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INFINIO GROUP LIMITED

INFINIO GROUP LIMITED Company Registration No. 199801660M 2 Leng Kee Road | #03-04 Thye Hong Centre | Singapore 159086

SEIZING OPPORTUNITIES

ANNUAL REPORT 2013

Tel: +65 6336 2338 | Fax: +65 6336 6929

INFINIO GROUP LIMITED

2013 ANNUAL REPORT


CONTENTS CORPORATE PROFILE LETTER TO SHAREHOLDERS BOARD OF DIRECTORS OUR BUSINESS – MOVING FORWARD OPERATIONS REVIEW CORPORATE DIRECTORY FINANCIAL REVIEW CORPORATE GOVERNANCE STATEMENT DETAILED TRADING AND PROFIT OR LOSS ACCOUNT ADMINISTRATIVE AND OTHER EXPENSES ADDITIONAL DISCLOSURE REQUIREMENTS STATISTICS OF SHAREHOLDINGS NOTICE OF ANNUAL GENERAL MEETING PROXY FORM

1 2 4 6 7 9 10 11 121 123 124 129 131

This Annual Report has been prepared by the Company and its contents have been reviewed by the Company's Sponsor, Stamford Corporate Services Pte Ltd, for compliance with the relevant rules of the SGX-ST. The Company's Sponsor has not independently verified the contents of this Annual Report. This Annual Report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this Annual Report, including the correctness of any of the statements or opinions made or reports contained in this Annual Report. The contact person for the Sponsor is Mr Yap Wai Ming: Tel: 6389 3000 Email: waiming.yap@stamfordlaw.com.sg


1 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE PROFILE The past year has seen the Company going through a difficult period. The proposed acquisition by the Company of the entire issued and outstanding share capital of Ephraim Resources Limited ("Ephraim") by way of an exchange for shares in the Company ("Proposed Acquisition") did not come to fruition as was planned. The Company and the Vendors, agreed after in depth discussions, not to extend the long-stop date, being 31 December 2012, for the satisfaction of the conditions precedent in the Sale & Purchase Agreement ("Conditions Precedent"). Accordingly, pursuant to the terms of the Sale & Purchase Agreement, the Sale & Purchase Agreement has terminated automatically since any or all of the Conditions Precedent have not been fulfilled or waived as relevant, by 31 December 2012. Upon termination, the Sale & Purchase Agreement shall cease to have any force and effect and neither Party shall have any claim against the other for costs, damages, compensation or otherwise by reason of such termination. The setback is unwelcome but the cost to continue with the Proposed Acquisition would have put the Company into further financial constraint. We have swiftly recalibrated our move and have focused our attention in the mineral resource industry. A number of exciting options are now being evaluated by the Board of Directors. An appropriate statement will be made in the near future. Shareholders can be assured of maximum effort from the Board of Directors.


2 INFINIO GROUP LIMITED ANNUAL REPORT 2013

LETTER TO SHAREHOLDERS DEAR SHAREHOLDERS, The twelve months of our financial year 2012/2013 have seen the Company pass through a period of critical examination of our operation. The re-evaluation of our intended RTO with Ephraim Resources Ltd and after extensive discussions with the Vendors, the parties agreed not to proceed with the agreement. Steps were taken in accordance with the terms and condition of the sale and purchase agreement to terminate the RTO amicably. Besides aborting the RTO of Ephraim Resources Ltd, the management also closely evaluated all existing operations. The Korean operations which was developed based on the in-house IPTV technology showed some promise in garnering interest from big media and education companies. However, while the projects in Korea appear to have merits, the long gestation period from development to sales necessitated further significant investment in product and market development which would require more funds and a longer lead time than was anticipated before a stable revenue could come on-stream. The advent of new technology, tablets, smart phones and the constant evolving hardware and software development make the task of success a greater hurdle to surmount. In the light of these factors, it was decided that it would be prudent to end our Korean operation. Steps have been set in motion to wind up the operations in an orderly manner. The Year has also seen the Company settle the bulk of its litigation liabilities, commenced to retire significant debts. The �house-keeping“ exercise has resulted in a healthier platform with less financial constraints moving forward. The Company has modest revenue from its licensing fees received in relation to the online gaming payments business. To position itself for investment opportunities and to provide working capital, the Company secured an equity loan note facility during the year. The loan note facility fund will allow the Company to meet its financial needs moving forward. Although the Company had not been profitable for the past years, the Board is committed to continue to pursue strategic investments and acquisitions which will enhance shareholder value in the longer term. With the settlement of significant liabilities, alleviation of cash flow concerns, a focused approach and new growth drivers, the Board is cautiously confident of a transformative year ahead.


3 INFINIO GROUP LIMITED ANNUAL REPORT 2013

UNEARTHING OPPORTUNITIES The Company is currently confronted by a volatile business environment and competition. Expectation to secure stable value for shareholders is extremely challenging. We recognize the need to perform and achieve the goal of turning into a viable enterprise. Our Board’s primary concern is to identify the best option taking into account both the immediate and sustainable longer term growth. We are currently evaluating in-depth the investment options that will yield the desired benefits. The mineral resources industry is one that offers the sustainability we seek. The Board is reviewing several such investment prospects on hand and we anticipate concluding our direction and decision shortly. NOTE OF THANKS On behalf of my fellow Directors, I extend our sincere appreciation to Mr Hong Seong Soo for his invaluable service. Mr Hong Seong Soo relinquished his duties as the Group’s Acting Chief Executive Officer and Executive Director on 4 December 2012, and continues to serve on the Board of Directors as a non-Executive Director. Also, our heartfelt gratitude to our loyal shareholders, business associates, clients and other stakeholders whose unwavering support and encouragement have seen us ride through yet another challenging year. Finally, a word of thanks too to our loyal and dedicated staff. Together, we will remain vigilant and focused on our strategies to meet uncertain challenges and strive to have a better year ahead.

RAYMOND HO D'ORVILLE EXECUTIVE DIRECTOR


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BOARD OF DIRECTORS Mr Ho has served as an Executive Director of our Group since 4 December 2012.

MR RAYMOND HO D’ORVILLE EXECUTIVE DIRECTOR

A certified public accountant (Australia) and a qualified teacher who taught accountancy, economics and cost & management accounting, Mr Ho started his career at Cycle & Carriage Company (Industries) Pte Ltd as a finance manager and company secretary in charge of finance, human resource and general management. He later served as the finance controller of Vetco Pte Ltd, a US-based multinational corporation which produces connectors and drill pipes for the petroleum industry. In 1976, he founded the Systematic Commercial Training Centre, an institution offering business related courses in Singapore and Malaysia. He is currently providing educational consultancy services to tertiary institutions in Vietnam, Cambodia, Thailand and Indonesia. Mr Ho graduated from Western Australian Institute of Technology. He holds an associateship in Commerce from Perth Technical College. He was a member of institute of Chartered Secretaries and Administrators (UK), and member of the Institute of Certified Practicing Accountants (Australia).

Mr Hong has served as a Director of our Group since June 2003. He acted as the Group’s Acting CEO and served as CEO of Infinio Korea Co., Ltd, the Group’s wholly-owned subsidiary before his resignation as Executive Director of our group. He was re-appointed as a Non- Executive Director of the Group on 4 December 2012.

MR HONG SEONG SOO NON-EXECUTIVE DIRECTOR

He has more than 20 years of international experience in Marketing and Project Management in the media content industry. He also has a broad range of expertise in strategic management, market development, operations, finance and human resource management. Both the Group and its subsidiaries have benefited from his strong worldwide network relationships in the industry, as well as his vast experience in multimedia education content, solution and delivery device. He is also a director of Gamespark Pte Ltd and Onegame Pte Ltd. Mr Hong holds a Bachelor of Business Administration from Korea University.


5 INFINIO GROUP LIMITED ANNUAL REPORT 2013

Mr Teoh has served as an Independent Director of our Group since 6 July 2011. Mr Teoh is currently the CEO of F & B Empires Group of Companies. Prior to this, he has held various management positions at Standard Chartered Bank Singapore and Star Elite Group of Companies. He is also an experienced business consultant to various SME companies and holds directorships in several private companies in Singapore. Mr Teoh holds a Diploma in Managerial Principles from Systematic Commercial Training Centre. MR MICK TEOH HONG FU INDEPENDENT DIRECTOR

Mr Kun has served as an Independent Director of our Group since 4 June 2009. He is the President and CEO of Singapore Banking Corporation Ltd (SBC Bank) in Cambodia, and has been instrumental in transforming the bank into one of the country’s most dynamic institutions in terms of banking, customer and community services. In addition, he is the Chairman of the Cambodia Institute of Banking, council member of The Association of Banks in Cambodia and board member of the country’s Rural Electrification Fund run by the Ministry of Industry, Mines & Energy. Mr Kun holds a Bachelor of Commerce (Accounting and Finance) from Murdoch University in Australia.

MR ANDY KUN SWEE TIONG INDEPENDENT DIRECTOR

Mr Wong was formerly an Executive Director of Infinio Group up to 2010. He returned as a Non-Executive Director in October 2011. Mr Wong currently provides advisory services and has more than 15 years of experience in business and financial advisory. He was previously a consultant with KPMG business advisory and corporate finance, in charge of valuation and the mergers and acquisition group. He is currently a director of Berlian Ferries and is also a director of a resource trading company. Mr Wong holds a Bachelor of Arts (Accounting and Finance) from the University of Leeds in the UK and a Master of Business Administration (Finance) from the Leeds University Business School.

MR WONG KUAN KIT KEITH NON-EXECUTIVE DIRECTOR


6 INFINIO GROUP LIMITED ANNUAL REPORT 2013

OUR BUSINESS – MOVING FORWARD The Company has brought in renewed funding with a view to adopt a slow and steady growth approach and will be entering into the mining and resource business. The Company has entered into a Memorandum of Understanding (”MOU“) with Mr Lim Yeow Sun (the ”Vendor“) on 1 July 2013 to acquire the entire issued and paid up capital of Summit Light Ventures Ltd (”Summit“), a special purpose company incorporated in the British Virgin Islands (the ”Proposed Acquisition“). Summit has been set up to consolidate the assets known as the Birthday Gold Mine in Western Australia (the ”Assets“). The Vendor is a Singaporean businessman who has interest in a jewellery business. Summit has or will acquire 100% of the rights and benefits to a Mining Lease (”ML77/450“) comprising an area of approximately 54.25ha known as the Birthday Gold Mine and a Prospecting Licence (”P77/3982“) with the right to prospect for gold and other minerals in the vicinity of the Birthday Mine. Under the MOU, the Company will, subject to a comprehensive due diligence on the Assets, and confirmation of transfer of all rights and benefits of ML77/450 and P77/3982 to Summit, acquire the entire issued and paid up capital of Summit on terms and at a consideration to be determined. The Proposed Acquisition is expected to constitute a major transaction and the acquisition consideration may be in cash or shares or a combination of both. Upon finalisation of the definitive agreement, if the Proposed Acquisition turns out to be clarified as a major transaction as defined under Chapter 8 of Section B: Rules of Catalist of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Company will be seeking shareholders' approval for the Proposed Acquisition at an extraordinary general meeting to be convened in due

course and keep shareholders updated of any material progress accordingly. The Company will have rights of acquisition for a period of 45 days from the date of the MOU unless otherwise agreed between the parties. Moving forward, the Company aims to grow through strategic investment and acquisitions and trading in the resource industry.


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OPERATIONS REVIEW


8 INFINIO GROUP LIMITED ANNUAL REPORT 2013

OPERATIONS REVIEW The Company faced another challenging year, with a difficult business environment. Management has taken the decision to stem out flows in non-generating business units with a strong emphasis on cost management and consolidation of resources. IPTV Business The IPTV solution business for Hospitality continued to be a challenging market. Our attempt to grow this segment has not been encouraging. We provided solution in setup boxes (hardware) as well content for our hotel clients. Our margin as re-seller of content (movies) has been affected by the significant cost increase by our supplier during the year. Our subsidiary, RoomWise has scaled down its operation in this service. Education products development in Korea needed more development expenditure for products and for marketing. Whilst the operation merited consideration, the changing environment of new technology of hardware and need for constant adaption, the management deemed it prudent to curtail the business. Steps have been set to cease the Korean operation. Hotel guests are now using tablets, smart phones for their entertainment making pay to view TV less attractive. The advert of the new technology has materially affected our entertainment and education services. Online gaming payments The online gaming payments business continues to operate albeit on a smaller scale than anticipated. As the bulk of operation has been outsourced, the Company is profitable requiring minimum effort.


9 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE DIRECTORY BOARD OF DIRECTORS Raymond Ho D’Orville Executive Director (w.e.f 4 December 2012) Hong Seong Soo Non-Executive Director (w.e.f 4 December 2012) Wong Kuan Kit Keith Non-Executive Director Kun Swee Tiong Andy Independent Director Mick Teoh Hong Fu Independent Director

REGISTERED OFFICE 80 Robinson Road #02-00 Singapore 068898 Tel: 6236 3333, Fax: 6236 4399

NOMINATING COMMITTEE Kun Swee Tiong Andy Chairman Mick Teoh Hong Fu Member (w.e.f 4 December 2012) Wong Kuan Kit Keith Member

SHARE REGISTRAR AND SHARE TRANSFER OFFICE Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte Ltd) 80 Robinson Road #02-00 Singapore 068898

AUDIT COMMITTEE Mick Teoh Hong Fu Kun Swee Tiong Andy Wong Kuan Kit Keith

Chairman (w.e.f 4 December 2012) Member Member

REMUNERATION COMMITTEE Mick Teoh Hong Fu Chairman (w.e.f 4 December 2012) Kun Swee Tiong Andy Member Wong Kuan Kit Keith Member

COMPANY SECRETARY Lee Bee Fong

PLACE OF BUSINESS 2 Leng Kee Road #03-04 Thye Hong Centre Singapore 159086

INDEPENDENT AUDITOR Robert Yam & Co., 190 Middle Road #16-01/03 Singapore 188979 Partner in Charge: Robert Yam Financial year appointed: 31 March 2013

SPONSOR Stamford Corporate Services Pte Ltd 10 Collyer Quay #27-00 Ocean Financial Centre Singapore 049315

PRINCIPAL BANKERS United Overseas Bank Limited Standard Chartered Bank


10 INFINIO GROUP LIMITED ANNUAL REPORT 2013

FINANCIAL REVIEW The Group’s revenue for the financial year ended 31 March 2013 is S$0.07 million compared to S$0.48 million for the same period of the immediately preceding year. The fall in revenue is due to the disposal of unprofitable and high cost of operation of our IPTV hotel solutions projects. After assessing the business of our South Korean subsidiary which require further development expenses, the management concluded that it would be in the best interest for the Company to deploy its resources in projects for tangible results. The change in strategy has enabled the cost of sales to reduce significantly by 92%, from S$0.36 million to S$0.03 million this financial year. In the light of declining profitability, the Group continues to restructure its operation by rationalizing resources to streamline costs. The Group took cost cutting measures which reduced the employee compensation by 36% from S$0.70 million to S$0.45 million for the financial year ended 31 March 2013. Distribution and marketing expenses cut down by 42% to S$0.05 million compared to S$0.09 million for the same reporting period prior year due to discontinued operation of South Korea’s subsidiary. The Group managed to reduce 30% of consulting fees to S$0.14 million compare to last reporting period and spend 32% lesser on company secretarial fees and tax fees as part of the Group’s restructuring efforts. The increment of 1302% in legal and professional fees to S$0.59 million against S$0.04 million in the full financial year ended 31 March 2013 mainly contributed by S$0.54 million paid for commitment fees and arranger fees in relation to issuance of equity linked redeemable structure convertible notes for fund raising purpose. The Group’s other income increased by 64% which was due to the fees waived by directors and writeback of trade payables amounting to S$0.11 million and S$0.10 million respectively. Furthermore, the hike of finance costs for the financial year ended 31 March 2013 mainly contributed by interest expense from late payment and interest expense from loan. Total costs of sales, distribution and marketing expenses and administrative expenses fell by 9% to S$1.95 million compared to S$2.1 million for the same period of immediately preceding year. The Group discontinued unprofitable projects and disposed the related project assets and fixed assets during the financial year to reduce maintenance expenses and cash outflow. The Group also did impairment on available-for-sale financial assets and written off deferred income tax assets and liabilities for the period ended 31 March 2013. This result the Group’s non-current assets value at S$0.03 million. The Group’s cash inflow is derived from the proceeds raised from borrowings and issuance of equity linked redeemable structure convertibles notes and warrants exercise, which have given rise to an aggregate of S$1.71 million in cash. The Group is constantly reviewing its current operations; assessing its viability in the short and medium term. Concurrently, the management is constantly seeking out other business opportunities that the Group could deploy its resources on sustainability basis. Amongst the industries the management and the Board will focus on are mining resources, property development and leisure. Project papers are being studied by the Directors who has been tasked with identifying the best option for the Group moving forward.


11 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The Board of Directors (the “Board”) of Infinio Group Limited is committed to maintaining a high standard of corporate governance within the Company and its subsidiaries (the “Group”) and adopts practices based on the Code of Corporate Governance 2012 (the “Code”) and the prevailing Section B: Rules of Catalist of the Listing Manual (the “Catalist Rules”) of the Singapore Exchange Securities Trading Limited (the “SGX-ST”). Sound corporate governance ensures greater transparency, protecting and enhancing the interests of its shareholders as well as strengthening investors’ confidence in its management and financial reporting. The main corporate governance practices adopted by the Group and Company are outlined below. 1.

BOARD OF DIRECTORS (THE “BOARD”) Principle 1: The Board’s Conduct of Affairs Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the long-term success of the company. The Board works with Management to achieve this objective and the Management remains accountable to the Board. The Board sets strategic objectives and overall business direction of the Group, with a particular focus on identifying new core business, major investments, disposals and funding matters for the Group. The Board establishes a framework of prudent and effective controls which enables risks to be assessed and managed, including safeguarding of shareholders’ interests and the company’s assets. The Board also manages the Group in the best interests of the shareholders as well as the interest of stakeholders and pursues the continual enhancement of the long-term shareholder value. To assist the Board in executing its duties, the Board has delegated specific functions to the Audit Committee (“AC”), the Nominating Committee (“NC”) and the Remuneration Committee (“RC”) of the Company. The Board conducts regular scheduled meetings and attendance by Directors during the year was regular. Ad-hoc meetings are also arranged as and when the need arises. Attendance of the Directors at meetings of the Board and Board Committees, as well as the frequency of such meetings, are as follows:


12 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT Attendance at Meetings

Board of Directors No. of Name

No. of

Audit

Remuneration

Nominating

Committee

Committee

Committee

No. of

No. of

No. of

No. of

No. of

No. of

meetings meetings meetings meetings meetings meetings meetings meetings held

attended

held

attended

held

attended

held

attended

4

4

2

2

1

1

1

1

4

3

2

1

1

Kun Swee Tiong Andy

4

3

2

2

1

1

1

1

Teoh Hong Fu Mick

4

3

2

2

1

1

1

1

Wong Kuan Kit Keith

4

4

2

2

1

1

1

1

Raymond Ho D’Orville Hong Seong Soo

(2)

(1)

Notes: (1) Mr Raymond Ho D’Orville has been appointed as Executive Director on 4 December 2012. (2) Mr Hong Seong Soo resigned as Acting CEO and Executive Director and has been re-designated as Non-Executive Director on 4 December 2012.

