Corporate Information 2 Profile of Directors 3 Board Committees 4 Letter to Shareholders & Financial Highlights Corporate Governance Report

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3 CONTENTS Corporate Information 2 Profile of Directors 3 Board Committees 4 Letter to Shareholders & Financial Highlights Corporate Governance Report 6-14 Financial Statements 15 Statistics of Shareholdings 50 Notice of Annual General Meeting 52 Proxy Form

4 CORPORATE INFORMATION FULL NAME OF COMPANY : NTI INTERNATIONAL LIMITED COMPANY REGISTRATION NUMBER : D PLACE AND DATE OF INCORPORATION : Singapore, 6 March 2002 BOARD OF DIRECTORS : Choo Pei Kevin Yu Peijie (Executive Director) Siew Teng Kean (Independent Director) Ong Wei Jin (Independent Director) Dali Bin Sardar (Non-Executive Director) Fong Wea Lea Joshua (Non-Executive Director) AUDIT COMMITTEE : Siew Teng Kean (Chairman) Ong Wei Jin Dali Bin Sardar Fong Wea Lea Joshua NOMINATING COMMITTEE : Ong Wei Jin (Chairman) Siew Teng Kean Dali Bin Sardar Fong Wea Lea Joshua REMUNERATION COMMITTEE : Ong Wei Jin (Chairman) Siew Teng Kean Dali Bin Sardar Fong Wea Lea Joshua COMPANY SECRETARY : Sin Chee Mei Tham Lee Meng REGISTERED OFFICE : 19 Keppel Road #03-10 Jit Poh Building Singapore Telephone: (65) Facsimile: (65) AUDITORS : PKF-CAP LLP Certified Public Accountants 146 Robinson Road #08-01, Singapore Partner-in-charge: Lee Eng Kian Appointed with effect from financial year ended 31 Dec 2007 SHARE REGISTRAR : Boardroom Corporate & Advisory Services Pte. Ltd. 3 Church Street #08-01 Samsung Hub, Singapore Telephone: (65) Facsimile: (65) PRINCIPAL BANKERS : Malayan Banking Berhad 2 Battery Road #16-01 Maybank Tower, Singapore DBS Bank 6 Shenton Way, DBS Building Singapore

5 PROFILE OF DIRECTORS Mr Choo Pei Kevin Yu Peijie Executive Director Mr Choo was appointed as a non-executive director of the Company on 19 January 2007 and assumed an executive role to oversee the management of the Group with effect from 18 May He was last re-elected as a Director on 26 April He is also currently a director of Pearz Pte Ltd and is also a director of CS2P Pte Ltd. He has more than 10 years experience in the banking and finance industry. Between 1996 and 1997, he worked in the corporate banking department of Sumitomo Bank in Singapore. Between 1997 and 2003, he was with the investment banking department of NM Rothschild & Sons where he worked on various corporate and debt restructuring, M&A and valuation exercises in the telecoms, utilities and IT sectors. From 2003 to 2004, he was Vice President of Business Planning, PT Mobile-8 Telecom in Jakarta. Mr Choo holds a Bachelor of Science (Economics) degree from the National University of Singapore. Mr Dali Bin Sardar Non-Executive Director Mr Sardar joined NTI as a non-executive director in August 2003 and was last re-elected as a Director on 25 April He is also a member of the Audit, Nominating and Remuneration Committees. With a background in banking and finance, he brings to the board over 27 years of valuable experience having spent 14 years in Citibank. He is now Director of DTA Capital Partners Sdn Bhd, a boutique corporate finance company involved mainly in venture capital, equity and debt raising, mergers and acquisitions, IPO planning and various forms of corporate restructuring. Previously, Mr Sardar was the CEO of Utama Merchant Bank Bhd. Between 1991 and 1996, he was with Citicorp Capital first as executive director, then as Managing Director from Mr Sardar was also the previous Chairman and treasurer of the Malaysian Venture Capital Association. Currently, he sits on the board of directors for several other companies: Chuan Huat Resources Bhd, MGIC Bhd, DTA Ventures Management Sdn Bhd, Mondragon (M) Sdn Bhd, XCT Sdn Bhd, MAVCAP ICT Sdn Bhd, Mastergy Sdn Bhd, Sage Interactive Sdn Bhd, Radiance Electronics Limited, Manstate Pte Ltd and Oxhill International Pte Ltd. Mr Sardar holds a BA (Economics) degree from Knox College, USA and a Masters in International Management from the American Graduate School of International Management. Mr Fong Wea Lea Joshua Non-Executive Director Mr Fong was appointed a non-executive director of the Company on 19 January 2007 and will be due for re-election at the coming Annual General Meeting. He is also a member of the Audit, Nominating and Remuneration Committees. He graduated with First Class Honours in Accountancy from the Nanyang Technological University and obtained his Chartered Financial Analyst (CFA) qualification in He started his career with the Monetary Authority of Singapore before moving to the investment banking department of NM Rothschild & Sons. He is currently Managing Director of Millennial Capital Pte Ltd and a director of Columbia Partners (Hong Kong) Limited. Mr Ong Wei Jin Independent Director Mr Ong was appointed an independent director of the Company on 16 May 2007 and was last re-elected as a Director on 25 April He is also Chairman of the Nominating and Remuneration Committees and a member of the Audit Committee. He is presently a partner in a law firm of in Singapore. His main areas of practice are corporate finance and general corporate law. He holds a Bachelor of Law (Honours) from the National University of Singapore, and an MBA (Investment and Finance) from the University of Hull and a Masters of Law from the National University of Singapore. Currently, he sits on the board of directors for several other companies: Luzhou Bio-Chem Technology Limited and China XLX Fertiliser Ltd. Mr Siew Teng Kean Independent Director Mr Siew was appointed an independent director of the Company on 30 January 2007 and will be due for re-election at the coming Annual General Meeting. He is also Chairman of the Audit Committee and a member of the Nomination and Remuneration Committees. He also holds directorships in Mediacorp Pte Ltd and Healthway Medical Corporation Ltd. Mr Siew is currently Head of Institutional Business in UOB Asset Management. He was previously a managing director at Temasek Holdings, where he worked from 1998 to 2006 in the area of private equity and funds investments, and prior to that, was a sell side analyst at Peregrine Securities Pte Ltd. Before that, he had worked as a lecturer in computer science at the National University of Singapore, senior design engineer with Austek Microsystems and electronics engineer at the Defence Science Organisation. Mr Siew holds a Master s degree in Computer Science & Engineering from the University of Michigan, and a Bachelor s degree in Electrical Engineering from the University of Adelaide. He obtained his Chartered Financial Analyst (CFA) qualification in 1997 and holds a Capital Market Services license for Fund Management from the Monetary Authority of Singapore. 3

