kee Chairman

Tan Hup Foi Member

Koh Soo Keong Member

The Audit Committee meets periodically to perform the following functions:-

a) reviewing the quarterly, half-yearly and annual financial statements before recommending them to

the Board for approval;

b) reviewing interested person transactions (as defined in Chapter 9 of the Listing Manual (“Listing

Manual”) of the Singapore Exchange Securities Trading Limited (“SGX-ST”), including such

transactions conducted under the shareholders’ general mandate previously obtained;

c) reviewing with external auditors the audit plan, their evaluation of the systems of internal controls,

their annual reports and their management letters and management’s response;

d) reviewing and recommending to the Board the re-appointment of the external auditors, taking

into consideration the non-audit services rendered by the external auditors and being satisfied

that the nature and extent of such services will not prejudice the independence and objectivity of

the external auditors;

e) reviewing the scope of internal audit procedures and the results and effectiveness of the internal

audit;

f) reviewing any suspected fraud or irregularity, or suspected infringement of any Singapore laws

or regulations or rules of the SGX-ST or any other regulatory authority in Singapore, which has

or is likely to have a material impact on the Group’s operating results or financial position, and

reporting such matters to the Board; and

g) considering other matters as requested by the Board.

The Audit Committee has full access to and co-operation of the Company’s management and the

internal auditors and has full discretion to invite any director or executive officer to attend its meetings.

The auditors, both internal and external, have unrestricted access to the Audit Committee. Reasonable

resources have been made available to the Audit Committee to enable them to discharge their duties.

The Audit Committee held 4 meetings since the date of the last annual report. The Audit Committee

reviewed the Interested Person Transactions for the year ended 31 December 2013 in accordance with

the terms of the Shareholders’ Mandate for such transactions as were approved on 29 April 2013.

Interested Person Transactions with a total value of $294.9 million were examined and the Audit

Committee is of the opinion that the said transactions were carried out on prevailing commercial

terms and did not prejudice the interest of the shareholders of the Company.

The Audit Committee had reviewed and confirmed that the methods and procedures for determining

the transaction prices relating to Interested Person Transactions have not changed since the last

shareholders’ approval. The Audit Committee also confirms that the methods and procedures are

sufficient to ensure that the transactions will be carried out on normal terms and will not be prejudicial

to the interests of the Company and its minority shareholders.

The Audit Committee had reviewed the non-audit services provided by the external auditors and

is satisfied with the independence of the auditors. The Audit Committee has recommended to the

Board that the auditors, KPMG, be nominated for re-appointment at the forthcoming Annual General

Meeting of the Company.



3534

Meetings and attendance are as follows:

Audit Committee

Name of Director No. of Meetings Attended

Leong Horn Kee (Chairman) 4 4

Tan Hup Foi 4 4

Koh Soo Keong 4 4

Internal Audit

Principle 13 : The company should establish an effective internal audit function that is adequately

resourced and independent of the activities it audits.

The Group has an internal audit department which is independent of the activities it audits. It performs

financial audits, implements operational and compliance controls. The Audit Committee approves

the hiring, removal, evaluation and compensation of the head of the internal audit department. The

Internal Auditor reports primarily to the Chairman of the Audit Committee and administratively to the

Group CEO. The Internal Auditor plans its internal audit work in consultation with, but independent of,

management, and its yearly plan is submitted to the Audit Committee for approval at the beginning

of each year. The Internal Auditor has access to all the Company’s documents, records, properties and

personnel and reports to the Audit Committee quarterly regarding its findings. The Audit Committee

also meets with the Internal Auditor at least once during the year without the presence of management.

The Audit Committee also ensures that the internal audit function is adequately resourced, and will

review annually the adequacy of the internal audit function.

The internal auditors are expected to carry out their function according to standards set by nationally

or internationally recognised professional bodies including the Standards for the Professional Practice

of Internal Auditing set by The Institute of Internal Auditors.

Investment Committee

The Investment Committee is chaired by the independent and non-executive director, Dr Leong Horn

Kee. The members of the Committee comprised Mr Foo Sen Chin, Mr Tan Hup Foi and Mr Ong Wei Hiam.

The Investment Committee meets periodically to perform the following functions:-

a) to review and recommend investment policy guidelines and capital expenditure plans to the

Board;

b) to review investment risk management policies;

c) to evaluate and recommend any proposed investments, divestments, geographical expansion,

mergers and acquisitions, joint ventures for Board’s approval; and

d) to review and monitor performance, forecast and business plan of investments.

Risk Management Committee

Risk management continues to play an important part in the Company’s business activities and is an

essential component of its planning process. The Board has overall responsibility to ensure that the

Company has the capability and necessary framework to manage risks in new and existing businesses

and that business plans and strategies accord with the risks appetite that the Company undertakes

to achieve its corporate objectives. To assist the Board in its risk management oversight, the Audit

Committee has been authorised by the Board to provide oversight and review on matters relating to

the risk management policies and systems of the Company.

The Audit Committee’s risk management function is assisted by a Risk Management Committee (“RM

Committee”), whose members comprise senior management. The RM Committee is responsible for

ensuring the effectiveness of the risk management framework of the Company, the objective of which

is to provide an enterprise-wide view of the risks involved in the business, finance and operations,

and a systematic process for identification, assessment, management and reporting of such risks on

a consistent and reliable basis. The RM Committee is mandated to focus on key strategic risks whilst

also ensuring that the business units are responsible for the day-to-day tracking, monitoring and

control of risks within their operations.

The designated Risk Coordinator assists by providing the RM Committee with the quarterly status of the

key strategic risk exposures and the senior management with a timely assessment of key risk exposures

and any new emerging risks that may require assessment. The RM Committee reports quarterly to the

Audit Committee on the overall strategic and operational risks positions, including mitigating measures,

treatment plans and the occurrence or potential occurrence of significant risk events.

The RM Committee had, since 2012, established a formal risk management framework. Within this

framework, significant business risks are identified, assessed, evaluated, monitored, managed, and

reported on a regular basis.

The risk governance structure of the Company is regularly reviewed against international standards

and best practices in risk management. The Company recognises that the risk management process

is an ongoing process and aims under its risk governance structure to continue to look for ways to

improve in the following areas:

• increase monitoring and control capabilities in its review of significant strategic business risks;

• review the effectiveness of the systems of internal controls to limit, mitigate, manage and monitor

identified risks;

• ensure that the operating systems deliver adequate and timely information required for effective

risk management; and

• build on and integrate into its existing governance and management systems the appropriate

tools for effective management of strategic business risks which are reflective of changes in

markets, products and emerging best practices.



3736


(D) COMMUNICATION WITH SHAREHOLDERS

Principle 14 : Companies should treat all shareholders fairly and equitably, and should recognise,

protect and facilitate the exercise of shareholders’ rights, and continually review and

update such governance arrangements.

Principle 15 : Companies should actively engage their shareholders and put in place an investor

relations policy to promote regular, effective and fair communication with shareholders.

Principle 16 : Companies should encourage greater shareholder participation at general meetings

of shareholders, and allow shareholders the opportunity to communicate their views

on various matters affecting the company.

The Group does not practice selective disclosure. In line with continuous obligations of the Group

pursuant to the Listing Manual and the Companies Act, Chapter 50, of Singapore, the Board’s policy is

that all shareholders are informed of all major developments of the Group. Price-sensitive information

is released publicly, and quarterly results and annual reports are announced or issued within the

mandatory period and are available on the Group’s website. Thereafter, a briefing by management

is held jointly for the media and analysts every half yearly. All shareholders of the Group receive the

annual report and notice of Annual General Meeting. Shareholders are encouraged to attend the

Annual General Meeting to ensure a high level of accountability and to stay informed of the Group’s

strategy and goals.

Code of Business Conduct and Ethics

The Board and senior management are committed to conducting business with integrity and

consistent with high standards of business ethics, and in compliance with all applicable laws and

regulatory requirements. The Company has adopted an internal code of business conduct and ethics

which sets out the Company’s ethical values and business principles and provides a communicable

and understandable framework for staff to observe these values and principles such as honesty,

integrity, responsibility and accountability at all levels of the organisation. The code is available on the

Company’s intranet and is easily accessible by all employees.

The code provides guidance on issues such as:

• conflicts of interest and the appropriate disclosures to be made;

• the Company’s stance against corruption and bribery;

• compliance with applicable laws and regulations;

• compliance with Company’s policies and procedures, including those on internal controls and

accounting;

• safeguarding and proper use of Company’s assets, confidential information and intellectual

property rights, including the respect of the intellectual property rights of third parties; and

• competition and fair dealing in the conduct of the Company’s business, in its relationships with

customers, suppliers, competitors and towards its employees.

(E) DEALING IN SECURITIES

The Company has adopted its own internal Code of Best Practices on Securities Transactions (“Code”)

with regard to dealings in the Company’s shares by its directors and executives. It emphasizes that

the law on insider dealing is applicable at all times, notwithstanding that the Code provides certain

window periods for directors and executives to deal in the shares of the Company. In addition, all

officers of the Company are prohibited from dealing in securities of the Company on short-term

considerations. Further, pursuant to the Company’s Code, the Company also issues a quarterly

notification to its directors and employees reminding them of the applicable blackout periods during

which they are prohibited from dealing in the Company’s securities (being two weeks before the

announcement of the Company’s financial statements for each of the first three quarters of each

financial year and one month before the announcement of its full year financial statements), and at

any time if they are in possession of unpublished material price-sensitive information. The Code also

enables the Company to monitor such share transactions by requiring directors and executives to

report to the Company whenever they deal in the Company’s shares. In the opinion of the directors,

the Company has complied with the Best Practices stipulated in Listing Manual Rule 1207 (19) of the

SGX-ST Listing Manual.

In addition, pursuant to Rule 728 of the Listing Manual, where any borrowings or loans of the Company

or its subsidiaries contains any provisions which makes reference to the shareholding interest of any

controlling shareholder(s), the Company will obtain an undertaking from such controlling shareholder(s)

to notify the Company, as soon as it becomes aware, of any share pledging arrangements relating to

these shares and of any event which may result in a breach of the Company’s loan provisions.

(F) INTERESTED PARTY TRANSACTIONS

The Group has adopted an internal policy in respect of any transactions with interested persons and

has procedures established for the review and approval of the Group’s Interested Party Transactions

(“IPT”).