The profile of each Director and the relevant information as at the date of this Annual Report are set out on pages 4 and 5 of this Annual Report. All Directors objectively discharge their duties and responsibilities at all times as fiduciaries in the interests of the Company. The Board oversees the business affairs of the Group, approves the financial objectives and the strategies to be implemented by Management and monitors the standards of performance and issues of policies directly. In addition to its statutory duties, the Board’s principal functions are to: (a)

provide entrepreneurial leadership, set strategic objectives, and ensure that the necessary financial and human resources are in place for the Group to meet its objectives;

(b)

supervise the overall management of the business and affairs of the Group, review management performance and approve the Group’s corporate and strategic policies and direction;

(c)

formulate and approve financial objectives of the Group and monitor its performance such as reviewing and approving of results announcements and approving of financial statements;


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CORPORATE GOVERNANCE STATEMENT (d)

establish a framework of prudent and effective controls which enables risks to be assessed and managed, including safeguarding of shareholders’ interests and the company’s assets;

(e)

oversee the processes for evaluating the adequacy of internal controls and risk management including the review and approval of interested persons transactions;

(f)

assume responsibility for corporate governance and compliance with the Companies Act, Cap. 50 (the “Act”) of Singapore and the rules and regulations of the revised regulatory bodies;

(g)

evaluate performance of Management;

(h)

review and approve the remuneration framework for the Board and key executives.

(i)

identify the key stakeholder groups and recognise that their perceptions affect the company’s reputation;

(j)

set the company’s values and standards (including ethical standards), and ensure that obligations to shareholders and other stakeholders are understood and met; and

(k)

consider sustainability issues, e.g. environmental and social factors, as part of its strategic formulation.

Without abdicating its responsibility, the Board has delegated its authority to make decisions on certain matters to board committees, details of which are set out herein. Matters which are specifically reserved for the approval of the Board include, among others, any material acquisitions and disposals of assets, corporate or financial restructuring, share issuance and the proposing of dividends. Clear directions are also given to the management on matters that must be approved by the Board. The Board’s approval is required for matters that are likely to have a material impact on the Group’s operations as well as matters other than in the ordinary course of business. The Board has adopted a set of internal guidelines on the matters requiring Board approval. Certain functions have also been delegated to various Board Committees, namely the AC, the NC and the RC. Each Committee operates within clearly defined terms of reference and operating procedures, which would be reviewed on a regular basis.


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CORPORATE GOVERNANCE STATEMENT New Directors are appointed by way of a Board Resolution, after the NC has approved their nomination. The Group has instituted an orientation program for new Directors to familiarise them with the Group’s core business and governance practices. Directors also given opportunities to visit the Group’s operational facilities and meet with management staffs to obtain a better understanding of the Group’s history, business operations, policies, strategic plans and objectives, as well as the duties and responsibilities as Directors. In order for the Board to fulfill its responsibilities, prior to Board Meetings, Management will provide the Board with management accounts and the relevant background information and documents relating to items of business to be discussed at a Board Meeting before the scheduled Meeting. All Directors are regularly briefed on the business activities of the Group. All Directors are updated regularly on the changes in company policies, board process, regulations, accounting standards, corporate governance and best practices in compliance with the relevant legislation and regulations including the Catalist Rules. Changes to regulations and accounting standards are monitored closely by the Management. To keep pace with regulatory changes, where these changes have an important bearing on the Company’s or Director’s disclosure obligations, the Board is updated regularly on these changes. All directors receive regular training, particularly on relevant new laws, regulations and changing commercial risks, from time to time. These training activities are arranged and funded by the Company. The Executive Director will brief all newly appointed Directors on the business activities of the Group and its strategic directions as well as the duties and responsibilities as Directors. Principle 2: Board Composition and Guidance There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management and 10% shareholders. No individual or small group of individuals should be allowed to dominate the Board’s decision making. As at the date of this report, the Board comprises one Executive Director, two Non-Executive Directors and two Independent Directors.


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CORPORATE GOVERNANCE STATEMENT The Independent Directors (“IDs”) have confirmed that they do not have any relationship with the Company or its related companies and its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors’ independent business judgement with a view to the best interests of the Company. The NC reviews the independence of each Director annually. The NC adopts the Code’s definition of what constitutes an Independent Director in its review. The NC is of the view that the current composition of the Board exhibits a level of independence that sufficiently enables the Board to exercise objective judgment on corporate affairs independently from the Management. The NC is also of the view that no individuals or small groups of individuals dominate the Board’s decision making processes. The Board has determined, taking into account the views of the NC, that each Independent Director is independent in character and judgement and that there are no relationships or circumstances which are likely to affect, or could appear to affect, that director’s judgement. The Board is of the view that the size of the current Board comprising five Directors is appropriate, with reference to the scope and extent of the Group’s operations. The Board considers that its composition of Directors is well-balanced, each Director having well-mixed knowledge, business network and commercial experience. Coupled with the independence element provided by the Independent Directors, the Board considers itself effective and capable of ensuring all corporate strategies are well directed while all proposals and significant issues brought to the Board by the executive management are thoroughly discussed and examined, focusing on the long term interests of the Group. The Non-Executive Directors aim to assist in the development of proposals on strategy by constructively challenging Management. The Non-Executive Directors would also review the performance of Management in the meetings. To-date, none of the IDs of the Company has been appointed as a Director of the Company’s principal subsidiaries. The Board and the Management are of the view that the current Board structures in the principal subsidiaries are already well organized and constituted. None of the IDs have served on the Board beyond 9 years from the respective date of their first appointment. In the event any ID’s tenure of service with the Company extends beyond 9 years, he/she should be subject to particularly rigorous review. The Board and the Management will from time to time review the Board structures of the principal subsidiaries and will make an appropriate corporate decision to consider the appointment of the Independent Director into the principal subsidiaries.


16 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The Board, at the recommendation of the NC, shall review Principle 2 of the Code and the Board composition in the new financial year to ensure there is a strong and independent element on the Board. The Board has no dissenting view on the Chairman’s statement for the year in review. The non-Executive Directors and IDs meet at least annually without the presence of Management. Principle 3: Role of Chairman and Chief Executive Officer There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company’s business. No one individual should represent a considerable concentration of power. The Company currently does not have a Chairman. The Chairman has not previously been appointed due to the Company’s evolving business and changes in its management staffs. The Company may consider the appointment of a Chairman once the Company’s core business has been stabilized. Mr Raymond Ho D’Orville has assumed the position as Executive Director of the Company since 4 December 2012. He has full executive responsibilities over business directions and operational decisions of the Group. The AC reviews all major decisions made by the Executive Director. The NC periodically reviews his performance and his appointment to the Board and the RC periodically reviews his remuneration package. The Board is of the view that there is a balance of power and authority with the various Committees chaired by the Independent Directors. Currently, the Company has two (2) IDs, Mr Kun Swee Tiong and Mr Teoh Hong Fu Mick. The NC and the Board shall, in the new financial year, find suitable candidates to be appointed as an additional ID. The Company does not have a Lead ID. When an additional ID is appointed, a Lead ID shall be appointed. The IDs meet regularly without the presence of the Executive Director. Thereafter, they provide feedback to the Executive Director and Management.


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CORPORATE GOVERNANCE STATEMENT Principle 4: Board Membership There should be a formal and transparent process for the appointment of Directors to the Board. The NC comprises non-Executive Directors, a majority of whom including the Chairman, are independent. The members are Mr Kun Swee Tiong Andy (Chairman), Mr Teoh Hong Fu Mick and Mr Wong Kuan Kit Keith. The NC’s written Terms of Reference describe its responsibilities, including: (a)

deciding on how the Board’s performance is to be evaluated and proposing objective performance criteria, subject to the approval by the Board;

(b)

determining on an annual basis whether or not a Director is independent, guided by the independent guidelines contained in the Code;

(c)

reviewing and recommending the nomination and re-nomination of Director having regard to the Director’s contribution and performance;

(d)

Reviewing and approving new employment of Director/related persons based on selection criteria such as incumbent’s credentials and his/her skills and contributions required by the Company and the proposed terms of their employment; and

(e)

Reviewing the training and professional development programmes for the Board.

The Company believes that Board’s renewal must be an on-going process, to ensure good governance and to maintain relevance to the business as well as changing needs of the Group. The search and nomination process for new Directors, if any, will be through search companies, contacts and recommendations that go through the normal selection process. New Directors are appointed after the NC has reviewed and nominated them for appointment. Such new Directors will submit themselves for re-election at the AGM of the Company. New Directors are appointed by way of a Board Resolution, after the NC has approved their


18 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT nomination. In its search and selection process for new Directors, the NC taps on the resources of Directors’ personal contacts and recommendations of potential candidates and appraises the nominees to ensure that the candidates possess relevant experience and have the calibre to contribute to the Group and its businesses, having regard to the attributes of the existing Board and the requirements of the Group. The Company’s Articles of Association require one-third of the Directors (excluding the Managing Director) to retire and subject themselves to re-election by shareholders at every Annual General Meeting (“AGM”). In other words, no Director stays in office for more than three years without being re-elected by shareholders. This will enable all shareholders to exercise their rights in selecting all Board members. Directors of or over 70 years of age are required to be re-elected every year at the AGM under Section 153(6) of the Companies Act, Cap. 50 before they can continue to act as Director. The Board, through the delegation of its authority to the NC, has used its best efforts to ensure that Directors appointed to the Board possess the background, experience and knowledge in technology, business, finance and management skills critical to the Group’s business and that each Director, through his unique contributions, brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made. The NC has in place guidelines to address the competing time commitments that are faced when some of the Directors have multiple board representations. The NC is satisfied that sufficient time and attention are being given by the Directors to the affairs of the Company and each Director is able to and has been adequately carrying out his/her duties as Director of the Company. None of the directors of the Company has any other listed company board representation for financial year ended 31 March 2013. When the concern arises that directors have multiple board representations which may compromise the sufficiency of time and attention to be given to the affairs of the Company, the Board will deliberate and decide the maximum number of listed company board representations which any director may hold, and disclose the same in the Company’s annual report. Each member of the NC abstains from voting on any resolutions and making any recommendation and/or participating in respect of matters in which he is interested. The NC recommended that the following Directors who are retiring at the forthcoming AGM to be nominated for re-election. The retiring Directors have offered themselves for re-election and the Board has accepted the recommendations of the NC. Name Mr Kun Swee Tiong Andy Mr Teoh Hong Fu Mick –

– –

Article No. to retire under Article 107 Article 107

Mr Kun Swee Tiong Andy will, upon re-election as a Director, remain as the Chairman of the NC and a member of the AC and the RC; and


19 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT –

Mr Teoh Hong Fu Mick, will, upon re-election as a Director, remain as the Chairman of the AC, the Chairman of RC and a member of the NC.

Mr Raymond Ho D’Orville will retire under Section 153(6) of the Companies Act and has offered himself for re-election. The dates of the initial appointment of each Director are set out as follows: Name Raymond Ho D’Orville Hong Seong Soo Wong Kuan Kit Keith Kun Swee Tiong Andy Teoh Hong Fu Mick

Appointment Executive Director Non-Executive Director Non-Executive Director Independent Director Independent Director

Date of initial appointment 31 July 2006 30 July 2010 20 October 2011 04 June 2009 06 July 2011

Principle 5: Board Performance There should be a formal annual assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each Director to the effectiveness of the Board. The Non-Executive Directors regularly reviews the performance of management in meeting agreed goals and objectives and monitors the reporting of performance. To facilitate a more effective check on management, Non-Executive Directors meet regularly without the presence of Management and/or the Executive Directors; and thereafter, the IDs provide feedback to the Executive Director. A formal review of the Board’s performance will be undertaken collectively and individually by the Board annually. The NC will also review the Board’s performance informally with inputs from the other Board members and the Executive Director. The evaluation exercise is carried out annually by way of a Board Assessment Checklist, which is circulated to the Board members for completion and thereafter, for the NC to review and determine the actions required to improve the corporate governance of the Company and effectiveness of the Board and Committees of the Board as a whole. Although the Directors are not evaluated individually, the factors taken into consideration with regards to the re-nomination of Directors for the current year are based on their attendances and contributions made at these meetings. Renewal or replacement of Directors does not necessarily reflect their contribution to-date, it may be due to the need to position and shape the Board in line with the needs of the Group and its business.


20 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The search and nomination process for new Directors, if any, will be through search companies, contacts and recommendations that go through the normal selection process. New Directors are appointed after the NC has reviewed and nominated them for appointment. Such new Directors will submit themselves for re-election at the AGM of the Company. Principle 6: Access to Information In order to fulfill their responsibilities, Directors should be provided with complete, adequate and timely information prior to Board meetings and on an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities. In order to ensure that the Board is able to fulfill its responsibilities, Management is required to provide complete, adequate and timely information to the Board on Board affairs and issues that require Board’s decision as well as on-going reports relating to operational and financial performance of the Company and the Group. Whenever appropriate, senior managers who can provide additional insight in the matters to be discussed are invited to attend the Board meeting. When a Director is first appointed to the Board, that Director will receive a comprehensive and tailored induction on joining the Board. An orientation program is arranged for him to ensure that he is familiar with the Group’s business and governance practices. The Company provides training for a first-time Director in areas such as accounting, legal and industry-specific knowledge as appropriate. Upon appointment of a Director, the Company provides a formal letter to the Director, setting out the Director’s duties and obligations. The Board has separate and independent access to the senior Management and the Company Secretary at all times. Directors are entitled to request from Management and should be provided with such additional information as needed to make informed decisions. Management shall provide the same in a timely manner. Information provided include board papers and related materials, background or explanatory information relating to matters to be brought before the Board, and copies of disclosure documents, budgets, forecasts and monthly internal financial statements. In respect of budgets, any material variance between the projections and actual results should also be disclosed and explained. Where necessary, the Company will, upon the request of Directors (whether as a group or individually), provide them with independent professional advice, at the Company’s expense, to enable them to discharge their duties.


21 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The Company Secretary is responsible for the compliance of the Board procedures and to ensure that the Company is in compliance with rules and regulations that are governed to the Company. All Directors have separate and independent access to the advice and services of the Company Secretary. The Board seeks independent professional advice as and when necessary to enable it to discharge its responsibilities effectively. The Directors, whether as a Group or individually, may seek and obtain legal and other independent professional advice, at the Company’s expense, concerning any aspect of the Group’s operations or undertakings in order to fulfill their roles and responsibilities as Directors. 2.

REMUNERATION MATTERS Principle 7: Procedures for Developing Remuneration Policies There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his own remuneration. Principle 8: Level and Mix of Remuneration The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the Directors to provide good stewardship of the company, and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose. Principle 9: Disclosure on Remuneration Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration and the procedure for setting remuneration in the Company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to Directors and key executives, and performance. The RC comprises two Independent Directors and one Non-Executive Director. The members are Mr Teoh Hong Fu Mick (Chairman), Mr Kun Swee Tiong Andy and Mr Wong Kuan Kit Keith.


22 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The RC’s written Terms of Reference describes its responsibilities, including: (a)

reviewing and recommending a remuneration framework and determine specific remuneration packages for the Executive Director of the Company, to provide a greater degree of objectivity and transparency in determining the remuneration of Executive Director; and

(b)

conduct annual review of the remuneration packages of employees who are related to any Directors or any substantial shareholders of the Company, if any.

The RC’s recommendations should be submitted for endorsement by the entire Board. The RC should cover all aspects of remuneration, including but not limited to director’s fees, salaries, allowances, bonuses, options, and benefits in kind. The RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the RC takes into consideration industry practices and norms in compensation, in addition to the Company’s relative performance to the industry and the performance of the individual Directors. The RC ensures that a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors and key officers. Although the recommendations are made in consultation with the Executive Director, the remuneration packages are ultimately approved by the entire Board. No Director will be involved in deciding his own remuneration. The RC reviews the Company’s obligations arising in the event of termination of the Executive Director and key management personnel’s contracts of service, to ensure that such contracts of service contain fair and reasonable termination clauses which are fair, commensurate with performance and not overly generous. The Company adopts a remuneration policy for employees comprising a fixed component and a variable component. The fixed component is in the form of a base salary. The variable component is in the form of a variable bonus that is linked to the performance of the Company and the individual. The Executive Director, Mr Raymond Ho D’Orville, has entered into a service agreement (“Service Agreement”) with the Company dated 2 December 2012. The service agreement covers the terms of employment, specifically salary and other benefits. The Service Agreement includes the termination clause, retirement and post-employment benefits. The Service Agreement is valid for one years (“Term”). Upon expiry of the Term, the employment of Mr Raymond Ho D’Orville shall be reviewed by the Board (in consultation with the RC) and renewed on such terms and conditions as the parties may agree.


23 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The remuneration of Independent Directors should be determined by his contribution to the Company, taking into account factors such as effort and time spent as well as his responsibilities on the Board. Directors’ Remuneration The Executive Director’s remuneration consists of salary, allowances and bonuses. Directors’ fees for Independent Directors are subject to shareholders’ approval at the AGM. The Board will recommend the remuneration of the Independent Directors for approval at the AGM. The following table shows the remuneration of each individual Director for the financial period under review: The remuneration of each individual director is disclosed as follows on a named basis with a breakdown in percentage terms of each directors’ remuneration in bands of S$250,000. Remuneration Band and Name of Director

Salary* (%)

Bonus# (%)

Fees (%)

Benefits (%)

Share Option

Hong Seong Soo (Appointed on 4 December 2012)

91

9

8,000,000

Raymond Ho D’Orville (Appointed on 4 December 2012)

41

59

3,000,000

Kun Swee Tiong Andy

100

2,000,000

Mick Teoh Hong Fu

100

Wong Kuan Kit Keith

100

Above S$250,000

Below S$250,000

* Salary is inclusive of allowance, CPF and other emoluments # Bonus is inclusive of CPF


24 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT Remuneration of Key Executives The Company has only two key executives, Mr Hong Seong Soo and Mr Raymond Ho D’Orville. None of the key executives are paid more than the sum of S$250,000 a year as disclosed above. Notwithstanding Guidelines 9.1 of the Code, the Company is disclosing the remuneration of two top key executives, Mr Hong Seong Soo and Mr Raymond Ho D’Orville as the Company did not have any other key executives (who were not also Directors) during the financial year ended 31 March 2013. Remuneration of Other Employees Related to a Director There are no employees in the Group whose annual remuneration exceeds S$50,000 who are immediate family members of the Acting CEO or any other Directors of the Company. Infinio Group Limited Share Option Scheme The Company has a performance share plan under the Infinio Group Limited Share Option Scheme (the “Scheme”) which was approved by shareholders on 16 May 2007. The Scheme is administered by the Board of Directors. The Scheme, which forms an integral component of the Company’s compensation plan, is to provide an opportunity for Group employees, who have met the performance conditions to be remunerated not just through cash bonuses but also by an equity stake in the Company. It is primarily a share incentive scheme and recognizes the fact that the services of such Group employees are important to the success and continued well-being of the Group. Implementation of the Scheme will enable the Company to give recognition to the contributions made by such Group employees. At the same time, it will give such Group employees an opportunity to have a direct interest in the Company and will also help to achieve the Scheme’s objectives, as enumerated in the Circular dated 20 April 2007 (the “Circular”). Under the rules of the Scheme, Group employees who are full-time employees of the Company and/or its subsidiaries who have attained the age of 21 years on or before the date of the award are eligible to participate in the Scheme at the absolute discretion of the Awards Committee. Controlling Shareholders and their associates and the Group Non-Executive Directors are not eligible to participate in the Scheme.