6 BOARD COMMITTEES Audit Committee Chairman: Siew Teng Kean (Independent Director) Members: Ong Wei Jin Dali Bin Sardar Fong Wea Lea Joshua (Independent Director) (Non-Executive Director) (Non-Executive Director) Remuneration Committee Chairman: Ong Wei Jin (Independent Director) Members: Siew Teng Kean Dali Bin Sardar Fong Wea Lea Joshua (Independent Director) (Non-Executive Director) (Non-Executive Director) Nominating Committee Chairman: Ong Wei Jin (Independent Director) Members: Siew Teng Kean Dali Bin Sardar Fong Wea Lea Joshua (Independent Director) (Non-Executive Director) (Non-Executive Director) 4

7 LETTER TO SHAREHOLDERS AND FINANCIAL HIGHLIGHTS Dear Shareholders, In FY2008, the Group recorded S$3.962m in revenues which is derived from the business of New Eagle (HK) Limited ( NEL ) which trades in used electronics components. That is 352% higher than FY2007 and the primarily reason for this increase is because NEL was consolidated for 4 months in FY2007. Gross profit was S$787k in FY2008 compared with S$318k in FY2007. Profit before tax in FY2008 was S$74k. Net loss attributable to equity holders of the Company is S$21k and S$583k for FY2008 and FY2007 respectively. Mr Goh Yong Hwee, the vendor of NEL, provided a profit guarantee of S$500k for FY2008 which has been met. The 18,181,818 shares of the Company that was issued to him as consideration for the acquisition of NEL by the Company is being held in escrow and shall be released to him only upon the Company receiving a total of S$450,000 in dividends for FY2008 by 30 April There is no profit guarantee from Mr Goh for FY2009. In FY2008, the Company drew down an additional S$1m from the convertible loan provided by Mr Ong Ming Liong, bringing the total amount drawn down to S$1.5m. The convertible loan is for the purpose of paying the fees, costs and expenses of third parties engaged or to be engaged to advise the Company on the proposed acquisition by the Company of the entire issued and paid-up share capital of Sun Light Limited. The conversion price shall be S$0.05 which is the Issue Price of the consideration shares per the Sales and Purchase Agreement announced by the Company on 1 November 2008 if the transaction is successfully completed. If the transaction is aborted, the conversion price shall be S$0.08 provided that the Lender shall not own more than 5% of the enlarged share capital of the Company and only up to half the total amount of money utilized from the convertible loan. The Sales and Purchase Agreement in relation to the proposed acquisition by the Company of the entire issued and paid-up share capital of Sun Light Limited was signed and announced on 1 November The outlook for FY2009 is uncertain in light of the credit crisis and sharp decline in global trade and economic growth. The business environment is expected to be difficult for NEL as its customers are mostly in China which is experiencing slowdown in economic activity. I would like to thank our stakeholders for their ongoing support in the past year as well as for the coming financial year. Choo Pei Kiat@ Kevin Yu peijie Executive Director NTI International Limited 5

