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ECS HOLDINGS
LIMITED
synergy in motion
annual report 2010
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VisionTo be a Premier Asia-Pacifc ICT Company that
thinks globally but acts locally, excelling in all our
business segments to deliver optimal value to our
stakeholders.
MissionTo be the preferred supplier of choice for ICT
products and value-added services by building
strong customer relationships.
To sustain our entrepreneurial growth by seeking
new markets & businesses.
To bring the best-of-breed ICT products
and services to enhance the competitiveness
of our customers businesses.
pg01
Corporate
Profle
pg08
Chairmans
Statement
pg11
CEOs
Statement
pg14
Board of
Directors
pg16
Senior
Management
pg19
Corporate
Executives
pg21
Group
Structure
pg22
Corporate
Information
pg24
2010
Awards
pg25
2010
Milestones
pg26
CorporateGovernance
Statement
pg34
Directors
Report
pg40
Statement by
Directors
pg41
Independent
Auditors
Report
pg42
Financial
Statements
pg84
Shareholdings
Statistics
pg85Notice of
Annual General
Meeting
pg23
Financial
Highlights
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CORPORATE PROFILEECS is a well-recognised provider of ICT products and services
with three main businesses, namely Enterprise Systems, IT Services
and Distribution. With a network of more than 23,000 active channel
partners across China, Thailand, Malaysia, Singapore, Indonesia
and the Philippines, ECS is well-positioned to be a regional partner
of choice suitable for any global-leading ICT brand vendor tapping
Asia Pacics ICT spending growth.
Leading global brand names like Hewlett-Packard (HP), Apple,
Dell, Lenovo, Microsoft, IBM, Oracle and EMC leverage on ECS
extensive channel partner network to distribute their products across
the region.
The Groups Enterprise Systems business aims to give MNCs, local
government and domestic companies a competitive edge over theirpeers by designing, installing and implementing IT infrastructure.
ECS IT Services business provides a comprehensive range of
professional, technical support and training services.
ECS Distribution business leverages on a well-established and
highly-efcient logistical and IT infrastructure to distribute fast-
moving products in the most efcient manner.
The Group has a consistent track record of protability and a
management that is focused on operational excellence to achievesustainable prot growth and to enhance shareholder returns.
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We extend our distribution footprint in growth markets
and expand our product range and service offerings in
tandem with emerging technologies and trends. Our agility
in anticipating and meeting changing market demandshas served us well, continuously driving prot growth and
stakeholder value.
growth in step
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Foresight, experience and acumen from astute leadership
enable us to distil market possibilities. Even as we seize
todays opportunities, our sight is rmly set on the future.
We proactively invest in our people to harness their full
potential and nurture our next generation of leaders.
future in sight
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Dear Shareholders,
It gives me great pleasure to present to you
ECS annual report for the nancial year
ended 31 December 2010 (FY2010), a
year that has witnessed the beginning of
several transformational strategies, all of
which have an important role to play in our
corporate evolution as a leading regionalICT company. First and foremost, I would like
to express my sincere gratitude to you, our
loyal shareholders, for your kind patience and
support during the transition of leadership.
There have been signicant changes in ECS
topmost leadership; with me returning to the
position of Group Non-executive Chairman
and my fellow founding Board member, Mr
Narong Intanate taking over as Group CEO.
We respect Mr Lis decision to relinquish his
position as Group Non-executive Chairman
to attend to personal matters and thank
him for his guidance over the last 4 years.
Similarly, we thank Mr Mao Xiangqian for his
contribution as acting Group CEO during
our transition in FY2009 and he will now be
able to return his focus to leading our China
operations, which continues to be our single
largest market.
CHAIRMANSSTATEMENT
Strengthening assets,leveraging value
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As part of the pioneering team of ECS, Narong
and I look forward to earmarking renewed
corporate and business initiatives that will
enable ECS to exploit new opportunities in the
regional ICT industry that is seeing stronger
demand for consumer IT products and
increased corporate IT spending.
Some of these efforts have already startedpaying off and our stellar FY2010 nancial
performance can be attributed to a
combination of our continuing focus on higher-
margin products, product enhancement,
internal operational and nancial efciencies
and recovery of regional economies.
Hence FY2010 saw ECS propose its highest-
ever nal dividend of 3.6 cents per ordinary
share in FY2010 as compared to 3.0 cents
per ordinary share a year earlier as the Group
continued to register bottom line expansion
with a record FY2010 net prot attributable
to shareholders of $53.0 million from $38.2
million in FY2009.
Concurrently FY2010 gross margin improved
to 5.0% compared to 4.9% in FY2009
despite a 5.1% decline in FY2010 revenue
to $3.1 billion as compared to $3.3 billion in
FY2009; the lower FY2010 revenue being aconsequence of deconsolidation of revenue
from our Malaysian associate, ECS ICT
Berhad.
Excluding the effect of the revenues of ECS
ICT Berhad, and adjusting for currency
translation effects, the Groups revenue for
FY2010 would have grown by 14.8% year-on-
year on higher sales of consumer printers,
notebooks, supplies and tablets such asApple iPads.
Additionally, in line with ECS continuing
nancial efciencies, tighter credit control
and shorter cash cycles led to signicant
improvements in the Groups working capital
position which in turn helped our cash
position.
While this performance is encouraging, ECS
believes that it must push itself up to the nextlevel of growth so that it can spread its reach
across as much as possible of the ICT growth
expected in the region over the next few years.
With leading industry analyst, IDC predicting
that the Asia Pacic region, excluding Japan
(APeJ), which saw growth of 13% last year,
will see another 10% increase in 2011. (http://
www.idg.com/www/pr.nsf/0/14FD296F1791
438E852578320054102A), ECS has started
to sharpen its ongoing margins-accretive
initiatives both externally and internally.
On the business front, we have started
adjusting our portfolio to concentrate on
emerging technologies and service offerings
from existing and new vendors that will
increase our revenue and protability, a
strategy, if executed well, can help us corner
signicant market share.
The recently secured distribution rights byour China subsidiary from Apple to distribute
its two iconic products, the iPad and iPhone
within China are a crucial component of this
strategy.
Presently, as we work towards replicating
this agreement to our other markets, I am
delighted to update that ECS has successfully
signed many other regional distributorships
by other ICT vendors, key among them notebooks by Lenovo and more recently,
servers and notebooks by Dell.
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On behalf of my fellow Directors, I once
again thank you, our shareholders, for your
loyal support of the Group. I would also
like to express my sincere appreciation to
our channel partners, vendors, technology
partners and business associates without
whom our success would not have been
possible.
I would also like to thank the management
and staff for their unstinting dedication and
hard work.
With these strategies already in place, ECS
anticipates its growth would continue to be
strong in the years to come and we look
forward to the continuing participation of all
our stakeholders during that time.
Mr Tay Eng Hoe
Chairman
16 March 2011
Additionally, ECS also sees opportunities in
the demand for mobile device accessories
and has already started deepening its
partnership with Japanese manufacturer,
Buffalo, to distribute their products and
accessories in the ve ASEAN countries where
ECS is the authorised distributor.
In this way, our 23,000 channel partnernetwork across 6 regional countries gives the
Group added advantages from increasing
economies of scale and ECS intends to adopt
similar go-to-market strategies and engage
more strategic vendors regionally to increase
efciency. At the same time, the Group will be
growing this regional network, especially in the
high-growth markets of Indonesia and China
where the IT penetration rate is still low and
there is scope for growth and expansion in the
emerging fourth and fth-tier cities of thesecountries.
ECS will also be on the lookout for suitable
partners to grow into new markets like India
and Vietnam, both of which have been on our
radar for some time now and which are some
of the regions fastest growing markets.
Internally, ECS has also outlined a plan for
standardising core operational processes sothat we can achieve better business synergies
across different geographical entities.
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Dear Shareholders,
In FY2010, ECS ongoing new business and
corporate strategies yielded positive growth
both across the diverse geographies as well
as business segments in which it operates.
As a result, FY2010 saw the Group report a
record high net prot of $53.0 million, up from$38.2 million in FY2009. Concurrently, ECS
also proposed a rst and nal dividend of 3.6
cents its highest ever.
Financial and Operations Review:
In FY2010, ECS net prot attributable to
shareholders rose 38.8% to a record $53.0million from $38.2 million in FY2009, propelled
by the Groups continuing focus on higher-
margin products and efciency measures as
regional economies rebounded.
Signicantly, this performance was achieved
despite a 5.1% decline in FY2010 revenue
to $3.1 billion as compared to $3.3 billion
in FY2009. The Groups lower revenue in
FY2010 was due to the deconsolidation of
revenue from its Malaysian subsidiary, ECS
ICT Berhad (which was listed on 15 April 2010
on the mainboard of Bursa Malaysia Securities
Berhad).
