aligning our strengths for a world of opportunities · fy2011 overview as the year wore on, a...

InternatIonal Press softcom lImIted annual report 2011

Aligning Our StrengthS fOr A WOrld Of OppOrtunitieS

To be The leading global Technology-based provider

of value chain services, prinT and media producTs for our

cusTomers.InternatIonal Press softcom lImIted 01

01. OurMissiOn

02. regiOnalPresence

03. OurgrOuP

04. chairMan’sstateMent

06. BOardOfdirectOrs

07. cOrPOrateculture

08. financialhighlights

09. cOrPOrategOvernancestateMent

19. cOrPOrateinfOrMatiOn

22. financialreview

conTenTs

This DocumenT has Been PrePareD By The comPany anD revieweD By The comPany’s sPonsor, cnP comPliance PTe lTD (“sPonsor”), For comPliance wiTh The singaPore exchange securiTies TraDing limiTeD (“sgx-sT”) lisTing manual secTion B: rules oF caTalisT. The sPonsor has noT veriFieD The conTenTs oF This DocumenT incluDing The accuracy or comPleTeness oF any oF The inFormaTion DiscloseD or The correcTness oF any oF The sTaTemenTs or oPinions maDe or rePorTs conTaineD in This DocumenT. This DocumenT has noT Been examineD or aPProveD By The sgx-sT. The sPonsor anD The sgx-sT assume no resPonsiBiliTy For The conTenTs oF This DocumenT incluDing The correcTness oF any oF The sTaTemenTs or oPinions maDe or rePorTs conTaineD in This DocumenT.

The conTacT Person For The sPonsor is mr PraDeeP Kumar singh aT 36 carPenTer sTreeT, singaPore 059915, TelePhone: (65) 6323 8383; email: [email protected].

our mission

ausTralia

1

International Press Softcom Limited (HQ)

2

IP Softcom (Malaysia) Sdn. Bhd

3

IP Softcom (Xiamen) Co., Ltd/ IP Media (Xiamen) Co., Ltd

4

IP Softcom (Shanghai)Co., Ltd/IPS Trading (Shanghai) Co., Ltd

5

IP Softcom (Shenzhen) Co., Ltd

7

IP Softcom (Australia) Pty Ltd

10

International Press Softcom (Vietnam) Co., Ltd

8

IP Softcom (India) Pvt Ltd

9

Scantrans (India) Pvt Ltd

list of all subsidiaries

•IPSoftcom(Malaysia)Sdn.Bhd•IPSoftcom(Xiamen)Co.,Ltd/ IPMedia(Xiamen)Co.,Ltd•IPSoftcom(Shanghai)Co.,Ltd/ IPSTrading(Shanghai)Co.,Ltd

•IPSoftcom(Shenzhen)Co.,Ltd•IPSoftcom(Australia)PtyLtd•IPSoftcom(India)PvtLtd

•Scantrans(India)PvtLtd•InternationalPressSoftcom(Vietnam)Co.,Ltd•IPVenturesPteLtd•InPacVenturesPteLtd•GreenfieldVentures(M)Sdn.Bhd•AvantouchSystemsPteLtd

annual rePort 201102 03InternatIonal Press softcom lImIted

india

singapore

malaysia

vieTnam

china

our groupregional presence

“our healthy financial position and cash balance of s$10.3 million will allow us to cope with any adverse situations that might arise.”

toS$7.2million.Inspiteofthelowerturnover,netprofitaftertaximproved16.7%toS$1.4millioninFY2011ascompared to FY2010’s S$1.2million. Thiswasmainlyattributed to better cost control and lower foreignexchangelosses.

TurnoverfromAvantouch,theGroup’sChinasubsidiaryspecializing in touchscreen, marketing and paymentkiosks,doubledtoS$1.0millioninFY2011.

Turnover fromAustraliaoperations recordeda12.5%increasetoS$1.8millioninFY2011duetoanewprojectwhichwasstartedinAugust2011.Thesegment’snetprofitaftertaxdoubledtoS$0.2millioninFY2011.

OutlOOk Looking ahead, we expect economic and businessconditions for 2012 to remain challenging. We willadopt a cautious and vigilant approach in managingopportunities,costandcashflow.Lastbutnotleast,ourhealthy financial position and cashbalanceof S$10.3millionwillallowustocopewithanyadversesituationsthatmightarise.

AppreciAtiOn Onbehalf of theBoard, Iwould like to thank all ourshareholders, business partners and customers fortheir continuedsupportandconfidence inus,and toour management and staff for their dedication andteamwork.

lOw SOng tAkeChairman

FY2011 OverviewAstheyearworeon,adiscerniblepatternemerged–theUSeconomy limpedalong froma slowstart toaslowfinish,whiletheweakerEuropeanUnionmemberscontinued tobestymiedbyeconomic slowdownandtheir escalating sovereign debt crisis. The politicalupheavals intheMiddleEast furtherexacerbatedtheglobaluncertainty.

Amidst this unpredictable environment, marketconditionsweregenerallydifficult.Assuch,theGroup’sturnoverdecreasedmarginally3.6%yearonyear(yoy)to S$56.4 million in FY2011. However inspite of thelower turnover, we managed to narrow our net lossbeforetax5.6%,fromS$6.6millioninFY2010toS$6.2millioninFY2011.

geOgrAphicAl perFOrmAnceThe Singapore operations grew to S$19.5 million inFY2011,up4.3%yoyfromS$18.7millioninFY2010,asaresultofhigherdemandfromasupplychainprojectfor theChinamarket,aswellasnewoverseasordersin the commercial segment of about S$0.7 million.Excluding the non-recurring gain on property salesof S$1.1million in 1H2010, the Singapore operationrecordedasmallernet lossafter taxofS$6.4million,comparedtoS$7.0millionintheprecedingyear.

TurnoverfromexistingChinaoperationsdecreasedby4.0%toS$14.5millionduetothelowerdemandinthecontractmanufacturingsegmentaswellasrestructuringandbusinessconsolidationbycustomers.However,duetoa change in salesmixandbetter cost control, theGroup’sChinaoperationsmanageda25.0%increaseinnetprofitaftertaxtoS$1.5million.

As a result of lower demand fromamajor customer,turnover fromMalaysiaoperationsdeclinedby26.5%

dear valued shareholders,

2011 started off with uncertainty as the slow recovery of the us economy was accompanied by unresolved sovereign debt issues in europe. There were also fears that asian economies were overheated by accommodative monetary policies.

05InternatIonal Press softcom lImIted annual rePort 201104

chairman’s sTaTemenT

cusTomer focusedresulTs orienTedcommiTmenTTeam spiriTinnovaTiveexcellenT Work environmenT

mr cheong poh kinIndependent Director

mr woo khai SanExecutive Director

mr low Song takeChairman

mr tiong choon hieng StevenIndependent Director

mr woo khai chongVice Chairman

mr low ka choon kevinManaging Director /CEO

mr ng kim leongIndependent Director

annual rePort 201106 07InternatIonal Press softcom lImIted

corporaTe culTureboard of direcTors

The Board of Directors of International Press Softcom Limited recognises the importance of corporate governance in ensuring greater transparency, protecting the interests of its shareholders as well as strengthening investors’ confidence in its management and financial reporting and is, accordingly, committed to maintaining a high standard of corporate governance within the Group.

The Report of the Corporate Governance Committee dated 21 March 2005 requires that a listed company which holds its Annual General Meeting (“AGM”) on or after 1 January 2003 (the “effective date”) should describe its corporate governance practices with specific reference to the principles of Code of Corporate Governance (“Code”) in its annual report.

The main corporate governance practices that were in place throughout the financial year ended 31 December 2011 are set out below.

BOARD MATTERS

The Board’s Conduct of its Affairs

Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board.

The Board of Directors (“Board”) holds meetings on a regular basis throughout the year to approve the Group’s key strategic plans as well as major investments, disposals and funding decisions. The Board is also responsible for the overall corporate governance of the Group.

The Board considers that its composition of Independent Non-Executive Directors provides an effective Board with a mix of knowledge, business contacts and successful business and commercial experience. The balance is important in ensuring that the strategies proposed by the executive management are fully discussed and examined, taking into account the long-term interests of the Group.

The Board conducts regular scheduled meetings and three meetings were held in 2011. Where circumstances require, ad-hoc meetings are arranged. Board meetings are conducted in Singapore and the Directors’ attendance is regular. The Company’s Articles of Association allow the Board to convene meetings through teleconferencing, video conferencing or similar communication equipment whereby all persons participating in the meeting are able to hear one another. The attendance of the Directors at meetings of the Board and Board committees, as well as the frequency of such meetings, is as follows:-

Attendance at Meetings

Board of Directors Audit CommitteeRemuneration

CommitteeNominating Committee

(“IPS Board”) (“AC”) (“RC”) (“NC”)Name of Director No. of

meetings held

No. of meetings attended

No. of meetings

held


No. of meetings

held


No. of meetings

held


Low Song Take 3 3 - - - - 1 1Low Ka Choon Kevin 3 3 - - - - - -Woo Khai Chong 3 3 - - - - - -Woo Khai San 3 3 - - - - 1 1Cheong Poh Kin 3 2 4 4 1 1 1 1Ng Kim Leong 3 3 4 4 1 1 1 1Tiong Choon Hieng Steven 3 3 4 4 1 1 1 1

CORPORATE GOVERNANCE STATEMENT

(Loss)/Profit Before Tax (S$’000)

(Loss)/Profit Attributable toOwners of the Company (S$’000)

Turnover (S$’000)

Fixed Assets (S$’000)

(Loss)/Earnings Per Share (cents)

2007

2009

2008

2010

2011

2007

2009

2008

2010

2011

2008

20082008

2007

20072007

2009

20092009

2010

2011

139,399

137,002

115,299

58,525

56,442

32,059

34,276

30,603

35,568

33,460

(6,617)

(6,244)

(6,222)

(1.03)

(1.33)

(1.36)

(5,850)

(4,533)

(5,957)

1,562

0.251,120

8,818

1.80*

* Includes both continuing and discontinued operations.

2010

2011

2010

2011

7,899

ANNUAL REPORT 201108 AnnuAl RepoRt 20112 9InteRnAtIonAl pRess softcom lImIted

CORPORATE GOVERNANCE STATEMENT (cont’d)

All Directors are updated regularly on changes in Company’s policies. Newly appointed Directors will be given briefings by the Management on the business activities of the Group. The Directors also participate in seminars and discussions to keep themselves updated on the latest developments concerning the Group and to keep abreast of the latest regulatory changes.

Board Composition and Guidance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

The Board comprises four Executive Directors and three Independent Non-Executive Directors. Key information regarding the Directors can be found under the “Corporate Information on Directors and Executive Officers” section of this annual report. The independence of each Director is reviewed annually by the Nominating Committee (“NC”). The NC is of the view that the Board, with Independent Non-Executive Directors making up at least one-third of the Board, has adequate objectivity in exercising judgement on corporate affairs independently from the management. The NC is also of the view that no individual or small group of individual dominates the Board’s decision-making process.

The Board is of the view that the current board size of seven Directors is appropriate, taking into account the nature and scope of the Company’s operations.

The Board considers that its composition of Independent Non-Executive Directors provide the Board with a mix of knowledge, business network and extensive business and commercial experience. This balance is important in ensuring that the strategies proposed by the executive management are fully discussed and examined, taking into account the long-term interests of the Company.

To-date none of the three Independent Directors has been appointed as a director of any of the Company’s principal subsidiaries outside of Singapore. The Board and the Management are of the view that the current board structures in the Company’s principal subsidiaries outside of Singapore are already well organised and constituted. The Board will make the required disclosures if there is any appointment of the Independent Directors to the boards of the Company’s principal subsidiaries outside of Singapore.

Roles of Chairman and Managing Director / CEO

Principle 3: There should be a clear division of responsibilities at the top of the company – the working of the Board and the executive responsibility of the company’s business – which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

The roles of the Chairman and Managing Director / CEO are separate and their responsibilities are clearly defined to ensure a balance of power and authority within the Company.

The Chairman of the Board is Mr Low Song Take. His role is to approve agendas for board meetings and exercise control over the quality, quantity and timeliness of the flow of information between management and the Board. He also ensures effective communication with shareholders. He chairs board meetings and monitors the translation of the board’s decisions to the management. He promotes high standards of corporate governance.

The Managing Director / CEO, Mr Low Ka Choon Kevin, is the son of the Chairman. He has full executive responsibilities of the overall business and operational decisions of the Group. The Managing Director / CEO’s performance and appointment to the Board and his remuneration package are reviewed annually by the Remuneration Committee (“RC”).

Board Membership

Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board.

The Company believes that Board renewal must be an ongoing process, to ensure good governance and to maintain relevance to the business and changing needs of the Company. The Company’s Articles of Association require at least one-third of Directors (excluding the Managing Director / CEO) to retire and subject themselves to re-election by shareholders at each Annual General Meeting (“AGM”). In other words, no Director shall stay in office for more than three consecutive years without being re-elected by shareholders.

Mr Tiong Choon Hieng Steven, an Independent Director, is the Chairman of the NC. The NC comprises three Independent Directors, Mr Tiong Choon Hieng Steven, Mr Ng Kim Leong and Mr Cheong Poh Kin and two Executive Directors, Mr Low Song Take and Mr Woo Khai San.

The responsibilities of the NC are (i) re-nomination of the Directors having regard to the Directors’ contribution and performance, (ii) determining annually whether or not a Director is independent, (iii) deciding on whether or not a Director is able to and has been adequately carrying out his duties as a Director of the Company and (iv) review the Board’s structure, size, composition and makes recommendations to the Board with regards to any adjustments that are deemed necessary.

The NC decides how the Board’s performance is to be evaluated and proposes objective performance criteria, subject to the approval of the Board.

The date of Director’s initial appointment, last re-election and their directorships are set out below:

Name of DirectorDate of Initial Appointment

Date of Last Re-election

Present Directorships in Listed Companies

Past Directorships in Listed Companies*

Low Song Take 30/08/1972 28/04/2011 - -Woo Khai Chong 19/08/1991 28/04/2011 - -Woo Khai San 23/06/1999 28/04/2010 - -Low Ka Choon Kevin 23/06/1999 - - -Ng Kim Leong 10/08/1999 28/04/2011 - -Cheong Poh Kin 10/08/1999 28/04/2011 - -Tiong Choon Hieng Steven 18/12/2002 28/04/2010 - -

* Within the past three years

Board Performance

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each Director to the effectiveness of the Board.

The NC will use its best efforts to ensure that Directors appointed to the Board possess the relevant background, experience and knowledge to enable balanced and well-considered decisions to be made.

A formal review of the Board’s performance will be undertaken collectively and individually by the Board annually. The Board’s performance will also be reviewed informally by the NC with inputs from the other Board members and the Managing Director / CEO.

AnnuAl RepoRt 201110 11InteRnAtIonAl pRess softcom lImIted

Access to Information

Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis.

In order to ensure that the Board is able to fulfill its responsibilities, the management is required to provide adequate and timely information to the Board on affairs and issues that require the Board’s decision as well as ongoing reports relating to the operational and financial performance of the Company and the Group.

The Board has separate and independent access to the senior management of the Company and the Company Secretary at all times. Should Directors, whether as a group or individually, require independent professional advice, the Company Secretary will, upon direction by the Board, appoint a professional advisor selected by the group or the individual, and approved by the Managing Director / CEO, to render such advice. The cost of such professional advice will be borne by the Company.

The Company Secretary attends all Board meetings and is responsible for ensuring that Board procedures are followed and applicable rules and regulations that are applicable to the Company are complied with. All Directors have separate and independent access to the advice and services of the Company Secretary.

Please refer to the “Corporate Information on Directors and Executive Officers” section of the annual report for the composition of the Company’s Board of Directors, Board committees and the executive committee.

REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his own remuneration.

Level and Mix of Remuneration

Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the Directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of Executive Directors’ remuneration should be structured so as to link rewards to corporate and individual performance.

Disclosure on Remuneration

Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to Directors and key executives, and performance.

The functions of the RC is to review the remuneration of the Executive Directors of the Company, to recommend the framework of remuneration for the Directors and Key Executives or Senior Management for endorsement by the entire Board and to provide a greater degree of objectivity and transparency in determining the remuneration of the Executive Directors.

The RC comprises Mr Ng Kim Leong, Mr Cheong Poh Kin and Mr Tiong Choon Hieng Steven who are Independent Directors of the Company. Mr Ng Kim Leong chairs the RC.

The RC will review and recommend to the Board a framework of remuneration for the Directors and key executives, and determine specific remuneration packages for the Chairman and the Managing Director / CEO. The recommendations of the RC should be submitted for endorsement by the entire Board. All aspects of remuneration, including but not limited to Directors’ Fees, salaries, allowances, bonuses, options and benefits in kind are covered by the RC. The RC will also review the remuneration packages of employees who are related to the Directors and/or substantial shareholders.

The RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the RC will take into consideration industry practices and norms in compensation in addition to the Company’s relative performance to the industry and the performance of the individual Directors. No Director will be involved in deciding his own remuneration.

