Challenger AR Complete Low-Res

FOR YOU
ANNUAL REPORT 2012

ALL
02 Corporate Profle
03 Chief Executives Message
05 Corporate Information
06 Group of Companies
07 Profle of Board of Directors
08 Profle of Key Management
10 Challenger Retail Locations
13 Financial Highlights
14 Operations Review
CONTENTS
1
CHALLENGER
ALL FOR YOU aPtLy DesCRiBes us
stRiving to give ouR veRy Best
to ouR CustoMeRs, MeMBeRs,
Business PaRtneRs, sHaReHoLDeRs
anD investoRs. tHe aDDition oF
new stoRes Has aLLoweD us to
gRow stRengtH to stRengtH in
ouR RetaiL Business anD seRviCe
DeLiveRy stanDaRDs. at tHe HeaRt
oF eveRytHing is ouR MeMBeRs in
aDDition to sHowCasing tHe Latest
it anD LiFestyLe PRoDuCts, we aRe
ConstantLy enRiCHing tHeiR sHoPPing
exPeRienCe By PioneeRing RetaiL
teCHnoLogies FaR aHeaD oF
tHe MaRKet.
Challenger Technologies Limited . Annual Report 2012
WE ARE
2
Challenger Technologies Limited. Annual Report 2012
CORPORATE
PROFILE
witH ConvenienCe anD seRviCe
as ouR RetaiL HaLLMaRKs,
CHaLLengeR teCHnoLogies LiMiteD
(CHaLLengeR) is singaPoRes
LeaDing it PRoDuCts anD seRviCes
PRoviDeR. ouR extensive netwoRK
oF 29 stRategiCaLLy-LoCateD RetaiL
stoRes CoMPRise oF 1 FLagsHiP
MEGASTORE, 19 SUPERSTORES
anD 9 Mini stoRes. in MaLaysia,
CHaLLengeR is RePResenteD
By 1 FLagsHiP MegastoRe anD
3 suPeRstoRes. ListeD on tHe
singaPoRe stoCK exCHange sinCe
JanuaRy 2004, ouR aCHieveMents
aRe weLL-gRounDeD witH a LoyaL
Base oF oveR 400,000 MeMBeRs.
3
CHieF
EXECUTIVES
MESSAGE
By Mr Loo Leong thye
For the fnancial year ended 31
December 2012 (FY2012), our
Group revenue increased by about
6% to $337.3 million and net proft
increased by about 4% to $16.4
million. Revenue from the core retail
business in IT products and services
also increased by about 7% to $331.4
million in FY2012. Fueled by full-year
operations for stores opening during
FY2011 and new store openings
in FY2012, our retail business
contributed about 98.3% of our
Group revenue.
Singapore has presented opportunities
for us to grow our retail footprint. In
FY2012, we opened three stores. In
the frst half of FY2013 alone, we will
open up to fve stores. The expansion
trend will continue as long as we fnd
stores at suitable locations to serve
our customers better.
In the frst quarter of 2013, we closed
two stores in Singapore. While we
continue to expand with more new
store openings, we will also close
stores at malls that undergo large-
scale renovations or are deemed not
viable. In Malaysia, we currently have
three stores in Kuala Lumpur and one
in Malacca. We will continue to add
more stores in Malaysia once suitable
locations at reasonable rentals are
found.
In the past year, we have continued
to enhance our loyalty programme
for our members by improving
our product range, redemption
process and value buys. The
result is a signifcant increase in
our membership base, with our
members forming the bulk of our
daily transactions and foot traffc.
To reward our members with more
value, we will be celebrating with an
exclusive 3-day member event at the
end of April 2013.
Riding on the upward trend, our
subsidiary, Incall Systems Pte Ltd
(Incall), increased its revenue in
FY2012 by about 30% to about $4.6
million. Incall is in the business
of operating call centres, event
management, direct marketing,
database management and publishing
of directories. In addition, Incall
offers extended warranties for various
electrical and IT products through
its Star Shield Extended Warranty
programme (Star Shield). It is the
exclusive service provider for Star
Shield sold at our retail stores in
Singapore.
The electronic signage service
business, operated by CBD eVision
Pte Ltd, registered a decrease in
turnover of about 62% to $1.3 million
in FY2012 due to lesser completion
of projects for commercial buildings
such as offces and shopping malls.
A fnal tax-exempt one-tier dividend of
1.25 cents per ordinary share has been
proposed, subject to shareholders
approval during the coming Annual
General Meeting to be held on 15
April 2013. We had paid an interim
tax-exempt one-tier dividend of 1.0
cent per ordinary share in September
2012. This brings the total dividend
to 2.25 cents per ordinary share for
FY2012, which is an increase of 2.3%
over FY2011 of 2.2 cents per ordinary
share.
I would like to thank my fellow
directors, management team and
all employees for their hard work
and commitment to the Company.
In addition, I also appreciate the
invaluable support rendered to us by
shareholders and business partners
for their contributions to the Group.
As we enter into another new year, we
look forward to the continued support
from all our stakeholders.

4
ALL
INCLUSIVE INCLUSIVE INCLUSIVE
ALL
INCLUSIVE INCLUSIVE
ALL
INCLUSIVE INCLUSIVE
Our customers, especially our members are the lifeblood of our business and their patronage
underpins our growth. Our member base is diverse, from tech-savvy teenagers to
busy professionals.
5
CORPORATE
INFORMATION
BoaRD oF DiReCtoRs
Loo Leong Thye
(Chief Executive Offcer)
Ng Kian Teck
(Executive Director)
Ho Boon Chuan Wilson
(Lead Independent Director)
Max Ng Chee Weng
(Independent Director)
Tan Han Beng
Tan Chay Boon
auDit CoMMittee
Chairman
Members
Max Ng Chee Weng
Tan Han Beng
Tan Chay Boon
NOMINATING COMMITTEE
Chairman
Max Ng Chee Weng
Members
Tan Han Beng
Tan Chay Boon
REMUNERATION COMMITTEE
Chairman
Max Ng Chee Weng
Members
Tan Han Beng
Tan Chay Boon
COMPANY SECRETARY
Chia Foon Yeow
RegisteReD oFFiCe
1 Ubi Link
Challenger TecHub
Singapore 408553
Tel: (65) 6318 9800
Fax: (65) 6318 9801
Email: ir@challenger.sg
Company Registration No.:
198400182K
sHaRe RegistRaR anD sHaRe
TRANSFER OFFICE
Boardroom Corporate &
Advisory Services Pte. Ltd.
50 Raffes Place
#32-01 Singapore Land Tower
Singapore 048623
auDitoRs
RSM Chio Lim LLP
Public Accountants and
Certifed Public Accountants
(a member of RSM International)
8 Wilkie Road
#03-08 Wilkie Edge
Singapore 228095
Partner-in-charge: Lee Mong Sheong
(effective from fnancial year ended
31 December 2010)
PRinCiPaL BanKeRs
Citibank, N.A.
8 Marina View
#17-01 Asia Square Tower 1
Singapore 018960
DBS Bank Limited
6 Shenton Way
DBS Building
Singapore 068809
United Overseas
Bank Limited
80 Raffes Place
UOB Plaza
Singapore 048624
6
GROUP OF
COMPANIES
2.
CBD eVision Pte Ltd (Singapore)
(Electronic Signage)
100%
6.
Challenger eCommerce Pte. Ltd.* (Singapore)
(Online Retail Store)
100%
Incall Systems Pte Ltd (Singapore)
(Telephonic Call Centre, Data Management Services and
Provision of Star Shield Extended Warranty)
70%
7.
Challenger Technologies (M) Sdn.Bhd. (Malaysia)
(IT Retail Store)
100%
1.
3.
Challenger Holding (HK) Private Limited (Hong Kong)
(Trading and Investment Holding)
100%
4.
Valore Lifestyle Pte. Ltd. (Singapore)
(IT Specialty Store)
100%
5.
Challenger IT Services Pte. Ltd.* (Singapore)
(IT Solutions Provider for Businesses)
100%
* Currently dormant
7
PROFILE OF
BoaRD oF
DiReCtoRs
Mr Loo Leong thye
Chief Executive Offcer
He is responsible for the overall
management of our Group. He also
charts our corporate directions,
strategies and policies. He has over
30 years of experience in the IT
industry. He started the business
operations of our Group in 1982 as
a sole-proprietorship business and
has been instrumental in growing
the operations of our Group to its
present size. In 1986, he started the
electronic signage business under
CBD eVision and has been involved in
the operations of the Company since
its inception. In 2011, he received the
Best Chief Executive Offcer Award
(listed companies with less than $300
million in market capitalisation)
from Singapore Corporate Awards,
organised by The Business Times
and supported by the Singapore
Exchange.
Mr ng Kian teck
Executive Director
He is in charge of merchandising
and inventory control of the
Singapore retail operations. He
joined the Group in 1996 and has
over 18 years of experience in the IT
industry. Mr Ng holds a Bachelor of
Science in Business Administration
from the California State University,
Los Angeles.
Mr Ho Boon Chuan wilson
Lead Independent Director
He is the Managing Director of
Westcon Solutions, the IT security
and value-added distribution arm of
Westcon across Asia. His experiences
over the past 20 years include
working in the capital markets group
of DBS Bank, holding the post of
Chief Financial Offcer of a listed
company in Singapore and managing
a regional IT distribution group. Mr
Ho is an accountant by training and
is a Certifed Public Accountant with
the Institute of Certifed Public
Accountants of Singapore and a
Chartered Financial Analyst.
Mr Max Ng Chee Weng
Independent Director
He is the Managing Director of
Gateway Law Corporation, a regional
intellectual property and technology
law practice, headquartered in
Singapore with offces in Kuala
Lumpur, Jakarta and Hong Kong.
He specialises in intellectual property
and other forms of litigation. He is
also frequently listed as a leading
lawyer in his feld in publications
such as Chambers Asia-Pacifc,
Legal 500, AsiaLaw Leading Lawyers,
The International Whos Who of
Business Lawyers and Singapores
inaugural Legal Whos Who. He holds
a Master of Law from the National
University of Singapore, and is also
admitted to practice in Malaysia,
England and Wales. He is also a
partner of a law frm based in Kuala
Lumpur, Malaysia.
Mr tan Han Beng
He is a Director at CNP Compliance
Pte Ltd, which provides advisory
services to SGX listed companies
on listing rules and corporate
governance. He has over 14 years
of professional accounting and
fnancial experience including
fnancial, internal and special
audit engagements with a Big
Four accounting frm. Mr Tan is
an accountant by training and is a
Certifed Public Accountant with
the Institute of Certifed Public
Accountants of Singapore.
Ms tan Chay Boon
She has more than 25 years of
working experience in the IT and fast-
moving consumer goods industries
covering Singapore, Asia Pacifc and
global regions. She was most recently
the Vice President for Enterprise
Group (South East Asia) in Hewlett
-Packard. In her 21 years tenure with
Hewlett-Packard, she held several
management positions in charge of
consumer, small medium business
and enterprise segments.

Ms Tan has a Master of Business
Administration from University
of Dubuque, Iowa. She also holds
a Bachelors degree with a dual
major in Logistics/Transportation
and International Business, and a
minor in Industrial Psychology from
Ohio State University, Ohio.
8
PROFILE
oF Key
MANAGEMENT
Mr tan Huat Ben
Group Chief Operating Offcer
He joined the Group in October 2012
and oversees the retail operations,
merchandising, marketing and
corporate sales departments of the
Group. He has more than 20 years
of experience in the IT industry and
retail operations. Prior to joining the
Group, he was General Manager of
Retail Sales and Marketing Division in
Microsoft (Asia Pacifc), responsible
for over US$500 million in revenue
from four business units over nine
countries and has been employed by
Microsoft corporations for over 16
years. He has a Master of Business
Administration and a Bachelor of
Business Administration from the
University of Portland, Oregon.
Mr Chia Kang whye
General Manager & Executive
Director CBD eVision Pte Ltd
He is responsible for the day-to-
day management of the electronic
signage business, which includes
the marketing of electronic
signage products and overseeing
turnkey projects for the supply and
installation of electronic signage. He
joined CBD eVision in 1986 and has
over 24 years of experience in the
electronic signage business.
Mr tan wee Ko
Group Chief Financial Offcer
He joined the Group in May 2005
and oversees human resources,
business development, accounting,
fnancial and funding requirements
of the Group. He is a Certifed
Public Accountant with the Institute
of Certifed Public Accountants of
Singapore and CPA Australia. He has
a Master of Business Administration
from the University of Adelaide and
a Bachelor degree in Accountancy
from the Nanyang Technological
University.
Mr Seah Chin Tiong
Managing Director Incall Systems
Pte Ltd
In 2001, he started inCall Systems,
an Outsourced Business Service
Provider which offers end-to-end
integrated marketing solutions.
He is responsible for the overall
management and the day-to-day
operations of our database, call centre
and direct marketing business. With
more than 20 years of experience in
the IT industry, he brings a dynamic
and unique blend of technology
experience and business expertise to
the Company. He holds a Bachelor
of Business Administration from the
National University of Singapore
and a Graduate Diploma in Systems
Analysis from the Institute of Systems
Science.
Mr Woon Yoon Siong
Group Chief Information Offcer
He joined the Group in September
2011 and oversees the network,
hardware and software systems.
He has more than 20 years of
experience in IT systems and is
instrumental in developing the
Groups Enterprise Resource
Planning and Point of Sales (POS)
systems. He holds a Master of Science
in Computer & Information Sciences
from the National University of
Singapore.
9
1
33
2
28
3
14
2
0
6
8
9
1
0
11
12
1
3
1
5
16
ALL
12 12
aRounD
2
0
2
0
14 14
US
33 33
7
US US
Keeping in line with our strategy to expand our retail footprint, our customers can conveniently
locate a Challenger near them today.
10
Challenger Technologies Limited . Annual Report 2012
CHaLLengeR
RETAIL
LOCATIONS
SINGAPORE
MEGASTORE
Megastore @ Funan
109 North Bridge Road
#06-00 Funan DigitaLife Mall
Singapore 179097
Tel: 6339 9008
fc@challenger.sg
SUPERSTORES
Ang Mo Kio Hub
53 Ang Mo Kio Avenue 3
#02-10 Ang Mo Kio Hub
Singapore 569933
Tel: 6555 8138
amk@challenger.sg
Bedok Point
799 New Upper Changi Road
#B1-23 Bedok Point
Singapore 467351
Tel: 6446 7398
bp@challenger.sg
Changi City Point
5 Changi Business Park Central 1
#01-56 Changi City Point
Singapore 486038
Tel: 6636 2302
cp@challenger.sg
City Square Mall
180 Kitchener Road
#B1-11A/12 City Square Mall
Singapore 208539
Tel: 6509 1308
cy@challenger.sg
The Clementi Mall
3155 Commonwealth Avenue West
#04-56 The Clementi Mall
Singapore 129588
Tel: 6570 5766
cm@challenger.sg
Great World City
1 Kim Seng Promenade
#02-22 Great World City
Singapore 237994
Tel: 6592 6770
gwc@challenger.sg
Hougang Mall
90 Hougang Avenue 10
#04-15 Hougang Mall
Singapore 538766
Tel: 6488 0123
hm@challenger.sg
IMM
2 Jurong East Street 21
#02-23, IMM Building
Singapore 609601
Tel: 6426 9123
imm@challenger.sg
JCube
2 Jurong East Central 1
#02-11 JCube
Singapore 609731
Tel: 6592 5376
jc@challenger.sg
Jurong Point
63 Jurong West Central 3
#B1-94/95/96 Jurong Point
Shopping Centre
Singapore 648886
Tel: 6793 7122
jp@challenger.sg
112 Katong
112 East Coast Road
#03-01 112 Katong
Singapore 428802
Tel: 6447 2112
kt@challenger.sg
nex Serangoon Central
23 Serangoon Central
#04-33 nex
Singapore 556083
Tel: 6634 6478
nex@challenger.sg
Northpoint
930 Yishun Avenue 2
#03-15 Northpoint
Shopping Centre
Singapore 769098
Tel: 6853 8300
np@challenger.sg
Parkway Parade
80 Marine Parade Road
#04-01, Parkway Parade
Singapore 449269
Tel: 6342 5699
pp@challenger.sg
Plaza Singapura
68 Orchard Road
#04-12 Plaza Singapura
Singapore 238839
Tel: 6837 8797
ps@challenger.sg
Tampines 1
10 Tampines Central 1
#04-24/25, Tampines 1
Singapore 529536
Tel: 6260 6318
tp@challenger.sg
Tiong Bahru Plaza
302 Tiong Bahru Road
#03-19, Tiong Bahru Plaza
Singapore 168732
Tel: 6376 5646
tb@challenger.sg
VivoCity
1 HarbourFront Walk
#02-34/35, VivoCity
Singapore 098585
Tel: 6376 6100
vc@challenger.sg
White Sands
1 Pasir Ris Central Street 3
#03-03, White Sands
Singapore 518457
Tel: 6585 5188
ws@challenger.sg
11

