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Radiance Group Limited

Leading the Future

Annual Report 2010

Contents
Corporate Information Chairmans Statement Board of Directors Key Management Corporate Structure Report on Corporate Governance Report of the Directors Statement by Directors Independent Auditors Report Consolidated Statement of Comprehensive Income Statements of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Shareholders Information Notice of Annual General Meeting Appendix A Proxy Form 1 2 3 6 8 9 19 23 24 26 27 28 29 30 70 72 76

Corporate Information
BOARD OF DIRECTORS
Anthony Brian Taylor Gary Patrick Stafford Malcolm John Burrell Cosimo Borrelli John Lim Yew Kong Dali Kumar @ Dali Bin Sardar Executive Chairman Executive Director Executive Director Non-Executive Director Lead Independent Director Independent Director Chairman

AUDIT COMMITTEE
John Lim Yew Kong Dali Kumar @ Dali Bin Sardar Cosimo Borrelli Dali Kumar @ Dali Bin Sardar John Lim Yew Kong Cosimo Borrelli Anthony Brian Taylor Dali Kumar @ Dali Bin Sardar John Lim Yew Kong Cosimo Borrelli Yvonne Choo, FCIS Lim Keng San Shirley, FCIS

NOMINATING COMMITTEE
Chairman

REMUNERATION COMMITTEE
Chairman

COMPANY SECRETARIES

REGISTERED OFFICE
9 Temasek Boulevard, #32-02A Suntec Tower Two, Singapore 038989 Tel: 68848270 Fax: 68848273 Website: www.radiance-sin.com.sg

SHARE REGISTRAR
B.A.C.S. Private Limited 63 Cantonment Road, Singapore 089758 Tel: 65934848 Fax: 65934847

AUDITORS
Moore Stephens LLP Certified Public Accountants 10 Anson Road, #29-15 International Plaza, Singapore 079903 Tel: 62213771 Fax: 62213815 Partner-in-charge: Ng Chiou Gee Willy (Appointed since the financial period ended 31 December 2008)

PRINCIPAL BANKERS
Industrial and Commercial Bank of China The Hongkong and Shanghai Banking Corporation Limited
RADIANCE GROUP LIMITED ANNUAL REPORT 2010 1

Chairmans Statement
Dear Shareholders, Despite a disruptive and busy year, the Group performed well for the year under review. Global Invacom Limited (GIL) became the new major shareholder of the Company. GIL is the largest customer of the Groups Electronics Manufacturing Services (EMS) division, manufacturing subsystems for satellite communications broadcasters in the Groups Shanghai facility. The Group is also the largest supplier to GIL. Revenue improved by 18.5% in the second half of the year. The Group achieved total revenue of S$85.2 million compared to S$112.2 million last year. The EMS business concentration on high mix/low volume category and the satellite communications segments, coupled with better cost controls contributed to a higher gross profit margin and profitability for the year. Overall, the Group achieved profit before tax of S$8.5 million; a significant increase compared to the previous year and recorded net profit of S$5.8 million for the year after taxes of S$2.7 million. The Groups total equity stood at S$38.3 million, an increase of S$2.2 million from the previous year, with non-current assets at S$3.4 million and net current assets at S$34.9 million. Earnings per share was 2.19 cents per share and net assets per share was 14.51 cents for the year. No dividend was declared for the year under review. The Companys new board is also facilitating the Groups acquisition of the operating entities of Global Invacom Holdings Limited and its subsidiaries (the GIHL Group) (the Acquisition), resulting in the Company becoming the common holding entity of both the Group and the GIHL Groups business. We are expecting completion of the Acquisition within the year. The Acquisition is expected to enable synergistic upward integration for the Group into the satellite and cable peripherals business. It will enhance and diversify the Companys commercial offering and will enable the Group to maximise its current production capacity. The Board believes that the Acquisition will enable the Company to capitalise on its listing status and enhance the value of shareholders equity interests in the Company. If completed, it may also increase the market capitalisation of the Company, which would enable the Company to attract more extensive analyst coverage and consequently lead to an overall increase in trading liquidity in the shares of the Company. On behalf of the Board, I would like to thank all our shareholders, customers, suppliers and business associates for their support and confidence. I would also like to express my sincere appreciation to the management and staff for their continued hard work and dedication.

Anthony Brian Taylor Executive Chairman


2 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Board of Directors
ANTHONY BRIAN TAYLOR
Executive Chairman Mr Anthony Brian Taylor was appointed as Executive Director on 18 August 2010 and Executive Chairman of the Board of Directors on 26 October 2010. He is also a member of the Nominating Committee. Mr Taylor is the Managing Director of Global Invacom Holdings Limited and was appointed to the Board of Global Invacom Holdings Limited in 2006. Mr Taylors entire professional career has been spent working within international high technology businesses with diverse commercial propositions which include semiconductors, automotive electronics, military and satellite-related products. He also has over 11 years of experience in senior executive leadership roles. He was formerly the District Sales Manager at Harris-MHS/MHS Semiconductor Sales Limited from 1984 to 1987. From 1987 to 1990, he was the European & Export Sales Manager at Marconi Electronic Devices before becoming the Product Manager at SGS-THOMSON Microelectronics between 1991 and 1998. Mr Taylor was appointed the Chief Executive Officer of TechnoFusion GmbH where he served from 1999 to 2002, and was the General Manager of Amphenol Limited from 2002 to 2006. Mr Taylor holds a Bachelor of Science, Electronics degree (with honours) from Coventry University in the United Kindgom.

GARY PATRICK STAFFORD


Executive Director Mr Gary Patrick Stafford was appointed as Executive Director on 18 August 2010. Mr Stafford is the Business Development Director of Global Invacom Limited and is a Microwave Engineer. Between 1979 and 1989, he worked in Marconi Space and Defence Systems Ltd as an Antenna Design Engineer. He then joined the DBS department of Marconi Space and Defence Systems Ltd as an Antenna Engineer and worked on a range of DBS antenna. He was subsequently appointed the Microwave Design Group Manager in 1997 at Grundig Gmbh and was the Project Manager for the design and development of a range of new products for consumer electronics based on Microwave systems. Mr Stafford was also the Founding Director of Invacom Limited in 2000. With his experience in designing and developing products based on microwave systems, he expanded the product range of Invacom and continues to do the same with Global Invacom Holdings Limited. He currently has 12 patents under his name. He graduated from Plymouth College in the United Kingdom following a sponsorship conferred upon him by the British Broadcasting Corporation.
RADIANCE GROUP LIMITED ANNUAL REPORT 2010 3

Board of Directors
MALCOLM JOHN BURRELL
Executive Director Mr Malcolm John Burrell was appointed as Executive Director on 18 August 2010. Mr Burrell is the Technical Director of Global Invacom Limited and has held this position since November 1997. Mr Burrell is a Chartered Engineer with 29 years of RF design, technical management and corporate management experience, gained whilst working in businesses within the consumer electronics, satellite earth station and military communications sectors. Prior to joining Global Invacom Limited, he was a Senior Development Engineer at Marconi Communication Systems Ltd, from September 1981 to September 1987. From October 1987 to December 1991, he was the Technical Manager at Multipoint Communications Ltd, and thereafter was the Principal Systems Engineer at Marconi Radar Systems Ltd from January 1992 to October 1997. Mr Burrell holds a Bachelor of Science Engineering (Electronic Engineering) degree from the University of Southampton, United Kingdom and a Certificate in Management (CIM). He is a member of the Institution of Engineering and Technology.

COSIMO BORRELLI
Non-Executive Director Mr Cosimo Borrelli was appointed as Non-Executive Director on 4 December 2009. He was the Chairman of the Board of Directors from 4 December 2009 to 25 October 2010. He is also a member of the Audit, Nominating and Remuneration Committees. Mr Borrelli is a Chartered Accountant with over 21 years of experience in formal and informal corporate restructuring, forensic accounting and financial investigations. This experience has included being appointed by courts, lenders and financiers, distressed companies, secured and unsecured creditors, investors and other interested parties. He has a track record in establishing and delivering restructuring and corporate advisory arrangements in industries including financial services, property, telecommunications, retail, manufacturing and professional services. Mr Borrelli holds a Bachelors degree in Economics from University of Adelaide, Australia. He is a member of the Institute of Chartered Accountants in Australia, member of the Institute of Certified Public Accountants and Institute of Certified Public Accountants Insolvency Interest Group of Hong Kong and a member of the Insolvency Practitioners Association of Australia.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Board of Directors
JOHN LIM YEW KONG
Lead Independent Director Mr John Lim Yew Kong was appointed as Independent Director on 13 September 2010. He is the Chairman of the Audit Committee, Lead Independent Director and a member of the Nominating and Remuneration Committees. Mr Lim is currently a director of AXIA Equity Pte Ltd, a firm which provides business and financial advisory services to companies in Singapore and the region. Prior to this and since 1991, Mr Lim was involved in the private equity and venture capital industry in Asia as a director of an investment advisory firm engaged in direct investment in the region. From 1989 to 1991, Mr Lim worked in Dowell Schlumberger in the United Kingdom, where he was United Kingdom division controller. Between 1984 and 1988, he was with Arthur Andersen & Co, London. Mr Lim holds a Bachelors degree in Economics from London School of Economics and Political Science, United Kingdom. He is a qualified chartered accountant since 1987.

DALI KUMAR @ DALI BIN SARDAR


Independent Director Mr Dali Kumar @ Dali Bin Sardar was appointed as Independent Director on 22 October 2007. Mr Sardar was the Chairman of the Audit Committee from 21 November 2007 to 12 September 2010. He is currently the Chairman of the Nominating and Remuneration Committees and a member of the Audit Committee. Mr Sardar has more than 28 years of experience in the banking and finance industry where he spent 14 years with Citibank/Citigroup. He founded DTA Capital Group in 1996 which specialises in venture capital/private equity fund management, equity and debt raising, mergers and acquisitions and various forms of restructuring. He currently sits on several Boards including listed entities like M Development Limited (SGX) and Chuan Huat Resources Bhd (KLSE). Mr Sardar holds a Bachelors degree in Economics from Knox College, Illinois, USA and an MBA from the American Graduate School of International Management (Thunderbird), Arizona, USA.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Key Management
GOH BOON LENG
General Manager, EMS Division Mr Goh Boon Leng was appointed as General Manager, EMS Division on 16 September 2010. He is responsible for the overall operations as well as charting the direction and strategic development of the Electronics Manufacturing Services (EMS) business of the Group. Mr Goh is also responsible for formulating marketing strategies and has been instrumental in securing and building strong relationships with customers. Mr Goh has more than 26 years of experience in the electronics industry in areas of quality control, production engineering and operations. He was the Executive Director and Chief Executive Officer of the Company from May 2002 to October 2006, and the Executive Director of the Company from 22 October 2007 to 15 September 2010. Mr Goh holds a Diploma in Mechanical Engineering from the Singapore Polytechnic.

GOH CHWEE HEONG


General Manager, RESZ Mr Goh Chwee Heong is the General Manager of Radiance Electronics (Shenzhen) Co., Ltd. (RESZ) He manages the daily operations and business development of the manufacturing plant in Shenzhen. Mr Goh has accumulated more than 24 years of experience in the SMT and SMT-related industries. Prior to joining the Group, he has held management stints in several electronics companies. Mr Goh holds a Diploma in Mechanical Engineering from the Ngee Ann Polytechnic, Singapore.

WONG PEI FERN


Group Financial Controller Ms Wong Pei Fern is the Group Financial Controller of the Company. She is responsible for the overall financial, accounting, tax, treasury, corporate finance and compliance matters of the Group. Ms Wong has been in the finance and accounting field for more than 14 years. She has held various management positions in multinational and listed companies in the information technology, computer and telecommunications industries. Ms Wong holds a Bachelors degree in Accountancy from Nanyang Technological University, Singapore. She was admitted as a member of the Institute of Certified Public Accountants of Singapore in 1998 and is a Certified Public Accountant since 2001.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Key Management
YU LAI HOE
General Manager, RESH Mr Yu Lai Hoe is the General Manager of Radiance Electronics (Shanghai) Co., Ltd. (RESH) He oversees the day-to-day operations of the plant and is also responsible for the business development and strategic planning of the manufacturing operations in Shanghai. He has more than 23 years of experience in the EMS industry. Prior to joining the Group, Mr Yu has held various management positions in several design and event management companies. Mr Yu graduated with a Bachelor of Science in Production Technology and Production Management (Honours) from the Aston University, Birmingham, United Kindgom.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Corporate Structure

Radiance Group Limited

Radiance Electronics (Shenzhen) Co Ltd 100%

Radiance Manufacturing Pte Ltd 100%

Sino-Brilliant Energy Pte Ltd 100%

Radiance Cayman Limited 100%

Radiance Electronics (Shanghai) Co Ltd 100%

Radiance Energy Technology Co Ltd 100%

RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Report on Corporate Governance


The Board of Directors (the Board) of Radiance Group Limited (the Company) is committed to maintaining a high standard of corporate governance. The Board confirms that it has generally adhered to the principles and guidelines as set out in the Code of Corporate Governance 2005 (the Code), where they are applicable, relevant and practicable to the Group. This report describes the Companys corporate governance policies and practices with specific reference made to each of the principles of the Code in compliance with the Listing Manual of the Singapore Exchange Securities Trading Limited. Principle 1: Boards Conduct of its Affairs The Board oversees the business and corporate affairs of the Company and its subsidiaries (collectively the Group) and is collectively responsible for its success. The Board sets the overall strategy of the Group and sets policies on matters as financial control, financial performance and risk management procedures. Board approval is required for matters such as corporate restructuring, mergers and acquisition, major investments and divestments, acquisitions and disposal of assets, major corporate policies on key areas of operations, acceptance of bank facilities, release of the Groups financial results and interested person transactions of a material nature. The Board comprises: Executive Directors Anthony Brian Taylor Gary Patrick Stafford Malcolm John Burrell Non-Executive Directors Cosimo Borrelli John Lim Yew Kong Dali Kumar @ Dali Bin Sardar

(Chairman)

(Lead Independent) (Independent)

The Board currently has a total of six (6) members, one third of whom are independent directors. The Board comprises members with a broad range of knowledge, expertise and experience such as accounting, finance, business and management. Management together with the Board Committees including the Audit, Nominating and Remuneration Committees support the Board in discharging its responsibilities. The roles and powers of the Board committees are set out separately in this Report. All committees have been constituted with clear written terms of reference. The Board conducts regular scheduled meetings at least twice yearly and as warranted by particular circumstances. The Companys Articles of Association provides for directors to convene meetings by way of telephone conferencing or any other electronic means of communication. When a physical Board meeting is not possible, timely communication with members of the Board can be achieved through electronic means or via circular of written resolutions for approval by the Board.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Report on Corporate Governance


Principle 1: Boards Conduct of its Affairs (contd) Details of Board and Board committee meetings held for the financial year ended 31 December 2010 (FY2010) are disclosed in the table below: Audit Committee 3 1 1 3 2 1 Nominating Committee 1 1 1 1 Remuneration Committee 1 1 1 1

No. of Meetings Held Anthony Brian Taylor(1) Gary Patrick Stafford(2) Malcolm John Burrell(2) Cosimo Borrelli(3) John Lim Yew Kong(4) Dali Kumar @ Dali Bin Sardar(5) Goh Boon Leng(6) Hamish Alexander Christie(7) Chi Lai Man Jocelyn(8) Chan Thye Aun Ivan(9)
(1) (2) (3) (4) (5) (6) (7) (8) (9)

Board 7 3 3 3 7 2 7 5 5 5 2

Mr Anthony Brian Taylor was appointed as Executive Director on 18 August 2010. Mr Taylor was appointed as Executive Chairman of the Board and a member of the Nominating Committee on 26 October 2010. Both Mr Gary Patrick Stafford and Mr Malcolm John Burrell were appointed as Executive Directors on 18 August 2010. Mr Cosimo Borrelli stepped down as Non-Executive Chairman of the Board and was appointed a member of the Audit Committee and Remuneration Committee on 26 October 2010. Mr John Lim Yew Kong was appointed as Independent Director and Chairman of the Audit Committee on 13 September 2010. Mr Lim was also appointed Lead Independent Director and a member of the Nominating Committee and Remuneration Committee on 26 October 2010. Mr Dali Kumar @ Dali Bin Sardar stepped down as Chairman of Audit Committee on 12 September 2010 and was appointed as Chairman of Nominating Committee on 16 March 2010. Mr Sardar remains as Chairman of the Remuneration Committee. Mr Goh Boon Leng resigned as Executive Director on 15 September 2010. Mr Hamish Alexander Christie resigned as Non-Executive Director and member of the Audit Committee on 31 August 2010. Ms Chi Lai Man Jocelyn resigned as Non-Executive Director and member of the Remuneration Committee on 31 August 2010. Mr Chan Thye Aun Ivan resigned as Independent Director, Chairman of Nominating Committee and member of Audit and Remuneration Committees on 16 March 2010.

