International Press Softcom Limited Annual Report 2010 Perseverance. Navigating Towards Value

Transcription

1 International Press Softcom Limited Annual Report 2010 Perseverance Navigating Towards Value

2 contents our mission 1. Our Mission 2. Regional Presence 3. Our 4. Chairman s Statement 6. Board of Directors 7. Corporate Culture 8. Financial Highlights 9. Corporate Governance Statement 18. Corporate Information 21. Financial Review To be the leading global technologybased provider of value chain services, print and media products for our customers. AR2010 This document has been prepared by the Company and reviewed by the Company s sponsor, CNP Compliance Pte Ltd ( Sponsor ), for compliance with the Singapore Exchange Securities Trading Limited ( SGX-ST ) Listing Manual Section B: Rules of Catalist. The Sponsor has not verified the contents of this document including the accuracy or completeness of any of the information disclosed or the correctness of any of the statements or opinions made or reports contained in this document. This document has not been examined or approved by the SGX-ST. The Sponsor and the SGX- ST assume no responsibility for the contents of this document including the correctness of any of the statements or opinions made or reports contained in this document. The contact person for the Sponsor is Mr Pradeep Kumar Singh at 36 Carpenter Street, Singapore , telephone: (65) ; pksingh@cnplaw.com. Annual Report 2010 International Press Softcom Limited 1

3 regional presence o u r g r o u p CHINA VIETNAM INDIA MALAYSIA List of all subsidiaries IP Softcom (Malaysia) Sdn. Bhd IP Softcom (Xiamen) Co., Ltd IP Softcom (Shanghai) Co., Ltd / IPS Trading (Shanghai) Co., Ltd Pictured from top, left to right: 1. International Press Softcom Limited (HQ) 2. IP Softcom (Malaysia) Sdn. Bhd 3. IP Softcom (Xiamen) Co., Ltd 4. IP Softcom (Shanghai) Co., Ltd / IPS Trading (Shanghai) Co., Ltd SINGAPORE AUSTRALIA IP Softcom (Shenzhen) Co., Ltd IP Media (Xiamen) Co., Ltd IP Softcom (Australia) Pty Ltd IP Softcom (India) Pvt Ltd Scantrans (India) Pvt Ltd International Press Softcom (Vietnam) Co., Ltd 5. IP Softcom (Shenzhen) Co., Ltd 6. IP Media (Xiamen) Co., Ltd 7. IP Softcom (Australia) Pty Ltd 8. IP Softcom (India) Pvt Ltd 9. Scantrans (India) Pvt Ltd 10. International Press Softcom (Vietnam) Co., Ltd IP Ventures Pte Ltd InPac Ventures Pte Ltd Greenfield Ventures (M) Sdn. Bhd Avantouch Systems Pte Ltd 2 Annual Report 2010 International Press Softcom Limited 3

4 Chairman s Statement Dear Valued Shareholders, The year 2010 was marked by the uneven global economic recovery and rising inflationary pressures. Despite putting forth our best efforts, we were impacted by the unfavourable market conditions. The softening demand for our s services combined with increasing cost competition resulted in FY10 s net losses increasing to S$5.9 million from S$4.5 million in FY09. In spite of the difficult operating environment in 2010, our maintained a strong balance sheet with cash position of S$14.5 million. This cash pile acts as a buffer against unexpected headwinds and allows us to seek out business opportunities. Our s FY10 revenue declined 49.2% year-over-year to S$58.5 million, mainly due to lower revenue contributions from Singapore and India. Revenue from Singapore operations went down by 57.9% to S$18.7 million, primarily due to the relocation of a client s supply chain activities and sluggish orders. As for India, the segment s turnover decreased to S$11.5 million from S$38.5 million in FY09, mainly attributed to a huge decline in orders from a particular contract. The reduction in orders was as a result of a change in the country s taxation laws which made the s services in this contract unattractive. The decline in revenue was partially cushioned by higher turnover contribution from Vietnam s operations. Revenue from our Vietnam business unit increased from S$0.4 million in FY09 to S$1.3 million in FY10, fuelled by good demand for supply chain services. In spite of the difficult operating environment in 2010, our maintained a strong balance sheet with cash position of S$14.5 million. This cash pile acts as a buffer against unexpected headwinds and allows us to seek out business opportunities. Outlook The outlook for 2011 remains challenging. To brave through the storm, it is of paramount importance for us to stay innovative and productive. We believe that our ongoing efforts to diversify and streamline operations will eventually strengthen our businesses and enhance profitability. Avantouch s kiosks represent one of our s promising products to tap into the burgeoning consumer retail market in PRC. As an affirmation of our confidence in this business model, we have increased our equity funding in Avantouch in July Currently we have more than 300 kiosks already deployed in major convenience stores throughout Shanghai. Meanwhile, the is actively restructuring the Indian operations by shutting down the unprofitable Rudrapur plant owned by our subsidiary, Scantrans, and boosting the capacity of its Chennai plant. We anticipate that this streamlining project, estimated to be completed by end March 2011, would subsequently return Scantrans operations back to profitability. Appreciation On behalf of the Board of Directors, I would like to take this opportunity to express my wholehearted thanks to all the shareholders and customers for their continued support over the years. In addition, I would like to show my heartfelt appreciation to our employees and business associates for their invaluable contributions. Last but not least, I would like to express my gratitude to my fellow Board Members and management team for their strategic guidance and steadfast commitment. Low Song Take Chairman 4 5