SINGAPORE
MINI STORES
Challenger Mini @ Funan
#02-05, Funan DigitaLife Mall
Singapore 179097
Tel: 6334 6101
fcmini@challenger.sg
Singapore 179097
Tel: 6338 7792
fm@mig.sg
Singapore 179097
Tel: 6339 3529
fm@mig.sg
Singapore 179097
Tel: 6334 1741
fcm19@challenger.sg
Challenger Mini @
Causeway Point
1 Woodlands Square
#04-07 Causeway Point
Singapore 738099
Tel: 6893 8721
cw@challenger.sg
Challenger Mini @ Lot One
21 Choa Chu Kang Avenue 4
#03-05/06 Lot One
Singapore 689812
Tel: 6894 5868
L1@challenger.sg
Challenger Mini @ Thomson
301 Upper Thomson Road
#03-28/29, Thomson Plaza
Singapore 574408
Tel: 6457 3219
ts@challenger.sg
Challenger Mini @ IMM
2 Jurong East Street 21
#02-18 IMM Building
Singapore 609601
Tel: 6562 0361
imm@challenger.sg
Challenger Mini @
Yew Tee Point
21 Choa Chu Kang North 6
#01-18 Yew Tee Point
Singapore 689578
Tel: 6465 8872
yt@challenger.sg
MALAYSIA
MEGASTORE
Megastore @ Mines
Shopping Fair
L04-16, Mines Shopping Fair
Jalan Dulang, Mines Resort City
43300 Seri Kembangan
Selangor, Malaysia
Tel: (603) 8946 9000
enquiry@challenger.my
SUPERSTORES
Capsquare
Lot F12a - F15a, Level 1
Pikom Ict Mall Capsquare
No. 7 Persiaran Capsquare
Capital Square 50100
Kuala Lumpur, Malaysia
Tel: (603) 2202 8009
Suria KLCC
Lot 306-307, Third Floor
Suria KLCC
Kuala Lumpur City Centre
50088 Kuala Lumpur
Malaysia
Tel: (603) 2332 2650
Mahkota Parade
Lot S09b, Mahkota Parade
No. 1 Jalan Merdeka
75000 Melaka
Malaysia
Tel: (606) 2839 399
NEW STORES OPENING IN SECOND QUARTER 2013
Bukit Panjang Plaza
1 Jelebu Road
#03-10A Bukit Panjang Plaza
Singapore 677743
JEM
50 Jurong Gateway Road
#04-01
Singapore 608549
CHaLLengeR
RETAIL
LoCations (ContD)
12
Upholding high standards of corporate disclosure is our conviction. We believe in facilitating
communication with our stakeholders, constantly keeping ourselves in check and striving
to achieve the best results.
13
FINANCIAL
HigHLigHts
CHaLLengeR teCHnoLogies LiMiteD anD its suBsiDiaRies
FY2012
$000
FY2011
$000
FY2010
$000
FY2009
$000
FY2008
$000
(Restated)
Revenue 337,258 316,864 240,999 191,599 168,723
Proft Before Tax 19,531 19,018 16,496 13,652 7,989
Proft After Tax 16,362 15,725 13,778 11,145 5,981
Earnings/(Loss) Per Share
(cents) - diluted
4.69 4.53 3.96 4.80 2.58
Shareholders Funds 51,055 42,717 34,292 26,286 20,781
Net Tangible Assets Per Share (cents) 14.79 12.37 9.93 11.47 9.09
Key FinanCiaL Ratios
FY2012
$000
FY2011
$000
FY2010
$000
FY2009
$000
FY2008
$000
(Restated)
Net Proft Margin (%) 4.9% 5.0% 5.7% 5.8% 3.5%
Inventory Turnover (days) 37 34 45 36 25
Trade Receivable Turnover (days) 3 4 4 6 4
Return on Equity (%) 32% 37% 40% 42% 29%
Quick Ratio (times) 1.37 1.11 0.92 0.96 1.21
Current Ratio (times) 2.16 1.59 1.47 1.56 1.57
14
OPERATIONS
REVIEW
ConsoLiDateD stateMent oF PRoFit oR Loss anD otHeR CoMPReHensive inCoMe
Group
Variance
Increase /
(Decrease)
S$000
Remarks
31.12.2012
S$000
31.12.2011
S$000
Revenue 337,258 316,864 20,394
Revenue increased mainly due to
improved retail performance of
existing stores and expansion of retail
operations in Singapore and Malaysia.
Changes in Inventories 4,127 (650) 4,777
Cost of Goods Purchased (277,804) (255,812) 21,992
This increase has been in line with
higher retail revenue achieved in
FY2012.
Other Consumables Used (719) (694) 25
Other Items of Income
Interest Income 41 209 (168)
Dividend Income 1 39 (38)
Other Credits 873 598 275
Other Items of Expense
Depreciation Expense (3,772) (3,126) 646
This increase has been due to
acquisition of new plant and
equipment as a results of expansion
of retail stores.
Employee Benefts Expense (20,013) (18,812) 1,201
The increase has been mainly due to
increase in number of headcount for
new stores and higher staff incentive
paid as a result of higher sales achieved.
Finance Costs (18) (100) (82)
Other Expenses (20,251) (18,811) 1,440
The increase has been mainly due to:
1) higher premises expenses due to
increased number of stores in
FY2012; and
2) increase other operating expenses to
support additional stores.
Other Charges (192) (687) (495)
The decrease has been due to unrealised
foreign exchange gain arising from
United States (US) dollar against
Singapore dollar for the purpose of US
dollar purchase transactions, compared
to a loss recorded in FY2011.
Proft Before Tax 19,531 19,018 513
Income Tax Expenses (3,169) (3,293) (124)
Proft Net of Tax 16,362 15,725 637
15
OPERATIONS
Review (ContD)
ConsoLiDateD stateMent oF FinanCiaL Position
Group
Variance
Increase /
(Decrease)
S$000
Remarks
31.12.2012
S$000
31.12.2011
S$000
Assets
Non-Current Assets
Deferred Tax Assets - 27 (27)
Other Financial Assets - 1,768 (1,768)
The decrease has been mainly due
to the disposal of Australian dollar
investment fund.
Property, Plant and
Equipment
13,170 14,203 (1,033)
The decrease has been due to
depreciation expense and disposal
charged for the year. These have
been partially offset by acquisition of
equipment and renovation for new
and existing retail stores in Singapore
during FY2012.
Total Non-Current Assets 13,170 15,998 (2,828)
Current Assets
Inventories 28,127 24,081 4,046
This increase has been due to the
opening of new stores and more
purchase in December 2012.
Cash and Cash Equivalents 42,094 48,879 (6,785)
The decrease has been mainly due to
settlement of short term loan, payment
of dividends and capital expenditure
incurred for new and existing retail
stores. These have been partially offset
by operating profts and working capital
generated from operations.
Trade and Other Receivables 3,210 3,281 (71)
This decrease has been due to lower
trade debt.
Other Assets 3,660 3,637 23
higher deposits paid for new stores in
Singapore.
Total Current Assets 77,091 79,878 (2,787)
Total Assets 90,261 95,876 (5,615)
16
Group
Variance
Increase /
(Decrease)
S$000
Remarks
31.12.2012
S$000
31.12.2011
S$000
Equity and Liabilities
Equity
Share Capital 18,775 18,775 -
Retained Earnings 32,216 23,611 8,605
Other Reserves 64 331 (267)
Total Shareholders Funds 51,055 42,717 8,338
Non-Controlling Interests 371 298 73
Total Equity 51,426 43,015 8,411
Non-Current Liabilities
Deferred Tax Liabilities 164 142 22
Other Liabilities 3,014 2,335 679
increase in deferment of the recognition
of membership admin fee and revenue
from Starshield Warranty.
Total Non-Current Liabilities 3,178 2,477 701
Current Liabilities
Trade and Other Payables 24,160 23,375 785
This increase has been mainly due to
higher provisions for expenses.
Income Tax Payable 3,389 3,744 (355)
Other Financial Liabilities - 16,629 (16,629)
The decrease has been due to repayment
of short-term loan facility.
Other Liabilities 8,108 6,636 1,472
This has been mainly due to increase
in deferment of the recognition of
reward points granted to customers
and deferment of the recognition of
membership admin fee recognition.
Total Current Liabilities 35,657 50,384 (14,727)
Total Liabilities 38,835 52,861 (14,026)
Total Equity and Liabilities 90,261 95,876 (5,615)
OPERATIONS
Review (ContD)
ConsoLiDateD stateMent oF FinanCiaL Position (ContD)
17
18 Corporate Governance
32 Directors Report
35 Statement by Directors
36 Independent Auditors Report
38 Consolidated Statement of Proft or
Loss and Other Comprehensive Income
39 Statements of Financial Position
40 Statements of Changes in Equity
42 Consolidated Statement of Cash Flows
43 Notes to the Financial Statements
84 Statistics of Shareholdings
86 Notice of Annual General Meeting
FINANCIAL
CONTENTS
18
The Board of Directors of Challenger Technologies Limited is committed to achieving a high standard of corporate
governance within the Group. Therefore, the Board has put in place effective and self-regulatory corporate governance
practices for greater transparency, protection of shareholders interests and enhancement of long-term shareholder value
and to strengthen investors confdence in its management and fnancial reporting.
The Board has adopted for its corporate governance practices all applicable principles of the Code of Corporate
Governance 2005 (the Code). The Board will be reviewing, and where necessary, adopting the recommendations given
under the revised Code of Corporate Governance 2012 (CG2012) issued on 2 May 2012 which would be effective for the
fnancial years commencing from 1 November 2012 onwards.
The Boards Conduct of its Affairs
Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is
collectively responsible for the success of the company. The Board works with Management to achieve this and the
Management remains accountable to the Board.
Role of Board
The Board provides leadership to the Group by setting up the corporate policies and strategic aims. The principal functions
of the Board, apart from its statutory responsibilities, are:
i. charting the corporate strategy and direction of the Group, including the approval of broad policies, strategies and
fnancial objectives;
ii. approving annual budgets, proposals for acquisition, investments and disposals;
iii. reviewing the fnancial results of the Group and approving the publishing of the same;
iv. approving the annual report of the Company and the audited fnancial statements of the Group;
v. with the assistance of the Audit Committee, overseeing the processes for evaluating the adequacy of internal
controls, risk management practices, fnancial reporting structures and compliance controls;
vi. approving nominations to the Board and appointing key personnel;
vii. evaluating the performance and approving the remuneration of key management personnel; and
viii. generally managing the affairs of the Group.
Delegation to Sub-Committees
To ensure that specifc issues are subject to in-depth reviews and discussions, certain functions have been delegated by
the Board to Committees of its members. These Committees make recommendations to the Board, upon such reviews
and discussions. Currently, there are three Committees the Audit Committee (AC), the Nominating Committee (NC) and
the Remuneration Committee (RC).
CORPORATE GOVERNANCE
19
Frequency of Meetings
The Board and Committees meet regularly and as and when warranted by particular circumstances as deemed appropriate
by the Board. The Articles of Association of the Company also provide for telephonic meetings.
The number of meetings of the Board and Committees held in FY2012, as well as the attendance of each Board member
thereat, are set out below:
Board Committees
Audit Nominating Remuneration
Number of meetings held 4 4 1 1
Board Members Number of meetings attended
Loo Leong Thye 4 4 1 1
Ng Kian Teck 4 4 1 1
Ong Sock Hwee
1
4 4 1 1
Ho Boon Chuan Wilson 4 4 1 1
Max Ng Chee Weng 4 4 1 1
Tan Han Beng
2
NA NA NA NA
Tan Chay Boon
3
NA NA NA NA
1
Mdm Ong Sock Hwee, a Non-Executive Director, resigned as a member of the Audit Committee, Nominating Committee and
Remuneration Committee on 1 March 2013.
2
Mr Tan Han Beng was appointed as an Independent Director (member of the Audit Committee, Nominating Committee and
Remuneration Committee) on 1 March 2013. No Audit Committee, Nominating Committee or Remuneration Committee meetings
were held during the fnancial period under review after his appointment.
3
Ms Tan Chay Boon was appointed as an Independent Director (member of the Audit Committee, Nominating Committee and
Remuneration Committee) on 1 March 2013. No Audit Committee, Nominating Committee or Remuneration Committee meetings
were held during the fnancial period under review after her appointment.
Matters requiring Board Approval
The Board had previously approved and adopted internal control procedures and guidelines for the Company. Under such
procedures and guidelines, the approval of the Board is required for any transaction exceeding $1 million in value not
entered into in the ordinary course of business.
Training for Directors
Comprehensive briefngs are conducted for new Directors to provide them with an insight to the operations of the Group and
its corporate governance practices. Directors are also periodically briefed on the performance and developments in respect
of the Group. Directors are also informed of changes in laws, regulations and risks impacting the Group. Directors will be sent
for external seminars to obtain updates in business and regulatory changes relevant to the Group, when necessary.
In addition to the above, Directors may also request further explanations, briefngs or informal discussions on any aspect
of the Groups operations or business issues from the management.
20
Letter to New Directors
The Company will provide formal letters of appointment for any newly appointed Directors, setting out their duties and
obligations.
Board Composition and Guidance
Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective
judgment on corporate affairs independently, in particular, from Management. No individual or small group of
individuals should be allowed to dominate the Boards decision making.
Strong and independent element on the Board
As at the date of this report, the Board comprises of six members. Save for Mr Loo Leong Thye (the CEO) and Mr Ng Kian
Teck, the rest of the Board is made up of non-executive and independent Directors (the IDs). Each Director has been
appointed on the strength of his and her calibre and experience. Please refer to the section on the Board of Directors for
their individual profles.
As there are two IDs on the Board for the fnancial year under review, the requirement of the Code that at least one-third of
the Board comprised of IDs is satisfed.
The NC adopts the Codes defnition of what constitutes an ID. The independence of each Director is reviewed annually by
the NC. The NC is of the view that Mr Ho Boon Chuan Wilson, Mr Max Ng Chee Weng, Mr Tan Han Beng and Ms Tan Chay
Boon are independent and that there are no individuals or small groups of individuals who dominate the Boards decision
making process.
Board Size
The Board periodically examines its size to ensure that it is of an appropriate number for effective decision making, taking
into account the scope and nature of the operations of the Company.
Competencies of Directors
The Board is of the opinion that its current size is appropriate and facilitates effective decision making, taking into account
the nature and scope of the Groups operations. The Board composition refects the broad range of experience, skills and
knowledge necessary for the effective stewardship of the Group. The Board comprises of businessmen and professionals
who as a group possess competencies in accounting, fnance, business, management and law, and knowledge and
experience in strategic planning and the Groups industry and customer-base. The profle of each Director is set out in this
Annual Report.
Chairman and Chief Executive Offcer
Principle 3: There should be a clear division of responsibilities at the top of the company the working of the Board
and the executive responsibility of the companys business which will ensure a balance of power and authority,
such that no one individual represents a considerable concentration of power.
21
Chairman
The Company has not created a separate position of Chairman as the Directors are of the view that the current Board
composition and the establishment of the Committees, namely, the AC, NC and RC, are suffcient to ensure accountability
and independent decision-making.
The Board collectively ensures the following:
i. in consultation with the management, the timely scheduling of meetings to enable the Board to perform its duties
responsibly, while not interfering with the fow of the Companys operations;
ii. in consultation with the management, the preparation of the agenda for Board meetings;
iii. in consultation with the management, the exercise of control over the quality, quantity and timeliness of information
between the management and the Board; and
iv. compliance with corporate governance best practices.
CEO
The CEO, Mr Loo Leong Thye, bears executive responsibility for the Groups business and implements the decisions and
directions of the Board. For administrative purposes only, he is usually elected as the Chairman of each Board meeting.
In view of the above and in line with the Code, the Company has appointed an ID, Mr Ho Boon Chuan Wilson to be
the Lead Independent Director (the Lead ID) to enhance the independence of the Board and to assist the CEO in the
discharge of his duties when the need arises. He is also available to address shareholders concerns on issues that cannot
be appropriately dealt with by the CEO.
Board Membership
Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board.
Establishment, Composition and Membership of NC
The Company has the NC, which makes recommendations to the Board on all appointments and re-appointments to the
Board.
As the date of this report, the NC comprises of four IDs. The Chairman of the NC is neither a substantial shareholder nor
directly associated (within the meaning of the Code) to a substantial shareholder (with an interest of 5% or more in the
voting shares of the Company).
The membership of the NC is, as follows:
Chairman: Max Ng Chee Weng (ID)
Members: Ho Boon Chuan Wilson (Lead ID)
Tan Han Beng (Appointed on 01/03/2013) (ID)
Tan Chay Boon (Appointed on 01/03/2013) (ID)
22
However, for the fnancial year under review, the Nominating Committee comprised of three Non-Executive Directors then,
namely Mr Max Ng Chee Weng (Chairman), Mr Ho Boon Chuan Wilson (member) and Mdm Ong Sock Hwee (member). When
Mdm Ong Sock Hwee resigned with effect from 1 March 2013, she also stepped down from the Nominating Committee.
The NC has written terms of reference that describe the responsibilities of its members.
Responsibilities of NC
The responsibilities of the NC are:
i. to review the nominations for the appointments and re-appointments of Directors;
ii. to review the independence of the Directors;
iii. to review the adequacy of each Directors contribution at meetings and his ability and capacity in carrying out the
duties as a Director;
iv. to ensure that all Directors submit themselves for re-nomination and re-election at regular intervals and at least
once every three years; and
v. to decide on how the Boards performance may be evaluated, and propose objective performance criteria to assess
effectiveness of the Board as a whole and the contribution of each Director.
Independence and Commitment of Directors
The NC determines on an annual basis whether or not a Director is independent, for the purposes of the Code. The NC
is of the view that the IDs are independent. To be in line with the CG2012, the NC had adopted a set of revised terms of
reference in May 2012.
In assessing the performance of each individual Director, the NC considers whether he has multiple board representations
and is able to and adequately carried out his duties as a Director notwithstanding such commitments. The NC is satisfed
that suffcient time and attention to the affairs of the Company has been given by those Directors who have multiple board
representations. In accordance with the CG2012, the Board has stipulated that the maximum number of listed company
board representations which any director may hold is fve (5).
Selection and Appointment of New Directors
The Company does not have a formal process for the selection and appointment of new Directors to the Board. However,
if required, the Company has or is able to procure search services, contacts and recommendations for the purposes of
identifying suitably qualifed and experienced persons for appointment to the Board.
23
Key information on Directors
The date of initial appointment and last re-election of each director, together with their directorships in other listed
Companies are set out below:
Name Age Appointment
Date of initial
appointment
Date of last
election
Directorships in
other listed companies
Loo Leong Thye 59 Chief Executive
Offcer
14/01/1984 27/04/2010 NIL
Ng Kian Teck 45 Executive Director 03/05/2011 25/04/2012 NIL
Ong Sock Hwee
(resigned with effect
from 01/03/2013)
58 Non-Executive
Director
28/12/1994 25/04/2012 NIL
Ho Boon Chuan Wilson 43 Independent
Director
17/11/2003 27/04/2010 Present Directorships
Sysma Holdings Limited
Past Directorships
(in the last three
preceding years)
Multi-Chem Limited
Max Ng Chee Weng 42 Independent
Director
12/01/2006 26/04/2011 Present Directorships
NIL
Past Directorships
(in the last three
preceding years)
NIL
Tan Han Beng 38 Independent
Director
01/03/2013 - Present Directorships
NIL
Past Directorships
(in the last three
preceding years)
NIL
Tan Chay Boon 53 Independent
Director
01/03/2013 - Present Directorships
NIL
Past Directorships
(in the last three
preceding years)
NIL
Key information of each Director is disclosed in the profle of that Director as set out in this Annual Report.
24
Board Performance
Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution
by each director to the effectiveness of the Board.
Formal assessment of the effectiveness of the Board and contribution of each Director
The NC has adopted processes for the evaluation of the Boards performance and effectiveness as a whole and the
performance of individual Directors, based on performance criteria set by the Board. For the fnancial year ended 31
December 2012, the NC has set performance targets in respect of sales, profts, gross proft margin and return on equity
as gauges to measure and monitor the performance of the Board. Other performance criteria include qualitative and
quantitative factors such as performance of principal functions and fduciary duties, level of participation at meetings,
guidance provided to the management and attendance record.
Access to Information
Principle 6: In order to fulfl their responsibilities, Board members should be provided with complete, adequate and
timely information prior to board meetings and on an on-going basis.
Information from and Access to Management
Each member of the Board has complete access to such information regarding the Company as may be required for the
discharge of his duties and responsibilities. Prior to each Board meeting, the members of the Board are each provided
with the relevant documents and information necessary, including background and explanatory statements, fnancial
statements, budgets, forecasts and progress reports of the Groups business operations, for them to comprehensively
understand the issues to be deliberated upon and make informed decisions thereon.
As a general rule, notices are sent to the Directors one week in advance of Board meetings, followed by the Board papers
in order for the Directors to be adequately prepared for the meetings. Senior management personnel attend board meetings
to address queries from the Directors. The Directors also have unrestricted access to the Companys senior management.
The Company Secretary
The Company Secretary or his colleague attends all Board meetings and ensures that Board procedures and the provisions
of applicable laws, the Articles of Association of the Company and the SGX Listing Manual are followed. The Company
Secretary also assists with the circulation of Board papers and updates the Directors on changes in laws and regulations
relevant to the Group. The appointment and removal of the Company Secretary is a matter for the Board as a whole.
Professional Advisers
The Board (whether as individual members or as a group) has direct access to independent professional advisers, where
so requested by them in the furtherance of their duties, at the expense of the Company.
25
Remuneration Matters
Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration
and for fxing the remuneration packages of individual directors. No director should be involved in deciding his own
remuneration.
Establishment, Composition and Membership of RC
The Company has the RC, which makes recommendations to the Board on the framework of remuneration and the specifc
remuneration packages for each Director and the CEO. Recommendations of the RC have to be submitted to and endorsed
by the entire Board.
The RC comprises of four IDs.
The membership of the RC is, as follows:
Chairman: Max Ng Chee Weng (ID)
Members: Ho Boon Chuan Wilson (Lead ID)
However, for the fnancial year under review, the Nominating Committee comprised of three Non-Executive Directors then,
namely Mr Max Ng Chee Weng (Chairman), Mr Ho Boon Chuan Wilson (member) and Mdm Ong Sock Hwee (member).
When Mdm Ong Sock Hwee resigned with effect from 1 March 2013, she also stepped down from the Remuneration
Committee.
The RC has written terms of reference that describe the responsibilities of its members.
Responsibilities of RC
The responsibilities of the RC are:
i. to recommend to the Board a framework of remuneration, including but not limited to directors fees, salaries,
allowances, bonuses, options and benefts in kind;
ii. to recommend specifc remuneration packages for each Director, including the CEO; and
iii. to review the remuneration of senior management.
The members of the RC are familiar with executive compensation matters as they manage their own businesses and/or are
holding other directorships. The RC has access to advice regarding executive compensation matters, if required.
26
Level and Mix of Remuneration
Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed
to run the company successfully but companies should avoid paying more than is necessary for this purpose. A
signifcant proportion of executive directors remuneration should be restructured so as to link rewards to corporate
and individual performance.
Appropriate remuneration to attract, retain and motivate Directors
The remuneration, including incentive bonuses of the CEO, Mr Loo Leong Thye, is based on the service agreement made
on 15 September 2003, as disclosed in the Companys IPO prospectus dated 5 January 2004. The service agreement was
for an initial term of three years and is automatically renewed for successive terms of two years each after the initial term
on such terms and conditions as the CEO and the Company may agree. Either the CEO or the Company may terminate the
relevant service agreement by giving three months written notice or payment in lieu thereof.
The Company has also entered into a service agreement with the Executive Director, Mr Ng Kian Teck on 3 May 2011
for an initial term of three years and is automatically renewed for successive terms of two years each on such terms and
conditions as may be mutually agreed.
The remuneration of the Executive Directors includes a fxed salary and a variable performance related bonus which is
designed to align the interests of the Directors with those of shareholders. Revisions to the terms of the service agreements
are subject to review by the RC (taking into consideration the employment conditions within the IT industry and comparable
companies), which then recommends the same to the Board for their consideration and approval.
Independent Directors are each paid a Directors fee for their effort and time spent, responsibilities and contributions to the
Board, subject to the approval of shareholders at the Companys Annual General Meetings.
Disclosure on Remuneration
Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration,
and the procedure for setting remuneration in the companys annual report. It should provide disclosure in relation
to its remuneration policies to enable investors to understand the link between remuneration paid to directors and
key executives, and performance.
27
Directors Remuneration
Breakdown of remuneration of each Director by % (fnancial year ended 31 December 2012)
Remuneration Band &
Name of Directors Fixed Salary Directors Fees
Variable or Performance
Related Income/Bonus Total
$1,000,000 to $1,249,999
Loo Leong Thye 35% - 65% 100%
Below $250,000
Ng Kian Teck 69% - 31% 100%
Ho Boon Chuan Wilson - 100% - 100%
Max Ng Chee Weng - 100% - 100%
Ong Sock Hwee
1
- - - -
1
Mdm Ong Sock Hwee does not receive any remuneration in her capacity as a Non-Executive Director.
Remuneration of Key Executives
The remuneration of its top 5 executives for the year ended 31 December 2012 is as shown:

Remuneration Band &
Name of Key Executives Fixed Salary
Variable or Performance
Related Income/Bonus Total
$500,000 to $749,999
Tan Wee Ko 33% 67% 100%
Below $250,000
Chia Kang Whye 57% 43% 100%
Seah Chin Tiong 72% 28% 100%
Tan Huat Ben
1
83% 17% 100%
Woon Yoon Siong 66% 34% 100%
1
Mr Tan Huat Ben was appointed as the Chief Operating Offcer with effect from 1 October 2012.
No immediate family member of any Director and whose remuneration had exceeded $150,000 during the fnancial year
ended 31 December 2012 was employed by the Company or its subsidiaries.
28
Accountability
Principle 10: The Board should present a balanced and understandable assessment of the companys performance,
position and prospects.
Quarterly and full year results are released via SGXNET within the respective time lines stipulated in the SGX Listing Manual.
In this regard, the Board, with the assistance of the management, strives to provide a balanced and understandable
assessment of the Companys performance, position and prospects. The Board also released other price sensitive public
reports and reports to regulators, where required.
Audit Committee
Principle 11: The Board should establish an Audit Committee with written terms of reference which clearly set out
its authority and duties.
Establishment, Composition and Membership of AC
The Company has the AC, which reports to the Board on all matters requiring audit in respect of the Company.
The AC comprises of four IDs.
The membership of the AC is, as follows:
Chairman: Ho Boon Chuan Wilson (Lead ID)
Members: Max Ng Chee Weng (ID)
However, for the fnancial year under review, the Audit Committee comprised of three Non-Executive Directors then, namely
Mr Ho Boon Chuan Wilson (Chairman), Mr Max Ng Chee Weng (member) and Mdm Ong Sock Hwee (member). When Mdm
Ong Sock Hwee resigned with effect from 1 March 2013, she also stepped down from the Audit Committee.
The AC has written terms of reference that clearly set out its authority and duties.
Responsibilities of AC
The responsibilities of the AC are:
i. to review the quarterly fnancial statements and the accompanying statements presented for approval, before
endorsement by the Board so as to ensure the integrity of information to be released;
ii. to review the scope and results of the audit of the Group and its cost effectiveness, and the independence and
objectivity of the external auditors;
iii. to review the nature and extent of non-audit services by the external auditors, when necessary and to seek a
balance in the maintenance of objectivity;
iv. to review signifcant fnancial reporting issues and judgments to ensure the integrity of fnancial statements and any
formal announcements relating to the Companys fnancial statements;
29
v. to review the adequacy of the Companys internal fnancial controls, operational and compliance controls and risk
management policies and systems established by the Management;
vi. to meet with the external auditors without the presence of the Management at least once a year; and
vii. to review the independence of the external auditors annually.
The members of the AC have suffcient fnancial management expertise, as determined by the Board in its business
judgment, to discharge the ACs functions.
The AC has met with the external auditors and the internal auditors, without the presence of the management at least once
in FY2012.
The aggregate amount of fees paid to the external auditors and other independent auditors for FY2012 was approximately
$121,000. The audit fees to the external auditors amounted to approximately $91,000 and non-audit fees (in connection
with the provision of income tax compliance work and review of results announcement service) amounted to approximately
$22,000. The audit fees paid to the other independent auditors for FY 2012 amounted to approximately $6,000 and non-
audit fees (in connection with the provision of income tax compliance work) amounted to approximately $2,000. The AC,
having reviewed such non-audit services is satisfed that the nature and extent of such services will not prejudice the
independence and objectivity of the external auditors.
The Board of Directors and AC are satisfed that the appointment of different auditing frms would not compromise the
standard and effectiveness of the audit of the Group. The Group confrms that it has complied with Rule 712 and 715 of the
SGXST Listing Manual in relation to its auditing frms.
The AC has reviewed arrangements by which the staff of the Company may, in confdence, raise concerns about (such as
possible improprieties in matters of fnancial reporting or other matters), with the object of ensuring that arrangements are
in place for the independent investigation of such matters for appropriate follow-up action. In this regard, the AC had since
adopted a whistle-blowing policy with effect from FY2007.
Internal Controls
Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to
safeguard the shareholders investments and the companys assets.
The Groups internal controls and systems are designed to provide reasonable assurance as to the integrity and reliability
of the fnancial information and to safeguard and maintain accountability of its assets. Procedures are in place to identify
major business risks and evaluate potential fnancial consequences, as well as for the authorisation of capital expenditures
and investments. Comprehensive budgeting systems are in place to develop annual budgets covering key aspects of the
business of the Group. Actual performance is compared against budgets and periodical revised forecasts for the year.
The Board and Audit Committee are of the opinion that, there are adequate controls in place within the Group addressing
fnancial, operational and compliance risks as at 31 December 2012, based on:
The internal controls established and maintained by the Group;
Confrmation by the Chief Executive Offcer and Chief Financial Offcer;
Reports issued by the internal and external auditors; and
Regular reviews performed by the management, various Board committees and the Board.
30
The Board notes that no system of internal controls can provide absolute assurances against the occurrence of material
errors, poor judgment in decision making, human error, fraud or other irregularities.
The Board recognises the importance of establishing a formal Enterprise Risk Management Framework to facilitate the
governance of risks and monitoring the effectiveness of internal controls. Accordingly, to facilitate the compliance of Rule
1207(10) of the Listing Manual, the Board has engaged an external consultant, Yang Lee & Associates, to set up an
Enterprise Risk Management Framework in the fnancial year 2013, after a review conducted by Yang Lee & Associates
during the fnancial year 2012.
Internal Audit
Principle 13: The company should establish an internal audit function that is independent of the activities it audits.
The Company outsources its internal audit function to an external CPA frm. The internal auditors have conducted a review
of the Companys internal control systems during the fnancial year ended 31 December 2012. In addition to the internal
audit function, the key element in the Groups internal control system is the control which the senior management exercises
over procurement of products and goods, cash collections and point-of-sales system, expenditures for projects and capital
spending, with different levels of approvals required for different limits set by the Board. The issuance of cheques is
approved by two authorised signatories in accordance with the authorisation limits set by the Board.
The Company has appointed Yang Lee & Associates as its internal auditors to review the Groups internal control system.
The internal auditors have a direct and primary reporting line to the Audit Committee and assist the Board in monitoring
and managing risks and internal controls of the Group. The internal auditor will plan its internal audit reviews in consultation
with, but independent of the management. The audit plan will be submitted to the Audit Committee for approval prior
to the commencement of the audit. The Audit Committee will review the activities of the internal auditors on a regular
basis, including overseeing and monitoring the implementation of improvements required on internal control weaknesses
identifed.
The Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors are used as a
reference and guide by the Companys internal auditors.
Communication with Shareholders
Principle 14: Companies should engage in regular, effective and fair communication with shareholders.
Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the
opportunity to communicate their views on various matters affecting the company.
The Board is mindful of its obligations to provide timely disclosure of material information to shareholders of the Company
and does so through:
i. annual reports issued to all shareholders. Non-shareholders may access the SGX website for copies of the
Companys annual reports;
ii. quarterly and full year announcements of, and press briefngs on, its fnancial statements on the SGXNET;
iii. other announcements on the SGXNET;
31
iv. press releases on major developments regarding the Company; and
v. the Companys website at www.challengerasia.com through which shareholders can access information on the
Company.
The Company regards its Annual General Meeting as an opportunity to communicate directly with shareholders and
therefore encourages greater shareholder participation, whether in person or by proxy. The CEO and other Directors attend
the Annual General Meetings and are available to answer questions from shareholders.
Securities Transactions by Offcers and Employees
In compliance with the best practices set out in the SGX Listing Manual on dealings in securities, Directors and employees
of the Company are advised not to deal in the Companys shares on short-term considerations or when they are in the
possession of unpublished price-sensitive information. The Company prohibits dealings in its shares by its offcers and
employees during the period commencing two weeks before the announcement of the Companys quarterly results or one
month before the announcement of the Companys full year results, and ending on the date of the announcement of the
results.
Interested Person Transactions (IPTs)
When a potential confict of interest arises, the director concerned does not participate in discussion and refrains from
exercising any infuence over other members of the Board.
The Company has established internal control polices to ensure that IPTs are properly reviewed and approved and are
conducted at arms length basis.
Saved as disclosed in the audited fnancial statements of this Annual report, the Company confrms that there was no
interested person transactions, as defned in Chapter 9 of the SGX-ST Listing Manual, above $100,000 entered into during
FY2012.
Corporate Social Responsibility

