750c chai chee road #02-03 technopark @ chai chee singapore … · 2013. 5. 13. · net profit...

750C Chai Chee Road #02-03 Technopark @ Chai Chee Singapore 469003

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( Contents

integra2000 Ltd Annual Report 2002

CHAIRMAN & CEO’S MESSAGE

BOARD OF DIRECTORS

CORPORATE INFORMATION

CORPORATE PROFILE

CORPORATE GOVERNANCE

REPORT OF THE DIRECTORS

STATEMENT OF DIRECTORS

AUDITORS’ REPORT

BALANCE SHEETS

INCOME STATEMENTS

STATEMENTS OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

ANALYSIS OF SHAREHOLDINGS

NOTICE OF ANNUAL GENERAL MEETING

PROXY FORM

Chairman & CEO’s Message

FINANCIAL REVIEWFor the year ended 31st December 2002, revenue increasedby 17% to S$25.2 million. Net profit after tax at S$2.9 millionwas 68% better than prior year.

Since the introduction of our mainframe web product in thelater part of 2001, about 30% of our fortune 500 customershave purchased this web product in 2002. ProductDevelopment expenses decreased significantly as the webproduct was completed by the last quarter of 2001.

The HR/Payroll outsourcing business acquired in 2001 andour new IT line of business have also contributed positivelyto our results.

ACQUISITIONIn November 2002, we acquired 85.7% of IDEX GlobalServices Inc. IDEX does technology infrastructure design,implementation and support and offers network resources,including network engineering and design and projectmanagement and installation.

BUSINESS OUTLOOKWe will continue to seek opportunities to expand andcomplement our products and services. For year 2003, theGroup’s new IT line is expected to contribute significantly toRevenue and Profits. However overall business might beaffected by developments in the USA as well political andeconomic issues of global concern.

In closing I would like to thank customers, associates andstaff for their support and contribution. I am confident thatwith their continued support we can face the challenges aheadwith optimism.

Lim Ho SengChairman

SINGAPORE OPERATIONSDespite faster and more economical internet access,Application Software Providers (ASP) are still encounteringreluctance on the part of companies to use ASP solutions.This is partly due to the bursting of the ‘Dot-Com’ bubble.However web-based solutions are the way to go as suchsolutions are cost effective, easier to maintain, allows for moreproductive work processes, and provide ‘anywhere/anytime’access.

In July 2002 we launched the ‘stand-alone’ ideal web-basedHR/Pay software which allows companies to benefit from theuse of web-based solutions. ideal is a three in one solution forHuman Resource, Payroll and Leave functions. It has ManagerSelf-Service and Employee Self-Service capabilities. This‘stand-alone’ product provides us a more competitive edge tomarket to larger Organizations and Business ProcessOutsourcers.

In line with our strategy to explore opportunities to expandin this part of the world we have in the last quarter of 2002purchased SuperPay and SuperPersonnel software products.These software products are used by organisations of varioussizes including well known multi-nationals. The take-over ofthe software products and staff was completed in January2003. With the acquisition of these established Payroll andHR software products, integra2000 is well positioned to offera comprehensive range of products to meet the needs of theHR/Pay software market in Singapore.

Kwok Kah KieCEO

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Lim Ho Seng, 59, Chairman and Independent Director ofintegra2000, appointed on 13 September 2000. He is also theChairman of the Nominating Committee and a member of theAudit and Remuneration Committees. He is also the Chairmanof Sim Siang Choon Ltd, Baker Technology Ltd and sits on theBoard of Want Want Holdings Ltd, Kian Ann Engineering Ltd,Flairis Technology Corporation Limited, Norelco CentrelineHoldings Ltd, Prima Limited, ecoWise Holdings Limited andSinwa KS Ltd. He was the former Chief Executive Officer ofNTUC FairPrice Co-Operative Ltd. Ho Seng is a Certified PublicAccountant and a Fellow of both the Institute of CharteredSecretaries & Administrators and the Singapore Institute ofDirectors. Ho Seng was re-elected as a Director at the 2002AGM.

Kwok Kah Kie, 53, Chief Executive Officer and ManagingDirector of integra2000 since inception and Chairman of i2KHoldings Inc. Prior to forming integra2000 he was with theCSA group for 18 years including some years in running Integralas its CEO. He was instrumental in initiating and heading theManagement Buy Out (MBO) of Integral from CSA in 1999. Hehas many years of experience taking charge of Finance invarious listed companies. Mr Kwok has a BAcc.(Hons) degreefrom the University of Singapore.

Ong Beng Hong, 34, Independent Director of integra2000,appointed 5 November 1999. Beng Hong is a Director of WongTan & Molly Lim LLC. She is also the Chairman of theRemuneration Committee and member of the Audit andNominating Committees. She is the legal advisor to integra2000.Beng Hong is an Advocate and Solicitor of the Supreme Courtof Singapore, Solicitor of the Supreme Court of England andWales and Advocate and Solicitor of the Malaysian Bar. BengHong holds a LL.B (Hons.) from Kings College London. BengHong was re-elected as a Director at the 2001 AGM.

Foo Say Mui @ Bill Foo, 44, Independent Director ofintegra2000, appointed on 13 September 2000. He is also theChairman of the Audit Committee and a member of both theRemuneration and Nominating Committees. Bill has extensiveexperience in the banking industry. Currently, Bill works forthe Australia and New Zealand Banking Group Ltd (“ANZ”) asGeneral Manager for the Singapore Branch and as ManagingDirector of ANZ Singapore Ltd, its merchant banking arm. Heis also the Council Member Representative for ANZ at theAssociation of Banks in Singapore. Bill has a Bachelor ofAdministration degree from Concordia University and a Mastersof Business Administration from McGill University. Bill was re-elected as a Director at the 2002 AGM.

Craig Daron Morris, 39, Executive Director of integra2000,He is the Chief Executive Officer of i2K Holdings Inc. and theChief Financial Officer of integra2000. Craig is responsible forthe USA operations & investment activities as well as theGroup’s finance function. He formed part of the coremanagement team in the MBO of Integral from CSA in 1999.Craig is a CPA and a Chartered Accountant (SA) and holds apost-graduate degree in Accounting from the University of CapeTown. Craig is the brother of Grant Morris, the Chief ExecutiveOfficer and Director of PRG. Craig was re-elected as a Directorat the 2001 AGM.

Wee Thong Hai, 54, General Manager and Executive Directorof integra2000, is in charge of the Asian Operations. Prior tojoining integra2000 he has been in Management and Financepositions with MNCs taking charge of Finance, IT,Manufacturing and Logistics. Thong Hai is a CPA (Singapore)and holds a B Acc degree from the University of Singapore.Thong Hai was re-elected as a Director at the 2001 AGM.

from left to right:Ong Beng Hong, Kwok Kah Kie, Lim Ho Seng, Craig Daron Morris, Wee Thong Hai, Foo Say Mui

Board of Directors3

Board of DirectorsLim Ho Seng - Chairman and Independent DirectorKwok Kah Kie - Chief Executive OfficerOng Beng Hong - Independent DirectorFoo Say Mui @ Bill Foo - Independent DirectorCraig Daron Morris - Chief Financial Officer

Wee Thong Hai - General Manager

Audit CommitteeFoo Say Mui @ Bill Foo - ChairmanLim Ho SengOng Beng Hong

Remuneration CommitteeOng Beng Hong - ChairmanLim Ho SengFoo Say Mui @ Bill Foo

Nominating CommitteeLim Ho Seng - ChairmanFoo Say Mui @ Bill FooOng Beng Hong

Company SecretaryTan Swee Gek

Management TeamKwok Kah Kie - CEO, integra2000 Ltd

- Chairman, i2K Holdings, Inc.Craig Daron Morris - CEO, i2K Holdings, Inc.

- CFO, integra2000 LtdPatsy Bosco - CEO, Integral Systems, Inc.Grant Morris - CEO, Payroll Resource Group, Inc.Robin Kulasingam - CEO, IDEX Global Services, Inc.Wee Thong Hai - General Manager, integra2000 Ltd

Registered Office750C Chai Chee Road #02-03Technopark @ Chai CheeSingapore 469003Tel: 6243 3743Fax: 6243 3641

Share RegistrarB.A.C.S. Private Limited63 Cantonment RoadSingapore 089758

SINGAPOREintegra2000 Ltd750C Chai Chee Road #02-03Technopark @ Chai CheeSingapore 469003www.integra2000.com.sgHR Portal: www.i-hrms.com

USAi2K Holdings, Inc.230 California Street, Suite 410San FranciscoCalifornia 94111, USA

Integral Systems, Inc.2730 Shadelands Drive, Suite 101Walnut CreekCalifornia 94598, USAwww.integralsys.com

InPower, Inc.230 California Street, Suite 410San FranciscoCalifornia 94111, USAwww.inpower.com

Payroll Resource Group, Inc.230 California Street, Suite 420San FranciscoCalifornia 94111, USAwww.p-r-g.com

IDEX Global Services, Inc.230 California Street, 6th FloorSan FranciscoCalifornia 94111, USAwww.idexglobal.com

CANADAIntegral Systems Software Ltd.Suite 3800, South TowerRoyal Bank PlazaToronto, OntarioCanada M5J 2J7

BRITISH VIRGIN ISLANDSiDEX Asia LtdC/o 750C Chai Chee Road #02-03Technopark @ Chai CheeSingapore 469003

AuditorsChio Lim and Associates(Member of Horwath International)18 Cross Street#09-01 China Square CentralSingapore 048423

Wilson Markle Stuckey Hardesty & Bott101 Larkspur Landing CircleSuite 200 LarkspurCalifornia 94939, USA

Corporate Information4

Corporate Profile

INTEGRAL SYSTEMS, INC.

2002 was indeed a landmark year for Integral. As weentered our 30th year, 2 major goals were established for2002: one goal was to bring our exciting, newlydeveloped web-enabled system, i-Trust Web, includingBenefits Management System and Applicant TrackingSystem, to the marketplace; the other goal, was toimprove and give added value to the system maintenanceservices we deliver to our clients and strengthencustomer loyalty.

The early adopters of our new i-Trust Web product camefrom a diverse group:

Healthcare IndustryJohns Hopkins Health SystemHealthEastMemorial Hermann HospitalThe Washington Hospital

GovernmentThe United States SenatePalm Beach County, FloridaCity & County of HonoluluState of Colorado

Private IndustryZurich InsuranceInland SteelBranch Banking & TrustHallmark

Higher EducationMichigan State UniversityUniversity of ChicagoUniversity and Community Colleges of Nevada

Added value to our maintenance services in 2002comprised of over 27 major changes/ enhancements toour product line.

We developed a new consulting division to provideconsulting services on our new product line. We formednew alliances with other software providers tocomplement our existing products.

Our goals for 2003:

1. Continue to expand the sales of i-Trust Web toexisting clients

2. Begin the sales of Benefits Management System,Applicant Tracking System, and other add-onproducts to the early adopters of i-Trust Web

3. Continue delivering added value to our systemmaintenance services to solidify client loyalty

4. Sell i-Trust Web to both new clients and formerclients no longer active on maintenance

5. Completing development and launching salesof a new product, Manager Self-Service/Workflow

Patsy Bosco,73, CEO of Integral Inc , joined Integral in Feb 2000. He began his career in North Americain 1953, establishing a channel partner sales network throughout North America for a communitybuilder of retirement homes in Florida, California, Arizona. In1963, he moved to London, England, andformed European Marketing Consultants headquartered in London establishing salesforces and channelpartner distribution network and/or joint ventures throughout Europe for American companies andproducts. From 1992 to 1996, he moved to Prague, Czech Republic and worked as volunteer with“Education for Democracy” an American non-profit organization that provides volunteer English teachersto the Czech Republic, Poland, Hungary after the fall of communism. Pat graduated from DuquesneUniversity, Pittsburgh, Pennsylvania with a Bachelor of Education degree in History and French Language.A Korean War Veteran, he did Military Service from 1951 to 1953, was a Lieutenant, and was awarded aBronze Star.

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PAYROLL RESOURCE GROUP INC (PRG)

Based in San Francisco, California, PRG is the premierprovider of comprehensive solutions for payrollprocessing, benefits administration and human resourceoutsourcing. With a strong commitment to customerservice, PRG provides its clients cost-effective,customizable business process functions that bridge thegap between corporate payroll, employee benefits, andhuman resources management.

PRG specializes in tailored payroll, benefits, and humanresource packages for small to medium size enterprises.Our technology and customer service provideadvantages to both PRG and our clients. For our clients,integration reduces employee data errors, makes theirprocessing more efficient, and helps them save time andmoney. We offer an extensive range of outsourcedbusiness functions, including:

• Complete payroll processing services• Employment tax management• Integrated payroll, benefits, and human

resource software platforms• Web-based employee self-service programs• Human resource tools, including policy and

procedure handbooks

Our integrated suite of services offers efficient andproductive ways to internally manage our business. Ourtechnology platform delivers scalability and flexibilityand allows us to reduce the cost of processing. Andbecause the technology infrastructure we havedeveloped is secure and stable, it can expand,accommodating both future change and growth.

