Audit Committee - ECS Holdings Limited

ECS Holdings Limited 

ANNUAL REPORT 2001 

37 

ECS Holdings Limited • Annual Report 2001 

®

CONTENTS 

About ECS Holdings Limited 1 

Our Geographic Presence 2 

Key Events 3 

Financial Highlights 4 

Chairman’s Message 12 

Chief Executive Officer’s Message 14 

Operations Review 17 

Board of Directors 29 

Management Staff 30 

Organisation Chart 31 

Corporate Governance 32 

Corporate Information 34 

38 

ECS Holdings Limited • Annual Report 2001

ABOUT ECS 

ECS Holdings Limited (“ECS”) is the holding company of a group 

of four companies comprising ECS Computers (Asia) Pte Limited 

in Singapore, K.U. Sistem Holdings Sdn Bhd in Malaysia, The Value 

Systems Co., Limited in Thailand and PCI-SLR Technology (China) 

Limited in China (“the Group”). 

The Group is a leading e-infrastructure enabler and e-services 

provider serving and supporting Asia’s growing internet 

economies. 

The substantial shareholders of ECS comprise: 

Pacific City International Holdings Limited 19.3% 

Solectron Technology Singapore Pte Ltd 19.3% 

Technocrat Investments Limited 13.0% 

The shares of ECS are listed on the mainboard of the Singapore 

Exchange Securities Trading Limited as of 9 February 2001. 

Note to Shareholders 

ECS Holdings Limited would like to inform our shareholders that the 

comparative financial information for the years 1998 to 2000 as set out in 

the Financial Highlights, Chairman’s Message, Chief Executive Officer’s 

Message and Operations Review sections of this Annual Report on Pages 4 

to 28, where applicable, are presented on a pro forma basis. The “Pro forma 

Group” refers to the companies which now form part of the ECS Holdings 

Group as a result of the restructuring exercise that was mentioned in our 

Prospectus dated 30 January 2001. The pro forma results had been prepared 

as if the restructured ECS Holdings Group had always been in existence. 

The pro forma results for the years 1998 to 2000 have been arrived at after 

making the pro forma adjustments described in the Prospectus. 

1 


OUR GEOGRAPHIC PRESENCE 


Blk 19 Kallang Avenue 

#07-153 

Singapore 339410 

Mr Tay Eng Hoe 

(Group Chief Executive Officer) 

ECS Computers (Asia) 

Pte Limited 

Blk 19 Kallang Avenue 

#07-153 to 159 


Website: www.ecssin.com.sg 

Mr Foong Kam Tho (President) 

Chengdu 

Thailand 

Malaysia 

Singapore 

2 

Beijing 

Wuhan 

Shanghai 

Shenyang 

Shenzhen 

Guangzhou Hong Kong 

The Value Systems Co., Limited. 

34th Floor, Charn Issara Tower 2 

2922/328-331 

New Petchburi Road Bangkapi, 

Huay-Kwang Bangkok 10320, Thailand 

Website: www.value.co.th 

Mr Narong Intanate (President) 

K.U. Sistem Holdings Sdn. Bhd. 

107 Block C Glomac Business Centre 

10 Jalan SS6/1 Kelana Jaya 47301 

Petaling Jaya Malaysia 

Websites: www.peri.com.my 

www.astar.com.my 

Mr Foo Sen Chin (Managing Director) 


Group Headquarter 

Branches of PCI-SLR Technology 

(China) Limited 

Subsidiary of ECS 

Holdings Limited 

China Headquarter 

PCI-SLR TECHNOLOGY 

(CHINA) LIMITED 

PCI Building, 

No. 50 Jianzhong Road, 

Tianhe Software Park, 

Guangzhou, 

P.R.C. (510665) 

Website: www.pci.com.cn 

Mr Liu Wei 

(Chief Executive Officer)

January 2001 

Initial Public Offering 

KEY EVENTS 

The Group’s Initial Public Offering (“IPO”) was launched on 31st January 

2001. At the IPO, 40,000,000 shares comprising 35,545,000 New Shares 

and 4,455,000 Vendor Shares were offered as follow: 

1) 3,000,000 Offer Shares at $0.66 each by way of public offer; 

2) 37,000,000 Placement Shares by way of placement comprising:- 

(a) 32,325,000 Placement Shares at $0.66 for each Placement Share 

for applications by way of application forms; 

(b) 3,000,000 Placement Shares at $0.66 for each Placement Share 

reserved for applications through the Internet; and 

(c) 1,675,000 Reserved Shares at $0.66 for each Reserved Share by 

way of offer to our Directors and key Executive Officers, 

We received a total of 17.6 times subscription for our public offer. 

July 2001 

Signed Merger Agreement with 

Pacific City International Holdings Limited 

ECS Holdings Ltd (“ECS”) entered into a conditional sale and purchase 

agreement with Pacific City International Holdings Limited (“PCIH”) to 

acquire 5,865,000 ordinary shares of par value US$1.00 each in the 

capital of PCI-SLR Technology (China) Limited (“PCI”) representing 51% 

of the issued and paid-up share capital of PCI from PCIH. The 

consideration will be satisfied in cash of US$12.5 million and 60 million 

new ordinary shares of par value $0.10 each in the capital of ECS. 

December 2001 

Completion of Merger and Placement 

1) Completion of the merger with PCI-SLR Technology (China) Limited. 

2) Placement of 40,000,000 Ordinary Shares at $0.67 per share raising 

net proceeds of approximately $26 million. These funds were used to 

reduce the Group’s bank borrowings and support its additional 

working capital needs. 

3 


600,000 

500,000 

400,000 

300,000 

200,000 

100,000 

FINANCIAL HIGHLIGHTS 

0 

20,000 

16,000 

12,000 

8,000 

4,000 

- 

10.00 

9.00 

8.00 

7.00 

6.00 

5.00 

4.00 

3.00 

2.00 

1.00 

- 

187,596 

1998 

221 

(1) 

Revenue (S$’000) 

267,074 

4 

434,070 


552,030 

1999 2000 2001 

8,289 

4,796 

18,093 

11,169 

20,602 

13,463 

1998 1999 2000 2001 

Profit before taxation 

Profit (S$’000) 

Profit after taxation and minority interests 

Earnings Per Share (cents) 

(0.00) 

6.39 

9.06 

6.41 

1998 1999 2000 2001


Revenue 

The Group’s revenue rose from $434.1 million in 2000 to $552.0 million in 2001 

representing an increase of approximately 27.2% or $117.9 million over that of the 

previous year. 

This year’s revenue included one month’s contribution of our operations in China 

amounting to $71.4 million, after the completion of the acquisition of the subsidiary, 

PCI-SLR Technology (China) Limited on 3 December 2001. 

Performance for 2001 was achieved on the back of difficult market conditions arising 

from the regional economic slowdown and also the aftermath of the September 11 

incident. The economic slowdown was more evident in the later part of the second 

half of the year, which is traditionally the Group’s better half-year. Nonetheless, the 

Group achieved a better performance from growth in all its three business segments 

in 2001. 

Profit 

The Group’s profit after taxation and minority interests rose from $11.2 million in 2000 

to $13.5 million in 2001 representing an increase of 20.5% over the previous year. 

Our China’s operations contributed $0.5 million to the Group’s profit after taxation and 

minority interest. 

Earnings Per Share 

Earnings per share fell from 9.06 cents in 2000 to 6.41 cents in 2001, representing a 

decrease of 29.2% over that of the previous year. The decrease is mainly attributable 

to the enlarged share capital of the Company. 

Earnings per share are computed based on the weighted average share capital of the 

Company. During the year, the Company had issued : 

(i) 35,545,000 new ordinary shares pursuant to its initial public offering on 9 February 

2001; 

(ii) 46,000,000 new ordinary shares as part of the consideration for the acquisition 

of PCI-SLR Technology (China) Limited on 3 December 2001; and 

(iii) 40,000,000 new ordinary shares pursuant to the Company’s private 

placement on 11 December 2001. 

5 


100% 

75% 

50% 

25% 

0% 


Group Revenue by Business Segments 

62.6% 

62.6% 

3.5% 2.8% 

33.9% 34.6% 

6 

54.0% 

4.0% 

42.0% 


60.5% 

5.0% 

34.5% 

1998 1999 2000 2001 

IT Products Distribution 

IT Services 

E-enabling Infrastructure


Revenue 

By Business Segments 

The Group experienced growth in all its business segments during the year. 

IT Services 

This segment saw the highest growth in 2001 posting an increase of $10.8 million or 

63.1% from $17.1 million in 2000 to $27.9 million in 2001. Revenue contribution from 

IT services to the Group’s total revenue increased from 3.9% to 5.0%. This growth is 

in line with the Group’s focus with more resources to expand this segment. 

IT Products Distribution 

Revenue from this segment also posted a strong growth by an increase of $99.5 

million representing 42.4% from $234.5 million in 2000 to $334.0 million in 2001. The 

main contributor to the increase is the inclusion of the distribution business from the 

newly acquired subsidiary in China. 

E-enabling Infrastructure 

Revenue from the e-enabling infrastructure segment registered a lower growth rate 

with an increase of $7.7 million representing 4.2% from $182.5 million in 2000 to 

$190.2 million in 2001. This is mainly due to the cut back of IT expenditure by major 

customers within this business segment in Singapore. 

7 



Group Revenue by Geographical Segments 

48.00% 

50.40% 

1998 1999 

19.30% 

32.70% 

19.50% 

30.10% 

8 

46.10% 


21.10% 

32.80% 

2000 2001 

39.40% 

12.90% 

29.00% 

18.70% 

Singapore Malaysia Thailand China


Revenue 

By Geographical Segments 

Singapore 

Following the cut back of IT expenditure by major customers during the year, our 

Singapore’s operations revenue experienced a slight drop of 0.7% from $219.0 million 

in 2000 to $217.5 million in 2001. 

Thailand 

Revenue from our Thai operations showed a strong growth increasing by $29.3 million 

representing 22.4% from $130.6 million in 2000 to $159.9 million in 2001. 

The new product lines introduced in 2000 helped to contribute to the increase in revenue 

during the year. 

Malaysia 

Revenue from our Malaysian operations also saw strong growth of 22.2%, increasing 

from $84.5 million in 2000 to $103.3 million in 2001, an increase of $18.8 million over 

the previous year. 

Like Thailand, Malaysia also introduced new product lines in 2000 which also helped 

improve the revenue contribution from this market. 

China 

With the completion of the acquisition of PCI-SLR Technology (China) Limited on 3 

December 2001, the one-month’s contribution from the China’s operations to the 

Group’s revenue amounted to $71.4 million. 

9 


1.50 

1.00 

0.50 

4000 

2000 

0 

15.00 

10.00 

5.00 

- 

- 

1.38 


2,230 

Interest Coverage (Times) 

1.10 

1.16 

0.26 0.23 

Interest Expenses (S$’000) 

1,189 

7.97 

10 

13.19 

1998 1999 2000 2001 

Interest Coverage 

(PBIT / Interest Expense) 

0.27 

1.35 

1998 1999 2000 2001 

Debt equity ratio 

Leverage Ratios 

External borrowings vs total assets 

1,484 

1998 1999 2000 2001 


0.91 

0.22 

1,792 

12.50


Leverage Ratios 

In FY 2001, following the completion of the merger with PCI, the Group’s borrowings 

and total assets rose as a result of the inclusion of both the borrowings and the assets 

of the new subsidiary. 

However, with the proceeds from the IPO and the placement, the gearing ratio of the 

Group declined from 1.35 in 2000 to 0.91 in 2001. Correspondingly, the ratio of external 

borrowings over total assets of the Group also dipped from 0.27 in 2000 to 0.22 in 

2001. 

Interest Expense and Coverage 

The Group’s interest expense during the year was affected by the inclusion of the 

interest expense of PCI following the completion of the merger in December 2001. In 

FY 2001, the Group’s interest expense rose to $1.8 million from $1.5 million in the 

previous year. The higher interest expense for the year also affected the interest 

coverage of the Group, which slipped marginally from 13.2 times in 2000 to 12.5 times 

in 2001. 

11 


Chester Lin Chien 

Chairman 

The Year in Perspective 

12 


CHAIRMAN’S 

MESSAGE 

“ The framework that we 

have put in place over the last 

twelve months has given the 

Group a firm foothold into the 

large China market. 

” 

On behalf of the Board and Management of ECS Holdings Limited. (“ECS” or “the 

Group”), I am pleased to inform our shareholders that despite the weak economic 

condition in the region, the Group has performed well with the support and hard work 

of all our staff across the region over the last twelve months. 

In FY 2001, the Group posted strong growth in its revenue and after tax net profit 

notwithstanding the events of September 11, 2001 and the economic uncertainties 

surrounding the region. Revenue for the year rose 27% from $434.1 million to $552.0 

million while post tax net profits increased from $11.2 million to $13.5 million 

representing a rise of about 20% for the year. The strong performance is a result of the 

higher revenue contributions from Malaysia and Thailand while the contribution from 

Singapore was slightly lower due to a pull back of IT expenses by both the corporate 

and consumer sectors in the country. 

The year posted many new challenges for the Group with the acquisition of our China 

subsidiary, PCI-SLR Technology (China) Limited (“PCI”) and the placement of 

40,000,000 new shares into the market in December 2001. Placed at $0.67 per share, 

the private placement brought in net proceeds of about $26 million. The funds were 

used to repay bank borrowings of the Group which were substantially incurred in 

connection with the acquisition of PCI-SLR Technology (China) Limited with the balance 

of the net proceeds to be utilised as additional working capital and to undertake 

strategic acquisitions to expand the business and operations of the Group.

CHAIRMAN’S MESSAGE 

The acquisition of PCI was completed in December 2001. Following this completion, 

we were able to recognize one-month revenue and profit contribution from our China 

subsidiary in the 2001 financial year. I would like to take this opportunity to welcome 

Mr Liu Wei, the Chief Executive Officer of PCI-SLR Technology (China) Limited and all 

his staff to ECS and we look forward to the opportunity of working with them. I am 

confident that with the strong team at the helm of ECS the Group is a step closer to its 

vision to become one of the leading IT distributors in the region. 

Looking Ahead 

We believe that the worst is over although economic recovery in the region remains 

uncertain amidst signs of a more positive outlook for FY 2002. Despite these 

uncertainties, we are confident that once the economic recovery sets in, the demand 

for IT products and services will increase significantly. 

The framework that we have put in place over the last twelve months has given the 

Group a firm foothold into the large China market. Furthermore, into the new financial 

year, ECS has also adopted a new business strategy aiming at migrating from its 

traditional role in volume distribution of IT products into the areas of value-added IT 

products distribution. This new strategy optimally positions the Group to meet the 

new e-infrastructure enabling needs in the region as the countries emerge from the 

recent economic slowdown. 

The smooth integration of PCI with the rest of ECS’s operations has been extremely 

encouraging. In 2002 we will continue to focus our attention on further integrating and 

aligning our China operations. This will ensure that all business units within the Group 

can work together optimally sharing market intelligence, knowledge and know-how 

throughout the entire organisation. 

Finally, on behalf of the Board and Management of ECS Holdings Limited, I would like 

to thank all our shareholders, customers, principals, employees, business associates 

and friends for their trust and confidence in 2001. Mr Hsieh Fu Hua has resigned as 

non-executive director of the Company with effect from 4 March 2002. The Board and 

I would like to thank Mr Hsieh for his contributions during his appointment. 

We would like to welcome Mr Teo Ek Tor who was appointed as a director with effect 

from 4 March 2002. Mr Teo has vast experience in the finance industry. With his 

experience, Mr Teo will be able to contribute significantly to the Group. 

We looking forward to your continuing support in the new financial year as we move 

ahead to meet the new challenges ahead of us. 