8 CORPORATE GOVERNANCE The Report refers to Corporate Governance as the processes and structure by which the business and affairs for the company are directed and managed, in order to enhance long term shareholders value through enhancing corporate performance and accountability, whilst taking into account the interests of other stakeholders. Good corporate governance therefore embodies both enterprise (performance) and accountability (conformance). We believe that Corporate Governance is important and is the cornerstone in our communications to our shareholders, customers, staff, suppliers and other stakeholders. This Report below outlines the corporate governance practices that were put in place by the Company with reference to the Code of Corporate Governance 2005 (the Code ) throughout the financial year. Any deviations from the Code are disclosed in this Report. Board Matters Principle 1: The Board s Conduct of Affairs Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board. Our Board of Directors (the Board ) supervises the management of the business and affairs of the Group. Key functions of the Board include the setting of the Group s strategic plans, key operational initiatives, major investments and funding decisions. The Board also identifies principal risks of the Group s business, ensures the implementation of appropriate systems to manage these risks and reviews the financial performance of the Group. The Board holds meetings on a regular basis throughout the year to approve the Group s key strategic plans as well as major investments, disposals and funding decisions. The Board also ensures effective management is in place and provides oversight in the proper conduct of the Group s businesses. The Board has delegated specific duties and responsible to various committees mentioned below. The Board has adopted internal policies and procedures, which set out material transactions that require the prior approval of the Board. The entry into joint ventures, mergers and acquisitions and divestments would be examples of transactions that would require the Board s approval under such policies and procedures. As at the date of this Report, the Board comprises of five directors, all of whom are from various professional backgrounds. The profiles of our directors can be found on page 3 of the Annual Report. Being business leaders and/or professionals, our directors, for their own continuing professional development, have to attend various courses and/or various presentations or seminars. Our directors are therefore aware of changes in the business environment, relevant new laws, business practices and cultures both locally and globally. Further, at the Company s expense, our directors are also encouraged to undergo relevant training programs to enhance not only their skills and knowledge but also to be briefed on new laws, regulations and changing business risks, business practices and cultures. Our directors also sit on the boards of other companies, and are therefore not only well aware of their duties and responsibilities, but how to discharge such duties. For incoming and/or new directors, the Company has put in place an orientation program to ensure that any incoming and/or new directors are familiar with the Group s businesses and corporate governance practices. Upon appointment of a new director, the Company would issue a formal letter of appointment setting out the statutory and other duties and obligations of the director. During the financial year in review, the Board conducted regular meetings at least twice a year, ad hoc meetings are convened if there are matters requiring the Board s decision at the relevant times. Board approval is specifically sought for major financial and investment proposals. In between the scheduled meetings, should the board has information discussions on matters requiring urgent attention, it would then be formally confirmed and approved by circulating resolutions in writing. Board meetings are conducted in Singapore and if required meetings via telephone and conference via audio-visual communications as allowed under the Company s Articles of Association. 6

9 CORPORATE GOVERNANCE The attendance of the Directors at Board and Board committees meetings for the financial year under review are disclosed as follows:- Number of Audit Committee Meetings attended Number of Nominating Committee Meetings attended Number of Remuneration Committee Meetings attended Number of Board Board Members Meetings attended Number of Meetings Held Choo Pei Kevin Yu Peijie Dali Bin Sardar Fong Wea Lea Joshua Ong Wei Jin Siew Teng Kean Principle 2: Board Composition and Guidance There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board s decision making. As at the date of this Report, the Board consists of five Directors, one of which is an Executive Director and four Non- Executive Directors of which two are considered to be independent by the Nominating Committee. Each Director has been appointed on the strength of his expertise, talent, experience and potential contributions to the Company. The Board has adopted the definition in the Code of what constitutes an Independent Director in its review of the independence of each director. The Nominating Committee is of the view that the current Board, with Independent Directors making up at least one-third of the Board, has a strong and independent element that is able to exercise independent judgement on corporate affairs and provide the Management with a diverse and objective perspective on issues. The Board considers that its current composition of Independent and non-executive Directors provides an effective Board with a mix of knowledge, business contacts and successful business and commercial experience. This balance is important in ensuring that the strategies proposed by the executive management are fully discussed and examined, taking into account the long term interests of the Group. Part of the role of non-executive directors is to constructively challenge and help develop proposals on strategy; and review the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. The Board is of the view that the current Board size is appropriate, taking into consideration the nature and scope of the Company s operations. Principle 3: Chairman and Chief Executive Officer There should be a clear division of responsibilities at the top of the company - the working of the Board and the executive responsibility of the company s business - which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power. The Code states that the roles of Chairman and Chief Executive Officer ( CEO ) should in principle be separate, to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision making. In addition, companies should disclose the relationship between the Chairman and CEO where they are related to each other. The scope of the Group s current operations and the existing structure of the Group does not warrant the additional costs which would be incurred in the appointment of a Chairman of the Board for the current position. After careful consideration, the Board is of the opinion that there is adequate accountability and transparency as there is participation from independent directors. The Board believes that the interests of the minority shareholders will not be prejudiced without the appointment of a Chairman. Mr Choo Pei Kevin Yu Peijie, the Executive Director would endeavour to enhance the shareholders value. 7