Concurrently, the Groups FY2010 gross
margin improved to 5.0% compared to 4.9% in
FY2009.
Excluding the effect of the revenues of ECSICT Berhad, and adjusting for currency
translation effects, ECS revenue for FY2010
would have grown by 14.8% year-on-year
driven by higher sales of consumer printers,
notebooks, supplies and tablets such as
Apple iPads.
During FY2010, the Group carried on with
CEOSSTATEMENT
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ongoing nancial efciencies. As a result
of tighter credit control and shorter cashcycles, the Groups working capital position
strengthened. Working capital days were
further reduced to 35.1 days for the 12 months
ended 31 December 2010 from 35.9 days a
year ago.
Consequently, the Group generated a strong
positive operating cash ow of $21.3 million
in 4Q10 as compared to a negative operating
cash ow of $11.8 million in 4Q09.
As at 31 December 2010, ECS cash and cash
equivalents were $92.5 million, up signicantly
from $51.1 million as at 31 December 2009.
Due to the improved operating cash ow and
protability, net gearing was reduced to 0.45
times as at 31 December 2010 from 0.48 times
as at 31 December 2009.
As a result of these efforts, earnings per
share (EPS), on a fully diluted basis,
correspondingly rose to 14.51 cents in FY2010
versus 10.45 cents in FY2009 while net asset
value (NAV) per share increased to 81.18
cents as at 31 December 2010 versus 71.03
cents as at 31 December 2009.
Review by Business Segments:
Coinciding with the continuing upsurge in
IT spending, the adjustments we have been
making to our product portfolio to leverage
on emerging technologies and products from
existing and new vendors have beneted our
business performance across all segments.
Distribution:
Riding on the recovery in consumer spending
that emerged during the second half of 2010,
ECS strengthened its product portfolio with
the addition of emerging products that are
in demand, such as iPads and tablets. In
FY2010, our Distribution segment remained
as our growth driver, contributing about $1.9
billion or 62.5% to FY2010 revenue. This
growth is mainly driven by consumer printing
and imaging products, and mobile devicessuch as iPads.
Enterprise Systems:
Enterprise Systems also grew well due to a
strong surge in pent-up enterprise demand
which coincided with additional enterprise
products and recovery in corporate spending
on IT infrastructure. Contributed mainly
by networking and storage products, the
Enterprise Systems segment accounted for
$1.1 billion or 36.7% of revenue in FY2010,
up from 36.5% in FY2009.
Review by Geographical Markets:
Geographically both North Asia and South-east Asia continued on their growth path.
North Asia:
North Asia remained as ECS single largest
market at $1.8 billion in FY2010, up from
$1.7 billion in FY2009. The 5.6% increase in
revenue is mainly contributed by higher salesof printers, consumables and networking
products. Sales of Apples iPad in the last
quarter of 2010 also contributed to this growth.
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ECS also sees opportunities in the demand
for mobile device accessories for growingits Distribution business. We have started
working with Japanese accessories
manufacturer Buffalo to expand its portfolio
of products in the ve ASEAN countries ECS
operate in.
Moving forward, the Group seeks to adopt
a similar go-to-market strategy and engage
vendors regionally instead of on a standalone-
country basis to increase efciency andeconomies of scale.
This will be complemented by geographical
expansion particularly in the high-growth
markets of Indonesia and China, where
many of our vendors also want to grow.
In addition, India and Vietnam are also on
our agenda for expansion as one cannot
ignore the tremendous potential that both
these economies present. We will updateshareholders when these plans materialise.
Last but not the least, to support these
expansion plans, ECS will continue in
its efforts to carry on improving internal
efciencies, such as its cost-efcient
operational framework, working capital
management programmes, as well as core
operational processes.
I am condent these strategies will position us
for future successes.
Mr Narong Intanate
Group Chief Executive Ofcer
16 March 2011
Southeast Asia:
Revenue contribution from Southeast Asia
decreased by 16.6%. Excluding currency
translation effect and the deconsolidation of
ECS ICT Berhad, ECS Holdings associate
company that was listed on the mainboard
of Bursa Malaysia on 15 April 2010, revenue
would have grown 18.4%, contributed
mainly by the higher sales of notebooks and
desktops in Thailand and Indonesia.
Outlook:
Our ongoing growth initiatives have been
successful in diversifying our revenue base
while simultaneously boosting protability
and establishing a cost-effective operational
framework.
Moving forward, we anticipate increased
synergies from our business and corporate
growth efforts.
On the product front, our portfolio has been
suitably revamped with numerous new
consumer and enterprise products that have
been dominating global technology. This has
already started driving up our sales portfolios
across both business and geographicalsegments.
The two consecutive contracts that our China
subsidiary secured from Apple to distribute
the iPad and iPhone in China during the last
quarter of FY2010 will hopefully be replicated
to other countries in the Group.
In line with this, ECS has also recently signed
regional agreements for notebooks by Lenovoand for servers and notebooks by Dell. The
impact of these key wins should be felt more
substantially from FY2011 onwards.
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0301
0402
01.Mr Tay Eng Hoe
Mr Tay Eng Hoe was appointed the Non-ExecutiveChairman of the Group on 27 September 2010. He
is the founder of ECS Holdings Limited and also
the immediate past Group Chief Executive Ofcer.
Mr Tay has been a Director of the Group since 1
April 2001. He brings with him more than 28 years
of experience in the IT industry. Mr Tay is also a
Director and Vice Chairman of VST Holdings Limited,
the parent company of ECS Holdings Limited. In
August 2005, he was conferred the Public Service
Medal by the President of the Republic of Singapore
in recognition for his public service to the country.
Mr Tay holds a Bachelor of Science (Honours)
degree from the LaTrobe University and a Master of
Business Administration from the University
of Melbourne.
03.Mr Foo Sen Chin
Mr Foo Sen Chin was appointed as a Director on
15 December 2000 and is concurrently the Advisor
to Group Human Resources of the Company. He is
also the Managing Director and founder of ECS ICT
Berhad, our associate company which is listed onthe Main Board of Bursa Malaysia Securities Berhad.
Mr Foo plays a pivotal role in steering the strategic
direction of ECS ICT Berhad. His responsibilities
include the development of its long term business
goals, overall operation and administrative
management of ECS ICT Berhad. Prior to joining our
Group, he was the General Manager of a computer
bureau services company in Kuala Lumpur before
forming ECS KU Sdn Bhd (formerly known as K.U.
Sistems Sdn Bhd) in 1985. Mr Foo is an advisor
to the current Council of PIKOM, Association of
Computer and Multimedia Industry of Malaysia.He has a Bachelor of Science degree in Electrical
and Electronic Engineering from the University
of Birmingham, UK and he also holds a Masters
degree in Business Administration from the Craneld
School of Management in the United Kingdom.
02.Mr Narong Intanate
Mr Narong Intanate was appointed the Group ChiefExecutive Ofcer of ECS Holdings Limited and
also to the Board of the ECS subsidiaries on 1 July
2010. He was formerly an Executive Director of the
Company an appointment on 15 December 2000.
Mr Intanate is actively involved in the management
of the subsidiaries and associate companies under
the ECS Group and plays a pivotal role in steering the
strategic direction of the Group. He is the founder and
Executive Chairman of The Value Systems Co., Ltd.,
our subsidiary, since 1988. Mr Intanate is currently an
advisor of the Hatyai University. He holds a Bachelor
of Science in Business Administration and a Master
of Business Administration from California State
University. Prior to forming The Value Systems Co.,
Ltd., he was the Marketing Manager of Sahaviriya
Infortech Computers Co., Ltd. from 1982 to 1983 and
the Marketing Director of Sahaviriya OA from 1983 to
1988.
BOARD OF DIRECTORS
04.Mr Mao Xiangqian
Mr Mao Xiangqian was appointed as Executive
Director of the Company on 3 May 2010 and is alsoconcurrently the Chief Executive Ofcer of ECS
Technology (China) Limited, a principal subsidiary
of ECS Holdings Limited. He has more than twenty
years of experience in Chinas ICT industry. Prior to
joining the Group, Mr Mao served as the Senior Vice
President of Digital China Holdings Limited, one of
Chinas leading ICT distributor, and was President
of Digital China Technology Limited, which is the
distribution business division of Digital China Holdings
Limited. Prior to Digital China, Mr Mao spent ten years
with the Lenovo Group. Mr Mao holds a Bachelor of
Science (Machine Building and Automation) degree
and a Master of Science (Modal Analysis) from Tianjin
University as well as an Executive MBA Degree from
China Europe International Business School.