5 board of directors corporate culture Customer Focused Results Oriented commitment team spirit innovative Excellent Work Environment Mr Cheong Poh Kin Independent Director 2. Mr Woo Khai San Executive Director 3. Mr Woo Khai Chong Vice Chairman 4. Mr Low Song Take Chairman 5. Mr Low Ka Choon Kevin Managing Director /CEO 6. Mr Tiong Choon Hieng Steven Independent Director 7. Mr Ng Kim Leong Independent Director 6 7

6 Financial Highlights CORPORATE GOVERNANCE STATEMENT 2010 Turnover (S$ 000) 58,525 (6,617) (Loss)/Profit Before Tax (S$ 000) 2010 The Board of Directors of International Press Softcom Limited recognises the importance of corporate governance in ensuring greater transparency, protecting the interests of its shareholders as well as strengthening investors confidence in its management and financial reporting and is, accordingly, committed to maintaining a high standard of corporate governance within the , ,002 (6,222) ,562 The Report of the Corporate Governance Committee dated 21 March 2005 requires that a listed company which holds its Annual General Meeting ( AGM ) on or after 1 January 2003 (the effective date ) should describe its corporate governance practices with specific reference to the Code of Corporate Governance ( Code ) in its annual report , , ,428 8,818 The main corporate governance practices that were in place throughout the financial year ended are set out below. BOARD MATTERS (5,850) (Loss)/Profit Attributable to Owners of the Parent (S$ 000) 2010 (1.33) (Loss)/Earnings Per Share (cents) 2010 The Board s Conduct of its Affairs Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board. (4,533) ,120 (1.03) The Board of Directors ( Board ) holds meetings on a regular basis throughout the year to approve the s key strategic plans as well as major investments, disposals and funding decisions. The Board is also responsible for the overall corporate governance of the ,355 7, * The Board considers that its composition of Independent Non-Executive Directors provides an effective Board with a mix of knowledge, business contacts and successful business and commercial experience. The balance is important in ensuring that the strategies proposed by the executive management are fully discussed and examined, taking into account the longterm interests of the. Fixed Assets (S$ 000) , , , , ,199 * Includes both continuing and discontinued operations The Board conducts regular scheduled meetings and three meetings were held in Where circumstances require, ad-hoc meetings are arranged. Board meetings are conducted in Singapore and the Directors attendance is regular. The Company s Articles of Association allow the Board to convene meetings through teleconferencing, video conferencing or similar communication equipment whereby all persons participating in the meeting are able to hear one another. The attendance of the Directors at meetings of the Board and Board committees, as well as the frequency of such meetings, is as follows:- Attendance at Meetings Name of Director Remuneration Nominating Board of Directors Audit Committee Committee Committee ( IPS Board ) ( AC ) ( RC ) ( NC ) No. of No. of No. of No. of No. of No. of No. of No. of meetings meetings meetings meetings meetings meetings meetings meetings held attended held attended held attended held attended Low Song Take Low Ka Choon Kevin Woo Khai Chong Woo Khai San Cheong Poh Kin Ng Kim Leong Tiong Choon Hieng Steven ANNuAL REPoRT 2010 INTERNATIONAl PRESS SOfTCOM limited 9

