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Our Vision To be the Best Digital Lifestyle Store in Asia. Delivering adelightful customers shopping experience and providingvalue adds to our stakeholders.

Our Mission Total Commitment to Customers, unmatched serviceexcellence and innovative services for their one stop

shop Digital Lifestyle needs.

Our Core Values Innovative.Provide fresh, new & effective ideas, actions, services &

value add to our customers, employees and stakeholders.

Learning.

Continuous Learning. Open learning and sharing of

knowledge with each other.

Ownership.

Take pride in your work; be accountable with your job.

Act on best interests of the company.

Speed in execution and implementation.

Vision.

Ability to think and plan ahead according to business

needs.

Excellence.

Perform 2Q & 1T.

Quality Service to Customers. Quantity to Sales.

Transcend Beyond Job Scope.

Integrity.

Be honest; keep to promise and deliver as promise.

Teamwork.

Be proactive to achieve Companys vision, mission &

objective.

Trust in each other professionalism.

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3/801Afor Limited Annual Report 2008

Contents PAGE

1. Corporate Profile 2

2. Awards & Achievements 3

3. CEOs Message 4

4. Board of Directors 6

5. Management Team 86. Corporate Information 9

7. Group Structure 10

8. Group of Companies 11

9. Retail Locations 12

10. Financial Highlights 13

11. Corporate Governance 14

12. Financial Statements 23

13. Statistic of Shareholdings 71

14. Notice of Annual General Meeting 73

15. Proxy Form 75

iMac iPod classic iPhone 3G

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4/802 Afor Limited Annual Report 2008

Everything Mac & More

1. Corporate Profile

Our Services

iConcierge and

After-Sales Services

Repair Clinic

Trade-in Services

Training

Membership Loyalty

Programme

Best Apple Deals

Incorporated in Singapore in April 2002, and listed on Singapore Exchange in January

2008, Afor Limited (Afor), is the first Apple Premium Reseller in Asia specialising in

the sale of Apple brand products and its complementary products. As an Apple Premium

Reseller, Afor carries a wide range of Apple brand products, accessories and a variety of

softwares as well as complementary products under its own proprietary iWorld brand.

Headquartered in Singapore and listed on the Singapore Exchange in January 2008,

Afor has six outlets in Singapore and Malaysia named EpiCentre.

Afor offers customers a one-stop shop Digital Lifestyle shopping experience. At its

EpiCentre outlets, customers can enjoy an interactive shopping experience where they

are encouraged to touch, feel and test the range of Apple products offered.

Other than a wide range of Apple products and accessories, Afor also provides

training and hands-on coaching on Everything Mac

& more....

As a one-stop service centre, it also provides after-sales

support at its EpiCentre outlets. This would include

the iConcierge where support and guidance for Mac

users can be obtained and trade-in services, where

Apple products can be brought in for a valuation and

trade-in for a new one.

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2.Awards & Achievements

3Afor Limited Annual Report 2008

We have been recognised by Apple for our growth rate and the

quality of our service. In this regard, we received the following

awards for our successful retailing efforts :

Best Apple Centre in Singapore in 2003

Best Apple Point-of-Sale (Retail Store)in Asia 2006

Best Apple Service Provider in ASEAN 2006

Top Apple Point-of-Sale (Retail Store)in Asia 2007

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Dear Shareholders

Iam pleased to announce that FY2008

was another successful year for the

Group. We have continued our track

record of profitability and growth. For

FY2008, the Group recorded a 26.1 %

growth in revenues to S$64.3 million,

compared to S$51.0* million in FY2007. The

Group continued to remain profitable with

the net profit attributable to equity holders

stood at S$3.3 million, a marginal decrease

of 5.5% as compared to S$3.5* million in

FY2007. Concurrently, the Groups cash and

cash equivalents increased by S$7.5 million.

Earnings per share for the year based on

the weighted average number of ordinaryshares issued was 6.42 cents while net

tangible assets backing per ordinary share

based on our issued share capital was 15.90

cents.

The increase in the Groups revenue was

attributed mainly to:

Demand increase for Apple brand

products through new products

introduced and product bundling

with third-parties and complementary

products.

Full-year revenue contributions from

the retail outlet at Suntec City Mall;

and

Maiden contributions from the newly-

opened outlet in Kuala Lumpur,

Malaysia.

One of the highlights of the Group over the

year was our initial public offering of shares

was made on 18 January 2008. The IPO,

comprising 23.5 million shares at S$0.33

each, was more than 1.67 times subscribed.

In addition to raising S$6.4 million in net

proceeds (after deducting S$1.4 million inthe IPO expenses for the Group), the issue

has also raised the profile of Afor Limited

and put it in good stead to improve its

business relationships with existing and

potential customers and suppliers. The IPO

net proceeds of S$6.4 million has been used

for:

a. S$2.4 million for working capital.

b. Balance of S$4.0 million is currently

3. CEOs Message

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placed in the Fixed Deposit for future

business expansion.

The consistent profit achievements for the

past few years and efficient working capital

management have put us in good financial

standing. The Group is relatively debt-free. With a strong cash position of S$11.0

million bolstered in part by the initial public

offering of shares in January 2008, coupled

with strong working capital of S$14.5

million, we strongly believe that we could

bring the Group to greater heights.

We want to thank our shareholders in

supporting our vision to create value. In

recognition of their unwavering loyalty and

given our healthy financial position, the

Board is pleased to propose a final exempt

(one-tier) dividend of 2 cents per ordinary

share for FY2008.

We are well on-track with our aggressive

expansion to increase our retail footprint

with the set up of our flagship store,

EpiCentre@Pavilion, at Pavilion Kuala

Lumpur in Malaysia and the addition of

two new outlets in Singapore towards

the end of FY 2008. Recently in July, we

have also launched another outlet in Bugis

Junction, Singapore and are excited about

the opening of our next two outlets in ION

and Marina Sands, Singapore. We are also

keeping in view our developments in the Asia

region. Barring unforeseen circumstances,

the Group is cautiously optimistic about the

performance for FY2009.

On behalf of the Board of Directors and

the management team, I would like to

sincerely thank our customers, suppliers,

business associates and shareholders for

their support, without which we would

not have been able to achieve the strong

growth which we have. I would also like tothank my colleagues on the Board for their

support and service. Last but not least, I

also want to thank the management and

our employees for their hard work and

dedication.

Jimmy Fong Teck Loon

Chief Executive Officer

* Results of the Proforma Group as disclosed in Prospectus

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4. Board of Directors

The Board of Directors is entrusted with the responsibility for the overall management of our Group. OurDirectors particulars are listed below :

Jimmy Fong Teck Loon

Mr Fong is our Chief Executive Officer and was one of the co-founders of the Group. He was appointed toour Board on 9 April 2002. He is responsible for setting the strategic direction, tracking the financial andprofitability growth of the Group, managing the business and overseeing all aspects of the daily operationsof the Company. He has more than 12 years of experience in audit, management, IT and finance withcommercial and financial organisations in Asia and Singapore. In 1991, he began his career in audit and was

with Oversea-Chinese Banking Corporation as an IT system auditor before moving on to hold various senioraudit positions in financial institutions and corporations, such as, Citibank, Schlumberger Oilfield Servicesand I.B.M. World Trade Asia Corporation. Prior to establishing our Company in 2002, he held managerialpositions in finance and was the Director of Finance for the Asia Pacific region with Intensia Asia Pacific. Heholds a Bachelor of Commerce and Administration from the Victoria University of Wellington, New Zealand,majoring in accountancy with a minor in IT. In 1998, he also obtained a Master of Business Administrationfrom Rutgers, the State University of New Jersey, the USA.

