THE FUTURE IN SMART METERING SOLUTIONS

THE FUTURE IN SMART METERING SOLUTIONS

ANNUAL REPORT 2008

Global Reports LLC

To provide total metering solutions and quality service

to global customers, fair and consistent returns to its

shareholders and a challenging, fulfilling work environment

for its employees.

cORPORATE PROFILE

vISION

MISSION

Contents01 Enhancing Value Through

Integrated Smart Metering Solutions

02 Letter to Shareholders05 Financial Highlights06 Board of Directors08 Key Executives

09 Corporate Structure10 Our Products14 Corporate Information15 Group Addresses16 Corporate Governance25 Financial Statements

EDMI is one of the leading smart metering solutions providers in the world. Based in Singapore, EDMI is focused on designing, developing and manufacturing innovative and technologically advanced energy meters and metering systems for the global utility industry. The Company’s metering portfolio includes a comprehensive range of premium quality metering products, advanced infrastructure and energy management systems.

EDMI’s metering products are fully compliant with IEC standards as well as specific national standards in several countries. Accredited to the latest quality standards, notably of OFGEM, SAC-SINGLAS and further awarded by SGS (UK) for our compliance

with the European Measuring Instruments Directive 2004/22/EC has indeed proven EDMI’s long term commitment to supply the highest standard of metering products and excellent customer service throughout the world.

EDMI has marketing offices and regional hubs in Singapore, Australia, China, Malaysia, Vietnam, Thailand, the Philippines and India. These centres serve as regional customer service and technical support centres which are responsible for supporting specific local market requirements. The Company also has an extensive sales distribution network in Asia, Europe, ASEAN, the Middle East and Africa.

To be a market leader in electronic energy meters and

metering solutions.

Global Reports LLC

ENHANcING vALUE THROUGH INTEGRATEd SMART METERING SOLUTIONS

Positioned to meet the growing global demand for advanced metering systems

EUROPE

AFRICA

ASIA

Tanzania

India

VietnamThailand

Philippines

Indonesia

ChinaTHEMIDDLE EAST

Australia

New Zealand

Sales AgentsEuropeAsiaThe Middle EastAfrica

Offices and Customer Service CentresSingaporeAustraliaChinaMalaysiaVietnamThailandIndiaPhilippines

Singapore

Malaysia

EdMI LIMITEd – ANNUAL REPORT 2008 01Global Reports LLC

LETTER TO SHAREHOLdERS

Dear Valued Shareholders,

Financial PerformanceThe operating environment in 2008 was set against a looming global economic crisis, wide swings in foreign exchange rates, peaking and dropping of oil prices all of which ravaged major economies and businesses worldwide. It is therefore somewhat consoling to note that the EDMI Group did well to remain profitable and indeed deliver double-digit growth in revenue and earnings for the year ended 31 December 2008 (“FY2008”). Group revenue increased 25.5% from $45.1 million in FY2007 to a record $56.6 million, underpinned by a 23.8% increase in the total number of meters delivered from 168,000 units in FY2007 to 208,000 units in FY2008. This sales level exceeded the previous high of $53.2 million set in FY2006.

In line with the increase in Group revenue, profit attributable to shareholders increased 37.7% from $1.4 million in FY2007 to $1.9 million in FY2008. The Group’s net profit could have been higher if not for a hefty foreign exchange loss of about $2.3 million caused by fluctuations in foreign exchange rates.

Earnings per share on a fully diluted basis increased from 0.74 cents to 0.91 cents for the year ended 31 December 2008. However, the Group’s net asset value per share decreased from 20.97 cents to 20.69 cents due to the significant decline in the fair value of the available-for-sale equity instrument to $813,000 as at 31 December 2008.

Business EnvironmentThe market potential for smart meters and metering systems is vast. The European Union (EU) has mandated smart meters for its member states to be implemented over

Left to right:

LEE KWANG MONGManaging Director

LEE PHUAN WENGExecutive Chairman

the next ten years. The United Kingdom (UK) government for example has plans for the replacement of 45 million gas and electricity meters within ten years. In France the EDF is expected to tender out some 30 million electricity meters within eight years. Spain, Germany, Benelux, Greece, Portugal and others are expected to follow suit.

In Asia, the demand is equally encouraging. In Australia, the networks are planning one form of Advanced Metering Infrastructure (AMI) or another, involving millions of meters. China is planning to replace all its residential meters with AMI or Automatic Meter Reading (AMR) electronic meters. In ASEAN, many utilities are seriously considering to implement or trial AMI or AMR systems, some with prepayment.

EDMI Growth into the Systems Business2008 saw another major milestone in the Company’s drive to become a supplier of smart meters and metering solutions. In January, we won a 55,000 metering point AMI contract in New Zealand with NGC Metering. This contract was expanded in August to 500,000 to become what is probably the largest GPRS AMI rollout in the Asia Pacific Region. EDMI will supply industrial and residential smart meters (Atlas series), GSM/GPRS modems and meter reading software (Multidrive) over a 5-year period. As at December 2008, 22,500 meters and modem points have been installed.

EDMI also completed the supply of 30,000 Three Phase Genius meters and Multidrive software for its Provincial Electric Authority of Thailand (PEA) AMR project. The project allows PEA to monitor and manage its energy demand with 15-minute reads. Amongst other benefits, the system has allowed PEA to capture full customer usage data, manage meters and minimize energy thefts. Its overwhelming success has led PEA to consider a second rollout.

EdMI LIMITEd – ANNUAL REPORT 200802Global Reports LLC

As we forge ahead in these challenging market conditions, we remain optimistic about the potential growth in demand for our metering products. With our wide range of products and ready solution offerings, we are poised to advance our market position in FY2009.

To date, EDMI meters and Meter Reading Software has been installed in the United Kingdom, Sweden, China, Tanzania, Philippines and Australia. Customers have found that using Multidrive instead of general AMR software allows for optimization of meter reading processes and to enjoy the full feature spectrum offered by our meters. The Company’s system roadmap for Zigbee LAN will allow for communication between In-Home Display modules, gas and water meters, and provision for pre-payment.

In the Philippines, we have installed several thousands of sub-meters in malls and industries for billing and energy management. We expect business in sub-metering to continue its growth as consumer awareness on energy saving is heightened.

With an impressive installation and performance track record behind us and the rapid realization of our development roadmap, we can hope to secure more systems orders in the coming years.

R&D and New ProductsEDMI continues to strengthen its R&D capabilities in Australia, Singapore and Shanghai to create innovative hardware and software solutions. These development centers also adopt and modify meters hardware, firmware and software to meet varying customers’ specifications in different parts of the world.

The Product Design & Development (PDD) teams have completed the development of the Atlas Mk10D, Mk10E and Mk10A for Australasia and Europe, and the Shanghai team also created a lower cost Mk29 for the ASEAN and Asian markets. We hope to complete the development of a new top-of-the-line series of Power Quality (PQ) meters by the end of this year. All these meters will be production-ready in 2009. In addition, we are in the process of completing an

AMR meter (Mk8B) which is developed in conjunction with BGlobal Metering for the UK residential market.

The emphasis in our R&D approach to hardware development has been to optimize communications and operational efficiency in AMI systems. The Company is already the market leader in GPRS solutions and is fast acquiring the technology and products to be a strong competitor in RF (Zigbee) for Home Area and Local Area Networks.

Technology CollaborationDuring the year, we entered into a technology partnership with Wavecom SA to develop advanced Automatic Meter Management (AMM) for remote management of meters and load. The advanced Atlas series meters were paired with Wavecom’s Wireless CPU to provide a wireless AMM solution for a leading utility in New Zealand. The collaboration also calls for the development of advanced GSM, GPRS and 3G modems to make GPRS the most reliable, cost effective and ease-of-use communication media.

EDMI also enters into a joint development with I-WOW to develop new multi-purpose chipsets for multi-media communication in AMI solutions. This is under the International Enterprise (IE) Singapore’s iPartners scheme.

Furthermore, EDMI is in discussion with various parties, as well, to implement Power Line Carrier (PLC) solutions which are popular in Europe and China.

ATLAS Measurement Pty LtdOur acquisition of the majority interest in Atlas Measurement Pty Ltd (ATLAS) was held up by a minor delay in seeking regulatory approval, which has been granted as at February 2009. ATLAS is involved in the business of supplying quality measurement and control equipment in the gas


LETTER TO SHAREHOLdERS

and electricity industries and associated repair services throughout Australia. This acquisition will enable EDMI to enter the gas metering market in Australasia and expand our product offering from electricity metering to include gas metering products. EDMI will also in turn market ATLAS’ gas metering products to our global customers.

EDMI Philippines – Sub-meteringEDMI Philippines Inc. (EPI) was incorporated in Manila to spearhead the Group’s thrust into the Philippines. Currently, EPI is handling several sub-metering projects for malls and condominiums, providing information for accurate and timely billing of electricity, and energy management. It has effectively become our incubation centre for our foray into the sub-metering market in ASEAN.

Going Challenges Ahead Amidst the current climate of economic uncertainty, the business environment has become extremely challenging and unpredictable. Nevertheless, we are well positioned to take advantage of continued demand for advanced meters and smart metering systems in the global market.

As our operations are conducted in multiple currencies, the high volatility and unpredictability of foreign currency fluctuations also mean inherent uncertainties may impact our future performance. We shall exercise prudence in managing foreign exchange risks and practise caution when pricing our contracts in foreign currencies.

As we forge ahead in these challenging market conditions, we remain optimistic about the potential growth in demand for our metering products. With our wide range of products and ready solution offerings, we are poised to advance our market position in FY2009.

We have a strong order-book, and as at 20 February 2009, our orders on hand amounted to approximately $22.0 million.

AppreciationOn behalf of our fellow Board members, we would like to extend our deepest appreciation to all the management and staff for their dedicated commitment and contribution to continually improve and enhance our products and services to our customers. We would also like to express our sincere gratitude to all our customers, loyal stakeholders, suppliers and business partners for their support and cooperation throughout the year. Last but not least, we wish to thank our fellow Directors for their invaluable counsel and guidance in the past year. Let us keep up the good work and look forward to an even better year ahead.

Lee Kwang MongManaging Director

Lee Phuan WengExecutive Chairman


FINANcIAL HIGHLIGHTS

(1) The basic earings per share is calculated based on the weighted average number of ordinary shares in issue during the year

(2) The net asset value per share is caclucated based on number of ordinary shares at end of the financial year

NET ASSET vALUE PER SHARE(2)

(cENTS)

2003 2004 2005 2006 2007 2008

12.71

20.52

14.47

20.97

16.95

REvENUE($MILLION)

2003 2004 2005 2006 2007 2008

25.744

53.155

30.188

45.121

37.482

56.636

20.69

BASIc EARNINGS PER SHARE(1)

(cENTS)

2003 2004 2005 2006 2007 2008

2.22

3.99

1.73

0.74

2.8

0.91

2003 2004 2005 2006 2007 2008

4.628

9.312

4.062

1.625

6.536

2.492

PROFIT BEFORE TAx($MILLION)


LEE PHUAN WENG is the Executive Chairman of EDMI and leads the Board in charting the overall business strategy of our Group. He was last re-elected as a Director of the Company on 27 April 2007.

Mr Lee has been the Chairman and Chief Executive Officer of SMB United Limited (“SMB”), EDMI’s ultimate holding company, since its listing on the Mainboard of SGX-ST in 1996. He is one of the co-founders of the SMB group and has been with the SMB group since 1973. He has more than 35 years of experience in the manufacturing and construction industries.

LEE KWANG MONG is the Chief Executive Officer and Managing Director of EDMI and is responsible for the overall management and direction of the Group. He was last re-elected as a Director of the Company on 29 April 2008.

Mr Lee is also a Non-Executive Director of SMB. He joined SMB in 1999 and relinquished his executive functions in SMB upon the listing of EDMI on SGX-SESDAQ in 2003. Prior to joining SMB, he was with Keppel Corporation Ltd from 1991 to 1999 where he held positions of President or Chief Executive Officer of various companies in Keppel’s stable of companies in the United States of America and the Philippines.

Mr Lee was a Colombo Plan Scholar and holds a Bachelor of Science in Mechanical Engineering (Honours) degree from University of Surrey, United Kingdom.

BOARd OF dIREcTORS

CHIN JIN MENG is the Executive Director of EDMI and plays a key role in the management and decision-making in key functional areas in our Group. He was last re-elected as a Director of the Company on 27 April 2007.

Mr Chin joined SMB as the Group Financial Manager in 1995 and assumed the position of Financial Controller of EDMI in 1998. Prior to joining SMB, he spent more than 7 years in the auditing and accounting industry with Teo, Foong and Wong, Deloitte & Touche LLP and Soh, Wong and Partners.

Mr Chin is a fellow of the Association of Chartered Certified Accountants and a member of the Institute of Certified Public Accountants of Singapore.

LIM TAT is an Independent Non-Executive Director of the Company. He was last elected as a Director of the Company on 29 April 2008.

Mr Lim is a lawyer and has 19 years of experience in the legal industry, with expertise in dispute resolutions and corporate and commercial matters.

Mr Lim holds a Bachelor of Laws Honours degree, a Joint Masters in Business Administration and Law from the National University of Singapore and a Masters in Science (Construction Law & Arbitration) from King’s College London and National University of Singapore. He is admitted to the Singapore Bar and is a fellow of the Chartered Institute of Arbitrators and the Singapore Institute of Arbitrators.

Lee Phuan WengExecutive Chairman

Lee Kwang MongManaging Director

Chin Jin MengExecutive Director


LING YONG WAH is an Independent Non-Executive Director of the Company. He was last re-elected as a Director of the Company on 27 April 2006 and will be seeking re-election as a Director at the forthcoming Annual General Meeting held on 29 April 2009.

Mr Ling is currently an Investment Manager with Seavi Advent Corporation Limited (“Seavi”), a private equity firm in Singapore. Seavi is an affiliate of Advent International Corporation, a US private equity firm with total cumulative capital raised of nearly €8 billion and completed transactions valued at over €22 billion. At Seavi, he is responsible for identifying suitable companies for acquisitions, executing investment transactions and for monitoring portfolio companies. From 1996 to 2000, he was a Business Development Manager with Econ International Ltd (“Econ”), an engineering and construction service provider listed on the Main Board of the SGX-ST. At Econ, he was involved in several cross-border acquisitions. From 1994 to 1996, he was a Deputy Manager with United Overseas Bank Limited, where he was responsible for executing corporate finance transactions under the bank’s Corporate Finance Department.

Mr Ling holds a Bachelor of Economics from Monash University in Melbourne, Australia, and is a member of the Institute of Chartered Accountants in England and Wales.

YEO JEU NAM is an Independent Non-Executive Director of the Company. He was last re-elected as a Director of the Company on 27 April 2006 and will be seeking re-election as a Director at the forthcoming Annual General Meeting held on 29 April 2009. Mr Yeo also acts as an Independent Director in Swiber Holdings Limited and Enzer Corporation Ltd.

Mr Yeo is the Managing Director and founder of Radiance Consulting Pte Ltd, a business and management consultancy firm specializing in corporate strategy and transformation, corporate regeneration and restructuring as well as human capital solutions. Formerly, a Senior Consulting Partner at Ernst & Young Consultants Pte Ltd, he headed the Strategy and Transformation practice as well as the HR consulting practice for more than 12 years. Before joining Ernst & Young Consultants Pte Ltd, Mr Yeo was a Director at PwC Consulting where he headed their Public Sector Consulting practice.