We believe that environmentally-friendly practices complement business effciency. Our staff are encouraged to reduce,
recycle and reuse and we advocate corporate social responsibility towards the environment by incorporating these
processes in our daily operations. We encourage the use of non-woven bags in our retail outlets.
32
DIRECTORS REPORT
The Directors of the Company are pleased to present their report together with the audited fnancial statements of the
Company and of the Group for the reporting year ended 31 December 2012.
1. Directors at Date of Report
The Directors of the Company in offce at the date of this report are:
Loo Leong Thye (Chief Executive Offcer)
Ng Kian Teck
Max Ng Chee Weng
Tan Han Beng (Appointed on 1 March 2013)
Tan Chay Boon (Appointed on 1 March 2013)
2. Arrangements to Enable Directors to Acquire Benefts by Means of the Acquisition of Shares and
Debentures
Neither at the end of the reporting year nor at any time during the reporting year did there subsist any arrangement
whose object is to enable the Directors of the Company to acquire benefts by means of the acquisition of shares
or debentures in the Company or any other body corporate.
3. Directors Interests in Shares and Debentures
The Directors of the Company holding offce at the end of the reporting year had no interests 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 Companies Act, Chapter 50 (the Act) except as follows:
Name of directors
At beginning of
the reporting year
At end of
the reporting year
holdings in Challenger Technologies Limited
Number of shares of no par value
Direct interest
Loo Leong Thye 149,324,250 149,324,250
Ong Sock Hwee (Resigned on 1 March 2013) 32,940,750 32,940,750
Ng Kian Teck 1,200,000 1,200,000
Ho Boon Chuan Wilson 225,000 225,000
Max Ng Chee Weng 17,500 17,500
Deemed interest
Loo Leong Thye 1,644,750 1,644,750
Ng Kian Teck 157,500 157,500
Max Ng Chee Weng 11,500 11,500
By virtue of section 7 of the Act, Mr Loo Leong Thye with the above shareholding in the Company is deemed to
have an interest in all the related corporations of the Company.
The Directors interests as at 21 January 2013 were the same as those at the end of the reporting year.
33
DIRECTORS REPORT
4. Contractual Benefts of Directors
Since the beginning of the reporting year, no Director of the Company has received or become entitled to receive
a beneft which is required to be disclosed under section 201(8) of the Act, by reason of a contract made by the
Company or a related corporation with the Director or with a frm of which he is a member, or with a Company in
which he has a substantial fnancial interest except as disclosed in the fnancial statements.
There were certain transactions (shown in the fnancial statements under related party transactions) with
corporations in which certain directors have an interest.
5. Share Options
During the reporting year, no option to take up unissued shares of the Company or any subsidiary was granted.
During the reporting year, there were no shares of the Company or any subsidiary issued by virtue of the exercise
of an option to take up unissued shares.
At the end of the reporting year, there were no unissued shares of the Company or any subsidiary under option.
6. Audit Committee
The members of the Audit Committee at the date of this report are as follows:
Ho Boon Chuan Wilson Chairman of Audit Committee and Independent Director
Max Ng Chee Weng Independent Director
Tan Han Beng Independent Director
Tan Chay Boon Independent Director
The Audit Committee performs the functions specifed by section 201B (5) of the Companies Act. Among other
functions, it performed the following:
Reviewed with the independent external auditors their audit plan;
Reviewed with the independent external auditors their evaluation of the Companys internal accounting controls
relevant to their statutory audit, and their report on the fnancial statements and the assistance given by the
Companys offcers to them;
Reviewed with the internal auditors the scope and results of the internal audit procedures;
Reviewed the fnancial statements of the Group and the Company prior to their submission to the Directors
of the Company for adoption; and
Reviewed the interested person transactions (as defned in Chapter 9 of the Listing Manual of SGX).
34
6. Audit Committee (Contd)
Other functions performed by the Audit Committee are described in the report on corporate governance included
in the annual report of the Company. It also includes an explanation of how independent auditor objectivity and
independence is safeguarded where the independent auditors provide non-audit services.
The Audit Committee has recommended to the Board of Directors that the independent auditors, RSM Chio Lim
LLP, be nominated for re-appointment as independent auditors at the next Annual General Meeting of the Company.
7. Independent Auditors
The independent auditors, RSM Chio Lim LLP, have expressed their willingness to accept re-appointment.
8. Subsequent Developments
There are no signifcant developments subsequent to the release of the Groups and the Companys preliminary
fnancial statements, as announced on 7 February 2013, which would materially affect the Groups and the
Companys operating and fnancial performance as of the date of this report.
On Behalf of The Directors
Loo Leong Thye Ng Kian Teck
Chief Executive Offcer Executive Director
15 March 2013
DIRECTORS REPORT
35
In the opinion of the Directors,
(a) the accompanying consolidated statement of proft or loss and other comprehensive income, statements of
fnancial position, statements of changes in equity, consolidated statement of cash fows, and notes thereto are
drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31
December 2012 and of the results and cash fows of the Group and changes in equity of the Company and of the
Group for the reporting year then ended; and
(b) at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they fall due.
The Board of Directors approved and authorised these fnancial statements for issue.
On Behalf of The Directors
Loo Leong Thye Ng Kian Teck
Chief Executive Offcer Executive Director
15 March 2013
STATEMENT BY DIRECTORS
36
Independent Auditors Report to the Members of
Challenger Technologies Limited (Registration No: 198400182K)
Report on the Financial Statements
We have audited the accompanying fnancial statements of Challenger Technologies Limited (the Company) and its
subsidiaries (the Group), which comprise the consolidated statement of fnancial position of the Group and the statement
of fnancial position of the Company as at 31 December 2012, and the consolidated statement of proft or loss and other
comprehensive income, statement of changes in equity and statement of cash fows of the Group, and statement of
changes in equity of the Company for the reporting year then ended, and a summary of signifcant accounting policies and
other explanatory information.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation of the fnancial statements that give a true and fair view in accordance
with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards,
and for devising and maintaining a system of internal accounting controls suffcient 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 statement of proft or loss and other
comprehensive income and statements of fnancial position and to maintain accountability of assets.
Auditors Responsibility
Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial
statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material
misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation of fnancial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys 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 fnancial statements.
We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.
INDEPENDENT AUDITORS REPORT
37
Independent Auditors Report to the Members of
Challenger Technologies Limited (Registration No: 198400182K)
Opinion
In our opinion, the consolidated fnancial statements of the Group and the statement of fnancial position 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 31 December 2012 and of the results, changes in equity and cash fows of the Group and the changes in equity of the
Company for the reporting year ended on that date.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries
incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
RSM Chio Lim LLP
Public Accountants and
Certifed Public Accountants
Singapore
15 March 2013
Partner in charge of audit: Lee Mong Sheong
Effective from year ended 31 December 2010
INDEPENDENT AUDITORS REPORT
38
Group
Notes 2012 2011
$000 $000
Revenue 5 337,258 316,864
Other Items of Income
Interest Income 6 41 209
Dividend Income 1 39
Other Credits 7 873 598
Other Items of Expense
Changes in Inventories 4,127 (650)
Cost of Goods Purchased (277,804) (255,812)
Other Consumables Used (719) (694)
Depreciation Expense (3,772) (3,126)
Employee Benefts Expense 8 (20,013) (18,812)
Finance Costs 6 (18) (100)
Other Expenses 9 (20,251) (18,811)
Other Charges 7 (192) (687)
Proft Before Tax from Continuing Operations 19,531 19,018
Income Tax Expense 11 (3,169) (3,293)
Proft from Continuing Operations, Net of Tax 16,362 15,725
Other Comprehensive (Loss) Income:
Items that may be Reclassifed Subsequently to Proft or Loss:
Exchange Difference on Translating Foreign Operations, Net of Tax 23 52 35
Gain on Available-for-Sale Financial Assets, Reclassifed from Equity to Proft
or Loss as a Reclassifcation Adjustment 23 (319)
Other Comprehensive (Loss) Income for the Year, Net of Tax (267) 35
Total Comprehensive Income 16,095 15,760
Proft Attributable to Equity Holders of the Company, Net of Tax 16,199 15,639
Proft Attributable to Non-Controlling Interests, Net of Tax 163 86
Proft Net of Tax 16,362 15,725
Total Comprehensive Income Attributable to Equity Holders of
the Company 15,932 15,674
Total Comprehensive Income Attributable to Non-Controlling Interests 163 86
Total Comprehensive Income 16,095 15,760
Earnings Per Share
Earnings per Share Currency Unit Cents Cents
Continuing Operations
Basic 12 4.69 4.53
Diluted 12 4.69 4.53
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHEr COMPrEHENSIVE INCOME
Year Ended 31 December 2012
The accompanying notes form an integral part of these fnancial statements.
39
Group Company
Notes 2012 2011 2012 2011
$000 $000 $000 $000
ASSETS
Non-Current Assets
Property, Plant and Equipment 14 13,170 14,203 11,897 12,710
Investments in Subsidiaries 15 2,482 2,182
Investment in Associate 16
Deferred Tax Assets 11 27
Other Financial Assets 17 1,768 1,768
Total Non-Current Assets 13,170 15,998 14,379 16,660
Current Assets
Inventories 18 28,127 24,081 25,635 22,122
Trade and Other Receivables 19 3,210 3,281 7,590 7,591
Other Assets 20 3,660 3,637 3,259 3,065
Cash and Cash Equivalents 21 42,094 48,879 37,115 45,507
Total Current Assets 77,091 79,878 73,599 78,285
Total Assets 90,261 95,876 87,978 94,945
EQUITY AND LIABILITIES
Equity
Share Capital 22 18,775 18,775 18,775 18,775
Retained Earnings 32,216 23,611 35,591 26,342
Other Reserves 23 64 331 319
Equity, Attributable to Equity Holders of the Company 51,055 42,717 54,366 45,436
Non-Controlling Interests 371 298
Total Equity 51,426 43,015 54,366 45,436
Non-Current Liabilities
Deferred Tax Liabilities 11 164 142 22 22
Other Liabilities 24 3,014 2,335 1,077 810
Total Non-Current Liabilities 3,178 2,477 1,099 832
Current Liabilities
Trade and Other Payables 26 24,160 23,375 21,002 21,692
Income Tax Payable 3,389 3,744 3,341 3,663
Other Financial Liabilities 25 16,629 16,629
Other Liabilities 24 8,108 6,636 8,170 6,693
Total Current Liabilities 35,657 50,384 32,513 48,677
Total Liabilities 38,835 52,861 33,612 49,509
Total Equity and Liabilities 90,261 95,876 87,978 94,945
STATEMENTS OF FINANCIAL POSITION
As at 31 December 2012
40
Attributable to Equity Holders of the Company
Total
Attributable
to Parent Share Retained Other
Non-
Controlling
Equity sub-total Capital Earnings Reserves Interests
$000 $000 $000 $000 $000 $000
Group
Current Year:
Opening Balance at
1 January 2012 43,015 42,717 18,775 23,611 331 298
Movements in Equity:
Total Comprehensive Income
for the Year 16,095 15,932 16,199 (267) 163
Dividends Paid (Note 13) (7,684) (7,594) (7,594) (90)
Closing Balance at
31 December 2012 51,426 51,055 18,775 32,216 64 371
Previous Year:
Opening Balance at
1 January 2011 34,549 34,292 18,775 15,221 296 257
Total Comprehensive Income
for the Year 15,760 15,674 15,639 35 86
Dividends Paid (Note 13) (7,294) (7,249) (7,249) (45)
Closing Balance at
31 December 2011 43,015 42,717 18,775 23,611 331 298
STATEMENTS Of CHANgES IN EquITy
41
Total
Equity
Share
Capital
Retained
Earnings
Other
Reserves
$000 $000 $000 $000
Company
Current Year:
Opening Balance at 1 January 2012 45,436 18,775 26,342 319
Total Comprehensive Income for the Year 16,524 16,843 (319)
Dividends Paid (Note 13) (7,594) (7,594)
Closing Balance at 31 December 2012 54,366 18,775 35,591
Previous Year:
Opening Balance at 1 January 2011 36,504 18,775 17,410 319
Total Comprehensive Income for the Year 16,181 16,181
Dividends Paid (Note 13) (7,249) (7,249)
Closing Balance at 31 December 2011 45,436 18,775 26,342 319
STATEMENTS Of CHANgES IN EquITy
42
Group
2012 2011
$000 $000
Cash Flows From Operating Activities
Proft Before Tax 19,531 19,018
Adjustments for:
Depreciation Expense of Property, Plant and Equipment 3,772 3,126
Loss on Disposal of Plant and Equipment 66 1
Gain on Disposal of Available-for-Sale Financial Assets (15) (482)
Gains on Available-for-Sale Financial Assets Reclassifed from
Equity to Proft or Loss as a Reclassifcation Adjustment (319)
Interest Expense 18 100
Interest Income (41) (209)
Dividend Income (1) (39)
Foreign Exchange Adjustment Gain (38) (16)
Other Liabilities Non-Current 679 528
Net Effect of Exchange Rate Changes in Consolidating Foreign Operations 80 35
Operating Cash Flows Before Working Capital Changes 23,732 22,062
Trade and Other Receivables 71 (453)
Other Assets (23) (939)
Inventories (4,046) 1,080
Trade and Other Payables 785 (7,690)
Other Liabilities Current 1,472 1,506
Net Cash Flows From Operations 21,991 15,566
Income Taxes Paid (3,475) (2,333)
Net Cash Flows From Operating Activities 18,516 13,233
Cash Flows From Investing Activities
Interest Received 41 209
Dividends Received 1 39
Proceeds from Disposal of Plant and Equipment 15 156
Proceeds from Disposal of Available-for-Sale Financial Assets 1,821 1,455
Purchase of Plant and Equipment (2,848) (5,186)
Net Cash Flows Used in Investing Activities (970) (3,327)
Cash Flows From Financing Activities
Cash Restricted in Use 29,826 (22,580)
Dividends Paid to Equity Owners (7,594) (7,249)
Dividends Paid to Non-Controlling Interests (90) (45)
Interest Paid (18) (100)
Increase from New Borrowings 16,629
Repayment of Borrowings (16,629) (6,429)
Net Cash Flows From (Used in) Financing Activities 5,495 (19,774)
Net Increase (Decrease) in Cash and Cash Equivalents 23,041 (9,868)
Cash and Cash Equivalents, Consolidated Statement of Cash Flows,
Beginning Balance 19,053 28,921
Cash and Cash Equivalents, Consolidated Statement of Cash Flows,
Ending Balance (Note 21) 42,094 19,053
CONSOlIDATED STATEMENT Of CASH flOwS
43
NOTES TO THE fINANCIAl STATEMENTS
1. General
The Company is incorporated in Singapore with limited liability. The fnancial statements are presented in Singapore
dollars and they cover the Company (referred to as parent) and the subsidiaries.
The Board of Directors approved and authorised these fnancial statements for issue on the date of the statement
by Directors.
The principal activities of the Company are to provide IT products and services through the sale of IT and related
products. It is listed on the Singapore Exchange Securities Trading Limited.
The principal activities of the subsidiaries are described in Note 15 to the fnancial statements.
The registered offce is: 1 Ubi Link, Challenger TecHub, Singapore 408553. The Company is situated in Singapore.
2. Summary of Signifcant Accounting Policies
Accounting Convention
The fnancial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS)
and the related Interpretations to FRS (INT FRS) as issued by the Singapore Accounting Standards Council and
the Companies Act, Chapter 50. The fnancial statements are prepared on a going concern basis under the historical
cost convention except where an FRS requires an alternative treatment (such as fair values) as disclosed where
appropriate in these fnancial statements. Other comprehensive income comprises items of income and expense
(including reclassifcation adjustments) that are not recognised in the income statement, as required or permitted by
FRS. Reclassifcation adjustments are amounts reclassifed to proft or loss in the income statement in the current
period that were recognised in other comprehensive income in the current or previous periods.
Basis of Presentation
The consolidated fnancial statements include the fnancial statements made up to the end of the reporting year
of the Company and all of its directly and indirectly controlled subsidiaries. The consolidated fnancial statements
are the fnancial statements of the Group presented as those of a single economic entity and are prepared using
uniform accounting policies for like transactions and other events in similar circumstances. All signifcant intragroup
balances and transactions, including proft or loss and other comprehensive income items and dividends are
eliminated on consolidation. The results of any subsidiary acquired or disposed of during the reporting year are
accounted for from the respective dates of acquisition or up to the date of disposal which is the date on which
effective control is obtained of the acquired business, until that control ceases.
Changes in the Groups ownership interest in a subsidiary that do not result in the loss of control are accounted
for within equity as transactions with owners in their capacity as owners. The carrying amounts of the Groups and
non-controlling interests are adjusted to refect the changes in their relative interests in the subsidiary. When the
Group loses control of a subsidiary it derecognises the assets and liabilities and related equity components of the
former subsidiary. Any gain or loss is recognised in proft or loss. Any investment retained in the former subsidiary
is measured at its fair value at the date when control is lost and is subsequently accounted as available-for-sale
fnancial assets in accordance with FRS 39.
The Companys fnancial statements have been prepared on the same basis, and as permitted by the Companies
Act, Chapter 50, no statement of proft or loss and other comprehensive income is presented for the Company.
44
2. Summary of Signifcant Accounting Policies (Contd)
Basis of Preparation of the Financial Statements
The preparation of fnancial statements in conformity with generally accepted accounting principles requires the
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the fnancial statements and the reported amounts of
revenues and expenses during the reporting year. Actual results could differ from those estimates. The estimates
and assumptions are reviewed on an ongoing basis. Apart from those involving estimations, management has
made judgements in the process of applying the entitys accounting policies. The areas requiring managements
most diffcult, subjective or complex judgements, or areas where assumptions and estimates are signifcant to the
fnancial statements, are disclosed at the end of this note, where applicable.
Revenue Recognition
The revenue amount is the fair value of the consideration received or receivable from the gross infow of economic
benefts during the reporting year arising from the course of the activities of the entity and it is shown net of any
related sales taxes, returns and rebates. Revenue from the sale of goods is recognised when signifcant risks
and rewards of ownership are transferred to the buyer, there is neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the goods sold, and the amount of revenue
and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Rental revenue is
recognised on a time-proportion basis that takes into account the effective yield on the asset on a straight-line
basis over the lease term. Revenue from rendering of services that are of short duration is recognised when the
services are completed although the costs are recognised as an expense as incurred. Interest is recognised using
the effective interest method. Dividend from equity instruments is recognised as income when the entitys right to
receive payment is established. Revenue from project contracts is recognised in accordance with the accounting
policy on project contracts (see below).
The consideration received from the sale of goods to customers under the customer loyalty programme is allocated
to the goods sold and the points issued (award credits) that are expected to be redeemed. The consideration
allocated to the award credits is measured at the fair value of the points. It is recognised as a liability (deferred
revenue) on the statement of fnancial position and recognised as revenue when the points are redeemed, have
expired or are no longer expected to be redeemed. The amount of revenue recognised is based on the number of
award credits that have been redeemed, relative to the total number expected to be redeemed.
Warranty service revenues are recognised rateably over the warranty period; warranty-related costs are recognised
as incurred. The unearned warranty service revenues are recognised as a liability on the statement of fnancial
position.
Membership fees are recognised rateably over the membership period after recognition of a portion of fees as initial
setup revenue. The unearned membership fees are recognised as a liability on the statement of fnancial position.
45
Project Contracts
When the outcome of a project contract can be estimated reliably, the revenue and costs associated with the
contract are recognised as revenue and expenses respectively by reference to the stage of completion of the
contract activity at the end of the reporting year using the completion of a physical proportion of the contract work
method. Contract costs consist of costs that relate directly to the specifc project, costs that are attributable to
contract activity in general and can be allocated to the project and such other costs as are specifcally chargeable
to the customer under the terms of the contract. Variations in contract work, claims and incentive payments are
included to the extent that they have been agreed with the customer. The stage of completion method relies on
estimates of total expected contract revenue and costs, as well as dependable measurement of the progress made
towards completing a particular project. Recognised revenues and profts are subject to revisions during the project
in the event that the assumptions regarding the overall project outcome are revised. The cumulative impact of a
revision in estimates is recorded in the period such revisions become likely and estimable. When it is probable that
total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
The work in progress projects have operating cycles longer than one year. The management includes in current
assets amounts relating to the contracts realisable over a period in excess of one year.
Employee Benefts
Contributions to defned contribution retirement beneft plans are recorded as an expense as they fall due. The
entitys legal or constructive obligation is limited to the amount that it agrees to contribute to independently
administered funds which include the Central Provident Fund in Singapore (a government managed retirement
beneft plan). For employee leave entitlement the expected cost of short-term employee benefts in the form of
compensated absences is recognised in the case of accumulating compensated absences, when the employees
render service that increases their entitlement to future compensated absences; and in the case of non-
accumulating compensated absences, when the absences occur. A liability for bonuses is recognised where the
entity is contractually obliged or where there is constructive obligation based on past practice.
46
Income Tax
The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable
or refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events
that have been recognised in the fnancial statements or tax returns. The measurements of current and deferred
tax liabilities and assets are based on provisions of the enacted or substantially enacted tax laws; the effects of
future changes in tax laws or rates are not anticipated. Income tax expense represents the sum of the tax currently
payable and deferred tax. Current and deferred income taxes are recognised as income or as an expense in
proft or loss unless the tax relates to items that are recognised in the same or a different period outside proft or
loss. For such items recognised outside proft or loss the current tax and deferred tax are recognised (a) in other
comprehensive income if the tax is related to an item recognised in other comprehensive income and (b) directly
in equity if the tax is related to an item recognised directly in equity. Deferred tax assets and liabilities are offset
when they relate to income taxes levied by the same income tax authority. The carrying amount of deferred tax
assets is reviewed at each end of the reporting year and is reduced, if necessary, by the amount of any tax benefts
that, based on available evidence, are not expected to be realised. A deferred tax amount is recognised for all
temporary differences, unless the deferred tax amount arises from the initial recognition of an asset or liability
in a transaction which (i) is not a business combination; and (ii) at the time of the transaction, affects neither
accounting proft nor taxable proft (tax loss). A deferred tax liability or asset is recognised for all taxable temporary
differences associated with investments in subsidiaries and associates except where the reporting entity is able to
control the timing of the reversal of the taxable temporary difference and it is probable that the taxable temporary
difference will not reverse in the foreseeable future or for deductible temporary differences, they will not reverse in
the foreseeable future and they cannot be utilised against taxable profts.
Foreign Currency Transactions
The functional currency of the Company is the Singapore dollar as it refects the primary economic environment
in which the entity operates. Transactions in foreign currencies are recorded in the functional currency at the rates
ruling at the dates of the transactions. At each end of the reporting year, recorded monetary balances and balances
measured at fair value that are denominated in non-functional currencies are reported at the rates ruling at the end of
the reporting year and fair value dates respectively. All realised and unrealised exchange adjustment gains and losses
are dealt with in proft or loss except when recognised in other comprehensive income and if applicable deferred in
equity such as for qualifying cash fow hedges. The presentation is in the functional currency.
Translation of Financial Statements of Other Entities
Each entity in the Group determines the appropriate functional currency as it refects the primary economic
environment in which the relevant reporting entity operates. In translating the fnancial statements of such an entity
for incorporation in the consolidated fnancial statements in the presentation currency the assets and liabilities
denominated in other currencies are translated at end of the reporting year rates of exchange and the income and
expense items for each statement presenting proft or loss and other comprehensive income are translated at
average rates of exchange for the reporting year. The resulting translation adjustments (if any) are recognised in
other comprehensive income and accumulated in a separate component of equity until the disposal of that relevant
reporting entity.
47
Borrowing Costs
All borrowing costs that are interest and other costs incurred in connection with the borrowing of funds. Borrowing
costs that are directly attributable to the acquisition, construction or production of a qualifying asset that necessarily
take a substantial period of time to get ready for their intended use or sale are capitalised as part of the cost of
that asset until substantially all the activities necessary to prepare the qualifying asset for its intended use or sale
are complete. Other borrowing costs are recognised as an expense in the period in which they are incurred. The
interest expense is calculated using the effective interest rate method.
Property, Plant and Equipment
Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets less their
residual values over their estimated useful lives of each part of an item of these assets. The annual rates of
depreciation are as follows:
Leasehold property 3.8%
Renovations 12.5% to 33%
Plant and equipment 10% to 33%
An asset is depreciated when it is available for use until it is derecognised even if during that period the item is idle.
Fully depreciated assets still in use are retained in the fnancial statements.
Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost less any
accumulated depreciation and any accumulated impairment losses. The gain or loss arising from the derecognition
of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if
any, and the carrying amount of the item and is recognised in proft or loss. The residual value and the useful life of
an asset is reviewed at least at each end of the reporting year and, if expectations differ signifcantly from previous
estimates, the changes are accounted for as a change in an accounting estimate, and the depreciation charge for
the current and future periods are adjusted.
Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing the
asset or component to the location and condition necessary for it to be capable of operating in the manner intended
by management. Subsequent costs are recognised as an asset only when it is probable that future economic
benefts associated with the item will fow to the entity and the cost of the item can be measured reliably. All other
repairs and maintenance are charged to proft or loss when they are incurred.
Cost includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it
is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having
used the item during a particular period for purposes other than to produce inventories during that period.
48
Leases
Whether an arrangement is, or contains, a lease, it is based on the substance of the arrangement at the inception
date, that is, whether (a) fulflment of the arrangement is dependent on the use of a specifc asset or assets
(the asset); and (b) the arrangement conveys a right to use the asset. Leases are classifed as fnance leases if
substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classifed
as operating leases. At the commencement of the lease term, a fnance lease is recognised as an asset and as a
liability in the statement of fnancial position at amounts equal to the fair value of the leased asset or, if lower, the
present value of the minimum lease payments, each determined at the inception of the lease. The discount rate
used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease, if this
is practicable to determine, the lessees incremental borrowing rate is used. Any initial direct costs of the lessee are
added to the amount recognised as an asset. The excess of the lease payments over the recorded lease liability
are treated as fnance charges which are allocated to each reporting year during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses
in the reporting years in which they are incurred. The assets are depreciated as owned depreciable assets. Leases
where the lessor effectively retains substantially all the risks and benefts of ownership of the leased assets are
classifed as operating leases. For operating leases, lease payments are recognised as an expense in proft or
loss on a straight-line basis over the term of the relevant lease unless another systematic basis is representative
of the time pattern of the users beneft, even if the payments are not on that basis. Lease incentives received are
recognised in proft or loss as an integral part of the total lease expense. Rental income from operating leases is
recognised in proft or loss on a straight-line basis over the term of the relevant lease unless another systematic
basis is representative of the time pattern of the users beneft, even if the payments are not on that basis. Initial
direct cost incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased
asset and recognised on a straight-line basis over the lease term.
Subsidiaries
A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the Group.
Control is the power to govern the fnancial and operating policies of an entity so as to obtain benefts from its
activities accompanying a shareholding of more than one half of the voting rights or the ability to appoint or remove
the majority of the members of the Board of Directors or to cast the majority of votes at meetings of the Board
of Directors. The existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity.
In the Companys own separate fnancial statements, an investment in a subsidiary is accounted for at cost less
any allowance for impairment in value. Impairment loss recognised in proft or loss for a subsidiary is reversed
only if there has been a change in the estimates used to determine the assets recoverable amount since the last
impairment loss was recognised. The carrying value and the net book value of the investment in a subsidiary is not
necessarily indicative of the amount that would be realised in a current market.
49
Associates
An associate is an entity including an unincorporated entity in which the reporting entity has a substantial fnancial
interest (usually not less than 20% of the voting power), signifcant infuence and that is neither a subsidiary nor a
joint venture of the investor. Signifcant infuence is the power to participate in the fnancial and operating policy
decisions of the investee but is not control or joint control over those policies. The accounting for investments in
an associate is on the equity method. Under equity accounting, the investment in an associate is carried in the
statement of fnancial position at cost plus post-acquisition changes in the share of net assets of the associate,
less any impairment in value. The proft or loss refects the reporting entitys share of the results of operations of
the associate. Losses of an associate in excess of the reporting entitys interest in the relevant associate are not
recognised except to the extent that the reporting entity has an obligation. An investment in an associate includes
goodwill on acquisition, which is accounted for in accordance with FRS 103 Business Combinations. However
the entire carrying amount of the investment is tested under FRS 36 for impairment, by comparing its recoverable
amount (higher of value in use and fair value less costs to sell) with its carrying amount, whenever application
of the requirements in FRS 39 indicates that the investment may be impaired. Profts and losses resulting from
transactions between the reporting entity and an associate are recognised in the fnancial statements only to the
extent of unrelated reporting entitys interests in the associate. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are
changed where necessary to ensure consistency with the policies adopted by the reporting entity. The carrying
value and the net book value of the investment in the associate are not necessarily indicative of the amounts that
would be realised in a current market exchange. The reporting entity discontinues the use of the equity method
from the date that it ceases to have signifcant infuence over the associate and accounts for the investment in
accordance with FRS 39 from that date. Any gain or loss is recognised in proft or loss. Any investment retained in
the former associate is measured at its fair value at the date that it ceases to be an associate.
In the Companys own separate fnancial statements, an investment in an associate is accounted for at cost less
any allowance for impairment in value. Impairment loss recognised in proft or loss for an associate is reversed
only if there has been a change in the estimates used to determine the assets recoverable amount since the last
impairment loss was recognised. The carrying value and the net book value of an investment in the associate are
not necessarily indicative of the amounts that would be realised in a current market exchange.
Segment Reporting
The Group discloses fnancial and descriptive information about its reportable segments. Reportable segments
are operating segments or aggregations of operating segments that meet specifed criteria. Operating segments
are components about which separate fnancial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance. Generally, fnancial
information is reported on the same basis as is used internally for evaluating operating segment performance and
deciding how to allocate resources to operating segments.
Business Combinations
Business combinations are accounted for by applying the acquisition method. There were none during the reporting
year.
50
Non-Controlling Interests
The non-controlling interests in the net assets and net results of a consolidated subsidiary are shown separately
in the appropriate components of the consolidated fnancial statements. For each business combination, any
non-controlling interest in the acquiree (subsidiary) is initially measured either at fair value or at the non-controlling
interests proportionate share of the acquirees identifable net assets. Where the non-controlling interest is
measured at fair value, the valuation techniques and key model inputs used are disclosed in the relevant note.
Proft or loss and each component of other comprehensive income are attributed to the owners of the parent and
to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the
non-controlling interests even if this results in the non-controlling interests having a defcit balance.
Impairment of Non-Financial Assets
Irrespective of whether there is any indication of impairment, an annual impairment test is performed at the same
time every year on an intangible asset with an indefnite useful life or an intangible asset not yet available for use.
The carrying amount of other non-fnancial assets is reviewed at each end of the reporting year for indications of
impairment and where an asset is impaired, it is written down through proft or loss to its estimated recoverable
amount. The impairment loss is the excess of the carrying amount over the recoverable amount and is recognised
in proft or loss. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less
costs to sell and its value in use. When the fair value less costs to sell method is used, any available recent market
transactions are taken into consideration. When the value in use method is adopted, in assessing the value in use,
the estimated future cash fows are discounted to their present value using a pre-tax discount rate that refects
current market assessments of the time value of money and the risks specifc to the asset. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifable cash
fows (cash-generating units). At each end of the reporting year non-fnancial assets other than goodwill with
impairment loss recognised in prior periods are assessed for possible reversal of the impairment. An impairment
loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would
have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Inventories
Inventories are measured at the lower of cost (frst in frst out method) and net realisable value. Net realisable value
is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale. A write down on cost is made for where the cost is not recoverable or
if the selling prices have declined. Cost includes all costs of purchase, costs of conversion and other costs incurred
in bringing the inventories to their present location and condition.
51
Financial Assets
Initial recognition, measurement and derecognition:
A fnancial asset is recognised on the statement of fnancial position when, and only when, the entity becomes
a party to the contractual provisions of the instrument. The initial recognition of fnancial assets is at fair value
normally represented by the transaction price. The transaction price for fnancial asset not classifed at fair value
through proft or loss includes the transaction costs that are directly attributable to the acquisition or issue of the
fnancial asset. Transaction costs incurred on the acquisition or issue of fnancial assets classifed at fair value
through proft or loss are expensed immediately. The transactions are recorded at the trade date.
Irrespective of the legal form of the transactions performed, fnancial assets are derecognised when they pass the
substance over form based on the derecognition test prescribed by FRS 39 relating to the transfer of risks and
rewards of ownership and the transfer of control.
Subsequent measurement:
Subsequent measurement based on the classifcation of the fnancial assets in one of the following four categories
under FRS 39 is as follows:
1. Financial assets at fair value through proft or loss: As at end of the reporting year, there were no fnancial
assets classifed in this category.
2. Loans and receivables: Loans and receivables are non-derivative fnancial assets with fxed or determinable
payments that are not quoted in an active market. Assets that are for sale immediately or in the near
term are not classifed in this category. These assets are carried at amortised costs using the effective
interest method (except that short-duration receivables with no stated interest rate are normally measured
at original invoice amount unless the effect of imputing interest would be signifcant) minus any reduction
(directly or through the use of an allowance account) for impairment or uncollectibility. Impairment charges
are provided only when there is objective evidence that an impairment loss has been incurred as a result of
one or more events that occurred after the initial recognition of the asset (a loss event) and that loss event
(or events) has an impact on the estimated future cash fows of the fnancial asset or group of fnancial
assets that can be reliably estimated. The methodology ensures that an impairment loss is not recognised
on the initial recognition of an asset. Losses expected as a result of future events, no matter how likely, are
not recognised. For impairment, the carrying amount of the asset is reduced through use of an allowance
account. The amount of the loss is recognised in proft or loss. An impairment loss is reversed if the reversal
can be related objectively to an event occurring after the impairment loss was recognised. Typically the
trade and other receivables are classifed in this category.
3. Held-to-maturity fnancial assets: As at end of the reporting year, there were no fnancial assets classifed
in this category.
52
Financial Assets (Contd)
4. Available-for-sale fnancial assets: These are non-derivative fnancial assets that are designated as
available-for-sale on initial recognition or are not classifed in one of the previous categories. These assets
are carried at fair value. Changes in fair value of available-for-sale fnancial assets (other than those
relating to foreign exchange translation differences on monetary investments) are recognised in other
comprehensive income and accumulated in a separate component of equity under the heading revaluation
reserves. Such reserves are reclassifed to proft or loss when realised through disposal. When there is
objective evidence that the asset is impaired, the cumulative loss is reclassifed from equity to proft or
loss as a reclassifcation adjustment. A signifcant or prolonged decline in the fair value of the investment
below its cost is considered to be objective evidence of impairment. If, in a subsequent period, the fair
value of an equity instrument classifed as available-for-sale increases and the increase can be objectively
related to an event occurring after the impairment loss, it is reversed against revaluation reserves and is
not subsequently reversed through proft or loss. However for debt instruments classifed as available-for-
sale impairment losses recognised in proft or loss are subsequently reversed if an increase in the fair value
of the instrument can be objectively related to an event occurring after the recognition of the impairment
loss. The weighted average method is used when determining the cost basis of publicly listed equities
being disposed of. For non-equity instruments classifed as available-for-sale the reversal of impairment is
recognised in proft or loss. These fnancial assets are classifed as non-current assets unless management
intends to dispose of the investments within 12 months of the end of the reporting year. Usually non-current
investments in equity shares and debt securities are classifed in this category but it does not include
subsidiaries, joint ventures, or associates. Unquoted investments are stated at cost less allowance for
impairment in value where there are no market prices, and management is unable to establish fair value
by using valuation techniques except that where management can establish fair value by using valuation
techniques the relevant unquoted investments are stated at fair value. For unquoted equity instruments
impairment losses are not reversed.
Changes in the fair value of non-functional currency denominated investments classifed as available-for-sale
are analysed between translation differences and other changes in the carrying amount of the investments.
The translation differences on monetary investments are recognised in proft or loss determined based on
the amortised cost of the monetary investments; translation differences on non-monetary investments are
recognised in other comprehensive income. The other changes in carrying amount of monetary and non-
monetary investments classifed as available-for-sale are recognised in other comprehensive income.
Cash and Cash Equivalents
Cash and cash equivalents include bank and cash balances, on demand deposits and any highly liquid debt
instruments purchased with an original maturity of three months or less. For the statement of cash fows the item
includes cash and cash equivalents less cash subject to restriction and bank overdrafts payable on demand that
form an integral part of cash management.
53
Financial Liabilities
Initial recognition, measurement and derecognition:
A fnancial liability is recognised on the statement of fnancial position when, and only when, the entity becomes
a party to the contractual provisions of the instrument and it is derecognised when the obligation specifed in the
contract is discharged or cancelled or expires. The initial recognition of fnancial liability is at fair value normally
represented by the transaction price. The transaction price for fnancial liability not classifed at fair value through
proft or loss includes the transaction costs that are directly attributable to the acquisition or issue of the fnancial
liability. Transaction costs incurred on the acquisition or issue of fnancial liability classifed at fair value through
proft or loss are expensed immediately. The transactions are recorded at the trade date. Financial liabilities
including bank and other borrowings are classifed as current liabilities unless there is an unconditional right to
defer settlement of the liability for at least 12 months after the end of the reporting year.
Subsequent measurement:
Subsequent measurement based on the classifcation of the fnancial liabilities in one of the following two categories
under FRS 39 is as follows:
1. Liabilities at fair value through proft or loss: Liabilities are classifed in this category when they are incurred
principally for the purpose of selling or repurchasing in the near term (trading liabilities) or are derivatives
(except for a derivative that is a designated and effective hedging instrument) or have been classifed
in this category because the conditions are met to use the fair value option and it is used. Financial
guarantee contracts if signifcant are initially recognised at fair value and are subsequently measured at
the greater of (a) the amount determined in accordance with FRS 37 and (b) the amount initially recognised
less, where appropriate, cumulative amortisation recognised in accordance with FRS 18. All changes in fair
value relating to liabilities at fair value through proft or loss are charged to proft or loss as incurred.
2. Other fnancial liabilities: All liabilities, which have not been classifed as in the previous category fall into
this residual category. These liabilities are carried at amortised cost using the effective interest method.
Trade and other payables and borrowings are usually classifed in this category. Items classifed within
current trade and other payables are not usually re-measured, as the obligation is usually known with a high
degree of certainty and settlement is short-term.
Fair Value of Financial Instruments
The carrying values of current fnancial instruments approximate their fair values due to the short-term maturity
of these instruments and the disclosures of fair value are not made when the carrying amount of current fnancial
instruments is a reasonable approximation of the fair value. The fair values of non-current fnancial instruments may
not be disclosed separately unless there are signifcant differences at the end of the reporting year and in the event
the fair values are disclosed in the relevant notes. The fair value of a fnancial instrument is derived from an active
market or by using an acceptable valuation technique. The appropriate quoted market price for an asset held or
liability to be issued is usually the current bid price without any deduction for transaction costs that may be incurred
on sale or other disposal and, for an asset to be acquired or liability held, the asking price. If there is no market,
or the markets available are not active, the fair value is established by using an acceptable valuation technique.
54
Fair Value of Financial Instruments (Contd)
The fair value measurements are classifed using a fair value hierarchy of 3 levels that refects the signifcance
of the inputs used in making the measurements, that is, Level 1 for the use of quoted prices (unadjusted) in
active markets for identical assets or liabilities; Level 2 for the use of inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived
from prices); and Level 3 for the use of inputs for the asset or liability that are not based on observable market
data (unobservable inputs). The level is determined on the basis of the lowest level input that is signifcant to
the fair value measurement in its entirety. Where observable inputs that require signifcant adjustment based on
unobservable inputs, that measurement is a Level 3 measurement. The maximum exposure to credit risk is: the
total of the fair value of the fnancial assets; the maximum amount the entity could have to pay if the guarantee is
called on; and the full amount of any payable commitments at the end of the reporting year.
Equity
Equity instruments are contracts that give a residual interest in the net assets of the Company. Ordinary shares are
classifed as equity. Equity instruments are recognised at the amount of proceeds received net of incremental costs
directly attributable to the transaction. Dividends on equity are recognised as liabilities when they are declared.
Interim dividends are recognised when declared by the Directors.
Provisions
A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a past
event, it is probable that an outfow of resources embodying economic benefts will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. A provision is made using best
estimates of the amount required in settlement and where the effect of the time value of money is material, the
amount recognised is the present value of the expenditures expected to be required to settle the obligation using
a pre-tax rate that refects current market assessments of the time value of money and the risks specifc to the
obligation. The increase in the provision due to passage of time is recognised as interest expense. Changes in
estimates are refected in proft or loss in the reporting year they occur.
Critical Judgements, Assumptions and Estimation Uncertainties
The critical judgements made in the process of applying the accounting policies that have the most signifcant
effect on the amounts recognised in the fnancial statements and the key assumptions concerning the future, and
other key sources of estimation uncertainty at the end of the reporting year, that have a signifcant risk of causing
a material adjustment to the carrying amounts of assets and liabilities currently or within the next reporting year
are discussed below. These estimates and assumptions are periodically monitored to ensure they incorporate all
relevant information available at the date when fnancial statements are prepared. However, this does not prevent
actual fgures differing from estimates.
55
Critical Judgements, Assumptions and Estimation Uncertainties (Contd)
Net realisable value of inventories:
A review is made periodically on inventory for excess inventory and declines in net realisable value below cost and
an allowance is recorded against the inventory balance for any such declines. The review requires management
to consider the future demand for the products. In any case the realisable value represents the best estimate
of the recoverable amount and is based on the acceptable evidence available at the end of the reporting year
and inherently involves estimates regarding the future expected realisable value. The usual considerations for
determining the amount of allowance or write-down include ageing analysis, technical assessment and subsequent
events and arrangements with the suppliers. In general, such an evaluation process requires signifcant judgment
and materially affects the carrying amount of inventories at the end of the reporting year. Possible changes in these
estimates could result in revisions to the stated value of the inventories. The carrying amount of inventories at the
end of the reporting year was $28,127,000 (2011: $24,081,000).
Customer loyalty programme:
The group allocates the consideration received from the sale of goods to the goods sold and the points issued under
its Reward Points Customer Loyalty Programme. The consideration allocated to the points issued is measured at
their fair values. Fair values are determined by considering, among others, the following factors: the range of
products available to the customers, the prices at which the Group sells the products which can be redeemed and
the changing patterns in the redemption rates. The carrying amount of the Groups deferred revenue in relation to
the Customer Loyalty Programme at the end of the reporting year was $5,009,000 (2011: $4,070,000).
Useful lives of property, plant and equipment:
The estimates for the useful lives and related depreciation charges for property, plant and equipment is based
on commercial and other factors which could change signifcantly as a result of innovations and in response to
market conditions. The depreciation charge is increased where useful lives are less than previously estimated
lives, or the carrying amounts written off or written down for technically obsolete items or assets that have been
abandoned. It is impracticable to disclose the extent of the possible effects. It is reasonably possible, based on
existing knowledge, that outcomes within the next reporting year that are different from assumptions could require
a material adjustment to the carrying amount of the balances affected. The carrying amount of the specifc asset at
the end of the reporting year affected by the assumption is $13,170,000 (2011: $14,203,000).
Estimated impairment of subsidiary:
Where a subsidiary is in net equity defcit and has suffered losses a test is made whether the investment in the
investee has suffered any impairment. This determination requires signifcant judgement. An estimate is made of
the future proftability of the investee, and the fnancial health of and near-term business outlook for the investee,
including factors such as industry and sector performance, and operational and fnancing cash fow. The amount
of the relevant investment is $427,000 (2011: $427,000) at the end of the reporting year.
56
3. Related Party Relationships and Transactions
FRS 24 defnes a related party as a person or entity that is related to the reporting entity and it includes (a) A
person or a close member of that persons family if that person: (i) has control or joint control over the reporting
entity; (ii) has signifcant infuence over the reporting entity; or (iii) is a member of the key management personnel
of the reporting entity or of a parent of the reporting entity. (b) An entity is related to the reporting entity if any of the
following conditions applies: (i) The entity and the reporting entity are members of the same group. (ii) One entity
is an associate or joint venture of the other entity. (iii) Both entities are joint ventures of the same third party. (iv)
One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) The entity is a
post-employment beneft plan for the beneft of employees of either the reporting entity or an entity related to the
reporting entity. (vi) The entity is controlled or jointly controlled by a person identifed in (a). (vii) A person identifed
in (a)(i) has signifcant infuence over the entity or is a member of the key management personnel of the entity (or
of a parent of the entity).
The ultimate controlling party is Mr Loo Leong Thye.
3.1 Related companies:
Related companies in these fnancial statements include the members of the Group of companies.
There are transactions and arrangements between the reporting entity and members of the Group
and the effects of these on the basis determined between the parties are refected in these fnancial
statements. The current intercompany balances are unsecured without fxed repayment terms and interest
unless stated otherwise. For any signifcant non-current balances and signifcant fnancial guarantees an
interest or charge is charged or imputed unless stated otherwise.
Intragroup transactions and balances that have been eliminated in these consolidated fnancial
statements are not disclosed as related party transactions and balances below.
3.2 Related parties other than related companies:
There are transactions and arrangements between the reporting entity and related parties and the effects
of these on the basis determined between the parties are refected in these fnancial statements. The
current related party balances are unsecured without fxed repayment terms and interest unless stated
otherwise. For any signifcant non-current balances and signifcant fnancial guarantees an interest or
charge is charged or imputed unless stated otherwise.
Signifcant related party transactions:
In addition to the transactions and balances disclosed elsewhere in the notes to the fnancial statements,
this item includes the following:
Group
Other related parties
2012
$000
2011
$000
Fees to a frm in which a director has an interest 54 3
Purchase of goods and services from a related party 1 79
57
3. Related Party Relationships and Transactions (Contd)
3.3 Key management compensation:
Group
2012
$000
2011
$000
Salaries and other short-term employee benefts 2,455 1,746

