dmx technologies annual report 2008

8/14/2019 DMX Technologies Annual Report 2008

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DMX TECHNOLOGIES GROUP LIMITED



CONTENTS10 Chairman’sStatement

14 CEO’sStatement

24 BoardoDirectors29 Directorships

30 KeyManagement

32 RegionalCoverage

33 BusinessSegments

34 FinancialHighlights

36 CorporateInormation

37 CorporateGovernance



...and it’s been

accelerating in momentum



It has and it ill continue to change the a e

see things,



giving us more clarit,choice and reedom.



It’s not just conned to a single countr or continent but it is a...



...globalphenomenon



China the most populous nation in the orld is gripped b it’s



ervour



digital revolution gros in momentumAnd as this

Thedigitalworldisnotjusttheuture.It’shereNOW.Openingupvastopportunitiesinthe

wayinormation,entertainmentandcommunicationservicesaredeliveredtoconsumersathomeandonthego.It’smakingphone,computerandtelevisionaster,betterandmore

interactive.It’saboutgivingconsumersmoreowhattheywantandwhentheywantit.

Asthisdigitalrevolutioncontinuestogatherpaceitisbecomingincreasinglyclearthat

Digitisation is the Future o Media.



grothopportunities.

so too ill our



CHAIRMAN’SSTATEMENTDear Shareholders

OnbehalotheBoardoDirectorsorDMXTechnologiesGroupLimited,ItakegreatpleasureinpresentingourAnnualReportorthenancialyearended31December2008.ItwasasignicantyearoaccomplishmentsmarkedbyaseriesomilestonebreakthroughsthatwereachievedbyacommittedDMXteam.

Firstly,IwishtothankallourcustomersandshareholderswhohavecontinuedtoshareandsupportDMX’svisionasweprogressivelyevolveDMXintoanend-to-endmediaservicesand

applicationsolutionsproviderandtherebystrengthenourlong-termgrowthprospects.

TheBoardandmanagementhadidentiedtheDigitalMediaindustryastheuturegrowthengineasearlyasin2004.NowinFY2008,wehavebeguntoseeourlong-terminvestmentpaying

oatthetop-line,asattestedbyourFY2008nancialresultswithrecordrevenuereported.

OurDigitalMediagroup,whichdevelopedtheproprietarysotwareapplicableorbothInternetProtocolTV(“IPTV”)andCableTV(“CATV”)solutions,has

beenverysuccessulinprovidingthesesolutionsinChina.WehaveextendedourootprintintoseverallargeprovincialandcityCATVoperatorsintheyearunderreviewandsecuredaorerunnerpositioninthisindustry.

Althoughthereisstillsomewaytogobeorewecanullyenjoy

thebenetsorisingeconomiesoscaleonourbottom-line,wesincerelyhopethatourvaluedcustomersandenduringshareholderswillcontinuetostandbehindus.Theyears2009and2010areexpectedtobetoughasbusinessesworldwidetrytonavigatethroughun-charteredwatersbroughtonbytheunprecedentedcreditcrisisandglobalrecession.

TheChineseStateAdministrationoRadio,FilmandTelevision(SARFT)hassetthemandatetodigitiseallbroadcastsignaltransmissionsby2015;some165millionhouseholds.Digitaltransmissionoersbettereciencyandbandwidth,whichinturnallowCATVoperators

toprovidetheirconsumerswithanadditionalsuiteointeractiveentertainmentchoices,throughmoreTVchannels,value-addedservices,suchasVideoonDemand(“VOD”),ontopouturehigh-denitionprogramming.

Beyondthetechnological

promise,thenancialpotentialisalsoexciting.InadditiontotheCATVmarket,telecomoperatorsandInternetserviceprovidersarenoweyeingtheIPTVmarkettomakeuporslowerrevenuegrowthastelephonyandbroadbandmarketsbecomeincreasinglymature.

annual report 2008 11



CHAIRMAN’S STATEMENT

Theadoptionoa“triple play” businessmodel–bundling

voice,Internetandpay-TVservices–oerstheseoperatorsthefexibilitytopackagetheirproductsintovariousvalueoeringsandacilitatecustomerretention,especiallyorxed-linenetworks.

MediaPartnersAsia’sApril2008researchreport“Asia Pacifc Pay-TV & Broadband Markets 2008” haspredictedthatAsiaPacic’sIPTVsubscriberswillreach19.4millionby2012whilesubscriptionrevenueisprojectedtohitUS$2.8billion,representingCAGRo43.7%orthe

nextouryears.ThispresentsauniqueopportunityorustoleverageonourstrategicrelationshipswithAsiaDMX

SOLUTIONS AND SOfTwARE

DIGITIzING THE HUGECHINA MARkET THROUGH




Pacic’smajortelecomoperators,

manyowhicharelong-standingcustomersromourInrastructureSolutionbusiness.

In2008,totalbroadbandsubscribersinChinagrewto83.4millionandmadethecountrytheworld’slargestbroadbandmarket.WhileIPTVhasdevelopedataslowerpaceascomparedto

digitalcableTVinChina,thisincreasingadoptionobroadbandinternet–anessentialIPTVdeliverychannel–mayhelptospurtheuturegrowthoIPTV.

Ontheotherhand,ourManagedServicessegmentispoisedorstronggrowth.Manycorporationsaswellasgovernmentagencies

aremoreawareotheneedtosaeguardtheirnetworks,dataandITinrastructureromexternalattacksandinternalthreats.OurVantage -brandedManagedServicesbusinessoersacost-eective,one-stopsolutiontoaddressthisconcern.

Thelatestreportpublishedin

January2009byapremierglobalITresearchrm,IDC,pinpointedmanagedservicesasoneotwokeygrowthareaswithintheITservicesmarketinAsiaPacic(excludingJapan)(“APEJ”)or2009.Inaseparatereport,IDCestimatedthatthemanagedsecurityservices(“MSS”)marketinAPEJwouldreachUS$1.1

billionin2012withave-yearCAGRo17.1%.

Allsaid,FY2008hasbeenanexcitingandsatisyingyear,althoughtheunortunateMay2008Sichuanearthquakeandthecountry’socusondeliveringtheoutstandingBeijingOlympicsledtodelaysinsomeoouro

projectimplementationsandthusaectedourtradereceivablecollectionsthatarebasedoncompletedmilestones.

Iwouldliketoexpressmyhearteltappreciationtoallourcustomers,suppliersandbusinessassociatesortheirunwaveringsupport,

withoutwhichthesignicant

breakthroughswehadin2008wouldnotbepossible.

Inaddition,IwouldliketoacknowledgethecontributionsoourBoardoDirectorsastheirinsightshavehelpedtocarrytheDMXGroupthroughourambitioustransormation.Lastbutnotleast,Ithankour

managementandstaorworkingsmartlyandeectivelyimplementingvariousinitiativesthatledustosucceedinthisimportanttransitionyear.

Ibelievethatouruniquebusinesspropositionwilllitourbusinesstogreaterheightsandtogetherwithmyellowshareholders,

lookorwardtomaintainingoursuccessinFY2009.

Yourssincerely,

Emmy Wu

ExecutiveChairman




CEO’sSTATEMENT

B2Centit

DMX IS TRANSfORMINGINTO A MEDIA fOCUSED




CEO’S STATEMENT

Dear Shareholders

Theyear2008willgodownintheannalsocorporatehistoryormanygrowingenterprisesastheyearocreditcrunchanddemandevaporationonanunprecedentedscale,wherebyalltheworst-casescenariosincorporateplanningbecamestarkrealityalmostovernight.

However,againstsuchanadversebackdrop,ItakegreatpleasureandprideinreportingtomyellowshareholdersthatDMXhadmanyinitiativesthatproceededasplanned.Byandlarge,FY2008turnedouttobeaverymotivatingwatershedyear.Ourprimarygrowthengine,DigitalMediagroup,signicantlytookoandtappedon

China’sexplosivegrowthindigitalmedia,particularlytheCATVindustry.ThisattributedtotheGroupachievingrecord-highrevenueoUS$172.7MillioninFY2008.

OVERVIEW

InFY2008,theGroupeectivelyharnessedthecumulativemomentumachievedinprevious

yearssinceestablishingitsexcitingDigitalMediabusinessbackin2004.Ourlatestresultsunderscoredthatourlong-terminvestmentstoortiyourDigitalMediagroup’sproprietarysotwareandnewproductsarestartingtopayowithstrategicprovincialwinsandimprovedgrossmargins.

Atthesametime,wearealsopleasedwiththetasteoearlysuccessorourVantage -brandedManagedServices,whichcomesunderourInrastructureEnablingbusinessgroup.Thisemergingnewsegmentaddsanotherspectrumtoourstrategyogeneratingrecurringincomestreamsandcomplements

ourtraditionallyproject-centricInrastructureSolutionbusiness,whichisstillgeneratingdecentgrossmargins.

HighlightsoFY2008includetheollowingachievementsacrosstheGroup:

• Record-high total revenue o

US$172.7 million or FY2008,up 6.9% y-o-y rom US$161.6million

RevenueromDigitalMediagroupsurged48.7%y-o-yaslong-termcontractssecuredinFY2007andFY2008romlargecityandprovincialcableTVoperatorsintheChinatook

eect.

EmergingManagedServicessegmentgainedmarketacceptancewith91.8%revenuegrowthinFY2008andcrossedtheUS$10.0millionmilestone.

Withbothcylindersogrowthringawayintheirrespective

markets,theGroupachievedrecord-highrevenueinspiteotheplannedlowerrevenueromtheInrastructureSolutionsegment,whereweremainmargin-selectiveonnewprojectspursuedvis-à-vischallengingconditionsinmorematuremarketssuchasKorea.

• Higher average gross margino 26.45% or FY2008compared to 24.42% orFY2007

Grossmarginimprovedtwopercentagepointsortheyearasaresultobetterrevenuemix.

• Operating proft jumped toUS$20.9 million; Net proftattributable to equity holderso US$3.6 million was lowerthan FY2007’s US$9.3 million

AsIndonesianRupiahandKoreanWonsubstantiallydepreciatedagainsttheUSdollar,theGroupincurredUS$1.3millionoreignexchangeloss.OtheroperatingexpensesincreasedbyUS$9.8milliontoUS$15.2million.TheseincludedaUS$4.7millionincreaseinamortisationointangibleassetssuchassotwareandnew

productdevelopmentactivities,orwhichamortisationisrecognizedoverthreeyearsuponcommercialdeployment.



DMX SOfTwARE ISSUITABLE fOR BOTHCABLE AND IPTVOPERATORS

Themanagementadoptedaprudentstanceonpossiblescenariosresultantromanyalloutduetotheglobaleconomiccrisis,WedecidedtorecordaUS$2.2millionullimpairment

lossorouravailable-or-saleinvestmentinUnitedKingdom-incorporatedCompleteTVLimited(“CTV”).CTV,inwhichwetookastakein2007,encountereddicultiesinitsattempttoraisenewcapitaltounditsoperationsandgrowthplans.

Torefectthesituation,wehavealsoinitiatedaprovisionoraUS$1.5millionadvancemadetoCTV,whichweoriginallyintendedtoapplytowardsmaintainingourstakeinCTVat19.9%asCTVraisesextracapitalromnewinvestors.TakingtheUS$1.5millionintoaccount,ourtotalincreaseinallowancesorother

receivableswasUS$2.0million.Inaddition,theGrouphasmadeprovisionsorUS$0.9millioninallowancesortradereceivablesandUS$0.5millionostockswritteno.




CEO’S STATEMENT

• Breaking new rontiers in its

pursuit o expanding marketshares as strategic initiativesexpedite penetration intonew segments

DigitalMediasuccessullymovedupthevaluechaininFY2008.FromsigningonBeijingGehua,thesolecableTVoperatorinthecapitalcityoBeijinginFY2007

toamongstotherinnovativecontractsor“rst-ever”projects,theGroupsecuredourmajorcableTVoperatorsorInnerMongolia,Shaanxi,HubeiandJiangsuprovinces.

Chinacontinuedtobethelargestrevenuecontributorat70.8%with4.4%y-o-ygrowthdespite

uncertaineconomicconditionsduringsecondhaloFY2008.

TheGroup’smarketoutsideoChinagrew13.6%y-o-yandaccountedor29.2%ogrouprevenue.ThegrowthwaslargelyromtelecomoperatorsinIndonesia.TheGroup’sIndonesiansubsidiary,

PTPacketSystemsIndonesia,wasconerredtheGoldVendorAward(BigVendorCategory)

byIndonesia’slargestull

inormationandcommunicationsserviceandnetworkprovider,PTTelekomunikasiIndonesia.

• Balance sheet remainedstrong through FY2008 inspite o the global fnancialcrisis; Group remains in anet cash position movinginto FY2009

TradereceivableswerehigherinFY2008ascollectionswereimpactedbydelaystoprojectinstallationsandacceptancesinChina,mainlybroughtaboutbytheMay2008Sichuanearthquake,BeijingOlympicsandtherestructuringoitstelecomindustry.

US$7.3mocashwasgenerated

romnancingactivitiesin4Q2008;mainlyromtherightsissueinOctober2008thatwasstronglysupportedbyDMX’scontrollingandsubstantialshareholders.

Asat31December2008,totalassetsincreasedtoUS$220.4million.Despitethedilutionrom

therightsissue,netassetvalueperordinarysharewas34.82UScentscomparedto37.51UScentsyear-ago.TotalborrowingsamountedtoUS$11.5million,whilepledgedbankdepositsandcashandcashequivalentsstoodatUS$8.6millionandUS$15.1million,respectively.



220MILLIONHOUSEHOLDS IN CHINATO GO DIGITAL By 2015

AN EXPECTED



CEO’S STATEMENT

Digitisation

DMXremainsdierentiatedintheChinamarket,

oeringullycustomisedsolutionswhicharehardwareagnostic.Weworkwithmanyotheglobalmarket-leadingsuppliersandpartnersintheindustry,allowingoroptimalprovisionosolutionsintermsobothperormanceandpricetomeetthecompletespectrumocustomers’needs.

AstheGroupevolvesintoanend-to-endmediasolutionsandapplicationsolutionsprovider,potentialandon-goingcustomerswillndgreaterassurancein

DMX’scontinuingrelevancetotheiruturebusinessrequirementsandgrowthtowardsprovidingmorevalue-addedservices.Toexpandthisvision,inFY2008theGroupurtherinvestedUS$10.8millioninenhancingitsproprietarymulti-mediasotwareandUS$1.1millioninajointventuretourtherstrengthenitspenetrationwithinthedigitalmediamarket.

mediais the uture o




Inrastructure Enabling

InrastructureEnablingrecorded4.9%lowerrevenuestoUS$119.6millionromUS$125.8millionyear-ago.Accordingly,itsshareogrouprevenuedecreasedto69.2%rom77.9%.

DMX’straditionaloriginalcorebusinessoInrastructureSolutionscontinuedtoaccountorthebulkoGrouprevenueat63.4%,butgenerated9.1%lowerrevenueinFY2008toUS$109.6millionromUS$120.6million.Thestrictcommitmenttobeingmargin-selectiveinpursuingnewprojectsinmorematuringmarketshelpedensuredecentmarginswereretained.

InitiativestotapDMX’straditional

customerbasegeneratedanewsourceorecurringee-basedincomeundertheVantage -brandedManagedServicesbusiness.Ourcompletesuiteoservicesincludesositedatareplicationservice,inrastructuresecuritysolutionandmanagedsecurityservices(“MSS”),whichuncovertrends,abnormal

activitiesandcyberattacksthroughourpowerulVantageSecurityOperationsCentre.

Thisemergingsegmentsaw91.8%growthtoUS$10.0millionor5.8%oGrouprevenueinitsrstull-yearooperations,comparedtoUS$5.2millioninFY2007.ManagedServices

quicklyearnedcredibilityandmarketacceptance,securingmajorcontractsincludingoneromMNCAnji-TNTAutomotiveLogisticsCo,oneothebiggestautomotivelogisticscompaniesinChina,toprovideMSSortheirenterprisenetwork.

DMX’sMSScapabilitieswere

strengthened,asitbecameacertiedQualysreseller,acilitatingitsprovisionoregular,highlyaccurateauditanddiagnosisonetworkandservervulnerabilitieswithanimmediateviewosecuritypositioning.WealsoreceivedanaccoladeorourcustomisedMSSimplementationduringthe2008BeijingOlympics

Games.

TheGroupalsoinkedastrategicregionalpartnershipwithSiliconValley-basednetworkandsecuritysolutionspartner,A10Networks,whichappointedDMX’swhollyownedMalaysiansubsidiaryasitsstrategicchannelpartnertomarketitsentirerangeoaward-

winningandinnovativeproductsinthreekeyITmarkets,Malaysia,SingaporeandIndonesia.

& largerthan lie



IN THE PALM Of yOUR HANDOf MOBILITyfREEDOM



DIRECTORSBOARD Of

JISMyL TEOCHOR kHIN JIM CHEUNG

CHUNG wAH

EMMy wU




fOO MENG TONG

MARk wANGyAT-yEE

THIAN NIE kHIAN

BOARD Of DIRECTORS



Emmy Wu

Executive Chairman

EmmyWuhasbeenservingasourExecutiveChairmansinceJune2002.HeisresponsibleorexercisingcontroloverthequalityandtimelinessothefowoinormationbetweentheboardoDirectorsandthemanagementotheGroup.Mr.WubeganhiscareerattheMitsubishi-RyodenGroupin1982wherehewassenioraccountsexecutive.HelettheMitsubishi-RyodenGroupin1986tojoinDataGeneral,initiallyasaccountmanager,andlaterasPRCsalesand

marketingmanager.HewassubsequentlypromotedtoregionalsalesandmarketingmanagerorthePRCandHongKong.Mr.WuletDataGeneralin1991andjoinedtheDatacratAsiagroupinaseriesopositions,includinggeneralmanagerandmanagingdirectororDatacratChinaLimited,regionaldirectororNorthAsiaoDatacratAsiaLimited,salesdirectororDatacratAsiaLimitedandadvisertoDatacratJapanLimited.Mr.Wuhasmorethan20yearsexperienceodoingbusinessinChina.

Jismyl Teo Chor Khin

Chie Executive Ofcer, Executive Director

JismylTeoChorKhinwaspromotedtoChieExecutiveOcerwitheectrom8September2006.MsTeoisresponsibleorthestrategicdirections,managementandnancialwell-beingoourGroup.Priortothepromotion,MsTeowastheChieFinancialOcer,whoisresponsibleorallaspectsonancialplanning,nancialbudgetingandcontrol,logistics,humanresources,administrationandcorporatesecretarialmattersortheGroup.ShejoinedourGroupinJanuary2001andwasappointedasourDirectorinDecember2001.Ms.TeoworkedorErnst&WhinneyasanassistantaccountantromJanuary1984toJune1985.ShejoinedtheDatacratAsiagroupinJune1985asanaccountant,andwaspromotedtonanceandadministrationmanagerwhereshestayeduntilOctober1990.InNovember1990,shejoinedChin,Lim&CoPtyLtdasanaccountantandletinJune1991toworkorFrigstagOshorePteLtd,Singaporeasanaccountsandadministrationmanagerrom

January1992toNovember1992.Ms.TeorejoinedtheDatacratAsiagroupinNovember1992asnanceandadministrationmanagerandcontinuedtoworkortheminaseriesopositions,includingregionalnancemanager,jointcompanysecretaryandregionaldirectorooperations.ShelettheDatacratAsiagroupinJanuary2001tojointheTVHgroupinJanuary2001andwasassignedtheChieFinancialOceroourGroup.Ms.TeoisamemberotheInstituteoCertiedPublicAccountantso

Singaporeandholdsapost-graduateDiplomainBusinessAdministrationandBacheloroBusinessStudiesromMasseyUniversityoNewZealand.

