Vision:

To be the leading provider of ICT products

and value-added services. We strive for
sustainable growth to achieve optimum returns
to shareholders.

Mission:
To be the preferred supplier of choice for ICT
products and value-added services by building
strong customer relationships.
To sustain our entrepreneurial growth by
expanding our business regionally.
To bring the best-of-breed ICT products and
services to enhance the competitiveness of our
customers’ businesses.

Contents
Corporate Profile p.01
Chairman’s Message p.04
CEO’s Message p.10
Corporate Information p.14
Financial Highlights p.15
Board of Directors p.20
Senior Management p.23
Milestones p.26
Group Structure p.28
Financial Contents p.29
ECS Holdings Limited (“ECS” or “the Group”) is a leading
Information and Communications Technology (“ICT”)
products and services provider that was established in 1985
and listed on the SGX Mainboard in 2001.

ECS is a well-recognised provider of ICT products and
services with three main businesses, namely Enterprise
Systems, IT Services and Distribution. With a network
of more than 18,000 active channel partners across
China, Thailand, Malaysia, Singapore, Indonesia and
the Philippines, ECS is well-positioned to be a regional
partner of choice suitable for any global-leading
MNC ICT brand vendor tapping Asia Pacific’s ICT
spending growth.
Leading global brand names like Hewlett-Packard
(“HP”), Apple, Microsoft, Sun Microsystems, IBM,
Oracle and EMC leverage on ECS’ extensive channel
partner network to distribute their products across
the region.
The Group’s Enterprise Systems business aims to give
MNCs, local government and domestic companies
a competitive edge over their peers by designing,
installing and implementing IT infrastructure. ECS’
IT Services business provides a comprehensive range of
professional, technical support and training services.
In 2007, the Group’s strategies acquired an additional
dimension when Hong Kong based and HKSE-listed
VST Holdings, a leading distributor of IT components
in China bought a 52.5% controlling stake in ECS from
certain ECS substantial shareholders.
The resultant union between ECS’ downstream regional
distribution of end-user ICT products and VST’s strong
upstream component distribution business and market
leadership in China, created a combined entity that
intends to be a leading full-range Asian ICT distributor.
The transaction makes VST ECS’ single largest
shareholder.
The Group has a consistent track record of profitability
and a management that is focused on operational
excellence to achieve sustainable profit growth and to
enhance shareholder returns.

ECS’ Distribution business leverages on a well-

established and highly efficient logistical and IT
infrastructure to distribute fast-moving products in
the most efficient manner.

Corporate
Profile
p.
Annual Report 2008 01
 Strengthening our Assets

We believe our relentless effort in pursuing margin enhancement initiatives and

operational efficiency has strengthened our foundation. Notwithstanding the current
economic challenges, we are committed towards continuing to strengthen these
advantages to achieve even greater success moving forward.

p.
02 ECS Holdings Limited
 p.
Annual Report 2008 03
 “While our overriding business
objectives this year continued to
be driven by our own ongoing
margin enhancement initiatives
started more than three years ago,
FY2008 was another exciting year
that strengthened the Group’s
business foundation.”

Mr Li Jia Lin
Chairman

Chairman’s
Message
p.
04 ECS Holdings Limited
DEAR STAKEHOLDERS
I am pleased to present to you our FY2008 annual
report which chronicles another stellar performance,
underscoring the efficacy of ECS’ margins accretive growth
strategies and more significantly, our agility to adjust to
changing economic circumstances.
Having resumed our listed status on the Singapore Exchange
in August 2008 since the completion of the VST transaction,
I am happy to report that the transition in ECS’ controlling
shareholding did not impact ECS’ exemplary track record
of operations and performance. Our relationships with our
vendors, customers and bankers remain strong.
While our overriding business objectives this year continued to
be driven by our own ongoing margin enhancement initiatives
started more than three years ago, FY2008 was another exciting
year that strengthened the Group’s business foundation.
We believe that our widened product range, enlarged
distribution network and enhanced operational efficiency
will place us in good stead to compete in an increasingly
challenging business environment that the world is poised for
over the next few quarters.
These efforts had continued to gain momentum even before
the current financial crisis deepened during the second half of
calendar year 2008, as we sharpened our focus on improving
internal efficiencies including generating positive operating
cash flow through better management of working capital and
more effective management of financial resources.
Notwithstanding the impact of the ongoing financial crisis in
the countries in which we operate, for the financial year ended
31 December 2008 (“FY2008”) the Group continued to break
new records across different parameters.
Accordingly in FY2008, net profit attributable to equity
holders rose 25.8% to $29.4 million.
Concurrently, FY2008 net profit growth continued to outstrip
FY2008 revenue growth as the Group consciously tried to
enhance operating performance with revenue growth an
important but secondary priority.
For the period under review, operating profit increased 22.9%
to $52.2 million from $42.5 million even as revenue rose
slightly by 5.8% to $2.9 billion from $2.8 billion. ECS’ revenue
performance in FY2008 would have been better by about 11.6%
had it not been for a one-time effect of a currency translation.
In line with our resolve to strengthen our long–term prospects,
we conscientiously focused on controlling costs. Consequently
profit margins continued their upward trend, operating
cash flows and cash position also strengthened considerably
compared to a year ago.
Having intensified our focus on cash management in view
of the declining financial conditions worldwide, as at 31
December 2008, ECS generated a positive operating cash flow
of $16.4 million, up from $7.2 million at 31 December 2007.
Due to the improved operating cash flow, net gearing improved
to 0.60 times from 0.68 times a year ago.
Earnings per share (“EPS”), on a fully diluted basis,
correspondingly rose to 8.0 cents versus 6.4 cents in FY2007
while net asset value (“NAV”) per share increased to 65.09 cents
as at 31 December 2008 versus 58.20 cents a year ago.
I am happy to report that comparing by business division, our
on-going initiatives to enhance the Group’s sales mix in line
with market fundamentals have continued to pay off.
Revenue from higher-margin Enterprise Systems, comprising
servers, networking products and enterprise software, grew
17.5% while net profit rose 31.5%.
On a geographical market basis, North Asia led the growth in
profitability with a 47.6% growth in profit before interest and
taxation (“PBIT”) buoyed by sales of higher-margin enterprise
software, networking products and servers.
While these strategies were undertaken to maximise our leverage
on opportunities that we believe will strengthen our long-term
growth prospects, this process is by no means complete.
Most significantly, FY2008 represents our on-going smooth and
successful integration with VST.
Chairman’s
Message
p.
Annual Report 2008 05
 OUTLOOK
I am very pleased that ECS has continued to deliver commendable
results in spite of softer consumer spending amid the global
financial uncertainty.
Given our strong vendor base, wide channel network and
experienced local management teams, we believe that we
will be positioned advantageously when the future outlook
becomes clearer.

Having successfully integrated management and operation
styles along with our new parent VST, in FY2009 we can look
forward to giving more shape to our product and geographical
expansion plans.
However, we will be mindful of the global economic trends as
they unfold and consider our steps well before proceeding.
DIVIDEND PAYMENT AND APPRECIATION
On behalf of my fellow Directors, I once again thank you,
our shareholders, for your loyal support of the Group even as
we continue our transformation. For FY2008, the Directors
have proposed a first and final dividend of 2.7 cents per share
(tax exempt).

As the near-term outlook for the global economic and IT
industry continues to be uncertain and notwithstanding the
challenges in the external environment, we will continue to
further strengthen internal competencies which, in turn,
will safeguard longer-term growth opportunities when
markets recover.
While improving working capital management and cash flow
will be key initiatives over the next few quarters, ECS will
additionally look into other operational factors including
human resource and technological improvements.
I would also like to express my sincere appreciation to all our
customers, technology partners and business associates without
whom our success would not have been possible.
Additionally, I would like to thank management and staff for
their relentless hard work that helped ECS achieve our growth
plan and build a strong business.
Last but the least, I would like to thank my fellow Directors
for their pioneering direction and invaluable guidance that has
made the milestone achievements of FY2008 possible.

Looking ahead, despite the anticipated slowdown in demand

for ICT products in 2009, the Directors are confident that in MR LI JIA LIN
FY2009, ECS will still be profitable. Chairman
6 April 2009
Having said that, with a 25-year long track record and
experience in the regional ICT market, we have weathered
many storms before and I am confident that ECS will emerge
stronger after this global financial crisis as well.

While the Directors recognise that these countries will not be

immune to the spillover of the ongoing global financial crisis, I
also believe that ECS has put in place a firm foundation for the
Group’s growth strategy.

Chairman’s
Message
p.
06 ECS Holdings Limited
 p.
Annual Report 2008 07
 Targeted Expansion

Asia presents vast potential and opportunities for the Group’s expansion.
By strategically developing both new markets as well as complementary business categories,
ECS is committed to enhancing our corporate positioning and shareholder value.

p.
08 ECS Holdings Limited
 p.
Annual Report 2008 09
 “Continued margins enhancement
and improved cash management
led ECS to generate not only
strong profit and margins growth
but also stronger cash flow.”

Mr Tay Eng Hoe

Group CEO

CEO’s
Message
p.
10 ECS Holdings Limited
AN OVERVIEW
FY2008 distinguishes itself as a year that witnessed ECS’ ongoing
margins accretive growth initiatives gaining momentum.
These efforts which were put in place a few years ago, continued
unabated throughout FY2008 even though ECS relisted its
shares on the Singapore Exchange only in August.
During the period under review, our conscious commitment
to enhance operating performance with revenue growth an
important but secondary priority saw net profit growth continue
to outstrip revenue growth.
But most importantly, our improving bottomline and margins
for the year under review, even after the current financial
crisis deepened during the second half of calendar year 2008,
demonstrated our agility to adapt to challenging economic
circumstances and uncertainties.
Realising our limited control over these externalities, we
sharpened focus on improving internal efficiencies including
generating positive operating cash flow through better
management of working capital and more effective management
of financial resources.
Continued margins enhancement and improved cash
management led ECS to generate not only strong profit and
margins growth but also stronger cash flow. This is particularly
significant in view of deteriorating financial conditions
worldwide.
In fact, these two initiatives will continue to be pivotal to our
growth strategy over the next few quarters.
FINANCIAL AND OPERATIONS REVIEW
In FY2008 ECS’ net profit attributable to equity holders
rose 25.8% to $29.4 million from $23.4 million in FY2007
propelled by continued margins enhancement and improved
cash management.
The Group’s sustained efforts to enhance operating performance
with revenue growth an important but secondary objective saw
operating profit increase 22.9% to $52.2 million from $42.5
million even though revenue inched up slightly by 5.8% to
$2.9 billion from $2.8 billion over the comparative period.
Consequently, net profit before interest and tax (“PBIT”) rose
19.6% to $41.4 million from $34.6 million.
Concurrently gross and operating margins increased to 5.1%
from 4.8% and to 1.8% from 1.5% respectively, over the
comparative periods.
Despite the slight revenue growth, the Group’s total operating
expenses increased by 6.5% to $102.1 million from $95.9
million as we stepped up sales particularly in the higher margin
enterprise systems business segment.
Due to increases in interest rates, our finance costs also rose
30.0% to $11.4 million from $8.7 million. Current and
non-current bank borrowings rose 4.9% to $193.2 million
from $184.2 million.
Notwithstanding the challenges in the external environment,
throughout the year, the Group retained focus on improving
financial health by generating strong profit and margin growth
as well as stronger cash flow.
As at 31 December 2008, ECS generated a positive operating
cash flow of $16.4 million, up from $7.2 million as at 31
December 2007. We also continued to further reduce accounts
receivable days to 43.6 days from 47.8 days during the period
under review.
CEO’s
Message
p.
Annual Report 2008 11
 Tighter credit control and shorter cash cycles also led to
significant improvements in working capital. As at 31 December
2008, ECS’ cash and cash equivalents were $49.5 million, up
from $39.4 million a year ago. Net gearing improved to 0.60
times from 0.68 times.
As a result of these efforts, FY2008 earnings per share (“EPS”),
on a fully diluted basis, correspondingly rose to 8.0 cents from
6.4 cents while net asset value (“NAV”) per share increased to
65.09 cents from 58.20 cents a year ago.
REVIEW BY BUSINESS SEGMENTS
Enterprise Systems
Enterprise Systems continued to be the Group’s growth driver
in FY2008 even as global economic volatility began to dampen
ICT spending rates in the region as ECS reiterated its ongoing
strategy to continue pursuing bottomline and margins growth.
Consequently in FY2008, ECS’ higher margins’ Enterprise
Systems segment grew by 17.5% to $1.1 billion from $964.3
million mainly driven by higher sales of servers, networking
products and enterprise software in the Group’s mainstay
North Asia market as well as some Southeast Asian markets.
At the same time, PBIT from this segment strongly increased
by 31.5% to $26.4 million from $20.1 million.
Distribution
In line with the slowdown in demand for consumer ICT
products, in FY2008 our Distribution sales managed to sustain
themselves within the $1.7 billion range to dip only slightly by
0.6%. Encouragingly, Distribution PBIT grew 19.6% to $23.9
million from $20.0 million again propelled by better margins
mix of products.
CEO’s
Message
p.
12 ECS Holdings Limited
REVIEW BY GEOGRAPHICAL MARKETS
ECS’ ongoing pursuit of country-specific business thrusts
continued to reap results and both North Asia and Southeast
Asia continued to deliver revenue and PBIT growth.
North Asia
Led by sustained business ICT infrastructure spending in first
and second tier cities which continued throughout FY2008,
North Asia revenue grew 5.8% to $1.5 billion from $1.4
billion. PBIT grew 47.6% to $25.3 million from $17.2 million
over the comparative periods.
Southeast Asia
During the year under review, sales of both consumer electronics
especially notebooks and enterprise products in Malaysia,
Indonesia and the Philippines rose 5.7% to $1.43 billion
from $1.36 billion while PBIT grew 6.4% to $26.9 million
from $25.3 million; Southeast Asia continues to be the major
contributor to Group PBIT.
OUTLOOK
While ECS has put a solid foundation into place, we are
cognizant of the fact that at least the near-term outlook for
the global economy and the global ICT industry continues to
be uncertain. The countries in our region will not be immune
from the spillover effect of this scenario.
In a revised statement in December 2008, technology sector
analyst IDC, said that it anticipates IT spending in the region
to fall to US$195.6 billion in 2009 from the US$201.4
billion it had forecast in July 2008. IDC added that strategic
investments in IT will remain critical in achieving further
efficiency and productivity gains, and driving longer term
growth of businesses.
As these external developments remain out of our control, as
in the past, we prefer to adopt a prudent business approach
by taking the opportunity to further enhance our business
fundamentals during trying times.
ECS recognises the importance of strengthening internal
competencies that have placed us in good stead even as the
economic challenges began to manifest themselves in our
industry during the last few months of FY2008.
We believe that by honing these operating and financial
efficiencies, ECS will be able to capitalise on the longer-term
growth opportunities when markets eventually recover.

Firstly, we intend to enhance operating cash flow and working

capital. This will help us to reduce our debt and funding costs,
thereby strengthening our balance sheet.

Secondly, we will work on strengthening internal business

processes like credit control to make operations more
cost-effective.

Finally, we plan to also implement tactical human resource

and technological improvements that will further scale up our
operational efficiencies.

Looking further ahead, despite the anticipated slowdown in Once again, ECS has delivered
demand for ICT products in 2009, the Directors are confident
that in FY2009, ECS will still remain profitable. an excellent set of results despite
the operating uncertainties
IN APPRECIATION that dampened global business
Once again, ECS has delivered an excellent set of results despite sentiments during the latter part
the operating uncertainties that dampened global business
sentiments during the latter part of FY2008.
of FY2008.
I must commend my fellow management team and staff for
their relentess determination and hard work which has helped
us to make major strides externally and internally.

To my fellow Board members, I would like thank you for your

valuable input that has steered ECS onto a solid path for many
more future successes.

ECS is on a new threshold and our newly strengthened

fundamentals auger well for the vast opportunities that lie
ahead of us when the global economy comes back on track.

TAY ENG HOE

Group Chief Executive Officer & Executive Director
6 April 2009

CEO’s
Message
p.
Annual Report 2008 13
 BOARD OF DIRECTORS SENIOR MANAGEMENT AT ECS
Mr Li Jia Lin (Chairman, Non-Executive Director) HOLDINGS LIMITED’S SUBSIDIARIES
Mr Liu Wei (Vice Chairman, Non-Executive Director) Mr Foong Kam Tho (Chief Executive Officer)
ECS Technology (China) Limited
Mr Tay Eng Hoe (Group Chief Executive Officer)
Mr Narong Intanate (Executive Director) Mr Somsak Pejthaveeporndej (President)
The Value Systems Co., Ltd.
Mr Foo Sen Chin (Executive Director)
Mr Foo Sen Chin (Managing Director)
Mr Leong Horn Kee (Independent Director) ECS KUSH Sdn Bhd
Mr Tan Hup Foi (Independent Director)
Mr Sebastian Chong (President)
Mr Koh Soo Keong (Independent Director) ECS Computers (Asia) Pte Ltd
Mr Nana Juhana Osay (Executive Director)
AUDIT COMMITTEE PT ECS Indo Jaya
Mr Leong Horn Kee (Chairman)
Mr Jimmy Go (President)
Mr Tan Hup Foi MSI-ECS Phils., Inc.
Mr Koh Soo Keong
AUDITORS
COMPENSATION COMMITTEE KPMG
Certified Public Accountants
Mr Koh Soo Keong (Chairman)
16 Raffles Quay #22-00
Mr Leong Horn Kee Hong Leong Building
Mr Tan Hup Foi Singapore 048581
Partner-in-charge : Tran Phuoc
NOMINATING COMMITTEE (Since FY2006)
Mr Tan Hup Foi (Chairman)
REGISTRAR
Mr Leong Horn Kee
Mr Koh Soo Keong M&C Services Private Limited
138 Robinson Road #17-00
Mr Tay Eng Hoe
The Corporate Office, Singapore 068906
SENIOR MANAGEMENT AT REGISTERED OFFICE
ECS HOLDINGS LIMITED
19 Kallang Avenue #07-153
Mr Tay Eng Hoe (Group Chief Executive Officer) Singapore 339410
Mr Foong Kam Tho (Group Chief Operating Officer)
Mr Eddie Foo Toon Ee
PRINCIPAL BANKERS
(Group Chief Financial Officer) DBS Bank Ltd
Mr Foo Sen Chin (Group Human Resource Director) KBC Bank N.V.
Mr Lim Tow Cheng Malayan Banking Berhad
(Senior Vice President, Business Development) Oversea-Chinese Banking Corporation
Mr Eugene Tan Teck Thye Rabobank International
(Group Financial Controller) Standard Chartered Bank
Sumitomo Mitsui Banking Corporation
Mr Newman Li (Senior Internal Audit Manager)
United Overseas Bank Limited
COMPANY SECRETARY
Eddie Foo Toon Ee, CPA
Corporate
Information
p.
14 ECS Holdings Limited
ECS OFFICES
ECS Holdings Limited
19 Kallang Avenue #07-153
Singapore 339410
Website : www.ecs.com.sg
ECS Technology (China) Limited
PCI Building, No. 50 Jianzhong Road
Tianhe Software Park
Guangzhou, P.R.C. (510665)
Branches in Beijing, Chengdu, Fuzhou, Guangzhou,
Hangzhou, Hong Kong, Jinan, Nanjing, Nanning,
Shanghai, Shenyang, Shenzhen, Wuhan, Xi’an
Website : www.ecschina.com
The Value Systems Co., Ltd.
34th Floor, Charn Issara Tower 2
2922/328-331 New Petchburi Road
Bangkapi, Huay-Kwang
Bangkok 10320, Thailand
Branches in Bangkok, Chiang Mai, Hat Yai,
Khon Kaen, Nakhon Ratchasima, Phitsanulok,
Phuket, Rayong, Surat Thani
Website : www.value.co.th
ECS KUSH Sdn Bhd
Lot 3, Jalan Teknologi 3/5,
Taman Sains Selangor,
Kota Damansara
47810 Petaling Jaya,
Selangor, Malaysia
Branches in Penang, Petaling Jaya
Websites : www.ecsm.com.my
ECS Computers (Asia) Pte Ltd
19 Kallang Avenue #07-153
Singapore 339410
Website : www.ecs.com.sg
ECS Indo Pte Ltd
19 Kallang Avenue #06-151
Singapore 339410
Branches in Bandung, Jakarta, Medan,
Surabaya, Yogyakarta
Website : www.ecsindo.com
MSI-ECS Phils., Inc.
Topy II Bldg, #3 Economia St.,
Libis, Quezon City, Philippines 1110
Branches in Manila, Cebu
Website : www.msi-ecs.com.ph
Stroll down memory lane and re-live
ECS’ winning performance over
the years. On the record, ECS has
consistently surpassed itself to deliver
greater value for both stakeholders
and partners.