39

abOUT US CORPORaTE INFORMaTION


Pursuant to Rule 907 of the Listing Manual, the Group has the following IPTs entered into during the

financial year, together with the corresponding aggregate value of the IPTs entered into with the same

interested person, are disclosed as follows:

Name of Interested Person

Aggregate value of all IPTs during the financial year under review (excluding transactions

less than $100,000 and transactions conducted

under shareholders’ mandate pursuant to Rule 920 of

Listing Manual of SGX-ST)

Aggregate value of all IPTs conducted under shareholders’ mandate pursuant to Rule 920 of

Listing Manual of SGX-ST (excluding transactions

less than $100,000)

a) Transactions for the sale

of goods and services with

Vnet Capital Co., Ltd and

its subsidiaries

- S$5,240,444

b) Transactions for the sale

of goods and services with

VST Holdings Ltd and its

subsidiaries

- S$278,470,130

c) Transactions for the

purchase of goods with

VST Holdings Ltd and its

subsidiaries

- S$154,303

39


Directors’ Report 40

Statement by Directors 46

Independent auditors’ Report 47

Statement of Financial Position 48

Consolidated Statement of Comprehensive Income 49

Consolidated Statement of Changes in Equity 50

Consolidated Statement of Cash Flows 52

Notes to the Financial Statements 53

Shareholdings Statistics 105

FINaNCIaL STaTEMENT

38

4140

ABOUT US CORPORATE INFORMATION FINANCIAL STATEMENT

Directors’ report Directors’ report

We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended 31 December 2013.

DIRECTORS

The directors in office at the date of this report are as follows:

Tay Eng Hoe Ong Wei Hiam Narong Intanate Foo Sen Chin Leong Horn Kee Tan Hup Foi Koh Soo Keong

DIRECTORS’ INTERESTS

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants or share options of the Company and in related corporations (other than wholly-owned subsidiaries) are as follows:

Name of director and corporationin which interests are held

Holdings at beginning

of the year

Holdings at end

of the year

ECS Holdings Limited

- options to subscribe for ordinary shares at $0.550 per share between 15/10/2011 and 15/10/2020

Narong Intanate 1,000,000 1,000,000

Foo Sen Chin 300,000 300,000


- options to subscribe for ordinary shares at $0.550 per share between 15/10/2011 and 15/10/2015

Tay Eng Hoe 700,000 700,000

Leong Horn Kee 400,000 400,000

Koh Soo Keong 400,000 400,000

Tan Hup Foi 400,000 400,000

Ong Wei Hiam 300,000 300,000


- ordinary shares

Narong Intanate 569,000 569,000

DIRECTORS’ INTERESTS (CONT’D)

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the financial year, or at the end of the financial year.

Except as disclosed in this report, neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 January 2014.

During the financial year, certain of its subsidiaries have, in the normal course of business entered into transactions with companies in which Mr Narong Intanate has an interest. These transactions include the purchase and sale of information technology products and services amounting to $112,000 (2012: $140,000) and $14,201,000 (2012: $15,680,000) respectively and are carried out on normal commercial terms.

However, the directors have not received nor will they be entitled to receive any benefits arising out of these transactions other than those which they may be entitled to as shareholders of those companies or as a member of the firm.

Except as disclosed above and in note 34 to the financial statements, since the end of the last financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest.

SHARE OPTIONS

The Company

(a) Share option scheme

The ECS Share Option Scheme II (“Scheme II”) was approved and adopted by its members at an Extraordinary General Meeting held on 13 December 2000. Scheme II provides an opportunity for employees and directors, including non-executive directors, of the Group who have contributed significantly to the growth and performance of the Group to participate in the equity of the Company.

The above scheme is administered by the Compensation Committee (the “Committee”), which comprises the following directors:

Koh Soo Keong (Chairman) Leong Horn Kee Tan Hup Foi

Details of Scheme II were set out in the Directors’ Report for the year ended 31 December 2000.

(b) Options granted

On 15 October 2010, the Group granted 13,770,000 share options pursuant to the rules of the ECS Share Option Scheme II. The options have an exercise price of $0.550 per share; a vesting period of 1 year from date of grant; and can be exercised within 5 years from date of grant for non-executive directors and 10 years from date of grant for executive directors and employees.

4342


SHARE OPTIONS (CONT’D)

(c) Issue of shares under option

During the financial year, there is no issuance of shares under the share option scheme of the Company. For the year ended 31 December 2012, the Company has issued 550,000 shares under the share option scheme of the Company.

(d) Unissued shares under option

Date of grant of options

Exercise price per

share Exercise period

Number of option holders

at 31 December 2013

Options outstanding

at 31 December 2013

15/10/2010 $0.550 15/10/2011 to 15/10/2015 5 2,200,000

15/10/2010 $0.550 15/10/2011 to 15/10/2020 43 8,350,000

The details of options granted and exercised are as follows:

Name of participantsOptions granted

Aggregate options granted

Aggregate optionsexercise

Aggregate options

forfeited/ lapsed

Aggregate options

outstanding

[1] [2] [3] [4] [5]

Executive directors

- Narong Intanate – 11,006,000 (9,406,000) (600,000) 1,000,000

- Ong Wei Hiam – 300,000 – – 300,000

Non-executive directors

- Tay Eng Hoe – 5,676,000 (2,226,000) (2,750,000) 700,000

- Foo Sen Chin – 4,160,000 (3,340,000) (520,000) 300,000

- Leong Horn Kee – 678,000 – (278,000) 400,000

- Koh Soo Keong – 520,000 – (120,000) 400,000

- Tan Hup Foi – 400,000 – – 400,000

Former directors

- Wong Heng Chong – 1,713,000 (1,113,000) (600,000) –

- Lin Chien – 128,000 – (128,000) –

- Chay Yee Meng – 188,000 – (188,000) –

- Teo Ek Tor – 130,000 – (130,000) –

- Wang Fangmin – 50,000 – (50,000) –

- Hsieh Fu Hua – 88,000 – (88,000) –

- Lee Suet Fern – 258,000 – (258,000) –

- Mao Xiangqian – 900,000 – (900,000) –

Directors’ reportDirectors’ report

Name of participantsOptions granted

Aggregate options granted

Aggregate optionsexercise

Aggregate options

forfeited/ lapsed

Aggregate options

outstanding

[1] [2] [3] [4] [5]

Employees (including executive officers)

- Foong Kam Tho – 8,629,000 (6,679,000) (1,950,000) –

- Other employees – 32,162,000 (50,000) (25,062,000) 7,050,000

– 66,986,000 (22,814,000) (33,622,000) 10,550,000

[1] Options granted during the financial year under review.

[2] Aggregate options granted since commencement of the schemes to the end of the financial year under review.

[3] Aggregate options exercised since commencement of the schemes to the end of the financial year under review.

[4] Aggregate options lapsed since commencement of the schemes to the end of the financial year under review.

[5] Aggregate options outstanding as at end of the financial year under review.

Except as disclosed, since the commencement of the option schemes:

(i) no option has been granted to the controlling shareholder of the Company or their associates;

(ii) no participant under the schemes has been granted 5% or more of the total options available under the schemes; and

(iii) no option has been granted to employees of subsidiaries under the schemes.

The options granted by the Company do not entitle the holders of the options, by virtue of such holding, to any rights to participate in any share issue of any other company.

ECS PERFORMANCE SHARE SCHEME

The ECS Performance Share Scheme (the “Scheme”) was approved at the Company’s Extraordinary General Meeting held on 1 December 2006. The Scheme is administered by the Compensation Committee which comprises the Non-Executive Directors Messrs Koh Soo Keong, Leong Horn Kee and Tan Hup Foi.

Group Executives who have attained the age of 21 years on or before the date of grant of the Award (as defined below), Group Executive Directors and Non-Executive Directors are eligible to participate in the Scheme (“Participants”). The Scheme is to reward Participants by award of existing Shares held as treasury shares in the Company (“Awards”), which are given free of charge to the Participants according to the extent to which their performance targets set under the Scheme are achieved at the end of a specified performance period.

Since the commencement of the Scheme, no Awards have been granted.

SHARE OPTIONS (CONT’D)

(d) Unissued shares under option (cont’d)

4544


AUDIT COMMITTEE

The members of the Audit Committee during the year and at the date of this report are:

Leong Horn Kee (Chairman, Lead independent director)Tan Hup Foi (Independent director)Koh Soo Keong (Independent director)

The Audit Committee performs the functions specified by section 201B of the Companies Act, the SGX Listing Manual and the Code of Corporate Governance.

The Audit Committee held four meetings since the last directors’ report. In performing its functions, the Audit Committee met with the Company’s external and internal auditors to discuss the scope of their work and the results of their examination and evaluation of the Company’s internal accounting control system.

The Audit Committee also reviewed the following:

• assistance provided by the Company’s officers to the internal and external auditors;

• quarterly financial information and annual financial statements of the Group and the Company prior to their submission to the directors of the Company for adoption; and

• interested person transactions (as defined in Chapter 9 of the Listing Manual of the Singapore Exchange).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.

In appointing our auditors of the Company, subsidiaries and significant associated companies, we have complied with Rules 712 and 715 of the SGX Listing Manual.

AUDITORS

The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Ong Wei HiamDirector

Tay Eng HoeDirector

7 March 2014

Directors’ reportDirectors’ report

4746


In our opinion:

(a) the financial statements set out on pages 48 to 104 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2013 and of the results, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Board of Directors

Ong Wei HiamDirector

Tay Eng HoeDirector

7 March 2014

Statement by directors Independent auditors’ report

Members of the CompanyECS Holdings Limited

Report on the financial statements

We have audited the accompanying financial statements of ECS Holdings Limited (the Company) and its subsidiaries (the Group), which comprise the statement of financial position of the Group and the Company as at 31 December 2013, statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 48 to 104.

Management’s responsibility for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2013 and the results, changes in equity and cash flows of the Group for the year ended on that date.

