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A n n u a l R e p o r t 2 0 0 4

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Mission Statement

Contents02 CHAIRMAN & CEO’S MESSAGE

04 BOARD OF DIRECTORS

06 MANAGEMENT TEAM

07 CORPORATE PROFILE

09 REPORT ON CORPORATE GOVERNANCE

18 REPORT OF THE DIRECTORS

24 STATEMENT OF DIRECTORS

25 AUDITORS’ REPORT

26 BALANCE SHEETS

27 CONSOLIDATED INCOME STATEMENT

28 STATEMENTS OF CHANGES IN EQUITY

30 CONSOLIDATED CASH FLOW STATEMENT

32 NOTES TO THE FINANCIAL STATEMENTS

67 ANALYSIS OF SHAREHOLDINGS

69 ANALYSIS OF WARRANTHOLDINGS

70 NOTICE OF ANNUAL GENERAL MEETING

PROXY FORM

CORPORATE INFORMATION

www.i-hrms.com

A n n u a l R e p o r t 2 0 0 4i n t e g r a 2 0 0 0 L T D 1

2004 has been a challenging but satisfying year. Our IT Services line of business recorded a loss of $500k due to operational issues caused by delays in the commencement of several major projects, as well as the escalating costs of copper and steel materials. However, the continued profi tability of our traditional lines of business, HR/payroll products and HR/payroll outsourcing, more than offset the loss in the IT Services business so that our Company continued to show a profi t in its latest fi nancial year.

In 2004, Integral scored another impressive win. We won the Los Angeles County Board of Education (“LaCBE”) contract for the webifi cation of their Payroll system against stiff competition from the IT giant IBM. Following on the heels of our landmark sale to the US Senate in 2003, this was a signifi cant contract win that reaffi rmed the quality and cost-effectiveness of our web HR/payroll products. Furthermore, what was especially satisfying about this contract win was that LaCBE had previously been an old client, up to the point it terminated its maintenance contract with us in the early 1990s. This sale marks the beginning of the second phase of our marketing strategy to win back the customers that were previously on maintenance contracts with us. Many of our customers had shifted away from our mainframe services to client-server solutions in the 1990s. Then the client-server solution had the advantage of being accessible from user desks, and did not require users to access main frame

terminals from data centres. Integral had lost out on this business some years back, as previous management had failed to offer a competitive client-server solution. Today, however, customers are again making another paradigm shift, this time towards employing web-based (and sometimes even outsourced) internet solutions for their HR functions. Such web-based solutions have proved to be clearly more cost effective and secure than the client-server solution. With our latest web-based products, we now expect to win back many of our old customers (like LaCBE), based on the familiarity of past experience and the effectiveness of our products.

Last year, we developed a Canadian version of our web HR/payroll products and successfully sold it into the Canadian market. Canadian Tire, a large retail chain in Canada, became our fi rst customer. Several other Canadian prospects are currently evaluating our web products. This is very encouraging, as it has opened the door for us to expand into new markets geographically.

As expected, in line with the trend of the past few years, the rate of discontinuances of maintenance clients dropped by more than 50% in 2004. The reason was that 60% of our existing customers have already adopted ‘i-trust’, our new web-product, and another 15-20% are currently evaluating to upgrade to the internet solution. With the paradigm shift towards the internet, we are no longer losing customers to client-server solutions. Hence, we expect the rate of

A n n u a l R e p o r t 2 0 0 4i n t e g r a 2 0 0 0 L T D2

Chairman: Dr. John Lim CEO: Dr. Kwok Kah Kie

Chairman & CEO’ s Message

maintenance discontinuances will continue to drop in 2005. The effect of these discontinuances is being partly offset by the annual increase in maintenance fees, and coupled with the steady growth of our online HR/payroll outsourcing business, integra2000 managed to end the year with a small 4% growth in net profi t after tax, despite the loss in the IT Services business.

In Singapore, our small but fast growing online HR/payroll outsourcing business grew by more than 50% in 2004. This is not surprising as online HR/payroll outsourcing is now the fastest growing segment of the HR industry, both in the USA and in Singapore. With advancing technology and the better security of web-products, more and more customers have come to recognize the cost-effectiveness of the internet so that there is now a growing market acceptance of web-based/online HR and payroll services. Clearly, we will be focussing more of our attention on this sector and expect further signifi cant growth to come in 2005.

Deferment of IPOWith the poor performance of the IT Services business we have decided to defer the listing plan for idexCLS. Management will be reviewing the listing plan and may attempt the IPO at a later date in 2005 or early 2006. It is likely that idex, the US subsidiary for IT Services, will be excluded from the listing plan as it will be restructured to focus more on smaller projects where margins are better.

Maturity of RCPS and Reduction of Interest in CLSWith the IPO deferred, there was no opportunity for our pre-IPO investors to exercise conversion of the RCPS (Redeemable Convertible Preference Shares) into listed shares. As a result, with the maturity of the RCPS, some of these investors opted for the return of funds, while others chose to extend their investment for another year in the form of a convertible bond carrying a 5% interest coupon. There was a third group of investors, however, who wanted to receive shares in Control Logic Systems (“CLS”), nevertheless. Taking into consideration that CLS was loss making, management agreed to sell 31% of CLS to these investors at cost, thus reducing our interest in CLS to 19%.

2005 OutlookWe are concerned about the impact of the weakening US$ and the rising cost of copper and steel. Management has taken appropriate steps to minimize the impact of currency volatility on our annual accounts. Firstly, given that the majority of our businesses are in the United States and to more accurately refl ect the progress of our operations there, we have decided it would be more appropriate to present the annual fi nancial statements in US dollars instead of Singapore dollars. Additionally, as most of our working capital requirements are in US currency, we shall be keeping our cash balances in US dollars so as to minimize currency mismatch.

As for the rising cost of materials, we have now shifted towards focusing on IT services projects that are smaller in size, and where lead times and project completion times are shorter. This will help us avoid lengthy project delays (which the bigger projects are prone to) and be less exposed to infl ationary increases in the price of materials.

We are also refocusing on expanding the marketing effort for our traditional HR/payroll products and outsourcing businesses, to take advantage of the growing acceptability of internet and web products. Appreciationintegra2000 would like to express its appreciation to the independent directors – Dr John Lim (Chairman), Ong Beng Hong and Peter Chan for their advice, support and contributions.

Credit also goes to our staff and management team for making it all happen during this challenging year. Their creativity, willingness to cut costs and put in long hours, have been a very signifi cant contribution towards ensuring the continued profi tability of the Group.

Dr. John Lim Dr. Kwok Kah KieChairman CEO


Chairman & CEO’ s Message

Board of Directors

From left to right: Peter Chan Kwan Teck, Dr. John Lim Boon Seng, Ong Beng Hong, Dr. Kwok Kah Kie, Craig Daron Morris.


“without vision/dreams, there is a tendency todrift aimlessly and deteriorate... therefore we

d t d bi d d h f th

Board of Directors


Dr. John Lim Boon Seng, 41, Chairman of integra2000 Ltd, appointed 24 July 2003. Dr. John Lim is also the Chairman of the Nominating Committee and a member of both the Audit and Remuneration Committees. He is also the founder and Executive Chairman of the Shepherd Group of companies since 1988. Currently, he holds the directorship of Altron Education Group Pte Ltd, Boston Learning Systems Pte Ltd, Service Stratagems Corporation Pte Ltd, Living Faith Church Ltd and Berkley Institute of Media Arts Pte Ltd. He holds a PhD In Business Administration from Southern California University For Professional Studies and has been admitted as a Fellow of the Australian Institute of Company Directors. Dr. John Lim was re-elected as a Director at the 2004 AGM.

Dr. Kwok Kah Kie, 56, Chief Executive Offi cer and Managing Director of integra2000 Ltd. He is also the Chairman of i2k Holdings, Inc. He was instrumental in initiating and heading the Management Buy Out (MBO) of Integral Systems, Inc. from CSA, a Singapore listed company, in 1999. Prior to that, Dr. Kwok was the Chief Financial Offi cer of CSA which he joined in 1982. Dr. Kwok has a B Acc. (Hons) from the National University of Singapore and an honorary PhD in Business Administration.

Craig Daron Morris, 41, Executive Director of integra2000 Ltd. He is the Chief Executive Offi cer of i2k Holdings, Inc. and the Chief Executive Offi cer of IDEX Global Services, Inc. Craig is responsible for the USA operations and investment activities as well as the Group’s fi nance function. He joined Integral Systems, Inc. in 1994 and was part of the Management Buy Out team of Integral Systems, Inc. Prior to joining the integra2000 Ltd Group, Craig trained in South Africa to become a member of the Institute of Chartered Accountants of South Africa and in

the UK to be a Company and Trust Administrator. Craig holds a B Comm. from Rhodes University and has a Post Graduate Degree in Accountancy from the University of Cape Town. Craig is a Chartered Accountant (South Africa) as well as a California CPA and has spent most his career in general management. Craig is the brother of Grant Morris, the Chief Executive Offi cer and Director of PRG. Craig was re-elected as a Director at the 2004 AGM.

Ong Beng Hong, 37, Independent Director of integra2000 Ltd, appointed 5 November 1999. Beng Hong is a Director of Wong Tan & Molly Lim LLC. She is also the Chairman of the Remuneration Committee and member of the Audit and Nominating Committees. She is the legal advisor to integra2000. Beng Hong is an Advocate and Solicitor of the Supreme Court of Singapore, Solicitor of the Supreme Court of England and Wales and Advocate and Solicitor of the Malaysian Bar. Beng Hong holds a LL.B (Hons.) from Kings College, London. Beng Hong was re-elected as a Director at the 2003 AGM.

Peter Chan Kwan Teck, 53, Independent Director of integra2000 Ltd, appointed 25 August 2003. Peter is the Chairman of the Audit Committee and a member of both the Remuneration and Nominating Committees. Currently, Peter is also the Managing Director and owner of PC Asset Management Pte Ltd, which manages stock portfolios focusing on high net worth private clients. Peter’s career history includes wide experience in managing client portfolios for well-known fi nancial institutions such as Schroders, Chemical Bank, Mees Pierson, and OCBC Securities, dating from the period 1980 to 2002. Peter is a Business Administration graduate (1976) from the National University of Singapore. Peter was re-elected as a Director at the 2004 AGM.

iNTEGRA2000LTD annual report 2004

Sheldon Shaw, 37, CEO of Integral System, Inc. (Integral) joined Integral in May 2003. He began his career in the Information Technology fi eld in the late 80s, specializing in the area of artifi cial intelligence and expert systems. In the mid 90s, he established a fi rm that supported HR/Payroll upgrades and development and work with Integral as a part of its service arm in 2001. He has a degree in Computer Science through Eastern Michigan University.

Grant Morris, 43, CEO of Payroll Resource Group, Inc. (PRG), has been a pioneer in delivering integrated payroll, benefi ts and HR services to emerging companies since 1991. Before founding his fi rst company in 1991, Grant spent almost 7 years at Ernst & Young, consulting with companies ranging from start-ups to established public corporations. He has advised companies on business strategies, accounting and adoption of new payroll and HR technology systems. Grant received the Chartered Accountancy (SA) designation in 1987, his California State CPA license in 1990, and is an active member of the American Institute of Certifi ed Public Accountants and California Society of CPAs.

Chew Soon Lee, 46, General Manager, has been with integra2000 Ltd since September 1999. Prior to joining the company, he has served as IT Manager of a MNC for 7 years. He holds a Master degree in Software Engineering and a Bachelor degree in Science from NUS. Additionally, he holds a Post Graduate Diploma in Systems Analysis (JSIST) and a Post Graduate Diploma in Education (IE).


Dr. Kwok Kah KieCEO

Craig MorrisCEOi2k HoldingsiDEX

Grant MorrisCEOPRG

Sheldon ShawCEOIntegral

Chew Soon LeeGeneral Managerintegra2000 Ltd

Management Team

Corporate Profi le

Integral Systems, Inc.Integral is an industry-leading provider of mainframe software solutions that address the complex business requirements of medium- and large-sized organizations. Its functionally robust human resource management and payroll software applications provide a comprehensive set of tools to support enterprise workforce management. For 33 years, Integral has continuously evaluated new technology to effectively address customer requirements.

Our corporate mission is to make our clients more productive and effi cient in the areas of human capital administration and management, by providing superior software and support services that save labor, minimize human error, and improve communication.

Integral is focused on ways to make the human capital management experience more effi cient, less costly, and more secure.

2004 was a year of many challenges and exciting rewards. The excitement from the integrated human capital suite that had its infancy in 2004 has brought about marked stability within the client base and renewed interest in the product as a new sale. This was evidenced most recently by a sale to Los Angeles County Board of Education in Q4. The Integral product has proven itself the market leader in many industries and represents ease of use, scalability, customizability and integrity.

Our goals for 2005:1. Continue to expand the sales of i-Trust Web to existing clients;2. Promote the sale of Benefi ts Management System, Applicant Tracking System, and other add-on products to the early adopters of i-Trust Web;3. Continue delivering added value to our system maintenance services to solidify client loyalty; and4. Sell i-Trust Web to both new clients and former clients no longer active on maintenance.