The Board recommends a first and final gross dividend of 6% per ordinary share of 

$0.10 each in respect of the financial year ended 31 December 2001. 

Chester Lin Chien 

Chairman 

13 


TAY ENG HOE 

Group Chief Executive Officer 

Highlights Of The Year 

14 


CEO’S 

MESSAGE 

” 

2001 saw major developments within ECS Holding Limited (“ECS” or “the Group”) 

marked by the merger with PCI-SLR Technology (China) Limited (“PCI”), the third largest 

IT products distributor in the People’s Republic of China (“PRC” or “China”) and the 

share placement of 40,000,000 new ordinary shares at $0.67 per share in December 

2001. Both events, receiving strong support from our shareholders and investors, were 

completed smoothly on time. 

Our Financial Performance 

“ We will aggressively 

expand our value-added 

IT products and IT services 

business, to complement our 

existing volume base 

business, 

China. 

especially in 

The Group successfully turned in a 27% increase in revenue and 20% increase in post tax 

net profits despite the weak economic conditions that prevailed throughout the region 

during the year. Especially significant were the events of September 11, which brought the 

global economy to a virtual standstill. During the year, the Group delivered revenues of 

$552.0 million and post tax net profits of $ 13.5 million compared to the $434.1 million and 

$11.2 million reported in FY 2000. The improved performance is attributable to the higher 

contributions from both Thailand and Malaysia. Although the contribution from Singapore 

remained relatively static as both businesses and consumers postponed their IT 

expenditures, Singapore’s profitability showed an improvement of 1.2% despite the lower 

revenue and the challenging environment during the year. This is attributable to the 

contribution from value added and IT services businesses like consultancy, training and 

maintenance. Relative to the traditional volume distribution business, these businesses 

command better profit margins.

CEO’S MESSAGE 

Also contributing to our performance in FY 2001 is a one-month revenue and profit 

contribution from PCI following the completion of the merger in December 2001. Revenue 

contributed by PCI to the Group totaled approximately $71.4 million with a post tax net 

profit of about $0.5 million. Into the new 2002 financial year, PCI will play an important role 

in contributing to the Group’s performance. With the assistance and cooperation of many 

staff in the Group, we were able to smoothly integrate the operations of PCI into the entire 

Group. Riding on the strengths and synergies within both companies, we are now in a 

stronger position to enhance our business operations and this is likely to boost the 

performance of the entire group in the financial year 2002. 

Our People Asset 

As at 4 March 2002, Mr Liu Wei, the Chief Executive Officer of PCI, effectively assumes his 

new appointment as the Vice Chairman of ECS Holdings Limited. Liu Wei is well recognized 

in China for his achievements in the PRC. Especially impressive is his ability in growing PCI 

into the third largest IT products distributor in the PRC over the last decade. In recognition 

of his achievements, Liu Wei was named as one of the top ten most outstanding achievers 

in China by IT magazines. 

Corresponding to the growth of the Group, we have also expanded our staff strength. In 

January 2002, we recruited a new Group Chief Operating Officer, Mr Jansen Ek, who will be 

responsible for the operations of ECS. Jansen brings with him many years of experience 

from his previous employment in Hewlett Packard and Silicon Graphics. I would like to take 

this opportunity to welcome Jansen into the ECS family. 

Looking ahead 

After the turbulence in FY 2001, we believe that the global scene in FY 2002 will be relatively 

more optimistic. The new financial year will see the full year contribution from PCI China. 

With the network of about 4200 resellers in China and another 4000 in Singapore, Malaysia 

and Thailand, we now have an expanded network of more than 8200 resellers in the region. 

Today, ECS has one of the largest networks of resellers in the region. 

On our business strategy, we will continue to invest in building up our people, infrastructure 

and IT system to improve our operational efficiency and reduce cost. We will be stepping 

up our B2B e-commerce operations. Presently Thailand has successfully implemented its 

B2B e-commerce operations to serve its reseller network in the country. We are now ready 

to duplicate this model into our operations in Malaysia and the PRC. The B2B e-commerce 

system is expected to come on stream for Malaysia and the PRC in 2002. In Singapore, our 

B2B system will be further enhanced to serve the expanded needs of the enlarged Group. 

We will aggressively expand our value-added IT products and IT services business, to 

complement our existing volume base business, especially in China. Since January 2002, 

our China operations has created a new value-added product and IT services unit to 

complement its existing volume base business. The division is building up smoothly as the 

team has been able to leverage on the successful experiences from Singapore and shortened 

the learning cycle. Once established, this unit will be able to bring in the better margin 

businesses focusing on high-end products like Unix server, storage, security and network 

products and IT services like consultancy, implementation, maintenance and training. 

15 


Notwithstanding our commitment to focus on the business growth in China, we will continue 

to be on the look out and open to any opportunities that may arise for us to enter into 

strategic alliances and partnerships, especially in countries like India, Philippines, Indonesia 

and Indochina. 

Finally, I would like to thank all our shareholders, our customers, our principals and our 

staff for their support and contribution amidst difficult economic environment in FY 2001 

and I look forward to your continuing support in the new financial year. 

TAY ENG HOE 


CEO’S MESSAGE 

16 


OPERATIONS REVIEW 

Signing Ceremony for the merger with PCI-SLR Technology (China) Limited. 

FY 2001 was a challenging year for the Group as global economies roller coaster 

through the events created by declining demand in the IT industry across the world. 

This situation was further exacerbated by both economic and political uncertainties 

brought about by the events of September 11, 2001. 

Notwithstanding the difficult and uncertain business climates in the region, the Group 

managed to turn in a strong performance with a 27% rise in its revenue for the year 

and a 20% increase in post tax net profits. The revenue for the year rose from $434.1 

million in FY 2000 to $552.0 million in FY 2001 while post tax net profits rose to $13.5 

million from $11.2 million in the previous year. 

The highlights of the year were the acquisition of 51% of the shares of PCI-SLR 

Technology (China) Limited (“PCI”) and the placement of 40,000,000 new shares in 

December 2001 at a price of $0.67 per share. Additionally 15,000,000 vendor shares 

were also placed out simultaneously during the same period as the issuance of the 

new shares to help increase the liquidity of ECS’s shares in the market. Net proceeds 

of approximately $26 million were raised through the new share placement and the 

funds were used to reduce the Group’s bank borrowings and support its working capital 

needs. 

17 



Our China Headquater in Guangzhou, China. 

18 



PCI is our first major footprint into the People’s Republic of China (“PRC” or “China”). 

Headquartered in Guangzhou, PCI ranks as the third largest IT products distributor in 

China with a network of 8 offices and 11 warehouses across China and a workforce of 

over 628 employees. The market share of PCI is 14% in IT-distribution business in 

China as researched by IDC. The Group acquired 51% of PCI’s equity holdings for a 

consideration of US$12.5 million cash and 60,000,00 shares. This acquisition was 

successfully completed on 3 December 2001. As such, we were able to recognize 

one-month revenue and profit contribution from PCI amounting to $71.4 million and 

$0.5 million respectively. The integration of PCI into the Group’s operations was 

undertaken smoothly and while we will continue with the integration process into the 

new financial year, we are confident that we will be able to complete this exercise 

according to plan. 

In January 2002, our management team also expanded when Mr Jansen Ek joined us 

as the Group Chief Operating Officer. Mr Ek brings with him 24 years of experience 

from his previous employment with Hewlett Packard and Silicon Graphics during which 

he was responsible for the Asia Pacific markets. This experience is extremely valuable 

to ECS, especially in view of the Group’s rapid expansion into the markets in the Asia 

Pacific region. 

March 2002 saw the appointment of Mr Liu Wei as the Vice Chairman of ECS. With his 

experience in the IT products distribution industry and his strong reputation among 

customers in China and the principals in the international IT industry, Mr Liu will help 

to further strengthen and enhance the management capabilities within the Group. 

19 



Segmental Analysis 

By Products and Services 

IT Products Distribution continues to predominate with a contribution of $334.0 million 

during the year representing approximately 60% of the Group’s total revenue. This is 

followed by E-enabling Infrastructure and IT Services which contributed approximately 

$190.2 million and $27.8 million or 35% and 5% of the Group’s revenue respectively. 

However, IT Services which posted a growth rate of 63.1% over that of the previous 

year showed the highest growth for the year. 

On a profit before interest and taxation level, once again IT services showed the highest 

percentage increase rising from $2.8 million to $5.6 million representing a growth of about 

97.5%. IT Products Distribution grew by about 29.2% while E-enabling Infrastructure showed 

a 12.0% decline. The highest contributor to the Group’s profit before interest and taxation 

is from E-enabling Infrastructure with $10.3 million followed by IT Products Distribution and 

IT Services contributing $6.5 million and $5.6 million respectively. On a percentage basis, 

contributions from E-enabling Infrastructure business comprise about 46% of the profits 

before interest and taxation while IT Products Distribution contributed 29% and IT Services 

contributed 25%. 

The ECS Group serves a network of more than 8,000 resellers across Asia. 

20 



By Geographic Region 

Singapore remained the highest contributor to the Group’s revenue turning revenues 

of about $217.5 million representing about 39.4%. This is followed by Thailand with a 

revenue contribution of $159.9 million (29.0%) and Malaysia with a contribution of 

$103.3 million (18.7%). With the completion of the merger of PCI, the Group recognized 

a one-month revenue contribution from China amounting to approximately $71.4 

million. 

At the profit before interest and taxation level, Thailand showed the highest pre-tax 

profits growth in FY 2001. Profit before interest and taxation from Thailand rose from 

$6.6 million in FY 2000 to $7.4 million in FY 2001 representing an increase of about 

13.4%. Singapore continues to predominate with a pre-tax profit of about $10.8 million 

representing approximately 48.4% of the Group’s aggregate profit before interest and 

taxation although the increase over the previous year’s contribution was slightly lower 

by about 1.2%. Malaysia showed a slight decrease in its profit before interest and 

taxation declining 2.6% from $2.3 million in FY 2000 to $2.2 million in FY 2001. 

Celebrating yet another handshake with Hewlett Packard in China. 

21 



Signing ceremony for the appoinment as IBM enterprise server distributor. 

Highlights of the year by markets 

CHINA 

FY 2001 saw the expansion of PCI into north eastern China with the establishment of 

the Shenyang branch in June 2001. This is the seventh distribution branch to be opened 

by PCI and it will help distribute IT products and services to customers in the north 

eastern part of China. 

Another major event during the year is the series of road shows conducted between 

May and September 2001 covering Shenyang, Beijing, Shanghai, Wuhan, Guangzhou 

and Chengdu. These road shows aim to strengthen PCI’s relationship with its core 

channel partners throughout China. Termed the Core Channel Partners Program, these 

road shows saw the participation of more than 600 core channel partners through 

China. 

In March 2002, the new ERP system within PCI became operational. Established at a 

cost of about US$3.0 million, the Oracle 11i ERP system will provide real time 

management information system as well as raise the capabilities of the CRM and ecommerce 

system within the organization. 

22 



In its position as the third largest IT products distributor in China, PCI frequently receives 

recognition from its principals for various achievements. In 2001, among the many 

awards that the company received are the “Asia Pacific’s Highest Growth Award” from 

CISCO in July, the “FY 01 Best Performance Award” from Hewlett Packard in December 

and the “Asia Pacific’s Destop Best Distributor Award” from IBM in March 2002. 

PCI became part of a public listed company in Singapore upon the completion of the 

merger in December 2001. This major corporate milestone will open up new business 

avenues, resources as well as knowledge and know how to PCI as it taps into the 

extensive network and strong management of ECS. 

Prospects in FY 2002 

Following its merger into ECS Holdings Limited., PCI will now have access to new 

capabilities and know how from ECS. In FY 2002, PCI will be expanding its traditional 

volume driven IT products distribution business into value-add IT products distribution. 

The company will mirror the successful business model from ECS Singapore into the 

China market. Under the value-added distribution business, PCI will now expand into 

the distribution of e-enabling infrastructure products like networking products, Unix 

systems, storage systems and related software. A technical support team has been 

set-up in order to provide better services to channel partners and major account. 

With respect to the company’s volume distribution business, it’s strategy will be to 

increase the focus on product lines that are more stable and those which the company 

has significant market share. These product lines will include HP and IBM. 

In terms of its customers, the company aims to focus on large corporate accounts in 

key industries like telecommunication, banking and finance, the financial securities 

industry, as well as system integrators. 

23 



MALAYSIA 

Our Malaysian operations saw strong demand from the government and corporate 

sectors during the year. Among the contracts that were supplied in FY 2001 by 

K.U.Sistem Holdings Sdn Bhd (K.U.Sistem) to their resellers are: POS Malaysia for 

IBM PCs and Servers, Telekom Malaysia and Shell Malaysia for Sun Microsystems 

Servers, Celcom for IBM Lotus Software and FELDA for Cisco switches and routers. 

One of the more challenging projects undertaken by our Malaysian subsidiary during 

the year was the e-Book project for the supply of wireless network at 50 schools 

nationwide. This project requires the contractors to install, implement and commission 

the network system for schools in major towns as well as remote villages in the states 

of Kedah, Penang, Johor, Malacca, Terengganu, Perak, and Selangor. One of our roles 

in this e-Book project was to determine the best location to install the wireless access 

points in each school compound to link the Cisco switch and router, which is connected 

to the Internet via an ISDN line. 

In recognition for its achievements in 2001, K.U.Sistem received many awards from 

major international IT principals. Some of these include the HP Highest Growth 

Wholesaler, Canon Top Three Distributor for Bubblejet, Laser Printer and Scanner, 

IBM/Lotus Top Software Distributor for Asean/South Asia and Lexmark Top Laser Printer 

Distributor. 

During the year, K.U.Sistem implemented a new ERP system with Financial, Trade 

and Logistics applications to increase its operating efficiencies and productivity. 


The economic outlook in Malaysia remains uncertain into 2002 although recovery can 

be expected in the second half of the year. However, like other Asean countries, 

economic recovery will be largely dependent on the state of the US economy. 

For its business, our Malaysian subsidiary will continue to focus on two major customer 

sectors, namely the government and corporations with emphasis on 

telecommunications, banking and finance, and education. 

Following the overall strategy of the Group, K.U.Sistem will expand its capabilities 

beyond the traditional IT products distribution business into value-added IT products 

with more focus on Unix servers and software. To support the new business direction, 

the company will invest in human resources to ensure that its technical staff are trained 

and certified to handle the value added IT products and services. In addition, 

K.U.Sistem will also join the rest of the Group to implement a B2B online system to 

serve its resellers. 

24 



ECS also has the ability to offer e-Enabling Infrastructure Services. 

SINGAPORE 

In FY 2001, our Singapore office performed relatively well considering the weak 

economic conditions in the country. 

ECS Singapore continues to grow its customer base despite the challenging and 

competitive environment in the market during the year. New business alliances were 

forged with a diversity of local and multinational customers from different industries. 

Through joint efforts with our strategic partners including system integrators and 

solutions implementers, we were able to win major contracts from the public and the 

banking and finance sectors. One of the major contracts awarded during the year is 

the development of the Construction and Real Estate Network (“CORENET”), a major 

IT initiative spearheaded by the Building and Construction Authority of Singapore 

(“BCA”). CORENET helps to re-engineer business processes such as the electronic 

submission, processing and approval of building projects over the Internet. Major 

projects wins are the contracts from the Home Affairs, Education and Defence 

Ministries. These contracts were won through strategic alliances with our business 

partners and they involve the implementation of enterprise level solutions such as 

provisions of servers, storage, network security and the maintenance and supply of 

workstations. Significant firsts were also achieved in FY 2001. One of them is in being 

the first in South East Asia to sell High-End Mainframe class Data Center Servers 

such as the SUN FIRE 15K to a major local bank. 