Mr Yeo graduated with a Bachelor of Social Science (Class II Upper, Honours) degree from the University of Singapore, now known as National University of Singapore.

Lim TatIndependent Non-Executive Director

Ling Yong WahIndependent Non-Executive Director

Yeo Jeu NamIndependent Non-Executive Director


KEY ExEcUTIvES

DOUGLAS DAVID ROSSGeneral Manager, EDMI Pty Ltd

Mr Ross joined the Company in 2004 and is responsible for the strategic development of the Australian and New Zealand markets as well as the financial and operational performance of EDMI Pty Ltd. He has more than 20 years of industry experience and extensive metering knowledge accumulated from prior executive and management roles with Australian utilities and energy metering companies.

Mr Ross holds a Master of Business Administration from Deakin University in Australia which complements an Associate Diploma in Electrical and Electronic Engineering from the University of Southern Queensland.

SUKANT BEHERAVice President (Business Development), EDMI Limited

Mr Behera is responsible for the business development in Asia, Middle-East and Africa. With more than 19 years of experiences in the sales and marketing management roles within Asia Pacific, he plays a key role in ensuring EDMI’s growth objectives through various strategic business developments in these regions. He joined EDMI in 2000 as a test engineer and has held various positions in the company before rising to his current position.

Mr Behera holds a Bachelor of Engineering in Electrical Engineering degree from Gulbarga University. He is an Associate Member of Institution of Engineers in India and Singapore.

IVAN NOEL BARRONChief Technical Officer, EDMI Pty Ltd

Mr Barron joined the Company in 1994 and is responsible for setting the Group’s technology direction. Over the years, he has led EDMI’s product development teams to create the Genius and Atlas products.

Mr Barron holds an Honours degree in Electrical Engineering from the University of Queensland, Australia. He is a member of the Institute of Electrical and Electronics Engineers.

DANIEL JAMES VON SNARSKIBusiness Development Manager, EDMI Pty Ltd

Mr Von Snarski is responsible for the development for software and systems for the Group. He leads the international sales and marketing team in the identification, specification and execution of system projects. He joined EDMI Pty Ltd in 1994 as an Engineer and plays a key role in the development of EDMI’s metering and system software and for the execution of AMI projects in the Asia Pacific and European markets.

Mr Von Snarski holds a Bachelor of Electronic Engineering degree and Bachelor of Information Technology degree from the Queensland University of Technology, Australia.

ANDREW BRYAN MANSBRIDGEVice President (Marketing), EDMI Limited

Mr Mansbridge is responsible for leading the marketing team to provide technical support services and business development in African and European markets. Prior to his current position, he was the Regional Manager for EDMI Europe for five years in sales and technical support functions. He joined EDMI in 1997 as a Research and Development Engineer and had worked in various positions in Australia and Singapore for several years in production, engineering and technical support roles.

Mr Mansbridge holds an Honours degree in Electronic Engineering from the University of Queensland, Australia and a Graduate Diploma in Management from the University of Southern Queensland.

RAGHAVAN PILLAI RAJENDRA KUMAREngineering Manager, EDMI Limited

Mr Kumar has been with EDMI since 2000 where he leads the Production and Design Engineering teams in Singapore. He has more than 20 years of extensive engineering experience and is responsible for ensuring the technical competence, production and customer support levels are of the highest standards. He also heads the Technical Management of our accredited Test Laboratory.

Mr Kumar holds a Diploma in Electronics from NTTF Electronics Centre, Bangalore, India. He is an Associate Member of Institute of Electrical and Electronic Engineers and a member of Project Management Institute.

CHEN YEN LINGFinance Manager, EDMI Limited

Ms Chen is responsible for the finance and accounting operations for the Group. She has more than 14 years of commercial experience in financial and accounting. Prior to joining EDMI in June 2008, she was the Senior Group Finance Manager of Advanced Holdings Ltd., a company listed on the SGX-ST, from 2004 to 2008 where she oversees the financial and accounting operations of the Group.

Ms Chen holds a Diploma in Accountancy from Singapore Polytechnic and is a graduate from Association of Chartered Certified Accountants (ACCA). She is a fellow of ACCA and a non-practising member of the Institute of Certified Public Accountants of Singapore.

NICOLE CHIEWFinancial Controller, EDMI Pty Ltd

Ms Chiew is responsible for the financial and accounting management of EDMI Pty Ltd. She has accumulated more than 10 years of commercial experience in various industries. She is a member of CPA Australia.


cORPORATE STRUcTURE

EDMI Meters Sdn Bhd

EDMI Pty Ltd Noustech Pty Ltd

EDMI International Trading (Shanghai) Co., Ltd

Advanced MeterSoftware Pte Ltd

100%

100% 100%

100%

50%

EDMI VietnamCompany Ltd

51%

EDMI Philippines Inc.

100%

Power House Technology Company Limited

49%

Wallaby Metering Systems Private Limited

50%


OUR PROdUcTS

EDMI today offers a comprehensive range of smart meters and metering

systems which enable our customers to manage their distribution, load

consumption and meter data resources more efficiently.

Recent updates on our product offerings are as follow:

THE FUTURE IN SMART METERING SOLUTIONS

THREE PHASE METERS

ATLAS SERIES

Mk10 Mk10D

ATLA

S

The Mk10 is the original meter built on Atlas, a low-power, cost-efficient metering platform developed in 2002. The Mk10 is a Class 1 Three Phase revenue meter, catering to the commercial and lower-end industrial markets, with proven reliability and advanced communications capabilities over GSM/GPRS, PLC, PSTN, RF and other media for use in AMI/AMR/AMM, and a component of the Smart Grid.

The Mk10D meter is a variation of the Mk10, with an additional feature for 100A remote connect-disconnect relays of electrical services.


SINGLE PHASE METERS

Mk10E

Mk7A

Mk10A

Mk7C

The Mk10E is an enhanced variation of the Mk10 meter, with a higher class accuracy of 0.5S catering to the higher-end market, and additional communication ports.

The Mk7A is an advanced Single Phase two-element revenue meter, targeted at top-end residential metering, demanding more on basic electricity measurements. Its capabilities include four-quadrant measurement, remote reading, optional integrated main and load disconnect relays, remote monitoring and communication capabilities for use in Power Quality indication.

The Mk10A is the latest addition to the series which enhances the Mk10 with additional communications capabilities for use in Power Quality indication, higher memory storage, and advanced commissioning functionalities.

The Mk7C is a variation of the Mk7A, a single-element residential meter in a more compact profile that offers full integrated AMI functionalities as the Mk7A.

Atlas


Abacu

sG

en

ius

Mk6NThe Mk6N is a variation of the Mk6 incorporating an updated hardware platform that qualifies it for the more stringent requirements of the latest relevant IEC standards.

SINGLE PHASE METERS

ABAcUS SERIES

Mk29The Mk29 is a Class 1 Single Phase revenue meter designed for the China market with its own unique protocol, and other advanced features such as infra-red communications and climatic outdoor capabilities.

OUR PROdUcTS

THREE PHASE METERS

GENIUS SERIES

Mk6EThe Mk6E is an enhanced upgrade of the Mk6 meter built with a higher class accuracy of 0.2S catering to the high-end markets. The Mk6E is a high-precision meter created for generation and transmission applications, as well as for revenue metering at facilities of high-end consumers.

The Mk6 meter is EDMI’s first generic metering product developed in 1998 utilizing the “smartest” metering platform available at the time. Built with a class accuracy of 0.5S, 1 and 2 to cater to the middle and lower-end markets, its stability and flexibility in the last 10 years has ensured over 300,000 meters installed all over the world.

Mk6


WIRELESS dATA HUBS

AMR SOFTWARE

EDMI’s wireless data-hubs WH1 and WH2 are radio based data loggers that utilise the Wavenis ultra-low power communications. These data-hubs collect data for water and gas consumption and temperature profiles. This enables the creation of a multi-utility wireless system over mesh radio network. It is designed to work with the Genius and Atlas series meters.

MultiDrive is a comprehensive data management and data accumulation software that facilitates the collection of a large volume of data from meters and other measuring devices. It is offered separately as a software suite or as part of EDMI’s AMR metering systems for use in utility and sub-metering systems. MultiDrive has a flexible and scalable architecture using distributed communication servers for high performance and robustness, and takes full advantage of all of the advanced features of the EDMI range of meters.


cORPORATE INFORMATION

BOARD OF DIRECTORSMr Lee Phuan WengExecutive Chairman

Mr Lee Kwang MongManaging Director

Mr Chin Jin MengExecutive Director

Mr Lim TatIndependent Non-Executive Director

Mr Ling Yong WahIndependent Non-Executive Director

Mr Yeo Jeu Nam Independent Non-Executive Director

AUDIT COMMITTEEMr Ling Yong Wah (Chairman)Mr Lim TatMr Yeo Jeu Nam

REMUNERATION COMMITTEEMr Yeo Jeu Nam (Chairman)Mr Lim TatMr Ling Yong Wah (appointed on February 26, 2009)

Mr Lee Kwang Mong (resigned on February 26, 2009)

NOMINATING COMMITTEEMr Lim Tat (Chairman)Mr Yeo Jeu NamMr Lee Phuan Weng

COMPANY SECRETARIESMr Chin Jin Meng, CPAMs Chen Yen Ling, CPA

REGISTERED OFFICE & BUSINESS ADDRESS47 Yishun Industrial Park A, #01-00Singapore 768724Tel: +65 6756 2938 Fax: +65 6756 0125Email: [email protected]: www.edmi-meters.com

SHARE REGISTRARBoardroom Corporate & Advisory Services Pte. Ltd.3 Church Street#08-01 Samsung HubSingapore 049483Tel: +65 6536 5355 Fax: +65 6536 1360

AUDITORSDeloitte & Touche LLPPublic Accountants and Certified Public Accountants6 Shenton Way #32-00DBS Building Tower Two Singapore 068809Partner-in-charge: Mr Kenny Horlley YoungAppointed with effect from the financial year ended31 December 2007

BANKERSUnited Overseas Bank Limited80 Raffles PlaceUOB Plaza Singapore 048624

The Hongkong and Shanghai Banking Corporation Limited21 Collyer Quay #01-00HSBC Building Singapore 049320


EDMI Limited47 Yishun Industrial Park A, #01-00Singapore 768724

Tel: +65 6756 2938Fax: +65 6756 [email protected]@edmi-meters.com

AUSTRALIAEDMI Pty Ltd162 South Pine Road,Brendale, Queensland 4500Australia

Tel: +61 7 3881 6466Fax: +61 7 3881 [email protected]@edmi.com.au

Noustech Pty Ltd162 South Pine Road,Brendale, Queensland 4500Australia

Tel: +61 7 3881 6451Fax: +61 7 3881 6422

MALAYSIAEDMI Meters Sdn BhdSuite G-1A, Ground Floor,N-Tatt Building, No.2 Jln TP 5,Taman Perindustrian UEP,47600 Subang Jaya,Selangor, Malaysia

Tel: +60 3 8023 6317Fax: +60 3 8023 [email protected]

CHINAEDMI International Trading (Shanghai) Co., LtdRoom 1504-1508, Tower A,Cao He Jing High Tech Building,900 Yishan Road, Shanghai 200233,P.R.China

Tel: +86 21 5423 4452Fax: +86 21 5423 [email protected]@edmi-meters.com.cn

VIETNAMEDMI Vietnam Co. Ltd12/6 Dao Duy Anh Street, Ward 9,District Phu Nhuan, Ho Chi Minh City,Vietnam


PHILIPPINESEDMI Philippines Inc.Singer Building2100 Pasong Tamo Extension Makati City 1200Philippines

Tel: +63 2 757 3032Fax: +63 2 757 [email protected]@edmi-meters.com

THAILANDPower House Technology Co., Ltd61/1 Pattanakarn Road, Soi 54,Suan Luang, Bangkok 10250Thailand

Tel: +66 2 320 0462Fax: +66 2 722 [email protected]@csloxinfo.com

INDIAWallaby Metering Systems Private LimitedM-3, 9th Street, Dr. VSI EstateThiruvanmiyur, Chennai 600041


SINGAPOREAdvanced Meter Software Pte Ltd47 Yishun Industrial Park A, #01-00Singapore 768724

GROUP AddRESSES

> SUBSIdIARIES

> ASSOcIATE

> JOINT vENTURES


The Board of Directors of EDMI Limited (the “Company”) is committed to ensure that high standards of corporate governance and transparency are practiced to create long-term Shareholders’ value and investor confidence in the company as a trusted business enterprise.

This report outlines the Company’s corporate governance processes with specific reference to the principles and guidelines of the Code of Corporate Governance 2005 (the “Code”), which forms part of the Continuing Obligation of the Singapore Exchange Securities Trading Limited’s (SGX-ST) Listing Manual.

The Board is pleased to affirm that the Company has taken steps to adhere to the principles and guidelines as set out in the Code for the financial year ended 31 December 2008. Where there are deviations from the Code, appropriate explanations are provided.

BOARD MATTERS

BOARD’S CONDUCT OF ITS AFFAIRSPrinciple 1: Effective Board to lead and control the Company

The primary responsibility of the Board is to protect and enhance long-term Shareholders’ value. It provides leadership, directions and guidance to the overall management of the Group.

The primary functions of the Board include: -1. Providing entrepreneurial leadership, setting strategic directions and overall corporate policies of the

Group;2. Supervising and monitoring the performance of the management team;3. Ensuring the adequacy of internal controls, risk management and periodic reviews of the Group’s financial

performance and compliance;4. Approving the financial performance of the Group including its half year and full year financial results

announcements;5. Approving annual budget, major investments and divestment proposals;6. Assuming responsibility for good corporate governance practices; and7. Approving corporate or financial restructuring, share issuance, dividends and other returns to Shareholders

and Interested Person Transactions.

The Board is supported by various committees set up to provide independent supervision of Management. They are Audit Committee, Nominating Committee and Remuneration Committee.

These committees function within clearly defined terms of reference, which are reviewed on a regular basis. The terms of reference for the respective committees have incorporated the recent changes under the Code.

Matters which are specifically reserved to the full Board for decision are those involving a conflict of interest for a Substantial Shareholder or a Director, material acquisitions, disposal of assets, corporate or financial restructuring and share issuances, dividends and other returns to Shareholders and matters which require Board approval as specified under the Company’s interested person transaction policy.

The Board meets at least twice every year and where necessary, additional meetings to address significant ad-hoc issue that may arise. At meeting of the Board, the Directors are free to discuss and seek an objective views presented by the Management and other Directors. Telephone attendance and conference via audio-visual communication at board meetings are allowed under the Company’s Articles of Association.

cORPORATE GOvERNANcE


The details of the number of Board meetings held during the financial year ended 31 December 2008 (“FY2008”) as well as the attendance of each Board members at those meetings of various board committees are tabulated below:-

BOARD COMPOSITION AND BALANCEPrinciple 2: Strong and independent element on the Board

The Board comprises six members, three of whom are Executive Directors and three are Independent Non–Executive Directors. The Board comprises business leaders and professionals with industry, legal, accounting, financial, and management backgrounds, and Management is able to benefit from their contributions in terms of directions and insight. Key information regarding the Directors is set out under the section entitled “Board of Directors” of this Annual Report.

The Nominating Committee (“NC”) considers an “Independent” Director as one who has no relationship with the Company or its related companies that could interfere or be reasonably perceived to interfere, with the exercise of the Director’s independent judgement of the conduct of the Group’s affairs and is not a Substantial Shareholder, or a partner in (with 5% or more stake) or an executive officer of any for profit business organization to which the Company made or from which the Company received significant payments (aggregated over any financial year in excess of S$200,000) in the current or immediate past financial year.