Singapore OperationsIn Singapore, integra2000 Ltd. is a provider of cost-effective Human Resource/Payroll software. Our products include the window-based SuperPay, SuperPersonnel and OrgPlus which are widely used in many major organizations like Burger King, Starbucks, MINDEF, BASF Singapore, Royal Brunei Airlines, PSA Corporation, CSA and many others.

We are also the fi rst to provide an online service called idealPay via our portal www.i-hrms.com. This is an application service provider (ASP) model where we offer human resources and payroll solutions online and users pay according to the level of usage. Customers need not be bothered with regular backups, security or having an in-house IT Department. There is no need to invest substantially in hardware and software. Our online web-based solutions allow for more productive work processes and most importantly provide global access. This model offers our clients the freedom to work anywhere and anytime with internet connection. This is an ideal solution for smaller SMEs that operate from home or small offi ces spread geographically around the world.

In 2004, we launched our iSuperSuite providing integrated payroll and HR functions. iSuperSuite comprises iSuperLeave, iSuperPay, iSuperClaims and iSuperHR. It is a web-based solution which enables companies to use it either as a standalone, on a local-area-network or even over a wide-area-network easily. It is scalable and cost-effective hence protecting the initial investments of our customers. We plan in 2005 to expand this suite of products to cater to the growing needs of our clients.


IDEX Global Services, Inc. (“idex”)idex is recognized as a leader in the Design, Support and Implementation of Technology Infrastructure for Federal, State, Municipal governments and top companies in the USA. With offi ces around the USA, idex is well positioned to provide high-level service to these nation-wide organizations.

As more of our customers streamline and improve their businesses through technology, idex is being asked to be responsible for designing, implementing and maintaining their infrastructure. As technology trends changes, idex adapts by offering value-add services that include IT Professional Services, Voice over IP (VOIP) and indoor & outdoor Broadband Wireless.

As the economic conditions in the USA continue to improve, we believe that our customers will upgrade their technology infrastructure to keep pace with changing trends. In 2004, idex completed the major infrastructure and cabling projects at the California State University, Sacramento and the University of California, San Francisco. We have commenced work for the new facility at the San Jose Civic Center which is expected to be completed in Q3 of 2005.

Many companies are taking advantage of lower commercial rents by upgrading their facilities and signing long-term deals. As these companies move into new locations, the technology infrastructure has to be upgraded to meet the needs of the new lease. This is where idex comes in.

Historically idex has strived to obtain an even mix of public vs private projects. In 2004 this mix was trending towards the higher revenue/lower margin public projects. As we move into 2005, idex will concentrate on obtaining a higher mix of low revenue/higher margin private projects.

Payroll Resource Group, Inc. (“PRG”)Headquartered in San Francisco, California, PRG is a leading provider of fully integrated payroll, benefi ts, and human resources solutions for small- and medium-sized businesses.

PRG delivers a “best-of-breed” payroll processing platform delivered over the web or from an installed Windows desktop solution. Positioned with both payroll and human resource departments in mind, the software seamlessly integrates payroll with human resources.

The relationship between PRG’s clients and their client service representative is unique to our market. Our account managers are certifi ed and trained in payroll process, and are responsible for coordinating service and support of payroll, tax, HR and technical expertise. We build best practices into our process, giving clients the value of service and delivering consistent results.

Our high client retention and steady infl ux of new clients rests on our unparalleled service delivery model and innovative, fl exible technology and service solutions. As we grow, we are obtaining new clients, building strong client and referral partnerships, delivering new services, and ensuring a consistent, profi table revenue stream that will sustain our future activities. In 2004, we grew our payroll client base and continued to implement a shift in our derived revenue mix by expanding payroll services and decreasing lower margin benefi ts administration services. We successfully completed our SAS70 level II internal control audit which has helped our clients in their compliance needs for the Sarbanes-Oxley Act.

Our goals for 2005 are to ensure the addition of more key employees to our organization, to increase our client base by focusing more on larger organizations (typically 100 to 1,000 employees), and to enhance partnering relationships with strategic referral sources.

Corporate Profi le

9A n n u a l R e p o r t 2 0 0 4iNTEGRA2000 LTD

31 DECEMBER 2004

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

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

1. The Board’s Conduct of its Affairs

The principal functions of the Board are:

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

b. supervising and monitoring the management of the Group;

c. together with the help of the Audit Committee, overseeing the processes for evaluating adequacy of internal controls, risk management, fi nancial reporting and compliance;

d. approving annual budgets, proposals for acquisitions, investments and disposals;

e. approving nominations to the Board and appointment of key personnel;

f. assuming responsibility for corporate governance.

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

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

a. the review of the annual budget and the performance of the Group;

b. review of key activities and business strategies;

c. approval of the corporate strategy and direction of the Group;

d. approval of transactions involving a confl ict of interest for a substantial shareholder or a director or interested person transactions;

e. material acquisitions and disposals;

f. corporate or fi nancial restructuring and share issuances;

g. declaration of dividends and other returns to shareholders;

h. appointments of new directors.

Report on Corporate Governance

A n n u a l R e p o r t 2 0 0 410 iNTEGRA2000 LTD

31 DECEMBER 2004

1. The Board’s Conduct of its Affairs (cont’d)

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

2. Board’s Composition and Balance

The Board comprises fi ve Directors, three of whom are non-executive, independent directors. The independence of each director is reviewed annually by the Nominating Committee. The Nominating Committee is of the view that the non-executive Directors of integra2000 are independent directors and as independent directors make up more than half of the Board, no individual or small group of individuals dominate the Board’s decision making process.

The Board comprises business leaders and professionals with industry, fi nancial and legal backgrounds and its composition enables the management of integra2000 to benefi t from a diverse and objective external perspective on issues raised before the Board. The Board is of the view that the current board’s size is appropriate, taking into account the nature and scope of integra2000’s operations. Profi les of the Directors are set out on page 5 of this Annual Report.

3. Chairman and Chief Executive Offi cer

The Chairman and Chief Executive Offi cer are separate persons to ensure a clear division of responsibilities at the top of the company. The position of Chairman and Chief Executive Offi cer are held by Dr John Lim Boon Seng and Dr Kwok Kah Kie respectively.

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

The Chairman’s responsibilities include the following:

a. scheduling meetings, in consultation with the Chief Executive Offi cer, that enable the Board to perform its duties responsibly while not interfering with the fl ow of integra2000’s operations;

b. preparing meeting agenda, in consultation with the Chief Executive Offi cer;

c. exercising control over quality, quantity and timeliness of the fl ow of information between Management and the Board;

d. assisting in ensuring compliance with integra2000’s guidelines on corporate governance.



31 DECEMBER 2004

4. Board Membership

The Nominating Committee comprises three independent Directors, namely Dr John Lim Boon Seng, Mr Peter Chan Kwan Teck and Ms Ong Beng Hong. The Nominating Committee is chaired by Dr John Lim Boon Seng.

The functions of the Nominating Committee include the following:

a. making recommendations to the Board on appointments or re-appointments to the Board and Board committees;

b. assessing the effectiveness of the Board as a whole and the contribution by each individual director to the effectiveness of the Board;

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

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

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

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

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

The Directors standing for re-election at the forthcoming Annual General Meeting pursuant to Article 91 are Dr John Lim Boon Seng and Ms Ong Beng Hong.

The Nominating Committee, after assessing their contributions and performance has recommended Dr John Lim Boon Seng and Ms Ong Beng Hong for re-election at the forthcoming Annual General Meeting.

5. Board Performance

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

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



31 DECEMBER 2004

6. Access to Information

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

Directors of integra2000 will be regularly updated by Management on the developments within the Group so that they are equipped to participate fully at Board Meetings. Board papers are prepared for each Board Meeting and such Board papers shall include suffi cient information from Management on the fi nancial, business and corporate issues to enable the Directors to be properly briefed on issues to be raised at Board Meetings.

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

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

7. Remuneration Matters

Remuneration Committee

The Remuneration Committee is chaired by Ms Ong Beng Hong and has as its members, Dr John Lim Boon Seng and Mr Peter Chan Kwan Teck, all of whom are independent Directors.

The Remuneration Committee meets when necessary to recommend and advise the Board on the remuneration of Executive Directors, senior executives and employees who are related to integra2000’s substantial shareholders, if any. No Director will be involved in deciding his own remuneration. The Remuneration Committee will have access to expert advice inside and outside the Group if necessary on matters of executive compensation. The Remuneration Committee has met once during the last fi nancial year.

integra2000 has in place service contracts for each of its executive Directors which sets out the framework of remuneration. The Remunerating Committee will upon the expiry of such service contracts, recommend to the Board a framework of remuneration for the Board and key executives and to determine specifi c remuneration packages for each executive Director and the Chief Executive Offi cer. The Remuneration Committee’s recommendations shall be made in consultation with the Chairman and submitted for endorsement by the entire Board. The Remuneration Committee shall cover all aspects of remuneration, including but not limited to director’s fees, salaries, allowances, bonuses, options and benefi ts in kind.



31 DECEMBER 2004

7. Remuneration Matters (cont’d)

Level and Mix of Remuneration

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

Performance-related elements of remuneration forms a signifi cant proportion of the total remuneration package of executives and would be designed to align their interests with those of shareholders and link rewards to corporate and individual performance.

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

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

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

The Directors receiving remuneration from the Group for the year ended 31 December 2003 and 31 December 2004:

Number of Directors

Remuneration band 2004 2003

S$500,000 and above 1 1

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

Below S$250,000 3 3

Total 5 5



31 DECEMBER 2004

7. Remuneration Matters (cont’d)

Disclosure on Remuneration

Salary Bonus Fees Allowances and other benefi ts

Total

% % % % %DirectorsS$500,000 and aboveKwok Kah Kie 71 28 - 1 100

S$250,000 to S$499,999Craig Daron Morris 68 29 - 3 100

Below S$250,000Dr John Lim Boon Seng - - 100 - 100Peter Chan Kwan Teck - - 100 - 100Ong Beng Hong - - 100 - 100

Key personnel of the GroupBelow S$250,000Grant Morris, CEO, PRG 97 - - 3 100Sheldon Shaw, CEO, Integral Systems 72 - - 28 100

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

8. Accountability

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

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

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

9. Audit Committee

The Audit Committee is chaired by Mr Peter Chan Kwan Teck and has as its members, Dr John Lim Boon Seng and Ms Ong Beng Hong, all of whom are independent Directors. Mr Peter Chan Kwan Teck has extensive experience in the fund management industry and holds a Business Administration degree, Dr John Lim Boon Seng, the founder and executive chairman of the Altron group of companies, holds a PhD in Business Administration



31 DECEMBER 2004

9. Audit Committee (cont’d)

and has been admitted as a Fellow of the Australian Institute of Company Directors, and Ms Ong Beng Hong is a practicing advocate and solicitor of the Supreme Court of Singapore.

The Audit Committee has met four times during the last fi nancial year. The Committee reviewed the following, where relevant, with the executive Directors and the external auditors:

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

b. the Group’s fi nancial and operating results and accounting policies;

c. the fi nancial statements of integra2000 and the consolidated fi nancial statements of the Group before their submission to the Board and the external auditors’ report on those fi nancial statements;

d. the co-operation given by Management to the external auditors;

e. the appointment of the external auditors of integra2000, review of the scope and results of the audit and its cost-effectiveness.

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

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

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

10. Internal Control and Risk Management

The Group’s internal controls and systems are designed to provide reasonable assurance as to the integrity and reliability of the fi nancial information and to safeguard and maintain accountability of its assets. Procedures are in place to identify major business risks and evaluate potential fi nancial effects, as well as for the authorization of sales contracts, capital expenditure and investments. Comprehensive budgeting systems are in place to develop annual budgets covering key aspects of the business. Actual performance is compared with budgets and revised forecasts for the year are prepared on a regular basis.

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



31 DECEMBER 2004

11. Internal Audit

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

An internal auditor has been appointed and he adopts the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors (USA) as most of the Group’s operations are currently in the USA. integra2000 shall ensure that (i) the internal audit function is adequately resourced and (ii) the internal auditor has appropriate standing within the Group.

12. Communication with Shareholders

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

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

13. Code on Securities Transactions by Offi cers

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

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



31 DECEMBER 2004

14. Attendance at Board and Board Committee Meetings

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

Name Board Audit Committee Nominating Committee#

Remuneration Committee#

No. of meetings

held

No. of meetings attended

No. of meetings

held


No. of meetings

held


No. of meetings

held


Dr Kwok Kah Kie 4 4 NA NA NA NA NA NA

Dr John Lim Boon Seng

4 4 4 3 NA NA NA NA

Peter Chan Kwan Teck

4 4 4 4 NA NA NA NA

Ong Beng Hong 4 3 4 3 NA NA NA NA

Craig Daron Morris

4 4 NA NA NA NA NA NA

Note:# No meetings of the Nominating Committee or Remuneration Committee were held in 2004, and resolutions

of both the Nominating Committee and the Remuneration Committee in 2004 were passed instead by way of written resolutions.



31 DECEMBER 2004

The Directors of the Company are pleased to present their report together with the audited fi nancial statements of the Company and of the Group for the fi nancial year ended 31 December 2004.