Report on other legal and regulatory requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

KPMG LLPPublic Accountants and Chartered Accountants

Singapore7 March 2014

4948


Group CompanyNote 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Non-current assets

Property, plant and equipment 4 8,399 9,100 70 95

Intangible assets 5 33,522 33,522 – –

Subsidiaries 6 – – 219,301 215,325

Interest in associates 7 51,379 48,923 3,320 3,320

Deferred expenses 18 1,871 3,065 – –

Deferred tax assets 8 8,889 8,791 – –

104,060 103,401 222,691 218,740

Current assetsInventories 9 281,264 280,804 – –

Trade and other receivables 10 727,075 576,009 51,144 36,841

Derivative assets 729 – – –

Deferred expenses 18 1,732 2,271 – –

Cash and cash equivalents 13 120,864 108,210 4,119 4,357

1,131,664 967,294 55,263 41,198

Total assets 1,235,724 1,070,695 277,954 259,938

Equity attributable to owners of the Company

Share capital 14 113,117 113,117 113,117 113,117

Reserves 15 258,624 226,562 14,490 15,844

371,741 339,679 127,607 128,961

Non-controlling interests – 1,339 – –

Total equity 371,741 341,018 127,607 128,961

Non-current liabilitiesFinancial liabilities 17 113,436 110,268 113,400 110,250

Deferred income 18 2,387 3,822 – –

Deferred tax liabilities 8 4,581 3,192 27 27

120,404 117,282 113,427 110,277

Current liabilitiesFinancial liabilities 17 145,795 134,004 10,080 4,288

Deferred income 18 2,514 3,037 – –

Trade and other payables 19 590,237 471,866 26,428 16,112

Current tax payable 5,033 3,488 412 300

743,579 612,395 36,920 20,700

Total liabilities 863,983 729,677 150,347 130,977

Total equity and liabilities 1,235,724 1,070,695 277,954 259,938

Statement of financial position As at 31 December 2013

Consolidated statement of comprehensive income Year ended 31 December 2013

Note 2013 2012

$’000 $’000

Revenue 23 4,201,068 3,643,651

Cost of sales (4,044,436) (3,499,842)

Gross profit 156,632 143,809

Other income 10,815 6,781

Selling and distribution expenses (73,172) (73,448)

General and administrative expenses (45,459) (38,196)

Profit from operations 24 48,816 38,946

Finance costs 25 (9,327) (8,947)

Share of profit of associates, net of tax 6,350 6,997

Profit before income tax 45,839 36,996

Income tax expense 26 (11,381) (7,207)

Profit for the year 34,458 29,789

Other comprehensive income

Items that are or may be reclassified subsequently to profit or loss:

Exchange gain/(loss) on translation of net assets of foreign subsidiaries 6,443 (8,031)

Share of foreign currency translation differences of associates (1,302) (809)

Other comprehensive income for the year, net of tax 5,141 (8,840)

Total comprehensive income for the year 39,599 20,949

Profit attributable to:

Owners of the Company 34,416 29,646

Non-controlling interests 42 143

Profit for the year 34,458 29,789

Total comprehensive income attributable to:

Owners of the Company 39,510 20,888

Non-controlling interests 89 61

Total comprehensive income for the year 39,599 20,949

Earnings per share

- Basic 27 9.41 cents 8.10 cents

- Fully diluted 27 9.40 cents 8.10 cents

The accompanying notes form an integral part of these financial statements.The accompanying notes form an integral part of these financial statements.

5150

ABOUT US CORPORATE INFORMATION FINANCIAL STATEMENTS

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Consolidated statement of changes in equity Year ended 31 December 2013

Consolidated statement of changes in equity Year ended 31 December 2013

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5352


Note 2013 2012

$’000 $’000

Cash flows from operating activities

Profit before income tax 45,839 36,996

Adjustments for:

Depreciation of property, plant and equipment 2,760 2,646

Finance costs 9,327 8,947

Interest income (825) (551)

Loss on disposal of property, plant and equipment 17 37

Net fair value loss on financial instruments 536 65

Property, plant and equipment written off – 1

Share of profit of associates (6,350) (6,997)

51,304 41,144

Changes in working capital:

Inventories 11,551 (58,512)

Trade and other receivables (119,663) (44,355)

Trade and other payables 84,143 59,262

Cash from/(used in) operations 27,335 (2,461)

Income taxes paid (8,468) (11,758)

Net cash from/(used in) operating activities 18,867 (14,219)

Cash flows from investing activities

Dividend received from associates 1,581 2,443

Interest received 825 551

Proceeds from disposal of property, plant and equipment 249 67

Purchases of property, plant and equipment (2,045) (2,169)

Net cash from investing activities 610 892

Cash flows from financing activities

Dividends paid to equity holders of the Company (8,050) (8,050)

Interest paid (9,427) (9,551)

Payment of finance lease (118) (132)

Proceeds from issuance of shares – 302

Proceeds from bank loans/trade financing 1,129,469 1,316,632

Repayment of bank loans/trade financing (1,120,518) (1,303,707)

Acquisition of non-controlling interests, net of cash acquired 29 (304) –

Net cash used in financing activities (8,948) (4,506)

Net increase/(decrease) in cash and cash equivalents 10,529 (17,833)

Cash and cash equivalents at 1 January 108,210 131,397

Effect of exchange rate fluctuations on cash held 2,125 (5,354)

Cash and cash equivalents at 31 December 13 120,864 108,210

Consolidated statement of cash flows Year ended 31 December 2013

Notes to the financial statements

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 7 March 2014.

1. DOMICILE AND ACTIVITIES ECS Holdings Limited (the “Company”) is incorporated in the Republic of Singapore and has its registered

office at 8 Temasek Boulevard, #34-02, Suntec Tower Three, Singapore 038988.

The financial statements of the Company as of and for the year ended 31 December 2013 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest in associates.

The principal activities of the Company are those relating to investment holding and provision of management services. The principal activities of the subsidiaries are set out in note 6 to the financial statements.

The immediate and ultimate holding company is VST Holdings Limited, a company incorporated in the Cayman Islands.

2. BASIS OF PREPARATION

2.1 Statement of compliance The financial statements have been prepared in accordance with Singapore Financial Reporting

Standards (“FRS”).

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except for certain financial assets and financial liabilities as described below.

2.3 Functional and presentation currency

The financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.

2.4 Use of estimates and judgements

The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements, assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is described in notes 5 and 7.

The accompanying notes form an integral part of these financial statements.

5554


Notes to the financial statementsNotes to the financial statements

2. BASIS OF PREPARATION (CONT’D)

2.5 Changes in accounting policies

(i) Fair value measurement

FRS 113 establishes a single framework for measuring fair value and making disclosures about fair value measurements, when such measurements are required or permitted by other FRSs. In particular, it unifies the definition of fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date. It also replaces and expands the disclosure requirements about fair value measurements in other FRSs, including FRS 107 Financial Instruments: Disclosures.

From 1 January 2013, in accordance with the transitional provisions of FRS 113, the Group has applied the new fair value measurement guidance prospectively, and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Group’s assets and liabilities. The additional disclosures necessary as a result of the adoption of this standard has been included in notes 21 and 30.

(ii) Presentation of items of other comprehensive income

From 1 January 2013, as a result of the amendments to FRS 1, the Group has modified the presentation of items of other comprehensive income in its consolidated statement of comprehensive income, to present separately items that would be reclassified to profit or loss in the future from those that would never be. Comparative information has also been re-presented accordingly.

The adoption of the amendment to FRS 1 has no impact on the recognised assets, liabilities and comprehensive income of the Group.

2.6 Accounting policies for new transactions and events

Distributions of non-cash assets to owners of the Company

From 1 January 2013, the Group has applied INT FRS 117 Distributions of Non-cash Assets to owners in accounting for distributions of non-cash assets to owners of the Company. The new accounting policy (see note 3.3 (iii)) has been applied prospectively.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by Group entities, except as explained in note 2.5, which addresses changes in accounting policies.

3.1 Basis of consolidation

(i) Business combinations

Business combinations are accounted for using the acquisition method in accordance with FRS 103 Business Combination as at the acquisition date, the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.1 Basis of consolidation (cont’d)

(i) Business combinations (cont’d)

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

For non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation, the Group elects on a transaction-by-transaction basis whether to measure them at fair value, or at the non-controlling interests’ proportionate share of the recognised amounts of the acquire’s identifiable net assets, at the acquisition date. All other non-controlling interests are measured at acquisition-date fair value or when applicable, on the basis specified in another standard.

When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.

(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

(iii) Investments in associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies of these entities. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Investments in associates are accounted for using the equity method (equity-accounted investees) and are recognised initially at cost. The cost of the investments includes transaction costs.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the equity-accounted investees, after adjustments to align the accounting policies of the equity-accounted investees with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.

5756



3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.1 Basis of consolidation (cont’d)

(iv) Acquisition of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. Any difference between the adjustment to non-controlling interests and the fair value of consideration paid is recognised directly in equity and presented as part of equity attributable to owners of the Company.

(v) Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(vii) Accounting for subsidiaries and associates

Investments in subsidiaries and associates are stated in the Company’s statement of financial position at cost less accumulated impairment losses.

3.2 Foreign currencies

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at the reporting date. The reporting currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss, except for the following differences which are recognised in other comprehensive income arising on the retranslation of:

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.2 Foreign currencies (cont’d)

(i) Foreign currency transactions (cont’d)

• available-for-sale equity instruments except on impairment in which case foreign currency differences that have been recognised in other comprehensive income are reclassified to profit or loss;

• a financial liability designated as a hedge if the net investment in a foreign operation to the extent that the hedge is effective; or

• qualifying cash flow hedges to the extent the hedge is effective.

Foreign currency differences arising on retranslation are recognised in the profit or loss.

(ii) Foreign operations

The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are translated to Singapore dollars at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to Singapore dollars at exchange rates at the dates of the transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operation and translated at the closing rate. For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were used.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the profit or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognised in other comprehensive income, and are presented in the translation reserve equity.

3.3 Financial instruments

(i) Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

5958



3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.3 Financial instruments (cont’d)

(i) Non-derivative financial assets (cont’d)

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Non-derivative financial assets comprise loans and receivables.

Loans and receivables

The carrying amount of the dividend is remeasured at each reporting date and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the differences, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.

Loans and receivables are financial assets with fixed or determinable payments that are not quoted

in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Loans and receivables comprise cash and cash equivalents and trade and other receivables.

Cash and cash equivalents comprise cash balances and bank deposits.

(ii) Non-derivative financial liabilities

The Group initially recognises subordinated liabilities on the date that they are originated. Financial liabilities for contingent consideration payable in a business combination are recognised at the acquisition date. All other financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

Financial liabilities for contingent consideration combination are initially measure at fair value. Subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Other financial liabilities comprise loans and borrowings, bank overdrafts, and trade and other payables.

Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.3 Financial instruments (cont’d)

(iii) Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

Repurchase, disposal and reissue of share capital (treasury shares)

When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the reserve for own share account. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in non-distributable capital reserve.

Distribution of non-cash assets to owners of the Company

The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting date and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the differences, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.

(iv) Derivative financial instruments

The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognised in profit or loss.

The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the statement of financial position date, taking into account current interest rates and the current credit-worthiness of the swap counterparties. The fair value of forward exchange contracts is their quoted market price at the statement of financial position date, being the present value of the quoted forward price.

(v) Financial guarantee contracts

Financial guarantee contracts are regarded as insurance contracts under which the Group accepts significant insurance risk from a third party by agreeing to compensate that party on the occurrence of a specified uncertain future event. Provisions are recognised when it is probable that the guarantee will be called upon and an outflow of resources embodying economic benefits will be required to settle the obligations.

6160



3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

3.4 Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for its intended use, the cost of dismantling and removing the items and restoring the site on which they are located and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and is recognised net within other income/other expenses in profit or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Assets under construction are not depreciated.

Depreciation is recognised from the date that the property, plant and equipment are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use.

The estimated useful lives are as follows: -

Freehold building - 50 years Leasehold improvements - 10 years Office equipment - 5 years Furniture and fittings - 5 years Computers - 5 years Motor vehicles - 5 years

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.