The Executive Directors have entered into service agreements with the Company. The service agreements cover the terms of employment, specifically salary and other benefits. The remuneration of Non-Executive Directors is determined by his contribution to the Company, taking into account factors such as effort and time spent as well as his responsibilities on the Board. The Board will recommend the remuneration of the Non-Executive Directors for approval at the AGM.

Each member of the RC shall abstain from voting on any resolutions in respect of his remuneration package or that of employees related to Directors and/or substantial shareholders.

Directors’ Remuneration

The Executive Directors’ remuneration comprise mainly of their salary, allowances, bonuses and profit sharing awards conditional upon their meeting certain profit before tax targets. The details of their remuneration package are given below.

The Independent Non-Executive Directors have remuneration packages which comprise of a Directors’ Fee component. The Directors’ Fees are based on a scale of fees divided into basic retainer fees as a Director and additional fees for serving on Board committees and their roles in the committee. Directors’ Fees for the Directors are subject to the approval of the shareholders at the forthcoming AGM.

The basis of allocation of the number of share options pursuant to the International Press Softcom Limited Share Option Scheme (“Scheme”) to Directors takes into account the Director’s contributions and his additional responsibilities at Board committees. As at 31 December 2011, all share options under the Scheme have expired.



Directors’ Remuneration (cont’d)

For competitive reasons, the Company does not disclose the annual remuneration of each individual Director for the financial year ended 31 December 2011. Instead, the Company discloses the bands of remuneration as follows:-

Directors’ Fees*Percentage of

Variable Remuneration

Percentage of Fixed Remuneration (including Directors’

Fees)

No. of Share Options granted as at 31 December 2011 (exercise Price)

S$500,001 to S$1,000,000Low Song Take 40,000 13.1 86.9 NA

S$250,001 to S$500,000Woo Khai Chong 35,000 14.9 85.1 NAWoo Khai San 35,000 10.3 89.7 NALow Ka Choon Kevin ** 35,000 25.6 74.4 NA

S$250,000 and belowCheong Poh Kin 40,000 - 100 NANg Kim Leong 40,000 - 100 NATiong Choon Hieng Steven 40,000 - 100 NA

* The remuneration in the form of Directors’ Fees are subject to the approval of the shareholders at the forthcoming AGM.**Mr Low Ka Choon Kevin is the son of Mr Low Song Take.

Remuneration of Key Executives

Details of remuneration paid to key executives (who are not Directors of the Company) of the Group for the financial year ended 31 December 2011 are set out below. For competitive reasons, the Company discloses only the band of remuneration of each executive as follows:-

Percentage of Variable Remuneration

Percentage of Fixed Remuneration

No. of Share Options granted as at 31 December 2011 (exercise price)

S$250,000 and belowTeh Eng Chai 10.4 89.6 NASrihari Raghavan 22.2 77.8 NAChan Yee Liang 16.3 83.7 NANg Ching Beng Alvin 10.9 89.1 NA

There are no employees in the Group whose remuneration exceed S$150,000 per annum and who are immediate family members of a Director or Substantial Shareholders.

ACCOUNTABILITy AND AUDIT

Accountability

Principle 10: The Board should present a balanced and understandable assessment of the company’s performance, position and prospects.

The Board believes that it should promote best practices in order to build an excellent business for the shareholders as they are accountable to shareholders for the Company’s and the Group’s performance.

The Board is mindful of its obligations to provide timely and full disclosure of material information in compliance with statutory reporting requirements. Price sensitive information is first publicly released, after the review by the Board, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual reports will be announced or issued within legally prescribed periods.

Audit Committee

Principle 11: The Board should establish an Audit Committee (“AC”) with written terms of reference which clearly set out its authority and duties.

The Audit Committee (“AC”) is made up of three Independent Non-Executive Directors, of which two have the appropriate accounting experience or related financial management expertise. The Independent Non-Executive Directors are Mr Cheong Poh Kin, Mr Ng Kim Leong and Mr Tiong Choon Hieng Steven. Mr Cheong Poh Kin chairs the AC.

The AC holds periodic meetings and reviews primarily the following, where relevant, with the Executive Directors and external auditors of the Company:-

(a) review issues of accounting policies and presentation for external financial reporting;

(b) review the Company’s external auditors’ audit plans;

(c) review the external auditors’ reports;

(d) review the co-operation given by the Company’s Officers to the external auditors;

(e) review the scope, strategies and results of the internal audit function;

(f) review the half-year interim results and annual financial statements of the Company and the Group before their submission to the Board of Directors for approval;

(g) review the independence and objectivity of the external auditors annually;

(h) nominate external auditors for appointment and re-appointment;

(i) review the Group’s compliance with such functions and duties as may be required under the relevant statutes or the Listing Manual (Section B: Rules of Catalist) (“Rules of Catalist”) and such amendments made thereto from time to time;

(j) review interested person transactions; and



Audit Committee (cont’d)

In addition to the above, the AC will meet with the external and internal auditors, in the absence of the management, at least once a year.

The AC has the power to conduct or authorise investigations into any matters within its terms of reference. The AC also has full access to and the co-operation of the management. The external auditors have unrestricted access to the AC. Minutes of the AC meetings are regularly submitted to the Board for its review.

The AC has reviewed all non-audit services provided by the external auditor and is satisfied that the nature and extent of such services has not and will not prejudice the independence and objectivity of the external auditors.

The AC constantly bears in mind the need to maintain a balance between the independence and objectivity of the external auditors and the work carried out by the external auditors based on value for money consideration.

The AC has recommended to the Board the nomination of Ernst & Young LLP, for re-appointment as auditors of the Company at the forthcoming AGM.

The Company has appointed different auditors for its overseas subsidiaries and/or significant associated company. The Board and the AC have reviewed the appointment of different auditors for its subsidiaries and/or significant associated company and were satisfied that the appointment of different auditors would not compromise the standard and effectiveness of the audit of the Group. Accordingly, the Company has complied with Rule 712 and 716 of the Listing Manual of the Singapore Exchange Securities Trading Limited (Section B: Rules of Catalist).

Internal Controls

Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the company’s assets.

Although the Board acknowledges that it is responsible for the overall internal control framework, it also recognises that no cost effective internal control system will preclude all errors and irregularities. A system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The AC, on behalf of the Board, has reviewed the effectiveness of the internal control systems put in place by the management with the assistance of the internal and external auditors and the Board is satisfied that the Company has effective internal control systems which are adequate in meeting the needs of the Group in its current business environment. With the concurrence of the AC, the Board is of the opinion that the Company’s internal controls are adequate in addressing the financial, operational and compliance risks.

Internal Audit

Principle 13: The company should establish an internal audit function that is independent of the activities it audits.

The Company has an in-house Internal Audit (“IA”) function and the Internal Auditor reports to the AC Chairman on audit matters and to the Board on administrative matters. The AC reviews IA’s reports on an ongoing basis. The AC reviews the internal audit procedures and ensures that the internal audit function has appropriate standing within the Group. The AC also reviews the annual IA plan to ensure that the IA has the necessary resources to perform its functions adequately.

COMMUNICATION WITH SHAREHOLDERS

Communication with Shareholders

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

Greater Shareholder Participation

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

The Company recognises the importance of regular, timely and effective communication with the shareholders.

The Company does not practice selective disclosure. In line with continuous obligations of the Company pursuant to the Rules of Catalist and the Companies Act of Singapore, it is the Board’s policy that all shareholders should be equally informed, on a timely basis, of all major developments that will or expect to have an impact on the Company or the Group.

Shareholders are encouraged to attend the AGM to stay informed of the Company’s goals and strategies and to ensure a high level of accountability by the Management. Notice of AGM will be dispatched to shareholders, together with explanatory notes or a circular on items of special business (if necessary), at least 14 calendar days before the meeting (excluding the date of notice and the date of meeting). The Board welcomes questions from shareholders who have an opportunity to raise issues either informally or formally before or at the AGM. The Chairman of the Audit, Remuneration and Nominating Committees are normally available at the meeting to answer those questions relating to the work of these committees.

Risk Management

The Company does not have a Risk Management Committee. However, the Management regularly reviews the Company’s business and operational activities to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. The Management reviews all significant control policies and procedures and highlights all significant matters to the Directors and the AC.

Dealings in Securities

The Company has adopted an Internal Code in relation to dealings in the Company’s securities pursuant to Rule 1204 (19) of the Rules of Catalist that is applicable to the Company and all its officers.

The Internal Code prohibits the officers from dealing in the Company’s shares on short-term considerations. It also disallows the Company and its officers from dealing in the Company’s shares during the period commencing two weeks and one month before the announcement of the Group’s half-yearly and full year results respectively and ending on the date of the announcement of the results.

Directors and Executives are also expected to observe insider trading laws at all times even when dealing with securities within the permitted trading period.



OTHER INFORMATION

1. Interested Person Transactions

In compliance with Rule 907 of the Rules of Catalist, the Company is required to disclose Interested Person Transactions to guard against the risk that interested persons could influence the Company, its subsidiaries or associated company, to enter into transactions with them that may adversely affect the interests of the Company or its shareholders.

During the financial year, the Board has reviewed the transactions entered into with interested persons and disclosure of interested person transactions is set out below.

Name of interested person Nature of transaction

Aggregate value of all interested person

transactions during the financial year under review

(excluding transactions less than $100,000 and transactions conducted

under shareholders’ mandate pursuant to Rule

920 of the Rules of Catalist)

Aggregate value of all interested person

transactions conducted under shareholders’

mandate pusuant to Rule 920 of the Rules of Catalist (excluding transactions less

than $100,000)Avantouch Systems Pte Ltd Subscription of additional

shares in subsidiaryS$720,360 -

2. Material Contracts

There were no material contracts of the Company or its subsidiaries involving the interests of the Directors or controlling shareholders during the financial year.

3. Non-Audit Fees

S$42,612 non-audit fees were paid to the Auditors for the financial year ended 31 December 2011.

4. Non-Sponsor Fees

No non-sponsor fees were paid to the Sponsor for the financial year ended 31 December 2011.

CORPORATE GOVERNANCE STATEMENT (cont’d) CORPORATE iNfORMATiON

bOARd Of diRECTORSLow Song Take (Chairman)Woo Khai Chong (Vice Chairman)Low Ka Choon Kevin (Managing Director / CEO)Woo Khai San (Executive Director)Ng Kim Leong (Independent Director)Cheong Poh Kin (Independent Director)Tiong Choon Hieng Steven (Independent Director)

COMPANy SECRETARiESTeh Eng Chai, FCCA, FCMASin Chee Mei, ACIS, PMP

REGiSTEREd OffiCECo. Reg. No: 197201169E80 Robinson Road#02-00Singapore 068898Tel: 6236 3333Fax: 6236 4399

ShARE REGiSTRAR ANdShARE TRANSfER OffiCEM&C Services Private Limited138 Robinson Road#17-00 The Corporate OfficeSingapore 068906Tel: 6227 6660Fax: 6225 1452

AudiT COMMiTTEECheong Poh Kin (Chairman)Ng Kim LeongTiong Choon Hieng Steven

REMuNERATiON COMMiTTEENg Kim Leong (Chairman)Cheong Poh KinTiong Choon Hieng Steven

NOMiNATiNG COMMiTTEETiong Choon Hieng Steven (Chairman)Ng Kim LeongCheong Poh KinLow Song TakeWoo Khai San

EMPlOyEE ShARE OPTiON COMMiTTEELow Song Take (Chairman)Woo Khai ChongLow Ka Choon Kevin

AudiTORSErnst & Young LLPOne Raffles Quay#18-01 North TowerSingapore 048583

PARTNER-iN-ChARGE Of AudiTAng Chuen Beng (appointed since 2008)

PRiNCiPAl bANkERSDBS Bank Ltd.6 Shenton WayDBS Building Tower OneSingapore 068809

United Overseas Bank Ltd.1 Raffles PlaceOUB CentreSingapore 048616


iNfORMATiON ON diRECTORS ANd ExECuTiVE OffiCERS

1. The business and working experience of the Directors are as follows:-

Low Song Take is the Chairman and co-founder of the Group. Mr Low established the business in 1968 as a partnership and has been in the printing industry for over 45 years. As Chairman of the Group, he exercises control over quality, quantity and timeliness of the flow of information between management and the Board. He also actively participates in the overall strategic planning and business direction of the Group.

Woo Khai Chong is the Vice Chairman of the Group. Mr Woo assists the Chairman in the overall flow of information between management and the Board. He also assists the Managing Director / CEO in overseeing the management and operations of the Group. Mr Woo has been with the Group since 1972 and has extensive practical experience in the printing industry, particularly in the areas of marketing, production, costing and print management.

Woo Khai San is an Executive Director of the Group and is responsible for the Commercial and Packaging Printing business of the Group. Mr Woo has been in the printing industry and with the Group since 1974 and has extensive experience in the areas of marketing and print production.

Low Ka Choon Kevin is the Managing Director / CEO and is responsible for the general management of the Group. Prior to his appointment as Managing Director / CEO in 1999, he held the position of the Business Development Director from 1995 when he joined International Press Softcom Limited (“IPS”). Prior to joining IPS, Low Ka Choon Kevin worked as a lawyer in a law firm in Singapore. He holds a Bachelor of Laws (Hons.) degree from the National University of Singapore.

Ng Kim Leong was appointed as an Independent Director on 10 August 1999. He retired from the DBS group in 1998. During his 30 years with the DBS group, he was variously the General Manager of DBS (Shanghai Branch), the Executive Director of DBS Finance Ltd and the Deputy Chairman of DBS Factors Ltd. Mr Ng was the Chairman of the Finance Houses Association of Singapore and was an Executive Committee Member of the Factors Chain International, an international factoring association based in Amsterdam.

Cheong Poh Kin was appointed as an Independent Director on 10 August 1999. Mr Cheong is presently a senior executive in an insurance firm. He has more than 27 years of working experience in investment, finance and corporate planning. Mr Cheong holds a Bachelor’s of Engineering degree (First Class Honours) from the National University of Singapore and an MBA from the University of California at Los Angeles.

Tiong Choon Hieng Steven was appointed as an Independent Director on 18 December 2002. He was formerly a Non-Executive Director of Adroit Innovations Ltd, a listed company in the Stock Exchange of Singapore. Prior to this, he went into business as an investor and held several directorships. Mr Tiong also has years of experience working in several banks specialising in spot currencies trading. He holds a Bachelor of Science degree (First Class Honours) in Naval Architecture & Ocean Engineering from the University of Glasgow, UK.

2. The business and working experience of the Executive Officers are as follows:-

Teh Eng Chai is the Group Financial Controller. Mr Teh joined the Group in January 1998 and he is responsible for managing the Accounts Department and handling all finance-related matters. Mr Teh has approximately 21 years of experience in auditing, accounting and management in various organisations. Prior to joining the Group, Mr Teh was the Group Finance Manager of a manufacturing company with regional operations. Mr Teh holds a Bachelor of Science (Hons) degree in Finance and Accounting from the University of Salford, England. He is a Fellow of the Chartered Management Accountants and a Fellow of the Chartered Certified Accountants.

Srihari Raghavan is the General Manager for the Company’s subsidiary in India, IP Softcom India Pvt Ltd (IPSI) and is appointed the General Manager for the Singapore operations in 2010. Mr. Raghavan joined the Group in 2006, as a Deputy General Manager for the India subsidiary and has since been promoted to the current position in 2009. He is responsible for the general management of Singapore and the subsidiary in India. Prior to joining the Group, Mr. Raghavan was a Sr. Vice President in one of India’s largest printers and was responsible for Business Development for IT & Exports and Supply Chain Operations. Mr. Raghavan has approximately 21 years of experience in Supply Chain, Print and Packaging industry. He holds a Master of Commerce from the University of Mumbai and a MBA in Finance from the Institute of Chartered Financial Analysts of India (ICFAI).

Chan yee Liang is the General Manager who is in-charge of the group of companies for China region. Mr. Chan joined the Company in 2003 as a Senior Manager, and was since promoted to Deputy General Manager of China Region in 2005 and General Manager of China region in 2009. Prior to joining the Company, he has many years of overseas and local working experience in the financial industry. His experience and expertise bring a different management prospective into the Group while managing the operations in China. Mr. Chan holds a Bachelor of Commerce & Economics (Honors) from the University of Windsor, Canada.

Ng Ching Beng Alvin is the General Manager who is in-charge of Malaysia, Australia and Vietnam markets. Mr. Ng joined the Company in November 2005 as Deputy General Manager overseeing the business and operations for Malaysia, Australia and Vietnam. He has since been promoted to the current position in 2009. He has approximately 19 years of experience in the manufacturing and supply chain management industry. Mr. Ng holds a Bachelor of Arts degree in Business Administration from Ottawa University, US and Diploma in Production Technology from German Singapore Institute (now Nanyang Polytechnic).

CORPORATE iNfORMATiON (cont’d)


fiNANCiAl REViEw

AR2011

23. Director’s Report

29. Statement by Directors

30. Independent Auditors’ Report

32. Balance Sheets

34. Consolidated Income Statement

35. Consolidated Statement of Comprehensive Income

36. Consolidated Statement of Changes in Equity

40. Consolidated Statement of Cash Flow

42. Notes to the Financial Statements

106. Shareholdings Statistics

108. Notice of Annual General Meeting

Proxy Form

The Directors hereby present their report to the members together with the audited consolidated financial statements of International Press Softcom Limited (the “Company”) and its subsidiaries (collectively, the “Group”) and the balance sheet of the Company for the financial year ended 31 December 2011.