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05.Mr Leong Horn Kee
Mr Leong Horn Kee was appointed as anIndependent Director on 15 December 2000, and
currently serves as the Chairman of the Audit
Committee and a member of the Nominating and
Compensation Committees. He is currently the
Chairman/CEO of CapitalCorp Partners Pte Ltd.
Mr Leong was a Member of Parliament for 22 years.
He has wide work experience in the public sector in
the Ministries of Finance and Trade & Industry, and
in the private sector in venture capital, merchant
banking, corporate investments, hotels and property
development. Mr Leong is currently Singapores
Non-Resident Ambassador to Mexico and a member
of the Securities Industry Council. He holds a
degree (Honours) in Production Engineering from
Loughborough University, UK; a degree (Honours)
in Economics from the University of London, UK; a
degree in Chinese Language and Literature from
Beijing Normal University, China; an MBA degree
from Insead, France, and a Master in Business
Research from the University of Western Australia.
05
06 08
08.Mr Ong Wei Hiam
Mr Ong Wei Hiam was appointed as Non-ExecutiveDirector of the Company on 3 May 2010. Mr Ong
is the Group Chief Financial Ofcer and Executive
Director of VST Holdings Limited, the parent
company of ECS Holdings Limited. Mr Ong holds
a Bachelor Degree in Economics from University
College London and a Master Degree in Analysis,
Design & Management of Information Systems
from the London School of Economics and Political
Science. He is a Fellow of the Institute of Chartered
Accountants in England and Wales, and Fellow of the
Hong Kong Institute of Certied Public Accountants.
Prior to joining the VST Group, Mr Ong served in a
senior position at PricewaterhouseCoopers and
has extensive working experience in London and
Hong Kong.
07.Mr Koh Soo KeongMr Koh Soo Keong was appointed as an Independent
Director on 11 February 2008, and currently serves
as Chairman of the Compensation Committee and a
member of the Audit and Nominating Committees.
Mr Koh was, until April 2007, the Chief Executive
Ofcer and President of Toll Asia Pte Ltd, formerly
SembCorp Logistics Ltd (SembLog) which was
acquired by Toll in May 2006. Currently, he is the
CEO of KS Distribution Pte Ltd. With over 20 years of
experience in the logistics industry, he had helmed
SembLog and its preceding companies since 1986.
He is a board member of four other publicly listed
companies and the Chairman of the Agri-Food
and Veterinary Authority of Singapore. He holds
a Bachelor of Engineering (Honours), a Master of
Business Administration and a Postgraduate Diploma
in Business Law from the National University of
Singapore.
06.Mr Tan Hup Foi
Mr Tan Hup Foi was appointed as an IndependentDirector on 7 February 2006, and currently serves
as Chairman of the Nominating Committee and a
member of the Audit and Compensation Committees.
He was the Chief Executive of Trans-Island Bus
Services Ltd from 1994 to 2005 and also the Deputy
President of SMRT Corporation Ltd from 2003 to
2005. Mr Tan is known internationally as the Honorary
Vice President of the International Association of
Public Transport (UITP) and Honorary Chairman of
UITP Asia-Pacic Division. Mr Tan is the Chairman
of Ngee Ann Polytechnic Council. He was awarded
the Bintang Bakti Masyarakat (Public Service Star) in
2008 and the Pingat Bakti Masyarakat (Public Service
Medal) in 1996 by the President of Singapore.
Mr Tan graduated from Monash University in Australia
with a First Class Honours degree in Mechanical
Engineering in 1974 and he obtained a Master
of Science (Industrial Engineering) degree from
University of Singapore in 1979.
07
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01 03
02
01.Mr Narong Intanate
Mr Narong Intanate was appointedthe Group Chief Executive Ofcer
of ECS Holdings Limited and
also to the Board of the ECS
subsidiaries on 1 July 2010. He
was formerly an Executive Director
of the Company an appointment
on 15 December 2000.
Mr Intanate is actively involved
in the management of the
subsidiaries and associate
companies under the ECS Group
and plays a pivotal role in steering
the strategic direction of the
Group. He is the founder and
Executive Chairman of The Value
Systems Co., Ltd., our subsidiary,
since 1988.Mr Intanate is currently
an advisor of the Hatyai University.
He holds a Bachelor of Science
in Business Administration and a
Master of Business Administration
from California State University.
Prior to forming The Value SystemsCo., Ltd., he was the Marketing
Manager of Sahaviriya Infortech
Computers Co., Ltd. from 1982 to
1983 and the Marketing Director of
Sahaviriya OA from 1983 to 1988.
02.Mr Eddie Foo
Mr Eddie Foo is the Group ChiefFinancial Ofcer of the Company
and is concurrently the Group
Company Secretary. Mr Foo
is responsible for the Groups
overall nancial strategy and
management, corporate nance
and treasury management, tax,
and investor relations of ECS
Holdings, and is also a director
on the boards of various ECS
companies. Mr Foo has several
years of nancial management
and audit experience in
multinational companies and
public accounting rms. Prior
to serving as Group Chief
Financial Ofcer, Mr Foo was
the Group Financial Controller
of the Company. Mr Foo holds a
Bachelor degree in Accountancy
from the Nanyang Technological
University and is a member of
the Institute of Certied PublicAccountants of Singapore.
03.Mr Lim Tow Cheng
Mr Lim Tow Cheng was appointedSenior Vice President, Business
Development on 18 October 2005.
He is responsible for managing
the regional expansion strategy
and for identifying new business
opportunities for the Group.
Mr Lim has more than 20 years of
experience in senior management
positions in the IT industry. Prior to
joining the Group, Mr Lim was the
Director for South Asia of Western
Digital and has previously worked
with Digiland International Limited
for more than 8 years, holding
several senior management
positions, including as Chief
Executive Ofcer. Mr Lim has an
Honours Degree in Economics
from the National University of
Singapore.
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05
04
04.Mr Mao Xiangqian
Mr Mao Xiangqian was appointedas Executive Director of the
Company on 3 May 2010
and is also concurrently the
Chief Executive Ofcer of ECS
Technology (China) Limited,
a principal subsidiary of ECS
Holdings Limited. He has more
than 20 years of experience in
Chinas ICT industry. Prior to
joining the Group, Mr Mao served
as the Senior Vice President of
Digital China Holdings Limited,
one of Chinas leading ICT
distributor, and was President of
Digital China Technology Limited,
which is the distribution business
division of Digital China Holdings
Limited. Prior to Digital China,
Mr Mao spent 10 years with the
Lenovo Group. Mr Mao holds a
Bachelor of Science (Machine
Building and Automation) degree
and a Master of Science (ModalAnalysis) from Tianjin University as
well as an Executive MBA Degree
from China Europe International
Business School.
05.Mr Somsak
PejthaveeporndejMr Somsak Pejthaveeporndej was
appointed as the President of
The Value Systems Co., Ltd., our
wholly-owned subsidiary, on
1 February 2009. He is responsible
for the overall management of The
Value Systems and has been with
our Group since 1988.
Mr Pethaveeporndej was formerly
responsible for managing
the Enterprise Systems & ICTServices Division of The Value
Systems. He has more than
20 years of experience in the
IT industry. Prior to joining our
Group, he was employed as a
technical manager by Sun Shine
Co., Ltd. from 1981 to 1984,
followed by Sahaviriya Telecom
Co., Ltd. from 1984 to 1988. He
holds a Bachelor of Science
degree majoring in electronics
from Rajamangala University ofTechnology Krungthep, Thailand,
and a Mini MBA from The Faculty
of Commerce and Accountancy,
Chulalongkorn University.
06. Mr Foo Sen Chin
Mr Foo Sen Chin was appointedas a Director on 15 December
2000 and is concurrently the
Advisor to the Group Human
Resources of the Company. He
is also the Managing Director
and founder of ECS ICT Berhad,
our associate company which is
listed on the Main Board of Bursa
Malaysia Securities Berhad. Mr
Foo plays a pivotal role in steering
the strategic direction of ECS
ICT Berhad. His responsibilities
include the development of its
long term business goals, overall
operation and administrative
management of ECS ICT Berhad.
Prior to joining our Group, he
was the General Manager of
a computer bureau services
company in Kuala Lumpur
before forming ECS KU Sdn Bhd
(formerly known as K.U. Sistems
Sdn Bhd) in 1985. Mr Foo is anadvisor to the current Council of
PIKOM, Association of Computer
and Multimedia Industry of
Malaysia. He has a Bachelor of
Science degree in Electrical and
Electronic Engineering from the
University of Birmingham, UK and
he also holds a Masters degree in
Business Administration from the
Craneld School of Management
in the United Kingdom.