REVENUE ($ million)

2,949.9
2,789.4

2,339.3

2,036.3
1,865.7

FY 04 FY 05 FY 06 FY 07 FY 08

Financial
Highlights
p.
Annual Report 2008 15
 REVENUE BY BUSINESS SEGMENT ($ million)
3,500

3,000 2,949.9
2,789.4 33.6
32.2 1,783.0
1,792.9
2,500 2,339.3
23.2
2,036.3 1,416.0
2,000 1,865.7 22.0
24.9 1,233.2
1,215.2
1,500
Legend
1,133.3
1,000 Total
900.1 964.3
781.1 IT Services
500 625.6
Distribution

Enterprise Systems
0
FY 04 FY 05 FY 06 FY 07 FY 08

PROFITABILITY ($ million) REVENUE BY GEOGRAPHICAL SEGMENT ($ million)

60

45 41.4 North Asia

34.6 1,515.6
30 29.4
27.0
22.5 23.4
19.1 20.1
17.3
15 13.5
South East Asia
1,434.3
0
FY 04 FY 05 FY 06 FY 07 FY 08
Legend
Net profit attributable Profit from
to equity holders operations before tax

Financial
Highlights
p.
16 ECS Holdings Limited
SHAREHOLDERS’ EQUITY ($ million) DIVIDENDS PER SHARE (cents)

2.7

237.8
212.7

190.1
174.2
158.7
1.5
1.4

0.8

FY 04 FY 05 FY 06 FY 07 FY 08 FY 04 FY 05 FY 06 FY 07 FY 08

RETURN ON EQUITY (%) RETURN ON CAPITAL EMPLOYED (%)

15 18

14 15

13 13.0 12 11.7
10.0
9.1
12 9 8.1 8.4
11.6
11 11.0 6
10.4
10 8.8 3

0 0
FY 044 FY 05 FY 06
6 FY 07 FY 08 FY 044 FY 05 FY 06
6 FY 07 FY 08

Financial
Highlights
p.
Annual Report 2008 17
 Geared for Sustained Future Growth

With the unleashed potential from our transformation to a complete ICT products
and services provider, the synergies from our union with VST will accelerate the Group
to the next level of growth.

p.
18 ECS Holdings Limited
 p.
Annual Report 2008 19
 1. 2. 3.

4. 5. 6.

7. 8.

Board of
Directors
p.
20 ECS Holdings Limited
1. CHAIRMAN
Mr Li Jia Lin was appointed Chairman of the Board on 31
December 2007. Mr Li is also the Chairman and Chief Executive
Officer and an Executive Director of VST Holdings Limited.
Mr Li is also the Director of VST Group Limited (BVI) and
VST Computers (H.K.) Limited respectively. He is responsible
for the overall management and strategic positioning of the
Group. Mr Li graduated from Tsinghua University of the People’s
Republic of China with a Degree of Bachelor of Engineering in
1983 and a Master Degree in Management Engineering in 1986.
2. VICE CHAIRMAN
Mr Liu Wei was appointed Vice Chairman of the Company on
3 December 2001 and is currently a director of ECS Technology
(China) Limited, our subsidiary in China. Mr Liu is one of the
founding members of Pacific City International Holdings Limited
and has more than 18 years of experience in the IT industry in
China. Mr Liu has assumed the positions of Vice Chairman
of Guangdong CAD and Executive Chairman of Guangdong
Academy of Electronics, and is a member of Guangzhou People’s
Congress. In recognition of his contributions and achievements,
Mr Liu had received many awards from the Chinese Government
and Industry Publications including, “Top 10 Economic
Contributors” by the Ministry of Information Industry of China
in 2006, “Ten Best New Entrepreneurs in Guangdong” and
“Guangdong Outstanding Entrepreneur of Private Enterprise”
by the Guangdong Government in 2006. He was recognised in
2004 as one of the top 10 IT leaders in China and was recipient
of the “Outstanding Enterprise Contribution Award” in 2003.
Mr Liu was awarded China Channel Permanent Achievement
Medal by Computer Business News in 2002 and was also listed
by Computer World as IT Fortune Top 50 in 2001. Mr Liu
graduated with a Bachelor’s degree in Applied Mechanics from
the Zhongshan University, PRC.
3. GROUP CHIEF EXECUTIVE OFFICER
Mr Tay Eng Hoe was appointed the Executive Director of
the Company on 1 April 2000 and he is also the Group Chief
Executive Officer of the Company. Mr Tay is the founder of
the ECS Group and also ECS Computers (Asia) Pte Ltd, our
Singapore subsidiary. He brings with him more than 20 years of
experience in the IT business. Mr Tay is an Executive Director
of VST Holdings Limited. In August 2005, he was conferred
the Public Service Medal by the President of the Republic of
Singapore in recognition for his public services to the country.
Mr Tay holds a Bachelor of Science (Honours) degree from the
LaTrobe University and a Master of Business Administration
from the University of Melbourne.
4. EXECUTIVE DIRECTOR
Mr Narong Intanate is the founder and Executive Chairman
of The Value Systems Co., Ltd., our subsidiary, since 1988.
He is actively involved in the management of The Value
Systems Co., Ltd. and plays a pivotal role in steering the
strategic direction of The Value Systems. He was appointed
as an Executive Director of the Company on 15 December
2000 and he is currently an advisor of the Hatyai University.
He holds a Bachelor of Science in Business Administration
and a Master of Business Administration from California State
University. Prior to forming The Value Systems Co., Ltd.,
he was the Marketing Manager of Sahaviriya Infortech
Computers Co., Ltd. from 1982 to 1983 and the Marketing
Director of Sahaviriya OA from 1983 to 1988.
Board of
Directors
p.
Annual Report 2008 21
 5. EXECUTIVE DIRECTOR
Mr Foo Sen Chin was appointed as an Executive Director on
15 December 2000 and is concurrently the Group Human
Resource Director of the Company. He is also the Managing
Director and founder of ECS KUSH Sdn Bhd, our subsidiary.
Mr Foo plays a pivotal role in steering the strategic direction
of ECS KUSH Sdn Bhd. His responsibilities include the
development of its long term business goals, overall operation
and administrative management of ECS KUSH. Prior to
joining our Group, he was the General Manager of a computer
bureau services company in Kuala Lumpur before forming
ECS KUSH Sdn Bhd (formerly known as K.U. Sistems Sdn
Bhd) in 1985. Mr Foo is an advisor to the current Council of
PIKOM, Association of Computer and Multimedia Industry
of Malaysia. Mr Foo has a Bachelor of Science degree in
Electrical and Electronic Engineering from the University of
Birmingham, UK and he also holds a Master’s degree in Business
Administration from the Cranfield School of Management in
the United Kingdom.
6. NONEXECUTIVE INDEPENDENT DIRECTOR
Mr Leong Horn Kee was appointed as an Independent
Director on 15 December 2000, and currently serves as the
Chairman of the Audit Committee and a member of the
Nominating and Compensation Committees. He is currently
the Chairman/CEO of CapitalCorp Partners Pte Ltd. Mr Leong
was a Member of Parliament for 22 years. He has extensive work
experience in the public sector in the Ministries of Finance and
Trade & Industry, and in the private sector in venture capital,
merchant banking, corporate investments, hotels and property
development. Mr Leong is appointed Singapore’s Non-Resident
Ambassador to Mexico and a member of the Security Industry
Council in 2006. He holds a Bachelor of Technology (Honours)
degree in Production Engineering from Loughborough
University, UK; an Economics (Honours) degree from the
University of London, UK; and an MBA from INSEAD,
France. In 2008, he completed a degree in Chinese Language and
Literature from Beijing Normal University, China.
Board of
Directors
p.
22 ECS Holdings Limited
7. NONEXECUTIVE INDEPENDENT DIRECTOR
Mr Tan Hup Foi was appointed as an Independent Director
on 7 February 2006, and currently serves as Chairman of
the Nominating Committee and a member of the Audit and
Compensation Committees. He was the Chief Executive of
Trans-Island Bus Services Ltd from 1994 to 2005 and also the
Deputy President of SMRT Corporation Ltd from 2003 to
2005. Mr Tan is known internationally as the Honorary Vice
President of the International Association of Public Transport
(UITP) and Honorary Chairman of UITP Asia Pacific
Division. Mr Tan is the Chairman of Ngee Ann Polytechnic
Council and a Board member of Singapore Corporation of
Rehabilitative Enterprises (SCORE). He was awarded the
Bintang Bakti Masyarakat (Public Service Star) and the Pingat
Bakti Masyarakat (Public Service Medal) by the President of
Singapore in 2008 and 1996 respectively. Mr Tan graduated
from Monash University in Australia with a First Class
Honours degree in Mechanical Engineering in 1974 and he
obtained a Master of Science (Industrial Engineering) degree
from University of Singapore in 1979.
8. NONEXECUTIVE INDEPENDENT DIRECTOR
Mr Koh Soo Keong was appointed as an Independent Director
on 11 February 2008, and currently serves as Chairman of the
Compensation Committee and a member of the Audit and
Nominating Committees. Mr Koh was, until April 2007, the
Chief Executive Officer and President of Toll Asia Pte Ltd,
formerly SembCorp Logistics Ltd (SembLog) which was acquired
by Toll in May 2006. Currently, he is the Managing Director
of EcoSave Pte Ltd. With over 20 years of experience in the
logistics industry, he has helmed SembLog and its preceding
companies since 1986. He is a board member of four other
publicly listed companies and the Chairman of the Agri-Food
and Veterinary Authority of Singapore. He holds a Bachelor of
Engineering (Honours), a Master of Business Administration
and a Postgraduate Diploma in Business Law from the National
University of Singapore.
1. 2. 3. 4.

5. 6. 7. 8.

9. 10. 11.

Senior
Management
p.
Annual Report 2008 23
 1. GROUP CHIEF EXECUTIVE OFFICER
Mr Tay Eng Hoe was appointed the Executive Director of
the Company on 1 April 2000 and he is also the Group Chief
Executive Officer of the Company. Mr Tay is the founder of
the ECS Group and also ECS Computers (Asia) Pte Ltd, our
Singapore subsidiary. He brings with him more than 20 years of
experience in the IT business. Mr Tay is an Executive Director
of VST Holdings Limited. In August 2005, he was conferred
the Public Service Medal by the President of the Republic of
Singapore in recognition for his public services to the country.
Mr Tay holds a Bachelor of Science (Honours) degree from the
LaTrobe University and a Master of Business Administration
from the University of Melbourne.
2. GROUP CHIEF OPERATING OFFICER,
CHIEF EXECUTIVE OFFICER ECS China)
Mr Foong Kam Tho was appointed as Group Chief Operating
Officer of ECS Holdings Limited with effect from 1 January
2008. He is responsible for the overall operational management
of the Group including setting business strategies and building
long-term customers and partners’ relationships. Mr Foong is
concurrently the Chief Executive Officer of ECS China and
was formerly the President of ECS Computers (Asia) Pte Ltd.
He joined ECS Computers (Asia) Pte Ltd in 1985 and had
more than 20 years experience in the IT industry. Mr Foong
holds a Bachelor of Science degree (Computer Science) from
the National University of Singapore.
3. GROUP CHIEF FINANCIAL OFFICER
Mr Eddie Foo is the Group Chief Financial Officer of the
Company and is concurrently the Group Company Secretary.
Mr Foo is responsible for the corporate finance and treasury,
reporting, accounts, tax, information technology and risk
management of ECS Holdings and is also a director on the boards
of various ECS companies. Mr Foo has more than 14 years of
financial management and audit experience in multinational
and public accounting firms. Prior to serving as Group Chief
Financial Officer, Mr Foo was the Group Financial Controller of
the Company. Mr Foo holds a Bachelor degree in Accountancy
from the Nanyang Technological University and is a member of
the Institute of Certified Public Accountants of Singapore.
Senior
Management
p.
24 ECS Holdings Limited
4. SENIOR VICE PRESIDENT,
BUSINESS DEVELOPMENT
Mr Lim Tow Cheng was appointed Senior Vice President,
Business Development on 18 October 2005. He is responsible
for managing the regional expansion strategy and for identifying
new business opportunities for the Group. In addition, he also
looks after investor relations. Mr Lim has more than 20 years of
experience in senior management positions in the IT industry.
Prior to joining the Group, Mr Lim was the Director for South
Asia of Western Digital and has previously worked with Digiland
International Limited for more than 8 years, holding several
senior management positions, including as Chief Executive
Officer. Mr Lim has an Honours Degree in Economics from
the National University of Singapore.
5. GROUP FINANCIAL CONTROLLER
Mr Eugene Tan was appointed as Group Financial Controller
of the Company on 1 March 2008. He is responsible for the
financial management of the Group, which covers accounting,
treasury, tax, financial control and reporting. Prior to his
appointment as Group Financial Controller, Mr Tan was the
Vice President, Finance of ECS Computers (Asia) Pte Ltd, the
wholly-owned Singapore subsidiary of ECS Holdings Ltd. Prior
to joining the Group, Mr Tan worked for KPMG Singapore as a
senior auditor. Mr Tan holds a Bachelor degree in Accountancy
& Economics from the University of Reading.
6. SENIOR INTERNAL AUDIT MANAGER
Mr Newman Li is the Senior Manager, Group Internal Audit
of the Company. He is a member of CPA China and has more
than 10 years of financial and audit experience. Prior to joining
the Group, he worked for Foshan Power Construction Group
Co. Ltd in 1998 and Guangdong Telecom in 2004. Mr Li holds
a Bachelor degree in Accountancy from the Tianjin University
of Commerce and was appointed to his current position since
May 2008.
7. PRESIDENT The Value Systems Co., Ltd.)
Mr Somsak Pejthaveeporndej was appointed as the President
of The Value Systems Co., Ltd on 1 February 2009 and he
is responsible for the overall operational management of The
Value Systems. He has been with our Group since 1988 and
was formerly involved in managing the Enterprise Systems &
ICT Services division. He has more than 20 years experience in
the IT industry. Prior to joining our Group, he was employed
as a technical manager by Sun Shine Co., Ltd. between 1981
to 1984, followed by Sahaviriya Telecom Co., Ltd. between
1984 to 1988. He holds a Bachelor of Science degree majoring
in electronics from Rajamangala University of Technology
Krungthep, Thailand, and a Mini MBA from The Faculty of
Commerce and Accountancy, Chulalongkorn University.
8. MANAGING DIRECTOR ECS KUSH Sdn Bhd)
Mr Foo Sen Chin was appointed as an Executive Director on
15 December 2000 and is concurrently the Group Human
Resource Director of the Company. He is also the Managing
Director and founder of ECS KUSH Sdn Bhd, our subsidiary.
Mr Foo plays a pivotal role in steering the strategic direction
of ECS KUSH Sdn Bhd. His responsibilities include the
development of its long term business goals, overall operation
and administrative management of ECS KUSH. Prior to
joining our Group, he was the General Manager of a computer
bureau services company in Kuala Lumpur before forming
ECS KUSH Sdn Bhd (formerly known as K.U. Sistems Sdn
Bhd) in 1985. Mr Foo is an advisor to the current Council of
PIKOM, Association of Computer and Multimedia Industry
of Malaysia. Mr Foo has a Bachelor of Science degree in
Electrical and Electronic Engineering from the University of
Birmingham, UK and he also holds a Master’s degree in Business
Administration from the Cranfield School of Management in
the United Kingdom.
9. PRESIDENT ECS Computers (Asia) Pte Ltd)
Mr Sebastian Chong is the President of ECS Computers
(Asia) Pte Ltd, the wholly-owned Singapore subsidiary of ECS
Holdings Ltd. Mr Chong joined ECS in 1990 and has 18
years of experience in the IT industry. He oversees the sales and
operations of the commercial, consumer and retail segments
of ECS Singapore. Mr Chong is also responsible for business
development, business strategy and building of long term
relationships with vendors, channels and partners.
10. EXECUTIVE DIRECTOR PT ECS Indo Jaya)
Mr Nana Juhana Osay is the Executive Director of PT ECS
Indo Jaya. He is responsible for overseeing ECS Indonesian
operations and has over 15 years experience in the IT industry.
Mr Osay was formerly Secretary General for Indonesia Computer
Business Association, a position he held from 1999 to 2005.
Mr Osay was educated in the Bandung Institute of Technology
from 1976 to 1981.
11. PRESIDENT (MSI-ECS Phils, Inc)
Mr Jimmy Go is the founder and President of MSI-ECS Phils.,
Inc. He has more than 25 years of experience in the IT industry
in the Philippines. He started in the IT industry way back in
1982 after graduating from college selling Fujitsu & Apple
computers. He currently holds a Bachelor degree in Electronics
& Communication Engineering from De La Salle University
with an award of Magna Cum Laude and Post Graduate degree
of Masters in Business Administration in Ateneo de Manila
University. Mr. Go was also the past President of COMDDAP
(Computer Manufacturers, Distributors & Dealers Association
of the Philippines). In 1998, Mr Go was named President and
CEO of MSI-Digiland. He was instrumental in growing the
business of MSI in the Philippines making it one of the biggest
IT distributors in the country in less than 5 years.
Senior
Management
p.
Annual Report 2008 25
 2008 HIGHLIGHTS