25 



The Singapore office garnered several major awards from our principals like Hewlett 

Packard, Sun Microsystems and IBM. Some of the awards include the Diamond Award 

for Excellence in Performance, Enterprise Distribution and Channel Development from 

Sun Microsystems; The Top Performing Business Partner from IBM Software and the 

Outstanding Performance in Consumer Business and Highest Shipment Numbers for 

Notebooks from Hewlett Packard. 


In anticipation of an economic recovery in the second half of 2002, the IT market in 

the region is expected to grow by about 13.5% according to a study by IDC. However, 

the economic and political uncertainties that continue to surround the region which 

inevitably left their impact on the decisions by many corporations with respect to their 

IT investments may moderate the rate of growth in the IT industry. Notwithstanding 

the uncertainties, we see growth prospects in the areas of data storage, Internet security 

and managed services. 

The traditional volume distribution business will be further balanced with the valueadded 

IT products distribution business. Representing leading brands and 

technologies from key vendors, we will be able to leverage upon this strength to offer 

total integrated solutions encompassing hardware, software, consulting services, 

training, implementation and maintenance to customers serving them with a one-stop 

center for all their IT requirements. Some of the initiatives we are able to offer include 

High Available Database Infrastructure Services, Enterprise Security Infrastructure, 

Users Access Management and Enterprise e-Enabling Services. These complete 

packages include consultation, training, implementation and post implementation 

support utilizing technologies from technology leaders in their respective fields. 

Corresponding to the thrust by the Group towards implementing the B2B e-commerce 

system, we will further enhance our B2B system so as to provide better quality service 

to our customers. 

26 



THAILAND 

Our Thai subsidiary, The Value Systems Co., Limited achieved major corporate 

milestones during the year. We topped the list of the “Top 1000 Thai Companies” 

published by The Nation Multimedia (Public) Company as the No.1 computer company 

in terms of revenue and profit in 2000 (excluding vendors). Another achievement was 

the selection by The Software Business Alliance (“BSA”) as one of the 10 companies 

in the developing world who has successful implemented e-commerce systems in its 

white paper entitled e-commerce & developing markets for BSA’s Software Policy 

Summit 2001. During the year, our Thai subsidiary was also honored as one of the 

“CIO 100 Honorees” by the CIO magazine for successfully implementing an internally 

developed B2B e-business and sales management information system. This B2B 

system was developed with the use of the Active Server Page and the Crystal Report 

from Crystal Decisions. 

The Value Systems Co., Limited in Thailand also won many awards from global IT 

principals in 2001. Some of the awards received include the “Compaq Excellence 

Award 2001 – Best Performance – Server” and the “Highest Growth Sales Award for 

Portable Distributor Year 2000” from Compaq Computer (Thailand) Limited. and the 

“Distinguished Partner Wholesaler Award FY 2001” from Hewlett Packard (Thailand) 

Limited. 

Staging, testing and configuration to order. 

27 



Some of our Human Capital...... 


According to a report by the Thai Farmer Bank Research Center, the Thai economy is 

expected to post a growth from between 1.6% - 2.8% in 2002, a slight improvement 

from the 1.5% growth seen in 2001. 

Corresponding to the overall strategy of the Group we will be setting up networking 

infrastructure including hardware and software to enhance our management 

information system. Simultaneously we will also be investing in staff training to increase 

our productivity, improve our customer service quality in a move to boost our 

performance and eventually, our profitability. 

Opportunities will come from government projects and the education industry. The egovernment 

and e-education network will help to fuel the industry. Additionally, there 

will also be a growth market in the Service industry as more companies and government 

agencies move towards computerisation and automation. To tap into these business 

opportunities, we will be expanding our traditional volume driven IT products 

distribution business into the area of value-added IT products distribution. These 

combined capabilities will place us in a good position to meet the challenges and 

competition in the market. 

28 


BOARD OF DIRECTORS 

Mr Liu Wei 

Vice Chaiman 



Mr Wong Heng Chong 

Group Chief Financial Officer 

Mr Chay Yee Meng 

Director 

Mr Foo Sen Chin 

Director 

Mr Chester Lin Chien 

Chaiman 

Audit Committee 

Mr Leong Horn Kee (Chairman) 

Mrs Lee Suet Fern 


Compensation Committee 

Mr Chester Lin Chien (Chairman) 

Mr Leong Horn Kee 


29 


Mr Narong Intanate 

Director 

Mr Teo Ek Tor 

Director 

Mr Wang Fangmin 

Director 

Mrs Lee Suet Fern 

Independent Director 

Mr Leong Horn Kee 

Independent Director

MANAGEMENT STAFF 



Mr Jansen Ek 

Group Chief Operating Officer 


Group Chief Financial Officer 

Mr Wee Sien Yang 

Group Financial Controller 

Mr Foong Kam Tho 

President of ECS Computers (Asia) Pte Limited 

Mr Liu Wei 

Chief Executive Officer of PCI-SLR Technology (China) Limited 

Mr Wang Fangmin 

Executive Vice President of PCI-SLR Technology (China) Limited 

Mr Narong Intanate 

President of The Value Systems Co., Limited 

Mr Somsak Pejthaveeporndej 

Vice President of the Sales Division of 

The Value Systems Co., Limited 

Mr Foo Sen Chin 

Managing Director of K.U. Sistem 

Mr Soong Jan Hsung 

General Manager and Executive Director of 

Astar Marketing Sdn Bhd and Pericomp-Sistech Sdn Bhd. 

30 


ORGANISATION CHART 

® 


75%* 

100% 

60% 

51% 

(Thailand) 

The Value 

Systems 

Co., Limited 

(Singapore) 

ECS 

Computers 

(Asia) Pte 

Limited 

(Malaysia) 

K.U. Sistem 

Holdings 

Sdn Bhd 

(China) 

PCI-SLR 

Technology 

(China) 

Limited 

* denotes effective interest 

31 


80% 

100% 

100% 

70% 

100% 

100% 

100% 

Pericomp- 

Sistech 

Sdn Bhd 

K.U. 

Sistem 

Sdn Bhd 

Astar 

Marketing 

Sdn Bhd 

Antara IT 

Sdn Bhd 

PCI-SLR 

International 

Trading 

(Shanghai) 

Co., Ltd 

PCI-SLR 

Technology 

(Guangzhou) 

Co., Ltd 

PCI-SLR 

Technology 

Co., Limited

CORPORATE GOVERNANCE 

BOARD OF DIRECTORS 

The Board at ECS Holdings Limited comprises eleven directors namely Mr Chester 

Lin Chien (Group Chairman), Mr Liu Wei (Group Vice-Chairman), Mr Tay Eng Hoe 

(Group Chief Executive Officer), Mr Wong Heng Chong (Group Chief Financial Officer), 

Mr Chay Yee Meng, Mr Foo Sen Chin, Mr Narong Intanate, Mr Teo Ek Tor, Mr Wang 

Fangmin, Mr Leong Horn Kee (independent) and Mrs Lee Suet Fern (independent). 

ECS 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 current Board of ECS comprises individuals 

with proven track record in the public and/or corporate sector, and is each a highly 

respected member of the business community. 

The Board shall hold at least two formal meetings a year and shall also hold informal 

meetings regularly. The Board of Directors supervises the management of the business 

and affairs of the Group and approves the Group’s strategic operational initiatives, 

major investments and funding decisions. Apart from fulfilling its statutory 

responsibilities, the Board reviews the Group’s financial performance and 

compensation of senior management personnel. These functions are performed either 

directly or through the Board committees like the Audit Committee and the 

Compensation Committee, as well as through a system of Delegation of Authority to 

senior management personnel within the Group. 

AUDIT COMMITTEE 

The Audit Committee comprises our independent directors, Mr Leong Horn Kee and 

Mrs Lee Suet Fern and our Group Chief Financial Officer, Mr Wong Heng Chong. Mr 

Leong is the Chairman of the Audit Committee. The Audit Committee shall meet 

periodically to perform the following functions:- 

• Monitoring the effectiveness of the management of financial business risks and 

the reliability of management reporting; 

• Monitoring the compliance with laws and regulations, particularly those of the 

Companies Act, Chapter 50 and the Singapore Exchange Listing Manual; 

• Reviewing the appropriateness of half year and full year annoucements and 

reports; 

• Reviewing the effectiveness and efficiency of internal and external audits; and 

• Reviewing related party transactions. 

32 


CORPORATE GOVERNANCE 

Specific functions of the audit committee include reviewing the scope of work of the 

internal and external auditors, the assistance given by the Company to the auditors 

and receiving and considering the reports of the internal and external auditors including 

their evaluation of the system of internal controls. The consolidated financial statements 

of the Company are reviewed by the audit committee prior to their submission to the 

Board of Directors for adoption. The audit committee also recommends the 

appointment of the external auditors and reviews the level of audit fees. 

COMPENSATION COMMITTEE 

We have established a Compensation Committee with the responsibility to oversee 

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 and ECS Share Option Scheme II. The Compensation 

Committee of the Board comprises Mr Chester Lin Chien, Mr Leong Horn Kee and 

Mr Tay Eng Hoe. Mr Chester Lin Chien is the Chairman of the Compensation Committee. 

ECS adopts the Best Practices Guide issued by The Singapore Exchange Securities 

Trading Limited and has issued its own internal compliance code on dealings in 

securities by the company, its directors and officers. 

33 


AUDITORS 

KPMG 

Certified Public Accountants 

16 Raffles Quay #22-00 

Hong Leong Building 


(Partner-in-charge : 

Ms Lee Tuck Ngor, Adeline) 

REGISTRAR 

M&C Services Private Limited 

138 Robinson Road #17-00 

The Corporate Office 


CORPORATE INFORMATION 

REGISTERED OFFICE 

19 Kallang Avenue #07-153 


PRINCIPAL BANKERS 

Bank of Communications 

Guangzhou YueXiu Subbranch 

No.4,Guangwei Road 

Guangzhou, P.R.C. 

Citibank N.A., Singapore Branch 

3 Temasek Avenue 

Centennial Tower 


Citibank N.A., Shenzhen Branch 

37th Floor, Shenzhen International 

Financial Building 

2022 Jian She Road 

Shenzhen, P.R.C. 

34 

Deutsche Bank 

6 Shenton Way #15-08 

DBS Building Tower Two 



Oversea-Chinese Banking Corporation 

65 Chulia Street 

OCBC Centre 


Standard Chartered Bank, 

Singapore Branch 

6 Battery Road 


Standard Chartered Bank, 

Shenzhen Branch 

Unit 1-8, 52F, Shun Hing Square, 

Di Wang Commercial Centre, 

No.5002, Shennan Road East. 

Shenzhen, P.R.C. 

United Overseas Bank Limited 

80 Raffles Place 

UOB Plaza 1 


COMPANY SECRETARY 

Wee Sien Yang, CPA

Financial 

Contents 

Directors’ Report 36 

Statement by Directors 46 

Report of the Auditors 47 

Balance Sheets 48 

Profit and Loss Accouts 49 

Statements of Changes in Equity 50 

Consolidated Statement of Cash Flows 51 

Notes to the Financial Statements 53 

Analysis of Shareholdings 83 

Notice of Annual General Meeting 84 

Proxy Form 87 

35 


Directors’ Report 

On behalf of all the directors of the Company, we are pleased to submit this annual report to the 

members together with the audited financial statements of the Group and of the Company for the 

financial year ended 31 December 2001. 

Directors 

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

Lin Chien 

Liu Wei (Appointed on 3 December 2001) 

Tay Eng Hoe 

Wong Heng Chong 

Narong Intanate 

Foo Sen Chin 

Chay Yee Meng 

Leong Horn Kee 

Lee Suet Fern 

Wang Fangmin (Appointed on 3 December 2001) 

Teo Ek Tor (Appointed on 4 March 2002) 

Principal Activities 

The principal activities of the Company during the financial year have been those relating to investment 

holding and the distribution of information technology products. 

The principal activities of the subsidiaries are set out in note 4 to the financial statements. 

There have been no significant changes in the activities of the Group or of the Company during the 

financial year. 

Acquisitions and Disposals of Subsidiaries 

During the financial year, the Company acquired a 51% interest in the equity of PCI-SLR Technology 

(China) Limited for a consideration of $50,775,832. The Company's share of the net tangible assets 

acquired amounted to $15,433,413. 

Except as disclosed, the Company and its subsidiaries did not acquire or dispose of any subsidiaries. 

36 


Financial Results 


The results of the Group and of the Company for the financial year were as follows:- 

37 


Group Company 

$ $ 

Profit after taxation 16,011,367 1,903,933 

Minority interests (2,548,080) - 

Profit attributable to members of the Company 13,463,287 1,903,933 

Accumulated profits/(losses) brought forward 9,996,712 (1,311,937) 

Accumulated profits carried forward 23,459,999 591,996 

Transfers to and from Reserves and Provisions 

The following material transfers to or from reserves were made during the financial year:- 

Increase/(decrease) in reserves: 

Group Company 

$ $ 

Share premium reserve:- 

Premium from issue of ordinary shares 55,910,914 55,910,914 

Currency translation reserve:- 

Exchange gain on translation of net assets 

of foreign subsidiaries 931,784 - 

Except as disclosed above, there were no material transfers to or from reserves during the financial 

year. Material movements in provisions (including allowances, impairment, depreciation and 

amortisation) are as set out in the accompanying financial statements. 

Issues of Shares and Debentures 

During the financial year, the Company:- 

(a) On 30 January 2001, issued 35,545,000 ordinary shares of $0.10 each at an offer price of $0.66 

each pursuant to its initial public offer. The Company's shares were listed on the Mainboard of 

the Singapore Exchange Securities Trading Limited on 9 February 2001. 

(b) On 3 December 2001, issued 46,000,000 ordinary shares of $0.10 each fully paid at $0.455 per 

share as part consideration for the acquisition of a 51% interest in the equity of PCI-SLR 

Technology (China) Limited. 

(c) On 11 December 2001, issued 40,000,000 ordinary shares of $0.10 each fully paid at $0.67 per 

share for cash in a private placement to provide funds for the repayment of bank borrowings, 

the acquisition of PCI-SLR Technology (China) Limited and additional working capital.


Arrangements to Enable Directors to Acquire Shares and Debentures 

Except as disclosed under the "Share Options" section of 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. 

Directors' Interests in Shares or Debentures 

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, 

Chapter 50, particulars of interests of directors who held office at the end of the financial year in shares 

and share options in the Company are as follows:- 

Company 

Holdings in the name Other holdings in which 

of the director, spouse the director is deemed 

or infant children to have an interest 

At beginning At beginning 

of the year/ of the year/ 

date of At end date of At end 

appointment of the year appointment of the year 

Ordinary shares of $0.10 each fully paid 

Lin Chien - 550,000 - - 

Liu Wei 300,000 300,000 46,000,000 46,000,000 

Tay Eng Hoe - - 78,450,000 40,476,481 

Wong Heng Chong - 250,000 - - 

Narong Intanate - 50,000 17,988,000 12,988,000 

Foo Sen Chin - 125,000 957,000 957,000 

Chay Yee Meng - 450,000 - - 

Wang Fangmin 300,000 300,000 - - 

Options to subscribe for ordinary shares 

of $0.10 each exercisable between 

21/12/2001 and 20/12/2005 

at $0.10 per share 

Tay Eng Hoe 1,113,000 1,113,000 - - 

Wong Heng Chong 556,500 556,500 - - 

Narong Intanate 4,453,000 4,453,000 - - 

Foo Sen Chin 1,670,000 1,670,000 - - 



21/12/2002 and 20/12/2005 

at $0.10 per share 

Tay Eng Hoe 1,113,000 1,113,000 - - 

Wong Heng Chong 556,500 556,500 - - 

Narong Intanate 4,453,000 4,453,000 - - 

Foo Sen Chin 1,670,000 1,670,000 - - 

38 



Directors' Interests in Shares or Debentures (cont'd) 

Company 

Holdings in the name Other holdings in which 

of the director, spouse the director is deemed 

or infant children to have an interest 

At beginning At beginning 

of the year/ of the year/ 

date of At end date of At end 

appointment of the year appointment of the year 



3/9/2002 and 2/9/2011 at $0.51 per share 

Wong Heng Chong - 400,000 - - 

Narong Intanate - 400,000 - - 

Foo Sen Chin - 400,000 - - 



3/9/2002 and 2/9/2006 at $0.51 per share 

Lin Chien - 128,000 - - 

Chay Yee Meng - 88,000 - - 

Leong Horn Kee - 128,000 - - 

Lee Suet Fern - 108,000 - - 

Hsieh Fu Hua (resigned on 4 March 2002) - 88,000 - - 

Except as disclosed above, 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 date of appointment, if later or at the end of the financial year. 