7 CORPORATE GOVERNANCE STATEMENT (cont d) All Directors are updated regularly on changes in Company s policies. Newly appointed Directors will be given briefings by the Management on the business activities of the. The Directors also participate in seminars and discussions to keep themselves updated on the latest developments concerning the and to keep abreast of the latest regulatory changes. Board Composition and Guidance Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board s decision making. The Board comprises four Executive Directors and three Independent Non-Executive Directors. Key information regarding the Directors can be found under the Corporate Information on Directors and Executive Officers section of this annual report. The independence of each Director is reviewed annually by the Nominating Committee ( NC ). The NC is of the view that the Board, with Independent Non-Executive Directors making up at least one-third of the Board, has adequate objectivity in exercising judgement on corporate affairs independently from the management. The NC is also of the view that no individual or small group of individual dominates the Board s decision-making process. The Board is of the view that the current board size of seven Directors is appropriate, taking into account the nature and scope of the Company s operations. The Board considers that its composition of Independent Non-Executive Directors provide the Board with a mix of knowledge, business network and extensive 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 longterm interests of the Company. Roles of Chairman and Managing Director / CEO Principle 3: 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 roles of the Chairman and Managing Director / CEO are separate and their responsibilities are clearly defined to ensure a balance of power and authority within the Company. The Chairman of the Board is Mr Low Song Take. His role is to approve agendas for board meetings and exercise control over the quality, quantity and timeliness of the flow of information between management and the Board. He also ensure effective communication with shareholders. He chairs board meetings and monitors the translation of the board s decisions to the management. He promotes high standards of corporate governance. The Managing Director / CEO, Mr Low Ka Choon Kevin, is the son of the Chairman. He has full executive responsibilities of the overall business and operational decisions of the. The Managing Director / CEO s performance and appointment to the Board and his remuneration package are reviewed annually by the Remuneration Committee ( RC ). Board Membership Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board. The Company believes that Board renewal must be an ongoing process, to ensure good governance and to maintain relevance to the business and changing needs of the Company. The Company s Articles of Association require at least onethird of Directors (excluding the Managing Director / CEO) to retire and subject themselves to re-election by shareholders at each Annual General Meeting ( AGM ). In other words, no Director shall stay in office for more than three consecutive years without being re-elected by shareholders. Mr Tiong Choon Hieng Steven, an Independent Director, is the Chairman of the NC. The NC comprises three Independent Directors, Mr Tiong Choon Hieng Steven, Mr Ng Kim Leong and Mr Cheong Poh Kin and two Executive Directors, Mr Low Song Take and Mr Woo Khai San. The responsibilities of the NC are (i) re-nomination of the Directors having regard to the Directors contribution and performance, (ii) determining annually whether or not a Director is independent, (iii) deciding on whether or not a Director is able to and has been adequately carrying out his duties as a Director of the Company and (iv) review the Board s structure, size, composition and makes recommendations to the Board with regards to any adjustments that are deemed necessary. The NC decides how the Board s performance is to be evaluated and proposes objective performance criteria, subject to the approval of the Board. The date of Director s initial appointment, last re-election and their directorships are set out below: Date of Initial Date of Last Present Directorships in Past Directorships in Name of Director Appointment Re-election Listed Companies Listed Companies* Low Song Take 30/08/ /04/ Woo Khai Chong 19/08/ /04/ Woo Khai San 23/06/ /04/ Low Ka Choon Kevin 23/06/ Ng Kim Leong 10/08/ /04/ Cheong Poh Kin 10/08/ /04/ Tiong Choon Hieng Steven 18/12/ /04/ * Within the past three years Board Performance Principle 5: 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 the Board possess the relevant background, experience and knowledge to enable balanced and well-considered decisions to be made. A formal review of the Board s performance will be undertaken collectively and individually by the Board annually. The Board s performance will also be reviewed informally by the NC with inputs from the other Board members and the Managing Director / CEO. Access to Information Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis. In order to ensure that the Board is able to fulfill its responsibilities, the management is required to provide adequate and timely information to the Board on affairs and issues that require the Board s decision as well as ongoing reports relating to the operational and financial performance of the Company and the. 10 Annual Report 2010 International Press Softcom Limited 11

8 CORPORATE GOVERNANCE STATEMENT (cont d) Access to Information (cont d) The Board has separate and independent access to the senior management of the Company and the Company Secretary at all times. Should Directors, whether as a group or individually, require independent professional advice, the Company Secretary will, upon direction by the Board, appoint a professional advisor selected by the group or the individual, and approved by the Managing Director / CEO, to render such advice. The cost of such professional advice will be borne by the Company. The Company Secretary attends all Board meetings and is responsible for ensuring that Board procedures are followed and applicable rules and regulations that are applicable to the Company are complied with. All Directors have separate and independent access to the advice and services of the Company Secretary. Please refer to the Corporate Information on Directors and Executive Officers section of the annual report for the composition of the Company s Board of Directors, Board committees and the executive committee. REMUNERATION MATTERS Procedures for Developing Remuneration Policies Principle 7: 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. Level and Mix of Remuneration Principle 8: 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 proportion of Executive Directors remuneration should be structured so as to link rewards to corporate and individual performance. Disclosure on Remuneration Principle 9: 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. The function of the Remuneration Committee ( RC ) is to review the remuneration of the Executive Directors of the Company and to provide a greater degree of objectivity and transparency in determining the remuneration of the Executive Directors. The RC comprises Mr Ng Kim Leong, Mr Cheong Poh Kin and Mr Tiong Choon Hieng Steven who are Independent Directors of the Company. Mr Ng Kim Leong chairs the RC. The RC will review and recommend to the Board a framework of remuneration for the Directors and key executives, and determine specific remuneration packages for the Chairman and the Managing Director / CEO. The recommendations of the RC should be submitted for endorsement by the entire Board. All aspects of remuneration, including but not limited to Director s fees, salaries, allowances, bonuses, options and benefits in kind are covered by the RC. The RC will also review the remuneration packages of employees who are related to the Directors and/or substantial shareholders. The RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the RC will take into consideration industry practices and norms in compensation in addition to the Company s relative performance to the industry and the performance of the individual Directors. No Director will be involved in deciding his own remuneration. The Executive Directors have entered into service agreements with the Company. The service agreements cover the terms of employment, specifically salary and other benefits. The remuneration of Non-Executive Directors is determined by his contribution to the Company, taking into account factors such as effort and time spent as well as his responsibilities on the Board. The Board will recommend the remuneration of the Non-Executive Directors for approval at the AGM. Directors Remuneration The Executive Directors remuneration comprise mainly of their salary, allowances, bonuses and profit sharing awards conditional upon their meeting certain profit before tax targets. The details of their remuneration package are given below. The Independent Non-Executive Directors have remuneration packages which comprise 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 Board committees and their roles in the committee. Directors Fees for the Directors are subject to the approval of the shareholders at the forthcoming AGM. The basis of allocation of the number of share options pursuant to the Scheme to Directors takes into account the Director s contributions and his additional responsibilities at Board committees. During the financial year, no share options were granted to any of the Directors. For competitive reasons, the Company does not disclose the annual remuneration of each individual Director for the financial year ended. Instead, the Company discloses the bands of remuneration as follows:- Percentage of Variable Percentage of Fixed Remuneration (including Directors No. of Stock Options granted as at 31 December 2010 Directors Fees* Remuneration Fees) (exercise Price) S$500,001 to S$1,000,000 Low Song Take 40, NA S$250,001 to S$500,000 Woo Khai Chong 35, NA Woo Khai San 35, NA Low Ka Choon Kevin ** 35, NA S$250,000 and below Cheong Poh Kin 40, NA Ng Kim Leong 40, NA Tiong Choon Hieng Steven 40, NA * The remuneration in the form of Directors Fees are subject to the approval of the shareholders at the forthcoming AGM. ** Mr Low Ka Choon Kevin is the son of Mr Low Song Take. 12 Annual Report 2010 International Press Softcom Limited 13

