A Stronger Financial Position

The Group?s balance sheet and cash position remain strong with cash and cash reserves standing at a healthy $32.7 million, with $7.1 million cash generated from operations during the fi nancial year. This is after payment of approximately $4 million in dividends in December 2005.

Net total assets (NTA) of the Group have grown to $104.3 million or 12.66 cents per share, compared to 12.54 cents per share in FY2005. Earnings per share improved from 0.63 cent in FY2005 to 0.89 cent in FY2006, a marked increase of 41.3%. Of the NTA of 12.66 cents per share, approximately 4 cents or 31.4% are backed by cash.

Providing Good Returns to Shareholders

The Group has achieved three consecutive years of profit earnings since FY2004 and attaining profit growth year on year. NTA has grown similarly over the last three years. The Group has proposed a first and final dividend of 0.6 cent per share for FY2006 made in December 2005.

The Board of Directors is pleased to announce a dividend policy payout of at least 30% of net profi t for FY2007 to FY2010. The Board will review, and if appropriate, revise the dividend policy regularly to accommodate the Group?s future cash needs.

Exciting Times Ahead

As we extend our footprint within the region through our growth strategy as outlined above, our ability to scale ourselves quickly by leveraging on our regional operations to enjoy cost arbitrage will yield signifi cant advantage for growth. Independent market research firms such as IDC and Gartner Research have forecasted an annual growth rate of 8.6% for the IT industry in Asia, driven by explosive growth in countries such as India and China, which are expected to contribute some 63% of total IT spending in the region.

Within the area of Outsourcing alone, revenue is expected to rise to $25.3 billion in 2009 at a compounded annual growth rate in excess of 10%. As global businesses place increasing demands on IT service providers to deliver more value at a lower cost, our Outsourcing business will continue to be the main thrust of our growth strategy. Leveraging on our reputation as a total solutions provider, we will also seek avenues for expansion through the provision of our IT infrastructure services, which acts as a good entry point for further business development.

In recent IDC projections, both China and India will top the IT services market in the region. By 2010, the Chinese market is expected to grow at a compounded annual growth rate of 18.1%, and India?s IT services market will grow by 16.6%.

Alongside this, several Asian countries, including Singapore and Malaysia, have also announced long-term mega-plans to enhance IT infrastructure in their respective countries.

In Singapore, the Infocomm Development Authority (?IDA?) recently announced a 10-year master plan (iN2015) to transform Singapore into an intelligent nation powered by info-communications. One of the objectives of the iN2015 plan is to establish a Next Generation National Infocomm Infrastructure that will see a pervasive, ultra high-speed national wireless broadband network being built. This will help fuel demand for new generation of applications and
services to take advantage of the high-speed broadband bandwidth in the coming year. To deal with ever-evolving cyber security threats, IDA also outlined an Infocomm Security Masterplan for a National Authentication Framework and a National Trust Framework.

Extract from Frontline website. Message from the MD and CEO