10 CORPORATE GOVERNANCE The roles of the Executive Director are : Schedules meetings that enable the Board of the Company to perform its duties responsibly; Advises the Board on the meeting agenda; Exercises control over quality, quantity and timeliness of the flow of information between Management and the Board; and Assists in ensuring compliance with Company on corporate governance guidelines. The Board also believes that as major decisions made by the Executive Director are being reviewed by the Audit Committee ( AC ), Nominating Committee ( NC ) and Remuneration Committee ( RC ) which are chaired by Independent Directors, there are adequate safeguards against an uneven concentration of power and authority in the Company. Principle 4: Board Membership There should be a formal and transparent process for the appointment for new directors to the Board. We believe that Board renewal must be an ongoing process, to both ensure good governance, and to maintain relevance to the changing needs of the Company and business. Article 107 of the Company s Articles of Association require at least one-third of our Directors to retire and subject themselves to re-election by shareholders at every Annual General Meeting ( AGM ) of the Company, with the directors who have been in office longest since their re-election or appointment standing for election. In other words, no Director will stay in office for more than three years without being re-elected by shareholders. Accordingly, Mr Siew Teng Kean and Mr Fong Wea Lea Joshua shall retire by rotation at the Company s forthcoming Annual General Meeting and are eligible for re-election. In addition, Article 117 of the Company s Articles of Association provides that newly appointed director shall hold office until the next AGM and shall be eligible for re-election following his appointment. No new directors were appointed during the financial year The Board has established a NC, which as at the date of this Report are as follows: Chairman: Ong Wei Jin (Independent Director) Members: Siew Teng Kean Dali Bin Sardar Fong Wea Lea Joshua (Independent Director) (Non-Executive Director) (Non-Executive Director) The NC is regulated by a set of written terms of reference. The NC met once in FY2008, and in between the schedule meetings, should the NC has informal discussions on matters requiring urgent attention, it would then be formally confirmed and approved by circulating resolutions in writing. The duties and responsibilities of the NC are :- To determine the criteria for identifying candidates, reviewing nominations and make recommendations to the Board on all board appointments; To decide how the Board s performance may be evaluated and propose objective performance criteria. Such performance criteria, that allow comparison with its industry peers, should be approved by the Board and address how the Board has enhanced long term shareholders value; To review such performance criteria on an annual basis and where circumstances deem it necessary for any of the criteria to be changed, to recommend to the Board that changes; To consider implement a process to assess the effectiveness of the Board as a whole for assessing the contribution and performance by each individual director to the effectiveness of the Board. The assessment process shall be disclosed annually; To determine annually whether or not a director is independent according to the guidelines as set out in the Code; and To evaluate and decide whether or not a director is able to and has been adequately carrying out his/her duties as director of the company when a director has multiple board representation. 8

11 CORPORATE GOVERNANCE The NC has reviewed and is satisfied that the directors have been able to devote adequate time and attention to the affairs of the Company to fulfil their duties as director of the Company, in addition to their multiple board appointments. Certain key information on the Directors is set out below: Name of Director Choo Pei Kevin Yu Peijie (Executive Director) Dali Bin Sardar (Non- Executive Director) Fong Wea Lea Joshua (Non- Executive Director) Ong Wei Jin (Non- Executive, Independent Director) Siew Teng Kean (Non- Executive, Independent Director) Directorship a) Date of first appointment b) Date last re-election a) b) a) b) Due for re-election at the forth coming AGM a) b) Retirement pursuant to Article 107 a) b) a) b) Retirement pursuant to Article 107 Principle 5: Board Performance There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board. The NC will use its best efforts to ensure that Directors appointed to our Board possess the relevant background, experience and knowledge and that each Director brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made. The NC is responsible for a formal assessment of the effectiveness of the Board as a whole and is currently reviewing how to assess the contribution and performance by each individual director to the effectiveness of the Board and determine the performance criteria and evaluation methods. For the year under review, NC has evaluated the Board s performance as a whole. We believe that apart from the fiduciary duties (i.e. to act in good faith, with due diligence and care and in the best interests of the Company and its shareholders); the Board s key responsibilities are to set the strategic directions of the Company and ensure that the long term objective of enhancing shareholders value is achieved. The Board s performance is measured by its ability to support the management, especially in times of crisis, and to steer the Company towards profitable directions. Principle 6: Access to Information In order to fulfil their responsibilities, board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis. We uphold the principle that the Board should be provided with timely and complete information prior to Board meetings and as and when the need arises. New directors, if any, will be fully briefed on the business of the Group. The Board members have separate and independent access to the Company s senior management. Management of the Company is required to provide adequate and timely information to the Board on matters, which require the Board s decision, as well as ongoing reports relating to the operational and financial performance of the Company. The Company s Articles of Association provide for directors to convene meetings by teleconference or videoconference. Where a physical board meeting is not possible, timely communication with the directors is effective through electronic means, which includes electronic mail, teleconferencing and/or videoconferencing. Alternatively, Management will meet and brief each director before seeking Board approval. The Board members have separate and independent access to the Company Secretaries. The Company Secretaries or their representatives attend all Board s meetings and the Board Committees meetings. The Company Secretaries assist the Board to ensure that board procedures and rules and regulations are complied with. 9