January - March July – September

• The Value Systems held “ECS Bus Rally” on the Occasion of
its 20th Anniversary
• The Value Systems hosted “Thank You Party” for Partners on
the Occasion of its 20th Anniversary
• ECS Astar Sdn Bhd was Appointed as Distributor for Nortel
• ECS Astar Sdn Bhd was Apppointed as Distributor for
HP Procurve
April - June
• The Value Systems was Appointed as Distributor for
Fujitsu Scanners
• The Value Systems Inaugurated “The Fairy Tale Project II”
on Occasion of its 20th Anniversary
• ECS Indo Jaya was Appointed as Distributor for Extreme
Networks
• ECS Computers (Asia) Pte Ltd was Appointed as Distributor
for OKI
• ECS (China) was Appointed as Distributor for Commercial
Products of EMC
• ECS(China) was Appointed as Distributor for O2
• ECS(China) was Appointed as Distributor for of Huawei /
Symantec Blade Server
• The Value Systems was Appointed as Distributor for SRAN
(Security Revolution Analysis Network)
• The Value Systems Established Arts & Culture Campaign on
the Occasion of its 20th Anniversary
• ECS Astar Sdn Bhd was Appointed as Distributor for
Extreme Network
• ECS Computers (Asia) Pte Ltd was Appointed as Distributor
for TriActive
• ECS Computers (Asia) Pte Ltd was Appointed as Distributor
for Intermec
• ECS (China) was Appointed as Distributor for Fujitsu
Enterprise Series Platform Products
• ECS(China) was Appointed as Distributor for Novell
October – December
• ECS Indo Jaya was Appointed as Distributor for Intermec
• The Value Systems was Appointed as Distributor for Red Hat
• The Value Systems was Appointed as Distributor for VMware
• The Value Systems Established ECS Tree Planting II
Campaign
• ECS Pericomp Sdn Bhd was Appointed as Distributor
for Intermec
• ECS Pericomp Sdn Bhd was Appointed as Distributor for
EMC Storage
• ECS Pericomp Sdn Bhd was Appointed as Distributor for
Blue Coat
• ECS Computers (Asia) Pte Ltd was Appointed as Distributor
for Adobe

Milestones
Highlights & Awards
p.
26 ECS Holdings Limited
2008 AWARDS
Group
• ECS Holdings Ranked 19th in Singapore International
100 Award
China
• ECS China Awarded 2nd in Top 100 IT Distribution Firms
by CBINEWS
• ECS China Awarded 2nd in Top 100 Distribution Firms by
China Computer Magazine
• Samsung – Top Performing Notebook Distributor FY08
• H3C – Best Network Distributor 2008
• H3C – Top Wholesaler for Integrated Services in Q2/Q3/Q4
& FY08
Thailand
• HP – Top Performing Partner for HP Business Critical Server
– HP Integrity Solution (HP Partner Connect Achievers
Club 2008)
• Symantec – Top Performing Distributor FY 2008
• Symantec – Distribution Partner for Symantec Partner
Program 2009
Malaysia
• HP – ECS Astar Sdn Bhd Awarded Best Wholesaler Of The
Year for Consumer Category FY08
• HP – ECS Astar Sdn Bhd Awarded Top Wholesaler for
Commercial Storage Works FY08
• HP – ECS Astar Sdn Bhd Awarded Top Wholesaler Industry
Standard Servers FY08
• HP – ECS Astar Sdn Bhd Awarded Top Wholesaler for HP
Services FY08
• HP – ECS Astar Sdn Bhd Awarded Top Wholesaler for
Consumer Imaging & Printing FY08
• HP – ECS Astar Sdn Bhd Awarded Top Valued Added
Distributor Award FY08
• HP – ECS Astar Sdn Bhd Awarded Top Master Parts Reseller
of the year Award 2008
• HP – ECS Astar Sdn Bhd Awarded Top Event Service
Contributor FY08
• HP – ECS Astar Sdn Bhd Awarded Top Upfront Volume
Services Contributor FY08
• HP – ECS Astar Sdn Bhd Awarded Top Upfront Value
Service Contributor FY08
• HP – ECS Astar Sdn Bhd Awarded Best Authorized Support
Partner Program FY08
• HP – ECS Astar Sdn Bhd Awarded Best Overall HP Services
Partner Champion FY08
• HP – ECS Astar Sdn Bhd Awarded Top Performing Master
Part Reseller in Asia Pacific Replacement Parts business
Singapore
• Achievement as a Singapore 1000 Company 2008
• HP - Awarded as a Distinguished Partner of Hewlett-Packard
Singapore (Sales) Pte Ltd (January-December 2008)
• Sun Microsystems - Asia South Platinum Award FY08
• Sun Microsystems - Asia South, Partner of the Year, SPA
CDP Category, FY08
• Fuji-Xerox - Recognition for Being part of Fuji-Xerox
Printers One Million Record Sales 2004 – 2008
Indonesia
• Cisco – The Best Services Sales Distributor 2008
• Cisco – The Best System Engineer Distributor 2008
• Cisco – Distributor of the Year 2008
• Microsoft – In Recognition of Technological Excellence &
Impact on Customer through Microsoft Product & Services
2008 - 2009
The Philippines
• Acer – ePinnacle Award for Most Outstanding Master ASP
• HP – Outstanding IWS / InkJet Distributor of the Year
• HP – Outstanding SWD / Server Storage Distributor of
the Year
• HP – Outstanding Product Manager of the Year
• Oracle – Value-added Distributor of the Year (Technology)
• Oracle – Partner Sales Representative of the Year
(Technology)
• EMC – Channel Partner of the Year
• EMC – Pre-sales Engineer of the Year
Milestones
Highlights & Awards
p.
Annual Report 2008 27
 ECS HOLDINGS LIMITED

THAILAND SINGAPORE CHINA MALAYSIA INDONESIA PHILIPPINES

The Value ECS Computers ECS Technology ECS KUSH ECS Indo ECS Infocom
Systems Co., Ltd. (Asia) Pte Ltd (China) Limited Sdn Bhd Pte Ltd (Phils) Pte. Ltd.
100% 100% 100% 60% 90% 100%

Pacific City ECS Technology ECS KU PT ECS MSI-ECS

(Asia Pacific) Pte Ltd (Guangzhou) Co., Ltd Sdn Bhd Indo Jaya Phils., Inc.
100% 100% 100% 100% 49.99%

ECS Technology ECS Astar

Co., Ltd Sdn Bhd
100% 100%

ECS International Trading ECS ICT

(Shanghai) Co., Limited Sdn Bhd
100% 99%

ECS China Technology ECS Pericomp

(Shanghai) Co., Limited Sdn Bhd
100% 80%

Group
Structure
p.
28 ECS Holdings Limited
Financial Contents
Corporate Governance Statement p.30
Directors’ Report p.38
p.
Statement by Directors 43
Independent Auditors’ Report p.44
p.
Balance Sheets 46
p.
Consolidated Income Statement 47
Consolidated Statement of Changes in Equity p.48
Consolidated Cash Flow Statement p.50
Notes to the Financial Statements p.52
Shareholdings Statistics p.98
Substantial Shareholders p.99
Notice of Annual General Meeting p.100
Proxy Form
 ECS Holdings Limited (the “Company”) is committed to comply with the Code of Corporate Governance 2005 issued by the Corporate
Governance Committee. It believes in maintaining a high standard of corporate governance and has put in place policies and practices that
will help to protect its shareholders’ interest and enhance long term shareholder value. This report describes the main corporate governance
practices that are adopted by the Company.

A BOARD MATTERS

The Board’s Conduct of its Affairs

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

The Board’s role is to:

a) provide entrepreneurial leadership, set strategic aims, and ensure that the necessary financial and human resources are in place for the
company to meet its objectives;
b) establish a framework of prudent and effective controls which enables risk to be assessed and managed;
c) review management performance; and
d) set the company’s values and standards, and ensure that obligations to shareholders and others are understood and met.

The Board meets to consider the following, without limitation, corporate events and/or actions:

a) approval of quarterly results announcements;

b) approval of annual report and accounts;
c) declaration of interim dividend and proposal of final dividends;
d) approval of corporate strategy;
e) authorisation of major transactions;
f) review and approval of annual budgets;
g) compensation of senior management personnel; and
h) convening of shareholders’ meetings.

All directors must objectively take decisions in the interests of the Company.

The Board has delegated the day-to-day management and running of the Company to the management headed by our Group Chief
Executive Officer (“Group CEO”) and Executive Director, Mr Tay Eng Hoe, while reserving certain key issues and policies for its approval.
Additionally, to facilitate effective management, certain functions have been delegated to the following sub-committees, each of which has
its own written terms of reference:

a) the Nominating Committee;

b) the Compensation Committee; and
c) the Audit Committee.

Newly-appointed directors are given briefings by the Management on the Group’s activities and its strategic directions. Changes to
regulations and accounting standards are monitored closely by Management. To keep pace with regulatory changes, where these changes
have an important bearing on the Company’s or directors’ disclosure obligations, directors are briefed either during Board meetings or at
specially convened sessions conducted by professionals.

Corporate
Governance Statement
p.
30 ECS Holdings Limited
The Board intends to hold about four meetings each year and shall also hold informal meetings regularly. The Company’s Articles of
Association provide for telephonic and videoconference meetings. The number of Board meetings held since the date of the last annual
report, as well as the attendance of every Board member at those meetings is as follows:

DIRECTORS’ ATTENDANCE AT BOARD MEETINGS

BOARD
No. of Meetings Attended
Board Member
Li Jia Lin (appointed on 31 December 2007) 4 3
Liu Wei 4 3
Tay Eng Hoe 4 4
Narong Intanate 4 4
Foo Sen Chin 4 4
Leong Horn Kee 4 4
Tan Hup Foi 4 4
Koh Soo Keong (appointed on 11 February 2008) 4 4

Board Composition and Guidance

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

The Board comprises eight directors of which five are non-executive directors (including three independent directors) and three executive
directors. The Company places great importance on the quality of its Board of Directors. The Group achieves this by appointing to its
Board highly respected individuals and prominent leaders in their respective professions. The Board comprises individuals with proven
track record in the public and/or corporate sector, and each is a highly respected member of the business community. As a group, they
provide core competencies such as accounting or finance, business or management experience, industry knowledge, strategic planning and
customer-based experience or knowledge. Key information regarding the directors is given in the Board of Directors section on pages 20 to
22 of the annual report.

Chairman and Chief Executive Officer

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

Mr Li Jia Lin, a non-executive director, is the Chairman of the Company and Mr Tay Eng Hoe is the Group CEO. They each perform separate
functions to ensure that there is an appropriate balance of power and authority, and that accountability and independent decision-making
are not compromised. The Chairman is responsible for the functioning of the Board. The Group CEO has full executive responsibilities
over the running of the Group's business, the business direction and operational decisions of the Group. No individual or small group of
individuals dominate the Board's decision making process.

Corporate
Governance Statement
p.
Annual Report 2008 31
 Board Membership & Board Performance

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

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

The Nominating Committee was formed on 6 January 2003 and comprises four directors, including three independent directors, Mr Tan
Hup Foi, Mr Leong Horn Kee, Mr Koh Soo Keong and one executive director, Mr Tay Eng Hoe. Mr Tan Hup Foi is the Chairman of the
Nominating Committee.

The role of the Nominating Committee is to perform the following functions:

a) identifies and reviews all nominations for Board appointments and re-nominations of directors;
b) assesses the effectiveness of the Board as a whole and the contribution by each individual director to the effectiveness of the Board;
and
c) determines whether or not a Director is independent.

In accordance with the Company’s Articles of Association, at each Annual General Meeting, one-third of the Board shall retire from office
by rotation provided that no director holding office as Managing or Joint Managing Director shall be subject to retirement by rotation or
be taken into account in determining the number of directors to retire.

Access to Information

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

All directors are provided with complete, adequate and timely information prior to meeting and on a regular basis to enable them to perform
their roles properly. All directors have separate and independent access to senior management and the company secretary. The company
secretary has defined roles and responsibilities and attends all Board and sub-committee meetings of the Company. Should directors,
whether as a group or individually, need independent professional advice in the furtherance of their duties, cost of such professional advice
will be borne by the Company.

B REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 7 : There should be a formal and transparent procedure for fixing the remuneration packages of individual directors. No director
should be involved in deciding his own remuneration.

The Compensation Committee oversees the general compensation of employees of our Group with a goal to motivate, recruit and retain
employees and directors through competitive compensation and progressive policies. In particular, the Compensation Committee is
responsible for overseeing our employee profit sharing scheme as well as the share incentives, including the ECS Share Option Scheme I,
ECS Share Option Scheme II and ECS Performance Shares Scheme. The Compensation Committee of the Board comprises Mr Koh Soo
Keong, Mr Leong Horn Kee, and Mr Tan Hup Foi. Mr Koh Soo Keong is the Chairman of the Compensation Committee.

Corporate
Governance Statement
p.
32 ECS Holdings Limited
Level and Mix of Remuneration; Disclosure of Remuneration

Principle 8 : The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company
successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of executive
directors’ remuneration should be structured so as to link rewards to corporate and individual performance.
Principle 9 : Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for
setting remuneration, in the company’s annual report. It should also provide disclosure in relation to its remuneration policies
to enable investors to understand the link between remuneration paid to directors and key executives, and performance.

The Group’s remuneration policy is to provide a competitive remuneration package so as to attract, retain and motivate directors and senior
management of the required experience and expertise to run the Group successfully. In setting remuneration packages for executive directors
and senior management of the Group, the pay and employment conditions within the industry and in comparable companies are taken
into consideration.

The compensation package of the Group’s executive directors including its Group CEO and senior management consists of salary, allowances,
share options and bonuses which are conditional upon meeting certain performance targets.

Non-executive directors have remuneration packages which consist of a directors’ fee component and a share option component pursuant
to the Company’s Share Option Scheme. The directors’ fee policy is based on a scale of fees divided into basic retainer fees as a director and
additional fees for serving on board committees. Directors’ fees for non-executive directors are subject to the approval of shareholders at the
Annual General Meeting. The report on directors’ remuneration is given below:

SUMMARY COMPENSATION TABLE FOR THE YEAR ENDED 31 DECEMBER 2008

Allowances
and other
Salary Bonus Fees Benefits Total
Name of Director % % % % %
$1,000,000 to below $1,250,000
Tay Eng Hoe 50 49 – 1 100
$750,000 to below $1,000,000
- – – – – –
$500,000 to below $750,000
Narong Intanate 37 53 – 10 100
Foo Sen Chin 28 61 – 11 100
$250,000 to below $500,000
- – – – – –
Below $250,000
Li Jia Lin – – – – –
Liu Wei 100 – – – 100
Leong Horn Kee – – 100 – 100
Tan Hup Foi – – 100 – 100
Koh Soo Keong – – – – –

Corporate
Governance Statement
p.
Annual Report 2008 33
 Executives’ Remuneration
Rather than setting out the names of the top five key executives who are not also directors of the Company, we have shown a Group-wide
cross-section of executive remuneration by number of employees earning $100,000 upwards in bands of $250,000 below. This should give
a macro view of the remuneration pattern in the Group, while maintaining confidentiality of staff remuneration matters.

NO. OF EXECUTIVES IN REMUNERATION BANDS

No. of Total Variable Total Fixed

Total Compensation Employees Compensation Compensation Total
(S$) (Note 1) (Note 2) (Note 3) Remuneration
$100,000 to $249,999 24 $1,735,944 $1,942,618 $3,678,562
$250,000 to $499,999 8 $1,547,384 $1,704,997 $3,252,381
$500,000 to $749,999 2 $ 718,594 $ 365,913 $1,084,507
Total 34 $4,001,922 $4,013,528 $8,015,450

Notes :

1. Including employees in local and overseas subsidiaries

2. Sales commission, bonus and other statutory contributions
3. Inclusive salaries, AWS, related CPF and other statutory contributions, allowances and fringe-benefits.

There are no employees in the Group who are immediate family members of a director or the Group CEO.

C ACCOUNTABILITY AND AUDIT

Accountability

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

In presenting the annual financial statements and quarterly announcements to shareholders, it is the aim of the Board to provide the
shareholders with a detailed analysis, explanation and assessment of the Group’s financial position and prospects. On a quarterly basis, Board
members are provided with business and financial reports comparing actual performance with budget and with prior year comparisons with
highlights on key business indicators and any significant business development. In addition, the Group CEO communicates regularly with
Board members through informal meetings and phone calls with appropriate updates on Company developments.

Corporate
Governance Statement
p.
34 ECS Holdings Limited
Audit Committee

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

The Audit Committee comprises three members, of which all members, including the Chairman, are independent. The members of the
Audit Committee at the date of this report are:

Leong Horn Kee Chairman

Tan Hup Foi Member
Koh Soo Keong Member

The Audit Committee meets periodically to perform the following functions:-

a) reviewing the quarterly, half-yearly and annual financial statements before recommending them to the Board for approval;

b) reviewing interested person transactions (as defined in Chapter 9 of the Listing Manual (“Listing Manual”) of the Singapore Exchange
Securities Trading Limited (“SGX-ST”), including such transactions conducted under the shareholders' general mandate previously
obtained;

c) reviewing with external auditors the audit plan, their evaluation of the systems of internal controls, their annual reports and their
management letters and management’s response;

d) reviewing and recommending to the Board the re-appointment of the external auditors, taking into consideration the non-audit services
rendered by the external auditors and being satisfied that the nature and extent of such services will not prejudice the independence and
objectivity of the external auditors;

e) reviewing the scope of internal audit procedures and the results and effectiveness of the internal audit; and

f) considering other matters as requested by the Board.

The Audit Committee has full access to and co-operation of the Company's management and the internal auditors and has full discretion to
invite any director or executive officer to attend its meetings. The auditors, both internal and external, have unrestricted access to the Audit
Committee. Reasonable resources have been made available to the Audit Committee to enable them to discharge their duties.

The Audit Committee held five meetings since the date of the last annual report. The Audit Committee reviewed the Interested Person
Transactions for the year ended 31 December 2008 in accordance with the terms of the Shareholders' Mandate for such transactions as were
approved on 30 April 2008. Interested Person Transactions with a total value of $13.9 million were examined and the Audit Committee
is of the opinion that the said transactions were carried out on prevailing commercial terms and did not prejudice the interest of the
shareholders of the Company.

The Audit Committee had reviewed and confirmed that the methods and procedures for determining the transaction prices relating to
Interested Person Transactions have not changed since the last shareholders' approval. The Audit Committee also confirms that the methods
and procedures are sufficient to ensure that the transactions will be carried out on normal terms and will not be prejudicial to the interests
of the Company and its minority shareholders.

Corporate
Governance Statement
p.
Annual Report 2008 35
 The Audit Committee had reviewed the non-audit services provided by the external auditors and is satisfied with the independence of the
auditors. The Audit Committee has recommended to the Board that the auditors, KPMG LLP, be nominated for re-appointment at the
forthcoming Annual General Meeting of the Company.

Meetings and attendance are as follows:

BOARD
No. of Meetings Attended
Name of Director
Leong Horn Kee (Chairman) 5 5
Tan Hup Foi 5 5
Koh Soo Keong 5 5

Internal Controls

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

The Board acknowledges that it is responsible for the Group’s system of internal control. It believes that in the absence of any evidence to
the contrary and from due enquiry, the system of internal controls that has been maintained by the Group throughout the financial year is
adequate to meet the needs of the Group in its current business environment. However, the Board notes that the system of internal controls
is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not
absolute assurance against material misstatements or loss.

Internal Audit

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

The Group has an internal audit department which is independent of the activities it audits. It performs financial audits, implements
operational and compliance controls. The Internal Auditor reports primarily to the Chairman of the Audit Committee and administratively
to the Group CEO. The Internal Auditor plans its internal audit work in consultation with, but independent of, Management, and its
yearly plan is submitted to the Audit Committee for approval at the beginning of each year. The Internal Auditor reports to the Audit
Committee quarterly regarding its findings. The Audit Committee also meets with the Internal Auditor at least once during the year without
the presence of Management. The Audit Committee also ensures that the internal audit function is adequately resourced, and will review
annually the adequacy of the internal audit function.

The internal auditors are expected to meet or exceed the standards set by nationally or internationally recognised professional bodies
including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.