There was no change in any of the above-mentioned interests in the Company between the end of the 

financial year and 21 January 2002. 

Dividends 

Since the end of the last financial year, no dividend has been paid in respect of that previous year. No 

dividend has been paid in respect of the financial year under review. The directors now propose the 

payment of a gross final dividend of 6% in respect of the financial year under review. 

Bad and Doubtful Debts 

Before the profit and loss account and the balance sheet of the Company were made out, the directors 

took reasonable steps to ascertain what action had been taken in relation to writing off bad debts and 

providing for doubtful debts of the Company. The directors have satisfied themselves that all known 

bad debts have been written off and that adequate provision has been made for doubtful debts. 

At the date of this report, the directors are not aware of any circumstances which would render any 

amounts written off for bad debts or provided for doubtful debts in the Group inadequate to any 

substantial extent. 

39 


Current Assets 


Before the profit and loss account and the balance sheet of the Company were made out, the directors 

took reasonable steps to ensure that current assets of the Company which were unlikely to realise their 

book values in the ordinary course of business have been written down to their estimated realisable 

values and that adequate provision has been made for the diminution in value of such current assets. 

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in 

this report which would render the values attributable to current assets in the consolidated financial 

statements misleading. 

Charges and Contingent Liabilities 

Since the end of the financial year: 

(i) no charge on the assets of the Group or of the Company has arisen which secures the liabilities 

of any other person; and 

(ii) no contingent liability of the Group or of the Company has arisen. 

Ability to Meet Obligations 

No contingent liability or other liability of the Group or of the Company has become enforceable or is 

likely to become enforceable within the period of twelve months after the end of the financial year 

which, in the opinion of the directors, will or may substantially affect the ability of the Group or of the 

Company to meet their obligations as and when they fall due. 

Other Circumstances Affecting the Financial Statements 

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in 

this report or the financial statements which would render any amount stated in the financial statements 

of the Group or of the Company misleading. 

Unusual Items 

In the opinion of the directors, no item, transaction or event of a material and unusual nature has 

substantially affected the results of the operations of the Group or of the Company during the financial 

year. 

In the opinion of the directors, except as set out in note 34 to the financial statements, no item, transaction 

or event of a material and unusual nature has arisen in the interval between the end of the financial year 

and the date of this report which is likely to affect substantially the results of the operations of the 

Group or of the Company for the financial year in which this report is made. 

40 


Directors' Interests in Contracts 


During the financial year, the Company and/or its related corporations have, in the normal course of 

business, entered into transactions with companies in which certain directors of the Company have an 

interest. Such transactions comprised purchase and sale of information technology products and 

services, and other transactions carried out on normal commercial terms. In addition, the Company 

entered into transactions relating to the provision of professional services, by a firm in which a director 

of the Company is a member. 

However, the directors have not received nor will they be entitled to receive any benefits arising out of 

these transactions other than those to which they may be entitled to as shareholders of those companies 

or as a member of the firm. 

Except as disclosed above, 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 

(a) Share Option Schemes 

The ECS Share Option Scheme I ("Scheme I") was approved at the Company's extraordinary 

general meeting held on 13 December 2000 to grant one-time share options to certain eligible 

directors and executives of the Company in recognition of their contribution to the growth and 

performance of the Company. 

The ECS Share Option Scheme II ("Scheme II") was approved at the Company's 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 schemes are administered by a Compensation Committee (the "Committee") 

comprising directors of the Company. The Committee comprises the following members:- 

Lin Chien (Chairman) 


Tay Eng Hoe 

Details of Scheme I and Scheme II were set out in the Directors' Report for the year ended 31 

December 2000. 

41 


Share Options (cont'd) 

(b) Options Granted 


On 3 September 2001, the following options were granted to eligible persons under Scheme II 

at the exercise price of $0.51 per share:- 

No. of No. of Shares under Option 

Option Category Holders Period 1 Period 2 Total 

(1) (2) 

Executive directors 

- Wong Heng Chong 1 400,000 - 400,000 

- Narong Intanate 1 400,000 - 400,000 

- Foo Sen Chin 1 400,000 - 400,000 

Non-executive directors 

- Lin Chien 1 - 128,000 128,000 

- Chay Yee Meng 1 - 88,000 88,000 

- Leong Horn Kee 1 - 128,000 128,000 

- Lee Suet Fern 1 - 108,000 108,000 

- Hsieh Fu Hua 

(resigned on 4 March 2002) 1 - 88,000 88,000 

Employees (including 

executive officers) 225 10,141,000 - 10,141,000 

(1) Exercisable between 3/9/2002 and 2/9/2011 

(2) Exercisable between 3/9/2002 and 2/9/2006 

(c) Issue of Shares Under Option 

233 11,341,000 540,000 11,881,000 

During the financial year, no shares were issued pursuant to the exercise of options, under the 

Company's share option schemes, to take up unissued shares of the Company or its subsidiaries. 

42 



(d) Unissued Shares under Option 


At the end of the financial year, unissued shares of the Company under option are as follows:- 

Date of Grant Exercise Price Number of Options 

of Option Per Share Exercise Period Option Holders Outstanding 

Scheme I 

21/12/2000 $0.10 21/12/2001 to 20/12/2005 5 11,132,000 

21/12/2000 $0.10 21/12/2002 to 20/12/2005 5 11,132,000 

Scheme II 

43 


10 22,264,000 

3/9/2001 $0.51 3/9/2002 to 2/9/2006 5 540,000 

3/9/2001 $0.51 3/9/2002 to 2/9/2011 228 11,341,000 

233 11,881,000 

Total outstanding at 31 December 2001 243 34,145,000 

The details of options granted and exercised during the year were as follows:- 

Aggregate Aggregate Aggregate Aggregate 

Name of Options Options Options Options Options 

Participants Granted Granted Exercised Lapsed Outstanding 

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


- Tay Eng Hoe - 2,226,000 - - 2,226,000* 

- Wong Heng Chong 400,000 1,513,000 - - 1,513,000 

- Narong Intanate 400,000 9,306,000 - - 9,306,000* 

- Foo Sen Chin 400,000 3,740,000 - - 3,740,000* 


- Lin Chien 128,000 128,000 - - 128,000 

- Chay Yee Meng 88,000 88,000 - - 88,000 

- Leong Horn Kee 128,000 128,000 - - 128,000 

- Lee Suet Fern 108,000 108,000 - - 108,000 


(resigned on 

4 March 2002) 88,000 88,000 - - 88,000 

Executive officers 

- Foong Kam Tho 750,000 7,429,000 - - 7,429,000* 

Employees (including 

other executive officers) 9,391,000 9,391,000 - - 9,391,000 

11,881,000 34,145,000 - - 34,145,000 

* Represents 5% or more of total number of options available under the respective schemes.


(d) Unissued Shares under Option (cont'd) 


[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 schemes:- 

(i) no options have been granted to the controlling shareholders of the Company and their 

associates; 

(ii) no participant under the schemes have been granted 5% or more of the total options 

available under the schemes; and 

(iii) no options have been granted to employees of the holding company or related companies 

under the schemes. 

The options granted by the Company do not entitle the holders of the options, by virtue of such 

holdings, to any right to participate in any share issue of any other company. 

Except as disclosed, there were:- 

(i) no options granted by the Company or its subsidiaries to any person to take up unissued 

shares in the Company or its subsidiaries; 

(ii) no shares issued by virtue of any exercise of option to take up unissued shares of the 

Company or its subsidiaries; and 

(iii) no unissued shares of the Company or its subsidiaries under option at the end of the 

financial year. 

44 


Audit Committee 


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

Leong Horn Kee (Chairman) 

Lee Suet Fern 


The Audit Committee performs the functions specified by section 201B of the Companies Act, and the 

Listing Manual and the Best Practices Guide of the Singapore Exchange. 

The Audit Committee held three 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; 

� Financial statements of the Group and the Company prior to their submission to the directors of 

the Company for adoption; and 

� Interested party transactions (as defined in Chapter 9A 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 has recommended to the Board of Directors that the auditors, KPMG, be nominated 

for re-appointment as auditors at the forthcoming Annual General Meeting of the Company. 

Auditors 

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

On behalf of the Board of Directors 

Tay Eng Hoe 

Director 


Director 

Singapore 

17 April 2002 

45 


Statement by Directors 

for the year ended 31 December 2001 

We, Tay Eng Hoe and Wong Heng Chong, being directors of ECS Holdings Limited, do hereby state 

that in our opinion:- 

(a) the financial statements set out on pages 48 to 82 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 2001, and of the 

results of the business and changes in equity of the Group and of the Company and cash flows 

of the Group for the year ended on that date; 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 authorised these financial statements for issue on the date of this statement. 

On behalf of the Board of Directors 

Tay Eng Hoe 

Director 


Director 

Singapore 

17 April 2002 

46 


Report of the Auditors 

to the Members of ECS Holdings Limited 

We have audited the consolidated financial statements of the Group and the financial statements of the 

Company for the year ended 31 December 2001 as set out on pages 48 to 82. These financial statements 

are the responsibility of the Company's directors. 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 plan and perform the audit to obtain reasonable assurance about whether the financial 

statements are free of material misstatement. An audit includes examining, on a test basis, evidence 

supporting the amounts and disclosures in the financial statements. An audit also includes assessing 

the accounting principles used and significant estimates made by the directors, as well as evaluating 

the overall financial statement presentation. We believe that our audit provides a reasonable basis for 

our opinion. 

In our opinion:- 

(a) the financial statements are properly drawn up in accordance with the provisions of the 

Companies Act, Chapter 50 (the "Act") and Singapore Statements of Accounting Standard and 

so as to give a true and fair view of:- 

(i) the state of affairs of the Group and of the Company as at 31 December 2001 and of the 

results and changes in equity of the Group and of the Company and of the cash flows of 

the Group for the year ended on that date; and 

(ii) the other matters required by Section 201 of the Act to be dealt with in the financial 

statements; 

(b) the accounting and other records and the registers required by the Act to be kept by the Company 

and by the subsidiary incorporated in Singapore have been properly kept in accordance with 

the provisions of the Act. 

We have considered the financial statements and auditors' reports of all the subsidiaries which have 

been audited by member firms of KPMG International, being financial statements that have been included 

in the consolidated financial statements of the Group. The names of these subsidiaries are stated in 

note 4 to the financial statements. 

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the 

financial statements of the Company are in form and content appropriate and proper for the purposes 

of the preparation of the consolidated financial statements of the Group and we have received satisfactory 

information and explanations as required by us for those purposes. 

The auditors' reports on the financial statements of the subsidiaries were not subject to any qualification, 

and in respect of the subsidiary incorporated in Singapore, did not include any comment made under 

Section 207(3) of the Act. 

KPMG 

Certified Public Accountants 

Singapore 

17 April 2002 

47 


Balance Sheets 

as at 31 December 2001 

Group Company 

Note 2001 2000 2001 2000 

$ $ $ $ 

Non-Current Assets 

Property, plant and equipment 3 13,402,792 5,048,178 12,036 16,568 

Subsidiaries 4 - - 61,719,564 10,943,732 

Other assets 5 329,000 - 140,000 - 

Goodwill on consolidation 6 35,146,070 - - - 

48,877,862 5,048,178 61,871,600 10,960,300 

Current Assets 

Inventories 7 206,195,347 34,192,527 - - 

Trade and other receivables 8 162,642,254 94,182,026 35,998,231 4,908,810 

Cash and bank balances 12 56,011,202 1,806,984 1,586,832 281,195 

424,848,803 130,181,537 37,585,063 5,190,005 

Current Liabilities 

Bank overdrafts 12 4,813,397 1,267,934 - - 

Trade and other payables 13 156,371,035 59,529,619 7,283,595 319,242 

Current portion of interest 

bearing bank loans 15 156,796,300 35,710,900 - - 

Current portion of obligations 

under finance leases 16 976,563 118,782 - - 

Provision for taxation 4,951,642 4,752,127 - - 

323,908,937 101,379,362 7,283,595 319,242 

Net Current Assets 100,939,866 28,802,175 30,301,468 4,870,763 

Non-Current Liabilities 

Loans due to shareholders 17 7,400,000 - - - 

Interest bearing bank loans 15 242,071 325,785 - - 

Obligations under 

finance leases 16 934,469 236,360 - - 

Deferred taxation 18 85,614 31,619 2,658 - 

8,662,154 593,764 2,658 - 

Minority Interests 24,995,459 5,926,959 - - 

Net Assets 116,160,115 27,329,630 92,170,410 15,831,063 

Capital and Reserves 

Share capital 19 29,297,500 17,143,000 29,297,500 17,143,000 

Shares to be issued 4 6,370,000 - 6,370,000 - 

Reserves 20 80,492,615 10,186,630 56,502,910 (1,311,937) 

116,160,115 27,329,630 92,170,410 15,831,063 

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

48 


Profit and Loss Accounts 


Group Company 

Note 2001 2000 2001 2000 

$ $ $ $ 

Revenue 21 552,030,114 373,994,737 16,504,494 23,390,144 

Cost of sales (505,394,486) (336,932,637) (16,027,469) (22,567,593) 

Gross profit 46,635,628 37,062,100 477,025 822,551 

Other income 372,653 253,011 2,321,828 10,530 

Selling, general and 

administrative expenses (24,614,700) (20,720,025) (523,974) (589,735) 

Profit from operations 22 22,393,581 16,595,086 2,274,879 243,346 

Finance costs 23 (1,791,609) (1,217,815) (44) (60,092) 

20,601,972 15,377,271 2,274,835 183,254 

Share of profit of associate - 1,105,103 - - 

Profit from ordinary 

activities before taxation 20,601,972 16,482,374 2,274,835 183,254 

Taxation 25 (4,590,605) (4,663,219) (370,902) - 

Profit from ordinary 

activities after taxation 16,011,367 11,819,155 1,903,933 183,254 

Minority interests (2,548,080) (3,373,669) - - 

Net profit for the year 

transferred to 

accumulated profits 13,463,287 8,445,486 1,903,933 183,254 

Earnings per share 26 

- Basic 6.4 cents 11.1 cents 

- Fully diluted 5.9 cents 11.1 cents 


49 


Group 

Statements of Changes in Equity 


Shares Accumulated Currency 

Share to be Share Capital Profits/ Translation 

Capital Issued Premium Reserve (Losses) Reserve TOTAL 

$ $ $ $ $ $ $ 

At 1 January 2000 7,500,000 - - - 1,551,226 (113,316) 8,937,910 

Issue of shares 9,643,000 - - - - - 9,643,000 

Capital reserve arising 

on acquisition of 

subsidiaries - - - 1,044,624 - - 1,044,624 

Net profit for the year - - - - 8,445,486 - 8,445,486 

Exchange loss 

on translation of net 

assets of foreign 

subsidiaries and 

associate - - - - - (741,390) (741,390) 