Reliability, innovation, efficiency, and flexibility. Weempower clients with tools they need, allowing themto offload non-core activities to us, while avoiding costlyinvestments in human capital and technology. Ourprofessional employees and streamlined processes giveour clients the most value for their outsourcinginvestment. We focus on small to medium sizeenterprises, giving clients the confidence that we knowhow to take care of their outsourcing requirements.

The relationship between our clients and their clientservice representative is unique to our market. Ouraccount managers are certified and trained in payrollprocess, and are responsible for coordinating serviceand support of payroll, tax, HR and technical experts.We build best practices into our process, giving clientsthe value of service, delivering consistent results.Combining innovative technology, skilled people, andan efficient process has enabled PRG to create afoundation for continued success.

With this foundation, we have been able to grow in spiteof challenging economic times. Our high client retentionand steady influx of new clients rests on our unparalleledservice delivery model and innovative, f lexibletechnology and service solutions. As we grow, we areobtaining new clients, building strong client & clientreferral partnerships, creating new services, and ensuringa consistent, profitable revenue stream that will sustainour future activities.

PRG’s leadership team includes seasoned CPAs with “Big4” accounting experience. PRG is headquartered in SanFrancisco, with sales offices in San Rafael and WalnutCreek, California, and Dallas and Houston, Texas.

Grant Morris, 41, CEO of PRG, has been a pioneer in delivering integrated payroll, benefits and HRservices to emerging companies since 1991. Before founding his first company in 1991, Grant spentalmost 7 years at Ernst & Young, consulting with companies ranging from start-ups to established publiccorporations. He has advised companies on business strategies, accounting, and adoption of new pay-roll and HR technology systems. Grant received the Chartered Accountancy (SA) designation in 1987,his California State CPA license in 1990, and is an active member of the American Institute of CertifiedPublic Accountants and California Society of CPAs.

Corporate Profile6

Corporate Profile

IDEX GLOBAL SERVICES, INC (IDEX)

Headquartered in San Francisco, California, IDEX is anational provider of comprehensive and integratednetwork infrastructure solutions serving markets acrossthe US. We offer a complete range of WAN (wide areanetwork), voice, video, and data communication services,while assisting clients in the development, planning,integration, design, maintenance and support of thosenetworks.

IDEX specializes in customized network andinfrastructure projects, designing and building networksthat can expand and accommodate the dynamic changesin information technology. IDEX concentrates on thekey aspects of any infrastructure build-out:

• Project Development

• Network Engineering

• Cabling

• Electrical Wiring

• Global Networks

By offering an integrated suite of services, IDEX can bea ‘one stop shop’ for large and mid sized infrastructurecontracts. This all-in-one capability enables IDEX tosimplify the project scope and management by givingclients one point of contact for multiple contractingprojects.

Many companies in our competitive set found 2002 tobe a challenging year, making it difficult or impossibleto meet their fiscal profit goals. While many companieswere struggling, IDEX was able to expand its currentclient base, while renewing current client contracts.Coming out of 2002, IDEX is poised in the marketplacefor continued growth.

In 2002, IDEX communications was able to retain manyestablished, loyal clients, such as Safeway, Wells FargoBank, Walmart, Citibank, British Petroleum, and Deloitte& Touche to long-term service & maintenance contracts,and new projects that will be started in 2003. While upselling current clients, IDEX has been aggressivelypursuing new clients in the marketplace.

In 2003, we are concentrating on three key objectives:

1. Up sell to our current client base, ensuringpreservation of loyal, current customers bycontinuing to provide them with consistent,proactive customer service and support, and thebest infrastructure solution on the market

2. Increase current client base and market shareby continued aggressive selling tactics andmarketing initiatives

3. Continue the expansion of our products andservices, ensuring the solutions we provide arethe best for our clients.

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Robin Kulasingam, 36, CEO and a director of IDEX. He has held various positions during his 8 yearsat IDEX including Chief Operating Officer and Senior Vice President of Sales and Marketing. He isresponsible for all aspects of business development, operations and strategic market positioning. Priorto joining IDEX he held various executive management positions in the technology and finance sector.He has a Bachelor of Science Degree from the University of San Diego, California, majoring in ElectricalEngineering with a minor in Quantitative Economics and Decision Sciences .

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The Directors and Management of integra2000 are committed to enhancing corporate performance and accountability andthereby enhancing long term shareholder value and protecting the interests of our employees, customers and shareholders.

The following is a report outlining the main corporate governance practices of integra2000 that were in place throughout thefinancial year.

1. The Board’s Conduct of its Affairs

The principal functions of the Board are:

a. overseeing the corporate strategy and direction of the Group, including but not limited to approving broad policies,strategies and financial objectives of the Group;

b. supervising and monitoring the management of the Group;c. together with the help of the Audit Committee, overseeing the processes for evaluating adequacy of internal controls,

risk management, financial reporting and compliance;d. approving annual budgets, proposals for acquisitions, investments and disposals;e. approving nominations to the Board and appointment of key personnel;f. assuming responsibility for corporate governance.

The Board meets regularly on a quarterly basis. Unscheduled meetings are also convened on an ad-hoc basis whencircumstances necessitate the need for such meetings. The attendance of the Directors at Board meetings and Boardcommittees, as well as the frequency of such meetings is disclosed in this Report.

Matters which require the Board’s approval include the following:

a. the review of the annual budget and the performance of the Group;b. review of key activities and business strategies;c. approval of the corporate strategy and direction of the Group;d. approval of transactions involving a conflict of interest for a substantial shareholder or a director or interested person

transactions;e. material acquisitions and disposals;f. corporate or financial restructuring and share issuances;g. declaration of dividends and other returns to shareholders;h. appointments of new directors.

The Board intends to implement an orientation programme for newly appointed directors in order to familiarise them withthe Group’s business operations and governance practices. The Directors are also kept abreast of any developments whichare relevant to the Group and any developments of relevant new laws and regulations.

2. Board’s Composition and Balance

The Board comprises six Directors, three of whom are non-executive, independent directors. The independence of eachdirector is to be reviewed annually by the Nominating Committee. The Nominating Committee is of the view that the non-executive Directors of integra2000 are independent directors and that no individual or small group of individuals dominatethe Board’s decision making process.

The Board comprises business leaders and professionals with industry, financial and legal backgrounds and its compositionenables the management of integra2000 to benefit from a diverse and objective external perspective on issues raisedbefore the Board. The Board is of the view that the current board’s size is appropriate, taking into account the nature andscope of integra2000’s operations. Profiles of the Directors are set out in page 3 of this Annual Report.

3. Chairman and Chief Executive Officer

The Chairman and Chief Executive Officer are separate persons to ensure a clear division of responsibilities at the top ofintegra2000. The position of Chairman and Chief Executive Officer are held by Mr Lim Ho Seng and Mr Kwok Kah Kierespectively.

Corporate Governance )


9Corporate Governance )

3. Chairman and Chief Executive Officer (cont’d)

This separation of roles ensures that the working of the Board and the executive responsibility of the Group’s business arekept distinct, ensuring a balance of power and authority, increased accountability and that no individual or small group ofindividuals dominate the Board’s decision making process. The Chairman is also an independent Director.

The Chairman shall:

a. in consultation with the Chief Executive Officer, schedule meetings that enable the Board to perform its duties responsiblywhile not interfering with the flow of integra2000’s operations;

b. prepare meeting agenda in consultation with the Chief Executive Officer;c. in consultation with the Chief Executive Officer, exercise control over quality, quantity and timeliness of the flow of

information between Management and the Board; andd. assist in ensuring compliance with integra2000’s guidelines on corporate governance.

4. Board Membership

The Nominating Committee was established on 28 November 2002 and comprises three independent Directors, namelyMr Lim Ho Seng, Mr Foo Say Mui @ Bill Foo and Ms Ong Beng Hong. The Nominating Committee did not meet in 2002 buthas met once in 2003 since it was established. The Nominating Committee is chaired by Mr Lim Ho Seng.

The functions of the Nominating Committee include the following:

a. making recommendations to the Board on appointments or re-appointments to the Board and Board committees;b. assessing the effectiveness of the Board as a whole and the contribution by each individual Director to the effectiveness

of the Board;c. determining the independence of each of the members of the Board.

The Nominating Committee will adopt internal guidelines to address competing time commitments that are faced whenDirectors serve on multiple boards.

New Directors of integra2000 will be appointed by way of a board resolution after the Nominating Committee has approvedsuch appointment. New Directors must submit themselves for re-election at the next Annual General Meeting of integra2000in accordance with integra2000’s Articles of Association.

As part of integra2000’s continuing efforts to enhance its corporate governance practices by ensuring a greater level oftransparency and independence, the Board has resolved that the position of Chairman in each of the Audit Committee,Remuneration Committee and Nominating Committee be changed every two years.

Pursuant to Articles 91 and 92 of integra2000’s Articles of Association, an election of Directors shall take place each yearat the Annual General Meeting, where not less than one-third of the Directors shall retire from office by rotation but areeligible for re-election. The Managing Director, Mr Kwok Kah Kie, shall, however, not be subject to retirement by rotationor be taken into account in determining the number of Directors to retire.

The Directors standing for re-election at the forthcoming Annual General Meeting pursuant to Article 91 are Mr CraigDaron Morris and Ms Ong Beng Hong.

The Nominating Committee, after assessing their contributions and performance has recommended Mr Craig Daron Morrisand Ms Ong Beng Hong for re-election at the forthcoming Annual General Meeting.

5. Board Performance

The Nominating Committee in considering the re-appointment of any Director evaluates such Director’s contribution andperformance, such as their attendance at meetings of the Board or Board committees, where applicable, participation,candour and any special contributions.

The Nominating Committee in assessing the board’s performance adopted both quantitative and qualitative criteria includingthe success of the strategic and long-term objectives set by the Board.


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6. Access to Information

integra2000 acknowledges that in order to fulfil their responsibilities, members of the Board should be provided withcomplete, adequate and timely information prior to Board meetings and on an on-going basis.

Directors of integra2000 will be regularly updated by Management on the developments within the Group so that they areequipped to participate fully at Board Meetings. Board papers are prepared for each Board Meeting and such Board papersshall include sufficient information from Management on the financial, business and corporate issues to enable the directorsto be properly briefed on issues to be raised at Board Meetings.

All directors have unrestricted access to integra2000’s records and information and the independent Directors have accessto all levels of key personnel in the Group. The Company Secretary attends Board Meetings and meetings of Board committeesand all the Directors have separate and independent access to the Company Secretary. The Company Secretary is responsiblefor ensuring that board procedures are followed and that applicable rules and regulations are complied with.

Should the Directors, whether as a group or individually, in furtherance of their duties require independent professionaladvice, Management will, upon direction from the Board, appoint a professional advisor selected by the group or individual,and approved by the Chairman, to render the advice at integra2000’s expense.

7. Remuneration Matters

Remuneration Committee

The Remuneration Committee is chaired by Ms Ong Beng Hong and has as its members, Mr Lim Ho Seng and Mr Foo SayMui @ Bill Foo, all of whom are independent Directors.

The Remuneration Committee meets when necessary to recommend and advise the Board on the remuneration of ExecutiveDirectors, senior executives and employees who are related to integra2000’s substantial shareholders, if any. No Directorwill be involved in deciding his own remuneration. The Remuneration Committee will have access to expert advice insideand outside the Group if necessary on matters of executive compensation. The Remuneration Committee has met onceduring the last financial year.

Currently, integra2000 has in place service contracts for each of its executive Directors which sets out the framework ofremuneration. The Remunerating Committee will in the future, upon the expiry of such service contracts, recommend tothe Board a framework of remuneration for the Board and key executives and to determine specific remuneration packagesfor each executive Director and the Chief Executive Officer. The Remuneration Committee’s recommendations shall bemade in consultation with the Chairman and submitted for endorsement by the entire Board. The Remuneration Committeeshall cover all aspects of remuneration, including but not limited to director’s fees, salaries, allowances, bonuses, optionsand benefits in kind.

Level and Mix of Remuneration

The Group’s remuneration policy is to provide compensation packages appropriate to attract, retain and motivate theDirectors and key personnel required to run the Group successfully.

Performance-related elements of remuneration forms a significant proportion of the total remuneration package of executivesand would be designed to align their interests with those of shareholders and link rewards to corporate and individualperformance.

The remuneration of non-executive Directors should be appropriate to the level of contribution, taking into account factorssuch as effort and time spent and responsibilities of the Directors. Non-executive Directors shall not be over-compensatedto the extent that their independence may be compromised. The Board will, if necessary, consult experts on the remunerationof non-executive directors. The board will recommend the remuneration of the non-executive Directors for approval at theAGM.



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7. Remuneration Matters (cont’d)

For service contracts, there shall be a fixed appointment period for the Directors. Service contracts shall not be excessivelylong or with onerous removal clauses. The Remuneration Committee will consider what compensation the Directors’contracts of service would entail in the event of early termination and will aim to be fair and avoid rewarding poorperformance. The Remuneration Committee will consider whether Directors should be eligible for benefits under long-term incentive schemes.