Corporate
Governance Statement
p.
36 ECS Holdings Limited
D COMMUNICATION WITH SHAREHOLDERS

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

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

The Group does not practice selective disclosure. In line with continuous obligations of the Group pursuant to the Listing Manual and the
Companies Act, Chapter 50, of Singapore, the Board’s policy is that all shareholders are informed of all major developments of the Group.
Price-sensitive information is released publicly, and quarterly results and annual reports are announced or issued within the mandatory
period and are available on the Group’s website. Thereafter, a briefing by Management is held jointly for the media and analysts every half
yearly. All shareholders of the Group receive the annual report and notice of Annual General Meeting. Shareholders are encouraged to attend
the Annual General Meeting to ensure a high level of accountability and to stay informed of the Group’s strategy and goals.

E INTERESTED PARTY TRANSACTIONS

The Group has adopted an internal policy in respect of any transactions with interested persons and has procedures established for the review
and approval of the Group’s Interested Party Transactions (“IPT”).

Pursuant to Rule 907 of the Listing Manual, the Group has the following IPTs entered into during the financial year, together with the
corresponding aggregate value of the IPTs entered into with the same interested person, are disclosed as follows:

Aggregate value of all IPTs during

the financial year under review Aggregate value of all IPTs conducted
(excluding transactions less than under shareholders’ mandate
$100,000 and transactions conducted pursuant to Rule 920 of Listing
under shareholders’ mandate pursuant to Manual of SGX-ST (excluding
Name of Interested Person Rule 920 of Listing Manual of SGX-ST) transactions less than $100,000)
(A) Transactions for the sale of goods and – $2,033,141
services with Vnet Capital Co., Ltd
and its subsidiaries
(B) Transactions for the sale of goods and – $424,948
services with Guangzhou
Jia Dou Ji Tuan Co Ltd and
its subsidiaries

Corporate
Governance Statement
p.
Annual Report 2008 37
 We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial
year ended 31 December 2008.

DIRECTORS

The directors in office at the date of this report are as follows:-

Li Jia Lin (Chairman)

Liu Wei (Vice-Chairman)
Tay Eng Hoe (Group Chief Executive Officer)
Narong Intanate
Foo Sen Chin
Leong Horn Kee
Tan Hup Foi
Koh Soo Keong (Appointed on 11 February 2008)

DIRECTORS’ INTERESTS

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), no director
who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company or of related
corporations, either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year.

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of
whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the
Company or any other body corporate.

Since the end of the last financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the
Company or a related corporation with the director, or with a firm of which he is a member or with a company in which he has a substantial
financial interest.

There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 January
2009.

Except as disclosed under the “Share Options” section of this report, neither at the end of, nor at any time during the financial year, was
the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire
benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

During the financial year, the Company and certain of its subsidiaries have, in the normal course of business entered into transactions with
companies in which Mr Narong Intanate and Mr Liu Wei have an interest. These transactions include the purchase and sale of information
technology products and services of $15,231,472 (2007: $2,115,875) and $13,836,284 (2007: $10,840,896) respectively and are carried
out on normal commercial terms.

However, the directors have not received nor will they be entitled to receive any benefits arising out of these transactions other than those
which they may be entitled to as shareholders of those companies or as a member of the firm.

Directors’
Report
p.
38 ECS Holdings Limited
DIRECTORS’ INTERESTS CONT’D

Except as disclosed above and in note 32 to the financial statements, since the end of the last financial year, no director has received or
become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm
of which he is a member or with a company in which he has a substantial financial interest.

SHARE OPTIONS

(a) Share Option Scheme

The ECS Share Option Scheme II (“Scheme II”) was approved and adopted by its members at an Extraordinary General Meeting
held on 13 December 2000. Scheme II provides an opportunity for employees and directors, including non-executive directors,
of the Group who have contributed significantly to the growth and performance of the Group to participate in the equity of the
Company.

The above scheme is administered by the Compensation Committee (the “Committee”) which comprises the following directors:-

Koh Soo Keong (Chairman)

Leong Horn Kee
Tan Hup Foi

Details of Scheme II were set out in the Directors’ Report for the year ended 31 December 2000.

(b) Options Granted

During the financial year, no option was granted under Scheme II.

(c) Issue of Shares Under Option

In 2007, the Company issued a total of 1,761,000 ordinary shares of $0.10 each fully paid at par for cash upon the exercise of options
granted under Scheme II.

(d) Unissued Shares under Option

At the end of the financial year, there are no unissued shares under the share option schemes of the Company.

Directors’
Report
p.
Annual Report 2008 39
 SHARE OPTIONS CONT’D

The details of options granted and exercised are as follows:-

Aggregate
Aggregate Aggregate Options Aggregate
Options Options Options Forfeited/ Options
Name of Participants Granted Granted Exercised Lapsed Outstanding
[1] [2] [3] [4] [5]

Executive directors
- Tay Eng Hoe - 4,976,000 (2,226,000) (2,750,000) -
- Narong Intanate - 9,506,000 (8,906,000) (600,000) -
- Foo Sen Chin - 3,860,000 (3,340,000) (520,000) -

Non-executive directors
- Leong Horn Kee - 278,000 - (278,000) -
- Koh Soo Keong
(appointed on 11 February 2008) - 120,000 - (120,000) -

Former directors
- Wong Heng Chong - 1,713,000 (1,113,000) (600,000) -
- Lin Chien - 128,000 - (128,000) -
- Chay Yee Meng - 188,000 - (188,000) -
- Teo Ek Tor - 130,000 - (130,000) -
- Wang Fangmin - 50,000 - (50,000) -
- Hsieh Fu Hua - 88,000 - (88,000) -
- Lee Suet Fern - 258,000 - (258,000) -

Employees (including executive officers)

- Foong Kam Tho - 8,629,000 (6,679,000) (1,950,000) -
- Other employees - 23,292,000 - (23,292,000) -
- 53,216,000 (22,264,000) (30,952,000) -

[1] Options granted during the financial year under review.

[2] Aggregate options granted since commencement of the schemes to the end of the financial year under review.
[3] Aggregate options exercised since commencement of the schemes to the end of the financial year under review.
[4] Aggregate options lapsed since commencement of the schemes to the end of the financial year under review.
[5] Aggregate options outstanding as at end of the financial year under review.

Directors’
Report
p.
40 ECS Holdings Limited
SHARE OPTIONS CONT’D

Except as disclosed, since the commencement of the option schemes:-

(i) no option has been granted to the controlling shareholders of the Company or their associates;

(ii) no participant under the schemes has been granted 5% or more of the total options available under the schemes; and

(iii) no option has been granted to employees of subsidiaries under the schemes.

The options granted by the Company do not entitle the holders of the options, by virtue of such holdings, to any right to participate in any
share issue of any other company.

Except as disclosed above, there were:-

(i) no options granted by the Company or its subsidiaries to any person to take up unissued shares in the Company or its subsidiaries;

(ii) no shares issued by virtue of any exercise of option to take up unissued shares of the Company or its subsidiaries; and

(iii) no unissued shares of the Company or its subsidiaries under option at the end of the financial year.

ECS PERFORMANCE SHARE SCHEME

The ECS Performance Share Scheme (the “Scheme”) was approved at the Company’s Extraordinary General Meeting held on 1 December
2006. The Scheme is administered by the Compensation Committee which comprises the Non-Executive Directors Messrs Koh Soo
Keong, Leong Horn Kee and Tan Hup Foi.

Group Executives who have attained the age of 21 years on or before the date of grant of the Award (as defined below), Group Executive
Directors and Non-Executive Directors are eligible to participate in the Scheme (“Participants”). The Scheme is to reward Participants by
award of existing Shares held as treasury shares in the Company (“Awards”), which are given free of charge to the Participants according to
the extent to which their performance targets set under the Scheme are achieved at the end of a specified performance period.

Since the commencement of the Scheme, no Awards have been granted.

AUDIT COMMITTEE

The members of the Audit Committee during the year and at the date of this report are:-

Leong Horn Kee (Chairman, Independent director)

Tan Hup Foi (Independent director)
Koh Soo Keong (Independent director)

The Audit Committee performs the functions specified by section 201B of the Companies Act, the SGX Listing Manual and the Code of
Corporate Governance.

Directors’
Report
p.
Annual Report 2008 41
 AUDIT COMMITTEE CONT’D

The Audit Committee held five meetings since the last directors’ report. In performing its functions, the Audit Committee met with the
Company’s external and internal auditors to discuss the scope of their work and the results of their examination and evaluation of the
Company’s internal accounting control system.

The Audit Committee also reviewed the following:-

• Assistance provided by the Company’s officers to the internal and external auditors;

• Quarterly financial information and annual financial statements of the Group and the Company prior to their submission to the
directors of the Company for adoption; and

• Interested person transactions (as defined in Chapter 9 of the Listing Manual of the Singapore Exchange).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority
and discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment
of the external auditors and reviews the level of audit and non-audit fees.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of
Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the
Company.

AUDITORS

The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Li Jia Lin
Director

Tay Eng Hoe

Director

27 February 2009

Directors’
Report
p.
42 ECS Holdings Limited
In our opinion:

(a) the financial statements set out on pages 46 to 97 are drawn up so as to give a true and fair view of the state of affairs of the Group and
of the Company as at 31 December 2008 and of the results, changes in equity and cash flows of the Group for the year ended on that
date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards;
and

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

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Board of Directors

Li Jia Lin
Director

Tay Eng Hoe

Director

27 February 2009

Statement by
Directors
p.
Annual Report 2008 43
 MEMBERS OF THE COMPANY
ECS HOLDINGS LIMITED

We have audited the financial statements of ECS Holdings Limited (the Company) and its subsidiaries (the Group), which comprise the
balance sheets of the Group and the Company as at 31 December 2008, the income statement, statement of changes in equity and cash
flow statement of the Group for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set
out on pages 46 to 97.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the
Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards. This responsibility includes:

(a) devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are
safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded
as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of
assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

AUDITORS’ RESPONSIBILITY

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

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

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

Independent
Auditors’ Report
p.
44 ECS Holdings Limited
OPINION

In our opinion:

(a) the consolidated financial statements of the Group and the balance sheet of the Company are properly drawn up in accordance with
the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group
and of the Company as at 31 December 2008 and the results, changes in equity and cash flows of the Group for the year ended on
that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore
of which we are the auditors have been properly kept in accordance with the provisions of the Act.

KPMG LLP
Public Accountants and
Certified Public Accountants

Singapore
27 February 2009

Independent
Auditors’ Report
p.
Annual Report 2008 45
 Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000
Non-Current Assets
Property, plant and equipment 3 10,918 10,599 225 198
Goodwill on consolidation 4 33,522 33,522 - -
Subsidiaries 5 - - 174,374 107,774
Interest in associate 6 7,284 7,019 - -
Other financial assets 7 303 718 151 151
Deferred tax assets 8 4,257 2,314 - -
56,284 54,172 174,750 108,123
Current Assets
Inventories 9 175,292 163,094 - -
Trade and other receivables 10 444,662 428,890 46,697 82,014
Cash and cash equivalents 14 50,518 39,425 2,087 470
670,472 631,409 48,784 82,484

Total Assets 726,756 685,581 223,534 190,607

Equity Attributable to Equity Holders of the Company

Share capital 15 112,815 112,815 112,815 112,815
Reserves 16 124,986 99,838 20,741 11,907
237,801 212,653 133,556 124,722
Minority Interests 14,285 10,983 - -
Total Equity 252,086 223,636 133,556 124,722

Non-Current Liabilities
Financial liabilities 18 66,818 5 66,600 -
Deferred income 19 978 968 - -
Deferred tax liabilities 8 886 308 27 27
68,682 1,281 66,627 27
Current Liabilities
Financial liabilities 18 126,596 190,533 20,660 62,790
Deferred income 19 556 302 - -
Trade and other payables 20 275,424 267,111 2,594 2,964
Current tax payable 3,412 2,718 97 104
405,988 460,664 23,351 65,858
Total Liabilities 474,670 461,945 89,978 65,885

Total Equity and Liabilities 726,756 685,581 223,534 190,607

.
The accompanying notes form an integral part of these financial statements.

Balance
Sheets
As at 31 December 2008
p.
46 ECS Holdings Limited
 Note 2008 2007
$’000 $’000

Revenue 22 2,949,871 2,789,415

Cost of sales (2,800,395) (2,655,162)
Gross profit 149,476 134,253
Other income 4,915 4,176
Selling and distribution expenses (60,057) (55,023)
General and administrative expenses (42,090) (40,893)
Profit from operations 23 52,244 42,513
Finance costs 24 (11,350) (8,730)
Share of profit of associate, net of tax 492 825
Profit before income tax 41,386 34,608
Income tax expense 25 (8,115) (8,445)
Profit for the year 33,271 26,163

Attributable to:
Equity holders of the Company 29,386 23,352
Minority interests 3,885 2,811
33,271 26,163

Earnings per share 26

- Basic 8.0 cents 6.4 cents
- Fully diluted 8.0 cents 6.4 cents

The accompanying notes form an integral part of these financial statements.

Consolidated
Income Statement
Year Ended 31 December 2008
p.
Annual Report 2008 47
 Total
attributable
to equity
Currency holders
Share Dividend General translation Accumulated of the Minority
capital reserve reserve reserve profits Company interests Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2007
At 1 January 2007 112,016 5,655 - (5,623) 78,007 190,055 8,248 198,303
Transfer of reserves - - 669 - (669) - - -
Translation differences relating
to financial statements of
subsidiaries - - - 3,903 - 3,903 (76) 3,827
Net gains/(losses) recognised
directly in equity - - - 3,903 - 3,903 (76) 3,827
Net profit for the year - - - - 23,352 23,352 2,811 26,163
Total recognised income and
expense for the year - - - 3,903 23,352 27,255 2,735 29,990
Issue of shares 799 - - - - 799 - 799
Final tax-exempt one-tier
dividends paid at 1.50 cents per
share for 2006 - (5,456) - - - (5,456) - (5,456)
Proposed tax-exempt one-tier
dividends of 1.50 cents per
share for 2007 - 5,480 - - (5,480) - - -
At 31 December 2007 112,815 5,679 669 (1,720) 95,210 212,653 10,983 223,636

The accompanying notes form an integral part of these financial statements.

Consolidated Statement of
Changes in Equity
Year Ended 31 December 2008
p.
48 ECS Holdings Limited
 Total
attributable
to equity
Currency holders
Share Dividend General translation Accumulated of the Minority
capital reserve reserve reserve profits Company interests Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2008
At 1 January 2008 112,815 5,679 669 (1,720) 95,210 212,653 10,983 223,636
Transfer of reserves - - 1,754 (7) (1,747) - - -
Translation differences relating
to financial statements of
subsidiaries - - - 1,250 (8) 1,242 (583) 659
Net gains/(losses) recognised
directly in equity - - - 1,250 (8) 1,242 (583) 659
Net profit for the year - - - - 29,386 29,386 3,885 33,271
Total recognised income and
expense for the year - - - 1,250 29,378 30,628 3,302 33,930
Reversal of dividend reserve - (199) - - 199 - - -
Final tax-exempt one-tier
dividends paid at 1.50 cents per
share for 2007 - (5,480) - - - (5,480) - (5,480)
Proposed tax-exempt one-tier
dividends of 2.70 cents per
share for 2008 - 9,865 - - (9,865) - - -
At 31 December 2008 112,815 9,865 2,423 (477) 113,175 237,801 14,285 252,086

The accompanying notes form an integral part of these financial statements.

Consolidated Statement of
Changes in Equity
Year Ended 31 December 2008
p.
Annual Report 2008 49
 Note 2008 2007
$’000 $’000

Operating Activities
Profit before income tax 41,386 34,608

Adjustments for:
Share of profit of associate (492) (825)
Net fair value changes on financial instruments - 3,533
Depreciation of property, plant and equipment 2,915 3,416
Loss on disposal of property, plant and equipment 171 54
Gain on disposal of other assets (286) -
Finance costs 11,350 8,730
Interest income (272) (477)
Negative goodwill arising from additional investment in subsidiary - (55)
Fair value loss/(gain) on call option 102 (756)
Operating profit before working capital changes 54,874 48,228

Changes in working capital:

Inventories (14,050) (39,707)
Trade and other receivables (21,386) (75,266)
Trade and other payables 5,871 81,623
Cash generated from operations 25,309 14,878
Income taxes paid (8,944) (7,649)
Cash flows from operating activities 16,365 7,229

Investing Activities
Interest received 272 477
Purchases of property, plant and equipment (3,514) (3,411)
Proceeds from disposal of property, plant and equipment 29 88
Purchase of other assets (17) -
Proceeds from sale of other assets 674 -
Cash flows used in investing activities (2,556) (2,846)

The accompanying notes form an integral part of these financial statements.

Consolidated Cash
Flow Statement
Year Ended 31 December 2008
p.
50 ECS Holdings Limited
 Note 2008 2007
$’000 $’000

Financing Activities
Interest paid (11,430) (9,367)
Proceeds from issue of shares - 799
Proceeds from bank loans/trade financing 697,339 802,540
Repayment of bank loans/trade financing (684,782) (782,304)
Payment of finance lease instalments (43) (26)
Dividends paid to equity holders of the Company (5,480) (5,456)
Repayment of loans from minority shareholders of a subsidiary (13) (4,563)
Repayment of loan to associate 1,253 4,605
Cash flows (used in)/from financing activities (3,156) 6,228

Net increase in cash and cash equivalents 10,653 10,611

Cash and cash equivalents at beginning of the year 39,425 29,381
Effect of exchange rate changes on balances held in foreign currencies (576) (567)
Cash and cash equivalents at end of the year 14 49,502 39,425

The accompanying notes form an integral part of these financial statements.

Consolidated Cash
Flow Statement
Year Ended 31 December 2008
p.
Annual Report 2008 51
 The financial statements were authorised for issue by the directors on 27 February 2009.

1 DOMICILE AND ACTIVITIES

ECS Holdings Limited (the “Company”) is incorporated in the Republic of Singapore and has its registered office at 19 Kallang
Avenue, #07-153, Singapore 339410.

The principal activities of the Company are those relating to investment holding and the distribution of information technology
products. The principal activities of the subsidiaries are set out in note 5 to the financial statements.

The immediate and ultimate holding company is VST Holdings Limited, a company incorporated in the Cayman Islands.

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”) and the Group’s
interests in associates.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

The financial statements have been prepared on the historical cost basis except for certain financial assets and financial liabilities as
described below.

The financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial information
presented in Singapore dollars has been rounded to the nearest thousand, unless stated otherwise.

The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies
that have the most significant effect on the amounts recognised in the financial statements are described in note 4 on the assumptions
relating to recoverable amount of goodwill.

The accounting policies used by the Group have been applied consistently to all periods presented in these financial statements.

Notes to the
Notes to the
Financial
Financial Statements
Statements
These notes form an integral part of the financial statements.
p.
52 ECS Holdings Limited
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.2 Consolidation

Business combinations

Business combinations are accounted for under the purchase method. The cost of an acquisition is measured at the fair value of the
assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to
the acquisition.

The excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of
acquisition is credited to the income statement in the period of the acquisition.

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the power to govern, directly or indirectly, the financial and
operating policies of a company so as to obtain benefits from its activities. In assessing control, potential voting rights that presently
are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases.

Minority interests represent the portion of the net assets of subsidiaries attributable to interests that are not owned by the Company,
whether directly or indirectly through subsidiaries. Minority interests are presented in the consolidated balance sheet within equity,
separately from equity attributable to the equity shareholders of the Company. Minority interests in the results of the Group are
presented on the face of the consolidated income statement as an allocation of the total profit or loss for the year between minority
interests and the equity shareholders of the Company.

Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary, the excess, and any further losses
applicable to the minority, are charged against the Group’s interest except to the extent that the minority has a binding obligation to,
and is able to, make additional investment to cover the losses. If the subsidiary subsequently reports profits, the Group’s interest is
allocated all such profits until the minority share of losses previously absorbed by the Group has been recovered.

Associates

Associates are those entities in which the Group has significant influence, but not control, over financial and operating policies.
Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Associates are accounted for using the equity method. The consolidated financial statements include the Group’s share of income,
expenses and equity movements of associates after adjustments to align the accounting policies with those of the Group, from the
date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds
its interest in an associate, the carrying amount of that interest (including any long-term investments) is reduced to zero and the
recognition of further losses is discontinued except to the extent that the Group has an obligation or made payments on behalf of
the associate.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 53
 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.2 Consolidation (Cont’d)

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated against the
investment to the extent of the Group’s interest in the associate. Unrealised losses are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries and associates by the Company

Investments in subsidiaries and associates are stated in the Company’s balance sheet at cost less accumulated impairment losses.

2.3 Foreign Currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rate at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies
that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was
determined.

Foreign currency differences arising on retranslation are recognised in the income statement, except for differences arising on the
retranslation of monetary items that in substance form part of the Group’s net investment in a foreign operation (see below) and
available-for-sale equity instruments.

Foreign operations

The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates prevailing at the reporting date.
The income and expenses of foreign operations are translated to Singapore dollars at exchange rates prevailing at the dates of the
transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2006 are
treated as assets and liabilities of the foreign operation and translated at the closing rate. For acquisitions prior to 1 January 2006, the
exchange rates at the date of acquisition were used.

Foreign currency differences are recognised in the foreign currency translation reserve. When a foreign operation is disposed of, in
part or in full, the relevant amount in the foreign exchange translation reserve is transferred to the income statement.

Net investment in foreign subsidiaries and associates

Exchange differences arising from monetary items that in substance form part of the Company’s net investment in foreign operations
are recognised in the Company’s income statement. Such exchange differences are reclassified to equity in the consolidated financial
statements. When the foreign operation is disposed of, the cumulative amount in equity is transferred to the income statement.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
54 ECS Holdings Limited
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.4 Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the
cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended
use, and the cost of dismantling and removing the items and restoring the site on which they are located.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The
costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are determined as the differences
between the net disposal proceeds and the carrying amount of the item and are recognised in the income statement on the date of
retirement or disposal.

Except for assets under construction, depreciation is recognised in the income statement on a straight-line basis over the estimated
useful lives (or lease term, if shorter) of each part of an item of property, plant and equipment.

The estimated useful lives are as follows: -

Freehold building - 50 years

Leasehold improvements - 10 years
Office equipment - 5 years
Furniture and fittings - 5 years
Computers - 5 years
Motor vehicles - 5 years

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.

Fully depreciated assets are retained in the financial statements until they are no longer in use.

2.5 Goodwill on Consolidation

Goodwill

Acquisitions occurring between 1 January 2001 and 31 December 2004

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets and
liabilities of the acquiree. Goodwill arising on the acquisition of subsidiaries is presented in intangible assets.

Goodwill was stated at cost from the date of initial recognition and amortised over its estimated useful life of not more than 20 years.
On 1 January 2005, the Group discontinued amortisation of this goodwill. The remaining goodwill balance is subject to testing for
impairment, as described in note 2.8.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 55
 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.5 Goodwill on Consolidation (Cont’d)

Goodwill (Cont’d)

Acquisitions on or after 1 January 2005

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities of the acquiree. Goodwill arising on the acquisition of subsidiaries is presented in intangible
assets.

Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment as described in note 2.8.

Negative goodwill arising on the acquisition of controlled subsidiaries and associates represents the excess of the Group’s share of the
fair value of identifiable assets and liabilities acquired over the cost of the acquisition. Negative goodwill is accounted for as follows:

- for acquisitions before 1 January 2005, negative goodwill is credited to a capital reserve;

- on 1 January 2005, the negative goodwill in the capital reserve was derecognised by crediting accumulated profits; and

- for acquisitions on or after 1 January 2005, to the extent that negative goodwill relates to an expectation of future losses and
expenses that are identified in the plan of acquisition and can be measured reliably, but which have not yet been recognised, it is
recognised in the consolidated income statement when the future losses and expenses are recognised. Any remaining negative
goodwill is recognised immediately in the consolidated income statement.

Acquisitions of minority interest

Goodwill arising on the acquisition of a minority interest in a subsidiary represents the excess of the cost of the additional investment
over the carrying amount of the net assets acquired at the date of exchange.

2.6 Financial Instruments

Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents,
financial liabilities, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss,
any directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as
described below.

A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are
derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial
asset to another party without retaining control or transfers substantially all the risks and rewards of the asset. Regular way purchases
and sales of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset.
Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
56 ECS Holdings Limited
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.6 Financial Instruments (Cont’d)

Non-derivative financial instruments (Cont’d)

Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on demand and that form
an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the
statement of cash flows.

Available-for-sale financial assets

The Group’s investments in equity securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they
are measured at fair value and changes therein, other than for impairment losses and foreign exchange gains and losses on available-
for-sale monetary items (see note 2.3), are recognised directly in equity. When an investment is derecognised, the cumulative gain or
loss in equity is transferred to the income statement.

Equity securities available-for-sale which do not have a quoted market price in an active market and whose fair value cannot be
reliably measured are stated at cost less impairment losses which, in the opinion of the directors, are other than temporary.

Others

Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment
losses.

Derivative financial instruments and hedging activities

The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives
are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and
the embedded derivates are not closely related, a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.

Derivative financial instruments are recognised initially at fair value; attributable transaction costs are recognised in the income
statement when incurred. Subsequent to initial recognition, derivative financial instruments are measured at fair value. The gain or
loss on remeasurement to fair value is recognised immediately in the income statement. However, where derivatives qualify for hedge
accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged as described below.

The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the balance
sheet date, taking into account current interest rates and the current credit-worthiness of the swap counterparties. The fair value of
forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quoted forward price.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 57
 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.6 Financial Instruments (Cont’d)

Derivative financial instruments and hedging activities (Cont’d)

Cash flow hedges

Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised directly in equity to
the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in the income
statement.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge
accounting is discontinued prospectively. The cumulative gain or loss previously recognised in equity remains there until the forecast
transaction occurs. When the hedged item is a non-financial asset, the amount recognised in equity is transferred to the carrying
amount of the asset when it is recognised. In other cases, the amount recognised in equity is transferred to the income statement in
the same period that the hedged item affects the income statement.

Impairment of financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial
asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated
future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying
amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss
in respect of an available-for-use financial asset is calculated by reference to its current fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed
collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in the income statement. Any cumulative loss in respect of an available-for-sale financial asset
recognised previously in equity is transferred to the income statement.

Impairment losses once recognised in the income statement in respect of available-for-sale equity securities are not reversed through
the income statement. Any subsequent increase in the fair value of such assets is recognised directly in equity.

Share capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net
of any tax effects.

Where share capital recognised as equity is repurchased (treasury shares), the amount of the consideration paid, including directly
attributable costs, is presented as a deduction from equity. Where such shares are subsequently reissued, sold or cancelled, the
consideration received is recognised as a change in equity. No gain or loss is recognised in the income statement.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
58 ECS Holdings Limited
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.7 Leases

When entities within the group are lessees of a finance lease

Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon
initial recognition, property, plant and equipment acquired through finance leases are capitalised at the lower of their fair value and
the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with
the accounting policy applicable to that asset.

Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between finance
expense and reduction of the lease liability. The finance expense is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the
lease adjustment is confirmed.

At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions even though the
arrangement is not in the legal form of a lease.

When entities within the group are lessees of an operating lease

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the income statement
on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part
of the total lease payments made. Contingent rentals are charged to the income statement in the accounting period in which they
are incurred.

2.8 Impairment – non-financial assets

The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill, recoverable
amount is estimated at each reporting date, and as when indicators of impairment are identified.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A
cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets
and groups. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount
of the other assets in the unit (group of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods
are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 59
 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.9 Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and condition.

Work-in-progress is stated at cost incurred plus attributable profits. Cost includes direct materials, sub-contracted costs, an appropriate
share of production overheads based on normal operating capacity and other related costs incurred. Progress billings received and
receivable are shown as a deduction from the value of work-in-progress. Provision is made for anticipated losses on uncompleted
projects when foreseeable.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the
estimated costs necessary to make the sale. In arriving at net realisable value, due allowance is made for all obsolete and slow moving
inventories.

2.10 Dividends

Dividends on ordinary shares are recognised as a liability in the period in which it is declared.

2.11 Employee Benefits

Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as
incurred.

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has
a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation
can be estimated reliably.

Share-based payments

The share option programme allows Group employees to acquire shares of the Company. The fair value of options granted is
recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread
over the vesting period. At each balance sheet date, the Company revises its estimates of the number of options that are expected
to become exercisable. It recognises the impact of the revision of original estimates in employee expense and in a corresponding
adjustment to equity over the remaining vesting period.

The proceeds received net of any directly attributable transaction costs are credited to share capital when the options are exercised.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
60 ECS Holdings Limited
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.12 Financial Guarantee Contracts

Financial guarantee contracts are regarded as insurance contracts under which the Group accepts significant insurance risk from a
third party by agreeing to compensate that party on the occurrence of a specified uncertain future event. Provisions are recognised
when it is probable that the guarantee will be called upon and an outflow of resources embodying economic benefits will be required
to settle the obligations.

2.13 Revenue Recognition

Sale of goods

Revenue from the sale of goods which encompasses distribution of e-enabling infrastructure and IT products is measured at the
fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue
is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration
is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management
involvement with the goods, and the amount of revenue can be measured reliably.

Transfers of risks and rewards vary depending on the individual terms of the contract of sale. For sales of IT products, transfer usually
occurs when the product is received at the customer’s warehouse; however, for some international shipments, transfer occurs upon
loading of the goods on to the relevant carrier.

Service fees

Fees from service maintenance contracts are recognised over the period of the contract.

Project revenue

Revenue on projects is recognised in the income statement based on the percentage of completion method, measured by reference to
the percentage of contract costs incurred to date to estimated total contract costs for the contract.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 61
 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT’D

2.14 Finance Income and Expenses

Finance income comprises interest income, dividend income, gains on the disposal of available-for-sale financial assets and gains
on hedging instruments that are recognised in the income statement. Interest income is recognised as it accrues, using the effective
interest method. Dividend income is recognised on the date that the Group’s right to receive payment is established, which in the
case of quoted securities is the ex-dividend date.

Finance expenses comprise interest expense on borrowings, impairment losses recognised on financial assets, and losses on hedging
instruments that are recognised in the income statement. All borrowing costs are recognised in the income statement using the
effective interest method, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or
production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.

Foreign currency gains and losses are reported on a net basis.

2.15 Income Tax Expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the
extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of prior years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for
the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in
subsidiaries and joint ventures to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is
measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have
been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable
right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is
no longer probable that the related tax benefit will be realised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of
the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not be reversed in the
foreseeable future.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
62 ECS Holdings Limited
3 PROPERTY, PLANT AND EQUIPMENT

Assets
Freehold Leasehold Office Furniture Motor under
Building Improvements Equipment and Fittings Computers Vehicles Construction Total
Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Cost
At 1 January 2007 1,596 1,977 2,251 1,463 14,061 1,537 383 23,268
Additions 9 389 227 161 1,745 220 660 3,411
Disposals - (65) (30) (60) (1,093) (181) - (1,429)
Transfers/
Reclassifications - (22) (780) 106 1,011 (79) (236) -
Translation adjustment 22 9 93 177 583 11 48 943
At 31 December 2007 1,627 2,288 1,761 1,847 16,307 1,508 855 26,193
Additions 102 148 401 384 2,093 346 279 3,753
Disposals - - (246) (243) (2,662) (23) - (3,174)
Transfers/
Reclassifications - - - - 58 - (58) -
Translation adjustment (86) 130 (123) (175) (161) 1 (88) (502)
At 31 December 2008 1,643 2,566 1,793 1,813 15,635 1,832 988 26,270

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 63
 3 PROPERTY, PLANT AND EQUIPMENT CONT’D

Assets
Freehold Leasehold Office Furniture Motor under
Building Improvements Equipment and Fittings Computers Vehicles Construction Total
Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Accumulated
Depreciation
At 1 January 2007 199 952 1,331 660 9,027 776 - 12,945
Depreciation charge for
the year 49 214 133 281 2,475 264 - 3,416
Disposals - (1) (30) (50) (1,025) (181) - (1,287)
Transfers/
Reclassifications - (11) (152) 11 152 - - -
Translation adjustment 6 2 73 98 333 8 - 520
At 31 December 2007 254 1,156 1,355 1,000 10,962 867 - 15,594
Depreciation charge for
the year 50 269 152 256 1,921 267 - 2,915
Disposals - - (246) (141) (2,577) (10) - (2,974)
Transfers/
Reclassifications - - - - - - - -
Translation adjustment (26) 95 (98) (115) (40) 1 - (183)
At 31 December 2008 278 1,520 1,163 1,000 10,266 1,125 - 15,352

Carrying Amount
At 1 January 2007 1,397 1,025 920 803 5,034 761 383 10,323
At 31 December 2007 1,373 1,132 406 847 5,345 641 855 10,599
At 31 December 2008 1,365 1,046 630 813 5,369 707 988 10,918

The net carrying amount of property, plant and equipment under finance leases as at 31 December 2008 was $269,000 (2007:
$27,000).

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
64 ECS Holdings Limited
3 PROPERTY, PLANT AND EQUIPMENT CONT’D

Leasehold Office Furniture

Improvements Equipment and Fittings Computers Total
Company $’000 $’000 $’000 $’000 $’000

Cost
At 1 January 2007 191 10 22 76 299
Additions - - - 118 118
Disposals - - - (4) (4)
At 31 December 2007 191 10 22 190 413
Additions - 1 - 83 84
Disposals - - - - -
At 31 December 2008 191 11 22 273 497

Accumulated Depreciation
At 1 January 2007 94 10 21 59 184
Depreciation charge for the year 19 - 1 15 35
Disposals - - - (4) (4)
At 31 December 2007 113 10 22 70 215
Depreciation charge for the year 19 - - 38 57
Disposals - - - - -
At 31 December 2008 132 10 22 108 272

Carrying Amount
At 1 January 2007 97 - 1 17 115
At 31 December 2007 78 - - 120 198
At 31 December 2008 59 1 - 165 225

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 65
 4 GOODWILL ON CONSOLIDATION

2008 2007
$’000 $’000

Goodwill on consolidation 33,522 33,522

Impairment testing for goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s cash-generating unit (CGU) in a group of subsidiaries in
the same geographical location with similar principal activities.

The recoverable amount of each CGU is based on its value-in-use. Value-in-use is determined by discounting the future cash flows
generated from the continuing use of the unit and is based on the following key assumptions:

• Cash flows were projected based on actual operating results and the five-year business plan.

• The anticipated annual revenue growth included in the cash flow projections ranges from 9.7% to 13.5% per annum for the
years 2009 to 2013, giving an average annual growth in revenue of 11.4%.

• A pre-tax discount rate of 7.8% (2007: 8.5%) per annum was used. The discount rate used reflects the risk-free rate and the
premium for specific risks relating to the business unit.

• Terminal value was not considered.

The values assigned to the key assumptions represent management’s assessment of future trends in the IT industry and are based on
both external sources and internal sources and both past performance (historical data) and its expectations for market development.

Group management believes that any reasonably possible changes in the above key assumptions applied are not likely to materially
cause the recoverable amount to be lower than its carrying amount.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
66 ECS Holdings Limited
5 SUBSIDIARIES

Company
Note 2008 2007
$’000 $’000

Unquoted equity shares, at cost 100,258 100,258

Quasi-equity loans to subsidiaries, at cost (a) 7,516 7,516
Loan to subsidiary (b) 66,600 -
174,374 107,774

(a) The loans to subsidiaries are unsecured and interest-free. The settlement of these loans is neither planned nor likely to occur
in the foreseeable future. As these loans are, in substance, part of the Company’s net investments in the subsidiaries, the loans
are stated at cost.

(b) The loan to subsidiary is unsecured, repayable on 17 January 2011 and bears interest at rates ranging from 4.174% to 4.555%
per annum.

Details of the subsidiaries held directly by the Company are set out below.

Country of Group’s Effective

Incorporation/ Equity Interest
Name of Company Principal Activities Business 2008 2007
% %

ECS Computers Provider of information technology Singapore 100 100

(Asia) Pte Ltd products and services for IT infrastructure

ECS Indo Pte Ltd Distributor of information technology Singapore 90 90

products

The Value Systems Co., Ltd Provider of information technology Thailand 100 100
products and services for IT infrastructure

ECS KUSH Sdn Bhd Investment holding Malaysia 60 60

ECS Technology (China) Investment holding, provider of Hong Kong 100 100
Limited information technology products and
services for IT infrastructure

EC Sure Holdings (Thailand) Investment holding Thailand 99.9 99.9

Co., Ltd

ECS Infocom (Phils) Investment holding Singapore 100 100

Pte. Ltd.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 67
 5 SUBSIDIARIES CONT’D

Details of the significant subsidiaries held by the direct subsidiaries of the Company are set out below.

Country of Group’s Effective

Incorporation/ Equity Interest
Name of Company Principal Activities Business 2008 2007
% %

Subsidiaries of ECS Computers (Asia) Pte Ltd

Pacific City (Asia Pacific) Pte Ltd Retail of information technology Singapore 100 100
products, IT equipment and
accessories

Subsidiary of ECS Indo Pte Ltd

PT ECS Indo Jaya Distributor of information technology Indonesia 90 90

products

Subsidiaries of ECS KUSH Sdn Bhd

ECS Pericomp Sdn Bhd ) Provider of information technology Malaysia 48 48

) products and services for IT
) infrastructure

ECS Astar Sdn Bhd ) Malaysia 60 60

Subsidiaries of ECS Technology (China) Limited

ECS International Trading (Shanghai) ) Provider of information technology People’s 100 100
Co., Limited (a) ) products and services for IT Republic
) infrastructure of China

ECS China Technology (Shanghai) ) People’s 100 100

Co., Ltd (a) ) Republic
) of China

(a) Audited by other member firms of KPMG International for consolidation purposes.

KPMG LLP Singapore is the auditor of all the Singapore incorporated subsidiaries. Other member firms of KPMG International are
auditors of the significant foreign-incorporated subsidiaries.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
68 ECS Holdings Limited
6 INTEREST IN ASSOCIATE

Group
2008 2007
$’000 $’000

Investment in associate, at equity-accounted value 6,618 6,271

Loan to associate 666 748
7,284 7,019

The loan to the associate is denominated in United States dollars, unsecured and interest-free. Settlement is neither planned nor likely
to occur in the foreseeable future. As this loan is, in substance, part of the Company’s net investment in the associate, it is stated at
cost.

Details of the associate, which is audited by Pelayo Teodoro Santamaria & Co., are as follows:

Country of Effective equity

Name of associate incorporation held by the Group
2008 2007

MSI-ECS Phils., Inc. Philippines 49.99% 49.99%

The summarised financial information below relating to the associate is not adjusted for the percentage of ownership held by the
Group.