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

Low Song TakeWoo Khai ChongWoo Khai SanLow Ka Choon KevinCheong Poh KinNg Kim LeongTiong Choon Hieng Steven

ARRANGEMENTS TO ENABLE DIRECTORS TO ACqUIRE SHARES AND DEBENTURES Except for the International Press Softcom Share Option Scheme, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose object is, to enable the Directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate.

DIRECTORS’ INTERESTS IN SHARES AND DEBENTURESThe following Directors, who held office at the end of the financial year, had, according to the Register of Directors’ Shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares and share options of the Company and related corporations (other than wholly-owned subsidiaries) as stated below:

Direct interest Deemed interest1 January

201131 December

201121 January

20121 January

201131 December

201121 January

2012Chee Chun Holdings

Pte. Ltd.Ordinary shares

Woo Khai Chong 140,002 140,002 140,002 – – –Woo Khai San 140,001 140,001 140,001 – – –

Avantouch Systems Pte LtdOrdinary shares

Tiong Choon Hieng Steven 775,000 826,568 826,568 – – –

diRECTORS’ REPORT

InternatIonal Press softcom lImIted (Incorporated in the Republic of Singapore) and its Subsidiaries

23InteRnAtIonAl pRess softcom lImIted

DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (CONT’D)

Direct interest Deemed interest1 January

201131 December

201121 January

20121 January

201131 December

201121 January

2012Ze Hua Holdings Pte. Ltd.Ordinary shares (“A” shares)

Low Song Take 28,001 28,001 28,001 28,001 28,001 28,001

Ordinary shares (“B” shares)

Low Ka Choon Kevin 56,000 56,000 56,000 – – –

International Press Softcom LimitedOrdinary shares

Low Song Take 29,541,600 29,541,600 29,541,600 286,839,480 286,839,480 286,839,480Woo Khai Chong 14,770,800 14,770,800 14,770,800 286,839,480 286,839,480 286,839,480Woo Khai San 14,770,800 14,770,800 14,770,800 286,839,480 286,839,480 286,839,480Low Ka Choon Kevin 7,484,320 7,484,320 7,484,320 286,839,480 286,839,480 286,839,480Ng Kim Leong 50,000 50,000 50,000 – – –

The Company’s holding company is International Press Holdings Pte Ltd, incorporated in Singapore. The holding company is equally owned by Chee Chun Holdings Pte. Ltd. and Ze Hua Holdings Pte. Ltd., both incorporated in Singapore.

By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Messrs. Woo Khai Chong and Woo Khai San are deemed to have an interest in the shares held by Chee Chun Holdings Pte. Ltd. in International Press Holdings Pte Ltd and its subsidiaries. Messrs. Low Song Take and Low Ka Choon Kevin are deemed to have an interest in the shares held by Ze Hua Holdings Pte. Ltd. in International Press Holdings Pte Ltd and its subsidiaries.

DIRECTORS’ CONTRACTUAL BENEFITSSince the end of the previous financial year, no Director of the Company has received or become entitled to receive a benefit (other than as disclosed in the financial statements) by reason of a contract made by the Company or a related corporation with the Director, or with a firm of which the Director is a member, or with a Company in which the Director has a substantial financial interest.

diRECTORS’ REPORT (cont’d)

OPTIONSInternational Press Softcom Limited- Employees’ Share Option PlanThe International Press Softcom Share Option Scheme (“Scheme”) was approved and adopted by the members of the Company at an Extraordinary General Meeting held on 29 October 2001. The Scheme is administered by a committee comprising the following members:

Low Song Take (Chairman)Low Ka Choon KevinWoo Khai Chong

(a) The options granted by the Company to employees of the Company and its subsidiaries were as follows:

Options granted

during the financial year

Aggregate options

granted since commencement

of scheme to end of financial

year

Aggregate options

exercised since commencement


year

Aggregate options lapsed/ forfeited since

commencement of scheme to

end of financial year

Aggregate options

outstanding as at end of

financial year

Chee Chong Fatt- Employee of the

Company (resigned on 31 March 2010) *

– 2,050,000 – (2,050,000) –

Teh Eng Chai- Employee of the

Company– 1,300,000 – (1,300,000) –

Tan Kia Huat- Employee of the

Company (resigned on 30 April 2009) *

– 1,300,000 – (1,300,000) –

Chan Yee Liang- Employee of the

subsidiary– 2,200,000 – (2,200,000) –

Ng Ching Beng- Employee of the

subsidiary– 2,000,000 – (2,000,000) –

Srihari Raghavan- Employee of the

Company– 2,000,000 – (2,000,000) –

Tiong Choon Hieng Steven

- Independent director – 100,000 – (100,000) –

* These employees had resigned from the Company.

Except for the above, no options were granted to other Directors and controlling shareholders or to associates of controlling shareholders of the Company and no employees of the Company or any corporation in the Group have received 5% or more of total options available under the Scheme.



AnnuAl RepoRt 201124



OPTIONS (CONT’D)International Press Softcom Limited- Employees’ Share Option Plan (cont’d)(b) All share options were expired on 30 December 2011.

(c) As at 31 December 2011, all shares of the Company under options were expired as follow:

Number of shares under options

Date granted Exercise period

Aggregate options

granted and accepted since commencement

of scheme

Aggregate options

lapsed since commencement


year

Aggregate options

forfeited since commencement


year

Aggregate options



year

Aggregate options


financial yearExercise

price

31 December 2001

31 December 2002 to 30 December 2011

2,600,000 1,550,000 1,050,000 – – $0.175 per share payable in full on application

21 January 2002

21 January 2003 to 30 December 2011

6,160,000 1,676,500 4,477,500 6,000 – $0.235 per share payable in full on application

16 April 2004 * 16 April 2005 to 15 April 2009

100,000 100,000 – – – $0.177 per share payable in full on application

16 April 2004 16 April 2005 to 30 December 2011

880,000 320,000 560,000 – – $0.177 per share payable in full on application

2 August 2007 2 August 2008 to 30 December 2011

10,100,000 10,100,000 – – – $0.155 per share payable in full on application

20 June 2008 20 June 2009 to 30 December 2011

1,600,000 – 1,600,000 – – $0.105 per share payable in full on application

* This relates to options granted by the Company to Directors holding office at the end of the financial year. Details of the options are detailed under Note (a) of Share options.

The options under the Scheme do not entitle the holders of the options to participate in any share issue of any other corporation by virtue of the option. No unissued shares other than those referred to above, are under option as at the date of this report. No options were granted at a discount during the year and no options were granted to employees of related corporations.

Except for the above, no options to take up unissued shares of the Company were granted and no shares were issued by virtue of the exercise of options to take up unissued shares of the Company.


SUBSIDIARy’S OPTION SCHEMEAvantouch Systems Pte Ltd (“Avantouch”) – Avantouch Share Option SchemeThe Avantouch Systems Pte. Ltd. Share Option Scheme (“the Scheme”) was approved and adopted by the members of Avantouch at an Extraordinary General Meeting held on 30 December 2009.

The Scheme is administered by a committee comprising the following members:

Lee Kia HweeLow Ka Choon Kevin

Under the Scheme, an option entitles the option holder to subscribe for a specific number of new ordinary shares at an exercise price specified in the Letter of Offer of Option. The consideration for the grant of the option is $1.00.

As at 31 December 2011, unissued ordinary shares of Avantouch were as follows:


Date granted Exercise period

Aggregate options

granted and accepted since commencement

of scheme

Aggregate options

lapsed since commencement


year

Aggregate options

forfeited since commencement


year

Aggregate options



year

Aggregate options


financial yearExercise

price

30 December 2009


826,000 – – – 826,000 $1 per share payable in full on application

31 March 2010

31 March 2010 to 29 December 2019

18,000 – – – 18,000 $1 per share payable in full on application

Except disclosed above, there were no unissued shares of Avantouch or its subsidiaries under options granted by Avantouch or its subsidiaries as at the end of the financial year.

AUDIT COMMITTEE The Audit Committee (the “AC”) carried out its functions in accordance with section 201B(5) of the Singapore Companies Act, Cap. 50. The functions performed are disclosed in the Corporate Governance Report.

The Board of Directors and the AC have reviewed the adequacy of the Group’s internal controls that address the Group’s financial, operational and compliance risks. Based on the review conducted, the Board of Directors and the AC are of the opinion that, in the absence of any evidence to the contrary, the system of internal controls in place are adequate in meeting the current scope of the Group’s business operations.






AUDITORSErnst & Young LLP have expressed their willingness to accept re-appointment as auditors.

On behalf of the Board of Directors,

Low Song TakeDirector

Low Ka Choon KevinDirector

Singapore26 March 2012


We, Low Song Take and Low Ka Choon Kevin, being two of the Directors of International Press Softcom Limited, do hereby state that, in the opinion of the Directors,

(i) the accompanying balance sheets, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement together with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2011 and the results of the business, changes in equity and cash flows of the Group and the changes in equity of the Company for the year ended on that date, and

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

On behalf of the Board of Directors,

Low Song TakeDirector

Low Ka Choon KevinDirector

Singapore26 March 2012

STATEMENT by diRECTORS





TO THE MEMBERS OF INTERNATIONAL PRESS SOFTCOM LIMITED

REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of International Press Softcom Limited (the “Company”) and its subsidiaries (collectively, the “Group”) set out on pages 32 to 105, which comprise the balance sheets of the Group and the Company as at 31 December 2011, the statement of changes in equity, the consolidated income statement, consolidated statement of comprehensive income and consolidated cash flow statement of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information.

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

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

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

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

iNdEPENdENT AudiTORS’ REPORT For the financial year ended 31 December 2011

iNdEPENdENT AudiTORS’ REPORT (cont’d)For the financial year ended 31 December 2011

OpinionIn our opinion, the consolidated financial statements of the Group and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2011 and the results, changes in equity and cash flows of the Group for the year ended on that date.

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

Ernst & Young LLPPublic Accountants and Certified Public AccountantsSingapore26 March 2012





Note Group Company31.12.2011 31.12.2010 31.12.2011 31.12.2010

$ $ $ $

Non-current assetsFixed assets 4 33,460,465 35,568,428 24,470,211 25,457,503Intangible assets 5 4,137,436 3,899,720 6,517 6,843Investments in subsidiaries 6 – – 23,102,088 23,102,088Deferred tax assets 17 104,883 101,611 – –Other receivable 45,000 57,000 45,000 57,000Long-term receivable 7 926,618 – 926,618 –

Current assets

Inventories 8 7,050,464 5,636,457 3,406,391 2,428,649Trade receivables 9 12,464,413 12,880,551 5,160,775 5,974,313Other receivables and deposits 10 3,339,516 3,221,406 341,098 283,796Prepayments 1,029,758 456,627 45,366 82,107Amounts due from subsidiaries

(non-trade) 11 – – 4,032,613 4,197,982Tax recoverable 519,232 1,689,177 – –Derivative 7 56,557 – 56,557 –Cash and bank balances 12 10,298,939 16,402,624 1,533,169 1,689,960

34,758,879 40,286,842 14,575,969 14,656,807

Current liabilities

Trade and other payables 13 7,690,708 6,699,285 2,346,810 2,496,762Accruals 14 3,349,968 3,375,281 2,015,516 1,956,567Amounts due to subsidiaries (non-trade) 11 – – 340,171 124,883Interest-bearing bank loans 15 3,468,747 4,195,134 – –Hire purchase liabilities 16 171,975 473,754 – –Provision for taxation 398,916 863,624 – –Loan from holding company 755,000 – 755,000 –

15,835,314 15,607,078 5,457,497 4,578,212

Net current assets 18,923,565 24,679,764 9,118,472 10,078,595

bAlANCE ShEETS as at 31 December 2011

Note Group Company31.12.2011 31.12.2010 31.12.2011 31.12.2010

$ $ $ $

Non-current liabilitiesHire purchase liabilities 16 – (46,086) – –Deferred tax liabilities 17 (1,697,109) (1,777,421) (1,220,000) (1,409,558)

Net assets 55,900,858 62,483,016 56,448,906 57,292,471

Equity attributable to owners of the Company

Share capital 18 49,549,249 49,549,249 49,549,249 49,549,249Reserves 19 5,555,041 11,704,459 6,899,657 7,743,222

55,104,290 61,253,708 56,448,906 57,292,471Non-controlling interests 796,568 1,229,308 – –

Total equity 55,900,858 62,483,016 56,448,906 57,292,471

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

bAlANCE ShEETS (cont’d)as at 31 December 2011





Note 2011 2010$ $

Turnover 20 56,441,727 58,524,649

Other operating income 577,615 2,090,313Changes in stocks of finished goods and work in progress 344,269 (629,234)Raw materials and consumables used (28,763,667) (31,305,762)Personnel expenses 21 (17,720,780) (17,427,181)Depreciation and amortisation 4,5 (3,280,283) (3,630,048)Rental, property tax and utilities (3,342,295) (3,220,907)Freight, travelling and transportation expenses (2,560,067) (2,424,534)Repair and maintenance expenses (1,111,990) (1,054,450)Royalties (56,616) (138,017)Subcontractor costs (1,138,563) (967,743)Other operating expenses (5,318,515) (6,135,214)Impairment of fixed assets and intangible assets 4,5 – (18,139)Financial expense – net 22 (314,950) (280,997)

Loss before tax 23 (6,244,115) (6,617,264)Tax expense 24 (858,070) (441,683)

Loss, net of tax (7,102,185) (7,058,947)

Loss attributable to:

Owners of the Company (5,956,607) (5,849,946)Non-controlling interests (1,145,578) (1,209,001)

(7,102,185) (7,058,947)

Loss per share attributable to owners of the Company (cents per share)

Basic 25 (1.36) (1.33) Diluted 25 (1.36) (1.33)


CONSOlidATEd iNCOME STATEMENT for the year ended 31 December 2011

Note 2011 2010$ $

Loss net of tax (7,102,185) (7,058,947)

Other comprehensive (loss)/income:Net surplus on revaluation of leasehold land and factory building 220,406 6,662,254Foreign currency translation (190,453) (788,961)

Other comprehensive income for the year, net of tax 29,953 5,873,293

Total comprehensive income for the year, net of tax (7,072,232) (1,185,654)

Total comprehensive income attributable to:

Owners of the Company (6,160,807) 23,347Non-controlling interests (911,425) (1,209,001)

(7,072,232) (1,185,654)


CONSOlidATEd STATEMENT Of COMPREhENSiVE iNCOME for the year ended 31 December 2011





GroupShare capital

Revaluation reserve

Translation reserve

Restricted reserve Other reserves

Accumulated profits

Equity attributable to owners of the

Company, totalNon-controlling

interestsEquity, total

2011 $ $ $ $ $ $ $ $ $

At 1 January 2011 49,549,249 7,680,085 (2,401,858) 932,071 1,010,315 4,483,846 61,253,708 1,229,308 62,483,016Loss for the year – – – – – (5,956,607) (5,956,607) (1,145,578) (7,102,185)Other comprehensive income

Net surplus on revaluation of leasehold land and factory building – 220,406 – – – – 220,406 – 220,406Foreign currency translation – – (424,606) – – – (424,606) 234,153 (190,453)

Other comprehensive income/(loss) for the year, net of tax – 220,406 (424,606) – – – (204,200) 234,153 29,953

Total comprehensive income for the year – 220,406 (424,606) – – (5,956,607) (6,160,807) (911,425) (7,072,232)

Contributions by and distribution to ownersExpiry of employee share options – – – – (335,552) 335,552 – – –Others – – – – 18,118 – 18,118 6,039 24,157

Total contributions by and distribution to owners – – – – (317,434) 335,552 18,118 6,039 24,157

Changes in ownership interests in subsidiaries that do not result in a loss of control

Acquisition of non-controlling interests by a subsidiary – – – – (6,729) – (6,729) 472,646 465,917

Total changes in ownership interests in subsidiaries that do not result in a loss of control – – – – (6,729) – (6,729) 472,646 465,917

Total transactions with owners in their capacity as owners – – – – (324,163) 335,552 11,389 478,685 490,074

At 31 December 2011 49,549,249 7,900,491 (2,826,464) 932,071 686,152 (1,137,209) 55,104,290 796,568 55,900,858

CONSOlidATEd STATEMENT Of ChANGES iN EquiTy for the year ended 31 December 2011

CONSOlidATEd STATEMENT Of ChANGES iN EquiTy (cont’d)for the year ended 31 December 2011





GroupShare capital

Revaluation reserve

Translation reserve

Restricted reserve Other reserves

Accumulated profits

Equity attributable to

owners of the Company,

totalNon-controlling

interestsEquity, total

2010 $ $ $ $ $ $ $ $ $

At 1 January 2010 49,549,249 2,110,938 (1,612,897) 932,071 563,994 9,240,685 60,784,040 367,730 61,151,770Loss for the year – – – – – (5,849,946) (5,849,946) (1,209,001) (7,058,947)Other comprehensive incomeNet surplus on revaluation of leasehold factory building – 6,662,254 – – – – 6,662,254 – 6,662,254Foreign currency translation – – (788,961) – – – (788,961) – (788,961)