Moreover, the Chairman of NC is not associated or directly associated with a Substantial Shareholder with a view to the best interests of the Company. As a result of the NC’s review of the independence of each director for FY2008, the NC is of the view that the following Directors are independent of the Company’s Management as contemplated by the Code:-

Lim Tat IndependentYeo Jeu Nam IndependentLing Yong Wah Independent

There is presently a good balance between the Executive and Non-Executive Directors and a strong and independent element on the Board. The NC is of the view that the current board size is appropriate to facilitate effective decision-making and achieving the objective of a balance of skills and experiences after taking into account the nature and scope of the Company’s operations.

Board of Directors

AuditCommittee

RemunerationCommittee

NominatingCommittee

No of meetings

No of meetings attended

No of meetings


No of meetings


No of meetings


Lee Phuan Weng 2 2 NA NA NA NA 1 1

Lee Kwang Mong 2 2 NA NA 1 1 NA NA

Chin Jin Meng 2 2 NA NA NA NA NA NA

Ling Yong Wah 2 2 2 2 NA NA NA NA

Yeo Jeu Nam 2 2 2 2 1 1 1 1

Lim Tat 2 2 2 2 1 1 1 1



CHAIRMAN AND CHIEF EXECUTIVE OFFICER (“CEO”)Principle 3: Clear division of responsibilities at the top of the Company

The clear division of the role and responsibilities between the Chairman and the CEO ensures proper balance of power and authority in the Group.

The Executive Chairman, Mr Lee Phuan Weng, is responsible for the Board and may act independently in the best interests of the Company and Shareholders. The role of the Chairman includes ensuring that Board meetings are held when necessary and sets the Board meeting agenda in consultation with the Company Secretaries and ensuring that Board members are provided with complete, adequate and timely information.

Mr Lee Kwang Mong is the CEO and Managing Director of the Company. He is responsible for the running of the Group’s businesses and has full executive oversight over the business directions and operational decisions of the Group.

Mr Lee Phuan Weng and Mr Lee Kwang Mong are brothers. The Board believes that there are adequate safeguards in place to ensure that there is a balance of independence and objectivity in decision-making by the Board.

BOARD MEMBERSHIPPrinciple 4: Formal and transparent process for appointment of new directors to the Board

The NC comprises two Independent Directors and the Executive Chairman.

Lim Tat (Chairman)Yeo Jeu Nam (Member)Lee Phuan Weng (Member)

The NC held one meeting during the financial year. The NC was established for the purpose of ensuring that there is a formal and transparent process for all board appointments. It has adopted written terms of reference defining its membership, administration and duties.

The NC responsibilities include the following:

1. To make recommendations to the Board on the appointment of new Executive and Non-Executive Directors, including making recommendations on the composition of the Board generally and the balance between Executive and Non-Executive Directors appointed to the Board. There are procedures in place for the selection and appointment of Non-Executive Directors.

2. To regularly review the Board structure, size and composition and make recommendations to the Board with regards to any adjustments that are deemed necessary.

3. To be responsible for assessing nominees or candidates for appointment or election to the Board, determining whether or not such nominees have the requisite qualifications and whether or not they are independent.

4. To make plans for succession, in particular for the Chairman and Chief Executive Officer.

5. To determine, on an annual basis, if a Director is independent. If the NC determines that a Director, who has one or more of the relationships mentioned under the Code is in fact independent, the Company would disclose in full, the nature of the Director’s relationship and bear responsibility for explaining why he should be considered independent.


6. To recommend Directors who are retiring by rotation to be put forward for re-election.

7. To decide whether or not a Director is able to and has been adequately carrying out his/her duties as a Director of the Company, particularly when he/she has multiple board representations.

8. To be responsible for assessing the effectiveness of the Board as a whole and for assessing the contribution of each individual director to the effectiveness of the Board. This assessment process shall be disclosed annually.

The Directors who are retiring and who, being eligible, have offered themselves for re-election at the forthcoming Annual General Meeting are named below:

Name of Directors Date of Appointment Date of Last ElectionLing Yong Wah 10 September 2003 27 April 2006Yeo Jeu Nam 10 September 2003 27 April 2006

BOARD PERFORMANCEPrinciple 5: Formal assessment of the effectiveness of the Board and contributions by each Director.

While the Code recommends that the NC be responsible for assessing the Board as a whole and also assessing the individual evaluation of each Directors’ contribution, the NC felt that it is more appropriate and effective to assess the Board as a whole, bearing in mind that each member of the Board contributes in different way to the success of the Company.

The NC has conducted a Board performance evaluation to assess the effectiveness of the Board in FY2008 and is satisfied that the Directors have dedicated sufficient time and attention to the affairs of the Group.

The NC in conducting the appraisal process to assess the performance and effectiveness of the Board as a whole, it focuses on a set of performance criteria which includes the evaluation of the size and composition of the Board, the Board’s access to information, Board processes and accountability, Board performance in relation to discharging its principal responsibilities and the Directors’ standards of conduct.

ACCESS TO INFORMATIONPrinciple 6: Board members to have complete, adequate and timely information

The Directors have separate and independent access to the Company’s Senior Management, who together with the Company Secretaries, are responsible for ensuring that the board procedures are followed and that applicable rules and regulation are complied with. The Company Secretaries administers, attend and prepares minutes of all board and committee meetings. They assist the Chairman in ensuring that the board procedures are followed and reviewed in accordance with the Company’s Memorandum and Articles of Association and relevant rules and regulation, including requirements of the Companies Act and the SGX-ST are complied with.

The Directors whether as a group or individually may appoint a professional advisor selected by the Group or the individual, approved by the Chairman, to render the service. The costs of such service shall be borne by the Company.



PROCEDURES FOR DEVELOPING REMUNERATION POLICIESPrinciple 7: Formal and transparent procedure for fixing remuneration packages of Directors and key management executives

Remuneration Committee (the “RC”)

The RC comprises of three members, all of whom are Independent Directors:

Yeo Jeu Nam (Chairman)Lim Tat (Member)Ling Yong Wah (Member)

The members of RC carried out their duties in accordance within their defined terms of reference. As part of its review, the RC shall ensure that:

(i) all aspects of remuneration including Directors’ fees, salaries, allowances, bonuses, options and benefits-in-kind should be covered. This includes the recommendation of remuneration package for Directors and Senior Management whose employment contracts are over a period of three years (and thereafter for such period as the Board may decide) as well as the remuneration package for key executives.

(ii) the remuneration packages should be comparable within the industry and comparable companies and shall include a performance-related element coupled with appropriate and meaningful measures of assessing individual Executive Directors’ and senior executives’/divisional directors’ performance.

(iii) the remuneration package of employees related to Executive Directors and controlling Shareholders of the Group are in line with the Group’s staff remuneration guidelines and commensurate with their respective job scopes and levels of responsibility.

The Committee also administers the EDMI Share Option Scheme 2003 (“EDMI ESOS 2003”), which was established on 10th September 2003, in accordance with the rules approved by the Shareholders. The EDMI ESOS 2003 is a long-term incentive scheme whose sole objective is to retain, reward and motivate Executive Directors and key management executives to ensure the continual growth and success of the Company.

From time to time, the RC seeks external expert advice on remuneration matters relating to the Directors.

LEVEL AND MIX OF REMUNERATIONPrinciple 8: The level of remuneration for Directors should be adequate, not excessive, and linked to performance.

The remuneration policy of the Group aims to be competitive to attract, retain and motivate Directors and key executives. Remuneration components mainly consist of base salary, annual wage supplement, fixed allowances and variable performance bonus.

The Executive Directors’ and key Senior Management remuneration packages are based on service contracts. Their remuneration is determined by having regard to their individual performance and current market trends.

Independent Directors are paid on an agreed annual fees based on their contributions, taking into account factors such as responsibilities, contributions to the Company, efforts and time spent. Directors’ fees are recommended by the Board for Shareholders’ approval at the Company’s Annual General Meeting.


DISCLOSURE ON REMUNERATIONPrinciple 9: Clear disclosure of remuneration policy, level and mix of remuneration, and the procedure for setting the remuneration

An appropriate and attractive level of remuneration has been set to attract, retain and motivate Directors and staffs. The remuneration package is made up of both fixed and variable components. The variable component is determined based on the performance of the individual employee as well as the Group’s performance. All Directors are paid Directors’ fees that are subject to Shareholders’ approval at the Annual General Meetings.

The annual remuneration report on the Directors and key executives for FY2008 are set out below:-

Directors’ Remuneration

(1) Includes performance-related bonus pegged to the results of the Group.

(2) These fees are subject to approval by Shareholders as a lump sum at the Annual General Meeting.

The details of the EDMI ESOS 2003 granted to the Directors are disclosed in the Report of the Directors.

Top 8 Key Executives’ Remuneration Band

There are no employees who are immediate family members of a Director or the CEO and whose remuneration exceeded $150,000 in FY2008.

Remuneration BandSalary

%Bonus(1)

%

Other Allowance & Benefits

%

Directors’ Fees(2)

%

Share Option

%Total

%

$250,000 to below $500,000

Lee Kwang Mong 67 17 8 5 3 100

Chin Jin Meng 63 16 11 6 4 100

Below $250,000

Lee Phuan Weng - - - 100 100

Lim Tat - - - 100 100

Ling Yong Wah - - - 98 2 100

Yeo Jeu Nam - - - 98 2 100

Remuneration Band Name of Executive

Below $250,000 Douglas David RossSukant BeheraAndrew Bryan MansbridgeIvan Noel BarronRaghavan Pillai Rajendra Kumar

Daniel James Von SnarskiChung Hui Koon (Resigned on 9 May 2008)Chen Yen LingNicole Chiew



ACCOUNTABILITYPrinciple 10: Board should present a balanced and understandable assessment of the Company’s performance, position and prospects

The Board updates Shareholders on the operations and financial position of the Company, through half yearly and full year results announcements as well as timely announcements of other matters as prescribed by the relevant rules and regulations.

The Management is accountable to the Board by providing the Board with management accounts, which present a balanced and understandable assessment of the Company’s performance, position and prospect for the discharge of its duties.

AUDIT COMMITTEEPrinciple 11: Establishment of Audit Committee with written terms of reference

The Audit Committee (the “AC”) comprises three members, all of whom are Independent Directors:-

Ling Yong Wah (Chairman)Lim Tat (Member)Yeo Jeu Nam (Member)

The AC assists the Board to maintain a high standard of Corporate Governance, particularly by providing an independent review of the effectiveness of the financial reporting, management of financial and control risks, and monitoring of the internal control systems.

The members of AC, collectively, have expertise or experience in financial management and are qualified to discharge the AC’s responsibilities.

The AC performs the following functions:

• reviewingandassessingtheeffectivenessoftheCompanyinternalcontrols,includingfinancial,operationaland compliance controls. It ensures that the Company follows up on the external auditors’ recommendations in respect of any non-compliance and internal control weaknesses detected during the course of the audit;

• reviewing the audit plans of the external auditors, their findings and recommendations together withmanagement’s responses thereto, and the extent of the co-operation rendered by the Company’s officers to the external auditors;

• reviewingthehalfyearlyandfullyearfinancialresultsoftheGroupandthereportoftheexternalauditorsthereon;

• reviewinginterestedpersontransactions;

• reviewingthenon-auditservicesprovidedbytheexternalauditortoassesswhetherthenatureandextentof those services rendered might prejudice the independence and objectivity of the external auditors; and

• meetingtheCompany’sexternalandinternalauditorswithoutthepresenceofManagement.

The AC has the power to conduct or authorise investigations into any matters within its terms of reference. The Company has in place a whistle-blowing policy, which provides an avenue for the staff of the Company to access the AC Chairman to raise concerns about improprieties and the independent investigation of such matters by the AC. Contact details of AC have been made available to all staff.


The AC meets with the external auditors, at least once a year, without the presence of Management. The AC had also reviewed the non-audit services provided by the external auditors, which comprise tax services and was satisfied that the independence of the external auditors was not impaired.

The AC has recommended to the Board of Directors that Deloitte and Touche LLP be nominated for reappointment as auditors at the forthcoming Annual General Meeting of the Company.

INTERNAL CONTROLSPrinciple 12: The Board to ensure that the management maintains a sound system of internal controls to safeguard the shareholders’ investments and the company’s assets.

AC to review the adequacy of financial, operational and compliance controls and risk management policies.

A review of major business risks and the effectiveness of the Group’s internal controls, including financial, operational and compliance controls has been carried out by the AC aided by the external auditors. The Board is satisfied that there are adequate internal controls in place within the Group.

INTERNAL AUDITPrinciple 13: Setting up independent internal audit function

The Group does not have an Internal Audit Department. The Group’s internal control process is anchored by the Group’s corporate office, which assists the Board in monitoring the compliance of key internal controls procedures as well as the plan and performance of its subsidiaries and is reported internally on a monthly basis. The Board shall consider expanding its internal audit resources as and when the need arises.

COMMUNICATION WITH SHAREHOLDERSPrinciple 14: Regular, effective and fair communication with shareholdersPrinciple 15: Shareholders’ participation at AGM

The Board places great emphasis on investor relations with the Company’s Shareholders to maintain a high standard of transparency and to promote greater awareness of the Company and instill investors’ confidence.

The Board is also mindful of its obligations to provide timely disclosure on matters of material impact to Shareholders in accordance with the Corporate Disclosure Policy of the SGX-ST.

The Board provides Shareholders with an assessment of the Company’s performance, position and prospects on a half yearly basis via financial result announcements and other ad-hoc announcements as required by the SGX-ST.

All Shareholders of the Company receive the annual report and notice of Annual General Meeting (“AGM”). At general meetings of the Company, Shareholders are given the opportunity to voice their views and ask Directors or Management questions regarding the Company’s affairs. The Chairmen of the Audit, Remuneration and Nominating Committees will normally be present at AGM to answer any questions relating to the work of these Committees. The external auditors are also present at the AGM to assist the Directors in answering questions from Shareholders.



DEALING IN COMPANY’S SECURITIES

In line with SGX-ST’s best practices on dealing’s in securities, the Group issues circulars to its Directors, officers and employees that there must be no dealings in the shares of the Company during the period commencing one month before the release of the half year and full year financial results, and at any time they are in possession of unpublished material price sensitive information.

The Group has complied with the Best Practices Guide on Securities Transactions issued by the SGX-ST.

MATERIAL CONTRACTS

There are no material contracts of the Company or its subsidiaries involving the interests of the Managing Director, each Director or Controlling Shareholders, either still subsisting at the end of the financial year or entered into since the end of the previous financial year.

INTERESTED PARTY TRANSACTION

The Group 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 at arm’s length basis which are disclosed under the section ‘Related party transactions’ on page 56 to page 57.

All interested person transactions are subject to review by the AC to ensure compliance with the established procedures.

RISK MANAGEMENT POLICIES & PROCESSES (Listing Manual Rule 1207(4))

The management of all forms of business risk continues to be an important part of ensuring that the Group creates and protects value for its Shareholders. The main risks faced by the Group are credit risk and foreign exchange risk, which are primarily attributable to its nature of its business. The Group has concentration of these risk spread over its geographical regions as mentioned on page 76 to page 78 of this Annual Report. Accordingly, stringent credit control polices and processes have been set up and closely monitored to ensure adequate prevention, early detection and resolution of potential bad debts.