3.5 Intangible assets

(i) Goodwill

Goodwill represents the excess of:

• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree; plus

• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree,

over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

Subsequent measurement

Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted investee.

3.6 Leased assets

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other leases are operating leases and are not recognised in the Group’s statement of financial position.

3.7 Inventories

Inventories are measured at the lower of cost and net realisable value.

Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. In arriving at net realisable value, due allowance is made for all obsolete and slow moving inventories.

3.8 Impairment

(i) Non-derivative financial assets

A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

6362




3.8 Impairment (cont’d)

(i) Non-derivative financial assets (cont’d)

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. The Group considers a decline of 20% to be significant and a period 9 months to be prolonged.

Loans and receivables

The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All individually significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified.

Loans and receivables that are not individually significant are collectively assessed for impairment by grouping together loans and receivables with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

(ii) Non-financial assets

The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (“CGU”) exceeds its recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU. Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.


3.8 Impairment (cont’d)

(ii) Non-financial assets (cont’d)

The Group’s corporate assets do not generate separate cash inflows and are utilised by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired.

3.9 Dividends

Dividends on ordinary shares are recognised as a liability in the period in which it is declared.

3.10 Employee benefits

(i) Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(ii) Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

6564




3.10 Employee benefits (cont’d)

(iii) Share-based payments

The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees unconditionally become entitled to payment. The liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised as personnel expense in profit or loss.

3.11 Revenue recognition

(i) Goods sold

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement. For sales of IT products, transfer usually occurs when the product is received at the customer’s warehouse; however, for some international shipments, transfer occurs upon loading of the goods on to the relevant carrier.

(ii) Service fees

Fees from service maintenance contracts are recognised over the period of the contract.

3.12 Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.


3.12 Lease payments (cont’d)

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying asset.

At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s incremental borrowing rate.

3.13 Finance Costs

Finance costs comprise interest expense on borrowings that are recognised in profit or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

3.14 Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

• temporary differences related to investments in subsidiaries and associates to the extent that the Group is able to control the timing of the reversal of the temporary difference and it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

The measurement of deferred taxes reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

6766




3.14 Income tax (cont’d)

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

In determining the amount of current and deferred tax, the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors including interpretations of tax law and prior experience. The assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Company to change its judgment regarding the adequacy of existing tax liabilities, such changes to tax liabilities will impact tax expense in the period that such a determination is made.

3.15 Earnings per share

The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.

3.16 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill.

3.17 New standards and interpretations not adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing these consolidated financial statements. None of these are expected to have a significant effect on the consolidated financial statements of the Group.

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6968



4. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Leasehold improvements

Office equipment

Furniture and fittings Computers Total

Company $’000 $’000 $’000 $’000 $’000

Cost

At 1 January 2012 22 17 32 74 145

Additions – 3 – 11 14

Disposal/write off – (2) – (2) (4)

At 31 December 2012 22 18 32 83 155

Additions – – 1 3 4

At 31 December 2013 22 18 33 86 159

Accumulated depreciation

At 1 January 2012 2 5 4 23 34

Depreciation charge for the year 3 4 6 14 27

Disposal/write off – (1) – * (1)

At 31 December 2012 5 8 10 37 60

Depreciation charge for the year 3 3 7 16 29

At 31 December 2013 8 11 17 53 89

Carrying amounts

At 1 January 2012 20 12 28 51 111

At 31 December 2012 17 10 22 46 95

At 31 December 2013 14 7 16 33 70

* Amount less than $1,000.

5. INTANGIBLE ASSETS

Group

2013 2012

$’000 $’000

Goodwill on consolidation 33,522 33,522

Impairment testing for goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s CGU of ECS Technology (China) Limited group of companies being a group of entities operating in the same geographical location with similar principal activities.

5. INTANGIBLE ASSETS (CONT’D)

Impairment testing for goodwill (cont’d)

The recoverable amount of each CGU is based on its value-in-use. Value-in-use is determined by discounting the future cash flows generated from the continuing use of the unit and is based on the following key assumptions:

• Cash flows were projected based on actual operating results and the five-year business plan.

• The anticipated annual revenue growth included in the cash flow projections ranges from 2.9% to 7.4% (2012: 6.1% to 10.4%) per annum for the years 2014 to 2018 (2012: 2013 to 2017), giving an average annual growth in revenue of 5.7% (2012: 7.4%).

• A pre-tax discount rate of 12.1% (2012: 14.4%) per annum was used. The discount rate used reflects the risk-free rate and the premium for specific risks relating to the business unit.

• Terminal value was estimated using a growth rate of 4.3% (2012: 4.3%).

The values assigned to the key assumptions represent management’s assessment of future trends in the IT industry and are based on both external sources and internal sources and both past performance (historical data) and its expectations for market development.

Group management believes that any reasonably possible changes in the above key assumptions applied are not likely to materially cause the recoverable amount to be lower than its carrying amount.

6. SUBSIDIARIES

Company

Note 2013 2012

$’000 $’000

Unquoted equity shares, at cost 98,385 97,559

Quasi-equity loans to subsidiaries, at cost (a) 7,516 7,516

Loans to subsidiaries (b) 113,400 110,250

219,301 215,325

(a) The quasi-equity loans to subsidiaries are unsecured and interest-free. The settlement of these loans

is neither planned nor likely to occur in the foreseeable future. As these loans are, in substance, part of the Company’s net investments in the subsidiaries, the loans are stated at cost.

(b) The loans to subsidiaries are unsecured, repayable on 27 September 2015 (2012: 27 September 2015) and bear interest at 3.60% (2012: 3.68%) per annum.

7170



Details of the significant subsidiaries are set out below.

Name of company Principal activities

Country of incorporation/ business

Group’s effective equity interest

2013 2012% %


Provider of information technology products and services for IT infrastructure

Singapore 100 100

ECS Indo Pte Ltd1 Distributor of information technology products

Singapore 100 89.18

The Value Systems Co., Ltd (a)


Thailand 100 100

ECS Technology (China) Limited (a)

Investment holding, provider of information technology products and services for IT infrastructure

Hong Kong 100 100

EC Sure Holdings (Thailand) Co., Ltd(a)

Investment holding Thailand 99.9 99.9

ECS Infocom (Phils) Pte. Ltd.

Investment holding Singapore 100 100

ECS Vietnam Company Limited (b)

Trading of information and communications technology products and services

Vietnam 100 100

Subsidiaries of ECS Computers (Asia) Pte Ltd

Pacific City (Asia Pacific) Pte Ltd

Retail of information technology products, IT equipment and accessories

Singapore 100 100

ECS Enterprise Solutions Pte Ltd


Singapore 100 100

Subsidiary of ECS Indo Pte Ltd

PT ECS Indo Jaya1 (a) Distributor of information technology products

Indonesia 100 89.18

6. SUBSIDIARIES (CONT’D) 6. SUBSIDIARIES (CONT’D)

Name of company Principal activities

Country of incorporation/ business

Group’s effective equity interest

2013 2012% %

Subsidiaries of ECS Technology (China) Limited

ECS (Shanghai) Management Co., Ltd (a)


People’sRepublicof China

100 100

ECS China Technology (Shanghai) Co., Ltd (a)



100 100

ECS Beijing Chuang Yue Technology Co., Ltd (a)



100 100

EIT info-tech Limited (a) Provider of information technology products and services for IT infrastructure

Hong Kong 100 100

ECS Technology (HK) Co., Limited (a)


Hong Kong 100 100

ECS Chongqing Marketing & Payment Co., Ltd (a)

Electronic settlement business centre and provider of information technology products and services for IT infrastructure.


100 100

1 On 27 August 2013, there was an acquisition of non-controlling interests which resulted in an increase in the Group’s effective equity interest from 89.18% to 100%. (See note 29)

(a) Audited by other member firms of KPMG International for consolidation purposes.

(b) Exempted from audit in the country of incorporation.

KPMG LLP Singapore is the auditor of all the Singapore incorporated subsidiaries.

7. INTEREST IN ASSOCIATES

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Investment in associates 50,812 48,372 3,320 3,320

Loan to associate 567 551 – –

51,379 48,923 3,320 3,320

7372



7. INTEREST IN ASSOCIATES (CONT’D)

The loan to an associate is denominated in United States dollars, unsecured and interest-free. Settlement is neither planned nor likely to occur in the foreseeable future. As this loan is, in substance, part of the Company’s net investment in the associate, it is stated at cost.

Details of the associates are as follows:

Name of associate Audited byCountry ofincorporation

Effective equity held by the Group

2013 2012

MSI-ECS Phils., Inc. Pelayo Teodoro Santamaria & Co.

Philippines 49.99% 49.99%

ECS ICT Berhad (“ECSB”) KPMG Malaysia Malaysia 41% 41%

ECSB is listed on the Main Market of Bursa Malaysia Securities. Based on its closing price at the reporting

date, the fair value of the Group’s investment in ECSB is $33,402,000 (2012: $30,715,000). MSI-ECS Phils., Inc. is not listed.

Included in the investment in ECSB is goodwill on acquisition and customer relationships amounting to $6,388,000 (2012: $6,388,000) and $4,157,000 (2012: $4,157,000) respectively. These amounts have been determined based on a fair valuation of ECSB’s identifiable net assets in accordance with the requirement of FRS 28. The intangible asset relating to customer relationships is amortised over an estimated useful life of 5 years amounting to $333,000 for the year (2012: $333,000).

The summarised financial information set out below relating to the associates are not adjusted for the percentage of ownership held by the Group.

2013 2012

$’000 $’000

Revenue 847,029 809,339

Profit after taxation 13,262 14,533

Total assets 228,401 225,849

Total liabilities 126,025 129,874

Impairment testing for investment in an associate

As the market value of the Group’s shareholding in ECSB at reporting date is below the carrying value of the Group’s investment in ECSB, management performed an impairment assessment to determine the recoverable value of its investment in ECSB.

The recoverable amount of ECSB is based on its value-in-use. Value-in-use is determined by discounting the future cash flows generated from the continuing use of ECSB and is based on the following key assumptions:

• Cash flows are projected based on actual operating results and expected growth anticipated by the Group.

7. INTEREST IN ASSOCIATES (CONT’D)

Impairment testing for investment in an associate (cont’d)

• The anticipated annual revenue growth included in the cash flow projections ranges from 0% to 10.1% per annum (2012: 1.9% to 5.9% per annum) for the years 2014 to 2018 (2012: 2013 to 2017), giving an average annual growth in revenue of 3.0% (2012: 3.3%).

• A pre-tax discount rate of 13.6% (2012: 17.4%) per annum was used. The discount rate used reflects the risk-free rate and a premium for specific risks relating to ECSB.

• Terminal value was estimated using a growth rate of 3.0% (2012: 3.0%).

The values assigned to the key assumptions represent management’s assessment of future trends in the IT industry and are based on both external sources and internal sources and both past performance (historical data) and its expectations for market development.