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08.Ms Lina Choo
Ms Lina Choo was appointed asExecutive Director of PT ECS Indo
Jaya in April 2009. She joined
ECS in September 2007 and is
responsible for overseeing the
nancial management of ECS
Indonesia. Ms Choo has more
than 15 years experience in
nancial management in various
companies, of which over 10
years was in the IT industry. Prior
to joining ECS Indonesia, she
worked with Natsteel Electronics
in Singapore as an accountant
before returning to Indonesia
to work as Finance Manager
for Diebold Indonesia and
subsequently, Datacraft Indonesia.
Ms Choo holds a Bachelor degree
in Accountancy from the University
of HKBP Nommensen.
09.Mr Jimmy Go
Mr Jimmy Go is the founder andPresident of MSI-ECS Phils.,
Inc., our associate company.
He has more than 25 years of
experience in the IT industry in the
Philippines. Mr Go started in the
IT industry way back in 1982 after
graduating from college selling
Fujitsu & Apple computers. He
currently holds a Bachelor degree
in Electronics & Communication
Engineering from De La Salle
University with an award of Magna
Cum Laude and Post Graduate
degree of Masters in Business
Administration in Ateneo de Manila
University. Mr Go was also the
past President of COMDDAP
(Computer Manufacturers,
Distributors & Dealers Association
of the Philippines). In 1998, Mr. Go
was named President and CEO of
MSI-Digiland. He was instrumental
in growing the business of MSI inthe Philippines, making it one of
the biggest IT distributors in the
country in less than 5 years.
07.Mr Sebastian Chong
Mr Sebastian Chong is thePresident of ECS Computers
(Asia) Pte Ltd, the wholly-owned
Singapore subsidiary of ECS
Holdings Limited. Mr Chong joined
ECS in 1990 and has 20 years of
experience in the IT industry. He is
responsible for strategic direction,
overall management, including
the sales and operations of the
commercial, consumer and retail
segments of ECS Singapore. Mr
Chong is also responsible for
business development, business
strategy and building of long
term relationships with vendors,
channels and partners.
07 09
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01
CORPORATE EXECUTIVES
02.Ms Peggy Leong-Yeo
Ms Peggy Leong-Yeo is theVice President of Group Human
Resources for ECS Holdings
Limited. Her main responsibility
is to establish HR strategies for
the Group and to strengthen
the Groups human capital. This
includes redening leading-edge
performance management and
development practices to support
leadership succession planning.
She provides leadership and
tactical support in formulation,
implementation and review of
HR policies in key HR areas to
support the Groups strategic
intent to ensure alignment and
adoption of best practices. She
has more than 20 years of Human
Resources experience behind
her, occupying management and
senior management positions with
Siemens, a global multinational
company. Ms Leong-Yeo wasinstrumental in achieving for
Siemens the prestigious Work
Life Balance Excellence Award,
the Workplace Health Promotion
Award and the People Developer
Award for several years. She
holds a Diploma in Administrative
Management from The Institute
of Administrative Management
in UK and a Master in Business
Administration from the University
of Birmingham, United Kingdom.
01.Mr Eugene Tan
Mr Eugene Tan was appointedas Group Financial Controller of
the Company on 1 March 2008.
He is responsible for the nancial
management of the Group, which
covers accounting, treasury, tax,
nancial control and reporting.
Prior to his appointment as Group
Financial Controller, Mr Tan was
the Vice President, Finance of
ECS Computers (Asia) Pte Ltd,
the wholly-owned Singapore
subsidiary of ECS Holdings
Limited. Prior to joining the
Group, Mr Tan worked for KPMG
Singapore as a senior auditor. Mr
Tan holds a Bachelor degree in
Accountancy & Economics from
the University of Reading.
03.Mr Newman Li
Mr Newman Li is the SeniorManager, Group Internal Audit of
the Company. He is a member
of CPA China and has more than
10 years of nancial and audit
experience. Prior to joining the
Group, he worked for Foshan
Power Construction Group Co. Ltd
in 1998 and Guangdong Telecom
in 2004. Mr Li holds a Bachelor
degree in Accountancy from the
Tianjin University of Commerce
and was appointed to his current
position since May 2008.
03
02
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05
04.Ms Lim Yok Yen
Ms Lim Yok Yen is the RegionalBusiness Controller of ECS
Holdings Limited. She is
responsible for nancial planning
and analysis, budgeting,
forecasting as well as providing
decision support and partnering
the business on analysis to
support the Groups business
growth strategy. Ms Lim is also
responsible for all channel
nance activities including credit
management, working capital
requirements and planning
with vendor nance teams and
internal business units. Prior
to joining ECS in April 2008,
she was a Group Accountant
in a public listed company in
Singapore where she handled
Group reporting and treasury
planning. Ms Lim has more
than 13 years of experience in
nancial accounting and groupreporting in the freight forwarding
industry and companies listed on
Singapore Exchange. Ms Lim is a
Certied Public Accountant and
also a member of Association of
Chartered Certied Accountants
(ACCA) since 2001.
05.Mr Tang Kin Meng
Mr Tang Kin Meng is the MIS andIT Technical Adviser to the Group.
He assists corporate management
in overseeing and advising on IT
policies, standardisation practices
and technology refresh programs
for the ECS Group. Prior to his
appointment in August 2008, he
was the Senior Vice President of
the IT Services Support Business
in ECS Computers (Asia) Pte
Ltd, the Groups wholly-owned
Singapore subsidiary. Mr Tang
joined ECS in April 1998 and
was instrumental in building a
variety of IT services and delivery
programs for the company. He
was awarded the ASEAN Partner
SE Manager of the Year by Sun
Microsystems in 2000 for his role
in managing the deployment of the
IT infrastructure for Starhubs Data
Center. Prior to ECS, Mr Tang has
worked for Fujitsu as a DivisionManager from 1992 to 1998, and
as a software specialist based in
Tokyo, Japan from 1992 to 1998
for NEC Corporation. He holds a
Diploma and Graduate Diploma
in Business Administration from
the Australian Institute of Business
Administration and was a Fellow
Member of the Institute. Mr Tang
was also a Professional Member of
the British Computer Society. While
lecturing in Ngee Ann Polytechnicfrom 1978 to 1986, he was granted
a scholarship to the City University,
London where he obtained the
specialist Post Graduate Diploma
in Business Systems and Design
in 1981.
06.Mr Paul Chong
Mr Paul Chong is the Group PRManager of ECS Holdings Limited
and also concurrently, the Vice
President, Marketing of ECS
Computers (Asia) Pte Ltd, the
Groups wholly-owned Singapore
subsidiary. As Group PR Manager,
Mr Chong is responsible for
the Groups branding and
communication programs,
publicity, corporate affairs
and internal communication
between management and
employees. In his role as Vice
President, Marketing, Mr Chong
is responsible for providing
comprehensive marketing
communications solutions such
as direct marketing programs,
promotions, events, seminars,
tradeshows and advertising. Prior
to joining the ECS Group in 1997,
Mr Chong worked for six years
in the public sector of Singaporehandling national IT initiatives
and training and development
programs. Mr Chong holds a
bachelor degree in Business
Administration from the National
University of Singapore and a
Master of Business Administration
Degree from the University of
Western Australia.
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group structure
ECSHOLDINGSLI
MITED
CHINA
ECS Technology
(China) Limited100%
ECS
Technology
(Guangzhou)
Co., Ltd100%
ECS
Technology
Co., Ltd
100%
ECS
(Shanghai)
Management
Co., Ltd100%
ECS China
Technology
(Shanghai)
Co., Limited100%
EIT info-tech
Limited
100%
ECS
Technology
(HK) Co.,
Limited
100%
THAILAND
The ValueSystems Co., Ltd.
100%
MALAYSIA
ECS ICT
Berhad41%
ECS KU
Sdn Bhd
100%
ECS Astar
Sdn Bhd
100%
ECS KUSH
Sdn Bhd
100%
ECS Pericomp
Sdn Bhd
100%
SINGAPORE
ECS Computers
(Asia) Pte Ltd100%
Pacic City
(Asia Pacic)
Pte Ltd100%
ECS Enterprise
Solutions
Pte Ltd100%
INDONESIA
ECS Indo
Pte Ltd
89%
PT ECS
Indo Jaya
100%
PHILIPPINES
ECS Infocom
(Phils) Pte. Ltd.100%
MSI-ECS
Phils., Inc49.99%
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corporate information
Board o Directors
Mr Tay Eng Hoe (Chairman, Non-Executive Director)Mr Narong Intanate (Executive Director)
Mr Foo Sen Chin (Non-Executive Director)
Mr Leong Horn Kee (Independent Director)
Mr Tan Hup Foi (Independent Director)
Mr Koh Soo Keong (Independent Director)
Mr Mao Xiangqian (Executive Director, appointed on 3 May 2010)
Mr Ong Wei Hiam (Non-Executive Director, appointed on 3 May 2010)
Audit Committee
Mr Leong Horn Kee (Chairman)
Mr Tan Hup Foi
Mr Koh Soo Keong
Compensation Committee
Mr Koh Soo Keong (Chairman)
Mr Mr Leong Horn Kee
Mr Tan Hup Foi
Nominating Committee
Mr Tan Hup Foi (Chairman)
Mr Leong Horn Kee
Mr Koh Soo Keong
Mr Tay Eng Hoe
Senior Management at ECS Holdings LimitedMr Narong Intanate (Group Chief Executive Ofcer)
Mr Eddie Foo Toon Ee (Group Chief Financial Ofcer)
Mr Lim Tow Cheng (Senior Vice President, Business Development)
Senior Management at ECS Holdings Limiteds Subsidiaries
and Associate Companies
Mr Mao Xiangqian (Chief Executive Ofcer)
ECS Technology (China) Limited
Mr Somsak Pejthaveeporndej (President)
The Value Systems Co., Ltd.