25 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The aggregate amount of new shares which may be issued pursuant to the vesting of the award granted on any date, when added to the amount of new shares issued and issuable in respect of (i) all awards previously granted under the Scheme; and (ii) any other share-based incentive scheme of the Company, shall not exceed 15% of the issued and paid-up share capital of the Company on the day preceding that date. The number of existing shares purchased from the market which may be delivered pursuant to the awards granted under the Scheme, and the amount of cash which may be paid upon the release of such awards in lieu of shares, will not be subject to any limit, as such methods will not involve the issue of any new shares. Subject to the foregoing limits, there shall be no other limitation on the number of shares available to participants of the Scheme. The Scheme shall continue in operation for a maximum duration of 10 years and may be continued for any further period thereafter with the approval of the shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required. Since the commencement of the Scheme till the end of the financial year under review and up to the current date of this Report, no shares were granted under the Scheme to the Group employees. The number of unissued ordinary shares of the Company under option in relation to the Scheme outstanding at the end of FY2013 was as follows: No. of unissued ordinary shares

3.

Under option at 31.3.2013

Exercise price

Exercise period

2009 Options

3,000,000

$0.04

11.8.2010 – 11.8.2013

2010 Options

10,000,000

$0.045

12.6.2010 – 01.09.2014

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


26 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The Board acknowledges that it is accountable to the shareholders and is mindful of the obligations to furnish timely information and to ensure full disclosure of material information in compliance with statutory reporting requirements. Price sensitive information is first publicly released, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual reports will be announced or issued within legally prescribed periods. The Board provides the shareholders with a detailed and balanced explanation and analysis of the Group’s performance, position and prospects on a half yearly basis. The Management provides the Board with appropriately detailed management accounts of the Group’s performance and prospects on a half yearly basis. Principle 11: Risk Management and Internal Controls The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard shareholders’ interests and the company’s assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives. The Board should establish an AC with written terms of reference which clearly set out its authority and duties. The Board has required the Management to maintain a sound system of risk management and internal controls to safeguard shareholders’ interests and the Company’s assets, and determines the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives. The Board determines the Company’s levels or risk tolerance and risk policies, and oversees Management in the design, implementation and monitoring of the risk management and internal control systems. The Group regularly reviews and improves its business and operational activities to identify areas of significant business risks as well as respond appropriately to control and mitigate these risks. The Group reviews all significant matters to the AC and the Board. The Board reviews at least annually, the adequacy and effectiveness of the Company’s risk management and internal control systems, including financial, operational, compliance and information technology controls. Based on the internal controls established and maintained by the Group, work performed by the internal and external auditors, and reviews performed by Management, various Board Committees and the Board, the AC and the Board are of the opinion that the Group’s internal controls, addressing financial, operational and compliance risks, were adequate as at 31 March 2013. The Company consistently improves and adopts the recommendations highlighted by the auditors and the Sponsor to safeguard the Group’s internal controls. The Board has received assurances from the ED and the Accounting Manager (a) that the financial records have been properly maintained and the financial statements give a true and fair


27 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT view of the Company’s operations and finances; and (b) that the Company’s risk management and internal control systems are sufficiently effective. Principle 12: AC The Board should establish an AC with written terms of reference which clearly set out its authority and duties. The AC is based on the internal controls established and maintained by the Group, work performed by the internal and external auditors, and reviews performed by Management, various Board Committees and the Board, the AC and the Board are of the opinion that the Group’s internal controls, addressing financial, operational and compliance risks, were adequate as at 31 March 2013. The Company consistently improves and adopts the recommendations highlighted by the auditors and the Sponsor to safeguard the Group’s internal controls. The Board has received assurances from the Executive Director (a) that the financial records have been properly maintained and the financial statements give a true and fair view of the Company’s operations and finances, and (b) that the Company’s risk and internal control systems are sufficiently effective. The AC of the Company is made up of one Non-executive Director and two Independent Directors, among whom the two Independent Directors possess appropriate accounting experience and/or related financial management expertise. Mr Teoh Hong Fu Mick, an Independent Director of the Company, chairs the AC. The other members of the AC are Mr Kun Swee Tiong Andy and Mr Wong Kuan Kit Keith. The Company’s AC provides a channel of communication between the Board, Management and external auditors on matters relating to audit. The responsibilities of the AC include: (a)

Reviews with independent auditors’ on their audit plans, their scope and results of the external audit;

(b)

Review the independent auditors’ reports and the letter to Management and Management’s response;

(c)

Review the assistance given by the Management to the independent auditors;


28 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT (d)

review the internal control procedures and the adequacy of the Group’s internal controls and ensure co-ordination between the independent auditors and the Management, and review the assistance given by the Management to the auditors, and discuss problems and concerns, if any, arising from the interims and final audits, and any matters which auditors may wish to discuss (in absence of the Management, where necessary), if any;

(e)

Review the significant financial reporting issues and judgements of the Company and the Group so as to ensure integrity of the financial statements of the Group;

(f)

Review the half-yearly and annual announcements as well as the press release on the results and financial positions of the Company and the Group before submission to the Board for approval;

(g)

Recommend to Board on the appointment, re-appointment and removal of independent auditors and approving the remuneration and terms of engagement of the independent auditor;

(h)

Review the Group’s compliance with such functions and duties as may be required under the relevant statutes or the Section B: Rules of Catalist of the Listing Manual of the Singapore Exchange Securities Trading Limited, and by such amendments made thereto from time to time;

(i)

Review interested person transactions (if any) failing within the scope of Chapter 9 of Section B of the SGX-ST Listing Manual (Rules of catalyst);

(j)

Review the remuneration packages of employees who are related to the Directors and/or substantial shareholders; and

(k)

review potential conflicts of interest (if any).

Apart from the functions listed above, the AC shall also commission and review the findings of internal investigations into matters with independent auditors where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on the Group’s operating results and/or financial position.


29 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The AC has explicit authority to investigate any matter within its terms of reference, full access to and co-operation by Management and full discretion to invite any Director or Executive Officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. In addition to the above, the AC will meet with the independent auditor, in the absence of the Management, at least once a year. The AC has full access to and the co-operation of the Management. The independent auditor has unrestricted access to the AC. The AC constantly bears in mind the need to maintain a balance between the independence and objectivity of the independent auditor and the work carried out by the independent auditors based on value for money considerations. The AC has reviewed the independence of the Company’s independent auditor and is satisfied with the independence and objectivity of the independent auditor. The aggregate amount of fees paid/payable to the independent auditor of the Company and subsidiaries for audit services was S$35,000. There were no non-audit services provided by the independent auditor of the Company for the financial year ended 31 March 2013. The AC has recommended to the Board the nomination of Robert Yam & Co., for reappointment as independent auditor of the Company at the forthcoming AGM. The Group has appointed different auditors for its overseas subsidiary. The Board and AC have reviewed that the appointment of different auditors for its overseas subsidiary and were satisfied that the appointment of different auditors would not compromise the standard and effectiveness of the audit of the Group. The Company confirms that Rules 712 and 715 of the Catalist Listing Manual has been complied with. The AC has reviewed the annual financial statements of the Company and the Group for the financial period ended 31 March 2013 as well as the Auditors’ Reports thereon. Interested Persons Transactions of the Group in the said financial period have also been reviewed by the AC. Every AC member shall abstain from voting on any resolutions in respect of matters in which he is or may be interested in. The AC has incorporated a whistle blowing policy into the Company’s internal control procedures to provide a channel for staff to report in good faith and in confidence, without fear of reprisals, concerns about suspected fraud, corruption, dishonest practices or other similar matters. The objective of the policy is to ensure an independent investigation of such matters and to appropriate follow-up action.


30 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT Although the Board acknowledges that it is responsible for the overall internal control framework, it also recognises that no cost effective internal control system will preclude all errors and irregularities. A system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The Board is satisfied that the system of internal procedures, controls and reviews that the Group has in place provides reasonable assurance against material financial misstatements or loss, safeguarding of assets, the maintenance of proper accounting records, reliability of financial information, compliance with legislation, regulations and best practices and the identification and management of business risks. The Board, with concurrence of AC, is therefore of the opinion that the Group’s system of internal controls is adequate to address financial, operational and compliance risks of the Group in its current business environment. Principle 13: Internal Audit The Company should establish an internal audit function that is adequately resourced and independent of the activities it audits. As of the date of this report, no internal auditors have been appointed by the Company as the monitoring of internal functions may not be a top priority for the Company due to more critical matter of establishing a strong core business first. The AC is currently looking into the formation of the internal audit function and whether this function will be outsourced to a qualified and professional firm or undertaken internally. 4.

COMMUNICATION WITH SHAREHOLDERS Principle 14: Communication with Shareholders Companies should actively engage their shareholders and put in place an investor relations policy to promote regular, effective and fair communication with shareholders. Principle 15: Greater Shareholder Participation Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.


31 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT The Company communicates information to its shareholders and the investing community through the release of announcements to the SGX-ST via SGXNET outside trading hours. Such announcements include the half-year and full-year results, material transactions and other developments relating to the Group requiring disclosure under the corporate disclosure policy of the SGX-ST. The Company’s Annual Report together with the notice of the AGM is sent to all shareholders of the Company. The Company’s main forum for dialogue with shareholders takes place at its AGM, whereas members of the Board, senior Management and the independent auditor are in attendance. At the AGM, shareholders are given the opportunity to express their views and ask questions regarding the Group. The Company believes in encouraging shareholder participation at its general meetings. The Company’s Articles of Association allow a shareholder entitled to attend and vote at general meetings to appoint not more than two proxies who need not be shareholders of the Company to attend and vote on his stead. Corporations which provide nominees and custodial services could appoint up to two of proxies so that shareholders who hold shares through such corporations can attend and participate in general meetings as proxies. The Board welcomes questions from shareholders who have an opportunity to raise issues either informally or formally before or at the AGMs/EGMs, via the Company’s website or contact the executives at the Company business office. The Chairmen of the AC, RC and NC will be available at the meetings to answer questions relating to their work. At AGMs and other general meetings, separate resolutions will be set out on distinct issues for approval by shareholders. The Company prepares Minutes of general meetings that include substantial and relevant comments or queries from shareholders relating to the agenda of the meeting, and responses from the Board and Management. These Minutes will be available to shareholders upon their request. Since financial year 2010, the Company has not paid any dividends to shareholders as the Company had been making losses.


32 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT 5.

INTERESTED PERSON TRANSACTIONS The Company has established procedures to ensure that all transactions with interested persons are reported on a timely manner to the AC and that the transactions are carried out on normal commercial terms and will not be prejudicial to the interests of the Company and its minority shareholders. There were no interested person transactions entered during the financial year under review.

6.

NON-SPONSOR FEES For the financial year ended 31 March 2013, there were no non-sponsor fees paid to the Company’s Sponsor.

7.

DEALINGS IN SECURITIES The Company has adopted policies in relation to dealings in the Company securities pursuant to the SGX-ST Best Practices Guide that are applicable to all its Directors and officers. The Company and its officers should not deal in the Company’s shares during the period commencing one month before half-year or full-year financial results announcement, as the case may be, and ending on the date of the announcements of the relevant results. Directors and key executives are also expected to observe the insider-trading laws at all times even when dealing with securities within the permitted trading period. The Company confirms that Rule 1204(19) of the Catalist Listing Manual has been complied with.

8.

STATEMENT OF COMPLIANCE The Board confirms that for the financial year ended 31 March 2013, the Company has generally adhered to the principles and guidelines as set out in the Code of Corporate Governance of 2 May 2012.


33 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CORPORATE GOVERNANCE STATEMENT 9.

MATERIAL CONTRACTS Save for the service agreement between Director and the Company, there were no material contracts of the Company or its subsidiaries involving the interests of each Director or controlling shareholder, either still subsisting at the end of the financial year under review or if not then subsisting, entered into since the end of the previous financial year.

10.

USE OF PROCEEDS For the financial year ended 31 March 2013, the Company raised gross proceeds of an aggregate of S$600,000 from a series of conversion of 5.0% equity linked redeemable structure convertible notes due 2015 in January and February 2013 and S$7,660 from raised from a series of warrants exercise. The proceeds have been utilized for the following purposes: Use of Proceeds

S$

Company’s General Corporate and Working Capital Purposes:– Legal claim and damages – Suit No. 127 of 2007

180,614

General and administrative costs

427,046

Total

607,660

The use of proceeds as disclosed above is in accordance with the stated use and is in accordance with the percentage allocated in the announcement of the Company.


FINANCIAL CONTENTS Directors’ Report Statement by Directors Independent Auditor’s Report Statement of Financial Position Statement of Comprehensive Income Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements

35 40 41 44 45 47 50 51


35 INFINIO GROUP LIMITED ANNUAL REPORT 2013

DIRECTORS’ REPORT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

The directors present their report to the members together with the audited consolidated financial statements of Infinio Group Limited (the “Company”) and its subsidiaries (the “Group”) and the statement of financial position, statement of comprehensive income and statement of changes in equity of the Company for the financial year ended 31 March 2013. DIRECTORS The directors of the Company in office at the date of this report are: Raymond Ho D’Orville Hong Seong Soo Kun Swee Tiong Andy Wong Kuan Kit Keith Teoh Hong Fu Mick ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES According to the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act, Cap. 50, none of the directors holding office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations. DIRECTORS’ CONTRACTUAL BENEFITS Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in the accompanying financial statements and in this report.


36 INFINIO GROUP LIMITED ANNUAL REPORT 2013

DIRECTORS’ REPORT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

SHARE OPTIONS AND WARRANTS (a)

Infinio Group Limited Share Option Scheme The Infinio Group Limited Share Option Scheme (the “Scheme”) for key management personnel and employees of the Group was approved by members of the Company at an Extraordinary General Meeting on 16 May 2007. The Scheme is administered by the Board of the Directors of the Company. Under the Scheme, options to subscribe for the ordinary shares of the Company are granted to key management personnel and employees. The exercise price of the options is determined at the average of the closing prices of the Company’s ordinary shares as quoted on the Singapore Exchange for five market days immediately preceding the date of the grant. Options are granted at no discount or at a discount of 20% to the prevailing market price of the shares. The vesting of the options is conditional on the key management personnel or employees completing another one year for no discount and two years of service for a discount of 20% from the grant date. Once the options are vested, they are exercisable for a period of three years. The options may be exercised in full or in part in respect of any 1,000 shares or a multiple thereof, on the payment of the exercise price. The persons to whom the options have been issued have no right to participate by virtue of the options in any share issue of other company. The Group has no legal or constructive obligation to repurchase or settle the options in cash. The aggregate number of shares over which options may be granted on any date, when added to the number of shares issued and issuable in respect of all options granted under the Scheme, shall not exceed 15% of the issued share capital of the Company on the day preceding that date. On 11 August 2008, the Company granted options to subscribe for 14,150,000 ordinary shares of the Company at exercise price of S$0.04 per share (“2009 Options”). The 2009 Options are exercisable from 11 August 2010 and will expire on 11 August 2013. On 12 June 2009, the Company further granted options to subscribe for 42,000,000 ordinary shares of the Company at exercise price of S$0.045 per share. The options were issued at market price and are exercisable from 12 June 2010 and will expire on 1 September 2014. A further 2,000,000 options were granted to Mr Ross Pollack upon his joining the Company as an Independent Director on 1 September 2009. In total, 44,000,000 share options (The “2010 Options”) were granted during the financial year ended 31 March 2010. The total value of the 2009 and 2010 Options granted was estimated to be S$363,512 using the Black Scholes Model. No options were granted during the financial year ended 31 March 2013.


37 INFINIO GROUP LIMITED ANNUAL REPORT 2013

DIRECTORS’ REPORT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

SHARE OPTIONS AND WARRANTS (CONTINUED) (a)

Infinio Group Limited Share Option Scheme (Continued) Details of the options granted to the following directors of the Company are as follows: No. of unissued ordinary shares of the Company under option

Name of Directors

Aggregate

Aggregate

Aggregate

Granted in

granted since

exercised since

lapsed since

Aggregate

financial year

commencement

commencement

commencement

outstanding

ended

of Scheme to

of Scheme to

of Scheme to

as at

31 March 2013

31 March 2013

31 March 2013

31 March 2013

31 March 2013

Raymond Ho D’Orville

3,000,000

3,000,000

Kun Swee Tiong Andy

2,000,000

2,000,000

Hong Seong Soo

8,000,000

8,000,000

No options have been granted to the controlling shareholders of the Company or their associates (as defined in the Listing Manual of Singapore Exchange Securities Trading Limited) and no participant under the Scheme has been granted 5% or more of the total options available under the Scheme. (b)

Share Options Outstanding The number of unissued ordinary shares of the Company under option in relation to the Scheme outstanding at the end of the financial year was as follows:

(c)

No. of unissued ordinary shares under option at 31 March 2013

Exercise price

2009 Options

3,000,000

S$0.04

2010 Options

10,000,000

S$0.045

Exercise period 11 August 2010 – 11 August 2013 12 June 2010 – 1 September 2014

Rights Shares cum Warrants Issue During the financial year, the Company issued 383,000 new ordinary shares pursuant to the Rights Shares cum Warrants Issue (the “Rights Issue”) for a total cash consideration of S$7,660. The Company does not hold any treasury shares and there are no outstanding warrants as at 31 March 2013.


38 INFINIO GROUP LIMITED ANNUAL REPORT 2013

DIRECTORS’ REPORT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

SHARE OPTIONS AND WARRANTS (CONTINUED) On 25 January 2013, warrants totaling to 467,955,594 expired. AUDIT COMMITTEE The members of the Audit Committee at the end of the financial year were as follows: Teoh Hong Fu Mick (Chairman) Kun Swee Tiong Andy Wong Kuan Kit Keith All members of the Audit Committee were Non-Executive and Independent Directors. The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act. In performing those functions, the Committee reviewed: •

The audit plan of the Company’s independent auditor and any recommendations on internal accounting controls arising from the statutory audit;

The assistance given by the Company’s management to the independent auditor; and

The statement of financial position of the Company and the consolidated financial statements of the Group for the financial year ended 31 March 2013 before their submission to the Board of Directors, as well as the independent auditor’s report on the statement of financial position of the Company and the consolidated financial statements of the Group.

The Audit Committee has recommended that Robert Yam & Co. be nominated for re-appointment as Company’s independent auditor at the forthcoming Annual General Meeting.


39 INFINIO GROUP LIMITED ANNUAL REPORT 2013

DIRECTORS’ REPORT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

INDEPENDENT AUDITOR The independent auditor, Robert Yam & Co., has expressed its willingness to accept reappointment.

On behalf of the board of directors:

Wong Kuan Kit Keith Director 8 July 2013

Raymond Ho D’Orville Director


40 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATEMENT BY DIRECTORS

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

In the opinion of the directors: (a)

the accompanying statement of financial position, statement of comprehensive income, statement of changes in equity, and consolidated statement of cash flows together with the notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2013 and the results of the business and changes in equity of the Group and the Company and cash flows of the Group for the year ended on that date;

(b)

at the date of this statement, on the assumption that the Company will be successful in the issuance of the equity linked redeemable structured convertible notes (Note 33) the Company will be able to continue as a going concern; and

(c)

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

On behalf of the board of directors:

Wong Kuan Kit Keith Director 8 July 2013

Raymond Ho D’Orville Director


41 INFINIO GROUP LIMITED ANNUAL REPORT 2013

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF INFINIO GROUP LIMITED

REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of Infinio Group Limited (the “Company”) and its subsidiaries (the “Group”) set out on pages 44 to 120, which comprise the statement of financial position of the Group and the Company as at 31 March 2013, the statement of comprehensive income and statement of changes in equity of the Group and the Company, and the consolidated statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Qualified Audit Opinion on the Consolidated Financial Statements for the Year Ended 31 March 2013 The consolidated financial statements for the year ended 31 March 2012 were audited by another auditor who expressed a qualified opinion on 2 July 2012 due to the inability to obtain sufficient and appropriate audit evidence on the current liabilities associated with discontinued operations amounting to S$1,294,537.