Other comprehensive income/(loss) for the year, net of tax – 6,662,254 (788,961) – – – 5,873,293 – 5,873,293

Total comprehensive income for the year – 6,662,254 (788,961) – – (5,849,946) 23,347 (1,209,001) (1,185,654)

Contributions by and distribution to ownersReserve attributable to disposal of leasehold factory building

classified as held for sale – (1,093,107) – – – 1,093,107 – – –Others – – – – 35,824 – 35,824 – 35,824

Total contributions by and distribution to owners – (1,093,107) – – 35,824 1,093,107 35,824 – 35,824

Changes in ownership interests in subsidiaries that do not result in a loss of control

Acquisition of non-controlling interests by a subsidiary – – – – 410,497 – 410,497 2,070,579 2,481,076

Total changes in ownership interests in subsidiaries that do not result in a loss of control – – – – 410,497 – 410,497 2,070,579 2,481,076

Total transactions with owners in their capacity as owners – (1,093,107) – – 446,321 1,093,107 446,321 2,070,579 2,516,900

At 31 December 2010 49,549,249 7,680,085 (2,401,858) 932,071 1,010,315 4,483,846 61,253,708 1,229,308 62,483,016








CONSOlidATEd STATEMENT Of CASh flOw for the year ended 31 December 2011

Note 2011 2010$ $

Cash flows from operating activitiesLoss before tax (6,244,115) (6,617,264)Adjustments for:

Depreciation of fixed assets 4 3,279,957 3,629,722Impairment of fixed assets and intangible assets 4,5 – 18,139Amortisation of intangible assets 5 326 326Loss/(gain) on disposal of fixed assets 16,422 (181)Gain on disposal of assets held-for-sale – (1,073,985)Fixed assets written off 19,188 19,300Interest income (249,602) (246,828)Interest expense 564,552 527,825Bad debts written off 3,607 840Bad debts recovered – (1,449)Allowance for doubtful trade receivables 168,199 365,292Allowance for doubtful trade receivables written back (30,557) (171,028)Allowance for inventory obsolescence 101,760 655,104Allowance for inventory obsolescence written back (106,095) (398,937)Inventories written off 484,128 802,572Write back of inventories written off (7,267) –Currency realignment 846,777 (302,241)

Operating cash flows before working capital changes (1,152,720) (2,792,793)

(Increase)/decrease in:Inventories (1,894,897) 345,686Trade receivables 289,479 3,911,556Other receivables, deposits and prepayments (705,676) (1,794,898)

Increase/(decrease) in:Trade and other payables 935,161 (5,616,262)Accruals (25,313) 462,007

Cash flows used in operations (2,553,966) (5,484,704)Interest received 305,046 189,839Interest paid (559,552) (523,610)Tax paid (1,395,003) (647,626)Tax recoverable 1,197,173 (11,519)

Net cash flows used in operating activities (3,006,302) (6,477,620)

CONSOlidATEd STATEMENT Of CASh flOw (cont’d)for the year ended 31 December 2011

Note 2011 2010$ $

Cash flows from investing activitiesPurchase of fixed assets (1,630,594) (1,117,414)Additions to intangible assets (748,743) –Proceeds from disposal of fixed assets 159,819 91,289Proceeds from disposal of assets held-for-sale – 1,900,000Long-term receivable (983,175) –

Net cash (used in)/generated from investing activities (3,202,693) 873,875

Cash flows from financing activitiesDraw down of interest-bearing bank loans (726,387) 1,403,924Payment to hire purchase creditors (347,865) (490,818)Pledge of fixed deposits 806,350 71,158Issuance of new shares to non-controlling shareholders by a subsidiary 429,562 2,495,389Proceeds from interest bearing loan from holding company 750,000 –

Net cash flows generated from financing activities 911,660 3,479,653

Net decrease in cash and cash equivalents (5,297,335) (2,124,092)Cash and cash equivalents at beginning of year 14,485,622 16,609,714

Cash and cash equivalents at end of year 12 9,188,287 14,485,622






NOTES TO ThE fiNANCiAl STATEMENTS (cont’d)31 December 2011

1. CORPORATE INFORMATIONInternational Press Softcom Limited (the “Company”) is a limited liability company, which is domiciled and incorporated in Singapore and listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). The immediate holding company is International Press Holdings Pte Ltd, incorporated in Singapore. The immediate holding company is equally owned by Chee Chun Holdings Pte. Ltd. and Ze Hua Holdings Pte. Ltd., both incorporated in Singapore.

The registered office of International Press Softcom Limited is located at 80 Robinson Road #02-00, Singapore 068898. The address of its principal place of business is International Press Building, 26 Kallang Avenue, Singapore 339417.

The principal activities of the Company are the provision of supply chain solutions, print and media products which include material procurement, inventory management, logistics management and order fulfillment, printing; packaging and software replication.

The principal activities of the subsidiaries are as shown in Note 6 to the financial statements.

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation

The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Singapore dollars (SGD or $).

2.2 Changes in accounting policiesThe accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (INT FRS) that are effective for annual periods beginning on or after 1 January 2011. The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company.

NOTES TO ThE fiNANCiAl STATEMENTS31 December 2011

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have been issued but not yet effective:

Description

Effective for annual periods beginning

on or after

Amendments to FRS 107 Disclosures – Transfers of Financial Assets 1 July 2011Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets 1 January 2012 Amendments to FRS 1 Presentation of items of Other Comprehensive Income 1 July 2012Revised FRS 19 Employee Benefits 1 January 2013Revised FRS 27 Separate Financial Statements 1 January 2013Revised FRS 28 Investments in Associates and Joint Ventures 1 January 2013FRS 110 Consolidated Financial Statements 1 January 2013FRS 111 Joint Arrangements 1 January 2013FRS 112 Disclosure of Interests in Other Entities 1 January 2013FRS 113 Fair Value Measurements 1 January 2013

Except for the Amendments to FRS 1, FRS 110, revised FRS 27, FRS 112 and FRS 113, the Directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the Amendments to FRS 1, FRS 110, revised FRS 27, FRS 112 and FRS 113 are described below.

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income

The Amendments to FRS 1 Presentation of Items of Other Comprehensive Income (“OCI”) is effective for financial periods beginning on or after 1 July 2012.

The Amendments to FRS 1 changes the grouping of items presented in OCI. Items that could be reclassified to profit or loss at a future point in time would be presented separately from items which will never be reclassified. As the Amendments only affect the presentations of items that are already recognised in OCI, the Group does not expect any impact on its financial position or performance upon adoption of this standard.

FRS 110 Consolidated Financial Statements and Revised FRS 27 Separate Financial Statements

FRS 110 and the revised FRS 27 are effective for financial periods beginning on or after 1 January 2013.

FRS 110 establishes a single control model that applies to all entities (including special purpose entities). The changes introduced by FRS 110 will require management to exercise significant judgment to determine which entities are controlled, and therefore are required to be consolidated by the Group, compared with the requirements that were in FRS 27. Therefore, FRS110 may change which entities are consolidated within a group. The revised FRS 27 was amended to address accounting for subsidiaries, joint ventures and associates in separate financial statements. The Group is currently determining the impact of the changes to the concept of control and assess whether the adoption of this FRS 110 in 2013 will likely lead to more entities being consolidated to the Group.







2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.3 Standards issued but not yet effective (cont’d)

FRS 112 Disclosure of Interests in Other Entities

FRS 112 is effective for financial periods beginning on or after 1 January 2013.

FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. FRS 112 requires an entity to disclose information that helps users of its financial statements to evaluate the nature and risks associated with its interests in other entities and the effects of those interests on its financial statements. The Group is currently determining the impact of the disclosure requirements. As this is a disclosure standard, it will have no impact to the financial position and financial performance of the Group when implemented in 2013.

FRS 113 Fair Value Measurements

FRS 113 is effective for financial periods beginning on or after 1 January 2013.

FRS 113 provides a single source of guidance for all fair value measurements. FRS 113 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under FRS when fair value is required or permitted by FRS. The Group does not expect the adoption of this standard to have material impact to the financial statements.

2.4 Basis of consolidation and business combinations (a) Basis of consolidation

Basis of consolidation from 1 January 2010

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.4 Basis of consolidation and business combinations (cont’d) (a) Basis of consolidation (cont’d)

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

- De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts at the date when controls is lost;

- De-recognises the carrying amount of any non-controlling interest;

- De-recognises the cumulative translation differences recorded in equity;

- Recognises the fair value of the consideration received;

- Recognises the fair value of any investment retained;

- Recognises any surplus or deficit in profit or loss; and

- Re-classifies the Group’s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

Basis of consolidation before 1 January 2010

Certain of the above-mentioned requirements were applied on a prospective basis. The following differences, however, are carried forward in certain instances from the previous basis of consolidation:

- Acquisition of non-controlling interests, prior to 1 January 2010, were accounted for using the parent entity extension method, whereby, the difference between the consideration and the book value of the share of the net assets acquired were recognised in goodwill.

- Losses incurred by the Group were attributed to the non-controlling interest until the balance was reduced to nil. Any further losses were attributed to the Group, unless the non-controlling interest had a binding obligation to cover these. Losses prior to 1 January 2010 were not reallocated between non-controlling interest and the owners of the Company.

- Upon loss of control, the Group accounted for the investment retained at its proportionate share of net asset value at the date control was lost. The carrying value of such investments as at 1 January 2010 have not been restated.

(b) Business combinationsBusiness combinations from 1 January 2010

Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.







2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.4 Basis of consolidation and business combinations (cont’d) (b) Business combinations (cont’d)

Business combinations from 1 January 2010 (cont’d)Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not be remeasured until it is finally settled within equity.

In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out in Note 2.6(a). In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date.

Business combinations before 1 January 2010

In comparison to the above mentioned requirements, the following differences applied:

Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets.

Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any additional acquired share of interest did not affect previously recognised goodwill.

When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree were not reassessed on acquisition unless the business combination resulted in a change in the terms of the contract that significantly modified the cash flows that otherwise would have been required under the contract.

Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration were recognised as part of goodwill.

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.5 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated balance sheet, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

2.6 Intangible assets (a) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in Note 2.13.

Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2005 are deemed to be assets and liabilities of the Company and are recorded in SGD at the rates prevailing at the date of acquisition.







2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.6 Intangible assets (cont’d) (b) Other intangible assets

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profit or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.

Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

(i) Club membershipsClub membership was acquired separately and is amortised on a straight-line basis over its finite useful life of 30 years.

(ii) Website development costsWebsite development costs are expensed as incurred. Deferred development costs arising from development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete and the ability to measure reliably the expenditures during the development.

Following initial recognition of the deferred development costs as an intangible asset, it is carried at cost less accumulated amortisation and any accumulated impairment losses. Amortisation of the intangible asset begins when development is complete and the asset is available for use. Website development costs have a finite life of three years and is amortised on a straight-line basis.

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.7 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. The Group generally has such power when it, directly or indirectly, holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the board of directors.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any impairment losses.

2.8 Financial assets Initial recognition and measurement

Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial assets at initial recognition.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurementThe subsequent measurement of financial assets depends on their classification as follows:

(a) Loans and receivablesNon-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

(b) Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by FRS 39. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial assets are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss include exchange differences, interest and dividend income.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.







2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.8 Financial assets (cont’d)

De-recognitionA financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On de-recognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned.

2.9 Borrowing costsBorrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

2.10 Impairment of financial assetsThe Group assesses at each end of the reporting period whether there is any objective evidence that a financial asset is impaired.

(a) Financial assets carried at amortised costFor financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in profit or loss.

When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the financial asset.

To determine whether there is objective evidence that an impairment loss on financial assets has incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.10 Impairment of financial assets (cont’d) (a) Financial assets carried at amortised cost (cont’d)

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

2.11 Convertible noteConvertible note is separated into liability and equity components based on the terms of the contract. The fair value of the equity-conversion component of the convertible note (the Group and Company’s rights to call for shares of the issuer) is determined by adopting the residual approach by calculating the fair value of liability component first. This amount is classified as a financial asset measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption in accordance with the accounting policy set out in Note 2.10.

The remainder of the proceeds is allocated to the equity-conversion component of the convertible note that is recognised as a derivative financial asset on the balance sheet. If a reliable measure of fair value subsequently becomes available, the equity-conversion component of the convertible note is to be remeasured at that fair value in subsequent year, and the gain or loss recognised in profit or loss.

2.12 Impairment of non-financial assetsThe Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when an annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset, except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.







2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.12 Impairment of non-financial assets (cont’d)

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

2.13 Foreign currency The Group’s consolidated financial statements are presented in Singapore Dollars, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

(a) Transactions and balancesTransactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

(b) Consolidated financial statementsFor consolidation purpose, the assets and liabilities of foreign operations are translated into SGD at the rate of exchange ruling at the end of the reporting period and their profit or loss are translated at the exchange rates prevailing at the date of the transactions. The exchange differences arising on the translation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-controlling interest and are not recognised in profit or loss. For partial disposals of associates or jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.14 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in Note 2.9. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Leasehold factory buildings and freehold land are measured at fair value less accumulated depreciation on buildings and impairment losses recognised after the date of the revaluation. Valuations are performed every 3 or 5 years to ensure that the carrying amount does not differ materially from the fair value of the freehold land and buildings at the end of the reporting period.

Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset carried in the asset revaluation reserve.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset is transferred directly to accumulated profits on retirement or disposal of the asset.

Freehold land has an unlimited useful life and therefore is not depreciated.

Depreciation is provided on all fixed assets at the following rates calculated to write off the cost or revalued amount, less estimated residual value, of each asset on a straight-line basis over its estimated useful life:

Leasehold factory buildings 30 – 50 years

Other fixed assets are depreciated using the reducing balance method to write-off the cost over their estimated useful lives. The annual depreciation rates are as follows:

Plant and machinery 10% - 20%Factory equipment 10% - 30%Computers 30%Motor vehicles 20%Furniture, fittings and office equipment 10% - 20%







2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.14 Property, plant and equipment (cont’d)

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.15 InventoriesInventories are stated at the lower of cost and net realisable value. Cost includes materials, all direct expenditures and an attributable portion of overheads determined on a weighted average cost basis.

Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of inventories to the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

2.16 Cash and cash equivalentsCash and cash equivalents comprise cash at bank and on hand, fixed deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in values. These also include bank overdrafts that form an integral part of the Group’s cash management.

2.17 Financial liabilitiesFinancial liabilities include trade payables, which are normally settled on 30-120 day terms, other payables, payables to subsidiaries, hire purchase liabilities, interest-bearing loans and loan from holding company.

Initial recognition and measurementFinancial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus in the case of other financial liabilities, not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurementThe measurement of financial liabilities depends on their classification as follows:

After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.17 Financial liabilities (cont’d)

De-recognitionA financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.18 LeasesThe determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104.

As lesseeFinance leases which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.19 ProvisionsProvisions are recognised when the Group has 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 to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.







2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.20 Employee benefits (a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Employee leave entitlementEmployee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to the end of the reporting period.

(c) Employee share option plansEmployees (including senior executives) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for share options (“equity-settled transactions”).

Employees of the Group receive remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled share-based payment transactions with employees for awards granted after 22 November 2002 is measured by reference to the fair value of the options at the date on which the options are granted which takes into account market conditions and non-vesting conditions. This cost is recognised in profit or loss, with a corresponding increase in the employee share option reserve, over the vesting period. The cumulative expense recognised at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market condition or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. In the case where the option does not vest as the result of a failure to meet a non-vesting condition that is within the control of the Group or the employee, it is accounted for as a cancellation. In such case, the amount of the compensation cost that otherwise would be recognised over the remainder of the vesting period is recognised immediately in profit or loss upon cancellation. The employee share option reserve is transferred to retained earnings upon expiry of the share options.

2.21 Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Group assesses its revenue arrangements to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognised:

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.21 Revenue (cont’d) (a) Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer, usually on delivery of goods. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(b) Rendering of servicesRevenue from computer systems integration and consultancy services are measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.

(c) Interest incomeInterest income is recognised using the effective interest method.

(d) Dividend incomeDividend income is recognised when the Group’s right to receive payment is established.

2.22 Taxes (a) Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting period, in the countries where the Group operates and generates taxable income.

Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) Deferred taxDeferred tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.







2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.22 Taxes (cont’d) (b) Deferred tax (cont’d)

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of each reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it incurred during the measurement period or in profit or loss.

(c) Sales taxRevenues, expenses and assets are recognised net of the amount of sales tax except:

- Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

2. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 2.23 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 32, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.24 Related parties A related party is defined as follows:

(a) A person or a close member of that person’s family is related to the Group and Company if that person:

(i) Has control or joint control over the Company;

(ii) Has significant influence over the Company; or

(iii) Is a member of the key management personnel of the Group or Company or of a parent of the Company.

(b) An entity is related to the Group and the Company if any of the following conditions applies:

(i) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company;

(vi) The entity is controlled or jointly controlled by a person identified in (a);

(vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).