9 CORPORATE GOVERNANCE STATEMENT (cont d) Remuneration of Key Executives Details of remuneration paid to key executives (who are not Directors of the Company) of the for the financial year ended are set out below. For competitive reasons, the Company discloses only the band of remuneration of each executive as follows:- Percentage of Variable Percentage of Fixed No. of Stock Options granted as at 31 Remuneration Remuneration December 2010 (exercise price) S$250,000 and below Teh Eng Chai ,000 (S$0.175)/ 1,000,000 (S$0.155) Srihari Raghavan ,000,000 (S$0.155) Chan Yee Liang ,000 (S$0.177)/ 2,000,000 (S$0.155) Ng Ching Beng Alvin ,000,000 (S$0.155) There are no employees in the whose remuneration exceed S$150,000 per annum and who are immediate family members of a Director or Substantial Shareholders. Accountability and Audit Accountability Principle 10: The Board should present a balanced and understandable assessment of the company s performance, position and prospects. The Board believes that it should promote best practices in order to build an excellent business for the shareholders as they are accountable to shareholders for the Company s and the s performance. The Board is mindful of its obligations to provide timely and full disclosure of material information in compliance with statutory reporting requirements. Price sensitive information is first publicly released, after the review by the Board, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual reports will be announced or issued within legally prescribed periods. Audit Committee Principle 11: The Board should establish an Audit Committee ( AC ) with written terms of reference which clearly set out its authority and duties. The Audit Committee ( AC ) is made up of three Independent Non-Executive Directors, of which two have the appropriate accounting experience or related financial management expertise. The Independent Non-Executive Directors are Mr Cheong Poh Kin, Mr Ng Kim Leong and Mr Tiong Choon Hieng Steven. Mr Cheong Poh Kin chairs the AC. The AC holds periodic meetings and reviews primarily the following, where relevant, with the Executive Directors and external auditors of the Company:- (a) (b) (c) review issues of accounting policies and presentation for external financial reporting; review the Company s external auditors audit plans; review the external auditors reports; (d) review the co-operation given by the Company s Officers to the external auditors; (e) review the scope, strategies and results of the internal audit function; (f) review the half-year interim results and annual financial statements of the Company and the before their submission to the Board of Directors for approval; (g) nominate external auditors for appointment and re-appointment; (h) review the s compliance with such functions and duties as may be required under the relevant statutes or the Listing Manual (Section B: Rules of Catalist) ( Rules of Catalist ) and such amendments made thereto from time to time; (i) review interested person transactions; and In addition to the above, the AC will meet with the external and internal auditors, in the absence of the management, at least once a year. The AC has the power to conduct or authorise investigations into any matters within its terms of reference. The AC also has full access to and the co-operation of the management. The external auditors have unrestricted access to the AC. Minutes of the AC meetings are regularly submitted to the Board for its review. The AC has reviewed the external auditor s non-audit services and is satisfied that the nature and extent of such services has not prejudiced the independence and objectivity of the external auditors. The AC constantly bears in mind the need to maintain a balance between the independence and objectivity of the external auditors and the work carried out by the external auditors based on value for money consideration. The AC has recommended to the Board the nomination of Ernst & Young LLP, for re-appointment as auditors of the Company at the forthcoming AGM. Internal Controls Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders investments and the company s assets. Although the Board acknowledges that it is responsible for the overall internal control framework, it also recognises that no cost effective internal control system will preclude all errors and irregularities. A 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 AC, on behalf of the Board, has reviewed the effectiveness of the internal control system put in place by the management and is satisfied that there are adequate internal controls in the Company. Internal Audit Principle 13: The company should establish an internal audit function that is independent of the activities it audits. The Internal Audit ( IA ) function is headed by the Chairman of the AC. The Internal Auditor reports to the AC on audit matters and to the Board on administrative matters. The AC reviews IA s reports on a half yearly basis. The AC reviews the internal audit procedures and ensures that the internal audit function has appropriate standing within the. The AC also reviews the annual IA plan to ensure that the IA has the necessary resources to perform its functions adequately. 14 Annual Report 2010 International Press Softcom Limited 15