The above amounts are included under employee benefts expense. Included in the above amounts are the
following items:
Group
2012
$000
2011
$000
Remuneration of Directors of the Company 1,203 1,282
Fees to Directors of the Company 56 50
Key management personnel are Directors and those persons having authority and responsibility for
planning, directing and controlling the activities of the Company, directly or indirectly. The above amounts
for key management compensation are for fve Directors and other key management personnel.
Further information about the remuneration of individual Directors is provided in the report on corporate governance.
4. Financial Information by Operating Segments
4A. Information about reportable Segment Proft or loss, Assets and liabilities
Disclosure of information about operating segments, products and services, the geographical areas, and
the major customers are made as required by FRS 108 Operating Segments. This disclosure standard has
no impact on the reported results or fnancial position of the Group.
For management purposes the Group is organised into the following major strategic operating segments
that offer different products and services: (1) IT products and services, (2) electronic signage services and (3)
telephonic call centre and data management services. Such a structural organisation is determined by the
nature of risks and returns associated with each business segment and defnes the management structure as
well as the internal reporting system. It represents the basis on which the management reports the primary
segment information. They are managed separately because each business requires different strategies.
The segments and the types of products and services are as follows:
The IT products and services segment is involved in retailing a large selection of IT products including
personal computers, notebooks, printers, scanners, digital imaging solutions, personal digital assistants,
mobile and wireless connectivity solutions, audio-visual and projection equipment, and related peripherals.
The electronic signage services segment is involved in the supply and installation of electronic signages
and provision of electronic signage services.
The telephonic call centre and data management services segment carries on the business of telephonic
call centre, data management services and direct marketing services.
58
4. Financial Information by Operating Segments (Contd)
4A. Information about reportable Segment Proft or loss, Assets and liabilities (Contd)
Inter-segment sales are measured on the basis that the entity actually used to price the transfers. Internal
transfer pricing policies of the Group are as far as practicable based on market prices. The accounting policies
of the operating segments are the same as those described in the summary of signifcant accounting policies.
The management reporting system evaluates performances based on a number of factors. However the primary
proftability measurement to evaluate segments operating results comprises two major fnancial indicators:
(1) earnings from operations before depreciation, amortisation, interests and income taxes (called Recurring
EBITDA) and (2) operating result before interests and income taxes and other unallocated items (called ORBIT).
4B. Proft or loss from Continuing Operations and reconciliations
IT
products
and
services
Electronic
signage
Telephonic
call centre
and data
management
services Unallocated Total
$000 $000 $000 $000 $000
CONTINUING OPERATIONS 2012
Revenue by Segment
Total revenue by segment 331,413 1,280 4,615 337,308
Inter-segment sales and services (31) (19) (50)
Total revenue 331,382 1,261 4,615 337,258
Recurring EBITDA 22,470 210 641 23,321
Depreciation (3,694) (6) (72) (3,772)
Finance costs (18) (18)
ORBIT 19,531
Proft before tax from
continuing operations 19,531
Income tax expense (3,169)
Proft from continuing operations 16,362
CONTINUING OPERATIONS 2011
Revenue by Segment
Total revenue by segment 310,108 3,368 3,562 317,038
Inter-segment sales and services (15) (159) (174)
Total revenue 310,093 3,209 3,562 316,864
Recurring EBITDA 21,518 373 353 22,244
Depreciation (3,038) (10) (78) (3,126)
ORBIT 19,018
Proft before tax from
continuing operations 19,018
Income tax expense (3,293)
Proft from continuing operations 15,725
59
4C. Assets and Reconciliations
IT
products
and
services
Electronic
signage
Telephonic
call centre
and data
management
$000 $000 $000 $000 $000
2012
Total assets for reportable
segments 67,881 848 3,029 71,758
Unallocated:
Cash and cash equivalents 18,503 18,503
Total Group Assets 67,881 848 3,029 18,503 90,261
2011
Total assets for reportable
segments 60,007 1,074 3,174 64,255
Unallocated:
Deferred tax assets 27 27
Cash and cash equivalents 29,826 29,826
Other fnancial assets 1,768 1,768
Total Group Assets 60,007 1,074 3,174 31,621 95,876
4D. Liabilities and Reconciliations
IT
products
and
services
Electronic
signage
Telephonic
call centre
and data
management
$000 $000 $000 $000 $000
2012
Total liabilities for reportable
segments 31,596 176 3,510 35,282
Unallocated:
Deferred and current tax liabilities 3,553 3,553
Total Group Liabilities 31,596 176 3,510 3,553 38,835
2011
Total liabilities for reportable
segments 46,363 251 2,361 48,975
Unallocated:
Deferred and current tax liabilities 3,886 3,886
Total Group Liabilities 46,363 251 2,361 3,886 52,861
60
4E. Other Material Items and Reconciliations
IT
products
and
services
Electronic
signage
Telephonic
call centre
and data
management
$000 $000 $000 $000 $000
Expenditures for non-current assets
2012 2,776 72 2,848
2011 5,127 59 5,186
4F. Geographical Information
Revenue Non- current assets
2012
$000
2011
$000
2012
$000
2011
$000
Singapore 317,857 301,959 12,031 14,686
Malaysia 19,401 14,905 1,139 1,312
337,258 316,864 13,170 15,998
Revenues are attributed to countries on the basis of the customers location, irrespective of the origin of
the goods and services. The non-current assets are analysed by the geographical area in which the assets
are located.
4G. Information About Major Customers
There are no customers with revenue transactions of over 10% of the Group revenue.
5. Revenue
Group
2012
$000
2011
$000
IT products and services 329,811 308,553
Electronic signage services rendering of services 1,261 3,209
Rental income 1,571 1,540
Telephonic call centre and data management services 4,615 3,562
337,258 316,864
61
6. Interest Income and (Finance Costs)
Group
2012
$000
2011
$000
Interest income 41 209
Interest expense on bank borrowings (18) (100)
23 109
Presented in proft or loss as:
Interest income 41 209
23 109
7. Other Credits and (Other Charges)
Group
2012
$000
2011
$000
Bad debts written off trade receivables (13)
Foreign exchange adjustment gains (losses) 316 (647)
Sundry income 223 116
Loss on disposal of plant and equipment (66) (1)
Gain on disposal of available-for-sale fnancial assets 15 482
Gains on available-for-sale fnancial assets reclassifed from
equity to proft or loss as a reclassifcation adjustment 319
Inventories written off (98) (39)
Impairment allowance on inventories (15)
Net 681 (89)
Presented in proft or loss as:
Other credits 873 598
Other charges (192) (687)
Net 681 (89)
8. Employee Benefts Expense
Group
2012
$000
2011
$000
Employee benefts expense 17,786 16,891
Contributions to defned contribution plans 2,227 1,921
Total employee benefts expense 20,013 18,812
62
9. Other Expenses
Group
2012
$000
2011
$000
Rental expenses 12,313 11,226
Selling and distribution costs 4,381 4,361
Other operating expenses 3,557 3,224
20,251 18,811
10. Items in the Consolidated Statement of Proft or loss and Other Comprehensive Income
In addition to the charges and credits disclosed elsewhere in the notes to the fnancial statements, this item
includes the following charges:
Group
2012
$000
2011
$000
Audit fees to independent auditors:
Companys independent auditors 91 83
Other independent auditors 6 15
Subtotal 97 98
Other fees to independent auditors:
Companys independent auditors 22 20
Other independent auditors 2 10
Subtotal 24 30
121 128
11. Income Tax
11A. Components of tax expense (income) recognised in proft or loss include:
Group
2012
$000
2011
$000
Current tax expense (income):
Current tax expense 3,380 3,181
Over adjustments to current tax in respect of prior periods (260) (8)
Subtotal 3,120 3,173
Deferred tax expense (income):
Deferred tax (income) expense (22) 120
Under adjustments to deferred tax in respect of prior periods 71
Subtotal 49 120
Total income tax expense 3,169 3,293
63
11. Income Tax (Contd)
11A. Components of tax expense (income) recognised in proft or loss include (Contd):
The reconciliation of income taxes below is determined by applying the Singapore corporate tax rate.
The income tax in proft or loss varied from the amount of income tax amount determined by applying
the Singapore income tax rate of 17% (2011: 17%) to proft or loss before income tax as a result of the
following differences:
Group
2012
$000
2011
$000
Proft before tax 19,531 19,018
Income tax expense at the above rate 3,320 3,233
Non deductible items 240 174
Tax exemptions (420) (60)
Over adjustments to tax in respect of prior periods (189) (8)
Prior years unrecorded capital allowances utilised (43)
Effect of different tax rates in different countries 14 (10)
Deferred tax assets not recognised 197
Other minor items less than 3% each 7 7
Total income tax expense 3,169 3,293
There are no income tax consequences of dividends to owners of the Company.
11B. Deferred tax expense (income) recognised in proft or loss includes:
Group
2012
$000
2011
$000
Excess of net book value of plant and equipment over tax values (132) 249
Excess of tax values over net book value of plant and equipment 27
Deferred revenue (43) (129)
Deferred tax assets not recognised 197
Total deferred tax expense recognised in proft or loss 49 120
11C. Deferred tax balance in the statements of fnancial position:
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Deferred tax liabilities:
Excess of net book value of plant and equipment
over tax values (819) (951) (677) (831)
Total deferred tax liabilities (819) (951) (677) (831)
Deferred tax assets:
Excess of tax values over net book value of plant
and equipment 27
Deferred revenue 852 809 852 809
Deferred tax assets not recognised (197) (197)
Total deferred tax assets 655 836 655 809
Net balance (164) (115) (22) (22)
64
11. Income Tax (Contd)
11C. Deferred tax balance in the statements of fnancial position (Contd):
Presented in the statements of fnancial position as follows:
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Deferred tax liabilities (164) (142) (22) (22)
Deferred tax assets 27
Net balance (164) (115) (22) (22)
It is impracticable to estimate the amount expected to be settled or used within one year.
Temporary differences arising in connection with interests in subsidiaries and associates are insignifcant.
For the Malaysia company, the realisation of the future income tax beneft from tax loss carryforwards and
temporary difference from capital allowances is available for an unlimited future period subject to agreement
with tax authorities. The tax losses and unabsorbed capital allowance amounting to approximately
$1,689,000 (2011: $1,648,000) and $803,000 (2011: $594,000) respectively.
12. Earnings Per Share
The following table illustrates the numerators and denominators used to calculate basic and diluted earnings per
share of no par value:
Group
2012
$000
2011
$000
A. Numerators: earnings attributable to equity:
Continuing operations: attributable to equity holders 16,199 15,639
B. Denominators: weighted average number of equity shares
Basic 345,208 230,139
Bonus shares
(a)
115,069
Diluted 345,208 345,208
The weighted average number of equity shares refers to shares in circulation during the reporting period.
Basic earnings per share ratio is based on the weighted average number of ordinary shares outstanding during each
reporting year. The diluted earnings per share is based on the weighted average number of ordinary shares and
dilutive ordinary share equivalents outstanding during each reporting year.
(a)
The Company issued a total of 115,069,000 bonus shares on the basis of one bonus share for every two existing ordinary
shares during the reporting year 2011. The weighted average number of shares used in the calculation of earnings per
share have been computed as if the bonus share issue had occured at the beginning of the earliest period presented.
65
13. Dividends on Equity Shares
Group and Company
2012
$000
2011
$000
Interim tax exempt (1-tier) dividend paid of 1.0 cents
(2011: 1.0 cents) per share 3,452 3,452
Final tax exempt (1-tier) dividend paid of 1.2 cents
(2011: 1.1 cents) per share 4,142 3,797
7,594 7,249
In respect of the current reporting year, the Directors propose that a fnal dividend of 1.25 cents per share totalling
$4,315,100 to be paid to shareholders after the Annual General Meeting. There are no income tax consequences.
This dividend is subject to approval by shareholders at the next Annual General Meeting and has not been included
as a liability in these fnancial statements. The proposed fnal dividend is payable in respect of all ordinary shares
in issue at the end of the reporting year and including the new qualifying shares issued up to the date the dividend
become payable.
14. Property, Plant and Equipment
Group
Leasehold
Property Renovation
Plant &
Equipment Total
$000 $000 $000 $000
Cost:
At 1 January 2011 7,200 5,714 9,770 22,684
Additions 1,305 3,881 5,186
Disposals (3,099) (3,447) (6,546)
At 31 December 2011 7,200 3,920 10,204 21,324
Foreign exchange adjustments (15) (30) (45)
Additions 1,022 1,826 2,848
Disposals (286) (310) (596)
At 31 December 2012 7,200 4,641 11,690 23,531
Accumulated depreciation:
At 1 January 2011 554 3,958 5,872 10,384
Depreciation for the year 277 830 2,019 3,126
Disposals (3,047) (3,342) (6,389)
At 31 December 2011 831 1,741 4,549 7,121
Foreign exchange adjustments (8) (9) (17)
Disposals (258) (257) (515)
At 31 December 2012 1,108 2,463 6,790 10,361
Net book value:
At 1 January 2011 6,646 1,756 3,898 12,300
At 31 December 2011 6,369 2,179 5,655 14,203
At 31 December 2012 6,092 2,178 4,900 13,170
66
14. Property, Plant and Equipment (Contd)
Company
Leasehold
Property Renovation
Plant &
Equipment Total
$000 $000 $000 $000
Cost:
At 1 January 2011 7,200 4,854 8,318 20,372
Additions 1,102 2,968 4,070
Disposals (2,771) (3,133) (5,904)
At 31 December 2011 7,200 3,185 8,153 18,538
Additions 952 1,528 2,480
Disposals (286) (234) (520)
At 31 December 2012 7,200 3,851 9,447 20,498
Accumulated depreciation:
At 1 January 2011 554 3,414 5,045 9,013
Disposals (2,770) (3,120) (5,890)
At 31 December 2011 831 1,356 3,641 5,828
Disposals (258) (191) (449)
At 31 December 2012 1,108 1,941 5,552 8,601
Net book value:
At 1 January 2011 6,646 1,440 3,273 11,359
At 31 December 2011 6,369 1,829 4,512 12,710
At 31 December 2012 6,092 1,910 3,895 11,897
Certain bank facilities were secured by a frst legal mortgage over the above property.
67
15. Investments in Subsidiaries
Company
2012
$000
2011
$000
Movements during the year:
At beginning of the year 3,799 3,799
Additions 300
At end of the year 4,099 3,799
Less: Allowance for impairment (1,617) (1,617)
Total at cost 2,482 2,182
Net book value of subsidiaries (405) (185)
Movements in allowance for impairment:
Balance at beginning and end of the year 1,617 1,617
Analysis of above amount denominated in non-functional currency:
Malaysian ringgit 427 427
68
15. Investments in Subsidiaries (Contd)
The subsidiaries held by the Company are listed below:
Name of Subsidiaries, Country of Incorporation,
Place of Operations and Principal Activities
(and Independent Auditors)
Cost in Books
of Company
Effective
Percentage
of Equity Held
2012
$000
2011
$000
2012
%
2011
%
CBD eVision Pte Ltd
(a)
1,500 1,500 100 100
Singapore
Electronic signage business
Valore Lifestyle Pte. Ltd.
(a) (c)
685 385 100 100
Singapore
Provision of IT products and services
Challenger IT Services Pte. Ltd.
(a)
100 100 100 100
Singapore
IT maintenance and technical support services
Challenger Technologies (M) Sdn Bhd
(b)
427 427 100 100
Malaysia
Provision of IT products and services
(Douglas Loh & Associates)
Incall Systems Pte Ltd
(a)
887 887 70 70
Singapore
Telephonic call centre and data management services
Challenger eCommerce Pte. Ltd.
(a)
500 500 100 100
Singapore
Online retailing
Challenger Holding (HK) Private Limited
(d)
100
Hong Kong
Trading and investment holding
4,099 3,799
(a)
Audited by RSM Chio Lim LLP, a member of RSM International.
(b)
Other independent auditors. Audited by frms of accountants other than member frms of RSM International of which RSM Chio
Lim LLP in Singapore is a member. Their names are indicated above.
(c)
Formerly known as Matrix Integration Pte. Ltd.
(d)
Newly incorporated company on 13 November 2012. Subsequent to the end of the reporting year, $237,630 was injected
into the share capital of the subsidiary. Not audited as it is immaterial.
As is required by Rule 716 of the Listing Manual of The Singapore Exchange Securities Trading Limited the Audit Committee and the Board
of Directors of the Company have satisfed themselves that the appointment of different auditors for certain of its overseas subsidiaries
would not compromise the standard and effectiveness of the audit of the Group.
69
16. Investment in Associate
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Carrying value:
Unquoted equity shares at cost 311 311 311 311
Less: Allowance for impairment (311) (311) (311) (311)