Group management believes that any reasonably possible changes in the above key assumptions applied are not likely to materially cause the recoverable amount to be lower than its carrying amount.

8. DEFERRED TAX

Unrecognised deferred tax liabilities

At 31 December 2013, a deferred tax liability of $7,658,000 (2012: $6,837,000) for temporary differences of $76,581,000 (2012: $68,372,000) related to investments in a subsidiary were not recognised because the Company controls whether the liability will be incurred and it is satisfied that it will not be incurred in the foreseeable future.

Recognised deferred tax assets and liabilities

Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The amounts determined after appropriate offsetting are included in the balance sheet as follows:

Assets Liabilities2013 2012 2013 2012

$’000 $’000 $’000 $’000

Group

Provisions 8,889 8,791 26 26Withholding tax for profit derived

from subsidiaries – – (4,414) (3,025)Accelerated tax depreciation – – (193) (193)Deferred tax assets/(liabilities) 8,889 8,791 (4,581) (3,192)Set off of tax – – – –Net deferred tax assets/ (liabilities) 8,889 8,791 (4,581) (3,192)

Company

Accelerated tax depreciation – – (27) (27)Deferred tax assets/(liabilities) – – (27) (27)Set off of tax – – – –Net deferred tax assets/ (liabilities) – – (27) (27)

7574



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9. INVENTORIES

Group

2013 2012

$’000 $’000

Trading inventories 236,682 225,973

Goods in transit 54,092 65,193

290,774 291,166

Allowance for obsolete inventories (9,510) (10,362)

281,264 280,804

Comprises:

Inventories, at cost 54,092 65,193

Inventories, at net realisable value 227,172 215,611

281,264 280,804

In 2013, changes in trading inventories recognised as cost of sales amounted to $4,140,666,000 (2012: $3,598,102,000).

10. TRADE AND OTHER RECEIVABLES

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Trade receivables 658,461 502,108 19 –

Bills receivable 4,126 4,019 – –

Amounts due from affiliated companies 21,650 45,172 – –

684,237 551,299 19 –

Allowance for doubtful receivables (31,893) (22,840) – –

652,344 528,459 19 –

Amount due from related corporations 11 2,505 2,626 50,868 36,538

654,849 531,085 50,887 36,538

Deposits and other receivables 12 19,031 20,233 96 95

Loans and receivables 673,880 551,318 50,983 36,633

Prepayments 53,195 24,691 161 208

727,075 576,009 51,144 36,841

An affiliated company is a company, other than a related corporation, which directly or indirectly through one or more intermediaries, is under common significant influence.

The Group and the Company’s exposure to credit and impairment losses, currency and interest rate risks related to loans and receivables are disclosed in note 21.

7776



11. AMOUNTS DUE FROM/TO RELATED CORPORATIONS

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Amounts due from subsidiaries -

Dividend receivable – – 8,997 4,981

Non-trade receivables – – 4,153 8,996

Loans receivable – – 35,213 19,935

– – 48,363 33,912

Amounts due from associate -

Non-trade receivables 2,505 2,626 2,505 2,626

2,505 2,626 2,505 2,626

10 2,505 2,626 50,868 36,538

Amounts due to subsidiaries -

Non-trade payables – – 1,589 5,660

Loans payable – – 22,522 7,513

19 – – 24,111 13,173

The loans due from subsidiaries are unsecured, repayable on demand and bear interest at rates ranging from 2.76% to 4.00% (2012: 2.54% to 6.50%) per annum.

The non-trade balances are unsecured, repayable on demand and interest-free. The loans payable are unsecured, repayable on demand and bear interest at 2.54% to 2.89% (2012: 2.72% to 3.05%) per annum.

There is no allowance made for doubtful receivables arising from the outstanding balances.

12. DEPOSITS AND OTHER RECEIVABLES

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Deposits 9,471 7,769 95 95

Recoverables 464 1,327 1 –

Tax recoverables 2,536 4,461 – –

Other receivables 4,867 5,133 – –

Call option (a) 1,693 1,543 – –

Deposits and other receivables 10 19,031 20,233 96 95

12. DEPOSITS AND OTHER RECEIVABLES (CONT’D)

(a) On 4 January 2006, a subsidiary entered into a call option agreement with a shareholder of the associate for US$1 cash consideration which will entitle the subsidiary to acquire additional 10% equity interest in the associate. The call option is exercisable beginning 4 July 2008 and ending on the date falling three years thereafter, unless otherwise further extended by the shareholder in writing, at an option price equivalent to US$450,000. On 4 May 2012, the shareholder agreed to defer the commencement date of the call option period to eighty-eight months from 4 January 2006 and ending on the date falling three years thereafter, unless otherwise further extended by the shareholder in writing. The fair value of the call option as at the reporting date has been recognised as an option asset with its corresponding change in fair value during the year recognised in profit or loss.

13. CASH AND CASH EQUIVALENTS

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Cash at bank and in hand 118,464 106,316 4,119 4,357

Fixed deposits 2,400 1,894 – –

Cash and cash equivalents 120,864 108,210 4,119 4,357

The weighted average effective interest rates per annum relating to cash and cash equivalents, excluding bank overdrafts, at the reporting date for the Group range from 0.10% to 16.91% (2012: 0.10% to 3.90%) per annum. Interest rates reprice at daily to monthly intervals.

The Group and the Company’s exposure to currency risks are disclosed in note 21.

14. SHARE CAPITAL

Group and Company

No. of shares

2013 2012

’000 ’000

Issued and fully paid, with no par value:

At 1 January and 31 December 365,910 365,910

During the financial year, there is no issuance of shares under the share option scheme of the Company.

For the year ended 31 December 2012, the Company has issued 550,000 ordinary shares, at an issue price of $0.55 per share, pursuant to the exercise of options granted under the ECS Share Option Scheme II (see note 16).

All shares rank equally with regards to the Company’s residual assets. The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company.

7978



15. RESERVES

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Currency translation reserve (a) (12,271) (17,365) – –

Dividend reserve (b) 8,050 8,050 8,050 8,050

General reserve (c) 8,315 6,927 – –

Accumulated profits 254,530 228,950 6,440 7,794

258,624 226,562 14,490 15,844

(a) Currency translation reserve

The currency translation reserve of the Group comprises foreign exchange differences arising from the translation of the financial statements of foreign operations.

(b) Dividend reserve

The dividend reserve of the Group represents dividends proposed which are subject to approval of the shareholders at a general meeting.

(c) General reserve

According to the current People’s Republic of China (“PRC”) Company Law, the PRC subsidiaries of the Group are required to transfer 10% of their profit after taxation to statutory surplus reserve until the surplus reserve balance reaches 50% of the registered capital. For the purpose of calculating the amount to be transferred to reserve, the profit after taxation is the amount determined under PRC accounting standards. The amount of transfer to this reserve has to be made before profit distribution to shareholders.

Legal reserve is set up under the provision of the Civil and Commercial Code of Thailand, which requires that a company shall allocate not less than 5% of its net profit appropriated for payment of dividend to a reserve account (“legal reserve”) upon each dividend distribution, until the balance reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.

16. EQUITY COMPENSATION BENEFITS

The Company

The ECS Share Option Scheme II (“Scheme II”) was approved and adopted by its members at an Extraordinary General Meeting held on 13 December 2000. Scheme II provides an opportunity for employees and directors, including non-executive directors, of the Group who have contributed significantly to the growth and performance of the Group to participate in the equity of the Company.

16. EQUITY COMPENSATION BENEFITS (CONT’D)

The above scheme is administered by the Compensation Committee (the “Committee”) which comprises the following directors:

Koh Soo Keong (Chairman) Leong Horn Kee Tan Hup Foi

Information regarding the scheme is set out below:

Scheme II

(a) The exercise price of the options exercisable pursuant to Scheme II is set either at:

- a price equal to the average of the last dealt price for the three consecutive trading days immediately preceding the grant of the option; or

- a discount to the market price not exceeding 20% of the market price in respect of that option.

(b) Options granted are exercisable at any time after the first anniversary of the grant date and in the case of options with exercise price set at a discount, at any time after the second anniversary of date of grant. Options granted to employees and executive directors are exercisable up to the tenth anniversary of date of grant and those granted to non-executive directors are exercisable up to the fifth anniversary of the date of grant.

(c) The scheme will continue to be in force at the discretion of the Committee, subject to a maximum period of 10 years commencing 13 December 2000.

On 15 October 2010, the Group granted 13,770,000 share options pursuant to the rules of the ECS Share Option Scheme II. The options have an exercise price of $0.550 per share; a vesting period of 1 year from date of grant; and can be exercised within 5 years from date of grant for non-executive directors and 10 years from date of grant for executive directors and employees.

At 31 December 2013, details of the options granted were as follows:

Date of grant of options

Exercise price per

share

Options outstanding

at 1 January

2013Options granted

Options exercised

Options forfeited

or lapsed

Options outstanding

at 31 December

2013Exercise

period

15/10/2010 $0.550 9,850,000 – – (1,500,000) 8,350,00015/10/2011 to

15/10/2020

15/10/2010 $0.550 2,200,000 – – – 2,200,00015/10/2011 to

15/10/2015

The fair value of the employee share options is measured using quoted share price on measurement date and exercise price of the instrument.

8180



17. FINANCIAL LIABILITIES

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Non-current liabilities

Unsecured bank loans 113,400 110,250 113,400 110,250

Finance lease liabilities 36 18 – –

113,436 110,268 113,400 110,250

Current liabilities

Unsecured trade financing 5,395 13,000 – –

Unsecured bank loans 140,374 119,759 10,080 3,200

Finance lease liabilities 26 71 – –

Derivative liabilities – 1,174 – 1,088

145,795 134,004 10,080 4,288

Total financial liabilities 259,231 244,272 123,480 114,538

Included in unsecured bank loans is a club loan amounting to $113,400,000 (2012: $110,250,000). On 27 September 2012, the Company has signed a $113,400,000 (2012: $110,250,000) three-year term loan financing facility with three major financial institutions. The facility was fully drawn on 17 October 2012. The club loan bears interest at 2.60% to 2.68% (2012: 2.73% to 3.25%) per annum. The long term portion of the club loan amounted to $113,400,000 (2012: $101,238,000) and is due on 27 September 2015 (2012: 27 September 2015). The loans are guaranteed by certain subsidiaries.