2008 2007
$’000 $’000

Revenue 126,911 163,933

Profit after taxation 695 1,066
Total assets 44,451 51,480
Total liabilities 31,257 37,398

7 OTHER FINANCIAL ASSETS

Group Company
2008 2007 2008 2007
$’000 $’000 $’000 $’000
Available-for-sale
Unquoted equity investments, at cost - 432 - -
Club memberships, at cost 292 275 140 140
Others 11 11 11 11
303 718 151 151

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 69
 8 DEFERRED TAX

Movements in deferred tax assets and liabilities during the year are as follows:-

Recognised Recognised
in income Over in income
At statement Translation At provided in statement Translation At
1/1/2007 (note 25) adjustment 31/12/2007 prior years (note 25) adjustment 31/12/2008
Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Deferred Tax Assets

Provisions 1,987 107 220 2,314 (39) 2,208 (226) 4,257

Deferred Tax
Liabilities
Accelerated tax
depreciation (398) 13 77 (308) (47) (538) 7 (886)

Company

Deferred Tax
Liabilities
Accelerated tax
depreciation (27) - - (27) - - - (27)

9 INVENTORIES

Group
2008 2007
$’000 $’000

Trading inventories 161,816 149,917

Goods in transit 21,214 17,819
183,030 167,736
Allowance for obsolete inventories (7,738) (4,642)
175,292 163,094
Comprises:-
Inventories, at cost 21,214 17,819
Inventories, at net realisable value 154,078 145,275
175,292 163,094

Cost of sales represents trading inventories and changes in work-in-progress recognised in income statement during the year.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
70 ECS Holdings Limited
10 TRADE AND OTHER RECEIVABLES

Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000

Trade receivables 11 384,672 403,457 - -

Deposits, prepayments and other receivables 12 59,667 23,857 69 40
Amount due from related corporations 13 323 1,576 46,628 81,974
444,662 428,890 46,697 82,014

11 TRADE RECEIVABLES

Group Company
2008 2007 2008 2007
$’000 $’000 $’000 $’000

Trade receivables 374,721 370,534 - -

Bills receivable - 218 - -
Amounts due from affiliated companies 21,116 40,977 - -
395,837 411,729 - -
Allowance for doubtful receivables (11,165) (8,272) - -
384,672 403,457 - -

An affiliated company is a company, other than a related corporation, which directly or indirectly through one or more intermediaries,
is under common significant influence.

The maximum exposure credit risk for trade receivables at the balance sheet date by geographic region is:

Group Company
2008 2007 2008 2007
$’000 $’000 $’000 $’000

North Asia 210,845 202,483 - -

South East Asia 173,827 200,974 - -
384,672 403,457 - -

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 71
 11 TRADE RECEIVABLES CONT’D

The maximum exposure credit risk for trade receivables at the balance sheet date by type of customer is:

Group Company
2008 2007 2008 2007
$’000 $’000 $’000 $’000

Value added resellers 120,549 105,907 - -

System integrators 45,105 39,455 - -
Direct accounts 171,236 199,824 - -
Retailers 41,508 33,809 - -
Others 6,274 24,462 - -
384,672 403,457 - -

Impairment losses

The aging of trade receivables at the balance sheet date is:

Group Company
2008 2007 2008 2007
$’000 $’000 $’000 $’000
Gross
Not past due 280,996 252,464 - -
Past due 0 – 30 days 71,061 106,933 - -
Past due 31 – 120 days 31,906 41,727 - -
Past due 121 – 365 days 5,596 2,793 - -
More than one year 6,278 7,812 - -
395,837 411,729 - -

Impairment losses
Not past due (4) - - -
Past due 0 – 30 days (233) (233) - -
Past due 31 – 120 days (663) (296) - -
Past due 121 – 365 days (3,987) (135) - -
More than one year (6,278) (7,608) - -
(11,165) (8,272) - -

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
72 ECS Holdings Limited
11 TRADE RECEIVABLES CONT’D

The change in impairment losses in respect of trade receivables during the year is as follows:

Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000

At 1 January 8,272 8,884 - -

Utilised during the year (1,547) (4,333) - -
Impairment loss recognised 23(b) 4,773 3,151 - -
Translation differences on consolidation (333) 570 - -
At 31 December 11,165 8,272 - -

Based on historical default rates, the Group believes that no further impairment allowance is necessary in respect of trade receivables
not past due as at 31 December 2008. These receivables are mainly arising with customers that have a good record with the Group.

12 DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000

Deposits 1,620 913 - -

Prepayments 53,346 14,953 59 26
Recoverables 2,563 3,169 - 14
Tax recoverables 33 - - -
Other receivables 1,452 4,066 10 -
Call option (a) 653 756 - -
10 59,667 23,857 69 40

(a) On 4 January 2006, a subsidiary entered into a call option agreement with a shareholder of the associate for US$1 cash
consideration which will entitle the subsidiary to acquire additional 10% equity interest in the associate. The call option is
exercisable beginning 4 July 2008 and ending on the date falling three years thereafter, unless otherwise further extended by
the shareholder in writing, at an option price equivalent to US$450,000. The fair value of the call option as at balance sheet
date has been recognised as an option asset with its corresponding change in fair value during the year recognised in the income
statement.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 73
 13 AMOUNTS DUE FROM/TO RELATED CORPORATIONS

Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000
Amounts due from subsidiaries -
Non-trade receivables - - 2,481 2,145
Loans receivable (current) - - 43,824 78,253
- - 46,305 80,398
Amounts due from associate -
Non-trade receivables 323 1,576 323 1,576

10 323 1,576 46,628 81,974

Amounts due to subsidiaries -

Non-trade payables - - 478 535
20 - - 478 535

The loans due from subsidiaries are unsecured, repayable on demand and bear interest at rates ranging from 1.96% to 6.73% (2007:
2.64% to 7.75%) per annum; and

The non-trade balances are unsecured, interest-free and repayable on demand.

There is no allowance made for doubtful receivables arising from the outstanding balances.

14 CASH AND CASH EQUIVALENTS

Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000

Cash at bank and in hand 50,518 39,425 2,087 470

Bank overdrafts 18 (1,016) - - -
Cash and cash equivalents in cash flow statement 49,502 39,425 2,087 470

The weighted average effective interest rates per annum relating to cash and cash equivalents, excluding bank overdrafts, at the balance
sheet date for the Group range from 0.3% to 3.0% (2007: 0.5% to 2.0%) per annum. Interest rates reprice at monthly intervals.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
74 ECS Holdings Limited
15 SHARE CAPITAL

Group and Company

No. of shares
2008 2007
’000 ’000
Issued and fully paid:
At 1 January 365,360 363,599
Issue of shares - 1,761
At 31 December 365,360 365,360

In 2007, the Group has issued share options under its ECS Share Option Scheme II.

At 31 December 2008, there were nil (2007: 110,000) outstanding share options of unissued ordinary shares of the Company
granted under the ECS Share Option Scheme II.

Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. The Board of Directors monitors the return on capital, which the Group defines as net operating
income divided by total shareholders’ equity excluding minority interest. The Board also monitors the level of dividends to ordinary
shareholders.

The Group has a share buy-back mandate to purchase its own shares on the market; the timing of these purchases depends on market
prices. Primarily, the shares purchased are intended to be used for issuing shares under the Group’s share option programme. Buy
and sell decisions are made on a specific transaction basis by the Board. No shares have been purchased to date.

There were no changes in the Group’s approach to capital management during the year.

The Group is subject to externally imposed capital requirements which involve financial covenants relating to consolidated tangible
net worth as stipulated by its bankers in respect of credit facilities. The Group ensures its compliance by monitoring such financial
covenants on a regular basis.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 75
 16 RESERVES

Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000

Currency translation reserve (a) (477) (1,720) - -

Dividend reserve (b) 9,865 5,679 9,865 5,679
General reserve (c) 2,423 669 - -
Accumulated profits 113,175 95,210 10,876 6,228
124,986 99,838 20,741 11,907

(a) Currency Translation Reserve

The currency translation reserve of the Group comprises foreign exchange differences arising from the translation of the
financial statements of foreign entities.

(b) Dividend Reserve

The dividend reserve of the Group represents dividends proposed which are subject to approval of the shareholders at a general
meeting.

(c) General Reserve

According to the current People’s Republic of China (“PRC”) Company Law, the PRC subsidiaries of the Group are required
to transfer 10% of their profit after taxation to statutory surplus reserve until the surplus reserve balance reaches 50% of the
registered capital. For the purpose of calculating the amount to be transferred to reserve, the profit after taxation is the amount
determined under PRC accounting standards. The amount of transfer to this reserve has to be made before profit distribution
to shareholders.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
76 ECS Holdings Limited
17 EQUITY COMPENSATION BENEFITS

The ECS Share Option Scheme II (“Scheme II”) was approved and adopted by its members at an Extraordinary General Meeting
held on 13 December 2000. Scheme II provides an opportunity for employees and directors, including non-executive directors,
of the Group who have contributed significantly to the growth and performance of the Group to participate in the equity of the
Company.

The above scheme is administered by the Compensation Committee (the “Committee”) which comprises the following directors:-

Koh Soo Keong (Chairman)

Leong Horn Kee
Tan Hup Foi

Information regarding the scheme is set out below:-

Scheme II

(a) The exercise price of the options exercisable pursuant to Scheme II is set either at:

- a price equal to the average of the last dealt price for the three consecutive trading days immediately preceding the grant
of the option; or

- a discount to the market price not exceeding 20% of the market price in respect of that option.

(b) Options granted are exercisable at any time after the first anniversary of the grant date and in the case of options with exercise
price set at a discount, at any time after the second anniversary of date of grant. Options granted to employees and executive
directors are exercisable up to the tenth anniversary of date of grant and those granted to non-executive directors are exercisable
up to the fifth anniversary of the date of grant.

(c) The scheme will continue to be in force at the discretion of the Committee, subject to a maximum period of 10 years
commencing 13 December 2000.

At 31 December 2008, details of the options granted under the Company’s option schemes for unissued ordinary shares of the
Company were as follows:-

Date of Options Options Options Options Options

grant of Exercise outstanding Options forfeited outstanding vested vested Exercise
options price 1 Jan 2008 exercised or lapsed 31 Dec 2008 1 Jan 2008 31 Dec 2008 period

Scheme II:
11/03/2003 to
2002 $0.72 110,000 - (110,000) - 110,000 - 10/03/2012

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 77
 18 FINANCIAL LIABILITIES

Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000
Non-current liabilities
Unsecured bank loans 18(a) 66,600 - 66,600 -
Finance lease liabilities 218 5 - -
66,818 5 66,600 -

Current liabilities
Unsecured bank overdrafts 14 1,016 - - -
Unsecured trade financing 25,621 29,902 - -
Unsecured bank loans 18(a) 99,955 154,280 20,660 62,790
Finance lease liabilities 4 22 - -
Derivative liabilities - 6,329 - -
126,596 190,533 20,660 62,790

Total financial liabilities 193,414 190,538 87,260 62,790

(a) A negative pledge has been given in respect of all of the assets of certain subsidiaries with a total net book value at 31 December
2008 of $220,546,617 (2007: $129,404,784).

Finance Lease Liabilities

At 31 December, the Group has obligations under finance leases that are payable as follows:

Principal Interest Payments

$’000 $’000 $’000
2008
Repayable within 1 year 4 - 4
Repayable after 1 year but within 5 years 218 79 297
222 79 301

2007
Repayable within 1 year 22 2 24
Repayable after 1 year but within 5 years 5 2 7
27 4 31

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
78 ECS Holdings Limited
18 FINANCIAL LIABILITIES CONT’D

Terms and conditions of all other interest-bearing liabilities are as follows:

Nominal 2008 2007

interest Year of Face Carrying Face Carrying
rate maturity value amount value amount
$’000 $’000 $’000 $’000

Group
Unsecured bank loans and trade
financing
- S$ floating rate 1.19% - 6.73% 2009 14,500 14,500 7,000 7,000
- US$ floating rate 1.19% - 8.10% 2009 – 2011 99,938 99,938 82,042 82,042
- RMB floating rate 4.50% - 7.52% 2009 28,604 28,604 26,358 26,358
- THB floating rate 3.13% - 5.66% 2009 23,220 23,220 37,872 37,872
- RM floating rate 4.87% - 8.05% 2009 25,914 25,914 30,910 30,910
192,176 192,176 184,182 184,182

Unsecured bank overdrafts 7.00% - 8.05% 2009 1,016 1,016 - -

US$ finance lease liabilities 10.00% 2009 – 2012 222 222 27 27
Derivative liabilities - - - - 6,329 6,329
193,414 193,414 190,538 190,538

Company
Unsecured bank loans
- S$ floating rate loans 1.71% - 3.56% 2009 2,500 2,500 4,500 4,500
- US$ floating rate loans 1.19% - 6.91% 2009 84,760 84,760 58,290 58,290
87,260 87,260 62,790 62,790

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 79
 18 FINANCIAL LIABILITIES CONT’D

Liquidity Risk

The following are the contractual undiscounted cash outflows of financial liabilities, including interest payments and excluding the
impact of netting agreements:

Cash flows
Carrying Contractual Within Between
amount cash flows 1 year 1 to 5 years
Group $’000 $’000 $’000 $’000

2008
Non-derivative financial liabilities
Unsecured bank overdrafts 1,016 (1,016) (1,016) -
Unsecured trade financing 25,621 (25,621) (25,621) -
Unsecured bank loans 166,555 (171,505) (102,052) (69,453)
Finance lease liabilities 222 (222) (4) (218)
Trade and other payables* 241,827 (241,827) (241,827) -
435,241 (440,191) (370,520) (69,671)

2007
Non-derivative financial liabilities
Unsecured trade financing 29,902 (29,902) (29,902) -
Unsecured bank loans 154,280 (154,796) (154,796) -
Finance lease liabilities 27 (27) (22) (5)
Trade and other payables* 233,088 (233,088) (233,088) -

Derivative financial liabilities

Forward exchange contracts used for hedging 6,329 (6,329) (6,329) -
423,626 (424,142) (424,137) (5)

* excludes accrued operating expenses

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
80 ECS Holdings Limited
18 FINANCIAL LIABILITIES CONT’D

Cash flows
Carrying Contractual Within Between
amount cash flows 1 year 1 to 5 years
Company $’000 $’000 $’000 $’000

2008
Non-derivative financial liabilities
Unsecured bank loans 87,260 (92,269) (22,816) (69,453)
Trade and other payables* 478 (478) (478) -
87,738 (92,747) (23,294) (69,453)

2007
Non-derivative financial liabilities
Unsecured bank loans 62,790 (63,000) (63,000) -
Trade and other payables* 792 (792) (792) -
63,582 (63,792) (63,792) -

* excludes accrued operating expenses

19 DEFERRED INCOME

Deferred income relates to fees billed in advance on service maintenance contracts and consists of:

Group
2008 2007
$’000 $’000

Current portion 556 302

Non-current portion 978 968
1,534 1,270

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 81
 20 TRADE AND OTHER PAYABLES

Group Company
Note 2008 2007 2008 2007
$’000 $’000 $’000 $’000

Trade payables 230,638 217,631 - -

Accruals and other payables 21 44,786 49,480 2,116 2,429
Amounts due to subsidiaries 13 - - 478 535
275,424 267,111 2,594 2,964

21 ACCRUALS AND OTHER PAYABLES

Group Company
2008 2007 2008 2007
$’000 $’000 $’000 $’000

Accrued operating expenses 33,597 34,023 2,116 2,172

Deposits received 5,851 10,718 - -
Other payables 5,338 3,062 - 257
Interest payables - 1,677 - -
44,786 49,480 2,116 2,429

22 REVENUE

Group
2008 2007
$’000 $’000

Sale of IT products 2,916,291 2,757,195

IT services 33,580 32,220
2,949,871 2,789,415

Transactions within the Group have been excluded in arriving at revenue for the Group.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
82 ECS Holdings Limited
23 PROFIT FROM OPERATIONS

The following items have been included in arriving at profit from operations:-

(a) Staff Costs

Group
2008 2007
$’000 $’000

Wages and salaries 52,321 49,651

Contributions to defined contribution plans 4,096 4,792
56,417 54,443

(b) Other Expenses/(Income)

Group
2008 2007
$’000 $’000

Exchange gains (net) (987) (1,054)

Interest income
- banks (272) (217)
- associate - (260)
Allowances made for
- obsolete inventories 4,225 1,323
- doubtful trade receivables 4,773 3,151
Directors’ fees 207 341
Inventories written back (466) (315)
Bad debts written off net of bad debts recovered 127 -
Loss on disposal of property, plant and equipment 171 54
Non-audit fees to auditors of the Company 23 9
Negative goodwill arising from additional investment in subsidiary - (55)
Net fair value changes on financial instruments - 3,533
Fair value loss/(gain) on call option 102 (756)
Operating lease expenses 5,163 4,624

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 83
 24 FINANCE COSTS

Group
2008 2007
$’000 $’000
Interest paid and payable on
- bank overdrafts 29 20
- finance leases 10 4
- short-term loans 11,311 8,706
11,350 8,730

25 INCOME TAX EXPENSE

Group
2008 2007
$’000 $’000
Tax Expense
Current tax expense
- Current year 9,881 7,872
- (Over)/under provided in prior years (96) 693
9,785 8,565
Deferred tax expense
- Movements in temporary differences (1,584) (117)
- Changes in tax rates - (17)
- (Over)/under provided in prior years (86) 14
(1,670) (120)

Income tax expense for the year 8,115 8,445

Reconciliation of Effective Tax Rate

Profit before tax 41,386 34,608

Income tax at 18% 7,450 6,229

Non-deductible expenses 508 992
Tax rebate/relief/exemption - (78)
Income not subject to tax (84) (165)
Effect of different tax rates in foreign jurisdictions 804 894
Recognition of previously unrecognised tax losses - 50
(Over)/under provided in prior years (182) 707
Utilisation of previously unrecognised tax losses (528) -
Others 147 (184)
Income tax expense for the year 8,115 8,445

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
84 ECS Holdings Limited
26 EARNINGS PER SHARE

Group
2008 2007

Basic earnings per share is based on:-

Net profit for the year ($’000) 29,386 23,352

Number of shares outstanding at the beginning of the year (’000) 365,360 363,599
Weighted average number of shares issued during the year (’000) - 974
Weighted average number of shares in issue during the year (’000) 365,360 364,573

For the purpose of calculation of the diluted earnings per ordinary share, the weighted average number of ordinary shares in issue
during the year is adjusted to take into account the dilutive effect arising from the dilutive share options, with the potential ordinary
shares weighted for the period outstanding:

Number of Shares
2008 2007
’000 ’000

Weighted average number of shares used in calculation of basic earnings per share 365,360 364,573
Weighted average number of dilutive potential ordinary shares - 9,422
Number of shares that would have been issued at fair value - (7,877)
Weighted average number of ordinary shares (diluted) 365,360 366,118

In 2007, 110,000 ordinary shares at exercise price of $0.72 per share were outstanding but were not included in the computation of
diluted earnings per share because those options were anti-dilutive.

27 SEGMENT INFORMATION

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment),
or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and
rewards that are different from those of other segments.

Segment information is presented in respect of the Group’s business and geographical segments. The primary format, business
segments, is based on the Group’s management and internal reporting structure.