12 CORPORATE GOVERNANCE The Directors, either individually or as a group, has the right to seek independent legal and other professional advice, if necessary, at the Company s expenses concerning any aspect of the Group s operations or undertakings in order to fulfil their duties and responsibilities as directors. Remuneration Matters Principle 7: Procedures for Developing Remuneration Policies There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration. The Board has established a RC, which as at the date of this Report are as follows: Chairman: Ong Wei Jin (Independent Director) Members: Siew Teng Kean Dali Bin Sardar Fong Wea Lea Joshua (Independent Director) (Non-Executive Director) (Non-Executive Director) The RC is regulated by a set of written terms of reference. The RC met once in FY2008, and in between the schedule meetings, should the RC has informal discussions on matters requiring urgent attention, it would then be formally confirmed and approved by circulating resolutions in writing. The RC reviews the remuneration of the management of the Company and to provide a greater degree of objectivity and transparency in the setting of remuneration. The RC is independent of Management and free from any business or other relationships, which may materially interfere with the exercise of their independent judgement. The RC reviews and recommends to the Board, in consultation with management, a framework of all aspects of remuneration. The RC also determines the specific remuneration packages and terms of employment of the Executive Directors of the Company including those employees related to the Executive Directors and controlling shareholders of the Company as well as the senior executives. The RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. Principle 8: Level and Mix of Remuneration The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant portion of executive directors remuneration should be structured so as to link rewards to corporate and individual performance. In its deliberations, the RC takes into consideration industry practices and norms in addition to the Company s relative performance and the performance of the individual management executive. No Director will be involved in deciding his own remuneration. The RC oversees executive compensation and development in the Company with the goal of building capable and committed management teams through competitive compensation, focused management and progressive policies which can attract, motivate and retain a pool of talented executive to meet the Group s current and future growth plans. Non-executive directors will not be over-compensated to the extent that their independence may be compromised. Nonexecutive directors do not have service contracts. They are paid a fixed director s fee component and/or share options plus additional fees for appointment as chairman or a member of a particular board committee. The Board may, if it considers necessary, consult experts on the remuneration of non-executive directors. The Company had entered into a Service Agreement with Mr Choo Pei Kevin Yu Peijie, the Executive Director of the Company for a period of two years with effect from 1 May The Service Agreement covers the terms of employment, specifically salaries. Directors fees do not form part of the terms of the Service Agreement, as these require the approval of the shareholders of the Company s at the Annual General Meeting ( AGM ). The Service Agreement provide for termination by either party upon giving not less than two months notice in writing. 10

13 CORPORATE GOVERNANCE On June 25, 2002 and in conjunction with the company s listing on the Singapore Exchange Securities Trading Limited, the company adopted the NTI Employees Share Option Scheme ( the Scheme ). The purpose of the Scheme is to provide an opportunity for the employees of the Group to participate in the equity of the company and to motivate them towards better performance through increased dedication and loyalty. The Scheme is administered by a Special Committee whose members as at date of this report are: Chairman: Ong Wei Jin (Independent Director) Members: Siew Teng Kean Fong Wea Lea Joshua Choo Pei Kevin Yu Peijie (Independent Director) (Non-Executive Director) (Executive Director) No share options have been granted pursuant to the Scheme during FY2008. Principle 9: Disclosure on Remuneration Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the company s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance. Directors Remuneration Our Executive Director s remuneration consists of his basic salary and bonuses. The details of their remuneration package are given below. Our Independent Directors and non-executive Directors have remuneration packages which consist of a Directors fee component. The Directors fees are based on a scale of fees divided into basic retainer fees as a Director and additional fees for serving on any Board committees. The Board recommends payment of Directors fees to be approved by shareholders at the AGM. The Board recommends payment of Directors fees for FY2009 to be paid quarterly in arrears in FY2009 to the non-executive Directors. The payment of such fees shall be subject to shareholders approval at the forthcoming AGM. The breakdown of remuneration of the directors of the Company for the financial year ended 31 December 2008 is as follows:- Remuneration band: Below S$250,000 Name of Director Salary & Bonus Directors Fee Choo Pei Kevin Yu Peijie 100% - Dali Bin Sardar - 100% Fong Wea Lea Joshua - 100% Ong Wei Jin - 100% Siew Teng Kean - 100% The breakdown of remuneration of the top executives (who are not directors of the Company) for the financial year ended 31 December 2008 is as follows:- Remuneration band: Below S$250,000 Name of Executive Salary & Bonus Benefits in kind Goh Yong Hwee 100% - There are no employees in the Group who are immediate family members of a Director. 11