For further details on the risk faced by the Group, please refer to page 51 to page 56 of this Annual Report.


FINANcIAL STATEMENTS

Contents26 Report of the Directors31 Independent Auditors’ Report33 Balance Sheets34 Consolidated Profit and Loss Statement35 Statements of Changes in Equity37 Consolidated Cash Flow Statement

39 Notes to Financial Statements80 Statement of Directors81 Statistics of Shareholdings82 Notice of Annual General Meeting Proxy Form

Global Reports LLC

The directors present their report together with the audited consolidated financial statements of the group and the balance sheet and statement of changes in equity of the company for the financial year ended December 31, 2008.

1 DIRECTORS

The directors of the company in office at the date of this report are:

Lee Phuan Weng Lee Kwang Mong Chin Jin Meng Lim Tat Ling Yong Wah Yeo Jeu Nam

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

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement to which the company is a party whose object is to enable the directors to acquire benefits by means of the acquisition of shares or debentures in the company or any other body corporate except for options to take up unissued shares under the EDMI Share Option Scheme 2003 as disclosed in paragraphs 3 and 5(b) of the Report of the Directors.

3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The directors of the company holding office at the end of the financial year had no interest in the share capital of the company and related corporations as recorded in the register of directors’ shareholdings kept by the company under Section 164 of the Singapore Companies Act except as follows:

Shareholdings Shareholdings registered in in which directors are name of director deemed to have an interest At At Name of directors and companies beginning At end beginning At end in which interests are held of year of year of year of year

The company EDMI Limited (Ordinary shares)

Lee Phuan Weng - - 130,000 130,000 Lee Kwang Mong 1,900,000 1,900,000 - - Chin Jin Meng 1,015,000 1,015,000 - - Ling Yong Wah 50,000 50,000 - -

The share options of the company held by the directors are disclosed in paragraph 5(b) of the Report of the Directors.

The directors’ interest in the shares and share options of the company at January 21, 2009 were the same at December 31, 2008.

REPORT OF THE DIRECTORS

EDmI lImITED – annual REPORT 200826Global Reports LLC

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

Shareholdings Shareholdings registered in in which directors are name of director deemed to have an interest At At Name of directors and companies beginning At end beginning At end in which interests are held of year of year of year of year

Ultimate holding company SMB United Limited (Ordinary shares)

Lee Phuan Weng 35,688,544 35,688,544 7,141,248 7,761,248 Lee Kwang Mong 2,082,000 2,082,000 - - Chin Jin Meng 309,000 309,000 - -

4 DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS

Since the beginning of the financial year, no director has received or become entitled to receive a benefit which is required to be disclosed under Section 201(8) of the Singapore Companies Act, 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 for salaries, bonuses and other benefits as disclosed in the financial statements and in the following paragraphs. Certain directors have received remuneration from related corporations in their capacity as directors and/or executives of those related corporations.

5 SHARE OPTIONS

(a) Options to take up unissued shares

During the financial year, no option to take up unissued shares of the company or any related corporation was granted.

(b) Unissued shares under option and options exercised

EDMI Share Option Scheme 2003 (the “ESOS”)

This Scheme was approved by shareholders of the company at an Extraordinary General Meeting held on September 10, 2003 and remains in force at the discretion of the Scheme Committee, subject to a maximum period of 10 years.

The Scheme Committee administering this Scheme comprises the directors, Lee Kwang Mong, Lim Tat and Yeo Jeu Nam (Chairman).

None of the directors in the committee participated in any deliberation or decision in respect of options granted to himself.


EDmI lImITED – annual REPORT 2008 27Global Reports LLC

5 SHARE OPTIONS (cont'd)

(b) Unissued shares under option and options exercised (cont'd)

Details of the unissued shares under options granted pursuant to the ESOS, options exercised and cancelled/lapsed during the financial year, and options outstanding as at December 31, 2008 were as follows:

Number of options to subscribe for ordinary shares Balance Balance at at Type of January Cancelled/ December Exercise price share options Date of grant 1, 2008 Exercised lapsed 31, 2008 per share Expiry date ’000 ’000 ’000 ’000 Executive

(Directors and

employees) February 7, 2005 9,615 (590) (150) 8,875 $0.13 September 9, 2013

March 13, 2007 5,490 - (2,800) 2,690 $0.32 September 9, 2013

Non-executive

(Independent

directors) February 7, 2005 400 - - 400 $0.13 February 6, 2010

15,505 (590) (2,950) 11,965

Each share option entitles the employees (excluding employees who are also controlling shareholders and their associates), executive directors (excluding those who are substantial shareholders) and independent directors to subscribe for one new ordinary share at an exercise price equal to the average of the last dealt prices for a share over the three trading days immediately preceding the grant of the option, rounded up to the nearest whole cent in the event of fractional prices.

The aggregate nominal amount of shares over which the Scheme Committee may grant options, when added to the aggregate nominal amount of shares issued and issuable under the EDMI Share Option Scheme 2003 shall not exceed 15% of the issued ordinary share capital of the company on the date immediately preceding the offer date of the option.

The employees’ eligibility to participate in the EDMI Share Option Scheme 2003 shall be at the absolute discretion of the Scheme Committee and, in addition, an employee must satisfy certain requirements including the requirement to be in full-time service of the EDMI Limited group for at least one year on or prior to the date of offer of options.

The options are to be granted for a consideration of $1.00 for all the shares in respect of which the options are granted.

An option may be exercised after the first anniversary of the date of grant of the option subject to the following:

i) up to 25% of the shares in respect of which that option is granted may be exercised prior to the second anniversary of the offer date of that option;

ii) up to 50% of the shares in respect of which that option is granted (including the 25% referred to in sub-paragraph (i) above) may be exercised prior to the third anniversary of the offer date of that option; and

iii) up to 75% of the shares in respect of which that option is granted (including the 50% referred to in sub-paragraph (ii) above) may be exercised prior to the fourth anniversary of the offer date of that option,



5 SHARE OPTIONS (cont'd)

(b) Unissued shares under option and options exercised (cont'd)

provided always that:

a) the Scheme Committee may stipulate in its letter of offer in relation to an option granted to any participant, conditions to which the option is granted and also extend (but not abridge) the vesting periods set out above; and

b) options granted to a full time employee shall be exercised before the tenth anniversary of the relevant offer date and options granted to Independent Directors shall be exercised before the fifth anniversary of the relevant offer date, or such earlier date as may be determined by the Scheme Committee, failing which all unexercised options shall immediately lapse and become null and void and a participant shall have no claim against the company.

The information on directors of the company participating in the Scheme is as follows:

Aggregate Aggregate Aggregate options options options granted since exercised since lapsed since Aggregate Options commencement commencement commencement options granted of the Scheme of the Scheme of the Scheme outstanding as during the to the end of to the end of to the end of at the end of Name of director financial year financial year financial year financial year financial year

Lee Kwang Mong - direct - 2,800,000 1,400,000 - 1,400,000 Chin Jin Meng - direct - 2,800,000 1,400,000 - 1,400,000 Lim Tat - direct - 200,000 - - 200,000 Yeo Jeu Nam - direct - 200,000 - - 200,000

With the exception of Lee Kwang Mong and Chin Jin Meng who each received approximately 8.8% of the total share options available under the Scheme, none of the eligible employees and directors received 5% or more of the total share options available under this Scheme.

There are no options granted to any of the company’s controlling shareholders or their associates (as defined in the Singapore Exchange Securities Trading Listing Manual).

6 AUDIT COMMITTEE

At the date of this report, the Audit Committee comprises the following members:

Ling Yong Wah (Chairman) Lim Tat Yeo Jeu Nam

All the members of the Audit Committee are independent directors.

The Audit Committee has met two times since the last Annual General Meeting and has reviewed the following, where relevant, with the executive directors and the external auditors of the company:

i) the audit plans of the external auditors’ in relation to the group’s financial and operating results;

ii) the group’s financial and operating results and accounting policies;



6 AUDIT COMMITTEE (cont'd)

iii) the balance sheet and statement of changes in equity of the company and the consolidated financial statements of the group before their submission to the directors of the company and the external auditors’ report on those financial statements;

iv) the half-yearly and annual announcements as well as the related press releases on the results and financial position of the company and the group;

v) the co-operation and assistance given by the management to the external auditors;

vi) the re-appointment of the external auditors of the company; and

vii) interested person transactions.

The Audit Committee has full access to and has the co-operation of the management and has been given the resources required for it to discharge its function properly. It also has full discretion to invite any director and executive officer to attend its meetings. The external auditors have unrestricted access to the Audit Committee.

The Audit Committee has recommended to the Board of Directors the nomination of Deloitte & Touche LLP as auditors of the company at the forthcoming Annual General Meeting.

7 AUDITORS

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

ON BEHALF OF THE DIRECTORS

Lee Phuan Weng

Lee Kwang Mong

March 24, 2009



We have audited the accompanying financial statements of EDMI Limited (the company) and its subsidiaries (the group) which comprise the balance sheets of the group and the company as at December 31, 2008, the profit and loss statement, statement of changes in equity and cash flow statement of the group and the statement of changes in equity of the company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 33 to 79.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility includes: 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 account and balance sheets and to maintain accountability of assets; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

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

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

Opinion

In our opinion,

a) the consolidated financial statements of the group and the balance sheet and statement of changes in equity of the company are properly drawn up in accordance with the provisions of the Act and 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 December 31, 2008 and of the results, changes in equity and cash flows of the group and changes in equity of the company for the year ended on that date; and

b) the accounting and other records required by the Act to be kept by the company have been properly kept in accordance with the provisions of the Act.

InDEPEnDEnT auDITORS’ REPORT TO THE MEMBERS OF EDMI LIMITED


Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 3 to the financial statements wherein management has disclosed the considerable judgement made in concluding that an impairment loss need not be recognised in the profit and loss statement in relation to a significant decline in the fair value of the company’s and group’s available-for-sale equity investment from $2,887,000 at the beginning of the financial year to $813,000 at December 31, 2008.

Deloitte & Touche LLPPublic Accountants andCertified Public AccountantsSingapore

Kenny Horlley YoungPartnerAppointed with effect from the financial year ended December 31, 2007

March 24, 2009

InDEPEnDEnT auDITORS’ REPORT TO THE MEMBERS OF EDMI LIMITED


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

ASSETS

Current assetsCash and bank balances 7 10,776 4,542 8,617 2,144Trade receivables 8 17,026 18,019 17,343 22,807Other receivables and prepayments 9 1,002 1,343 1,061 1,205Inventories 10 23,102 23,563 20,505 18,561Total current assets 51,906 47,467 47,526 44,717

Non-current assetsSubsidiaries 11 - - 3,637 3,379Associate 12 252 330 103 103Joint ventures 13 280 84 607 84Available-for-sale investment 14 813 2,887 813 2,887Plant and equipment 15 4,567 4,829 3,954 3,984Long term receivable 16 499 - 499 -Goodwill 17 316 316 - -Deferred tax assets 18 330 550 - -Total non-current assets 7,057 8,996 9,613 10,437

Total assets 58,963 56,463 57,139 55,154

LIABILITIES AND EQUITY

Current liabilitiesBank overdrafts and loans 19 - 4,171 - 4,171Trade payables 20 11,750 4,701 11,285 4,587Other payables 21 2,691 2,331 1,780 1,471Income tax payable 333 406 266 403Current portion of finance leases 22 86 143 86 143Total current liabilities 14,860 11,752 13,417 10,775

Non-current liabilitiesFinance leases 22 20 104 20 104Deferred tax liabilities 18 401 420 399 418Total non-current liabilities 421 524 419 522

Capital, reserves and minority interestsShare capital 24 22,217 22,140 22,217 22,140Reserves (1,370) 1,116 (1,252) 590Retained earnings 22,869 20,939 22,338 21,127Equity attributable to equity holders of the company 43,716 44,195 43,303 43,857Minority interests (34) (8) - -Total equity 43,682 44,187 43,303 43,857

Total liabilities and equity 58,963 56,463 57,139 55,154

See accompanying notes to financial statements.

BalanCE SHEETSDecember 31, 2008


Group Note 2008 2007 $’000 $’000

Revenue 25 56,636 45,121Other operating income 26 337 207Raw materials and consumables (35,134) (29,953)Changes in inventories of finished goods and work-in-progress (222) 2,130Employee benefits expense (11,720) (10,783)Depreciation expense 15 (954) (931)Other operating expenses (6,042) (4,209)Share of (loss) profit of associate 12 (65) 119Share of loss of joint ventures 13 (283) -Finance cost 27 (61) (76)Profit before income tax 2,492 1,625Income tax expense 28 (588) (260)Profit for the year 29 1,904 1,365

Attributable to:Equity holders of the company 1,930 1,402Minority interests (26) (37) 1,904 1,365

Basic earnings per share (cents) 30 0.91 0.74

Diluted earnings per share (cents) 30 0.91 0.71


COnSOlIDaTED PROFIT anD lOSS STaTEmEnTYear ended December 31, 2008


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2008 2007 $’000 $’000Operating activities Profit before income tax 2,492 1,625 Adjustments for: Share of loss (profit) of associate 65 (119) Share of loss of joint ventures 283 - Depreciation of plant and equipment 954 931 Loss on disposal of plant and equipment 25 39 Interest expense 61 76 Interest income (237) (153) Allowance for doubtful trade receivables - 157 Allowance for doubtful non-trade receivables 24 - Allowance for inventories 120 38 Inventories written off 12 242 Share-based payment expense 232 238 Foreign exchange loss 40 - Operating cash flows before movements in working capital 4,071 3,074

Trade receivables 993 (6,023) Other receivables and prepayments 317 (588) Inventories 329 (1,870) Trade payables 7,049 (876) Other payables 360 (260) Cash generated from (used in) operations 13,119 (6,543)

Interest paid (61) (76) Interest received 237 153 Income tax paid (518) (2,150)Net cash from (used in) operating activities 12,777 (8,616)

Investing activities Acquisition of investment in joint venture (523) (83) Repayment from joint venture - 627 Proceeds from disposal of plant and equipment - 3 Purchase of plant and equipment (Note A) (864) (941) Long term receivable (653) -Net cash used in investing activities (2,040) (394)

Financing activities Proceeds from issue of shares 77 5,591 Repayment of finance leases (141) (132) Increase in deposits under pledge to banks (Note 7) (132) (7) Net (repayment) proceeds from bank loans (3,028) 3,028 Dividends paid - (1,716)Net cash (used in) from financing activities (3,224) 6,764

Net increase (decrease) in cash and cash equivalents 7,513 (2,246)Cash and cash equivalents at beginning of year 3,335 5,473Effects of exchange rate changes on the balance of cash held in foreign currencies (268) 108Cash and cash equivalents at end of year (Note B) 10,580 3,335

COnSOlIDaTED CaSH FlOW STaTEmEnTYear ended December 31, 2008


Note A: PURCHASE OF PLANT AND EQUIPMENT

In 2007, the group acquired plant and equipment with an aggregate cost of $969,000 of which $28,000 was acquired under finance lease agreement. Cash payments of $941,000 was made to purchase plant and equipment.

Note B: CASH AND CASH EQUIVALENTS 2008 2007 $’000 $’000

Cash at bank (Note 7) 8,864 4,478Fixed deposits (Note 7) 1,716 -Bank overdrafts (Note 19) - (1,143)Total 10,580 3,335


COnSOlIDaTED CaSH FlOW STaTEmEnTYear ended December 31, 2008


1 GENERAL

The company (Registration No. 199701694K) is incorporated in Singapore with its registered office and its principal place of business at No. 47 Yishun Industrial Park A #01-00, Singapore 768724. The company is listed on the Main Board of the Singapore Exchange Securities Trading Limited. The financial statements are expressed in Singapore dollars.