Mr Foo Sen Chin (Managing Director)
ECS ICT Berhad
Mr Sebastian Chong (President)
ECS Computers (Asia) Pte Ltd
Ms Lina Choo (Executive Director)
PT ECS Indo Jaya
Mr Jimmy Go (President)
MSI-ECS Phils., Inc.
Corporate Executives
Mr Eugene Tan (Group Financial Controller)
Ms Peggy Leong-Yeo (Vice President ,Group Human Resources)
Mr Newman Li (Senior Manager, Group Internal Audit)
Ms Lim Yok Yen (Regional Business Controller)Mr Tang Kin Meng (Group MIS Advisor)
Mr Paul Chong (Group PR Manager)
Auditors
KPMG LLP
Certied Public Accountants
16 Rafes Quay #22-00 Hong Leong Building
Singapore 048581
Partner-in-charge : Mr Tran Phuoc
(Since FY2006)
Registrar
M&C Services Private Limited138 Robinson Road #17-00 The Corporate Ofce
Singapore 068906
Registered Oce
19 Kallang Avenue #07-153 Singapore 339410
Principal Bankers
ANZ Bank
Citibank N.A.
DBS Bank Ltd
KBC Bank N.V.
Malayan Banking Berhad
Oversea-Chinese Banking Corporation
Standard Chartered Bank
Sumitomo Mitsui Banking Corporation
United Overseas Bank Limited
Company SecretaryMr Eddie Foo Toon Ee, CPA
ECS Oces
ECS Holdings Limited
19 Kallang Avenue #07-153 Singapore 339410
Website : www.ecs.com.sg
ECS Technology (China) Limited
6/7F, Wanliuyicheng Building,
No.11 Changchunqiao Road, Haidian District,
Beijing, P.R.C(100089)
Branches in Beijing, Chengdu, Guangzhou,
Hong Kong, Shanghai, Shenyang, Shenzhen,
Wuhan, Xian
Website : www.ecschina.com
The Value Systems Co., Ltd.
21st Floor, Serm-Mit Tower
159/35 Sukhumvit 21 Road (Asok)
North Klongtoey, Wattana
Bangkok 10110, Thailand
Branches in Bangkok, Chiang Mai, Hat Yai,
Khon Kaen, Nakhon Ratchasima, Phitsanulok,
Phuket, Rayong, Surat Thani
Website : www.value.co.th
ECS ICT Berhad
Lot 3, Jalan Teknologi 3/5
Taman Sains Selangor, Kota Damansara
Selangor, Malaysia
Branches in Johor Bahru, Kota Kinabalu,
Kuantan, Kuching, Penang, Petaling Jaya
Websites : www.ecsm.com.my
ECS Computers (Asia) Pte Ltd
19 Kallang Avenue #07-153 Singapore 339410
Website : www.ecs.com.sg
PT ECS Indo Jaya
Ruko Mangga Dua Square
Blok E 34-37 Jl. Gunung Sahari Raya No.1
Jakarta Utara 14420, Indonesia
Branches in Bali, Bandung, Jakarta, Makassar,
Medan, Palembang, Semarang, Surabaya,
Yogyakarta
Website : www.ecsindo.com
MSI-ECS Phils., Inc.
Topy II Bldg, #3 Economia St.,
Libis, Quezon City,
Philippines 1110Branches in Cebu, Davao, Manila
Website : www.msi-ecs.com.ph
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financiaL HigHLigHts
REVENUE(S$ million)
# Due to deconsolidation of the Groupsassociate company, ECS ICT Berhadwhich was listed on the main market ofBursa Malaysia on 15 April, 2010
0
500
1500
2500
1000
2000
3500
3000
4000
FY 06
2,339.3
FY 07
2,789.4
FY 08
2,949.9
FY 09
3,252.0
FY10
#3,085.4
0
0.5
1.5
2.5
1
2
3.5
3
4
FY 06
1.5
FY 07
1.5
FY 08
2.7
FY 09
3.0
FY10
3.6
DIVIDENDS PER SHARE (cents) RETURN ON EQUITY(%) RETURN ON CAPITALEMPLOYED
(%)
0
3
9
15
21
6
12
18
FY 06 FY 07 FY 08 FY 09 FY10
24
11.0 1
1.6
13.0
15.4
19.1
0
3
9
15
21
6
12
18
FY 06 FY 07 FY 08 FY 09 FY10
24
9.1 1
0.0 1
1.7 1
2.2
15.3
PROFITABILITY (S$ million)
80
Net Proft Attributable to Equity Holders
0
10
30
50
70
20
40
60
FY 06
20.1
FY 07
23.4
FY 08
29.4
FY 09
38.2
FY10
53.0
SHAREHOLDERS
EQUITY (S$ million)
0
50
150
250
350
100
200
300
FY 06
190.1
FY 07
212.7
FY 08
237.8
FY 09
259.5
FY10
296.6
400
REVENUE BY GEOGRAPHICAL
SEGMENT(S$ million)
North Asia
1,779.0
Southeast Asia
1,306.4
REVENUE BY BUSINESS SEGMENT (S$ million)
# Due to deconsolidation of the Groups associate company, ECS ICT Berhad which was listed onthe main market of Bursa Malaysia on 15 April, 2010
0
500
1500
2500
1000
2000
3500
3000
4000
FY 06
23.22,339.3
FY 07
32.22,789.4
FY 08
2,949.9
33.6
FY 09
3,252.0
29.9
FY 10
#3,085.4
24.5
Enterprise Systems Distribution IT Services
1,416.0
900.1
1,792.9
964.3
1,783.0
1,133.3
2,034.2
1,187.9
1,928.4
1,132.5
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2010 awarDs
COUNTRY AWARDED BY AWARD
ECS Holdings DP Information S1000 - Ranked 20th for Top Public-listed Company Ranked by Sales
TurnoverECS Holdings DP Information S1000 - Ranked 104th for Top Company Ranked by Sales Turnover
ECS China CBI News ECS China Awarded 2nd in Top 100 IT Distribution Firms by CBINEWS
ECS China China ComputerMagazine
ECS China Awarded 2nd in Top 100 Distribution Firms by ChinaComputer Magazine
ECS China Microsoft The Fastest Growing Award In Microsoft Authorized Distributors 2010
ECS Thailand Cisco Systems Top Distributor Of The Year 2009
ECS Thailand Microsoft Microsoft Distribution Partner of the Year FY2010
ECS Thailand Sun Microsystems RISE! Award
ECS Thailand Symantec Top Symantec Performing Distributor Award FY2010
ECS Thailand Symantec Top Value Added Distributor Asia South Region
ECS Malaysia AutoCad LT FY10 Highest Over Achievement Distributor
ECS Malaysia Buffalo Best Sales Growth Award
ECS Malaysia HP Top Performing Partner Sales Representative - HP Attach Services
ECS Malaysia HP ESSN The C.E.O. Award
ECS Malaysia HP ESSN Industry Standard Servers - Top Wholesaler
ECS Malaysia HP ESSN StorageWorks - Top Wholesaler
ECS Malaysia HP PSG Signicant Contribution - Wholesaler HP Consumer Desktop &Notebook PC
ECS Malaysia HP PSG Commercial Workstation Top Wholesaler
ECS Malaysia HP TSG Top Performing Master Parts Reseller for Asia Pacic, ReplacementParts Business
ECS Malaysia Printronix Most Signicant Business Improvement
ECS Singapore IBM 2010 Signicant Growth Software Group - Value Added Distributor
ECS Singapore Lenovo Winner - T1 Distributor, ThinkPad Challenge Award
ECS Singapore Lenovo Top Distributor of the Year 2010 - Key Account Business
ECS Singapore Oracle System Dsitributor Partner of the Year FY10
ECS Singapore Oracle Value-Added Distributor Partner of the Year FY10
ECS Singapore Lenovo Winner - T1 Distributor, ThinkPad Challenge Award
ECS Singapore Lenovo Top Distributor of the Year 2010 - Key Account Business
ECS Indonesia Cisco The Best Distributor FY10
ECS Indonesia Cisco The Best Services Strategic Distributor FY10
ECS Indonesia Hewlett-Packard The Best PSG Channel Coverage Wholesaler 1H 2010
ECS Philippines Acer Best in Growth Award (Consumer Products)
ECS Philippines HP HP PSG Wholesaler of the Year - Commercial Business (FY 2010)
ECS Philippines HP HP SWD Wholesaler of the Year (FY 2010)
ECS Philippines HP IWS (Inkjet) Wholesaler of the Year Award
ECS Philippines HP HP PSG (PC & Notebook) Wholesaler of the Year Award
ECS Philippines HP HP ISS (Server) Wholesaler of the Year Award
ECS Philippines HP Product Manager of the Year Award
ECS Philippines Lenovo Distributor of the Year Award - Commercial
ECS Philippines Lenovo PM of the Year Award Commercial
ECS Philippines Lenovo PM of the Year Award - Consumer
ECS Philippines Lenovo Distributor Sales Representative of the Year Award - Commercial
ECS Philippines Lenovo System Engineer of the Year Award - Commercial
ECS Philippines Lenovo 100% Achievement Award - Commercial
ECS Philippines Lenovo Distributor of the Year award - SMB Category
ECS Philippines Oracle Value Added Distributor of the Year
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2010 miLestones