42 INFINIO GROUP LIMITED ANNUAL REPORT 2013

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INFINIO GROUP LIMITED

This qualified audit opinion for the previous financial year continues into the current financial year as discussed below. Basis of Qualified Opinion (a)

Included in the current liabilities presented in the statement of financial position is an amount of S$1,294,537 recognised by the Group arising from the discontinued operations (Note 30). The discontinued operations, comprising of Broadband Network Systems Limited and its subsidiaries, are now currently under liquidation as they ceased operation in 2011. The financial statements of these discontinued operations were not audited since 2011 due to the resignations of all its directors and staff and their financial records were not available to be audited. We were unable to satisfy ourselves even through alternative audit procedures to obtain sufficient and appropriate audit evidence to determine whether the Group is required to recognise the total liabilities of the discontinued operations of S$1,294,537, and if required, whether the recorded liabilities is fairly stated. As such, we are unable to determine the impact on the current financial year’s consolidated statement of comprehensive income arising from any adjustments to these liabilities.

(b)

Included in the other receivables presented in the statements of financial position is a loan receivable made to PT FirstFlower (“PTFF”), a subsidiary of Ephraim Resources Limited, amounting to S$811,869 (Note 9). As at date of this report, a total of S$100,000 was offset by a Company’s creditor against the Company’s receivable from PTFF. On 21 March 2013, the Company and PTFF mutually agreed to extend the loan repayment date from 31 December 2012 to 31 December 2013. We were unable to satisfy ourselves even through alterative procedures to obtain sufficient and appropriate audit evidence whether the loan receivable is recoverable.

Qualified Audit Opinion In our opinion, except for the significant effects of the matter described in Basis of Qualified Opinion above, the consolidated financial statements of the Group and the statement of financial position, statement of comprehensive income and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and the Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2013 and the results, changes in equity and cash flows of the Group and the Company for the year ended on that date. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 2(b) to the financial statements. The Group incurred a net loss of S$1,629,805 (2012: S$1,475,279) for the financial year ended 31 March 2013. As at 31 March 2013, the Group’s current liabilities exceeded its current assets by S$2,140,415 (2012: S$2,164,864) and is in a net deficit position of S$2,111,121 (2012: S$1,273,037).


43 INFINIO GROUP LIMITED ANNUAL REPORT 2013

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF INFINIO GROUP LIMITED

The conditions described in the preceding paragraph indicate the existence of material uncertainties which may cast significant doubt on the ability of the Group and the Company to meet their obligations as and when they fall due and to operate as a going concern. The accompanying consolidated financial statements of the Group have been prepared on a going concern basis under the assumptions that continuous funds will be received from the issuance of the S$10,000,000 equity linked redeemable structured convertible notes (“Convertible Notes”) to a third party (Note 33) so that the Group and the Company will be able to pay its debts as and when they fall due. As of the date of this report, a total of S$1,600,000 funds were received and converted to shares, and available as working capital funds. In the event the issuance of the Convertible Notes is not fully utilised and no additional funds are forth coming, it may affect the Group and the Company to continue as a going concern for the foreseeable future. Adjustments would have to be made to reflect the situation that the assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts stated in the statements of financial position. In addition, the Company and the Group may have to provide for further liabilities which may arise, and to reclassify non-current assets and non-current liabilities as current assets and current liabilities respectively. No such adjustments have been made to the statement of financial position of the Company and consolidated financial statements of the Group. In forming our opinion, we have considered the adequacy of the disclosure of the above matter in the financial statements. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In our opinion, the accounting and other records required by the Act to be kept by the Company and by the subsidiary incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Robert Yam & Co. Public Accountants and Certified Public Accountants Singapore 8 July 2013


44 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2013

Group Note

2013 S$’000

2012 S$’000

Company 2013 2012 S$’000 S$’000

ASSETS Non-Current Assets Property, plant and equipment Intangible assets Investment in subsidiaries Available-for-sale financial assets Deferred income tax assets

4 5 6 7 14

– 29 – – – 29

245 44 – 606 120 1,015

– – – – – –

53 – 240 606 – 899

Current Assets Trade receivables Other receivables Other current assets Cash and cash equivalents

8 9 10 11

46 832 107 177 1,162 1,191

59 681 56 309 1,105 2,120

29 821 100 171 1,121 1,121

136 1,267 48 305 1,756 2,655

12 13 13 13

Non-controlling interests Total equity Non-Current Liabilities Deferred income tax liabilities

35,212 103 164 – (37,576) (2,097) (14) (2,111)

33,948 103 101 534 (35,948) (1,262) (12) (1,274)

35,212 103 – – (36,002) (687) – (687)

33,948 103 – 534 (33,602) 983 – 983

14

124

Current Liabilities Trade payables Other payables Loans payable

15 16 17

928 629 450

769 1,206 –

824 534 450

638 1,034 –

30

1,295 3,302 (2,140) (2,111) 1,191

1,295 3,394 (2,165) (1,274) 2,120

– 1,808 (687) (687) 1,121

– 1,672 84 983 2,655

Total assets EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital Share option reserve Currency translation reserve Fair value reserve Accumulated losses

Current liabilities associated with discontinued operations Total liabilities Net current (liabilities)/assets Net (liabilities)/assets Total equity and liabilities

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


45 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

Group Note Continuing operations Revenue Cost of sales

18

Gross profit Other income – net Distribution and marketing expenses Administrative expenses

19

Results from operating activities Finance income Finance cost

Company 2013 2012 S$’000 S$’000

2013 S$’000

2012 S$’000

71 (27)

481 (357)

– –

– –

44

124

310 (52) (1,872)

189 (90) (1,696)

351 (36) (2,656)

480 (33) (1,600)

(1,570)

(1,473)

(2,341)

(1,153)

9 (68)

1 (3)

9 (68)

1 (3)

Finance cost – net

21

(59)

(2)

(59)

(2)

Loss before tax Income tax benefit

22 23

(1,629) 4

(1,475) –

(2,400) –

(1,155) –

(1,625)

(1,475)

(2,400)

(1,155)

(5)

(1,630)

(1,475)

(2,400)

(1,155)

(496) (38)

532 (48)

(496) (38)

532 (48)

63

(9)

(471)

475

(534)

484

(2,101)

(1,000)

(2,934)

(671)

Loss from continuing operations Discontinued operations Loss from discontinued operations Loss for the year Other comprehensive income/(loss): Available-for-sale financial assets – Fair value gain/(loss) – Reclassification Currency translation differences arising from consolidation Other comprehensive income/(loss) for the year, net of tax Total comprehensive loss for the year

30


46 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

Group Note Loss attributable to: Owners of the Company Non-controlling interests

Total comprehensive income/(loss) attributable to: Owners of the Company Non-controlling interests

2013 S$’000

2012 S$’000

(1,628) (2)

(1,470) (5)

(1,630)

(1,475)

(2,099) (2)

(995) (5)

(2,101)

(1,000)

Loss per share – Basic loss per share (cents)

31

(0.09)

(0.10)

– Diluted loss per share (cents)

31

(0.09)

(0.10)

Loss per share – continuing operations – Basic loss per share (cents)

31

(0.09)

(0.10)

– Diluted loss per share (cents)

31

(0.09)

(0.10)

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


47 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

Attributable Share

Currency

Share

option

translation

capital

reserve

reserve

reserve

S$’000

S$’000

S$’000

33,948

103

101

– Fair value loss

– Reclassification

Group

Balance at 1 April 2012 Loss for the year

to owners

Non-

of the

controlling

Total

losses

Company

interests

equity

S$’000

S$’000

S$’000

S$’000

S$’000

534

(35,948)

(1,262)

(12)

(1,274)

(1,628)

(1,628)

(2)

(1,630)

(496)

(496)

(496)

(38)

(38)

(38)

63

63

63

63

(534)

(1,628)

(2,099)

(2)

(2,101)

Fair value Accumulated

Other comprehensive income/(loss) Available-for-sale financial assets

Currency translation differences arising from consolidation Total comprehensive income/(loss) for the year Contributions by and distributions to owners of the Company Issuance of shares Balance at 31 March 2013

1,264

1,264

1,264

35,212

103

164

(37,576)

(2,097)

(14)

(2,111)


48 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

Attributable Share

Currency

Share

option

translation

capital

reserve

reserve

reserve

S$’000

S$’000

S$’000

32,507

220

110

– Fair value gain

– Reclassification

Group

Balance at 1 April 2011 Loss for the year

to owners

Non-

of the

controlling

Total

losses

Company

interests

equity

S$’000

S$’000

S$’000

S$’000

S$’000

50

(34,595)

(1,708)

(7)

(1,715)

(1,470)

(1,470)

(5)

(1,475)

532

532

532

(48)

(48)

(48)

(9)

(9)

(9)

(117)

117

(117)

(9)

484

(1,353)

(995)

(5)

(1,000)

Fair value Accumulated

Other comprehensive income/(loss) Available-for-sale financial assets

Currency translation differences arising from consolidation Employee share option scheme – Share options forfeited Total comprehensive income/(loss) for the year Contributions by and distributions to owners of the Company Issuance of shares Balance at 31 March 2012

1,441

1,441

1,441

33,948

103

101

534

(35,948)

(1,262)

(12)

(1,274)


49 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

Company

Share capital S$’000

Share option reserve S$’000

Balance at 1 April 2012

33,948

103

534

(33,602)

983

Loss for the year

(2,400)

(2,400)

Other comprehensive loss Available-for-sale financial assets: – Fair value loss – Reclassification

– –

– –

(496) (38)

– –

(496) (38)

Total comprehensive loss for the year

(534)

(2,934)

Contributions by and distributions to owners of the Company Issuance of shares

Fair value reserve S$’000

Accumulated losses S$’000

Total equity S$’000

1,264

1,264

Balance at 31 March 2013

35,212

103

(36,002)

(687)

Company Balance at 1 April 2011

32,507

220

50

(32,564)

213

Loss for the year

(1,155)

(1,155)

Other comprehensive income/(loss) Available-for-sale financial assets: – Fair value gain – Reclassification Employee share option scheme: – Share options forfeited

– –

– –

532 (48)

– –

532 (48)

(117)

117

(117)

484

(1,038)

(671)

Total comprehensive income/(loss) for the year Contributions by and distributions to owners of the Company Issuance of shares Balance at 31 March 2012

1,441

1,441

33,948

103

534

(33,602)

983


50 INFINIO GROUP LIMITED ANNUAL REPORT 2013

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013

Note

2013 S$’000

2012 S$’000

(1,630)

(1,475)

46 15 60 25 (14) (4)

122 16 – – – –

(38) –

(48) (1)

Operating cash flows before changes in working capital Changes in working capital, net of effects from acquisition and disposal of subsidiaries: Trade and other receivables Other current assets Trade and other payables

(1,540)

(1,386)

(138) (51) (418)

(492) 78 (1,342)

Cash used in operations Interest received

(2,147) –

(3,142) 1

Net cash used in operating activities

(2,147)

(3,141)

Cash flows from investing activities Proceeds from disposal of available-for-sale financial assets Proceeds from disposal of property, plant and equipment

162 139

– –

Net cash from investing activities

301

Cash flows from financing activities Proceeds from new ordinary shares Proceeds from loans

1,264 450

1,441 –

Net cash from financing activities

1,714

1,441

(132) 309

(1,700) 2,018

(9)

177

309

Cash flows from operating activities Loss before tax Adjustments for: Depreciation of property, plant and equipment Amortisation of intangible assets Loss on disposal of property, plant and equipment Impairment loss on available-for-sale financial assets Gain on disposal of available-for-sale financial assets Adjustment in deferred tax Reclassification adjustments from fair value reserve to profit or loss upon disposal Interest income

4 5 7

13

Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of year

11

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


51 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

1.

GENERAL INFORMATION Infinio Group Limited (the “Company”) is listed on the Singapore Exchange and incorporated and domiciled in Singapore. The registered office is at 80 Robinson Road, #02-00 Singapore 068898 and principal place of business of the Company is located at 2 Leng Kee Road, #03-04 Thye Hong Centre, Singapore 159086. The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are set out in Note 6 to the financial statements. The dormant subsidiaries, Widget Exchange Pte Ltd and Roomwise Systems Limited have discontinued its operations during the financial year (Note 30). The subsidiaries, Elan Game World Inc, Infinio Holdings Ltd, Travel Point Inc and Pomoho Investment Ltd have discontinued its operations during last financial year (Note 30). The financial statements for the financial year ended 31 March 2013 were authorised for issue in accordance with a resolution of directors on 8 July 2013.

2.

SIGNIFICANT ACCOUNTING POLICIES (a)

Basis of preparation The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”). The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below. The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (INT FRS) that are effective for annual periods beginning on or after 1 April 2012. The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company.

(b)

Going concern basis The Group incurred net loss of S$1,629,805 (2012: S$1,475,279) for the financial year ended 31 March 2013. As at 31 March 2013, the Company’s current liabilities exceeded its current assets by S$2,140,415 (2012: S$2,164,864) and is in a net deficit position of S$2,111,121 (2012: S$1,273,037). These factors indicate the existence of material uncertainties which may cast significant doubt on the ability of the Group and the Company to meet their obligations as and when they fall due and to operate as a going concern.


52 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b)

Going concern basis (Continued) The consolidated financial statements have been prepared on a going concern basis under the assumptions that continuous funds will be received from the issuance of the S$10,000,000 equity linked redeemable structured convertible notes (“Convertible Notes”) (Note 33) to a third party so that the Group and the Company will be able to pay its debts as and when they fall due. As of the date of this report, a total of S$1,600,000 funds were received and converted to shares, and available as working capital funds. In the event the issuance of the Convertible Notes is not fully utilised and the funds are not forthcoming, the Group and the Company are unable to continue as a going concern for the foreseeable future, adjustments would have to be made to reflect the situation that the assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts stated in the statements of financial position. In addition, the Company and the Group may have to provide for further liabilities which may arise, and to reclassify non-current assets and non-current liabilities as current assets and current liabilities respectively. No such adjustments have been made to the statement of financial position of the Company and consolidated financial statements of the Group.

(c)

Basis of consolidation and business combinations (i)

Basis of consolidation Basis of consolidation from 1 January 2010 The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: –

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

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


53 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c)

Basis of consolidation and business combinations (Continued) (i)

Basis of consolidation (Continued) Basis of consolidation from 1 January 2010 (Continued) –

de-recognises the cumulative translation differences recorded in equity;

recognises the fair value of the consideration received;

recognises the fair value of any investment retained;

recognises any surplus or deficit in profit or loss; and

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

Basis of consolidation prior to 1 January 2010 Certain of the above-mentioned requirements were applied on a prospective basis. The following differences, however, are carried forward in certain instances from the previous basis of consolidation: –

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

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

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


54 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c)

Basis of consolidation and business combinations (Continued) (ii)

Business combinations Business combinations from 1 January 2010 Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity. In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss. The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.


55 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c)

Basis of consolidation and business combinations (Continued) (ii)

Business combinations (Continued) Business combinations from 1 January 2010 (Continued) Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out in Note 2(f)(i). In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date. Business combinations prior to 1 January 2010 In comparison to the above mentioned requirements, the following differences applied: Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets. Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any additional acquired share of interest did not affect previously recognised goodwill. When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree were not reassessed on acquisition unless the business combination resulted in a change in the terms of the contract that significantly modified the cash flows that otherwise would have been required under the contract. Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration were recognised as part of goodwill.


56 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d)

Transactions with non-controlling interests Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company. Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

(e)

Property, plant and equipment Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in profit or loss as incurred. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the year the asset is derecognised.


57 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e)

Property, plant and equipment (Continued) Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

Furniture and fittings Equipment Motor vehicles Renovation

Useful lives 3-5 years 3-5 years 5 years 5 years

The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed at each financial year-end, and adjusted prospectively, if appropriate. The effects of any revision are recognised in profit or loss when the changes arise. (f)

Intangible assets (i)

Goodwill on acquisitions Goodwill on acquisitions of subsidiaries and businesses on or after 1 January 2010 represents the excess of (i) the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over (ii) the fair value of the net identifiable assets acquired. Goodwill on acquisition of subsidiaries and businesses prior to 1 January 2010 and on acquisition of joint ventures and associates represents the excess of the cost of the acquisition over the fair value of the Group’s share of the net identifiable assets acquired. Goodwill on subsidiaries is recognised separately as intangible assets and carried at cost less accumulated impairment losses. Goodwill on associates and joint ventures is included in the carrying amount of the investments.


58 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (f)

Intangible assets (Continued) (i)

Goodwill on acquisitions (Continued) Gains and losses on the disposal of subsidiaries, associates and joint ventures include the carrying amount of goodwill relating to the entity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjusted against retained profits in the year of acquisition and is not recognised in profit or loss on disposal.

(ii)

Acquired gaming/computer software licences Acquired gaming/ computer software licences are initially capitalised at cost which includes the purchase prices (net of any discounts and rebates) and other directly attributable cost of preparing the asset for its intended use. Costs associated with maintaining the computer software are recognised as an expense when incurred. Gaming/ computer software licences are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to profit or loss using the straight-line method over their estimated useful life of 4-10 years. The amortisation period and amortisation method of gaming/ computer software licences are reviewed at least at the end of each reporting period. The effects of any revision are recognised in profit or loss when the changes arise.

(g)

Subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

(h)

Investment in subsidiaries Investment in subsidiaries are carried at cost less accumulated impairment losses in the Company’s separate financial statements. On disposal of investment in subsidiaries, the difference between disposal proceeds and the carrying amounts of the investment are recognised in profit or loss.


59 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i)

Impairment of non-financial assets (i)

Goodwill Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication that the goodwill may be impaired. For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating units (CGU) expected to benefit from synergies arising from the business combination. An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use. The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.

(ii)

Property, plant and equipment, investments in subsidiaries, and intangible assets Property, plant and equipment, investments in subsidiaries, and intangible assets are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs.


60 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i)

Impairment of non-financial assets (Continued) (ii)

Property, plant and equipment, investments in subsidiaries, and intangible assets (Continued) If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense, a reversal of that impairment is also recognised in profit or loss.


61 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (j)

Financial assets Initial recognition and measurement Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows: (i)

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

(ii)

Available-for-sale financial assets Available-for-sale financial assets include equity and debt securities. Equity investments classified as available-for-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.


62 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (j)

Financial assets (Continued) Subsequent measurement (Continued) (ii)

Available-for-sale financial assets (Continued) After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any gains or losses from changes in fair value of the financial asset are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

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


63 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k)

Impairment of financial assets The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. (i)

Financial assets carried at amortised cost For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in profit or loss. When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the financial asset.


64 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k)

Impairment of financial assets (Continued) (i)

Financial assets carried at amortised cost (Continued) To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii)

Available-for-sale financial assets In the case of equity investments classified as available-for-sale, objective evidence of impairment include (a) significant financial difficulty of the issuer or obligor, (b) information about significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in equity instrument may not be recovered; and (c) a significant or prolonged decline in the fair value of the investment below its costs. ‘Significant’ is to be evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost.