The immediate holding company and ultimate holding company of EDMI Limited are Bridex Singapore Pte Ltd and SMB United Limited (“SMB”) respectively. SMB is listed on the Main Board of Singapore Exchange Securities Trading Limited.

The principal activities of the company comprise the manufacture and sale of electronic revenue meters for use principally by utility companies involved in the generation, distribution and supply of electricity.

The principal activities of the subsidiaries, associate and joint ventures are disclosed in Notes 11, 12 and 13 to the financial statements.

The consolidated financial statements of the group and the balance sheet and statement of changes in equity of the company for the year ended December 31, 2008 were authorised for issue by the Board of Directors on March 24, 2009.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING - The financial statements have been prepared in accordance with the historical cost basis except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).

ADOPTION OF NEW AND REVISED STANDARDS - In the current financial year, the group has adopted all the new and revised FRSs and Interpretations of FRS (“INT FRS”) that are relevant to its operations and effective for annual periods beginning on or after January 1, 2008. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the group’s and company’s accounting policies and has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRSs which are relevant to the group and the company were issued but not effective:

FRS 1 - Presentation of Financial Statements (Revised) FRS 23 - Borrowing Costs (Revised) FRS 102 - Share-based Payment (Amendments relating to Vesting Conditions and Cancellations) FRS 108 - Operating Segments

Consequential amendments were also made to various standards as a result of these new/revised standards.

The management anticipates that the adoption of the above FRS, INT FRS and amendments to FRS in future periods will not have a material impact on the financial statements of the group and of the company in the period of their initial adoption except for the following:

FRS 1 – Presentation of Financial Statements (Revised)

FRS 1 (Revised) will be effective for annual periods beginning on or after January 1, 2009, and will change the basis for presentation and structure of the financial statements. It does not change the recognition, measurement or disclosure of specific transactions and other events required by other FRSs.

nOTES TO FInanCIal STaTEmEnTSDecember 31, 2008



2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

FRS 108 – Operating Segments

FRS 108 will be effective for annual financial statements beginning on or after January 1, 2009 and supersedes FRS 14 – Segment Reporting. FRS 108 requires operating segments to be identified on the basis of internal reports about components of the group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. In contrast, FRS 14 requires an entity to identify two sets of segments (business and geographical), using a risks and rewards approach, with the entity’s ‘system of internal financial reporting to key management personnel’ serving only as the starting point for the identification of such segments. As a result, following the adoption of FRS 108, the identification of the group’s reportable segments may change.

BASIS OF CONSOLIDATION - The consolidated financial statements incorporate the financial statements of the company and entities controlled by the company (its subsidiaries). Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by other members of the group.

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

Minority interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination (see below) and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority interest in excess of their interest in the subsidiary’s equity are allocated against the interests of the group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover its share of those losses.

In the company’s financial statements, investments in subsidiaries, associates and joint ventures are carried at cost less any impairment in net recoverable value that has been recognised in the profit and loss statement.

BUSINESS COMBINATIONS - The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 Business Combinations are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with FRS 105 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the consolidated profit and loss statement.

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




FINANCIAL INSTRUMENTS - Financial assets and financial liabilities are recognised on the group’s balance sheet when the group becomes a party to the contractual provisions of the instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest basis for debt instruments.

Financial assets

Financial assets are classified into the following specified categories: “available-for-sale” financial assets and “loans and receivables”. The classification depends on the nature and purpose of financial assets and is determined at the time of initial recognition.

Available-for-sale financial assets

Certain equity securities held by the group are classified as being available for sale and are stated at fair value. Investments are recognised and de-recognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value plus transaction costs. Fair value is determined in the manner described in Note 4. Gains and losses arising from changes in fair value are recognised directly in the fair value reserve with the exception of impairment losses. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the fair value reserve is included in profit or loss for the period. Dividends on available-for-sale equity instruments are recognised in profit or loss when the group’s right to receive payments is established.

Loans and receivables

Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “trade and other receivables”.

Trade and other receivables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate method, except for short-term receivables where the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial asset have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade and other receivables where the carrying amount is reduced through the use of an allowance account. When a receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.




Impairment of financial assets (cont'd)

With the exception of available-for-sale equity instruments, 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 loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss, is recognised directly in equity.

Derecognition of financial assets

The group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the group retains substantially all the risks and rewards of ownership of a transferred financial asset, the group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method, with interest expense recognised on an effective yield basis except for short-term payables where the recognition of interest would be immaterial.

Interest-bearing bank loans and overdrafts are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs (see below). Finance lease obligations are stated in accordance with the accounting policy denoted below.

Derecognition of financial liabilities

The group derecognises financial liabilities when, and only when, the group’s obligations are discharged, cancelled or expired.




LEASES - Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The group as lessee

Assets held under finance leases are recognised as assets of the group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the group’s general policy on borrowing costs (see below). Contingent rentals are recognised as expenses in the periods in which they are incurred.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis‚ except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

INVENTORIES - Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

Cost of work-in-progress includes raw materials, direct labour and an appropriate proportion of production overheads.

Cost of inventories are determined as follows:

Raw materials - first in, first out method Work-in-progress - standard cost which approximates actual cost Finished goods - first in, first out method

PLANT AND EQUIPMENT - Plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment loss.

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the straight-line method, on the following bases:

Machinery and equipment - 10% to 20% Motor vehicles - 20%

Fully depreciated assets still in use are retained in the financial statements.

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.




Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

The gain or loss arising on the disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the profit and loss statement.

GOODWILL - Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

The group’s policy for goodwill arising on the acquisition of an associate or a jointly controlled entity is described under “Associates” below.

RESEARCH EXPENDITURE - Expenditure on research activities is recognised as an expense in the period in which it is incurred.

IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL - At each balance sheet date, the group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss statement.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit and loss statement.




ASSOCIATES - An associate is an entity over which the group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for under FRS 105 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the group’s interest in that associate (which includes any long-term interests that, in substance, form part of the group’s net investment in the associate) are not recognised, unless the group has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in the consolidated profit and loss statement.

Where a group entity transacts with an associate of the group, unrealised profits and losses are eliminated to the extent of the group’s interest in the relevant associate.

INTERESTS IN JOINT VENTURES - A joint venture is a contractual arrangement whereby the group and other parties undertake an economic activity that is subject to joint control, that is when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.

Where a group entity undertakes its activities under joint venture arrangements directly, the group’s share of jointly controlled assets and any liabilities incurred jointly with other venturers are recognised in the financial statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the group’s share of the output of jointly controlled assets, and its share of joint venture expenses, are recognised when it is probable that the economic benefits associated with the transactions will flow to/from the group and their amount can be measured reliably.

Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly controlled entities. The group reports its interests in jointly controlled entities using proportionate consolidation except when the investment is classified as held for sale, in which case it is accounted for under FRS 105 Non-current Assets Held for Sale and Discontinued Operations. The group’s share of the assets, liabilities, income and expenses of jointly controlled entities are combined with the equivalent items in the consolidated financial statements on a line-by-line basis.

Where a group entity transacts with its joint ventures, unrealised profits and losses are eliminated to the extent of the group’s interest in the joint venture.

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 the group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

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




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

Warranties

Warranty cost is provided for the estimated liability to repair or replace products under warranty at the balance sheet date. This warranty cost is determined based on assessment of each batch of production and the directors’ best estimate of the expenditure required to settle the group’s obligation. Provision for warranty cost is made where there are indicators of defects which may result in material repair or replacement cost.

SHARE-BASED PAYMENTS - The group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value of the equity instruments (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the group’s estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

Fair values for share based payments under the EDMI Share Option Scheme 2003 are measured using Binomial pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

GOVERNMENT GRANTS - Government grants are not recognised until there is reasonable assurance that the group will comply with the conditions attaching to them and the grants will be received. Government grants whose primary condition is that the group should purchase, construct or otherwise acquire non-current assets are recognised as deferred income in the balance sheet and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Other government grants are recognised as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the group with no future related costs are recognised in profit or loss in the period in which they become receivable.

REVENUE RECOGNITION - Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Sale of goods

Revenue from the sale of goods is recognised when all the following conditions are satisfied:

• the group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the group; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.




Rendering of services

Revenue from rendering of services that are of a short duration is recognised when the services are completed.

Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

BORROWING COSTS - Borrowing costs are recognised in the profit and loss statement in the period in which they are incurred.

RETIREMENT BENEFIT COSTS - Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the group’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

EMPLOYEE LEAVE ENTITLEMENT - Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.

INCOME TAX - Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit and loss statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the company and subsidiaries operate by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.




Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.

FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION - The individual financial statements of each group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the group and the balance sheet and statement of changes in equity of the company are presented in Singapore dollars, which is the functional currency of the company and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the group’s foreign operations (including comparatives) are expressed in Singapore dollars using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the group’s translation reserve. Such translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities), and of borrowings and other currency instruments designated as hedges of such investments, are taken to the foreign currency translation reserve.

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




CASH AND CASH EQUIVALENTS - Cash and cash equivalents comprise cash on hand, demand deposits and bank overdrafts that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the group’s accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the entity’s accounting policies

Management did not make any material judgements that have significant effect on the amounts recognised in the financial statements except as discussed below.

Impairment of available-for-sale equity investment

During the year, there was a significant decline in the fair value of the available-for-sale equity instrument from $2,887,000 at the beginning of the financial year to $813,000 as at December 31, 2008 (Note 14). In the company’s financial statements, the available-for-sale equity instrument is stated at the fair value of $813,000. The loss arising from the decline in fair value is recognised directly in the fair value reserve in equity. Management is of the view that the decline in fair value is not an impairment loss that should be charged against profit for the year in the profit and loss statement. Management concluded that the company will be able to recover its original cost of investment of $3,012,000 on the basis that:

the investee has positive near term business prospects that would enable it to enhance its earning potential i) despite losses reported by the investee company in recent financial years;

the investee has been able to raise additional funds to support near term working capital requirements;ii)

the current depressed equity market conditions are not expected to persist and will recover in the longer iii) term; and

the company has the intent and ability to retain its investment for a period of time sufficient to allow for iv) the anticipated recovery in the investee’s fair value to an amount equal to or above its original investment cost.

Management’s conclusion on the recoverable value of the available-for-sale equity instrument involves considerable judgement. There is a possibility that an impairment loss will be recognised in a subsequent reporting period if the decline in fair value continues and recoverability becomes doubtful.



3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (cont'd)

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, 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:

Allowance for inventories

The policy for allowance for inventories of the group is based on the aging analysis of inventories and on management’s judgement on the saleability of the inventories.

As at December 31, 2008, the inventories include certain meters of $1,734,000 (2007 : $2,631,000) which were returned by a customer in Australia over the period in 2005 and 2006. Management has plans to utilise the meters by end of year 2010 and is of the view that no allowance is required.

Management has assessed the allowance for other inventories as $139,000 as at December 31, 2008 (2007 : $47,000). The carrying amount of the inventories is disclosed in Note 10 to the financial statements.

Allowances for receivables

An allowance for receivables accounts for estimated loss resulting from the subsequent inability of the customers to make required payments. If the financial conditions of the customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required in future periods. Management specifically analyses accounts receivables and analyses historical bad debt, customer credit worthiness, results of recovery efforts and past default experience when making a judgement to evaluate the adequacy of the allowances for receivables.

The management believes that the allowance of $496,000 as at December 31, 2008 (2007 : $500,000) is adequate. The carrying amount of the trade and other receivables are disclosed in Notes 8, 9 and 16 to the financial statements.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the balance sheet date was $316,000 (2007 : $316,000) (Note 17). There is no impairment loss recognised for 2008 and 2007.

Impairment of investments in subsidiaries, associate and joint ventures

Determining whether investments in subsidiaries, associate and joint ventures are impaired requires an estimation of the value in use of the investments. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Management is of the view that there was no impairment in the value of these investments during the year. The carrying amount of the investments in subsidiaries, associate and joint ventures are disclosed in Notes 11, 12 and 13 to the financial statements.



4 FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

(a) Categories of financial instruments

The following table sets out the financial instruments as at the balance sheet date:

Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Financial assets

Loans and receivables (including cash and cash equivalents) 29,167 23,556 27,389 25,814 Available-for-sale investment 813 2,887 813 2,887

Financial liabilities

Amortised cost 14,547 11,450 13,171 10,476

(b) Financial risk management policies and objectives

The group’s financial instruments include trade receivables, other receivables, long term receivable, bank balances, available-for-sale investment, trade and other payables and bank borrowings. The risks associated with these financial instruments include foreign currency risk, interest rate risk, equity price risk, credit risk and liquidity risk.

(i) Foreign exchange risk management

The group transacts in various foreign currencies, including United States dollar, British pounds, Thai baht, Australian dollar and New Zealand dollar and is therefore exposed to foreign currency risk.

The group also has investments in foreign subsidiaries, whose net assets are exposed to currency translation risk.

The group does not utilise financial derivative contracts to hedge its exposure to foreign currency risk.

The carrying amounts of monetary assets including intra-group receivables and monetary liabilities including intra-group payables denominated in foreign currencies other than the functional currencies of the respective entities within the group at the reporting date are as follows:

Group Company

Liabilities Assets Liabilities Assets

2008 2007 2008 2007 2008 2007 2008 2007

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

United States

dollar 9,547 3,838 13,119 9,767 9,856 3,835 13,564 10,381

British pounds 54 2 1,981 5,386 54 2 1,981 5,386

Thai baht - 205 1,492 5,253 - 205 1,492 5,253

New Zealand

dollar - - 1,221 - - - 1,212 -

Australian dollar 213 - 4,718 5,744 213 - 4,718 5,744



4 FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (cont'd)

(b) Financial risk management policies and objectives (cont'd)

(i) Foreign exchange risk management (cont'd)

Foreign currency sensitivity

The following table details the group’s sensitivity to a 10% increase or decrease in the relevant foreign currencies against the functional currency of each group entity. 10% represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the group where the denomination of the loan is in a currency other than the currency of the lender or the borrower.

If the relevant foreign currency strengthens by 10% against the functional currency of each group entity:

Profit or loss will increase by approximately:

Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Impact arising from United States dollar 357 593 371 655 British pounds 111 249 111 249 Thai baht 149 505 149 505 Australian dollar 451 574 451 574 New Zealand dollar 122 - 121 - 1,190 1,921 1,203 1,983

Fair value reserve in equity will increase by approximately:

Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Impact arising from British pounds 81 289 81 289

If the relevant foreign currency weakens by 10% against the functional currency of each group entity, there will be an equal and opposite effect on profit or loss and fair value reserve in equity.

(ii) Interest rate risk

The group is exposed to interest rate risk arising from changes in interest rates on interest-bearing debts and interest-earning fixed deposits.

The interest rates and terms of repayment for bank overdrafts and loans and finance leases are disclosed in Notes 19 and 22 to the financial statements.

The interest rates and repricing period for fixed deposits are disclosed in Note 7 to the financial statements.

The group does not use financial derivative instruments to manage interest rate risk.





(ii) Interest rate risk (cont'd)

Interest rate sensitivity

No sensitivity analysis is prepared as the group does not expect any material effect on the group’s profit or loss arising from the effects of reasonably possible changes to interest rates as the group does not have bank overdrafts and loans as at December 31, 2008 and interest rates on finance lease obligations are fixed.