COUNTRY MONTH DESCRIPTION OF MILESTONE
ECS China Jan - Mar 10 ECS China Appointed as Distributor for Lenovo
ECS China Jan - Mar 10 ECS China Appointed as Distributor for InfortrendECS China Jan - Mar 10 ECS China Appointed as Distributor for Motorola
ECS China Jan - Mar 10 ECS China Appointed as Distributor for Roucore
ECS Malaysia Jan - Mar 10 ECS Astar Sdn Bhd Appointed as Distributor for ASUS
ECS China Apr - Jun 10 ECS China Appointed as Distributor for Dvision
ECS China Apr - Jun 10 ECS China Appointed as Distributor for Fluke
ECS China Apr - Jun 10 ECS China Appointed as Distributor for Tandberg
ECS Thailand Apr - Jun 10 The Value Systems established the Corporate Social Responsibilitycampaign of The Fairy Tale Project IV at Banplaiklongnoi School,Krathum Baen District, Samut Sakhon province
ECS Thailand Apr - Jun 10 The Value Systems Appointed as Distributor for IronPort
ECS Malaysia Apr - Jun 10 ECS Astar Sdn Bhd Appointed as Distributor for Bakbone
ECS Malaysia Apr - Jun 10 ECS Pericomp Sdn Bhd Appointed as Distributor for Fujitsu
ECS Malaysia Apr - Jun 10 Listing of ECS ICT Berhad on the Main Market of Bursa MalaysiaSecurities Berhad
ECS Singapore Apr - Jun 10 ECS Singapore Appointed as Distributor for Huawei Symantec
ECS Singapore Apr - Jun 10 ECS Singapore Appointed as Distributor for Stratus
ECS Indonesia Apr - Jun 10 ECS Indonesia Appointed as Distributor for APC
ECS Indonesia Apr - Jun 10 ECS Indonesia Appointed as Distributor for Belkin
ECS Philippines Apr - Jun 10 ECS Philippines Appointed as Distributor for Samsung Notebook
ECS Holdings Jul - Sep 10 Appointment of Mr Narong Intanate as Group Chief Executive Ofcer
ECS Holdings Jul - Sep 10 US$89M Syndicated LoanECS Holdings Jul - Sep 10 Appointment of Mr Tay Eng Hoe as Chairman
ECS China Jul - Sep 10 ECS China Appointed as Distributor for Buffalo
ECS China Jul - Sep 10 ECS China Appointed as Distributor for Greenplum
ECS Thailand Jul - Sep 10 The Value Systems Appointed as Distributor for Canon
ECS Thailand Jul - Sep 10 The Value Systems Appointed as Distributor for Emerson
ECS Malaysia Jul - Sep 10 ECS Astar Sdn Bhd and ECS Pericomp Appointed as Distributor for APC
ECS Singapore Jul - Sep 10 ECS Singapore Appointed as Distributor for Promethean
ECS Singapore Jul - Sep 10 ECS Singapore Appointed as Distributor for APC
ECS Philippines Jul - Sep 10 ECS Philippines Appointed as Distributor for Microsoft Hardware
ECS Holdings Oct - Dec 10 ECS Proposed TDRECS China Oct - Dec 10 ECS China Appointed as Distributor for Apple iPad
ECS China Oct - Dec 10 ECS China Appointed as Distributor for Apple iPhone
ECS China Oct - Dec 10 ECS China Appointed as Distributor for Epson
ECS China Oct - Dec 10 ECS China Appointed as Distributor for Wescom
ECS China Oct - Dec 10 ECS China Appointed as Distributor for Cisco
ECS China Oct - Dec 10 ECS China Appointed as Distributor for SafeNet
ECS China Oct - Dec 10 ECS China Appointed as Distributor for Found
ECS China Oct - Dec 10 ECS China Appointed as Distributor for ZTE
ECS Thailand Oct - Dec 10 The Value Systems established the Corporate Social Responsibilitycampaign of The Tree Planting Project IV at Suan Pachumchon Moo 1Community Forest, Phra Pradaeng district, Samut Prakan province.
ECS Thailand Oct - Dec 10 The Value Systems Appointed as Distributor for Fortinet
ECS Thailand Oct - Dec 10 The Value Systems Appointed as Distributor for Extreme Network
ECS Thailand Oct - Dec 10 The Value Systems Appointed as Distributor for Dell
ECS Malaysia Oct - Dec 10 The Company held a Recycling Day campaign at its premise to promotethe principle of Reduce, Reuse and Recycle
ECS Malaysia Oct - Dec 10 ECS Astar Sdn Bhd Appointed Exclusive Distributor of YTLCommunications 4G Devices
ECS Singapore Oct - Dec 10 ECS Singapore Appointed as Distributor for Dell
ECS Singapore Oct - Dec 10 ECS Singapore Appointed as Distributor for Lexmark
ECS Singapore Oct - Dec 10 ECS Singapore Appointed as Distributor for Trend Micro
ECS Indonesia Oct - Dec 10 ECS Indonesia Appointed as Distributor for Lenovo
ECS Philippines Oct - Dec 10 ECS Philippines Appointed as Distributor for BelkinECS Philippines Oct - Dec 10 ECS Philippines Appointed as Distributor for Oracle Sun
ECS Philippines Oct - Dec 10 ECS Philippines Appointed as Distributor for Dell
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corporate
governance statement
ECS Holdings Limited (the Company) is committed to comply with the Code of Corporate Governance 2005
issued by the Corporate Governance Committee. It believes in maintaining a high standard of corporategovernance and has put in place policies and practices that will help to protect its shareholders interest and
enhance long term shareholder value. This report describes the main corporate governance practices that are
adopted by the Company.
(A) BOARD MATTERS
The Boards Conduct o its Aairs
Principle 1 : Every company should be headed by an effective Board to lead and control the company.
The Board is collectively responsible for the success of the company. The Board works withManagement to achieve this and the Management remains accountable to the Board.
The Boards role is to:
a) provide entrepreneurial leadership, set strategic aims, and ensure that the necessary nancial and human
resources are in place for the company to meet its objectives;
b) establish a framework of prudent and effective controls which enables risk to be assessed and managed;
c) review management performance; and
d) set the companys values and standards, and ensure that obligations to shareholders and others are
understood and met.
The Board meets to consider the following, without limitation, corporate events and/or actions:
a) approval of quarterly results announcements;
b) approval of annual report and accounts;
c) declaration of interim dividend and proposal of nal dividends;
d) approval of corporate strategy;
e) authorisation of major transactions;
f) review and approval of annual budgets;
g) compensation of senior management personnel; andh) convening of shareholders meetings.
All directors must objectively take decisions in the interests of the Company.
The Board has delegated the day-to-day management and running of the Company to the management
headed by our Group Chief Executive Ofcer (Group CEO), while reserving certain key issues and policies
for its approval. Additionally, to facilitate effective management, certain functions have been delegated to the
following sub-committees, each of which has its own written terms of reference:
a) the Nominating Committee;
b) the Compensation Committee; and
c) the Audit Committee.
Newly-appointed directors are given briengs by the Management on the Groups activities and its strategic
directions. Changes to regulations and accounting standards are monitored closely by Management. To keep
pace with regulatory changes, where these changes have an important bearing on the Companys or directors
disclosure obligations, directors are briefed either during Board meetings or at specially convened sessions
conducted by professionals.