BOARD Of DIRECTORS




Foo Meng Tong

Independent Non-Executive Director

FooMengTongwasappointedasanIndependentNon-ExecutiveDirectoroourCompanyinNovember2002.Mr.FooworkedintheEconomicDevelopmentBoard(EDB)oratotalo26yearsuntilApril1993.HislastappointmentattheEDBwasasthedirectoroitsIndustryDevelopmentDivisionandthegeneralmanageroEDBInvestmentsPteLtd.HewasalsotheadministratorotheSkillsDevelopmentFundrom1980to1986.HehasservedoverseasastheregionaldirectoroEDB’socesinEurope(basedinParis)andNorthAmerica(basedinNewYork).From1994to1997,Mr.FoowasSingapore’sAmbassadortoFrancewithconcurrentaccreditationstoSpain,Portugal,Switzerland(1994to1996)andIsrael(1996to1997).Mr.FoowasawardedthePublicAdministrationMedal(Silver)in1986andtheFrenchGovernmentconerredhimasaChevalierintheOrderothePalmesAcademiquesin1988.Mr.FooholdsaProessionalDiplomainElectricalEngineeringromtheSingapore

PolytechnicandhasattendedtheStanordExecutiveProgramatStanordUniversity,USAin1985.HeisaFellowotheInstitutionoEngineers,Singapore.

Mark Wang Yat-Yee

Independent Non-Executive Director

MarkWangYat-YeewasappointedasanIndependentNon-ExecutiveDirectortoourCompanyinNovember2002.Mr.WangiscurrentlytheGroupVicePresidentoEnterpriseSolutionsGroup,AsiaPacicorInorGlobalSolutions,aprivateapplicationsotwarecompany.Between1974and1977,Mr.WangworkedasatechnicalmanagerortheIllinoisDepartmentoTransportation.HesubsequentlyjoinedXeroxCorporationastheirnancemanagerrom1977to

1984.In1984,hejoinedComputervisionCorporationwhereheservedinvariouspositions,includingbusinessplanningmanager,salesmanager(basedinShanghai)andregionalsalesmanagerorASEAN.From1988to1992,Mr.WangservedasmanagingdirectororCentralandSoutheastAsiaoOracleCorporation.HejoinedInormixCorporationin1992astheirvicepresidentandgeneralmanagerortheAsiaPacicregionwhereheserveduntil1994.Mr.WangsubsequentlyworkedatDigitalEquipment

Corporationrom1994to1995asthevicepresident,systemsbusinessunit,ortheAsiaPacicregion.From1995to1998,hewasseniorvicepresidentandgeneralmanagerortheAsiaPacicregionoSeerTechnologiesCorporation.HejoinedCandleCorporationin1998asvicepresidentandgeneralmanagerotheAsiaPacicRegionandletin2000.Mr.WangwastheSeniorVicePresidentandGeneralManagerorSybaseCorporationinAsiaPacicregionrom2000to2003.From2003to2006,MrWangwas

aprivateinvestorinvariousbusinessesinSingaporeandChina.Mr.WanggraduatedwithadegreeinAppliedMathematicsromtheMassachusettsInstituteoTechnologyin1972andalsoholdsbothanM.AinEconomicsandanMBAromtheUniversityoChicago,UnitedStates.

BOARD Of DIRECTORS



BOARD Of DIRECTORS

Thian Nie Khian

Non-Independent Non-Executive Director

ThianNieKhianwasappointedasNon-IndependentNon-ExecutiveDirectorinJune2007.MrThianistheChieTechnologyOceroVentureCorporationLimited(“Venture”)andwasappointedtotheBoardoDMXaterVenture’sinvestmentinDMX.MrThianhasoverthirtyyearsexperienceinproductdevelopmentandoperationsmanagement.HejoinedVentureinNovember1994toestablishtheOriginalDesignandManuacturing(ODM)businessorthecompany.Priortothat,heworkedinPlesseyTelecommunicationsLimitedintheUKasaR&DengineerandsubsequentlyjoinedHewlett-Packardwhereheheldvarioussenior

managementpositionsinR&DandoperationsworkinginMalaysia,SingaporeandtheUS.HeholdsaBacheloroEngineering(Honours)inElectricalEngineeringromtheUniversityoLiverpool,U.K.

Jim Cheung Chung WahNon-Independent Non-Executive Director

JimCheungChungWahhasbeenourNon-IndependentNon-ExecutiveDirectorsinceOctober2002.Mr.Cheunghasmorethan20yearsosalesandmanagementexperienceinHongKongandChina.Hebeganhiscareer

asasaleexecutiveatOrientalDataSystemCo.Ltd.in1980.In1983,hejoinedWangComputerCorporationasanaccountmanagerbeoreservingConcurrentComputerCorporationin1985.In1987,Mr.CheungenteredthetextileandgarmentmarketbyworkingorGerberGarmentTechnologyCo.Ltd.,atechnologyspecialistinthetextileandgarmentindustryromtheUS,whichlaythepathorhiscurrentpositionatGlobalGartechServicesCo.(China)Ltd.Mr.CheungholdsaBachelordegreeinMathematicsromtheUniversityoWaterloo,Ontario,Canada.


DIRECTORSHIPS



DIRECTORSHIPS

ThelistopresentdirectorshipsoeachDirectorincludingthoseheldwithintheGroup:-

Jim Cheung Chung WahOther Companies

FastWorthManagementLimited

Thian Nie Khian Other Companies

AdvancedProductsCorporationPteLtd.InnovativeTrekTechnologyPteLtd.VentureDesignServices,Inc.VentureElectronicsInternational,Inc.VentureElectronicsSpainS.L.VipColorTechnologiesPteLtd.VipColorTechnologiesUSA,Inc.VMServices,IncVSElectronicsPteLimited

Foo Meng Tong Other Companies

ActatekPteLtd.CarrierNetGlobalLtd(ormerlyknownasArianeCorpLimited)EastgateTechnologyLtdFischerTechLtdWhiterockMedicalCompanyPteLtd

Mark Wang Yat-YeeOther Companies

Net-ItechAsiaPacicPteLtdSonataServicesCo.LimitedStrawTechnologyAsiaPacicPteLtdTrekInnovationsPteLimited

Emmy WuGroup Companies

BEEMediaSotLimitedDMX(BVI)LimitedDMXTechnologies(HongKong)LimitedDMXTechnologiesSdnBhdDMXTechnologies(S’pore)PteLtdEquatorOnePteLimited

LotunTechnologyLimitedPacketSystemsPteLimited

Other Companies

BrilliantRainbowInvestmentLimitedBrilliantRegalInvestmentLimitedFastOnLimitedGroupEquityInternationalLimitedHubbardManagementLimitedSureBrightInvestmentLimited

Jismyl Teo Chor KhinGroup Companies

BEEMediaSotLimitedDMX(BVI)LimitedDMXTechnologies(HongKong)LimitedDMXTechnologiesSdnBhdDMXTechnologies(S’pore)PteLtd

DMXTechnologies(China)LimitedDMXTechnologies(MacaoCommercialOshore)CoLimitedDMXTechnologiesKoreaCo.,Ltd.EquatorOnePteLimitedLotunTechnologyLimitedNettaskingTechnologyLimitedPacketSystemsPteLtdPacketSystems(Malaysia)SdnBhdPTPacketSystemsIndonesia

Other Companies

EagleOneConsultantsLimitedGroupEquityInternationalLimited

kEy MANAGEMENT



kEy MANAGEMENT

Skip Tang

Chie Financial Ofcer

Mr.SkipTangwaspromotedtothepositionoChieFinancialOceron26June2008.HejoinedDMXinJuly2001asBusinessManagementManagerandwaspartothecorporateteamthatledDMX’sIPOontheSingaporeExchangein2002.PriortohisCFOappointment,hewastheBusinessOperationsDirector,responsibleorTreasury,OperationalandHumanResourcesmattersotheGroup;andlogisticsandsalescontractadvisorytoChinaoces.Mr.Tang

hasover20yearsonanceadvisoryandhumanresourcesadministrationinvarioustechnologycompaniesincludingWorldTradeFoundationLimited,acomputersystemintegratordistributing,DEC,HPandHitachiSystems.HeholdsadegreeinBusinessAdministrationromtheTamkangUniversityinTaiwan.

Fu Yan Yan

Regional Director, CEO o China

Mr.FuYanYan,RegionalDirectorandCEOoChina,isresponsibleorthebusinessoperationsinChina.Mr.Fuhasover25yearsexperienceinsettingupandmanagingbusinessinChina.Mr.Fustartedhiscareerin1975attheMinistryoElectronicIndustryoChinaandparticipatedinthestrategicdevelopmentandprojectmanagementocommunicationsandcomputingproductsinthecountry.HeoundedWideTradeFoundationLtdin1982,acompanyinHongKonginthedistributionandinstallationocomputerandoceautomationsystemstogovernmentagenciesinChina.HejoinedDatacratChinaLtdasGeneralManagerrom1996to2003.HehasadegreeinElectronicsEngineering(majoringinwirelesscommunications)romtheUniversityoElectronicScienceandTechnologyoChina.

Michael Mak Tak Ming

Regional Director, North Asia

Mr.MichaelMakTakMingjoinedusinJune2001andisourRegionalDirectororNorthAsia;andourGeneralManagerorHongKong.Heisresponsibleorallaspectsothecompany’sbusinessintheassignedterritory.Mr.MakbeganhiscareeratEproSystemin1984asanaccountmanager.HesubsequentlyjoinedDigitalEquipmentCorporationin1987asasalesaccountmanager.Between1990and2001,heservedtheDatacratAsiagroupinvariouspositionsincluding

countrysalesmanager,assistantgeneralmanagerandgeneralmanager.HeholdsaMasterdegreeinOperationalResearch,andaBacheloroSciencedegreeinComputerScienceandMathematicsrom

theUniversityoLondon.

Tang Yik Hong

Regional Director, South Asia

Mr.TangYikHongjoinedourcompanyinJanuary2001andisourRegionalDirectororSouthAsia.Heisresponsibleorthecompany’sbusinessintheSouthAsiaregion,whichincludesMalaysia,SingaporeandThailand.FromApril1987toMarch1993,Mr.TangwastheassistantgeneralmanageroDataprep(M)SdnBhd.Between1993and2001,heservedtheDatacratAsiagroupinvariouspositionsincludingregionaldirectorotheCentralAsiaregion(comprisingMalaysiaandthePhilippines).Mr.Tangisamember

otheCharteredInstituteoMarketingotheUnitedKingdom.




Lee Mun Young

Regional Director o the group

Mr.LeeMunYoungjoinedusinJuly2005andistheRegionalDirectoroDMXTechnologiesGroup.HeisresponsibleorthemanagementoPacket-SystemsasaChairman,oneothesubsidiariesoDMXTechnologiesGroup.AterhismilitaryservicesasanOcer,Mr.LeejoinedDaewooCorporationinJuly1987.BetweenApril1991andDecember1998,heservedDacomCorporationinvariouscapacityincludinginternationalBusiness,VicePresidentoKOKOTEL(a

joint-venturewithalocaltelephoneserviceproviderinRussia)andbusinessplanning.HesubsequentlyjoinedDatacratin1999asCEOoDatacratKoreaandRegionalDirectoroDatacratAsia.InMarch2003,Mr.LeeoundedVNOSolutionandservedastheChairmanothecompany.Mr.LeethenoundedPacketSystemsandservedastheChairmanothecompanypriortojoiningDMX.Mr.LeeholdsadegreeoElectricalEngineeringromSungkyunkwaUniversityandamasterdegreeromGraduateSchooloForeign

TradeandPolicySungkyunkwanUniversity.

Samson Cheng

Regional Director, Digital Media Solution

Mr.SamsonChengistheRegionalDirectoroDigitalMediaSolutionandCEOoBEEMediaSotLimited,awhollyownedsubsidiaryoDMX.HeisresponsibleorboththebusinessdevelopmentactivitiesodigitalsolutionstoCATVoperators,TelcosandleadingtheoverallstrategyandexecutivemanagementoBEEMediaSotLimited.Mr.ChengjoinedDMXin2002andpriortohisCEOappointmentinJanuary2008,hewastheVicePresident,ProductManagement,responsibleortheproductdevelopmentinBEEMediaSot.Mr.Chenghasover15yearsoITexperienceworkinginvarioustechnologycompaniesincludingOpenEnvironment,aUS-basedtechnologyrmondistributedsystemmiddlewareandLBMSDintheUK,specialisinginprocessmanagementandinormation

engineering.HeholdsaBachelorandMastersDegreeinComputerScienceromCityUniversityoHongKong.

Ashley Yau

Regional Director, Inrastructure Enabling

Mr.AshleyYaujoinedDMXin2001astheFieldMarketingManagerresponsibleormanagingapre-salesteamo20networkproessionalsinChinatoensuretechnicalcompetencyandsolutionsormulationorinrastructureprojects.HewasthenpromotedtothepositionoRegionalDirectorInrastructureSolutionsin2007.PriortojoiningDMX,hewastheProductManager/NetworkConsultantoDatacratChinaLimitedor4years;providing

assessment,designandconsultationservicestolargetelecomoperatorsinChina.Mr.Yauhasover14yearsexperienceincomputerandcommunicationtechnologiesandholdsaFirstClassHonoursDegreeinEngineeringromtheUniversityoHongKong.

John Leung

GM, New Media Content

Mr.JohnLeungjoinedDMXasGeneralManagerortheNewMediaContentGroupinSeptember2007.Mr.Leung’sprimaryroleistospearheadthedevelopmentostrategiesandbusinessplansonNewMediaContentproductsandoerings,includingexecutionoinvestments,acquisitions,creationobusinesspartnershipsandoriginalcontent.Mr.LeungwasalsoappointedDirectoroMarketingorDMXinJanuary2008,responsibleormarketingthecompany’sincreasingstrategicexpansionintheDigitalMediamarket.Mr.Leunghascomprehensiveknowledgeomedia,music,sportandinteractivecontentindustryinAsiaPacic;havingover13yearsexperienceinadvertising,marketing,businessandcorporatedevelopment.JohnstartedhiscareerinadvertisingwithM&CSaatchiandlatermovedintotheentertainmentindustrywhenhejoinedMTVNetworksAsiaasDirectoroMarketing.Mr.LeungholdsaBSc(Hons)degreeromManchesterUniversityandisapostgraduateinmarketingmanagementstudies.

REGIONAL COVERAGE



REGIONAL COVERAGE

China

Korea

Macau Hong Kong

Malaysia

Singapore

Indonesia



fINANCIAL HIGHLIGHTS




2005 2006 2007 2008

Turnover (US$M)

129

161 162173

Gross Proft (US$M)

2005 2006 2007 2008

36

4340

46

Shareholder’s Equity (US$M)

2005 2006 2007 2008

102

165173

185

2005 2006 2007 2008

Proft Ater Tax (US$M)

15

18

9

4

2005 2006 2007 2008

26

45

24

50

Cash And Bank Deposits (US$M)

Earnings Per Share (US Cents)

2005 2006 2007 2008

1.99

0.68

4.054.04





Revenueby BusinessSegments

Revenueby GeographicalRegion

Outside China

China

Multi-Media Software

Digital Media Solution

FY2008 FY2007

Managed Services

Infrastructure Solution

70.8% 72.5%

29.2% 27.5%

FY200822.9%

63.4%

7.9%

5.8%

US$39.5M

US$13.6M

US$10.0M

US$109.6M

FY2007

17.5%

74.7%

4.6%

3.2%

US$28.3M

US$7.4M

US$5.2M

US$120.6M

Total RevenueUS$172.7M




US$50.5M US$122.2M US$44.4M US$117.2M

CORPORATE INfORMATION



BOARD OF DIRECTORS

EmmyWu(ExecutiveChairman)

JismylTeoChorKhin(ChieExecutiveOcer,ExecutiveDirector)

JimCheungChungWah(Non-IndependentNon-ExecutiveDirector)

ThianNieKhian(Non-IndependentNon-ExecutiveDirector)

FooMengTong(IndependentNon-ExecutiveDirector)

MarkWangYat-Yee

(IndependentNon-ExecutiveDirector)

AUDIT COMMITTEE

FooMengTong(Chairman)MarkWangYat-YeeJimCheungChungWahThianNieKhianEmmyWu

REMUNERATION COMMITTEE

MarkWangYat-Yee(Chairman)FooMengTongJimCheungChungWahThianNieKhian

NOMINATING COMMITTEE

FooMengTong(Chairman)MarkWangYat-YeeEmmyWu

COMPANY SECRETARY

JismylTeoChorKhin

DEPUTY SECRETARYSherynTanPingPing

REGISTERED OFFICE

Canon’sCourt,22VictoriaStreetHamiltonHM12BermudaTelephone:(441)2952244Facsimile:(441)2928666

BERMUDA SHARE REGISTRAR

ReidManagementLimitedArgyleHouse41ACedarAvenueHamiltonHM12Bermuda

SINGAPORE SHARE

TRANSFER AGENTBoardroomCorporate&AdvisoryServicesPteLtd3ChurchStreet#08-01SamsungHubSingapore049483Telephone:(65)65365355Facsimile:(65)65361360

AUDITORS

Deloitte&ToucheLLPPublicAccountantandCertiedPublicAccountants6ShentonWay#32-00DBSBuildingTowerTwoSingapore068809AuditPartner:TsiaCheeWahDateoAppointment:08January2009

PRINCIPAL BANKERS

TheHongkongandShanghaiBankingCorporationLimitedBankoChina(HK)LtdHangSengBankLtd


CORPORATE GOVERNANCE



DMX Technologies Group Limited (the “Company”) continue to be committed to maintaining a high standard o corporate

governance within the Group and has put in place sel-regulatory corporate practices to protect the interests o its shareholdersand enhance long-term shareholder value.

The Board o Directors (the “Board”) is pleased to report compliance o the Company with the benchmark set by the Code oCorporate Governance 2005 (the “Code”), except where otherwise stated.

BOARD MATTERS

Principle 1: Board’s Conduct o its Aairs

Apart rom its statutory duties and responsibilities, the Board oversees the management and aairs o the Company. It ocuses

on strategies and policies, with particular attention paid to growth and nancial perormance. It delegates the ormulation obusiness policies and day-to-day management to the Executive Directors.

The principal unctions o the Board are:

(a) to approve the Group’s key business strategies and nancial objectives;

(b) to approve the annual budget, major investments and divestments, and unding proposals;

(c) to oversee the processes or evaluating the adequacy o internal controls, risk management, nancial reporting and

compliance; and

(d) to assume responsibility or corporate governance.

The Board discharges its responsibilities either directly or indirectly through various committees comprising members o theBoard.

During the nancial year, the Directors received updates on regulatory changes to the Listing Manual o the Singapore ExchangeSecurities Trading Limited (“SGX-ST”) and changes to the Accounting Standards. The Directors also received updates on thebusiness o the Group through regular presentations and meetings.