At 31 December 2000 17,143,000 - - 1,044,624 9,996,712 (854,706) 27,329,630 

Issue of shares 12,154,500 - 55,910,914 - - - 68,065,414 

Obligation to issue shares - 6,370,000 - - - - 6,370,000 


Exchange gain 

on translation of 

net assets of foreign 

subsidiaries - - - - - 931,784 931,784 

At 31 December 2001 29,297,500 6,370,000 55,910,914 1,044,624 23,459,999 77,078 116,160,115 

Company 

At 1 January 2000 7,500,000 - - - (1,495,191) - 6,004,809 

Issue of shares 9,643,000 - - - - - 9,643,000 

Net profit for the year - - - - 183,254 - 183,254 

At 31 December 2000 17,143,000 - - - (1,311,937) - 15,831,063 

Issue of shares 12,154,500 - 55,910,914 - - - 68,065,414 

Obligation to issue shares - 6,370,000 - - - - 6,370,000 


At 31 December 2001 29,297,500 6,370,000 55,910,914 - 591,996 - 92,170,410 


50 


Consolidated Statement of Cash Flows 


51 


Group 

2001 2000 

$ $ 

Operating Activities 

Profit from ordinary activities before taxation 20,601,972 16,482,374 

Adjustments for: 

Amortisation of goodwill 196,349 - 

Depreciation of property, plant and equipment 1,282,610 940,839 

Loss on disposal of property, plant and equipment 8,330 135,633 

Interest expense 1,791,609 1,217,815 

Interest income (248,244) (116,480) 

Operating profit before working capital changes 23,632,626 18,660,181 

Changes in working capital: 

Inventories 21,574,148 (11,722,636) 

Trade and other receivables (6,079,299) (26,656,798) 

Trade and other payables (31,701,251) 11,852,974 

Cash generated/(utilised) in operations 7,426,224 (7,866,279) 

Income taxes paid (5,124,738) (1,722,018) 

Cash flows from operating activities 2,301,486 (9,588,297) 

Investing Activities 

Interest received 248,244 116,480 

Acquisition of subsidiaries, net of cash acquired (note A) 7,960,534 (4,863,374) 

Additional investment in subsidiary - (4,403,754) 

Purchases of property, plant and equipment (1,832,433) (1,658,747) 

Proceeds from disposal of property, plant and equipment 99,312 568,001 

Purchase of other assets (329,000) - 

Proceeds from disposal of club memberships - 159,110 

Cash flows from investing activities 6,146,657 (10,082,284) 

Financing Activities 

Interest paid (1,791,609) (1,217,815) 

Proceeds from issue of shares 47,135,414 9,643,000 

Proceeds from bank loans 16,783,086 11,963,464 

Repayment of bank loans (19,692,394) - 

Payment of finance lease rentals (206,200) (208,111) 

Cash flows from financing activities 42,228,297 20,180,538 

Net increase in cash and cash equivalents, carried forward 50,676,440 509,957

Consolidated Statement of Cash Flows 



52 


Group 

2001 2000 

$ $ 

Net increase in cash and cash equivalents, brought forward 50,676,440 509,957 

Cash and cash equivalents at beginning of the year 539,050 29,093 

Effect of exchange rate changes on balances held 

in foreign currencies (17,685) - 

Cash and cash equivalents at end of the year (note 12) 51,197,805 539,050 

During the year, the Group acquired property, plant and equipment with an aggregate cost of $3,594,523 

(2000: $1,910,459), of which $1,762,090 (2000: $251,712) was acquired by means of finance leases. 

Cash payments of $1,832,433 (2000: $1,658,747) were made to purchase property, plant and equipment. 

Notes to the Consolidated Statement of Cash Flows: 

(A) Net Effect of Acquisition of Subsidiaries 

Group 

2001 2000 

$ $ 

Non-current assets 5,925,691 3,028,370 

Current assets 284,102,513 46,188,424 

Current liabilities (251,088,525) (33,793,986) 

Non-current liabilities (7,400,000) (379,195) 

Minority interests (16,106,266) (4,762,082) 

Translation adjustment - (92,921) 

15,433,413 10,188,610 

Goodwill/(capital reserve) arising from 

acquisition of subsidiaries 35,342,419 (1,044,624) 

Purchase consideration 50,775,832 9,143,986 

Cash and bank balances less overdrafts of 

subsidiaries acquired (28,144,616) 132,254 

Consideration satisfied through issue of shares (27,300,000) - 

Deferred purchase consideration (3,291,750) - 

Amount previously accounted as investment in associate - (3,051,028) 

Deposit paid - (1,361,838) 

Net cash flow on 

acquisition of subsidiaries (7,960,534) 4,863,374

Notes to the Financial Statements 

31 December 2001 

These notes form an integral part of the financial statements. 

The financial statements were authorised for issue by the Directors on 17 April 2002. 

1. Domicile and Activities 

ECS Holdings Limited (the "Company") is incorporated in the Republic of Singapore with its 

registered office at 19 Kallang Avenue, #07-153, Singapore 339410. 

The principal activities of the Company are those relating to investment holding and the 

distribution of information technology products. The principal activities of the subsidiaries are 

set out in note 4 to the financial statements. 

The consolidated financial statements for the year ended 31 December 2001 relate to the 

Company and its subsidiaries (referred to as the "Group"). 

2. Summary of Significant Accounting Policies 

(a) Statement of Compliance 

The financial statements have been prepared in accordance with Singapore Statements 

of Accounting Standard ("SAS") (including Interpretations of Statements of Accounting 

Standard) issued by the Institute of Certified Public Accountants of Singapore and the 

applicable requirements of the Singapore Companies Act, Chapter 50. 

In 2001, the Group and the Company adopted nine new or revised accounting standards 

which became effective for the financial statements for 2001. The adoption of SAS 8 

(revised 2000) - Net Profit or Loss for the Period, Fundamental Errors and Changes in 

Accounting Policies, SAS 10 (revised 2000) - Events After the Balance Sheet Date, SAS 

17 (2000) - Employee Benefits, SAS 22 (revised 2000) - Business Combinations, SAS 31 

(2000) - Provisions, Contingent Liabilities and Contingent Assets, SAS 32 (2000) - Financial 

Instruments: Disclosure and Presentation, SAS 34 - Intangible Assets, SAS 35 (2000) - 

Discontinuing Operations and SAS 36 (2000) - Impairment of Assets, have no material 

impact on the financial statements of the Group and the Company for the prior and 

current years. 

(b) Basis of Preparation 

The financial statements, which are expressed in Singapore dollars unless stated to be 

expressed in Singapore dollars thousands, are prepared on the historical cost basis. 

53 




2. Summary of Significant Accounting Policies (cont'd) 

(c) Basis of Consolidation 

(i) Subsidiaries 

Subsidiaries are those companies controlled by the Company. Control exists when 

the Company has the power, directly or indirectly, to govern the financial and 

operating policies of a company so as to obtain benefits from its activities. 

The financial statements of subsidiaries are included in the consolidated financial 

statements from the date that control commences until the date that control ceases. 

(ii) Transactions Eliminated on Consolidation 

All significant intra-group transactions, balances and unrealised gains are eliminated 

on consolidation. Unrealised losses are eliminated in the same way as unrealised 

gains, but only to the extent that there is no evidence of impairment. 

(iii) Disposals 

On disposal of a subsidiary, any attributable amount of purchased goodwill not 

previously amortised through the profit and loss account or which has previously 

been dealt with as a movement in Group reserves is included in the calculation of 

the profit or loss on disposal. 

(d) Property, Plant and Equipment 

(i) Owned Assets 

Property, plant and equipment are stated at cost less accumulated depreciation 

and impairment losses. 

(ii) Disposals 

Gains or losses arising from the retirement or disposal of property, plant and 

equipment are determined as the difference between the estimated net disposal 

proceeds and the carrying amount of the asset and are recognised in the profit 

and loss account on the date of retirement or disposal. 

(iii) Leased Assets 

Leases in terms of which the Group assumes substantially all risks and rewards of 

ownership are classified as finance leases. Property, plant and equipment acquired 

by way of finance leases is capitalised at an amount equal to the lower of its fair 

value and the present value of the minimum lease payments at the inception of the 

lease, less accumulated depreciation and impairment losses. Lease payments 

are apportioned between the finance charges and reduction of the lease liability 

so as to achieve a constant rate of interest on the remaining balance of the liability. 

Finance charges are charged directly against income. Capitalised leased assets 

are depreciated over the shorter of the economic useful life of the asset and the 

lease term. 

54 





(d) Property, Plant and Equipment (cont'd) 

(iv) Depreciation 

(e) Subsidiaries 

Depreciation is provided on the straight-line basis so as to write off items of property, 

plant and equipment over their estimated useful lives 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 

No depreciation is provided on assets under construction. 

Investments in subsidiaries in the Company's balance sheet are stated at cost less 

impairment losses. 

(f) Intangible Assets 

(i) Goodwill 

Goodwill arising on acquisition represents the excess of the cost of acquisition 

over the fair value of the Group's share of the identifiable net assets acquired. 

Goodwill is stated at cost less accumulated amortisation and impairment losses. 

Goodwill is amortised from the date of initial recognition over its estimated useful 

life of not more than 15 years for acquisition completed on or after 1 January 2001. 

For acquisitions before that date, goodwill and negative goodwill was recorded 

against reserves. 

(ii) Amortisation 

(g) Other Assets 

Amortisation is charged to the profit and loss account on a straight-line basis over 

the estimated useful life of the goodwill. Amortisation is from the date of initial 

recognition. 

Equity securities held for the long-term are stated at amortised cost less allowance for 

diminution in value which, in the opinion of the directors, are other than temporary. 

Profits or losses on disposal of equity securities are determined as the difference between 

the net disposal proceeds and the carrying amount of the equity securities and are 

accounted for in the profit and loss account as they arise. 

55 





(h) Inventories 

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

Cost is calculated using the weighted average cost formula and comprises all cost 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 the estimated costs necessary to make the sale. 

When inventories are sold, the carrying amount of those inventories is recognised as an 

expense in the period in which the related revenue is recognised. The amount of any 

allowance for write-down of inventories to net realisable value and all losses of inventories 

are recognised as an expense in the period the write-down or loss occurs. The amount 

of any reversal of any allowance for write-down of inventories, arising from an increase in 

net realisable value, is recognised as a reduction in the amount of inventories recognised 

as an expense in the period in which the reversal occurs. 

(i) Trade and Other Receivables 

Trade and other receivables are stated at their cost less allowance for doubtful receivables. 

(j) Cash and Cash Equivalents 

Cash and cash equivalents comprise cash balances and bank deposits. For the purpose 

of the statement of cash flows, cash and cash equivalents are presented net of bank 

overdrafts which are repayable on demand and which form an integral part of the Group's 

cash management. 

(k) Impairment 

The carrying amounts of the Group's assets, other than inventories, are reviewed at each 

balance sheet date to determine whether there is any indication of impairment. If any 

such indication exists, the asset's recoverable amount is estimated. 

An impairment loss is recognised whenever the carrying amount of an asset or its cashgenerating 

unit exceeds its recoverable amount. All impairment losses are recognised in 

the profit and loss account. 

(l) Trade and Other Payables 

Trade and other payables are stated at cost. 

(m) Interest-Bearing Loans and Borrowings 

Interest-bearing loans and borrowings are recognised at cost. 

56 





(n) Deferred Taxation 

Deferred taxation is provided using the liability method in respect of the taxation effect 

arising from all material timing differences between the accounting and tax treatments of 

income and expenditure which are expected with reasonable probability to crystallise in 

the foreseeable future. 

Deferred tax benefits are recognised in the financial statements only to the extent of any 

deferred tax liability or when such benefits are reasonably expected to be realisable in 

the near future. 

(o) Revenue Recognition 

(i) Sale of Goods 

Revenue is recognised when the significant risks and rewards of ownership have 

been transferred to the buyer. Revenue excludes goods and services taxes, and 

other sales taxes, and is arrived at after deduction of trade discounts. No revenue 

is recognised if there are significant uncertainties regarding recovery of the 

consideration due, associated costs or the possible return of goods. 

(ii) Service Fees 

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

contract. 

(iii) Dividends 

Dividend income is recognised in the profit and loss account when the shareholder's 

right to receive payment is established. 

(iv) Interest Income 

(p) Dividends 

Interest income from bank deposits is accrued on a time-apportioned basis. 

Dividends on ordinary shares are recognised as a liability in the period in which they are 

declared. 

(q) Operating Leases 

Where the Group has the use of assets under operating leases, payments made under 

the leases are recognised in the profit and loss account on a straight line basis over the 

term of the lease. Lease incentive received are recognised in the profit and loss account 

as an integral part of the total lease payments made. 

57 





(r) Finance Costs 

Interest expense and similar charges are expensed in the profit and loss account in the 

period in which they are incurred. The interest component of finance lease payments is 

recognised in the profit and loss account using the effective interest rate method. 

(s) Foreign Currencies 

(i) Translation of Foreign Currencies 

Monetary assets and liabilities in foreign currencies are translated into Singapore 

dollars at rates of exchange approximate to those ruling at the balance sheet date. 

Transactions in foreign currencies are translated at rates ruling on transaction dates. 

Translation differences are included in the profit and loss account. 

(ii) Financial Statements of Foreign Operations 

The Group's foreign operations are not considered an integral part of the Company's 

operations. Accordingly, the assets and liabilities of foreign operations, including 

goodwill and fair value adjustments arising on consolidation, are translated to 

Singapore dollars at the rates of exchange ruling at the balance sheet date. The 

results and cash flows of foreign operations are translated at the average exchange 

rates for the year. Exchange differences arising on translation are recognised 

directly in equity. 

In the previous financial year, the results and cash flows of foreign operations 

were translated to Singapore dollars at the rates of exchange ruling at the balance 

sheet date. The change in accounting policy did not have a significant impact 

on the financial statements of the Group. 

(t) Segment Reporting 

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, business segments, is based on the Group's management 

and internal reporting structure. 

Inter-segment pricing is determined on an arm's length basis. 

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 income-earning assets and revenue, interest-bearing loans, borrowings and 

expenses, 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. 

58 


3. Property, Plant and Equipment 



Leasehold Furniture Assets 

Freehold Improve- Office and Motor under 

Building ments Equipment Fittings Computers Vehicles Construction Total 

$ $ $ $ $ $ $ $ 

Group 

Cost 

At 1 January 2001 

Acquisition of 

1,719,992 157,903 1,830,269 361,845 1,486,429 621,736 - 6,178,174 

subsidiary - - - 396,666 1,914,668 266,569 3,347,788 5,925,691 

Additions 5,582 54,225 796,390 250,849 2,432,164 51,533 3,780 3,594,523 

Disposals 

Translation 

- (5,158) (84,927) (61,058) (463,441) (11,214) - (625,798) 

adjustment 116,954 - 100,618 10,357 - 27,309 - 255,238 

Transfers - - (545,899) (5,874) 551,773 - - - 

At 31 December 

2001 1,842,528 206,970 2,096,451 952,785 5,921,593 955,933 3,351,568 15,327,828 

Accumulated 

Depreciation 

At 1 January 2001 39,890 24,551 444,486 101,563 417,370 102,136 - 1,129,996 

Depreciation charge 50,428 19,037 374,905 94,478 591,670 152,092 - 1,282,610 

Disposals 

Translation 

- (4,684) (51,944) (29,384) (427,482) (4,662) - (518,156) 

adjustment 2,737 - 23,684 1,954 - 2,211 - 30,586 


2001 93,055 38,904 791,131 168,611 581,558 251,777 - 1,925,036 

Depreciation 

charge for 2000 39,890 16,205 448,587 60,450 271,635 104,072 - 940,839 

Carrying Amount 


2001 1,749,473 168,066 1,305,320 784,174 5,340,035 704,156 3,351,568 13,402,792 


2000 1,680,102 133,352 1,385,783 260,282 1,069,059 519,600 - 5,048,178 

The net book value of property, plant and equipment of the Group includes assets held under finance 

leases with a carrying value of $2,111,342 (2000: $461,882) 

59 


3. Property, Plant and Equipment (cont'd) 



Furniture 

Leasehold Office and Motor 

Improvements Equipment Fittings Computers Vehicles Total 

$ $ $ $ $ $ 

Company 

Cost 

At 1 January 2001 - 2,177 420 22,157 - 24,754 

Additions - - - 523 - 523 

At 31 December 2001 - 2,177 420 22,680 - 25,277 

Accumulated Depreciation 

At 1 January 2001 - 676 124 7,386 - 8,186 

Depreciation charge - 435 84 4,536 - 5,055 

At 31 December 2001 - 1,111 208 11,922 - 13,241 

Depreciation charge for 2000 981 805 956 5,958 27,253 35,953 

Carrying Amount 

At 31 December 2001 - 1,066 212 10,758 - 12,036 

At 31 December 2000 - 1,501 296 14,771 - 16,568 

4. Subsidiaries 

60 


Company 

2001 2000 

Unquoted equity shares, at cost $61,719,564 $10,943,732 

During the financial year, the Company acquired a 51% interest in the equity of PCI-SLR 

Technology (China) Limited for a consideration of $50,775,832. The consideration comprised 

the following:- 

(a) Cash payment of $22.3 million (equivalent of US$12.5 million) of which approximately 

$3.3 million (equivalent of US$1.8 million) was outstanding at 31 December 2001 (see 

note 14). 