65 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k)

Impairment of financial assets (Continued) (ii)

Available-for-sale financial assets (Continued) If an available-for-sale financial asset is impaired, an amount comprising the difference between its acquisition cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from other comprehensive income and recognised in profit or loss. Reversals of impairment losses in respect of equity instruments are not recognised in profit or loss; increase in their fair value after impairment are recognised directly in other comprehensive income. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss. Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increases can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed in profit or loss.

(l)

Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.


66 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m)

Financial liabilities Initial recognition and measurement Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification as follows: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial liabilities are recognised in profit or loss. The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss.


67 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m)

Financial liabilities (Continued) Other financial liabilities After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(n)

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

(o)

Leases The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. As lessee Finance leases which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.


68 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o)

Leases (Continued) As lessee (Continued) Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(p)

Income taxes Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period. Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.


69 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p)

Income taxes (Continued) Deferred income tax is measured: (i)

at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period; and

(ii)

based on the tax consequence that will follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in profit or loss, except to the extent that the tax arises from a business combinations or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition. (q)

Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably.

(r)

Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sales of goods and rendering of service in the ordinary course of the Group’s activities. Revenue is presented, net of goods and services tax, rebates and discounts, and after eliminating revenue within the Group. The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that the collectability of the related receivables is reasonably assured and when the specific for each of the Group’s activities are met as follows:


70 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (r)

Revenue recognition (Continued) (i)

Rendering of service (a)

Multimedia and Television service Revenue from multimedia and television services are recognised when the services are rendered.

(b)

Internet Protocol Television (IPTV) Solutions Revenue from system integration services are generally recognised in the period in which the projects are billed. Billing phases are typically agreed at the start of projects and based on stages of completion or acceptance of delivery by customers.

(c)

License fees Upfront license fees in relation to licensing for the payment platform are recognised in the period in which the transaction occurs. An estimated cost of technical support was deducted from license fees and deferred as technical support revenue. Technical support revenue is recognised over the contractual support period based on license contract.

(ii)

Sale of goods Revenue from sale of goods or services is recognised when a Group entity has delivered the products to the customer, the customer has accepted the products and the collectability of the related receivables is reasonably assured.

(iii)

Interest income Interest income is recognised using the effective interest method.


71 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (s)

Employee benefits (i)

Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.

(ii)

Share-based compensation The Group operates an equity-settled, share-based compensation plan. The value of the employee services received in exchange for the grant of the options is recognised as an expense with a corresponding increase in the share option reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of options granted on the date of grant. Non-market vesting conditions are included in the estimation of the number of shares under options that are expected to become exercisable on the vesting date. At each balance sheet date, the Group revises its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period. When the options are exercised, the proceeds received net of any directly attributable transactions costs are credited to share capital when the options are exercised.


72 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (t)

Currency translation (i)

Functional and presentation currency Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollars (“S$”), which is the functional currency of the Company.

(ii)

Transactions and balances Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the end of the reporting period are recognised in profit or loss. However, in the consolidated financial statements, currency translation differences arising from borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations, are recognised in other comprehensive income and accumulated in the currency translation reserve. When a foreign operation is disposed of or any loan forming part of the net investment of the foreign operation are repaid, a proportionate share of the accumulated translation differences is reclassified to profit or loss, as part of the gain or loss on disposal. Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.


73 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (t)

Currency translation (Continued) (iii)

Translation of Group entities’ financial statements The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a)

assets and liabilities are translated at the closing exchange rates at the end of the reporting period;

(b)

income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(c)

all resulting currency translation differences are recognised in other comprehensive income and accumulated in the currency translation reserve. These currency translation differences are reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such reserve.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rates at the end of the reporting period. (u)

Government grants Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Where the grant relates to an asset, the fair value is recognised as deferred capital grant on the statement of financial position and is amortised to profit or loss over the expected useful life of the relevant asset by equal annual instalments. Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the same periods in which the expenses are recognised.


74 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v)

Related parties A related party is defined as follows: (i)

(ii)

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

has control or joint control over the Company;

(b)

has significant influence over the Company; or

(c)

is a member of the key management personnel of the Group or Company or of a parent of the Company.

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

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

(b)

one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(c)

both entities are joint ventures of the same third party;

(d)

one entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(e)

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


75 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

2.

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v)

Related parties (Continued) (ii)

(w)

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

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

(g)

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

Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating resources and assessing performance of the operating segments.

(x)

Discontinued operations A discontinued operation is a component of an entity that either has been disposed of, or that is classified as held-for-sale and represents a separate major line of business or geographical area of operations.

(y)

Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.


76 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

3.

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

Judgments made in applying accounting policies In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognised in the consolidated financial statements: (a)

Impairment of available-for-sale financial assets The Group records impairment charges on available-for-sale financial assets when there has been a significant or prolonged decline in the fair value below their cost. The determination of what is “significant” or “prolonged” requires judgment. In making this judgment, the Group evaluates, among other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost. For the financial year ended 31 March 2013, the amount of impairment loss recognised for available-for-sale financial assets was S$25,216 (2012: Nil) (Note 7).

(b)

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


77 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

3.

SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONTINUED) (i)

Judgments made in applying accounting policies (Continued) (c)

Deferred income tax assets The Group recognises deferred income tax assets on carried forward unutilised capital allowances and tax losses to the extent there are sufficient estimated future taxable profits and/or taxable temporary differences against which the capital allowances and tax losses can be utilised. Significant management judgement is required to determine the amount of deferred income tax assets that can be recognised based upon the likely timing and level of future taxable profits. During the financial year ended 2013, deferred income tax of $120,000 (2012: Nil) was written off during the year because of the uncertainty of its recoverability in the future period (Note 14).

(ii)

Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. The Group based its assumptions and estimates on parameters available when the financial statements are prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur. (a)

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


78 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

3.

SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONTINUED) (ii)

Key sources of estimation uncertainty (Continued) (a)

Impairment of loans and receivables (Continued) Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amounts of the Group’s loans and receivables at the end of each reporting period are disclosed in Note 8 (Trade receivables) and Note 9 (Other receivables) to the financial statements.

(b)

Useful lives of property, plant and equipment The cost of property, plant and equipment is depreciated on a straight-line basis over the property, plant and equipment’s estimated economic useful lives. Management estimates the useful lives of these property, plant and equipment to be within 3 to 5 years. Changes in the expected level of usage and technological developments could impact the economic useful lives of these assets, therefore, future depreciation charges could be revised. The carrying amount of the Group’s property, plant and equipment at the end of each reporting period is disclosed in Note 4 (Property, plant and equipment) to the financial statements.


79 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

4.

PROPERTY, PLANT AND EQUIPMENT Furniture and fittings S$’000

Equipment S$’000

Motor vehicles S$’000

Renovation S$’000

Total S$’000

Group – 2013 Cost Beginning of financial year Disposals Write off

155 – (13)

394 (337) (48)

60 (60) –

10 – (10)

619 (397) (71)

End of financial year

142

9

151

135

203

26

10

374

20 – (13)

21 (167) (48)

5 (31) –

– – (10)

46 (198) (71)

End of financial year

142

9

151

Net book value End of financial year

155

394

60

10

619

90

132

20

10

252

45

71

6

122

End of financial year

135

203

26

10

374

Net book value End of financial year

20

191

34

245

Accumulated depreciation Beginning of financial year Charge for the year (Note 22) Disposals Write off

Group – 2012 Cost Beginning and end of financial year Accumulated depreciation Beginning of financial year Charge for the year (Note 22)


80 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

4.

PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Furniture and fittings S$’000

Motor vehicles S$’000

Equipment S$’000

Total S$’000

Company – 2013 Cost Beginning of financial year Disposals

141 –

60 (60)

9 –

210 (60)

End of financial year

141

9

150

Accumulated depreciation Beginning of financial year Charge for the year (Note 22) Disposals

123 18 –

25 6 (31)

9 – –

157 24 (31)

End of financial year

141

9

150

Net book value End of financial year

141

60

9

210

78 45

19 6

9 –

106 51

End of financial year

123

25

9

157

Net book value End of financial year

18

35

53

Company – 2012 Cost Beginning and end of financial year Accumulated depreciation Beginning of financial year Charge for the year (Note 22)


81 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

5.

INTANGIBLE ASSETS Group 2013 S$’000

2012 S$’000

Composition: Goodwill arising on consolidation (Note (a)) Licenses and development costs (Note (b))

(a)

– 29

– 44

29

44

Cost Beginning and end of financial year

6,078

6,078

Accumulated impairment Beginning and end of financial year

(6,078)

(6,078)

1,119

1,119

Accumulated amortisation Beginning of financial year Amortisation charge for the year (Note 22)

593 15

577 16

End of financial year

608

593

Accumulated impairment Beginning and end of financial year

482

482

29

44

Goodwill arising on consolidation

Net book value (b)

Licenses and development costs Cost Beginning and end of financial year

Net book value


82 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

6.

INVESTMENT IN SUBSIDIARIES Company 2013 S$’000

2012 S$’000

10,489 10,489

10,489 10,249

240

Analysis of impairment losses on investment in subsidiaries as follows: Beginning of financial year Impairment loss recognised during the year (Note 22)

10,249 240

10,249 –

End of financial year

10,489

10,249

Shares, at cost Less: Impairment losses

Details of the subsidiaries are as follows:

Name of subsidiary Continuing operations Roomwise Holdings Pte Ltd(1) (formerly known as Broadband Network Systems Pte. Ltd.) Onegame Pte Ltd(1) Infinio Korea Co. Ltd(2) Gamespark Pte Ltd(1) Discontinued operations Widget TV Pte Ltd (Strike off) Widget Exchange Pte Ltd (Strike off) Broadband Network Systems Ltd (In compulsory liquidation) Held by Roomwise Holdings Pte Ltd Roomwise Systems Limited (Strike off)

Country of incorporation Singapore

Principal activities

Percentage of equity held 2013 2012 % %

Cost of investment 2013 2012 S$’000 S$’000

100

100

–(3)

–(3)

Singapore South Korea

Internet protocol and hardware – related business and services Online gaming Online media/e-learning

83 100

83 100

5,150 240

5,150 240

Singapore

Dormant

100

100

99

99

Singapore Singapore Hong Kong

Dormant Dormant Dormant

100 100 100

100 100 100

2,000 –(3) 3,000

2,000 –(3) 3,000

Hong Kong

Dormant

100

100

–(3)

–(3)

10,489

10,489

TOTAL

Details of the subsidiaries are as follows: (1) Audited by Robert Yam & Co. (2) Audited by Anse Accounting Corporation. (3) Investments in these subsidiaries are below S$1,000.


83 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

7.

AVAILABLE-FOR-SALE FINANCIAL ASSETS Group 2013 S$’000 Beginning of financial year Fair value gains/(loss) recognised in other comprehensive income Impairment losses (Note 22) Disposals End of financial year

2012 S$’000

Company 2013 2012 S$’000 S$’000

606

74

606

74

(534) (25) (47)

532 – –

(534) (25) (47)

532 – –

606

606

Available-for-sale financial assets are analysed as follows: Group 2013 S$’000 Quoted equity investments – Australia

2012 S$’000

Company 2013 2012 S$’000 S$’000

606

606

Quoted equity investments The fair value of quoted equity investments is determined by reference to their published bid price at the end of the reporting period. Investments in quoted shares are denominated in the following currencies: Group 2013 S$’000 Australia Dollar

2012 S$’000 606

Company 2013 2012 S$’000 S$’000 –

606

During the financial year, the Group and the Company recognised an impairment loss of S$25,216 (2012: Nil) against an equity security in Australia whose trade prices had been below cost for a prolonged period.


84 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

8.

TRADE RECEIVABLES Group

Subsidiaries Non-related parties

Company 2013 2012 S$’000 S$’000

2013 S$’000

2012 S$’000

– 101

– 487

357 29

436 373

101

487

386

809

Less: Allowance for impairment – subsidiaries – non-related parties

– (55)

– (428)

(357) –

(300) (373)

Total trade receivables, net

(55) 46

(428) 59

(357) 29

(673) 136

Trade receivables are non-interest bearing and are generally on 15 to 30 days’ terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition. Trade receivables are denominated in the following currencies: Group 2013 S$’000 Singapore Dollar

46

2012 S$’000 59

Company 2013 2012 S$’000 S$’000 29

136

Trade receivables that are past due but not impaired The age analysis of trade receivables that are past due at the end of the reporting period but not impaired is as follows: Group Company 2013 2012 2013 2012 S$’000 S$’000 S$’000 S$’000 Past due < 3 months Past due 3 to 6 months Past due over 6 months

12 1 –

28 – 31

– – –

– – 68

13

59

68


85 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

8.

TRADE RECEIVABLES (CONTINUED) Trade receivables that are impaired The Group’s and the Company’s trade receivables that are impaired at the end of the reporting period and the movement of the allowance accounts used to record the impairment are as follows: Group 2013 S$’000 Gross amount Less: Allowance for impairment

Movement in the allowance for impairment: Beginning of financial year Allowance made (Note 22) Amount utilised End of financial year

2012 S$’000

Company 2013 2012 S$’000 S$’000

55 (55)

428 (428)

357 (357)

673 (673)

428 – (373)

505 – (77)

673 57 (373)

543 130 –

55

428

357

673

Trade receivables that are individually determined to be impaired at the end of the reporting period relate to debtors that are in significant financial difficulties and have defaulted in payments. These receivables are not secured by any collateral or credit enhancements.


86 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

9.

OTHER RECEIVABLES Group

Amount due from subsidiaries – non-trade Amount due from non related parties – non-trade Refundable deposits

2013 S$’000

2012 S$’000

820 12

600 81

832 Less: Allowance for impairment

681 –

832

– 681

Company 2013 2012 S$’000 S$’000 1,310

1,256

820 1

584 11

2,131 (1,310) 821

Movement in the allowance for impairment: Beginning of financial year Allowance made (Note 22) Amount utilized

– – –

– – –

584 726 –

End of financial year

1,310

1,851 (584) 1,267

586 – (2) 584

The Group and the Company wrote off other receivables amounting to S$19,533 (2012: S$39,074) and S$15,395 (2012: S$52,226) respectively during the financial year (Note 22). Included in the non-trade receivables from non-related parties is a loan of S$811,869 (2011: S$582,000) made to PT FirstFlower (“PTFF”), a subsidiary of Ephraim Resources Limited (“Ephraim”). On 29 March 2011, the Company has entered into a conditional sale and purchase agreement (“S&P Agreement”) with the existing shareholders of Ephraim to acquire 300,000,000 shares in the capital of Ephraim, representing the entire issued and paid-up share capital of Ephraim. The S&P Agreement has terminated automatically since the conditions precedent in the S&P Agreement have not been fulfilled or waived, as relevant, by 31 December 2012. Ephraim is a private limited company incorporated in the British Virgin Islands. It holds 99% of the total issued share capital of PTFF, a company incorporated in Indonesia. The loan is interest-free, repayment of the loan is on every first anniversary of the date on which the relevant proportion of the loans is disbursed or such other date as may be mutually agreed upon by both parties and secured over a “Share charge” which is equivalent to 12 million ordinary shares or representing 4% of the entire share capital of Ephraim. On 21 March 2013, the Company and PTFF mutually agreed to extend the loan repayment date from 31 December 2012 to 31 December 2013.


87 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

9.

OTHER RECEIVABLES (CONTINUED) As at date of this report, a total of S$100,000 was offset by a Company’s creditor against the Company’s receivable from PTFF. Other are denominated in the following currencies: Group

Singapore Dollar

10.

2013 S$’000

2012 S$’000

832

681

821

1,267

OTHER CURRENT ASSETS Group 2013 S$’000 Prepayments GST receivable

11.

Company 2013 2012 S$’000 S$’000

2012 S$’000

Company 2013 2012 S$’000 S$’000

92 15

46 10

85 15

38 10

107

56

100

48

CASH AND CASH EQUIVALENTS Group

Cash and bank balances

2013 S$’000

2012 S$’000

177

309

Company 2013 2012 S$’000 S$’000 171

305

Cash and cash equivalents are denominated in the following currencies: Group

Singapore Dollar Korean Won

Company 2013 2012 S$’000 S$’000

2013 S$’000

2012 S$’000

171 6

307 2

171 –

305 –

177

309

171

305


88 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

12.

SHARE CAPITAL Group and Company No. of ordinary shares Amount ’000 S$’000 Issued and fully paid 2013 Beginning of financial year Issuance of ordinary shares for commitment fees of S$0.006 each Issuance of right shares cum warrants of S$0.02 each Issuance of shares for 5% equity linked redeemable structured notes due 2015 Share issue expenses End of financial year

2012 Beginning of financial year Issuance of ordinary shares for private placement of S$0.005 each Issuance of right shares cum warrants of S$0.04 each Share issue expenses End of financial year

1,705,099

33,948

83,333

500

383

8

277,354 –

800 (44)

2,066,169

35,212

1,405,016

32,507

300,000 83 –

1,500 3 (62)

1,705,099

33,948

All issued ordinary shares are fully paid. There is no par value for these ordinary shares. The Company has one class of ordinary shares which carry one vote per share without restriction. The holders of the ordinary shares are entitled to receive dividends as and when declared by the Company.


89 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

12.

SHARE CAPITAL (CONTINUED) During the financial year, the Company issued new shares as follows: (a)

83,333,333 new ordinary shares at issue price of S$0.006 were issued for settlement of commitment fees under subscription agreement with Advance Opportunities Fund and Value Capital Asset Management Private Limited of 5% equity linked redeemable structured convertible notes due in 2015 (“ELN Subscription Agreement”).

(b)

383,000 rights shares cum warrants with an exercise price of S$0.02 each.

(c)

277,354,113 new ordinary shares were issued pursuant to ELN Subscription Agreement entered on 22 June 2012.

As at 31 March 2013, the total number of issued ordinary shares of the Group was 2,066,169,329 (2011: 1,705,098,883). The newly issued shares rank pari passu in all respects with the previously issued shares. There are no outstanding warrants or treasury shares in the financial year end. 13.

OTHER RESERVE Group 2013 2012 S$’000 S$’000 (a)

(b)

Composition: Share option reserve Currency translation reserve Fair value reserve

Company 2013 2012 S$’000 S$’000

103 164 –

103 101 534

103 – –

103 – 534

267

738

103

637

103

220

103

220

(117)

(117)

103

103

103

103

Movements: (i)

Share option reserve Beginning of financial year Employee share option scheme – Share options forfeited End of financial year


90 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

13.

OTHER RESERVES (CONTINUED) Employee Share Options Value of employee services Share options were granted to key management personnel and other employees with more than two years of service under the Infinio Group Limited Share Option Scheme (the ”Scheme“). Under the Scheme, options to subscribe for the ordinary shares of the Company are granted to key management personnel and other employees. The exercise price of the options is determined at the average of the closing prices of the Company’s ordinary shares as quoted on the Singapore Exchange for five market days immediately preceding the date of the grant. Options are granted at no discount or at a discount of 20% to the prevailing market price of the shares. The vesting of the options is conditional on the key management personnel or employees completing another one year for no discount and two years of service for a discount of 20% from the grant date. Once the options are vested, they are exercisable for a period of three years. The options may be exercised in full or in part in respect of 1,000 shares or a multiple thereof, on the payment of the exercise price. The persons to whom the options have been issued have no right to participate by virtue of the options in any share issue of any other company. The Group has no legal or constructive obligation to repurchase or settle the options in cash. The aggregate number of Shares over which options may be granted on any date, when added to the number of shares issued and issuable in respect of all options granted under the Scheme, shall not exceed 15% of the issued share capital of the company on the day preceding that date. On 11 August 2008, the Company granted options to subscribe for 14,150,000 ordinary shares of the Company at exercise price of S$0.04 per share (“2009 Options”). The 2009 Options are exercisable from 11 August 2010 and will expire on 11 August 2013. On 12 June 2009, the Company further granted options to subscribe for 42,000,000 ordinary shares of the Company at exercise price of S$0.045 per share. The options were issued at market price and are exercisable from 12 June 2010 and will expire on 12 June 2014. A further 2,000,000 options were granted to Mr Ross Pollack upon his joining the Company as an Independent Director on 1 September 2009. In total, 44,000,000 share options (The “2010 Options”) were granted during the financial year ended 31 March 2010. No options were granted during the financial year ended 31 March 2013.