Johnson Goh Ann Ann

Mr Goh is our Executive Director and Chief Operations Officer who was appointed to our Board on 10December 2007. He is responsible for our Companys local and regional sales and operations, including theoverall management and continued development of strategic partners and supplier relationships. He also

leads the formulation and execution of EpiCentres retail strategy and heads the ODM and distributionbusiness units for third party products, playing a key role in securing exclusive rights to major accessoriesbrands as well as developing new accessory products under our Companys own brand, iWorld. He has morethan 15 years of experience in sales, operations and business development and prior to joining our Groupin 2004, he was also the Director of Business Development for Avant-logic Computer Technology Pte Ltd. Heholds an Advanced Diploma in Marketing Management from Oklahoma City University as well as a GraduateDiploma in Marketing Management from the Marketing Institute of Singapore. In 2003, he received a Masterin Business Administration (Marketing) from the University of Leicester.

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Mac ProBrenda Yeo

Ms Yeo is our Executive Director who was appointed to our Board on 21 February 2007. She oversees thehuman resource department of our Group and has more than 7 years of experience in human resource. In2005, she first joined our Group as a human resource executive and was promoted to a personal assistant in2006. She holds a Diploma in Human Resource Management from the International Business and ManagementEducation Centre.

Siow Chee Keong

Mr Siow is is our Lead Independent Director and was appointed to our Board on 10 December 2007. He has morethan 25 years of audit and management experience in operations, business systems, information technology,finance and accounting with commercial and financial organisations in Canada, USA, England and Singapore.He is currently the Managing Director of JF Virus Pte. Ltd. and offers audit, risk and consultancy services toexchange listed companies. Mr Siow qualified as a Chartered Certified Accountant with the Association ofChartered Certified Accountants in 1981, a Certified Internal Auditor with the Institute of Internal AuditorsInc. in 1985, a Certified General Accountants with the Certified General Accountants of Canada in 1990 andis a member of the Institute of Certified Public Accountants of Singapore. He graduated from the Universityof Warwick, England, with a Master of Business Administration in 1998. Mr Siow is on board of several listedand private companies, and is a member of the Singapore Institute of Directors.

Lee Keen Whye

Mr Lee is our Independent Director and was appointed to our Board on 10 December 2007. He is the ManagingDirector of Strategic Alliance Capital Pte Ltd (SAC), a venture capital and investment management advisorycompany. Prior to founding SAC, Mr Lee was the founder and Managing Director of Rothschild Ventures AsiaPte Ltd, a member of the N M Rothschild & Sons global merchant banking group, and worked there from1990 to 1997. He was Associate Director with Kay Hian James Capel Pte Ltd which he joined in 1987 as Headof Research for Singapore and Malaysia. Between 1985 and 1987, Mr Lee was based in California and workedwith venture capital companies seeking investments in emerging growth companies. Prior to that, he wasan Investment Manager with the Government of Singapore Investment Corporation. Mr Lee currently sits onthe boards of several companies, including Santak Holdings Ltd, Oniontech Limited and Ultro TechnologiesLimited, which are listed on the SGX-ST. Mr Lee holds a Masters Degree in Business Administration from Harvard

Business School and a Bachelors Degree in Business Administration from the University of Singapore.

Liu Zipeng

Mr Liu is our Independent director and was appointed to our Board on 10 December 2007. He is presentlya director with Quantum Law Corporation and has undertaken a broad spectrum of general corporate andcommercial matters including domestic and cross border mergers and acquisitions and real estate transactionalwork including the sales, acquisitions and leasing of residential and commercial properties and developmentwork. He has also advised financial institutions and corporations in the negotiation and legal documentationof various aspects of corporate banking business. He also had experience in the advisory and transactionalwork relating to initial public offerings in Singapore as well as corporate finance work. Mr Liu graduatedfrom the University of Nottingham and joined Messrs William Lai & Alan Wong (now known as WLAW LLC)as a legal assistant after being called to the Singapore Bar in July 1997. Mr Liu then joined Societe Generale

as their in-house legal counsel from 1999 to 2000. Prior to joining Quantum Law Corporation, Mr Liu was anassociate with Wong Partnerships Corporate Real Estate Department from April 2006 to April 2007 and apartner with Chang See Hiang & Partners which he joined from November 2000 to February 2006.

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5. Management Team

Mac OS X Leopard iLife,08 iWork

,08

The particulars of our Executive Officers are set out below :

Ong Omar Peter Young

Mr Ong is our Chief Financial Officer responsible for the overall group finance and corporate affairs of ourGroup. Mr Ong joined our Group in June 2008 prior to which he was a Chief Financial Officer and ExecutiveDirector of Esmart Holdings Limited, an SGX listed company. Prior to joining Esmart Holdings Limited,Mr Ong held the posts of finance manager of Price Johnson Controls Pte Ltd and finance manager andlogistics manager of Shanghai Johnson Controls Air-Conditioning Co. Ltd., both subsidiaries of JohnsonControls, Inc., a global market leader in automative systems, facility management and control. Mr Ong

has approximately 14 years experience in accounting and finance. Mr Ong holds a Bachelor of Business(Accounting) from the University of Technology Sydney and is a member of CPA Australia and SingaporeInstitute of Directors.

Joanne Lee Sieu Wei

Ms Lee is our Operations Manager who is responsible for the retail management of the Group. In 1999,she started her career as a sales executive with Challenger Technologies Ltd (Challenger), and wassubsequently promoted to become its assistant manager. Prior to joining our Group in August 2005, shewas tasked with overseeing the operations of two of Challengers subsidiary companies. She holds anInternational Diploma in Computer Studies from Informatics Computer School, Singapore, as well as aDiploma in Retail Management from the University of Stirling.

Goh Ling Chuan

Mr Goh is our General Manager for Afor (Malaysia) who is responsible for the general operations ofAfor (Malaysia). He joined our Group in August 2007. Between 1980 and 1985, he was employed as theCustomer Service Manager for Unidata Sdn Bhd and was the Operations Manager (Operations & Services)for Pan Malaysian Pools Sdn Bhd from 1985 to 1991. Between 1991 and 2007, Mr Goh was employed asthe Senior Manager for OCE System (M) Sdn Bhd, SiS Distribution (M) Sdn Bhd and Basis Bay Sdn Bhd,respectively, where he was responsible for the management and development of the respective companiesfinancial targets and business goals. Mr Goh holds a Diploma in Electrical Engineering from the FederalInstitute of Technology of Kuala Lumpur and was awarded certificates for Telecommunication Technicianby the City and Guilds of London Institute. He has also received several certificates for completing variousmanagement, technology and development courses from institutions including Oce Nederland B.V. Venlo,Concurrent Computer Corporation of the USA, Robert Lam English Language Centre, Malaysian Institute

of Management and Singapore Institute of Management.

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6. Corporate Information6. Corporate Information

BOARD OF DIRECTORS : Jimmy Fong Teck Loon (Chief Executive Officer)Johnson Goh Ann Ann (Chief Operations Officer)Brenda Yeo (Executive Director)Siow Chee Keong (Independent Director)Lee Keen Whye (Independent Director)Liu Zhipeng (Independent Director)

AUDIT COMMITTEE : Siow Chee Keong (Chairman)

Lee Keen WhyeLiu Zhipeng

NOMINATING COMMITTEE : Liu Zhipeng (Chairman)Siow Chee KeongLee Keen WhyeJimmy Fong Teck Loon

REMUNERATION COMMITTEE : Lee Keen Whye (Chairman)Siow Chee KeongLiu Zhipeng

COMPANY SECRETARY : Tham Lee Meng

REGISTERED OFFICE : 501 Orchard Road, Wheelock Place,#02-20/22 Singapore 238880

Telephone: (65) 62389378Facsimile: (65) 62387681

AUDITORS : BDO Raffles19 Keppel Road, Jit Poh Building,#02-01 Singapore 089058

PARTNER-IN-CHARGE : Chia Soo HienAppointed with effect from

financial year ended 30 June 2007

SHARE REGISTRAR AND : Boardroom Corporate & Advisory Services Pte. Ltd.SHARE TRANSFER OFFICE 3 Church Street, Samsung Hub,

#08-01 Singapore 049483

Telephone: (65) 65365355Facsimile: (65) 65361360

PRINCIPAL BANKERS : Oversea-Chinese Banking Corporation LimitedCitibank, N.A., Singapore BranchStandard Chartered Bank

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7. Group Structure

Afor Limited

ACDC Technologies Pte. Ltd.100%

Afor Sdn. Bhd.100%

EpiCentre Pte. Ltd.100%

iPod family

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8. Group of Companies

SINGAPORE

Afor Limited

501 Orchard Road, Wheelock Place,

#02-20/22 Singapore 238880

Telephone: +65 6238 9378

Facsimile: +65 6238 6780

Epicentre Pte. Ltd.501 Orchard Road, Wheelock Place,

#02-20/22 Singapore 238880

Telephone: +65 6238 9378

Facsimile: +65 6238 6780

ACDC Technologies Pte. Ltd.