Analysis of above amount denominated in non-functional currency:
China renminbi 311 311 311 311
The associate held by the Company is listed below:
Name of Associates, Country of Incorporation,
Place of Operations and Principal Activities
Percentage of Equity
Held by Group
2012
%
2011
%
Challenger Infortech (Beijing) Co., Ltd
(a) (b)
40 40
Peoples Republic of China
Provision of software and installation services
(a)
Other independent auditors. Audited by frms of accountants other than member frms of RSM International of which RSM
Chio Lim LLP in Singapore is a member.
(b)
The accounts of the associate for years ended 31 December 2012 and 31 December 2011 were not available. The Group
has recognised its share of loss up to the cost of investment totalling $311,000 (2011: $311,000) which is not material to
the Group. The associate is currently dormant.
17. Other Financial Assets
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Balance is made up of:
Investment in unit trust as available-for-sale at fair value
through other comprehensive income 1,768 1,768
Movements during the year:
Fair value at beginning of the year 1,768 2,725 1,768 2,648
Disposals (1,768) (973) (1,768) (896)
Foreign exchange adjustments 16 16
Fair value at end of the year 1,768 1,768
70
17. Other Financial Assets (Contd)
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Analysis of amount denominated in non- functional currency:
Australian dollars 1,768 1,768
Movements in allowance:
Balance at beginning of the year 746 746
Disposal during the year (746) (746)
Balance at end of the year
The investments in unit trust were held primarily for long-term growth potential. The fair value of the investment in
unit trust was derived based on the fair value of the underlying portfolio investments held by the unit trust as at the
end of the previous reporting year (level 3).
18. Inventories
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Goods for resale 28,127 24,081 25,635 22,122
Inventories are stated after allowance.
Movements in allowance:
Balance at beginning of the year 33 33 29 29
Charged to proft or loss included in other charges 15 15
Charged to proft or loss included in cost of goods purchased 2 6
Balance at end of the year 50 33 50 29
The write-downs of inventories charged to proft or loss
included in other charges 98 39 69
There are no inventories pledged as security for liabilities.
19. Trade and Other Receivables
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Trade receivables:
Outside parties 3,094 3,281 1,719 2,002
Subtotal 3,094 3,281 1,719 2,002
Other receivables:
Subsidiaries (Note 3) 5,786 5,582
Other receivables 116 85 7
Subtotal 116 5,871 5,589
Total trade and other receivables 3,210 3,281 7,590 7,591
71
20. Other Assets
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Deposits to secure services 3,568 3,547 3,182 2,982
Prepayments 92 90 77 83
Balance at end of the year 3,660 3,637 3,259 3,065
21. Cash and Cash Equivalents
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Not restricted in use 42,094 19,053 37,115 15,681
Cash pledged for bank facilities
#a
29,826 29,826
Balance at end of the year 42,094 48,879 37,115 45,507
Interest earning balances 18,503 29,826 17,003 29,826
The rate of interest for the cash on interest earning balances was between 0.05% and 4.90% (2011: 0.05% and 4.90%).
Cash and cash equivalent in the consolidated statement of cash fows:
Group
2012
$000
2011
$000
Amount as shown above 42,094 48,879
Cash pledged for bank facilities
#a
(29,826)
Cash and cash equivalents for consolidated statement of cash fows
purposes at end of the year 42,094 19,053
#a
Certain bank facilities were secured by a charge on the fxed deposit balances (Note 25).
22. Share Capital
Group and Company
Number of
shares issued
Share
capital
000 $000
Ordinary shares of no par value:
Balance at beginning of the year 1 January 2011 230,139 18,775
Issue of shares arising from bonus share issue
(a)
115,069
Balance at end of the year 31 December 2011 345,208 18,775
Balance at end of the year 31 December 2012 345,208 18,775
(a)
On 29 March 2011, the Company issued a total of 115,069,000 new ordinary shares, being bonus share issue on the basis
of one bonus share for every two existing ordinary shares. These bonus shares were offcially listed and quoted on the
Singapore Exchange Securities Trading Limited on 30 March 2011.
72
22. Share Capital (Contd)
The ordinary shares of no par value are fully paid, carry one vote each and have no right to fxed income. The
Company is not subject to any externally imposed capital requirements except as mentioned below.
Capital management:
The objectives when managing capital are: to safeguard the reporting entitys ability to continue as a going concern,
so that it can continue to provide returns for owners and benefts for other stakeholders, and to provide an adequate
return to owners by pricing the sales commensurately with the level of risk. The management sets the amount of
capital to meet its requirements and the risk taken. There were no changes in the approach to capital management
during the reporting year. The management manages the capital structure and makes adjustments to it where
necessary or possible in the light of changes in conditions and the risk characteristics of the underlying assets.
In order to maintain or adjust the capital structure, the management may adjust the amount of dividends paid to
owners, return capital to owners, issue new shares, or sell assets to reduce debt. Adjusted capital comprises all
components of equity (that is, share capital and reserves).
In order to maintain its listing on the Singapore Stock Exchange it has to have share capital with a free foat of
at least 10% of the shares. The Company met the capital requirement on its initial listing and the rules limiting
treasury share purchases mean it will automatically continue to satisfy that requirement, as it did throughout
the reporting year. Management receives a report from the registrars frequently on substantial share interests
showing the non-free foat to ensure continuing compliance with the 10% limit throughout the reporting year.
The primary objective for capital management is to ensure a strong credit rating and healthy capital ratios to
support its business and maximise shareholder value. The management does not set a target level of gearing
but uses capital opportunistically to support its business and to add value for shareholders. The key discipline
adopted is to widen the margin between the return on capital employed and the cost of that capital.
The Group and Companys bank loans are secured by specifc assets. There is also large cash balance. The
debt-to-adjusted capital ratio may not provide a meaningful indicator of the risk of borrowings.
23. Other Reserves
Revaluation
reserve
Currency
translation Total
$000 $000 $000
Group:
At 1 January 2012 319 12 331
Foreign exchange adjustment 52 52
Gain on available-for-sale fnancial assets, reclassifed from
equity to proft or loss as a reclassifcation adjustment (319) (319)
At 31 December 2012 64 64
At 1 January 2011 319 (23) 296
Foreign exchange adjustment 35 35
At 31 December 2011 319 12 331
73
23. Other Reserves (Contd)
Revaluation
reserve
$000
Company:
At 1 January 2012 319
Gain on available-for-sale fnancial assets, reclassifed from equity
to proft or loss as a reclassifcation adjustment (319)
At 31 December 2012
At 1 January 2011 319
At 31 December 2011 319
The currency translation reserve accumulates all foreign exchange differences.
The revaluation reserve arises from the annual remeasurement of available-for-sale fnancial assets. It is not
distributable until it is released to the proft or loss on the disposal of the investments.
All reserves classifed on the face of the statement of fnancial position as retained earnings represents past
accumulated earnings and are distributable as cash dividends. The other reserves are not available for cash
dividends unless realised.
24. Other Liabilities
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Non-current:
Membership fees 1,077 810 1,077 810
Star Shield warranty 1,937 1,525
Total non-current deferred revenue 3,014 2,335 1,077 810
Current:
Customer loyalty programme (Note 24A) 5,009 4,070 5,009 4,070
Membership fees 3,005 2,352 3,005 2,352
Customer vouchers 94 214 93 208
Star Shield warranty 63 63
Total current deferred revenue 8,108 6,636 8,170 6,693
74
24. Other Liabilities (Contd)
24A. Customer Loyalty Programme
The Company operates the Challenger Membership Scheme, where every dollar spent on the purchase of
the Companys products entitles the member to earn one reward point. Reward points accumulated can
be used to redeem specifc products at specifc retail location, or cash vouchers issued by the Company.
Group and Company
2012
$000
2011
$000
Revenue deferred relating to customer loyalty programme:
Balance at beginning of the year 4,070 3,330
Revenue deferred in respect of award credits earned 3,084 2,532
Revenue recognised on discharge of obligations for award credits (2,145) (1,792)
Balance at end of the year 5,009 4,070
25. Other Financial Liabilities
Group and Company
2012
$000
2011
$000
Bank loans (secured) 16,629
All the amounts were at foating interest rates. The range of interest rates paid was from 1.2% to 1.21% (2011:
1.26% to 1.265%).
The bank loan was a short-term loan for 1-month, 3-month or 6-month duration for up to US$20,000,000 and shall be
repayable on demand. It was secured by a charge on certain fxed deposits (Note 21).
26. Trade and Other Payables
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Trade payables:
Outside parties and accrued liabilities 22,856 22,293 19,640 20,505
Subsidiaries (Note 3) 141 188
Subtotal 22,856 22,293 19,781 20,693
Other payables:
Subsidiaries (Note 3) 721 421
Advances 974 777 208 320
Deposits received 276 239 276 239
Other payables 54 66 16 19
Subtotal 1,304 1,082 1,221 999
Total trade and other payables 24,160 23,375 21,002 21,692
75
27. Financial Instruments: Information on Financial Risks
27A. Classifcation of financial Assets and liabilities
The following table summarises the carrying amount of fnancial assets and liabilities recorded at the end
of the reporting year by FRS 39 categories:
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Financial assets:
Cash and bank balances 42,094 48,879 37,115 45,507
Loans and receivables 3,210 3,281 7,590 7,591
Available-for-sale fnancial assets 1,768 1,768
At end of the year 45,304 53,928 44,705 54,866
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Financial liabilities:
Borrowings measured at amortised cost 16,629 16,629
Trade and other payables measured at
amortised cost 24,160 23,375 21,002 21,692
At end of the year 24,160 40,004 21,002 38,321
Further quantitative disclosures are included throughout these fnancial statements.
27B. Financial Risk Management
The main purpose for holding or issuing fnancial instruments is to raise and manage the fnances for
the entitys operating, investing and fnancing activities. The main risks arising from the entitys fnancial
instruments are credit risk, interest risk, liquidity risk, foreign currency risk and market price risk comprising
interest rate and currency risk exposures. Management has certain practices for the management of
fnancial risks. The guidelines set up the short and long term objectives and action to be taken in order to
manage the fnancial risks. The guidelines include the following:
1. Minimise interest rate, currency, credit and market risk for all kinds of transactions.
2. Maximise the use of natural hedge: favouring as much as possible the natural off-setting of sales
and costs and payables and receivables denominated in the same currency and therefore put in
place hedging strategies only for the excess balance. The same strategy is pursued with regard to
interest rate risk.
3. All fnancial risk management activities are carried out and monitored by senior management staff.
4. All fnancial risk management activities are carried out following good market practices.
5. When appropriate may consider investing in shares or similar instruments.
76
27. Financial Instruments: Information on Financial Risks (Contd)
27B. Financial Risk Management (Contd)
There has been no changes to the exposures to risk; the objectives, policies and processes for managing
the risk and the methods used to measure the risk.