Finance lease liabilities

At 31 December, the Group has obligations under finance leases that are payable as follows:

Principal InterestFuture minimum lease payments

$’000 $’000 $’000

2013

Repayable within 1 year 26 5 31

Repayable after 1 year but within 5 years 36 6 42

62 11 73

2012

Repayable within 1 year 71 18 89

Repayable after 1 year but within 5 years 18 5 23

89 23 112

17. FINANCIAL LIABILITIES (CONT’D)

Terms and debt repayment schedule

Terms and conditions of financial liabilities are as follows:

Nominal 31 December 2013 31 December 2012

Currencyinterest

rateYear of

maturityFace

valueCarrying amount

Face value

Carrying amount

$’000 $’000 $’000 $’000

Group

Unsecured bank loans and trade financing

- floating rate SGD 1.29% - 1.97% 2014 29,249 29,249 27,521 27,521- floating rate USD 1.50% - 4.28% 2014 – 2015 162,033 162,033 138,021 138,021- floating rate RMB 5.60% 2014 46,599 46,599 37,948 37,948- floating rate THB 2.52% -2.65% 2014 19,827 19,827 35,640 35,640- floating rate IDR 11.00% -12.5% 2014 1,461 1,461 3,879 3,879

259,169 259,169 243,009 243,009Finance lease liabilities IDR 4.00% - 7.00% 2014 73 62 112 89Derivative liabilities – – – – – 1,174 1,174

259,242 259,231 244,295 244,272

Company

Unsecured bank loans- floating rate SGD – – – – 3,200 3,200- floating rate USD 1.75%-2.60% 2014-2015 123,480 123,480 110,250 110,250

123,480 123,480 113,450 113,450Derivative liabilities – – – – – 1,088 1,088

123,480 123,480 114,538 114,538

18. DEFERRED INCOME AND EXPENSES

Deferred income and expenses relate to fees billed/paid in advance on service maintenance contracts and consist of:

Group

2013 2012$’000 $’000

Deferred incomeCurrent portion 2,514 3,037Non-current portion 2,387 3,822

4,901 6,859

Deferred expensesCurrent portion 1,732 2,271Non-current portion 1,871 3,065

3,603 5,336

8382



19. TRADE AND OTHER PAYABLES

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Trade payables 545,774 440,900 40 –

Accruals and other payables 20 44,463 30,966 2,277 2,939

Amounts due to subsidiaries 11 – – 24,111 13,173

590,237 471,866 26,428 16,112

The Group and the Company’s exposure to liquidity and currency risks related to trade and other payables are disclosed in note 21.

20. ACCRUALS AND OTHER PAYABLES

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Accrued operating expenses 18,593 17,034 1,643 2,291

Deposits received 13,913 7,677 – –

Other payables 11,124 5,322 20 140

Interest payables 833 933 614 508

19 44,463 30,966 2,277 2,939

21. FINANCIAL INSTRUMENTS

Credit risk

The maximum amount of financial assets, representing the maximum exposure to credit risk, at the reporting date was:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Non-current loans to subsidiaries – – 113,400 110,250

Loans and receivables 673,880 551,318 50,983 36,633

Cash and cash equivalents 120,864 108,210 4,119 4,357

794,744 659,528 168,502 151,240

21. FINANCIAL INSTRUMENTS (CONT’D)

Credit risk (cont’d)

The maximum exposure to credit risk for loans and receivables at the reporting date by geographic region was:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

China 439,161 292,872 19,329 8,132Thailand 110,391 123,775 2,677 2,587Singapore 43,640 40,366 26,439 23,232Indonesia 56,500 68,592 – –Philippines 2,510 2,676 2,510 2,676Hong Kong – 23,037 – –Others 21,678 – 28 6

673,880 551,318 50,983 36,633

The maximum exposure to credit risk for loans and receivables at the reporting date by type of customer

was:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Value added resellers 285,022 223,275 – –

System integrators 106,247 69,064 – –

Direct accounts 114,532 65,583 – –

Retailers 109,406 134,210 – –

Others 58,673 59,186 50,983 36,633

673,880 551,318 50,983 36,633

Impairment losses

The aging of loans and receivables at the reporting date was:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Gross

Not past due 510,299 421,265 50,983 36,633

Past due 0 – 30 days 88,599 71,646 – –

Past due 31 – 120 days 60,058 45,635 – –

Past due 121 – 365 days 24,791 15,534 – –

More than one year 22,026 20,078 – –

705,773 574,158 50,983 36,633

8584




Impairment losses (cont’d)

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Impairment losses

Not past due – – – –

Past due 0 – 30 days (2) – – –

Past due 31 – 120 days (2,605) (1,125) – –

Past due 121 – 365 days (12,092) (3,583) – –

More than one year (17,194) (18,132) – –

(31,893) (22,840) – –

The movements in the allowance for impairment in respect of loans and receivables during the year were as follows:

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

At 1 January 22,840 19,440 – –

Utilised during the year (1,039) (174) – –

Allowances made during the year 24(b) 9,134 4,333 – –

Translation differences on consolidation 958 (759) – –

At 31 December 31,893 22,840 – –

The loans and receivables that were not past due or impaired at the reporting date is assessed to be at

acceptable risk.

Based on historical default rates, the Group believes that no further impairment allowance is necessary in respect of loans and receivables as at 31 December 2013 and 31 December 2012. These receivables are mainly arising with customers that have a good record with the Group.


Liquidity risk

The following are the contractual maturities of financial liabilities, including estimated interest payments:

Cash flows

Carrying amount

Contractual cash flows

Within 1 year

Between 1 to 5 years

$’000 $’000 $’000 $’000

Group

2013

Unsecured trade financing 5,395 (5,395) (5,395) –

Unsecured bank loans 253,774 (259,843) (144,232) (115,611)

Finance lease liabilities 62 (73) (31) (42)

Trade and other payables* 576,324 (576,324) (576,324) –

835,555 (841,635) (725,982) (115,653)

2012

Unsecured trade financing 13,000 (13,000) (13,000) –


Finance lease liabilities 89 (112) (89) (23)

Derivative liabilities

- Inflow – 19,821 19,821 –

- Outflow 1,174 (20,995) (20,995) –


708,461 (716,596) (601,170) (115,426)

Company

2013



149,908 (155,248) (39,637) (115,611)

2012


Derivative liabilities

- Inflow – 296 296 –

- Outflow 1,088 (1,384) (1,384) –


130,650 (138,762) (23,359) (115,403)

* Excludes deposits received

It is not expected that the cash flow included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

8786




Exposure to currency risk

The Group’s exposure to foreign currency risk based on notional amounts was as follows:

‹--------------------- 2013 --------------------› ‹-------------------- 2012 --------------------›

USD IDR PHP THB USD IDR PHP THB

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Loans and receivables 53,822 – – 2,677 33,169 16,351 – 2,587

Cash and cash equivalents 5,442 – – – 7,597 2,929 – –

Unsecured bank loans/trade financing (139,325) – – – (110,250) (3,879) – –

Trade and other payables (119,102) – – – (19,179) (6,536) – –

Forward exchange contracts and hybrid swaps 24,815 – – – 74,650 – – –

Loans receivable from associates 2,564 – 587 – 2,822 – 456 –

Finance lease liabilities – – – – – (89) – –

(171,784) – 587 2,677 (11,191) 8,776 456 2,587

‹----------------- 2013 ----------------› ‹----------------- 2012 ----------------›

USD PHP THB USD PHP THB

$’000 $’000 $’000 $’000 $’000 $’000

Company

Loan receivables

- non-current 113,400 – – 110,250 – –

- current 16,705 587 – 13,580 456 –

Dividend receivables 4,508 – 2,677 1,095 – 2,587

Cash and cash equivalents 419 – – 3,701 – –

Unsecured bank loans/trade financing (123,480) – – (110,250) – –

Forward exchange contracts and hybrid swaps – – – 55,125 – –

11,552 587 2,677 73,501 456 2,587


Exposure to currency risk (cont’d)

Sensitivity analysis

A 1% strengthening of the Singapore dollar against the above currencies at 31 December would have increased/(decreased) profit or loss before tax by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis for 2012.

Group Company

Profit or loss Profit or loss

2013 2012 2013 2012

$’000 $’000 $’000 $’000

USD 1,718 112 (116) (735)

IDR – (88) – –

PHP (6) (5) (6) (5)

THB (27) (26) (27) (26)

A 1% weakening of the Singapore dollar against the above currencies at 31 December would have had the following effect as shown below, on the basis that all other variables remain constant.

Group CompanyProfit or loss Profit or loss

2013 2012 2013 2012$’000 $’000 $’000 $’000

USD (1,718) (112) 116 735IDR – 88 – –PHP 6 5 6 5THB 27 26 27 26

Interest rate risk

The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s debt obligations. The Group manages some of its exposure to floating rate interest by entering into interest rate swaps and hybrid swaps.

At reporting date, the interest rate profile for the interest-bearing financial instruments was:

Group CompanyCarrying amount Carrying amount

2013 2012 2013 2012$’000 $’000 $’000 $’000

Fixed rate instrumentsFinancial liabilities (62) (89) – –

8988




Interest rate risk (cont’d)

Group Company

Carrying amount Carrying amount

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Variable rate instruments

Financial assets – – 148,613 130,185

Financial liabilities (259,169) (243,009) (146,002) (120,963)

(259,169) (243,009) 2,611 9,222

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased/ (decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2012.

GroupProfit or loss

CompanyProfit or loss

100 bp increase

100 bp decrease

100 bp increase

100 bp decrease

Group $’000 $’000 $’000 $’000

31 December 2013

Variable rate instruments (2,592) 2,592 26 (26)

Cash flow sensitivity (net) (2,592) 2,592 26 (26)

31 December 2012

Variable rate instruments (2,430) 2,430 92 (92)

Interest rate swaps and hybrid swaps 205 (205) 205 (205)

Cash flow sensitivity (net) (2,225) 2,225 297 (297)


Fair values

The carrying amounts of the Group and the Company’s financial instruments carried at cost or amortised cost are not materially different from their fair values as at 31 December 2013.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 : inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Level 1 Level 2 Level 3 Total

$’000 $’000 $’000 $’000

Group

31 December 2013

Option asset – – 1,693 1,693

Derivative assets/(liabilities) – 729 – 729

31 December 2012

Option asset – – 1,543 1,543

Derivative assets/(liabilities) – (1,174) – (1,174)

Company

31 December 2013

Derivative liabilities – – – –

31 December 2012

Derivative liabilities – (1,088) – (1,088)

The valuation techniques and the inputs used in the fair value measurements of the financial assets and

financial liabilities for measurement and/or disclosure purposes are set out in note 30.

9190




Fair values (cont’d)

Assets measured at fair value based on Level 3

Fair value measurement at end of the reporting date:

Group Option

asset$’000

2013

Balance at beginning of the year 1,543Total gains in profit or loss 150Transfer out of Level 3 –Balance at end of the year 1,693

2012

Balance at beginning of the year 1,263Total gains in profit or loss 280Transfer out of Level 3 –Balance at end of the year 1,543

Gains included in profit or loss for the year is presented in other income as follows:

2013 2012

$’000 $’000

Total gains included in profit or loss for the year 150 280

Total gains for the period included in profit or loss for assets held at the end of the reporting date 150 280

The following table shows the valuation technique and key unobservable inputs used in the determination of fair value of option assets:

31 December 2013

Valuation techniqueSignificant unobservable inputs

Inter-relationship between significant observable inputs and fair value measurement

The fair value is calculated using 10% of equity of the associate less purchase price of the option

Equity of the associate The estimated fair value would increase if• Equity of the associate was higher

Management considers that changing one or more of the significant unobservable inputs used to other

reasonably possible alternative assumptions would not result in a significant change in the estimated fair value.