Directors are kept informed of the relevant laws, regulations and challenging commercial risks from time to time. Relevant updates, news releases issued by the Singapore Exchange Securities Trading Limited (SGX-ST) and the Accounting and Corporate Regulatory Authority (ACRA) are circulated to the Board for information. Newly appointed directors are provided with information on the Groups business and are briefed on the business activities and the strategic direction of the Group. Directors also have the opportunity to meet with Management to gain a better understanding of the Groups business operations. New directors have been briefed on their duties, responsibilities and obligations.

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Report on Corporate Governance


Principle 2: Board Composition and Balance The size and composition of the Board are reviewed on an annual basis by the Nominating Committee to ensure that it has the appropriate mix of core expertise and experience consistent with the nature, size and complexities of the Groups business and its operating environment. The Nominating Committee, with the concurrence of the Board, considers the current Board size of six (6) members appropriate, having regard to the nature and scope of the Groups operations. The diversity of the directors experiences allows for the useful exchange of ideas and views. The non-executive directors contribute to the Board process by monitoring and reviewing managements performance against goals and objectives. Their views and opinions provide alternative perspectives to the Groups business. When challenging managements proposals or decisions, they bring independent judgment to bear on business activities and transactions involving conflict of interests and other complexities. Principle 3: Role of Chairman and Chief Executive Officer Mr Anthony Brian Taylor took over the role of an Executive Chairman of the Board on 26 October 2010. His main responsibilities include leading the Board to ensure its effectiveness on various aspects of its role, assisting in ensuring compliance with the Groups guidelines on corporate governance and ensuring that the directors are provided with complete, adequate and timely information. The Company Secretaries assist the Chairman in scheduling Board and Board Committee meetings and prepare agenda papers in consultation with the Executive Chairman. Mr Taylor also functions as the Chief Executive Officer (CEO) of the Company. As CEO, Mr Taylor manages and overseas the Groups day-to-day operations and implementation of the Groups strategies, plans and policies to achieve the planned corporate performance and financial goals. Although this deviates from the recommendations set out in the Code, the Board believes that vesting the roles of both Chairman and CEO on the same person who is knowledgeable in the business of the Group provides the Group with a strong and consistent leadership and allows for more effective planning and execution of long term business strategies. Mr Taylors dual role as Executive Chairman and CEO will enable the Group to conduct its business more efficiently and to ensure that the decision making process of the Group would not be unnecessarily hindered. The Board believes that there are adequate safeguards and checks in place to ensure that the process of decision making by the Board is independent and based on collective decision making without Mr Taylor exercising any undue influence on any decision made by the Board. The Nominating Committee will review the need to separate the roles of Chairman and CEO from time to time and make its recommendation. In line with the guidelines of the Code, Mr John Lim Yew Kong, was appointed as the Lead Independent Director of the Company on 26 October 2010. He would address the concerns, if any, of the Companys shareholders on issues that cannot be appropriately dealt with by the Chairman and CEO.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 11

Report on Corporate Governance


Principle 4: Board Membership Principle 5: Board Performance The Nominating Committee comprises all non-executive directors. The Chairman, Mr Dali Kumar @ Dali Bin Sardar, an independent director, is not associated with any substantial shareholders. The members of the Nominating Committee are: Dali Kumar @ Dali Bin Sardar John Lim Yew Kong Cosimo Borrelli Anthony Brian Taylor (Chairman)

The Nominating Committee makes recommendations to the Board on all nominations for the appointment and re-appointment to the Board, and the Board Committees. It ascertains the independence of directors annually with reference to the guidelines set out in the Code and has determined Messrs Dali Kumar @ Dali Bin Sardar and John Lim Yew Kong are independent. The Nominating Committee, in recommending the nomination of any director for re-election, considers the contribution of each director, which includes his attendance record, overall participation, expertise, strategic vision, business judgement and sense of accountability. Pursuant to the Companys Article of Association, an election of directors shall take place each year. All directors shall retire at least every three (3) years but shall be eligible for re-election at the Annual General Meeting. Messrs Anthony Brian Taylor, Gary Patrick Stafford, Malcom John Burrell and John Lim Yew Kong who are retiring under Article 88 at the forthcoming Annual General Meeting have offered themselves for re-election. The Board has accepted the Nominating Committees recommendation and the abovenamed directors will be offering themselves for re-election at the forthcoming Annual General Meeting. Each member of the Nominating Committee had abstained from voting on any resolutions and making any recommendations/ participating in any deliberations of the Nominating Committee in respect of his re-nomination as director. Set out below are the names, dates of appointment and last re-election of each director: Name Anthony Brian Taylor Gary Patrick Stafford Malcolm John Burrell Cosimo Borrelli John Lim Yew Kong Dali Kumar @ Dali Bin Sardar Position Executive Chairman Executive Director Executive Director Non-Executive Director Lead Independent Director Independent Director Date of Appointment 18 August 2010 18 August 2010 18 August 2010 4 December 2009 13 September 2010 22 October 2007 Date of Last Re-election 30 April 2010 24 April 2009

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Report on Corporate Governance


Principle 4: Board Membership (contd) Principle 5: Board Performance (contd) The Nominating Committee has adopted a Process for Selection and Appointment of New Directors. This provides the procedure for identification of potential candidates, evaluation of candidates skills, knowledge and experience, assessment of candidates suitability and recommendation for nomination to the Board. The Board approves the appointment upon recommendation by the Nominating Committee. The Nominating Committee evaluates the Boards performance annually based on established criteria. Based on the evaluation for FY2010, the Nominating Committee is generally satisfied with the Boards performance. The Nominating Committee will continue to renew its procedure, effectiveness and development from time to time. Key information regarding the Directors is provided on pages 3 to 5 of this Annual Report. Principle 6: Access to Information The Board is provided with management reports containing complete, adequate and timely information prior to Board meetings and on an on-going basis. The directors interact with and are provided with the contact details of the Companys senior management and the Company Secretaries to facilitate direct, separate and independent access. Should the directors, whether as a group or individually, require independent professional advice to fulfill their duties, the cost of such professional advice is borne by the Company. The Company Secretary or her representative attends all Board meetings and meetings of the committees and prepare minutes of Board proceedings. The Articles of Association of the Company provide that the appointment and removal of Company Secretary shall be reviewed by the Board.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 13

Report on Corporate Governance


Principle 7: Procedures for Developing Remuneration Policies Principle 8: Level and Mix of Remuneration Principle 9: Disclosure of Remuneration The Remuneration Committee comprises all non-executive directors. The members of the Remuneration Committee are: Dali Kumar @ Dali Bin Sardar John Lim Yew Kong Cosimo Borrelli (Chairman)

The Remuneration Committee reviews and recommends to the Board: (a) (b) the remuneration packages of the executive directors and key management of the Group; and directors fees for all directors, taking into factors such as work undertaken and time spent, their responsibilities; and long term incentive schemes which may be set up from time to time.

(c)

The Remuneration Committee is also responsible for administering the Radiance Electronics Share Option Scheme 2003 (the Scheme). Details of the options granted and the Scheme are as disclosed in Note 5 of the Report of the Directors. In setting remuneration packages for the executive directors and key management of the Group, the pay and employment conditions within the industry and in comparable companies are taken into account to maintain an appropriate and competitive level of remuneration that will attract, retain and motivate key management. Directors fees take into account the relevant directors level of contribution and responsibilities. For the financial year under review, the Remuneration Committee has recommended to the Board directors fees of S$158,230, which will be tabled at the forthcoming Annual General Meeting for shareholders approval. The Remuneration Committee has adopted a framework for directors fees and within the framework, the Remuneration Committee has recommended that directors fees of S$280,000 be paid quarterly at the end of each calendar quarter for the year ending 31 December 2011. No director was involved in determining his own remuneration. Messrs Anthony Brian Taylor, Gary Patrick Stafford and Malcolm John Burrell, as executive directors, do not receive any directors fees.

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Report on Corporate Governance


Principle 7: Procedures for Developing Remuneration Policies (contd) Principle 8: Level and Mix of Remuneration (contd) Principle 9: Disclosure of Remuneration (contd) The remuneration paid to the directors for FY2010 are as shown: FY2010 Directors Below S$250,000 Cosimo Borrelli John Lim Yew Kong Dali Kumar @ Dali Bin Sardar Chan Thye Aun Ivan*

Key Management S$500,000 and above S$250,000 to below S$500,000 Below S$250,000

Goh Boon Leng** Yu Lai Hoe Goh Chwee Heong Wong Pei Fern

* **

Mr Chan Thye Aun Ivan resigned on 16 March 2010. Mr Goh Boon Leng resigned as Executive Director on 15 September 2010 but remains a key manager of the Company.

The Board is of the opinion that the details of remuneration for the individual director and the key management are confidential, and disclosure of such information would not be in the interest of the Company. There are no employees of the Group who are immediate family members of a director or the CEO and whose remuneration exceeds S$150,000 during the year. Principle 10: Accountability Management is accountable to the Board and provides the Board with appropriately detailed management accounts of the Groups performance, position and prospects on a regular basis. In the discharge of its duties to shareholders, the Board, when presenting annual financial statements and announcements, seek to provide shareholders with detailed analysis, explanation and assessment of the Groups financial position and prospects.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 15

Report on Corporate Governance


Principle 11: Audit Committee The Audit Committee comprises all non-executive directors. The members of the Audit Committee are: John Lim Yew Kong Dali Kumar @ Dali Bin Sardar Cosimo Borrelli (Chairman)

The Board is satisfied that the members of the Audit Committee are appropriately qualified to discharge their responsibilities. All Audit Committee members possess extensive business and financial management experience at both senior management and Board levels. The Audit Committee meets at least two (2) times a year and as and when necessary to carry out its functions which are set out in Note 6 of the Report of the Directors. The Audit Committee has full access to and the co-operation of management, has full discretion to invite any director or executive officer to attend its meetings, and has been given adequate resources to enable it to discharge its functions. The Audit Committee met with the external and internal auditors, without the presence of management, at least once a year and had established that the external auditors have had full co-operation of management in carrying out the audit. No non-audit services were rendered by the external auditors during FY2010. The Audit Committee has also reviewed the Companys material internal controls including financial, operational and compliance controls. The Audit Committee is satisfied that there are adequate internal controls in the Group in its current business environment. The Whistle-Blowing Policy programme provides an avenue for staff of the Group to raise concerns about possible improprieties in matters of financial reporting or other matters and ensure that arrangements are in place for the independent investigation of such matters and appropriate follow-up actions to be taken. No reports of whistle blowing incidents were recorded in FY2010. The Audit Committee has recommended the re-appointment of Moore Stephens LLP as external auditors for the ensuing year. Principle 12: Internal Controls The Groups internal control systems are designed to ensure the reliability and integrity of financial information and to safeguard the assets of the Group. For the financial year under review, the Audit Committee and the Board have reviewed the Groups internal controls system and were satisfied with the adequacy of the Groups system of internal controls in its current business environment.

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Report on Corporate Governance


Principle 13: Internal Audit The Groups internal audit function is outsourced to BDO Raffles Consultants Pte Ltd. The internal auditor reports directly to the Chairman of the Audit Committee on audit matters and the CEO on administrative matters. The Audit Committee, on an annual basis, assess the effectiveness of the internal audit by examining the scope of the internal audit work and results of the areas reviewed, the internal auditors reports and recommendations and managements implementation of such recommendations. Principle 14: Communication with Shareholders Principle 15: Greater Shareholders Participation In line with its continuous disclosure obligations, the Group is committed to maintaining regular and proactive communication with shareholders. It is the Boards policy that shareholders are informed of all major developments that impact the Group. Information is communicated to shareholders on a timely basis and is made through: (a) (b) annual reports that are prepared and issued to all shareholders; financial statements containing a summary of the financial information and affairs of the Group for the year published through the SGXNET; notices of and explanatory memoranda for annual and extraordinary general meetings; press releases on major developments of the Group; and the Companys website which provides, inter alia, corporate announcements, press releases, annual reports and profile of the Group at www.radiance-sin.com.sg.

(c) (d) (e)

At the Annual General Meeting, shareholders will be given the opportunity to voice their views and seek clarifications. The Chairmen of the Audit, Remuneration and Nominating Committees and the external auditors are normally available at the Annual General Meeting to answer shareholders queries. Securities Transactions The Group has adopted an internal compliance code of conduct which provides guidance to directors and officers with regards to dealing in the Companys securities. Directors and officers are prohibited from dealing in securities of the Company one month before the release of the half year and full year results and at all times, whilst in possession of price-sensitive information. The Group confirmed that it had adhered to its policy for securities transaction for FY2010.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 17

Report on Corporate Governance


Interested Person Transactions The Company has established procedures to ensure that all transactions with interested persons are submitted in a timely manner to the Audit Committee for review and approval, and that all such transactions are conducted at arms length basis. The Company had disclosed the following interested person transactions for FY2010, pursuant to Rule 907 of the Listing Manual of the Singapore Exchange Securities Trading Limited: Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than S$100,000 and transactions conducted under shareholders mandate pursuant to Rule 920 of the Listing Manual) 22,230,034*

Name of interested person Global Invacom Limited


*

Aggregate value of all interested person transactions conducted under shareholders mandate pursuant to Rule 920 of the Listing Manual (excluding transactions less than S$100,000)

Relates to transactions entered into between the Group and Global Invacom Limited from 1 August 2010 to 31 December 2010 and the transactions were ratified, confirmed and approved by the shareholders at the Extraordinary General Meeting held on 25 January 2011.

Material Contracts There were no material contracts, not being contracts entered into in the ordinary course of business, had been entered into by the Company and its subsidiaries involving the interest of the executive director, any director or controlling shareholder of the Company during FY2010. Risk Management Management, led by the CEO, regularly reviews the Groups operations and activities to identify areas of risks as well as appropriate measures to control and mitigate these risks. Significant matters would be reported to the Audit Committee and the Board. The Groups financial risk management is described under Note 28 of the Notes to the Financial Statements on page 62 of this Annual Report.

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Report of the Directors


31 DECEMBER 2010

The directors are pleased to present their report to the members together with the audited consolidated financial statements of Radiance Group Limited (the Company) and its subsidiaries (collectively the Group) for the financial year ended 31 December 2010 and the statement of financial position of the Company as at 31 December 2010. 1 DIRECTORS The directors of the Company in office at the date of this report are: Anthony Brian Taylor Gary Patrick Stafford Malcolm John Burrell Cosimo Borrelli John Lim Yew Kong Dali Kumar @ Dali Bin Sardar 2 Executive Chairman Executive Director Executive Director Non-Executive Director Lead Independent Director Independent Director Appointed on 18 August 2010 Appointed on 18 August 2010 Appointed on 18 August 2010 Appointed on 13 September 2010

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 any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate.

DIRECTORS INTERESTS IN SHARES OR DEBENTURES As recorded in the register of directors shareholdings under Section 164 of the Singapore Companies Act, Chapter 50, none of the directors holding office at the end of the financial year had any interest in the shares of the Company and its related corporations.

DIRECTORS CONTRACTUAL BENEFITS Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except as disclosed in the notes to the financial statements.