501 Orchard Road, Wheelock Place,

#02-20/22 Singapore 238880

Telephone: +65 6238 9378

Facsimile: +65 6238 6780

MALAYSIA

Afor Sdn. Bhd.

Central Plaza Suite 170617th Floor, 34 Jalan Sultan Ismail,

Kuala Lumpur, Malaysia

Telephone: +603 2141 1787

Facsimile: +603 2141 3787

8. Groupof Companies

Afor Limited Annual Report 2008

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MALAYSIA

SINGAPORE

9. Retail Locations

iPod nanofamily

EpiCentre@Orchard501 Orchard Road, Wheelock Place#02-20/23 Singapore 238880Tel : +65 6238 9378Fax : +65 6238 6780

EpiCentre@Suntec3 Temasek Boulevard#02-179 Singapore 038983Tel : +65 6835 8168Fax : +65 6337 8246

EpiCentre@Bugis Junction200 Victoria Street,#01-57 Singapore 188021Tel : +65 6338 4855Fax : +65 6338 4892

EpiCentre@Friven & Co56 Tanglin Road,#02-01 Singapore 247964Tel : +65 6238 9378Fax : +65 6238 6780EpiCentre@Best Denki391 Orchard Road, Ngee Ann City#05-01/05 Singapore 238873Tel : +65 6238 9378Fax : +65 6238 6780

EpiCentre@PavilionLot 5.24.07, Level 5, Pavilion168 Jalan Bukit Bintang 55100 Kuala LumpurTel : +603 2141 6378Fax : +603 2141 6318

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10. Financial Hightlights

Revenue(S$M)

Gross Profit(S$M)

Net ProfitAttributable toShareholders(S$M)

Profit BeforeTax (S$M)

26.1

37.9

51.0

64.3

3.7

5.6

7.8

11.7

0.9

2.0

3.53.3

1.2

2.4

4.34.0

10. Financial Highlights

* Financial results for the years 2005, 2006 and 2007 are based on the performances of the Proforma Group as disclosed in the Prospectus.

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11. Corporate Governance

Corporate Governance Report

The Board of Directors (the Board) of Afor Limited (the Company) is committed anddedicated to maintaining a high standard of corporate governance in order to protect andenhance the interests of its shareholders. This report outlines the Companys corporategovernance processes and activities that were in place throughout the financial year, withspecific reference made to the principles and guidelines of the Code of Corporate Governance(Code) .

The Boards conduct of its Affairs

Principle1:Every company should be headed by an effective Board to lead and control thecompany. The Board is collectively responsible for the success of the company. The Boardworks with Management to achieve this and the Management remains accountable to theBoard.

The Boards primary role is to protect and enhance long-term shareholder value. It sets theoverall strategy for the Group and supervises executive management. To fulfill this role, theBoard sets the Groups strategic direction, establishes goals for management and monitorsthe achievement of these goals, thereby taking responsibility for the overall corporategovernance of the Group.

The Board meets at least twice a year and ad hoc meetings are convened when circumstancesrequire. Important and critical matters concerning the Group are also tabled for the Boardsdecision by way of written resolutions, faxes, electronic mails and tele-conferencing.

In addition to its statutory duties, the Boards principal functions are :-

1. approving the Groups strategic plans, key operational initiatives, major investments anddivestments and funding requirements;

2. approving the annual budget, reviewing the performance of the business and approvingthe release of the financial results of the Group to shareholders;

3. providing guidance in the overall management of the business and affairs of the Group;

4. overseeing the processes for risk management, financial reporting and compliance; and5. approving the recommended framework of remuneration for the Board and key

executives.

All newly appointed Directors are given briefings by Management on the history and businessoperations and corporate governance practices of the Group. The Company will, from timeto time, organise seminars and briefing sessions for the Directors to enable them to keeppace with regulatory changes, where changes to regulations and accounting standards havea material bearing on the Company.

Board Composition and Balance

Principle 2 : There should be a strong and independent element on the Board, which isable to exercise objective judgement on corporate affairs independently, in particular, from


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Management. No individual or small group of individuals should be allowed to dominate theBoards decision making.

As at the end of the financial year, the Board comprises six Directors, three of whom areIndependent Directors. The criteria for independence are determined based on the definitionprovided in the Code.

The Board is supported by various sub-committees, namely, the Nominating Committee, theAudit Committee and the Remuneration Committee, whose functions are described below.The Board is able to exercise objective judgment independently from Management and no

individual or small group of individuals dominate the decisions of the Board.The Board is of the opinion that, given the scope and nature of the Groups operations, thepresent size of the Board is appropriate for effective decision making. The Board is made up ofDirectors who are qualified and experienced in various fields including manufacturing, legal,business administration and finance. Accordingly, the current Board comprises of persons whoas a group, have core competencies necessary to lead and manage the Company.

Chairman and Chief Executive Officer

Principle 3 : There should be a clear division of responsibilities at the top of the company theworking 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 considerableconcentration of power.

The Company has not created a separate position of Chairman as the Board is of the view thatit is in the best interests of the Group to adopt a single leadership structure so as to ensure thedecision-making process of the Group would not be unnecessarily hindered.

The CEO, Mr Jimmy Fong Teck Loon, plays a pivotal role in the Groups business developmentand provides the Group with strong leadership and vision. As CEO of the Group, he supervisesthe business operations and developments, as well as implements the decisions and directionsof the Board. For administrative purposes only, he is usually elected as the Chairman of eachBoard meeting.

The Board collectively schedules Board meetings as and when required and sets the agendafor the Board meetings. In addition, the Board sets guidelines on and ensures quality, quantity,accurateness, and timeliness of information flow between the Board, Management andshareholders of the Company. The Board also encourages and builds constructive relationbetween the Board and Management and takes a leading role in ensuring the Companyscompliance with corporate governance guidelines.

As all major decisions made by Mr Fong are reviewed by the respective Board Committees,the Board is of the view that there are sufficient safeguards to ensure accountability andindependent decision making.

The Company has also appointed Mr Siow Chee Keong as the Lead Independent Directorpursuant to the recommendations of the Code. The Lead Independent Director will be available

to shareholders where they have concerns which contact through the normal channels of theCEO has failed to resolve or for which such contact is in-appropriate.

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Nominating Committee

Principle 4 :There should be a formal and transparent process for the appointment of newdirectors to the Board. As a principle of good corporate governance, all directors should berequired to submit themselves for re-nomination and re-election at regular intervals.

To facilitate a formal and transparent process for the appointment of new Directors, theBoard has formed the Nominating Committee (NC).

The Nominating Committee comprises :-

Mr Liu Zhipeng (Chairman)

Mr Jimmy Fong Teck Loon (Member)

Mr Siow Chee Keong (Member)

Mr Lee Keen Whye (Member)

Save for Mr Jimmy Fong Teck Loon, the other members of the Committee are independentDirectors.

The NC has written terms of reference and their role includes:-

1. making recommendations to the Board on all board appointments, including thedevelopment of a set of criteria for Director appointments;

2. re-nominating Directors having regard to the Directors contribution to the Group andhis performance at Board Meetings, for example, attendance, participation and criticalassessment of issues deliberated upon by the Board;

3. considering and determining on an annual basis, whether or not a Director is independent;and

4. to decide on how the Boards performance may be evaluated and propose objectiveperformance criteria to the Board.