10 CORPORATE GOVERNANCE STATEMENT (cont d) COMMUNICATION WITH SHAREHOLDERS Communication with Shareholders Principle 14: Companies should engage in regular, effective and fair communication with shareholders. Greater Shareholder Participation Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company. Other Information 1. Interested Person Transactions In compliance with Rule 907 of the Rules of Catalist, the Company is required to disclose Interested Person Transactions to guard against the risk that interested persons could influence the Company, its subsidiaries or associated company, to enter into transactions with them that may adversely affect the interests of the Company or its shareholders. During the financial year, the Board has reviewed the transactions entered into with interested persons and disclosure of interested person transactions is set out below. The Company recognises the importance of regular, timely and effective communication with the shareholders. Aggregate value of all The Company does not practice selective disclosure. In line with continuous obligations of the Company pursuant to the Rules of Catalist and the Companies Act of Singapore, it is the Board s policy that all shareholders should be equally informed, on a timely basis, of all major developments that will or expect to have an impact on the Company or the. interested person transactions during the financial year Aggregate value of all under review (excluding interested person transactions transactions less than $100,000 conducted under shareholders and transactions conducted mandate pursuant to Rule 920 Shareholders are encouraged to attend the AGM to stay informed of the Company s goals and strategies and to ensure a high level of accountability by the Management. Notice of AGM will be dispatched to shareholders, together with explanatory notes or a circular on items of special business (if necessary), at least 14 calendar days before the meeting (excluding the date of notice and the date of meeting). The Board welcomes questions from shareholders who 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 available at the meeting to answer those questions relating to the work of these committees. Name of interested person Avantouch Systems Pte Ltd Nature of transaction Additional investment in subsidiary under shareholders mandate (excluding transactions less pursuant to Rule 920) than $100,000) S$2,755,000 - Risk Management 2. Material Contracts The Company does not have a Risk Management Committee. However, the Management regularly reviews the Company s business and operational activities to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. The Management reviews all significant control policies and procedures and highlights all significant matters to the Directors and the AC. Dealings in Securities The Company has adopted an Internal Code in relation to dealings in the Company s securities pursuant to rule 1204 (18) of the Rules of Catalist that is applicable to the Company and all its officers. The Internal Code prohibits the officers from dealing in the Company s shares on short-term considerations. It also disallows the Company and its officers from dealing in the Company s shares during the period commencing two weeks and one month before the announcement of the s half-yearly and full year results respectively and ending on the date of the announcement of the results. There were no material contracts of the Company or its subsidiaries involving the interests of the Directors or controlling shareholders during the financial year. 3. Non-Audit Fees S$41,373 non-audit fees were paid to the Auditors for the financial year ended. 4. Non-Sponsor Fees No non-sponsor fees were paid to the Sponsor for the financial year ended. Directors and Executives are also expected to observe insider trading laws at all times even when dealing with securities within the permitted trading period. 16 Annual Report 2010 International Press Softcom Limited 17