14 CORPORATE GOVERNANCE Accountability and Audit Principle 10: Accountability The Board should present a balanced and understandable assessment the Company s performance, position and prospects. The Board upholds its continuing obligations of prompt disclosures in a responsive way. The Board believes as they are accountable to shareholders for the Company and the Group s performance, it continues to review the Company s businesses to provide the shareholders with a balanced and understandable assessment of the company s performance, position and prospects on a timely basis. The Management provides all members of the Board with a balanced and understandable management accounts of the company s performance, position and prospects on a regular, ongoing and upon request basis. This is further supplemented by our Audit Committee in its report to the Board. The directors also have separate and independent access to the Company s key management. The Board is mindful of its obligations to provide timely and fair disclosure of material information in compliance with statutory reporting requirements and the SGX-ST Listing Rules. Price sensitive information is first publicly released either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Principle 11: Audit Committee The Board should establish an Audit Committee with written terms of reference which clearly set out is authority and duties. The composition of the AC which as at the date of this Report is as follows: Chairman: Siew Teng Kean (Independent Director) Members: Ong Wei Jin Dali Bin Sardar Fong Wea Lea Joshua (Independent Director) (Non-Executive Director) (Non-Executive Director) The Board is satisfied that the members of the AC are appropriately qualified to discharge their responsibilities and at least two AC members have accounting or related financial management expertise and/or experience. The AC met twice in FY2008, and in between the schedule meetings, should the AC have informal discussions on matters requiring urgent attention, it would then be formally confirmed and approved by circulating resolutions in writing. The AC holds periodic meetings and reviews the following with the Executive Director and external auditors of the Company: The review of the scope and results of the audit and its cost effectiveness, and the independence and objectivity of the external auditors; The review of the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the company and any formal announcements relating to the company s financial performance; The review of the nature and extent of non-audit services provided by the external auditors; The review of the adequacy of the company s internal controls; The review of the effectiveness of the company s internal audit function; and Recommendations on the appointment, re-appointment and removal of the external auditor, and approving the remuneration and terms of engagement of the external auditor to the Board. In FY2008, the AC met once with the external auditors without the presence of management. The AC, having reviewed the scope and value of non-audit services provided to the Company and Group by the external auditors and satisfied that the nature and extent of such services has not prejudiced the independence and objectivity of the external auditors in their conduct of the statutory audit. The AC recognizes the need to maintain a balance between the independence and objectivity the external auditors and the work carried out by the external auditors based on value-formoney considerations. 12

15 CORPORATE GOVERNANCE The Company has adopted a set of terms of reference, in relation to the roles and responsibilities of the AC. The AC s duties are not limited to keeping under review the scope and results of the audit, its cost effectiveness and the independence and objectivity of the external auditors, but it also has explicit authority to investigate any matter within its terms of reference including accounting, auditing, internal controls and financial practices, full access of records, resources and personnel and co-operation by Management. The Audit Committee also has full access to Management and the Company s external auditors, and has discretion to invite any Director or executive officer to attend its meetings and is assured of adequate resources to enable it to discharge its functions properly. The Company has an arrangement whereby employees of the Company can have access to the Board of Directors to raise any issues. Principle 12: Internal Controls The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders investments and the company s assets. The AC should ensure that a review of the effectiveness of the Company s financial, operational and compliance controls, risk management and the adequacy of internal controls is conducted at least annually, with such a review to be carried out by internal and/or external auditors. The Board acknowledges that it is responsible for the overall internal control framework, but recognizes that no cost effective internal control system will preclude all errors and irregularities, as the system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The Company s external auditors conducts an annual review, in accordance with their audit plan, of the effectiveness of the Company s material internal control, including financial, operational and compliance controls and risk management. Any material non-compliance or failures in internal controls and recommendations for improvements are reported to the AC. The AC also reviews the effectiveness of the actions taken by the management on the recommendations made by the external auditors in this respect, if any. Principle 13: Internal Audit The company should establish an internal audit function that is independent of the activities it audits. Due to the limited scale of the Company s business and corporate structure, the Company has not appointed an external party to provide internal audit and advisory services to the Company for FY2008. The Board recognises and is responsible for maintaining a system of internal control processes to safeguard shareholders investments and the Group s business and assets. Although the Company does not have a separate internal audit function, the Board believes that the existing systems of internal control are adequate taking into consideration the corporate structure and scope of the Company s operations. The key element in the Group s internal system is the control which executive director exercise over expenditure for investments and capital spending, with the various levels of approvals documented in the authorisation limits granted by the Board. Principle 14: Communication with Shareholders Companies should engage in regular, effective and fair communication with shareholders. The Company upholds the need to regularly convey pertinent information, gather views or inputs, and address shareholders concerns. In disclosing information, the Board strives to be a descriptive, detailed and forthcoming as possible. The Company does not practise selective disclosure. In line with continuous obligations of the Company pursuant to the SGX- ST Listing Rules and the Companies Act (Cap 50, Singapore), the Board s policy is that all shareholders should be equally and timely informed of all major developments that impact the Company or the Group. Material information concerning our Group are announced promptly through the SGXNET in accordance with the requirements under the SGX-ST Listing Rules. 13