Every Executive Director receives appropriate training to develop individual skills in order to discharge his or her duties.The Group also provides extensive inormation about its history, mission and values to the Directors. All newly appointeddirectors will be given an orientation on the Group’s business strategies and operations. The Board currently holds at least our scheduled meetings each year to review and deliberate on the key activities and businessstrategies o the Group, including reviewing and approving internal guidelines on materiality o transactions, acquisitions,nancial perormance, and to endorse the release o the quarterly and annual nancial results. Where necessary, additionalmeetings may be held to address signicant transactions or issues. The Company’s Bye-laws permit a Board meeting to beconducted by way o tele-conerence and video-conerence.

38 annual report 2008




During the nancial year, the number o meetings held and the attendance o each Director at every Board and other committees

meetings are as ollows:-

NameBoard Audit

CommitteeNominatingCommittee

RemunerationCommittee

No. omeetings

held

No. omeetingsattended

No. omeetings

held


No. omeetings

held


No. omeetings

held


Mr Emmy Wu(Executive Chairman)

5 5 4 4 2 2 - -

Ms Jismyl Teo Chor Khin(Chie Executive Ocer, Executive Director)

5 5 - - - - - -

Mr Jim Cheung Chung Wah(Non-Independent Non-Executive Director)

5 5 4 4 - - 2 2

Mr Thian Nie Khian(Non-Independent Non-Executive Director)

5 5 4 4 - - 2* 1*

Mr Foo Meng Tong(Independent Non-Executive Director)

5 5 4 4 2 2 2 2

Mr Mark Wang Yat-Yee(Independent Non-Executive Director)

4 5 4 4 2 2 2 2

Note:

* Mr Thian Nie Khian has been appointed as member o Remuneration Committee with eect rom 29 February 2008.

Principle 2: Board Composition and Balance

The Company believes that there should be a strong and independent element in the Board to exercise objective judgment.The Board o 6 Directors includes 2 Independent and 2 Non-Executive Directors. The Directors appointed are qualied

proessionals who possess a diverse range o expertise to provide a balanced view within the Board. Key inormation regardingthe Directors’ academic and proessional qualications and other appointments is set out on pages 26 to 28 o the AnnualReport.

The independence o each Director is reviewed by the Nominating Committee (“NC”). The NC adopts the denition o whatconstitutes an Independent Director rom the Code. The NC is o the view that Mr Foo Meng Tong and Mr Mark WangYat-Yee are independent.

The Board considers that the present Board size acilitates eective decision making and is appropriate or the nature andscope o the Group’s operations.

Principle 3: Chairman and Chie Executive Ofcer

The role o the Chairman and Chie Executive Ocer is separate. The Chairman o the Company is Mr Emmy Wu. Mr Wu isan Executive Director. Besides giving guidance on the corporate and business direction o the Group, the role o the Chairmanincludes scheduling and chairing o Board meetings, and controlling o the quality, quantity and timeliness o inormation suppliedto the Board. Ms Jismyl Teo, the Chie Executive Ocer, sets the business strategies and directions o the Group and managesthe business operations o the Group with the Chie Financial Ocer and other Key Executive Ocers o the Company.



All Directors are subject to the provisions o the Company’s Bye-laws whereby one-third o the Directors are required to retire

and subject themselves to re-election by shareholders at every AGM.

A newly-appointed Director will have to submit himsel or re-election at the AGM immediately ollowing his appointment and,thereater, be subjected to the one-third-rotation rule.

The NC recommended to the Board that Mr Jim Cheung Chung Wah and Mr Foo Meng Tong be nominated or re-appointmentat the orthcoming AGM.

In making the recommendation, the NC had considered the Directors’ overall contribution and perormance.

The NC has reviewed the composition o the Audit Committee (“AC”) and is satised that it is adequate and appropriate orthe Company notwithstanding its deviation rom the Code.

Principle 5: Board Perormance

The Group has implemented the Board-approved evaluation process and perormance criteria to assess the perormance o theBoard. In drawing up the objective perormance criteria or such evaluation and determination, the NC considered a number oactors, including achieving nancial targets, perormance o the Board, perormance o individual Director’s vis-à-vis attendanceand contributions during Board meetings.

The NC assessed the Board’s perormance as a whole in FY2008.

The assessment process involves and includes input rom the Board members, applying the perormance criteria recommendedby the NC and approved by the Board. The Directors’ input are collated and reviewed by the Chairman o the NC, who presentsa summary o the overall assessment to the NC or review. Areas where the Board’s perormance and eectiveness could beenhanced and recommendations or improvement are then submitted to the Board or discussion and or implementation.

Remuneration Committee (“RC”)

Principle 7: Procedures or Developing Remuneration Policies

The RC comprises Mr Mark Wang Yat-Yee as Chairman and Mr Foo Meng Tong, Mr Jim Cheung Chung Wah and Mr Thian Nie

Khian as members. All these Directors are non-executive or independent.

The RC is responsible or :-

(a) recommending to the Board a ramework o remuneration or the Board and the key executives o the Group coveringall aspects o remuneration such as Director’s ees, salaries, allowances, bonuses, options and benets-in-kind;

(b) proposing to the Board, appropriate and meaningul measures or assessing the perormance o the ExecutiveDirectors;

(c) determining the specic remuneration package or each Executive Director;

(d) considering the eligibility o Directors or benets under long-term incentive schemes; and

(e) considering and recommending to the Board the disclosure o details o the Company’s remuneration policy, level andmix o remuneration and procedure or setting remuneration and details o the specic remuneration packages o theDirectors and key executives o the Company to those required by law or by the Code.

The members o the RC do not participate in any decisions concerning their own remuneration.





Principle 8 and 9 : Level and Mix o Remuneration and Disclosure on Remuneration

The Company sets remuneration packages to ensure that it is competitive and sucient to attract, retain and motivate Directorsand senior management o the required experience and expertise to run the Group successully. The ollowing table shows abreakdown o the remuneration o Directors and eight key executives or 2008.

Remuneration Bands

Salary

%

PerormanceBonus

%

Directors’Fees

%

Others

%

TotalCompensation

%

DirectorBelow S$750,000

Emmy Wu 100 100


Jismyl Teo Chor Khin 100 100


Foo Meng Tong 100 100

Mark Wang Yat-Yee 100 100

Key ExecutivesBelow S$250,000

Skip Tang 100 100

Fu Yan Yan 100 100

Michael Mak Tak Ming 100 100

Tang Yik Hong 100 100

Lee Mun Young 100 100

Samson Cheng 100 100Ashley Yau 100 100

John Leung 100 100

Save or Mr Jim Cheung Chung Wah and Mr Thian Nie Khian, who are not compensated in any orm, the remuneration othe Independent Non-Executive Directors is in the orm o a xed ee. The remuneration o the Directors will be subject toshareholders’ approval at the AGM.

The two Executive Directors o the Company, Mr Emmy Wu and Ms Jismyl Teo, have entered into separate service agreementswith the Company. The service agreements cover the terms o employment, specically salaries and bonuses and are renewedon a yearly basis.

The Company does not have any employees who are immediate amily members o a Director or the Chie Executive Ocer,whose remuneration exceeded S$150,000 during the nancial year ended 31 December 2008.

Share options are oered to employees as a part o long-term incentive scheme to attract and retain the relevant persons tosupport the growth o the Company. During the year, share options were granted to Directors and employees o the Company.Further inormation on the share option scheme can be ound on pages 94 to 95 o the Annual Report.





Principle 11: Audit Committee

The AC comprises Mr Foo Meng Tong as Chairman, Mr Mark Wang Yat-Yee, Mr Emmy Wu, Mr Jim Cheung Chung Wah andMr Thian Nie Khian as members, the majority o whom are non-executive and Chairman is independent.

The AC is responsible or :-

a) reviewing with external auditors the audit plan, and results o the internal auditors’ examination and evaluation o thesystem o internal accounting controls;

b) reviewing the Group’s nancial results and the announcements beore submission to the Board or approval;

c) reviewing the assistance given by management to external auditors;

d) considering and recommending the appointment/re-appointment o the external auditors;

e) reviewing the internal audit programme; i any

) reviewing interested person transactions; and

g) perorming other unctions as required by law or the Code.

During the nancial year, the AC has met our times, two o which were with external auditors to discuss and review the auditplan, the audit report and to evaluate the system o internal controls.

The AC has been given ull access to and obtained the co-operation o the Company’s management. The AC has ull discretionto invite any Director or key executive to attend its meetings. The AC has reasonable resources to enable it to discharge itsunctions properly.

The AC has met with the external auditors without the presence o the management. The AC also met with the external auditorsto discuss the results o their examinations and their evaluations o the systems o internal accounting controls.

The AC has reviewed the volume o non-audit services to the Group by the external auditors, and being satised that nature andextent o such services will not prejudice the independence and objectivity o the external auditors, is pleased to recommendtheir re-appointment as auditors o the Company at the orthcoming Annual General Meeting.

The Group has appointed dierent auditors or certain overseas subsidiaries. The Board and the AC are satised that theappointment would not compromise the standard and eectiveness o the audit o the Group.

The Company considers the current composition o the AC adequate and appropriate given the nature and size o the Company’soperation, notwithstanding its deviation rom the Code.





Principle 12: Internal Controls

The Group’s internal controls and systems are designed to provide reasonable, but not absolute, assurance as to the integrityand reliability o the nancial inormation and to saeguard and maintain the accountability o the assets.

The Board believes that, in the absence o any evidence to the contrary, the system o internal controls maintained by theGroup’s management and that was in place throughout the year and up to the date o this report, is adequate to meet theneeds o the Group in its current business environment.

The Company has established a whistle blowing policy to enable persons employed by the Group a channel to report anysuspicions o non-compliance with regulations, policies and raud, etc, to the appropriate authority or resolution, without anyprejudicial implications or these employees. The AC will be vested with the power and authority to receive, investigate and

enorce appropriate action when any such non-compliance matter is brought to its attention.

Principle 13: Internal Audit

The internal audit unction o the Company is outsourced to Grant Thornton Consulting Sdn Bhd or FY2008.

The AC has reviewed the internal audit programme, the scope and results o internal audit procedures. The AC is satised thatthe internal audit is adequately resourced and has appropriate standing within the Group.

COMMUNICATION WITH SHAREHOLDERS

Principle 10: AccountabilityThe Board provides the shareholders with a detailed and balanced explanation and analysis o the Company’s perormance,position and prospects on a quarterly basis.

The management provides the Board with appropriately detailed management accounts o the Group’s perormance, positionand prospects on a quarterly basis.

Principles 14 and 15 : Communications with Shareholders and Greater Shareholder Participation

The Company does not practise selective disclosure. Inormation on any new initiatives is disseminated via SGXNET, news

releases and the Company’s website. Price-sensitive inormation is publicly released on an immediate basis where requiredunder the Listing Manual. Where an immediate announcement is not possible, the announcement is made as soon as possibleto ensure that shareholders and the public have a air access to the inormation.

The AGM o the Company is a principal orum or dialogue and interaction with all shareholders. All shareholders will receivethe Annual Report and the notice o AGM. At the AGM, shareholders will be given the opportunity to voice their views and todirect questions regarding the Group to the Directors including the chairpersons o each o the Board committees. The externalauditors are also present to assist the Directors in addressing any relevant queries rom the shareholders.

The Company ensures that there are separate resolutions at general meetings on each distinct issue.

The Company’s Bye-laws allow a member o the Company to appoint one or two proxies to attend and vote at generalmeetings.





RISK MANAGEMENT

(Listing Manual Rule 1207(4)(b)(iv))

The Group is continually reviewing and improving the business and operational activities to take into account the risk managementperspective. This includes reviewing management and manpower resources, updating work fows, processes and proceduresto meet the current and uture market conditions. The Group has also considered the various nancial risks and management,details o which are ound on pages 73 to 79 o the Annual Report.

SECURITIES TRANSACTIONS

(Listing Manual Rule 710(18))

The Company has put in place an internal code on dealings in securities by Directors and ocers o the Group. Directors,management and ocers o the Group who have access to price-sensitive, nancial or condential inormation are not permittedto deal in the Company’s shares during the periods commencing two weeks beore announcement o the Group’s quarterlyresults or one month beore the announcement o the Group’s yearly results and ending on the date o announcements osuch results, or when they are in possession o unpublished price-sensitive inormation on the Group. To provide urtherguidance to employees on dealing in the Company’s shares, the Company has adopted a code o conduct on transactionsin the Company’s shares. The code o conduct was modeled ater the best practices on dealings in securities o the SGX-STwith some modications.

MATERIAL CONTRACTS(Listing Manual Rule 1207(8))

Save or the service agreements between the Executive Directors and the Company, there were no material contracts o theCompany or its subsidiaries involving the interest o any Director or controlling shareholders subsisting as at the nancial yearended 31 December 2008.

INTERESTED PARTY TRANSACTIONS

(Listing Manual Rule 907)

The Company has established procedures to ensure that all transactions with interested persons are reported in a timelymanner to the AC and that the transactions are on an arm’s length basis.

The Group conrms that there were no interested party transactions during the nancial year under review.

USE OF PLACEMENT PROCEEDS

The Company completed a rights issue o 70,450,082 new ordinary shares o US$0.05 each on 22 October 2008. The totalnet proceeds o S$10.2 million rom the rights issue were used or the ollowing purposes :

(a) an aggregate amount o S$2.9 million were utilized or continuous development o multi-media sotware;




REPORT OF ThE dIRECTORs



The directors present their report together with the audited consolidated nancial statements o the Group and balance sheetand statement o changes in equity o the Company or the nancial year ended 31 December 2008.

1. DIRECTORS

The directors o the Company in oce at the date o this report are:

Emmy WuFoo Meng TongJim Cheung Chung WahJismyl Teo Chor KhinMark Wang Yat-Yee

Thian Nie Khian

2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OFSHARES AND DEBENTURES

Neither at the end o the nancial year nor at any time during the nancial year did there subsist any arrangementwhose object is to enable the directors o the Company to acquire benets by means o the acquisition o shares ordebentures in the Company or any other body corporate, except or the options mentioned in paragraph 5 o the Reporto the Directors.

3. DIRECTORS’ INTERESTS IN SHARES AND DEBENTURESThe directors o the Company holding oce at the end o the nancial year had no interests in the share capital anddebentures o the Company and related corporations as recorded in the register o directors’ shareholdings kept by theCompany under section 164 o the Singapore Companies Act except as ollows:

Shareholdings Shareholdingsregistered in in which directors are

name o the director deemed to have an interest

At the At thebeginning At the end beginning At the endo the year o the year o the year o the year

The Company

Ordinary share o US$0.05 each

Emmy Wu 100,000 1,125,000 28,855,765 43,283,647Jismyl Teo Chor Khin 100,000 1,875,000 36,778,645 55,167,967Jim Cheung Chung Wah - - 30,267,295 30,267,295

The directors’ interests in shares o the Company as at 21 January 2009 were the same as those at the end o the

nancial year.





4. DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS

Since the beginning o the nancial year, no director has received or become entitled to receive a benet by reasono a contract made by the Company or a related corporation with the director or with a rm o which he is a member,or with a company in which he has a substantial nancial interest except or salaries, bonuses and other benets asdisclosed in the consolidated nancial statements.

5. SHARE OPTIONS

(a) Options to take up unissued shares

On 12 November 2002, the Company adopted the DMX Employee Share Option Scheme (the “Scheme”) togrant share options to eligible employees, including the executive directors and non-executive directors o the

Company and its subsidiaries.

The options under the Scheme grant the right to the holder to subscribe or new ordinary shares o the Companyat a discount to market price o the share (subject to a maximum limit o 20%) or at a price equal to the averageo the closing prices o the shares on the SGX-ST on the ve trading days immediately preceding the date othe grant o the option. The maximum number o shares in respect o which options may be granted under theScheme shall not exceed 15% o the issued share capital o the Company on the date preceding the date othe relevant grant.

Each option grants the holder the right to subscribe or one ordinary share o US$0.05 each in the Company.

The options may be exercised in ull or in part thereo. The holders do not have the right to participate by virtueo the options in any share issue o the other companies in the Group. Options granted are cancelled when theholder is no longer a ull-time employee o the Company or any corporations in the Group subject to certainexceptions at the discretion o the Remuneration Committee.

The above share option scheme is administered by a Remuneration Committee which has been authorised todetermine the terms and conditions o the grant o the options.

The members o Remuneration Committee are:

Mark Wang Yat-Yee (Chairman)Foo Meng TongJim Cheung Chung WahThian Nie Khian (Appointed on 29 February 2008)





5. SHARE OPTIONS - continued

(b) Unissued shares under option and options exercisedDuring the nancial year, the ollowing options in respect o unissued ordinary shares in the Company weregranted, exercised and cancelled:

ExerciseBalance at Balance pricebeginning Adjustment at end per share

Date o grant o year Granted Cancelled (Note) o year (Note) Exercise period

3 October 2003 3,007,000 - - 320,677 3,327,677 S$0.6778 2 October 2004 to

26 May 2013

4 May 2007 16,068,000 - (16,068,000) - - - 3 May 2008 to

26 April 2016

25 April 2008 - 18,000,000 - 1,919,580 19,919,580 S$0.226 24 April 2009 to

25 April 2018

28 November 2008 - 20,000,000 - - 20,000,000 S$0.093 27 November 2009

to

28 November 2018

19,075,000 38,000,000 (16,068,000) 2,240,257 43,247,257

At the end o the nancial year, there were no unissued shares o the Company or any corporation in the Groupunder option except or the share option scheme disclosed above and as disclosed in Note 25 o the nancialstatements.

The details o share options granted under the Scheme to the directors o the Company are as ollows:

Aggregate Aggregate Aggregateoptions options options

granted since exercised since cancelled since Aggregate

Options commencement commencement commencement optionsgranted o the Scheme o the Scheme o the Scheme outstanding

during the up to the end o up to the end o up to the end o Adjustment as at end o

Name o director fnancial year fnancial year fnancial year fnancial year (Note) fnancial year

Emmy Wu 4,500,000 9,500,000 (1,000,000) (3,000,000) 319,930 5,819,930Jismyl Teo Chor Khin 4,500,000 8,250,000 (375,000) (3,000,000) 253,278 5,128,278Foo Meng Tong 900,000 1,700,000 - (600,000) 63,986 1,163,986Mark Wang Yat-Yee 900,000 1,700,000 - (600,000) 63,986 1,163,986Jim Cheung Chung Wah 500,000 500,000 - - - 500,000Thian Nie Khian 500,000 500,000 - - - 500,000

11,800,000 22,150,000 (1,375,000) (7,200,000) 701,180 14,276,180

Note: The number and exercise price o the share options were adjusted as a result o the completion o a rightsissue in the proportion o one rights share or every two existing shares held on 25 September 2008.The exercise prices shown above represent the adjusted exercise prices as at 31 December 2008.





5. SHARE OPTIONS - continued

Except as disclosed above, there were no participants to the above share option scheme who are controlling shareholderso the Company and their associates. No participants to the above share option scheme received options which represents5% or more o the total number o shares available under the above scheme and no shares were issued at a discountto the market price.

6. AUDIT COMMITTEE

At the date o this report, the Audit Committee comprises the ollowing members:

Foo Meng Tong Chairman and Independent Non-Executive directorMark Wang Yat-Yee Independent Non-Executive directorJim Cheung Chung Wah Non-Independent Non-Executive directorThian Nie Khian Non-Independent Non-Executive directorEmmy Wu Executive director

The Audit Committee has met our times since the last Annual General Meeting and has reviewed the ollowing, whererelevant, with the executive directors, the external auditors and the internal auditors o the Company:

(a) the audit plans and results o the internal auditors’ examination and evaluation o the Group’s systems o internalaccounting controls;

(b) the Group’s nancial and operating results and accounting policies;

(c) the nancial statements o the Company and the consolidated nancial statements o the Group beore theirsubmission to the directors o the Company and external auditors’ report on those nancial statements;

(d) the quarterly, hal-yearly and annual announcements as well as the related press releases on the results andnancial position o the Company and the Group;

(e) the co-operation and assistance given by management to the Group’s external auditors; and

() the re-appointment o the external auditors o the Group.