1 DIRECTORS AT DATE OF REPORT

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

Dr John Lim Boon Seng (Chairman) (Independent Director)Dr Kwok Kah Kie (Chief Executive Offi cer)Craig Daron Morris (Executive Director)Ong Beng Hong (Independent Director) Peter Chan Kwan Teck (Independent Director)

2 ARRANGEMENTS TO ENABLE DIRECTORS TO ACCQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the fi nancial year nor at any time during the fi nancial year did there subsist any arrangement whose object is to enable the Directors of the Company to acquire benefi ts by means of the acquisition of shares or debentures in the Company or any other body corporate except for the options rights mentioned below (see paragraphs 3 and 5 below).

3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The Directors holding offi ce at the end of the fi nancial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of Directors’ shareholdings kept by the Company under section 164 of the Companies Act except as follows:

Name of Directors and companies in which interests are held

Direct Interest Deemed InterestAt beginning

of year At endof year

At beginningof year

At end of year

integra2000 Ltd

Ordinary shares of

S$0.05 each

Ordinary shares of

S$0.20 each

Ordinary shares of

S$0.05 each

Ordinary shares of

S$0.20 each

Dr Kwok Kah Kie 22,841,798 6,926,449 40,938,543 10,264,385Craig Daron Morris 17,867,763 4,466,940 17,613,000 4,403,250Ong Beng Hong 159,000 39,750 – – Dr John Lim Boon Seng 568,500 142,125 – –

Report of the Directors


31 DECEMBER 2004

3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (cont’d)

Name of Directors and companies in which interests are held

Direct Interest Deemed InterestAt beginning

of year At endof year

At beginningof year

At end of year

Warrants of integra2000 Ltd

Dr Kwok Kah Kie – 4,216,224 – 5,159,192Craig Daron Morris – 2,233,470 – 4,435,095Ong Beng Hong – 19,875 – – Dr John Lim Boon Seng – 72,250 – –

idexCLS Pte Ltd Redeemable Convertible Preference Shares of S$10,000 each

Dr Kwok Kah Kie – 9 – –Dr John Lim Boon Seng – 9 – – Ong Beng Hong – 9 – – Also see paragraph 5 below.

The Directors’ interests as at 21 January 2005 were the same as those at the end of the year.

4 CONTRACTUAL BENEFITS OF DIRECTORS

Since the beginning of the fi nancial year, no Director has received or become entitled to receive a benefi t which is required to be disclosed under section 201(8) of the Companies Act, Cap 50, by reason of a contract made by the Company or a related corporation with the Director or with a fi rm of which he is a member, or with a Company in which he has a substantial fi nancial interest.

5 OPTIONS TO TAKE UP UNISSUED SHARES

During the fi nancial year, no option to take up unissued shares of the Company or any corporations in the Group was granted other than as disclosed below:

Bonus Warrants of the Company

In 2004, the Company issued 62,346,313 Bonus Warrants based on one (1) Bonus Warrant for every two (2) ordinary shares of S$0.20 each held by entitled shareholders as at the books closure date, fractional entitlements to be disregarded.

Each Bonus Warrant shall carry the right to subscribe in cash for one (1) new share at the exercise Price (being S$0.20), subject to adjustments under certain circumstances in accordance with the terms and conditions set out in the Deed Poll.

The exercise price represents a discount of approximately 33.3% to the last traded price of S$0.075 (before consolidation of 4 shares of S$0.05) per share on the SGX SESDAQ as at the announcement date, and a discount of approximately 28.6% to the closing price of S$0.070 per share (before consolidation of 4 shares of S$0.05) on the SGX SESDAQ, as at the latest practicable date.



31 DECEMBER 2004

5 OPTIONS TO TAKE UP UNISSUED SHARES (cont’d)

The Bonus Warrants may be exercised at any time commencing on 2 September 2004 and expiring at 5.00 p.m. on the day immediately preceding the fi fth (5th) anniversary of the date of issue of the Bonus Warrant,(but excluding (i) such period(s) during which the Register of Members of the Company and/or the Register of Warrant holders may be closed and (ii) a day which is not a market Day, in which event the Bonus Warrants shall expire on the date prior to the closure of the Register of Members of the Company and/or the Register of Warrant holders or on the immediately preceding Market Day, as the case may be, excluding such period(s) during which the Register of Members of the Company and/or the Register of Warrant holders may be closed) subject to the terms and conditions set out in the Deed Poll. Bonus Warrants remaining unexercised at the expiry of such period shall lapse and cease to be valid for any purpose.

Details of options granted in previous years are as follows:

Stock Option Plans of Subsidiaries:

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

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

During 1996, InPower adopted the InPower, Inc. Stock Option Plan (“InPower Plan”) and reserved 2,500,000 shares of InPower common stock for issuance. The InPower Plan provides for the grant of incentive stock options to employees of InPower and ISI and the grant of nonqualifi ed stock options and restricted stock options to employees, offi cers, directors, consultants and advisors of InPower and ISI. The InPower Plan has similar terms and conditions as the ISI Plans. In February 2000, the board of directors discontinued new grants under the InPower Plan and offered all current employees holding InPower Plan stock options the ability to convert each InPower stock option into two ISI stock options with the exercise price of US$0.10 per share under the ISI 1993 Plan. Service with InPower will be recognised for vesting purposes on converted stock options and the term of each converted stock option will be measured from the grant date of the original InPower stock option. This exchange is, in effect, a repricing of the exchange stock options and results in these options becoming variable stock options. Future increases in the fair value of these options will result in compensation cost to ISI.



31 DECEMBER 2004


Activities under the ISI and Inpower Plans are as follows:

Date of GrantAt

1.1.2004Expired/

CancelledAt

31.12.2004

Weighted average

exercise price Exercise periodISI Plans :9 Feb 2000 1,521,900 (50,000) 1,471,900 US$0.10 9 Feb 2000 – 9 Feb 201010 May 1994 250 (250) – US$0.97 10 May 1994 – 10 May 20046 Feb 1995 1,000 – 1,000 US$1.25 6 Feb 1995 – 6 Feb 2005

1,523,150 (50,250) 1,472,900

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

The following table summarises information about Director share options under the ISI and Inpower Plans outstanding as at 31 December 2004:

Name of participant

Options granted during2004

Aggregated options granted from start of scheme to end

of 2004

Aggregated options exercised/lapsed

from start of scheme to end of 2004

Aggregated options

outstanding at 31.12.2004

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

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

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

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

Warrants of ISI

Effective from 1 October 2001, ISI purchased 60% of the outstanding stock of Payroll Resources Group, Inc. (PRG), incorporated in California from its sole owner, Robeson, Ltd. (Robeson), incorporated in the British Virgin Islands. ISI paid Robeson US$1,900,000 and 2,550,000 common stock warrants, which Robeson may exercise to purchase



31 DECEMBER 2004


2,550,000 shares of common stock of ISI for US$0.10 per share, as adjusted. ISI borrowed US$1,900,000 from the Company to fi nance the acquisition of PRG with an option for the Company to convert all or part of the loan to common stock of ISI for US$0.10 per share. Effective 1 January 2003, i2K Holdings, Inc (“i2K Holdings”) purchased the remaining 40% of the outstanding stock of PRG from Robeson. The Company contributed 30,800,000 of its “new ordinary shares” to i2K Holdings and i2K Holdings exchanged the contributed “new ordinary shares” for the remaining 40% of the outstanding stock of PRG. integra2000 valued the contributed shares at S$0.08 (Singapore dollars) per share of S$0.05 each, equivalent to US$1,400,000.

In the event Robeson and the Company converted the warrants and loan respectively, the interest of the Company in ISI would be increased from 85% to 87%. Management has determined that the fair value of the common stock warrants issued in connection with the purchase of its interest in PRG had only a nominal value, because the exercise price was equal to the fair market value of the common shares.

On 31 March 2004, IDEX had a right issue exercise. After the right issue exercise, i2k Holdings interest in IDEX increase from 85.7% to 95.4%.

Warrants of IDEX

Effective from 29 October 2002, ISI purchased 85.7% of the outstanding stock of IDEX Global Services, Inc., (“IDEX”), a California corporation. ISI paid US$5,000 for the stock and agreed to assume certain bank and other indebtedness of IDEX. As of the acquisition date, the indebtedness exceeded the fair value of the assets acquired by US$4,086,000 which amount is recorded as goodwill in the accompanying consolidated balance sheet. Before the acquisition, IDEX had issued warrants for the purchase of up to 13% of the IDEX. These warrants were not cancelled in connection with the acquisition and are exercisable for nominal amounts. Shortly before the acquisition, IDEX sold shares to certain employees for US$300,000 of which US$102,000 was paid and US$198,000 is payable in the form of promissory notes secured by the IDEX shares. The IDEX shares sold to employees represent 4.8% of the total shares outstanding.

6 OPTIONS EXERCISED

During the fi nancial year, there were no shares of the Company or any corporation in the Group issued by virtue of the exercise of option to take up unissued shares except as indicated in paragraph 5 above.

7 UNISSUED SHARES UNDER OPTION

At the end of the fi nancial year, there were no unissued shares of the Company or any corporation in the Group under option except as indicated in paragraph 5 above.

8 AUDIT COMMITTEE

The members of the audit committee at the date of this report are as follows:

Peter Chan Kwan Teck (Chairman of Audit Committee and Independent Director)



31 DECEMBER 2004

8 AUDIT COMMITTEE (cont’d)

Dr John Lim Boon Seng (Independent Director)Ong Beng Hong (Independent Director)

The audit committee performs the functions specifi ed by section 201B(5) of the Companies Act. Among others, it performed the following functions:

• Reviewed with the external auditors the external audit plan;• Reviewed with the external auditors their evaluation of the company’s internal accounting control, and their

report on the fi nancial statements and the assistance given by the company’s offi cers to them;• Reviewed the fi nancial statements of the group and the company prior to their submission to the directors of

the company for adoption;• Reviewed the interested person transactions (as defi ned in Chapter 9 of the Listing Manual of SGX).

Other functions performed by the audit committee are described in the report on corporate governance included in the annual report.

The audit committee has recommended to the board of Directors that the auditors, Chio Lim & Associates, be nominated for re-appointment as auditors at the next annual general meeting of the Company.

9 AUDITORS

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

10 DEVELOPMENTS

There are no signifi cant developments subsequent to the release of the Group’s and the Company’s preliminary fi nancial statements, as announced on 25 February 2005, which would materially affect the Group’s and the Company’s operating and fi nancial performance as of the date of this report.

ON BEHALF OF THE DIRECTORS

Dr. Kwok Kah KieDirector

Ong Beng HongDirector

1 March 2005



31 DECEMBER 2004

In the opinion of the Directors, the accompanying fi nancial statements are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2004 and changes in equity of the Company and of the Group, and of the results and cash fl ows of the Group for the fi nancial year then ended and at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

ON BEHALF OF THE DIRECTORS

Dr Kwok Kah KieDirector

Ong Beng HongDirector

1 March 2005

Statement of Directors


31 DECEMBER 2004

TO THE MEMBERS OF iNTEGRA2000 LTD

We have audited the accompanying fi nancial statements of integra2000 Ltd for the year ended 31 December 2004. These fi nancial statements are the responsibility of the Company’s Directors. Our responsibility is to express an opinion on these fi nancial statements based on our audit.

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

In our opinion,

(a) the consolidated fi nancial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Companies Act, Cap. 50 (the “Act”) and International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2004 and the results, changes in equity and cash fl ows of the Group and the changes in equity of the Company for the year ended on that date;

(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.

Chio Lim & AssociatesCertifi ed Public Accountants

Kaka Singh Partner in charge from 31 December 2001

Singapore1 March 2005

Auditors’ Report


31 DECEMBER 2004

Group CompanyNotes 2004 2003 2004 2003

ASSETS US$’000 US$’000 US$’000 US$’000Current assets:Cash and cash equivalents 4 11,515 10,750 110 85Financial assets at fair value through profi t or loss 5 2,461 2,651 – 854Trade receivables 6 5,685 6,278 1,267 332Other receivables and prepayments 7 1,024 640 787 484Inventories 8 3,578 562 – – Total current assets 24,263 20,881 2,164 1,755

Non-current assets:Investments in subsidiaries 9 – – 10,480 10,847Other investments 10 332 187 332 187Property, plant and equipment 11 1,262 1,432 256 280Deferred tax assets 27 656 471 207 – Goodwill on consolidation 12 17,906 18,060 – – Intangible assets 13 84 37 84 37Other assets 14 169 122 4,240 3,976Total non-current assets 20,409 20,309 15,599 15,327

Total assets 44,672 41,190 17,763 17,082

LIABILITIES AND EQUITYCurrent liabilities:Short-term borrowings 15 4,789 3,746 – – Trade payables and accrued liabilities 16 11,117 8,796 231 282Other payables 17 – 822 268 – Deferred revenue 18 2,653 3,921 59 52Income tax payable 868 – – – Current portion of fi nance leases 19 – 4 – – Total current liabilities 19,427 17,289 558 334

Non-current liabilities:Finance leases 19 – 17 – – Total non-current liabilities – 17 – –

Equity attributable to equity holders of parent:Issued capital 20 14,373 14,373 14,373 14,373Reserves 10,872 9,298 2,832 2,375

25,245 23,671 17,205 16,748Minority interest – 213 – – Total equity 25,245 23,884 17,205 16,748

Total liabilities and equity 44,672 41,190 17,763 17,082

See accompanying notes to fi nancial statements.