22. OFFSETTING FINANCIAL ASSETS AND LIABILITIES

The disclosures set out in the tables below include financial assets and financial liabilities that:

• are offset in the Group’s and the Company’s statements of financial position; or• are subject to an enforceable master netting arrangement, irrespective of whether they are offset in

the statement of financial position.

Financial instruments such as trade receivables and trade payables are not disclosed in the tables below unless they are offset in the statements of financial position.

Financial assets and financial liabilities subject to offsetting and enforceable master netting arrangements

Gross amounts of recognised

financial assets

Gross amounts of recognised

financial liabilities

offset in the statement

of financial position

Net amountsof financial

assets presented

in the statement

of financial position

Related amounts not offset in the

statementof financial

position financial

instrumentsNet

amount

$’000 $’000 $’000 $’000 $’000

Group

31 December 2013

Financial assetsTrade receivables 14,969 (14,316) 653 – 653Total 14,969 (14,316) 653 – 653

Financial liabilitiesTrade payables 6,717 (6,291) 426 – 426Total 6,717 (6,291) 426 – 426

31 December 2012

Financial assetsTrade receivables 4,178 (4,155) 23 – 23Total 4,178 (4,155) 23 – 23

Financial liabilitiesTrade payables 6,254 (5,462) 792 – 792Derivative liabilities 1,384 (296) 1,088 – 1,088Total 7,638 (5,758) 1,880 – 1,880

Company

31 December 2012

Financial liabilitiesDerivative liabilities 1,384 (296) 1,088 – 1,088Total 1,384 (296) 1,088 – 1,088

9392



22. OFFSETTING FINANCIAL ASSETS AND LIABILITIES (CONT’D)

For the financial year ended 31 December 2013, there are no financial assets that are offset in the Company’s statement of financial position; or are subject to an enforceable master netting arrangement, irrespective of whether they are offset in the statement of financial position.

The gross amounts of financial assets and financial liabilities and their net amounts as presented in the statements of financial position that are disclosed in the above tables are measured in the statements of financial position on the following basis:

• derivative assets and liabilities - fair value; and• trade receivables and trade payables - amortised cost.

The amounts in the above tables that are offset in the statements of financial position are measured on the same basis.

The tables below reconcile the ‘Net amounts of financial assets and financial liabilities presented in the statements of financial position’, as set out above, to the line items presented in the statements of financial position.

Net amounts

Line item in statementof financial position

Carrying amountin statement of

financial position

Financial assetsnot in scopeof offsetting

disclosures Note$’000 $’000 $’000

Group

31 December 2013

Types of financial assets

Trade receivables 653 Trade and other receivables 727,075 726,422 10

Types of financial liabilities

Trade payables 426 Trade and other payables 590,237 589,811 19

31 December 2012

Types of financial assets

Trade receivables 23 Trade and other receivables 576,009 575,986 10


Trade payables 792 Trade and other payables 471,866 471,074 19Derivative liabilities 1,088 Current financial liabilities 134,004 132,916 17

Company

31 December 2012


Derivative liabilities 1,088 Current financial liabilities 4,288 3,200 17

23. REVENUE

Group

2013 2012

$’000 $’000

Sale of IT products 4,165,423 3,607,339

IT services 35,645 36,312

4,201,068 3,643,651

Transactions within the Group have been excluded in arriving at revenue for the Group.

24. PROFIT FROM OPERATIONS

The following items have been included in arriving at profit from operations:

(a) Staff costs

Group

2013 2012

$’000 $’000

Wages and salaries 54,483 54,145

Contributions to defined contribution plans 8,307 8,569

(b) Other expenses/(income)

Allowances made/(reversed) for

- obsolete inventories (1,194) 1,961

- doubtful trade receivables 9,134 4,333

Audit fees paid/payable to:

- auditors of the Group 562 644

Bad debts written off, net 326 11

Directors’ fees 314 320

Exchange gains, net (2,200) (2,036)

Interest income

- banks (669) (512)

- associate (156) (39)

Inventories written off 216 65

Loss on disposal of property, plant and equipment 17 37

Non-audit fees paid/payable to auditors of the Group 228 70

Net fair value loss on financial instruments 536 65

Operating lease expenses 7,600 7,576

Property, plant and equipment written-off – 1

Depreciation expense 2,760 2,646

9594



25. FINANCE COSTS

Group

2013 2012

$’000 $’000

Recognised in profit for the year

Interest paid and payable on

- bank overdrafts 4 4

- finance leases 21 33

- short-term loans 7,663 7,483

- trade financing 1,639 1,427

9,327 8,947

26. INCOME TAX EXPENSE

Group

2013 2012

$’000 $’000

Tax expenseCurrent tax expense

- Current year 10,024 8,081

- Over provided in prior years (12) (397)

10,012 7,684

Deferred tax expense

- Movements in temporary differences 1,369 (455)

- Changes in tax rates – (22)

1,369 (477)

Income tax expense for the year 11,381 7,207

Reconciliation of effective tax rate

Profit before tax 45,839 36,996

Income tax at 17% 7,793 6,289

Non-deductible expenses 1,922 1,184

Income not subject to tax (319) (286)

Effect of different tax rates in foreign jurisdictions 1,755 1,472

Changes in tax rates – (22)

Deferred tax benefits not recognised 772 –

Income tax at concessionary rate (873) (400)

Over provided in prior years (12) (397)

Withholding taxes on profits from PRC subsidiaries 1,297 437

Share of profit of associates, net of tax (1,080) (1,189)

Others 126 119

Income tax expense for the year 11,381 7,207

27. EARNINGS PER SHARE

Group

2013 2012

$’000 $’000

Basic earnings per share is based on:

Net profit for the year ($’000) 34,416 29,646

Number of shares outstanding at the beginning of the year (’000) 365,910 365,360

Weighted average number of shares issued during the year (’000) – 421

Weighted average number of shares in issue during the year (’000) 365,910 365,781

For the purpose of calculation of the diluted earnings per ordinary share, the weighted average number of

ordinary shares in issue during the year is adjusted to take into account the dilutive effect arising from the dilutive share options, with the potential ordinary shares weighted for the period outstanding:

Number of shares

2013 2012

’000 ’000

Weighted average number of shares used in calculation of basic earnings per share 365,910 365,781

Weighted average number of dilutive potential ordinary shares 1,758 3,158

Number of shares that would have been issued at fair value (1,444) (3,066)

Weighted average number of ordinary shares (diluted) 366,224 365,873

28. OPERATING SEGMENTS

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

Segment information is presented in respect of the Group’s business and geographical segments. The primary format of segment information is based on the Group’s management and internal reporting structure. This is regularly reviewed by the Group’s management.

Segment information was presented in the prior year by business segment based on the Group’s business activities. For the current year, the Group’s management has identified geographical segments as the primary format. Business operations in each region are managed separately because subsidiaries in each region operate within a different economic environment that is subject to risks and rewards that are different from those of other geographical segments.

9796



28. OPERATING SEGMENTS (CONT’D)

(a) Geographical segments

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and related revenue, interest in the associate, interest-bearing loans, borrowings and related expenses, income tax assets and liabilities, negative goodwill and corporate assets and expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.

The following describes the operations in each of the Group’s reportable segment:

Segments Principal activities

North Asia Investment holding, provider of information technology products and services for IT infrastructure

South East Asia Provider of information technology products and services for IT infrastructure

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before interest expense and income tax, as included in the internal management reports that are reviewed by the Group’s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments.

North Asia South East Asia Elimination Consolidated

$’000 $’000 $’000 $’000

2013

Total revenue from external customers 2,509,226 1,691,842 – 4,201,068

Inter-segment revenue – 30 (30) –

Total revenue 2,509,226 1,691,872 (30) 4,201,068

Interest income 620 5,334 (5,129) 825

Interest expense (7,404) (7,052) 5,129 (9,327)

Depreciation and amortisation (890) (1,870) – (2,760)

Share of profit of associates – 6,350 – 6,350

Reportable segment profit before interest and tax 34,183 20,983 – 55,166

Income tax expense (6,335) (5,046) – (11,381)

Reportable segment assets 608,465 370,667 – 979,132

Capital expenditure 446 1,678 – 2,124

Reportable segment liabilities 428,928 166,209 – 595,137


(a) Geographical segments (cont’d)

North Asia South East Asia Elimination Consolidated$’000 $’000 $’000 $’000

2012

Total revenue from external customers 2,183,358 1,460,293 – 3,643,651

Inter-segment revenue – 8 (8) –Total revenue 2,183,358 1,460,301 (8) 3,643,651

Interest income 483 5,301 (5,233) 551Interest expense (6,833) (7,347) 5,233 (8,947)Depreciation and amortisation (830) (1,816) – (2,646)Share of profit of associates – 6,997 – 6,997

Reportable segment profit before interest and tax 15,814 30,129 – 45,943

Income tax expense (1,975) (5,232) – (7,207)

Reportable segment assets 468,489 386,462 – 854,951Capital expenditure 561 1,608 – 2,169Reportable segment liabilities 284,391 194,336 – 478,727

Reconciliations of reportable segments profit or loss, assets and liabilities and other material items:

2013 2012$’000 $’000

Profit or loss

Total profit for reportable segments 55,166 45,943Unallocated amounts:- Finance costs (9,327) (8,947)

Consolidated profit before tax 45,839 36,996

AssetsTotal assets for reportable segments 979,132 854,951Investments in associate 51,379 48,923Other unallocated amounts 205,213 166,821Consolidated total assets 1,235,724 1,070,695

LiabilitiesTotal liabilities for reportable segments 595,137 478,727Other unallocated amounts 268,846 250,950Consolidated total liabilities 863,983 729,677

9998




(a) Geographical segments (cont’d)

Financial information pertaining to the Group’s country of domicile, Singapore, is as follows:

Revenue Non-current assets

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Singapore 678,745 470,651 2,686 4,106

(b) Business segments

The main business segments of the Group are the following:

Segments Principal activities

Enterprise systems Provider of enterprise systems tools (middleware, operating systems, Unix/NT servers, databases, storage and security products) for IT infrastructure.

IT services IT infrastructure design and implementation, training, maintenance and support services.

Distribution Distribution of IT products (desktop PCs, notebooks, handhelds, printers, etc) for the commercial and consumer markets.

In presenting information on the basis of business segments, segment revenue is based on the principal activities under each business segment.