SHARE OPTIONS RADIANCE ELECTRONICS SHARE OPTION SCHEME 2003 The Radiance Electronics Share Option Scheme 2003 (the Scheme) was approved and adopted by shareholders at an Extraordinary General Meeting held on 25 April 2003. The Remuneration Committee administering the Scheme comprises directors, Messrs Dali Kumar @ Dali Bin Sardar (Chairman of the Remuneration Committee), John Lim Yew Kong and Cosimo Borrelli. The Scheme forms an integral and important component of the employee compensation plan, which is designed to primarily reward and retain executive directors, non-executive directors and employees of the Group whose services are integral to the success and the continued growth of the Group.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 19

Report of the Directors


31 DECEMBER 2010

SHARE OPTIONS RADIANCE ELECTRONICS SHARE OPTION SCHEME 2003 (contd) Principal Terms of the Scheme (a) Participants Under the rules of the Scheme, executive and non-executive directors (including independent directors) and employees of the Group, who are not controlling shareholders or their associates, are eligible to participate in the Scheme. (b) Size of the Scheme The aggregate number of shares over which the Remuneration Committee may grant options on any date, when added to the number of shares issued and issuable in respect of all options granted under the Scheme, shall not exceed 15% of the issued shares of the Company on the day preceding that date. (c) Options, Exercise Period and Exercise Price The options that are granted under the Scheme may have exercise prices that are, at the Remuneration Committees discretion, set at a price (the Market Price) equal to the weighted average share price of the shares for the last trading day immediately preceding the relevant date of grant of the option or at a discount to the Market Price (subject to a maximum discount of 20%). Options which are fixed at the Market Price (Market Price Option) may be exercised after the first anniversary of the date of grant of that option while options exercisable at a discount to the Market Price (Discounted Option) may only be exercised after the second anniversary from the date of grant of the options. Options granted under the Scheme to all employees (including executive directors) and non-executive directors will have a life span of 10 and 5 years respectively. (d) Grant of Options Under the rules of the Scheme, there are no fixed periods for the grant of options during the options life span. As such, offers for the grant of options may be made at any time from time to time at the discretion of the Remuneration Committee. In addition, in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent, offers may only be made after the second market day from the date on which the aforesaid announcement is made. (e) Termination of Options Special provisions in the rules of the Scheme deal with the lapse or earlier exercise of options in circumstances which include the termination of the participants employment by the Group, the bankruptcy of the participant, the death of the participant, a take-over of the Company and the winding-up of the Company. (f) Acceptance of Options The grant of options shall be accepted within 30 days from the date of offer. Offers of options made to grantees, if not accepted before the closing date, will lapse. Upon acceptance of the offer, the grantee must pay the Company a consideration of S$1.00.

20 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Report of the Directors


31 DECEMBER 2010

SHARE OPTIONS RADIANCE ELECTRONICS SHARE OPTION SCHEME 2003 (contd) Principal Terms of the Scheme (contd) (g) Duration of the Scheme The Scheme shall continue in operation for a maximum duration of 10 years and may be continued for any further period thereafter with the approval of shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required. Options Granted Under the Scheme There were: (a) (b) no options granted to take up unissued shares of the Company or its subsidiaries during the financial year; no shares of the Company and its subsidiaries issued by virtue of the exercise of options to take up unissued shares of the Company and its subsidiaries during the financial year; and no unissued shares of the Company or its subsidiaries under options at the end of the financial year.

(c) 6

AUDIT COMMITTEE The Audit Committee (AC) comprises all non-executive directors. The members of the Audit Committee are: John Lim Yew Kong Dali Kumar @ Dali Bin Sardar Cosimo Borrelli (Chairman)

The AC carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Chapter 50, the Singapore Exchange Securities Trading Limited (SGX-ST) Listing Manual and the Code of Corporate Governance, which includes the following: (a) Reviews the audit plans of the internal and external auditors of the Company, and reviews the internal auditors evaluation of the adequacy of the Companys system of internal accounting controls and the assistance given by the Companys management to the external and internal auditors; Reviews the half-yearly announcement on financial performance, annual financial statements and the auditors report on the annual financial statements of the Company before their submission to the Board of Directors; Reviews the effectiveness of the Companys material internal controls, including financial, operational and compliance controls and risk management via reviews carried out by the internal auditors; Meets with the external auditors, other committees and management in separate executive sessions to discuss any matters that these groups believe should be discussed privately with the AC;

(b)

(c)

(d)

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 21

Report of the Directors


31 DECEMBER 2010

AUDIT COMMITTEE (contd) (e) Reviews legal and regulatory matters that may have a material impact on the financial statements, related compliance policies and programmes and any reports received from regulators; Reviews the cost effectiveness and the independence and objectivity of the external auditors; Reviews the nature and extent of non-audit services provided by the external auditors; Recommends to the Board of Directors the external auditors to be nominated, and reviews the scope and results of the audit; Reports actions and minutes of the AC to the Board of Directors with such recommendations as the AC considers appropriate; Reviews interested person transactions in accordance with the requirements of the SGX-ST Listing Manual; and Undertakes such other functions and duties as may be agreed to by the AC and the Board of Directors.

(f) (g) (h)

(i)

(j)

(k)

Further details regarding the AC are disclosed in the Report on Corporate Governance in this Annual Report. The AC has recommended to the Board of Directors the nomination of Moore Stephens LLP for their appointment as independent auditors of the Company at the forthcoming Annual General Meeting. 7 INDEPENDENT AUDITORS The auditors, Moore Stephens LLP, Public Accountants and Certified Public Accountants, have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

ANTHONY BRIAN TAYLOR Director

COSIMO BORRELLI Director

Singapore 31 March 2011

22 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Statement by Directors
31 DECEMBER 2010

In the opinion of the directors: (a) the accompanying consolidated financial statements of the Group and the statement of financial position of the Company together with the notes thereto, as set out on pages 26 to 69, are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and the results, changes in equity and cash flows of the Group for the year ended on that date; and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

(b)

On behalf of the Board of Directors

ANTHONY BRIAN TAYLOR Director

COSIMO BORRELLI Director

Singapore 31 March 2011

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 23

Independent Auditors Report


TO THE MEMBERS OF RADIANCE GROUP LIMITED (Incorporated in Singapore)

We have audited the accompanying financial statements of Radiance Group Limited (the Company) and its subsidiaries (collectively the Group), as set out on pages 26 to 69, which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 December 2010, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the year ended 31 December 2010, and a summary of significant accounting policies and other explanatory notes. Managements Responsibility for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entitys preparation of financial 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 controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

24 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Independent Auditors Report


TO THE MEMBERS OF RADIANCE GROUP LIMITED (Incorporated in Singapore)

(contd) Opinion In our opinion, the consolidated financial statements of the Group and the statement of financial position 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 2010 and the results, changes in equity and cash flows of the Group for the 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.

Moore Stephens LLP Public Accountants and Certified Public Accountants

Singapore 31 March 2011

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 25

Consolidated Statement of Comprehensive Income


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Group Note 2010 S$000 85,218 (70,173) 15,045 763 (119) (7,159) (75) 139 (93) 8,501 (2,722) 5,779 2009 S$000 112,176 (100,844) 11,332 432 (175) (8,221) (645) 39 (256) 2,506 (1,422) 1,084

Revenue Cost of sales Gross profit Other income Distribution costs Administrative expenses Other operating expenses Finance income Finance costs Profit before income tax Income tax Profit after income tax Other comprehensive income Exchange differences on translation of foreign subsidiaries Total comprehensive income for the year attributable to equity holders of the Company Earnings per share (cents) Basic and diluted

(4)

(5) (6) (7) (8)

(3,642)

(905)

2,137

179

(9)

2.19

0.41

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


26 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Statements of Financial Position


AS AT 31 DECEMBER 2010

Group Note 2010 S$000 2009 S$000 2010 S$000

Company 2009 S$000

ASSETS Non-current Assets Plant and equipment Investments in subsidiaries Club membership

(10) (11)

3,337 82 3,419

4,636 82 4,718

177 24,649 82 24,908

307 24,649 82 25,038

Current Assets Due from subsidiaries Inventories Trade receivables Other current assets Cash and cash equivalents

(12) (13) (14) (15) (16)

11,369 23,007 761 29,115 64,252 67,671

7,110 18,828 1,178 29,188 56,304 61,022

1,409 120 68 1,597 26,505

5,436 154 235 5,825 30,863

Total assets EQUITY AND LIABILITIES Share Capital and Reserves Share capital Reserves Total equity Non-current Liabilities Obligations under hire purchase

(17) (18)

28,553 9,716 38,269

28,553 7,579 36,132

28,553 (3,241) 25,312

28,553 (2,360) 26,193

(19)

98 98

98 98

Current Liabilities Trade payables Other payables Borrowings Obligations under hire purchase Provision for income tax Total liabilities Total equity and liabilities

(20) (21) (19)

19,317 5,128 3,917 53 987 29,402 29,402 67,671

13,284 7,189 3,745 102 472 24,792 24,890 61,022

1,132 53 8 1,193 1,193 26,505

704 3,700 102 66 4,572 4,670 30,863

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


RADIANCE GROUP LIMITED ANNUAL REPORT 2010 27

Consolidated Statement of Changes in Equity


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Note

Share capital S$000

Capital reserve S$000

Foreign Retained currency profits/ translation (Accumulated reserve losses) S$000 S$000

Total S$000

Group Balance as at 1 January 2010 Total comprehensive income for the year Transfer to capital reserve in accordance with statutory requirements Balance as at 31 December 2010 Balance as at 1 January 2009 Total comprehensive income for the year Capital reduction Transfer to capital reserve in accordance with statutory requirements Balance as at 31 December 2009

28,553

4,172

(2,752) (3,642)

6,159 5,779

36,132 2,137

(18)

28,553 35,501 (6,948)

449 4,621 3,942

(6,394) (1,847) (905)

(449) 11,489 (1,643) 1,084 6,948

38,269 35,953 179

(17)

(18)

28,553

230 4,172

(2,752)

(230) 6,159

36,132

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


28 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Consolidated Statement of Cash Flows


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Group Note Cash Flows from Operating Activities Profit before income tax Adjustments for: Depreciation of plant and equipment Loss on disposal of plant and equipment Impairment of plant and equipment (Write-back of)/Allowance for inventory obsolescence Gain on de-registration of subsidiary Interest income Interest expense Operating cash flow before working capital changes Changes in working capital: Inventories Trade receivables Other current assets Trade and other payables Cash generated from operating activities Interest paid Income tax paid Prior year tax rebate received Net cash generated from operating activities Cash Flows from Investing Activities Interest received Purchase of plant and equipment Proceeds from disposal of plant and equipment Net cash used in investing activities Cash Flows from Financing Activities Proceeds from borrowings Repayment of borrowings Repayment to hire purchase creditors (Increase)/Decrease in restricted cash Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effect of foreign exchange rate changes on the balance of cash held in foreign currencies Cash and cash equivalents at the end of the year 2010 S$000 2009 S$000

8,501 1,238 70 (800) (139) 93 8,963 (6,430) (4,377) 417 6,330 4,903 (93) (2,235) 31 2,606 139 (495) 174 (182) 3,917 (3,745) (147) (4,093) (4,068) (1,644) 24,833 (2,522) 20,667

2,506 1,740 443 94 178 (2) (39) 256 5,176 4,703 9,665 1,895 (7,382) 14,057 (256) (1,446) 68 12,423 39 (344) 3 (302) 45 (3,165) (98) 106 (3,112) 9,009 16,525 (701) 24,833

(16)

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


RADIANCE GROUP LIMITED ANNUAL REPORT 2010 29

Notes to the Financial Statements


31 December 2010 These notes form an integral part of and should be read in conjunction with the accompanying financial statements: 1 GENERAL Radiance Group Limited (the Company) is a public limited company incorporated and domiciled in Singapore and is listed on the Mainboard of the Singapore Exchange Securities Trading Limited (SGX-ST). The registered address of the Company and the principal place of business is at 9 Temasek Boulevard, #32-02A Suntec Tower Two, Singapore 038989. The principal activity of the Company is that of an investment holding company. The principal activities of the subsidiary companies are set out in Note 11. Previously, the immediate and ultimate holding company was Thumb (China) Holdings Group Limited. During the current financial year, The Pacific Trust became the immediate and ultimate controlling party of the Company (see Note 2). The Pacific Trust was constituted on 15 July 2010 by way of a trust deed which circumscribes, amongst others, the power to deal with its trust assets. The trustee of The Pacific Trust is Vistra Corporate Services Limited, a company incorporated in Jersey, the United Kingdom. The financial statements for the financial year ended 31 December 2010 were authorised for issue in accordance with a resolution of the directors on the date of the Statement by Directors. 2 SIGNIFICANT EVENTS On 29 March 2010, Global Invacom Limited (GIL), a company incorporated in England, and the relevant concert parties, issued a pre-conditional mandatory cash offer stating that GIL had entered into a conditional share purchase agreement with Thumb (China) Holdings Group Limited (In Liquidation) (TCH) and TCHs liquidators, pursuant to which TCH agreed to sell, and GIL agreed to purchase, an aggregate of 138,235,390 ordinary shares representing approximately 52.41% of the total issued shares in the capital of the Company, for a cash consideration of S$0.07618 per share (the Acquisition). On 30 July 2010, GIL completed the Acquisition, and GIL became a majority shareholder of the Company, holding approximately 52.41% of the total issued shares in the capital of the Company, as of that date. On 1 August 2010, in accordance with Rule 14 of the Singapore Code on Take-overs and Mergers, GIL made a mandatory unconditional cash offer for all the shares, other than those already owned, controlled or agreed to be acquired by GIL for a consideration of S$0.07618 per share (the Offer). By the close of the Offer on 14 September 2010, an aggregate of 10,291,703 shares were accepted, representing approximately 3.90% of the total issued shares in the capital of the Company, resulting in GIL owning an aggregate of 148,527,093 shares, representing approximately 56.31% of the total issued shares in the capital of the Company, as of that date. Subsequently on 20 September 2010 and 4 October 2010, GIL transferred all the shares held by it on the completion of the Acquisition and the Offer, respectively to The Pacific Trust (see Note 1) and consequently, GIL ceased to be a shareholder of the Company. The Pacific Trust was constituted as a discretionary trust for the benefit of, inter alia, all bona fide employees of any member of GIL and its subsidiaries (the GIL Group) (which currently includes directors and shareholders of GIL). Further, in view of the unique structure of The Pacific Trust, the Company and GIL had sought a clarification from the SGX-ST that GIL is independent of The Pacific Trust and SGX-STs response was that GIL and The Pacific Trust are deemed not to be wholly-independent of each other and accordingly, GIL is deemed to be an associate of a controlling shareholder under Chapter 9 of the SGX-ST Listing Manual and is also treated as an interested person for the purpose of Chapter 9 of the SGX-ST Listing Manual.