The independence of each Director is reviewed annually by the NC based on the Codesdefinition of what constitutes an independent director.

Pursuant to the Articles of Association of the Company :-

(a) one third of the Directors are to retire from office and be subject to re-election at everyAnnual General Meeting; and

(b) directors appointed during the course of the year must retire and submit themselvesfor re-election at the next Annual General Meeting of the Company following theirappointments.

Principle 5 :There should be a formal assessment of the effectiveness of the Board as a wholeand the contribution by each director to the effectiveness of the Board.

The NC assesses the performance of the Board as a whole in view of the complementary andcollective nature of the Directors contributions. The Committee has established objective

performance criteria by which the Boards performance may be evaluated.


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Access to Information

Principle 6 : In order to fulfil their responsibilities, Board members should be provided withcomplete, adequate and timely information prior to board meetings and on an on-going basis.

The Board is provided with complete and adequate information prior to Board meetings andkept informed of on-going developments within the Group. Board papers are generally madeavailable to Directors before the meeting and would include financial management reports,reports on performance of the Group, papers pertaining to matters requiring the Boardsdecision, updates on key outstanding issues, strategic plans and developments in the Group.

The Directors have separate and independent access to the Companys senior management andthe Company Secretary at all times. Should the Directors, whether as a group or individually,require independent professional advice, such professionals (who will be selected with theapproval of the Chairman of the Committee requiring such advice) will be appointed at theCompanys expense.

The Company Secretary attends all Board Meetings and is responsible for ensuring that Boardprocedures are followed. The Company Secretary assists senior management in ensuring thatthe Company complies with rules and regulations which are applicable to the Company.

Remuneration Committee

Principle 7: There should be a formal and transparent procedure for developing policy onexecutive remuneration and for fixing the remuneration packages of individual directors. Nodirector should be involved in deciding his own remuneration.

Principle 8 :The level of remuneration should be appropriate to attract, retain and motivatethe directors needed to run the company successfully but companies should avoid paying morethan is necessary for this purpose. A significant proportion of the remuneration, especially thatof executive directors, should be structured so as to link rewards to corporate and individualperformance.

The Remuneration Committee comprises:-

Mr Lee Keen Whye (Chairman)Mr Liu Zhipeng (Member)

Mr Siow Chee Keong (Member)

All members of the Committee are Independent Directors.

The Remuneration Committee (RC) has written terms of reference and their role includes:-

1. making recommendations to the Board on a framework of remuneration for the directorsand key executives to ensure that it is appropriate to attract, retain and motivate them to runthe Group successfully;

2. reviewing and determining specific remuneration packages for each executive director and

key executives;

3. reviewing and recommending to the Board terms of renewal of service contracts;

4. considering various disclosure requirements for directors remuneration; and

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Directors of the Company Salary & Bonus % Fees % Total %

$250,000 to $499,999 Jimmy Fong Teck Loon 100 100

Johnson Goh Ann Ann 100 100

Below $250,000 Brenda Yeo 100 100

Siow Chee Keong 100 100

Lee Keen Whye 100 100

Liu Zhipeng 100 100

Fong Kim Seong(a) 100 100

5. considering the participation of directors, CEO and key executives in the share schemesand other long-term incentive schemes as may from time to time be implemented.

In setting remuneration packages, RC took into account the performance of the Group aswell as the Directors and key executives aligning their interests with those of shareholdersand linking rewards to corporate and individual performance as well as industry benchmarks.The review of remuneration packages takes into consideration the longer term interests ofthe Group. The review covers all aspects of remuneration including salaries, fees, allowances,bonuses, options and benefits-in-kind. The Committees recommendations are submitted forendorsement by the entire Board. The payment of Directors fees is subject to the approval

of shareholders.

Disclosure on Remuneration

Principle 9 : Each company should provide clear disclosure of its remuneration policy, leveland mix of remuneration, and the procedure for setting remuneration, in the companysannual report. It should provide disclosure in relation to its remuneration policies to enableinvestors to understand the link between remuneration paid to directors and key executives,and performance.

Details of remuneration of Directors of the Company for FY2008 is set out below :-

(a) Fong Kim Seong retired from office on 10 December 2007 before the Companys IPO on 18 January 2008

Rather than set out the names of the top five executives who are not also Directors of theCompany, the remuneration of the top five executives for FY 2008 are set out below in bandsof S$250,000. This will maintain confidentiality of the remuneration packages of the keyexecutives:

> S$250,000 < S$500,000 : 0

< S$250,000 : 4

Brenda Yeo, our Executive Director, is the spouse of Jimmy Fong Teck Loon, our Chief ExecutiveOfficer and Substantial Shareholder. Fong Kim Seong who retired from office on 10 December2007 before the Companys IPO on 18 January 2008 is the father of Jimmy Fong Teck Loon.

Save as disclosed above, none of our Directors or employees are immediate family members

of the Directors or the Chief Executive Officer.

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Accountability and Audit

Accountability

Principle 10 :The Board is accountable to the shareholders while the Management is accountableto the Board.

Management provides the Board with the necessary financial information on a quarterly basisfor the discharge of its duties.

In presenting the half year and full year financial statement and dividend announcement toshareholders, as well as timely announcements of other matters as prescribed by the relevantrules and regulation, it is the aim of the Board to provide shareholders with a balancedand understandable assessment of the Companys and Groups performance, position andprospects.

Audit Committee

Principle 11:The Board should establish an Audit Committee with written terms of referencewhich clearly set out its authority and duties.

The Audit Committee comprises :-

Mr Siow Chee Keong (Chairman)

Mr Lee Keen Whye (Member)

Mr Liu Zhipeng (Member)

All three Audit Committee (AC) members are independent Directors of the Company. Themembers have had many years of experience in accounting, legal, business and financialmanagement. The Board considers that the members of the AC are appropriately qualified todischarge the responsibilities of the AC.

The AC has written terms of reference. Specifically, the AC meets on a periodic basis to performthe following functions :-

1. review with the external and internal auditorstheir respective audit plans, scope, reports,findings and action taken by management on the findings.

2. review the independence of the external and internal auditors annually.

3. recommend the appointment or reappointment of external and internal auditors andremuneration of the external and internal auditors.

4. review the adequacy of internal financial controls, operational and compliance controls, andrisk management policies and systems established by Management (collectively internalcontrols).

5. review the effectiveness of the internal audit activities.

6. review the co-operation given by the Management to the auditors.

7. review the performance of external and internal auditors with the management.

8. review the financial statements of the Company and draft announcements to SGX before

their submission to the Board.9. review Interested Party Transactions (IPT).

10. review arrangements by which staff of the company may, in confidence, raise concernsabout possible improperties in matters of financial reporting or other matters.

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11. undertake such other functions and duties as may be required by statute or the ListingManual, and by such amendments made thereto from time to time.

12. to meet with the external and internal auditors without the presence of Management atleast once a year.

13. to note any significant actions commenced against the Company and to note anysignificant breaches of regulations or legislation.

14. to consider any other topics specifically delegated to the Committee by the Board fromtime to time.

The AC has full access to and the co-operation of Management and the full discretion toinvite any Director or executive officer to attend its meetings, and has reasonable resourcesto enable it to discharge its functions properly.

The AC has undertaken a review of all non-audit services provided by the auditors and inthe ACs opinion, the provision of these services does not affect the independence of theauditors.

The AC has recommended to the Board the nomination of Messrs BDO Raffles for re-appointment as external auditors of the Company at the forthcoming AGM.

The AC has reviewed arrangements by which the staff of the Company may, in confidence,

raise any improprieties in matters of financial reporting or other matters, with the objectiveof ensuring that arrangements are in place for the independent investigation of such mattersfor appropriate follow-up action. In this regard, the Management is in the process of adoptinga whistle-blower policy.