Balance Sheets


31 DECEMBER 2004

GroupNotes 2004 2003

US$’000 US$’000

Revenue 22 27,168 23,166

Cost of services (18,206) (12,735)

Gross profi t 8,962 10,431

Other operating income 23 204 24

Distribution costs (2,599) (2,768)

Administrative expenses (3,491) (4,546)

Product development (979) (1,019)

Other (charges) / credits 24 (308) 257

Profi t from operations 1,789 2,379

Finance costs 25 (80) (199)

Profi t before income tax 26 1,709 2,180

Income tax expense 27 (180) (639)

Profi t after income tax 1,529 1,541

Minority interests 74 –

Net profi t for the year 1,603 1,541

Earnings per share (cents) of S$0.20 each 28- Basic 1.29 1.48- Diluted 1.29 1.48


Consolidated Income Statement


31 DECEMBER 2004

AccumulatedShare Share Revaluation profi ts/capital premium Reserves (losses) Total

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

Balance at 31 December 2002 8,691 3,408 – 3,866 15,965Changes in equity for 2003Issue of shares (Note 20) 868 483 – – 1,351Rights issue of shares (Note 20) 4,814 – – – 4,814Net profi t for the year – – – 1,541 1,541Total recognised income and expense for the year – – – 1,541 1,541Balance at 31 December 2003 14,373 3,891 – 5,407 23,671Changes in equity for 2004Warrant Issue expenses recognised directly in equity (Note 20) – (29) – – (29)Net losses recognised directly in equity – (29) – – (29)Net profi t for the year – – – 1,603 1,603Total recognised income and expense for the year – (29) – 1,603 1,574Balance at 31 December 2004 14,373 3,862 – 7,010 25,245

(a)Company

Balance at 31 December 2002 8,691 3,408 7,057 (1,436) 17,720Changes in equity for 2003Available-for-sale investments: Valuation gains (reversed) on subsidiary taken to equity (Note 36) – – (7,057) – (7,057)Net losses recognised directly in equity – – (7,057) – (7,057)Issue of shares (Note 20) 868 483 – – 1,351Rights issue of shares (Note 20) 4,814 – – – 4,814Net loss for the year – – – (80) (80)Total recognised income and expense for the year – – (7,057) (80) (7,137)

Balance at 31 December 2003 14,373 3,891 – (1,516) 16,748

Statements of Changes in Equity


31 DECEMBER 2004

Share Share Revaluation profi ts/ capital premium Reserves (losses) Total

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

Balance at 31 December 2003 14,373 3,891 – (1,516) 16,748Changes in equity for 2004Warrants issue expenses recognised directly in equity (Note 20) – (29) – – (29)Net losses recognised directly in equity – (29) – – (29)Net profi t for the year – – – 486 486Total recognised income and expense for the year – (29) – 486 457Balance at 31 December 2004 14,373 3,862 – (1,030) 17,205

(a) (a)

(a) Not realised and not available for cash dividends


Statements of Changes in Equity


31 DECEMBER 2004

2004 2003US$’000 US$’000

Cash fl ows from operating activities :Profi t before income tax 1,709 2,180Adjustments for :- Depreciation expense 333 394 Goodwill amortisation expense – 1,080 Intangibles amortisation expense 4 – Dividend income – (5) Interest income (204) (19) Interest expense 80 199 Loss on disposal of plant and equipment – (3)

Operating profi t before working capital changes 1,922 3,826Cash restricted beyond 3 months – (1,928)Financial assets at fair value through profi t or loss 189 (1,907)Trade receivables 347 (729)Other receivables and prepayments (417) (157)Inventories (3,162) (208)Trade payables and accrued liabilities 2,608 675Other payables (822) 794Deferred revenue (1,268) (1,371)

Cash used in operations ( 603) (1,005)Interest paid (80) (199)Dividend income received – 5Interest received 204 19Income tax (paid) benefi t 553 (1,340)

Net cash from (used in) operating activities 74 (2,520)

Consolidated Cash Flow Statement


31 DECEMBER 2004

2004 2003US$’000 US$’000

Cash fl ows from investing activities :Purchase of property, plant and equipment (198) (194)Disposal of property, plant and equipment – 3Increase in other investments (145) (106)Increase in goodwill – (3,431)Acquisition of subsidiaries (Note 33) – (32)Disposal of subsidiary (Note 32) 176 –Increase in intangibles (51) (37)Decrease/(increase) in other assets (92) 883

Net cash used in investing activities ( 310) (2,914)

Cash fl ows from fi nancing activities :Proceeds from issuing shares (expenses) (21) 6,165Increase in borrowings 1,043 – Decrease in fi nance leases – 513Others (29) (91)

Net cash from fi nancing activities 993 6,587

Net effect of exchange rate changes in consolidating subsidiaries 8 383

Net increase in cash 765 1,536Cash at beginning of year 8,822 7,286Cash at end of year (Note 4) 9,587 8,822


Consolidated Cash Flow Statement


31 DECEMBER 2004

1. GENERAL

The Company is incorporated in Singapore. The fi nancial statements are presented in United States dollars. They are drawn up in accordance with the provisions of the Singapore Companies Act, Cap 50, (“Act”) and International Financial Reporting Standards (which incorporate the International Accounting Standards) (“IFRS”). However although required by IFRS, the Act exempts the Company from presenting the income statement and the cash fl ow statement of the Company. The fi nancial statements were approved and authorised for issue to the shareholders by the board of Directors on 1 March 2005.

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

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

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

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

The Company is domiciled in Singapore.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING CONVENTION – The fi nancial statements are prepared under the historical cost convention, modifi ed to include the revaluation of certain fi nancial assets and fi nancial liabilities.

BASIS OF PRESENTATION – The consolidation accounting method is used for the consolidated fi nancial statements which include the fi nancial statements made up to 31 December each year of the Company and of those companies in which it holds, directly or indirectly through subsidiaries, over 50 percent of the shares and voting rights. The consolidated fi nancial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. All signifi cant intragroup balances and transactions, including income, expenses and dividends, are eliminated in full on consolidation. The results of the investees acquired or disposed of during the fi nancial year are consolidated from the respective dates of acquisition or up to the dates of disposal. On disposal the attributable amount of unamortised goodwill is included in the determination of the gain or loss on disposal.

GOODWILL – Goodwill arising on acquisition is based on the purchase method. Goodwill arising on consolidation represents the excess of the cost of acquisition over the acquirer’s interest in the fair value of the identifi able assets, liabilities and contingent liabilities of the subsidiary acquired as at the date of acquisition. Goodwill is carried at cost less any accumulated impairment losses. Up to 2003 it was amortised on the straight-line method over its useful life to refl ect the best estimate of the period during which future economic benefi ts are expected to fl ow to the acquirer and it is amortised over 10 to 20 years. From 2004 the Group adopted IFRS 3 Business Combination. IFRS prohibits the amortisation of goodwill acquired in a business combination and instead requires the goodwill to be tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired, in accordance with IAS 36 Impairment of Assets. See Note 12.

Notes to the Financial Statements


31 DECEMBER 2004

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

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

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

SUBSIDIARIES – In the Company’s own fi nancial statements, the investments in subsidiaries are stated at fair values as available-for-sale fi nancial assets unless it is impracticable to determine a reliable fair value when cost is used. A gain or loss on remeasuring available-for-sale fi nancial assets to fair value is recognised in directly in equity until the fi nancial asset is sold, collected, or otherwise disposed of, or when determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in net profi t or loss for the year. The net book values of the subsidiaries are not necessarily indicative of the amounts that would be realised in a current market exchange.

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - The investments held as trading fi nancial assets included under current assets are stated at fair value using the portfolio basis. A gain or loss on remeasuring trading fi nancial assets to fair value (other than those relating to hedges) is recognised in the income statement. The trasactions are recorded at the trade date.

NON-CURRENT INVESTMENTS – Non-current investments held as available-for-sale fi nancial assets are stated at fair values as available-for-sale fi nancial assets unless it is impracticable to determine a reliable fair value when cost is used. Fair value is by reference to the transaction price or other market prices. If such market prices are not reliably determinable, the fair value is estimated as the sum of all future cash payments or receipts, discounted, if the effect of doing so would be material, using the prevailing market rates of interest of an issuer with a similar credit rating. The trasactions are recorded at the trade date. A gain or loss on remeasuring available-for-sale fi nancial assets or liability to fair value (other than those relating to hedges) is recognised directly in equity until the fi nancial asset is sold, collected, or otherwise disposed of, or when determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in net profi t or loss for the year.

REVENUE RECOGNITION – Maintenance revenue is recognised on a time-proportion basis over the maintenance period, which is generally one year. Service revenue consists primarily of training and consulting services and other revenues are recognised as the services are completed. Software license revenue is recognised upon delivery provided that no signifi cant obligations remain, no signifi cant uncertainties exist with respect to product acceptance and collection is probable. The Group allocates a portion of software license fees to post-contract maintenance activities. Cable installation revenues are recognised as billed and this method approximates the stage of completion method, calculated on the cost to total cost basis. Revenue from rendering of services is recognised only when the amount of revenue, stage of completion, and costs of the transaction (including future costs to complete) can be measured reliably. Losses are recorded as an expense immediately.

Deferred revenue – Deferred revenue consists principally of amounts billed or collected from customers for software maintenance services that the Group will provide in future periods.

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



31 DECEMBER 2004


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

INVENTORIES – Inventories consisting of supplies and parts are measured at the lower of cost (fi rst in fi rst out method) and net realisable value.

FOREIGN CURRENCY TRANSACTIONS – The functional currency is the United States dollar as it refl ects primary economic environment in which the entity operates. Transactions in foreign currencies are recorded in United States dollars at the rates ruling at the dates of the transactions. At each balance sheet date, recorded monetary balances and balances measured at fair value that are denominated in foreign currencies are reported at the rates ruling at the balance sheet and fair value dates respectively. All realised and unrealised exchange adjustment gains and losses are dealt with in the income statement. In 2003 the presentation currency was the Singapore $. The fi nancial statements are now presented in US$ as it is convenient and the US currency is quoted daily in the fi nancial newspapers.

FOREIGN CURRENCY FINANCIAL STATEMENTS – The foreign entities determine the appropriate functional currency as it refl ects the primary economic environment in which the entities operate. In translating the fi nancial statements of a foreign entity for incorporation in the consolidated fi nancial statements of the parent company the assets and liabilities denominated in currencies other than the functional currency of the parent company are translated at year end rates of exchange and the income and expense items are translated at average rates of exchange for the year. The resulting translation adjustments (if any) are accumulated in a separate component of shareholders’ equity until the disposal of the foreign entity.

RESEARCH AND DEVELOPMENT COSTS – The Group charges the costs of research and development incurred to establish the technological feasibility of computer software products to operations when incurred. Thereafter, it capitalises all software development costs until the product is available for general release to customers.

SHARE BASED COMPENSATION – The cost or other obligation is not recognised as an expense when the share options are granted to the employees. However the issued capital (nominal value) and share premium are increased by the amount received from the employees.

INCOME TAX – The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events that have been recognised in the fi nancial statement or tax returns. The measurements of current and deferred tax liabilities and assets are based on provisions of the enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefi ts that, based on available evidence, are not expected to be realised. A deferred tax liability is recognised for all taxable temporary differences, unless the deferred tax liability arises from (a) goodwill for which amortisation is not deductible for tax purposes; or (b) the initial recognition of an asset or liability in a transaction which (i) is not a business combination; and (ii) at the time of the transaction, affects neither accounting profi t nor taxable profi t (tax loss).



31 DECEMBER 2004


PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment losses. Depreciation is provided on gross carrying amounts in equal annual instalments over the estimated useful lives of the assets. The annual rates of depreciation are as follows:

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

Fully depreciated assets still in use are retained in the fi nancial statements.

The residual value and the useful life of an asset are reviewed at least at each fi nancial year end and, if expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate.

INTANGIBLE ASSETS– Intangible assets are carried at acquisition cost less accumulated amortisation and any accumulated impairment losses. The depreciable amount of an intangible asset is allocated on a systematic basis over the best estimate of its useful life. The useful live of the software is 10 years. If necessary, special amortisation is effected which is set aside if the reasons for this cease to exist.

IMPAIRMENT OF ASSETS – At each reporting date an assessment is made whether there is any indication that a depreciable or amortisable asset may be impaired. If any such indication exists, an estimate is made of the recoverable amount of the asset. Irrespective of whether there is any indication of impairment, an annual impairment test is performed on an intangible asset with an indefi nite useful life or an intangible asset not yet available for use. A provision is made for the excess of the carrying amount over the recoverable amount. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

RETIREMENT BENEFITS COSTS – Contributions to defi ned contribution retirement benefi t plans are recorded as an expense as they fall due. Contributions made to government managed retirement benefi t plan such as the Central Provident Fund in Singapore which specifi es the employer’s obligations are dealt with as defi ned contribution retirement benefi t plans and are expensed as incurred.