Details of remuneration paid to the Directors are set out below:

The Directors receiving remuneration from the Group for the year ended 31 December 2001 and 31 December 2002:

Number of directorsRemuneration band 2002 2001

S$500,000 and above 1 1

S$250,000 to S$499,999 1 1

Below S$250,000 4 7

Total 6 9

During the last financial year, one Director has resigned from the Board and two Directors have decided not to stand for re-election and their remuneration have not been included in the above analysis.

Disclosure on RemunerationAllowances

Salary Bonus Fees and other benefits Total% % % % %

Directors

S$500,000 and aboveKwok Kah Kie 58 38 - 4 100

S$250,000 to S$499,999Craig Daron Morris 68 32 - - 100

Below S$250,000Lim Ho Seng - - 100 - 100Foo Say Mui @ Bill Foo - - 100 - 100Ong Beng Hong - - 100 - 100Wee Thong Hai 85 7 - 8 100

Key personnel of the Group

Below S$250,000Patsy Bosco , CEO, Integral 100 - - - 100Grant Morris , CEO , PRG 90 8 - 2 100Robin Kulasingam, CEO , IDEX 82 - - 18 100

Details of the stock option plans of Integral Systems, Inc. are set out in the Directors’ report.

8. Accountability

integra2000 recognises that the Board should provide shareholders with a balanced and understandable assessment of theGroup’s performance, position and prospects on a regular basis.

integra2000 adopts the practice of communicating major developments in its business and operations to the SGX-ST, itsshareholders and its employees.

Management shall provide the Directors with balanced and understandable management accounts of the Group’sperformance prior to board meetings and as and when necessary. The Directors have separate and independent access toall levels of key personnel in the Group.



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9. Audit Committee

The Audit Committee is chaired by Mr Foo Say Mui @ Bill Foo and has as its members, Mr Lim Ho Seng and Ms Ong BengHong, all of whom are independent Directors. Mr Foo Say Mui @ Bill Foo has extensive experience in the banking industryand holds a Masters of Business Administration, Mr Lim Ho Seng is a Certified Public Accountant, and Ms Ong Beng Hongis a practicing advocate and solicitor of the Supreme Court of Singapore.

The Audit Committee has met three times during the last financial year. The Committee reviewed the following, whererelevant, with the executive Directors and the external auditors:

a. the audit plan of the external auditors and results of their examination and evaluation of the Group’s systems ofinternal accounting controls;

b. the Group’s financial and operating results and accounting policies;c. the financial statements of integra2000 and the consolidated financial statements of the Group before their submission

to the Board and the external auditors’ report on those financial statements;d. the co-operation given by Management to the external auditors; ande. the appointment of the external auditors of integra2000, review of the scope and results of the audit and its cost-

effectiveness.

The Audit Committee has full access to and co-operation of Management and has explicit authority to investigate anymatter within its purview. The Audit Committee shall meet with the external auditors and the internal auditor without thepresence of Management at least once annually. The external auditors have unrestricted access to the Audit Committee.

The Audit Committee has undertaken a review of all non-audit services provided by the external auditors and has confirmedthat such non-audit services would not in the Audit Committee’s opinion, affect the independence of the external auditors.

The Audit Committee has recommended to the Board the nomination of Chio Lim & Associates for re-appointment asexternal auditors of integra2000 at the forthcoming Annual General Meeting.

10. Internal Control and Risk Management

The Group’s internal controls and systems are designed to provide reasonable assurance as to the integrity and reliability ofthe financial information and to safeguard and maintain accountability of its assets. Procedures are in place to identifymajor business risks and evaluate potential financial effects, as well as for the authorization of sales contracts, capitalexpenditure and investments. Comprehensive budgeting systems are in place to develop annual budgets covering keyaspects of the business. Actual performance is compared with budgets and revised forecasts for the year are prepared ona regular basis.

The Board believes that the system of internal controls and risk management maintained by integra2000 is adequate tosafeguard shareholders’ investment and integra2000’s assets.

11. Internal Audit

The Group’s effectiveness of the internal financial control systems and procedures are monitored by an internal auditor inorder to identify, analyse and manage the risks incurred by the Group in its activities and promote continuous improvementsto the Group’s operations. The internal auditor reports to the Chairman of the Audit Committee on audit matters and toManagement on administrative matters. In the event the internal auditor reports to the Chairman of the Audit Committeeon any material non-compliance and internal control weaknesses, the Audit Committee will oversee and monitor theimplementation of any improvements thereto.

The internal auditor was recently appointed and he will adopt the Standards for the Professional Practice of InternalAuditing set by The Institute of Internal Auditors (USA) as most of the Group’s operations are currently in the USA.



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12. Communication with Shareholders

The Board is mindful of its obligations to provide timely disclosure of material information to shareholders and does sothrough the Annual Report, results announcements and other MASNET announcements on developments within theGroup or in relation to disclosures required by the SGX-ST.

The Board regards the AGM as an opportunity to communicate directly with shareholders and encourages greater shareholderparticipation. The Chairman and the other Directors attend the AGM and are available to answer questions from shareholdersat the AGMs. External auditors are also present to assist Directors in addressing any relevant queries from shareholders.

13. Code on Securities Transactions by Officers

In compliance with the Best Practices Guide, integra2000 adopted an internal code to provide guidance to its Directors andemployees on their dealings in its securities.

Dealings in integra2000’s securities while in possession of price-sensitive information and during the “close period” beforethe announcement of the annual, half year or quarterly results is prohibited. Dealings on short-term considerations are alsodiscouraged.

14. Attendance at Board and Board Committee Meetings

The table below sets out the attendances at meetings of the Board and Board committees convened in the course of theyear under review:

Audit Nominating RemunerationName Board Committee Committee Committee

No. of No. of No. of No. of No. of No. of No. of No. ofmeetings meetings meetings meetings meetings meetings meetings meetings

held attended held attended held attended held attended

Lim Ho Seng 4 4 3 3 1NA NA 1 1

Foo Say Mui @ Bill Foo 4 4 3 3 NA NA 2NA 2NA

Ong Beng Hong 4 4 3 3 NA NA 1 1

Kwok Kah Kie 4 4 NA NA NA NA NA NA

Craig Daron Morris 4 4 NA NA NA NA NA NA

Wee Thong Hai 4 4 NA NA NA NA NA NA

1 The Nominating Committee was only established on 28 November 2002 and no meetings of the Nominating Committeewere convened during the last financial year.

2 Mr Foo Say Mui @ Bill Foo was only appointed as a member on 3 May 2002 and no meetings of the RemunerationCommittee were convened after Mr Foo’s appointment.



14Report of the Directors )

The Directors of the Company are pleased to present their report together with the audited financial statements of the Companyand of the Group for the financial year ended 31 December 2002.

1 DIRECTORS AT DATE OF REPORT

The Directors of the Company in office at the date of this report are:

Lim Ho Seng (Chairman and Independent Director) (a) (b) (c)Kwok Kah Kie (Chief Executive Officer)Craig Daron Morris (Chief Financial Officer)Wee Thong Hai (General Manager)Foo Say Mui @ Bill Foo (Independent Director) (a) (b) (c)Ong Beng Hong (Independent Director) (a) (b) (c)

(a) Member of Audit Committee.(b) Member of Remuneration Committee.(c) Member of Nominating Committee.

2 PRINCIPAL ACTIVITIES

The principal activities of the Company are those of an investment holding company and information technology servicesprovider. The principal activities of the subsidiaries are disclosed in the notes to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

3 RESULTS FOR THE FINANCIAL YEARGroup Company$’000 $’000

Net profit / (loss) for the year 2,905 (398)Restated accumulated profits / (losses) at beginning of year 4,254 (2,295)Accumulated profits / (losses) at end of year 7,159 (2,693)

4 MATERIAL TRANSFERS TO OR FROM RESERVES OR PROVISIONS

During the financial year, there were no material transfers to or from reserves and provisions other than those disclosed inthe attached financial statements.

5 ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES

There were no acquisitions or disposals of subsidiaries during the financial year except for the acquisition as follows:

Name of subsidiary Consideration Net liabilities Group’s interest$’000 $’000

IDEX Global Services, Inc. S$8 S$7,083(US$4.5) (US$4,086) 73%

The above corporation was acquired by a subsidiary of the Company. The transaction is more fully described in Note 29 tothe financial statements.

Also see paragraph 18 below on the purchase of the above subsidiary.

6 ISSUE OF SHARES OR DEBENTURES

During the financial year, the Company or subsidiaries in the Group did not issue any shares or debentures.



7 ARRANGEMENTS TO ENABLE DIRECTORS TO ACCQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARESAND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whoseobject is to enable the Directors of the Company to acquire benefits by means of the acquisition of shares or debentures inthe Company or any other body corporate except for the options rights mentioned below (see paragraphs 8 and 18below).

8 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The Directors holding office at the end of the financial year had no interests in the share capital and debentures of theCompany and related corporations as recorded in the register of Directors’ shareholdings kept by the Company undersection 164 of the Companies Act, Cap 50, except as follows:

Name of Directors and Direct Interest Deemed Interestcompanies in which At beginning At end At beginning At endinterests are held of year of year of year of year

integra2000 Ltd Ordinary shares of S$0.05 eachKwok Kah Kie 47,559,111 24,899,111 1,135,543 28,135,543Craig Daron Morris 23,023,263 23,653,263 – –Wee Thong Hai 150,000 1,000,000 – –Lim Ho Seng 100,000 100,000 – –Foo Say Mui @ Bill Foo 100,000 100,000 – –Ong Beng Hong 100,000 100,000 – –

Also see paragraph 18 below.

The Directors’ interests as at 21 January 2003 were the same as those at the end of the year except for Mr Kwok Kah Kiewhose direct interest was 26,210,111 on that date.

9 DIVIDENDS

No dividend has been paid or declared or recommended by the Company since the end of the previous financial year.

10 ACTIONS RELATING TO BAD AND DOUBTFUL DEBTS

Before the income statement and the balance sheet were made out, the Directors of the Company took reasonable stepsto ascertain that proper action had been taken in relation to the writing off of and the making of provision for bad anddoubtful debts of the Company and have satisfied themselves that all known bad debts if any of the Company have beenwritten off and that where necessary adequate provision has been made for doubtful debts.

At the date of this report, the Directors of the Company are not aware of any circumstances which would render amountsif any written off or the amount of provision for bad and doubtful debts for the Group of Companies in the consolidatedfinancial statements of the Company inadequate to any substantial extent.

11 ACTIONS RELATING TO CURRENT ASSETS

Before the income statement and the balance sheet were made out, the Directors of the Company took reasonable stepsto ascertain that any current assets of the Company which were unlikely to realise in the ordinary course of business theirbook values have been written down to their estimated realisable values or were adequately provided for.

At the date of this report, the Directors of the Company are not aware of any circumstances which would render the valueattributable to current assets in the consolidated financial statements misleading.



12 CHARGES ON ASSETS AND EXISTENCE OF CONTINGENT LIABILITIES AFTER YEAR END DATE

At the date of this report:

a) there does not exist any charge on the assets of the Company or any corporation in the Group which has arisen sincethe end of the financial year which secures the liability of any other person; and

b) there does not exist any contingent liability of the Company or any corporation in the Group which has arisen sincethe end of the financial year.

13 ABILITY TO MEET OBLIGATIONS

No contingent or other liability of the Company or any corporation in the Group has become enforceable or is likely tobecome enforceable within the period of twelve months after the end of the financial year which, in the opinion of theDirectors of the Company, will or may substantially affect the ability of the Company and of the Group to meet its obligationsas and when they fall due.

14 OTHER CIRCUMSTANCES AFFECTING FINANCIAL STATEMENTS

At the date of this report, the Directors of the Company are not aware of any circumstances not otherwise dealt with in thereport or consolidated financial statements which would render any amount stated in the financial statements of theCompany and the consolidated financial statements misleading.

15 UNUSUAL ITEMS DURING THE YEAR

In the opinion of the Directors of the Company, the results of the operations of the Company and of the Group have notbeen substantially affected by any item, transaction or event of a material and unusual nature during the financial yearexcept as disclosed in the financial statements.

16 UNUSUAL ITEMS AFTER YEAR END DATE

In the opinion of the Directors of the Company, no item, transaction or event of a material and unusual nature has arisenin the interval between the end of the financial year and the date of the report which would affect substantially the resultsof the operations of the Company and of the Group for the financial year in which this report is made.

17 CONTRACTUAL BENEFITS OF DIRECTORS

Since the beginning of the financial year, no director has received or become entitled to receive a benefit which is requiredto be disclosed under section 201(8) of the Companies Act, Cap 50, by reason of a contract made by the Company or arelated corporation with the director or with a firm of which he is a member, or with a Company in which he has asubstantial financial interest except as disclosed in the financial statements. Certain Directors of the Company receivedremuneration from related corporations in their capacity as Directors and or executives of those related corporations.