3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONT’D)The preparation of the Group’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

3.1 Critical judgments made in applying accounting policiesThe following are the judgements made by management in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements:

i) Impairment of financial assetsThe Group follows the guidance of FRS 39 on determining when a financial asset is considered impaired. This determination requires significant judgment. The Group evaluates, among other factors, the duration and extent to which the fair value of a financial asset is less than its cost; and the financial health of and the near-term business outlook of the issuer of the instrument, including factors such as industry performance, changes in technology and operational and financing cash flows.

ii) Impairment of non-financial assetsThe Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill is tested for impairment annually and at other times when such indicators exist. Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable.

iii) Determination of functional currencyThe Group measures foreign currency transactions in the respective functional currencies of the Company and its subsidiaries. In determining the functional currencies of the entities in the Group, judgment is required to determine the currency that mainly influences sales prices for goods and services and of the country whose competitive forces and regulations mainly determines the sales prices of its goods and services. The functional currencies of the entities in the Group are determined based on management’s assessment of the economic environment in which the entities operate and the entities’ process of determining sales prices.

3.2 Key sources of estimation uncertaintyThe key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Useful lives of property, plant and equipment and investment propertiesThe costs of the property, plant and equipment are depreciated on a reducing balance method. The Group reviews annually the estimated useful lives of property, plant and equipment and investment properties, based on the factors that include asset utilisation, anticipated use of the assets and related industry benchmark information. It is possible that future results of operations could be materially affected by changes in these estimates brought about by changes in factors mentioned. A reduction in the estimated useful lives of property, plant and equipment and investment properties would increase depreciation expense and decrease non-current assets.

3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONT’D) 3.2 Key sources of estimation uncertainty (cont’d) (b) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amount of the Group’s provision for taxation, deferred tax liabilities and deferred tax assets as at 31 December 2011 was $398,916 (2010: $863,624), $1,697,109 (2010: $1,777,421) and $104,883 (2010: $101,611) respectively.

(c) Impairment of loans and receivablesThe Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivable at the end of the reporting period is disclosed in Note 31(c) to the financial statements.

(d) Revaluation of leasehold factory building and landThe Group carries its leasehold factory buildings at fair value, with changes in fair value being recognised in other comprehensive income.

The fair value of leasehold factory building is determined by independent real estate valuation expert using recognised valuation techniques. These techniques comprise both the Direct Comparison Method and the Income Capitalisation Method.

The determination of the fair value of the leasehold factory building requires the analysis and study of recent sales of comparable properties in the vicinity localities. Adjustments are made for differences in location, age, tenure, size, condition, building facilities and date of sale, etc. before arriving at the market value of the building.

(e) Impairment of goodwillAn impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm’s length transaction of similar assets or observable market prices less incremental costs for disposing the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows. Further details of the key assumptions applied in the impairment assessment of goodwill are given in Note 5 to the financial statements.







4. FIxED ASSETSAt valuation At cost At cost

GroupLeasehold factory

buildings Freehold land Plant and machinery Factory equipment Computers Motor vehiclesFurniture, fittings and

office equipment Total$ $ $ $ $ $ $ $

Cost or valuationAt 1 January 2010 16,116,709 90,945 49,598,241 1,841,274 6,876,092 401,954 6,323,735 81,248,950Additions – – 62,328 225,923 205,185 15,635 613,347 1,122,418Disposals – – (147,122) – (43,024) (22,551) (2,750) (215,447)Written off – – (7,889) (43,803) (80,773) – (8,143) (140,608)Revaluation surplus 8,026,812 – – – – – – 8,026,812Elimination of accumulated depreciation

on revaluation (3,396,925) – – – – – – (3,396,925)Translation difference 24,367 (3,911) (537,940) (43,275) (63,401) (1,699) (90,516) (716,375)

At 31 December 2010 and 1 January 2011 20,770,963 87,034 48,967,618 1,980,119 6,894,079 393,339 6,835,673 85,928,825

Additions – – 415,840 140,846 368,895 24,138 737,137 1,686,856Disposals – – (828,719) – (166,165) (15,728) (232,444) (1,243,056)Written off – – (50,767) (3,250) (12,883) – (41,154) (108,054)Revaluation surplus 293,867 – – – – – – 293,867Translation difference (29,053) (13,672) (1,018,237) (171,548) (71,934) (7,169) (38,293) (1,349,906)

At 31 December 2011 21,035,777 73,362 47,485,735 1,946,167 7,011,992 394,580 7,260,919 85,208,532

Accumulated depreciationAt 1 January 2010 3,185,006 – 37,279,531 943,607 5,085,074 276,577 3,876,433 50,646,228Charge for the year 329,038 – 1,971,769 190,114 557,991 25,954 554,856 3,629,722Disposals – – (67,839) – (40,509) (13,277) (2,714) (124,339)Written off – – (5,673) (30,894) (79,200) – (5,541) (121,308)Impairment – – – – – – 18,139 18,139Elimination of accumulated depreciation

on revaluation (3,396,925) – – – – – – (3,396,925)Translation difference 944 – (186,902) (14,800) (27,906) (763) (61,693) (291,120)

At 31 December 2010 and 1 January 2011 118,063 – 38,990,886 1,088,027 5,495,450 288,491 4,379,480 50,360,397

Charge for the year 542,767 – 1,581,999 177,206 465,102 24,351 488,532 3,279,957Disposals – – (679,562) – (163,171) (6,255) (217,827) (1,066,815)Written off – – (49,776) (2,505) (10,837) – (25,748) (88,866)Translation difference (2,060) – (580,937) (78,240) (41,865) (4,679) (28,825) (736,606)

At 31 December 2011 658,770 – 39,262,610 1,184,488 5,744,679 301,908 4,595,612 51,748,067

Net carrying amountAt 31 December 2011 20,377,007 73,362 8,223,125 761,679 1,267,313 92,672 2,665,307 33,460,465

At 31 December 2010 20,652,900 87,034 9,976,732 892,092 1,398,629 104,848 2,456,193 35,568,428







4. FIxED ASSETS (CONT’D)At valuation At cost At cost

CompanyLeasehold factory

buildings Plant and machinery Factory equipment Computers Motor vehiclesFurniture, fittings and

office equipment Total$ $ $ $ $ $ $

Cost or valuationAt 1 January 2010 14,370,113 33,615,948 904,020 4,202,811 318,674 3,068,493 56,480,059Additions – 23,214 2,100 140,628 15,635 9,490 191,067Disposals – (147,122) – (41,443) – – (188,565)Written off – (7,700) (43,200) – – (5,539) (56,439)Elimination of accumulated depreciation on revaluation (3,396,925) – – – – – (3,396,925)Revaluation surplus 8,026,812 – – – – – 8,026,812

At 31 December 2010 and 1 January 2011 19,000,000 33,484,340 862,920 4,301,996 334,309 3,072,444 61,056,009Additions – 326,028 – 272,991 16,069 14,421 629,509Disposals – (743,000) – (33,461) – – (776,461)Written off – (50,000) (3,250) – – (17,750) (71,000)

At 31 December 2011 19,000,000 33,017,368 859,670 4,541,526 350,378 3,069,115 60,838,057

Accumulated depreciation

At 1 January 2010 3,107,380 28,458,910 641,233 3,362,687 241,993 1,934,873 37,747,076

Charge for the year 289,545 666,114 28,227 270,427 16,418 125,205 1,395,936

Disposals – (67,839) – (39,640) – – (107,479)

Written off – (5,578) (30,623) – – (3,901) (40,102)

Elimination of accumulated depreciation on revaluation (3,396,925) – – – – – (3,396,925)

At 31 December 2010 and 1 January 2011 – 29,051,607 638,837 3,593,474 258,411 2,056,177 35,598,506

Charge for the year 503,935 586,882 24,575 242,600 18,208 111,430 1,487,630

Disposals – (622,382) – (32,153) – – (654,535)

Written off – (49,500) (2,505) – – (11,750) (63,755)

At 31 December 2011 503,935 28,966,607 660,907 3,803,921 276,619 2,155,857 36,367,846

Net carrying amount

At 31 December 2011 18,496,065 4,050,761 198,763 737,605 73,759 913,258 24,470,211

At 31 December 2010 19,000,000 4,432,733 224,083 708,522 75,898 1,016,267 25,457,503







4. FIxED ASSETS (CONT’D)Major properties of the Group are as follows:

Description Location

Area

(sq. m)

Tenure of

lease Net carrying amount2011 2010

$ $Leasehold propertyPurpose built 6-storey industrial building

26 Kallang Avenue, Singapore 339417

12,500 60 years 18,496,065 19,000,000

Single-storey factory cum warehouse with 1 attached double-storey office

Plot No. 46, Hilir Sungai Keluang 2, Phase IV, Bayan Lepas Industrial Estate, 11900 Penang, Malaysia

4,157 60 years 1,880,942 1,652,900

Freehold propertyLand 4, 2nd Cross Street

Shirdi Sai Nagar LayoutAkshaya NagarBegur Bangalore, India

131 NA 73,362 87,034

Revaluation of leasehold factory buildingsThe Company’s leasehold factory building at 26 Kallang Avenue was revalued in December 2010 based on valuations performed by an accredited independent valuer, Colliers International Consultancy & Valuation (Singapore) Pte Ltd, based on a fair market valuation basis.

As at 31 December 2011, the Group’s leasehold factory building at Plot No. 46, Hilir Sungai Keluang 2, Phase IV, Bayan Lepas Industrial Estate, 11900 Penang, Malaysia is stated on an independent professional valuation carried out by Henry Butcher Malaysia in December 2011 based on a fair market valuation basis.

Had the leasehold factory buildings been stated at cost less accumulated depreciation, the net carrying amount of the leasehold factory buildings as at 31 December 2011 would have been $9,137,131 (2010: $9,542,910).

Asset pledged as security The Company’s leasehold factory building with a carrying amount of $18,496,065 (2010: $19,000,000) are mortgaged to secure the Company’s banking facilities.

During the financial year, the Group acquired property, plant and equipment of $1,686,856 (2010: $1,122,418). The additions were by way of cash payments of $1,615,779 (2010: $1,107,603) and amount payable to other creditors of $71,077 (2010: $14,815). Cash outflow for the year also include payments in respect of property, plant and equipment acquired in the previous years of $14,815 (2010: $9,811).

5. INTANGIBLE ASSETS

Group

Website development

costsClub

membership Goodwill Total$ $ $ $

At costAt 1 January 2010 – 9,776 4,038,954 4,048,730Translation differences – – (146,077) (146,077)

At 31 December 2010 and 1 January 2011 – 9,776 3,892,877 3,902,653Translation differences – – (510,701) (510,701)Additions 748,743 – – 748,743

At 31 December 2011 748,743 9,776 3,382,176 4,140,695

Accumulated amortisation and impairment lossesAt 1 January 2010 – 2,607 – 2,607Amortisation for the year – 326 – 326

At 31 December 2010 and 1 January 2011 – 2,933 – 2,933Amortisation for the year – 326 – 326

At 31 December 2011 – 3,259 – 3,259

Net carrying amountAt 31 December 2011 748,743 6,517 3,382,176 4,137,436

At 31 December 2010 – 6,843 3,892,877 3,899,720

The remaining amortisation period for club membership is 20 years and website development costs is 3 years.

CompanyClub

membership$

At 1 January 2010, 31 December 2010, 1 January 2011 and 31 December 2011 9,776

Accumulated amortisationAt 1 January 2010 2,607Amortisation for the year 326

At 31 December 2010 and 1 January 2011 2,933Amortisation for the year 326

At 31 December 2011 3,259

Net carrying amountAt 31 December 2011 6,517

At 31 December 2010 6,843







5. INTANGIBLE ASSETS (CONT’D) Impairment testing of goodwill on consolidation

Goodwill acquired through business combinations arose from the acquisition of Avantouch and Scantrans in previous financial years. Avantouch’s principal activities are those relating to computer systems integration and consultancy services and Scantrans’s principal activities are those relating to printing and packaging.

The recoverable amounts of the above balances are determined based on value in use calculations, using cash flow projections based on financial budgets approved by management covering a five-year period. Cash flow projections beyond the five-year period are extrapolated using the estimated rates stated below. The growth rate is based on management’s assessment of the industry growth rate.

Key assumptions used for impairment testingThe following describes the key assumptions on which management has based its cash flow projections to undertake impairment testing of goodwill in the computer systems integration and consultancy services and commercial and packaging printing segments.

2011 2010

Growth rate 4% - 6% 15% - 45%Discount rate 11% - 15% 10% - 12%

Management determined the weighted average growth rate based on past performance and its expectations for market development. The discount rate used is pre-tax and reflect specific risks relating to its business segment.

6. INVESTMENTS IN SUBSIDIARIESCompany

2011 2010$ $

Shares, at cost 15,057,838 15,057,838Cost of share based payments (Note 19)# 340,800 340,800Impairment losses (970,000) (970,000)

Carrying amount of investments 14,428,638 14,428,638Loans to subsidiaries 8,673,450 8,673,450

23,102,088 23,102,088

# This arose from the share-based payment expense not being re-charged to subsidiaries for the share options granted to the employees of the subsidiaries.

Loans to subsidiaries are unsecured, interest-free and no fixed terms of repayment.

Included in loans to subsidiaries are $302,850 (2010: $302,850) denominated in Australian Dollars.

6. INVESTMENTS IN SUBSIDIARIES (CONT’D)Movement in changes in investments in subsidiaries are analysed as follows:

CompanyNote 2011 2010

$ $

Balance as at beginning of the year 15,057,838 15,051,008Increase in investment in a subsidiary (a) – 6,830

Carrying amount of investments 15,057,838 15,057,838

(a) In 2010, the Company had increased the cost of investment in International Press Softcom (Vietnam) Company Ltd by $6,830.

Details of subsidiaries are as follows:

Name of company Principal activities

Country of incorporation and place of

business

Percentageof equity interest

held Cost of investment2011 2010 2011 2010

% % $ $Held by the Company

IP Softcom (Malaysia) Sdn. Bhd. (1)

Assembling software packages and peripherals, printed materials, compact discs and diskettes and manufacturing and duplication of diskettes and compact discs

Malaysia 100 100 2,151,840 2,151,840

IP Softcom (Xiamen) Co., Ltd (1)

Manufacturing and distribution of electronic and telecommunication goods, computer software, hardware and its peripherals and packaging boxes, paper boxes, plastic products and providing other related technical services and after sales service

People’s Republic of

China

100 100 338,100 338,100







6. INVESTMENTS IN SUBSIDIARIES (CONT’D)



business




IP Ventures Pte Limited (2)

Investment holding Singapore 100 100 2 2

IP Softcom (Shanghai) Co., Ltd (1)

Development of all kinds of computer software, manufacturing of computer hardware, electrical & electronics products and its accessories, sales of the products and providing related technical, consulting and after-sales services (subject to license where a license if required)


China

100 100 527,200 527,200

IP Softcom (Shenzhen) Co., Ltd (1)

Manufacturing and distributing computer software and hardware and providing other technical related services


China

100 100 516,000 516,000

InPac Ventures Pte Ltd (2)

Investment holding Singapore 100 100 200,000 200,000

Greenfield Ventures (M) Sdn Bhd (1)

Investment holding Malaysia 100 100 1 1

IP Media (Xiamen) Co., Ltd. (1)

Manufacturing and printing and providing other technical related services


China

100 100 2,467,503 2,467,503




business




IP Softcom (Australia) Pty Ltd (1)

Manufacturing and processing of electronics and communication products, computer software, hardware and peripherals and providing related technical development and support and after-sales services

Australia 100 100 127,600 127,600

IP Softcom (India) Private Limited (1)

Provision of software contract manufacturing services comprising of supply chain management services, software replication, documentation, assembling of software packages and peripherals

India 99.99 99.99 555,713 555,713

Scantrans (India) Pvt. Ltd (1)

Offset printing and packaging services

India 75 75 7,655,106 7,655,106

International Press Softcom (Vietnam) Co., Ltd (5)

Packing of software bundles, software printed manuals, permitted compact discs and other permitted software packages and peripherals. Supply of prepacked software, computer hardware, and industrial and consumer electronics related components and equipment, and supply chain management services incidental to these services

Vietnam 100 100 73,745 73,745










business




IPS Trading (Shanghai) Co., Ltd (6)

Whole sale, commission agency (excluding auction), import and export of electronic products, communication products, computers, printers and related cum accessories; paper products, plastic products, packing materials; office appliances, medical hardware, household appliance, electronic components; medical appliances, medical materials (including Class 3 medical appliance: the injection puncture instrument, medical polymer materials and products, Class 2 medical appliance: operating room, emergency room, clinic equipment and appliances, dental materials, medical sanitation materials and dressings), and providing related supporting services (not involving state-owned trade management products, but involving in quota and license management products, make application in accordance with relevant state regulations; related to administrative licensing, applying relevant license


China

100 100 445,028 445,028

15,057,838 15,057,838




businessEffective interest

held by the Group2011 2010

% %Held through subsidiary, IP Ventures Pte LtdIP Softcom (India) Private Limited (1)

Provision of software contract manufacturing services comprising of supply chain management services, software replication, documentation, assembling of software packages and peripherals

India 0.01 0.01

Avantouch Systems Pte Ltd(3)

Computer systems integration and consultancy services

Singapore 60.07 60.03

Held through subsidiary’s subsidiary,Avantouch Systems Pte LtdAvantouch Software (Suzhou) Co., Ltd (4)

Computer systems integration and consultancy services


China

60.07 60.03

(1) Audited by member firms of Ernst & Young Global in the respective countries.(2) Audited by Ernst & Young LLP, Singapore.(3) Audited by PK Lim & Co., Certified Public Accountant, Singapore.(4) Audited by Suzhou Sucheng Certified Public Accountants Co. Ltd, People’s Republic of China.(5) Audited by BHP Auditing and Accounting Consultancy Service Company.(6) Audited by Pan China Certified Public Accountants, People’s Republic of China.