30 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 2 SIGNIFICANT EVENTS (contd) On 3 November 2010, the Company entered into a Memorandum of Understanding (MOU) with the shareholders of Global Invacom Holdings Limited (GIHL) (collectively the Parties), a company incorporated in England, in relation to the proposed acquisition of the entire share capital of GIHL, which if undertaken and completed will result in a very substantial acquisition (VSA) of GIHL as defined under Chapter 10 of the SGX-ST Listing Manual. GIHL and its subsidiaries are principally involved in the manufacture of satellite and cable peripherals. The principal terms of the VSA as set out in the MOU are subject to the terms and conditions to be agreed and set out in definitive agreements to be entered into between the Parties. At the date of these financial statements, the definitive agreements are still in the progress of negotiations. 3 SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial statements have been prepared in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards (FRS). The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below. The accounting policies adopted are consistent with those of the previous financial year except as follows: Adoption of New/Revised FRS which are effective The Group has adopted the following revised standards which are effective and relevant to the Group as of 1 January 2010: (i) FRS 103 (Revised) Business Combinations The revised standard has been applied prospectively and will affect the accounting of business combinations for which the acquisition date is on or after the adoption of the revised standard. The impact of the application of the revised standard is: to allow a choice on a transaction-by-transaction basis for the measurement of non-controlling interests (previously referred to as minority interests) either at fair value or at the noncontrolling interests share of the fair value of the identifiable net assets of the acquiree; to change the recognition and subsequent accounting requirements for contingent consideration. Under the previous version of the standard, contingent consideration was recognised at the acquisition date only if payment of the contingent consideration was probable and it could be measured reliably; any subsequent adjustments to the contingent consideration were recognised against goodwill. Under the revised standard, contingent consideration is measured at fair value at the acquisition date; subsequent adjustments to the consideration are recognised against goodwill only to the extent that they arise from better information about the fair value at the acquisition date, and they occur within the measurement period (a maximum of twelve months from the acquisition date). All other subsequent adjustments are recognised in profit or loss;

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 31

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (a) Basis of Preparation (contd) Adoption of New/Revised FRS which are effective (contd) (i) (contd) where the business combination in effect settles a pre-existing relationship between the Group and the acquiree, to require the recognition of a settlement gain or loss; and to require that acquisition-related costs be accounted for separately from the business combination, generally leading to those costs being recognised as an expense in profit or loss as incurred, whereas previously they were accounted for as part of the cost of the acquisition.

(ii)

FRS 27 (Revised) Consolidated and Separate Financial Statements The revised standard is a result of consequential amendments to changes to FRS 103 (Revised). The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. The revised standard has been applied prospectively and will affect future transactions with non-controlling interests, if any.

On adoption of these revised standards, the Group changed its accounting policies where relevant (see (c) below) but the changes had no effect on the financial performance and financial position of the Group for the financial year ended 31 December 2010. FRS 102 (Amendment) Group Cash-settled Share-based Payment Transactions - the amendments clarify the scope of FRS 102, as well as the accounting for Group cash-settled share-based payments transactions in the separate (or individual) financial statements of an entity receiving the goods and services when another group entity or parent entity has the obligation to settle the award. The adoption of amendment has no material impact to the consolidated financial statements of the Group for the financial year ended 31 December 2010. New/Revised IFRS which are not yet effective At the date of these financial statements, the following revised or amended standards which have been issued and are relevant to the Group but are not yet effective: Effective for accounting periods beginning on or after 1 January 2011 1 July 2010 1 July 2010 1 January 2011

FRS FRS FRS FRS

24 (Revised) 27 (Amendment) 103 (Amendment) 107 (Amendment)

Related Party Disclosures Consolidated and Separate Financial Statements Business Combinations Financial Instruments: Disclosures

Except for FRS 24 (Revised) and FRS107 (Amendment), the adoption of the other amended standards will have no material impact on the financial statements in the period of initial application. The nature of the impending changes on adoption of FRS 24 (Revised) and FRS 107 (Amendment) is discussed below.
32 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (a) Basis of Preparation (contd) New/Revised IFRS which are not yet effective (contd) (i) FRS 24 (Revised) Related Party Disclosures The revised standard provides a partial exemption for government-related entities. If a government controlled or significantly influenced an entity, the entity requires disclosures that are important to users of financial statements but eliminates requirements to disclose information that is costly to gather and of less value to users. This balance is achieved by requiring disclosure about these transactions only if they are individually or collectively significant. The amendment also provides a revised definition of a related party that is simplified and removes inconsistencies. The amendment is unlikely to have material impact on the related party transaction disclosures on initial application. FRS 107 (Amendment) Financial Instruments: Disclosures As part of the 2010 Annual Improvements to FRSs The amendments clarify the required level of disclosures about credit risk and collateral held and provide relief from disclosures previously required regarding renegotiated loans. As this is a disclosure standard, it will have no impact on the financial performance or financial position of the Group on initial application.

(ii)

(b)

Critical Accounting Estimates, Assumptions and Judgements The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the accounting policies. It also requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year. Although these judgements and estimates are based on historical experience and other relevant factors, including managements expectation of future events that are believed to be reasonable under the circumstances, actual results may ultimately differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical accounting estimates and assumptions used that are significant to the financial statements, and areas involving a higher degree of judgement are summarised below: Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the financial year that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 33

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (b) Critical Accounting Estimates, Assumptions and Judgements (contd) Key sources of estimation uncertainty (contd) (i) Useful lives of plant and equipment Plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives of these plant and equipment to be within 3 to 10 years. The carrying amount of the Groups plant and equipment as at 31 December 2010 was S$3,337,000 (2009: S$4,636,000). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual value of these plant and equipment, which management assesses annually and if the expectation differs from the original estimate, such difference will impact the depreciation in the period in which such an estimate has been changed. If depreciation on plant and equipment increases/decreases by 10% from managements estimate, the Groups profit for the year will decrease/increase by approximately S$124,000 (2009: S$174,000). Critical judgements in applying accounting policies In the process of applying the Groups accounting policies, the application of judgements that are expected to have a significant effect on the amounts recognised in the financial statements are discussed below. (i) Allowance for inventory obsolescence Reviews are made periodically by management in respect of inventories for excess inventories, obsolescence and decline in net realisable value below cost. Allowances are recorded against the inventories for any such declines based on historical obsolescence and slow-moving experiences. During the financial year, the Group wrote-back an allowance of approximately S$800,000 (2009: recognised an allowance of S$178,000) for inventory obsolescence (Note 7). The carrying amount of the Groups inventories as at 31 December 2010 was S$11,369,000 (2009: S$7,110,000) (Note 13). (ii) Impairment of trade receivables Management reviews trade receivables for objective evidence of impairment on a periodic basis. Significant financial difficulties of the debtor, the probability that the debtors will enter bankruptcy, and default or significant delay in payments are considered objective evidence that a receivable is impaired. In determining this, management makes judgements as to whether there is observable data indicating that there has been a significant change in the payment ability of the debtor, or whether there have been significant adverse changes in the technology, market, economic or legal environment in which the debtor operates. Where there is objective evidence of impairment, management judges whether an impairment loss should be recorded against the receivable. During the financial year, no impairment loss was recognised for trade receivables and as at 31 December 2010, the carrying amount of the Groups allowance for impairment of trade receivables was S$4,911,000 (2009: S$5,366,000) (Note 28(b)(ii)) and the carrying amount of the Groups trade receivables was S$23,007,000 (2009: S$18,828,000) (Note 14).
34 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (c) Group Accounting Consolidation Subsidiaries are entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases. In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Acquisition of businesses The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group elects for each individual business combination, whether a non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interests proportionate share of the acquirees net identifiable assets. Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Groups previously held equity interest in the acquiree (if any), over the net fair value of the acquirees identifiable assets and liabilities is recorded as goodwill on the statement of financial position. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date. Disposals of subsidiaries or businesses When a change in the Companys ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific standard. Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in profit or loss.
RADIANCE GROUP LIMITED ANNUAL REPORT 2010 35

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (d) Foreign Currencies The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Singapore Dollar (S$), which is the functional currency of the Company and the presentation currency for the consolidated financial statements. All values are rounded to the nearest thousand (S$000) except when otherwise indicated. Transactions and balances In preparing the financial statements of the individual group entities, transactions in currencies other than the entitys functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Currency translation differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the reporting date are recognised in profit or loss, unless they arise from borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations. Those currency translation differences are recognised in the currency translation reserve in equity and transferred to profit or loss as part of the gain or loss on disposal of the foreign operation. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Translation of group entities financial statements The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: assets and liabilities are translated at the closing exchange rates at the reporting date; income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and all resulting currency translation differences are recognised in the currency translation reserve.

On the disposal of a foreign operation, all of the accumulated currency translation differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any currency translation differences that have previously been attributed to non-controlling interests are derecognised, but they are not reclassified to profit or loss. In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation, the proportionate share of accumulated currency translation differences are re-attributed to non-controlling interests and are not recognised in profit or loss.
36 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (e) Plant and Equipment All items of plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Subsequent expenditure related to plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance expenses are recognised in profit or loss when incurred. Depreciation is calculated on the straight-line basis to write off the cost of plant and equipment over the estimated useful lives of the assets as follows: Machinery and equipment Furniture, fittings and equipment Motor vehicles Renovations 3 3 5 3 to to to to 10 years 10 years 10 years 5 years

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. The carrying amounts of plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The residual value, useful life and depreciation method are reviewed annually to ensure that the method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of plant and equipment. Plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the plant and equipment is included in profit or loss in the year the plant and equipment is derecognised. (f) Investments in Subsidiaries In the Companys separate financial statements, investments in subsidiaries are accounted for at cost less any impairment losses. An assessment of investments in subsidiaries is performed when there is an indication that the investments may have been impaired. On disposal of investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investment is recognised in profit or loss. (g) Club Membership Club membership is stated at cost less any impairment losses.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 37

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (h) Impairment of Non-financial Assets Non-financial assets are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired. At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any), on an individual asset. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. (i) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Cost includes the actual cost of materials and incidentals in bringing the inventories into store and for manufactured inventories, the cost of work-in-progress and finished goods comprises raw materials, direct labour and related production overheads. Net realisable value represents the estimated selling price in the ordinary course of business less all estimated costs of completion and costs necessary to make the sale. Allowance is made for obsolete and slow-moving items.

38 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (j) Trade and Other Receivables Trade and other receivables, which generally have 30 to 90 day terms, including amounts due from subsidiaries, are initially recognised at fair value, and subsequently measured at amortised cost using the effective interest rate method less allowance for impairment. An allowance for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all the amounts due according to the original terms of the receivables. The amount of the allowance is the difference between the assets carrying amount and the present value of the estimated cash flows discounted at the original effective interest rate. The amount of the allowance is recognised in profit or loss. (k) Cash and Cash Equivalents Cash and cash equivalents comprise cash on hand, bank balances and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above less bank deposits pledged as security. (l) Trade and Other Payables Trade and other payables, which are normally settled on 30 to 90 day terms, are initially recognised at fair value, and subsequently measured at amortised cost using the effective interest rate method. (m) Interest-bearing Loans and Borrowings Borrowings are initially recognised at fair value (net of transaction costs), and subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (n) Assets Under Hire Purchase Arrangements Where assets are financed by hire purchase arrangements that give rights approximating to ownership, the assets are capitalised under plant and equipment as if they had been purchased outright at the values equivalent to the present value of the total rental payable during the years of the hire purchase and the corresponding hire purchase commitments are recorded as liabilities. The excess of the hire purchase payments over the recorded hire purchase obligations is treated as finance charges, which are allocated over each hire purchase term to give a constant rate of interest on the outstanding balance at the end of each year. Hire purchase payments are treated as consisting of capital and interest elements and the interest is charged to profit or loss. Depreciation on the relevant assets is charged to profit or loss on the basis outlined in (e) above.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 39

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (o) Share Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account. (p) Financial Guarantees Financial guarantees are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due. Financial guarantees are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, financial guarantees are amortised to profit or loss over the period of the guarantee. If it is probable that the liability will be higher than the amount initially recognised less amortisation, the liability is recorded at the higher amounts with the difference charged to profit or loss. (q) Revenue Recognition Revenue for the Group comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of business, goods and services/value-added tax, rebates and discounts and after eliminating sales within the Group. The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that the collectibility of the related receivables is reasonably assured and when the specific criteria for each of the Groups activities are met as follows: Sale of goods Revenue on the sale of goods is recognised when the significant risks and rewards of ownership of the goods have been transferred to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods. Interest income Interest income is recognised on a time-proportion basis using the effective interest method. Dividend income Dividend income is recognised when the right to receive payment is established.

40 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (r) Employee Benefits Defined contribution plans Defined contribution plans (including state-managed retirement benefit schemes) are post-employment benefit plans under which the Group pays fixed contributions into separate entities on a mandatory, contractual or voluntary basis. Contributions to defined contributions plans are recognised as an expense in profit or loss as they fall due. Employee leave entitlement Employee entitlements to annual leave are recognised when they accrue to employees. A provision for the estimated liability for annual leave is recognised for services rendered by employees up to the reporting date. Employee share options Equity-settled share options The cost of equity-settled share options with employees is measured by reference to the fair value at the date on which the share options are granted. In valuing the share options, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company. The fair value determined at the grant date of the equity-settled options is recognised as an expense of employee share options in profit or loss with a corresponding increase in the share options reserve over the vesting period, based on the Companys estimate of shares that will eventually vest. Cash-settled share options The cost of cash-settled share options is measured initially at fair value at the grant date taking into account the terms and conditions upon which the options were granted. This fair value is expensed over the vesting period with the recognition of a corresponding liability. Until the liability is settled, it is remeasured at each reporting date with changes in fair value recognised in profit or loss. (s) Operating Leases Rental payments made under operating leases are recognised in profit or loss on a straight-line basis over the period of the leases.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 41

Notes to the Financial Statements


31 December 2010 3 SIGNIFICANT ACCOUNTING POLICIES (contd) (t) Income Tax Current income tax for current and prior year is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted and substantively enacted by the statement of financial position date. Deferred income tax is provided using the liability method on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are recognised for all temporary differences, except: Where the deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction affects neither the accounting profit nor taxable profit or loss; In respect of temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled by the Group and it is probable that the temporary differences will not reverse in the foreseeable future; and In respect of deductible temporary differences and carry-forward of unutilised tax credits and tax losses, if it is not probable that taxable profits will be available against which those deductible temporary differences and carry-forward of unutilised tax credits and tax losses can be utilised.

Unrecognised deferred tax assets are reassessed at each statement of financial position date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantially enacted at the statement of financial position date. (u) Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the management who are responsible for allocating resources and assessing performance of the operating segments.

42 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 4 REVENUE Group 2010 S$000 Sale of goods 5 FINANCE INCOME Group 2010 S$000 Interest income on fixed deposits 6 FINANCE COSTS Group 2010 S$000 Interest expense on borrowings hire purchase 2009 S$000 139 2009 S$000 39 85,218 2009 S$000 112,176

87 6 93

242 14 256

PROFIT BEFORE INCOME TAX Group 2010 S$000 This is arrived at after charging/(crediting): Cost of inventories recognised as an expense (included in cost of sales) Depreciation of plant and equipment included in: cost of sales administrative expenses Loss on disposal of plant and equipment Impairment of plant and equipment Operating lease expense Gain on de-registration of subsidiary (Write-back of)/Allowance for inventory obsolescence (Gain)/Loss on foreign exchange 2009 S$000

70,173 1,161 77 70 1,390 (800) (74)

100,844 1,604 136 443 94 1,853 (2) 178 183

There were no non-audit fees paid/payable to the Companys auditors during the financial year ended 31 December 2010 (2009: Nil).
RADIANCE GROUP LIMITED ANNUAL REPORT 2010 43

Notes to the Financial Statements


31 December 2010 8 INCOME TAX Group 2010 S$000 Income tax expense attributable to the results is made up of: Current income tax Withholding tax Cash tax rebate with regard to prior year 2009 S$000

2,551 202 (31) 2,722

1,387 103 (68) 1,422

The income tax expense on the profit before income tax varies from the amount of income tax expense determined by applying the applicable tax rates in each jurisdiction the Group operates due to the following factors: Group 2010 S$000 Profit before income tax Income tax expense calculated at applicable tax rates Non-deductible items Non-taxable income Deferred tax assets not recognised Withholding tax Cash tax rebate with regard to prior year 8,501 2,001 113 (32) 469 202 (31) 2,722 2009 S$000 2,506 586 214 587 103 (68) 1,422

The corporate tax rate applicable to the Company and those subsidiaries of the Group incorporated in Singapore is 17% (2009: 17%). In March 2007, the Enterprise Income Tax Law (EIT), effective 1 January 2008, was adopted at the Fifth Session of the Tenth National People Congress of the Peoples Republic of China (PRC) to unify income tax rates on domestic and foreign enterprises, including new preferential tax policies and tax deduction policies. Income tax rates for domestic and foreign enterprises are unified and set at 25%. Foreign enterprises that are enjoying preferential tax rates under the previous tax regime are given a 5-year transitional period before the new rate applies. The transitional tax rates, which are applicable to the subsidiaries of the Group in the PRC, based on calendar year are as follows: 2008 2009 2010 2011 2012 18% 20% 22% 24% 25%