18 OPTIONS TO TAKE UP UNISSUED SHARES

During the financial year, no option to take up unissued shares of the Company or any corporations in the Group wasgranted. Details of options granted in previous years are as follows:

Stock Option Plans of Subsidiaries:

Integral Systems, Inc. (“ISI”) has two stock option plans, the 1993 Plan and the 1982 Plan (collectively, the “ISI Plans”)which provide for the grant of incentive stock options to the ISI employees, Directors and officers and nonqualified stockoptions to the ISI officers, employees, consultants, advisors and Directors. 5,500,000 shares of common stocks (of US$0.01par value) are reserved for issuance under the 1993 Plan and no shares remain in reserve for issuance under the 1982 Plan.


17

18 OPTIONS TO TAKE UP UNISSUED SHARES (Cont’d)

The ISI Plans are administered by the Board of Directors of ISI or its designees and they provide generally that the optionprice for an incentive stock option shall not be less than the fair market value of the shares on the date of grant. The optionprice of a nonqualified stock option generally shall not be less than 85% of the fair market value on the date of grant.Under the ISI Plans, incentive and nonqualified stock options may be granted to a person who, at the time of the grant,owns stock of more than ten percent of the total combined voting power of all classes of outstanding stock of ISI. However,at the time such options are granted, the option price must be at least 110% of the fair market value of the stock and suchoption may not be exercisable until after five years from the date of grant. Options generally vest rateably over three yearsand expire ten years from the date of grant.

During 1996, InPower adopted the InPower, Inc. Stock Option Plan (“InPower Plan”) and reserved 2,500,000 shares ofInPower common stock for issuance. The InPower Plan provides for the grant of incentive stock options to employees ofInPower and ISI and the grant of nonqualified stock options and restricted stock options to employees, officers, Directors,consultants and advisors of InPower and ISI. The InPower Plan has similar terms and conditions as the ISI Plans. In February2000, the Board of Directors discontinued new grants under the InPower Plan and offered all current employees holdingInPower Plan stock options the ability to convert each InPower stock option into two ISI stock options with the exerciseprice of US$0.10 per share under the ISI 1993 Plan. Service with InPower will be recognised for vesting purposes onconverted stock options and the term of each converted stock option will be measured from the grant date of the originalInPower stock option. This exchange is, in effect, a repricing of the exchange stock options and results in these optionsbecoming variable stock options. Future increases in the fair value of these options will result in compensation cost to ISI.

Activities under the Plans are as follows:

At At ExerciseDate of Grant 1.1.2002 Cancelled 31.12.2002 price Exercise periodISI Plan Shares:9 Feb 2000 1,541,000 (9,000) 1,532,000 US$0.10 9 Feb 2000 – 9 Feb 20101 May 2000 33,100 (3,100) 30,000 US$0.10 1 May 2000 – 1 May 201021 Oct 1992 3,250 (3,250) - US$0.97 21 Oct 1992 – 21 Oct 200210 May 1994 250 - 250 US$0.97 10 May 1994 – 10 May 20046 Feb 1995 1,250 - 1,250 US$1.25 6 Feb 1995 – 6 Feb 200524 Jul 1995 500 - 500 US$1.25 24 Jul 1995 – 24 Jul 200515 Jun 1995 250 (250) - US$1.25 15 Jun 1995 – 15 June 2005

1,579,600 (15,600) 1,564,000

Activities under the Plans for the past year have been disclosed in the Directors’ report for last year.

The following table summarises information about director share options under the ISI Plan outstanding as at 31 December2002:

Options Aggregated options Aggregated options AggregatedGranted granted from start exercised/lapsed optionsduring of scheme to end from start of scheme outstanding at

Name of participant 2002 of 2002 to end of 2002 31.12.2002

Directors of the Company:Kwok Kah Kie - 500,000 - 500,000(a)Kwok Kah Kie - 80,000 (80,000) -Craig Daron Morris - 750,000 - 750,000(a)Craig Daron Morris - 240,000 (240,000) -Total - 1,570,000 (320,000) 1,250,000

Exercise price and period:

(a) US$0.10 exercisable between 9 February 2000 and 9 February 2010.

Report of the Directors )


18

18 OPTIONS TO TAKE UP UNISSUED SHARES (Cont’d)

No participant has received 5% or more of the total number of the options available under the Scheme except for theabove two Directors.

Except as disclosed above, there were no options outstanding at the end of the year or granted during the year to (a)Directors and controlling shareholders of the Company and (b) Directors and associates of the controlling shareholders ofthe Company.

Warrants of ISI

Effective from 1 October 2001, ISI purchased 60% of the outstanding stock of Payroll Resources Group, Inc. (PRG),incorporated in California from its sole owner, Robeson, Ltd. (Robeson), incorporated in the British Virgin Islands. ISI paidRobeson US$1,900,000 and 2,550,000 common stock warrants, which Robeson may exercise to purchase 2,550,000shares of common stock of ISI for US$0.10 per share, as adjusted. ISI borrowed US$1,900,000 from the Company tofinance the acquisition of PRG with an option for the Company to convert all or part of the loan to common stock of ISI forUS$0.10 per share. In the event Robeson and the Company converted the warrants and loan respectively, the interest ofthe Company in ISI would be increased from 85% to 87%. Management has determined that the fair value of the commonstock warrants issued in connection with the purchase of its interest in PRG had only a nominal value, because the exerciseprice was equal to the fair market value of the common shares.

Warrants of IDEX

Effective from 29 October 2002, ISI purchased 85.7% of the outstanding stock of IDEX Global Services, Inc., (“IDEX”), aCalifornia corporation. ISI paid US$4,500 (S$8,000) for the stock and agreed to assume certain bank and other indebtednessof IDEX. As of the acquisition date, the indebtedness exceeded the fair value of the assets acquired by US$4,086,000(S$7,083,000) which amount is recorded as goodwill in the acCompanying consolidated balance sheet. Before the acquisition,IDEX had issued warrants for the purchase of up to 13% of the IDEX. These warrants were not cancelled in connectionwith the acquisition and are exercisable for nominal amounts. Shortly before the acquisition, IDEX sold shares to certainemployees for US$300,000 of which US$102,000 (S$177,000) was paid and US$198,000 (S$343,000) is payable in theform of promissory notes secured by the IDEX shares. The IDEX shares sold to employees represent 4.8% of the totalshares outstanding.

19 OPTIONS EXERCISED

During the financial year, there were no shares of the Company or any corporation in the Group issued by virtue of theexercise of option to take up unissued shares except as indicated in paragraph 18 above.

20 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 underoption except as indicated in paragraph 18 above.

21 AUDIT COMMITTEE

The Members of the Audit Committee at the date of this report are as follows:

Lim Ho Seng (Chairman and Independent Director)Foo Say Mui @ Bill Foo (Independent Director)Ong Beng Hong (Independent Director)

The Audit Committee performs the functions specified by section 201B of the Companies Act, Cap 50, and the ListingManual and the Best Practices Guide of the Singapore Exchange (SGX”). The Audit Committee held three meetings duringthe last financial year. It met with the Company’s external auditors to discuss the scope of their work and the results oftheir examination and evaluation of the Company’s internal accounting control system.



19

21 AUDIT COMMITTEE (Cont’d)

The Audit Committee also reviewed the following:

• Assistance provided by the Company’s officers to the external auditors;• Financial statements of the Group and the Company prior to their submission to the Directors of the Company for

adoption; and• Interested person transactions (as defined in Chapter 9 of the Listing Manual of SGX).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. Ithas full authority and discretion to invite any director or executive officer to attend its meetings.

The Audit Committee has recommended to the Board of Directors that the auditors, Chio Lim & Associates, be nominatedfor re-appointment as auditors at the next annual general meeting of the Company.

22 AUDITORS

The auditors, Chio Lim & Associates, have expressed their willingness to accept re-appointment.

ON BEHALF OF THE DIRECTORS

Kwok Kah Kie Wee Thong HaiDirector Director

27 February 2003



20Statement of Directors )

In the opinion of the Directors, the accompanying financial statements are drawn up so as to give a true and fair view of thestate of affairs of the Company and of the Group as at 31 December 2002 and of the results and changes in equity of theCompany and of the Group and of the cash flows of the Group for the financial year then ended and at the date of thisstatement 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 DIRECTORS

Kwok Kah Kie Wee Thong HaiDirector Director

27 February 2003


21Auditors’ Report )to the members of integra2000 Ltd and Subsidiaries

We have audited the financial statements of integra2000 Ltd and of the Group as at 31 December 2002 set out on pages 22 to44. These financial statements are the responsibility of the Company’s Directors. Our responsibility is to express an opinion onthese financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by the Directors, as well as evaluatingthe overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion,

a) the accompanying financial statements and consolidated financial statements are properly drawn up in accordance withthe provisions of the Companies Act, Cap 50, (“Act”) and International Accounting Standards and Interpretations of thoseStandards and so as to give a true and fair view of :

i) the state of affairs of the Company and of the Group as at 31 December 2002 and of the results and changes inequity of the Company and of the Group and cash flows of the Group for the financial year then ended; and

ii) the other matters required by section 201 of the Act to be dealt with in the financial statements and consolidatedfinancial statements;

b) the accounting and other records, and the registers required by the Act to be kept by the Company have been properlykept in accordance with the provisions of the Act.

We have considered the financial statements and auditors’ reports of all the subsidiaries of which we have not acted as auditors,being financial statements included in the consolidated financial statements. The names of these subsidiaries are indicated inNote 7 to the financial statements.

We are satisfied that the financial statements of the subsidiaries that are consolidated with the financial statements of theCompany are in form and content appropriate and proper for the purposes of the preparation of the consolidated financialstatements, and we have received satisfactory information and explanations as required by us for those purposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification.

Chio Lim & AssociatesCertified Public Accountants

Kaka SinghPartner in charge from 31 December 2001

Singapore27 February 2003


22

Group Company

Notes 2002 2001 2002 2001

$’000 $’000 $’000 $’000

ASSETS

Current assets :

Cash and cash equivalents 12,372 14,767 2,064 3,118

Marketable securities 4 1,263 934 907 934

Trade receivables 5 8,904 2,422 138 181

Other receivables and prepayments 6 805 415 104 42

Inventories 526 - - -

Total current assets 23,870 18,538 3,213 4,275

Non-current assets :

Investments in subsidiaries 7 - - 20,843 16,952

Other investments 8 150 - 150 -

Property, plant and equipment 9 2,734 1,573 302 406

Deferred tax assets 23 803 855 - -

Goodwill on consolidation 10 27,938 21,836 - -

Other assets 11 1,775 22 3,642 3,580

Total non-current assets : 33,400 24,286 24,937 20,938

Total assets 57,270 42,824 28,150 25,213

LIABILITIES AND EQUITY

Current liabilities :

Short-term borrowings 12 5,490 - - -

Trade payables and accrued liabilities 13 13,593 8,897 345 494

Deferred revenue 14 8,988 7,029 - -

Income tax payable 1,240 2,073 - -

Total current liabilities 29,311 17,999 345 494

Minority interests 154 106 - -

Capital and reserves :

Issued capital 15 15,085 15,085 15,085 15,085

Reserves 12,720 9,634 12,720 9,634

Total equity 27,805 24,719 27,805 24,719

Total liabilities and equity 57,270 42,824 28,150 25,213

Balance Sheets )As at 31 December 2002

See accompanying notes to financial statements.