(b) Issue of 60,000,000 ordinary shares of $0.10 each at a price of $0.455 per share in two 

tranches. The first tranche of 46,000,000 ordinary shares was issued on 3 December 

2001 and the fair value of the shares amounting to $20.93 million was credited to share 

capital ($4.6 million) and share premium ($16.33 million). The second tranche of 

14,000,000 ordinary shares with a fair value of $6.37 million will be issued on 1 February 

2002 and has been accounted for as "Shares to be Issued" as a component of equity.

4. Subsidiaries (cont’d) 



The market price at the date of acquisition of $0.73 per share was not used as the fair 

value of the shares issued because significant movements in the market price of the 

Company's shares between the announcement of the acquisition of the subsidiary and 

the date of the issue of the shares render the market price at the date of issue an unreliable 

indicator of their value. Accordingly, the Company has applied the price of $0.455 per 

share, which was the mutually agreed price between the parties and which was based 

on a 10 per cent discount to the volume weighted average market price for the one 

month period leading up to the date of the announcement of the acquisition. 

Details of the subsidiaries directly held by the Company are set out below. The Singapore 

subsidiary is audited by KPMG Singapore. All other subsidiaries are audited by member firms 

of KPMG International. 

Place of Group's Effective Cost of 

Name of Incorporation/ Equity Interest Investment 

Company Principal Activities Business 2001 2000 2001 2000 

% % $ $ 

ECS Computers Provider of information Singapore 100 100 5,923,807 5,923,807 

(Asia) Pte Ltd technology products and 

services for e-commerce IT 

infrastructure, provider 

of general IT products and 

services and distributor 

of IT products 

EC Sure Investment holding Thailand 99.9 99.9 9,800 9,800 

Holdings 

(Thailand) 

Co., Ltd 

K.U. Sistem Investment holding Malaysia 60 60 2,831,591 2,831,591 

Holdings Sdn. 

Bhd. 

The Value Provider of information Thailand 75 75 2,178,534 2,178,534 

Systems Co., technology products and 

Ltd services for e-commerce IT 





PCI-SLR Investment holding and Hong Kong 51 - 50,775,832 - 

Technology provider of information 

(China) Limited technology products and 

services for e-commerce IT 





61 


61,719,564 10,943,732

4. Subsidiaries (cont’d) 



Details of the subsidiaries held by other subsidiaries of the Group are set out below. All companies 

are audited by member firms of KPMG International. 

Place of Group's Effective 

Incorporation/ Equity Interest 

Name of Company Principal Activities Business 2001 2000 

% % 

Subsidiaries of K.U. Sistem Holdings Sdn. Bhd. 

K.U. Sistem Sdn. Bhd. ) Provider of information Malaysia 60 60 

) technology products and 

Pericomp Sistech Sdn. Bhd. ) services for e-commerce Malaysia 48 48 

) IT infrastructure, provider 

Astar Marketing Sdn. Bhd. ) of general IT products Malaysia 60 60 

) and services and distributor 

) of IT products 

Antara IT Sdn. Bhd. Dormant Malaysia 42 42 

Subsidiaries of PCI-SLR Technology (China) Limited 

PCI-SLR Technology Co. Ltd ) China 51 - 

) Provider of information 

PCI-SLR Technology ) technology products and China 51 - 

(Guangzhou) Co., Ltd ) services for e-commerce 

) IT infrastructure, provider 

) of general IT products 

) and services and distributor 

PCI-SLR International ) of IT products China 51 - 

Trading (Shanghai) Co., Ltd ) 

PCI-Solectron Trading Ltd Dormant British Virgin 51 - 

Islands 

5. Other Assets 

At cost 

Group Company 

2001 2000 2001 2000 

$ $ $ $ 

� Unquoted equity shares 189,000 - - - 

� Club membership 140,000 - 140,000 - 

329,000 - 140,000 - 

62 


6. Goodwill on Consolidation 



63 


Group 

2001 2000 

$ $ 

Goodwill arising on acquisition of 

PCI-SLR Technology (China) Limited 35,342,419 - 

Less: 

Amortisation during the year 196,349 - 

7. Inventories 

35,146,070 - 

Group 

2001 2000 

$ $ 

Trading inventories 188,789,770 33,171,286 

Goods in transit 18,921,170 1,367,604 

Less: 

207,710,940 34,538,890 

Allowance for obsolete 

inventory - 

At 1 January 346,363 408,866 

Allowance made during the year 1,305,250 1,040,962 

Allowance used during the year (163,186) (1,103,465) 

Translation adjustment 27,166 - 

At 31 December 1,515,593 346,363 

206,195,347 34,192,527

8. Trade and Other Receivables 



Group Company 

Note 2001 2000 2001 2000 

$ $ $ $ 

Trade receivables 9 138,890,675 89,274,898 729,440 15,678 

Deposits, prepayments 

and other receivables 10 23,539,022 4,765,892 246,312 998,588 

Amounts due from 

- shareholder (nontrade) 

212,557 141,236 95,844 121,557 

- subsidiaries 11 - - 34,926,635 3,772,987 

162,642,254 94,182,026 35,998,231 4,908,810 

The amount due from a shareholder is unsecured and interest-free, and has no fixed terms of 

repayment. 

9. Trade Receivables 

Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Trade receivables 139,202,955 89,990,179 729,440 15,678 

Less: 

Allowance for doubtful 

receivables - 

At 1 January 715,281 429,908 - - 

Allowance made/(reversed) 

during the year (288,822) 841,933 - - 

Allowance used during the year (131,259) (556,560) - - 

Translation adjustment 17,080 - - - 

At 31 December 312,280 715,281 - - 

138,890,675 89,274,898 729,440 15,678 

64 




10. Deposits, Prepayments and Other Receivables 

Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Deposits 241,824 235,580 - - 

Prepayments 1,885,014 396,742 - 737,235 

Recoverables 2,243,060 2,309,058 - 2,441 

Tax recoverable 111,956 - 111,956 - 

Other receivables 19,057,168 1,824,512 134,356 258,912 

11. Amounts Due from and to Subsidiaries 

Amounts due from (note 8) - 

23,539,022 4,765,892 246,312 998,588 

65 


Company 

2001 2000 

$ $ 

� trade receivables 2,402,673 142,563 

� non-trade receivables 2,852,166 3,630,424 

� loan 29,671,796 - 

34,926,635 3,772,987 

The loan due from a subsidiary is unsecured, bore interest at rates ranging from 3% to 3.5% per 

annum and has no fixed terms of repayment. 

Amounts due to (note 13)- 

Company 

2001 2000 

$ $ 

� trade payables 3,563,632 47,880 

� non-trade payables 107,919 - 

3,671,551 47,880

12. Cash and Cash Equivalents 



Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Cash and bank balances 

- Cash at bank and in hand 34,276,329 1,806,984 1,586,832 281,195 

- Fixed deposits 21,734,873 - - - 

56,011,202 1,806,984 1,586,832 281,195 

Bank overdrafts (unsecured) (4,813,397) (1,267,934) - - 

Cash and cash equivalents 

in the Consolidated 

Statement of Cash Flows 51,197,805 539,050 1,586,832 281,195 

13. Trade and Other Payables 

Group Company 

Note 2001 2000 2001 2000 

$ $ $ $ 

Trade payables 130,541,615 52,303,632 - 622 

Accruals and 

other payables 14 24,922,471 6,220,737 3,612,044 270,740 

Amounts due to 

subsidiaries 11 - - 3,671,551 47,880 

Deferred income 906,949 1,005,250 - - 

156,371,035 59,529,619 7,283,595 319,242 

Deferred income relates to fees received in advance on service maintenance contracts. 

14. Accruals and Other Payables 

Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Accrued operating expenses 10,424,061 3,882,239 75,070 5,950 

Deposits received 95,247 165,930 - - 

Other payables 14,403,163 2,172,568 3,536,974 264,790 

24,922,471 6,220,737 3,612,044 270,740 

Other payables of the Group and the Company at 31 December 2001 include outstanding 

purchase consideration of approximately $3.3 million (equivalent of US$1.8 million) in respect 

of the Company's acquisition of PCI-SLR Technology (China) Limited (see note 4). 

66 


15. Interest-Bearing Bank Loans 



67 


Group 

2001 2000 

$ $ 

Secured 

Term loans 16,321,879 4,931,385 

Unsecured 

Term loans 132,949,492 25,556,000 

Trust receipts 7,767,000 5,549,300 

140,716,492 31,105,300 

157,038,371 36,036,685 

Comprising:- 

Current portion 156,796,300 35,710,900 

Non-current portion 242,071 325,785 

157,038,371 36,036,685 

(a) The secured bank facilities of the Group bore interest at rates ranging from 3.70% to 

6.50% (2000: 4.35% to 9.35%) per annum and are secured by :- 

- A fixed charge over the freehold office blocks of a subsidiary; 

- Fixed and floating charges over the assets of certain subsidiaries; and 

- Pledge of fixed deposits of certain subsidiaries. 

In addition, the facilities are jointly and severally guaranteed by certain directors of certain 

subsidiaries. 

(b) The unsecured bank facilities of the Group bore interest at rates ranging from 3.35% to 

8.50% (2000: 3.38% to 4.40%) per annum. 

16. Obligations under Finance Leases 

2001 2000 

Payments Interest Principal Payments Interest Principal 

$ $ $ $ $ $ 

Group 

Repayable: 

Within 1 year 1,070,146 93,583 976,563 145,389 26,607 118,782 

After 1 year but 

within 5 years 964,810 30,341 934,469 260,285 23,925 236,360 

2,034,956 123,924 1,911,032 405,674 50,532 355,142 

Information on interest rates and the Group's exposure to interest rate and currency risks are set 

out in note 30.

17. Loans Due to Shareholders 



The loans due to shareholders are unsecured and interest-free, and have no fixed terms of 

repayment. 

18. Deferred Taxation 

Group Company 

2001 2000 2001 2000 

$ $ $ $ 

At 1 January 31,619 110,000 - - 

Acquisition of subsidiary - 31,619 - - 

Provision made/(reversed) 

during the year 51,845 (110,000) 2,658 - 

Translation adjustment 2,150 - - - 

At 31 December 85,614 31,619 2,658 - 

19. Share Capital 

2001 2000 2001 2000 

No. of shares ('000) $ $ 

Authorised: 

Ordinary shares of $0.10 each 500,000 500,000 50,000,000 50,000,000 

Issued and fully paid: 

At 1 January 171,430 7,500 17,143,000 7,500,000 

Sub-division of shares of 

$1 to $0.10 each - 67,500 - - 

171,430 75,000 17,143,000 7,500,000 

Issue of shares 121,545 96,430 12,154,500 9,643,000 

At 31 December 292,975 171,430 29,297,500 17,143,000 

During the financial year, the Company:- 

(a) On 30 January 2001, issued 35,545,000 ordinary shares of $0.10 each at an offer price of 

$0.66 each pursuant to its initial public offer. The Company's shares were listed on the 

Mainboard of the Singapore Exchange Securities Trading Limited on 9 February 2001. 

(b) On 3 December 2001, issued 46,000,000 ordinary shares of $0.10 each fully paid at 

$0.455 per share as part consideration for the acquisition of a 51% interest in the equity 

of PCI-SLR Technology (China) Limited. 

(c) On 11 December 2001, issued 40,000,000 ordinary shares of $0.10 each fully paid at 

$0.67 per share for cash in a private placement to provide funds for the repayment of 

bank borrowings, the acquisition of PCI-SLR Technology (China) Limited and additional 

working capital. 

At the end of the financial year, options for 34,145,000 (2000: 22,264,000) unissued ordinary 

shares of $0.10 each of the Company granted under the ECS Share Options Scheme I and 

Scheme II were outstanding. 

68 


20. Reserves 



Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Share premium 55,910,914 - 55,910,914 - 

Capital reserve 1,044,624 1,044,624 - - 

Revenue reserve 23,459,999 9,996,712 591,996 (1,311,937) 

Currency translation reserve 77,078 (854,706) - - 

80,492,615 10,186,630 56,502,910 (1,311,937) 

Movements in reserves for the Group and the Company are set out in the statements of changes 

in equity. 

(a) Share Premium 

The application of the share premium account is governed by Sections 69 - 69F of the 

Companies Act, Chapter 50. This is stated net of share issue expenses which includes 

fees paid to auditors of the Company of $260,796 in relation to their work during the initial 

public offer. 

(b) Capital Reserve 

The capital reserve comprises principally negative goodwill arising on the acquisition of 

subsidiaries. 

(c) Currency Translation Reserve 

21. Revenue 

This comprises all foreign exchange differences arising from the translation of the financial 

statements of foreign operations that are not integral to the operation of the Company. 

Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Sale of IT products 524,211,802 362,901,136 16,504,494 23,390,144 

IT services 27,818,312 11,093,601 - - 

552,030,114 373,994,737 16,504,494 23,390,144 

Transactions within the Group have been excluded in arriving at revenue for the Group. 