16 CORPORATE GOVERNANCE Where there is inadvertent disclosure made to a selected group, the Company will make the same disclosure publicly to all other as soon as practicable, either publishing the information through SGXNET and/or the corporate website of the Company. Principle 15: Greater Shareholder Participation Companies should encourage greater shareholder participation at AGMs and allow shareholders the opportunity to communicate their views on various matters affecting the company. Shareholders are encouraged to attend AGMs to ensure a high level of accountability and to stay informed of the Company s strategy and goals. Notice of the AGM is dispatched to shareholders, together with explanatory notes or a circular on items of special business (if necessary). Separate resolutions are proposed for substantially separate issues at the meeting. Shareholders have the opportunity to participate effectively and to vote in our general meetings and are allowed to vote in person or by proxies. The Board welcomes questions from shareholders who will have an opportunity to raise issues either informally or formally before or at the AGM. The Chairman of the Audit, Remuneration and Nominating Committees are normally present at the AGM to answer those questions relating to the work of these committees. We have also adopted the practice of separate resolutions at general meetings on each distinct issue. So far, in all our annual general meetings, the chairpersons of the various committees have been present and the Board has upheld the practice of chairpersons of the Audit, Nominating and Remuneration Committees being present and available to address questions at general meetings. We also extend invitations to our external auditors to attend our annual general meetings and that they are present to assist the directors in addressing any relevant queries by shareholders. Additional Information Risk Management The Company regularly reviews and improves its business and operational activities to take into account the risk management perspective. The Company seeks to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. The Company reviews all significant control policies and procedures and highlights all significant matters to the AC. Dealing in Securities The Company has adopted internal codes pursuant to the SGX-ST Best Practices Guide that are applicable to all its officers in relation to dealings in the Company s securities. Officers of the Company are not allowed to deal in the Company s shares during the period commencing one month before the announcement of the Company s half-yearly and full year results and ending on the date of the announcement of the relevant results. Directors and executives are also expected to observe insider trading laws at all times even when dealing with the Company s securities within permitted trading periods. Material Contracts Save as disclosed in the Financial Statements and the Services Agreement, there were no material contracts (including loans) of the Company or its subsidiaries involving the interests of any Director or controlling shareholders subsisted at the end of the financial year or have been entered into since the end of the previous financial year. Interested Persons Transactions There were no Interested Persons Transactions of the Company or its subsidiaries involving the interests of any Director or controlling shareholders subsisted at the end of the financial year or have been entered into since the end of the previous financial year. 14

17 FINANCIAL STATEMENTS DIRECTORS Choo Pei Kevin Yu Peijie Dali Bin Sardar Fong Wea Lea Joshua Ong Wei Jin Siew Teng Kean SECRETARIES Sin Chee Mei Tham Lee Meng REGISTERED OFFICE 19 Keppel Road #03-10 Jit Poh Building Singapore BANKERS Malayan Banking Berhad DBS Bank Ltd 2 Battery Road 6 Shenton Way Maybank Tower DBS Building Tower One Singapore Singapore AUDITORS PKF-CAP LLP Partner-in-charge: Mr Lee Eng Kian (with effect from financial year ended 31 December 2007) INDEX PAGE DIRECTOR S REPORT 16 STATEMENT BY DIRECTORS 19 INDEPENDENT AUDITORS REPORT 20 CONSOLIDATED INCOME STATEMENT 22 BALANCE SHEETS 23 STATEMENT OF CHANGES IN EQUITY 24 CONSOLIDATED CASH FLOW STATEMENT 25 NOTES TO THE FINANCIAL STATEMENTS 26 15