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corporate
governance statement
The Board intends to hold about four meetings each year and shall also hold informal meetings regularly. The
Companys Articles of Association provide for telephonic and videoconference meetings. The number of Boardmeetings held since the date of the last annual report, as well as the attendance of every Board member at
those meetings is as follows:
DIRECTORS ATTENDANCE AT BOARD MEETINGS
Board
Board Member No. Of Meetings Attended
Tay Eng Hoe 5 5
Narong Intanate 5 5
Foo Sen Chin 5 5
Leong Horn Kee 5 5
Koh Soo Keong 5 5
Tan Hup Foi 5 5
Mao Xiangqian (appointed on 3 May 2010) 5 5
Ong Wei Hiam (appointed on 3 May 2010) 5 5
Li Jia Lin (resigned on 27 September 2010) 3 3
Board Composition and Guidance
Principle 2 : There should be a strong and independent element on the Board, which is able to exercise
objective judgement on corporate affairs independently, in particular, from Management. No
individual or small group of individuals should be allowed to dominate the Boards decision
making.
The Board comprises eight directors of which six are non-executive directors (including three independent
directors) and two executive directors. The Company places great importance on the quality of its Board of
Directors. The Group achieves this by appointing to its Board highly respected individuals and prominent
leaders in their respective professions. The Board comprises individuals with proven track record in the public
and/or corporate sector, and each is a highly respected member of the business community. As a group, they
provide core competencies such as accounting or nance, business or management experience, industryknowledge, strategic planning and customer-based experience or knowledge. Key information regarding the
directors is given in the Board of Directors section on pages 14 to 15 of the annual report.
Chairman and Chie Executive Ocer
Principle 3 : There should be a clear division of responsibilities at the top of the company - the working of the
Board and the executive responsibility of the companys business - which will ensure a balance
of power and authority, such that no one individual represents a considerable concentration of
power.
Mr Tay Eng Hoe, a non-executive director, was appointed as the Chairman of the Company on 27 September
2010. Mr Narong Intanate was appointed as Group CEO with effect from 1 July 2010. The Chairman and the
Group CEO each perform separate functions to ensure that there is an appropriate balance of power and
authority, and that accountability and independent decision-making are not compromised. The Chairman is
responsible for the functioning of the Board. The Group CEO has full executive responsibilities over the running
of the Groups business, the business direction and operational decisions of the Group. No individual or small
group of individuals dominate the Boards decision making process.
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Board Membership & Board Perormance
Principle 4 : There should be a formal and transparent process for the appointment of new directors to the
Board.
Principle 5 : There should be a formal assessment of the effectiveness of the Board as a whole and the
contribution by each director to the effectiveness of the Board.
The Nominating Committee was formed on 6 January 2003 and comprises four directors, including three
independent directors, Mr Tan Hup Foi, Mr Leong Horn Kee, Mr Koh Soo Keong and one non-executive director,
Mr Tay Eng Hoe. Mr Tan Hup Foi is the Chairman of the Nominating Committee.
The role of the Nominating Committee is to perform the following functions:
a) identies and reviews all nominations for Board appointments and re-nominations of directors;
b) assesses the effectiveness of the Board as a whole and the contribution by each individual director to the
effectiveness of the Board; and
c) determines whether or not a Director is independent.
In accordance with the Companys Articles of Association, at each Annual General Meeting, one-third of the
Board shall retire from ofce by rotation provided that no director holding ofce as Managing or Joint Managing
Director shall be subject to retirement by rotation or be taken into account in determining the number of
directors to retire.
Access to Inormation
Principle 6 : In order to full their responsibilities, board members should be provided with complete,
adequate and timely information prior to board meetings and on an on-going basis.
All directors are provided with complete, adequate and timely information prior to meeting and on a regular
basis to enable them to perform their roles properly. All directors have separate and independent access to
senior management and the company secretary. The company secretary has dened roles and responsibilities
and attends all Board and sub-committee meetings of the Company. Should directors, whether as a group orindividually, need independent professional advice in the furtherance of their duties, cost of such professional
advice will be borne by the Company.
(B) REMUNERATION MATTERS
Procedures or Developing Remuneration Policies
Principle 7 : There should be a formal and transparent procedure for xing the remuneration packages of
individual directors. No director should be involved in deciding his own remuneration.
The Compensation Committee oversees the general compensation of employees of our Group with a goal
to motivate, recruit and retain employees and directors through competitive compensation and progressive
policies. In particular, the Compensation Committee is responsible for overseeing our employee prot sharing
scheme as well as the share incentives, including the ECS Share Option Scheme I, ECS Share Option Scheme
II and ECS Performance Shares Scheme. The Compensation Committee of the Board comprises Mr Koh Soo
Keong, Mr Leong Horn Kee, and Mr Tan Hup Foi. Mr Koh Soo Keong is the Chairman of the Compensation
Committee.
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Level and Mix o Remuneration; Disclosure o Remuneration
Principle 8 : The level of remuneration should be appropriate to attract, retain and motivate the directors
needed to run the company successfully but companies should avoid paying more than is
necessary for this purpose. A signicant proportion of executive directors remuneration should
be structured so as to link rewards to corporate and individual performance.
Principle 9 : Each company should provide clear disclosure of its remuneration policy, level and mix of
remuneration, and the procedure for setting remuneration, in the companys annual report.
It should also provide disclosure in relation to its remuneration policies to enable investors
to understand the link between remuneration paid to directors and key executives, and
performance.
The Groups remuneration policy is to provide a competitive remuneration package so as to attract, retain
and motivate directors and senior management of the required experience and expertise to run the Group
successfully. In setting remuneration packages for executive directors and senior management of the
Group, the pay and employment conditions within the industry and in comparable companies are taken into
consideration.
The compensation package of the Groups executive directors including its Group CEO and senior
management consists of salary, allowances, share options and bonuses which are conditional upon meeting
certain performance targets.
Non-executive directors have remuneration packages which consist of a directors fee component and a share
option component pursuant to the Companys Share Option Scheme. The directors fee policy is based on a
scale of fees divided into basic retainer fees as a director and additional fees for serving on board committees.
Directors fees for non-executive directors are subject to the approval of shareholders at the Annual General
Meeting. The report on directors remuneration is given below:
SUMMARY COMPENSATION TABLE FOR THE YEAR ENDED 31 DECEMBER 2010
Name of Director
Salary
%
Bonus
%
Fees
%
Allowances andother Benets
%
Total
%
$1,000,000 to below $2,500,000
Tay Eng Hoe 24 72 - 4 100
$500,000 to below $1,000,000
Narong Intanate 31 64 - 5 100
Foo Sen Chin 21 68 - 11 100
Mao Xiangqian 58 39 - 3 100
Below $500,000
Li Jia Lin - - 100 - 100
Leong Horn Kee - - 100 - 100Tan Hup Foi - - 100 - 100
Koh Soo Keong - - 100 - 100
Ong Wei Hiam - - - - -
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Rather than setting out the names of the top ve key executives who are not also directors of the Company, we
have shown a Group-wide cross-section of executive remuneration by number of employees earning $100,000upwards in bands of $250,000 below. This should give a macro view of the remuneration pattern in the Group,
while maintaining condentiality of staff remuneration matters.
NO. OF EXECUTIVES IN REMUNERATION BANDS
Total Compensation (S$)
No. ofEmployees
(Note 1)
Total FixedCompensation
(Note 2)
Total VariableCompensation
(Note 3)Total
Remuneration
$100,000 to $249,999 12 $1,579,078 $175,500 $1,754,578
$250,000 to $499,999 9 $2,036,328 $1,836,882 $3,873,210
$500,000 to $749,999 5 $1,279,348 $1,658,488 $2,937,836
Total 26 $4,894,754 $3,670,870 $8,565,624
Notes :
1. Including employees in local and overseas subsidiaries.
2. Inclusive of salaries, AWS, related CPF and other statutory contributions, allowances and fringe-benets.
3. Sales commission, bonus and other statutory contributions.
There are no employees in the Group who are immediate family members of a director or the Group CEO.
(C) ACCOUNTABILITY AND AUDIT
Accountability
Principle 10 : The Board should present a balanced and understandable assessment of the companys
performance, position and prospects.
In presenting the annual nancial statements and quarterly announcements to shareholders, it is the aim of the
Board to provide the shareholders with a detailed analysis, explanation and assessment of the Groups nancial
position and prospects. On a quarterly basis, Board members are provided with business and nancial reports
comparing actual performance with budget and with prior year comparisons with highlights on key business
indicators and any signicant business development. In addition, the Group CEO communicates regularly
with Board members through informal meetings and phone calls with appropriate updates on Company
developments.