23Income Statements )Year ended 31 December 2002

Group Company

Notes 2002 2001 2002 2001

$’000 $’000 $’000 $’000

Revenue 17 25,191 21,600 1,385 724

Cost of services (7,183) (4,303) (1,013) (33)

Gross profit 18,008 17,297 372 691

Other operating income 18 103 334 322 316

Distribution costs (2,814) (1,377) (242) (237)

Administrative expenses (6,363) (5,497) (410) (1,393)

Product development (2,386) (4,389) (234) (330)

Amortisation of goodwill (1,431) (1,113) - -

Loss on phased-out product lines 19 - (1,161) - -

Other (charges) / credits 20 (297) (471) (206) (486)

Profit / (loss) from operations 4,820 3,623 (398) (1,439)

Finance costs 21 (48) (11) - -

Profit / (loss) before income tax 22 4,772 3,612 (398) (1,439)

Income tax expense 23 (1,811) (1,778) - -

Profit / (loss) after income tax 2,961 1,834 (398) (1,439)

Minority interests (56) (106) - -

Net profit / (loss) for the year 2,905 1,728 (398) (1,439)

Earnings per share (cents) of $0.05 each 24

- Basic 0.96 0.59

- Diluted 0.96 0.59



24

Accumulated

Share Share Translation Revaluation profits/

Group capital premium reserves reserves (losses) Total

$’000 $’000 $’000 $’000 $’000 $’000

Balance at 31 December 2000 1,908 10,934 (499) - 2,526 14,869

Foreign currency translation differences

(restated - Note 33) - - (7) - - (7)

Net gains and losses not recognised

in the income statement - - (7) - - (7)

Capitalisation (Note 15) 10,877 (10,877) - - - -

Issue of share capital 2,300 7,360 - - - 9,660

Share issue expenses - (1,531) - - - (1,531)

Net profit for the year (restated - Note 33) - - - - 1,728 1,728


Foreign currency translation differences - - 181 - - 181


in the income statement - - 181 - - 181

Net profit for the year - - - - 2,905 2,905


Company

Balance at 31 December 2000 1,908 10,934 - 2,883 (856) 14,869

Foreign currency translation differences

(restated - Note 33) - - 327 - - 327

Surplus on revaluation of subsidiaries - - - 2,833 - 2,833


in the income statement - - 327 2,833 - 3,160

Capitalisation (Note 15) 10,877 (10,877) - - - -

Issue of share capital (Note 15) 2,300 7,360 - - - 9,660

Share issue expenses - (1,531) - - - (1,531)

Net loss for the year (restated - Note 33) - - - - (1,439) (1,439)

Balance at 31 December 2001 15,085 5,886 327 5,716 (2,295) 24,719

Foreign currency translation differences (407) (407)

Surplus on revaluation of subsidiaries - - - 3,891 - 3,891


in the income statement - - (407) 3,891 - 3,484

Net loss for the year - - - - (398) (398)

Balance at 31 December 2002 15,085 5,886 (80) 9,607 (2,693) 27,805

Statements of Changes in Equity )Year ended 31 December 2002



25Consolidated Cash Flow Statements )Year ended 31 December 2002


2002 2001

$’000 $’000

Cash flows from operating activities :

Profit before income tax 4,772 3,612

Adjustments for :-

Depreciation expense 523 489

Goodwill amortisation expense 1,431 1,113

Dividend income (7) -

Interest income (91) (334)

Interest expense 48 11

Loss on disposal of plant and equipment - 2

Investment written off - 500

Operating profit before working capital changes 6,676 5,393

Marketable securities (329) (934)

Trade receivables (2,394) (2,310)

Other receivables and prepayments 167 231

Inventories (526) -

Trade payables and accrued liabilities (3,907) 2,054

Deferred revenue 977 (211)

Cash generated from operations 664 4,223

Interest paid (48) (11)

Dividend income received 7 -

Interest received 91 334

Income tax paid (2,592) (809)

Net cash (used in) from operating activities (1,878) 3,737

Cash flows from investing activities :

Purchase of property, plant and equipment (167) (444)

Disposal of property, plant and equipment - 4

Increase in other investments (150) (232)

Acquisition of subsidiaries net of cash acquired (Note 29) (8) 1,246

Increase in other assets (18) -

Net cash (used in) from operating activities (343) 574

Cash flows from financing activities :

Proceeds from issuing shares - 8,129

Decrease in finance leases - (13)

Decrease in deferred rent - (93)

Net cash from financing activities - 8,023

Net effect of exchange rate changes in consolidating subsidiaries (174) (66)

Net increase in cash (2,395) 12,268

Cash at beginning of year 14,767 2,499

Cash at end of year (Note 28) 12,372 14,767


26Notes to the Financial Statements )31 December 2002

1. GENERAL

The Company is incorporated in Singapore. The financial statements are expressed in Singapore dollars. They are drawn upin accordance with the provisions of the Companies Act, Cap 50, (“Act”) and International Accounting Standards (“IAS”)and Interpretations of those Standards. The financial statements were approved and authorised for issue to the shareholdersby the board of Directors on 27 February 2003.

The principal activities of the Company are those of an investment holding company and information technology serviceprovider.

The principal activities of the subsidiaries are disclosed in the notes to the financial statements.

The Company is listed on the Stock Exchange of Singapore Dealing and Automated Quotation System (“SESDAQ”).

The registered office address is: 750C Chai Chee Road, #02-03 Technopark @ Chai Chee, Singapore 469003.

The Company is domiciled in Singapore.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING CONVENTION – The financial statements are prepared under the historical cost convention, modified toinclude the revaluation of certain financial assets and financial liabilities.

BASIS OF PRESENTATION – The consolidation accounting method is used for the consolidated financial statements whichinclude the financial statements made up to balance sheet date each year of the Company and of those companies inwhich it holds, directly or indirectly through subsidiaries, over 50 percent of the shares and voting rights. All significantintercompany balances and transactions have been eliminated on consolidation. The results of subsidiaries acquired ordisposed of during the financial year are consolidated from the respective dates of acquisition or up to the dates ofdisposal. On disposal the attributable amount of unamortised goodwill is included in the determination of the gain or losson disposal.

GOODWILL – Goodwill or negative goodwill arising on acquisition is based on the purchase method. Goodwill arising onconsolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiableassets and liabilities of a subsidiary, at the date of acquisition. Goodwill is recognised as an asset and amortised on astraight-line basis following an assessment of its foreseeable life and it is amortised over 10 to 20 years. Goodwill and fairvalue adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity andtranslated at the closing rate.

MINORITY INTERESTS – Minority interests are stated at the appropriate proportion of the post-acquisition values of theidentifiable assets and liabilities of the subsidiaries.

INVENTORIES – Inventories of consisting of consumable components are measured at the lower of cost on first in first outmethod and net realisable value

SUBSIDIARIES – In the Company’s own financial statements, the investments in subsidiaries are stated at fair values asavailable-for-sale financial assets. The net book value of the subsidiaries is used as the fair value as it is impracticable todetermine a reliable fair value for the unlisted equity shares by other methods. A gain or loss on remeasuring available-for-sale financial assets to fair value is recognised directly in equity. The book values of the subsidiaries are not necessarilyindicative of the amounts that would be realised in a current market exchange.

OTHER INVESTMENTS – Investments in debt and equity securities that have readily determinable fair values are classifiedand accounted for in one of two categories: held-to-maturity, or available-for-sale. Held-to-maturity securities are recordedat amortised cost in short-term and long-term investments. Available-for-sale securities are recorded at fair value in short-term or long-term investments with the change in fair value recorded in earnings for short-term investments and excludedfrom earnings and recorded net of tax as a component of accumulated other non-owner changes in equity for long-terminvestments. Management determines the appropriate classification of its investments in debt and equity securities at thetime of purchase and re-evaluates such determinations at each balance sheet date.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Long-term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortisedcost using the effective interest method. Amortised cost is calculated by taking into account any discount or premium onacquisition, over the period to maturity. For investments carried at amortised cost, gains and losses are recognised inincome when the investments are derecognised or impaired, as well as through the amortisation process.

REVENUE RECOGNITION – Maintenance revenue is recognised on a time-proportion basis over the maintenance period,which is generally one year. Service revenue consists primarily of training and consulting services and other revenues arerecognised as the services are completed. Software license revenue is recognised upon delivery provided that no significantobligations remain, no significant uncertainties exist with respect to product acceptance and collection is probable. TheGroup allocates a portion of software license fees to post-contract maintenance activities. Cable installation revenues arerecognised as billed and this method approximates the stage of completion method, calculated on the cost to total costbasis.

Deferred revenue – Deferred revenue consists principally of amounts billed or collected from customers for softwaremaintenance services that the Group will provide in future periods and amounts billed in excess of costs and estimatedearnings on uncompleted cable installation contracts.

Interest revenue – Interest revenue is recognised on a time-proportion basis using the effective interest rate.

Dividend revenue – Dividend revenue is recognised when the shareholder’s right to receive the dividend is legally established.

FOREIGN CURRENCY TRANSACTIONS – The functional currency of the Company and the Group is the US dollar. Transactionsin foreign currencies are recorded in US dollars at the rates ruling at the dates of the transactions. At each balance sheetdate, recorded monetary balances and balances carried at fair value that are denominated in foreign currencies are reportedat the rates ruling at the balance sheet date. All realised and unrealised exchange adjustment gains and losses are dealtwith in the income statement. There is a change in accounting policy (see Note 33). For the purposes for the Singaporedollar financial statements the balances are translated into Singapore dollars using the temporal method, that is, the assetsand liabilities are translated at the closing rate of exchange and the income statement items at the average rate and thedifference arising from the translation is taken direct to reserves.

FOREIGN CURRENCY FINANCIAL STATEMENTS – For the purposes of consolidation, assets and liabilities of self-sustainingsubsidiaries denominated in currencies other than Singapore dollars are translated at the year end rates of exchange andthe results of their operations are translated at average rates of exchange for the year. The resulting translation adjustmentsare accumulated in a separate component of shareholders’ equity until the disposal of the subsidiaries.

RESEARCH AND DEVELOPMENT COSTS – The Group charges the costs of research and development incurred to establishthe technological feasibility of computer software products to operations when incurred. Thereafter, it capitalises allsoftware development costs until the product is available for general release to customers. During the years ended 31December 2002 and 2001, the Group did not capitalise any software development costs since the time between technologicalfeasibility and general release of a product is not significant and related costs incurred during that time are immaterial.

STOCK-BASED COMPENSATION – International Accounting Standard No. 19 “Employee Benefits” which establishes a fairvalue-based method for stock-based compensation plans, also permits an election to continue with disclosures of proformanet income under the method. The Group accounts for stock-based compensation under IAS 19 and complies with thedisclosure provision of IAS 19.

PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are stated at cost less accumulated depreciation.When assets are sold or retired, their cost and accumulated depreciation are removed from the financial statements andany gain or loss resulting from their disposal is included in the income statement.




Depreciation is provided on gross carrying amounts in equal annual instalments over the estimated useful lives of the assetsas follows:

Leasehold improvements – 3 years or over the remaining lease termPlant, equipment and software – 3 to 10 years

Fully depreciated assets still in use are retained in the financial statements.

INCOME TAXES – Income taxes are accounted for using the asset and liability method. The asset and liability methodrequires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for thefuture tax consequence of events that have been recognised in the financial statement or tax returns. The measurementsof current and deferred tax liabilities and assets are based on provisions of the enacted tax laws; the effects of futurechanges in tax laws or rates are not anticipated. The measurement of deferred tax assets is reduced, if necessary, by theamount of any tax benefits that, based on available evidence, are not expected to be realised.

NON-CURRENT ASSETS – Non-current assets, such as property, plant and equipment, goodwill and investments are reviewedfor impairment whenever events or changes in circumstances indicate that the net book value of these assets may not berecoverable. Impairment losses are determined based on the difference between fair value, which would generallyapproximate estimated future cash flows discounted at the Group’s cost of capital or where appropriate the sale value, andnet book value.

RETIREMENT BENEFITS COSTS – Contributions to defined contribution retirement benefit plans are recorded as an expenseas they fall due. Contributions made to government managed retirement benefit plan such as the Central Provident Fundwhich specifies the employer’s obligations are dealt with as defined contribution retirement benefit plans.

ACCOUNTING ESTIMATES – The preparation of financial statements in conformity with generally accepted accountingprinciples requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts ofrevenue and expenses during the reporting period. Actual results could differ from those estimates.

LIABILITIES AND PROVISIONS – A liability and provision is recognised when there is a present obligation (legal or constructive)as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation and a reliable estimate can be made of the amount of the obligation.

CREDIT RISK ON FINANCIAL ASSETS – Financial assets that are potentially subject to concentrations of credit risk consistprincipally of cash, cash equivalents and trade and other accounts receivable. The Directors believe that the financial risksassociated with these financial instruments are minimal. The Company places its cash and cash equivalents with high creditquality institutions. The Company performs ongoing credit evaluation of its debtors’ financial condition and maintains aprovision for doubtful accounts receivable based upon the expected collectibility of all accounts receivable.

OTHER RISKS ON FINANCIAL INSTRUMENTS – The Company monitors its interest, foreign exchange risks, and changes infair values from time to time and any gains and losses are included in the income statement. The Company does not utiliseforward contracts or other arrangements for trading or speculative purposes. At 31 December 2002 there were no sucharrangements, interest rate swap contracts or other derivative instruments outstanding. The Company is exposed to interestrate price risk for financial instruments with a fixed interest rate and to interest rate or cash flow risk for financial instrumentswith a floating interest rate that is reset as market rates change. The Company is also exposed to changes in foreignexchange rates and liquidity of businesses. Almost all its financial assets are in US dollars. The foreign exchange risks areminimal as the foreign subsidiaries are self-sustaining and operate in U.S.A.

OTHER BUSINESS RISKS AND UNCERTAINTIES – The Group is subject to a number of risks including the development andmarketing of unproven software products, the need to maintain adequate financing, better capitalised competitors anddependence on essential personnel. The software industry is characterised by rapid technological developments, frequentproduct introductions, evolving industry standards, changes in customer requirements and short product life cycles. Significanttechnological changes or the emergence of competitive products with new capabilities could adversely affect the businessplan and operating results of the Group.




FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying values of cash, accounts receivable, investments and other financialassets and, short-term borrowings, accounts payable and other current liabilities approximate their fair market values dueto the short-term maturity of these instruments. Where applicable, the fair market value of long-term debt is determinedbased on market quoted rates or is estimated using rates currently available to the Group for debt with similar terms andmaturities. The fair market value of long-term debt payable was not determined as there are no significant items as at theend of the year.

DERIVATIVE FINANCIAL INSTRUMENTS – The Group may, from time to time, enter into borrowing and foreign exchangearrangements or interest rate swap contracts or similar instruments as hedges against changes in interest rates or the fairvalue of the Group’s liabilities. The Group does not utilise these arrangements for trading or speculative purposes. At 31December 2002 there were no such arrangements, interest rate swap contracts or other derivative instruments outstanding.