(iii) Equity price risk management

The group is exposed to equity risks arising from equity investments classified as available-for-sale. Further details of these equity investments can be found in Note 14 to the financial statements.

Equity price sensitivity

The sensitivity analyses below have been determined based on the exposure to equity price risks at the reporting date.

In respect of available-for-sale equity investments, if the prices had been 10% higher/lower while all other variables were held constant:

• the group’s and company’s net profit for the year ended December 31, 2008 would have been unaffected as the equity investments are classified as available-for-sale and no investments were disposed of or impaired; and

• the group’s and company’s fair value reserves would decrease/increase by $81,000 (2007 : decrease/increase by $289,000).

(iv) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. The group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

The group’s credit risk is primarily attributable to its cash, trade and other receivables. Cash is placed with creditworthy financial institutions.

The group’s sales are concentrated on a few key customers and it reduces the exposure to credit risk by requesting for letters of credit for substantial transactions. Credit risk is also managed by monitoring payments from customers and requesting for advance payments on certain transactions.

As at December 31, 2008, 5 customers account for 63% (2007 : 82%) of the outstanding trade receivables balance. The trade and other receivables presented in the balance sheet are net of allowance for doubtful receivables, estimated by management based on an assessment of outstanding debts. Further details of credit risks on trade and other receivables are disclosed in Notes 8 and 9 to the financial statements.





(v) Liquidity risk management

The group has sufficient funds to finance its working capital requirements. Credit facilities are available from financial institutions.

Liquidity and interest risk analyses

Non-derivative financial liabilities

The following table details the remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the group and company can be required to pay. The table includes both interest and principal cash flows. The adjustment column represents the possible future cash flows attributable to the instrument included in the maturity analysis which is not included in the carrying amount of the financial liability on the balance sheet.

Weighted On average demand Within effective or within 2 to interest rate 1 year 5 years Adjustments Total % $’000 $’000 $’000 $’000 Group

2008

Non-interest bearing - 14,441 - - 14,441 Finance lease liability (fixed rate) 5.85 94 24 (12) 106 14,535 24 (12) 14,547

2007

Non-interest bearing - 7,032 - - 7,032 Finance lease liability (fixed rate) 5.85 154 118 (25) 247 Variable interest rate instruments 4.22 4,313 - (142) 4,171 11,499 118 (167) 11,450

EDmI lImITED – annual REPORT 200854




(v) Liquidity risk management (cont'd)

Non-derivative financial liabilities (cont'd)

Weighted On average demand Within effective or within 2 to interest rate 1 year 5 years Adjustments Total % $’000 $’000 $’000 $’000 Company

2008

Non-interest bearing - 13,065 - - 13,065 Finance lease liability (fixed rate) 5.85 94 24 (12) 106 13,159 24 (12) 13,171

2007

Non-interest bearing - 6,058 - - 6,058 Finance lease liability (fixed rate) 5.85 154 118 (25) 247 Variable interest rate instruments 4.22 4,313 - (142) 4,171 10,525 118 (167) 10,476

Non-derivative financial assets

Substantially all financial assets excluding available-for-sale investment of the group and company are on demand or due within one year.

(vi) Fair value of financial assets and financial liabilities

The carrying amounts of cash and cash equivalents, trade and other current receivables and payables, provisions and other liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to financial statements.

The fair values of financial assets and financial liabilities are determined as follows:

• the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and

• the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

The management considers that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate their fair value.

EDmI lImITED – annual REPORT 2008 55



(c) Capital risk management policies and objectives

The group manages its capital to ensure that entities in the group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of debt and equity.

The capital structure of the group consists of debt, which includes the borrowings and equity attributable to equity holders of the company, comprising issued capital, reserves and retained earnings.

The group’s overall strategy remains unchanged from 2007.

5 HOLDING COMPANY AND RELATED COMPANY TRANSACTIONS

The company is a subsidiary of Bridex Singapore Pte Ltd, incorporated in Singapore. The company’s ultimate holding company is SMB United Limited, incorporated in Singapore. Related companies in these financial statements refer to members of the ultimate holding company’s group of companies.

Some of the group’s transactions and arrangements are between members of the ultimate holding company’s group and the effect of these on the basis determined between the parties are reflected in these financial statements. The intercompany balances are unsecured, interest-free and repayable on demand unless stated otherwise.

Transactions between the company and its subsidiaries, which are related companies of the company, have been eliminated on consolidation and are not disclosed in this note.

During the year, the group entities entered into the following transactions with related companies that are not members of the group:

Group 2008 2007 $’000 $’000

Sale of goods to immediate holding company (38) (112) Sale of goods to related companies (473) (586) Purchase of goods from immediate holding company 24 1 Purchase of goods from related companies 154 127 Rental expenses paid to immediate holding company 490 438 Rental income from a related company (22) (23) Other expenses from immediate holding company 3 4



6 OTHER RELATED PARTY TRANSACTIONS

Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Associates also include those that are associates of the ultimate holding and/or related companies.

Some of the company’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements. The balances are unsecured, interest-free and repayable on demand unless otherwise stated.

Group and Company 2008 2007 $’000 $’000

Sale of goods to an associate 2,318 6,921 Sale of goods to a joint venture 336 -

Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the year was as follows:

Group 2008 2007 $’000 $’000

Short-term benefits 1,726 1,525 Post-employment benefits 83 92 Share-based payments 87 99 1,896 1,716

The remuneration of directors and key management is determined by the remuneration committee having regard to the performance of individuals and market trends.

7 CASH AND BANK BALANCES Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Cash at bank 8,864 4,478 6,843 2,080 Fixed deposits 1,716 - 1,716 - Deposits under pledge 196 64 58 64 10,776 4,542 8,617 2,144

Bank balances and cash comprise cash held by the group and short-term bank deposits with an original maturity of three months or less. The carrying amounts of these assets approximate their fair values.

The weighted average interest rate for fixed deposits is approximately 3.93% (2007 : Nil%) per annum and for a tenure of approximately 32 days (2007 : Nil days).

Deposits of the group and company amounting to $196,000 and $58,000 respectively (2007 : $64,000 and $64,000 respectively) are pledged to certain banks as security for credit facilities.



7 CASH AND BANK BALANCES (cont'd)

The group’s and company’s cash and bank balances that are not denominated in the functional currencies of the respective entities are as follows:

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

United States dollar 4,467 2,278 4,205 1,890 Euro 207 184 207 184 British pounds 95 34 95 34 Australian dollar 2,018 7 2,018 7

8 TRADE RECEIVABLES Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Outside parties 15,018 11,817 12,394 9,963 Less: Allowance for doubtful trade receivables (260) (288) (155) (155) 14,758 11,529 12,239 9,808 Related companies (Note 5) 459 646 444 596 Immediate holding company (Note 5) 24 11 24 11

Subsidiaries (Note 11) - - 2,858 6,565 Less: Allowance for doubtful trade receivables - - (7) (7) - - 2,851 6,558 Associate (Note 12) 1,540 5,796 1,540 5,797 Joint ventures (Note 13) 245 37 245 37 17,026 18,019 17,343 22,807

At December 31, 2008, retention monies held by a customer for performance retention amounted to $971,000 (2007 : $Nil).

The average credit period for sale of goods is 30 to 90 days (2007 : 30 to 60 days). No interest is charged on overdue balances.

The allowance for doubtful trade receivables has been determined by taking into consideration recovery prospects and past default experience.

Included in the group’s trade receivable balance are debtors with a carrying amount of $3,368,000 (2007 : $3,183,000) which are past due at the reporting date for which the group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable.

In determining the recoverability of a trade receivable, the group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. Accordingly, the directors believe that there is no further credit allowance required in excess of the allowance for doubtful debts.



8 TRADE RECEIVABLES (cont'd)

The table below is an analysis of trade receivables as at December 31:

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

Not past due and not impaired 13,651 14,829 11,942 14,495 Past due but not impaired (i) 3,368 3,183 5,394 8,301 17,019 18,012 17,336 22,796

Impaired receivables – individually assessed (ii), (iii) – Past due more than 12 months 267 295 169 173 Less: Allowance for doubtful debts (260) (288) (162) (162) 7 7 7 11

Total trade receivables, net 17,026 18,019 17,343 22,807

(i) Aging of receivables that are past due but not impaired >3 months 1,566 1,852 3,055 2,810 6 months to 9 months 1,193 557 1,534 4,414 9 months to 12 months 179 124 234 108 >12 months 430 650 571 969 3,368 3,183 5,394 8,301

(ii) These amounts are stated before any deduction for impairment losses. (iii) These receivables are not secured by any collateral or credit enhancements.

Movement in the allowance for doubtful debts:

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

Balance at beginning of the year 288 131 162 3 Increase in allowance recognised in profit or loss - 157 - 159 Exchange adjustments (28) - - - Balance at end of the year 260 288 162 162



8 TRADE RECEIVABLES (cont'd)

The group’s and company’s trade receivables that are not denominated in the functional currencies of the respective entities are as follows: Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

United States dollar 8,474 7,175 9,115 8,118 Euro 593 420 593 420 British pounds 1,053 2,437 1,053 2,437 Malaysian ringgit 496 - 555 80 Thai baht 1,492 5,253 1,492 5,253 Australian dollar - - 2,132 5,692 New Zealand dollar 1,221 - 1,212 -

9 OTHER RECEIVABLES AND PREPAYMENTS Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Other receivables 663 972 525 863 Less: Allowance for doubtful non-trade receivables (212) (212) (183) (183) 451 760 342 680 Prepayments 136 348 131 342 Deposits 352 162 94 48 Related company (Note 5) 7 - - - Subsidiaries (Note 11) - - 451 75

Joint venture (Note 13) 48 40 48 40 Less: Allowance for doubtful non-trade receivables (24) - (24) - 24 40 24 40 Staff loans 32 33 19 20 1,002 1,343 1,061 1,205

The group’s and company’s other receivables due from related company, subsidiaries and joint venture is interest-free and repayable on demand and the average age of these receivables is less than 30 days.

Movement in the allowance for doubtful debts:

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

Balance at beginning of the year 212 214 183 183 Increase in allowance recognised in profit and loss 24 - 24 - Exchange adjustments - (2) - - Balance at end of year 236 212 207 183



9 OTHER RECEIVABLES AND PREPAYMENTS (cont'd)

The group’s and company’s other receivables that are not denominated in the functional currencies of the respective entities are as follows:

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

United States dollar 178 314 244 373 Euro - 11 - 11 British pounds 20 28 20 28 Malaysian ringgit - - 365 16 Swiss franc - 1 - 1 Swedish kroner - 11 - 11 Australian dollar 69 45 69 45 Philippines peso 7 - 20 -

10 INVENTORIES Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Raw materials 11,810 12,049 11,789 11,846 Finished goods 9,914 10,443 7,338 5,645 Work-in-progress 1,378 1,071 1,378 1,070 23,102 23,563 20,505 18,561

The cost of inventories recognised as an expense includes direct write off of $12,000 (2007 : $242,000) and allowance for inventories of $120,000 (2007 : $38,000) in respect of write downs of inventories to net realisable value.

11 SUBSIDIARIES Company 2008 2007 $’000 $’000

Unquoted equity shares, at cost 3,808 3,550 Impairment loss (171) (171) 3,637 3,379

Impairment loss of $171,000 (2007 : $171,000) was recognised in relation to the carrying value of the investment in a subsidiary as the subsidiary is incurring losses from its operations and the recoverable value of its underlying assets had declined.



11 SUBSIDIARIES (cont'd)

Details of the company’s subsidiaries at December 31, 2008 are as follows:

Proportion of ownership Country of interest incorporation and voting Name of subsidiary and operation power held Principal activities 2008 2007 % %

EDMI Meters Sdn Bhd (1) Malaysia 100 100 Provision of service and after sales support for revenue meters and supply of electronic components

EDMI Pty Ltd (2) Australia 100 100 Design and sales of electronic revenue meters

EDMI International People’s 100 100 Provision of service and trading of electronics equipment Trading (Shanghai) Republic

Co., Ltd (3) of China

EDMI Vietnam Vietnam 51 51 Provision of installation and testing services for meters Company Limited (4)

EDMI Philippines Inc.(5) Philippines 100 - Sale of electronics revenue meters, supply of electronic components and provision of service and after sales support

Subsidiary of EDMI Pty Ltd

Noustech Pty Ltd (2) Australia 100 100 Provision and installation of metering systems

(1) Audited by Horwath, Kuala Lumpur. (2) Audited by BDO Kendalls, Brisbane Australia. (3) Audited by Shanghai Zhong Hui Certified Public Accountants Co., Ltd. (4) Audited by AFC Saigon, Vietnam. (5) The entity is incorporated on May 28, 2008 and is audited by Ramon F. Garcia & Company, CPAs.

The net assets and pre-tax profits of subsidiaries referred to in footnote (1), (2), (3), (4) and (5) above are individually less than 20% of the net assets and pre-tax profits respectively of the group.



12 ASSOCIATE Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Cost of investment in associate 103 103 103 103 Share of post-acquisition reserves 149 227 - - Carrying amount 252 330 103 103

Details of the associate of the group and the company at December 31, 2008 are as follows:

Proportion of ownership Country of interest incorporation and voting Name of associate and operation power held Principal activities 2008 2007 % %

Power House Technology Thailand 49 49 Manufacturing and sale of Company Limited (1) electronic revenue meters

(1) Audited by V.R. Accounting Solution Co., Ltd.

Summarised financial information in respect of the group’s associate is set out below: Group 2008 2007 $’000 $’000

Total assets 2,073 6,415 Total liabilities (1,559) (5,741) Net assets 514 674

Group’s share of associate’s net assets 252 330

Revenue 4,378 6,211 (Loss) Profit for the year (132) 242 Group’s share of associate’s (loss) profit for the year (65) 119

13 JOINT VENTURES Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Capital contribution to joint ventures (a) 607 84 607 84 Share of post-acquisition reserves (b) (327) - - - 280 84 607 84

The capital contribution comprises contribution to Advanced Meter Software Pte. Ltd. of less than $1,000 (a) (2007 : less than $1,000) and Wallaby Metering Systems Private Limited of $607,000 (2007 : $84,000).

The unrecognised share of loss for the joint ventures for 2008 is approximately $3,000 (2007 : $19,000). (b) The group considers this amount to be immaterial.



13 JOINT VENTURES (cont'd)

Details of the joint ventures of the group and the company at December 31, 2008 are as follows:

Proportion of ownership Country of interest incorporation and voting Name of joint venture and operation power held Principal activities 2008 2007 % %

Advanced Meter Software Singapore 50 50 Licensing and sale of software for meters. It has outsourced software development to a party related to the other joint venturers. This software development has yet to complete and no revenue has been generated

Pte. Ltd. (1)

Wallaby Metering India 50 50 Designing, manufacturing and marketing of electronic energy meters and systems for automatic energy reading management

(1) The entity has became dormant since financial year 2006 and is audited by Horwath First Trust, Singapore.(2) The entity is incorporated on July 20, 2007 and is insignificant to the results of the group as at year end.

Summarised financial information in respect of the group’s joint ventures is set out below: Group 2008 2007 $’000 $’000

Total assets 706 185 Total liabilities (199) (90) Net assets 507 95

Revenue 37 - Loss for the year (540) (39)

14 AVAILABLE-FOR-SALE INVESTMENT Group and Company 2008 2007 $’000 $’000

Quoted equity shares, at fair value 813 2,887

The investment in quoted securities offer the group the opportunity for return through dividend income and fair value gains.