Internal Controls

Principle 12 : The Board should ensure that Management maintains a sound system of internalcontrols to safeguard the shareholders investments and the companys assets.

The Company has in place a system of internal controls to safeguard shareholders investmentand the Groups assets. The AC has, during the year, reviewed, with the assistance of the

external auditors, the effectiveness of the Companys material internal controls, includingfinancial, operational and administrative controls and financial risk management. Basedon the review of the AC, the Board is satisfied that the internal controls of the Group areadequate to safeguard shareholders investments and the Companys assets and ensure theintegrity of its financial statements.

The Board, however, recognizes that no system of internal controls could provide absoluteassurance against human error, poor judgement in decision making, fraud and otherirregularities. The Board conducts regular review on the effectiveness of the Companys systemof internal controls.

Internal AuditPrinciple 13 :The company should establish an internal audit function that is independent ofthe activities it audits.

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MacBook Air

The Company outsources its internal audit function to an external CPA firm. The internal auditorsplan its internal audit schedules in consultation with, but independent of the Management. Theaudit plan is submitted to the Audit Committee for approval prior to the commencement of theinternal audit.

The Audit Committee reviews of the internal auditors on a regular basis, including overseeingand monitoring of the implementation or the improvements required on internal controlweaknesses identified.

Communications with the Shareholders

Principle 14 : Companies should engage in regular, effective and fair communication withshareholders.

Communications with Shareholders

The Company ensures that timely and adequate disclosure of information on matters of materialimpact on the Company are made to shareholders of the Company via SGXNET and pressreleases where appropriate, in compliance with the requirements set out in the Listing Manualof the Singapore Exchange Securities Trading Limited with particular reference to the CorporateDisclosure Policy set out therein.

Principle 15 : Companies should encourage greater shareholder participation at AGMs, andallow shareholders the opportunity to communicate their views on various matters affectingthe company.

Greater Shareholder Participation

At general meetings, shareholders of the Company are given the opportunity to air their viewsand ask Directors or Management questions regarding the Company. The Board and Managementare present at these meetings to address any questions that shareholders may have. The externalauditors are also present to assist the Board in addressing queries by shareholders.

The Articles of Association of the Company (Articles) allow a member of the Company toappoint one or two proxies to attend and vote in place of the member at general meetings.

For the time being, the Board is of the view that this is adequate to enable shareholders toparticipate in general meetings of the Company and is not proposing to amend their Articlesto allow votes in absentia. Separate resolutions on each distinct issue are tabled at generalmeetings and the Chairman of the Audit Committee and the external auditors will be present toaddress any queries from the shareholders attending the meeting.

Dealings in Securities

The Company has adopted the Singapore Exchange Securities Trading Limiteds Best PracticesGuide applicable in relation to dealings in the Companys securities by its officers. The Companyhas informed its officers not to deal in the Companys shares whilst they are in possession ofunpublished material price sensitive information and during the period commencing onemonth before the announcement of the Companys financial results and ending on the date ofannouncement of such financial results.

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Aggregate value of allinterested person transactionsconducted under shareholdersmandate pursuant to Rule 920(excluding transactions lessthan $100,000)

S$

Aggregate value of allinterested person transactionsduring the financial yearunder review (excludingtransactions conductedunder shareholders mandate

pursuant to Rule 920)S$


Interested Person Transaction

The aggregate value of interested person transaction entered during the financial year wasas follows:

Name of interested person

Material Contracts

Since the end of the previous year, the company and its subsidiaries did not enter into anymaterial contract involving interests of the Chief Executive Officer, directors or controllingshareholders and no such material contract still subsist at the financial year.

Directors Attendance at Board and Committee Meetings

The number of Directors and other committees meetings and the record of attendance ofeach Director during the financial year ended 30 June 2008 is set out below:-

Director Board Audit Remuneration NominatingCommittee Committee Committee

Number of 1 1 1 1Meetings Held

Number of Meetings Attended

Jimmy Fong Teck Loon 1 1 * 1 * 1 **

Johnson Goh Ann Ann 1 1 * 1 * 1 *

Brenda Yeo 1 1 * 1 * 1 *

Siow Chee Keong 1 1 1 1

Lee Keen Whye 1 1 1 1

Liu Zhipeng 1 1 1 1

* By invitation

** Jimmy Fong Teck Loon was appointed as member of NC on 14 February 2008.

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f i n a n c i a l r e p o r t 2 0 0 8

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Teck Loon is deemed to be interested in the shares held by his wife, Brenda Yeo, and viceversa.

AFOR LIMITEDAND ITS SUBSIDIARIES

REPORT OF THE DIRECTORS

The Directors of the Company present their report to the members together with the audited financialstatements for the financial year ended 30 June 2008 of the Group and the balance sheet of the

Company as at 30 June 2008.

1. Directors

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

Jimmy Fong Teck LoonBrenda YeoLee Keen Whye (appointed on 10 December 2007)Goh Ann Ann Johnson (appointed on 10 December 2007)Siow Chee Keong (appointed on 10 December 2007)Liu Zhipeng (appointed on 10 December 2007)

2. Arrangements to enable Directors to acquire shares or debentures

Neither at the end of nor at any time during the financial year was the Company a party to anyarrangement whose object is to enable the Directors of the Company to acquire benefits bymeans of the acquisition of shares in or debentures of the Company or any other bodycorporate.

3. Directors interests in shares or debentures

According to the register of Directors shareholdings kept by the Company for the purposes ofSection 164 of the Singapore Companies Act, Cap. 50 (the Act), none of the Directors of theCompany who held office at the end of the financial year had any interests in the shares ordebentures of the Company or its related corporations except as detailed below:

Shareholdings registered in thename of Directors

Shareholdings in whichDirectors are deemed to have

an interest

Balance at1 July 2007 or

later date ofappointment

Balance at30 June 2008

Balance at1 July 2007 or

later date ofappointment

Balance at30 June 2008

Number of ordinary shares

Company

Jimmy Fong Teck Loon 290,119 51,629,800 - 630,000

Brenda Yeo - 630,000 290,119 51,629,800

Lee Keen Whye - 100,000 - -

Goh Ann Ann Johnson - 9,450,000 - -

Siow Chee Keong - 100,000 - -

Liu Zhipeng - 100,000 - -

By virtue of Section 7 of the Act, Jimmy Fong Teck Loon is deemed to have interests in theshares of all the subsidiaries of the Company as at the end of the financial year. Jimmy Fong

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26 Afor Limited Annual Report 2008


REPORT OF THE DIRECTORS (Continued)

3. Directors interests in shares or debentures (Continued)

In accordance with the continuing listing requirements of the Singapore Exchange SecuritiesTrading Limited, the Directors of the Company state that, according to the register of Directorsshareholdings, the Directors interests as at 21 July 2008 in the shares of the Company havenot changed from those disclosed as at 30 June 2008.

4. Directors contractual benefits

Since the end of the previous financial year, no Director of the Company has received orbecome entitled to receive a benefit by reason of a contract made by the Company or by arelated corporation with the Director or with a firm of which he is a member, or with a companyin which he has a substantial financial interest, except as disclosed in the financial statements.

5. Share options

There were no share options granted by the Company or its subsidiaries during the financialyear.

There were no shares issued during the financial year by virtue of the exercise of options totake up unissued shares of the Company or its subsidiaries.

There were no unissued shares of the Company or of its subsidiaries under options as at theend of the financial year.

6. Audit committee

The Audit Committee comprises the following members, who are all non-executive Directorsand a majority of whom, including the Chairman, are Independent Directors. The members ofthe Audit Committee during the financial year and at the date of this report are:

Siow Chee Keong (Chairman) (appointed on 10 December 2007)Lee Keen Whye (appointed on 10 December 2007)Liu Zhipeng (appointed on 10 December 2007)

The Audit Committee performs the functions specified in Section 201B (5) of the Act. Inperforming those functions, the Audit Committee reviewed the audit plans and the overall scope

of examination by the external auditors of the Group and of the Company. The Audit Committeealso reviewed the independence of the external auditors of the Company and the nature andextent of the non-audit services provided by the external auditors.