The Audit Committee has ull access to and has the co-operation o management and has been given the resourcesrequired or it to discharge its unction properly. It also has ull discretion to invite any director and executive ocer toattend its meetings. The external and internal auditors have unrestricted access to the Audit Committee.

The Audit Committee has recommended to the directors the nomination o Deloitte & Touche LLP or re-appointmentas external auditors o the Group at the orthcoming Annual General Meeting o the Company.





7. AUDITORS

The auditors, Deloitte & Touche LLP, has expressed their willingness to accept re-appointment.

On behal o the Board o Directors

Emmy Wu Jismyl Teo Chor Khin

Hong Kong31 March 2009


INdEPENdENT AUdITOR’s REPORTTO ThE MEMBERs OF dMX TEChNOLOGIEs GROUP LIMITEd



We have audited the accompanying consolidated nancial statements o DMX Technologies Group Limited (the “Company”)and its subsidiaries (collectively reerred to as the “Group”) which comprise the balance sheets o the Group and the Company

as at 31 December 2008, the income statement, statement o changes in equity and cash fow statement o the Group andthe statement o changes in equity o the Company or the year then ended, and a summary o signicant accounting policiesand other explanatory notes, as set out on pages 52 to 103.

Directors’ Responsibility

The Company’s directors are responsible or the preparation and the true and air presentation o these nancial statementsin accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing andmaintaining internal control relevant to the preparation and the true and air presentation o nancial statements that are reerom material misstatement, whether due to raud or error; selecting and applying appropriate accounting policies; and making

accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordancewith International Standards on Auditing. Those standards require that we comply with ethical requirements and plan andperorm the audit to obtain reasonable assurance whether the nancial statements are ree rom material misstatement.

An audit involves perorming procedures to obtain audit evidence about the amounts and disclosures in the nancial statements.The procedures selected depend on the auditor’s judgement, including the assessment o the risks o material misstatemento the nancial statements, whether due to raud or error. In making those risk assessments, the auditor considers internal

control relevant to the entity’s preparation and air presentation o the nancial statements in order to design audit proceduresthat are appropriate in the circumstances, but not or the purpose o expressing an opinion on the eectiveness o the entity’sinternal control. An audit also includes evaluating the appropriateness o accounting policies used and the reasonableness oaccounting estimates made by directors, as well as evaluating the overall presentation o the nancial statements.

We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis or our audit opinion. Opinion

In our opinion, the consolidated nancial statements o the Group and the balance sheet and statement o changes in equityo the Company are properly drawn up in accordance with International Financial Reporting Standards so as to give a true and

air view o the state o aairs o the Group and o the Company as at 31 December 2008 and o the results, changes in equityand cash fows o the Group and changes in equity o the Company or the year ended on that date.

Deloitte & Touche LLPPublic Accountant andCertied Public AccountantsSingapore

31 March 2009


BALANCE shEETs31 dECEMBER 2008



See accompanying notes to consolidated nancial statements

THE GROUP THE COMPANY

NOTE 2008 2007 2008 2007US$’000 US$’000 US$’000 US$’000

ASSETS

Current assets:Cash and cash equivalents 7 15,055 39,987 98 22Pledged bank deposits 7 8,616 5,144 1,382 -Trade receivables 8 121,687 88,191 - -Other receivables, deposits and prepayments 9 4,399 8,085 104,651 98,593Other nancial assets at air value

through prot and loss 10 - 1,320 - 1,320Inventories 11 9,112 9,480 - -

Total current assets 158,869 152,207 106,131 99,935

Non-current assets:Property, plant and equipment 12 7,059 6,478 - -Goodwill 13 26,559 26,559 - -Intangible assets 14 27,298 24,933 - -Deposit paid or acquisition

o an investment 15 - 513 - -

Investment in subsidiaries 16 - - 11,534 11,534Interest in a jointly controlled entity 17 528 - - -Available-or-sale investment 18 - 2,227 - -Other nancial assets at air value

through prot and loss 10 - 1,704 - -Deerred tax assets 19 80 32 - -

Total non-current assets 61,524 62,446 11,534 11,534

Total assets 220,393 214,653 117,665 111,469


BALANCE shEETs31 dECEMBER 2008





NOTE 2008 2007 2008 2007

US$’000 US$’000 US$’000 US$’000

LIABILITIES AND EQUITY

Current liabilities:Bank loans 20 7,317 12,566 - -Trust receipt loans 21 3,985 3,142 - -Trade payables 22 10,675 11,874 - -Other payables 23 12,470 11,089 261 184Current portion o nance lease payables 63 60 - -

Total current liabilities 34,510 38,731 261 184

Non-current liabilities:Bank loans 20 - 2,200 - -Finance lease payables 152 217 - -Deerred tax liabilities 19 688 421 - -

840 2,838 - -Capital, reserves and minority interests:

Share capital 24 26,571 23,048 26,571 23,048Share premium 88,496 85,113 88,496 85,113

Contributed surplus 1,534 1,534 1,534 1,534Legal reserve 7 7 - -Foreign currency translation reserve 2,927 2,161 - -Share option reserve 25 1,060 1,511 1,060 1,511Accumulated prots (losses) 63,904 59,515 (257) 79

Equity attributable to equity holderso the Company 184,499 172,889 117,404 111,285

Minority interests 544 195 - -

Total equity 185,043 173,084 117,404 111,285

Total liabilities and equity 220,393 214,653 117,665 111,469


CONsOLIdATEd PROFIT & LOss sTATEMENTFOR ThE YEAR ENdEd 31 dECEMBER 2008




THE GROUP

NOTE 2008 2007

US$’000 US$’000

Revenue 26 172,744 161,552Cost o sales (127,056) (122,108)

Gross prot 45,688 39,444Other operating income 27 690 1,277Distribution costs (11,107) (12,028)Administrative expenses 28 (13,704) (11,588)Other operating expenses 29 (15,251) (5,410)

Share o result o a jointly controlled entity (543) -Finance costs 30 (827) (999)

Prot beore income tax 4,946 10,696Income tax expense 31 (1,367) (1,406)

Prot or the year 32 3,579 9,290

Attributable to:Equity holders o the Company 3,230 9,185Minority interests 349 105

3,579 9,290

Earnings per share (US cents) 34

Basic 0.68 1.99

Diluted 0.68 1.98


sTATEMENTs OF ChANGEs IN EQUITYFOR ThE YEAR ENdEd 31 dECEMBER 2008




AttributableForeign to equity

Contributed Legal currency Share Accumulated holdersShare Share surplus reserve translation option profts o the Minority

capital premium (note i) (note ii) reserve reserve (losses) Company interests Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

GROUP

Balance at 1 January 2007 23,048 85,113 1,534 - 1,501 1,141 52,567 164,904 90 164,994

Currency translationdierence recogniseddirectly in equity - - - - 660 - - 660 - 660

Net proft or the year - - - - - - 9,185 9,185 105 9,290

Total recognised incomeand expense or the year - - - - 660 - 9,185 9,845 105 9,950

Transer - - - 7 - - (7) - - -Recognition o

share-based payments - - - - - 1,159 - 1,159 - 1,159Reversal upon cancellation

o share options - - - - - (789) 789 - - -Dividends (Note 33) - - - - - - (3,019) (3,019) - (3,019)

Balance at31 December 2007 23,048 85,113 1,534 7 2,161 1,511 59,515 172,889 195 173,084

Currency translationdierence recogniseddirectly in equity - - - - 766 - - 766 - 766

Net proft or the year - - - - - - 3,230 3,230 349 3,579

Total recognised incomeand expense or the year - - - - 766 - 3,230 3,996 349 4,345

Issue o shares 3,523 3,653 - - - - - 7,176 - 7,176Transaction costs attributable

to issue o shares - (270) - - - - - (270) - (270)Recognition o

share-based payments - - - - - 708 - 708 - 708

Reversal upon cancellationo share options - - - - - (1,159) 1,159 - - -

Balance at31 December 2008 26,571 88,496 1,534 7 2,927 1,060 63,904 184,499 544 185,043


sTATEMENTs OF ChANGEs IN EQUITYFOR ThE YEAR ENdEd 31 dECEMBER 2008



AttributableForeign to equity

Contributed Legal currency Share Accumulated holdersShare Share surplus reserve translation option profts o the Minority

capital premium (note i) (note ii) reserve reserve (losses) Company interests Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

COMPANY

Balance at 1 January 2007 23,048 85,113 1,534 - - 1,141 (1,405) 109,431 - 109,431Net proft or the year - - - - - - 4,172 4,172 - 4,172Recognition o

share-based payments - - - - - 1,159 - 1,159 - 1,159Reversal upon cancellation

o share options - - - - - (789) 331 (458) - (458)Dividends (Note 33) - - - - - - (3,019) (3,019) - (3,019)

Balance at31 December 2007 23,048 85,113 1,534 - - 1,511 79 111,285 - 111,285

Issue o shares 3,523 3,653 - - - - - 7,176 - 7,176Transaction costs attributable

to issue o shares - (270) - - - - - (270) - (270)Net loss or the year - - - - - - (683) (683) - (683)

Recognition oshare-based payments - - - - - 708 - 708 - 708

Reversal upon cancellation

o share options - - - - - (1,159) 347 (812) - (812)

Balance at31 December 2008 26,571 88,496 1,534 - - 1,060 (257) 117,404 - 117,404

Notes:

(i) Contributed surplus represents the dierence between the underlying net tangible assets o the subsidiaries which were acquiredby the Company as at 31 December 2001 and the nominal amount o the shares issued by the Company under the restructuringexercise in 2002.

(ii) Legal reserve is reserve required by the relevant laws in Macau applicable to the Group’s subsidiary established in Macau.



CONsOLIdATEd CAsh FLOW sTATEMENTFOR ThE YEAR ENdEd 31 dECEMBER 2008



2008 2007US$’000 US$’000

Operating activities:Prot beore income tax 4,946 10,696Adjustments or:

Depreciation expense 3,414 2,506Interest expenses 827 999Allowances or doubtul trade receivables and other receivables 3,109 218Allowances or inventories 152 281Amortisation expense 8,443 3,726Impairment loss on available-or-sale investment 2,227 -

Inventories written o 552 -Imputed interest income on deerred purchase consideration - (30)Fair value change other nancial assets (75) 22Share-based payment expenses 708 1,159Share o results o a jointly controlled entity 543 -Loss on disposal o property, plant and equipment 60 26Interest income (448) (1,122)

Operating cash fows beore movements in working capital 24,458 18,481

(Increase) decrease in trade receivables (34,565) 2,334

Decrease (increase) in other receivables, deposits and prepayments 2,245 (1,212)Increase in inventories (336) (3,819)Decrease in trade payables (1,199) (7,179)Increase in other payables 1,981 3,135

Cash (used in) generated rom operations (7,416) 11,740Income taxes paid (738) (2,455)Interest paid (827) (999)Interest received 448 1,122

Net cash (used in) rom operating activities (8,533) 9,408

Investing activities:Addition to intangible assets (10,808) (13,907)Purchase o property, plant and equipment (4,253) (3,865)Increase in pledged bank deposits (3,472) (364)Acquisition o interests in a jointly controlled entity (1,071) -Payment o deerred consideration or acquisition o subsidiaries (600) (3,870)Advance to a third party (496) (204)Proceeds on disposal o other nancial assets 3,099 600Proceeds on disposal o property, plant and equipment 85 47Repayment rom a third party - 6Deposit paid or acquisition o an investment - (513)

Net cash used in investing activities (17,516) (22,070)



CONsOLIdATEd CAsh FLOW sTATEMENTFOR ThE YEAR ENdEd 31 dECEMBER 2008

2008



2008 2007US$’000 US$’000

Financing activities:Proceeds on issue o shares (net) 6,906 -New bank loans raised 2,957 17,414Increase (decrease) in trust receipt loans 843 (2,613)Repayment o bank loans (10,406) (5,475)Repayment o nance leases (62) (137)Dividend paid - (3,019)

Net cash rom nancing activities 238 6,170

Net decrease in cash and cash equivalents (25,811) (6,492)

Cash and cash equivalents at beginning o year 39,987 45,585

Net eect o exchange rate changes on the balance o cashheld in oreign currencies 879 894

Cash and cash equivalents at end o year 15,055 39,987



NOTEs TO ThE CONsOLIdATEd FINANCIAL sTATEMENTsFOR ThE YEAR ENdEd 31 dECEMBER 2008

1 GENERAL



1. GENERAL

The Company (Registration Number: 31201) was incorporated in Bermuda as an exempted Company with limited liabilityunder the Companies Act 1981 o Bermuda with its registered oce at Canon’s Court, 22 Victoria Street, HamiltonHM 12, Bermuda. Its principal place o business is at 1401 Stanhope House, 738 King’s Road, Quarry Bay, Hong Kong.The Company is listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). The nancial statements areexpressed in United States dollars.

The principal activities o the Company are those o an investment holding Company.

The principal activities o the subsidiaries are described in Note 16.

The consolidated nancial statements o the Group and balance sheet and statement o changes in equity o the

Company or the nancial year ended 31 December 2008 were authorised or issue by the Board o Directors at theirmeeting held on 31 March 2009.

2. FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARD (“IFRS”)

The consolidated nancial statements up to 31 December 2007 were prepared in accordance with Singapore FinancialReporting Standards. With eect rom 1 January 2008, the Group and Company prepare the nancial statementsin accordance with IFRS. The Group and Company have rst-time adopted IFRS and applied retrospectively or theyear ended 31 December 2007. Such adoption has had no material eect on how the results or the current or prioraccounting periods are prepared and presented and accordingly, no disclosures as required by IFRS1 First-Time Adoption

o International Financial Reporting Standards.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis o accounting

The consolidated nancial statements are prepared in accordance with the historical cost basis, except as disclosed inthe accounting policies below, and are drawn up in accordance with IFRS.

During the nancial year, the Group and the Company adopted all the new and revised IFRSs issued by the InternationalAccounting Standards Board and the Interpretations thereo issued by the International Financial Reporting Interpretations

Committee (“IFRIC”) which became eective and are applicable to their operations in the current nancial year. Therevised and/or new International Financial Reporting Standards eective or accounting period beginning on or ater1 January 2008 have no signicant impact on the Group and on the Company.

At the date o authorisation o these nancial statements, the ollowing IFRSs, IFRICs and amendments were issuedbut not eective:

IFRS 8 - Operating SegmentsIFRIC 15 - Agreements or the Construction o Real EstateIFRIC 16 - Hedges o a Net Investment in a Foreign Operation

IFRIC 17 - IFRIC 17 Distributions o Non-cash Assets to OwnersIFRIC 18 - IFRIC 18 Transers o Assets rom Customers




3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued




3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

Basis o consolidation

The consolidated nancial statements incorporate the nancial statements o the Company and entities controlledby the Company (its subsidiaries). Control is achieved where the Company has the power to govern the nancial andoperating policies o an entity so as to obtain benets rom its activities.

The results o subsidiaries acquired or disposed o during the year are included in the consolidated income statementrom the eective date o acquisition or up to the eective date o disposal, as appropriate.

Where necessary, adjustments are made to the nancial statements o subsidiaries to bring their accounting policiesinto line with those used by other members o the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Minority interests in the net assets (excluding goodwill) o consolidated subsidiaries are identied separately rom theGroup’s equity therein. Minority interests consist o the amount o those interests at the date o the original businesscombination (see below) and the minority’s share o changes in equity since the date o the combination. Losses applicableto the minority in excess o the minority’s interest in the subsidiary’s equity are allocated against the interests o theGroup except to the extent that the minority has a binding obligation and is able to make an additional investment tocover its share o those losses.

In the Company’s nancial statements, investments in subsidiaries are carried at cost less any impairment in netrecoverable value that has been recognised in the income statement.

Business combination

The acquisition o subsidiaries is accounted or using the purchase method. The cost o the acquisition is measuredat the aggregate o the air values, at the date o exchange, o assets given, liabilities incurred or assumed, and equityinstruments issued by the Group in exchange or control o the acquiree, plus any costs directly attributable to thebusiness combination. The acquiree’s identiable assets, liabilities and contingent liabilities that meet the conditions orrecognition under IFRS 3 Business Combinations are recognised at their air values at the acquisition date, except ornon-current assets (or disposal groups) that are classied as held or sale in accordance with IFRS 5 Non-Current Assets

Held or Sale and Discontinued Operations, which are recognised and measured at air value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess o the cost othe business combination over the Group’s interest in the net air value o the identiable assets, liabilities and contingentliabilities recognised. I, ater reassessment, the Group’s interest in the net air value o the acquiree’s identiable assets,liabilities and contingent liabilities exceeds the cost o the business combination, the excess is recognised immediatelyin the consolidated income statement.

The interest o minority shareholders in the acquiree is initially measured at the minority’s proportion o the net airvalue o the assets, liabilities and contingent liabilities recognised.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued




Interests in joint ventures

A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity thatis subject to joint control, that is when the strategic nancial and operating policy decisions relating to the activities othe joint venture require the unanimous consent o the parties sharing control.

Joint venture arrangements that involve the establishment o a separate entity in which venturers have joint controlover the economic activity o the entity are reerred to as jointly controlled entities.

The results and assets and liabilities o jointly controlled entities are incorporated in the consolidated nancial statementsusing the equity method o accounting. Under the equity method, investments in jointly controlled entities are carried in

the consolidated balance sheet at cost as adjusted or post-acquisition changes in the Group’s share o the net assetso the jointly controlled entities, less any identied impairment loss. When the Group’s share o losses o a jointlycontrolled entity equals or exceeds its interest in that jointly controlled entity (which includes any long-term intereststhat, in substance, orm part o the Group’s net investment in the jointly controlled entity), the Group discontinuesrecognising its share o urther losses. An additional share o losses is provided or and a liability is recognised onlyto the extent that the Group has incurred legal or constructive obligations or made payments on behal o that jointlycontrolled entity.

Any excess o the cost o acquisition over the Group’s share o the net air value o the identiable assets, liabilitiesand contingent liabilities o the jointly controlled entity recognised at the date o acquisition is recognised as goodwill.The goodwill is included within the carrying amount o the investment and is assessed or impairment as part o theinvestment.

Any excess o the Group’s share o the net air value o the identiable assets, liabilities and contingent liabilities overthe cost o acquisition, ater reassessment, is recognised immediately in the consolidated income statement.

When a Group entity transacts with a jointly controlled entity o the Group, unrealised prots or losses are eliminatedto the extent o the Group’s interest in the jointly controlled entity.

Financial instruments

Financial assets and nancial liabilities are recognised on the Group’s balance sheet when the Group becomes a partyto the contractual provisions o the instrument.

Eective interest method

The eective interest method is a method o calculating the amortised cost o a nancial instrument and o allocatinginterest income or expense over the relevant period. The eective interest rate is the rate that exactly discountsestimated uture cash receipts or payments (including all ees on points paid or received that orm an integral part othe eective interest rate, transaction costs and other premiums or discounts) through the expected lie o the nancialinstrument, or where appropriate, a shorter period. Income and expense is recognised on an eective interest basisor debt instruments other than those nancial instruments “at air value through prot or loss”.