LEASES – A fi nance lease is recognised as an asset and as liability in the balance sheet at amounts equal at the inception of the lease to the fair value of the leased assets or, if lower, at the present value of the lease payments based on the interest rate implicit in the lease. The excess of the lease payments over the recorded lease obligations are treated as fi nance charges which are allocated to each lease term so as to produce a constant rate of charge on the remaining balance of the obligations. The assets are depreciated as owned depreciable assets. Leases where the lessor effectively retains substantially all the risks and benefi ts of ownership of the leased assets are classifi ed as operating leases. For operating leases, lease payments are recognised as an expense in the income statement on a straight line basis unless another systematic basis is representative of the time pattern of the user’s benefi t, even if the payments are not on that basis.

ACCOUNTING ESTIMATES – The preparation of fi nancial statements in conformity with generally accepted accounting principles requires the entity to make estimates and assumptions that affect the reported amounts of



31 DECEMBER 2004


assets and liabilities and disclosure of contingent assets and liabilities at the date of the fi nancial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Apart from those involving estimations, management has made judgements in the process of applying the entity’s accounting policies that have the most signifi cant effect on the amounts recognised in the fi nancial statements. These included those relating to (a) impairment on goodwill, (b) impairment on trade receivables, (c) deferred tax assets, and (d) realisation of inventories.

LIABILITIES AND PROVISIONS – A liability and provision is recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. It is measured at the amount payable.

FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying values of cash, accounts receivable, current investments and other fi nancial assets, short-term borrowings, accounts payable and other current liabilities approximate their fair market values due to the short-term maturity of these instruments. Where applicable, the fair market value of long-term debt is determined based on market quoted rates or is estimated using rates currently available to the Group for debt with similar terms and maturities. The fair market value of long-term debt payable was not determined as there are no signifi cant items as at the end of the year except as disclosed in the notes to the fi nancial statements. Those fi nancial assets and liabilities that have a fi xed maturity are measured at amortised cost using the effective interest rate method. Those that do not have a fi xed maturity are measured at cost. All fi nancial assets are subject to review for impairment.

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

RISK MANAGEMENT POLICIES FOR FINANCIAL INSTRUMENTS

CREDIT RISK ON FINANCIAL ASSETS – Financial assets that are potentially subject to concentrations of credit risk consist principally of cash, cash equivalents and trade and other accounts receivable. The Directors believe that the fi nancial risks associated with these fi nancial instruments are minimal. The Group places its cash and cash equivalents with high credit quality institutions. The Group performs ongoing credit evaluation of its debtors’ fi nancial condition and maintains a provision for doubtful accounts receivable based upon the expected collectibility of all accounts receivable. There is no signifi cant concentration of credit risk, as the exposure is spread over a large number of counterparties and customers except as disclosed in the notes to the fi nancial statements.

OTHER RISKS ON FINANCIAL INSTRUMENTS – The Group monitors its interest, foreign exchange risks, and changes in fair values from time to time and any gains and losses are included in the income statement. The Group is exposed to interest rate price risk for fi nancial instruments with a fi xed interest rate and to interest rate or cash fl ow risk for fi nancial instruments with a fl oating interest rate that is reset as market rates change. The Group is also exposed to changes in foreign exchange rates and liquidity of businesses. The Group utilises forward contracts or



31 DECEMBER 2004


other arrangements to minimise these risks but it does not utilise forward contracts or other arrangements for trading or speculative purposes. At 31 December 2004 there were no such arrangements, interest rate swap contracts or other derivative instruments outstanding. Almost all its fi nancial assets and liabilities are in US dollars. The foreign exchange risks are minimal as the foreign subsidiaries are self-sustaining and operate in U.S.A.

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

3. RELATED COMPANY TRANSACTIONS

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

Some of the Company’s transactions and arrangements are between members of the Group and the effect of these on the basis determined between the parties are refl ected in these fi nancial statements. The intercompany balances are without fi xed repayment terms and interest unless stated otherwise.

4. CASH AND CASH EQUIVALENTS

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Not restricted in use 6,072 3,358 110 85Restricted in use (a) 5,443 5,217 – – Short-term investments – restricted in use (a) – 2,175 – –

11,515 10,750 110 85

Analysis of above amount by foreign currency:HK dollars – 201 – – Euro dollars – 65 – – Singapore dollars 540 829 110 85Japanese Yen 1,567 – – –

(a) These are for bank balances, deposits and equity-link notes held by bankers to cover performance bond of US$1,928,000 (2003: US$1,928,000) and other facilities (see Note 15) granted to the Group.

The rate of interest for the cash on interest earning accounts is between 2.0% and 2.5% (2003 : 2.0% and 2.5%) receivable monthly.



31 DECEMBER 2004

4. CASH AND CASH EQUIVALENTS (cont’d)

CASH AND CASH EQUIVALENTS IN THE CONSOLIDATED CASH FLOW STATEMNT:

Group2004 2003

US$’000 US$’000

As above 11,515 10,750Less cash restricted beyond 3 months (1,928) (1,928)

9,587 8,8225. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000At fair value:Listed bonds and notes of corporations 1,174 2,295 – 854Listed investments in unit trust 455 306 – –Listed equities of corporations 832 50 – –

2,461 2,651 – 854

Analysis of above amount by foreign currency:Euro dollars – 756 – –Singapore dollars 271 354 – 304Japanese Yen 263 – – –

The investment represent short-term investment which provide an opportunity for return through interest income, dividend income and trading gains. The fair values of these securities approximate to their market value. The fi nancial assets are pledge to bank for banking facilities granted to the Group.

The effective interest rates for the year are 9.47% (2003: 4.625%) per year.



31 DECEMBER 2004

6. TRADE RECEIVABLES

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Outside parties 5,702 5,077 61 18Less: provision (17) (35) – – Unbilled receivables _ 1,236 – – Subsidiaries (Notes 3 and 9) – – 1,206 314

5,685 6,277 1,267 332

Movements in above provision:Balance at beginning of year 35 35 – – Charge to income statement (18) – – – Balance at end of year 17 35 – –

The average credit period generally taken by customers, excluding all items provided for, ranges from 14 days to 25 days. A provision for impairment of trade receivables is established when there is objective evidence that management will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash fl ows, discounted at the effective interest rate unless they are short duration receivables. The amount of the provision is recognised in the income statement.

The amounts are mainly in US dollars.

Concentration of customers:Top 1 customer 864 1,053Top 2 customers 1,649 2,831Top 3 customers 1,977 4,740



31 DECEMBER 2004

7. OTHER RECEIVABLES AND PREPAYMENTS

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Subsidiary–interest bearing (Notes 3 and 9) – – 420 420Subsidiaries (Notes 3 and 9) – – 110 53Sundry receivables 637 154 250 4Income tax recoverable – 197 – –Prepayments 387 289 7 7

1,024 640 787 484

An advance of US$420,000 (2003 : US$420,000) to a subsidiary bears interest at 8% (2003: 8%) per year.

8. INVENTORIES

Group2004 2003

US$’000 US$’000

Material and consumables 971 562Work-in-progress 2,607 –

3,578 562

9. INVESTMENT IN SUBSIDIARIES

Company2004 2003

US$’000 US$’000

Unlisted equity shares at cost 10,480 10,847

Balance at beginning of year 10,847 6,607Foreign exchange adjustment 1 – Acquisition – 4,240Disposals (368) – Balance at end of year 10,480 10,847

The investments are mainly in US dollars.



31 DECEMBER 2004

9. INVESTMENT IN SUBSIDIARIES (cont’d)

The fair value of the subsidiaries as available-for-sale fi nancial assets is deemed to be not reliably measurable as the probabilities of the various estimates within the range cannot be reasonably assessed as used in estimating fair values. Consequently the investment is carried at cost less provision for impairment. The fair value increase in prior years based on the net book value has been reversed as a prior year adjustment. See note 36.

The subsidiaries held by the company and the subsidiaries are listed below:

Name of subsidiaries, country of incorporation,place of operations and principal activities

Cost in booksof Group

Effective interest held by Group

2004US$’000

2003US$’000

2004%

2003%

Control Logic Systems Pte Ltd, Singapore – 368 – 50Audio video infrastructure design and installation (d)(f)(disposal on 1 December 2004)

HRM Services, Inc., USA (e) (e) 100 100Inactive. (a) (c)

i2K Holdings, Inc., USA 10,430 10,430 100 100Investment holding company (c)

idex Asia Ltd, British Virgin Islands 50 50 100 100Investment holding company (d)

idexCLS Pte Ltd, Singapore (e) (e) 100 100Investment holding company (d)

Idex Global Holdings, Inc., USAInvestment holding company (c) (e) (e) 100 100

IDEX Global Services, Inc., USA (“iDEX”) 6 5 95 85iDEX engineers, designs, installs and implements networks. (a) (c)

Integral Systems, Inc., USA (“ISI”) 11,812 11,812 85 85ISI provides payroll, human resources and benefi ts management with mainframe, client/server and Web solutions. (b) (c)



31 DECEMBER 2004

9. INVESTMENT IN SUBSIDIARIES (cont’d)

Name of subsidiaries, country of incorporation,place of operations and principal activities

Cost in booksof Group

Effective interest held by Group

2004 2003 2004 2003US$’000 US$’000 % %

InPower Inc., USA (“InPower”) (e) (e) 99.9 99.9Inactive. (a) (c)

ixsys, Inc., USA 11,812 11,812 100 100Investment holding company. (a) (c)

Payroll Resource Group, Inc., USA (“PRG”) 3,300 3,300 100 100PRG provides payroll, benefi ts and human resources solutions and related outsourcing. (a) (c)

(a) Held by i2K Holdings, Inc. Also see Note 20.

(b) Held by ixsys, Inc. The investments also included investment in convertible and non-redeemable preferred stocks.

(c) Audited by Wilson Markle Stuckey Hardesty & Bott, USA, fi rms of accountants other than member fi rms of Horwath International of which Chio Lim & Associates, Singapore is a member.

(d) Audited by Chio Lim & Associates, Singapore (member of Horwath International).

(e) The cost of investment is insignifi cant.

(f) The Company controls over 50% of the voting rights in the board of the subsidiary for 2003.



31 DECEMBER 2004

10. OTHER INVESTMENTSGroup Company

Available-for-sale investments: 2004 2003 2004 2003US$’000 US$’000 US$’000 US$’000

Investments not readily marketable 856 856 – – Provision for impairment (856) (856) – – Unlisted equity shares at cost:At beginning of year 187 81 187 81Additions 145 106 145 106At end of year 332 187 332 187

Movements in above provision:Balance at beginning of year 856 856 – – Charge to income statement – – – – Balance at end of year 856 856 – –

Other investments are investments in equity securities, representing strategic investments in unlisted companies which are held primarily for long-term growth potential. The fair value of the investments as available-for-sale fi nancial assets is deemed to be not reliably measurable as the probabilities of the various estimates within the range cannot be reasonably assessed as used in estimating fair values. Consequently the investments are carried at cost less provision for impairment. The investments held by the Company are mainly in S$.



31 DECEMBER 2004

11. PROPERTY, PLANT AND EQUIPMENT

GroupLeasehold

improvements

Plant, equipment and

software TotalUS$’000 US$’000 US$’000

Cost:At beginning of year 355 4,724 5,079Subsidiary disposal – (67) (67)Additions 75 123 198At end of year 430 4,780 5,210

Accumulated depreciation:At beginning of year 269 3,379 3,648Subsidiary disposal – (33) (33)Depreciation for the year 71 262 333At end of year 340 3,608 3,948

Depreciation for last year 52 342 394

Net book value:At beginning of year 86 1,346 1,432

At end of year 90 1,172 1,262

CompanyLeasehold

improvementsPlant and equipment Total

US$’000 US$’000 US$’000Cost:At beginning of year 10 425 435Additions – 17 17At end of year 10 442 452

Accumulated depreciation:At beginning of year 7 147 155Depreciation for the year 1 40 41At end of year 8 187 196

Depreciation for last year 1 51 52

Net book value:At beginning of year 3 278 280

At end of year 2 254 256



31 DECEMBER 2004

12. GOODWILL ON CONSOLIDATION

Group2004 2003

US$’000 US$’000Cost :At beginning of year 18,060 14,996Goodwill adjustment (a) – 1,949Arising from acquisition of subsidiaries and increase in percentages – 1,115Arising from disposal of subsidiary (154) –At end of year 17,906 18,060

(a) Subsequent to the acquisition of iDEX, i2K Holdings, Inc. discovered overstatements of certain assets, certain unrecorded liabilities and contract revenue overstatements. These items added the adjustments on consolidation to goodwill and were recorded in the fi nancial statements for year 2003.