44 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 8 INCOME TAX (contd) According to a joint circular of the Ministry of Finance and the State Administration of Taxation, Cai Shui [2008] No. 1, only the profits earned by a foreign-investment enterprise prior to 1 January 2008, when distributed to foreign investors, can be exempted from withholding tax. Whereas, dividends distributed out of the profit generated thereafter, shall be subject to EIT at 10% (or at the concessionary rate of 5%, if applicable) and withheld by the PRC entity, pursuant to Articles 3 and 27 of the EIT Law and Article 91 of its Details Implementation Rules. As at 31 December 2010, withholding tax on the portion of the undistributed earnings derived by the Groups subsidiaries in the PRC which is expected to be distributed out as dividends in the foreseeable future amounted to approximately S$570,000 (2009: S$134,000), has not been accrued as the amount is not material to the Groups financial statements. Unrecognised tax losses As at 31 December 2010, the Group has unutilised tax losses of approximately S$15,213,000 (2009: S$12,454,000) which can be carried forward and used to offset against future taxable income of those Group entities in which the losses arose, subject to agreement, the agreement of the tax authorities and compliance with the relevant provisions of the tax legislation of the respective countries in which they operate. Deferred tax asset arising from these unutilised tax losses carry forward has not been recognised in accordance with the Groups accounting policy stated in Note 3(t). The deferred tax asset not recognised is estimated to be S$2,586,000 (2009: S$2,117,000). 9 EARNINGS PER SHARE The basic earnings per share is calculated on the Groups profit for the year attributable to equity holders of the Company divided by the weighted average number of shares outstanding during the financial year. There are no dilutive potential ordinary shares as there were no share options outstanding as at 31 December 2010 and 31 December 2009. The basic and diluted earnings per share calculated based on the above is as follows: 2010 Profit for the year attributable to equity holders of the Company (S$000) Weighted average number of ordinary shares outstanding for basic and diluted earnings per share computation (000) Basic and diluted earnings per share (cents) 5,779 2009 1,084

263,771 2.19

263,771 0.41

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 45

Notes to the Financial Statements


31 December 2010 10 PLANT AND EQUIPMENT Furniture, fittings & equipment S$000

Machinery & equipment S$000 Group 2010 Cost Balance as at 1 January 2010 Currency realignment Additions Disposals Balance as at 31 December 2010 Accumulated depreciation Balance as at 1 January 2010 Currency realignment Depreciation charge Disposals Balance as at 31 December 2010 Net book value Balance as at 31 December 2010 2009 Cost Balance as at 1 January 2009 Currency realignment Additions Disposals Impairment of plant and equipment Balance as at 31 December 2009 Accumulated depreciation Balance as at 1 January 2009 Currency realignment Depreciation charge Disposals Balance as at 31 December 2009 Net book value Balance as at 31 December 2009

Motor vehicles S$000

Renovations S$000

Total S$000

13,942 (1,112) 265 (134) 12,961

948 (76) 152 (200) 824

886 (31) 78 (297) 636

205 (10) (93) 102

15,981 (1,229) 495 (724) 14,523

9,997 (832) 1,063 (133) 10,095

805 (57) 92 (192) 648

399 (19) 79 (118) 341

144 (9) 4 (37) 102

11,345 (917) 1,238 (480) 11,186

2,866

176

295

3,337

15,833 (349) 207 (1,749) 13,942

1,206 (15) 33 (276) 948

884 (8) 104 (94) 886

3,390 (5) (3,180) 205

21,313 (377) 344 (5,205) (94) 15,981

10,301 (273) 1,428 (1,459) 9,997

835 (19) 156 (167) 805

295 (8) 112 399

3,237 (4) 44 (3,133) 144

14,668 (304) 1,740 (4,759) 11,345

3,945

143

487

61

4,636

As at 31 December 2010, the net book value of the Groups motor vehicles in respect of which hire purchase instalments are outstanding amounted to S$172,000 (2009: S$299,000).
46 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 10 PLANT AND EQUIPMENT (contd) Furniture, fittings & equipment S$000 Company 2010 Cost Balance as at 1 January 2010 Additions Disposals Balance as at 31 December 2010 Accumulated depreciation Balance as at 1 January 2010 Depreciation charge Disposals Balance as at 31 December 2010 Net book value Balance as at 31 December 2010 2009 Cost Balance as at 1 January 2009 Additions Disposals Impairment of plant and equipment Balance as at 31 December 2009 Accumulated depreciation Balance as at 1 January 2009 Depreciation charge Balance as at 31 December 2009 Net book value Balance as at 31 December 2009

Motor vehicles S$000

Total S$000

16 2 (5) 13

466 (176) 290

482 2 (181) 303

8 5 (5) 8

167 31 (80) 118

175 36 (85) 126

172

177

13 7 (4) 16

543 (77) 466

556 7 (4) (77) 482

2 6 8

113 54 167

115 60 175

299

307

As at 31 December 2010, the net book value of the Companys motor vehicles in respect of which hire purchase instalments are outstanding amounted to S$172,000 (2009: S$299,000).

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 47

Notes to the Financial Statements


31 December 2010 11 INVESTMENTS IN SUBSIDIARIES Company 2010 S$000 Unquoted equity shares, at cost Less: Impairment in investment in subsidiary 25,649 (1,000) 24,649 2009 S$000 25,649 (1,000) 24,649

Details of the subsidiaries as at the end of the financial year are as follows: Percentage of equity held by the Company 2010 2009 % %

Name of subsidiaries and country of incorporation

Principal activities and place of business

Cost of investment by the Company 2010 2009 S$000 S$000

Held by the Company Radiance Manufacturing Pte Ltd(1) Singapore Radiance Cayman Ltd(2) Cayman Islands Radiance Electronics (Shenzhen) Co., Ltd(5) PRC Sino-Brilliant Energy Pte Ltd(1) Singapore

Trading and investment holding Singapore Marketing and promotion Cayman Islands Electronics manufacturing services PRC Investment holding Singapore

100 100

100 100

19,694 #

19,694 #

100 100

100 100

4,955 1,000 25,649

4,955 1,000 25,649

Name of subsidiaries and country of incorporation

Principal activities and place of business

Percentage of equity held by the Group 2010 2009 % %

Held by a Subsidiary Radiance Electronics (Shanghai) Co., Ltd(3)(5) PRC Radiance Energy Technology Co., Ltd(4)(5) PRC

Electronics manufacturing services PRC Manufacturing and investment holding PRC

100

100

100

100

48 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 11 INVESTMENTS IN SUBSIDIARIES (contd)
(1) (2) Audited by Moore Stephens LLP, Singapore. Not required to be audited by law in its country of incorporation. However, the financial statements were audited in accordance with FRS for consolidation purposes by Moore Stephens LLP, Singapore. Wholly-owned subsidiary of Radiance Manufacturing Pte Ltd. Wholly-owned subsidiary of Sino-Brilliant Energy Pte Ltd. The financial statements were audited in accordance with FRS for consolidation purposes by Moore Stephens LLP, Singapore. denotes less than S$1,000

(3) (4) (5) #

Capital Commitment and Deregistration of RET Radiance Energy Technology Co., Ltd (RET), a wholly-owned subsidiary of Sino-Brilliant Energy Pte Ltd (SBE), was incorporated with a registered capital of RMB50,000,000 to be fully paid up by 2010. As at 31 December 2010, SBE had invested approximately RMB31,000,000 (equivalent to S$6,530,000) in RET. SBE has applied for the exemption from fulfilling the outstanding capital commitment of approximately RMB19,000,000 with the relevant PRC authorities and the application was approved subsequent to the financial year end. At the date of these financial statements, RET is undergoing deregistration. However, the deregistration of RET cannot be completed before the Proceedings (see Note 25) are resolved. Moreover, the Beijing Administration for Industry and Commerce may, at its discretion, require RET to pay a fine to be determined by reference to the time delayed in finalising the deregistration to a maximum of RMB100,000 (approximately S$20,000) upon the submission of the final application by RET for deregistration. No provision has been made in the financial statements for the potential fine as the Board of Directors is of the view that the amount involved is not material. 12 DUE FROM SUBSIDIARIES Company 2010 S$000 Due from subsidiaries 1,409 2009 S$000 5,436

The amounts due from subsidiaries are non-trade in nature, unsecured, interest-free and are repayable on demand, and will be settled in cash.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 49

Notes to the Financial Statements


31 December 2010 13 INVENTORIES Group 2010 S$000 Finished products Work-in-progress Raw materials 1,065 2,743 7,561 11,369 2009 S$000 1,878 1,890 3,342 7,110

Analysis of allowance for inventory obsolescence: Balance at the beginning of the year Currency realignment (Write-back of)/Allowance recognised for the year Balance at the end of the year

3,930 (201) (800) 2,929

3,848 (96) 178 3,930

The previous allowance for inventory obsolescence recognised has been reversed, amounting to approximately S$800,000 (2009: Nil), as a result of a change in the estimate of the future demand of the Groups products based on a review carried out by the Board of Directors as at the year end. 14 TRADE RECEIVABLES Group 2010 S$000 Trade receivables Related party Third parties Less: Impairment of trade receivables (Note 28(b)(ii)) 2009 S$000

11,158 16,760 27,918 (4,911) 23,007

24,194 24,194 (5,366) 18,828

The amount due from a related party is unsecured, interest-free and repayable on normal trade terms and in cash.

50 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 15 OTHER CURRENT ASSETS Group 2010 S$000 Other receivables Deposits Purchase advances paid Other debtors Prepaid expenses 2009 S$000 2010 S$000 Company 2009 S$000

365 131 117 613 148 761

531 373 82 986 192 1,178

61 27 88 32 120

111 111 43 154

16

CASH AND CASH EQUIVALENTS Group 2010 S$000 Cash and bank balances Fixed deposits 20,109 9,006 29,115 2009 S$000 23,380 5,808 29,188 2010 S$000 68 68 Company 2009 S$000 235 235

The fixed deposits mature on varying short-term periods and earned interest ranging from 0.06% to 1.71% (2009: 0.02% to 3.00%) per annum during the financial year. For the purpose of presentation in the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following: Group 2010 S$000 Cash and bank balances Fixed deposits Less: Restricted cash Cash and cash equivalents per the consolidated statement of cash flows 20,109 9,006 29,115 (8,448) 20,667 2009 S$000 23,380 5,808 29,188 (4,355) 24,833

Restricted cash includes fixed deposits amounted to S$3,858,000 (2009: S$4,355,000) pledged with the banks for loans granted to the Group (see Note 21) and bank balances of S$4,590,000 which are subject to the Preservation Order (see Note 25).

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 51

Notes to the Financial Statements


31 December 2010 17 SHARE CAPITAL Group and Company 2010 2009 S$000 S$000 Issued and fully paid: Balance as at the beginning of the year 263,771,400 (2009: 263,771,400) ordinary shares Capital reduction Balance as at the end of the year 263,771,400 (2009: 263,771,400) ordinary shares Ordinary shares of the Company do not have any par value. The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions. On 8 June 2009, the Company completed the reduction of the issued and paid-up share capital of the Company pursuant to Sections 78A(1)(b) and 78C of the Companies Act, Chapter 50, which was approved by the Companys shareholders at the Extraordinary General Meeting held on 24 April 2010. The share capital reduction exercise was effected by the write off of accumulated losses of the Company which amounted to approximately S$6,948,000 as at 31 December 2009, reducing the share capital of the Company by the same amount. 18 RESERVES Group 2010 S$000 Capital reserve Foreign currency translation reserve Retained profits/(Accumulated losses) 4,621 (6,394) 11,489 9,716 2009 S$000 4,172 (2,752) 6,159 7,579 2010 S$000 (3,241) (3,241) Company 2009 S$000 (2,360) (2,360)

28,553 28,553

35,501 (6,948) 28,553

Movements in reserves for the Group are set out in the consolidated statement of changes in equity. Capital Reserve In accordance with the relevant laws and regulations of the PRC, the subsidiaries of the Group in the PRC are required to set aside a statutory reserve fund by way of appropriation of 10% of their profit after tax as reported in the PRC statutory financial statements each year. The statutory reserve fund may be used to offset any accumulated losses or increase the registered capital of the subsidiaries, subject to approval from the relevant PRC authorities. The appropriation is required until the cumulative total of the statutory reserve fund reaches 50% of the subsidiarys registered capital. The statutory reserve is not available for dividend distribution to shareholders.
52 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 18 RESERVES (contd) Foreign Currency Translation Reserve The foreign currency translation reserve is used to record foreign exchange differences arising from the translation of the financial statements of group entities whose functional currency is different from that of the Groups presentation currency. 19 OBLIGATIONS UNDER HIRE PURCHASE The Company has certain plant and equipment under hire purchase arrangements. Future minimum lease payments under hire purchase together with the present value of the net minimum lease payments are as follows: Present value of minimum lease payments 2010 S$000 Present value of minimum lease payments 2009 S$000

Minimum lease payments 2010 S$000 Group and Company Amount payable under hire purchase: Within 1 year Between 2 to 5 years Total minimum lease payments Less: Future finance charges Present value of minimum lease payments Less: Repayable within 1 year included under current liabilities Repayable between 2 to 5 years included under non-current liabilities

Minimum lease payments 2009 S$000

54 54 (1) 53

53 53 53

110 101 211 (11) 200

102 98 200 200

(53)

(102) 98

The effective interest rate for the Companys hire purchase arrangements was 5.43% (2009: 5.37% to 5.43%) per annum during the financial year.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 53

Notes to the Financial Statements


31 December 2010 20 OTHER PAYABLES Group 2010 S$000 Accrued operating expenses Customers advances received Other creditors Amount due to a related party 3,675 146 1,244 63 5,128 2009 S$000 5,052 635 1,502 7,189 2010 S$000 1,036 33 63 1,132 Company 2009 S$000 699 5 704

The amount due to a related party is unsecured, interest-free, and is repayable on demand. 21 BORROWINGS Group 2010 S$000 Current Secured Unsecured Total 2009 S$000 2010 S$000 Company 2009 S$000

3,858 59 3,917

3,700 45 3,745

3,700 3,700

The secured loan outstanding as at 31 December 2010 is secured over a subsidiarys bank deposit of US$3,000,000 (see Note 16) and incurred interest at 0.90% (2009: 2.56% to 2.93%) per annum during the financial year. The secured loan outstanding as at 31 December 2009 was fully repaid during the financial year. The unsecured loan outstanding, which is equivalent to US$46,000, is secured on a corporate guarantee from the Company and incurred interest at a rate of 3.68% (2009: 3.40%) per annum during the financial year. The loan was subsequently repaid in full in February 2011.

54 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 22 EMPLOYEE BENEFITS (a) Staff Costs Group 2010 S$000 Salaries, bonus and related costs (including executive directors) Defined contribution plans Staff welfare benefits 6,974 1,268 1,170 9,412 2009 S$000 11,281 1,361 1,079 13,721

(b)

Employee Share Options The Radiance Electronics Share Option Scheme 2003 (the Scheme) of the Company was approved and adopted by shareholders at an Extraordinary General Meeting held on 25 April 2003. The Scheme is administered by the Companys Remuneration Committee (the Committee). Information regarding the Scheme is as follows: The exercise price of the options (Market Price Option), at the Committees discretion, may be set at a price (the Market Price) equal to the weighted average share price of the shares for the last trading day immediately preceding the relevant date of the grant of the option or the nominal value of the shares, whichever is greater, or at a discount to the Market Price (Discounted Option), subject to a maximum discount of 20%. The options may be exercised after 1 year after the grant for a Market Price Option and 2 years for a Discounted Option. The options granted will expire after 5 years for non-executive directors and 10 years for the employees including executive directors of the Group. No Discounted Options have been granted.

No share options were granted during the financial year (2009: Nil) and there were no outstanding share options as at 31 December 2010 (2009: Nil).