Audit Committee
Principle 11 : The Board should establish an Audit Committee with written terms of reference which clearly set
out its authority and duties.
The Audit Committee comprises three members, of which all members, including the Chairman, are
independent. The members of the Audit Committee at the date of this report are:
Leong Horn Kee Chairman
Tan Hup Foi Member
Koh Soo Keong Member
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The Audit Committee meets periodically to perform the following functions:-
a) reviewing the quarterly, half-yearly and annual nancial statements before recommending them to the
Board for approval;
b) reviewing interested person transactions (as dened in Chapter 9 of the Listing Manual (Listing Manual)
of the Singapore Exchange Securities Trading Limited (SGX-ST), including such transactions conducted
under the shareholders general mandate previously obtained;
c) reviewing with external auditors the audit plan, their evaluation of the systems of internal controls, their
annual reports and their management letters and managements response;
d) reviewing and recommending to the Board the re-appointment of the external auditors, taking into
consideration the non-audit services rendered by the external auditors and being satised that the nature
and extent of such services will not prejudice the independence and objectivity of the external auditors;
e) reviewing the scope of internal audit procedures and the results and effectiveness of the internal audit;and
f) considering other matters as requested by the Board.
The Audit Committee has full access to and co-operation of the Companys management and the internal
auditors and has full discretion to invite any director or executive ofcer to attend its meetings. The auditors,
both internal and external, have unrestricted access to the Audit Committee. Reasonable resources have been
made available to the Audit Committee to enable them to discharge their duties.
The Audit Committee held four meetings since the date of the last annual report. The Audit Committee reviewed
the Interested Person Transactions for the year ended 31 December 2010 in accordance with the terms
of the Shareholders Mandate for such transactions as were approved on 30 April 2010. Interested Person
Transactions with a total value of $23.6 million were examined and the Audit Committee is of the opinion that
the said transactions were carried out on prevailing commercial terms and did not prejudice the interest of the
shareholders of the Company.
The Audit Committee had reviewed and conrmed that the methods and procedures for determining the
transaction prices relating to Interested Person Transactions have not changed since the last shareholders
approval. The Audit Committee also conrms that the methods and procedures are sufcient to ensure that the
transactions will be carried out on normal terms and will not be prejudicial to the interests of the Company and
its minority shareholders.
The Audit Committee had reviewed the non-audit services provided by the external auditors and is satised
with the independence of the auditors. The Audit Committee has recommended to the Board that the auditors,
KPMG LLP, be nominated for re-appointment at the forthcoming Annual General Meeting of the Company.
Meetings and attendance are as follows:
Audit Committee
Name of Director No. Of Meetings Attended
Leong Horn Kee (Chairman) 4 4
Tan Hup Foi 4 4Koh Soo Keong 4 4
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Internal Controls
Principle 12 : The Board should ensure that the Management maintains a sound system of internal controls to
safeguard the shareholders investment and the companys assets.
The Board acknowledges that it is responsible for the Groups system of internal control. It believes that in the
absence of any evidence to the contrary and from due enquiry, the system of internal controls that has been
maintained by the Group throughout the nancial year is adequate to meet the needs of the Group in its current
business environment. However, the Board notes that the system of internal controls is designed to manage
rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not
absolute assurance against material misstatements or loss.
Internal Audit
Principle 13 : The Company should establish an internal audit function that is independent of the activities it
audits.
The Group has an internal audit department which is independent of the activities it audits. It performs nancial
audits, implements operational and compliance controls. The Internal Auditor reports primarily to the Chairman
of the Audit Committee and administratively to the Group CEO. The Internal Auditor plans its internal audit work
in consultation with, but independent of, Management, and its yearly plan is submitted to the Audit Committee
for approval at the beginning of each year. The Internal Auditor reports to the Audit Committee quarterly
regarding its ndings. The Audit Committee also meets with the Internal Auditor at least once during the yearwithout the presence of Management. The Audit Committee also ensures that the internal audit function is
adequately resourced, and will review annually the adequacy of the internal audit function.
The internal auditors are expected to meet or exceed the standards set by nationally or internationally
recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by
The Institute of Internal Auditors.
(D) COMMUNICATION WITH SHAREHOLDERS
Principle 14 : Companies should engage in regular, effective and fair communication with shareholders.
Principle 15 : Companies should encourage greater shareholder participation at AGMs, and allow
shareholders the opportunity to communicate their views on various matters affecting the
company.
The Group does not practice selective disclosure. In line with continuous obligations of the Group pursuant to
the Listing Manual and the Companies Act, Chapter 50, of Singapore, the Boards policy is that all shareholders
are informed of all major developments of the Group. Price-sensitive information is released publicly, and
quarterly results and annual reports are announced or issued within the mandatory period and are available
on the Groups website. Thereafter, a brieng by Management is held jointly for the media and analysts every
half yearly. All shareholders of the Group receive the annual report and notice of Annual General Meeting.
Shareholders are encouraged to attend the Annual General Meeting to ensure a high level of accountability and
to stay informed of the Groups strategy and goals.
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(E) DEALING IN SECURITIES
The Company has adopted its own internal Code of Best Practices on Securities Transactions (Code) with
regard to dealings in the Companys shares by its directors and executives. It emphasizes that the law on
insider dealing is applicable at all times, notwithstanding that the Code provides certain window periods for
directors and executives to deal in the shares of the Company. The Code also enables the Company to monitor
such share transactions by requiring directors and executives to report to the Company whenever they deal
in the Companys shares. In the opinion of the directors, the Company has complied with the Best Practices
stipulated in Listing Manual Rule 1207 (18) of the SGX-ST Listing Manual.
(F) INTERESTED PARTY TRANSACTIONS
The Group has adopted an internal policy in respect of any transactions with interested persons and has
procedures established for the review and approval of the Groups Interested Party Transactions (IPT).
Pursuant to Rule 907 of the Listing Manual, the Group has the following IPTs entered into during the nancial
year, together with the corresponding aggregate value of the IPTs entered into with the same interested person,
are disclosed as follows:
Name of Interested Person
Aggregate value of all IPTs during
the nancial year under review
(excluding transactions lessthan $100,000 and transactions
conducted under shareholders
mandate pursuant to Rule 920 of
Listing Manual of SGX-ST)
Aggregate value of all IPTs
conducted under shareholders
mandate pursuant to Rule 920of Listing Manual of SGX-ST
(excluding transactions less than
$100,000)
Transactions for the sale of goods
and services with Vnet Capital Co.,
Ltd and its subsidiaries $313,743 $9,413,050
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Directors
report
We are pleased to submit this annual report to the members of the Company together with the audited nancial
statements for the nancial year ended 31 December 2010.
Directors
The directors in ofce at the date of this report are as follows:-
Tay Eng Hoe
Narong Intanate
Foo Sen Chin
Leong Horn Kee
Tan Hup Foi
Koh Soo Keong
Mao Xiangqian (Appointed on 3 May 2010)
Ong Wei Hiam (Appointed on 3 May 2010)
Directors interests
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter
50 (the Act), particulars of interests of directors who held ofce at the end of the nancial year (including those
held by their spouses and infant children) in shares, debentures, warrants or share options of the Company and
in related corporations (other than wholly-owned subsidiaries) are as follows:
Name of director and corporation in which interests are held
Holdings atbeginning
of the year/date ofappointment
Holdings at endof the year
ECS Holdings Limited
- options to subscribe for ordinary shares at $0.550 per share
between 15/10/2011 and 15/10/2021
Narong Intanate - 1,500,000
Foo Sen Chin - 300,000
Mao Xiangqian - 900,000
ECS Holdings Limited
- options to subscribe for ordinary shares at $0.550 per share
between 15/10/2011 and 15/10/2016
Tay Eng Hoe - 700,000
Leong Horn Kee - 400,000
Koh Soo Keong - 400,000
Tan Hup Foi - 400,000
Ong Wei Hiam - 300,000
Except as disclosed in this report, no director who held ofce at the end of the nancial year had interests
in shares, debentures, warrants or share options of the Company, or of related corporations, either at the
beginning of the nancial year or date of appointment if later, or at the end of the nancial year.
Except as disclosed under the Share Options section of this report, neither at the end of, nor at any time
during the nancial year, was the Company a party to any arrangement whose objects are, or one of whose
objects is, to enable the directors of the Company to acquire benets by means of the acquisition of shares in ordebentures of the Company or any other body corporate.
There were no changes in any of the above mentioned interests in the Company between the end of the
nancial year and 21 January 2011.
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Directors
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During the nancial year, certain of its subsidiaries have, in the normal course of business entered into
transactions with companies in which Mr Li Jia Lin (resigned on 27 September 2010) and Mr Narong Intanatehave an interest. These transactions include the purchase and sale of information t