The Group opted for an early adoption of IFRS 3 Business Combinations, IAS 36 Impairment of Assets (revised 2004) and IAS 38 Intangible Assets (revised 2004) with effect from 1 January 2004 because the subsidiary in USA in preparing the consolidated fi nancial statements under generally accepted accounting principles in USA (SFAS 141 Business Combination) did not amortise goodwill since 2002. This change in accounting policy resulted in a change in the accounting policy for goodwill for the Group. Before 2004 goodwill was recognised as an asset and amortised on a straight-line basis following an assessment of its foreseeable life and it was amortised over 10 to 20 years and assessed for an indication of impairment at each balance sheet date. IFRS 3 prohibits the amortisation of goodwill acquired in a business combination and instead requires the goodwill to be tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired, in accordance with IAS 36. The accumulated amortisation as at 31 December 2003 has been eliminated with a corresponding decrease in the cost of goodwill. See Note 36.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of those cash-generating units represents the Group’s investment by each primary reporting segments as follows: -

HRMS HRMS ITSoftware Services Services ConsolidatedUS$’000 US$’000 US$’000 US$’000

Payroll Resource Group, Inc., USA (“PRG”) – 2,895 – 2,895IDEX Global Services, Inc., USA (“IDEX”) – – 5,246 5,246Integral Systems, Inc., USA (“ISI”) (derived) 9,765 – – 9,765

9,765 2,895 5,246 17,906

The goodwill was tested for impairment in accordance with IAS 36. An impairment loss is the amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. The recoverable amount of



31 DECEMBER 2004

12. GOODWILL ON CONSOLIDATION (cont’d)

an asset or a cash-generating unit is the higher of its fair value less costs to sell or its value in use. The fair value less costs to sell is the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. The recoverable amounts of cash-generating units have been determined based on fair value less costs to sell method and the value in use method as appropriate.

The Group has an offer to purchase Integral Systems for US$15,000,000. The offer is for US$10,000,000 cash and US$5,000,000 carryback for three years at 7% interest and this was announced to shareholders on 25 February 2005. During the past year, PRG had an indication offer of purchase for three times revenue. The price would have been approximately US$6,000,000. PRG was also subject to an outside business valuation in September 2001 that resulted in a valuation of US$5,584,000 using a discounted future earnings approach. These fair values less costs to sell exceed the carrying costs considerably. For IDEX the value in use based on profi ts for the current and future years is in excess of the carrying value.

13. INTANGIBLE ASSETSSoftware

Group and Companydevelopment

costsUS$’000

Cost :At beginning of year 37Additions 51At end of year 88

Accumulated amortisation:At beginning of year – Amortisation for the year 4At end of year 4

Net book value:At beginning of year 37At end of year 84



31 DECEMBER 2004

14. OTHER ASSETS

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Note receivable 1,000 1,000 – – Less: provision (901) (901) – – Deposits to secure services 70 23 – – Loans to subsidiaries (Notes 3 and 9) – – 4,240 3,976

169 122 4,240 3,976Movements in above provision:Balance at beginning of year 901 901 – – Charge to income statement – – – – Balance at end of year 901 901 – –

The note receivable in US dollar is payable on 31 October 2007 and is at the rate of 5% (2003 : 5%) per year. It is due from a corporation owned by a minor stockholders of IDEX.

The fair value of long-term debt receivable approximates its carrying value.

15. SHORT-TERM BORROWINGS

Group2004 2003

US$’000 US$’000

Bank loan 1 (secured) – 2,165Bank loan 2 (secured) 2,001 1,581Redeemable Convertible Preference Shares (“RCPS”) 2,788 –

4,789 3,746Analysis of above amount by foreign currency:Singapore dollars 3,905 629Euro dollars 286 751HK dollars – 200

Bank loan 1 variable interest at the bank prime rate plus 0.75%, that is, 4.75% (2003: 4.75 %) is due monthly. Certain assets of ISI and IDEX secure the credit line and ISI must meet various fi nancial standards and ratios, as defi ned in the agreement with the bank. i2K Holding, Inc guarantees the credit line. The loan had been fully repaid during the year.



31 DECEMBER 2004

15. SHORT-TERM BORROWINGS (cont’d)

Bank loan 2 comprises various revolving bank loans that mature in January 2005. These loans are secured by the cash at bank and fi nancial assets at fair value through profi t or loss of the Company (Note 4) and the effective interest rates ranged from 1.4687% to 3.1562% (2003 : 0.93% to 2.90% ) which accrue daily.

During the fi nancial year, a subsidiary issued 512 RCPS of S$10,000 each for cash. For the same period, 55 shares have been redeemed.

The RCPS holders are entitled to receive a non-cumulative preferential dividend but not any interest. The RCPS are redeemable one year from the date of issue on 18 February 2004. The holders have the option to convert them within a year into the subsidiary’s ordinary shares at a 20% discount on the share price at the initial public offering by the subsidiary.

After the maturity date on 18 February 2005, the holders of the RCPS were given an option to take up 5% convertible bond of the subsidiary or subscribe for the Company shares at 1 cent discount to market price but subject to a minimum of 20 cents par value. Those not taking up the option were paid in full.

16. TRADE PAYABLES AND ACCRUED LIABILITIES

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Outside parties and accrued liabilities 11,117 8,796 231 282Subsidiaries (Notes 3 and 9) – – – –

11,117 8,796 231 282

The amounts are mainly in US dollars. The average credit period taken by the Group to settle payables is about 45 days (2003 : 45 days).

17. OTHER PAYABLES

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Subsidiary (Note 3 and 9) – – 268 – Outside parties – 808 – – Director of subsidiary – 14 – –

– 822 268 –



31 DECEMBER 2004

17. OTHER PAYABLES (cont’d)

The amounts due are unsecured, with no fi xed repayment terms and interest. The amounts from outside parties were from potential shareholders in a subsidiary.

18. DEFERRED REVENUE

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Balance at beginning of year 3,920 5,183 52 –Credits during the year 4,557 14,108 92 52Transferred to income statement (5,824) (15,370) (85) –Balances at end of year 2,653 3,921 59 52

19. OBLIGATIONS UNDER FINANCE LEASES

Group Minimumpayments

Financecharges Present value

2003 US$’000 US$’000 US$’000Minimum lease payments payable:Due within one year 5 (1) 4Due within 2 to 5 years 22 (5) 17Total 27 (6) 21

Net book value of plant and equipment under fi nance leases 25

It is a policy to lease certain of its fi xtures and equipment under fi nance leases. The average lease term is 7 years. The rate of interest for fi nance leases is about 3.75% per year. Interest rates are fi xed at the contract date. All leases are on a fi xed repayment basis and no arrangements have been entered into for contingent rental payments. All lease obligations are denominated in S$. The fair value of the lease obligations approximates to their carrying amount. The obligations under fi nance leases are secured by the lessor’s charge over the leased assets.



31 DECEMBER 2004

20. ISSUED CAPITAL

Number of shares Group and Company2004 2003 2004 2003

US$’000 US$’000Authorised:Ordinary shares of S$0.20 (2003:S$0.05 each) 300,000,000 600,000,000 35,481 17,441Redeemable preference shares of US$0.10 each 50,000,000 50,000,000 5,000 5,000

Issued and fully paid:Ordinary shares of S$0.05 each at beginning of year 498,770,509 301,713,673 14,373 8,691

Consolidation of every issued ordinaryshares of S$0.05 each into 1 ordinaryshares of S$0.20 each (374,077,907) – – –

Issued for cash at a premium of S$0.03each on 11 April 2003. The proceeds were used for acquiring the remaining 40% interest in the issued shares of a subsidiary, Payroll Resource Group, Inc. – 30,800,000 – 868

Rights issue on the basis of one rightsshare for every two existing ordinaryshares at par on 24 July 2003. – 166,256,836 – 4,814At end of year 124,692,602 498,770,509 14,373 14,373

The share premium account balance and the unrealised reserves shown in the statement of changes in equity are not available for distribution as cash dividends. The share premium account is net of share issue expenses of US$63,000 in 2003.

OPTIONS AND WARRANTS:

During the fi nancial year, no option to take up unissued shares of the Company or any corporations in the Group was granted other than as disclosed below:

Bonus Warrants of the Company

In 2004, the Company issued 62,346,313 Bonus Warrants based on one (1) Bonus Warrant for every two (2) ordinary shares of S$0.20 each held by entitled shareholders as at the books closure date, fractional entitlements to be disregarded.



31 DECEMBER 2004

20. ISSUED CAPITAL (cont’d)

Each Bonus Warrant shall carry the right to subscribe in cash for one (1) new share at the exercise Price (being S$0.20), subject to adjustments under certain circumstances in accordance with the terms and conditions set out in the Deed Poll.

The exercise price represents a discount of approximately 33.3% to the last traded price of S$0.075 (before consolidation of 4 shares of S$0.05) per share on the SGX SESDAQ as at the announcement date, and a discount of approximately 28.6% to the closing price of S$0.070 per share (before consolidation of 4 shares of S$0.05) on the SGX SESDAQ, as at the latest practicable date.

The Bonus Warrants may be exercised at any time commencing on 2 September 2004 and expiring at 5.00 p.m. on the day immediately preceding the fi fth (5th) anniversary of the date of issue of the Bonus Warrant,(but excluding (i) such period(s) during which the Register of Members of the Company and/or the Register of Warrant holders may be closed and (ii) a day which is not a market Day, in which event the Bonus Warrants shall expire on the date prior to the closure of the Register of Members of the Company and/or the Register of Warrant holders or on the immediately preceding Market Day, as the case may be, excluding such period(s) during which the Register of Members of the Company and/or the Register of Warrant holders may be closed) subject to the terms and conditions set out in the Deed Poll. Bonus Warrants remaining unexercised at the expiry of such period shall lapse and cease to be valid for any purpose.

Details of options granted in previous years are as follows:

Stock Option Plans of Subsidiaries:

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

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

During 1996, InPower adopted the InPower, Inc. Stock Option Plan (“InPower Plan”) and reserved 2,500,000 shares of InPower common stock for issuance. The InPower Plan provides for the grant of incentive stock options to employees of InPower and ISI and the grant of nonqualifi ed stock options and restricted stock options to employees, offi cers, directors, consultants and advisors of InPower and ISI. The InPower Plan has similar terms and conditions as the ISI Plans. In February 2000, the board of directors discontinued new grants under the InPower Plan and offered all current employees holding InPower Plan stock options the ability to convert each InPower stock option into two ISI stock options with the exercise price of US$0.10 per share under the ISI 1993 Plan. Service with InPower will be recognised for vesting purposes on converted stock options and the term of each converted stock



31 DECEMBER 2004


option will be measured from the grant date of the original InPower stock option. This exchange is, in effect, a repricing of the exchange stock options and results in these options becoming variable stock options. Future increases in the fair value of these options will result in compensation cost to ISI.

Activities under the ISI and Inpower Plans are as follows:

Date of GrantAt

1.1.2004Expired/

Cancelled At 31.12.2004

Weighted averageexercise

price Exercise periodISI Plans :9 Feb 2000 1,521,900 (50,000) 1,471,900 US$0.10 9 Feb 2000 – 9 Feb 201010 May 1994 250 (250) – US$0.97 10 May 1994 – 10 May 20046 Feb 1995 1,000 – 1,000 US$1.25 6 Feb 1995 – 6 Feb 2005

1,523,150 (50,250) 1,472,900

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

The following table summarises information about Director share options under the ISI and Inpower Plans outstanding as at 31 December 2004:

Name of participant

Options granted during2004

Aggregated options granted from start of

scheme to end of 2004

Aggregated options exercised/lapsed from

start of scheme to end of 2004

Aggregated options

outstanding at 31.12.2004

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

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

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

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



31 DECEMBER 2004


Warrants of ISI

Effective from 1 October 2001, ISI purchased 60% of the outstanding stock of Payroll Resources Group, Inc. (PRG), incorporated in California from its sole owner, Robeson, Ltd. (Robeson), incorporated in the British Virgin Islands. ISI paid Robeson US$1,900,000 and 2,550,000 common stock warrants, which Robeson may exercise to purchase 2,550,000 shares of common stock of ISI for US$0.10 per share, as adjusted. ISI borrowed US$1,900,000 from the Company to fi nance the acquisition of PRG with an option for the Company to convert all or part of the loan to common stock of ISI for US$0.10 per share. Effective 1 January 2003, i2K Holdings, Inc (“i2K Holdings”) purchased the remaining 40% of the outstanding stock of PRG from Robeson. The Company contributed 30,800,000 of its “new ordinary shares” to i2K Holdings and i2K Holdings exchanged the contributed “new ordinary shares” for the remaining 40% of the outstanding stock of PRG. integra2000 valued the contributed shares at S$0.08 (Singapore dollars) per share of S$0.05 each, equivalent to US$1,400,000.

In the event Robeson and the Company converted the warrants and loan respectively, the interest of the Company in ISI would be increased from 85% to 87%. Management has determined that the fair value of the common stock warrants issued in connection with the purchase of its interest in PRG had only a nominal value, because the exercise price was equal to the fair market value of the common shares.