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 55

Notes to the Financial Statements


31 December 2010 23 RELATED PARTY TRANSACTIONS (a) Transactions with Related Parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party, or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. In addition to the related party information disclosed elsewhere in the financial statements, the Group had significant transactions with a related party during the financial year on terms agreed between the parties as follows: Group 2010 S$000 With companies which have common shareholders/directors Sales to a related party Purchases from a related party Other income charged to a related party Other expenses charged from a related party (b) Compensation of Directors and Key Management Group 2010 S$000 Salaries, bonus and related costs Directors fees Defined contribution plans 1,098 128 24 1,250 2009 S$000 2,381 240 27 2,648 2009 S$000

(16,587) 6 (299) 65

Comprise amounts paid/payable to: Directors of the Company Key management

491 759 1,250

2,050 598 2,648

56 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 24 COMMITMENTS Operating Lease Commitment As at 31 December 2010, the Group had entered into several operating lease commitments for factory buildings and office premises. These leases have an average lease life of between 2 and 3 (2009: 1 and 5) years with no restrictions placed upon the Group by entering into these leases. The leases have varying terms, escalation clauses and renewal rights. At the end of the financial year, the future minimum rentals payable under non-cancellable operating leases are as follows: Group 2010 S$000 Future minimum lease payments: Within 1 year Between 2 to 5 years 25 STATEMENT OF CLAIM In May 2010, the Groups wholly-owned subsidiary, Radiance Energy Technology Co., Ltd (RET), incorporated in Beijing, PRC, received a Statement of Claim from Thumb Mining Investments Co., Ltd (Thumb Mining), a company incorporated in Beijing, PRC, filed with the Beijing No. 2 Intermediate Peoples Court (the Beijing Intermediate Court), claiming RMB28,000,000 in compensation for economic loss suffered as a result of an alleged breach of a lease agreement and for affecting the normal operations of Thumb Mining. The Beijing Intermediate Court dismissed the claim filed by Thumb Mining in August 2010. In September 2010, RET was served with the same Statement of Claim by DaDing Century Properties Holdings Limited (DaDing Century), the new name of Thumb Mining, with the Beijing Chaoyang District Peoples Court (the Beijing District Court). Consequently, an asset preservation order was granted by the Beijing District Court against RET freezing RETs bank account with balances totalling approximately RMB23,000,000 on (approximately S$4,600,000) (the Preservation Order) (the Statement of Claim and Preservation collectively referred to as Proceedings). RET had made submissions to the Beijing Intermediate Court objecting to the Beijing District Courts jurisdiction to hear the claim by DaDing Century and request that the matter be directed back to the Beijing Intermediate Court which had dismissed the same previous claim by Thumb Mining. However, the Beijing Intermediate Court has rejected RETs objection based on its ruling in December 2010. RET had subsequently filed a further complaint with the Beijing High Court in this regard. The first hearing of the Proceedings was held in February 2011 and the outcome of the Proceedings remains at the date of these financial statements. As advised by the Companys legal counsel, in accordance with the Civil Procedure Law of the PRC, the Court has to grant the judgement by July 2011 and the whole procedure of the Proceedings will be extended for another three months if any party appeals the Courts decision to a higher court. 2009 S$000 2010 S$000 Company 2009 S$000

1,038 92

842 1,012

240

240 240

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 57

Notes to the Financial Statements


31 December 2010 25 STATEMENT OF CLAIM (contd) Notwithstanding the above, the Board of Directors of the Company is of the view that the claim by DaDing Century is without merit and the Company intends to vigorously defend the claim. On the basis of the advice of the Companys legal counsel, RET stands a good prospects in obtaining a favourable judgement from the Court. Accordingly, no provision has been made in the financial statements in respect of the claim. 26 CORPORATE GUARANTEE As disclosed in Note 21, the Company has provided a corporate guarantee of US$1,000,000 (2009: US$1,000,000) to a bank for a borrowing by a subsidiary of the Group. The loan outstanding was approximately S$59,000 (equivalent to US$46,000) (2009: S$45,000) as at 31 December 2010. The fair value of the above corporate guarantee has not been recognised in the financial statements of the Company, as the amount involved is, in the opinion of the Board of Directors, not material to the Company and has no impact on the consolidated financial statements of the Group. 27 SEGMENT INFORMATION The business of the Group is organised into the following product segments: Satellite Communications (SC) Computer Peripherals (CP) Other Products (OP) Management & Investment Activities (M&I)

For management purposes, the Group is organised into business segments based on their products as the Groups risks and rates of return are affected predominantly by differences in the products produced. Each product segments represents a strategic business unit and management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. The accounting policies of the reportable segments are the same as the Groups accounting policies discussed in Note 3. Segment results represent the profit earned by each segment without allocation of finance income/costs and taxation. Assets of the Group are organised interchangeably between the different segments and there is no reasonable basis to allocate liabilities of the Group between the different segments. Accordingly, assets and liabilities of the Group are disclosed as unallocated in the segment information. Segment revenue includes transfers between operating segments. Such transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods. The transfers are eliminated on consolidation. No operating segments have been aggregated to form the following reportable operating segments.

58 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 27 SEGMENT INFORMATION (contd) (a) Reportable Operating Segments SC S$000 2010 External revenue Inter-segment revenue Total revenue Segment results Finance income Finance costs Income tax Profit for the year Depreciation of plant and equipment Addition to plant and equipment Write-back of inventory obsolescence Assets and liabilities Unallocated assets Non-current assets Inventories Trade receivables Other current assets Cash and cash equivalents Total assets Unallocated liabilities Trade and other payables Borrowings and hire purchase Provision for income tax Total liabilities CP S$000 OP S$000 M&I S$000 Elimination S$000 Group S$000

41,985 1,344 43,329 5,507

459 459 109

42,774 1,840 44,614 6,471

4,939 4,939 (289)

(8,123) (8,123) (3,343)

85,218 85,218 8,455 139 (93) (2,722) 5,779 1,238 495 (800)

3,419 11,369 23,007 761 29,115 67,671

24,445 3,970 987 29,402

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 59

Notes to the Financial Statements


31 December 2010 27 SEGMENT INFORMATION (contd) (a) Reportable Operating Segments (contd) SC S$000 2009 External revenue Inter-segment revenue Total revenue Segment results Finance income Finance costs Income tax Profit for the year Depreciation of plant and equipment Addition to plant and equipment Assets and liabilities Unallocated assets Non-current assets Inventories Trade receivables Other current assets Cash and cash equivalents Total assets Unallocated liabilities Trade and other payables Borrowings and hire purchase Provision for income tax Total liabilities CP S$000 OP S$000 M&I Elimination Group S$000 S$000 S$000

67,184 281 67,465 4,448

337 337 30

44,655 11,108 55,763 2,244

2,875 2,875 (3,929)

(14,264) (14,264) (70)

112,176 112,176 2,723 39 (256) (1,422) 1,084 1,740 344

4,718 7,110 18,828 1,178 29,188 61,022

20,473 3,945 472 24,890

Plant and equipment purchased by the Group are used interchangeably in the manufacture of the different product categories. Accordingly, additions to plant and equipment and depreciation of plant and equipment are disclosed unallocated in this segment reporting.

60 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 27 SEGMENT INFORMATION (contd) (b) Geographical Information Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows: Others (principally Hong Kong and China) S$000

Asean S$000 2010 Total revenue from external customers Non-current assets 2009 Total revenue from external customers Non-current assets (c) Information about Major Customers

North America S$000

Europe S$000

Group S$000

16 289

16,134

62,027

7,041 3,130

85,218 3,419

425

9,534

80,900

21,742 4,293

112,176 4,718

Included in revenue arising from the Satellite Communications and Other Products segments of S$84,759,000 (2009: S$111,839,000) are sales of approximately S$58,752,000 (2009: S$84,218,000) which are sales to the Groups 2 largest customers.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 61

Notes to the Financial Statements


31 December 2010 28 FINANCIAL RISK MANAGEMENT The Groups activities expose it to a variety of market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Groups overall risk management strategy seeks to minimise adverse effects from the unpredictability of financial markets on the Groups financial performance. The Board of Directors of the Company is responsible for setting the objectives and underlying principles of financial risk management for the Group. The Audit Committee provides independent oversight to the effectiveness of the risk management process. The following sections provide details regarding the Groups and Companys exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. (a) Market Risk (i) Currency Risk Certain of the Groups transactions are denominated in foreign currencies such as United States Dollar (USD), Renminbi (RMB) and Hong Kong Dollar (HKD). As a result, the Group is exposed to movements in foreign currency exchange rates. The Group does not use derivative financial instruments to hedge against the volatility associated with foreign currency transactions. The Group is also exposed to currency translation risk arising from its net investments in foreign subsidiaries, primarily in the PRC. The Groups currency exposure based on the information provided to key management is as follows: SGD S$000 2010 Financial assets Cash and cash equivalents Trade receivables Other current assets USD S$000 RMB S$000 HKD S$000 Others S$000 Total S$000

271 125 396

23,882 22,662 279 46,823

4,920 345 205 5,470

39 4 43

3 3

29,115 23,007 613 52,735

Financial liabilities Borrowings Obligations under hire purchase Trade and other payables

(3,917) (53) (1,371) (18,295) (1,424) (22,212) (1,028) 24,611

(4,188) (4,188) 1,282

(382) (382) (339)

(3,917) (53) (63) (24,299) (63) (28,269) (60) 24,466

Net financial assets/(liabilities) Less: Net financial liabilities/(assets) denominated in the Groups entities functional currency Currency exposure

1,008 (20)

(24,578) 33

(4,376) (3,094)

(339)

(60)

(27,946) (3,480)

62 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 28 FINANCIAL RISK MANAGEMENT (contd) (a) Market Risk (contd) (i) Currency Risk (contd) SGD S$000 2009 Financial assets Cash and cash equivalents Trade receivables Other current assets USD S$000 RMB S$000 HKD S$000 Others S$000 Total S$000

408 174 582

20,495 18,788 314 39,597

8,246 40 498 8,784

36 36

3 3

29,188 18,828 986 49,002

Financial liabilities Term loans Obligations under hire purchase Trade and other payables

(3,700) (45) (200) (996) (12,239) (4,896) (12,284) (4,314) 27,313

(6,383) (6,383) 2,401

(220) (220) (184)

(3,745) (200) (19,838) (23,783) 25,219

Net financial assets/(liabilities) Less: Net financial liabilities/(assets) denominated in the Groups entities functional currency Currency exposure

4,272 (42)

(27,307) 6

(5,144) (2,743)

(184)

(28,179) (2,960)

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 63

Notes to the Financial Statements


31 December 2010 28 FINANCIAL RISK MANAGEMENT (contd) (a) Market Risk (contd) (i) Currency Risk (contd) If the USD, RMB and HKD change against the SGD by 5% with all other variables including tax rates being held constant, the effects arising from the net financial assets/liabilities position will be as follows: Increase/ (Decrease) Profit after tax Profit after tax 2010 2009 S$000 S$000 Group USD against SGD strengthened weakened RMB against SGD strengthened weakened HKD against SGD strengthened weakened (ii) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of the Groups and the Companys financial instruments will fluctuate because of changes in market interest rates. The Groups exposure to interest rate risk arises primarily from its borrowings. Information relating to the Groups interest rate exposure is disclosed in Note 21 on the Groups borrowings. The Group usually obtains additional financing through bank borrowings and its policy is to obtain the most favourable interest rates available. Surplus funds are placed with reputable banks for better yield returns than cash at banks and/or to satisfy conditions for banking facilities granted to the Group. The sensitivity analysis to a reasonably possible change in interest rates, with all other variables held constant, of the Groups profit after tax has not been disclosed as the Groups exposure to changes in market interest rates is not significant.

2 (2)

(155) 155

(137) 137

(17) 17

(9) 9

64 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 28 FINANCIAL RISK MANAGEMENT (contd) (b) Credit Risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. For trade receivables, the Group adopts the policy of dealing only with customers with an appropriate credit history, and obtaining sufficient security where appropriate to mitigate credit risk. For other financial assets, the Group adopts the policy of dealing only with high credit quality counterparties. Credit exposure to an individual counterparty is restricted by credit limits that are approved by the management based on an ongoing credit evaluation. The counterpartys payment profile and credit exposure are continuously monitored at the entity level and at the Group level by management. Where appropriate, the Group obtains advance payments from its major customers. The Group has a significant concentration of credit risk from its trade receivables as approximately 93% (2009: 80%) of the trade receivables outstanding as at the end of the financial year are owing from not more than 5 (2009: not more than 5) customers. As the Group does not hold any material collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the statement of financial position. The credit risk for trade receivables based on the information provided to key management is as follows: Group 2010 S$000 By Geographical Areas Asean North America Europe Others (principally Hong Kong and China) 2009 S$000

30 2,021 19,238 1,718 23,007

2,509 14,745 1,574 18,828

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 65

Notes to the Financial Statements


31 December 2010 28 FINANCIAL RISK MANAGEMENT (contd) (b) Credit Risk (contd) (i) Financial Assets that are Neither Past Due nor Impaired Bank deposits that are neither past due nor impaired are mainly deposits with banks with high creditratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group is as follow: Group 2010 S$000 Trade receivables: Not past due and not impaired (ii) Financial Assets that are Past Due and/or Impaired There is no other class of financial assets that is past due and/or impaired except for trade receivables. The age analysis of the Groups trade receivables past due as at the date of the statement of financial position but not impaired is as follows: Group 2010 S$000 Trade receivables past due: 0 to 30 days 31 to 60 days 61 to 90 days Over 91 days 6,042 2,564 882 4 9,492 2009 S$000 4,561 445 596 673 6,275 13,515 2009 S$000 12,553

The Groups trade receivables that are impaired at the date of the statement of financial position and the movement of the allowance account used to record the impairment is as follows: Group 2010 S$000 Trade receivables Less: Allowance for impairment 4,911 (4,911) 5,366 (455) 4,911 2009 S$000 5,366 (5,366) 5,495 (129) 5,366

Balance at the beginning of the year Currency realignment Balance at the end of the year (Note 14)
66 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 28 FINANCIAL RISK MANAGEMENT (contd) (c) Liquidity Risk Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Groups exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and financial liabilities. The Groups objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities. In the management of its liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Groups operations and mitigate the effects of fluctuations in cash flows. The table below analyses the maturity profile of the Groups and the Companys financial liabilities based on contractual undiscounted cash flows. Carrying amount S$000 Group 2010 Trade and other payables Borrowings Obligations under hire purchase Contractual cash flows S$000 Less than 1 year S$000 Between 2 to 5 years S$000

24,299 3,917 53 28,269

24,299 3,925 54 28,278

24,299 3,925 54 28,278

2009 Trade and other payables Borrowings Obligations under hire purchase

19,838 3,745 200 23,783

19,838 3,829 211 23,878

19,838 3,829 110 23,777

101 101

Company 2010 Other payables Borrowings Obligations under hire purchase

1,132 53 1,185

1,132 54 1,186

1,132 54 1,186

2009 Other payables Borrowings Obligations under hire purchase

704 3,700 200 4,604

704 3,784 211 4,699

704 3,784 110 4,598

101 101

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 67

Notes to the Financial Statements


31 December 2010 28 FINANCIAL RISK MANAGEMENT (contd) (c) Liquidity Risk (contd) The table below shows the contractual expiry by maturity of the Companys corporate guarantee. The maximum amount of the financial guarantee contract is allocated to the earliest period in which the guarantee could be called. Less than Less than 1 year 1 year 2010 2009 S$000 S$000 Company Financial guarantee (Note 26) (d) Capital Risk The Groups objectives when managing capital are to safeguard the Groups ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholders value. The Group manages its capital structure, and makes adjustment to it, in the light of changes in economic conditions. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings. No changes were made in the objectives, policies or processes during the financial years ended 31 December 2010 and 2009. As disclosed in Note 18, the Groups subsidiaries in the PRC are required to contribute to and maintain a nondistributable statutory reserve fund whose utilisation is subject to approval by the relevant PRC authorities. This externally imposed capital requirement has been complied with by the relevant subsidiaries for the financial years ended 31 December 2010 and 2009. The Group monitors capital using a net-debt-to-equity ratio, which is net debt divided by total equity. In general, the Groups policy is to keep the ratio within 50%. The Group includes within net debt, borrowings and hire purchase, trade and other payables, less cash and cash equivalents. Capital includes equity attributable to the equity holders of the Company. Group 2010 2009 S$000 S$000 Borrowings and hire purchase Trade and other payables Less: Cash and cash equivalents (Net cash)/Net debt Equity attributable to the equity holders of the Company 3,970 24,445 (29,115) (700) 38,269 3,945 20,473 (29,188) (4,770) 36,132