Inter-segment pricing is determined on an arm’s length basis.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable
basis. Unallocated items mainly comprise interest-earning assets and related revenue, interest in the associate, interest-bearing loans,
borrowings and related expenses, income tax assets and liabilities, negative goodwill and corporate assets and expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for
more than one period.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 85
 27 SEGMENT INFORMATION CONT’D

The main business segments of the Group are the following:-

Segments Principal Activities

Enterprise systems Provider of enterprise systems tools (middleware, operating systems, Unix/NT servers, databases, storage
and security products) for IT infrastructure.
IT services IT infrastructure design and implementation, training, maintenance and support services.
Distribution Distribution of IT products (desktop PCs, notebooks, handhelds, printers, etc) for the commercial and
consumer markets.

Enterprise
Systems IT Services Distribution Consolidated
Revenue $’000 $’000 $’000 $’000

2008

Total revenue from external customers 1,133,338 33,580 1,782,953 2,949,871

Segment results 26,437 1,874 23,933 52,244

Share of associate’s profit 492
Net fair value changes on financial Instruments -
Finance costs (11,350)
Unallocated negative goodwill -
Taxation (8,115)
Profit from ordinary activities after taxation 33,271
Minority interests (3,885)
Net profit for the year 29,386

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
86 ECS Holdings Limited
27 SEGMENT INFORMATION CONT’D

Enterprise
Systems IT Services Distribution Consolidated
$’000 $’000 $’000 $’000
Revenue

2007

Total revenue from external customers 964,334 32,220 1,792,861 2,789,415

Segment results 22,416 2,423 21,152 45,991

Share of associate’s profit 825
Net fair value changes on financial instruments (3,533)
Finance costs (8,730)
Unallocated negative goodwill 55
Taxation (8,445)
Profit from ordinary activities after taxation 26,163
Minority interests (2,811)
Net profit for the year 23,352

Assets and Liabilities

2008

Segment assets 223,604 26,194 354,606 604,404

Unallocated assets -
Tax assets 4,257
Others 118,095
Total assets 726,756

Segment liabilities 113,898 2,760 160,300 276,958

Unallocated liabilities -
Tax liabilities 4,298
Financial liabilities 193,414
Total liabilities 474,670

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 87
 27 SEGMENT INFORMATION CONT’D

Enterprise
Systems IT Services Distribution Consolidated
$’000 $’000 $’000 $’000
Assets and Liabilities (Cont’d)

2007

Segment assets 199,847 27,211 383,613 610,671

Unallocated assets -
Tax assets 2,314
Others 72,596
Total assets 685,581

Segment liabilities 98,983 3,452 165,946 268,381

Unallocated liabilities -
Tax liabilities 3,026
Financial liabilities 190,538
Total liabilities 461,945

Capital Expenditure

2008

Capital expenditure 1,308 56 2,389 3,753

2007

Capital expenditure 900 60 2,451 3,411

Significant Non-Cash Expenses

2008

Depreciation of property, plant and equipment 1,120 33 1,762 2,915

2007

Depreciation of property, plant and equipment 1,181 39 2,196 3,416

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
88 ECS Holdings Limited
28 GEOGRAPHICAL SEGMENTS GROUP

The Group operates principally in Singapore, Thailand, Malaysia, Indonesia and China. In presenting information on the basis of
geographic segments, segment revenue is based on the geographic location of operations. Segment assets are based on the geographic
location of the assets.

North Asia South East Asia Consolidated

$’000 $’000 $’000

2008

Total revenue from external customers 1,515,564 1,434,307 2,949,871

Segment assets 310,615 293,789 604,404

Segment liabilities 169,268 107,690 276,958

Capital expenditure 1,203 2,550 3,753

2007

Total revenue from external customers 1,432,078 1,357,337 2,789,415

Segment assets 289,579 321,092 610,671

Segment liabilities 149,306 119,075 268,381

Capital expenditure 523 2,888 3,411

29 FINANCIAL RISK MANAGEMENT

Overview

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable
balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s
risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures
and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee
is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management
controls and procedures, the results of which are reported to the Audit Committee.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 89
 29 FINANCIAL RISK MANAGEMENT CONT’D

Credit Risk (Group)

The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis.
Credit evaluations are performed on all customers requiring credit over a certain amount. If the customers are independently rated,
these ratings are used. Otherwise, the credit quality of customers is assessed after taking into account its financial position and past
experience with the customers.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other
receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that
no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the amount charged to
the allowance account is written off against the carrying amount of the impaired financial asset.

Cash and fixed deposits are placed with banks and financial institutions which are regulated.

Liquidity Risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance
the Group’s operations and to mitigate the effects of fluctuations in cash flows. Typically the Group ensures that it has sufficient
cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this
excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

In addition, as at 31 December 2008, the Group maintains various lines of credit amounting to $434 million, of these, $353 million
of the credit facilities are unsecured.

Market Risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return on risk.

Foreign Currency Risk

The Group incurs foreign currency risk mainly from foreign currency denominated sales, purchases and borrowings that are
denominated in currencies other than the various functional currencies of Group entities. The currencies giving rise to this risk
are primarily the United States dollar (“USD”), Thai Baht (“THB”), Chinese Renminbi (“RMB”) and Ringgit Malaysia (“RM”).
Movements in their exchange rates against the Singapore dollar could result in the Group incurring foreign exchange losses/gains.

The Group recognises that any significant fluctuations in the USD dollar may affect the Group’s foreign currency risk. As a result, the
Group actively monitors its exposure and uses forward foreign exchange contracts and currency swaps to hedge against USD dollar
exposures, as and when necessary and where possible.

In view of the nature of the Group’s business which spans several countries, foreign exchange risks will continue to be an integral
aspect of the Group’s risk profile in the future.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
90 ECS Holdings Limited
29 FINANCIAL RISK MANAGEMENT CONT’D

Foreign Currency Risk (Cont’d)

At 31 December, the Group has outstanding forward exchange contracts with a total notional amount of approximately $15,369,000
(2007: $12,158,000). In 2007, the Group also entered into a hybrid swap contract to hedge against US dollar exposure and floating
rate interest risks, with notional principal value of US$40,000,000 which commenced in 2005 and has expired in 28 January 2008.

Exposure to currency risk

The Group’s financial assets and liabilities are denominated in the following currencies:

SGD USD RMB THB RM Others

$’000 $’000 $’000 $’000 $’000 $’000
2008
Trade receivables 31,268 36,248 200,439 65,628 50,890 199
Loan receivable from associate 323 666 - - - -
Unsecured bank loans/trade financing (14,500) (99,938) (28,604) (23,800) (26,350) -
Trade payables (15,129) (31,384) (141,901) (21,434) (20,773) (17)
Forward exchange contracts and hybrid
swap - - - (7,450) (7,919) -
1,962 (94,408) 29,934 12,944 (4,152) 182

2007
Trade receivables 44,252 40,576 200,113 68,026 50,274 216
Loan receivable from associate 1,576 748 - - - -
Unsecured bank loans/trade financing (7,000) (82,042) (26,358) (37,872) (30,910) -
Trade payables (30,577) (34,290) (111,645) (15,902) (25,217) -
Forward exchange contracts and hybrid
swap - 58,000 - (4,574) (7,584) -
8,251 (17,008) 62,110 9,678 (13,437) 216

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 91
 29 FINANCIAL RISK MANAGEMENT CONT’D

Foreign Currency Risk (Cont’d)

Sensitivity analysis

A 1% strengthening of the Singapore dollar against financial assets and liabilities denominated in the following currencies other than
the functional currencies of Group entities at 31 December would have increased/(decreased) profit before tax by the amounts shown
below. This analysis assumes that all other variables, in particular interest rates, remain constant.

Income statement
2008 2007
$’000 $’000

USD 944 170

RMB (299) (621)
THB (129) (97)
RM 42 134

A 1% weakening of the Singapore dollar against the above currencies, would have had the equal but opposite effect on the above
currencies to the amounts shown above, on the basis that all other variables remain constant.

Interest Rate Risk

The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s debt obligations. The Group
manages some of its exposure to floating rate interest by entering into a hybrid swap as described above.

Sensitivity analysis

An increase of 100 bps in the interest rate at the balance sheet date would decrease profit in the income statement by the amounts
shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

Increase/(Decrease)
2008 2007
$’000 $’000

Hybrid swap - 580

Financial liabilities (1,932) (1,842)
(1,932) (1,262)

A decrease of 100 bps in the interest rate would have had the equal but opposite effect on the above financial instruments to the
amounts shown above, on the basis that all other variables remain constant.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
92 ECS Holdings Limited
29 FINANCIAL RISK MANAGEMENT CONT’D

Fair Values

The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments of the
Group and Company.

Derivatives

The fair value of forward exchange contracts is based on their quoted market price, if available. If a quoted market price is not
available, fair value is estimated by discounting the difference between the contractual forward price and the current forward price for
the residual period to maturity of the contract using a risk-free interest rate (based on government bonds).

The fair value of the hybrid swap is based on a broker quote. The quote is tested for reasonableness by discounting estimated
future cash flows based on the terms and maturity of the contract and using market interest rates for a similar instrument at the
measurement date.

Other financial assets

It is not practicable to estimate the fair value of the Group’s long-term unquoted equity investments because of the lack of quoted
market prices.

Other short term financial assets and liabilities

The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables,
cash and cash equivalents, and trade and other payables) approximate their fair values because of the short period to maturity. All
other financial assets and liabilities are discounted to determine their fair values.

Financial liabilities

2008 2007
Carrying Fair Carrying Fair
amount value amount value
$’000 $’000 $’000 $’000
Group
Unsecured bank overdrafts 1,016 1,016 - -
Unsecured trade financing 25,621 25,621 29,902 29,902
Unsecured bank loan 166,555 166,555 154,280 154,280
Finance lease liabilities 222 222 27 27
Derivative liabilities - - 6,329 6,329
193,414 193,414 190,538 190,538

Company
Unsecured bank loans 87,260 87,260 62,790 62,790

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 93
 30 COMMITMENTS

Operating Lease Commitments

At 31 December, the Group has commitments for future minimum lease payments under non-cancellable operating leases as
follows:-

Group
2008 2007
$’000 $’000
Payable:
Within 1 year 4,723 3,580
After 1 year but within 5 years 4,951 5,306
9,674 8,886

The Group leases office premises and warehouse facilities under operating leases. The leases typically run for an initial period of three
years, with an option to renew the lease after that date.

31 CONTINGENT LIABILITIES UNSECURED

Guarantees Issued

At 31 December, there were contingent liabilities in respect of the following:-

(a) Guarantees given to suppliers by the Company in respect of credit facilities extended to certain subsidiaries amounted to
$187,084,000 (2007: $150,388,000), of which the amount utilised was $56,174,000 (2007: $45,900,000). The guarantees
are renewed on a yearly basis.

(b) Guarantees given to financial institutions by the Company in respect of credit facilities extended to certain subsidiaries
amounted to $199,746,000 (2007: $156,016,000), of which the amount utilised was $74,494,000 (2007: $97,522,000).
The guarantees are renewed on a yearly basis.

(c) Guarantees given to financial institutions by the subsidiaries in respect of credit facilities extended to the Company amounted
to $81,400,000 (2007: $87,000,000), of which $81,400,000 (2007: $58,290,000) had been utilised.

(d) A claim was made on a subsidiary, The Value Systems Co., Ltd, which was named as a second defendant in a law suit for
copyright infringement amounting to Baht 170 million (equivalent to $7 million). The Central Intellectual Property and
International Trade Court of Thailand has ruled that the company was not liable for the damages claimed by the plaintiff.
Although the plaintiff has filed an appeal, based on legal opinion obtained, the directors are of the view that the claim has no
merit and accordingly, no provision for the claim is required.

The Group has accounted for these corporate guarantees as insurance contracts. There are no terms and conditions attached to the
guarantee contracts that would have a material effect on the amount, timing and uncertainty of the Company’s future cash flows.

The Company has undertaken to provide continuing financial support to certain subsidiaries to enable them to continue to operate
as going concerns and to meet their obligations as and when they fall due.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
94 ECS Holdings Limited
32 RELATED PARTIES

Transactions with directors and other key management personnel

Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and
controlling the activities of the Group. The directors and directors of subsidiaries and members of the management team are
considered as key management of the Group.

Key management personnel compensation comprises remuneration of directors and other key management personnel as follows:

Group
2008 2007
$’000 $’000
Directors of the Company
- Short-term employment benefits 2,271 2,218
- Other long-term benefits 94 71
Directors of the subsidiaries
- Short-term employment benefits 2,379 2,713
- Other long-term benefits 121 117
Executive officers
- Short-term employment benefits 1,387 961
- Other long-term benefits 23 23
6,275 6,103

During the year, the Company and certain of its subsidiaries have, in the normal course of business entered into the following
transactions with companies in which certain directors have interests:

Group
2008 2007
$’000 $’000

Purchase of information technology products 15,231 2,116

Sales of information technology products 13,836 10,841
Legal professional services fees - 92
Consultancy services - 161

The directors and other key management personnel participate in the Company’s share option plans, the terms and conditions of
which are stated in note 17. There are no options granted, exercised for the year ended 31 December 2008 or outstanding at 31
December 2008.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 95
 32 RELATED PARTIES CONT’D

Other Related Party Transactions

For the purpose of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly
or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice
versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be
individuals or other entities.

During the financial year, there were the following significant transactions with related parties, based on terms agreed by the
parties:-

Group Company
2008 2007 2008 2007
$’000 $’000 $’000 $’000
Subsidiaries
- sales - - - 81
- purchases - - - 81
- interest paid - - 369 646

Affiliates
- sales 110,770 23,799 - -

33 ACCOUNTING ESTIMATES AND JUDGEMENT

Management discussed with the Audit Committee the development, selection and disclosure of the Group’s and the Company’s
critical accounting policies and estimates and the application of these policies and estimates.

Key source of estimates uncertainty

Note 4 contains information about the assumptions and their risk factors relating to goodwill impairment.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
96 ECS Holdings Limited
34 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED

The Group has not applied the following accounting standards (including its consequential amendments) and interpretations that
have been issued as of the balance sheet date but are not yet effective:

FRS 1 (revised 2008) Presentation of Financial Statements

FRS 23 (revised) Borrowing Costs
FRS 32 Amendments relating to puttable financial instruments and obligations arising on
liquidation
FRS 108 Operating Segments
INT FRS 111 FRS 102 - Group and Treasury Share Transactions
INT FRS 113 Customer Loyalty Programmes
INT FRS 116 Hedges of a Net Investment in a Foreign Operation
Amendments to FRS 1 (revised 2008) Amendments relating to puttable financial instruments and obligations arising on
liquidation
Amendments to FRS 102 Amendments relating to vesting conditions and cancellation

FRS 23 will become effective for financial statements for the year ending 31 December 2009. FRS 23 removes the option to
expense borrowing costs and requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset as part of the cost of that asset. This standard does not have any material impact on the recognition
and measurement of the Group’s financial statements.

FRS 108 will become effective for financial statements for the year ending 31 December 2009. FRS 108, which replaces FRS 14
Segment Reporting, requires identification and reporting of operating segments based on internal reports that are regularly reviewed
by the Group’s chief operating decision maker in order to allocate resources to the segment and assess its performance. Currently, the
Group represents segment information in respect of its business and geographical segments (see notes 27 and 28). Under FRS 108,
the Group will present segment in respect of its operating segments.

Other than the changes in disclosures relating to FRS 108, the initial application of these standards and interpretations is not expected
to have any material impact on the Group’s financial statements. The Group has not considered the impact of accounting standards
issued after the balance sheet date.

Notes to the
Financial Statements
These notes form an integral part of the financial statements.
p.
Annual Report 2008 97
 Class of shares – Ordinary shares
Voting rights – On a show of hands : One vote for each member
– On poll : One vote for each ordinary share

ANALYSIS OF SHAREHOLDINGS

Range of Shareholdings No. of Shareholders % No. of Shares %

1 – 999 8 1.59 3,081 0.00
1,000 – 10,000 389 77.03 2,076,000 0.57
10,001 – 1,000,000 100 19.80 3,686,000 1.01
1,000,001 and above 8 1.58 359,595,093 98.42
505 100.00 365,360,174 100.00

Based on information available to the Company as at 16 March 2009, 10.34% of the issued ordinary shares of the Company is held by the
public and therefore Rule 723 of the Listing Manual is complied with.

TOP 20 SHAREHOLDERS

No. Name of Shareholder No. of Shares %

1 Raffles Nominees Pte Ltd 327,595,093 89.66
2 Thomas Tan Soon Seng (Thomas Chen Shuncheng) 7,400,000 2.03
3 Tat Hong Capital Pte Ltd 6,600,000 1.81
4 Ng Chwee Cheng 6,200,000 1.70
5 Phillips Securities Pte Ltd 4,800,000 1.31
6 HSBC (Singapore) Nominees Pte Ltd 4,400,000 1.20
7 Ng Siew Ban (Huang Xiuwan) 1,500,000 0.41
8 Ong Tiew Siam 1,100,000 0.30
9 DBS Nominees Pte Ltd 251,000 0.07
10 Sim Sok Koon 200,000 0.05
11 United Overseas Bank Nominees Pte Ltd 187,000 0.05
12 OCBC Nominees Singapore Pte Ltd 120,000 0.03
13 Pui Cheng Wui 120,000 0.03
14 Chee Swee Cheng Investments Pte Ltd 100,000 0.03
15 Circular Leasing Pte Ltd 100,000 0.03
16 Yap Kheok Joo 100,000 0.03
17 Estate Of Lim Chin Beng @ Seow Chong Beng Deceased 90,000 0.02
18 Tan Tiong Eng 84,000 0.02
19 Chan Chee Seng 80,000 0.02
20 Lee Cheng Cheong Edward 80,000 0.02
361,107,093 98.82

Shareholdings
Statistics
As at 16 March 2009
p.
98 ECS Holdings Limited
SUBSTANTIAL SHAREHOLDERS

Number of shares Number of shares in which

Name of Substantial registered in the name of the substantial shareholder is Percentage
Shareholder substantial shareholder deemed to have an interest Total (%)
VST Holdings Limited – 327,580,093(1) 327,580,093 89.66
L&L Limited – 327,580,093(1) 327,580,093 89.66

Notes :
(1)
Deemed interest through Raffles Nominees Pte Ltd

Substantial
Shareholders
As at 16 March 2009
p.
Annual Report 2008 99
 ECS HOLDINGS LIMITED
(Incorporated in the Republic of Singapore)
Company Registration No. 199804760R

NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of the Company will be held at 19 Kallang Avenue #07-153
Singapore 339410 on Thursday, 30 April 2009 at 10.00 a.m. to transact the following business :-

ORDINARY BUSINESS

1 To receive and adopt the Directors’ Report and Audited Accounts for the financial year ended 31 December 2008 and the Auditors’
Report thereon. [Resolution 1]

2 To declare a one-tier tax exempt first and final dividend of 2.7 cents per ordinary share for the year ended 31 December 2008.
[Resolution 2]

3 (a) To re-elect Mr Tan Hup Foi who is retiring in accordance with Article 91 of the Company’s Articles of Association, as Director
of the Company. [Resolution 3(a)]

Note: Mr Tan Hup Foi if re-elected, will remain as the Chairman of the Company’s Nominating Committee, and member of the Audit
Committee and Compensation Committee and will be considered as an independent director for the purposes of Rule 704(8) of the
Listing Manual of the Singapore Exchange Securities Trading Limited (“Listing Manual”).