Warrants of IDEX

Effective from 29 October 2002, ISI purchased 85.7% of the outstanding stock of IDEX Global Services, Inc., (“IDEX”), a California corporation. ISI paid US$5,000 for the stock and agreed to assume certain bank and other indebtedness of IDEX. As of the acquisition date, the indebtedness exceeded the fair value of the assets acquired by US$4,089,000 which amount is recorded as goodwill in the accompanying consolidated balance sheet. Before the acquisition, IDEX had issued warrants for the purchase of up to 13% of the IDEX. These warrants were not cancelled in connection with the acquisition and are exercisable for nominal amounts. Shortly before the acquisition, IDEX sold shares to certain employees for US$300,000 of which US$102,000 was paid and US$198,000 is payable in the form of promissory notes secured by the IDEX shares. The IDEX shares sold to employees represent 4.8% of the total shares outstanding.

On 31 March 2004, IDEX had a right issue exercise. After the right issue exercise, i2k Holdings interest in IDEX increase from 85.7% to 95.4%.

Fair value disclosures:

Had compensation cost for the ISI and InPower Plans been determined based on the fair value at the grant dates for the awards under a method permitted by IAS 19, the Group’s proforma net income would not have materially changed for the years ended 31 December 2004 and 2003. The fair value of each option is estimated on the date of grant using the minimum value method with the following assumption used for grants:

2004 2003

Annual dividend yield 0.00% 0.00%Risk-free annual interest rates 3.64% 3.53%Volatility 0.00% 0.00%Expected option term of years 3 years 3 years



31 DECEMBER 2004

21. RETIREMENT PLANS

Employees of the Company in Singapore contribute to the government managed retirement benefi t plan, the Central Provident Fund, which specifi es the employer’s obligations and these are dealt with as defi ned contribution retirement benefi t plans and are expensed as incurred.

The subsidiaries, ISI, IDEX, InPower and PRG sponsor separate defi ned contribution plans covering substantially all their employees. Their board of directors of the subsidiaries determine annually any contributions to the plans. During the year, ISI, IDEX, InPower and PRG did not contribute to the plan. The separate plans were combined into one plan in 2004.

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

22. REVENUE

Group2004 2003

US$’000 US$’000

Maintenance 5,822 6,676Services 18,242 13,688Software licence fees 325 165Outsourcing 2,603 2,498Others 176 139

27,168 23,166

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

23. OTHER OPERATING INCOMEGroup

2004 2003US$’000 US$’000

Dividend income from listed corporations – 5Interest income from non-related parties 204 19

204 24



31 DECEMBER 2004

24. OTHER CREDITS / (CHARGES)

Group2004 2003

US$’000 US$’000

Foreign exchange adjustments gain/(loss) (443) 24Gain on disposal of fi nancial assets at fair value through profi t or loss 216 174Gain on disposal of plant and equipment – 3Gain on disposal of subsidiary 126 – Fair value (loss) gain on fi nancial assets at fair value through profi t or loss (207) 56

( 308) 257

25. FINANCE COSTS

2004 2003US$’000 US$’000

Interest expense to non-related parties 80 199

26. PROFIT BEFORE INCOME TAX

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

Group2004 2003

US$’000 US$’000Directors’ remuneration Directors of the Company 926 986 Directors of subsidiaries 196 370 Fees to Directors of the Company 36 10Auditors’ remuneration: Auditors of the Company 15 14Auditors’ remuneration: Auditors of subsidiaries 30 17Other fee to auditors: Auditors of the Company 2 1 Auditors of subsidiaries 15 12Amortisation of goodwill included under administration expenses – 1,080Amortisation of intangible included under administration expenses 4 – Reversal for impairment of trade receivables included under administration expenses (18) – Changes in inventories (increase) (3,162) (208)



31 DECEMBER 2004

26. PROFIT BEFORE INCOME TAX (cont’d)

Amounts paid to a fi rm in which a Director is a member and to the auditors of the Company in 2004 of US$14,921 and US$3,000 (2003 of US$29,000 and US$3,000) respectively for professional fees in respect of the bonus warrants issues in 2004 and rights issues in 2003 (Note 20). These were charged against the share premium account. Also the prepayments in Note 7 included fees to a fi rm in which a Director is a member and to the auditors of the Company for non-audit services totalling US$32,000 and US$18,000 respectively.

27. INCOME TAX

Group2004 2003

US$’000 US$’000

Current 400 641Deferred tax (benefi t) (220) (2)

180 639

The income tax expense varied from the amount of income tax expense determined by applying the Singapore income tax rate of 20% (2003 : 22%) to profi t before income tax as a result of the following differences:-

Group2004 2003

US$’000 US$’000

Income tax expense at statutory rate 342 480Non-allowable (taxable) items 21 225State and local taxes (14) 188Difference in effective tax rates overseas 296 95Deferred tax valuation allowance (260) (2)Tax loss carryforwards used (133) (115)Research credits used (88) (249)Other items 16 17Total income tax expense 180 639

The tax expense is mainly for income taxes in U.S.A.

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



31 DECEMBER 2004

27. INCOME TAX (cont’d)

The movement in the deferred tax amounts in the balance sheet are as follows:

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Deferred tax liabilities – – – – Deferred tax assets 656 471 207 – Net position 656 471 207 –

The movements for the year in the deferred tax position are as follows:Balance at beginning of year 471 466 – – Acquisition/(Disposal) of subsidiary (34) 7 – – (Charge)/credit to income for the year (220) (2) 207 – Balance at end of year 656 471 207 –

Signifi cant components of the deferred tax assets are as follows:

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Tax loss carryforwards 982 884 351 246Accruals and reserves 226 130 17 – Deferred revenue 132 79 – – Overseas income not remitted (145) – (131) – Property and equipment (150) 27 28 26Total deferred tax assets 1,045 1,120 265 272Deferred tax assets valuation allowance (389) (649) (58) (272)Balance at end of year 656 471 207 –

An allowance is made to the extent that it is not probable that taxable profi t will be available against which the unused tax loss carryforwards can be utilised.

The realisation of the future Singapore income tax benefi ts from tax loss carryforwards and temporary differences from capital allowances is available for an unlimited future period subject to the conditions imposed by law including the retention of majority shareholders as defi ned. Where provision for deferred tax arising from temporary differences has been offset against the above tax loss carryforwards, such provision for deferred tax will be required to be set up when the tax losses are utilised in the future.



31 DECEMBER 2004

27. INCOME TAX (cont’d)

The tax loss and other tax credit carryforwards of the US subsidiaries expire in varying amount through 31 December 2018. These tax loss and other tax credit carryforwards are subject to an annual limitation due to cumulative changes in ownership of and may expire prior to utilisation. The subsidiaries are subject to Federal, State and local taxes in U.S.A.

At the balance sheet date, the aggregate amount of temporary differences associated with investments in subsidiaries for which deferred tax liabilities have not been recognised was US$1,298,000 (2003: US$719,000). No liability has been recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future.

28. EARNINGS PER SHARE

The earnings per share is calculated by dividing the Group’s profi t attributable to shareholders by the weighted number of shares of S$0.20 each in issue during the year.

2004 2003US$’000 US$’000

The calculation of the earnings per share is based on:Net profi t for the year 1,603 1,541Effect of dilutive potential ordinary share: - Share options and warrants – –Earnings for the purposes of diluted earnings per share 1,603 1,541

2004 2003Number of shares (in ‘000s)

Weighted average number of ordinary shares for the purposes of basic earnings per share 498,771 301,714 - Adjustment for ex-rights value per share – 43,102 - Placement issue on 11 April 2003 – 21,817 - Rights issue on 24 July 2003 – 49,481Subtotal 498,771 416,114Consolidation into shares of S$0.20 each 124,693 104,029Effect of dilutive potential ordinary shares: - Share options and warrants – –Weighted average number of ordinary shares for the purposes of diluted

earnings of share 124,693 104,029

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



31 DECEMBER 2004

29. STAFF COSTSGroup

2004 2003US$’000 US$’000

Staff costs including Directors 9,524 8,224Contributions to defi ned contribution plans 29 78Total staff costs 9,553 8,302

30. NUMBER OF EMPLOYEES

Group2004 2003

Number of employees (including full-time Directors) at end of year 173 151

31. DIRECTORS REMUNERATION

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

Group2004 2003

S$500,000 and above (US$295,858) 1 1S$250,000 to S$499,999 (US$147,929 to US$295,857) 1 1Below S$250,000 (US$147,928) 3 3Total 5 5



31 DECEMBER 2004

32. DISPOSAL OF SUBSIDIARY

The Group disposed 31% interest in Control Logic Systems Pte Ltd on 1 December 2004.

The fair values of net assets are as follows:2004

US$’000

Cash 66Trade receivables 262Other receivables and prepaid expenses 33Other assets 146Property, plant and equipment 79Other investments 39Goodwill 154Trade payables (287)Other liabilities (88)Minority interest (146)Consideration 242Less cash (66)Net cash infl ow from acquisition 176

The contributions from the subsidiary for the period between the beginning of the year and the date of disposal were as follows:

2004US$’000

Revenue 304Loss before income tax (101)

The 31% interest was sold at cost.

33. ACQUISITIONS OF SUBSIDIARY

The Group acquired 50% of Control Logic Systems Pte Ltd on 27 December 2003. The transactions were accounted for by the purchase method of accounting.



31 DECEMBER 2004

33. ACQUISITIONS OF SUBSIDIARY (cont’d)

The fair values of net assets acquired are as follows:

2003US$’000

Cash 336Trade receivables 140Other receivables and prepaid expenses 17Other assets 44Property, plant and equipment 34Deferred income tax assets 7Goodwill 155Trade payables (118)Other liabilities (35)Minority interest (212)Consideration 368Less cash (336)Net cash outfl ow from acquisition 32

The contributions from the subsidiary for the period between the date of acquisition and the balance sheet date were as follows:

2003US$’000

Revenue –Profi t before income tax –



31 DECEMBER 2004

34. COMMITMENTS

The companies in the Group lease offi ce and warehouse space and equipment under non-cancellable operating leases with various expiration dates through 2011. The leases generally provide for minimum annual rentals with escalation and renewal provisions. Future minimum lease payments and sublease rental receipts under non-cancellable operating leases as at 31 December 2004 are as follows:

Group Company2004 2003 2004 2003

US$’000 US$’000 US$’000 US$’000

Within one year 417 429 11 4 Within 2 to 5 years 695 392 16 – After 5 years 266 – – –

1,378 821 27 4

Rental expenses for the year 580 482 12 11Sublease rental income for the year 3 – – –

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

35. CONTINGENT ASSETS

In 2002 IDEX was a plaintiff in a matter brought under the jurisdiction of the courts of the State of Florida seeking payment of approximately US$2,003,000 for services under a time and materials contract. In addition, IDEX asserted a claim for costs and punitive damages in excess of US$2,000,000. Recovery of amounts under the Florida matter are recorded as revenue on receipt and these amounted to US$750,000 in 2003. The matter was fully settled in 2003.



31 DECEMBER 2004

36. RECLASSIFICATIONS AND COMPARATIVE FIGURES

Certain reclassifi cations and or restatements have been made to the prior year’s fi nancial statements due to the changes in accounting policies. These included the following:

After restatement

US$’000

Before restatement

US$’000DifferenceUS$’000

GROUP:Goodwill at cost (a) 18,060 21,232 3,172Accumulated amortisation - (3,172) (3,172)

COMPANY:Investment is subsidiaries (b) 17,904 24,961 (7,057)Revaluation reserves - 7,057 7,057

(a) Early adoption of IFRS 3 (issued 2004) Business Combinations. See Note 12.

(b) The fair value of the subsidiaries as available-for-sale fi nancial assets is deemed to be not reliably measurable as the probabilities of the various estimates within the range cannot be reasonably assessed as used in estimating fair values. Consequently the investment is carried at cost less provision for impairment in accordance with IAS 27 (revised 2003) Consolidated and Separate Financial Statements. See Note 9.

There was also a reclassifi cation of cash under restriction over three months in 2003 in the consolidated cash fl ow statement.

37. CHANGES AND ADOPTION OF ACCOUNTING STANDARDS

For the year ended 31 December 2004 the following new International Financial Reporting Standards were adopted for the fi rst time:

IAS 2 (revised 2003) InventoriesIAS 8 (revised 2003) Accounting Policies, Changes in Accounting Estimates and ErrorsIAS 10 (revised 2003) Events after the Balance Sheet DateIAS 16 (revised 2003) Property, Plant and EquipmentIAS 17 (revised 2003) LeasesIAS 21 (revised 2003) The Effects of Changes in Foreign Exchange RatesIAS 27 (revised 2003) Consolidated and Separate Financial StatementsIAS 28 (revised 2003) Investments in Associates (*)IAS 32 (revised 2003) Financial Instruments: Disclosure and PresentationIAS 33 (revised 2003) Earnings per ShareIAS 36 (revised 2004) Impairment of AssetsIAS 38 (revised 2004) Intangible AssetsIFRS 3 (issued 2004) Business CombinationsIFRS 5 (issued 2004) Non-current Assets Held for Sale and Discontinued Operations (*)



31 DECEMBER 2004

37. CHANGES AND ADOPTION OF ACCOUNTING STANDARDS (cont’d)

(*) Not applicable to the Group.

Adoption of the above new standards has resulted in some changes in the detailed application of the accounting policies and some modifi cations to fi nancial statement presentation as disclosed in Notes 36.