91 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

13.

OTHER RESERVES (CONTINUED) Movement in the number of unissued ordinary shares under option and their exercise prices are as follows: No. of ordinary shares under option Granted

Forfeited

Group and

Beginning of

during the

during the

End of

Company

financial year

financial year

financial year

financial year

3,000,000

3,000,000

2009 Options

Exercise price Exercise period S$0.04

11 August 2010 – 11 August 2013

2010 Options

10,000,000

10,000,000

S$0.045

12 June 2010 – 1 September 2014

Group

(ii)

2013 S$’000

2012 S$’000

101

110

63

(9)

164

101

Currency translation reserve Beginning of financial year Net currency translation differences of financial statements of foreign subsidiaries End of financial year

Group

(iii)

Fair value reserve Beginning of financial year Fair value gains on availablefor-sale financial assets Reclassification to profit or loss End of financial year

Other reserves are non-distributable.

Company 2013 2012 $’000 $’000

2013 $’000

2012 $’000

534

50

534

50

(496)

532

(496)

532

(38)

(48)

(38)

(48)

534

534


92 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

14.

DEFERRED INCOME TAX (ASSETS)/LIABILITIES Group 2013 S$’000

2012 S$’000

Deferred income tax assets Beginning of financial year Charged/(credited) to profit or loss (Note 23)

120 (120)

120 –

End of financial year

120

Deferred income tax assets: – Unutilised losses and capital allowances

120

120

(124) 124

(124) –

End of financial year

(124)

Deferred income tax liabilities: – property, plant and equipment – deferred revenue

– –

(120) (4)

(124)

(4)

Deferred income tax liabilities Beginning of financial year Charged/(credited) to profit or loss (Note 23)

Net deferred income tax (assets)/liabilities

Deferred income tax of S$120,000 (2012: Nil) was written off during the year because of the uncertainty of its recoverability in the future period (Note 23).


93 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

15.

TRADE PAYABLES Group

Non-related parties

2013 S$’000

2012 S$’000

928

769

Company 2013 2012 S$’000 S$’000 824

638

Trade payables are non-interest bearing and are normally settled on 30 days’ terms. Long-outstanding trade payables amounting to S$96,106 (2012: 16,064) and S$83,629 (2012: Nil) of the Group and the Company, respectively, were written back as no recent dealings or claims from the creditors anymore (Note 19). Trade payables are denominated in the following currencies: Group

Singapore Dollar United States Dollar Hong Kong Dollar

16.

Company 2013 2012 S$’000 S$’000

2013 S$’000

2012 S$’000

923 5 –

741 26 2

819 5 –

609 26 3

928

769

824

638

OTHER PAYABLES Group

Amount due to other related parties – non-trade Other payables Accrued expenses Amount due to directors

Company 2013 2012 S$’000 S$’000

2013 S$’000

2012 S$’000

66 172 171 220

695 3 277 231

66 160 88 220

692 – 111 231

629

1,206

534

1,034

Non-trade amount due to other related parties is unsecured, non-interest bearing and is repayable on demand.


94 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

16.

OTHER PAYABLES (CONTINUED) Other payables are unsecured, non-interest bearing and are repayable on demand. Amount due to directors is non-trade related, unsecured, non-interest bearing and is repayable on demand. Other payables are denominated in the following currencies: Group

Singapore Dollar Korean Won

17.

Company 2013 2012 S$’000 S$’000

2013 S$’000

2012 S$’000

608 21

1,102 104

534 –

1,034 –

629

1,206

534

1,034

LOANS PAYABLE Group 2013 S$’000 Borrowings Amount repayable within one year (current)

450

2012 S$’000

Company 2013 2012 S$’000 S$’000

450

On 27 June 2012, the Company has entered into a loan agreement with a third party amounting to S$700,000 with 1% interest per month for the purpose of repayment of existing liabilities and general working capital of the Company. The loan was drawn on 29 June 2012. Full repayment of the principal amount must be made within 24 months of the date of loan drawdown. A total of S$250,000 was paid in October and November 2012. As the Company’s cashflow from operations prohibits the repayment of the outstanding loan sum during the financial year and to further reduce the Company’s borrowing cost, the Company and the Lender have agreed on 19 February 2013 to the conversion of the outstanding loan sum S$450,000 into shares of the Company (the “Conversion Shares”) in lieu of repayment of cash. The Conversion Shares was granted listing and quotation on 26 April 2013 (Note 33).


95 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

18.

REVENUE Group 2013 S$’000 Multimedia and television service/ IPTV solutions License fees Sale of goods

19.

2012 S$’000

Company 2013 2012 S$’000 S$’000

23 43 5

115 32 334

– – –

– – –

71

481

OTHER INCOME – NET Group 2013 S$’000 Directors’ fees waived Gain on disposal of available-for-sale financial assets Government grant Net foreign exchange gains/(loss) Management fees Sundry income Waiver of loan Writeback of trade payables (Note 15)

2012 S$’000

Company 2013 2012 S$’000 S$’000

111

111

14 11 5 – 73 – 96

– 10 (48) – 11 200 16

14 6 (18) 89 65 – 84

– 5 (1) 269 7 200 –

310

189

351

480

Director’s fees waived The Company has accrued directors’ fees as approved by the members during the Annual General Meeting for financial years ended 2011 and 2012. However, the Company’s cashflow from operations prohibits the full settlement of accrued directors’ fees. The Board of Directors had approved the recommendation of Remuneration Committees for the waiver of total S$110,500 directors’ fees of financial years ended 2011 and 2012 in 2013.


96 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

20.

EMPLOYEE BENEFITS EXPENSE Group

Salaries, bonuses and allowances – directors (Note 25) – other employees Employer’s contribution to CPF – directors (Note 25) – other employees

21.

Company 2013 2012 S$’000 S$’000

2013 S$’000

2012 S$’000

109 296

120 539

109 211

120 247

8 34

9 32

8 33

9 32

447

700

361

408

FINANCE COST – NET Group Finance income Interest income from banks Dividend income on available-forfinancial assets Finance cost Interest expense from: – Loans payable – Late payments

Finance costs-net

2013 S$’000

2012 S$’000

Company 2013 2012 S$’000 S$’000

1

1

9

9

9

1

9

1

(52) (16)

(3) –

(52) (16)

(3) –

(68)

(3)

(68)

(3)

(59)

(2)

(59)

(2)


97 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

22.

LOSS FOR THE YEAR The following items have been included in arriving at loss for the year: Group 2013 S$’000 Amortisation of intangible assets (Note 5) Audit fees Allowance made for impairment of: – trade receivables (Note 8) – other receivables (Note 9) Trade receivables written off (Note 9) Consulting fees Company secretarial and tax fees Depreciation of property, plant and equipment (Note 4) Directors’ fees (Note 25) Employee benefits expense (Note 20) Impairment loss of available-for-sale financial assets (Note 7) Impairment of investment in subsidiaries (Note 6) Legal and professional fees Loss on disposal of property, plant and equipment Listing fees and AGM/EGM expenses Operating lease expenses – office and equipment

23.

2012 S$’000

Company 2013 2012 S$’000 S$’000

15 43

16 61

– 14

– 45

– – 20 137 34

– – 39 197 50

57 726 15 137 20

130 – 53 197 37

46 100 447

122 115 700

24 100 361

51 115 408

25

25

– 589

– 42

240 588

– 224

60 163

– 165

1 163

– 164

107

134

87

86

INCOME TAX BENEFIT Group 2013 S$’000 Current tax expense: – Current year – (Over)/under provision in respect of previous years Deferred income tax expense: – Utilisation of deferred tax (Note 14) – Write off deferred tax asset (Note 14)

2012 S$’000

– –

– –

(124) (120)

– –

(4)


98 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

23.

INCOME TAX BENEFIT (CONTINUED) Group

Loss before tax – Continuing operations – Discontinued operations

Tax calculated at statutory tax rate of 17% (2012: 17%) Different tax rates in other countries Expenses not deductible for tax purposes Income not subject to tax Utilisation of deferred tax Current year loss for which no deferred tax asset was recognised Income tax benefit

2013 S$’000

2012 S$’000

Company 2013 2012 S$’000 S$’000

(1,625) (5)

(1,475) –

(2,400) –

(1,155) –

(1,630)

(1,475)

(2,400)

(1,155)

(277) (6)

(251) (33)

(408) –

(196) –

10 (2) (4)

22 (2) –

4 (1) –

9 (1) –

275

264

405

188

(4)

As at 31 March 2013, the Group has unutilised tax losses of approximately S$3,743,657 (2012: S$2,127,545) and unutilised capital allowances of approximately S$603,055 (2012: S$603,055) available for set-off against future taxable income subject to compliance with certain provisions of the tax legislation. Deferred tax asset of approximately S$738,941 (2012: S$464,202) in respect of these unutilised tax losses and unutilised capital allowances has not been recognised because of the uncertainty of its recoverability in the future periods.


99 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

24.

COMMITMENTS AND CONTINGENCIES (a)

Operating lease commitments – where the Group is a lessee The Group leases office premises from non-related parties under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights. The future minimum lease payables under non-cancellable operating leases contracted for at the end of the reporting period but not recognised as liabilities, are as follows: Group 2013 S$’000 Not later than 1 year Later than 1 year but not later than 5 years

(b)

2012 S$’000

49 10

54 15

59

69

Contingencies The Company has agreed to provide financial support for its subsidiaries, at 31 March 2013. The support provided by the Company to its subsidiaries has no financial effect on the financial statements of the Group.


100 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

25.

RELATED PARTY TRANSACTIONS In addition to the information disclosed elsewhere in the financial statements, the following transactions were entered into by the Company and by the Group with related parties at terms agreed between the parties during the financial year: (a)

Management fees: Group 2013 2012 S$’000 S$’000 Management fees received from: – subsidiaries

(b)

Company 2013 2012 S$’000 S$’000 89

269

Key management personnel compensation: Group 2013 2012 S$’000 S$’000 Directors’ fees (Note 22) Salaries and bonuses (Note 20) Employer’s contribution to CPF (Note 20)

Company 2013 2012 S$’000 S$’000

100 109

115 120

100 109

115 120

8

9

8

9

217

244

217

244

Key management personnel refer to the directors of the Company.


101 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

26.

CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES The carrying amounts presented in the statements of financial position relate to the following categories of assets and liabilities:

Note

Group 2013 2012 S$’000 S$’000

Company 2013 2012 S$’000 S$’000

Financial assets Available-for-sale financial assets Loans and receivables: Trade receivables Other receivables Cash and cash equivalents

7

606

606

8 9 11

46 832 177

59 681 309

29 821 171

136 1,267 305

1,055

1,655

1,021

2,314

Note

Group 2013 2012 S$’000 S$’000

Company 2013 2012 S$’000 S$’000

Financial liabilities Financial liabilities measured at amortised cost: Current: Trade payables Other payables Loans payables

15 16 17

928 629 450

769 1,206 –

824 534 450

638 1,034 –

2,007

1,975

1,808

1,672

A description of the accounting policies for each category of financial instruments is disclosed in Note 2(j) (Financial assets) and Note 2(m) (Financial liabilities). A description of the Group’s financial risk management objectives and policies for financial instruments is given in Note 27.


102 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

27.

FINANCIAL RISK MANAGEMENT The main risks arising from the Group’s and Company’s financial instruments are credit risk, interest rate risk, foreign currency risk and liquidity risk. The Group and Company do not use derivatives and other instruments in its risk management activities. The Group and Company do not hold or issue derivative financial instruments for trading purposes. The board reviews and agrees policies for managing each of these risks on an informal basis and they are summarised below: (a)

Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The major classes of financial assets of the Group and Company are trade receivables, other receivables and cash and cash equivalents. For trade receivables, the Group and Company trade only with creditworthy customers. For other financial assets (including cash and cash equivalents), the Group and Company minimise credit risk by dealing only with high credit quality counterparties. At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position. The Group and Company determine concentrations of credit risk by monitoring the country and type of customer profile of their trade receivables on an ongoing basis. The credit risk concentration profile of the trade receivables at the end of the reporting period is as follows:

Group By country Singapore Malaysia

By types of customers Non-related parties: – Other companies

S$’000

2013 % of total

S$’000

2012 % of total

29 17

64 36

40 19

68 32

46

100

59

100

46

100

59

100

46

100

59

100


103 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

27.

FINANCIAL RISK MANAGEMENT (CONTINUED) (a)

Credit risk (Continued)

Company By country Singapore South Korea

By types of customers Non related parties Related parties – Subsidiaries

S$’000

2013 % of total

S$’000

2012 % of total

29 –

100 –

– 136

– 100

29

100

136

100

29 –

100 –

– 136

– 100

29

100

136

100

At the end of the reporting period, approximately 92% (2012: 94%) of the Group’s trade receivables were due from non-related parties (2012: non-related parties) debtors. Financial assets that are neither past due nor impaired Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group and Company. Cash and cash equivalents that are neither past due nor impaired are mainly deposits placed with reputable licensed banks with high credit ratings. Financial assets that are past due and/or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 7 (Available-for-sale financial assets,) Note 8 (Trade receivables) and Note 9 (Other receivables).


104 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

27.

FINANCIAL RISK MANAGEMENT (CONTINUED) (b)

Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and Company’s financial instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s exposure to interest rate risk arises primarily from their interest-bearing loans and borrowings. The Group has no policy to hedge against its interest rate risk. Sensitivity analysis for interest rate risk At the end of the reporting period, if SGD interest rate had been 7 (2011: Nil) basis points lower with all other variables including tax rate being held constant, the Group’s loss after tax would have been S$31,500 (2011: Nil) lower arising mainly as a result of lower interest expenses on floating rate loans and borrowings.

(c)

Foreign currency risk The Group and the Company incurs foreign currency risk on transactions and balances that are denominated in a currency other than Singapore Dollar. The foreign currencies giving rise to this risk are primarily United States Dollar (USD) and Australian Dollar (AUD). Exposure to foreign currency risk is monitored on an ongoing basis to ensure that the net exposure is at an acceptable level. The Group and the Company do not use any financial derivatives such as foreign currency forward contracts, foreign currency options or swaps for hedging purposes.


105 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

27.

FINANCIAL RISK MANAGEMENT (CONTINUED) (c)

Foreign currency risk (Continued) Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Group’s and the Company’s loss after tax to a reasonably possible change in the USD and AUD exchange rates against the respective functional currencies of the Group entities, with all other variables including tax rate being held constant.

Group

(d)

2013 Loss after tax S$

2012 Loss after tax S$

SGD against USD – strengthened 3.2% (2012: 5.7%) – weakened 3.2% (2012: 5.7%)

– –

(26) 26

SGD against AUD – strengthened 5.3% (2012: 4.6%) – weakened 5.3% (2012: 4.6%)

(23) 23

(25) 25

Liquidity risk Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group and the Company manage their liquidity risk by maintaining an adequate level of cash and cash equivalents and having available adequate amount of committed credit facilities from financial institution. The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the end of the reporting period based on contractual undiscounted payments.


106 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

27.

FINANCIAL RISK MANAGEMENT (CONTINUED) (d)

Liquidity risk (Continued)

Group 2013 Trade payables Other payables Loans payable

2012 Trade payables Other payables

Company 2013 Trade payables Other payables Loans payable

2012 Trade payables Other payables

1 year or less S$’000

1 to 5 years S$’000

Over 5 years S$’000

928 629 450

– – –

– – –

928 629 450

2,007

2,007

769 1,206

– –

– –

769 1,206

1,975

1,975

824 534 450

– – –

– – –

824 534 450

1,808

1,808

638 1,034

– –

– –

638 1,034

1,672

1,672

Total S$’000


107 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

28.

FAIR VALUE OF FINANCIAL INSTRUMENTS The following table presents financial instrument measured at fair value and classified as level 1 where quoted prices (unadjusted) are based in active markets for identical assets: Group and Company 2013 2012 S$’000 S$’000 Level 1 – Financial assets Available-for-sale financial assets – Equity securities

606

Total assets

606

The fair value of the available-for-sale financial assets is traded in active markets based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group and Company is the current bid price. These instruments are included in Level 1. The carrying amounts of trade receivables, other receivables, cash and cash equivalents, trade payables, other payables, and loans payable are reasonable approximation of fair values due to their short-term nature. 29.

CAPITAL MANAGEMENT Capital includes debt and equity items as disclosed in the table below. The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain a capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholder, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings. The Group’s overall strategy remained unchanged from 2012. Management monitors capital based on a gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total current liabilities less cash and cash equivalents. Total capital is calculated as equity plus net debt or less net cash.


108 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

29.

CAPITAL MANAGEMENT (CONTINUED) Group 2013 S$’000

2012 S$’000

Company 2013 2012 S$’000 S$’000

Trade payables Other payables Loans payables Current liabilities associated with discontinued operations

928 629 450

769 1,206 –

824 534 450

638 1,034 –

1,295

1,295

Total current liabilities Less: Cash and cash equivalents

3,302 (177)

3,270 (309)

1,808 (171)

1,672 (305)

Net debt

3,125

2,961

1,637

1,367

35,212 103 164 – (37,576) (14)

33,948 103 101 534 (35,948) (12)

35,212 103 – – (36,002) –

33,948 103 – 534 (33,602) –

Total equity

(2,111)

(1,274)

(687)

983

Total capital

1,014

1,687

950

2,350

308.19%

175.52%

172.32%

58.17%

Share capital Share option reserve Currency translation reserve Fair value reserve Accumulated losses Non-controlling interest

Gearing ratio

The Group and the Company are not subject to any externally imposed capital requirements for the financial years ended 31 March 2013 and 2012. 30.

DISCONTINUED OPERATIONS (a)

During the financial year ended 31 March 2013, the Group discontinued operations of its dormant subsidiaries namely, Widget Exchange Pte Ltd and Roomwise Systems Limited. In 2012, the Group discontinued operations of its dormant subsidiaries namely, Elan Game World Inc, Infinio Holdings Ltd, Travel Point Inc and Pomoho Investment Ltd.


109 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

30.

DISCONTINUED OPERATIONS (CONTINUED) (b)

In financial year 2011, the Broadband Network-Systems Limited (“BNS”) and its overseas subsidiaries ceased operations and all its directors and staff resigned during that year. The financial statements of the BNS and its overseas subsidiaries were not audited since 2011 as their financial records were not available to be audited. The write-off of the total assets is recognised in the Group’s financial statements. The total liabilities of the BNS and its overseas subsidiaries recognised by the Group amounted to approximately S$1,294,537 (2012: S$1,294,537) remained unchanged since 2011. The Official Receiver was appointed the provisional liquidator of the BNS following the winding-up order on 8 June 2011 and on the same date, in replacement of the Official Receiver, the Officer Receiver appointed Mr Arab Osman Mohammed and Mr Wong Tak Man Stephen of RSM Nelson Wheeler Corporate Advisory Limited, as the joint and several provisional liquidators of the Company under Section 194 (1A) of the Companies Ordinance. Subsequently, by order of the High Court dated 30 January 2012, Leung Shu Yin, William and Yick Yuel Wah, both of Fok Chan Leung Wan CPA Limited, Room 903-908, Kai Tak Commercial Building, 317-319 Des Voeux Road Central, Hong Kong have been appointed as Joint and Several Liquidators of BNS (In compulsory liquidation) without a committee of inspection. The condition precedent to the approval of the appointment of Joint and Several Liquidators were only satisfied on 27 April 2012, and, on the same date, the notice of appointment of liquidators of BNS was gazetted in Hong Kong local newspapers. The liquidation is still on going until further notice.