11 corporate information board of directors Low Song Take (Chairman) Woo Khai Chong (Vice Chairman) Low Ka Choon Kevin (Managing Director / CEO) Woo Khai San (Executive Director) Ng Kim Leong (Independent Director) Cheong Poh Kin (Independent Director) Tiong Choon Hieng Steven (Independent Director) company secretaries Teh Eng Chai, FCCA, FCMA Sin Chee Mei, ACIS, PMP (appointed on 01 October 2010) Chai Xui Gyn, ACIS (resigned on 01 October 2010) registered office Co. Reg. No: E 8 Cross Street #11-00 PWC Building Singapore Tel: Fax: share registrar and share transfer office M&C Services Private Limited 138 Robinson Road #17-00 The Corporate Office Singapore Tel: Fax: audit committee Cheong Poh Kin (Chairman) Ng Kim Leong Tiong Choon Hieng Steven nominating committee Tiong Choon Hieng Steven (Chairman) Ng Kim Leong Cheong Poh Kin Low Song Take Woo Khai San employee share option committee Low Song Take (Chairman) Woo Khai Chong Low Ka Choon Kevin auditors Ernst & Young LLP One Raffles Quay #18-01 North Tower Singapore partner-in-charge of audit Ang Chuen Beng (appointed since 2008) principal bankers DBS Bank Ltd. 6 Shenton Way DBS Building Tower One Singapore United Overseas Bank Ltd. 1 Raffles Place OUB Centre Singapore Information on Directors and Executive Officers 1. The business and working experience of the Directors are as follows:- Low Song Take is the Chairman and co-founder of the. Mr Low established the business in 1968 as a partnership and has been in the printing industry for over 44 years. As Chairman of the, he exercises control over quality, quantity and timeliness of the flow of information between management and the Board. He also actively participates in the overall strategic planning and business direction of the. Woo Khai Chong is the Vice Chairman of the. Mr Woo assists the Chairman in the overall flow of information between management and the Board. He also assists the Managing Director / CEO in overseeing the management and operations of the. Mr Woo has been with the since 1972 and has extensive practical experience in the printing industry, particularly in the areas of marketing, production, costing and print management. Woo Khai San is an Executive Director of the and is responsible for the Commercial and Packaging Printing business of the. Mr Woo has been in the printing industry and with the since 1974 and has extensive experience in the areas of marketing and print production. Low Ka Choon Kevin is the Managing Director / CEO and is responsible for the general management of the. Prior to his appointment as Managing Director / CEO in 1999, he held the position of the Business Development Director from 1995 when he joined International Press Softcom Limited ( IPS ). Prior to joining IPS, Low Ka Choon Kevin worked as a lawyer in a law firm in Singapore. He holds a Bachelor of Laws (Hons.) degree from the National University of Singapore. Ng Kim Leong was appointed as an Independent Director on 10 August He retired from the DBS group in During his 30 years with the DBS group, he was variously the General Manager of DBS (Shanghai Branch), the Executive Director of DBS Finance Ltd and the Deputy Chairman of DBS Factors Ltd. Mr Ng was the Chairman of the Finance Houses Association of Singapore and was an Executive Committee Member of the Factors Chain International, an international factoring association based in Amsterdam. Cheong Poh Kin was appointed as an Independent Director on 10 August Mr Cheong is presently a senior executive in an insurance firm. He has more than 26 years of working experience in investment, finance and corporate planning. Mr Cheong holds a Bachelor s of Engineering degree (First Class Honours) from the National University of Singapore and an MBA from the University of California at Los Angeles. Tiong Choon Hieng Steven was appointed as an Independent Director on 18 December He was formerly a Non- Executive Director of Adroit Innovations Ltd, a listed company in the Stock Exchange of Singapore. Prior to this, he went into business as an investor and held several directorships. Mr Tiong also has years of experience working in several banks specialising in spot currencies trading. He holds a Bachelor of Science degree (First Class Honours) in Naval Architecture & Ocean Engineering from the University of Glasgow, UK. remuneration committee Ng Kim Leong (Chairman) Cheong Poh Kin Tiong Choon Hieng Steven 18 Annual Report 2010 International Press Softcom Limited 19

12 Corporate Information (cont d) financial review 2. The business and working experience of the Executive Officers are as follows:- Teh Eng Chai is the Financial Controller. Mr Teh joined the in January 1998 and he is responsible for managing the Accounts Department and handling all finance-related matters. Mr Teh has approximately 20 years of experience in auditing, accounting and management in various organisations. Prior to joining the, Mr Teh was the Finance Manager of a manufacturing company with regional operations. Mr Teh holds a Bachelor of Science (Hons) degree in Finance and Accounting from the University of Salford, England. He is a Fellow of the Chartered Management Accountants and a Fellow of the Chartered Certified Accountants. Srihari Raghavan is the General Manager for the Company s subsidiary in India, IP Softcom India Pvt Ltd (IPSI) and is appointed the General Manager for the Singapore operations in Mr. Raghavan joined the in 2006, as a Deputy General Manager for the India subsidiary and has since been promoted to the current position in He is responsible for the general management of Singapore and the subsidiary in India. Prior to joining the, Mr. Raghavan was a Sr. Vice President in one of India s largest printers and was responsible for Business Development for IT & Exports and Supply Chain Operations. Mr. Raghavan has approximately 20 years of experience in Supply Chain, Print and Packaging industry. He holds a Master of Commerce from the University of Mumbai and a MBA in Finance from the Institute of Chartered Financial Analysts of India (ICFAI). Chan Yee Liang is the General Manager who is in-charge of the group of companies for China region. Mr. Chan joined the Company in 2003 as a Senior Manager, and was since promoted to Deputy General Manager of China Region in 2005 and General Manager of China region in Prior to joining the Company, he has many years of overseas and local working experience in the financial industry. His experience and expertise bring a different management prospective into the while managing the operations in China. Mr. Chan holds a Bachelor of Commerce & Economics (Honors) from the University of Windsor, Canada. 22. Director s Report 28. Statement by Directors 29. Independent Auditors Report 30. Balance Sheets 32. Consolidated Income Statement 33. Consolidated Statement of Comprehensive Income 34. Consolidated Statement of Changes in Equity 38. Consolidated Statement of Cash Flow 40. Notes to the Financial Statements 109. Shareholdings Statistics 111. Notice of Annual General Meeting Proxy Form Ng Ching Beng Alvin is the General Manager who is in-charge of Malaysia, Australia and Vietnam markets. Mr. Ng joined the Company in November 2005 as Deputy General Manager overseeing the business and operations for Malaysia, Australia and Vietnam. He has since been promoted to the current position in He has approximately 18 years of experience in the manufacturing and supply chain management industry. Mr. Ng holds a Bachelor of Arts degree in Business Administration from Ottawa University, US and Diploma in Production Technology from German Singapore Institute (now Nanyang Polytechnic). AR