Financial instruments - continued

Financial assets

Investments are recognised and de-recognised on a trade date where the purchase or sale o an investment is undera contract whose terms require delivery o the investment within the timerame established by the market concerned,and are initially measured at air value plus transaction costs, except or those nancial assets classied as at air valuethrough prot or loss which are initially measured at air value.

Other nancial assets are classied into the ollowing specied categories: nancial assets “at air value through protor loss”, “available-or-sale” nancial assets and “loans and receivables”. The classication depends on the nature andpurpose o nancial assets and is determined at the time o initial recognition.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, bank overdrats, and other short-term highlyliquid investments that are readily convertible to a known amount o cash and are subject to an insignicant risk ochange in value.

Financial assets at air value through proft or loss (“FVTPL”)

Financial assets at FVTPL are stated at air value, with any resultant gain or loss recognised in prot or loss. The netgain or loss recognised in prot or loss incorporates any dividend or interest earned on the nancial asset. Fair value is

determined in the manner described in Note 10.

Available-or-sale fnancial assets

Certain shares held by the Group are classied as being available or sale and are stated at air value. Fair value isdetermined in the manner described in Note 18. Gains and losses arising rom changes in air value are recogniseddirectly in the revaluation reserve with the exception o impairment losses and oreign exchange gains and losses onmonetary assets which are recognised directly in prot or loss. Where the investment is disposed o or is determinedto be impaired, the cumulative gain or loss previously recognised in the revaluation reserve is included in prot or lossor the period. Dividends on available-or-sale equity instruments are recognised in prot or loss when the Group’s rightto receive the dividends is established. The air value o available-or-sale monetary assets denominated in a oreign

currency is determined in that oreign currency and translated at the spot rate at reporting date. The change in air valueattributable to translation dierences are recognised in equity.

I the air values o the shares cannot be reasonably and reliably determined, the shares are stated at cost lessimpairment.

Loans and receivables

Trade receivables, loans and other receivables that have xed or determinable payments that are not quoted in an activemarket are classied as “loans and receivables”. Loans and receivables are initially measured at air value and aresubsequently measured at amortised cost using the eective interest method less impairment. Interest is recognised

by applying the eective interest method, except or short-term receivables when the recognition o interest would beimmaterial.







Financial assets - continued

Impairment o fnancial assets

Financial assets, other than those at FVTPL, are assessed or indicators o impairment at each balance sheet date.Financial assets are impaired where there is objective evidence that, as a result o one or more events that occurredater the initial recognition o the nancial asset, the estimated uture cash fows o the nancial asset have beenimpacted.

For nancial assets carried at amortised cost, the amount o the impairment is the dierence between the asset’scarrying amount and the present value o estimated uture cash fows, discounted at the original eective interestrate.

The carrying amount o the nancial asset is reduced by the impairment loss directly or all nancial assets with theexception o receivables where the carrying amount is reduced through the use o an allowance account. When areceivable is uncollectible, it is written o against the allowance account. Subsequent recoveries o amounts previouslywritten o are credited to prot or loss. Changes in the carrying amount o the allowance account are recognised inprot or loss.

With the exception o available-or-sale equity instruments, i, in a subsequent period, the amount o the impairment lossdecreases and the decrease can be related objectively to an event occurring ater the impairment loss was recognised,

the previously recognised impairment loss is reversed through prot or loss to the extent the carrying amount o thenancial asset at the date the impairment is reversed does not exceed what the amortised cost would have been hadthe impairment not been recognised.

In respect o available-or-sale equity instruments, any subsequent increase in air value ater an impairment loss, isrecognised directly in equity.

Derecognition o fnancial assets

The Group derecognises a nancial asset only when the contractual rights to the cash fows rom the asset expire, orit transers the nancial asset and substantially all the risks and rewards o ownership o the asset to another entity. Ithe Group neither transers nor retains substantially all the risks and rewards o ownership and continues to control thetranserred asset, the Group recognises its retained interest in the asset and an associated liability or amounts it mayhave to pay. I the Group retains substantially all the risks and rewards o ownership o a transerred nancial asset,the Group continues to recognise the nancial asset and also recognises a collateralised borrowing or the proceedsreceived.

Financial liabilities and equity instruments

Classifcation as debt or equityFinancial liabilities and equity instruments issued by the Group are classied according to the substance o the contractual

arrangements entered into and the denitions o a nancial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets o the Group ater deducting all oits liabilities. Equity instruments are recorded at the proceeds received, net o direct issue costs.







Financial liabilities and equity instruments - continued

Financial liabilities

Trade and other payables and nance lease payables, are initially measured at air value, net o transaction costs, andare subsequently measured at amortised cost, using the eective interest method, with interest expense recognisedon an eective yield basis.

Interest-bearing bank loans and trust receipt loans are initially measured at air value, and are subsequently measuredat amortised cost, using the eective interest method. Any dierence between the proceeds (net o transaction costs)and the settlement or redemption o borrowings is recognised over the term o the borrowings.

Derecognition o fnancial liabilities

The Group derecognises nancial liabilities when, and only when, the Group’s obligations are discharged, cancelled orthey expire.

Leases

Leases are classied as nance leases whenever the terms o the lease transer substantially all the risks and rewardso ownership to the lessee. All other leases are classied as operating leases.

The Group as lessee

Assets held under nance leases are recognised as assets o the Group at their air value at the inception o the leaseor, i lower, at initially the present value o the minimum lease payments. The corresponding liability to the lessor isincluded in the balance sheet as a nance lease obligation.

Lease payments are apportioned between nance charges and reduction o the lease obligation so as to achieve aconstant rate o interest on the remaining balance o the liability. Finance charges are charged directly to prot or loss.Contingent rentals are recognised as expense in the periods which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the term o the relevant lease.

Benets received and receivable as an incentive to enter into an operating lease are recognised as a reduction o rentalexpense over the lease term on a straight-line basis.

Inventories

Inventories are stated at the lower o cost and net realisable value. Cost comprises direct materials and, where applicable,direct labour costs and those overheads that have been incurred bringing inventories to their present location andcondition. Cost is calculated using the rst-in, rst-out method. Net realisable value represents the estimated sellingprice less all estimated costs o completion and costs necessary to make the sale.






Property, plant and equipment

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

Depreciation is charged so as to write o the cost o assets over their estimated useul lives, using the straight-linemethod. The estimated useul lives, residual values and depreciation method are reviewed at each year end, with theeect o any changes in estimate accounted or on a prospective basis.

Assets held under nance leases are depreciated over their expected useul lives on the same basis as owned assetsor, i there is no certainty that the lessee will obtain ownership by the end o the lease term, the asset shall be ully

depreciated over the shorter o the lease term and its useul lie.

The gain or loss arising on disposal or retirement o an item o property, plant and equipment is determined as thedierence between the sale proceed and the carrying amount o the asset and is recognised in prot or loss.

Goodwill

Goodwill arising on acquisition o subsidiaries represents the excess o the cost o acquisition over the Group’s interestin the net air value o the identiable assets, liabilities and contingent liabilities o the subsidiaries, at the date oacquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulatedimpairment losses.

For the purpose o impairment testing, goodwill is allocated to each o the Group’s cash-generating units expected tobenet rom the synergies o the combination. Cash-generating units to which goodwill has been allocated are testedor impairment annually, or more requently when there is an indication that the unit may be impaired. I the recoverableamount o the cash-generating unit is less than the carrying amount o the unit, the impairment loss is allocated rstto reduce the carrying amount o any goodwill allocated to the unit and then to the other assets o the unit pro-rata onthe basis o the carrying amount o each asset in the unit. An impairment loss recognised or goodwill is not reversedin a subsequent period.

On disposal o a subsidiary, the attributable amount o goodwill is included in the determination o the prot or loss on

disposal.

The Group’s policy or goodwill arising on the acquisition o a jointly controlled entity is described under interest in jointventures above.



I ibl




Intangible assets

An internally-generated intangible asset arising rom development (or rom the development phase o an internal project)is recognised i, and only i, all the ollowing have been demonstrated:

• thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale;

• theintentiontocompletetheintangibleassetanduseorsellit;

• theabilitytouseorselltheintangibleasset;

• howtheintangibleassetwillgenerateprobablefutureeconomicbenets;

• theavailabilityofadequatetechnical,nancialandotherresourcestocompletethedevelopmentandtouseor

sell the intangible asset; and

• theabilitytomeasurereliablytheexpenditureattributabletotheintangibleassetduringitsdevelopment.

The amount initially recognised or internally-generated intangible assets is the sum o the expenditure incurred rom thedate when the intangible asset rst meets the recognition criteria listed above. Where no internally-generated intangibleasset can be recognised, development expenditure is charged to prot or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisationand accumulated impairment losses, on the same basis as intangible assets acquired separately.

Intangible assets acquired separately and with nite useul lives are carried at costs less accumulated amortisation andany accumulated impairment losses. Amortisation or intangible assets with nite useul lives is provided on a straight-line basis over their estimated useul lives. Alternatively, intangible assets with indenite useul lives are carried at costless any subsequent accumulated impairment losses.

(i) Sotware development costs

Costs that are directly associated with the development o identiable and unique sotware products controlled bythe Group and have probable economic benet exceeding the costs beyond one year are recognised as intangibleassets. Direct costs include the sta costs o the sotware development team and an appropriate portion odirect overheads. Costs which enhance or extend perormance o computer sotware programs beyond theiroriginal specications are capitalised and added to the original cost o the sotware. Other sotware developmentcosts are expensed when incurred. Sotware development costs that are capitalised are amortised using thestraight-line method over their useul lives, not exceeding a period o three years.

(ii) Licensing costs

Licensing costs are assets measured initially at cost and amortised commencing the date o relevant commercial

activity, on a straight-line basis over their useul lives, not exceeding a period o three years.



Impairment o tangible and intangible assets excluding goodwill




Impairment o tangible and intangible assets excluding goodwill

At each balance sheet date, the Group reviews the carrying amounts o its tangible and intangible assets to determinewhether there is any indication that those assets have suered an impairment loss. I any such indication exists, therecoverable amount o the asset is estimated in order to determine the extent o the impairment loss (i any). Where itis not possible to estimate the recoverable amount o an individual asset, the Group estimate the recoverable amounto the cash-generating unit to which the asset belongs.

Intangible assets not yet available or use are tested or impairment annually, and whenever there is an indication thatthe asset may be impaired.

Recoverable amount is the higher o air value less costs to sell and value in use. In assessing value in use, theestimated uture cash fows are discounted to their present value using a pre-tax discount rate that refects currentmarket assessments o the time value o money and the risks specic to the asset.

I the recoverable amount o an asset (or cash-generating unit) is estimated to be less than its carrying amount, thecarrying amount o the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognisedimmediately in prot or loss.

Where an impairment loss subsequently reverses, the carrying amount o the asset (cash-generating unit) is increased tothe revised estimate o its recoverable amount, but so that the increased carrying amount does not exceed the carryingamount that would have been determined had no impairment loss been recognised or the asset (cash-generating unit)

in prior years. A reversal o an impairment loss is recognised immediately in prot or loss.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result o a past event, itis probable that the Group will be required to settle the obligation, and a reliable estimate can be made o the amounto the obligation.

The amount recognised as a provision is the best estimate o the consideration required to settle the present obligationat the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provisionis measured using the cash fows estimated to settle the present obligation, its carrying amount is the present valueo those cash fows.

When some or all o the economic benets required to settle a provision are expected to be recovered rom a third party,the receivable is recognised as an asset i it is virtually certain that reimbursement will be received and the amount othe receivable can be measured reliably.



Share-based payments




Share-based payments

The Group issues equity-settled share-based payments to certain directors and employees. Equity-settled share-basedpayments are measured at air value (excluding the eect o non market-based vesting conditions) at the date o grant.Details regarding the determination o the air value o equity-settled share-based transactions are set out in Note 25.The air value determined at the grant date o the equity-settled share-based payments is expensed on a straight-linebasis over the vesting period, based on the Group’s estimate o shares that will eventually vest and adjusted or theeect o non market-based vesting conditions. At each balance sheet date, the Group revises its estimate o the numbero equity instruments expected to vest. The impact o the revision o the original estimates, i any, is recognised inprot or loss overt the remaining vesting period, with a corresponding adjustments to equity-settled employee benetsreserves.

The policy described above is applied to all equity-settled share-based payments that were granted ater 7 November2002 and vested ater 1 January 2005.

Fair value is measured using the Black-Scholes pricing model. The expected lie used in the model has been adjusted,based on management’s best estimate, or the eects o non-transerability, exercise restrictions and behaviouralconsiderations.

Revenue recognition

Revenue is measured at the air value o the consideration received or receivable. Revenue is reduced or estimated

customer returns, rebates and other similar allowances.

Revenue rom sale o goods is recognised when all the ollowing conditions are satised:

• theGrouphastransferredtothebuyerthesignicantrisksandrewardsofownershipofthegoods;

• theGroupretainsneithercontinuingmanagerialinvolvementtothedegreeusuallyassociatedwithownership

nor eective control over the goods sold;

• theamountofrevenuecanbemeasuredreliably;

• itisprobablethattheeconomicbenetsassociatedwiththetransactionwillowtotheGroup;and

• thecostsincurredortobeincurredinrespectofthetransactioncanbemeasuredreliably.

Revenue rom rendering o services that are o a short duration is recognised as and when the services are completed.

Interest income is accrued on a time basis, by reerence to the principal outstanding and at the eective interest rateapplicable.



Retirement beneft costs




Retirement beneft costs

Payments to dened contribution retirement benet plans are charged as an expense as they all due. Payment madeto state-managed retirement benet schemes and dealt with as payments to dened contribution plans where theGroup’s obligations under the plans are equivalent to those arising in a dened contribution retirement benet plan.

Employee leave entitlement

Employee entitlement to annual leave are recognised when they accrue to employees. A provision is made or theestimated liability or annual leave as a result o services rendered by employees up to the balance sheet date.

Taxation

Income tax expense represents the sum o the tax currently payable and deerred tax.

The tax currently payable is based on taxable prot or the year. Taxable prot diers rom the prot as reported in theincome statement because it excludes items o income or expense that are taxable or deductible in other years andit urther excludes items that are not taxable or tax deductible. The Group’s liability or current tax is calculated usingtax rates (and tax laws) that have been enacted or substantively enacted in countries where the Company and thesubsidiaries operate by the balance sheet date.

Deerred tax is recognised on dierences between the carrying amounts o assets and liabilities in the nancial statementsand the corresponding tax bases used in the computation o taxable prot, and is accounted or using the balance sheet

liability method. Deerred tax liabilities are generally recognised or all taxable temporary dierences and deerred taxassets are recognised to the extent that it is probable that taxable prots will be available against which deductibletemporary dierences can be utilised. Such assets and liabilities are not recognised i the temporary dierence arisesrom goodwill or rom the initial recognition (other than in a business combination) o other assets and liabilities in atransaction that aects neither the taxable prot nor the accounting prot.

Deerred tax liabilities are recognised or taxable temporary dierences arising on investments in subsidiaries andjointly-controlled entity, except where the Group is able to control the reversal o the temporary dierence and it isprobable that the temporary dierence will not reverse in the oreseeable uture.

The carrying amount o deerred tax assets is reviewed at each balance sheet date and reduced to the extent that it isno longer probable that sucient taxable prots will be available to allow all or part o the asset to be recovered.

Deerred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or theasset is realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balancesheet date. The measurement o deerred tax liabilities and assets refect the tax consequences that would ollow romthe manner in which the Group expects, at the reporting date, to recover or settle the carrying amount o its assets andliabilities.

Deerred tax assets and liabilities are oset when there is a legally enorceable right to set o current tax assets against

current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intendsto settle its current tax assets and liabilities on a net basis.

Current and deerred tax are recognised as an expense or income in prot or loss, except when they relate to itemscredited or debited directly to equity, in which case the tax is recognised directly in equity.



Borrowing costs




g

All borrowing costs are recognised in prot or loss in the period in which they are incurred.

Foreign currencies

The individual nancial statements o each Group entity are measured and presented in the currency o the primaryeconomic environment in which the entity operates (its unctional currency). The consolidated nancial statements othe Group and the balance sheet and statement o changes in equity o the Company are presented in United Statesdollars, which is the unctional currency o the Company, and the presentation currency or the consolidated nancialstatements.

In preparing the nancial statements o the individual entities, transactions in currencies other than the entity’s unctionalcurrency are recorded at the rates o exchange prevailing on the date o the transaction. At each balance sheet date,monetary items denominated in oreign currencies are retranslated at the rates prevailing on the balance sheet date.Non-monetary items carried at air value that are denominated in oreign currencies are retranslated at the rates prevailingon the date when the air value was determined. Non-monetary items that are measured in terms o historical cost ina oreign currency are not retranslated.

Exchange dierences arising on the settlement o monetary items, and on retranslation o monetary items are includedin prot or loss or the period. Exchange dierences arising on the retranslation o non-monetary items carried at airvalue are included in prot or loss or the period except or exchange dierences arising on the retranslation o non-

monetary items in respect o which gains and losses are recognised directly in equity. For such non-monetary items,any exchange component o that gain or loss is also recognised directly in equity.

For the purpose o presenting consolidated nancial statements, the assets and liabilities o the Group’s oreign operations(including comparatives) are expressed in United States dollars using exchange rates prevailing on the balance sheetdate. Income and expense items (including comparatives) are translated at the average exchange rates or the period,unless exchange rates fuctuated signicantly during that period, in which case the exchange rates at the dates othe transactions are used. Exchange dierences arising, i any, are classied as equity and transerred to the Group’soreign currency translation reserve. Such translation dierences are recognised in prot or loss in the period in whichthe oreign operation is disposed o.

On consolidation, exchange dierences arising rom the translation o the net investment in oreign entities (includingmonetary items that, in substance, orm part o the net investment in oreign entities), and o borrowings andother currency instruments designated as hedges o such investments are taken to the oreign currency translationreserve.

Goodwill and air value adjustments arising on the acquisition o a oreign operation are treated as assets and liabilitieso the oreign operation and translated at the closing rate.


4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application o the Group’s accounting policies, which are described in Note 3, management is required to make




judgements, estimates and assumptions about the carrying amounts o assets and liabilities that are not readily apparentrom other sources. The estimates and associated assumptions are based on historical experience and other actorsthat are considered to be relevant. Actual results may dier rom these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimate is revised i the revision aects only that period, or in the period o therevision and uture periods i the revision aects both current and uture periods.

Critical judgements in applying the entity’s accounting policies

The ollowing are the critical judgements, apart rom those involving estimations (see below), that management hasmade in the process o applying the Group’s accounting policies and that have the most signicant eect on the amountsrecognised in the consolidated nancial statements.

Revenue recognition

For certain telecommunication products, management estimates that 5% o the sales amount relate to installationee. 95% sales amount is recognised when the goods were delivered to the customers and the remaining 5% othe sales amount will be recognised when the installation work is completed and the nal acceptance issued by thecustomers.

In making this judgement, management considered the detailed criteria or the recognition o revenue rom the sale ogoods set out in IAS 18 Revenue and, in particular, whether the Group had transerred to the buyer the signicant risksand rewards o ownership o the goods. The directors are satised that the signicant risks and rewards have beentranserred and that recognition o the revenue is appropriate.

Key sources o estimation uncertainty

The key assumptions concerning the uture, and other key sources o estimation uncertainty at the balance sheet date,that have a signicant risk o causing a material adjustment to the carrying amounts o assets and liabilities within thenext nancial year, are discussed below.