FUTURE CHANGES IN ACCOUNTING STANDARDS

The following new International Financial Reporting Standards will be effective from 1 January 2005. The transfer to the new standards may result in material adjustments to the fi nancial position, results of operations, or cash fl ows for the following year.

IAS 1 (revised 2003) Presentation of Financial StatementsIAS 8 (revised 2003) Accounting Policies, Changes in Accounting Estimates and ErrorsIAS 24 (revised 2003) Related Party DisclosuresIAS 39 (revised 2003) Financial Instruments: Recognition and MeasurementIFRS 2 (issued 2004) Share-based Payments

38. FINANCIAL INFORMATION BY SEGMENTS

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

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

Principal activities are as follows:

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

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

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



31 DECEMBER 2004

38. FINANCIAL INFORMATION BY SEGMENTS (cont’d)

Segment information about these businesses is presented below: -

Year ended HRMS HRMS IT31 December 2004 Software Services Services Eliminations Consolidated

US$’000 US$’000 US$’000 US$’000 US$’000REVENUEExternal sales 7,342 2,644 17,182 – 27,168Inter-segment sales – 78 – (78) –Total revenue 7,342 2,722 17,182 (78) 27,168RESULTSSegment results 2,434 348 (488) 178 2,216

Unallocated corporate expenses (323)Finance costs (80)Investment and interest income 204Other credits / (charges) (308)Profi t before tax 1,709Income tax expense (180)Profi t after income tax 1,529

OTHER INFORMATIONSegment assets 3,929 7,151 12,171 23,251Goodwill 17,906Corporate cash 3,515Consolidated total assets 44,672

Segment liabilities 3,239 6,390 9,798 19,427Capital expenditures – 181 17 198Depreciation 64 146 123 333Amortisation – – 4 4



31 DECEMBER 2004

39. FINANCIAL INFORMATION BY SEGMENTS (cont’d)

Year ended HRMS HRMS IT31 December 2003 Software Services Services Eliminations Consolidated

US$’000 US$’000 US$’000 US$’000 US$’000REVENUEExternal sales 7,455 2,528 13,183 – 23,166Inter-segment sales – 69 – (69) –Total revenue 7,455 2,597 13,183 (69) 23,166

RESULTSSegment results 2,549 326 613 (69) 3,419

Unallocated corporate expenses (241)Goodwill amortisation (1,080)Finance costs (199)Investment and interest income 24Other credits / (charges) 257Profi t before tax 2,180Income tax expense (639)Profi t after income tax 1,541

OTHER INFORMATIONSegment assets 4,623 8,327 6,654 19,604Goodwill 18,060Corporate cash 3,525Consolidated total assets 41,189

Segment liabilities 5,283 6,599 5,424 17,306Capital expenditures 4 182 8 194Depreciation 75 172 147 394Amortisation (1,080)



31 DECEMBER 2004

AUTHORISED SHARE CAPITAL : $30,000,000 ISSUED AND FULLY PAID-UP CAPITAL : $24,938,525.45 CLASS OF SHARES : ORDINARY SHARES OF S$0.20 EACH WITH EQUAL VOTING RIGHTS

SIZE OF SHAREHOLDINGSNO. OF

SHAREHOLDERS % NO. OF SHARES %

1 - 999 438 17.33 153,332 0.121,000 - 10,000 1,046 41.38 5,152,950 4.1310,001 - 1,000,000 1,028 40.66 42,824,773 34.351,000,001 & ABOVE 16 0.63 76,561,547 61.40

TOTAL 2,528 100.00 124,692,602 100.00

TOP TWENTY SHAREHOLDERS NO. OF SHARES %

DBS VICKERS SECURITIES (S) PTE LTD 12,398,963 9.94MAYBAN NOMINEES (S) PTE LTD 10,242,000 8.21HL BANK NOMINEES (S) PTE LTD 10,137,750 8.13DR KWOK KAH KIE 6,938,449 5.56UNITED OVERSEAS BANK NOMINEES PTE LTD 4,884,257 3.92MORGAN STANLEY ASIA (S’PORE) PTE LTD 4,721,974 3.79CRAIG DARON MORRIS 4,466,940 3.58KIM ENG SECURITIES PTE LTD 4,456,271 3.57UOB KAY HIAN PTE LTD 3,805,500 3.05PHILLIP SECURITIES PTE LTD 3,502,500 2.81LIM & TAN SECURITIES PTE LTD 2,686,000 2.15CROSSNET COMMUNICATIONS LTD 2,475,000 1.98HONG LEONG FINANCE NOMINEES PTE LTD 1,859,750 1.49OCBC SECURITIES PRIVATE LTD 1,723,443 1.38FRASER SECURITIES PTE LTD 1,200,000 0.96DBS NOMINEES PTE LTD 1,062,750 0.85LIN SHUI CHIN 841,250 0.67ANG CHIN CHUAN EDWIN 750,000 0.60WEE THONG HAI 750,000 0.60OCBC NOMINEES SINGAPORE PTE LTD 737,764 0.59

TOTAL 79,640,561 63.83

Analysis of Shareholdings


31 DECEMBER 2004


(as recorded in the Register of Substantial Shareholders as at 9 March 2005)

Name of Substantial Shareholder Number of shares of $0.20 each fully paidDirect Interest % Indirect Interest %

Dr Kwok Kah Kie 6,938,449 5.56 10,264,385 8.23

Craig Daron Morris 4,466,940 3.58 4,403,250 3.53

Note:(1) Dr Kwok Kah Kie’s indirect interest comprises 444,385 shares held by his wife and 9,820,000 shares held by

nominees.(2) Mr Craig Daron Morris’ indirect interest comprises of 4,403,250 shares held by nominees.

Percentage of Shareholding Held in the Hands of Public

As at 9 March 2005, the percentage of shareholding in the Company held in the hands of public is approximately 78.9%. At least 10% of the Company’s equity securities are held by the public at all times and the Company is in compliance with Rule 723 of the SGX-ST Listing Manual.



31 DECEMBER 2004

SIZE OF SHAREHOLDINGSNO. OF

WARRANTHOLDERS % NO. OF WARRANTS %

1 - 999 564 22.44 162,580 0.261,000 - 10,000 1,393 55.43 5,684,697 9.1210,001 - 1,000,000 543 21.61 20,415,182 32.741,000,001 & ABOVE 13 0.52 36,083,795 57.88

TOTAL 2,513 100.00 62,346,254 100.00

TOP TWENTY WARRANTHOLDERS NO. OF WARRANTS %

DBS VICKERS SECURITIES (S) PTE LTD 6,604,480 10.59DR KWOK KAH KIE 4,216,224 6.76MAYBAN NOMINEES (S) PTE LTD 3,800,000 6.09HL BANK NOMINEES (S) PTE LTD 3,401,125 5.46KIM ENG SECURITIES PTE LTD 2,668,759 4.28PHILLIP SECURITIES PTE LTD 2,467,750 3.96UNITED OVERSEAS BANK NOMINEES PTE LTD 2,460,378 3.95MORGAN STANLEY ASIA (S’PORE) PTE LTD 2,360,987 3.79CRAIG DARON MORRIS 2,233,469 3.58UOB KAY HIAN PTE LTD 1,888,998 3.03LIM & TAN SECURITIES PTE LTD 1,704,625 2.73CROSSNET COMMUNICATIONS LTD 1,237,500 1.98OCBC SECURITIES PRIVATE LTD 1,039,500 1.67HONG LEONG FINANCE NOMINEES PTE LTD 861,875 1.38SEE HUEY KEAN 603,000 0.97RAMESH S/O PRITAMDAS 522,000 0.84DBS NOMINEES PTE LTD 510,250 0.82LIM MENG SENG 400,000 0.64ANG CHIN CHUAN EDWIN 375,000 0.60LOH YONG LIM 356,295 0.57

39,712,215 63.69

Analysis of Warrantholdings


31 DECEMBER 2004

NOTICE IS HEREBY GIVEN that the Sixth Annual General Meeting of the Company will be held at Level 1, Tera 1 Room, 750C Chai Chee Road, Technopark @ Chai Chee, Singapore 469003 on Wednesday, 27 April 2005 at 9.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Accounts for the fi nancial year ended 31 December 2004 together with the Reports of the Directors and the Auditors of the Company.

(Resolution 1)2. To re-elect the following Directors retiring under Article 91 of the Company’s Articles of

Association:

i. Dr John Lim Boon Seng ii. Ms Ong Beng Hong

(Resolution 2)(Resolution 3)

3. To approve Directors’ fees of S$60,000 for the fi nancial year ended 31 December 2004. (Resolution 4)

4. To re-appoint Chio Lim & Associates as the Company’s Auditors and to authorise the Directors to fi x their remuneration.

(Resolution 5)

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

AS SPECIAL BUSINESS

6. To consider and, if thought fi t, to pass the following resolution as an Ordinary Resolution, with or without modifi cations:

“That pursuant to Section 161 of the Companies Act, Cap. 50 and the listing rules of the Singapore Exchange Securities Trading Limited, authority be and is hereby given to the Directors to issue shares and convertible securities in the Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fi t provided that the aggregate number of shares and convertible securities to be issued pursuant to this Resolution does not exceed fi fty per cent (50%) of the issued share capital of the Company at the date of this Resolution, of which the aggregate number of shares and convertible securities to be issued other than on a pro rata basis to shareholders of the Company does not exceed twenty per cent (20%) of the issued share capital of the Company at the date of this Resolution, and, unless revoked or varied by the Company in general meeting, such authority shall continue in force 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.”

(Resolution 6)

By Order of the Board

Tan Swee GekSecretary

4 April 2005

Notice of Annual General Meeting


31 DECEMBER 2004

Explanatory Note:

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

Notes:

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

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

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

Notice of Annual General Meeting


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Proxy Form

integra2000 LtdCompany Registration Number 199906459N

(Incorporated in the Republic of Singapore)

I/We (Name)

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

Name Address NRIC/Passport Number

Proportion of my/our Shareholding (%)

No. of shares %

and/or (delete as appropriate) Name Address NRIC/

Passport Number

Proportion of my/our Shareholding (%)

No. of shares %

as my/our proxy/proxies to vote for me/us on my/our behalf at the Sixth Annual General Meeting of the Company, to be held at Level 1, Tera 1 Room, 750C Chai Chee Road, Technopark @ Chai Chee, Singapore 469003 on Wednesday, 27 April 2005 at 9.00 a.m., and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specifi c direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Meeting.

No. Resolutions Relating To: For Against

Ordinary Business1. Adoption of Reports and Accounts2. Re-appointment of Dr John Lim Boon Seng 3. Re-appointment of Ms Ong Beng Hong4. Approval of Directors’ Fees5. Re-appointment of Auditors

Special Business6. Authority to allot and issue new shares

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

Dated this day of 2005.

Signature of Shareholder(s) or Common Seal

Total number of Shares held

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 defi ned 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 registered in your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

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

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

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

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

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

7. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter of power of attorney or a duly certifi ed 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.

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

BOARD OF DIRECTORSDr. John Lim Boon Seng ChairmanDr. Kwok Kah Kie CEOOng Beng Hong Independent DirectorPeter Chan Kwan Teck Independent DirectorCraig Daron Morris Executive Director

AUDIT COMMITTEEPeter Chan Kwan Teck ChairmanDr. John Lim Boon SengOng Beng Hong

REMUNERATION COMMITTEEOng Beng Hong ChairmanPeter Chan Kwan TeckDr. John Lim Boon Seng

NOMINATING COMMITTEEDr. John Lim Boon Seng ChairmanOng Beng HongPeter Chan Kwan Teck

COMPANY SECRETARYTan Swee Gek

MANAGEMENT TEAMDr. Kwok Kah Kie CEO, integra2000Chairman, i2K Holdings

Craig Daron Morris CEO, i2K HoldingsCEO, IDEX Global Services

Sheldon Shaw CEO, Integral System

Grant Morris CEO, Payroll Resource Group

Chew Soon Lee, GM, integra2000

REGISTERED OFFICE750C Chai Chee Road #02-03Technopark @ Chai CheeSingapore 469003Tel: 6243 3743Fax: 6243 3641Company Registration No.199906459N

SHARE REGISTRARB.A.C.S Private Limited63 Cantonment RoadSingapore 089758

AUDITORSChio Lim and Associates(Member of Horwath International)18 Cross Street#09-01 Marsh & McLennan CentreSingapore 048423

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

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

USAi2k Holdings, Inc.ixsys, Inc.160 Sansome Street , 6th fl oorSan FranciscoCalifornia 94104, USA

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

Payroll Resource Group, Inc.160 Sansome Street , 6th fl oorSan FranciscoCalifornia 94104, USAwww.p-r-g.com

IDEX Global Services, Inc.160 Sansome Street , 6th fl oorSan FranciscoCalifornia 94104, USAwww.idexglobal.com

CANADAIntegral System Software LtdSuite 3800, South TowerRoyal Bank PlazaToronto, OntarioCanada M5J 2J7

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

Corporate Information

750C Chai Road #02-03Technopark@Chai Chee Singapore 469003Tel :(65) 6243 3743 Fax:(65) 6243 3641 Website: www.integra2000.comCompany Registration Number: 199906459N

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