13 Directors Report Directors Report (cont d) The Directors hereby present their report to the members together with the audited consolidated financial statements of International Press Softcom Limited (the Company ) and its subsidiaries (collectively, the ) and the balance sheet of the Company for the financial year ended. Directors The Directors of the Company in office at the date of this report are: Directors interests in shares and debentures (cont d) Ze Hua Holdings Pte. Ltd. Ordinary shares ( A shares) 1 January 2010 Direct interest 31 December January January 2010 Deemed interest 31 December January 2011 Low Song Take Woo Khai Chong Woo Khai San Low Ka Choon Kevin Cheong Poh Kin Ng Kim Leong Tiong Choon Hieng Steven Arrangements to enable Directors to acquire shares and debentures Except for the International Press Softcom Share Option Scheme, 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 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 following Directors, who held office at the end of the financial year, had, according to the Register of Directors Shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares and share options of the Company and related corporations (other than wholly-owned subsidiaries), as stated below: Chee Chun Holdings Pte. Ltd. Ordinary shares 1 January 2010 Direct interest 31 December January January 2010 Deemed interest 31 December January Woo Khai Chong 140, , ,002 Woo Khai San 140, , , Low Song Take 28,001 28,001 28,001 28,001 28,001 28,001 Ordinary shares ( B shares) Low Ka Choon Kevin 56,000 56,000 56,000 International Press Softcom Limited Ordinary shares Low Song Take 29,541,600 29,541,600 29,541, ,839, ,839, ,839,480 Woo Khai Chong 14,770,800 14,770,800 14,770, ,839, ,839, ,839,480 Woo Khai San 14,770,800 14,770,800 14,770, ,839, ,839, ,839,480 Low Ka Choon Kevin 7,484,320 7,484,320 7,484, ,839, ,839, ,839,480 Ng Kim Leong 50,000 50,000 50,000 The Company s holding company is International Press Holdings Pte Ltd, incorporated in Singapore. The holding company is equally owned by Chee Chun Holdings Pte. Ltd. and Ze Hua Holdings Pte. Ltd., both incorporated in Singapore. By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Messrs. Woo Khai Chong and Woo Khai San are deemed to have an interest in the shares held by Chee Chun Holdings Pte. Ltd. in International Press Holdings Pte Ltd and its subsidiaries. Messrs. Low Song Take and Low Ka Choon Kevin are deemed to have an interest in the shares held by Ze Hua Holdings Pte. Ltd. in International Press Holdings Pte Ltd and its subsidiaries. Directors contractual benefits Since the end of the previous financial year, no Director of the Company has received or become entitled to receive a benefit (other than as disclosed in the financial statements) by reason of a contract made by the Company or a related corporation with the Director, or with a firm of which the Director is a member, or with a Company in which the Director has a substantial financial interest. Avantouch Systems Pte Ltd Ordinary shares Tiong Choon Hieng Steven 50, , , Annual Report 2010 International Press Softcom Limited 23