The Audit Committee also reviewed the assistance provided by the Companys officers to theexternal auditors and the consolidated financial statements of the Group and the balance sheetof the Company as well as the Independent Auditors Report thereon prior to their submission tothe Directors of the Company for adoption and reviewed the interested person transactions asdefined in Chapter 9 of the Listing Manual of the Singapore Exchange.

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REPORT OF THE DIRECTORS (Continued)

6. Audit committee (Continued)

The Audit Committee has full access to and has the co-operation of the management and hasbeen given the resources required for it to discharge its function properly. It has also fulldiscretion to invite any Director and executive officer to attend its meetings. The externalauditors have unrestricted access to the Audit Committee.

The Audit Committee has recommended to the Board of Directors the nomination of BDORaffles, for re-appointment as auditors of the Company at the forthcoming Annual GeneralMeeting. The Audit Committee has carried out an annual review of non-audit services providedby the external auditors to satisfy itself that the nature and extent of such services will notprejudice the independence and objectivity of the external auditors prior to recommending theirrecommendation.

7. Auditors

The auditors, BDO Raffles, have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

Jimmy Fong Teck Loon Goh Ann Ann JohnsonDirector Director

Singapore

18 September 2008


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STATEMENT BY DIRECTORS

In the opinion of the Board of Directors,

(a) the accompanying financial statements comprising the balance sheets, consolidated incomestatement, consolidated statement of changes in equity and consolidated cash flow statementtogether with the notes thereon are properly drawn up in accordance with the provisions of theSingapore Companies Act, Cap. 50 and Singapore Financial Reporting Standards so as to givea true and fair view of the state of affairs of the Group and of the Company as at 30 June 2008and of the results, changes in equity and cash flows of the Group for the financial year endedon that date; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will beable to pay its debts as and when they fall due.

On behalf of the Board of Directors

Jimmy Fong Teck Loon Goh Ann Ann JohnsonDirector Director

Singapore18 September 2008


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INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF AFOR LIMITED

We have audited the accompanying financial statements of Afor Limited (the Company) and itssubsidiaries (the Group) as set out on page 31 to 70, which comprise the balance sheets of theGroup and of the Company as at 30 June 2008, the consolidated income statement, consolidatedstatement of changes in equity and consolidated cash flow statement of the Group for the financialyear then ended, and a summary of significant accounting policies and other explanatory notes.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements inaccordance with the provisions of the Singapore Companies Act, Cap. 50 (the Act) and Singapore

Financial Reporting Standards. This responsibility includes:

(a) devising and maintaining a system of internal accounting controls sufficient to provide areasonable assurance that assets are safeguarded against loss from unauthorised use ordisposition; and transactions are properly authorised and that they are recorded as necessary topermit the preparation of true and fair income statements and balance sheets and to maintainaccountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

Auditors Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditors judgement, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entityspreparation and fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness 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, aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.


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INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF AFOR LIMITED (Continued)

Opinion

In our opinion,

(a) the consolidated financial statements of the Group and the balance sheet of the Company areproperly drawn up in accordance with the provisions of the Act and Singapore FinancialReporting Standards so as to give a true and fair view of the state of affairs of the Group and ofthe Company as at 30 June 2008 and of the results, changes in equity and cash flows of theGroup for the financial year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by thesubsidiary incorporated in Singapore of which we are the auditors, have been properly kept inaccordance with the provisions of the Act.

BDO RafflesPublic Accountants andCertified Public Accountants

Singapore18 September 2008


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


BALANCE SHEETS AS AT 30 JUNE 2008

Group Company

Note 2008 2008 2007$000 $000 $000

Non-current assets

Plant and equipment 4 437 229 310

Investments in subsidiaries 5 - 165 -

437 394 310

Current assets

Inventories 6 5,528 4,725 3,828

Trade and other receivables 7 3,822 6,091 3,181

Cash and cash equivalents 8 10,992 9,451 3,51420,342 20,267 10,523

Less:

Current liabilities

Trade and other payables 9 5,062 4,658 4,672

Finance lease payable 10 6 6 -

Current income tax payable 775 775 906

5,843 5,439 5,578

Net current assets 14,499 14,828 4,945

Less :

Non-current liabilities

Finance lease payable 10 13 13 -

Deferred tax liabilities 11 51 51 51

64 64 51

14,872 15,158 5,204

Capital and reserves

Share capital 12 6,709 6,709 315

Foreign currency translation reserve 13 6 - -

Accumulated profits 8,157 8,449 4,889Equity attributable to equity holders of the

Company 14,872 15,158 5,204


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CONSOLIDATED INCOME STATEMENTFOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

Note 2008$000

Revenue 14 64,312

Cost of sales (52,628)

Gross profit 11,684

Other income 15 415

Administrative expenses (5,759)

Selling and distribution costs (2,293)

Profit before income tax 16 4,047

Income tax expense 17 (779)

Profit after income tax attributable to equity holders of the Company 3,268

Earnings per share (in cents) 18

- Basic 6.42

- Diluted 6.42


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Thea

ccompanyingnotesforma

ninteg

ralpartofthesefinancialstateme

nts.

AFORLIMITED

AND

ITSSUBSIDIARIES

CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY

FOR

THEFINANCIALYEARENDED

30JUNE2008

Note

Sharecapital

Foreign

currency

translation

reserve

Accumulated

profits

Totalequity

attributableto

equityholderso

theCompany

$000

$000

$000

$000

Balan

ceasat1July2007

315

-

4,889

5,204

Issue

ofshares

12

7,790

-

-

7,790

Shareissueexpenses

12

(1,396)

-

-

(1,396)

Curre

ncytranslationadjustmentrecogn

iseddirectlyinequity

-

6

-

6

Netp

rofitforthefinancialyear

-

-

3,268

3,268

Total

recognisedincomeandexpense

forthefinancialyear

-

6

3,268

3,274

Balan

ceasat30June2008

6,709

6

8,157

14,872


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________________________________________________________________________________


CONSOLIDATED CASH FLOW STATEMENTFOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

Note 2008

$000

Cash flows from operating activities

Profit before income tax 4,047

Adjustments for:

Bad trade receivables written off 9

Depreciation of plant and equipment 4 274

Goodwill on acquisition of subsidiaries written off 5 13

Interest income (22)

Currency translation adjustment 15

Operating profit before working capital changes 4,336

Working capital changes:

Inventories (1,700)

Trade and other receivables (580)

Trade and other payables 312

Cash generated from operations 2,368

Interest received 22

Income taxes paid (910)

Net cash from operating activities 1,480

Cash flows from investing activities

Purchase of plant and equipment 4 (384)

Acquisition of subsidiaries 5 29

Net cash used in investing activities (355)

Cash flows from financing activities

Increase in fixed deposits pledged (1,740)

Net proceeds from issue of shares 6,359

Finance lease payments (6)

Net cash from financing activities 4,613

Net change in cash and cash equivalents 5,738

Cash and cash equivalents at beginning of financial year 3,151

Cash and cash equivalents at end of financial year 8 8,889


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_______________________________________________________________________________


NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

These notes form an integral part of and should be read in conjunction with the financial statements.

1. General corporate information

The balance sheet of Afor Limited (the Company) and the consolidated financial statements ofthe Company and its subsidiaries (the Group) for the financial year ended 30 June 2008 wereauthorised for issue in accordance with a Directors resolution dated 18 September 2008.

On 10 December 2007, the Company was converted to a public limited company and changedits name from Afor Pte. Ltd. to Afor Limited. On 18 January 2008, the Company was admitted tothe official list of Catalist under the Singapore Exchange Securities Trading Limited Dealing andAutomated Quotation ("SGX-SESDAQ) rules.