110 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

30.

DISCONTINUED OPERATIONS (CONTINUED) The results of the discontinued operations of Widget Exchange Pte Ltd and Roomwise System Limited are as follows: Group 2013 S$’000

2012 S$’000

Revenue Other income Expenses

– – (5)

– – –*

Loss from discontinued operations before tax Income tax

(5) –

– –

Loss from discontinued operations after tax

(5)

*

The total expenses incurred by dormant subsidiaries as stated above are below S$1,000.

The impact of the discontinued operations on the cash flows of the Group is as follows: Group 2013 S$’000 Operating cash outflows Investing cash outflows Financing cash outflows Total cash outflows *

2012 S$’000

(2) (4) 6

–* – –

The total expenses incurred by dormant subsidiaries as stated above, are below S$1,000.


111 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

30.

DISCONTINUED OPERATIONS (CONTINUED) Group 2013 S$’000 Details of the assets in discontinued operations are as follows: Current asset Non-current asset

Trade and other payables Other current liabilities Loan

2012 S$’000

– –

– –

– – –

1,220 16 59

1,295

Group 2013 S$’000

2012 S$’000

Total comprehensive loss attributable to the equity holders of the Company relates to: – Continuing operations – Discontinued operations

– –

(995) –

Total

(995)


112 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

31.

LOSS PER SHARE Basic and diluted loss per share Basic and diluted loss per share is calculated by dividing the net loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year. Continuing operations 2013 2012 Net loss attributable to equity holders of the Company (S$’000)

Discontinued operations 2013 2012

Total 2013

2012

(1,623)

(1,470)

(5)

(1,628)

(1,470)

Weighted average number of ordinary shares outstanding for basic loss per share (’000)

1,773,246

1,432,088

1,773,246

1,733,246

1,432,088

Weighted average number of ordinary shares outstanding for diluted loss per share (’000)

1,773,246

1,432,088

1,773,246

1,733,246

1,432,088

Basic loss per share (cents per share)

(0.09)

(0.10)

(0.09)

(0.10)

Diluted loss per share (cents per share)

(0.09)

(0.10)

(0.09)

(0.10)

The Group’s dilutive potential ordinary share is employee shares options. However, there is no impact on the Group’s earnings per share as the exercise of the dilutive employee share options will result in anti-dilution of earnings per share. 32.

SEGMENT INFORMATION Management has determined the operating segments based on the reports reviewed by the Executive Director (“ED”) and the department heads of each business within each geographical segment that are used to make strategic decisions. They consider the business from both a geographic and business segment perspective. Geographically, management manages and monitors the business in the two primary geographic areas: South Korea and Singapore.


113 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

32.

SEGMENT INFORMATION (CONTINUED) The segment information provided to the ED for the reportable segments is as follows: South Korea

Singapore Total

Sales of

Online

continuing

Group

goods

IPTV

gaming

operations

2013

S$’000

S$’000

S$’000

S$’000

Revenue – external parties

5

23

43

71

Gross profit

1

1

42

44

Other income-net

310

Unallocated costs

(1,384)

Loss before income tax

(1,629)

Income tax benefit

4

Net loss

(1,625)

Net loss includes: – Depreciation

21

21

15

15

13

1

57

71

8

106

1

115

– Amortisation and impairment Segment assets Segment liabilities


114 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

32.

SEGMENT INFORMATION (CONTINUED) South Korea

Singapore Total

Sales of

Online

continuing

Group

goods

IPTV

gaming

operations

2012

S$’000

S$’000

S$’000

S$’000

334

115

32

481

69

24

31

124

Revenue – external parties Gross profit Other income

189

Unallocated costs

(1,788)

Profit before income tax

(1,475)

Income tax expense

Net loss

(1,475)

Net loss includes: – Depreciation

4

3

7

– Amortisation and impairment Segment assets Segment liabilities

16

16

45

260

63

368

104

180

15

299

The ED assesses the performance of the operating segments based on gross profit. Segment results represent the profit earned by each segment without allocation of selling and distribution expenses, administrative expenses, other income and income tax expense. This is the measure reported to the ED for the purposes of resource allocation and assessment of segment performance.


115 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

32.

SEGMENT INFORMATION (CONTINUED) Reportable segments’ assets are reconciled to total assets as follows: The amounts provided to the ED with respect to total assets are measured in a manner consistent with that of the financial statements. For the purposes of monitoring segment performance and allocating resources between segments, the ED mainly monitors the property, plant and equipment, intangible assets, trade and other receivables and operating cash attributable to each segment. All assets are allocated to reportable segments other than cash and cash equivalents, trade and other receivables, other current assets, financial assets, available-for-sale and property, plant and equipment.

Segment assets for reportable segments Unallocated: – Cash and cash equivalents – Trade receivables – Other receivables – Other current assets – Available-for-sale financial assets – Property, plant and equipment – Intangible assets – Deferred income tax assets

2013 S$’000

2012 S$’000

71

368

171 821 29 99 – – – –

304 – 609 60 606 53 – 120

1,191

2,120


116 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

32.

SEGMENT INFORMATION (CONTINUED) Reportable segments’ liabilities are reconciled to total liabilities as follows: The amounts provided to the ED with respect to total liabilities are measured in a manner consistent with that of the financial statements. These liabilities are allocated based on the operations of the segments. All liabilities are allocated to reportable segments other than trade and other payables and borrowings.

Segment liabilities for reportable segments Unallocated: – Trade payables – Other payables – Loans payable – Deferred income tax liabilities – Current liabilities associated with discontinued operations

2013 S$’000

2012 S$’000

115

299

823 619 450 – 1,295

1,038 638 – 124 1,295

3,302

3,394

Geographical information The Group’s two business segments operate in two main geographical areas: South Korea and Singapore. •

South Korea – the operations in this area are principally Interactive Multimedia applications.

Singapore – the operations in this area are principally IPTV and online games. Total consolidated sales 2013 2012 S$’000 S$’000

South Korea Singapore

5 66

334 147

71

481


117 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

33.

CONVERTIBLE NOTES (a)

On 22 June 2012, the Company signed a subscription agreement (the “Subscription Agreement“) relating to the issue of 5.0% equity linked redeemable structured convertible notes (the “Convertible Notes“) in aggregate principal amount of up to S$10,000,000 comprising five tranches of principal amount of S$2,000,000 each with Advance Opportunities Fund and Value Capital Asset Management Private Limited. Each tranch shall comprise ten equal sub-tranches of S$200,000 each. The Convertible Notes shall entitle the holder thereof to 5.0% interest per annum, and on the terms and conditions stipulated in the Subscription Agreement, be convertible into ordinary shares in the capital of the Company which are listed on the Official List of Catalist. The Company raised gross proceeds of an aggregate of S$1,600,000 from a series of conversion of Convertible Notes as at date of this report.

(b)

On 27 June 2012, the Company has entered into a loan agreement with a third party amounting to S$700,000 with 1% interest per month for the purpose of repayment of existing liabilities and general working capital of the Company. The loan was drawn on 29 June 2012. Full repayment of the principal amount must be made with 24 months of the date of loan drawdown. A total of S$250,000 was paid in October and November 2012. As the Company’s cashflow from operations prohibits the repayment of the outstanding loan sum during the financial year and to further reduce the Company’s borrowing cost, the Company and the Lender have agreed on 19 February 2013 to the conversion of the outstanding loan sum S$450,000 into shares of the Company (the “Conversion Shares”) in lieu of repayment of cash. The Conversion Shares was granted listing and quotation on 26 April 2013.


118 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

34.

SUBSEQUENT EVENTS (a)

On 2 January 2013, the proposed acquisition by the Company of the entire issued and outstanding share capital of Ephraim by way of an exchange for shares in the Company (“Proposed Acquisition”), the Board announced that the long-stop date for the satisfaction of the conditions precedent in the S&P Agreement (“Conditions Precedent”), being 31 December 2012, has since lapsed, and the Company and the Vendors will not be extending the same. Accordingly, pursuant to the terms of the S&P Agreement, the S&P Agreement has terminated automatically since any or all of the Conditions Precedent have not been fulfilled or waived, as relevant, by 31 December 2012. Upon termination, the S&P Agreement shall cease to have any force and effect and neither Party shall have any claim against the other for costs, damages, compensation or otherwise by reason of such termination. On 21 March 2013, the Board announced that the Company has, at the request of PTFF, granted PTFF an extension of time till 31 December 2013 (or such other date as the Company may at its sole discretion provide) for the full repayment of the Loans disbursed by the Company to PTFF under the Loan Agreement. The repayment of the loans is secured by a first fixed charge over an aggregate of 12,000,000 shares in the share capital of Ephraim pursuant to share charge agreements dated 1 February 2012 entered into between the Company and the principal shareholders of Ephraim.

(b)

On 22 June 2012, the Company signed a subscription agreement (the “Subscription Agreement” relating to the issue of 5.0% equity linked redeemable structured convertible notes (the “Convertible Notes”) in aggregate principal amount of up to S$10,000,000 comprising five tranches of a principal amount of $2,000,000 each with Advance Opportunities Fund and Value Capital Asset Management Private Limited. Each tranch shall comprise ten equal sub-tranches of $200,000 each. The Convertible Notes shall entitle the holder thereof to 5.0% interest per annum, and on the terms and conditions stipulated in the Subscription Agreement, be convertible into ordinary shares in the capital of the Company which are listed on the Official List of Catalist. The Company raised gross proceeds of an aggregate of $1,600,000 from a series of conversion of Convertible Notes as at date of this report.


119 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

34.

SUBSEQUENT EVENTS (CONTINUED) (c)

On 27 June 2012, the Company has entered into a loan agreement with a third party amounting to S$700,000 with 1% interest per month for the purpose of repayment of existing liabilities and general working capital of the Company. The loan was drawn on 29 June 2012. Full repayment of the principal amount must be made within 24 months of the date of loan drawdown. A total of S$250,000 was paid in October and November 2012. As the Company’s cashflow from operations prohibits the repayment of the outstanding loan sum during the financial year and to further reduce the Company’s borrowing cost, the Company and the Lender have agreed on 19 February 2013 to the conversion of the outstanding loan sum S$450,000 into shares of the Company (the “Conversion Shares”) in lieu of repayment of cash. The Conversion Shares was granted listing and quotation on 26 April 2013.

(d)

On 1 July 2013, the Board announced that the Company has entered into a Memorandum of Understanding (“MOU”) with Mr Lim Yeow Sun (the “Vendor”) to acquire the entire issued and paid up capital of Summit Light Vetures Ltd (“Summit”), a special purpose company incorporated in the British Virgin Islands (the “Proposed Acquisition”). Summit has been set up to consolidate the assets known as the Birthday Gold Mine in Western Australia (the “Assets”). The Vendor is a Singaporean businessman who has interest in jewellery business. Summit has or will acquire 100% of the rights and benefits to a Mining Lease (“ML77/450”) comprising an area of approximately 54.25ha known as the Birthday Gold Mine and a Prospecting Licence (“P77/3982”) with the right to prospect for gold and other minerals in the vicinity of the Birthday Mine.


120 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2013

35.

NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS At the date of authorisation of these financial statements, the following standards and interpretations have been issued but not yet effective and which the Group and Company have not early adopted.

Description Amendments to FRS 12 Amendments to FRS 1 Amendments to FRS 101 Amendments to FRS 107 FRS 19 (revised) FRS 113 FRS 27 (revised) FRS 28 (revised) Amendments to FRS 32 FRS 110 FRS 111 FRS 112

Deferred Tax – Recovery of Underlying Assets Presentation of Items of Other Comprehensive Income Government Loans Disclosures – Offsetting Financial Assets and Financial Liabilities Employee Benefits Fair Value Measurements Separate Financial Statements Investments in Associates and Joint Ventures Offsetting Financial Assets and Financial Liabilities Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities

Improvements to FRS issued in 2012: – Amendment to FRS 101 First-time Adoption of International Financial Reporting Standards – Amendment to FRS 1 Presentation of Financial Statements – Amendment to FRS 16 Property, Plant and Equipment – Amendment to FRS 32 Financial Instruments: Presentation – Amendment to FRS 34 Interim Financial Reporting

Effective for annual periods beginning on or after 1 January 2012 1 July 2012 1 January 2013 1 January 2013 1 1 1 1 1

January January January January January

2013 2013 2014 2014 2014

1 January 2014 1 January 2014 1 January 2014

1 January 2013 1 1 1 1

January January January January

2013 2013 2013 2013

The directors expect that the adoption of the standards and interpretations above will have no material impact on the financial statements of the Group and of the Company in the period of initial application.


121 INFINIO GROUP LIMITED ANNUAL REPORT 2013

DETAILED TRADING AND PROFIT OR LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2013

The annexed detailed profit or loss account does not form part of the audited statutory accounts and therefore it is not covered by the independent auditorâ&#x20AC;&#x2122;s report. It is not necessary to file the detailed profit or loss account with the Accounting & Corporate Regulatory Authority.


122 INFINIO GROUP LIMITED ANNUAL REPORT 2013

DETAILED TRADING AND PROFIT OR LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2013

2013 S$’000

2012 S$’000

71

481

(27)

(357)

44

124

14 111 – 96 11 5 73

– – 200 16 10 (48) 11

310

189

Less : ADMINISTRATIVE AND OTHER EXPENSES

(1,924)

(1,786)

Results from operating activities

(1,570)

(1,473)

9 (68)

1 (3)

(1,629)

(1,475)

Sales Less : Cost of sales : Gross profit Add : Other income Gain on disposal of available-for-sale financial assets Directors' fees waived Waiver of loan Writeback of trade payables Government grant Net foreign exchange gains/(loss) Sundry income

Finance income, net Finance costs, net Loss before tax Income tax benefit

Loss from discontinued operations

4

(1,625)

(1,475)

(5)

(1,630)

(1,475)


123 INFINIO GROUP LIMITED ANNUAL REPORT 2013

ADMINISTRATIVE AND OTHER EXPENSES FOR THE YEAR ENDED 31 MARCH 2013

Amortisation of intangible assets Audit fees Bank charges Consulting fees Company secretarial and tax fees CPF on directors’ salaries, bonuses and allowances CPF on staff salaries, bonuses and allowances Depreciation Directors’ fees Directors’ salaries, bonuses and allowances Impairment loss of available-for-sale financial assets Trade receivables written off Operating lease expenses – office and equipment Listing fees and AGM/EGM expenses Marketing and Advertising Legal & professional fees Loss on disposal of property, plant and equipment Printing, postages and stationery Staff salaries, bonuses and allowance Telephone, telegrams & telex Others

2013 S$’000

2012 S$’000

15 43 2 137 34 8 34 25 100 109 25 20 107 163 52 589 60 8 296 11 86

16 61 4 197 50 9 32 122 115 120 – 39 134 165 90 42 – 3 539 25 23

1,924

1,786


124 INFINIO GROUP LIMITED ANNUAL REPORT 2013

ADDITIONAL DISCLOSURE REQUIREMENTS Material Contracts The following contracts have been entered into by the Group of Companies and are still subsisting or were entered into since the end of the previous financial year: (a)

A Subscription Agreement dated 22 June 2012 relating to the issue of 5.0% equity linked redeemable structured convertible notes due 2015 (“Convertible Notes”) in aggregate principal amount of up to S$10,000,000 was entered amongst the Company, Advance Opportunities Fund (the “Subscriber”) and Value Capital Asset Management Private Limited (the “Investment Manager”). The Company proposes to issue to subscriber Convertible Notes with an aggregate principal amount of up to S$10,000,000 comprising five tranches of a principal amount of S$2,000,000 each. Each tranche shall comprise ten equal sub-tranches of S$200,000 each. The Convertible Notes shall entitle the holder thereof to 5.0% interest per annum, and on the terms and conditions stipulated in the Subscription Agreement, be convertible into ordinary shares in the capital of the Company which are listed on the Official List of Catalist. Conditions precedent The Subscriber shall not be obligated to subscribe and pay for any of the Notes unless, inter alia, the following conditions precedent have been satisfied: (i)

the delivery of certified true copies of the Company’s board of directors’ resolutions and/or the resolutions of the shareholders of the Company (the “Shareholders”) approving the issue of the Notes and the new Shares to be issued upon conversion of the Notes (the “Conversion Shares”) to the Subscriber on each Closing Date (as defined in the Subscription Agreement);

(ii)

the delivery of certified true copies of all requisite approvals from the SGX-ST (where necessary) for the issue of the Conversion Shares and the listing and quotation of the Conversion Shares on the Official List of the Catalist (such approvals having been obtained and not withdrawn or revoked) to the Subscriber on each Closing Date; and

(iii)

the delivery of disclosure documents as listed in Schedule 1 of the Subscription Agreement to the Subscriber and the Investment Manager on each Closing Date.

The Company raised gross proceeds of an aggregate of S$1,600,000 from a series of conversion of Convertible Notes as at date of this report.


125 INFINIO GROUP LIMITED ANNUAL REPORT 2013

ADDITIONAL DISCLOSURE REQUIREMENTS (b)

On 27 June 2012, the Company has entered into a loan agreement with a third party (the “Lender”) amounting to S$700,000 with 1% interest per month for the purpose of repayment of existing liabilities and general working capital of the company. The loan was drawdown on 29 June 2012. Full repayment of the principal amount must be made within 24 months of the date of loan drawdown. The first interest payment payable in advance upon drawdown of the loan and thereafter on the 1st day of each subsequent month until the loan is fully repaid. Interest charges which are not paid when due shall be charged with late payment interest at 1% per month over the prescribed rate from the due date of actual payment, such interest to accumulate by way of compound interest. As the Company’s cashflow from operations prohibits the repayment of the outstanding loan sum during the financial year and to further reduce the Company’s borrowing cost, the Company and the Lender have agreed to the conversion of the outstanding loan sum S$450,000 into shares of the Company (the “Conversion Shares”) in lieu of repayment in cash. The Conversion Shares was granted listing and quotation on 26 April 2013.

(c)

A conditional sale and purchase agreement dated 29 March 2011 (“S&P Agreement”) with the existing shareholders (collectively, the “Vendors”) of Ephraim Resources Limited (“Ephraim”) to acquire 300,000,000 shares in the capital of Ephraim, representing the entire issued and paid-up share capital of Ephraim, from the Vendors (“Proposed Acquisition”). In conjunction with the Proposed Acquisition, the Company proposes to consolidate every ten (10) existing ordinary shares in the capital of the Company into one (1) Share (“Consolidated Share”) of S$0.20 each to comply with Rule 429 of Section B: Rules of Catalist of the Listing Manual of the Singapore Exchange Securities Trading Limited. The aggregate consideration for the Proposed Acquisition is S$381,810,000 which will be satisfied in full by the allotment and issue to the Vendors and/or their nominees(s) of 1,909,050,000 new Consolidated Shares at the issue price of S$0.20 each. Upon completion, the Vendors will collectively hold approximately 93.14% of the enlarged total number of issued shares of the Company. The S&P Agreement has terminated automatically since the conditions precedent in the S&P Agreement have not been fulfilled or waived, as relevant, by 31 December 2012.