The fair values of these securities are based on the quoted closing market prices on the last market day of the financial year.

The group’s and company’s available-for-sale investment is denominated in British pounds.



15 PLANT AND EQUIPMENT Machinery and Motor equipment vehicles Total $’000 $’000 $’000 The Group

Cost: At January 1, 2007 7,938 162 8,100 Additions 911 58 969 Disposals (68) (37) (105) Exchange differences 63 2 65 At December 31, 2007 8,844 185 9,029 Additions 864 - 864 Disposals (606) - (606) Exchange differences (305) (5) (310) At December 31, 2008 8,797 180 8,977

Accumulated depreciation: At January 1, 2007 3,231 67 3,298 Depreciation for the year 901 30 931 Eliminated on disposals (33) (30) (63) Exchange differences 33 1 34 At December 31, 2007 4,132 68 4,200 Depreciation for the year 920 34 954 Eliminated on disposals (581) - (581) Exchange differences (163) - (163) At December 31, 2008 4,308 102 4,410

Carrying amount: At December 31, 2008 4,489 78 4,567

At December 31, 2007 4,712 117 4,829

The Company

Cost: At January 1, 2007 6,054 126 6,180 Additions 773 35 808 At December 31, 2007 6,827 161 6,988 Additions 726 - 726 Disposals (31) - (31) At December 31, 2008 7,522 161 7,683

Accumulated depreciation: At January 1, 2007 2,247 38 2,285 Depreciation for the year 691 28 719 At December 31, 2007 2,938 66 3,004 Depreciation for the year 715 32 747 Disposals (22) - (22) At December 31, 2008 3,631 98 3,729

Carrying amount: At December 31, 2008 3,891 63 3,954

At December 31, 2007 3,889 95 3,984



15 PLANT AND EQUIPMENT (cont'd)

The group and the company have equipment and motor vehicles with carrying amounts of $308,000 (2007 : $349,000) and $47,000 (2007 : $63,000) respectively under finance leases (Note 22).

16 LONG TERM RECEIVABLE Group and Company 2008 2007 $’000 $’000

Loan to outside party 499 -

The loan is interest-free and will be applied towards the consideration payable for the acquisition of ATLAS Group (Note 34).

The group’s and company’s long term receivable is denominated in Australian dollar.

17 GOODWILL Group 2008 and 2007 $’000 Cost: At beginning and end of the year 316

The goodwill on consolidation relates to the acquisition of shares in the subsidiary, EDMI Pty Ltd in previous years.

The group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the above entity concerned are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the entity. The growth rates are based on industry growth forecasts.

The group prepares cash flow forecasts derived from the most recent financial budgets approved by management and extrapolates cash flows for the following two years based on an estimated growth rate of 5% (2007 : 5%) per annum.

The rate used to discount the forecast cash flows from the above entity is 9.7% (2007 : 9.7%) per annum.

18 DEFERRED TAX ASSETS/LIABILITIES Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Deferred tax assets 330 550 - -

Deferred tax liabilities 401 420 399 418



18 DEFERRED TAX ASSETS/LIABILITIES (cont'd)

Deferred tax assets

The movements for the year were as follow: Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Balance at beginning of year 550 406 - - (Credit) Charge to profit and loss for the year (162) 136 - - Exchange adjustments (58) 8 - - Balance at end of year 330 550 - -

The deferred tax assets relate largely to a subsidiary’s tax losses, accruals and allowances which are not currently tax-deductible.

Deferred tax liabilities

The movements for the year were as follows: Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Balance at beginning of year 420 408 418 406 (Credit) Charge to profit and loss for the year (19) (48) (19) 12 Adjustments for previous year - 61 - - Effect of change in tax rate - (1) - - Balance at end of year 401 420 399 418

The deferred tax liabilities relate largely to accelerated tax depreciation for plant and equipment.

At the balance sheet date, deferred tax liabilities arising from undistributed profits of subsidiaries have not been recognised because the group controls the dividend policy of these subsidiaries and has determined that the profits will not be distributed in the foreseeable future. The amount of the undistributed profits is approximately $1,348,000 (2007 : $1,058,000).

19 BANK OVERDRAFTS AND LOANS Group and Company 2008 2007 $’000 $’000

Bank overdraft A - 463 Bank overdraft B - 545 Bank overdraft C - 135 - 1,143 Bank loans - 3,028 Total - 4,171

Bank overdraft A was repaid during the year. The average effective interest rate in 2008 and 2007 approximated 5.0% and 5.4% per annum respectively and is determined based on prime rate.



19 BANK OVERDRAFTS AND LOANS (cont'd)

Bank overdraft B was repaid during the year. The average effective interest rate in 2008 and 2007 approximated 5.0% and 5.0% per annum respectively and is determined based on 0.75% plus prime rate.

Bank overdraft C was repaid during the year. The average effective interest rate in 2008 and 2007 approximated 12.5% and 13.4% per annum respectively and is determined based on prime rate.

The short-term loans in 2007 bore interest ranging 3.69% to 4.17% per annum, unsecured and was repayable within the next 12 months.

The group’s and company’s bank overdrafts and loans that are not denominated in the functional currencies of the respective entities are as follows:

Group and Company 2008 2007 $’000 $’000

United States dollar - 135

20 TRADE PAYABLES Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Outside parties 11,098 4,363 10,253 4,249 Related companies (Note 5) 173 49 11 49 Immediate holding company (Note 5) 479 289 479 289 Subsidiaries (Note 11) - - 542 - 11,750 4,701 11,285 4,587

The average credit period on purchase of goods is 30 to 60 days (2007 : 30 to 60 days). No interest is charged on overdue trade payables.

The group’s and company’s trade payables that are not denominated in the functional currencies of the respective entities are as follows:

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

United States dollar 9,223 3,703 9,532 3,700 Euro 75 54 75 54 British pounds 21 2 21 2 Australian dollar - - 213 - New Zealand dollar - - 30 - Swedish kroner 3 - 3 - Philippines peso 162 - - -



21 OTHER PAYABLES Group Company 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Associate (Note 12) - 205 - 205 Related company (Note 5) 84 - - - Salary-related accruals 1,183 1,304 690 714 Other accrued expenses 1,424 822 1,090 552 2,691 2,331 1,780 1,471

The group’s and company’s other payables that are not denominated in the functional currencies of the respective entities are as follows:

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

Thai baht - 205 - 205 United States dollar 324 - 324 - British pounds 33 - 33 - Euro 68 - 68 - Philippines peso 84 - - -

22 FINANCE LEASES Group and Company Present value Minimum of minimum lease payments lease payments 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Amounts payable under finance leases:

Within one year 94 154 86 143 In the second to fifth year inclusive 24 118 20 104 118 272 106 247 Less: Future finance charges (12) (25) NA NA Present value of lease obligations 106 247 106 247 Less: Amount due for settlement within 12 months (shown under current liabilities) (86) (143) Amount due for settlement after 12 months 20 104

Certain of the group’s and company’s equipment were acquired through finance leases. The average lease term is 3 to 7 years (2007 : 3 to 7 years). For the year ended December 31, 2008, the average effective borrowing rate was 5.0% to 6.6% (2007 : 5.0% to 6.6%) per annum. Interest rates are fixed at the contract date and thus expose the group to fair value interest rate risk. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

All lease obligations are denominated in Singapore dollars.

The fair value of the group’s lease obligations approximates their carrying amount.

The group’s and company’s obligations under finance leases are secured by the lessors’ title to the leased assets (Note 15).



23 SHARE-BASED PAYMENTS

Equity-settled share option scheme

EDMI Share Option Scheme 2003

The company has a share option scheme for all employees (excluding employees who are also controlling shareholders and their associates), executive directors (excluding those who are substantial shareholders) and independent directors of the group. The scheme is administered by the Scheme Committee. The options are granted for a consideration of $1.00 for all the shares in respect of which the options are granted. The options may be exercised after one year from the date of the grant subject to the condition that up to 25%, 50% and 75% of the options may be exercised prior to the second, third and fourth anniversary of the offer date of options respectively.

Options are exercisable at a price based on the average of the last dealt prices on the Main Board of Singapore Exchange Securities Trading Limited, for a share over the three trading days immediately preceding the grant of the option, rounded to the nearest whole cent in the event of fractional prices.

The exercisable period is 10 years for directors and employees, and 5 years for independent directors. If the options remain unexercised after the specified period from the date of grant, the options expire. Options are forfeited if the participant leaves the group before the options vest.

Details of the share options outstanding during the year are as follows:

Group and Company 2008 2007 Weighted Weighted Number average Number average of share exercise of share exercise options price options price ’000 $ ’000 $

Outstanding at beginning of year 15,505 0.23 13,615 0.13 Granted during the year - - 5,610 0.32 Exercised during the year (590) 0.13 (3,480) 0.13 Lapsed during the year (2,950) 0.31 (240) 0.23 Outstanding at end of year 11,965 15,505

Exercisable at end of year 6,728 3,175

The weighted average share price at the dates of exercise for share options exercised during the year was $0.22 (2007 : $0.35). The options outstanding at the end of the year have a weighted average remaining contractual life of 5.6 years (2007 : 6.6 years) for executive share options and 1.1 years (2007 : 2.1 years) for non-executive share options.

The estimated fair value of the options granted on March 13, 2007 is $665,000. No share options were granted in 2008.



23 SHARE-BASED PAYMENTS (cont'd)

The fair values for share options granted in 2007 were calculated using the Binomial pricing model. The inputs into the model were as follows:

Weighted average share price $0.32 Weighted average exercise price $0.32 Expected volatility 48% Expected life 7.9 Risk free rate 3.0% Expected dividend yield 1.0%

Expected volatility was determined by calculating the historical volatility of the company’s share price over the previous two years. The expected life used in the model had been adjusted, based on management’s best estimate, for the effects of non-transferrability, exercise restrictions and behavioural considerations. In relation to share-based payments arising from share options issued, the group and the company recognised total expenses of $232,000 (2007 : $238,000) during the year.

24 SHARE CAPITAL Group and Company 2008 2007 2008 2007 ’000 ’000 $’000 $’000 Number of ordinary shares Issued and paid up: At beginning of the year 210,735 188,455 22,140 16,457 Exercise of share options 590 3,480 77 543 Issued for cash - 18,800 - 5,140 At end of the year 211,325 210,735 22,217 22,140

The ordinary shares, which have no par value, carry one vote per share and carry a right to dividends as and when declared by the company.

In 2007, the company has issued 18,800,000 shares for cash to be used towards the capital requirement of the company.

25 REVENUE Group 2008 2007 $’000 $’000

Sale of goods 56,553 45,092 Service income 83 29 56,636 45,121



26 OTHER OPERATING INCOME Group 2008 2007 $’000 $’000

Interest income from non-related companies 237 153 Rental income from a related company (Note 5) 22 23 Miscellaneous income 78 31 337 207

27 FINANCE COST Group 2008 2007 $’000 $’000

Interest expense to non-related companies 61 76

28 INCOME TAX EXPENSE Group 2008 2007 $’000 $’000

Current 409 385 Deferred 143 (124) Under (Over) provision in prior years: - Current 36 (1) 588 260

Domestic income tax is calculated at 18% of the assessable profit for the year. Taxation for foreign entities is calculated at the rates prevailing in the relevant jurisdictions in which these entities operate.

The total charge for the year can be reconciled to the accounting profit as follows: Group 2008 2007 $’000 $’000

Profit before income tax 2,492 1,625

Tax at domestic income tax rate of 18% 449 293 Non-allowable items 82 14 Under (Over) provision in prior years 36 (1) Deferred tax benefit not recognised 15 21 Effect of change in tax rate (18) (1) Corporate tax exemption (27) (27) Effect of different tax rates of subsidiaries operating in other jurisdictions 56 (40) Others (5) 1 Tax expense for the year 588 260



28 INCOME TAX EXPENSE (cont'd)

The group has tax losses carryforwards available for offsetting against future taxable income as follows:

Group 2008 2007 $’000 $’000

Amount at beginning of year 593 248 Amount in current year 101 364 Amount utilised in current year (273) - Exchange adjustment (18) (19) Amount at end of year 403 593

Deferred tax benefit on above unrecognised 100 85

Deferred tax benefit on above recognised 13 86

Deferred tax benefits vary from the Singapore statutory tax rate as it comprise deferred tax on overseas operations.

The realisation of the future income tax benefits from tax losses carryforwards is available for an unlimited future period subject to the conditions imposed by law in the respective countries of incorporation including the retention of majority shareholders as defined.

The potential tax savings relating to tax losses carried forward are recognised as deferred tax assets only when there is reasonable expectation of realisation in the foreseeable future.

29 PROFIT FOR THE YEAR

Profit for the year has been arrived at after charging (crediting): Group 2008 2007 $’000 $’000

Directors’ remuneration: Company’s directors 865 702 Subsidiaries’ directors 304 301 Total directors’ remuneration 1,169 1,003

Employee benefits expense (including directors’ remuneration):

Share-based payments 232 238 Cost of defined contribution plans 773 730 Others 10,715 9,816 Total employee benefits expense 11,720 10,784



29 PROFIT FOR THE YEAR (cont'd)

Profit for the year has been arrived at after charging (crediting): Group 2008 2007 $’000 $’000

Allowance for doubtful trade receivables - 157 Allowance for doubtful non-trade receivables 24 - Depreciation of plant and equipment 954 931 Government grant (11) (12) Research expenses (1) 3,062 3,019 Inventories written off 12 242 Allowance for inventories 120 38 Foreign currency exchange adjustment loss - net 2,311 136 Cost of inventories recognised as an expense 39,849 32,138 Non-audit fees paid/payable to: Auditors of the company 5 5 Other auditors 2 1

(1) The group’s research expenses comprise manpower costs of $2,573,000 (2007 : $2,396,000) and has been included in employee benefits expense in the profit and loss statement.

30 EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the company is based on the following data:

Group 2008 2007 Basic Diluted Basic Diluted $’000 $’000 $’000 $’000 Net profit attributable to equity holders of the company 1,930 1,930 1,402 1,402

2008 2007 Number of shares ('000) Number of shares ('000)

Weighted average number of ordinary shares for purposes of basic earnings per share 211,194 190,142 Effect of dilutive potential ordinary shares arising from share options 2,084 7,434 Weighted average number of ordinary shares for the purposes of diluted earnings per share 213,278 197,576



31 COMMITMENTS

(i) Operating lease commitments Group 2008 2007 $’000 $’000 Minimum lease payments under operating leases included in the profit and loss statement 1,281 1,159

At the balance sheet date, the group has outstanding commitments under non-cancellable operating leases which fall due as follows:

Group 2008 2007 $’000 $’000

Within 1 year 951 527 Within 2 to 5 years 1,281 231 Total 2,232 758

Operating lease payments represent rentals payable by the group for the rental of factory spaces and office premises. Leases are entered into for a period of 2 to 5 years. Certain rental rates are subject to future adjustments based on changes in consumer price index of the lesser’s own economic environment.

(ii) Other commitment

At the balance sheet date, the company has committed to providing continuing financial support to the joint ventures (Note 13).

(iii) Performance bonds/guarantees Group and Company 2008 2007 $’000 $’000

Performance bonds/guarantees 1,005 1,603

These performance bonds and guarantees have been issued to third parties using bank credit facilities which are secured by margin deposits of the group and company amounting to approximately $196,000 and $58,000 respectively (2007 : $64,000 and $64,000 respectively) (Note 7).