The Company is a public limited company, incorporated and domiciled in Singapore with itsregistered office address and principal place of business at 501 Orchard Road, #02-20/22,Wheelock Place, Singapore 238880. The Companys registration number is 200202930G.

The principal activities of the Company are those of distribution and selling of computers andcomputer products and providing maintenance and computer related services.

The principal activities of the subsidiaries are set out in Note 5 to the financial statements.

2. Summary of significant accounting policies

(a) Basis of preparation of financial statements

The financial statements have been prepared in accordance with the provisions of theSingapore Companies Act, Cap. 50 and Singapore Financial Reporting Standards(FRS). The financial statements are presented in Singapore dollar and all values arerounded to the nearest thousand ($000) except when otherwise indicated. The financialstatements have been prepared under the historical cost convention, except as disclosedin the accounting policies below.

The preparation of financial statements in conformity with FRS requires the managementto exercise judgement in the process of applying the Group's and the Companysaccounting policies and requires the use of accounting estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosures of contingent assetsand liabilities at the balance sheet date, and the reported amounts of revenue and

expenses during the financial year. Although these estimates are based on themanagements best knowledge of historical experience and other factors, includingexpectations of future events that are believed to be reasonable under the circumstances,actual results may ultimately differ from those estimates. The estimates and underlyingassumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the financial year in which the estimate is revised if the revision affects onlythat financial year, or in the financial year of the revision and future financial years if therevision affects both current and future financial years.

Critical accounting judgements and key sources of estimation uncertainty used that aresignificant to the financial statements are disclosed in Note 3 to the financial statements.


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_______________________________________________________________________________


NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2008 (Continued)

2. Summary of significant accounting policies (Continued)

(a) Basis of preparation of financial statements (Continued)

During the financial year, the Group and the Company adopted the new and revised FRSand Interpretations of FRS ("INT FRS") that are relevant to their operations and effectivefor the current financial year. The adoption of FRS 107 has resulted in the expansion ofthe disclosures in these financial statements regarding the Groups and the Companysfinancial instruments. The Group and the Company have also presented informationregarding the objectives, policies and processes for managing capital as required by theamendments to FRS 1 (revised).

FRS and INT FRS issued but not yet effective

The Group and the Company have not adopted the following FRS and INT FRS that havebeen issued but not yet effective:

Effective date(Annual periodsbeginning on or

after)

FRS 23 : Borrowing Costs (revised) 1 January 2009

FRS 108 : Operating Segments 1 January 2009

INT FRS 112 : Service Concession Arrangements 1 January 2008

INT FRS 113 : Customer Loyalty Programmes 1 July 2008INT FRS 114 : FRS 19 The Limit on a Defined Benefit Asset,Minimum Funding Requirements and theirInteraction 1 January 2008

The Group and the Company expect that the adoption of the above pronouncements, ifapplicable will have no material impact on the financial statements in the period of initialapplication, except for FRS 23 (revised) and FRS 108 as indicated below.

FRS 23, Borrowing Costs (revised)

The revised standard removes the option to recognise immediately as an expense,borrowing costs that are attributable to qualifying assets, and requires an entity to

capitalise borrowing costs directly attributable to the acquisition, construction orproduction of a qualifying asset as part of the cost of plant and equipment.

FRS 108, Operating Segments

FRS 108, requires an entity to adopt a management perspective approach in reportingfinancial and descriptive information about its reportable segment. Financial information isrequired to be reported on the basis that it is used internally for evaluating operatingsegment performance and deciding how to allocate resources to operating segments.FRS 108 introduces additional segment disclosures to be made to improve theinformation about the operating segments.

The Group and the Company will apply FRS 23 (revised) and FRS 108 from annual

period beginning 1 July 2009.


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_______________________________________________________________________________




(b) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Companyand its subsidiaries made up to end of the financial year. The financial statements of thesubsidiaries are prepared for the same reporting date as the parent company.

The purchase method of accounting is used to account for the acquisition of subsidiaries.The cost of an acquisition is measured as the fair value of the assets given, equityinstruments issued or liabilities incurred or assumed at the date of exchange, plus costsdirectly attributable to the acquisition. Identifiable assets acquired and liabilities andcontingent liabilities assumed in a business combination are measured initially at their fairvalues on the date of acquisition, irrespective of the extent of any minority interest.

Subsidiaries are consolidated from the date on which control is transferred to the Groupto the date on which that control ceases. In preparing the consolidated financialstatements, inter-company transactions, balances and unrealised gains on transactionsbetween group companies are eliminated. Unrealised losses are also eliminated unlessthe transaction provides evidence of an impairment of the asset transferred. Wherenecessary, adjustments are made to the financial statements of subsidiaries to ensureconsistency of accounting policies with those of the Group.

(c) Subsidiaries

Subsidiaries are entities (including special purpose entities) over which the Group haspower to govern the financial and operating policies, generally accompanying ashareholding of more than one half of the voting rights. The existence and effect ofpotential voting rights that are currently exercisable or convertible are considered whenassessing whether the Group controls another entity.

Investments in subsidiaries are stated at cost on the Companys balance sheet lessaccumulated impairment in value, if any.

(d) Plant and equipment

Plant and equipment are initially recorded at cost. Subsequent to initial recognition, plantand equipment are stated at cost less accumulated depreciation and impairment in value,if any.

The cost of plant and equipment includes expenditure that is directly attributable to theacquisition of the items. Dismantlement, removal or restoration costs are included as partof the cost of plant and equipment if the obligation for dismantlement, removal orrestoration is incurred as a consequence of acquiring or using the plant and equipment.

Subsequent expenditure relating to the plant and equipment that has already beenrecognised is added to the carrying amount of the asset when it is probable that thefuture economic benefits, in excess of the standard of performance of the asset beforethe expenditure was made, will flow to the Group and the Company and the cost can bereliably measured. Other subsequent expenditure is recognised as an expense during thefinancial year in which it is incurred.


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_______________________________________________________________________________




(d) Plant and equipment (Continued)

On disposal of an item of plant and equipment, the difference between the net disposalproceeds and its carrying amount is taken to the income statement.

Depreciation is calculated on the straight-line method so as to write off the depreciableamount of the plant and equipment over the estimated useful lives as follows:

Years

Demo equipment 3

Office equipment 3Furniture and fittings 3

Renovation 3

Motor vehicles 10

The residual values, useful life and depreciation method are reviewed at each balancesheet date to ensure that the residual values, period of depreciation and depreciationmethod are consistent with previous estimates and the expected pattern of consumptionof the future economic benefits embodied in the items of plant and equipment.

(e) Impairment of non-financial assets

The carrying amounts of non-financial assets are reviewed at each balance sheet date todetermine whether there is any indication of impairment in value and whenever events orchanges in circumstances indicate that the carrying amount may not be recoverable. Ifany such indication exists, or when annual impairment testing for an asset is required, theassets recoverable amount is estimated.

An impairment in value is recognised whenever the carrying amount of an asset or itscash-generating unit exceeds its recoverable amount. A cash-generating unit is thesmallest identifiable asset group that generates cash flows that largely are independentfrom other assets and groups of assets. Impairment in value is recognised in the incomestatement, unless it reverses a previous revaluation, credited to equity, in which case it ischarged to equity.

The recoverable amount of an asset or cash-generating unit is the higher of its fair valueless costs to sell and its value in use. Recoverable amount is determined for individualasset, unless the asset does not generate cash inflows that are largely independent ofthose from other assets or groups of assets. If this is the case, the recoverable amount isdetermined for the cash-generating unit to which the assets belong. The fair value lesscosts to sell is the amount obtainable from the sale of an asset or cash-generating unit inan arms length transaction between knowledgeable, willing parties, less costs of disposal.Value in use is the present value of estimated future cash flows expected to be derivedfrom the continuing use of an asset and from its disposal at the end of its useful life,discounted at pre-tax rate that reflects current market assessment of the time value ofmoney and the risks specific to the asset or cash-generating unit for which the future cashflow estimates have not been adjusted.