1,286

1,405

As the Group was in a net cash position as at 31 December 2010 and 2009, the disclosure on net-debt-toequity ratio is not meaningful.
68 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notes to the Financial Statements


31 December 2010 29 FAIR VALUE OF FINANCIAL INSTRUMENTS Where possible, fair values have been estimated using market prices for the financial instruments. Where market prices are not available, values have been estimated using quoted prices for financial instruments with similar characteristics, or otherwise using a suitable valuation technique where it is practicable to do so. The fair value information presented represents the Groups best estimate of those values, subject to certain assumptions and limitations. The methodologies and assumptions used in estimating fair values depend on the terms and risk characteristics of the various instruments and include the following: (a) Obligations Under Hire Purchase In the opinion of the Board of Directors of the Company, the fair value of obligations under hire purchase approximates the present value of payments disclosed in Note 19. (b) Other Financial Assets and Financial Liabilities The carrying amounts of other financial assets and financial liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, trade and other payables and borrowings) are assumed to approximate their fair values because of their short periods to maturity. 30 SUBSEQUENT EVENTS On 25 January 2011, the Company convened an Extraordinary General Meeting (EGM) for the shareholders ratification, confirmation and approval of the transactions entered into between the Group and GIL from 1 August 2010 to the date of the EGM and the proposed interested person transactions mandate for future interested person transactions. All resolutions relating to the above were duly passed during the EGM.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 69

Shareholders Information
SHAREHOLDERS INFORMATION AS AT 15 MARCH 2011 Number of shares issued Class of shares Voting rights : : : 263,771,400 Ordinary shares One vote per share

DISTRIBUTION OF SHAREHOLDINGS Size of Shareholdings 1 999 1,000 10,000 10,001 1,000,000 1,000,001 and above No. of Shareholders 48 123 444 20 635 % 7.56 19.37 69.92 3.15 100.00 No. of Shares 19,644 540,000 40,969,939 222,241,817 263,771,400 % 0.01 0.20 15.53 84.26 100.00

TREASURY SHARES Pursuant to Rule 1207(9)(f) of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Company does not hold any treasury shares. TWENTY LARGEST SHAREHOLDERS No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Name of Shareholders Kim Eng Securities Pte. Ltd. Phillip Securities Pte Ltd OCBC Securities Private Ltd Bank of China Nominees Pte Ltd Boon Suan Lee United Overseas Bank Nominees Pte Ltd Bank of East Asia Nominees Pte Ltd UOB Kay Hian Pte Ltd HSBC (Singapore) Nominees Pte Ltd Hong Leong Finance Nominees Pte Ltd Lim & Tan Securities Pte Ltd Ng Choon Ngoi @ Ng Choon Ngo CIMB Securities (Singapore) Pte Ltd DBS Vickers Securities (S) Pte Ltd Neo Hock Tien or Goh Peck Hoon Neo Keng Lim Xu Ming Koh Jiak Chuang or Heng Boon Choo Tan Tien Seng Steven Ng Cheong Lian Total No. of Shares 149,627,093 16,833,800 9,562,500 6,696,000 6,688,000 5,039,800 4,070,000 3,388,800 2,500,000 2,354,824 2,353,000 2,199,000 1,983,000 1,564,000 1,406,000 1,359,000 1,265,000 1,182,000 1,100,000 1,070,000 222,241,817 % 56.73 6.38 3.63 2.54 2.54 1.91 1.54 1.28 0.95 0.89 0.89 0.83 0.75 0.59 0.53 0.52 0.48 0.45 0.42 0.41 84.26

70 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Shareholders Information
SUBSTANTIAL SHAREHOLDERS (As recorded in the Register of Substantial Shareholders) Direct Interest Vistra Corporate Services Limited as Trustee of The Pacific Trust Prospect China Limited 148,527,093 14,000,000 % 56.31 5.31 Deemed Interest %

SHAREHOLDINGS HELD IN THE HANDS OF PUBLIC Based on the information available and to the best knowledge of the Company, as at 15 March 2011, approximately 38.01% of the issued ordinary shares of the Company are held by the public. Accordingly, the Company has complied with Rule 723 of the Listing Manual issued by the Singapore Exchange Securities Trading Limited.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 71

Notice of Annual General Meeting


NOTICE IS HEREBY GIVEN that the Annual General Meeting of RADIANCE GROUP LIMITED (the Company) will be held at Suntec Singapore International Convention & Exhibition Centre, Meeting Room 307, Level 3, 1 Raffles Boulevard, Suntec City, Singapore 039593 on Wednesday, 27 April 2011 at 10.00 a.m. for the following purposes: AS ORDINARY BUSINESS 1. To receive and adopt the Directors Report and the Audited Accounts of the Company for the year ended 31 December 2010 together with the Auditors Report thereon. (Resolution 1) To re-elect the following Directors retiring pursuant to Article 88 of the Companys Articles of Association: Anthony Brian Taylor Gary Patrick Stafford Malcolm John Burrell John Lim Yew Kong (Resolution (Resolution (Resolution (Resolution 2) 3) 4) 5)

2.

Mr Anthony Brian Taylor will, upon re-election as a Director of the Company, remain as the Chairman of the Board and a member of the Nominating Committee. Mr John Lim Yew Kong will, upon re-election as a Director of the Company, remain as Lead Independent Director, Chairman of the Audit Committee and a member of the Remuneration and Nominating Committees respectively and will be considered independent for the purpose of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited. 3. To approve the payment of Directors fees of S$158,230 for the year ended 31 December 2010 (FY2010) (2009: S$127,500). (Resolution 6) To approve the payment of Directors fees of S$280,000 for the year ending 31 December 2011 (FY2011), to be paid quarterly, at the end of each calendar quarter. [See Explanatory Note (i)] (Resolution 7) To re-appoint Moore Stephens LLP as the Companys Auditors and to authorise the Directors to fix their remuneration. (Resolution 8) To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

4.

5.

6.

72 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notice of Annual General Meeting


AS SPECIAL BUSINESS To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 7. Authority to allot and issue shares up to 50 per centum (50%) of the total number of issued shares That pursuant to Section 161 of the Companies Act, Chapter 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, authority be given to the Directors of the Company to issue shares (Shares) whether by way of rights, bonus or otherwise, and/or make or grant offers, agreements or options (collectively, Instruments) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares at any time and upon such terms and conditions and to such persons as the Directors may, in their absolute discretion, deem fit provided that: (a) the aggregate number of Shares (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed fifty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, of which the aggregate number of Shares and convertible securities to be issued other than on a pro rata basis to all shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company; for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (a) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) of the Company as at the date of the passing of this Resolution, after adjusting for: (i) (ii) (iii) (c) new shares arising from the conversion or exercise of convertible securities; new shares arising from exercising share options or vesting of Share awards outstanding or subsisting at the time this Resolution is passed; and any subsequent bonus issue, consolidation or subdivision of shares;

(b)

and that such authority shall, unless revoked or varied by the Company in general meeting, continue in force (i) 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 earlier or (ii) in the case of shares to be issued in accordance with the terms of convertible securities issued, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of such convertible securities. [See Explanatory Note (ii)] (Resolution 9)

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 73

Notice of Annual General Meeting


8. Authority to allot and issue shares under the Radiance Electronics Share Option Scheme 2003 That pursuant to Section 161 of the Companies Act, Chapter 50, the Directors be authorised and empowered to allot and issue shares in the capital of the Company to all the holders of options granted by the Company, whether granted during the subsistence of this authority or otherwise, under the Radiance Electronics Share Option Scheme 2003 (the Scheme) upon the exercise of such options and in accordance with the terms and conditions of the Scheme, provided always that the aggregate number of additional ordinary shares to be allotted and issued pursuant to the Scheme shall not exceed fifteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time. [See Explanatory Note (iii)] (Resolution 10) 9. Renewal of Shareholders Mandate for Interested Person Transactions That for the purposes of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited: (a) approval be given for the renewal of the mandate for the Company, its subsidiaries and target associated companies or any of them to enter into any of the transactions falling within the types of Interested Person Transactions as set out in the Appendix to the Companys Annual Report dated 31 March 2011 (the Appendix A) with any party who is of the class of Interested Persons described in Appendix A, provided that such transactions are carried out in the normal course of business, at arms length and on commercial terms and in accordance with the guidelines of the Company for Interested Person Transactions as set out in Appendix A (the IPT Mandate); the IPT Mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the date that the next Annual General Meeting is held or is required by law to be held, whichever is earlier; the Audit Committee of the Company be and is hereby authorised to take such action as it deems proper in respect of such procedures and/or to modify or implement such procedures as may be necessary to take into consideration any amendment to Chapter 9 of the Listing Manual of the SGX-ST which may be prescribed by the SGX-ST from time to time; and authority be given to the Directors to complete and do all such acts and things (including executing all such documents as may be required) as they may consider necessary, desirable or expedient to give effect to the IPT Mandate as they may think fit. [See Explanatory Note (iv)] (Resolution 11)

(b)

(c)

(d)

By Order of the Board

Yvonne Choo Lim Keng San Shirley Company Secretaries Singapore 11 April 2011

74 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Notice of Annual General Meeting


Explanatory Notes on Resolutions to be passed: (i) The Ordinary Resolution 7 proposed in item 4 above, if passed, will facilitate the payment of Directors fees during the financial year in which the fees are incurred, that is, during FY2011. The amount of the Directors fees is computed based on the Directors fees structure adopted by the Remuneration Committee. The Ordinary Resolution 9 proposed in item 7 above, if passed, will empower the Directors from the date of the above meeting until the date of the next Annual General Meeting, to allot and issue Shares and convertible securities in the Company up to an amount not exceeding fifty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to twenty per centum (20%) may be issued other than on a pro rata basis. The Ordinary Resolution 10 proposed in item 8 above, if passed, will empower the Directors of the Company, to allot and issue shares in the Company of up to a number not exceeding in total fifteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time pursuant to the exercise of the options under the Scheme. The Ordinary Resolution 11 proposed in item 9 above, if passed, will authorise the Interested Person Transactions as described in the Appendix A to the Annual Report and recurring in the year and will empower the Directors to do all acts necessary to give effect to the IPT Mandate. This authority will, unless previously revoked or varied by the Company at a general meeting, expire at the conclusion of the next Annual General Meeting of the Company.

(ii)

(iii)

(iv)

Notes: 1. A Member entitled to attend and vote at the Annual General Meeting (the Meeting) is entitled to appoint not more than two (2) proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company. If the appointor is a corporation, the instrument appointing a proxy must be executed under seal or the hand of its duly authorised officer or attorney. The instrument appointing a proxy must be deposited at the registered office of the Company at 9 Temasek Boulevard, #32-02A Suntec Tower Two, Singapore 038989 not less than forty-eight (48) hours before the time appointed for holding the Meeting.

2.

3.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 75

Appendix A

RADIANCE GROUP LIMITED


(Incorporated in the Republic of Singapore) (Company Registration No.: 200202428H) If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. If you have sold or transferred all your shares in the capital of Radiance Group Limited, please forward this Appendix A immediately to the purchaser or transferee or to the bank, stockbroker or agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or referred to, or opinions expressed in this Appendix A. Capitalised terms used in this Appendix A are defined in Appendix A-1 below. APPENDIX A THE PROPOSED RENEWAL OF THE GENERAL MANDATE FOR INTERESTED PERSON TRANSACTIONS 1. 1.1 INTRODUCTION Proposed Resolution No. 11 in the Notice of the Annual General Meeting dated 11 April 2011 relates to the renewal of a general mandate to authorise the Company, its subsidiaries and Associated Companies that are considered to be entities at risk within the meaning of Chapter 9 of the Listing Manual, to enter in the ordinary course of business into any of the mandated transactions with specified classes of the Companys Interested Persons, provided that such transactions are made on normal commercial terms and in accordance with the review procedures for such transactions. At an extraordinary general meeting of the Company held on 25 January 2011, Shareholders approved the IPT Mandate. The purpose of this Appendix A is to provide Shareholders of the Company with information pertaining to the proposed renewal of the IPT Mandate. RENEWAL OF THE IPT MANDATE Under Chapter 9 of the Listing Manual, a general mandate for transactions with interested persons is subject to annual renewal. The IPT Mandate which was previously approved at an extraordinary general meeting of the Company on 25 January 2011 will continue to be in force until the conclusion of the next AGM to be held on 27 April 2011. The scope of the existing IPT Mandate is set out in paragraph 4 of this Appendix A below. It is proposed that the IPT Mandate be renewed at the upcoming AGM, to take effect until the conclusion of the AGM of the Company in April 2012. The nature of the Interested Person Transactions and the classes of Interested Persons in respect of which the renewal of the IPT Mandate is sought remains unchanged.

1.2

2. 2.1

2.2 2.3

76 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Appendix A
3. 3.1 BACKGROUND AND RATIONALE FOR THE IPT MANDATE The Group, through its subsidiary, Radiance Shanghai, has been providing electronics manufacturing services on a recurring basis to GIL since 1999, pursuant to the terms contained in the Manufacturing Agreement. Radiance Manufacturing, Radiance Shanghai and GIL entered into a new manufacturing agreement on 27 January 2011 (New Manufacturing Agreement) to continue the electronics manufacturing services to replace the existing Manufacturing Agreement which was to have expired on 30 March 2011. The terms of the New Manufacturing Agreement are substantially similar to the Manufacturing Agreement save that Radiance Manufacturing is also a party to the New Manufacturing Agreement and assumes the role of seller to enter into the Interested Person Transactions with GIL within the scope of the IPT Mandate, whereas Radiance Shanghai assumes the role of a subcontractor who will carry out the actual electronics manufacturing services. GIL is the main customer of the Group in respect of the Groups provision of electronics manufacturing services of components for satellite communications products, and the Group is the main appointed vendor of the satellite communications products to GIL. Under the existing IPT Mandate, orders from GIL are sent to Radiance Shanghai by way of purchase orders. Under the terms of the New Manufacturing Agreement, purchase orders will be sent to Radiance Manufacturing; however the actual electronics manufacturing services will continue to be provided by Radiance Shanghai as a sub-contractor. Such electronics manufacturing services include the manufacture of components for satellite communications products such as low noise block converters and satellite signal distribution equipment and accessories such as multiswitches, high isolation switches, booster splitters and distribution amplifiers. As the components manufactured for GIL are highly customised and specific for GILs purposes, the Group does not sell any of such components to non-interested third parties. It is envisaged that in the ordinary course of business, transactions between the Group and the GIL Group are likely to continue to occur frequently. Such transactions would include, but are not limited to, the provision of goods and services in the ordinary course of business of the Group to the GIL Group. These transactions occur frequently and constitute a core component of the Groups business. In view of the time-sensitive nature and the frequency of commercial transactions between the Group and GIL Group, obtaining a renewal of the IPT Mandate pursuant to Chapter 9 of the Listing Manual will enable: (a) (b) the Company; and subsidiaries of the Company (excluding subsidiaries listed on the SGX-ST or an approved exchange)

3.2

3.3

3.4

3.5

or any of them, in the ordinary course of their business, to enter into the categories of transactions set out in Section 4 below with the specified Interested Person as set out in Section 5 below which are necessary for the day-to-day operations of the Group, provided such Interested Person Transactions are carried out on an arms length basis and made on normal commercial terms.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 77

Appendix A
3.6 Benefits to Shareholders (a) The IPT Mandate will eliminate the need for the Company to announce, or to announce and convene separate general meetings on each occasion to seek Shareholders prior approval for the entry by the Group into, such Interested Person Transactions. This will substantially reduce the expenses associated with the convening of general meetings (including the engagement of external advisers and preparation of documents) on an ad hoc basis, improve administrative efficacy considerably, and allow manpower resources and time to be channelled towards attaining the Groups business objectives. The IPT Mandate is intended to facilitate transactions in the normal course of business of the Group which are transacted from time to time with the GIL Group, provided that they are carried out on an arms length basis and on normal commercial terms, and are not prejudicial to the interests of the Company and its minority Shareholders.