Enterprise Systems IT Services Distribution Consolidated2013 2012 2013 2012 2013 2012 2013 2012

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

External revenue 1,300,711 1,106,904 35,645 36,312 2,864,712 2,500,435 4,201,068 3,643,651

Depreciation and amortisation (854) (804) (23) (26) (1,883) (1,816) (2,760) (2,646)

Reportable segment profit before interest and tax 22,520 21,798 1,842 1,531 24,454 15,617 48,816 38,946

Reportable segment assets 312,947 266,292 6,507 7,809 659,678 580,850 979,132 854,951

Capital expenditure 682 629 19 33 1,423 1,507 2,124 2,169

Reportable segment liabilities 190,848 150,484 3,366 4,398 400,923 323,845 595,137 478,727

29. ACQUISITIONS OF NON-CONTROLLING INTERESTS

In August 2013, the Group acquired an additional 10.82% interest in ECS Indo Pte Ltd for $826,000 in cash, increasing the ownership from 89.18% to 100%. The carrying amount of ECS Indo Pte Ltd’s net assets in the Group financial statements on the date of the acquisition was $13,195,000. The Group recognised a decrease in non-controlling interests of $1,428,000 and an increase in accumulated profits of $602,000.

The following summarises the effect of changes in the Group’s interest in ECS Indo Pte Ltd:

2013

$’000

Group’s ownership interest at the beginning of the year 11,035

Effect of increase in Group’s ownership interest 1,428

Share of comprehensive income (6,725)

Group’s ownership interest at the end of the year 5,738

30. DETERMINATION OF FAIR VALUES

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods or as disclosed in the notes specific to that asset or liability. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) Inventories

The fair value of inventories is determined based on the estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.

(ii) Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the measurement date. Short-term receivables with no stated interest rate are measured at the original invoice amount if the effect of discounting is immaterial. Fair value is determined at initial recognition and, for disclosure purposes, at each annual reporting date.

(iii) Derivatives

The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds).

The fair value of interest rate swaps is based on broker quotes. These quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take into account of the credit risk of the Group entity and counterparty when appropriate.

101100



30. DETERMINATION OF FAIR VALUES (CONT’D)

(iv) Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases, the market rate of interest is determined by reference to similar lease agreements.

31. FINANCIAL RISK MANAGEMENT

Overview

Risk management is integral to the whole business of the Group. The management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

Credit risk

The principal risk to which the Group is exposed is credit risk in connection with the guarantee contracts it has issued. The credit risk represents the loss that would be recognised upon a default by the parties to which the guarantees were given on behalf of. To mitigate these risks, management continually monitors the risks and has established processes including performing credit evaluations of parties it is providing the guarantee on behalf of. Guarantees are only given to its subsidiaries.

The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. If the customers are independently rated, these ratings are used. Otherwise, the credit quality of customers is assessed after taking into account its financial position and past experience with the customers.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.

Cash and fixed deposits are placed with banks and financial institutions which are regulated.

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

31. FINANCIAL RISK MANAGEMENT (CONT’D)

Liquidity risk (cont’d)

In addition, as at the reporting date, the Group maintains various lines of credit, amounting to $869,434,000 (2012: $769,559,000), of which $756,034,000 (2012: $659,309,000) are uncommitted.

Market risk

Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Foreign currency risk

The Group incurs foreign currency risk mainly from foreign currency denominated sales, purchases and borrowings that are denominated in currencies other than the various functional currencies of Group entities. The currencies giving rise to this risk are primarily the United States Dollar (“USD”), Indonesian Rupiah (“IDR”), Philippines Peso (“PHP”) and Thailand Baht (“THB”). Movements in their exchange rates against the Singapore dollar could result in the Group incurring foreign exchange losses/gains.

The Group recognises that any significant fluctuations in the USD dollar may affect the Group’s foreign currency risk. As a result, the Group actively monitors its exposure and uses forward foreign exchange contracts and hybrid swaps to hedge against USD dollar exposures, as and when necessary and where possible.

In view of the nature of the Group’s business which spans several countries, foreign exchange risks will continue to be an integral aspect of the Group’s risk profile in the future.

Interest rate risk

The Group hedges its exposure to changes in interest rates on certain borrowings by entering into interest rate swaps and hybrid swaps.

Insurance risk

The Company only issues guarantees to its subsidiaries.

Capital management

The Board’s policy is to maintain a sound capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, retained earnings and non-controlling interest of the Group. The Board of Directors monitors the return on capital, which the Group defines as net operating income divided by total shareholders’ equity excluding minority interest. The Board also monitors the level of dividends to ordinary shareholders.

The Group has a share buy-back mandate to purchase its own shares on the market; the timing of these purchases depends on market prices. Primarily, the shares purchased are intended to be used for issuing shares under the Group’s share option programme. Buy and sell decisions are made on a specific transaction basis by the Board. No shares have been purchased to date.

There were no changes in the Group’s approach to capital management during the year.

103102



32. COMMITMENTS

Operating lease commitments

At 31 December, the Group has commitments for future minimum lease payments under non-cancellable operating leases as follows:

Group

2013 2012

$’000 $’000

Payable:

Within 1 year 4,943 4,175

After 1 year but within 5 years 3,930 3,670

8,873 7,845

The Group leases office premises and warehouse facilities under operating leases. The leases typically run for an initial period of three years, with an option to renew the lease after that date.

33. CONTINGENT LIABILITIES (UNSECURED)

Guarantees issued

At 31 December, there were contingent liabilities in respect of the following:

(a) Guarantees given to suppliers by the Company in respect of credit facilities extended to certain subsidiaries and associates amounted to $400,585,000 (2012: $370,065,000), of which the amount utilised was $197,611,000 (2012: $118,859,000). The guarantees are renewed on a yearly basis; and

(b) Guarantees given to financial institutions by the Company in respect of credit facilities extended to certain subsidiaries and associates amounted to $376,404,000 (2012: $331,453,000), of which the amount utilised was $137,685,000 (2012: $121,240,000). The guarantees are renewed on a yearly basis.

The Company has accounted for these corporate guarantees as insurance contracts. There are no terms and conditions attached to the guarantee contracts that would have a material effect on the amount, timing and uncertainty of the Group’s future cash flows.

The Company has undertaken to provide continuing financial support to certain subsidiaries to enable them to continue to operate as going concerns and to meet their obligations as and when they fall due.

34. RELATED PARTIES

Transactions with directors and other key management personnel

Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and controlling the activities of the Group. The directors and directors of subsidiaries and members of the management team are considered as key management of the Group.

Key management personnel compensation comprises remuneration of directors and other key management personnel as follows:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Directors of the Company

- Short-term employment benefits 2,102 2,255 2,102 1,655

- Other long-term benefits 21 22 21 7

Directors of the subsidiaries

- Short-term employment benefits 2,656 2,490 1,106 973

- Other long-term benefits 64 65 36 35

Executive officers

- Short-term employment benefits 3,536 3,650 – –

- Other long-term benefits 106 76 – –

8,485 8,558 3,265 2,670

During the year, certain of its subsidiaries have, in the normal course of business entered into the following transactions with companies in which certain directors have interests:

Group

2013 2012

$’000 $’000

Purchase of information technology products and services 112 140

Sales of information technology products and services 14,201 15,680

The directors and other key management personnel participate in the Company’s share option plans, the terms and conditions of which are stated in note 16.

105104


Notes to the financial statements

34. RELATED PARTIES (CONT’D)

Other related party transactions

For the purpose of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Other than disclosed elsewhere in the financial statements, during the financial year, there were the following significant transactions with related parties, based on terms agreed by the parties:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Subsidiaries

- dividend income – – 9,030 4,981

- interest expense – – (304) (267)

- interest income – – 4,826 4,966

- management fee income – – 1,434 1,754

Affiliate

- sales 305,149 152,394 – –

- purchases (209) (2,889) – –

Associates

- dividend income 1,581 2,443 1,581 2,443

- interest income 156 39 156 39

- management fee income 754 1,018 754 1,018

- service fee income 1,269 1,284 1,269 1,284

Shareholdings StatisticsAs at 13 March 2014

Class of shares - Ordinary shares Voting rights - On a show of hands : One vote for each member On poll : One vote for each ordinary share

ANALYSIS OF SHAREHOLDINGS

Range of Shareholdings No. of Shareholders % No. of Shares % 1 - 999 6 0.84 2,196 0.00

1,000 - 10,000 401 56.48 2,143,089 0.59

10,001 - 1,000,000 296 41.69 22,458,000 6.12

1,000,001 and above 7 0.99 342,206,889 93.29

710 100.00 366,810,174 100.00

Based on information available to the Company as at 13 March 2014, 10.29% of the issued ordinary shares

of the Company are held by the public and therefore Rule 723 of the Listing Manual is complied with.

TOP 20 SHAREHOLDERS

No. Name of Shareholder No. of Shares %1 Raffles Nominees (Pte) Ltd 328,175,093 89.472 Citibank Nominees Singapore Pte Ltd 3,665,000 1.003 UOB Kay Hian Pte Ltd 3,037,000 0.834 DBS Nominees Pte Ltd 2,670,000 0.735 Maybank Kim Eng Securities Pte Ltd 1,744,796 0.486 Liew Chee Kong 1,512,000 0.417 Hong Leong Finance Nominees Pte Ltd 1,403,000 0.388 Eddie Foo Toon Ee 900,000 0.259 See Beng Lian Janice 890,000 0.2410 United Overseas Bank Nominees Pte Ltd 870,000 0.2411 Lim & Tan Securities Pte Ltd 670,000 0.1812 HSBC (Singapore) Nominees Pte Ltd 623,000 0.1713 See Lop Fu James @ Shi Lap Fu James 619,000 0.1714 Phillip Securities Pte Ltd 595,000 0.1615 Lim Meng Seng 580,000 0.1616 Narong Intanate 569,000 0.1617 OCBC Securities Private Ltd 502,000 0.1418 DB Nmominees (S) Pte Ltd 440,000 0.1219 Tan Ah Pee 400,000 0.1120 CIMB Securities (S) Pte Ltd 367,000 0.10

350,231,889 95.50

SUBSTANTIAL SHAREHOLDERS

Name of Number of shares Number of shares Total Percentage shareholder shares registered in which substantial (%) in the name of the shareholder is deemed substantial Shareholder to have an interest VST Holdings Limited - 327,580,093(1) 327,580,093 89.31

L&L Limited - 327,580,093(1) 327,580,093 89.31

Notes :(1) Deemed interest through Raffles Nominees Pte Ltd

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ECS HOLDINGS LIMITED(Incorporated in The Republic of Singapore)

Co. Reg. No.: 199804760R

8 Temasek Boulevard


Singapore 038988

Phone: +65 6659 6888 | Fax: +65 6884 7549 | Website: www.ecs.com.sg

ECS Holdings Limited Annual Report 2013

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Transcript of ECS Holdings Limited Annual Report 2013