126 INFINIO GROUP LIMITED ANNUAL REPORT 2013

ADDITIONAL DISCLOSURE REQUIREMENTS (d)

On 14 July 2011, a loan agreement with PT FirstFlower (“PTFF”), a 99%-owned subsidiary of Ephraim, (pertaining to the S&P Agreement in paragraph (c) above) was drawn. The Company pursuant to the agreement agreed to extend to PTFF from time to time loans of such amounts as may be requested by PTFF, the aggregate of which shall not exceed S$20 million or such other amount as may be mutually agreed by the Company and PTFF in writing (the “Loans”). The Loans are to be utilised by PTFF for its general working capital purposes. The relevant proportion of the Loans shall be repayable by PTFF to the Company on the date falling on the first anniversary of the date on which the relevant proportion of the Loans is disbursed or such other date as may be mutually agreed by PTFF and the Company in writing. The Loans are interest-free and unsecured, save in the event that PTFF fails to repay the full amount of the Loans when due and payable as aforementioned, PTFF shall be liable to pay default interest calculated on a daily basis from the date repayment is to be made until the full amount of the Loans is repaid by PTFF. As at date of this report, the aggregate amount of the Loans given by the Company to PTFF is S$711,869.28. Based on the negotiation between the parties in respect of the repayment of the Loans, the Company expects recovery of the Loans by 31 December 2013.

(e)

A supplemental loan agreement dated 1 February 2012 with PTFF and share charge agreements dated 1 February 2012 with the principal shareholders of Ephraim, pursuant to which the repayment of the Loans will be secured by a first fixed charge over an aggregate of 12,000,000 shares in the share capital of Ephraim. Upon occurrence of certain events of default (including but not limited to the termination of the S&P Agreement), the Loans will become immediately due and repayable, and the Company shall be entitled to enforce the security interest constituted under the share charge agreements if such Loans are not repaid.


127 INFINIO GROUP LIMITED ANNUAL REPORT 2013

ADDITIONAL DISCLOSURE REQUIREMENTS Material Litigation Save as disclosed below, the Infinio Group is not engaged, in the last 12 months before the date of this Annual Report, or been in any litigation as plaintiff or defendant in respect of any claims or amounts which are material in the context of the Proposed Acquisition, and the Directors of the Infinio Group have no knowledge of any proceedings pending or threatened against the Infinio Group of Companies or any facts likely to give rise to any litigation, claims or proceedings which may have a material effect on the financial position of the business. (a)

On 8 June 2011, a winding up order was made by the High Court of Hong Kong in respective of Broadband Network Systems Limited (“BNSL”), a Hong Kong-incorporated wholly-owned subsidiary of the Company. An amended winding-up petition was filed by certain former employees of BNSL, namely, Au-Yeung Lo Chu Chris, Sin Tak Fai Karl and Gill Anke (collectively, the “Petitioners”) on 1 June 2011 in the High Court of Hong Kong against BNSL in respect of a claim for unpaid salaries and bonuses. Furthermore, the Company had extended various loans to BNSL amounting to an aggregate of S$4,824,694.51 (HK$30,500,812.39) between June 2008 and May 2011. The loans were repayable in full upon demand and were on an interest free basis. As at 8 June 2011, the loans have not been repaid in full. The Company, in view of the above, had on 7 June 2011 applied to the High Court of Hong Kong for an order to join as a supporting creditor in the winding up petition against BNSL by the Petitioners and such application was granted on 8 June 2011. The Company has appointed Fok Chan Wan CPA Limited as Joint and Several Liquidators to follow up on the liquidation of BNSL since 27 April 2012. The liquidation process is still on going as at the date of this report.


128 INFINIO GROUP LIMITED ANNUAL REPORT 2013

ADDITIONAL DISCLOSURE REQUIREMENTS (b)

On 1 March 2007, a writ of summons and a statement of claim were filed against the Company and Auston Institute of Management & Technology Pte Ltd (“AIMT”) by Mr Ng Swee Hua (the “Investor”) in respect of an investment agreement dated 15 December 2005, as amended by a supplementary agreement dated 14 June 2006, (collectively, the “Convertible Bond Agreements”) entered into between the 3 parties (the “Convertible Bond Claim”). Under the Convertible Bond Agreements, in consideration for a loan of S$200,000 (the “Loan”), the Investor subscribed for an S$200,000 worth of unsecured convertible bonds issued by the AIMT (the “Convertible Bonds”) with an option to subscribe for a further S$400,000 worth of convertible bonds by 15 December 2006 (the “Option”) (collectively, the “Subscription Bonds”). The Subscription Bonds were to be convertible into either (i) Shares at the conversion price of S$0.04 per Share, or (ii) ordinary shares of S$1.00 each in the capital of AIMT (“AIMT Shares”) at a prescribed formula, or (iii) a combination of both new Shares and AIMT Shares. Interest was to accrue to the Convertible Bonds from the date of issue at the rate of 3% per annum, payable annually on 31 December each year, until the Convertible Bonds are exercised. By a letter dated 3 November 2006, the Investor conveyed his intention to convert the Loan into 5,000,000 fully paid ordinary shares in the capital of the Company. Under the Statement of Claim, the Investor claimed against the Company and AIMT (i) interest on the Convertible Bonds; (ii) the 5,000,000 ordinary shares in the capital of the Company; (iii) interest thereof; (iv) costs; and (v) such further and/or other relief as the court deems fit and just. The Company and AIMT (“the Defendants”) filed their Defences on 22 March 2007, wherein the Defendants claimed, inter alia, that the Investor was not entitled to the S$200,000 worth of convertible bonds issued by AIMT as certain conditions precedent in the Convertible Bond Agreements were not fulfilled. The Convertible Bond Claim was awarded in favour of the Plaintiff, but the Company has appealed the matter. The appeal has been heard in the Court of Appeal and awarded in favour of the Plaintiff. The Assistant Registrar of the High Court assessed damages payable to the Plaintiff at S$1,482,500 on 28 July 2010, and the Company has since lodged an appeal against the High Court’s award. The Court of Appeal has on 27 May 2011 dismissed the Company’s appeal. The damages have been partial settled by the Company. The outstanding judgment debts and costs of assessment of damages and registrar’s appeal of S$625,728 is due on 13 June 2012. The Company has on 2 July 2012, issued a Cashier’s Order which has been accepted by the Plaintiff on 3 July 2012 as full and final settlement of the outstanding judgment debt, costs and interests due from the Company to the Plaintiff under Suit No 129 of 2007/T.


129 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATISTICS OF SHAREHOLDINGS AS AT 17 JUNE 2013

Issued and fully paid-up capital Class of Shares Treasury Shares Voting Rights

: : : :

S$47,222,692.39 (2,421,938,560 shares) Ordinary Shares Nil One Vote Per Share

DISTRIBUTION OF SHAREHOLDERS BY SIZE OF SHAREHOLDINGS AS AT 17 JUNE 2013 SIZE OF SHAREHOLDINGS

NO. OF SHAREHOLDERS

%

NO. OF SHARES

%

1 – 999 1,000 – 10,000 10,001 – 1,000,000 1,000,001 and above

42 421 2,028 288

1.51 15.15 72.98 10.36

6,783 2,744,530 423,763,833 1,995,423,414

0.00 0.11 17.50 82.39

TOTAL:

2,779

100.00

2,421,938,560

100.00

TWENTY LARGEST SHAREHOLDERS AS AT 17 JUNE 2013 NO. NAME OF SHAREHOLDER 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

i-BOX TECHNOLOGIES LTD HSBC (SINGAPORE) NOMINEES PTE LTD CITIBANK NOMINEES SINGAPORE PTE LTD UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED PHILLIP SECURITIES PTE LTD OCBC SECURITIES PRIVATE LTD LIM & TAN SECURITIES PTE LTD MERRILL LYNCH (SINGAPORE) PTE LTD CHONG KENG BAN @ JOHNSON CHONG BROADBAND NETWORK SYSTEMS ACQUISITIONS LTD. CIMB SECURITIES (SINGAPORE) PTE LTD ABN AMRO CLEARING BANK N.V. TAN ENG CHUA EDWIN HONG BO EDUCATION DEVELOPMENT HOLDINGS LTD DBS NOMINEES PTE LTD DMG & PARTNERS SECURITIES PTE LTD LIM CHOU LEONG TSAI WOAN LENG @ CAI QING QING LIU TZE YOUNG OCBC NOMINEES SINGAPORE PRIVATE LTD TOTAL:

NO. OF SHARES

%

125,000,000 108,015,000 104,813,654 75,282,495 73,888,410 50,940,000 48,487,975 47,580,000 45,000,000 39,192,000 36,110,190 33,579,000 32,031,000 32,000,000 31,284,100 25,772,500 25,000,000 25,000,000 23,000,000 21,508,340

5.16 4.46 4.33 3.11 3.05 2.10 2.00 1.96 1.86 1.62 1.49 1.39 1.32 1.32 1.29 1.06 1.03 1.03 0.95 0.89

1,003,484,664

41.42


130 INFINIO GROUP LIMITED ANNUAL REPORT 2013

STATISTICS OF SHAREHOLDINGS AS AT 17 JUNE 2013

SUBSTANTIAL SHAREHOLDERS Substantial Shareholders of the Company as recorded in the Register of Substantial Shareholders as at 17 June 2013.

Name I-Box Technologies Ltd

Direct Interest 125,000,000

No. of Ordinary shares % Indirect Interest

%

5.16

PUBLIC FLOAT As at 17 June 2013, approximately 94.49% of the issued ordinary shares of the Company was held in the hands of the public (on the basis of information available to the Company). Accordingly, the Company had complied with Rule 723 of the Rules of Catalist of the Singapore Exchange Securities Trading Limited.


131 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of Infinio Group Limited will be held at 2 Leng Kee Road, #03-04 Thye Hong Centre, Singapore 159086 on Tuesday, 30 July 2013 at 10.00 am for the following purposes:

AS ORDINARY BUSINESS 1.

To receive and adopt the Audited Financial Statements of the Company for the Resolution 1 financial year ended 31 March 2013 together with the Directors’ Report and Auditors’ Report thereon.

2.

To approve the payment of Directors’ Fees of S$100,000 for the financial year ended Resolution 2 31 March 2013 (2012: S$105,000).

3.

To re-appoint Mr Raymond Ho D’Orville as a Director of the Company to hold office until the next Annual General Meeting pursuant to Section 153(6) of the Companies Act, Cap. 50. Mr Raymond Ho D’Orville shall, upon re-appointment as Director of the Company, Resolution 3 remain as the Acting Chief Executive Officer and Executive Director of the Company.

4.

To re-elect Mr Kun Swee Tiong Andy who is retiring under Article 107 of the Articles of Association. Mr Kun Swee Tiong Andy shall, upon re-election as Director of the Company, remain Resolution 4 as Chairman of the Nominating Committee and a member of the Audit Committee and Remuneration Committee and shall be considered independent for the purposes of Rule 704(7) of Section B: Rules of Catalist of the Listing Manual of the Singapore Exchange Securities Trading Limited.

5.

To re-elect Mr Mick Teoh Hong Fu who is retiring under Article 107 of the Articles of Association. Mr Mick Teoh Hong Fu shall, upon re-election as Director of the Company, remain Resolution 5 as Chairman of the Audit and Remuneration Committees and a member of the Nominating Committee and shall be considered independent for the purposes of Rule 704(7) of Section B: Rules of Catalist of the Listing Manual of the Singapore Exchange Securities Trading Limited.


132 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTICE OF ANNUAL GENERAL MEETING 6.

To re-appoint Messrs Robert Yam & Co., Certified Public Accountants, as Auditors Resolution 6 of the Company and to authorise the Directors to fix their remuneration.

7.

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

AS SPECIAL BUSINESS To consider and, if thought fit, to pass the following resolution (with or without amendments) as an Ordinary Resolution: 8.

INFINIO GROUP LIMITED SHARE OPTION SCHEME

Resolution 7

“THAT approval be given to the Directors to offer and grant options under the Infinio Group Limited Share Option Scheme (the “Scheme”) and pursuant to Section 161 of the Companies Act, Cap. 50, to allot and issue from time to time such number of shares in the Company as may be required to be issued pursuant to the exercise of options under the Scheme, provided always that the aggregate number of shares to be issued pursuant to the Scheme shall not exceed 15% of the total issued share capital of the Company from time to time.” [See Explanatory Note (i)] 9.

AUTHORITY TO DIRECTORS TO ALLOT AND ISSUE SHARES “THAT pursuant to Section 161 of the Companies Act, Cap. 50 and subject to Rule 806 of the Listing Manual (Section B: Rules of Catalist), authority be and is hereby given to the Directors of the Company to issue and allot new shares in the capital of the Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit, PROVIDED ALWAYS that:

Resolution 8


133 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTICE OF ANNUAL GENERAL MEETING (i)

the aggregate number of shares to be issued pursuant to this Resolution does not exceed 100% of the issued shares of the Company (as calculated in accordance with sub-paragraph (ii) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to shareholders of the Company does not exceed 50% of the issued shares of the Company (as calculated in accordance with sub-paragraph (ii) below);

(ii)

(subject to such manner of calculation as may be prescribed by the Rules of Catalist), for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (i) above, the percentage of issued share capital shall be based on the issued shares of the Company at the time this Resolution is passed, after adjusting for:

(iii)

(a)

new shares arising from the conversion or exercise of any convertible securities or share options which are outstanding or subsisting at the time this Resolution is passed; and

(b)

any subsequent consolidation or subdivision of shares; and

unless revoked or varied by the Company in general meeting, such authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or by the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.â&#x20AC;?

[See Explanatory Note (ii)]

BY ORDER OF THE BOARD

LEE BEE FONG COMPANY SECRETARY SINGAPORE 15 July 2013


134 INFINIO GROUP LIMITED ANNUAL REPORT 2013

NOTICE OF ANNUAL GENERAL MEETING Explanatory Notes: (i)

Resolution 7 above, if passed, will empower the Directors to issue shares pursuant to the Infinio Group Limited Share Option Scheme (the “Scheme”) of up to an amount not exceeding in total 15% of the issued share capital of the Company for the time being pursuant to the exercise of the options under the Scheme. This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company.

(ii)

Resolution 8 is to empower the Directors of the Company from the date of this Meeting until the date of the next Annual General Meeting, to issue shares in the Company. The number of shares which the Directors may issue under this Resolution would not exceed 100% of the issued share capital of the Company at the time of passing this Resolution. For issue of shares other than on a pro-rata basis to all shareholders of the Company, the aggregate number of shares to be issued shall not exceed 50% of the issued share capital of the Company. This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company or by the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.

Notes: (i)

A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his stead. A member of the Company, which is a corporation, is entitled to appoint its authorised representative or proxy to vote on its behalf.

(ii)

A proxy need not be a member of the Company.

(iii)

The instrument appointing a proxy must be deposited at the Company’s registered office at 80 Robinson Road, #02-00, Singapore 068898 at least 48 hours before the time of the Meeting.


INFINIO GROUP LIMITED (Incorporated in the Republic of Singapore) (Company Registration No. 199801660M) I/We

(Name),

(NRIC/Passport No.),

of being a member/members of the above-mentioned Company, hereby appoint:– Name

NRIC/Passport No.

Address

Proportion of Shareholdings

No. of Shares

%

and/or (delete as appropriate) Name

NRIC/Passport No.

Address

Proportion of Shareholdings

No. of Shares

%

or failing him/her, the Chairman of the meeting, as my/our proxy/proxies to attend and to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 2 Leng Kee Road, #03-04 Thye Hong Centre, Singapore 159086, on Tuesday, 30 July 2013 at 10.00 am and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as hereunder indicated. If no specific directions as to voting are given, the proxy/proxies will vote or abstain from voting at his/her/their discretion as he/she/they will on any other matter arising at the Annual General Meeting. No.

Ordinary Resolutions

For

Against

Ordinary Business 1.

To adopt the Audited Financial Statements, Directors’ Report and Auditors’ Report of the Company for the financial year ended 31 March 2013.

2.

To approve the payment of Directors’ Fees for the financial year ended 31 March 2013.

3.

To re-appoint Mr Raymond Ho D’Orville as a Director pursuant to Section 153(6) of the Companies Act, Cap. 50.

4.

To re-elect Mr Kun Swee Tiong Andy as a Director under Article 107.

5.

To re-elect Mr Mick Teoh Hong Fu as a Director under Article 107.

6.

To re-appoint Robert Yam & Co., Certified Public Accountants as Auditors and authorise Directors to fix their remuneration.

Special Business 7.

To authorise Directors to allot and issue shares in connection with the exercise of options granted pursuant to Infinio Group Limited Share Option Scheme.

8.

To authorise Directors to allot shares pursuant to Section 161 of the Companies Act, Cap. 50.

Dated this

day of

2013.

Total no. of Shares in: Signature(s) of Shareholder(s) or, Common Seal of Corporate Shareholder

(a) CDP Register (b) Register of Members

No. of shares held


Notes: 1.

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

2.

A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote in his stead.

3.

Where a member appoints two proxies, he shall specify the percentage of his shares to be represented by each proxy and if no percentage is specified, the first named proxy shall be deemed to represent 100 per cent of his shareholding and the second named proxy shall he deemed to be an alternate to the first named.

4.

A proxy need not be a member of the Company.

5.

The instrument appointing a proxy or proxies together with the letter of power of attorney, if any, under which it is signed or a duly certified copy thereof, must be deposited at the registered office of the Company at 80 Robinson Road, #02-00 Singapore 068898 at least 48 hours before the time appointed for the Annual General Meeting.

6.

A corporation which is a member may authorise by resolution of its directors or other governing body such a person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50.

7.

Please indicate with an â&#x20AC;&#x153;Xâ&#x20AC;? in the spaces provided whether you wish your vote(s) to be for or against the Resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/ proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.

8.

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies.

9.

In the case of a member whose shares are entered against his name in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.


CONTENTS CORPORATE PROFILE LETTER TO SHAREHOLDERS BOARD OF DIRECTORS OUR BUSINESS â&#x20AC;&#x201C; MOVING FORWARD OPERATIONS REVIEW CORPORATE DIRECTORY FINANCIAL REVIEW CORPORATE GOVERNANCE STATEMENT DETAILED TRADING AND PROFIT OR LOSS ACCOUNT ADMINISTRATIVE AND OTHER EXPENSES ADDITIONAL DISCLOSURE REQUIREMENTS STATISTICS OF SHAREHOLDINGS NOTICE OF ANNUAL GENERAL MEETING PROXY FORM

1 2 4 6 7 9 10 11 121 123 124 129 131

This Annual Report has been prepared by the Company and its contents have been reviewed by the Company's Sponsor, Stamford Corporate Services Pte Ltd, for compliance with the relevant rules of the SGX-ST. The Company's Sponsor has not independently verified the contents of this Annual Report. This Annual Report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this Annual Report, including the correctness of any of the statements or opinions made or reports contained in this Annual Report. The contact person for the Sponsor is Mr Yap Wai Ming: Tel: 6389 3000 Email: waiming.yap@stamfordlaw.com.sg


INFINIO GROUP LIMITED

INFINIO GROUP LIMITED Company Registration No. 199801660M 2 Leng Kee Road | #03-04 Thye Hong Centre | Singapore 159086

SEIZING OPPORTUNITIES

ANNUAL REPORT 2013

Tel: +65 6336 2338 | Fax: +65 6336 6929

INFINIO GROUP LIMITED

2013 ANNUAL REPORT

Annual report 2013  

Infinio Group Limited

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