(iv) Capital commitment Group and Company 2008 2007 $’000 $’000

Purchase of plant and equipment 500 -



32 SEGMENT INFORMATION

The group is engaged in the design, manufacture and sale of electronic revenue meters for use principally by utility companies involved in the generation, distribution and supply of electricity and the provision of service and after sales support for these meters. As such, substantially all revenue are derived from the sale and servicing of electronic revenue meters.

Segment revenue : Segment revenue is analysed based on the location of customers regardless of where the goods are produced.

Segment assets and liabilities : Segment assets and liabilities are analysed based on location of those assets. Segment assets consist principally of receivables, inventories and plant and equipment, net of allowances and provisions. Segment liabilities consist principally of trade payables, other payables and bank overdrafts and loans.

Inter-segment transfers : Segment revenue and expenses include transfers between geographical regions. Inter-segment sales are charged at cost plus a percentage mark-up. These transfers and inter-segment mark-up are eliminated on consolidation.

The segment information is provided by geographical regions based on locations of customers. The geographical regions determined by management are as follows:

Australasia

Australasia includes mainly Australia, New Zealand and Fiji.

ASEAN

This refers to the 10 member countries of the Association of South East Asian Nations (“ASEAN”), namely, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Asia

Asia includes mainly Bangladesh, Sri Lanka, India, Korea and People’s Republic of China, but excludes members of ASEAN.

Europe

Europe includes mainly United Kingdom, Belgium, Sweden, Switzerland and Italy.

Others

Others comprise mainly the Middle East and Africa.



32 SEGMENT INFORMATION (cont'd) Asia (excluding ASEAN Australasia ASEAN countries) Europe Others Elimination Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 2008

Revenue External revenue 22,407 18,650 4,204 6,968 4,407 - 56,636 Inter-segment revenue 4,094 2,331 440 - - (6,865) - 26,501 20,981 4,644 6,968 4,407 (6,865) 56,636

Result Segment results 236 (609) 534 610 1,893 - 2,664 Interest expense (61) Interest income 237 Results of associate and joint ventures (348) Profit before income tax 2,492 Income tax expense (588) Profit for the year 1,904

Other information Segment assets 1,175 43,887 1,415 - - - 46,477 Interests in associate - 252 - - - - 252 Interests in joint ventures - - 280 - - - 280 Unallocated corporate assets 11,954 Consolidated total assets 58,963

Segment liabilities 344 13,679 752 - - - 14,775 Unallocated corporate liabilities 506 Consolidated total liabilities 15,281

Expenditure on plant and equipment 85 761 18 - - - 864 Depreciation 426 300 52 108 68 - 954



32 SEGMENT INFORMATION (cont'd)

Asia (excluding ASEAN Australasia ASEAN countries) Europe Others Elimination Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 2007

Revenue External revenue 9,127 20,569 5,110 7,803 2,512 - 45,121 Inter-segment revenue 8,993 254 613 - - (9,860) - 18,120 20,823 5,723 7,803 2,512 (9,860) 45,121

Result Segment results (52) (384) 605 889 365 6 1,429 Interest expense (76) Interest income 153 Results of associate 119 Profit before income tax 1,625 Income tax expense (260) Profit for the year 1,365

Other information Segment assets 6,384 43,158 706 - - - 50,248 Interests in associate - 103 - - - - 103 Interests in joint venture - - 607 - - - 607 Unallocated corporate assets 5,505 Consolidated total assets 56,463

Segment liabilities 724 9,160 177 - - - 10,061 Unallocated corporate liabilities 2,215 Consolidated total liabilities 12,276

Expenditure on plant and equipment 149 814 6 - - - 969 Depreciation 318 362 84 127 40 - 931

33 DIVIDENDS

In 2007, the company declared and paid a final dividend of 1.00 cent per ordinary share, less tax at 18% on the ordinary shares of the company totalling $1,716,000 in respect of the financial year ended December 31, 2006.



34 EVENT AFTER THE BALANCE SHEET DATE

On January 8, 2008, the company has entered into a Shareholders’ Deed of Arrangement and a Deed of Variation of Shareholders’ Deed of Arrangement (the “Deeds”) with

Global Machine Tools Pty Ltd (“GFT”);(i)

Ian Grant Montgomery and Jennie Helen Akers ATF Dorothy Akers Trust (“DAT”);(ii)

Brad Golic (“BG”) as shareholder representative of GFT;(iii)

Ian Grant Montgomery (“IGM”) as shareholder representative of DAT;(iv)

Lee Kwang Mong, Douglas David Ross and Chin Jin Meng as shareholder representative of the EDMI; and(v)

Atlas Measurement Pty Ltd (“ATLAS”) to record their agreement on the relationship between themselves (vi) and the way ATLAS carry on the proposed business acquisition from the Atlas Group of Companies (“ATLAS Group”).

ATLAS Group consist of Atlas Measurement (Gas) Pty Ltd, Atlas Measurement (Electricity) Pty Ltd and BSR Tooling (Australia) Pty Ltd which are all incorporated in Australia and are in the business of supplying quantity measurement and control equipment in the gas and electricity industries throughout Australia and associated repair services.

In accordance with the Deeds, the company will subscribe for 60% of shares in ATLAS at an agreed subscription price of A$3,216,000. The remaining 40% will be subscribed equally between GFT and DAT at A$1,072,000 each of the 20% shareholding interest in ATLAS.

Based on letter of agreement dated on June 12, 2008, the purchase price has been revised from A$5,360,000 to A$4,288,000. The company will subscribe for 75% of shares in ATLAS at an agreed subscription price of A$3,216,000. The remaining 25% will be subscribed equally between GFT and DAT at A$536,000 each of the 12.5% shareholding interest in ATLAS.

Based on the Final Extension Letter Agreement dated on November 26, 2008, it was mutually agreed that the final extension date in relation to the satisfaction of all the conditions precedent for the acquisition shall be extended to March 31, 2009. The company has extended a loan amounting to A$500,000 to ATLAS Group in June 2008 and the loan shall be used to partially offset against the company subscription price on the date of completion of the acquisition. The loan is interest free for the period from the loan disbursement date until the date of completion of the acquisition. In the event that the proposed acquisition is not completed by March 31, 2009, the company is entitled to the repayment of the full amount of the loan, together with all interest accrued based on prevailing commercial interest rate thereon from ATLAS Group within 12 months from the loan disbursement date.


In the opinion of the directors, the consolidated financial statements of the group and the balance sheet and statement of changes in equity of the company set out on pages 33 to 79 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 December 31, 2008 and of the results, changes in equity and cash flows of the group and changes in equity of the company for the financial year then ended and at the date of this statement there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due.

ON BEHALF OF THE DIRECTORS

Lee Phuan Weng

Lee Kwang Mong

March 24, 2009

STaTEmEnT OF DIRECTORS


Issued and fully Paid-Up Capital : $22,344,470Number of Ordinary Shares in Issue (excluding treasury shares) : 211,325,000Number of Treasury Shares held : NilClass of Shares : Ordinary SharesVoting Rights : One vote per share

DISTRIBUTION OF SHAREHOLDINGSNo. of

Size of Shareholdings Shareholders % No. of Shares %

1 - 999 4 0.46 2,215 0.001,000 - 10,000 534 61.10 2,014,000 0.9510,001 - 1,000,000 317 36.27 29,758,000 14.081,000,001 and above 19 2.17 179,550,785 84.97

Total 874 100.00 211,325,000 100.00

TWENTY LARGEST SHAREHOLDERS

No. Name No. of Shares %

1 Bridex Singapore Pte Ltd 125,289,535 59.292 United Overseas Bank Nominees Pte Ltd 11,455,000 5.423 Phillip Securities Pte Ltd 6,891,000 3.264 Kim Eng Securities Pte. Ltd. 3,752,250 1.785 Yeo Lay Leng 3,089,000 1.466 OCBC Securities Private Ltd 3,061,000 1.457 DMG & Partners Securities Pte Ltd 3,017,000 1.438 UOB Kay Hian Pte Ltd 2,724,000 1.299 DB Nominees (S) Pte Ltd 2,650,000 1.2510 Lee Kwang Mong 2,400,000 1.1411 Sim Hua Cheng 2,308,000 1.0912 Ong Tiew Siam 2,100,000 0.9913 Citibank Nominees S'pore Pte Ltd 2,011,000 0.9514 DBS Vickers Securities (S) Pte Ltd 1,943,000 0.9215 Chin Jin Meng 1,850,000 0.8816 Lee Hwei Shan 1,600,000 0.7617 Tan Tow Hung 1,200,000 0.5718 Soh Cheng Geek 1,129,000 0.5319 Chia Kee Koon 1,081,000 0.5120 Chan Sing Yee 1,000,000 0.47

Total 180,550,785 85.44

STaTISTICS OF SHaREHOlDInGS AS AT 23 MARCH 2009


PERCENTAGE OF SHAREHOLDINGS IN PUBLIC HANDS

Based on information available to the Company as at 23 March 2009, approximately 30.39% of the Company’s shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual issued by SGX-ST.

SUBSTANTIAL SHAREHOLDERS AS AT 23 MARCH 2009

Direct Deemed

1) SMB United Limited (1) - 125,289,5352) Bridex Singapore Pte Ltd (1) 125,289,535 -3) Yeoman Capital Management Pte Ltd (2) - 12,697,0004) Yeo Seng Chong (3) 700,000 12,550,000

Note:(1) Bridex Singapore Pte Ltd is a wholly owned subsidiary of SMB United Limited. Hence, SMB United Limited is deemed to be

interested in all the shares held by Bridex Singapore Pte Ltd.

(2) Yeoman Capital Management Pte Ltd is deemed to be interested in 10,500,000 shares held by CDP Nominees Pte Ltd and

2,197,000 shares held by DB Nominees (S) Pte Ltd.

(3) Yeo Seng Chong is deemed to be interested in 12,550,000 shares. The breakdown for the total numbers of shares are as

follows:-

a. 10,500,000 shares is held under the name of CDP Nominees Pte Ltd.

b. 2,000,000 shares is held under the name of DB Nominees (S) Pte Ltd.

c. 50,000 shares is held by his spouse, Ms Lim Mee Hwa.

STaTISTICS OF SHaREHOlDInGS AS AT 23 MARCH 2009


nOTICE OF annual GEnERal mEETInG

NOTICE IS HEREBY GIVEN that the Annual General Meeting of EDMI Limited (“the Company”) will be held at 47 Yishun Industrial Park A #01-00, Singapore 768724 on Wednesday, 29 April 2009 at 10.30 a.m. for the following purposes:

AS ORDINARY BUSINESS

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

2. To re-elect the following Directors of the Company retiring pursuant to Article 91 of the Articles of Association:

Mr Ling Yong Wah (Resolution 2) Mr Yeo Jeu Nam (Resolution 3)

Mr Ling Yong Wah will, upon re-election as a Director of the Company, remain Chairman of the Audit Committee and will be considered independent.

Mr Yeo Jeu Nam will, upon re-election as a Director of the Company, remain Chairman of the Remuneration Committee and a member of the Audit Committee and Nominating Committee and will be considered independent.

3. To approve the payment of Directors’ fees of S$132,000.00 for the year ended 31 December 2008 (2007: S$132,000.00). (Resolution 4)

4. To re-appoint Deloitte & Touche LLP as the Auditors of the Company and to authorise the Directors of the Company to fix their remuneration. (Resolution 5)

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

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 6. Authority to issue shares up to 50 per centum (50%) of the issued shares in the capital of the Company

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorised and empowered to:

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

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their absolute discretion deem fit; and

(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in (b) pursuance of any Instrument made or granted by the Directors of the Company while this Resolution was in force,



provided that:

the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or (1) granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed fifty per centum (50%) of the total number of issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for (2) the purpose of determining the aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the percentage of issued shares and Instruments shall be based on the total number of issued shares in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

new shares arising from the conversion or exercise of the Instruments or any convertible securities;(a) new shares arising from exercising share options or vesting of share awards outstanding and subsisting (b) at the time of the passing of this Resolution; and any subsequent bonus issue, consolidation or subdivision of shares;(c)

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

unless revoked or varied by the Company in a general meeting, such authority shall continue in force (i) until the (4) conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments.

[See Explanatory Note (i)] (Resolution 6) 7. Authority to issue shares under the EDMI Share Option Scheme 2003

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant options under the EDMI Share Option Scheme 2003 (“the Scheme”) and to issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the exercise of options granted by the Company under the Scheme, whether granted during the subsistence of this authority or otherwise, provided always that the aggregate number of additional ordinary shares to be issued pursuant to the Scheme shall not exceed fifteen per centum (15%) of the total number of issued shares in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (ii)] (Resolution 7)

By Order of the Board

Chin Jin MengChen Yen Ling Company Secretaries

Singapore, 9 April 2009


Explanatory Notes:

(i) The Ordinary Resolution 6 in item 6 above, if passed, will empower the Directors of the Company from the date of this Meeting until the date of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the total number of issued shares in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to existing shareholders of the Company. For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated based on the total number of issued shares in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent bonus issue, consolidation or subdivision of shares.

(ii) The Ordinary Resolution 7 in item 7 above, if passed, will empower the Directors of the Company, from the date of this Meeting until the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the exercise of options granted or to be granted under the Scheme up to a number not exceeding in total (for the entire duration of the Scheme) fifteen per centum (15%) of the total number of issued shares in the capital of the Company from time to time.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the Company.

2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 47 Yishun

Industrial Park A #01-00, Singapore 768724 not less than forty-eight (48) hours before the time appointed for holding the Meeting.



This page has been intentionally left blank.


EDmI lImITED(Company Registration No. 199701694K)(Incorporated In the Republic of Singapore with limited liability)

PROXY FORm(Please see notes overleaf before completing this Form)

I/We,

of

being a member/members of EDMI LIMITED (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of ShareholdingsNo. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of ShareholdingsNo. of Shares %

Address

or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on Wednesday, 29 April 2009 at 10.30 a.m. at 47 Yishun Industrial Park A #01-00, Singapore 768724 and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [√] within the box provided.)

No. Resolutions relating to: For Against1 Directors’ Report and Audited Accounts for the year ended 31 December 2008 2 Re-election of Mr Ling Yong Wah as a Director3 Re-election of Mr Yeo Jeu Nam as a Director4 Approval of Directors’ fees amounting to S$132,000.00 for the year ended 31 December

2008 5 Re-appointment of Deloitte & Touche LLP as Auditors6 Authority to issue new shares7 Authority to issue shares under the EDMI Share Option Scheme 2003

Dated this _________ day of _________ 2009

Total number of Shares in: No. of Shares(a) CDP Register(b) Register of Members

______________________________________Signature of Shareholder(s)or, Common Seal of Corporate Shareholder

IMPORTANT:

For investors who have used their CPF monies to buy EDMI Limited’s 1. shares, this Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

This Proxy Form is not valid for use by CPF investors and shall be 2. ineffective for all intents and purposes if used or purported to be used by them.

CPF investors who wish to attend the Meeting as an observer must 3. submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.

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

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the member shall specify the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy, failing which the nomination shall be deemed to be alternative.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 47 Yishun Industrial Park A #01-00, Singapore 768724 not less than forty-eight (48) hours before the time appointed for the Meeting.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument.

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

General:

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. In addition, in the case of Shares entered 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 forty-eight (48) hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

EDMI Limited47 Yishun Industrial Park ASingapore 768724

Tel: +65 6756 2938Fax: +65 6756 0125www.edmi-meters.com

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