Estimated impairment o trade and other receivablesWhen there is objective evidence o impairment loss, the Group takes into consideration the estimation o uture cashfows. The amount o the impairment loss is measured as the dierence between the asset’s carrying amount and thepresent value o estimated uture cash fows (excluding uture credit losses that have not been incurred) discounted atthe nancial asset’s original eective interest rate. Where the actual uture cash fows are less than expected, a materialimpairment loss may arise. As at 31 December 2008, the carrying amount o trade receivables and other receivablesis US$121.7 million and US$2.1 million (2007 : US$88.2 million and US$4.4 million) respectively.


4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY - continued

Estimated impairment o intangible assets




During the year, the directors evaluated the carrying amount o its intangible assets. The relevant project continues toprogress in a satisactory manner, and customer reaction has reconrmed the directors’ previous estimates o anticipatedrevenues rom the project. Detailed sensitivity analysis has been carried out and the directors are condent that thecarrying amount o the asset will be recovered in ull. This situation will be closely monitored, and adjustments will bemade in uture periods, i uture market activity indicates that such adjustments are appropriate. As at 31 December2008, the carrying amount o intangible assets is US$27.3 million (2007 : US$24.9 million).

Impairment o goodwill

Determining whether goodwill is impaired requires an estimation o the value in use o the cash-generating units to

which goodwill has been allocated. The value in use calculation requires the entity to estimate the uture cash fowsexpected to arise rom the cash-generating unit and a suitable discount rate in order to calculate present value. As at31 December 2008, the carrying amount o goodwill is US$26.6 million (2007 : US$26.6 million).

Fair value o available-or-sale investment

The Group has investment in unquoted equity shares classied as available-or-sale. The available-or-sale investment ismeasured at cost less impairment at each balance sheet date which included some assumptions that are not supportableby observable market prices or rates. Changes in the assumptions will signicantly aect the estimated value o theavailable-or-sale investment. As at 31 December 2008, the carrying value o the available-or-sale investment is US$Nil(2007 : US$ 2.2 million).

5. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

(a) Categories o fnancial instruments

The ollowing table sets out the nancial instruments as at the balance sheet date:


2008 2007 2008 2007US$’000 US$’000 US$’000 US$’000

Financial assetsOther nancial assets - 3,024 - 1,320Loans and receivables

(including cash and cash equivalents) 147,382 137,273 106,131 98,614Available-or-sale investment - 2,227 - -

Financial liabilitiesAmortised cost 30,073 36,461 - -


5. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT - continued

(b) Financial risk management policies and objectives




The Group has risk management policies. These policies set out the Group’s overall business strategies andits risk management philosophy. The risks associated with the Group’s nancial instruments include oreignexchange risk, interest rate risk, credit risk and liquidity risk. The Group’s overall risk management programmeseeks to minimise potential adverse eects o nancial perormance o the Group.

(i) Foreign exchange risk management

The Group transacts business in various oreign currencies, including the United States dollars, HongKong dollars, Macao Pataca, Singapore dollars, Indonesian Rupiah, Korean Won, Malaysia Ringgit andRenminbi and thereore is exposed to oreign exchange risk. The Group does not have a oreign currency

hedging policy. However, management monitors oreign exchange exposure and will consider hedgingsignicant oreign exchange risk should the need arises.

As at the reporting date, as the monetary assets and monetary liabilities o the Group and the Companyare substantially denominated in the respective entities’ unctional currencies which are disclosed inrespective notes to the nancial statements.

The exposure o the Group and Company to oreign currency fuctuations is limited.





(b) Financial risk management policies and objectives - continued

(iii) C dit i k t




(iii) Credit risk management

Credit risk reers to the risk that a counterparty will deault on its contractual obligations resulting in nancialloss to the Group. The Group has adopted a policy o only dealing with creditworthy counterparties as ameans o mitigating the risk o nancial loss rom deaults. The Group’s exposure and the credit ratingso its counterparties are continuously monitored and the aggregate value o transactions concluded isspread amongst approved counterparties. Credit exposure is controlled by the counterparty limits thatare reviewed and approved by management annually.

The credit risk on liquid unds is limited because the counterparties are banks with high credit-ratings

assigned by international credit-rating agencies.

As at 31 December 2008, the Group’s maximum exposure to credit risk which will cause a nancial lossto the Group due to ailure to discharge an obligation by the counterparties and nancial guaranteesprovided by the Group is arise rom:

• thecarryingamountoftherespectiverecognisednancialassetsasstatedinthebalancesheet;

and

• theamountofcontingentliabilitiesinrelationtonancialguaranteeissuedbytheGroupasdisclosed

in Note 36.

In order to minimise the credit risk, management has delegated a team responsible or determination ocredit limits, credit approvals and other monitoring procedures to ensure that ollow-up action is taken torecover overdue debts. In addition, the Group reviews the recoverable amount o each individual tradedebt at each balance sheet date to ensure that adequate impairment losses are made or irrecoverableamounts. In this regard, the directors o the Company consider that the Group’s credit risk is signicantlyreduced. As at 31 December 2008, the Group has ve customers which comprises 75% (2007 : 81%)o the Group’s outstanding trade receivables, which are located in the People’s Republic o China (the“PRC”).

Further details o credit risks on trade receivables are disclosed in Note 8.




(iv) Liquidity risk management




(iv) Liquidity risk management

The Group maintains sucient cash and cash equivalents, and internally generated cash fows to nanceits activities. The Group nances its liquidity through internally generated cash fows, short-term bank loansand trust receipt loans acilities and minimises liquidity risk by keeping committed credit lines available.

Liquidity and interest risk analyses

Non-derivative fnancial liabilities

The table below summarises the maturity prole o the Group’s nancial liabilities at the balance sheetdate based on contractual undiscounted payments.

Weighted Onaverage demand Withineective or within 2 to 5 Ater

interest rate 1 year years 5 years Total

% US$’000 US$’000 US$’000 US$’000

GROUP

2008Non-interest bearing - 18,556 - - 18,556

Finance lease liability (xed rate) 6.07 76 187 - 263Variable interest rate instruments 5.45 11,302 - - 11,302

29,934 187 - 30,121 2007Non-interest bearing - 18,276 - - 18,276Finance lease liability (xed rate) 6.03 74 229 26 329Variable interest rate instruments 4.92 15,708 2,200 - 17,908

34,058 2,429 26 36,513

The Company does not have any signicant non-derivative nancial liabilities or both years.






(v) Fair value o fnancial assets and fnancial liabilities




( ) t b t

The carrying amounts o cash and cash equivalents, trade and other current receivables and payablesand other liabilities approximate their respective air values due to the relatively short-term maturity othese nancial instruments. The air values o other classes nancial assets and liabilities are disclosedin the respective notes to nancial statements.

(c) Capital risk management policies and objectives

The Group monitors capital on the basis o the debt to equity ratio. This ratio is calculated as total liabilitiesdivided by equity. Total liabilities is “liabilities” as shown in the consolidated balance sheet and equity is “equity”

attributable to equity holders o the Company as shown in the consolidated balance sheet.

The debt to equity ratios at 31 December 2008 and 2007 were as ollows:

THE GROUP

2008 2007US$’000 US$’000

Total liability 35,350 41,569Equity 184,499 172,889Debt to equity ratio 0.19 0.24

There is no signicant change in the debt to equity ratio rom 2007.

The Group balances its overall capital structure through the payment o dividends, new share issues as well asthe issuance o new debts on the redemption o existing debt.

The Group’s overall strategy remains unchanged rom 2007.


6. COMPENSATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

The remuneration o directors and other members o key management during the year was as ollows:

THE GROUP




THE GROUP

2008 2007US$’000 US$’000

Short-term benets 1,560 1,446Post-employment benets 63 61

1,623 1,507Share-based payments 193 346

Total 1,816 1,853

The remuneration o directors and key management is determined by the remuneration committee having regard tothe perormance o individuals and market trends.

7. CASH AND CASH EQUIVALENTS AND PLEDGED BANK DEPOSITS


2008 2007 2008 2007US$’000 US$’000 US$’000 US$’000

Cash at banks 15,836 31,697 98 22Fixed deposits 272 8,104 - -Cash on hand 50 186 - -Less: Bank overdrats (1,103) - - -

Total cash and cash equivalents 15,055 39,987 98 22Pledged bank deposits 8,616 5,144 1,382 -

Total 23,671 45,131 1,480 22

Fixed deposits bear average eective interest rate o 3.75% (2007 : 4.18%) per annum and or a tenure o approximately30 days (2007 : 157 days).

At 31 December 2008, bank deposits in the aggregate amount o approximately US$8,616,000 (2007 : US$5,144,000)and US$1,382,000 (2007 : US$Nil) o the Group and Company respectively were pledged to nancial institutions tosecure general banking acilities granted to the Group.

At 31 December 2007, cash and cash equivalents included US$600,000 which had been earmarked to und the paymento deerred consideration pursuant to agreement or the acquisition or subsidiaries.


7. CASH AND CASH EQUIVALENTS AND PLEDGED BANK DEPOSITS - continued

The Group and Company’s cash and bank balances that are not denominated in the unctional currencies o the respective

entities are as ollow:





2008 2007 2008 2007US$’000 US$’000 US$’000 US$’000

United States dollars 1,080 276 - -Singapore dollars 269 148 62 8Hong Kong dollars 222 1,266 - -

8. TRADE RECEIVABLES THE GROUP

2008 2007US$’000 US$’000

Outside parties 124,042 89,972Less: Allowances or trade receivables (2,355) (1,781)

Total 121,687 88,191

The average credit period on sales o goods to telecommunication customers and non-telecommunication customersare 270 days (2007 : 270 days) and 60 days (2007 : 60 days) respectively. No interest is charged on outstanding tradereceivables. The Group reviews the customer’s credit quality regularly and denes credit limits by customer. Theallowance or trade receivables is provided based on management’s estimation or irrecoverable amounts to third partiesater reviewing the aging prole o the customers. The Group has provided ully or all receivables over 360 days andtrade receivables between 60 days and 360 days are provided or based on estimated irrecoverable, determined byreerence to past deault experience.

In determining the recoverability o a trade receivable the Group considers any change in the credit quality o the tradereceivable rom the date credit was initially granted up to the reporting date. Accordingly, the directors believe thatthere is no urther impairment allowance required in excess o the allowance or trade receivables.

O the trade receivable balance at the end o the year, 75% (2007 : 81%) are due rom the Group’s ve largest customerswhich are located in the PRC.

Included in the Group’s trade receivable balance are debtors with a carrying amount o US$13,032,000 (2007 : US$17,399,000)which are past due at the reporting date or which the Group has not provided as there has not been a signicant changein credit quality and the amounts are still considered recoverable. The Group does not hold any collateral over thesebalances. The average age o these receivables is 240 days (2007 : 190 days).


8. TRADE RECEIVABLES - continued

Aging o trade receivables that are past due but not impaired

THE GROUP




THE GROUP

2008 2007US$’000 US$’000

< 3 months 1,929 5,4903 months to 6 months 4,794 6,7726 months to 12 months 6,166 5,137> 12 months 143 -

13,032 17,399

Movement in the allowance or trade receivables

THE GROUP

2008 2007US$’000 US$’000

Balance at the beginning o the year 1,781 1,739Amounts written o/utilised during the year (495) (176)Increase in allowance recognised in prot or loss 1,069 218

Balance at the end o the year 2,355 1,781

The Group’s trade receivables that are not denominated in the unctional currencies o the respective entities are asollows:

THE GROUP

2008 2007US$’000 US$’000

Singapore dollars 111 77

United States dollars 25 -


9. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


2008 2007 2008 2007US$’000 US$’000 US$’000 US$’000




US$ 000 US$ 000 US$ 000 US$ 000

Advance to a third party 1,783 1,287 - -Others (Note) 2,677 3,470 - -Less: Allowance or other receivables (2,353) (313) - -

2,107 4,444 - -Other deposits 1,309 688 - -Prepayments 983 2,953 1 1Advance to subsidiaries (Note 16) - - 104,650 98,592

Total 4,399 8,085 104,651 98,593

Note: “Others” includes receipts collected on the Group’s behal by certain import/export agents.

The advance to subsidiaries are interest-ree and repayable on demand and the average age o these receivables isless than 180 days. The Company has not made any allowance as the directors are o the view that these receivablesare ully recoverable.

Movement in allowance or other receivables

THE GROUP

2008 2007US$’000 US$’000

Balance at the beginning o the year 313 1,080Increase in allowance recognised in prot or loss 2,040 -Amounts written o/utilised during the year - (767)

Balance at the end o the year 2,353 313

The Group’s other receivables that are not denominated in the unctional currencies o the respective entities are asollows:

THE GROUP

2008 2007US$’000 US$’000

Renminbi - 1,047British pound - 974




12. PROPERTY, PLANT AND EQUIPMENT

FurnitureLeasehold and Computer Other ofce

Building improvements fxtures equipment equipment Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000




US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000

THE GROUP

Cost:At 1 January 2007 115 575 1,184 5,940 772 8,586Additions - 113 41 3,653 182 3,989Exchange dierence - 16 13 99 18 146Disposals - (78) (29) (54) (130) (291)

At 31 December 2007 115 626 1,209 9,638 842 12,430Additions - 258 78 3,896 21 4,253Exchange dierence - (17) (255) 95 21 (156)Disposals - (175) (91) (131) (18) (415)

At 31 December 2008 115 692 941 13,498 866 16,112

Accumulated depreciation:At 1 January 2007 17 441 374 2,500 264 3,596Depreciation or the year 11 92 59 2,214 130 2,506Exchange dierence - 12 7 30 19 68

Eliminated on disposals - (72) (16) (51) (79) (218)

At 31 December 2007 28 473 424 4,693 334 5,952Depreciation or the year 11 119 376 2,751 157 3,414Exchange dierence - (10) (84) 44 7 (43)Eliminated on disposals - (175) (11) (71) (13) (270)

At 31 December 2008 39 407 705 7,417 485 9,053 Carrying amount:

At 31 December 2008 76 285 236 6,081 381 7,059

At 31 December 2007 87 153 785 4,945 508 6,478

The carrying amount o the Group’s property, plant and equipment includes an amount o approximately US$196,000(2007 : US$279,000) in respect o assets held under nance leases.

The dierent classes o property, plant and equipment are depreciated on a straight-line basis on the ollowing basis:

Building Over the term o the relevant lease or 25 years, whichever is shorterLeasehold improvements Over the term o the relevant lease o 3 to 5 years

Furniture and xtures 20% to 25% per annumComputer equipment 331 / 3% per annumOther oce equipment 20% to 25% per annum


13. GOODWILL

THE GROUP

US$’000




Cost:At 1 January 2007 27,416Adjustments to air value o measurement o purchase consideration

or acquisition o Packet Systems Pte Ltd (“Packet Systems”) in prior period (857)

At 31 December 2007 and 2008 26,559

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (“CGUs”) that areexpected to benet rom that business combination. Beore impairment testing, the carrying amount o goodwill had

been allocated as ollows:

THE GROUP

2008 2007US$’000 US$’000

Packet Systems 11,874 11,874Lotun Technology Limited 12,071 12,071Equator One Sotware Ltd 2,507 2,507Others 107 107

Total 26,559 26,559

The Group tests goodwill annually or impairment, or more requently i there are indications that goodwill might beimpaired.

The recoverable amounts o the CGUs are determined rom value in use calculations. The key assumptions or thevalue in use calculations are those regarding the discount rates, growth rates and expected changes to selling pricesand direct costs during the period. Management estimates discount rates using pre-tax rates that refect current marketassessments o the time value o money and the risks specic to the CGUs. The growth rates are based on industrygrowth orecasts. Changes in selling prices and direct costs are based on past practices and expectations o uturechanges in the market.

For Packet Systems, the Group prepares cash fows orecasts, taking into consideration o industry growth rate andbased on the most recent nancial budgets approved by directors or the next 1 year and extrapolated or a urther ouryears period using an estimated growth rate o 12% (2007 : 12%). This rate does not exceed the average long-termgrowth rate or the relevant markets.

Other than Packet Systems, the Group prepares cash fows orecasts, taking into consideration o industry growthrate and based on the most recent nancial budgets approved by directors or the next 1 year and extrapolated or aurther our years period using an estimated growth rate o 10% (2007 : 40%). This rate does not exceed the averagelong-term growth rate or the relevant markets.

The rate used to discount the orecast cash fows is 11% (2007 : 6.75%).

At 31 December 2008 and 2007, the recoverable amount o the CGUs is in excess o their respective carrying amounts.Thereore, no impairment loss is required or the year.

Directors believe that any reasonably possible change in any o these key assumptions would not signicantly causethe CGUs’ carrying amounts to exceed the recoverable amounts o these CGUs.


14. INTANGIBLE ASSETS

Sotware

development Licensingcosts costs Total

US$’000 US$’000 US$’000




US$ 000 US$ 000 US$ 000

THE GROUP

Cost:At 1 January 2007 11,946 9,149 21,095Additions 13,907 - 13,907

At 31 December 2007 25,853 9,149 35,002

Additions 10,808 - 10,808At 31 December 2008 36,661 9,149 45,810

Accumulated amortisation:At 1 January 2007 5,371 972 6,343Amortisation or the year 2,680 1,046 3,726

At 31 December 2007 8,051 2,018 10,069Amortisation or the year 5,751 2,692 8,443

At 31 December 2008 13,802 4,710 18,512

Carrying amount:

At 31 December 2008 22,859 4,439 27,298

At 31 December 2007 17,802 7,131 24,933

The intangible assets included above have nite useul lives, over which the assets are amortised. The amortisationperiod or the intangible assets is three years.

The amortisation expense has been included in the line item “other operating expenses” in the consolidated income

statement.

15. DEPOSIT PAID FOR ACQUISITION OF AN INVESTMENT

The amount represented deposit paid or acquisition o a 10% equity interest in Suntop Asia Limited, a private limitedcompany which is engaged in the telecommunication business. During the year, the acquisition was terminated byboth parties and the deposit paid or acquisition will be reundable within one year and is included in “other receivables,deposits and prepayments” in the balance sheet.

The market conditions and nancial perormance o Suntop Asia Limited have deteriorated during the year. Accordingly,

the directors have made ull allowance or the reundable deposit.


16. SUBSIDIARIES

THE COMPANY

2008 2007US$’000 US$’000




Unquoted equity shares, at cost 11,534 11,534

Details o the Company’s subsidiaries as at 31 December 2008 and 31 December 2007 are as ollows:

Country o Proportion oincorporation/ ownership interest

Name o subsidiary operation and voting power held Principal activities

2008 2007% %

Held by the Company

DMX (BVI )Ltd. (b) British Virgin 100 100 Investment holdingIslands (“BVI”)

Nettasking Technology BVI 100 100 Inactive(BVI) Limited (b)

Held by DMX (BVI) Ltd.