69 


22. Profit from Operations 



Profit from operations includes the following:- 

Group Company 

Note 2001 2000 2001 2000 

$ $ $ $ 

(a) Other Income 

Dividend income from 

a subsidiary - - 1,960,000 - 

Interest income 

- bank deposits 248,244 116,480 745 8,369 

- subsidiaries - - 361,083 2,161 

Others 124,409 136,531 - - 

372,653 253,011 2,321,828 10,530 

(b) Staff Costs 

Wages and salaries 16,318,219 12,386,843 221,825 258,701 

Contributions to defined 

contribution plans 1,330,854 1,108,622 17,984 8,947 

17,649,073 13,495,465 239,809 267,648 

Number of employees 

as at 31 December 1,074 495 3 2 

(c) Other Operating 

Income/Expenses 

Amortisation of goodwill 6 196,349 - - - 

Allowances made/ 

(reversed) for 

- obsolete inventory 7 1,305,250 1,040,962 - - 

- doubtful trade 

receivables 9 (288,822) 841,933 - - 

Audit fees 

- auditors of the Company 

- current year 48,000 39,000 24,000 15,000 

- other auditors 

- current year 87,067 21,448 - - 

- prior year 2,184 - - - 

Bad debts recovered (trade) (11,503) - - - 

70 


22. Profit from Operations (cont'd) 



Group Company 

Note 2001 2000 2001 2000 

$ $ $ $ 

(c) Other Operating 

Income/Expenses 

Depreciation of property, 

plant and equipment 3 1,282,610 940,839 5,055 35,953 

Directors' remuneration 

- directors of the Company 1,330,943 581,182 75,000 131,980 

- other directors 225,282 235,572 - - 

Exchange (gain)/loss (net) (239,457) 37,566 4,161 27,357 

Loss on sale of property, 

plant and equipment 8,330 135,633 - 3,167 

Non-audit fees 

- auditors of the Company 10,000 - 6,000 - 

- other auditors 5,828 - - - 

Operating lease expenses 511,310 765,050 - 10,400 

23. Finance Costs 

Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Interest paid and payable on: 

- bank overdrafts 325,424 77,567 44 1,141 

- lease financing 23,279 6,567 - 1,324 

- short-term loans 1,442,906 1,132,791 - 57,627 

- others - 890 - - 

24. Directors' Remuneration 

1,791,609 1,217,815 44 60,092 

The remuneration of the Company's directors fall within the following remuneration bands:- 

Number of Directors 

2001 2000 

Executive Non-Executive Executive Non-Executive 

Directors Directors Directors Directors 

$250,000 to $499,999 2 - 1 - 

Below $250,000 4 5 4 - 

71 


6 5 5 -

25. Taxation 



Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Based on results for the year 

- Current taxation 4,988,760 4,773,219 368,244 - 

- Deferred taxation 51,845 (110,000) 2,658 - 

Overprovision in respect of 

prior year 

- Current taxation (450,000) - - - 

Company 

4,590,605 4,663,219 370,902 - 

The taxation charge of the Company is lower than that arrived at by applying the statutory tax 

rate of 24.5% to the Company's profit as a result of the utilisation of unabsorbed tax losses 

carried forward from prior years which resulted in a tax saving of approximately $207,000. 

At 31 December 2000, the Company has unabsorbed tax losses and unutilised wear and tear 

allowances of approximately $1 million which are available for carry forward and set-off against 

future taxable income subject to the agreement of the Comptroller of Income Tax and compliance 

with the provisions of Sections 37 and 23 of the Singapore Income Tax Act, Chapter 134. In 

accordance with the accounting policy of the Group, a deferred tax benefit of approximately 

$0.25 million arising from these losses and allowances and other timing differences have not 

been recognised in the financial statements. 

Group 

The taxation charge of the Group is arrived at after taking into account the following:- 

(a) tax exemptions enjoyed by a foreign subsidiary; and 

(b) the effects of the introduction by the Minister of Finance of a new corporate tax exemption 

scheme which grants exemption of certain chargeable income from Singapore tax. 

In the previous financial year, the tax charge for the Group was higher than that arrived at by 

applying the statutory tax rate of 25.5% to the Group's profit principally because the losses 

incurred by the Company could not be set-off against profits earned by the subsidiaries and the 

tax rates of different countries in which the Group operates varied. 

72 


26. Earnings per Share 



The calculation of earnings per share is based on the following:- 

Basic Earnings Per Share 

73 


Group 

2001 2000 

� Profit after taxation and minority interests $ 13,463,287 $ 8,445,486 

� Weighted average number of shares 210,135,945 75,790,410 

Fully Diluted Earnings Per Share 

� Profit after taxation and minority interests $ 13,463,287 $ 8,445,486 

� Weighted average number of shares 230,056,395 76,264,889 

In arriving at the fully diluted earnings per share, only those potential ordinary shares arising 

from the exercise of options which would dilute the basic earnings per share of the Group are 

included in the computation. In addition, the shares to be issued in 2002 for the acquisition of 

PCI-SLR Technology (China) Limited has been treated as potential ordinary shares for 2001. 

27. Equity Compensation Benefits 

The ECS Share Option Scheme I ("Scheme I") was approved at the Company's extraordinary 

general meeting held on 13 December 2000 to grant one-time share options to certain eligible 

directors and executives of the Company in recognition of their contribution to the growth and 

performance of the Company. 

The ECS Share Option Scheme II ("Scheme II") was approved at the Company's 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 schemes are administered by a Compensation Committee (the "Committee") 

comprising directors of the Company. The Committee comprises the following members:- 

Lin Chien (Chairman) 


Tay Eng Hoe 

Information regarding the schemes are set out below: 

Scheme I 

(a) The exercise price of the options exercisable pursuant to Scheme I is the par value of the 

share.

27. Equity Compensation Benefits (cont'd) 

Scheme I (cont'd) 



(b) Options granted are exercisable after the first anniversary but before the fifth anniversary 

of the grant date, subject to the following:- 

Scheme II 

- up to 50% of the shares in respect of which option is granted may be exercised 

within the 12 month period after the first anniversary of the date of grant of the 

option; and 

- the balance of the shares in respect of which option is granted may be exercised 

at any time after the expiry of the aforesaid 12 month period. 

(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 nonexecutive 

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. 

As at 31 December 2001, details of the options granted under the schemes for unissued ordinary 

shares of $0.10 each of the Company were as follows:- 

74 


Number of Options 

2000 2001 Total 

Options Options Outstanding 

Exercise price $0.10 $0.51 

At 1 January 2001 22,264,000 - 22,264,000 

Options granted - 11,881,000 11,881,000 

Options exercised - - - 

Options cancelled/lapsed - - - 

At 31 December 2001 22,264,000 11,881,000 34,145,000 

Options vested in 2001 11,132,000 - 11,132,000

28. 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 the 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. 

Transactions with Directors 

Total directors' remuneration is disclosed in note 22 (c) 

During the financial year, the Company entered into transactions amounting to $361,325 for the 

provision of professional services by a firm in which a director of the Company is a member. 

The Company also entered into a sale and purchase agreement relating to the acquisition of 

PCI-SLR Technology (China) Limited, with a company in which a director of the Company has a 

substantial financial interest. 

The directors participate in the Company's equity-related compensation plans, the terms and 

conditions of which are stated in note 27. Details of options granted, exercised and outstanding 

at 31 December 2001 are set out below:- 

Options Cumulative Cumulative Cumulative 

Name of Granted Options Options Options Options 

Participants in Year Granted Exercised Lapsed Outstanding 


- Tay Eng Hoe - 2,226,000 - - 2,226,000 

- Wong Heng Chong 400,000 1,513,000 - - 1,513,000 

- Narong Intanate 400,000 9,306,000 - - 9,306,000 

- Foo Sen Chin 400,000 3,740,000 - - 3,740,000 


- Lin Chien 128,000 128,000 - - 128,000 

- Chay Yee Meng 88,000 88,000 - - 88,000 

- Leong Horn Kee 128,000 128,000 - - 128,000 

- Lee Suet Fern 108,000 108,000 - - 108,000 


(resigned on 

4 March 2002) 88,000 88,000 - - 88,000 

1,740,000 17,325,000 - - 17,325,000 

75 


28. Related Party Transactions (cont'd) 

Other Related Party Transactions 



During the financial year, there were the following significant transactions with related parties, 

based on terms agreed by the parties:- 

Group Company 

2001 2000 2001 2000 

$ $ $ $ 

Sales to 

- subsidiaries - - 12,617,198 14,931,408 

- associate - 4,982,467 - 3,724,995 

- shareholder 266,341 80,336 - - 

Sale of property, plant and 

equipment to a former director - 208,505 - 208,505 

29. Commitments 

(a) Capital Commitments 

At 31 December, the following commitments were not provided for in the financial 

statements:- 

76 


Company 

2001 2000 

$ $ 

Investments in subsidiaries - 60,000 

(b) Operating Lease Commitments 

At 31 December, the Group has commitments for future minimum lease payments under 

non-cancellable operating leases as follows:- 

Group 

2001 2000 

$ $ 

Payable: 

Within 1 year 2,395,610 736,276 

After 1 year but within 5 years 1,425,583 343,725 

3,821,193 1,080,001 

The Group leases office premises and warehouse facilities under operating leases. The 

leases typically run for an initial period of 3 years, with an option to renew the lease after 

that date.

30. Financial Instruments 



(a) Financial Risk Management Objectives and Policies 

Exposure to credit, interest rate and currency risk arises in the normal course of the 

Group's business. The Group has established risk management policies and guidelines 

which set out its overall business strategies, its tolerance of risk and its general risk 

management philosophy and has established processes to monitor and control the 

hedging of transactions in a timely and accurate manner. Such established policies are 

reviewed annually by the Group's management, and periodic reviews are undertaken to 

ensure that the Group's policy guidelines are adhered to. 

(b) Credit Risk 

Management has a credit policy in place and the exposure to credit risk is monitored on 

an ongoing basis. Credit evaluations are performed on all customers requiring credit 

over a certain amount. The Group does not require collateral in respect of financial assets. 

Investments and transactions involving derivative financial instruments are allowed only 

with counterparties that are of high credit quality. As such, management does not expect 

any counterparty to fail to meet their obligations. 

At balance sheet date, there were no significant concentrations of credit risk. The maximum 

exposure to credit risk is represented by the carrying amount of each financial asset in 

the balance sheets. 

(c) Interest Rate Risk 

The Group's exposure to market risk for changes in interest rates relates primarily to the 

Group's long-term debt obligations. 

(d) Effective Interest Rates and Repricing Analysis 

In respect of interest-earning financial assets and interest-bearing financial liabilities, the 

following table indicates their effective interest rates at balance sheet date and the periods 

in which they reprice. 

77 


30. Financial Instruments (cont'd) 



(d) Effective Interest Rates and Repricing Analysis (cont’d) 

2001 

Effective 

interest Within 1 to 5 

Note rate Total 1 year years 

% $ $ $ 

Financial Assets 

Cash and cash 

equivalents 12 0.88% - 4.13% 44,565,503 44,565,503 - 

Financial Liabilities 

Secured bank loans 15 5.00% - 6.50% 16,321,879 16,079,808 242,071 

Unsecured bank loans 15 4.05% - 5.00% 140,716,492 140,716,492 - 

Finance lease liabilities 16 5.00% - 5.67% 1,911,032 976,563 934,469 

Bank overdrafts 12 8.00% - 8.33% 4,813,397 4,813,397 - 

Total 163,762,800 162,586,260 1,176,540 

(e) Foreign Currency Risk 

The Group incurs foreign currency risk mainly from foreign currency denominated sales, 

purchases and operating expenses. While there is a certain extent of natural hedge 

between sales receipts and purchases, any significant fluctuation in the US dollar, Thai 

Baht, Ringgit Malaysia against the Singapore dollar could result in the Group incurring 

foreign exchange losses. Any significant fluctuations in the US dollar against the Renminbi 

could also result in an exposure to its Chinese subsidiary. 

The Group has not actively adopted any hedging strategies to cover its foreign exchange 

exposure faced by its Chinese subsidiary. The Group intends to consider and evaluate 

the need to implement hedging strategies for future foreign exchange denominated 

transaction. Except for the above, the Group hedges its US dollar net exposure using 

forward contracts. In addition, the Group constantly monitors all its foreign currency 

exposures and uses forward contracts to hedge any net exposures, as and when 

necessary. 

In view of the nature of the Group's business which spans over several countries, foreign 

exchange risks will continue to be an integral aspect of the Group's risk profile in the 

future. 

78 


30. Financial Instruments (cont'd) 

(f) Sensitivity Analysis 



In managing its interest rate and currency risks, the Group aims to reduce the impact of 

short-term fluctuations on the Group's earnings. Over the longer term, however, any 

prolonged adverse changes in foreign exchange and interest rates would have an impact 

on consolidated earnings. 

At 31 December 2001, it is estimated that a general increase of one percentage point in 

interest rates would decrease the Group's profit before tax by approximately $1,190,000. 

It is estimated that a general increase of one percentage point in value of the Singapore 

dollar against other foreign currencies would increase the Group's profit before tax by 

approximately $239,000. 

(g) Fair Values 

(i) Recognised Financial Instruments 

The fair value of the financial assets and liabilities approximates to their carrying 

value and are disclosed in the balance sheet and in the notes to the financial 

statements. 

It is not practicable to estimate the fair value of the Group's long-term unquoted 

equity investments because of the lack of quoted market prices and the inability to 

estimate fair value without incurring excessive costs. However, management 

believes that the carrying amounts recorded at the balance sheet date reflect the 

corresponding fair values. 

(ii) Unrecognised Financial Instruments 

The valuation of financial instruments not recognised in the balance sheet reflects 

amounts which the Group expects to pay or receive to terminate the contracts or 

replace the contracts at their current market rates at the balance sheet date. 

The notional amount and net fair value of financial instruments not recognised in 

the balance sheet as at 31 December 2001 are:- 

Group Notional Net Fair 

Amount Value 

Forward foreign exchange contracts $ 3,656,250 $ 42,600 

79 


31. Contingent Liabilities 



At 31 December 2001, there were contingent liabilities in respect of the following:- 

(a) Unsecured counter indemnity given to a financial institution by the Group for a bank 

guarantee issued on behalf of a third party amounted to $112,500 (2000: $112,500). 

(b) Guarantees given to financial institutions by the Company in respect of credit facilities 

extended to certain subsidiaries amounted to $78,845,500 (2000: $11,000,000), of which 

the amount utilised was $25,789,293 (2000: $9,841,396). 

32. Business Segments (Group) 

The main business segments of the Group comprises the following:- 

- E-enabling infrastructure: The design, installation and implementation of e-enabling 

infrastructure tools, operating systems and hardware. 

- IT services: Network infrastructure design and security implementation, training and 

maintenance support services. 

- IT products distribution: Distribution of IT products for IT principals. 

E-enabling IT IT Products 

Infrastructure Services Distribution TOTAL 

$'000 $'000 $'000 $'000 

Revenue and Expenses 

2001 

Total revenue 

- External customers 190,240 27,818 333,972 552,030 

Segment results 9,735 5,403 5,464 20,602 

Taxation (4,591) 

Profit from ordinary activities 

after taxation 16,011 

Minority interests (2,548) 

Net profit for the year 13,463 

80 


32. Business Segments (Group) (cont'd) 



E-enabling IT IT Products 

Infrastructure Services Distribution TOTAL 

$'000 $'000 $'000 $'000 

Revenue and Expenses 

2000 

Total revenue 

- External customers 187,246 16,241 170,508 373,995 

Segment results 9,215 2,222 3,940 15,377 

Share of profit of associate 1,105 


before taxation 16,482 

Taxation (4,663) 


after taxation 11,819 

Minority interests (3,374) 

Net profit for the year 8,445 

Assets and Liabilities 

2001 

Segment assets 49,580 9,063 392,839 451,482 

Unallocated assets 22,245 

Total assets 473,727 

Segment liabilities 33,352 6,557 291,504 331,413 

Unallocated liabilities 1,158 

Total liabilities 332,571 

Capital expenditure 613 1,903 7,004 9,520 

2000 

Segment assets 65,191 4,102 59,364 128,657 

Unallocated assets 6,573 

Total assets 135,230 

Segment liabilities 50,795 5,850 44,879 101,524 

Unallocated liabilities 449 

Total liabilities 101,973 

Capital expenditure 1,040 90 946 2,076 

81 


33. Geographical Segments (Group) 



The Group operates principally in Singapore, Thailand, Malaysia and China. In presenting 

information on the basis of geographic segments, segment revenue is based on the geographic 

location of operations. Segment assets are based on the geographic location of the assets. 