CASH AND CASH EQUIVALENTS – Cash and cash equivalents include bank and cash balances and any highly liquid debtinstruments purchased with an original maturity of three months or less. The carrying value of these instruments approximatesfair value due to short maturities.

3. RELATED COMPANY TRANSACTIONS

Related companies in these financial statements refer to the subsidiaries of the Company.

Some of the Company’s transactions and arrangements are between members of the Group and the effect of these on thebasis determined between the parties are reflected in these financial statements. The intercompany balances are withoutfixed repayment terms and interest unless stated otherwise.

4. MARKETABLE SECURITIESGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Listed bonds of corporations at cost 696 934 525 934Less: Provision (13) - (13) -Listed investments in unit trust at cost 159 - 88 -Less: Provision (1) - (1) -Listed equities of corporations at cost 817 - 703 -Less: Provision (395) - (395) -

1,263 934 907 934Fair valueListed bonds of corporations 683 934 512 934Listed investments in unit trust 158 - 87 -Listed equities of corporations 422 - 308 -

1,263 934 907 934Analysis of above amount by currency:US dollars 1,263 934 907 934Movements in provision:Balance at beginning of year - - - -Charge to income statement 409 - 409 -Balance at end of year 409 - 409 -

The marketable securities represent short-term investments in listed equity securities which provide an with opportunity forreturn through dividend income and trading gains. The fair value of these securities approximates to their market value.

The rate of interests for the bonds ranged from 5.00% to 6.80% (2001: 6.375%) receivable half yearly. The effectiveinterest rates for the year ranged from 5.20 to 6.80% (2001: 6.30%) per year.



5. TRADE RECEIVABLESGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Outside parties 14,717 2,476 1 -Less: provision (5,813) (54) - -Subsidiaries (Note 3 and 7) - - 137 181

8,904 2,422 138 181Movements in above provision:Balance at beginning of year 54 69 - -Subsidiary acquired 5,752 - - -Foreign exchange adjustments (3) - - -Charge/(reversed) to income statement 10 (15) - -Balance at end of year 5,813 54 - -

The average credit period taken by customers, excluding all items provided for ranges from 14 days to 25 days. A provisionis made for estimated irrecoverable amounts from the customers. This provision is determined by reference to past defaultexperience. The Directors consider that the carrying amount of trade receivables approximates to their fair value. Theamounts are mainly in US dollars.

There is no concentration of customers.

6. OTHER RECEIVABLES AND PREPAYMENTSGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Subsidiaries (Note 3 and 7) - - 70 -Sundry receivables 472 135 11 17Prepayments 333 280 23 25

805 415 104 42

The amounts are mainly in US dollars.

7. INVESTMENTS IN SUBSIDIARIESCompany

2002 2001$’000 $’000

Unlisted equity shares at cost 11,236 11,236Increase in fair value 9,607 5,716At Directors’ valuation of fair value 20,843 16,952

The investments are in US dollars.

The net book value of the subsidiaries is used as the fair value as it is impracticable to determine a reliable fair value for theunlisted equity shares by other methods.



7. INVESTMENTS IN SUBSIDIARIES (cont’d)

Name of subsidiaries, country of incorporation, Cost in books Percentage of equityplace of operations and principal activities of Company held by Group

2002 2001 2002 2001$’000 $’000 % %

Integral Systems, Inc., USA (“ISI”) 11,236 11,236 85(b) 85(b)Primarily engaged in providing maintenance service andsupport to its existing customer and the development andlicensing of an internet delivery system, for its humanresource and payroll application software.

IDEX Global Services, Inc., USA (“IDEX”) (a) - 73 -IDEX provides voice and data networks and cabling,project management, system integration andelectrical design and installation.(subsidiary from 29 October 2002)

InPower Inc., USA (“InPower”) (a) (a) 85 85Inactive.

Payroll Resource Group, Inc., USA (“PRG”) (a) (a) 51 51PRG provides payroll processing and related services(subsidiary from 1 October 2001)Total 11,236 11,236

(a) Held by Integral Systems, Inc.

(b) Ordinary and series D, E and F preference shares. The preference shares are convertible to ordinary stock at the optionof the holder. Series D, E and F preferred shareholders are entitled to receive dividends, when declared, before and inpreference to any payment of dividends to common stockholders at the rate of US$0.125, US$0.2881 and US$0.049per share per annum, respectively. Dividends are not cumulative and are payable only when and if declared by theboard of Directors of ISI.

(c) All the above subsidiaries are audited by Wilson Markle Stuckey Hardesty & Bott, USA, a firms of accountants otherthan member firms of Howarth International of which Chio Lim & Associates, Singapore is a member.

Also refer to Note 29 relating to the acquisitions of subsidiaries.

8. OTHER INVESTMENTSGroup Company

Available-for-sale investments: 2002 2001 2002 2001$’000 $’000 $’000 $’000

Unquoted equity shares at cost:At beginning of year - 500 - 500Additions 150 - 150 -Amounts written off - (500) - (500)Increase in fair value - - - -Fair value at end of year 150 - 150 -Fair value of other investments 150 - 150 -

Other investments are investments in equity securities, representing strategic investments in unlisted companies which areheld primarily for long-term growth potential. The fair value of these investments at the balance sheet date is estimated bythe Directors, based on the net present value of anticipated future cash flows.



9. PROPERTY, PLANT AND EQUIPMENT

Leasehold Plant, equipmentGroup improvements and software Total

$’000 $’000 $’000Cost:At beginning of year 158 4,007 4,165Foreign exchange adjustments (8) (242) (250)Subsidiary acquired 425 4,063 4,488Additions 40 127 167At end of year 615 7,955 8,570

Accumulated depreciation:At beginning of year 145 2,447 2,592Foreign exchange adjustments (8) (147) (155)Subsidiary acquired 372 2,504 2,876Depreciation for the year 34 489 523At end of year 543 5,293 5,836

Depreciation for last year 50 439 489

Net book value:At beginning of year 13 1,560 1,573At end of year 72 2,662 2,734

Leasehold Plant andCompany improvements equipment Total

$’000 $’000 $’000Cost:At beginning of year 18 487 505Foreign exchange adjustments (1) (29) (30)Additions - 9 9At end of year 17 467 484

Accumulated depreciation:At beginning of year 9 90 99Foreign exchange adjustments - (8) (8)Depreciation for the year 2 89 91At end of year 11 171 182

Depreciation for last year 5 69 74

Net book value:At beginning of year 9 397 406At end of year 6 296 302



10. GOODWILL ON CONSOLIDATIONGroup

2002 2001$’000 $’000

Cost :At beginning of year 23,976 20,536Foreign exchange adjustments 449 -Arising from acquisition of subsidiary 7,091 3,440At end of year 31,516 23,976

Accumulated amortisation:At beginning of year 2,140 1,027Foreign exchange adjustments 7 -Amortisation for the year 1,431 1,113At end of year 3,578 2,140

Net book value:At beginning of year 21,836 19,509At end of year 27,938 21,836

11. OTHER ASSETSGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Note and interest receivable from subsidiary (Notes 3 and 7) (a) - - 3,636 3,575Note receivable (b) 1,735 - - -Deposits to secure services 40 22 6 5

1,775 22 3,642 3,580

(a) The borrowing in US dollar is by ISI and it is evidenced by an Unsecured Convertible Promissory Note (“Note”).Principal and interest, fixed at 8% per year and compounded monthly from 30 September 2001 is due at maturity on30 September 2003. Under the terms of the Note, the Company may request or require conversion of all or a portionof the balance due under the Note to common stock of ISI at US$0.10 per share.

(b) The other note receivable in US dollar is payable in 2006 and is at the rate of 5% per year.

The fair value of long-term debt receivables approximates the carrying value.

12. SHORT-TERM BORROWINGSGroup

2002 2001$’000 $’000

Bank loan (secured) 5,490 -

The bank loan in US dollars to a subsidiary is subject to review by the bank on 31 October 2003. Variable interest at thebank prime rate plus 0.75% (4.25% prime rate as of December 31, 2002) is due monthly. Certain assets of ISI and IDEXsecure the credit line and ISI must meet various financial standards and ratios, as defined in the agreement with the bank.InPower guarantees the credit line. As of 31 December 2002, management believes that ISI complies with all terms of thecredit line.



13. TRADE PAYABLES AND ACCRUED LIABILITIESGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Outside parties and accrued liabilities 13,593 8,897 345 494

The amounts are mainly in US dollars.

The average credit period taken by the Group to settle payables is about 45 days.

14. DEFERRED REVENUEGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Balance at beginning of year 7,029 7,125 - -Foreign exchange adjustments (471) - - -Subsidiary acquired 982 116 - -Credits during the year 16,280 6,913 - -Transferred to income statement (14,832) (7,125) - -Balances at end of year 8,988 7,029 - -

15. ISSUED CAPITALNumber of shares Group and Company

2002 2001 2002 2001$’000 $’000

Authorised:Ordinary shares of $0.05 each 600,000,000 600,000,000 30,000 30,000

Issued and fully paid:Ordinary shares of $0.05 each 301,713,673 301,713,673 15,085 15,085

The share premium account balance and the unrealised reserves shown in the statement of changes in equity are notavailable for distribution as cash dividends.

OPTIONS AND WARRANTS:

During the financial year, no option to take up unissued shares of the Company or any corporations in the Group wasgranted. Details of options granted in previous years are as follows:

Stock Option Plans of Subsidiaries:

Integral Systems, Inc. (“ISI”) has two stock option plans, the 1993 Plan and the 1982 Plan (collectively, the “ISI Plans”)which provide for the grant of incentive stock options to the ISI employees, Directors and officers and nonqualified stockoptions to the ISI officers, employees, consultants, advisors and Directors. 5,500,000 shares of common stocks (of US$0.01par value) are reserved for issuance under the 1993 Plan and no shares remain in reserve for issuance under the 1982 Plan.

The ISI Plans are administered by the Board of Directors of ISI or its designees and they provide generally that the optionprice for an incentive stock option shall not be less than the fair market value of the shares on the date of grant. The optionprice of a nonqualified stock option generally shall not be less than 85% of the fair market value on the date of grant.Under the ISI Plans, incentive and nonqualified stock options may be granted to a person who, at the time of the grant,owns stock of more than ten percent of the total combined voting power of all classes of outstanding stock of ISI. However,at the time such options are granted, the option price must be at least 110% of the fair market value of the stock and suchoption may not be exercisable until after five years from the date of grant. Options generally vest rateably over three yearsand expire ten years from the date of grant.



15. ISSUED CAPITAL (Cont’d)

During 1996, InPower adopted the InPower, Inc. Stock Option Plan (“InPower Plan”) and reserved 2,500,000 shares ofInPower common stock for issuance. The InPower Plan provides for the grant of incentive stock options to employees ofInPower and ISI and the grant of nonqualified stock options and restricted stock options to employees, officers, Directors,consultants and advisors of InPower and ISI. The InPower Plan has similar terms and conditions as the ISI Plans. In February2000, the board of Directors discontinued new grants under the InPower Plan and offered all current employees holdingInPower Plan stock options the ability to convert each InPower stock option into two ISI stock options with the exerciseprice of US$0.10 per share under the ISI 1993 Plan. Service with InPower will be recognised for vesting purposes onconverted stock options and the term of each converted stock option will be measured from the grant date of the originalInPower stock option. This exchange is, in effect, a repricing of the exchange stock options and results in these optionsbecoming variable stock options. Future increases in the fair value of these options will result in compensation cost to ISI.

Activities under the Plans are as follows:

At At ExerciseDate of Grant 1.1.2002 Cancelled 31.12.2002 price Exercise periodISI Plan Shares:9 Feb 2000 1,541,000 (9,000) 1,532,000 US$0.10 9 Feb 2000 – 9 Feb 20101 May 2000 33,100 (3,100) 30,000 US$0.10 1 May 2000 – 1 May 201021 Oct 1992 3,250 (3,250) - US$0.97 21 Oct 1992 – 21 Oct 200210 May 1994 250 - 250 US$0.97 10 May 1994 – 10 May 20046 Feb 1995 1,250 - 1,250 US$1.25 6 Feb 1995 – 6 Feb 200524 Jul 1995 500 - 500 US$1.25 24 Jul 1995 – 24 Jul 200515 Jun 1995 250 (250) - US$1.25 15 Jun 1995 – 15 June 2005

1,579,600 (15,600) 1,564,000

Activities under the Plans for the past year have been disclosed in the Directors’ report for last year.

The following table summarises information about director share options under the ISI Plan outstanding as at 31 December2002:

Options Aggregated options Aggregated options AggregatedGranted granted from start exercised/lapsed optionsduring of scheme to end from start of scheme outstanding at

Name of participant 2002 of 2002 to end of 2002 31.12.2002

Directors of the Company:Kwok Kah Kie - 500,000 - 500,000(a)Kwok Kah Kie - 80,000 (80,000) -Craig Daron Morris - 750,000 - 750,000(a)Craig Daron Morris - 240,000 (240,000) -Total - 1,570,000 (320,000) 1,250,000

Exercise price and period:(a) US$0.10 exercisable between 9 February 2000 and 9 February 2010.