BEE Mediasot Limited (b) Hong Kong 100 - Inactive

DMX Technologies Hong Kong 100 100 Note (i)(Hong Kong) Limited (b)

DMX Technologies Sdn Bhd (c) Malaysia 100 100 Note (i)

DMX Technologies, Singapore 100 100 Note (i)

(S’pore) Pte Ltd (a)

DMX Technologies (China) Limited (b) Hong Kong 100 100 Investment holding

DMX Technologies Macau 100 100 Note (i)(Macao Commercial Oshore)Co. Limited (b)

Equator One Pte Limited (a) Singapore 100 100 Note (i)

Lotun Technology Limited (b) Hong Kong 100 100 Trading o broadbandinternet equipmentand network securitysotware

Packet Systems Pte Ltd. (a) Singapore 100 100 Investment holding


16. SUBSIDIARIES - continued

Country o Proportion o

incorporation/ ownership interestName o subsidiary operation and voting power held Principal activities

2008 2007




00% %

Held by DMX Technologies (China) Limited

Beijing DMX Technologies Limited (b) PRC 100 100 Note (i)

Held by Packet Systems Pte Ltd.

DMX Technologies Korea 100 100 Note (i)Korea Co. Ltd. (c)

Packet Systems (Malaysia) Sdn Bhd (c) Malaysia 100 100 Note (i)

PT Packet Systems Indonesia (c) Indonesia 60 60 Note (i)

Note (i): The principal activities o these subsidiaries are the provision, installation consultation, support o broadbandinternet equipment, network security sotware and services, and business sotware system architecturedesign, implementation and delivery.

(a) Audited by Deloitte & Touche LLP, Singapore(b) Audited by overseas practices o Deloitte Touche Tohmatsu(c) Audited by other auditors


17. INTEREST IN A JOINTLY CONTROLLED ENTITY

2008 2007

US$’000 US$’000

Unquoted equity shares, at cost 1,071 -




Share o post-acquisition loss (543) -

528 -

As at 31 December 2008, the Group had interest in the ollowing jointly controlled entity:

Place/ Principal Proportion oCountry o place o ownership interest

Name o entity incorporation operation power held Principal activity

Beijing Baustern PRC PRC 55% Provision o researchIno-Tech Ltd. (a) (Note) and development o(“Beijing Baustern”) technologies or the

digital media market

(a) Reviewed by overseas practices o Deloitte Touche Tohmatsu.

Note: The directors are o view that the above is a jointly controlled entity and is to be equity accounted or the ollowing

reasons:

i) although Beijing DMX Technologies Limited appointed three out o the ve directors in the board, more than 2/3 othe directors are required to approve major events;

ii) while Beijing DMX Technologies Limited is mainly responsible or sales and marketing unction, and other joint ventureparty is responsible or the production using the know-how that they have invested at air value, on the developmento new generation conditional access technologies or the digital market; and

iii) the daily operations are administered by a general manager appointed by the other joint venture party.

The nancial inormation in respect o the Group’s interest in the jointly controlled entity which are accounted or using

the equity method is set out below:

2008 US$’000

Current assets 203

Non-current assets 1,210

Current liabilities (135)

2008 US$’000

Income 150

Expenses 1,137


18. AVAILABLE-FOR-SALE INVESTMENT

THE GROUP

2008 2007US$’000 US$’000




Unquoted equity shares, at cost 2,227 2,227Less: impairment loss (2,227) -

- 2,227

As at 31 December 2008, the Group holds 19.9% (2007 : 19.9%) interest in Complete TV Limited.

The above available-or-sale investment is measured at cost less impairment at each balance sheet date because the

range o reasonable air value estimates is so signicant that the directors o the Group are o the opinion that their airvalue cannot be measured reliably.

The market conditions and nancial perormance o Complete TV Limited have deteriorated during the year. Accordingly,the directors have made ull impairment or the investment.

The Group’s available-or-sale investment is denominated in British pound.

19. DEFERRED (ASSETS) LIABILITIES

THE GROUP

2008 2007US$’000 US$’000

Deerred tax assets (80) (32)Deerred tax liabilities 688 421

608 389The movements or the year in deerred tax position were as ollows:

THE GROUP

Accelerated Othertax timing Tax

deprecation dierences * losses Total

US$’000 US$’000 US$’000 US$’000

At 1 January 2007 354 4 (215) 143Charge (credit) to prot or loss or the year (Note 31) 354 (323) 215 246

At 31 December 2007 708 (319) - 389Charge to prot or loss or the year (Note 31) 227 14 - 241

Eect o change in tax rate (39) 17 - (22)At 31 December 2008 896 (288) - 608

* Other timing dierences relate mainly to allowances or doubtul debts.


20. BANK LOANS

THE GROUP

2008 2007US$’000 US$’000

B k l 7 317 14 766




Bank loans 7,317 14,766Less: Amount due or settlement within twelve months

(shown under current liabilities) (7,317) (12,566)

Amount due or settlement ater twelve months (within 2 to 5 years) - 2,200

The bank loans are unsecured, bear foating interest ranging rom 3.42% to 8.28% (2007 : 4.25% to 8.88%) per annum.

The Group’s bank loans that are not denominated in the unctional currencies o the respective entities are asollows:

THE GROUP

2008 2007US$’000 US$’000

United States dollars 2,957 -Korean Won - 241Hong Kong dollars - 2,924

Directors are o the view that the carrying amount o the bank loans approximates their air value.

The bank loans are secured by pledged deposits o approximately US$8,616,000 (2007 : US$5,144,000) and US$1,382,000(2007 : US$Nil) o the Group and Company respectively (Note 7).

21. TRUST RECEIPT LOANS

At 31 December 2008, the trust receipt loans are secured by bank deposits o US$8,616,000 (2007 : US$5,144,000)(Note 7), bear foating interest ranging rom 2.3% to 6.0% (2007 : 7.25% to 8.25%) per annum and are denominatedin United States dollars.


22. TRADE PAYABLES

THE GROUP

2008 2007US$’000 US$’000




Outside parties 10,675 11,874

The average credit period on purchases o goods is 60 days (2007 : 60 days). No interest is charged on the outstandingbalances.

Trade creditors principally comprise amounts outstanding or trade purchases and ongoing costs.

The Group’s trade payables that are not denominated in the unctional currencies o the respective entities are asollows:

THE GROUP

2008 2007US$’000 US$’000

United States dollars 4,472 -Hong Kong dollars - 510

23. OTHER PAYABLES THE GROUP THE COMPANY

2008 2007 2008 2007US$’000 US$’000 US$’000 US$’000

Deerred purchase consideration - 600 - -Accrued expenses 4,124 4,288 261 184Other payables 8,346 6,201 - -

12,470 11,089 261 184

The Group’s and Company’s other payables are substantially denominated in the unctional currencies o the respectiveentities.

As at 31 December 2007, other payables included deerred purchase consideration o US$600,000 or the acquisitiono subsidiaries in previous years, which was subject to adjustments depending on the level o actual prots achievedin the subsequent nancial years. The consideration was settled by way o cash during the year.


24. SHARE CAPITAL

GROUP AND COMPANY

2008 2007 2008 2007Number o ordinary US$’000 US$’000

shares o US$0.05 each (‘000)




Authorised:

At the beginning o year 600,000 600,000 30,000 30,000Increase on 30 April 2008 900,000 - 45,000 -

At the end o year 1,500,000 600,000 75,000 30,000

Issued and paid up:

Ordinary shares o US$0.05 eachAt the beginning o year 460,960 460,960 23,048 23,048Shares issued during the year (Note) 70,450 - 3,523 -

At the end o year 531,410 460,960 26,571 23,048

Note: On 22 October 2008, the Company completed the rights issue by issuing 70,450,082 ordinary shares o US$0.05each on the basis o one rights share or every two existing shares held on 25 September 2008, at an exerciseprice o S$0.15 (equivalent to US$0.1019) per share.

25. SHARE - BASED PAYMENT

Equity - settled share option scheme:

A share option scheme was adopted by the Company pursuant to a resolution passed on 12 November 2002 (the “Scheme”).The board o directors o the Company may grant options to any eligible director and employee o the Group to subscribeor shares in the Company.

The options under the Scheme grant the right to the holder to subscribe or new ordinary shares o the Company at adiscount to market price o the share (subject to a maximum limit o 20%) or at a price equal to the average o the closingprices o the shares on the SGX-ST on the ve trading days immediately preceding the date o the grant o the option.The maximum number o shares in respect o which options may be granted under the Scheme shall not exceed 15%

o the issued share capital o the Company on the date preceding the date o the relevant grant. The vesting period is1 year. Once the options are vested, they are exercisable or a contractual option term o 10 years.

Each option grants the holder the right to subscribe or one ordinary share o US$0.05 each in the Company.The options granted may be exercised in ull or in part thereo. The holders do not have the right to participate by virtueo the options in any share issue o other companies in the Group. Options granted are cancelled when the holder isno longer a ull-time employee o the Company or any corporations in the Group subject to certain exceptions at thediscretion o the Remuneration Committee.

The above share option scheme is administered by a Remuneration Committee which has been authorised to determine

the terms and conditions o the grant o the options.


25. SHARE - BASED PAYMENT - continued

Details o the share options outstanding during the year are as ollows:

THE GROUP AND COMPANY

2008 2007

Number Weighted Number Weighted




g gof average o average

share exercise share exerciseoptions price options price

S$ S$

Outstanding at the beginning o the year 19,075,000 0.60 8,789,000 0.92Granted during the year 38,000,000 0.16 18,000,000 0.575

Adjustment (Note) 2,240,257 0.29 -Cancelled during the year (16,068,000) 0.575 (7,714,000) 0.89 Outstanding at the end o the year 43,247,257 0.20 19,075,000 0.60

Exercisable at the end o the year 3,327,677 3,007,000

The option outstanding at the end o the year have a weighted average remaining contractual lie o 9 years (2007 : 8 years).

Note: The number and exercise price o the share options were adjusted as a result o the completion o a right issue

in the proportion o one right share or every two existing shares held on 25 September 2008. The exerciseprices shown above represent the adjusted exercise prices as at 31 December 2008.

The estimated air values o the options granted on 25 April 2008 and 28 November 2008 (2007 : 4 May 2007) wereapproximately US$1,329,000 and US$674,000 respectively (2007 : US$2,610,000).

The air value or share options granted during the year were calculated using the Black-Scholes pricing model. Theinputs into the model were as ollows:

2008 2007

Grant date share price (S$) 0.25 0.09 0.605Exercise price (S$) 0.226 0.093 0.575Expected volatility 44.93% 63.04% 39%Expected lie 5.5 years 5.5 years 4.75 yearsRisk ree rate 1.93% 1.53% 2.52%Expected dividend yield - - - Expected volatilities were determined by calculating the historical volatility o the Company’s share price over the previous780 days and 932 days or the options granted on 25 April 2008 and 28 November 2008 respectively. The expected

lie used in the model has been adjusted, based on management’s best estimate, or the eects o non-transerability,exercise restrictions and behavioural considerations.

The Group and the Company recognised total expenses o US$708,000 (2007 : US$1,159,000) related to equity-settledshare-based payment transactions during the year.


26. REVENUE

THE GROUP

2008 2007US$’000 US$’000

Sale o goods 162,734 156,332




g ,Service income 10,010 5,220

Total 172,744 161,552

27. OTHER OPERATING INCOME

THE GROUP

2008 2007US$’000 US$’000

Interest income rom bank deposits 448 1,122Others 242 155

Total 690 1,277

28. ADMINISTRATIVE EXPENSES

THE GROUP

2008 2007US$’000 US$’000

Sta costs (including directors’ remuneration) 4,639 5,032Depreciation expense 3,414 2,506Oce rental expenses 1,310 1,046Other expenses 4,341 3,004

Total 13,704 11,588

29. OTHER OPERATING EXPENSES

THE GROUP

2008 2007US$’000 US$’000

Allowance or doubtul trade and other receivables 3,109 218Allowance or inventories 152 281Amortisation expense 8,443 3,726Impairment loss on available-or-sale investment 2,227 -Share-based payment expenses 708 1,159Inventories written o 552 -

Loss on disposal o property, plant and equipment 60 26

15,251 5,410


30. FINANCE COSTS

THE GROUP

2008 2007US$’000 US$’000

Interest expense on:




- obligations under nance leases 15 20- bank loans, trust receipt loans and bank overdrats 812 979

827 999

31. INCOME TAX EXPENSE

THE GROUP 2008 2007

US$’000 US$’000

The income tax charge comprises:

Current tax 1,169 1,006Deerred tax (Note 19)

- Current year 241 246- Attributable to a change in tax rate (22) -

(Over) under provision in prior years (21) 154

1,367 1,406

On 26 June 2008, the Hong Kong Legislative Council passed the Revenue Bill 2008 which reduced corporate prots taxrate rom 17.5% to 16.5% eective rom the year o assessment 2008 and 2009. Thereore, income tax is calculatedat Hong Kong Prots Tax o 16.5% (2007 : 17.5%) o the estimated assessable prots or the year.

Income tax expense arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

The tax charge or the year can be reconciled to the accounting prot as ollows:

2008 2007US$’000 US$’000

Prot beore income tax 4,946 10,696

Tax at Hong Kong Prots Tax o 16.5% (2007 : 17.5%) 816 1,872Tax eect o non-taxable income (92) (240)Tax eect o non-deductible expenses 1,640 2,112Eect o dierent tax rates o subsidiaries operating in other jurisdictions (1,084) (2,515)(Over) under provision in prior years (21) 154

Eect on deerred tax balance due to the change in income tax rate (22) -Others 130 23

Tax charge or the year 1,367 1,406


32. PROFIT FOR THE YEAR

THE GROUP

2008 2007US$’000 US$’000

Prot or the year has been arrived at ater charging (crediting):




Depreciation and amortisation:Depreciation expense 3,414 2,506Amortisation expense 8,443 3,726

Total depreciation and amortisation 11,857 6,232

Director’s ee 92 92

Directors’ remuneration:- o the Company 748 381- o the Subsidiaries 812 1,065

Total directors’ remuneration 1,560 1,446

Employee benets expense (including directors’ remuneration)Share-based payments - Equity settled 708 1,159Dened contribution plans 709 742

Salaries 11,289 12,107Total employee benets expense 12,706 14,008

Allowances or doubtul trade receivables and other receivables 3,109 218Allowances or inventories 152 281Inventories written o 552 -Impairment loss on available-or-sale equity investment 2,227 -Cost o inventories recognised as expense 127,056 122,108Net oreign exchange loss (gain) 1,307 (198)Loss on disposal o property, plant and equipment 60 26

Fair value change o other nancial assets (75) 22Non-audit ees:

- paid to auditor o the Company 2 -- paid to other auditors 3 6

33. DIVIDENDS

For the year ended 31 December 2007, a dividend o 0.65 US cents per share (total dividend o US$3,019,000) waspaid to shareholders.


34. EARNINGS PER SHARE

THE GROUP

2008 2007 Basic Diluted Basic Diluted

US$’000 US$’000 US$’000 US$’000

P t th tt ib t bl t




Prot or the year attributable toequity holders o the Company 3,230 3,230 9,185 9,185

No. of shares No. o shares

‘000 ‘000

Weighted average number o ordinary shares 474,627 474,627 460,960 460,960Adjustment or potential dilutive ordinary shares - - - 2,396

Weighted average number o ordinary sharesused to compute earnings per share 474,627 474,627 460,960 463,356

Earnings per share (US cents) 0.68 0.68 1.99 1.98

The potential ordinary shares attributable to the Company’s outstanding share options has anti-dilutive eect or currentperiod because the exercise price o share options outstanding was higher than the average market price or shares

or 2008.

35. NON-CASH TRANSACTIONS

During the year ended 31 December 2007, the Group had the ollowing non-cash transactions:

(a) Additions to plant and equipment amounting to US$124,000 were nanced by new nance lease.

(b) Additions to available-or-sale investment amounting to US$2,227,000 were settled by advance rom a thirdparty.

36. CONTINGENT LIABILITIES

THE GROUP

2008 2007US$’000 US$’000

Corporate guarantee given to a bank in respect o

banking acilities granted to a third party, unsecured 579 -


37. COMMITMENTS

THE GROUP

2008 2007US$’000 US$’000

Commitments or the acquisition o unquoted equity interest - 4,500Commitments or the additional investment in a jointly controlled entity 387 -




Commitments or the additional investment in a jointly controlled entity 387 -

387 4,500

38. OPERATING LEASE ARRANGEMENTS

THE GROUP

2008 2007US$’000 US$’000

Minimum lease payments paid under operating leases

recognised as an expense in the year 1,310 1,046

At the balance sheet date, the Group has outstanding commitment under non-cancellable operating leases, which alldue as ollows:

2008 2007US$’000 US$’000

Within one year 769 1,129In the second to th year inclusive 563 793

Total 1,332 1,922

Operating lease payments represent rentals payable by the Group or certain o its oce properties. Leases are negotiatedand rentals are xed or an average term o two to three years.

39. RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosedin this note.

During the year, the Group entered into the ollowing transaction with a related party:

THE GROUP

2008 2007US$’000 US$’000

Purchase o goods

A jointly controlled entity 150 -




40. GEOGRAPHICAL AND BUSINESS SEGMENT INFORMATION - continued

Inrastructure Managed Digital media Multi-media

solution services solution sotware TotalUS$’000 US$’000 US$’000 US$’000 US$’000

2007




REVENUE

External revenue 120,609 5,220 28,308 7,415 161,552

RESULTSegment result 20,176 3,694 5,659 5,623 35,152Unallocated other operating income 1,277Unallocated corporate expenses (24,734)Finance costs (999)

Prot beore income tax 10,696Income tax expense (1,406)

Prot or the year 9,290

ASSETSSegment assets 108,348 988 30,863 17,132 157,331

Unallocated corporate assets 57,322Consolidated total assets 214,653

LIABILITIESSegment liabilities 16,457 948 2,777 - 20,182Unallocated corporate liabilities 21,387

Consolidated total liabilities 41,569

Inormation on depreciation, capital additions and other non-cash expenses were not disclosed as it is impracticable toallocate to each o the primary business segments given the nature o the business.