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_______________________________________________________________________________




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

An assessment is made at each balance sheet date as to whether there is any indicationthat an impairment in value recognised in prior periods for an asset may no longer existor may have decreased. If such indication exists, the recoverable amount is estimated.An impairment in value recognised in prior periods is reversed only if there has been achange in the estimates used to determine the recoverable amount since the lastimpairment in value was recognised. If that is the case, the carrying amount of the assetis increased to its recoverable amount. An impairment in value is reversed only to theextent that the assets carrying amount does not exceed the carrying amount that wouldhave been determined, net of depreciation, if no impairment in value has beenrecognised. Reversals of impairment in value are recognised in the income statementunless the asset is carried at revalued amount, in which case the reversal in excess ofimpairment in value recognised in the income statement in prior periods is treated as arevaluation increase. After such a reversal, the depreciation is adjusted in future periodsto allocate the assets revised carrying amount, less any residual value, on a systematicbasis over its remaining useful life.

(f) Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined on a first-in, first-out basis and includes all costs of purchase, costsof conversion and other costs incurred in bringing the inventories to their present locationand condition.

Net realisable value is the estimated selling price at which inventories can be realised inthe ordinary course of business after allowing for the costs of realisation. Allowance ismade for obsolete, slow-moving and defective inventories.

(g) Financial assets

The Group and the Company classify their financial assets as loans and receivables. Theclassification depends on the purpose of which the assets were acquired. Themanagement determines the classification of the financial assets at initial recognition andre-evaluate this designation at the balance sheet date, where allowed and appropriate.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinablepayments that are not quoted in an active market. Loans and receivables areclassified within trade and other receivables and cash and cash equivalents on thebalance sheets.


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(g) Financial assets (Continued)

Recognition and derecognition

Regular purchases and sales of financial assets are recognised on trade-date, the dateon which the Group and the Company commit to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from thefinancial assets have expired or have been transferred and the Group and the Companyhave transferred substantially all risks and rewards of ownership.

On sale of a financial asset, the difference between the carrying amount and the net saleproceeds is recognised in the income statement.

Initial and subsequent measurement

Financial assets are initially recognised at fair value plus transaction costs.

After initial recognition, loans and receivables are carried at amortised cost using theeffective interest method, less impairment in value, if any.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financialinstrument and of allocating interest income or expense over the relevant period. The

effective interest rate is the rate that exactly discounts estimated future cash receipts orpayments through the expected life of the financial instrument, or where appropriate, ashorter period. Income and expense are recognised on an effective interest basis for debtinstruments other than those financial instruments at fair value through profit or loss.

Impairment

The Group and the Company assess at each balance sheet date whether there isobjective evidence that a financial asset or a group of financial assets is impaired.

(i) Loans and receivables

An allowance for impairment in value of loans and receivables is recognised when

there is objective evidence that the Group and the Company will not be able to collectall amounts due according to the original terms of the receivables. The amount ofallowance is the difference between the assets carrying amount and the presentvalue of estimated future cash flows, discounted at the original effective interest rate.The carrying amount of the asset is reduced through the use of an allowanceaccount. The amount of the loss is recognised in the income statement.

If, in a subsequent period, the amount of the impairment in value decreases and thedecrease can be related objectively to an event occurring after the impairment wasrecognised, the previously recognised impairment in value is reversed either directlyor by adjusting an allowance account. Any subsequent reversal of an impairment invalue is recognised in the income statement, to the extent that the carrying amount ofthe asset does not exceed its amortised cost at the reversal date.


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(h) Cash and cash equivalents

Cash and cash equivalents consist of cash and bank balances and short-term, highlyliquid investments that are readily convertible to known amounts of cash and which aresubject to an insignificant risk of changes in value.

(i) Financial liabilities

The accounting policies adopted for specific financial liabilities are set out below:

(i) Trade and other payables

Trade and other payables are recognised initially at cost which represents the fairvalue of the consideration to be paid in the future, less transaction cost, for goodsreceived or services rendered, whether or not billed to the Group and the Company,and are subsequently measured at amortised cost using the effective interestmethod.

Gains or losses are recognised in the income statement when the liabilities arederecognised as well as through the amortisation process.

Recognition and derecognition

Financial liabilities are recognised on the balance sheets when, and only when, theGroup and the Company become parties to the contractual provisions of the financial

instrument.

Financial liabilities are derecognised when the contractual obligation has beendischarged or cancelled or expired.

On derecognition of a financial liability, the difference between the carrying amount andthe consideration paid is recognised in the income statement.

(j) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of theGroup and the Company after deducting all of its liabilities.

Ordinary shares are classified as equity and recognised at the fair value of theconsideration received by the Group and the Company. Incremental costs directlyattributable to the issuance of new equity instruments are shown in the equity as adeduction from the proceeds.


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(k) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable for thesale of goods in the ordinary course of business. Revenue is recognised to the extent thatit is probable that the economic benefits will flow to the entity and the revenue can bereliably measured. Revenue is presented, net of rebates, discounts and sales relatedtaxes. The Groups revenue is in respect of external transactions only.

Revenue from sale of goods is recognised upon passage of title to the customer whichcoincides with the delivery and acceptance.

Interest income is recognised on a time-proportion basis using the effective interestmethod.

Sponsorship income is recognised upon public presentation for media advertising.

Facilities fees income is recognised on a straight-line basis over the term of the serviceagreement.

(l) Employee benefits

Defined contribution plan

Contributions to defined contribution plans are recognised as an expense in the income

statement in the same financial year as the employment that gives rise to thecontributions.

Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees.An accrual is made for estimated liability for unutilised annual leave as a result ofservices rendered by employees up to the balance sheet date.

(m) Leases

When the Group and the Company are the lessees of a finance lease

Leases in which the Group and the Company assume substantially the risks and rewardsof ownership are classified as finance leases.

Upon initial recognition, plant and equipment acquired through finance leases arecapitalised at the lower of its fair value and the present value of the minimum leasepayments. Any initial direct costs are also added to the amount capitalised.

Subsequent to initial recognition, the asset is accounted for in accordance with theaccounting policy applicable to that asset. Lease payments are apportioned betweenfinance charge and reduction of the lease liability. The finance charge is allocated to eachperiod during the lease term so as to achieve a constant periodic rate of interest on theremaining balance of the finance lease liability. Finance charge is recognised in theincome statement.


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(m) Leases (Continued)

When the Group and the Company are the lessees of operating leases

Leases of assets in which a significant portion of the risks and rewards of ownership areretained by the lessor are classified as operating leases. Payments made underoperating leases (net of any incentives received from the lessor) are recognised in theincome statement on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any paymentrequired to be made to the lessor by way of penalty is recognised as an expense in thefinancial year in which termination takes place.

Contingent rents are recognised as an expense in the income statement in the financialyear in which they are incurred.

(n) Income tax expense

Income tax expense for the financial year comprises current and deferred taxes. Incometax expense is recognised in the income statement except to the extent that it relates toitems recognised directly in equity, in which case such income tax is recognised in equity.

Current income tax is the expected tax payable on the taxable income for the financialyear, using tax rates enacted or substantively enacted at the balance sheet date, and anyadjustment to income tax payable in respect of previous financial years.

Deferred tax is provided, using the liability method, providing for temporary differences atthe balance sheet date between the tax bases of assets and liabilities and their carryingamounts for financial reporting purposes. Deferred tax is measured using the tax ratesexpected to be applied to the temporary differences when they are realised or settled,based on tax rates enacted or substantially enacted at the balance sheet date.

Deferred tax assets are recognised only to the extent that it is probable that future taxableprofits will be available against which the temporary differences can be utilised. Deferredtax assets are reviewed at each balance sheet date and reduced to the extent that it is nolonger probable that the related tax benefit will be realised.

Unrecognised deferred tax assets are reassessed at each balance sheet date and arerecognised to the extent that i

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