The Group and Company are exposed to currency and interest rate risks. The Company is primarily
exposed to currency and interest rate risk arising from its Australian dollar investment and fxed deposit.
The Company does not enter into derivative contracts and other hedging instruments to hedge against
these risks. It is the Groups policy not to trade in derivative contracts.
The Company places excess funds with reputable banks in foreign currency other than the Singapore dollar
to generate better interest income in comparison to placing the same amount in Singapore dollar accounts.
Interest rate risk is managed by placing such excess funds on varying maturities and interest rate terms.
As for the foreign currency investment, the Company reviews periodically its investment held in currency
other than the Singapore dollar to ensure that its net exposure is kept at an acceptable level.
The chief fnancial offcer who monitors the procedures reports to the Board.
27C. Fair Values of Financial Instruments
fair value of fnancial instruments stated at amortised cost in the statement of fnancial position
The fnancial assets and fnancial liabilities at amortised cost are at a carrying amount that is a reasonable
approximation of fair value.
fair value measurements recognised in the statement of fnancial position
The fair value measurements are classifed using a fair value hierarchy that refects the signifcance of the
inputs used in making the measurements. The levels are: Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities; Level 2: inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
and Level 3 inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
Balances recognised at fair value in the statement of fnancial position included investment in unit trust of
$Nil (2011: $1,768,000). They were measured at Level 3 of the fair value hierarchy.
77
27D. Credit Risk on Financial Assets
Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties
to discharge their obligations in full or in a timely manner consist principally of cash balances with banks,
cash equivalents and receivables, and other fnancial assets. The maximum exposure to credit risk is: the
total of the fair value of the fnancial instruments; the maximum amount the entity could have to pay if the
guarantee is called on; and the full amount of any loan payable commitment at the end of the reporting year.
Credit risk on cash balances with banks and any other fnancial instruments is limited because the counter-
parties are entities with acceptable credit ratings. Credit risk on other fnancial assets is limited because
the other parties are entities with acceptable credit ratings. For credit risk on receivables an ongoing credit
evaluation is performed on the fnancial condition of the debtors and a loss from impairment is recognised
in proft or loss. The exposure to credit risk is controlled by setting limits on the exposure to individual
customers and these are disseminated to the relevant persons concerned and compliance is monitored by
management.
Note 21 discloses the maturity of the cash and cash equivalents balances.
As part of the process of setting customer credit limits, different credit terms are used. The average credit
period generally granted to trade receivable customers is about 30 to 60 days (2011: 30 to 60 days). But
some customers take a longer period to settle the amounts.
Ageing analysis of the trade receivables amounts that are past due as at the end of the reporting year but
not impaired:
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Trade receivables:
61 to 90 days 346 221 28 28
Over 90 days 136 82 165 135
Total 482 303 193 163
As at the end of the reporting year, there were no amounts that were impaired.
Other receivables are normally with no fxed terms and therefore there is no maturity.
Available-for-sale fnancial assets: these were investments in unit trust and therefore there is no maturity.
78
27D. Credit Risk on Financial Assets (Contd)
Concentration of trade receivable customers as at the end of the reporting year:
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Top 1 customer 456 384 137 137
Top 2 customers 715 651 179 252
Top 3 customers 952 767 210 343
27E. Liquidity Risk
The following table analyses the non-derivative fnancial liabilities by remaining contractual maturity
(contractual and undiscounted cash fows):
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Less than 1 year:
Trade and other payables 24,160 23,375 21,002 21,692
Gross borrowings commitments 16,629 16,629
At end of the year 24,160 40,004 21,002 38,321
The undiscounted amounts on the borrowings with fxed and foating interest rates are determined by
reference to the conditions existing at the reporting date.
The above amounts disclosed in the maturity analysis are the contractual undiscounted cash fows and
such undiscounted cash fows differ from the amount included in the statement of fnancial position. When
the counterparty has a choice of when an amount is paid, the liability is included on the basis of the
earliest date on which it can be required to pay. At the end of the reporting year no claims on the fnancial
guarantees are expected to be payable.