7. LONG-TERM RECEIVABLEOn 14 July 2011, the Group and Company entered into a convertible note agreement for an amount of an Australian Dollars 750,000 (“aggregate consideration”) with Global Bionic Optics Limited (“GBO” or “the issuer”). Under the convertible note agreement, the Company has the rights to convert the aggregate consideration paid into ordinary shares of GBO if GBO receives an investment from a cornerstone investor amounting to at least Australian Dollars 6,500,000 (“cornerstone investment”). If GBO does not receive such cornerstone investment by the expiry of three years from the date of the convertible agreement, the aggregate consideration paid, may at the election of the Company be repaid together with interest at 5% per annum.

The aggregate consideration is derived based on a mutually negotiated valuation of GBO, and is paid wholly in cash, and if converted will result in the Company being issued ordinary shares equivalent to 3.75 per cent of the issued and paid up capital of GBO.

The convertible note comprises a financial liability at amortised cost and an equity-conversion component. The equity-conversion component of the convertible note amounted to $56,557 is accounted as a derivative financial asset on the balance sheet. At 31 December 2011, the carrying value of the liability component of the convertible note, measured at amortised cost (net of transaction costs), was $926,618.







8. INVENTORIESGroup Company

2011 2010 2011 2010$ $ $ $

Balance sheetFinished goods 3,919,183 3,045,241 2,049,343 1,574,567Work-in-progress 382,179 209,553 201,566 79,236Raw materials 2,749,102 2,381,663 1,155,482 774,846

Total inventories at lower of cost and net realisable value 7,050,464 5,636,457 3,406,391 2,428,649

Income statementInventories recognised as an expense

in cost of sales 28,419,398 31,934,996 9,374,596 9,526,500

9. TRADE RECEIVABLESGroup Company

2011 2010 2011 2010$ $ $ $

Trade receivables 12,945,641 13,325,510 4,525,840 5,142,278Amounts due from subsidiaries – – 931,188 1,054,009

12,945,641 13,325,510 5,457,028 6,196,287Allowance for doubtful trade

receivables:Trade receivables (481,228) (444,959) (296,253) (221,974)

12,464,413 12,880,551 5,160,775 5,974,313

Trade receivables are non-interest bearing and are generally on 30 to 120 days’ terms (2010: 30 to 120 days). They are recognised at their original invoice amounts which represents their fair value on initial recognition.

9. TRADE RECEIVABLES (CONT’D) Receivables that are past due but not impaired

The Group has trade receivables amounting to $7,713,798 (2010: $4,610,197) that are past due at balance sheet date but not impaired. These receivables are unsecured and the analysis of their aging at the balance sheet date is as follows:

Group2011 2010

$ $

Trade receivables past due:Lesser than 30 days 6,341,476 3,400,03631 – 60 days 1,007,001 724,40061 – 90 days 170,643 343,101More than 90 days 194,678 142,660

7,713,798 4,610,197

An impairment loss of $168,199 (2010: $365,292) was recognised in the Group’s income statement. Trade receivables that are determined to be impaired at the balance sheet date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

As at 31 December 2011, the following amounts are included in trade receivables of the Group and the Company:

Group Company2011 2010 2011 2010

$ $ $ $

- Singapore Dollars 1,671,773 2,005,738 2,062,330 2,396,211- United States Dollars 4,149,169 4,881,139 2,934,011 3,578,102- Renminbi 3,610,126 2,979,564 – –- Indian Rupees 1,969,773 2,184,015 – –- Ringgit Malaysia 286,009 435,775 – –- Others 777,563 394,320 164,434 –

12,464,413 12,880,551 5,160,775 5,974,313







10. OTHER RECEIVABLES AND DEPOSITSGroup Company

2011 2010 2011 2010$ $ $ $

Deposits 659,035 791,496 64,258 39,478Advance to employees 118,955 62,434 45,000 12,478Advances to suppliers 1,382,614 920,760 – –Service tax receivable 743,151 875,699 – –Notes receivable – 177,082 – –Other non-trade debtors 435,761 393,935 231,840 231,840

3,339,516 3,221,406 341,098 283,796Less: Advance to employees (118,955) (62,434) (45,000) (12,478) Advances to suppliers (1,382,614) (920,760) – – Service tax receivable (743,151) (875,699) – –

Total loans and receivables 1,094,796 1,362,513 296,098 271,318

Included in other non-trade debtors is an amount of $231,840 (2010: $231,840) receivable from the non-controlling interests of Scantrans as they were unable to meet the profit guarantee as per the terms and conditions in the Joint Venture Agreement entered into in 2007.

As at 31 December 2011, the following amounts are included in other receivables and deposits of the Group and the Company:

Group Company2011 2010 2011 2010

$ $ $ $

- Singapore Dollars 185,932 26,020 109,258 51,956- Ringgit Malaysia 13,363 22,599 – –- Renminbi 1,474,913 1,227,706 – –- Indian Rupees 1,546,800 1,887,510 231,840 231,840- Others 118,508 57,571 – –

3,339,516 3,221,406 341,098 283,796

11. AMOUNTS DUE FROM/(TO) SUBSIDIARIES (NON-TRADE)The amounts due from/(to) subsidiaries are unsecured and interest-free. The loans are to be settled in cash and are repayable on demand.

12. CASH AND BANK BALANCESCash and bank balances included in the consolidated statement of cash flows comprise the following balances as at 31 December:

Group Company2011 2010 2011 2010

$ $ $ $

Cash and bank balances 5,075,393 10,069,687 1,333,169 1,689,960Fixed deposits 5,223,546 6,332,937 200,000 –

10,298,939 16,402,624 1,533,169 1,689,960Less: Fixed deposits pledged* (1,110,652) (1,917,002) – –

Cash and cash equivalents 9,188,287 14,485,622 1,533,169 1,689,960

* This relates to fixed deposits pledged to customs authority, deposits with bank for executing forward contract and performance guarantee with bank by the Group.

These fixed deposits are placed on varying periods of between one month and five years depending on the immediate cash requirements of the Group and Company, and earn interests at the respective short-term deposit rates ranging from 0.1% to 9% (2010: from 0.36% to 9%) per annum.

As at 31 December 2011, the following amounts are included in cash and bank balances of the Group and the Company:

Group Company2011 2010 2011 2010

$ $ $ $

- Singapore Dollars 857,142 1,365,230 472,986 168,307- United States Dollars 1,780,300 2,338,049 1,058,735 1,521,653- Renminbi 3,705,988 8,138,584 1,448 –- Ringgit Malaysia 902,699 784,947 – –- Indian Rupees 1,334,262 1,227,685 – –- Australian Dollars 1,665,891 2,143,234 – –- Others 52,657 404,895 – –

10,298,939 16,402,624 1,533,169 1,689,960







13. TRADE AND OTHER PAyABLESGroup Company

2011 2010 2011 2010$ $ $ $

Trade payables 6,219,433 5,020,522 1,789,566 1,680,659Amounts due to subsidiaries (trade) – – 53,050 79,303Sundry payables 1,400,198 1,663,451 433,620 728,630Payables in relation to purchase of fixed

assets 71,077 15,312 70,574 8,170

7,690,708 6,699,285 2,346,810 2,496,762

Trade payables are non-interest bearing and are normally settled on 30 to 120 days terms (2010: 30 to 120 days).

As at 31 December 2011, the following amounts are included in trade and other payables of the Group and Company:

Group Company2011 2010 2011 2010

$ $ $ $

- Singapore Dollars 2,246,046 1,489,921 1,636,463 1,488,249- United States Dollars 853,499 1,127,564 593,090 753,118- Renminbi 1,901,480 2,236,322 – –- Indian Rupees 2,110,509 1,083,072 – –- Others 579,174 762,406 117,257 255,395

7,690,708 6,699,285 2,346,810 2,496,762

14. ACCRUALSGroup Company

2011 2010 2011 2010$ $ $ $

Accrued operating expenses 3,349,968 3,375,281 2,015,516 1,956,567

14. ACCRUALS (CONT’D)As at 31 December 2011, the following amounts are included in accruals of the Group and Company:

Group Company2011 2010 2011 2010

$ $ $ $

- Singapore Dollars 1,900,255 1,899,809 1,854,623 1,854,917- United States Dollars 160,893 101,650 160,893 101,650- Ringgit Malaysia 240,046 139,826 – –- Renminbi 517,235 547,210 – –- Indian Rupees 429,992 648,355 – –- Others 101,547 38,431 – –

3,349,968 3,375,281 2,015,516 1,956,567

15. INTEREST-BEARING BANK LOANSGroup Company

Effective interest rate Maturity 2011 2010 2011 2010

$ $ $ $

Indian Rupees bank loan 13.5% 2012 3,468,747 4,195,134 – –

The bank loan obtained by the subsidiary is partially supported by a standby letter of credit issued by a local bank of the Company.

16. HIRE PURCHASE LIABILITIESGroup Company

Maturity 2011 2010 2011 2010$ $ $ $

CurrentObligations under finance leases 2012 171,975 473,754 – –

Non-currentObligations under finance leases 2013 – 46,086 – –

171,975 519,840 – –

The Group has finance leases for the purchase of machineries. There are no restrictions placed upon the Group by entering into this lease.







16. HIRE PURCHASE LIABILITIES (CONT’D)Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Group2011

Group2010

Minimum lease payment

Present value of payments

Minimum lease payment

Present value of payments

$ $ $ $

Not later than one year 172,424 171,975 502,438 473,754Later than one year but not

later than five years – – 46,619 46,086

Total minimum lease payments 172,424 171,975 549,057 519,840

Less: Amounts representing finance charges (449) – (29,217) –

171,975 171,975 519,840 519,840

17. DEFERRED TAxDeferred tax liabilities as at 31 December relates to the following:

GroupAt 1 January

2011

Credited/(charged) to the income statement

Recognised in equity

Translation difference

At 31 December

20112011 $ $ $ $ $

Deferred tax liabilitiesDifferences in depreciation 34,532 427,714 – (806) 461,440Revaluation and other reserves (2,270,947) – 183,934 526 (2,086,487)Other sundry timing differences 458,994 (531,177) – 121 (72,062)

(1,777,421) (103,463) 183,934 (159) (1,697,109)

Deferred tax assetsProvisions 62,708 (4,507) – (1,661) 56,540Differences in depreciation 1,813 21,278 – (4,249) 18,842Other sundry timing differences 37,090 (8,566) – 977 29,501

101,611 8,205 – (4,933) 104,883

17. DEFERRED TAx (CONT’D)

GroupAt 1 January

2010



Translation difference

At 31 December

20102010 $ $ $ $ $

Deferred tax liabilitiesDifferences in depreciation (354,730) 346,461 36,161 6,640 34,532Revaluation and other reserves (906,389) – (1,364,558) – (2,270,947)Other sundry timing

differences 533,713 (75,535) – 816 458,994

(727,406) 270,926 (1,328,397) 7,456 (1,777,421)

Deferred tax assetsProvisions 46,937 17,624 – (1,853) 62,708Differences in depreciation 1,813 – – – 1,813Other sundry timing

differences 50,705 (10,391) – (3,224) 37,090

99,455 7,233 – (5,077) 101,611

CompanyAt 1 January

2011



At 31 December

20112011 $ $ $ $

Deferred tax liabilitiesDifferences in depreciation 146,123 425,841 – 571,964Revaluation reserve (2,049,899) – 189,077 (1,860,822)Other sundry timing differences 494,218 (425,360) – 68,858

(1,409,558) 481 189,077 (1,220,000)







17. DEFERRED TAx (CONT’D)

CompanyAt 1 January

2010



At 31 December

20102010 $ $ $ $

Deferred tax liabilities

Differences in depreciation (178,877) 325,000 – 146,123Revaluation reserve (685,341) – (1,364,558) (2,049,899)Other sundry timing differences 494,218 – – 494,218

(370,000) 325,000 (1,364,558) (1,409,558)

As at 31 December 2011, the Group had unutilised wear and tear allowances and tax losses of approximately $2,927,000 (2010: $3,643,000) and $15,167,000 (2010: $10,073,000) respectively, which are available for offset against future taxable income, subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operate. No deferred tax asset is recognised on these allowances and losses in accordance with the accounting policy as set out in Note 2.22(b).

18. SHARE CAPITAL2011 2010

No. of shares $ No. of shares $

Issued and fully paid:Balance at beginning and end of year- ordinary shares 439,222,000 49,549,249 439,222,000 49,549,249

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction. The ordinary shares have no par value.

18. SHARE CAPITAL (CONT’D)As at 31 December 2011, all options under the Employee Share Option Scheme had expired:


Date grantedExercise period

Outstanding at beginning

of year Granted Lapsed Forfeited Exercised

Outstanding at end of

year Exercise price

31 December 2001


1,550,000 – 1,550,000 – – – $0.175 per share payable in full on application

21 January 2002

21 January 2003 to 30 December 2011


16 April 2004 *

16 April 2005 to 30 December 2011

320,000 – 320,000 – – – $0.177 per share payable in full on application

2 August 2007 *

02 August 2008 to 30 December 2011


* Included within these balances are equity-settled options that have been recognised in accordance with FRS 102 as these equity-settled options were granted after 22 November 2002 and not yet vested by 1 January 2005.







19. RESERVESGroup Company

2011 2010 2011 2010$ $ $ $

Revaluation reserve 7,900,491 7,680,085 7,680,085 7,680,085Translation reserve (2,826,464) (2,401,858) – –Restricted reserve 932,071 932,071 – –Other reserves 686,152 1,010,315 340,800 676,352Accumulated (loss)/profits (1,137,209) 4,483,846 (1,121,228) (613,215)

5,555,041 11,704,459 6,899,657 7,743,222

(a) Movement in reserves for the Group is disclosed in the Consolidated Statement of Changes in Equity. Movement in reserves for the Company is set out below:

Company2011 2010

$ $

Revaluation reserveBalance at beginning of the year 7,680,085 2,110,938Net surplus on revaluation of leasehold factory building – 6,662,254Reserve attributable to disposal of leasehold factory building classified

as held for sale – (1,093,107)

Balance at end of the year 7,680,085 7,680,085

Other reservesBalance at beginning of the year 676,352 676,352Expiry of employee share options (335,552) –

Balance at end of the year (Note 6) 340,800 676,352

Accumulated (loss)/profitsBalance at beginning of the year (613,215) 786,813Net loss (843,565) (2,493,135)Expiry of employee share options 335,552 –Reserve attributable to disposal of leasehold factory building classified

as held for sale – 1,093,107

Balance at end of the year (1,121,228) (613,215)

Total reserves 6,899,657 7,743,222

19. RESERVES (CONT’D)(b) The Group adopted the entity concept method to account for additional shares in subsidiaries acquired

from non-controlling interests. Any acquisition of additional shares from non-controlling interests is treated as being a transaction between owners and the difference between the share of the assets and liabilities acquired from the non-controlling interests and the cost of the additional interests in the subsidiary acquired is reflected as discount arising from the purchase of non-controlling interests shares in other reserve.

Restricted reserveThe restricted reserve relates to appropriation of funds from the net profit of the subsidiaries established in the People’s Republic of China (“PRC”). In accordance with the PRC laws, a foreign owned subsidiary is required to allocate at least 10% of its net profit to the reserve fund until the balance of such fund has reached 50% of its registered capital. The reserve fund can only be used, upon approval by the relevant authority, to offset accumulated losses or increase capital.

With the exception of the translation reserve and restricted reserve, the reserves of the Group are available for distribution as dividends.

20. TURNOVERTurnover represents sale of goods and services in the normal course of business. Intra-group transactions have been excluded from Group turnover.

Turnover comprises the following:Group

2011 2010$ $

Software contract manufacturing 41,959,308 45,395,239Commercial and packaging printing 13,488,105 12,600,308Computer systems integration and consultancy services 994,314 529,102

56,441,727 58,524,649







21. PERSONNEL ExPENSESGroup

2011 2010$ $

Wages and salaries 15,119,760 14,849,566Central Provident Fund and other pension costs 1,630,637 1,518,328Other personnel related expenses 970,383 1,059,287Share-based compensation expense (Note a) – –

17,720,780 17,427,181

(a) International Press Softcom Share Option Scheme (“Scheme”)Share options are granted to Directors and full-time employees. The exercise price of the options shall be equal to the average of the last dealt prices for the shares on the SGX-ST for the 3 consecutive Market Days immediately preceding the relevant date of grant for which there was trading in the shares (“Market Price”). The contractual life of the options are laid out in the share option movement table below.

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movement, in share options during the year.