18 DIRECTOR S REPORT The directors are pleased to submit their report to the members together with the audited financial statements of the Group for the financial year ended 31 December DIRECTORS The directors of the Company in office at the date of this report are: Choo Pei Kevin Yu Peijie Dali Bin Sardar Fong Wea Lea Joshua Ong Wei Jin Siew Teng Kean ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES OR DEBENTURES Neither at the end of the financial year nor at any time during the financial year was the Company a party to any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate. DIRECTORS' INTERESTS IN SHARES AND DEBENTURES The directors holding office at the end of the financial year and their interests in the share capital, debentures, warrants and share options of the Company and related corporations as recorded in the register of directors' shareholdings kept by the Company under section 164 of the Companies Act, Chaper 50 were as follows:- Holdings registered in name of Director or nominee Holdings in which a Director is deemed to have an interest At beginning of the financial year At end of the financial year At beginning of the financial year At end of the financial year The Company Number of ordinary shares Number of ordinary shares Choo Pei Kevin Yu Peijie 3,200,000 3,200, Fong Wea Lea Joshua 3,200,000 3,200, Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, share options, warrants or debentures of the Company, or related corporations, either at the beginning of the financial year or at the end of the financial year. Except as disclosed above, there were no changes to any of the above-mentioned interests between the end of the financial year and 21 January

19 DIRECTOR S REPORT DIRECTORS' CONTRACTUAL BENEFITS Since the end of the previous financial year, no director has received or has become entitled to receive a benefit which is required to be disclosed under Section 201(8) of the Singapore Companies Act, 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 except as disclosed in the financial statements. SHARE OPTIONS (a) Options to take up unissued shares On June 25, 2002 and in conjunction with the company s listing on the Singapore Exchange Securities Trading Limited, the company adopted the NTI Employees Share Option Scheme ( the Scheme ). The purpose of the Scheme is to provide an opportunity for the employees of the group to participate in the equity of the company and to motivate them towards better performance through increased dedication and loyalty. The Scheme is administered by a committee whose members are: Ong Wei Jin (Chairman) Siew Teng Kean Choo Pei Kevin Yu Peijie Fong Wea Lea Joshua The size of the Scheme shall not exceed 15% of the total shares of the company. Confirmed full-time employees and executive directors and non-executive directors of the company (excluding independent directors) shall be eligible to participate in the Scheme. Offers of the options made to grantees, if not accepted by the grantees within 30 days, shall lapse. The Scheme shall continue in operation for a maximum period of 10 years commencing on the date which the Scheme is adopted by the company in a general meeting, unless otherwise extended by shareholders in a general meeting. Since the beginning of the Scheme, no options to take up unissued shares of the company or any corporation in the group were granted. (b) Options exercised During the financial year, there were no shares of the company or any corporation in the group issued by virtue of the exercise of an option to take up unissued shares. (c) Unissued shares under option At the end of the financial year, there were no unissued shares of the company or any corporation in the group under option. 17

20 DIRECTOR S REPORT 18

21 STATEMENT BY DIRECTORS 19

22 INDEPENDENT AUDITOR S REPORT 20

23 INDEPENDENT AUDITOR S REPORT 21

24 CONSOLIDATED INCOME STATEMENT Continuing operations The Group Note S$'000 S$'000 Revenue 4 3, Cost of sales (3,175) (558) Gross profit Other operating income ,288 Administrative expenses (724) (288) Other operating expenses 5 - (5,953) Interest expense 14 (19) - Profit before income tax ,365 Income tax expense 7 (95) (48) (Loss) / Profit from continuing operations (21) 1,317 Discontinued operations Loss from discontinued operations 8 - (1,900) Total loss attributable to the equity holders of the Company (21) (583) (Loss) / Earnings per share for (loss) / profit from continuing operations attributable to the equity holders of the Company (cents) 9 - Basic (0.01) Dilutive (0.01) 0.89 Loss per share for loss from discontinued operations attributable to the equity holders of the Company (cents) 9 - Basic - (1.29) - Dilutive - (1.29) The acccompanying notes form an integral part of these financial statements 22

25 BALANCE SHEETS The Group The Company Note S$'000 S$'000 S$'000 S$'000 ASSETS Current assets: Cash and bank balances Trade and other receivables 11 1, Total current assets 1,510 1, Non-current assets: Investment in subsidiary ,017 2,017 Goodwill 14 1,919 1, Deferred acquisition cost 12 1, , Total non-current assets 3,112 2,097 3,210 2,241 Total assets 4,622 3,373 3,695 2,947 LIABILITIES AND EQUITY Current liabilities: Trade and other payables Short term borrowings 16 1, , Income tax payable Total current liabilities 2, , Capital and reserves: Share capital 17 19,114 19,114 19,114 19,114 Option reserves Foreign currency translation reserves (124) (110) - - Accumulated losses (16,586) (16,565) (17,329) (16,848) Total equity 2,503 2,481 1,884 2,308 Total liabilities and equity 4,622 3,373 3,695 2,947 The accompanying notes form an integral part of these financial statements 23