The liquidity risk refers to the diffculty in meeting obligations associated with fnancial liabilities that are
settled by delivering cash or another fnancial asset. It is expected that all the liabilities will be paid at their
contractual maturity. The average credit period taken to settle trade payables is about 30 days (2011:
30 days). The other payables are with short-term durations. The classifcation of the fnancial assets is
shown in the statement of fnancial position as they may be available to meet liquidity needs and no further
analysis is deemed necessary. In order to meet such cash commitments the operating activity is expected
to generate suffcient cash infows. In addition, the fnancial assets are held for which there is a liquid
market and that are readily available to meet liquidity needs.
Financial guarantee contracts:
At the end of the reporting year, no claims on the fnancial guarantee are expected. All the corporate
guarantees provided are disclosed in Note 31. The underlying bank facilities mature within one year.
79
27E. Liquidity Risk (Contd)
Bank facilities: Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Undrawn borrowing facilities 52,783 37,192 52,683 37,092
Unused bank guarantees 3,416 3,288 3,166 3,038
The undrawn borrowing facilities are available for operating activities and to settle other commitments.
Borrowing facilities are maintained to ensure funds are available for the operations.
27F. Interest Rate Risk
The interest rate risk exposure is not signifcant.
27G. Foreign Currency Risks
Analysis of amounts denominated in non-functional currency:
Group
Australian
dollars
Malaysian
ringgit
United States
dollars Total
$000 $000 $000 $000
2012:
Financial assets:
Cash 901 83 984
Receivables 165 165
At end of the year 1,066 83 1,149
Trade and other payables 2,253 2,253
Net fnancial assets and (liabilities)
at end of the year (1,187) 83 (1,104)
2011:
Financial assets:
Cash 4,347 299 301 4,947
Receivables 146 146
At end of the year 6,115 445 301 6,861
Trade and other payables 1,180 3,467 4,647
At end of the year 1,180 3,467 4,647
at end of the year 6,115 (735) (3,166) 2,214
80
27G. Foreign Currency Risks (Contd)
Company
Australian
dollars
Malaysian
ringgit
United States
dollars Total
$000 $000 $000 $000
2012:
Financial assets:
Cash 76 76
Receivables 5,460 5,460
At end of the year 5,460 76 5,536
at end of the year 5,460 76 5,536
2011:
Financial assets:
Cash 4,347 4,347
Receivables 5,120 5,120
At end of the year 6,115 5,120 11,235
Trade and other payables 3,467 3,467
at end of the year 6,115 5,120 (3,467) 7,768
There is exposure to foreign currency risk as part of its normal business.
81
27G. Foreign Currency Risks (Contd)
Sensitivity analysis:
Group
2012
$000
2011
$000
A hypothetical 10% strengthening in the exchange rate of the
functional currency $ against the Australian dollars with all other
variables held constant would have a favourable (adverse) effect on
proft before tax of (612)
functional currency $ against United States dollars with all other
proft before tax of 317
functional currency $ against Malaysian ringgit with all other
proft before tax of 119 74
The above table shows sensitivity to a hypothetical 10% variation in the functional currency against the
relevant non-functional foreign currencies. The sensitivity rate used is the reasonably possible change in
foreign exchange rates. For similar rate weakening of the functional currency against the relevant foreign
currencies, there would be comparable impacts in the opposite direction on the proft or loss.
The hypothetical changes in exchange rates are not based on observable market data (unobservable
inputs). The sensitivity analysis is disclosed for each non-functional currency to which the entity has
signifcant exposure at end of the reporting year. The analysis above has been carried out on the following
basis that there are no hedged transactions.
In Managements opinion, the above sensitivity analysis is unrepresentative of the foreign currency risks as
the historical exposure does not refect the exposure in future.
28. Capital Commitments
Estimated amounts committed at the end of the reporting year for future capital expenditure but not recognised in
the fnancial statements are as follows:
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Commitments to purchase
plant and equipment 511 748 511 748
82
29. Operating Lease Payment Commitments
At the end of the reporting year the total of future minimum lease payment commitments under non-cancellable
operating leases are as follows:
Group Company
2012
$000
2011
$000
2012
$000
2011
$000
Not later than one year 11,197 11,214 10,058 10,206
Later than one year and not later than fve years 10,781 12,121 10,195 10,723
Rental expense for the year 12,313 11,226 11,228 10,241
Operating lease payments represent rentals payable by the Group for its retail outlets and offce space. The lease
rental terms are negotiated for an average of one to three years and rentals are subject to an escalation clause but
the amount of the rent increase is not to exceed a certain percentage.
30. Operating Lease Income Commitments
At the end of the reporting year the total of future minimum lease receivables committed under non-cancellable
operating leases are as follows:
Group and Company
2012
$000
2011
$000
Not later than one year 683 919
Rental income for the year 1,571 1,540
Operating lease income is for rental receivable from product and branding display at certain retail outlets. The lease
to the tenant is on a yearly basis.
31. Contingent Liabilities
Company
2012
$000
2011
$000
Corporate guarantee given to bank in favour of a subsidiary 350 350
Undertaking to support subsidiaries with defcits 3,066 2,555
83
32. Changes and Adoption of Financial Reporting Standards
For the reporting year ended 31 December 2012 the following new or revised Singapore Financial Reporting
Standards were adopted. The new or revised standards did not require material modifcation of the measurement
methods or the presentation in the fnancial statements.
FRS No. Title
FRS 1 Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
FRS 12 Deferred Tax (Amendments to ) Recovery of Underlying Assets
FRS 107 Financial Instruments: Disclosures (Amendments to) - Transfers of Financial Assets (*)
(*) Not relevant to the entity.
33. Future Changes in Financial Reporting Standards
The following new or revised Singapore Financial Reporting Standards that have been issued will be effective in
future. The transfer to the new or revised standards from the effective dates is not expected to result in material
adjustments to the fnancial position, results of operations, or cash fows for the following year.
FRS No. Title
Effective date for
periods beginning
on or after
FRS 1 Amendment to FRS 1 Presentation of Financial Statements
(Annual Improvements)
1 Jan 2013
FRS 16 Amendment to FRS 16 Property, Plant and Equipment
1 Jan 2013
FRS 19 Employee Benefts (Revised) 1 Jan 2013
FRS 27 Consolidated and Separate Financial Statements (Amendments to) 1 Jul 2012
FRS 27 Separate Financial Statements (Revised) 1 Jan 2014
FRS 28 Investments in Associates and Joint Ventures (Revised) 1 Jan 2014
FRS 32 Amendment to FRS 32 Financial instruments: Presentation
1 Jan 2013
FRS 107 Amendments to FRS 32 and 107 titled Offsetting Financial Assets
and Financial Liabilities
1 Jan 2013
FRS 110 Consolidated Financial Statements 1 Jan 2014
FRS 111 Joint Arrangements (*) 1 Jan 2014
FRS 112 Disclosure of Interests in Other Entities 1 Jan 2014
FRS 110 Amendments to FRS 110, FRS 111 and FRS 112 1 Jan 2014
FRS 113 Fair Value Measurements 1 Jan 2013
INT FRS 120 Stripping Costs in the Production Phase of a Surface Mine (*) 1 Jan 2013
(*) Not relevant to the entity.
84
STATISTICS Of SHArEHOlDINgS
AS AT 1 MARCH 2013
DISTrIBuTION Of SHArEHOlDINgS
Size of Shareholdings No. of Shareholders % No. of Shares %
1 - 999 104 12.61 25,041 0.01
1,000 - 10,000 260 31.51 1,129,107 0.33
10,001 - 1,000,000 442 53.58 33,669,629 9.75
1,000,001 AND ABOVE 19 2.30 310,384,184 89.91
TOTAL 825 100.00 345,207,961 100.00

TwENTy lArgEST SHArEHOlDErS
No. Name No. of Shares %
1 Loo Leong Thye 149,324,250 43.26
2 Ng Leong Hai 84,067,500 24.35
3 Ong Sock Hwee 32,940,750 9.54
4 DB Nominees (Singapore) Pte Ltd 9,384,500 2.72
5 Phillip Securities Pte Ltd 5,415,893 1.57
6 Lim Yew Hoe 5,377,950 1.56
7 United Overseas Bank Nominees (Pte) Ltd 2,858,286 0.83
8 Wang Tong Peng @Wang Tong Pang 2,833,999 0.82
9 DBS Nominees Pte Ltd 2,675,058 0.77
10 Citibank Nominees Singapore Pte Ltd 2,545,000 0.74
11 Tan Wee Ko 1,788,000 0.52
12 Ng Hian Hai 1,700,000 0.49
13 Loo Pei Fen (Lu Peifen) 1,611,000 0.47
14 Law Kim Hong Rosalind 1,574,999 0.46
15 Loh Tee Yang 1,447,499 0.42
16 Hong Leong Finance Nominees Pte Ltd 1,323,500 0.38
17 Kelly Ronan Philip 1,299,000 0.38
18 Ng Kian Teck 1,200,000 0.35
19 Wong Tong Liew 1,017,000 0.29
20 Heng Tock Hin 800,999 0.23
Total 311,185,183 90.15

85
STATISTICS Of SHArEHOlDINgS
AS AT 1 MARCH 2013
SuBSTANTIAl SHArEHOlDErS AS AT 1 MArCH 2013
Direct interest Deemed interest
Name of shareholders No. of Shares % No. of Shares %
Loo Leong Thye 149,324,250 43.26% 34,585,500* 10.02%*
Ng Leong Hai 84,067,500 24.35% - -
Ong Sock Hwee 32,940,750 9.54% - -

* Mr Loo Leong Thye is deemed to be interested in the 1,644,750 shares held by his daughter and son, and the 32,940,750 shares held by
his wife, Madam Ong Sock Hwee.

PErCENTAgE Of SHArEHOlDINgS IN PuBlIC HANDS
Based on the information available to the Company as at 1 March 2013, approximately 21.91% of the issued ordinary
shares of the Company is held by the public. Accordingly, the Company has complied with Rule 723 of the Listing Manual
issued by the Singapore Exchange Securities Trading Limited.
86
CHAllENgEr TECHNOlOgIES lIMITED
(Incorporated in the Republic of Singapore)
Company Registration No: 198400182K
NOTICE IS HErEBy gIVEN that the Annual General Meeting of CHALLENGER TECHNOLOGIES LIMITED will be held
at 1 Ubi Link, Challenger TecHub, Singapore 408553 on Monday, 15 April 2013 at 10.00 a.m. for the following purposes:-
AS ORDINARY BUSINESS:
1. To receive and adopt the audited accounts for the fnancial year ended 31 December 2012 together with the reports
of the Directors and Auditors, and the Statement of Directors. (Resolution 1)
2. To declare a fnal tax exempt (one-tier) dividend of 1.25 cent per ordinary share for the fnancial year ended 31
December 2012. (Resolution 2)

3. To re-elect the following Directors retiring pursuant to Article 107 and Article 117 of the Companys Articles of
Association:
(a) Mr Loo Leong Thye (Article 107) (Resolution 3)
(b) Mr Tan Han Beng (Article 117) (Resolution 4)
(c) Ms Tan Chay Boon (Article 117) (Resolution 5)
To record the retirement of Mr Ho Boon Chuan Wilson, an Independent Director retiring pursuant to Article 107 of
the Companys Articles of Association, who does not wish to seek for re-election.
[See Explanatory Note (1)]
4. To approve the payment of Directors fees of S$83,200 for the fnancial year ending 31 December 2013, to be paid
quarterly in arrears. (Resolution 6)
5. To re-appoint RSM Chio Lim LLP as Auditors of the Company and to authorise the Directors to fx their remuneration.
(Resolution 7)
6. To transact any other ordinary business that may be properly transacted at an Annual General Meeting.
NOTICE OF ANNUAL GENERAL MEETING
87
AS SPECIAL BUSINESS:
To consider and, if thought ft, to pass the following resolutions as Ordinary Resolutions:-
7. That pursuant to Section 161 of the Companies Act, Cap. 50, and the Listing Manual of the SGX-ST, authority be
and is hereby given to the Directors of the Company to allot and issue shares or convertible securities or exercise
of any share option or vesting of any share award outstanding or subsisting from time to time (whether by way of
rights, bonus or otherwise) and upon such terms and conditions and for such purposes and to such persons as the
Directors may in their absolute discretion deem ft, provided that the aggregate number of shares and convertible
securities which may be issued pursuant to such authority shall not exceed 50% of the issued share capital of
the Company, of which the aggregate number of shares and convertible securities which may be issued other
than on a pro-rata basis to the existing Shareholders of the Company shall not exceed 20% of the issued share
capital of the Company (the percentage of issued share capital being based on the issued share capital at the time
such authority is given after adjusting for new shares arising from the conversion or exercise of any convertible
securities or employee share options on issue at the time such authority is given and any subsequent consolidation
or subdivision of shares) and, unless revoked or varied by the Company in general meeting, such authority shall
continue in force until the conclusion of the Companys next Annual General Meeting, or the date by which the next
Annual General Meeting of the Company is required by law to be held, whichever is the earlier.
[see Explanatory Note (2)] (Resolution 8)
By OrDEr Of THE BOArD
CHIA fOON yEOw
Company Secretary
Singapore
28 March 2013
88
EXPLANATORY NOTES:
(1) Mr Loo Leong Thye will, upon re-election as a Director of the Company, remain as the Chief Executive Offcer of the
Company.
Mr Tan Han Beng will, upon re-election as a Director of the Company, remain as a member of the Audit Committee,
Nominating Committee and Remuneration Committee, and the Board considers him to be independent for the
purpose of Rule 704(8) of the Listing Manual of the SGX-ST.
Ms Tan Chay Boon will, upon re-election as a Director of the Company, remain as a member of the Audit Committee,
Nominating Committee and Remuneration Committee, and the Board considers her to be independent for the
purpose of Rule 704(8) of the Listing Manual of the SGX-ST.
Mr Ho Boon Chuan Wilson, who will be retiring pursuant to pursuant to Article 107 of the Companys Articles of
Association, has notifed the Company in writing that he does not wish to seek re-election to the Board of Directors.
(2) The Ordinary Resolution 8 proposed in item 7 above, if passed, will empower the Directors of the Company from
the date of the above Meeting until the next Annual General Meeting or the date by which the next Annual General
Meeting is required by law to be held, whichever is earlier, to allot and issue shares and convertible securities in
the Company up to an amount not exceeding in total ffty per cent (50%) of the total number of issued shares
excluding treasury shares of the Company for such purposes as they consider would be in the interest of the
Company, provided that the aggregate number of shares to be issued other than on a pro-rata basis to existing
shareholders pursuant to this Resolution shall not exceed twenty per cent (20%) of the total number of issued
shares excluding treasury shares of the Company. The percentage of the total number of issued shares excluding
treasury shares is based on the Companys total number of issued shares excluding treasury shares at the time the
proposed Ordinary Resolution is passed after adjusting for (a) new shares arising from the conversion or exercise
of convertible securities or exercise of share options or vesting of awards outstanding or subsisting at the time
the proposed Ordinary Resolution is passed and (b) any subsequent bonus issue, consolidation or subdivision
of shares. This authority will, unless previously revoked or varied at a General Meeting, expire at the next Annual
General Meeting of the Company.
NOTES:
(i) A member of the Company entitled to attend and vote at the above Meeting may appoint not more than two proxies to attend and
vote instead of him.
(ii) Where a member appoints two proxies, he shall specify the proportion of his shareholding to be represented by each proxy in the
instrument appointing the proxies. A proxy need not be a member of the Company.
(iii) If the member is a corporation, the instrument appointing the proxy must be under its common seal or the hand of its attorney or a
duly authorised offcer.
(iv) The instrument appointing a proxy must be deposited at the Registered Offce of the Company at 1 Ubi Link, Challenger TecHub,
Singapore 408553 not less than 48 hours before the time appointed for holding the above Meeting.
CHAllENgEr TECHNOlOgIES lIMITED
(Incorporated in the Republic of Singapore)
Company Registration No: 198400182K

I/We, (Name)
of (Address)
being a member/members of CHAllENgEr TECHNOlOgIES lIMITED (the Company) hereby appoint:
Name Address
NRIC/
Passport No.
Proportion of
Shareholdings (%)
and/or (delete as appropriate)
Name Address
NRIC/
Passport No.
Proportion of
Shareholdings (%)
as my/our proxy/proxies to vote for me/us on my/our behalf, at the Annual General Meeting (AGM) of the Company, to
be held on Monday, 15 April 2013 at 10.00 a.m, and at any adjournment thereof. I/We direct my/our proxy/proxies to vote
for or against the Resolutions to be proposed at the AGM as indicated hereunder. If no specifc directions as to voting are
given or in the event of any other matter arising at the AGM and at any adjournment thereof, the proxy/proxies will vote or
abstain from voting at his/their discretion.
No. of votes No. of votes
No. Resolutions relating to: For* Against*
Ordinary Business
1 Adoption of the Audited Accounts for the fnancial year ended 31 December 2012
together with the reports of the Directors and Auditors, and Statement of Directors.
2 Payment of proposed fnal tax exempt (one-tier) dividend of 1.25 cent per ordinary
share for the fnancial year ended 31 December 2012.
3 Re-election of Mr Loo Leong Thye as a Director.
4 Re-election of Mr Tan Han Beng as a Director.
5 Re-election of Ms Tan Chay Boon as a Director.
6 Approval of Directors fees amounting to S$83,200 for the fnancial year ending
31 December 2013 to be paid quarterly in arrears.
7 Re-appointment of RSM Chio Lim LLP as Auditors and to fx their remuneration.
Special Business
8 Authority to allot and issue new shares or convertible securities pursuant to Section
161 of the Companies Act, Cap. 50, and the Listing Manual of the Singapore Exchange
Securities Trading Limited.
* Please indicate your vote For or Against with a tick () within the box provided.
Dated this day of , 2013.
Signature(s) of Member(s) or Common Seal
IMPORTANT: PLEASE READ NOTES OVERLEAF
IMPORTANT:
1. This Annual Report is also forwarded to investors who have
used their CPF monies to buy shares in the Company at the
request of their CPF Approved Nominees, and is sent solely
for their information only.
2. The Proxy Form is, therefore, not valid for use by CPF
Investors and shall be ineffective for all intents and purposes
if used or purported to be used by them.
Total number of shares held in:
(a) CDP Register
(b) Register of Members
PROXY FORM
ANNUAL GENERAL MEETING
Notes
1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead.
2. Where a member appoints more than one proxy, the proportion of the shareholding to be represented by each proxy shall be
specifed in this proxy form. If no proportion is specifed, the Company shall be entitled to treat the frst named proxy as representing
the entire shareholding and any second named proxy as an alternate to the frst named or at the Companys option to treat this
proxy form as invalid.
3. A proxy need not be a member of the Company.
4. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as
defned in section 130A of the Companies Act, Cap. 50, you should insert that number of shares. If you have shares registered in
your name in the Register of Members of the Company, you should insert that number of shares. If you have shares entered against
your name in the Depository Register and registered in your name in the Register of Members, you should insert the aggregate
number of shares. If no number is inserted, this proxy form will be deemed to relate to all the shares held by you.
5. This proxy form must be deposited at the Companys registered offce at 1 Ubi Link, Challenger TecHub, Singapore 408553 not less
than 48 hours before the time set for the Meeting.
6. This proxy form must be under the hand of the appointor or of his attorney duly authorised in writing. Where this proxy form is
executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised
offcer.
7. Where this proxy form is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certifed copy
thereof must (failing previous registration with the Company) be lodged with this proxy form, failing which this proxy form shall be
treated as invalid.
General
The Company shall be entitled to reject a proxy form which is incomplete, improperly completed, illegible or where the true intentions of the
appointor are not ascertainable from the instructions of the appointor specifed on the proxy form. In addition, in the case of shares entered
in the Depository Register, the Company may reject a proxy form if the member, being the appointor, is not shown to have shares entered
against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certifed by The Central
Depository (Pte) Limited to the Company.
The Company Secretary
Challenger Technologies Limited
1 Ubi Link
Challenger TecHub
Singapore 408553
Affx
Postage
Stamp
CHaLLengeR teCHnoLogies LiMiteD
1 UBI LINK CHALLENGER TECHUB SINGAPORE 408553
Company Registration Number: 198400182K

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