No. WAEP ($) No. WAEP ($)2011 2011 2010 2010

Outstanding at beginning of year 13,646,500 0.168 13,868,500 0.169Lapsed during the year (13,646,500) 0.168 – –Forfeited during the year – – (222,000) 0.235Granted during the year – – – –

Outstanding at end of year – – 13,646,500 0.168

Exercisable at end of year – – 13,646,500 0.168

21. PERSONNEL ExPENSES (CONT’D) (a) International Press Softcom Share Option Scheme (“Scheme”) (cont’d)

The fair value of share options as at the date of grant is estimated by the Company using a binomial model, taking into account the terms and conditions upon which the options were granted. All options had expired in 2011. The inputs to the model used in 2010 is shown below:

2010

Dividend yield (%) 2.5Expected volatility (%) 81Risk-free interest rate (%) 3Expected life of options (years) 3Weighted average share price ($) 0.05

The expected life of options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of the option grant were incorporated into the measurement of fair value.

(b) Avantouch Systems Pte Ltd (“Avantouch”) Share Option SchemesUnder the Avantouch Share Option Schemes, an option entitles the option holder to subscribe for a specific number of new ordinary shares at an exercise price specified in the Letter of Offer of Option. The consideration for the grant of the option is $1.

Movements in the number of share options and their related weighted average exercise prices are as follows:

No. WAEP ($) No. WAEP ($)2011 2011 2010 2010

Outstanding at beginning of year 844,000 1.00 826,000 1.00Forfeited during the year – – – –Granted during the year – – 18,000 1.00

Outstanding at end of year 844,000 1.00 844,000 1.00

Exercisable at end of year 844,000 1.00 844,000 1.00







21. PERSONNEL ExPENSES (CONT’D) (b) Avantouch Systems Pte Ltd (“Avantouch”) Share Option Schemes (cont’d)

The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimate of the fair value of the service received is measured based on a Black-Scholes model. The inputs into the model were as follows:

2011 2010

Exercise price ($) 1 1Expected volatility (%) 40 39Risk-free interest rate (%) 3.00 3.00Expected life of options (years) 8 9Weighted average share price ($) 0.10 0.10

Expected volatility was determined by calculating the historical volatility of Avantouch’s net asset values since its incorporation in 2003. The expected life used has been adjusted, was based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

As the fair value of the share options was insignificant, the management had not recognised any expenses relating to the equity-settled share-based payment transactions.

22. FINANCIAL ExPENSE – NETGroup

2011 2010$ $

Interest income- bank deposits (249,602) (246,828)

Interest expense- interest-bearing bank loans 564,552 527,825

314,950 280,997

23. LOSS FROM OPERATIONS Loss is stated after charging/(crediting) the following:

Group2011 2010

$ $Audit fees- auditors of the Company 86,500 86,500- other auditors 172,569 222,928Non-audit fees- auditors of the Company 16,300 32,823- other auditors 26,312 8,550Bad debts recovered – (1,449)Bad debts written off 3,607 840Impairment of fixed assets and intangible assets – 18,139Directors’ fees- Directors of the Company 265,000 265,000- Directors of subsidiaries 52,454 53,129Exchange loss, net 409,569 1,107,229Fixed assets written off 19,188 19,300Net loss/(gain) on disposal of fixed assets 16,422 (1,074,166)Allowance for doubtful trade receivables 168,199 365,292Allowance for doubtful trade receivables written back (30,557) (171,028)Allowance for inventory obsolescence 101,760 655,104Allowance for inventory obsolescence written back (106,095) (398,937)Inventories written off 484,128 802,572Write back of inventories written off (7,267) –Operating lease expenses 1,208,763 1,536,457

24. INCOME TAx ExPENSE Major components of income tax expense The major components of income tax expense for the years ended 31 December 2011 and 2010 are:

Group2011 2010

$ $Income statement- current income tax: 1,123,919 689,854- under provision in respect of prior years 90,033 29,988Deferred income tax:- current year (225,570) (355,354)- (over)/under provision in respect of prior years (130,312) 77,195

Tax expense recognised in the income statement 858,070 441,683

Deferred tax expense related to other comprehensive income: - Net surplus on revaluation of leasehold factory building 183,934 1,364,558







24. INCOME TAx ExPENSE (CONT’D) Relationship between tax expense and accounting profit The reconciliation between tax expense and the product of accounting profit multiplied by the applicable

corporate tax rate for the year ended 31 December 2011 and 2010 are:Group

2011 2010$ $

Loss from operations before tax (6,244,115) (6,617,264)

Tax at the domestic rates applicable to profits in the countries concerned 863,633 378,692Income not subject to tax (898,653) (730,114)Effect of tax exemption (215,221) (208,895)Effect of change in tax rate (13,476) –Expenses not deductible for tax purposes 249,147 311,541Benefits from previously unrecognised tax losses (125,120) (248,074)(Over)/under provision in respect of prior years (40,279) 107,183Deferred tax on undistributed profit 250,000 –Deferred tax asset not recognised 803,080 859,927Others (15,041) (28,577)

Tax expense recognised in the income statement 858,070 441,683

The tax rates used in computing taxes for entities incorporated in the People’s Republic of China ranged from 11% to 25% (2010: 11% to 25%). The PRC entity in Shenzhen was taxed at a preferential rate of 11% (2010: 11%).

25. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the Group’s loss for the year attributable to ordinary equity

holders of the Company of $5,956,607 (2010: loss of $5,849,946) by the weighted average number of ordinary shares outstanding during the financial year of 439,222,000 shares (2010: 439,222,000 shares).

Diluted earnings per share is calculated by dividing the Group’s loss for the year attributable to ordinary equity holders of the Company of $5,956,607 (2010: loss of $5,849,946) by the weighted average number of ordinary shares outstanding during the financial year of 439,222,000 shares (2010: 439,222,000 shares) after adjusting for the effects of all dilutive potential ordinary shares.

In accordance with FRS 33, Earnings per share, share options are dilutive when they would result in the issue of ordinary shares for less than fair value.

26. COMMITMENTS AND CONTINGENT LIABILITIES (a) Contingent liabilities

Corporate guaranteesThe Company issued corporate guarantees amounting to $4,017,200 (2010: $4,048,110) in favour of certain financial institutions for banking facilities granted to and utilised by India subsidiary companies.

(b) Non-cancellable operating lease commitmentsThe Group have operating lease commitments in respect of office, factory and residential premises. These leases have an average life of between 7.5 months and 60 years with both renewal and non-renewal option included in the contracts. In addition, there is no escalation clause included in the contracts. There are no restrictions placed upon the Group or the Company by entering into these leases. Operating lease payments recognised in the consolidated income statement during the year amount to $1,208,763 (2010: $1,536,457).

Future minimum lease payments payable under non-cancellable operating leases as at 31 December are as follows:

Group Company2011 2010 2011 2010

$ $ $ $

Future minimum lease payments- not later than 1 year 1,081,772 1,260,489 229,176 217,191- 1 year to 5 years 3,216,269 1,926,719 922,800 874,600- later than 5 years 7,641,938 7,461,430 7,641,938 7,461,430

11,939,979 10,648,638 8,793,914 8,553,221

(c) Capital commitmentsGroup Company

2011 2010 2011 2010$ $ $ $

Capital commitments in respect of property, plant and equipment 130,313 1,089,710 – 304,986







27. RELATED PARTy DISCLOSURES An entity or individual is considered a related party of the Group for the purposes of the financial statements

if it possesses the ability (directly or indirectly) to control or exercise significant influence over the operating and financial decisions of the group or vice versa; or it is subject to common control or common significant influence.

Compensation of key management personnelGroup

2011 2010$ $

Short-term employee benefits 2,810,629 2,833,639Central Provident Fund contributions 67,946 61,114

Total compensation paid to key management personnel 2,878,575 2,894,753

Comprise amounts paid to:Directors of the Company 2,050,504 2,064,657Other key management personnel 828,071 830,096

2,878,575 2,894,753

The remuneration of key management personnel are determined by the remuneration committee having regards to the performance of individuals and market trends.

Key management personnel’s interest in an employee share option planAt 31 December 2011, all options held by the key management personnel had expired.

28. DIRECTORS’ REMUNERATIONNumber of Directors of the Company in remuneration bands:

2011 2010

$500,000 and above 1 1$250,000 to $499,999 3 3$0 to $249,999 3 3

7 7

29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESThe Group and the Company review its risk profile on a transactional basis arising from its operations and the use of financial instruments. The Group and the Company do not hold or issue derivative financial instruments for trading purposes. The key financial risks arising from the Group’s and the Company’s financial instruments are interest rate risk, liquidity risk, credit risk and foreign currency risk. The Board of Directors reviews and agrees policies for managing each of these risks, which are executed by the Group Financial Controller.

The following sections provide details regarding the Group’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates. The Group’s exposure to market risk for changes in interest rate relates primarily to its placements in fixed deposits and debt obligations with financial institution such as interest-bearing bank loans and hire purchase obligations. The Group’s policy is to obtain the most favourable interest rates available. The Group’s interest-bearing bank loans are repriced at interval of change in the prime ceiling rate. Hire purchase obligations are fixed at the contract rate and therefore not exposed to interest rate risk.

Sensitivity analysis for interest rate riskAt the balance sheet date, assuming that all other variables remain constant except that the Indian Rupee interest rate had been 100 basis points lower/higher, the Group’s results net of tax would have been $38,128 (2010: $42,346) higher/lower, arising mainly as a result of lower/higher interest expense on floating rate loans.

Liquidity riskLiquidity risk or funding risk is the risk that the Group or the Company will encounter difficulty in raising funds to meet financial obligations. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

In the management of liquidity risk, the Group and the Company monitor and maintain a level of cash and cash equivalents deemed adequate by the Board of Directors to finance the Group’s and the Company’s operations and mitigate the effects of fluctuation in cash flows. The Group and the Company will ensure that there are adequate funds to meet all its obligations in a timely and cost-effective manner. The Group and the Company will maintain sufficient liquid financial assets and stand-by credit facilities with at least two different banks.







29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) Liquidity risk (cont’d)

The table below summarises the maturity profile of the Group’s and the Company’s financial instruments at the balance sheet date based on contractual undiscounted payments.

Group 1 year or less1 to 5years Total

2011 $’000 $’000 $’000

Financial assets:Trade receivables 12,464 – 12,464Other receivables and deposits 1,095 – 1,095Tax recoverable 519 – 519Long-term receivable – 945 945Cash and bank balances 10,299 – 10,299

Total undiscounted financial assets 24,377 945 25,322

Financial liabilities:Trade and other payables 7,691 – 7,691Accruals 3,350 – 3,350Interest-bearing bank loans 3,469 – 3,469Hire purchase liabilities 172 – 172Loan from holding company 755 – 755

Total undiscounted financial liabilities 15,437 – 15,437

Total net undiscounted financial assets 8,940 945 9,885

Group2010

Financial assets:Trade receivables 12,881 – 12,881Other receivables and deposits 1,363 – 1,363Tax recoverable 1,689 – 1,689Cash and bank balances 16,403 – 16,403

Total undiscounted financial assets 32,336 – 32,336

Financial liabilities:Trade and other payables 6,699 – 6,699Accruals 3,375 – 3,375Interest-bearing bank loans 4,195 – 4,195Hire purchase liabilities 502 47 549

Total undiscounted financial liabilities 14,771 47 14,818

Total net undiscounted financial assets/(liabilities) 17,565 (47) 17,518

29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) Liquidity risk (cont’d)

Company 1 year or less1 to 5years Total

2011 $’000 $’000 $’000

Financial assets:Trade receivables 5,161 – 5,161Other receivables and deposits 296 – 296Amount due from subsidiaries (non-trade) 4,033 – 4,033Long-term receivable – 945 945Cash and bank balances 1,533 – 1,533

Total undiscounted financial assets 11,023 945 11,968

Financial liabilities:Trade and other payables 2,347 – 2,347Accruals 2,015 – 2,015Amount due to subsidiaries (non-trade) 340 – 340Loan from holding company 755 – 755


Total net undiscounted financial assets 5,566 945 6,511

Company2010

Financial assets:Trade receivables 5,974 – 5,974Other receivables and deposits 271 – 271Amount due from subsidiaries (non-trade) 4,198 – 4,198Cash and bank balances 1,690 – 1,690

Total undiscounted financial assets 12,133 – 12,133

Financial liabilities:Trade and other payables 2,497 – 2,497Accruals 1,956 – 1,956Amount due to subsidiaries (non-trade) 125 – 125


Total net undiscounted financial assets 7,555 – 7,555







29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) Credit risk

Credit risk is the risk of loss that may arise from any failure by counterparties to fulfil their obligations, as and when they fall due. The Group’s and the Company’s exposure to credit risk arises mainly from trade and other receivables. For financial assets such as cash and cash equivalents, the Group and the Company minimise credit risk by dealing exclusively with high credit rating and reputable financial institutions.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group performs credit evaluations of customers who wish to trade on credit terms. Careful consideration is given to the reputation and trustworthiness of potential customers before the Group sells to the customers. In addition, receivable balances are monitored on an ongoing basis and the result of the Group’s exposure to bad debt is not significant.

The Group believes that its credit risk in trade receivables is mitigated by its credit evaluation process, credit control and collection procedure.

Exposure to credit riskAt the balance sheet date, the Group and the Company’s maximum exposure to credit risk is represented by:

- the carrying amount of each class of financial assets recognised in the balance sheets.

Financial assets that are neither past due or impairedTrade and other receivables that are neither past due or impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents are placed with or entered into with reputable financial institutions.

Financial assets that are either past due or impairedInformation regarding financial assets that are either past due or impaired is disclosed in Note 9.

Foreign currency riskThe Group has transactional currency exposures arising from sales and purchases that are denominated in a currency other than the respective functional currencies of the Group entities, primary SGD, Ringgit Malaysia (RM), Renminbi (RMB), Australian Dollar (AUD), Indian Rupees (INR) and Vietnam Dong (VND). The foreign currencies in which these transactions are denominated are mainly the United States dollars (USD).

The Group and the Company also hold cash and cash equivalents denominated in foreign currency for working capital purposes. Information regarding cash and cash equivalents denominated in foreign currency is disclosed in Note 12.

In addition to transactional exposures discussed above, the Group is also exposed to currency translation risk arising from its net investments in the foreign operations, including Malaysia, People’s Republic of China (“PRC”), Australia, India and Vietnam. These assets are long-term in nature and the exchange differences from translation are taken directly to the translation reserve. The exchange rates are monitored regularly.

Sensitivity analysis for foreign currency riskThe table below demonstrates the sensitivity to a reasonably possible change in the USD, AUD, INR and EUR exchange rates (against SGD), with all other variables held constant, of the Group’s loss net of tax.

29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) Foreign currency risk (cont’d)

Increase/(decrease)

Increase/(decrease)

Loss after tax Loss after tax2011 2010$’000 $’000

United States Dollar- strengthened 10.4% (2010: 10.7%) 404 534- weakened 10.4% (2010: 10.7%) (404) (534)

Australian Dollar- strengthened 6.6% (2010: 13.6%) 44 –- weakened 6.6% (2010: 13.6%) (44) –

Indian Rupees- strengthened 14.1% (2010: 11.7%) 22 22- weakened 14.1% (2010: 11.7%) (22) (22)

Euro dollars- strengthened 6.4% (2010: 19.5%) (6) (41)- weakened 6.4% (2010: 19.5%) 6 41

30. CAPITAL MANAGEMENTThe primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustment to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2011 and 31 December 2010.

As disclosed in Note 19, a subsidiary is required by the Foreign Enterprise Law of the PRC to contribute to and maintain a non-distributable statutory reserve fund whose utilisation is subject to the approval by the relevant PRC authorities. This externally imposed capital requirement had been complied with by the subsidiary for the financial years ended 31 December 2011 and 2010.







30. CAPITAL MANAGEMENT (CONT’D)The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group’s policy is to keep the gearing ratio below 50%.

Note Group2011 2010

$ $

Trade and other payables 13 7,690,708 6,699,285Interest-bearing bank loans 15 3,468,747 4,195,134Hire purchase liabilities 16 171,975 519,840Loan from holding company 755,000 –Less: Cash and bank balances 12 (10,298,939) (16,402,624)

Net debt/(surplus) 1,787,491 (4,988,365)

Equity attributable to owners of the Company 55,104,290 61,253,708Less: Restricted reserves 19 (932,071) (932,071)

Total capital 54,172,219 60,321,637

Capital and net debt 55,959,710 55,333,272

Gearing ratio 3.2% Nil

31. FAIR VALUE OF FINANCIAL INSTRUMENTS (a) Fair value of financial instruments that are carried at fair value

The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy.

Group and Company2011

quoted prices in active markets for identical instruments

Significant other observable inputs

Significant unobservable

inputs Total(Level 1) (Level 2) (Level 3)

Fair value through profit and loss- Derivative (Note 7) – – 56,557 56,557

At 31 December 2011 – – 56,557 56,557

31. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D) (a) Fair value of financial instruments that are carried at fair value (cont’d)

Fair value hierarchyThe Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

- Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

- Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices), and

- Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

There were no financial instruments that were carried at fair value during the financial year 2010.

Determination of fair valueDerivative (Note 7): Fair value of the equity-conversion component of the convertible note is determined by adopting the residual approach by calculating the fair value of liability component (the issuer’s obligation to repay the aggregate consideration with interest) first and the equity-conversion component (the Group and Company’s rights to call for shares of the issuer) is treated as a residual.