2001 

Singapore Thailand Malaysia China TOTAL 

$'000 $'000 $'000 $'000 $'000 

Total revenue from 

- External customers 217,467 159,912 103,265 71,386 552,030 

Segment assets 81,258 54,087 32,754 305,628 473,727 

Segment liabilities 36,308 35,362 23,259 237,642 332,571 

Capital expenditure 2,116 643 668 6,093 9,520 

Significant non-cash expenses 

- Depreciation and 

amortisation of goodwill 466 291 486 236 1,479 

2000 

Total revenue from 

- External customers 223,946 65,571 84,478 - 373,995 

Segment assets 71,391 37,612 26,227 - 135,230 

Segment liabilities 56,521 25,865 19,587 - 101,973 

Capital expenditure 839 430 807 - 2,076 

Significant non-cash expenses 

- Depreciation 408 244 289 - 941 

34. Subsequent Events 

Subsequent to the balance sheet date:- 

(a) On 1 February 2002, the Company issued 14,000,000 new ordinary shares of $0.10 each 

fully paid at $0.455 per share in settlement of the remaining outstanding consideration 

for the acquisition of PCI-SLR Technology (China) Limited. 

(b) The directors proposed the payment of a gross final dividend of 6% in respect of the 

financial year under review. 

35. Comparative Information 

Certain items in the comparative figures have been reclassified to conform with the current 

year's presentation. 

82 


Analysis of Shareholdings 

as at 8 April 2002 

ANALYSIS OF SHAREHOLDINGS AS AT 8 APRIL 2002 

Number of No of 

Range of Shareholdings Shareholders % Shares % 

1 - 1,000 93 5.14 93,000 0.03 

1,001 - 10,000 1,219 67.31 7,360,000 2.37 

10,001 - 1,000,000 479 26.45 30,548,562 9.85 

1,000,001 and above 20 1.10 272,311,438 87.75 

TOP 20 SHAREHOLDERS LIST AS AT 8 APRIL 2002 

1,811 100.00 310,313,000 100.00 

Number of 

Name Shares Held % 

1 PACIFIC CITY INTERNATIONAL HOLDINGS LIMITED 60,000,000 19.33 

2 SOLECTRON TECHNOLOGY SINGAPORE PTE LTD 60,000,000 19.33 

3 TECHNOCRAT INVESTMENTS LIMITED 30,000,030 9.67 

4 DBS NOMINEES PTE LTD 29,547,519 9.52 

5 V INVESTMENT HOLDINGS LIMITED 12,988,000 4.18 

6 UOB KAY HIAN PTE LTD 12,375,451 3.99 

7 RAFFLES NOMINEES PTE LTD 12,135,438 3.91 

8 DB NOMINEES (S) PTE LTD 7,125,000 2.30 

9 MORGAN STANLEY ASIA (S'PORE) PTE LTD 6,821,000 2.20 

10 HSBC (SINGAPORE) NOMINEES PTE LTD 6,601,000 2.13 

11 NTUC INCOME INSURANCE CO-OPERATIVE LIMITED 6,300,000 2.03 

12 FOONG KAM THO 5,376,000 1.73 

13 OCBC SECURITIES PRIVATE LTD 5,079,000 1.64 

14 CITIBANK NOMINEES S'PORE PTE LTD 4,219,000 1.36 

15 UNITED OVERSEAS BANK NOMINEES PTE LTD 3,173,000 1.02 

16 WATERWORTH PTE LTD 3,000,000 0.97 

17 KIM ENG ONG ASIA SECURITIES PTE LTD 2,140,000 0.69 

18 MEADOWSPRING PTE LTD 2,000,000 0.65 

19 PHILLIP SECURITIES PTE LTD 1,717,000 0.55 

20 OVERSEA-CHINESE BANK NOMINEES PTE LTD 1,714,000 0.55 

SUBSTANTIAL SHAREHOLDERS LIST AS AT 8 APRIL 2002 

83 


272,311,438 87.75 

Name Number of 

Shares Held 

% 

PACIFIC CITY INTERNATIONAL HOLDINGS LIMITED 60,000,000 19.33 

SOLECTRON TECHNOLOGY SINGAPORE PTE LTD 60,000,000 19.33 

TECHNOCRAT INVESTMENTS LIMITED 40,476,481 13.04 

GLORIOUS SUCCESS LIMITED 18,518,519 5.97 

PRIME ENTERPRISE II, L.P. @ 18,518,519 5.97 

PRIMEPARTNERS ASSET MANAGEMENT PTE LTD @ 18,518,519 5.97 

PRIMEPARTNERS ASSET INC. @ 18,518,519 5.97 

@ deemed interest through Glorious Success Limited

Notice of Annual General Meeting 

NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of the Company will be held at 

Traders Hotel, 1A Cuscaden Road, Singapore, Temasek I, Level 2 on 21 May 2002 at 10.00 am to 

transact the following business :- 

As Ordinary Business 

1 To receive and adopt the Directors' Report and Audited Accounts for the financial year ended 31 

December 2001 and the Auditors’ Report thereon. [Resolution 1] 

2 To declare a First and Final Dividend of 6% less 24.5% income tax for the year ended 31 December 

2001. [Resolution 2] 

3 (a) To re-elect Mr Lin Chien who is retiring in accordance with Article 91 of the Company's 

Articles of Association, as Director of the Company. [Resolution 3(a)] 

(b) To re-elect Mr Wong Heng Chong who is retiring in accordance with Article 91 of the 

Company's Articles of Association, as Director of the Company. 

[See explanatory note (i)] [Resolution 3(b)] 

(c) To re-elect Mr Narong Intanate who is retiring in accordance with Article 91 of the 

Company's Articles of Association, as Director of the Company. [Resolution 3(c)] 

(d) To re-elect Mr Liu Wei who is retiring in accordance with Article 97 of the Company's 

Articles of Association, as Director of the Company. [Resolution 3(d)] 

(e) To re-elect Mr Wang Fangmin who is retiring in accordance with Article 97 of the 

Company's Articles of Association, as Director of the Company. [Resolution 3(e)] 

(f) To re-elect Mr Teo Ek Tor who is retiring in accordance with Article 97 of the Company's 

Articles of Association, as Director of the Company. [Resolution 3(f)] 

4 To approve the payment of Directors’ Fee of S$75,000/- for the year ended 31 December 2001 

(2000: Nil) [Resolution 4] 

5 To re-appoint KPMG as Auditors and to authorise the Directors to fix their remuneration. 

[Resolution 5] 

6 To transact any other business that may be properly transacted at an Annual General Meeting. 

[Resolution 6] 

As Special Business 

7 To consider and, if thought fit, to pass the following as Ordinary Resolutions, with or without 

modifications:- 

Ordinary Resolutions:- 

(a) "That pursuant to Section 161 of the Companies Act, Chapter 50 and the listing rules of 

the Singapore Exchange Securities Trading Limited, authority be and is hereby given to 

the Directors of the Company to issue ordinary shares in the Company ("whether by way 

of rights, bonus or otherwise) at any time and upon such terms and conditions and for 

such purposes and to such persons as the Directors may in their absolute discretion 

deem fit provided that the aggregate number of ordinary shares to be issued pursuant to 

this Resolution does not exceed fifty per cent (50%) of the issued share capital of the 

84 



Company for the time being, of which the aggregate number of ordinary shares to be 

issued other than on a pro-rata basis to shareholders of the Company does not exceed 

twenty per cent (20%) of the issued share capital of the Company for the time being, and, 

unless revoked or varied by the Company in general meeting, such authority shall continue 

in force until the conclusion of the next Annual General Meeting of the company or the 

date by which the next Annual General Meeting of the Company is required by law to be 

held, whichever is the earlier." 

[See explanatory note (ii)] [Resolution 7(a)] 

(b) "That the Directors be and are hereby authorized to offer and grant options in accordance 

with the provisions of the ECS Share Option Scheme II (the "Scheme II"), and to allot and 

issue from time to time such number of ordinary shares of S$0.10 each in the capital of 

the Company as may be required to be issued pursuant to the exercise of the options 

under the Scheme II provided always that the aggregate number of ordinary shares to be 

issued pursuant to the Scheme II shall not exceed fifteen per cent (15%) of the total 

issued share capital of the Company from time to time." 

[See explanatory note (iii)] [Resolution 7(b)] 

(c) "That for the purposes of Chapter 9A of the Listing Manual of the Singapore Exchange 

Securities Trading Limited: 

(i) approval be and is hereby given for the renewal of the shareholders' mandates for 

the Company, its subsidiaries and target associated companies or any of them to 

enter into any of the transactions falling within the types or categories of interested 

person transactions as set out in: 

(1) the Company's prospectus dated 30 January 2001 (the "Prospectus") with 

the interested person described in the Prospectus, provided that such 

transactions are carried out in the normal course of business, on commercial 

terms and in accordance with the guidelines for interested person 

transactions as set out on pages 93 to 95 in the Prospectus; and 

(2) the Company's circular to shareholders dated 22 October 2001 (the 

"Circular") with the interested person described in the Circular, provided 

that such transactions are entered into on an arm's length basis, on normal 

commercial terms and in accordance with the guidelines for interested 

person transactions as set out on pages 25 to 29 in the Circular; 

such shareholders' mandates collectively referred to as the "IPT Mandates": 

(ii) the IPT Mandates shall, unless revoked or varied by the Company in general 

meeting, continue in force until the next Annual General Meeting of the Company; 

and 

85 


By Order of the Board 

Wee Sien Yang 

Company Secretary 

Singapore 

6 May 2002 

Explanatory Notes : 


(iii) the Directors of the Company and/or any of them be and are hereby authorized to 

complete and do all such acts and things including, without limitation, executing 

all such documents and approving any amendment, alteration or modification to 

any document) as they may consider desirable, expedient or necessary or in the 

interests of the Company to give effect to the IPT Mandates and/or this Resolution." 

[See explanatory note (iv)] [Resolution 7(c)] 

(i) Mr Wong Heng Chong, if re-elected, will remain a member of the Company’s Audit Committee 

and will be considered as a non-independent director. 

(ii) Resolution No. 7(a), if passed, is to authorize the Directors to issue ordinary shares in the capital 

of the Company up to an amount not exceeding in total fifty percent (50%) of the issued ordinary 

share capital of the Company for the time being. 

(iii) Resolution 7(b), if passed, is to authorise the Directors to offer and grant options and to allot 

and issue shares pursuant to the ECS Share Option Scheme II, provided that the aggregate 

number of shares issued pursuant to the ECS Share Option Scheme II shall not exceed 15 per 

cent of the total issued share capital of the Company from time to time. 

(iv) Resolution 7(c), if passed, is to grant or renew (as the case may be) the IPT Mandates to allow 

the Company, its subsidiaries and target associated companies or any of them to enter into 

certain interested person transactions with persons who are considered "interested persons" 

(as defined in Chapter 9A of the Listing Manual of the Singapore Exchange Securities Trading 

Limited). Please refer to the Company's Prospectus dated 30 January 2001 and Circular to 

Shareholders dated 22 October 2001 (electronic copies of which are available on the website of 

Singapore Exchange Limited at www.sgx.com). 

Notes : 

A member entitled to attend and vote at the Annual General Meeting may appoint not more than two 

proxies to attend and vote on his behalf and where a member appoints more than one proxy, he shall 

specify the proportion of his shareholding to be represented by each proxy. A proxy need not be a 

member of the Company. The instrument appointing a proxy or proxies must be deposited at the 

Share Registrar office of the Company at M&C Services Private Limited, 138 Robinson Road #17-00, 

The Corporate Office, Singapore 068906, not less than 48 hours before the time set for the Annual 

General Meeting. 

86 


� 

ECS HOLDINGS LIMITED 

(Incorporated in the Republic of Singapore) 

PROXY FORM – ANNUAL GENERAL 

MEETING 

I/We ________________________________________________________________________________________________ 

of ___________________________________________________________________________________________________ 

being a member/members of ECS HOLDINGS LIMITED hereby appoint 

NRIC/Passport Proportion of 

Name Address Number Shareholdings (%) 

and/or (delete as appropriate) 

as my/our proxy/proxies to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Annual 

General Meeting of ECS HOLDINGS LIMITED to be held at Traders Hotel, 1A Cuscaden Road, Singapore, Temasek 

I, Level 2 on 21 May 2002 at 10.00 a.m. and at any adjournment thereof. 

(Please indicate with an "X" in the spaces provided whether you wish your vote(s) to be cast for or against the 

Ordinary Resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the 

proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual 

General Meeting.) 

NO ORDINARY RESOLUTIONS 

Ordinary Business : 

FOR AGAINST 

1. Adoption of Reports and Accounts 

2. To declare a First and Final Dividend of 6% less 24.5% income tax for the year 

ended 31 December 2001 

3. Re-election of Directors : 

(a) Mr Lin Chien 

(b) Mr Wong Heng Chong 

(c) Mr Narong Intanate 

(d) Mr Liu Wei 

(e) Mr Wong Fangmin 

(f) Mr Teo Ek Tor 

4. To approve the payment of Directors’ Fee of S$75,000 for the year ended 


5. Re-appointment of Auditors 

6. Any other ordinary business 

Special Business : 

7. (a) Authority for Directors to issue Shares pursuant to Section 161 of the 

Companies Act, Cap. 50. 

(b) Authority for Directors to offer and grant options and/or allot shares 

pursuant to the ECS Share Option Scheme II. 

(c) Approval for renewal of the IPT Mandates for transactions with 

interested persons 

Dated this day of 2002. 

Signature(s) of member(s) or Common Seal 

IMPORTANT :- 

PLEASE READ NOTES OVERLEAF 

87 


Important: 

1. For investors who have used their CPF monies to 

buy the Company’s shares, the Annual Report is 

forwarded to them at the request of their CPF 

Approved Nominees and is sent solely FOR 

INFORMATION ONLY. 

2. This Proxy Form is not valid for use by CPF 

investors and shall be ineffective for all intents and 

purposes if used or purported to be used by them. 

Total Number of Shares Held:

Notes :- 

1. Please insert the total number of shares held by you. If you have shares entered against your name 

in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), 

you should insert that number of shares. If you have shares registered in your name in the Register 

of Members, you should insert that number of shares. If you have shares entered against your name 

in the Depository Register and shares registered in your name in the Register of Members, you 

should insert the aggregate number of shares entered against your name in the Depository Register 

and registered in your name in the Register of Members. If no number is inserted, the instrument 

appointing a proxy or proxies shall be deemed to relate to all the shares held by you. 

2 A member of the Company entitled to attend and vote at a meeting of the Company is entitled to 

appoint one or two proxies, whether a member or not, to attend and vote instead of him. 

3 Where a member appoints two proxies, the appointments shall be invalid unless he specifies the 

proportion of his shareholding (expressed as a percentage of the whole) to be represented by each 

proxy. 

4 The instrument appointing a proxy or proxies must be deposited at the Share Registrar office of the 

Company at M&C Services Private Limited, 138 Robinson Road #17-00, The Corporate Office, 

Singapore 068906, not less than forty-eight (48) hours before the time appointed for the Annual 

General Meeting. 

5 The instrument appointing a proxy or proxies must be under the hand of the appointor or of his 

attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed 

by a corporation, it must be executed either under its common seal or under the hand of an officer or 

attorney duly authorised. 

6 A corporation which is a member may authorise by a resolution of its directors or other governing 

body such person as it thinks fit to act as its representative at the Annual General Meeting, in 

accordance with Section 179 of the Companies Act, Chapter 50 of Singapore. 

General: 

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, 

improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the 

instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the 

case of shares entered in the Depository Register, the Company may reject any instrument appointing a 

proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his 

name in the Depository Register as at forty-eight (48) hours before the time appointed for holding the Annual 

General Meeting, as certified by The Central Depository (Pte) Limited to the Company.

Produced by Asia Business Channels Pte Ltd 

35 


ECS Holdings Limited Blk 19, Kallang Avenue, #07-153 Singapore 339410 

Tel: 65-6299 9433 Fax: 65-6298 3629 Website: http://www.ecssin.com.sg 

36

Audit Committee - ECS Holdings Limited

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