40. GEOGRAPHICAL AND BUSINESS SEGMENT INFORMATION - continued

Geographical segments

The ollowing table provides an analysis o the Group’s sales by geographical market, irrespective o the origin o thegoods/services:

Revenue

2008 2007




US$’000 US$’000

China (including Hong Kong and Macao) 122,285 117,140Non-China 50,459 44,412

172,744 161,552

The ollowing is an analysis o the carrying amount o segment assets, additions to property, plant and equipment andadditions to intangible assets, analysed by the geographical area in which the assets are located:

Carrying Additionsamount o to property, plant Additions to

segment assets and equipment intangible assets

2008 2007 2008 2007 2008 2007US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

China

(including Hong Kong and Macao) 179,633 145,022 3,558 3,015 10,808 10,244Non-China 40,760 69,631 695 974 - 3,663

220,393 214,653 4,253 3,989 10,808 13,907


In the opinion o the directors, the consolidated nancial statements o the Group and the balance sheet and statement ochanges in equity o the Company as set out on pages 52 to 103 are drawn up so as to give a true and air view o the stateo aairs o the Group and o the Company as at 31 December 2008, and o the results, changes in equity and cash fows o

the Group and changes in equity o the Company or the nancial year then ended and at the date o this statement, there arereasonable grounds to believe that the Company will be able to pay its debts when they all due.

sTATEMENT OF dIRECTORs



On behal o the Board o Directors

Emmy Wu Jismyl Teo Chor Khin

Hong Kong31 March 2009


sTATIsTICs OF shAREhOLdINGsAs AT 16 MARCh 2009

Authorised share capital : US$75,000,000.00Issued and ully paid-up capital : US$26,570,509.00Total no. o issued shares

excluding treasury shares : 531,410,184Total no. o treasury shares : NilClass o shares : Ordinary share o US$0.05 eachVoting rights : One vote per share



DISTRIBUTION OF SHAREHOLDINGS

No. oSize o Shareholdings Shareholders % No. o Shares %

1 - 999 16 0.42 5,091 0.001,000 - 10,000 1,788 46.94 12,612,524 2.3710,001 - 1,000,000 1,973 51.80 106,043,088 19.961,000,001 AND ABOVE 32 0.84 412,749,481 77.67

TOTAL 3,809 100.00 531,410,184 100.00

TWENTY LARGEST SHAREHOLDERS

No. Name No. o Shares %

1 VENTURE CORPORATION LIMITED 142,500,000 26.822 UOB KAY HIAN PTE LTD 75,717,975 14.253 CIMB BANK NOMINEES (S) SDN BHD 34,733,647 6.544 HSBC (SINGAPORE) NOMINEES PTE LTD 24,169,196 4.555 WATERWORTH PTE LTD 19,000,000 3.586 DBS NOMINEES PTE LTD 15,444,600 2.917 NEO AIK SOO 10,620,000 2.008 LIM & TAN SECURITIES PTE LTD 10,052,667 1.899 OCBC SECURITIES PRIVATE LTD 9,934,000 1.8710 VIBRANT CAPITAL PTE LTD 8,900,000 1.67

11 SUNFIELD PTE LTD 7,000,000 1.3212 KIM ENG SECURITIES PTE. LTD. 5,543,000 1.0413 CITIBANK NOMINEES SINGAPORE PTE LTD 5,532,500 1.0414 CIMB-GK SECURITIES PTE. LTD. 4,980,000 0.9415 CHAN CHI KWONG STANLEY 4,724,000 0.8916 DBS VICKERS SECURITIES (S) PTE LTD 3,166,000 0.6017 HONG LEONG FINANCE NOMINEES PTE LTD 3,145,000 0.5918 HL BANK NOMINEES (S) PTE LTD 3,111,000 0.5919 CITIBANK CONSUMER NOMINEES PTE LTD 2,703,000 0.5120 PHILLIP SECURITIES PTE LTD 2,499,000 0.47

TOTAL 393,475,585 74.07


sTATIsTICs OF shAREhOLdINGsAs AT 16 MARCh 2009

SUBSTANTIAL SHAREHOLDERS

Substantial shareholders o the Company (as recorded in the Register o Substantial Shareholders)as at 16 March 2009

No. o Ordinary shares o US$0.05 each

Name Direct Interest % Indirect Interest %

Venture Corporation Limited 142 500 000 26 82%



Venture Corporation Limited 142,500,000 26.82%Fast Worth Management Limited 30,267,295 5.70%Group Equity International Limited 34,133,647 6.42%Jim Cheung Chung Wah 30,267,295 1 5.70%Jismyl Teo Chor Khin 1,875,000 0.35% 55,167,967 2 10.38%Emmy Wu 1,125,000 0.21% 43,283,647 3 8.15%

Aegis Portolio Managers Pte Ltdand Aegis Private Capital Pte Ltd 32,800,000 4 6.17%

Notes :

1. Mr Jim Cheung Chung Wah is deemed to be interested in the 30,267,295 shares held by Fast Worth ManagementLimited (“FWML”) by virtue o the act that he is the sole shareholder o FWML.

2. Ms Jismyl Teo Chor Khin is deemed to be interested in the 21,034,320 shares held by Eagle One Consultants Limited(“EOCL”) and 34,133,647 shares held by Group Equity International Limited (“GEIL”) by virtue o the act that she isthe sole shareholder and joint shareholder in EOCL and GEIL respectively.

3. Mr Emmy Wu is deemed to be interested in 9,150,000 shares held by Hubbard Management Limited (“HML”) and34,133,647 shares held by Group Equity International Ltd (“GEIL”) by virtue o the act that he is the sole shareholderand joint shareholder in HML and GEIL.

4. Aegis Portolio Managers Pte Ltd and Aegis Private Capital Pte Ltd is ull discretion und management companies andare deemed to be interested in the 32,800,000 shares held on behal o their clients.

FREE FLOAT

As at 16 March 2009, approximately 49% o the issued share capital o the Company was held in the hands o the public(on the basis o inormation available to the Company.


NOTICE OF ANNUAL GENERAL MEETINGdMX TEChNOLOGIEs GROUP LIMITEd

(INCORPORATED IN BERMUDA)

NOTICE IS HEREBY GIVEN that the Annual General Meeting o DMX Technologies Group Limited (the “Company”) will beheld at Amara Hotel Singapore, Level 3, Connection 1, 165 Tanjong Pagar Road, Singapore 088539 on Thursday, 30 April 2009at 10.30 a.m. or the ollowing purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and Audited Accounts o the Company or the nancial year ended 31December 2008 together with the Auditors’ Report thereon. (Resolution 1)



2. To re-elect Mr Jim Cheung Chung Wah, who is retiring pursuant to Bye-law 104 o the Bye-laws o the Company. (Resolution 2)

Mr Jim Cheung Chung Wah will, upon re-election as a director of the Company, remain as the member of the Audit

Committee and Remuneration Committee.

3. To re-elect Mr Foo Meng Tong, who is retiring pursuant to Bye-law 104 o the Bye-laws o the Company. (Resolution 3)

Mr Foo Meng Tong will, upon re-election as a director of the Company, remain as the chairman of the Audit Committee

and Nominating Committee and member of the Remuneration Committee and will be considered independent for the

purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

4. To approve the payment o Directors’ ees o S$124,190/- or the nancial year ended 31 December 2008 (2007:S$124,190/-). (Resolution 4)

5. To re-appoint Messrs Deloitte & Touche LLP as the Company’s Auditors and to authorise the Directors to x theirremuneration. (Resolution 5)

6. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and i thought t, to pass the ollowing resolutions as Ordinary Resolutions, with or without any modications:

7. Authority to allot and issue shares up to ty per cent (50%) o total number o issued shares excluding treasury shareso the Company – Ordinary Resolution

“That authority be and is hereby given to the Directors o the Company to:

(a) (i) issue ordinary shares in the capital o the Company (“Shares”) whether by way o rights, bonus orotherwise; and/or

(ii) make or grant oers, agreements or options (collectively, “Instruments”) that might or would requireShares to be issued, including but not limited to the creation and issue o (as well as adjustments to)

warrants, debentures or other instruments convertible into Shares,

at any time and upon such terms and conditions and or such purposes and to such persons as the Directorsmay in their absolute discretion deem t; and




(b) (notwithstanding the authority conerred by this Resolution 6 may have ceased to be in orce) issue Shares inpursuance o any Instrument made or granted by the Directors while this Resolution 6 was in orce,

provided that:

(1) the aggregate number o Shares to be issued pursuant to this Resolution 6 (including Shares to be issued inpursuance o Instruments made or granted pursuant to this Resolution 6) does not exceed 50% o the issuedShares (excluding treasury shares) in the capital o the Company (as calculated in accordance with sub-paragraph(2) below) o which the aggregate number o Shares to be issued other than on a pro rata basis to shareholders



(2) below), o which the aggregate number o Shares to be issued other than on a pro rata basis to shareholderso the Company (including Shares to be issued in pursuance o Instruments made or granted pursuant to thisResolution 6) does not exceed 20% o the issued Shares (excluding treasury shares) in the capital o the Company(as calculated in accordance with paragraph (2) below); and

(2) (subject to such manner o calculation as may be prescribed by Singapore Exchange Securities Trading Limited(“SGX-ST”), or the purpose o determining the aggregate number o Shares that may be issued under paragraph(1) above, the percentage o issued Shares (excluding treasury shares) shall be based on the number o issuedShares (excluding treasury shares) in the capital o the Company at the time this Resolution 6 is passed, ateradjusting or:

(i) new Shares arising rom the conversion or exercise o any convertible securities or share options or vestingo share awards which are outstanding or subsisting at the time this Resolution 6 is passed; and

(ii) any subsequent bonus issue, consolidation or sub-division o Shares;

(3) in exercising the authority conerred by this Resolution 6, the Company shall comply with the requirementsimposed by the SGX-ST rom time to time and the provisions o the Listing Manual o the SGX-ST or the timebeing in orce (in each case, unless such compliance has been waived by the SGX-ST), all applicable legalrequirements under the Companies Act 1981 o Bermuda (“Companies Act”) and otherwise, and the Bye-Lawsor the time being o the Company; and

(4) (unless revoked or varied by the Company in general meeting) the authority conerred by this Resolution 6shall continue in orce until the conclusion o the next Annual General Meeting o the Company or the date bywhich the next Annual General Meeting o the Company is required by law to be held, whichever is the earlier.”[See Explanatory Note (i)]

(Resolution 6)


8. Authority to allot and issue shares up to one hundred per cent. (100%) o the total number o issued shares excludingtreasury shares o the Company on a pro rata basis by way o a renounceable issue – Ordinary Resolution

“That authority be and is hereby given to the Directors o the Company to:

(a) (i) issue Shares whether by way o rights, bonus or otherwise; and/or

(ii) make or grant Instruments that might or would require Shares to be issued, including but not limited tothe creation and issue o (as well as adjustments to) warrants debentures or other instruments convertible





the creation and issue o (as well as adjustments to) warrants, debentures or other instruments convertibleinto Shares,

at any time and upon such terms and conditions and or such purposes and to such persons as the Directorsmay in their absolute discretion deem t; and

(b) (notwithstanding the authority conerred by this Resolution 7 may have ceased to be in orce) issue Shares inpursuance o any Instrument made or granted by the Directors while this Resolution 7 was in orce,

provided that:

(1) the aggregate number o Shares to be issued pursuant to this Resolution 7 on a pro rata basis to shareholderso the Company by way o a renounceable issue (other than a bonus issue) (including Shares to be issued inpursuance o Instruments made or granted pursuant to this Resolution 7) does not exceed 100% (or such otherlimit permitted by the SGX-ST rom time to time) o the issued Shares (excluding treasury shares) in the capitalo the Company (as calculated in accordance with sub-paragraph (2) below), and in determining whether such100% limit has been reached, all Shares to be issued pursuant to this Resolution 7 or Resolution 6 (includingShares to be issued in pursuance o Instruments made or granted pursuant to this Resolution 7 or Resolution 6)shall be taken into account (unless the SGX-ST’s prevailing regulations and requirements otherwise provide);

(2) (subject to such manner o calculation as may be prescribed by the SGX-ST), or the purpose o determining theaggregate number o Shares that may be issued under paragraph (1) above, the percentage o issued Shares(excluding treasury shares) shall be based on the number o issued Shares (excluding treasury shares) in thecapital o the Company at the time this Resolution 7 is passed, ater adjusting or:

(i) new Shares arising rom the conversion or exercise o any convertible securities or share options or vesting

o share awards which are outstanding or subsisting at the time this Resolution 7 is passed; and

(ii) any subsequent bonus issue, consolidation or sub-division o Shares;

(3) in exercising the authority conerred by this Resolution 7, the Company shall comply with the requirementsimposed by the SGX-ST rom time to time and the provisions o the Listing Manual o the SGX-ST or the timebeing in orce (in each case, unless such compliance has been waived by the SGX-ST), all applicable legalrequirements under the Companies Act and otherwise, and the Bye-Laws or the time being o the Company;and

(4) (unless revoked or varied by the Company in general meeting) the authority conerred by this Resolution 7shall continue in orce until the conclusion o the next Annual General Meeting o the Company or the date bywhich the next Annual General Meeting o the Company is required by law to be held, whichever is the earlier.”[See Explanatory Note (ii)]

(Resolution 7)


9. Authority to allot and issue shares on a non-pro rata basis at a discount exceeding 10% but not more than 20% – OrdinaryResolution

“That without prejudice to the generality o, and pursuant and subject to the approval o the general mandate to issueShares set out in Resolution 6, authority be and is hereby given to the Directors o the Company to issue Shares ona non-pro rata basis to shareholders o the Company, at a discount to the weighted average price o the Shares ortrades done on the SGX-ST or the ull market day on which the placement or subscription agreement is signed (or inot available, the weighted average price based on the trades done on the preceding market day), exceeding 10% butnot more than 20% at any time and upon such terms and conditions and or such purposes and to such persons as





not more than 20%, at any time and upon such terms and conditions and or such purposes and to such persons asthe Directors may in their absolute discretion deem t,

provided that:

(a) in exercising the authority conerred by this Resolution 8, the Company shall comply with the requirementsimposed by the SGX-ST rom time to time and the provisions o the Listing Manual o the SGX-ST or the timebeing in orce (in each case, unless such compliance has been waived by the SGX-ST), all applicable legalrequirements under the Companies Act and otherwise, and the Bye-Laws or the time being o the Company;and

(b) (unless revoked or varied by the Company in general meeting) the authority conerred by this Resolution 8shall continue in orce until the conclusion o the next Annual General Meeting o the Company or the date bywhich the next Annual General Meeting o the Company is required by law to be held, whichever is the earlier.”[See Explanatory Note (iii)]

(Resolution 8)

10. Authority to grant options and issue shares under the DMX Employee Share Option Scheme

“That the Directors be and are hereby empowered to grant options, and to allot and issue rom time to time such numbero shares as may be required to be issued pursuant to the exercise o options granted under the DMX Employee ShareOption Scheme (the “Scheme”) provided always that the aggregate number o shares in respect o which such optionsmay be granted and which may be issued pursuant to the Scheme shall not exceed teen per cent. (15%) o the totalnumber o issued shares excluding treasury shares o the Company rom time to time.” [See Explanatory Note (iv)]

(Resolution 9)

By Order o the Board

Jismyl Teo Chor KhinCompany Secretary

Singapore

13 April 2009


Explanatory Notes:

(i) Ordinary Resolution 6 is to empower the Directors, rom the date o the passing o Ordinary Resolution 6 to the dateo the next Annual General Meeting, to issue Shares in the capital o the Company and to make or grant Instruments

(such as warrants or debentures) convertible into Shares, and to issue Shares in pursuance o such Instruments, up toan amount not exceeding in total 50% o the issued Shares (excluding treasury shares) in the capital o the Company,with a sub-limit o 20% o the issued Shares (excluding treasury shares) or issues other than on a pro rata basis toshareholders. For the purpose o determining the aggregate number o Shares that may be issued, the percentage oissued Shares shall be based on the number o issued Shares (excluding treasury shares) in the capital o the Company atthe time that Ordinary Resolution 6 is passed, ater adjusting or (a) new Shares arising rom the conversion or exercise





the time that Ordinary Resolution 6 is passed, ater adjusting or (a) new Shares arising rom the conversion or exerciseo any convertible securities or share options or vesting o share awards which are outstanding or subsisting at the timethat Ordinary Resolution 6 is passed, and (b) any subsequent bonus issue, consolidation or sub-division o Shares. Inexercising the authority conerred by Ordinary Resolution 6, the Company shall comply with the requirements o theSGX-ST (unless waived by the SGX-ST), all applicable legal requirements and the Company’s Bye-Laws.

(ii) Ordinary Resolution 7 is to empower the Directors, rom the date o the passing o Ordinary Resolution 7 to the dateo the next Annual General Meeting, to issue Shares in the capital o the Company and to make or grant Instruments(such as warrants or debentures) convertible into Shares, and to issue Shares in pursuance o such Instruments, up to anamount not exceeding in total 100% o the issued Shares (excluding treasury shares) in the capital o the Company, ona pro rata basis to shareholders by way o a renounceable issue. For the purpose o determining the aggregate numbero Shares that may be issued, Shares issued pursuant to Ordinary Resolution 6 shall also be counted in determiningwhether the 100% limit has been reached, and the percentage o issued Shares shall be based on the number o issuedShares (excluding treasury shares) in the capital o the Company at the time that Ordinary Resolution 7 is passed, ateradjusting or (a) new Shares arising rom the conversion or exercise o any convertible securities or share options orvesting o share awards which are outstanding or subsisting at the time that Ordinary Resolution 7 is passed, and (b)

any subsequent bonus issue, consolidation or sub-division o Shares. In exercising the authority conerred by OrdinaryResolution 7, the Company shall comply with the requirements o the SGX-ST (unless waived by the SGX-ST), allapplicable legal requirements and the Company’s Bye-Laws. On 19 February 2009, the SGX-ST released a press releaseo new measures eective on 20 February 2009 (the “Press Release”); the new measures include allowing issuers toissue up to 100% o its issued share capital via a pro rata renounceable rights issue, subject to the condition that theissuer makes periodic announcements on the use o the proceeds as and when the unds are materially disbursed andprovides a status report on the use o proceeds in its annual report. The Press Release states that this new measurewill be in eect until 31 December 2010 when it will be reviewed by the SGX-ST.

(iii) Ordinary Resolution 8 is to empower the Directors, pursuant to the general mandate to issue Shares set out in Ordinary

Resolution 6, to issue Shares on a non-pro rata basis to shareholders o the Company, at a discount to the weightedaverage price o the Shares on the SGX-ST or the ull market day on which the placement or subscription agreementis signed (or i not available, the weighted average price based on the trades done on the preceding market day),exceeding 10% but not more than 20%. In exercising the authority conerred by Ordinary Resolution 8, the Companyshall comply with the requirements o the SGX-ST (unless waived by the SGX-ST), all applicable legal requirements andthe Company’s Bye-Laws. Rule 811(1) o the SGX-ST Listing Manual presently provides that an issue o shares must notbe priced at more than 10% discount to the weighted average price or trades done on the SGX-ST or the ull marketday on which the placement or subscription agreement is signed (or i not available, the weighted average price basedon the trades done on the preceding market day). The Press Release also included a new measure allowing issuersto undertake placements o new shares using the general mandate to issue shares, priced at discounts o up to 20%,subject to the conditions that the issuer seeks shareholders’ approval in a separate resolution at a general meeting toissue new shares on a non-pro rata basis at a discount exceeding 10% but not more than 20%, and the general shareissue mandate resolution is not conditional on this resolution. Ordinary Resolution 8 has been included ollowing thisnew measure. The Press Release states that this new measure will also be in eect until 31 December 2010 when itwill be reviewed by the SGX-ST.

(iv) Ordinary Resolution 9 proposed in item 10 above, i passed, will empower the Directors o the Company, to grantoptions and to allot and issue shares upon the exercise o such options in accordance with the Scheme.


Notes:

(1) I a shareholder o the Company, being a Depositor (as dened in Section 130A o the Companies Act, Chapter 50 oSingapore) whose name appears in the Depository Register (as dened in Section 130A o the Companies Act, Chapter

50 o Singapore) wishes to attend and vote at the Annual General Meeting, he must be shown to have shares enteredagainst his name in the Depository Register, as certied by The Central Depository (Pte) Limited, at least 48 hoursbeore the time o the Annual General Meeting.

(2) I a Depositor wishes to appoint a proxy/proxies, then the Depositor Proxy Form must be completed, signed anddeposited at the oce o the Company’s Singapore share transer agent, Boardroom Corporate & Advisory Services





deposited at the oce o the Company s Singapore share transer agent, Boardroom Corporate & Advisory ServicesPte. Ltd. at 3 Church Street #08-01, Samsung Hub, Singapore 049483, at least 48 hours beore the time o the AnnualGeneral Meeting.



1401 Stanhope House, 738 King’s Road, Quarry Bay, Hong Kong - Tel: (852) 2520 2660 Fax: (852) 2802 2062

10 Hoe Chiang Road, Keppel Towers #16-03, Singapore 089315 - Tel (65) 6536 9923 Fax: (65) 6538 7566

www.dmxtechnologies.com

(Regn. No.: 31201)

dmx technologies annual report 2008

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