(b) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair valueCash and bank balances, trade receivables, other receivables and deposits, amounts due from subsidiaries, trade and other payables, accruals, amounts due to subsidiaries and loan from holding company.

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the balance sheet date.

Loans to subsidiariesIt is non-practical to estimate the fair value of the non-current loans to subsidiaries due to principally to a lack of repayment term entered by the parties involved, and without incurring excessive costs. However, the Company does not anticipate the carrying amounts recorded at balance sheet date to be significantly different from the values that would be eventually be received or settled.







31. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D) (c) Carrying amounts of financial instruments by categories

The table below is an analysis of the carrying amounts of financial instruments by categories as at 31 December:

Note 2011 2010Group $ $

Loans and receivablesTrade receivables 9 12,464,413 12,880,551Other receivables and deposits 10 1,094,796 1,362,513Cash and bank balances 12 10,298,939 16,402,624Long-term receivable 7 926,618 –

24,784,766 30,645,688

Fair value through profit and lossDerivative 7 56,557 –

Financial liabilities at amortised costTrade and other payables 13 7,690,708 6,699,285Accruals 14 3,349,968 3,375,281Loan from holding company 755,000 –

11,795,676 10,074,566

Company

Loans and receivablesTrade receivables 9 5,160,775 5,974,313Other receivables and deposits 10 296,098 271,318Cash and bank balances 12 1,533,169 1,689,960Amounts due from subsidiaries (non-trade) 11 4,032,613 4,197,982Loans to subsidiaries 6 8,673,450 8,673,450Long-term receivable 7 926,618 –

20,622,723 20,807,023

Fair value through profit and lossDerivative 7 56,557 –

Financial liabilities at amortised costTrade and other payables 13 2,346,810 2,496,762Accruals 14 2,015,516 1,956,567Amounts due to subsidiaries (non-trade) 11 340,171 124,883Loan from holding company 755,000 –

5,457,497 4,578,212

32. SEGMENT INFORMATIONFor management purposes, the Group is organised into business units based on their products and services, and has four reportable operating segments as follows:

(i) The software contract manufacturing segment provides a wide range of value-added services which includes supply chain solutions, print and media products which include material procurement, inventory management, logistics management, software replication and order fulfilment.

(ii) The commercial and packaging printing segment provides simple printing activities to other related activities such as digital pre-press, binding and finishing activities. The services include printing of magazines, annual reports, brochures and catalogues.

(iii) The investment holding segment holds investment, whether quoted or unquoted.

(iv) The computer systems integration and consultation services segment focuses on mobile contents including digital product shelf displays and other related activities.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Segment assets consist primarily of fixed assets, certain inventories and receivables and mainly exclude operating cash, certain inventories and receivables and investment which cannot be allocated to the respective operating segments on a reasonable basis. Segment liabilities comprise operating liabilities and exclude items such as taxation. Capital expenditure comprises additions to fixed assets.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.







32. SEGMENT INFORMATION (CONT’D)By business segment

Software contract manufacturing

Commercial and packaging Investment holdings

Computer systems integration and

consultancy servicesAdjustments and

eliminations NotesPer consolidated

financial statements$’000 $’000 $’000 $’000 $’000 $’000

2011

Turnover:External customers 41,960 13,488 – 994 – 56,442Inter-segment 3,246 481 – – (3,727) A –

Total turnover 45,206 13,969 – 994 (3,727) 56,442

Results:Interest income 236 14 – – – 250Interest expense 55 510 – – – 565Depreciation and amortisation 2,076 994 – 210 – 3,280Other non-cash expenses 447 202 – – – B 649Segment loss (551) (3,953) (12) (1,599) (129) C (6,244)

Additions to non-current assets 1,037 178 – 1,221 – D 2,436Segment assets 40,513 24,864 284 4,577 3,195 E 73,433

Segment liabilities 6,809 7,705 5 162 2,851 F 17,532

2010

Turnover:External customers 45,396 12,600 – 529 – 58,525Inter-segment 2,582 493 – – (3,075) A –

Total turnover 47,978 13,093 – 529 (3,075) 58,525

Results:Interest income 238 9 – – – 247Interest expense 64 464 – – – 528Depreciation and amortisation 2,261 1,265 – 104 – 3,630Impairment of fixed assets – 18 – – – 18Other non-cash expenses 78 103 7 10 – B 198Segment loss (1,530) (3,293) (18) (1,769) (7) C (6,617)

Additions to non-current assets 529 32 – 561 – D 1,122Segment assets 55,605 16,573 289 4,933 2,514 E 79,914

Segment liabilities 8,114 6,490 5 180 2,642 F 17,431







32. SEGMENT INFORMATION (CONT’D) Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial

statements

A Inter-segment revenues are eliminated on consolidation.

B Other non-cash expenses consist of the following items:2011 2010$’000 $’000

Net loss/(gain) on disposal of fixed assets 16 (1,074)Fixed assets written off 19 19Bad debts written off 4 1Bad debts recovered – (1)Allowance for doubtful trade receivables 168 365Allowance for doubtful trade receivables written back (31) (171)Allowance for inventory obsolescence 102 655Allowance for inventory obsolescence written back (106) (399)Inventories written off 484 803Write back of inventories written off (7) –

649 198

C Unallocated expenses are added to segment loss to arrive at “loss before tax” presented in the consolidated income statement.

D Additions to non-current assets consists of additions to property, plant and equipment and intangible asset.

E The following items are added to segment assets to arrive at total assets reported in the consolidated balance sheet:

2011 2010$’000 $’000

Deferred tax assets 105 102Unallocated inter-segment assets 3,090 2,412

3,195 2,514

32. SEGMENT INFORMATION (CONT’D)F The following items are added to segment liabilities to arrive at total liabilities reported in the

consolidated balance sheet:2011 2010$’000 $’000

Deferred tax liabilities 1,697 1,778Provision for taxation 399 864Unallocated inter-segment liabilities 755 –

2,851 2,642

Geographical informationRevenue and non-current assets information based on the geographical location of the source of revenue and assets respectively are as follows:

GroupTurnover Non-current assets

2011 2010 2011 2010$’000 $’000 $’000 $’000

Singapore 19,562 18,694 26,174 26,166Malaysia 7,222 9,796 2,596 2,506PRC 15,487 15,618 3,664 2,746India 11,639 11,500 6,074 8,029Australia 1,777 1,628 36 45Vietnam 755 1,289 25 33

At 31 December 56,442 58,525 38,569 39,525

Non-current assets information presented above consist of property, plant and equipment, investment properties, other receivable, long-term receivable and intangible assets as presented in the consolidated balance sheet.

33. AUTHORISATION OF FINANCIAL STATEMENTS The financial statements for the year ended 31 December 2011 were authorised for issue in accordance with a

resolution of the Directors on 26 March 2012.





ShAREhOldiNGS STATiSTiCS as at 14 March 2012

Issued and fully paid-up - S$49,549,249Class of shares - Ordinary shares each with equal voting rights

SHAREHOLDINGS HELD IN HANDS OF PUBLICBased on information available to the Company as at 14 March 2012, 19.5% of the issued ordinary shares of the Company is held by the public and therefore Rule 723 of the Listing Manual is complied with.

ANALySIS OF SHAREHOLDINGS

No. of Shareholders No. of SharesRange of Shareholdings % %1 - 999 1 0.03 2 0.001,000 - 10,000 2,174 71.44 8,855,000 2.0210,001 - 1,000,000 851 27.97 52,670,998 11.991,000,001 and above 17 0.56 377,696,000 85.99

3,043 100.00 439,222,000 100.00

TOP 20 SHAREHOLDERS

No. of Shares No. Name of Shareholder %1 International Press Holdings Pte Ltd 286,839,480 65.312 Low Song Take or Leong Shook Wah 29,541,600 6.733 Woo Khai Chong 14,770,800 3.364 Woo Khai San 14,770,800 3.365 Low Ka Choon Kevin 7,484,320 1.706 Maybank Kim Eng Securities Pte Ltd 7,450,000 1.707 DBS Nominees Pte Ltd 2,182,000 0.508 Ong Chong Sun 2,000,000 0.469 Yeo Ah Moey 2,000,000 0.4610 United Overseas Bank Nominees Pte Ltd 1,924,000 0.4411 Lim Tee Ming or Low Sai Lee 1,665,000 0.3812 Chua Ah Bah 1,530,000 0.3513 Chan Yee Liang 1,150,000 0.2614 Cheong Chee Kin 1,150,000 0.2615 Ng Keat Leong 1,112,000 0.2516 OCBC Nominees Singapore Pte Ltd 1,079,000 0.2517 Tong Din Eu 1,047,000 0.2418 Chio Kian Huat 1,000,000 0.2319 Chee Chong Fatt 877,000 0.2020 Tan Sunny 850,000 0.19

380,423,000 86.63

ShAREhOldiNGS STATiSTiCS (cont’d)as at 14 March 2012

SUBSTANTIAL SHAREHOLDERS Name Direct Interest % Deemed Interest %International Press Holdings Pte Ltd 286,839,480 65.31 - -Low Song Take or Leong Shook Wah 29,541,600 6.73 286,839,480 65.31Woo Khai Chong 14,770,800 3.36 286,839,480 65.31Woo Khai San 14,770,800 3.36 286,839,480 65.31Low Ka Choon Kevin 7,484,320 1.70 286,839,480 65.31

The Company’s holding company is International Press Holdings Pte Ltd. The holding company is equally owned by Chee Chun Holdings Pte. Ltd. and Ze Hua Holdings Pte. Ltd., both incorporated in Singapore. Messrs. Woo Khai Chong and Woo Khai San are deemed to have an interest in the shares held by Chee Chun Holdings Pte. Ltd. in International Press Holdings Pte Ltd and its subsidiaries. Messrs. Low Song Take and Low Ka Choon Kevin are deemed to have an interest in the shares held by Ze Hua Holdings Pte. Ltd. in International Press Holdings Pte Ltd and its subsidiaries.





NOTICE IS HEREBy GIVEN THAT the Annual General Meeting of INTERNATIONAL PRESS SOFTCOM LIMITED will be held at 26 Kallang Avenue, Conference Room, Level 2 International Press Building, Singapore 339417 on Friday, 27 April 2012 at 10.00 a.m. for the following purposes:-

AS ORDINARy BUSINESS

1. To receive and adopt the Audited Financial Statements of the Company for the financial year ended 31 December 2011 together with the Directors’ Report and Auditors’ Report thereon.

Resolution 1

2. To approve the payment of Directors’ Fees of S$265,000 for the financial year ended 31 December 2011 (2010: S$265,000).

Resolution 2

3. To re-elect Mr Woo Khai San who is retiring under Article 107 of the Company’s Articles of Association. [See Explanatory Note (i)]

Resolution 3

4. To re-elect Mr Tiong Choon Hieng Steven who is retiring under Article 107 of the Company’s Articles of Association. [See Explanatory Note (ii)]

Resolution 4

5. To re-appoint Mr Low Song Take as a Director of the Company to hold office until the next Annual General Meeting pursuant to Section 153(6) of the Companies Act, Cap. 50. [See Explanatory Note (iii)]

Resolution 5

6. To note the retirement of Mr Ng Kim Leong, a Director retiring pursuant to Section 153(6) of the Companies Act, Cap. 50. [See Explanatory Note (iv)]

7. To re-appoint Messrs Ernst & Young LLP as auditors of the Company and to authorise the Directors to fix their remuneration.

Resolution 6

8. To transact any other ordinary business which may be properly transacted at an Annual General Meeting.

NOTiCE Of ANNuAl GENERAl MEETiNG

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following resolutions (with or without amendments) as Ordinary Resolutions:-

9. SHARE ISSUE MANDATE

“THAT pursuant to Section 161 of the Companies Act, Cap. 50 and subject to Rule 806 of the Rules of Catalist, authority be and is hereby given to the Directors of the Company to issue and allot new shares in the capital of the Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit, PROVIDED ALWAYS that:-

(i) the aggregate number of shares to be issued pursuant to this Resolution does not exceed 100% of the issued shares of the Company (as calculated in accordance with sub-paragraph (ii) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to shareholders of the Company does not exceed 50% of the issued shares of the Company (as calculated in accordance with sub-paragraph (ii) below);

(ii) (subject to such manner of calculation as may be prescribed by the Rules of Catalist), for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (i) above, the percentage of issued share capital shall be based on the issued shares of the Company at the time this Resolution is passed, after adjusting for:-

(a) new shares arising from the conversion or exercise of any convertible securities or share options which are outstanding or subsisting at the time this Resolution is passed; and

(b) any subsequent consolidation or subdivision of shares; and

(iii) unless revoked or varied by the Company in general meeting, such authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or by the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. [See Explanatory Note (v)]

Resolution 7

BY ORDER OF THE BOARD

TEH ENG CHAICompany Secretary

Date: 12 April 2012Singapore

NOTiCE Of ANNuAl GENERAl MEETiNG (cont’d)





ExPLANATORy NOTES:

(i) If re-elected under Resolution 3, Mr Woo Khai San will remain as a member of the Nominating Committee.

(ii) Mr Tiong Choon Hieng Steven, will upon re-election as Director of the Company, remain as a member of the Audit Committee and will be considered independent for the purposes of Rule 704(7) of the Listing Manual (Section B: Rules of Catalist) of the Singapore Exchange Securities Trading Limited (“Rules of Catalist”). He will also remain as Chairman of the Nominating Committee and a member of the Remuneration Committee.

(iii) If re-appointed under Resolution 5, Mr Low Song Take who is over the age of 70, will continue in office as Executive Chairman of the Board of Directors, Chairman of Employee Share Option Committee and member of the Nominating Committee until the next Annual General Meeting of the Company.

(iv) Mr Ng Kim Leong, will retire as a Director of the Company at the conclusion of the Annual General Meeting. Upon Mr Ng’s retirement, he will cease to be Chairman of the Remuneration Committee and a member of the Audit Committee and Nominating Committee. The appointment of his replacement for each Committee will be announced in due course.

(v) Resolution 7 is to empower the Directors of the Company from the date of this Meeting until the date of the next Annual General Meeting, to issue shares in the Company. The number of shares which the Directors may issue under this Resolution would not exceed 100% of the issued share capital of the Company at the time of passing this Resolution. For issue of shares other than on a pro-rata basis to all shareholders of the Company, the aggregate number of shares to be issued shall not exceed 50% of the issued share capital of the Company. This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company or by the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.

NOTES:-

(i) A member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. A member of the Company, which is a corporation, is entitled to appoint its authorised representative or proxy to vote on its behalf.

(ii) A proxy need not be a member of the Company.

(iii) The instrument appointing a proxy must be deposited at the Company’s registered office at 80 Robinson Road, #02-00, Singapore 068898 at least 48 hours before the time of the Meeting.

NOTiCE Of ANNuAl GENERAl MEETiNG (cont’d) IMPORTANT:1. For Investors who have used their CPF monies to buy International

Press Softcom Limited shares, this Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

PROxy fORM(Please see notes overleaf before completing this Form)(Company Registration No: 197201169E)

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I/We __________________________________________________________________________________________________of _____________________________________________________________________________________________________being a member/members of the above-mentioned Company, hereby appoint:-

Name Address NRIC/Passport No.

Proportion ofShareholdings (%)

and/or (delete as appropriate)

as my/our proxy/proxies to attend and to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 26 Kallang Avenue, Conference Room, Level 2 International Press Building, Singapore 339417 on Friday, 27 April 2012 at 10.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as hereunder indicated.

No. Ordinary Resolutions For Against

Ordinary Business1. Adoption of the Audited Financial Statements of the Company for the financial

year ended 31 December 2011 together with the Directors’ Report and Auditors’ Report.

2. Approval of Directors’ Fees.3. Re-election of Mr Woo Khai San.4. Re-election of Mr Tiong Choon Hieng Steven.5. Re-appointment of Mr Low Song Take.6. Re-appointment of Messrs Ernst & Young LLP as Auditors.Special Business7. Approval of Share Issue Mandate.

Dated this _____________ day of _____________ 2012.

No. of Shares Held

_______________________________________ IMPORTANT: PLEASE READ NOTES OVERLEAFSignature(s) of member(s) or Common Seal




Notes to the Proxy Form

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

2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote in his stead.

3. Where a member appoints two proxies, he shall specify the percentage of his shares to be represented by each proxy and if no percentage is specified, the first named proxy shall be deemed to represent 100 percent of his shareholding and the second named proxy shall be deemed to be an alternate to the first named.

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

5. The instrument appointing a proxy or proxies together with the letter of power of attorney, if any, under which it is signed or a duly certified copy thereof, must be deposited at the registered office of the Company at 80 Robinson Road, #02-00, Singapore 068898 at least 48 hours before the time appointed for the Annual General Meeting.

6. A corporation which is a member may authorise by resolution of its Directors or other governing body such a person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50.

7. Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be for or against the Resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.

8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies.

9. In the case of a member whose shares are entered against his name in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.

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Affix Postage Stamp

The Company Secretary

iNTERNATiONAl PRESS SOfTCOM liMiTEd(Incorporated in the Republic of Singapore - 197201169E)

80 Robinson Road #02-00Singapore 068898

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