(b) To re-elect Mr Narong Intanate who is retiring in accordance with Article 91 of the Company’s Articles of Association, as
Director of the Company. [Resolution 3(b)]

(c) To note that Mr Liu Wei who is retiring in accordance with Article 91 of the Company’s Articles of Association, as Director of
the Company, will not stand for re-election.

Note: Mr Liu Wei, a Non-Executive Director of the Company, will cease to be the Vice-Chairman of the Company.

4 To re-appoint KPMG LLP as Auditors and to authorise the Directors to fix their remuneration. [Resolution 4]

5 To approve the payment of Directors’ Fees of $189,000.00 for the year ended 31 December 2008. (2007: $348,000.00).
[Resolution 5]

SPECIAL BUSINESS

6 To consider and, if thought fit, to pass the following as Ordinary Resolutions, with or without modifications:-

(a) THAT pursuant to Section 161 of the Companies Act, Cap. 50 (the “Act”) and the listing rules of the Singapore Exchange
Securities Trading Limited (the “SGX-ST”), authority be and is hereby given to the Directors to:-

(i) issue shares in the capital of the Company whether by way of bonus issue, rights issue or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively “Instruments”) that might or would require shares to be issued,
including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments
convertible into shares; and/or

(iii) issue additional Instruments convertible into shares arising from adjustments made to the number of Instruments;

Notice of Annual
General Meeting
p.
100 ECS Holdings Limited
 at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may, in their absolute
discretion, deem fit; and (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares
in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided that:

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of any
Instruments made or granted pursuant to this Resolution):

(a) shall not exceed 50% of the total number of issued shares in the capital of the Company excluding treasury shares (as
calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other
than on a pro rata basis to shareholders of the Company shall not exceed 20% of the total number of issued shares in
the capital of the Company excluding treasury shares (as calculated in accordance with sub-paragraph (2) below); and

(b) the 50% limit in sub-paragraph (a) above may be increased to 100% for issues of shares and/or Instruments by way of
renounceable rights issue where shareholders of the Company are entitled to participate in the same on a pro rata basis;

(2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate
number of shares that may be issued under sub-paragraphs (1)(a) and (1)(b) above, the percentage of issued shares shall
be based on the total number of issued shares in the capital of the Company excluding treasury shares at the time this
Resolution is passed, after adjusting for:

(a) new shares arising from the conversion or exercise of any convertible securities;

(b) new shares arising from the exercise of share options or vesting of share awards which are outstanding or subsisting at
the time this Resolution is passed, provide that the aforesaid share options or share awards were granted in compliance
with Part VIII of Chapter 8 of the Listing Manual; and

(c) any subsequent bonus issue or consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing
Manual for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association
for the time being of the Company; and

(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in
force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general
meeting of the Company is required by law to be held, whichever is the earlier.
[See Explanatory Note (i)] [Resolution 6(a)]

(b) THAT, subject to the grant of the share issue mandate proposed to be tabled as Resolution 6(a) above and pursuant to the terms
and conditions of the share issue mandate, notwithstanding Rule 811 of the Listing Manual, the Directors of the Company be
and are hereby authorised to issue new shares of the Company to subscribers or placees under a share placement, undertaken on
a non pro rata basis, at a discount of up to 20% to the weighted average price for trades done on the SGX-ST for the full market
day on which the placement agreement or subscription agreement is signed, PROVIDED THAT, if trading in the Company’s
shares is not available for a full market day, the weighted average price shall be based on trades done on the preceding market day
up to the time the placement agreement or subscription agreement is signed.
[See Explanatory Note (ii)] [Resolution 6(b)]

Notice of Annual
General Meeting
p.
Annual Report 2008 101
 (c) That the Directors be and are hereby authorised to offer and grant options in accordance with the provisions of the ECS Share
Option Scheme II (the “ECS Share Option Scheme II”), and to allot and issue from time to time such number of shares in the
capital of the Company as may be required to be issued pursuant to the exercise of the options under the ECS Share Option
Scheme II provided always that the aggregate number of ordinary shares to be issued pursuant to the ECS Share Option Scheme
II shall not exceed fifteen per cent of the total number of issued shares in the capital of the Company from time to time.
[See Explanatory Note (iii)] [Resolution 6(c)]

(d) That for the purposes of Chapter 9 of the Listing Manual:

(i) the Shareholders’ General Mandate for the Company, its subsidiaries and associated companies or any of them to enter into
any of the transactions falling within the types or categories of interested person transactions as described in section 3.1
(Interested Person Transactions) of the Appendix A with Guangzhou Jia Dou Ji Tuan Co., Limited and its subsidiaries be and
is hereby approved, provided that such transactions are entered into on an arm’s length basis, on normal commercial terms
and in accordance with the guidelines for interested person transactions as set out in section 3.5 (Review Procedures) of the
Appendix A;

(ii) the aforesaid Shareholders’ General Mandate shall, unless earlier revoked or varied by the Company in general meeting,
continue in force until the next annual general meeting of the Company; and

(iii) the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts and things
(including, without limitation, executing all such documents and approving any amendment, alteration or modification to
any document) as they may consider desirable, expedient or necessary or in the interests of the Company to give effect to the
aforesaid Shareholders’ General Mandate and/or this Resolution 6(d).
[See Explanatory Note (iv)] [Resolution 6(d)]

(e) That for the purposes of Chapter 9 of the Listing Manual:

(i) the Shareholders’ General Mandate for the Company, its subsidiaries and associated companies or any of them to enter
into any of the transactions falling within the types or categories of interested person transactions as described in section
3.1 (Interested Person Transactions) of the Appendix A with Netband Consulting Co., Ltd, Vnet Capital Co., Ltd, Vnet
Capital International Co., Ltd., Thai Incubator.Com Co., Ltd and/or Vintcom Technology Co., Ltd. (as the case may be),
be and is hereby approved, provided that such transactions are entered into on an arm’s length basis, on normal commercial
terms and in accordance with the guidelines for interested person transactions as set out in section 3.5 (Review Procedures)
of the Appendix A;

(ii) the aforesaid Shareholders’ General Mandate shall, unless earlier revoked or varied by the Company in general meeting,
continue in force until the next annual general meeting of the Company; and

(iii) the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts and things
(including, without limitation, executing all such documents and approving any amendment, alteration or modification to
any document) as they may consider desirable, expedient or necessary or in the interests of the Company to give effect to
the aforesaid Shareholders’ General Mandate and/or this Resolution 6(e).
[See Explanatory Note (iv)] [Resolution 6(e)]

(f) That:

(i) for the purposes of the Companies Act, the exercise by the Directors of the Company of all the powers of the Company to
purchase or otherwise acquire the ordinary shares in the capital of the Company not exceeding in aggregate the Prescribed
Limit (as hereafter defined), at such price(s) as may be determined by the Directors of the Company from time to time up
to the Maximum Price (as hereafter defined), whether by way of:

Notice of Annual
General Meeting
p.
102 ECS Holdings Limited
 (a) market purchases (each a “Market Purchase”) on the Singapore Exchange Securities Trading Limited (“SGX-ST”);
and/or

(b) off-market purchases (each an “Off-Market Purchase”) effected otherwise than on the SGX-ST in accordance with
any equal access schemes as may be determined or formulated by the Directors of the Company as they consider fit,
which schemes shall satisfy all the conditions prescribed by the Companies Act, and otherwise in accordance with all
other provisions of the Companies Act and listing rules of the SGX-ST as may for the time being be applicable, be
and is hereby authorised and approved generally and unconditionally (the “Share Buyback Mandate”);

(ii) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors of the Company
pursuant to the Share Buyback Mandate may be exercised by the Directors at any time and from time to time during the
period commencing from the passing of this Resolution and expiring on the earlier of:

(a) the date on which the next annual general meeting of the Company is held or required by law to be held;

(b) the date on which the share buybacks are carried out to the full extent mandated; or

(c) the date on which the authority contained in the Share Buyback Mandate is varied or revoked;

(iii) in this Resolution:

“Prescribed Limit” means 10% of the issued ordinary share capital of the Company as at the date of passing of this
Resolution unless the Company has effected a reduction of the share capital of the Company in accordance with the
applicable provisions of the Companies Act, at any time during the Relevant Period, in which event the issued ordinary
share capital of the Company shall be taken to be the amount of the issued ordinary share capital of the Company as altered
(excluding any treasury shares that may be held by the Company from time to time);

“Relevant Period” means the period commencing from the date on which the last this AGM was is held and expiring on the
date the next AGM is held or is required by law to be held, whichever is the earlier, after the date of this Resolution; and

“Maximum Price” in relation to a share to be purchased, means an amount (excluding brokerage, stamp duties, applicable
goods and services tax and other related expenses) not exceeding:

(i) in the case of a Market Purchase : 105% of the Average Closing Price;

(ii) in the case of an Off-Market Purchase : 120% of the Highest Last Dealt Price,

where:

“Average Closing Price” means the average of the closing market prices of a share over the last five market days, on which
transactions in the shares were recorded, preceding the day of the Market Purchase, and deemed to be adjusted for any
corporate action that occurs after the relevant 5-day period;

“Highest Last Dealt Price” means the highest price transacted for a share as recorded on the market day on which
there were trades in the shares immediately preceding the day of the making of the offer pursuant to the Off-Market
Purchase; and

“day of the making of the offer” means the day on which the Company announces its intention to make an offer for
the purchase of shares from shareholders of the Company stating the purchase price (which shall not be more than the
Maximum Price calculated on the foregoing basis) for each share and the relevant terms of the equal access scheme for
effecting the Off- Market Purchase; and

Notice of Annual
General Meeting
p.
Annual Report 2008 103
 (iv) the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including
executing such documents as may be required) as they may consider expedient or necessary to give effect to the transactions
contemplated by this Resolution.
[See Explanatory Note (v)] [Resolution 6(f )]

7 To transact any other business that may be properly transacted at an annual general meeting. [Resolution 7]

By Order of the Board

Eddie Foo Toon Ee

Company Secretary

Singapore
14 April 2009

Explanatory Notes :
(i) Resolution 6(a), if passed, will authorise the Directors to issue shares in the capital of the Company and to make or grant Instruments
(such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such Instruments, up to a number not
exceeding (i) 50% of the total number of issued shares in the capital of the Company, of which up to 20% may be issued other than
on a pro rata basis to shareholders and (ii) the aforesaid limit of 50% may be increased to 100% for issue of shares and/or Instruments
by way of renounceable rights issue where shareholders of the Company are entitled to participate in the same on a pro rata basis. For
the purpose of determining the aggregate number of shares that may be issued, the percentage of issued shares shall be based on the
total number of issued shares excluding treasury shares in the capital of the Company at the time that Resolution 6(a) is passed, after
adjusting for (a) new shares arising from the conversion or exercise of any convertible securities, (b) new shares arising from the exercise
of share options or vesting of share awards which are outstanding or subsisting at the time that Resolution 6(a) is passed, provided
that the aforesaid share options or share awards were granted in compliance with Part VIII of Chapter 8 of the Listing Manual, (c) any
subsequent bonus issue or consolidation or subdivision or shares.

The authority for undertaking pro rata renounceable rights issues of up to 100% of the Company’s issued share capital is proposed
pursuant to the SGX-ST’s news release of 19 February 2009 which, inter alia, introduced further measures to accelerate and facilitate
the fund raising efforts of listed issuers. If Resolution 6(a) is approved, a renounceable rights issue made pursuant to the mandate is
conditional upon the Company:-

• making periodic announcements on the use of the proceeds as and when the funds are materially disbursed; and

• providing a status report on the use of proceeds in the annual report.

Resolution 6(a), if passed, will provide the Directors with an opportunity to raise funds and avoid prolonged market exposure by
reducing the time taken for shareholders’ approval, in the event such need arises. The risk to minority shareholders’ interests are
mitigated as all shareholders have equal opportunities to participate and can dispose of their entitlements through trading of nil-paid
rights if they do not wish to subscribe for their rights shares pursuant to any renounceable rights issue.

Notice of Annual
General Meeting
p.
104 ECS Holdings Limited
(ii) Resolution 6(b), if passed, will authorise the Directors to issue new shares in pursuance of the share issue mandate granted under
Resolution 6(a), to subscribers or placees, on a non pro rata basis, at a discount of not more than 20% to the weighted average price
for trades done on the SGX-ST for the full market day on which the placement or subscription agreement is signed.

The maximum discount of 20% is proposed pursuant to the SGX-ST’s news release of 19 February 2009 which, inter alia, introduced
further measures to accelerate and facilitate the fund raising efforts of listed issuers.

(iii) Resolution 6(c), if passed, will authorise the Directors to offer and grant options and to allot and issue shares pursuant to the ECS Share
Option Scheme II, provided that the aggregate number of shares issued pursuant to the ECS Share Option Scheme II shall not exceed
fifteen (15) per cent of the total number of issued shares in the capital of the Company from time to time.

(iv) Resolutions 6(d) and 6(e), if passed, will authorise the Company, its subsidiaries and associated companies, from the date of the annual
general meeting until the conclusion of the next annual general meeting, to enter into interested person transactions with certain
interested persons of the Company, its subsidiaries and/or associated companies. Each of such mandates shall, unless revoked or varied
by the Company in general meeting, continue in force until the next annual general meeting of the Company. For further details on
the interested person transactions and interested persons referred to, please see the appendices Appendix A to this Notice.

(v) Resolution 6(f), if passed, will renew effective up to the next annual general meeting (unless earlier revoked or varied by the Company
in general meeting) the Share Buy-back Mandate for the Company to purchase or acquire its ordinary shares. The amount of financing
required for the Company to purchase or acquire its ordinary shares, and the impact on the Company’s financial position, cannot be
ascertained as at the date of the Notice of Annual General Meeting as these will depend on the number of ordinary shares purchased or
acquired and the price at which such ordinary shares were purchased or acquired. For further details on the Share Buyback Mandate,
please see Appendix B to this Notice.

Proxies :
A member entitled to attend and vote at the annual general meeting may appoint not more than two proxies to attend and vote on his behalf
and where a member appoints more than one proxy, the proportion of the shareholding concerned to be represented by each proxy shall be
specified in the form of proxy. A proxy need not be a member of the Company. The instrument appointing a proxy must be deposited at
the office of the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road #17-00, The Corporate Office, Singapore
068906, not less than forty-eight hours before the time set for the holding of the annual general meeting.

NOTICE OF BOOKS CLOSURE AND DIVIDEND PAYMENT DATE

NOTICE IS ALSO HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on 9
May 2009, for the purpose of determining the members’ entitlements to the dividend to be proposed at the Annual General Meeting
of the Company to be held on 30 April 2009. Duly completed registrable transfers in respect of shares in the Company received up to
the close of business at 5.00 p.m. on 8 May 2009 by the Company’s Share Registrar, M & C Services Private Limited, will be registered
to determine members’ entitlements to such dividend. Members whose securities accounts with The Central Depository (Pte) Ltd are
credited with shares in the Company as at 5.00 p.m. on 8 May 2009 will be entitled to such proposed dividend.

The proposed dividend, if approved at the Annual General Meeting, will be paid on 22 May 2009.

Notice of Annual
General Meeting
p.
Annual Report 2008 105
 This page is intentionally left blank.

p.
106 ECS Holdings Limited
Proxy Form IMPORTANT:
1. For investors who have used their CPF monies to buy the Company’s shares, the Annual Report is forwarded to

Annual General Meeting them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used
or purported to be used by them.
ECS HOLDINGS LIMITED 3. CPF Investors who wish to attend the Annual General Meeting as OBSERVERS have to submit their requests
(Incorporated in the Republic of Singapore) through their respective Agent banks so that their Agent banks may register with the Company Secretary of ECS
Holdings Limited not less than 48 hours before the time appointed for holding the meeting.
Company Registration No. 199804760R

I/We ____________________________________________________________________________________________________________________

of _______________________________________________________________________________________________________________________
being a member/members of ECS HOLDINGS LIMITED hereby appoint

Name Address NRIC /Passport Number Proportion of Shareholdings(%)

and/or (delete as appropriate)

as my/our proxy/proxies to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting of ECS HOLDINGS LIMITED
to be held at 19 Kallang Avenue #07-153 Singapore 339410 on 30 April 2009 at 10.00 a.m. and at any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the Ordinary Resolutions as set out in the Notice of
Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter
arising at the Annual General Meeting.)

No ORDINARY RESOLUTIONS FOR AGAINST

Ordinary Business:
1. Adoption of Reports and Accounts
2. Declaration of a one–tier tax exempt first and final dividend of 2.7 cents per ordinary share for the year ended
31 December 2008
3. Re-election of Directors :
(a) Mr Tan Hup Foi
(b) Mr Narong Intanate
4. Re-appointment of Auditors
5. Approval of Directors’ Fees of S$189,000/- for the year ended 31 December 2008
Special Business
6. (a) Authority for Directors to issue shares pursuant to Section 161 of the Companies Act, Cap. 50
(b) Authority to issue shares priced at a discount of up to 20% for placement exercise
(c) Authority for Directors to offer and grant options and allot shares pursuant to the ECS Share Option Scheme II
(d) To approve the proposed renewal of the Shareholders’ General Mandate for Interested Person Transactions with
Guangzhou Jia Dou Ji Tuan Co., Limited and its subsidiaries
(e) To approve the proposed renewal of the Shareholders’ General Mandate for Interested Person Transaction with
Netband Consulting Co., Ltd, Vnet Capital Co., Ltd, Vnet Capital International, Thai Incubator.Com Co., Ltd
and/or Vintcom Technology Co., Ltd.
(f) To approve the proposed renewal of the Share Buy-back Mandate
7. Any other ordinary business

Dated this __________ day of __________ 2009. Total Number of Shares Held:

______________________________________
Signature(s) of member(s) or Common Seal

IMPORTANT : PLEASE READ NOTES OVERLEAF

Notes :-
1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A
of the Companies Act, Cap. 50), you should insert that number of shares. If you have shares registered in your name in the Register of Members, you
should insert that number of shares. If you have shares entered against your name in the Depository Register and shares registered in your name in the
Register of Members, you should insert the aggregate number of shares entered against your name in the Depository Register and registered in your name
in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the shares held by
you.
2 A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote
on his behalf. A proxy need not be a member of the Company.
3 Where a member appoints more than one proxy, the proportion of the shareholding concerned to be represented by each proxy shall be specified in the
form of proxy, failing which, the appointment shall be deemed to be in the alternative.
4 The instrument appointing a proxy must be deposited at the office of the Share Registrar of the Company, M&C Services Private Limited at 138
Robinson Road #17-00, The Corporate Office, Singapore 068906, not less than forty-eight (48) hours before the time appointed for the holding of the
Annual General Meeting.
5 The instrument appointing a proxy must be signed by the appointor or his attorney. Where the instrument appointing a proxy is given by a corporation,
it must be given either under its common seal or signed on its behalf by an attorney or a duly authorised officer of the corporation.
6. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof
must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
7. A corporation which is a member may by a resolution of its directors or other governing body authorise such person as it thinks fit to act as its
representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Cap. 50.

General:
The Company shall be entitled to reject an instrument of proxy if it is incomplete, improperly completed or illegible or where the true intentions of the
appointor are not ascertainable from the instructions of the appointor specified in the instrument of proxy. In addition, in the case of shares entered in the
Depository Register, the Company may reject an instrument of proxy lodged if the member, being the appointor, is not shown to have shares entered against
his name in the Depository Register as at forty-eight (48) hours before the time appointed for the holding of the Annual General Meeting, as certified by The
Central Depository (Pte) Limited to the Company.