No participant has received 5% or more of the total number of the options available under the Scheme except for theabove two Directors.

Except as disclosed above, there were no options outstanding at the end of the year or granted during the year to (a)Directors and controlling shareholders of the Company and (b) Directors and associates of the controlling shareholders ofthe Company.



15. ISSUED CAPITAL (Cont’d)

Warrants of ISI

Effective from 1 October 2001, ISI purchased 60% of the outstanding stock of Payroll Resources Group, Inc. (PRG),incorporated in California from its sole owner, Robeson, Ltd. (Robeson), incorporated in the British Virgin Islands. ISI paidRobeson US$1,900,000 and 2,550,000 common stock warrants, which Robeson may exercise to purchase 2,550,000shares of common stock of ISI for US$0.10 per share, as adjusted. ISI borrowed US$1,900,000 from the Company tofinance the acquisition of PRG with an option for the Company to convert all or part of the loan to common stock of ISI forUS$0.10 per share. In the event Robeson and the Company converted the warrants and loan respectively, the interest ofthe Company in ISI would be increased from 85% to 87%. Management has determined that the fair value of the commonstock warrants issued in connection with the purchase of its interest in PRG had only a nominal value, because the exerciseprice was equal to the fair market value of the common shares.

Warrants of IDEX

Effective from 29 October 2002, ISI purchased 85.7% of the outstanding stock of IDEX, a California corporation. ISI paidUS$4,500 (S$8,000) for the stock and agreed to assume certain bank and other indebtedness of IDEX. As of the acquisitiondate, the indebtedness exceeded the fair value of the assets acquired by US$4,086,000 (S$7,083,000) which amount isrecorded as goodwill in the acCompanying consolidated balance sheet. Before the acquisition, IDEX had issued warrantsfor the purchase of up to 13% of the IDEX. These warrants were not cancelled in connection with the acquisition and areexercisable for nominal amounts. Shortly before the acquisition, IDEX sold shares to certain employees for US$300,000 ofwhich US$102,000 (S$177,000) was paid and US$198,000 (S$343,000) is payable in the form of promissory notes securedby the IDEX shares. The IDEX shares sold to employees represent 4.8% of the total shares outstanding.

Fair value disclosures:

Had compensation cost for the ISI and InPower Plans been determined based on the fair value at the grant dates for theawards under a method permitted by IAS 19, the Group’s proforma net income would not have materially changed for theyears ended 31 December 2002 and 2001. The fair value of each option is estimated on the date of grant using theminimum value method with the following assumption used for grants:

2002 2001

Annual dividend yield 0.00% 0.00%Risk-free annual interest rates 4.31% 3.48%Volatility 0.00% 0.00%Expected option term of years 3 years 3 years

16. RETIREMENT PLANS

Employees of the Company in Singapore contribute to the government managed retirement benefit plan, the CentralProvident Fund, which specifies the employer’s obligations and these are dealt with as defined contribution retirementbenefit plans.

The subsidiaries, ISI, IDEX, InPower and PRG sponsor separate defined contribution plans covering substantially all theiremployees. Their board of Directors determine annually any contributions to the plans. During the year, PRG did notcontribute to the plan.

IDEX is required to contribute to various union-administered pension plans covering substantially all of its unionised employees.The Employees’ Retirement Income Security Act of 1974 (ERISA) in USA, as amended, imposes certain liabilities on contributorsto multi-employer plans when contributors withdraw. A withdrawing contributor would be liable for an allocated share ofthe plans’ total unfunded liabilities for vested benefits. The relative asset and benefit positions of IDEX in the various multi-employer pension plans are not currently determinable. The policy of IDEX is to expense contributions accrued, but it hasnot calculated the amount actuarially attributable to these plans.



17. REVENUEGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Maintenance 14,134 16,107 - -Services 5,902 2,521 1,371 720Software licence fees 460 1,475 - -Outsourcing 4,681 1,493 - -Others 14 4 14 4

25,191 21,600 1,385 724

Software licence fees consist of initial licenses for HR/payroll software. Software maintenance fees consist of fees fromrenewable maintenance contracts that provide HR/payroll software updates, upgrades and support. Contractual servicesconsist of payroll processing, cable installation and related services.

18. OTHER OPERATING INCOMEGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Dividend income from listed corporations – gross 7 - - -Rental income 5 - - -Interest income from subsidiaries - - 291 75Interest income from non-related parties 91 334 31 241

103 334 322 316

19. LOSS ON PHASED-OUT PRODUCT LINESGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Revenue - 2 - -Cost of sales - - - -Gross profit - 2 - -Product development - (890) - -Administrative expenses - (273) - -Loss on phased-out products - (1,161) - -

20. OTHER (CHARGES) / CREDITSGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Foreign exchange adjustments (loss)/gain (32) 14 (7) 14Reversal of /(provision) for doubtful trade debts (10) 15 - -Provision on marketable securities (409) - (409) -Gain on disposal of marketable securities 154 - 210 -Other investment written off - (500) - (500)

( 297) ( 471) (206) (486)

21. FINANCE COSTSGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Interest expense to non-related parties 48 11 - -



22. PROFIT / (LOSS) BEFORE INCOME TAX

In addition to the charges and credits disclosed elsewhere in the notes to the financial statements, this item includes thefollowing charges/(credits):

Group Company2002 2001 2002 2001$’000 $’000 $’000 $’000

Directors’ remunerationDirectors of the Company 1,664 1,440 1,226 1,186Directors of subsidiaries 465 226 - -Fees to Directors of the Company

- Current year 65 130 65 130- Over provision in prior year (5) - (5) -

Fee to a firm in which a director is a member 23 15 23 15Auditors’ remuneration:

Auditors of the Company 20 15 20 15Auditors of subsidiaries 50 64 - -

Other fee to auditors:Auditors of the Company 2 3 2 3Auditors of subsidiaries 21 109 - -

Depreciation expense 523 489 91 74Increase in inventories 526 - - -Inventories used 1,114 - - -

23. INCOME TAXGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Current 1,759 1,832 - -Deferred (benefit) 52 (54) - -

1,811 1,778 - -

The income tax expense varied from the amount of income tax expense determined by applying the Singapore income taxrate of 22% (2001: 24.5%) to profit before income tax as a result of the following differences:-

Group Company2002 2001 2002 2001$’000 $’000 $’000 $’000

Income tax expense (benefit) at statutory rate 1,050 885 (88) (352)Non-allowable (taxable) items 34 138 102 91State and local taxes 347 444 - -Difference in effective tax rates overseas 349 282 - -Other items 31 29 (14) 261Total income tax expense 1,811 1,778 - -

There are no income tax consequences of dividends to shareholders of the Company.



23. INCOME TAX (cont’d)

The net deferred tax amount in the balance sheet is as follows:

Deferred Tax:Group Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Deferred tax liabilities - - - -Deferred tax assets 803 855 - -Net position 803 855 - -

The movement for the year in the Group’s deferredtax position was as follows:

Balance at beginning of year 855 801 - -(Charge)/credit to income for the year (52) 54 - -Charge to equity for the year - - - -Balance at end of year 803 855 - -

Deferred tax assets :Group Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Tax loss carryforwards 1,296 1,915 336 321Accruals 118 179 - -Deferred revenue 121 135 - -Research credits 363 498 - -Property and equipment 14 506 33 22Total deferred tax assets 1,912 2,727 369 343Deferred tax assets valuation allowance (1,109) (2,378) (369) (343)Balance 803 855 - -

An allowance is made to the extent that it is not probable that taxable profit will be available against which the unused taxloss carryforwards can be utilised.

The realisation of the future Singapore income tax benefits from tax loss carryforwards and temporary differences fromcapital allowances is available for an unlimited future period subject to the conditions imposed by law including theretention of majority shareholders as defined. Where provision for deferred tax arising from temporary differences hasbeen offset against the above tax loss carryforwards, such provision for deferred tax will be required to be set up when thetax losses are utilised in the future. The tax loss and other tax credit carryforwards of the subsidiaries expire in varyingamount between 2002 and 2018. These tax loss and other tax credit carryforwards are subject to an annual limitation dueto cumulative changes in ownership of and may expire prior to utilisation. The subsidiaries are subject to Federal, State andlocal taxes in U.S.A.

At the balance sheet date, the aggregate amount of temporary differences associated with investments in subsidiaries forwhich deferred tax liabilities have not been recognised was $2,148,000 (2001: $1,276,000). No liability has been recognisedin respect of these differences because the Group is in a position to control the timing of the reversal of the temporarydifferences and it is probable that such differences will not reverse in the foreseeable future.



24. EARNINGS PER SHARE

The earnings per share is calculated by dividing the Group’s profit attributable to shareholders before and after extraordinaryitems by the weighted number of shares of $0.05 each in issue during the year.

The calculation of the earnings per share is based on:Net profit for the year (in $’000s) 2,905 1,728Effect of dilutive potential ordinary share:- Share options and warrants - -Earnings for the purposes of diluted earnings per share 2,905 1,728

Number of shares (in ‘000s)

Weighted average number of ordinary shares for the purposesof basic earnings per share 301,714 76,500- Bonus issue in 2001 - 217,547

Effect of dilutive potential ordinary shares:- Share options and warrants - -

Weighted average number of ordinary shares for the purposesOf diluted earnings of share 301,714 294,047

There is no dilution for the options and warrants of the subsidiaries because the exercise price is more than the fair value ofthe shares.

25. STAFF COSTSGroup Company

2002 2001 2002 2001$’000 $’000 $’000 $’000

Staff costs including Directors 10,155 8,253 1,402 1,180Contributions to defined contribution plans 134 189 86 78Total staff costs 10,289 8,442 1,488 1,258

26. NUMBER OF EMPLOYEESGroup Company

2002 2001 2002 2001

Number of employees (including full-time Directors)at end of year 174 53 6 9

27. DIRECTORS REMUNERATION

The number of Directors of the Company in remuneration bands are as follows:Group

2002 2001

$500,000 and above 1 1$250,000 to $499,999 1 1Below $250,000 4 7Total 6 9



28. CASH AND CASH EQUIVALENTS IN THE CASH FLOW STATEMENTGroup

2002 2001$’000 $’000

Cash and cash equivalents 12,372 14,767Effect of exchange rate changes - -Cash and cash equivalents at end of year 12,372 14,767

There was an amount of Nil (2001: $210,000) not involving cash from the swap of 1,210,990 redeemable preferenceshares for shares in ISI.

The large cash balance is due to advances from the customers.

29. ACQUISITIONS OF SUBSIDIARIES

The Group acquired 73% of IDEX Global Services, Inc., USA on 29 October 2002 and 51% of Payroll Resource Group, Inc.,USA on 1 October 2001. The transactions were accounted for by the purchase method of accounting.

The fair values of net assets acquired are as follows:

2002 2001$’000 $’000

Cash - 4,867Trade receivables 4,088 (619)Other receivables and prepaid expenses 252 -Other assets 305 9Property, plant and equipment 1,612 784Other investments 1,735 -Deferred income tax assets - -Goodwill 7,091 3,440Short-term borrowings (5,490) -Trade payables (8,125) (4,055)Deferred revenue (982) (115)Other liabilities (478) (690)Consideration 8 3,621Less cash - (4,867)Net cash outflow / (inflow) from acquisition 8 (1,246)

The contributions from the subsidiaries for the period between the date of acquisition and the balance sheet date were asfollows:

2002 2001$’000 $’000

Revenue 4,586 1,403Profit before income tax 247 265



30. COMMITMENTS

The Companies in the Group lease office space and equipment under non-cancellable operating and capital leases withvarious expiration dates through 2004. The leases generally provide for minimum annual rentals with escalation andrenewal provisions. Future minimum lease payments and sublease rental receipts under non-cancellable operating leases asat 31 December 2002 are as follows:

Group Company2002 2001 2002 2001$’000 $’000 $’000 $’000

Within one year 839 423 20 9Within 2 to 5 years 1,164 347 9 -After 5 years - - - -

2,003 770 29 9

Rental expenses for the year 566 1,056 22 20

Sublease rental income for the year - 184 - -

PRG acquired payroll processing computer software licenses from two vendors. In an agreement with one vendor forperiod 28 June 2000 through 31 December 2005, PRG paid and capitalised under plant, equipment and software US$500,000(S$923,000) for the initial license and pays and expenses one dollar per month per “active employee,” as defined. In anagreement dated 31 July 2001 and renewable annually for up to 20 years, PRG paid and capitalised under plant, equipmentand software US$50,000 (S$92,000) for the initial license and pays and expenses ten cents per “check,” as defined.

31. CONTINGENT ASSETS

IDEX is plaintiff in a matter brought under the jurisdiction of the courts of the State of Florida seeking payment of approximatelyUS$2,003,000 (S$3,475,000) for services under a time and materials contract. In addition, IDEX is asserting a claim forcosts and punitive damages in excess of US$2,000,000 (S$3,469,000). The services were provided and billed before theacquisition of IDEX by Integral. Amounts billed were fully reserved in connection with recording the IDEX purchase and,accordingly, recovery of amounts, if any, under the Florida matter will be recorded as income on receipt.