14 Directors Report (cont d) Directors Report (cont d) Options International Press Softcom Limited- Employees Share Option Plan The International Press Softcom Share Option Scheme ( Scheme ) was approved and adopted by the members of the Company at an Extraordinary General Meeting held on 29 October The Scheme is administered by a committee comprising the following members: Options (cont d) International Press Softcom Limited- Employees Share Option Plan (cont d) Except for the above, no options were granted to other Directors and controlling shareholders or to associates of controlling shareholders of the Company and no employees of the Company or any corporation in the have received 5% or more of total options available under the Scheme. Low Song Take (Chairman) Low Ka Choon Kevin Woo Khai Chong (b) (c) During the financial year ended, 222,000 share options were forfeited. As at, unissued shares of the Company under options were as follows: (a) The options granted by the Company to employees of the Company and its subsidiaries were as follows: Options granted during the financial year Aggregate options granted since commencement of scheme to end of financial year Aggregate options exercised since commencement of scheme to end of financial year Aggregate options lapsed/ forfeited since commencement of scheme to end of financial year Aggregate options outstanding as at end of financial year Chee Chong Fatt - Employee of the 2,050,000 2,050,000 Company (resigned on 31 March 2010) * Teh Eng Chai - Employee of the 1,300,000 1,300,000 Company Tan Kia Huat - Employee of the 1,300,000 1,300,000 Company (resigned on 30 April 2009) * Chan Yee Liang - Employee of the 2,200,000 2,200,000 subsidiary Ng Ching Beng - Employee of the 2,000,000 2,000,000 subsidiary Srihari Raghavan - Employee of the 2,000,000 2,000,000 Company Tiong Choon Hieng Steven - Independent director 100,000 (100,000) * These employees had resigned from the Company. However, the options granted to the employees remained outstanding as at year end. The Directors have approved the viability of the options per the Scheme Mandate. Date granted Exercise period 31 December January April 2004 * 31 December 2002 to 30 December January 2003 to 30 December April 2005 to 15 April April April 2005 to 30 December August August 2008 to 30 December June June 2009 to 30 December 2011 Aggregate options granted and accepted since commencement of scheme Aggregate options lapsed since commencement of scheme to end of financial year Number of shares under options Aggregate options forfeited since commencement of scheme to end of financial year Aggregate options exercised since commencement of scheme to end of financial year Aggregate options outstanding as at end of financial year Exercise price 2,600,000 1,050,000-1,550,000 $0.175 per share payable in full on application 6,160,000 4,477,500 6,000 1,676,500 $0.235 per share payable in full on application 100, ,000 - $0.177 per share payable in full on application 880, , ,000 $0.177 per share payable in full on application 10,100,000 10,100,000 $0.155 per share payable in full on application 1,600,000 1,600,000 $0.105 per share payable in full on application * This relates to options granted by the Company to Directors holding office at the end of the financial year. Details of the options are detailed under Note (a) of Share options. 24 Annual Report 2010 International Press Softcom Limited 25

15 Directors Report (cont d) Directors Report (cont d) Options (cont d) International Press Softcom Limited- Employees Share Option Plan (cont d) The options under the Scheme do not entitle the holders of the options to participate in any share issue of any other corporation by virtue of the option. No unissued shares other than those referred to above, are under option as at the date of this report. No options were granted at a discount during the year and no options were granted to employees of related corporations. Except for the above, no options to take up unissued shares of the Company were granted and no shares were issued by virtue of the exercise of options to take up unissued shares of the Company. Subsidiary s Option Scheme Avantouch Systems Pte Ltd ( Avantouch ) Avantouch Share Option Scheme The Avantouch Systems Pte. Ltd. Share Option Scheme ( the Scheme ) was approved and adopted by the members of Avantouch at an Extraordinary General Meeting held on 30 December Audit Committee (AC) The Audit Committee (AC) performed the functions specified in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50. The functions performed are disclosed in the Corporate Governance Report. Auditors Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors. On behalf of the Board of Directors, The Scheme is administered by a committee comprising the following members: Lee Kia Hwee Low Ka Choon Kevin Low Song Take Director Under the Scheme, an option entitles the option holder to subscribe for a specific number of new ordinary shares at an exercise price specified in the Letter of Offer of Option. The consideration for the grant of the option is $1.00. As at, unissued ordinary shares of Avantouch were as follows: Date granted Exercise period Aggregate options granted and accepted since commencement of scheme Aggregate options lapsed since commencement of scheme to end of financial year Number of shares under options Aggregate options forfeited since commencement of scheme to end of financial year Aggregate options exercised since commencement of scheme to end of financial year Aggregate options outstanding as at end of financial year Exercise price Low Ka Choon Kevin Director Singapore 25 March December December 2009 to 29 December March March 2010 to 29 December , ,000 $1 per share payable in full on application 18,000 18,000 $1 per share payable in full on application Except disclosed above, there were no unissued shares of Avantouch or its subsidiaries under options granted by Avantouch or its subsidiaries as at the end of the financial year. 26 Annual Report 2010 International Press Softcom Limited 27

16 Statement by Directors We, Low Song Take and Low Ka Choon Kevin, being two of the Directors of International Press Softcom Limited, do hereby state that, in the opinion of the Directors, (i) (ii) the accompanying balance sheets, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement together with notes thereto, are drawn up so as to give a true and fair view of the state of affairs of the and of the Company as at and the results of the business, changes in equity and cash flows of the for the year ended on that date, and 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. On behalf of the Board of Directors, Low Song Take Director Low Ka Choon Kevin Director Singapore 25 March 2011 Independent Auditors Report For the financial year ended To the Members of International Press Softcom Limited Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of International Press Softcom Limited (the Company ) and its subsidiaries (collectively, the ), which comprise the balance sheets of the and the Company as at, the statement of changes in equity, the consolidated income statement, consolidated statement of comprehensive income and consolidated cash flow statement of the for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements of the and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the and of the Company as at and the results, changes in equity and cash flows of the for the year ended on that date. Report on Other Legal and Regulatory Requirements In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. Ernst & Young LLP Public Accountants and Certified Public Accountants Singapore 25 March Annual Report 2010 International Press Softcom Limited 29