32. FINANCIAL INFORMATION BY SEGMENTS

During the year the Group operated principally in the United States. Accordingly, no geographical segment reporting isapplicable. The assets, liabilities and income statement items not in the United States are principally from the Company inSingapore.

For management purposes, the Group is currently organised into three operating divisions – HRMS Software, HRMS Servicesand IT Services. These divisions are the basis on which the Group reports its primary segment information.

Principal activities are as follows:

HRMS Software segment is primarily engaged in providing maintenance service, development and licensing of internetdelivery system for human resource and payroll application software.

HRMS Services segment is primarily engaged in providing payroll processing and related services.

IT Services segment is primarily engaged in providing voice and data networks and cabling, project management, systemsintegration and electrical design and installation.



32. FINANCIAL INFORMATION BY SEGMENTS (cont’d)

Segment information about these businesses is presented below: -

Year ended HRMS HRMS IT31 December 2002 Software Services Services Eliminations Consolidated

$’000 $’000 $’000 $’000 $’000REVENUEExternal sales 16,300 4,377 4,514 – 25,191Inter-segment sales – 1,371 – (1,371) –Total revenue 16,300 5,748 4,514 (1,371) 25,191

RESULTSSegment results 6,803 727 286 (1,371) 6,445

Unallocated corporate expenses (1,728)4,717

Finance costs (48)Interest income 91Income from investments 7Other operating income 5Profit before tax 4,772Income tax expense (1,811)Profit after tax 2,961

OTHER INFORMATIONCapital expenditures 121 46 – – 167Depreciation 196 275 52 – 523Amortisation 1,431

BALANCE SHEETAs at 31 December 2002

ASSETSSegment assets 9,557 10,416 9,359 – 29,332Goodwill 27,938Consolidated total assets 57,270

LIABILITIESSegment liabilities 9,682 7,974 11,655 – 29,311

REVENUEExternal sales 20,193 1,407 – – 21,600Inter-segment sales – 720 – (720) –Total revenue 20,193 2,127 – (720) 21,600

RESULTSSegment results 7,616 (862) – (720) 6,034Unallocated corporate expenses (2,745)

3,289Finance costs (11)Interest income 334Profit before tax 3,612Income tax expense (1,778)Profit after tax 1,834

OTHER INFORMATIONCapital expenditures 73 371 – – 444Depreciation 364 125 – – 489Amortisation 1,113

BALANCE SHEETAs at 31 December 2001

ASSETSSegment assets 9,124 11,864 – – 20,988Goodwill 21,836Consolidated total assets 42,824

LIABILITIESSegment liabilities 10,299 7,700 – – 17,999


44

33. CHANGE IN ACCOUNTING POLICY

With effect for the year ended 31 December 2002, for the financial statements of the Company itself, the functionalcurrency (measurement currency) was changed from Singapore dollars to US dollars. For the year ended 31 December2002, the US dollar financial statements of the Company were used. The change to the functional currency in US dollarswas made to provide information that is useful and reflects the economic substance of the underlying events andcircumstances relevant to the Company because all its revenue and investments are in US dollars. The comparatives for theyear 2001 have been restated accordingly.

The effects of the change for the prior year ended 31 December 2001 are as follows:

Group: Before change After change DifferenceS$’000 S$’000 S$’000

Issued capital 15,085 15,085 -Net profit for the year 2,045 1,728 (317)Foreign currency translation differences (334) (7) 327Shareholders’ equity including issued capital and

foreign exchange adjustment reserves 24,709 24,719 10

Company:

Issued capital 15,085 15,085 -Net loss for the year (1,122) (1,439) (317)Foreign currency translation differences - 327 327Shareholders’ equity including issued capital and

foreign exchange adjustment reserves 24,709 24,719 10

Notes to the Financial Statements )31 December 2002


45Analysis of Shareholdings )as at 24 March 2003 (as reflected in the records of The Central Depository (Pte) Limited (“CDP”))

AUTHORISED SHARE CAPITAL : $30,000,000.00ISSUED AND FULLY PAID-UP CAPITAL : $15,085,683.65CLASS OF SHARES : Ordinary Shares Of S$0.05 Each With Equal Voting RightsSIZE OF NO. OFSHAREHOLDINGS SHAREHOLDERS % NO. OF SHARES %

1 - 999 8 0.44 3,365 0.001,000 - 10,000 830 45.93 3,315,000 1.1010,001 - 1,000,000 926 51.25 72,271,525 23.951,000,001 & ABOVE 43 2.38 226,123,783 74.95

TOTAL 1,807 100.00 301,713,673 100.00

TOP TWENTY SHAREHOLDERS NO. OF SHARES %

DBS VICKERS SECS (S) PTE LTD 35,570,159 11.79KWOK KAH KIE 26,560,111 8.80MORRIS CRAIG DARON 23,653,263 7.84MAYBAN NOMINEES (S) PTE LTD 17,350,000 5.75CHEN WEN SHIANG DOLLY 12,502,480 4.14HL BANK NOMINEES (S) PTE LTD 11,718,000 3.88CHRISTOPHER CHONG MENG TAK 11,003,386 3.65MORGAN STANLEY ASIA (S’PORE) SECURITIES PTE LTD 7,071,880 2.34LIE YOK PHING 5,763,243 1.91LOH YONG LIM 4,760,243 1.58PHILLIP SECURITIES PTE LTD 4,662,237 1.55LIM SUET FERN 4,542,158 1.51HENG AIK MENG 4,242,158 1.41WONG KOK SIEW 3,942,158 1.31WONG CHIAT HOW BRUCE 3,197,283 1.06KOH SIEW KEE 3,105,000 1.03DBS NOMINEES PTE LTD 2,914,000 0.97LEE BENG CHENG 2,555,622 0.85TAN KONG SIN 2,428,000 0.80UNITED OVERSEAS BANK NOMINEES PTE LTD 2,343,000 0.78

TOTAL 189,884,381 62.95

Substantial Shareholders(as recorded in the Register of Substantial Shareholders as at 24 March 2003)

Number of Shares of $0.05 each fully paidName of Substantial Shareholder Direct interest % Indirect Interest %Kwok Kah Kie 26,560,111 8.80 28,285,534 9.37Craig Daron Morris 23,653,263 7.84 - -Christopher Chong Meng Tak 11,003,386 3.65 7,071,880 2.34

Notes:(1) Mr Kwok Kah Kie’s indirect interest comprises 1,135,543 shares held by his wife, 10,100,000 shares held by HL Bank

Nominees (S) Pte Ltd as his nominee, 17,000,000 shares held by Mayban Nominees (Singapore) Pte Ltd as his nominee and50,000 shares held by Oversea Chinese Bank Nominees Pte Ltd as his nominee.

(2) Mr Christopher Chong Meng Tak’s indirect interest comprises 7,071,880 shares held by Morgan Stanley Asia (Singapore)Securities Pte Ltd as his nominee.

Percentage of Shareholding Held in the Hands of PublicAs at 24 March 2003, the percentage of shareholding in the Company held in the hands of public is approximately 67.5%. Atleast 10% of the Company’s equity securities are held by the public at all times and the Company is in compliance with Rule 723of the SGX-ST Listing Manual.


46Notice of Annual General Meeting )

NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of the Company will be held at Level 1, Tera 1 Room, 750CChai Chee Road, Technopark @ Chai Chee, Singapore 469003 on Friday, 25 April 2003 at 10.00 a.m. for the following purposes:

(Resolution 1)

(Resolution 2)(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Accounts for the financial year ended 31 December 2002 togetherwith the Reports of the Directors and the Auditors of the Company.

2. To re-elect the following Directors retiring under Article 91 of the Company’s Articles of Association:

i. Mr Craig Daron Morrisii. Ms Ong Beng Hong

Mr Craig Daron Morris will, upon re-election as a Director of the Company, remain an Executive Directorof the Company.

Ms Ong Beng Hong will, upon re-election as a Director of the Company, remains the Chairman of theRenumeration Committee, member of the Audit Committee and the Nominating Committee and will beconsidered independent of management.

3. To approve Directors’ fees of $65,000 for the financial year ended 31 December 2002.

4. To re-appoint Chio Lim & Associates as the Company’s Auditors and to authorise the Directors to fix theirremuneration.

5. To transact any other business that may be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

6. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution, with orwithout modifications:

“That pursuant to Section 161 of the Companies Act, Cap. 50 and the listing rules of the SingaporeExchange Securities Trading Limited, authority be and is hereby given to the Directors to issue shares andconvertible securities in the Company (whether by way of rights, bonus or otherwise) at any time andupon such terms and conditions and for such purposes and to such persons as the Directors may in theirabsolute discretion deem fit provided that the aggregate number of shares and convertible securities tobe issued pursuant to this Resolution does not exceed fifty per cent (50%) of the issued share capital ofthe Company at the date of this Resolution, of which the aggregate number of shares and convertiblesecurities to be issued other than on a pro rata basis to shareholders of the Company does not exceedtwenty per cent (20%) of the issued share capital of the Company at the date of this Resolution, and,unless revoked or varied by the Company in general meeting, such authority shall continue in force untilthe conclusion of the next Annual General Meeting of the Company or the date by which the nextAnnual General Meeting of the Company is required by law to be held, whichever is the earlier.”

By Order of the Board

Tan Swee GekSecretary

8 April 2003


47Notice of Annual General Meeting )

Explanatory Note:

The Ordinary Resolution proposed in item 6 above, if passed, will empower the Directors from the passing of the above Meetinguntil the date of the next Annual General Meeting, to allot and issue shares and convertible securities in the Company up to anamount not exceeding, in total, 50% of the issued share capital of the Company at the time of passing of this resolution, ofwhich up to 20% may be issued other than on a pro rata basis to shareholders.

Notes:

1) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy or proxies (not morethan two) to attend and vote on his/her behalf. A proxy need not be a member of the Company.

2) The instrument appointing a proxy or proxies must be under the hand of the appointor or of his/her attorney duly authorisedin writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed eitherunder its seal or under the hand of an officer or attorney duly authorised.

3) The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 750C ChaiChee Road, #02-03 Technopark @ Chai Chee Singapore 469003 at least 48 hours before the time fixed for the Meeting.


48

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49integra2000 Ltd(Incorporated in the Republic of Singapore)

Proxy Form

I/We __________________________________________________________________________________________________ (Name)

of _________________________________________________________________________________________________ (Address)

being a member/members of integra2000 Ltd (the “Company”) hereby appoint

as my/our proxy/proxies to vote for me/us on my/our behalf at the Fourth Annual General Meeting of the Company, to be heldat Level 1, Tera 1 Room, 750C Chai Chee Road, Technopark @ Chai Chee, Singapore 469003 on Friday, 25 April 2003 at 10.00a.m., and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed atthe Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain fromvoting at his/their discretion, as he/they will on any other matter arising at the Meeting.

Name

and/or (delete as appropriate)

Proportion of my/ourShareholdings (%)

No. ofshares %

NRIC/PassportNumberAddress

Name

Proportion of my/ourShareholdings (%)

No. ofshares %

NRIC/PassportNumberAddress

Ordinary Business

1. Adoption of Reports and Accounts

2. Re-appointment of Mr Craig Daron Morris

3. Re-appointment of Ms Ong Beng Hong

4. Approval of Directors’ Fees

5. Re-appointment of Auditors

Special Business

6. Authority to allot and issue new shares

AgainstForNo. Resolutions Relating To:

(Please indicate with a cross [X] in the space provided whether you wish your vote to be cast for or against the Resolutions as setout in the Notice of the Meeting.)

Dated this _________ day of ____________________ 2003.

_______________________________________Signature of Shareholder(s) or Common Seal

Important: Please read notes overleaf

Total number of Shares held

✃


50

Notes:

1. Please insert the total number of shares held by you. If you have Shares entered against your name in the DepositoryRegister (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number of Shares. If you haveShares registered in your name in the Register of Members, you should insert that number of Shares. If you have Sharesregistered in your name in the Depository Register and Shares registered in your name in the Register of Members, youshould insert the aggregate number of Shares entered against your name in the Depository Register and registered in yourname in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemedto relate to all the Shares held by you.

2. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in hisstead.

3. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of hisshareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. A proxy need not be a member of the Company.

5. The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 750C Chai CheeRoad, #02-03 Technopark @ Chai Chee, Singapore 469003, not less than 48 hours before the time set for the Meeting

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorisedin writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed eitherunder its common seal or under the hand of its attorney or a duly authorised officer.

7. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter of power ofattorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrumentof proxy; failing which the instrument may be treated as invalid.

8. The Company shall be entitled to reject a Proxy Form which is incomplete, improperly completed, illegible or where the trueintentions of the appointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. Inaddition, in the case of shares entered in the Depository Register, the Company may reject a Proxy Form if the member,being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours beforethe time appointed for holding the Meeting, as certified by the Central Depository (Pte) Limited to the Company.

750c chai chee road #02-03 technopark @ chai chee singapore … · 2013. 5. 13. · net profit...

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