(b)

4. 4.1

SCOPE OF THE IPT MANDATE The Group envisages that in the ordinary course of their business, transactions between the Group and the GIL Group are likely to occur frequently. Such transactions would be limited to transactions stated in Section 3.4. For the avoidance of doubt, there will be no sale or purchase of any assets, undertakings or businesses within the scope of the IPT Mandate. The IPT Mandate will not cover any transactions by a member in the Group with an Interested Person that is below S$100,000 in value as Chapter 9 of the Listing Manual provides that such transactions be excluded from the threshold and aggregation requirements of Chapter 9. Transactions with other Interested Persons (other than the GIL Group) that do not fall within the ambit of the IPT Mandate will be subject to the relevant provisions of Chapter 9 of the Listing Manual and/or other applicable provisions of the Listing Manual. CLASS OF INTERESTED PERSON The IPT Mandate applies to the Interested Person Transactions (as described in Section 3 above) which are carried out with the GIL Group1.

4.2

4.3

4.4

5.

As The Pacific Trust is a discretionary trust for the benefit of, inter alia, all bona fide employees of any member of the GIL Group (which currently includes directors and shareholders of GIL), the SGX-ST is of the view that GIL is not wholly independent of The Pacific Trust and therefore, although GIL is not an Associate of The Pacific Trust as defined under the Listing Manual, it is an Interested Person for the purposes of Rule 904(4) of the Listing Manual.

78 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Appendix A
6. 6.1 GUIDELINES AND REVIEW PROCEDURES FOR INTERESTED PERSON TRANSACTIONS Review Procedures for the Provision of Electronics Manufacturing Services to GIL Group The Group has internal procedures in place to ensure that the Interested Persons Transactions are undertaken on an arms length basis and on normal commercial terms which are no more favourable to the Interested Person than those extended to unrelated third parties and are in the interest of the Company and are not prejudicial to the interests of the Company and its minority Shareholders. In particular, the following review procedures have been and shall continue to be implemented: (a) Transactions entered into by the Group with the GIL Group, approved by the relevant approving authority (as identified in the table below) are to be carried out on prevailing market rates or prices, on terms which are no more favourable to the GIL Group than commercial terms which the Group would extend to unrelated third parties for the provision of similar electronics manufacturing services. The relevant approving authority will consider whether the pricing of the transaction is in accordance with the Groups usual business practices and pricing policies.

(b)

The General Manager will conduct an estimated costing of the electronics manufacturing service or product to be provided or sold and a mark-up on the cost will be made when providing the quote to the Interested Person. In determining the mark-up, the margin achieved will be comparable to margins achieved when providing similar electronics manufacturing services to unrelated third parties. In reviewing the prices and terms, all pertinent factors including but not limited to, prevailing market conditions, quantity, volume, material and labour consumption, customer requirements, product specifications, duration of contract, strategic purpose of the transaction or the resources available to the Group will be taken into consideration. If the relevant approving authority has any interest in the transaction, then he/she shall not be involved in the decision making process. Each purchase order between the Group and the GIL Group in relation to the provision of electronics manufacturing services of satellite communications components will be monitored as an individual transaction and, based on the value of the transaction, will require the prior approval of the corresponding approving authority who is a Director or management employee of the Group (not being an Interested Person or its Associate) and does not have any interest, whether direct or indirect, in relation to the transaction as follows: Approval Limits < 3% of latest audited NTA 3% of latest audited NTA Relevant Approving Authority General Manager (not being an Associate of the Interested Person) Audit Committee

The above approval limits have been arrived at by the Group after taking into consideration the nature and size of the transactions, so as to provide for business efficiency and at the same time ensure that material transactions with the Interested Person are reviewed and approved by the Audit Committee. In reviewing and approving transactions equal or exceeding 3% of the Groups latest audited NTA, the Audit Committee will consider the estimated costing and the mark-up described above in respect of the electronics manufacturing service or product to be provided or sold. All transactions will be properly documented and a quarterly report will be forwarded to the Audit Committee for its review and approval.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 79

Appendix A
6.2 Register of Interested Person Transactions The Company will maintain a register of all Interested Person Transactions carried out with the GIL Group pursuant to the IPT Mandate which shall include all information pertinent to the evaluation of the Interested Person Transactions such as, but not limited to, the amount of the Interested Person Transactions, the basis for determining the transaction prices and supporting evidence and quotations obtained to support such basis. The register of Interested Person Transactions shall be prepared, maintained and monitored by personnel of the Company (not being an Associate of the Interested Person) who are duly delegated to do so by the Audit Committee, and shall be reviewed by internal auditors on an annual basis. 6.3 Internal/External Auditors The Companys internal audit plan incorporates a review of all transactions entered into in the relevant financial year pursuant to the IPT Mandate to ensure that the relevant approvals have been obtained and the review procedures in respect of such transactions had been adhered to. Such compliance review will be performed by the internal auditors, being an external audit firm appointed or to be appointed by the Company, on an annual basis and the annual report on such transactions will be forwarded to the Audit Committee. The internal auditors shall assist the Audit Committee in the review, and carry out such tests as they deem necessary on the Interested Person Transactions entered into pursuant to the IPT Mandate. As part of the Companys annual audit, external Auditors will review the Interested Person Transactions on a sampling basis. The external Auditors will report to the Audit Committee in the event of any non-compliance based on the audit sample. 6.4 Review by the Audit Committee As mentioned in Section 6.3 above, the Audit Committee shall review these annual internal audit reports on Interested Person Transactions to ascertain that the established review procedures to monitor Interested Person Transactions have been complied with. If during these annual reviews by the Audit Committee, the Audit Committee is of the view that the review procedures as stated above have become inappropriate or insufficient in light of changes to the nature of or the manner in which the business activities of the Company are conducted, in order to ensure that the mandated Interested Person Transactions will be conducted based on the Companys normal commercial terms and hence, will not be prejudicial to the interests of the Company and its minority Shareholders, the Company will then revert to Shareholders for a fresh mandate based on new guidelines and review procedures for transactions to be entered into with the Interested Person to ensure that the Interested Person Transactions will be on an arms length basis and on normal commercial terms. During the period prior to obtaining a fresh mandate from the Shareholders, all Interested Person Transactions, including those covered under the IPT Mandate, will be subject to prior review and approval by the Audit Committee. If any member of the Audit Committee has an interest in a transaction, he shall abstain from participating in the review and approval process in relation to that transaction.

80 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Appendix A
7. VALIDITY PERIOD OF THE IPT MANDATE The IPT Mandate will take effect from the passing of the Proposed Resolution, and will (unless revoked or varied by the Company in general meeting) continue in force until the next AGM of the Company. Approval from the Shareholders will be sought for the renewal of the IPT Mandate at the next AGM and at each subsequent AGM of the Company, subject to satisfactory review by the Audit Committee of its continued application to the transactions with the GIL Group. 8. DISCLOSURE IN THE ANNUAL REPORT The Company will announce the aggregate value of transactions conducted with the GIL Group pursuant to the IPT Mandate for the relevant financial periods which the Company is required to report on pursuant to the Listing Manual and within the time required for the announcement of such reports. Disclosure will also be made in the Companys annual report of the aggregate value of transactions conducted with the GIL Group pursuant to the IPT Mandate during the financial year, and in the annual reports for subsequent financial years that the IPT Mandate continues in force, in accordance with the requirements of Chapter 9 of the Listing Manual. The name of the Interested Person and the corresponding aggregate value of the Interested Person Transactions will be presented in the following format: Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than S$100,000 and transactions conducted under shareholders mandate pursuant to Rule 920 of the Listing Manual)

Name of interested person 9.

Aggregate value of all interested person transactions conducted under shareholders mandate pursuant to Rule 920 of the Listing Manual (excluding transactions less than S$100,000)

DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTERESTS As at the Latest Practicable Date, none of the Directors hold any Shares in the Company. The interests of the substantial Shareholders of the Shares, as recorded in the Companys Register of Substantial Shareholders as at the Latest Practicable Date, are as follows: Name of Substantial Shareholder Vistra Corporate Services Limited as trustee of The Pacific Trust(2) Prospect China Limited
Notes: (1) (2) Based on 263,771,400 Shares as at the Latest Practicable Date. Mr Anthony Brian Taylor, Mr Gary Patrick Stafford and Mr Malcolm John Burrell, who are Directors of the Company, are also employees of GIL and are therefore part of the class of beneficiaries of The Pacific Trust.

Direct Interest

%(1)

Deemed Interest

%(1)

148,527,093 14,000,000

56.31 5.31

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 81

Appendix A
10. STATEMENT OF THE AUDIT COMMITTEE The Audit Committee has reviewed the terms of the IPT Mandate and is satisfied that the review procedures for mandated Interested Person Transactions, as well as the annual reviews to be made by the Audit Committee in relation thereto, are sufficient to ensure that Interested Person Transactions with GIL will be entered into in accordance with the Companys normal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders. 11. INDEPENDENT DIRECTORS RECOMMENDATION Having fully considered the rationale set out in Section 3 of this Appendix A, the Directors who are deemed to be independent in relation to the proposed renewal of the IPT Mandate, namely, Mr John Lim Yew Kong, Mr Cosimo Borrelli and Mr Dali Kumar @ Dali Bin Sardar (Independent Directors) unanimously believe that the proposed renewal of the IPT Mandate is in the interests of the Company. The Independent Directors of the Company are of the unanimous opinion that the review procedures for determining transaction prices as stated in Section 6 for mandated Interested Person Transactions, as well as the annual reviews to be made by the Audit Committee in relation thereto, are sufficient to ensure that Interested Person Transactions will be made with the GIL Group on normal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders. Accordingly, they unanimously recommend that Shareholders vote in favour of the Proposed Resolution. 12. ACTION TO BE TAKEN BY SHAREHOLDERS If a Shareholder is unable to attend the AGM and wishes to appoint a proxy or proxies to attend and vote on his behalf, he should complete, sign and return the accompanying Proxy Form in accordance with the instructions printed thereon as soon as possible and, in any event, so as to reach the registered office of the Company at 9 Temasek Boulevard, #32-02A Suntec Tower Two, Singapore 038989, not less than 48 hours before the time appointed for holding the AGM. The completion and return of the Proxy Form by a Shareholder will not prevent him from attending and voting in person at the AGM if he subsequently wishes to do so. A Depositor shall not be regarded as a Shareholder entitled to attend the AGM and to speak and vote thereat unless he is shown to have Shares entered against his name in the Depository Register, as certified by CDP as at 48 hours before the AGM. 13. ABSTAINING FROM RECOMMENDATIONS AND VOTING GIL and The Pacific Trust has undertaken to ensure that their respective Associates will abstain from voting on the board resolution in connection with the proposed renewal of the IPT Mandate herein. Mr Anthony Brian Taylor, Mr Gary Patrick Stafford and Mr Malcolm John Burrell, being executive directors of GIL, are deemed to be interested in the outcome of the proposed renewal of the IPT Mandate. Accordingly, Mr Anthony Brian Taylor, Mr Gary Patrick Stafford and Mr Malcolm John Burrell shall abstain from voting on the board resolution in connection with the proposed renewal of the IPT Mandate herein. In addition, Mr Anthony Brian Taylor, Mr Gary Patrick Stafford and Mr Malcolm John Burrell have not voted and will also refrain from voting on the review and approval of any Interested Person Transactions with GIL.

82 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Appendix A
The Pacific Trust, being interested in the proposed renewal of the IPT Mandate, will abstain from voting at the AGM in connection with the Proposed Resolution in respect of its Shares. Save as disclosed herein, none of the Directors or substantial Shareholders of the Company has any interest, direct or indirect, in the Interested Person Transactions. 14. DOCUMENTS FOR INSPECTION Copies of the annual report of the Company for FY2010 may be inspected at the registered office of the Company during normal office hours up to and including the date of the AGM. 15. DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this Appendix A and confirm that, after having made all reasonable enquiries, to the best of their knowledge and belief, the facts stated and opinions expressed in this Appendix A are accurate and fair in all material respects as at the date of this Appendix A and that there are no other material facts, the omission of which would make any statement in this Appendix A misleading in any material respect.

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 83

Appendix A
APPENDIX A-1 In this Appendix, the following definitions apply throughout unless otherwise stated: AGM Associate : : The annual general meeting of the Company In the case of a company: (a) In relation to any director, chief executive officer, substantial shareholder or Controlling Shareholder (being an individual) means: (i) his immediate family; (ii) the trustees of any trust of which he or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object; and (iii) any company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more (b) In relation to a substantial shareholder or a Controlling Shareholder (being a company) means any other company which is its subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 30% or more

Associated Companies

Companies in which at least 20% but not more than 50% of its shares are held by the Company, and such associated companies are not listed on the SGX-ST or an approved exchange provided that the Company or the Company and its Interested Person, has control over the associated companies The auditors of the Company for the time being The audit committee of the Company, consisting of Mr John Lim Yew Kong, Mr Dali Kumar @ Dali Bin Sardar and Mr Cosimo Borrelli The Central Depository (Pte) Limited Radiance Group Limited A person who (a) holds directly or indirectly 15% or more of the nominal amount of all voting shares in a company; or (b) in fact exercises control over the company Shall have the meaning ascribed to them under section 130A of the Companies Act, Chapter 50 of the statutes of the Republic of Singapore Shall have the meaning ascribed to them under section 130A of the Companies Act, Chapter 50 of the statutes of the Republic of Singapore The directors of the Company as at the Latest Practicable Date

Auditors Audit Committee

: :

CDP Company Controlling Shareholder

: : :

Depositor

Depository Register

Directors

84 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

Appendix A

FY GIL GIL Group Group Independent Directors

: : : : :

Financial year ended 31 December Global Invacom Limited GIL and its subsidiaries The Company and its subsidiaries In the context of this Appendix A, this means the directors who are deemed to be independent in relation to the proposed IPT Mandate, namely, Mr John Lim Yew Kong, Mr Cosimo Borrelli, and Mr Dali Kumar @ Dali Bin Sardar Shall have the meaning ascribed to it in the Listing Manual as amended from time to time Shall have the meaning ascribed to it in the Listing Manual as amended from time to time The general mandate for the purposes of Chapter 9 of the Listing Manual, for the companies within the Group or any of them, to enter into the Interested Person Transactions, provided that such transactions are on an arms length basis, on normal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders The latest practicable date prior to the printing of this Appendix A, being 31 March 2011 The listing manual of the SGX-ST The agreement entered into between GIL and Radiance Shanghai dated 1 April 2008 containing the general terms and conditions that govern Radiance Shanghais provision of electronics manufacturing services to GIL Net tangible assets Ordinary Resolution number 11 as set out in the Notice of Annual General Meeting of the Company dated 11 April 2011, relating to the renewal of the IPT Mandate Radiance Manufacturing Pte Ltd Radiance Electronics (Shanghai) Co., Ltd Securities accounts maintained by a Depositor with CDP but does not include securities sub-accounts Singapore Exchange Securities Trading Limited

Interested Person

Interested Person Transaction(s) IPT Mandate

Latest Practicable Date

Listing Manual Manufacturing Agreement

: :

NTA Proposed Resolution

: :

Radiance Manufacturing Radiance Shanghai Securities Accounts

: : :

SGX-ST

RADIANCE GROUP LIMITED ANNUAL REPORT 2010 85

Appendix A

Shareholders

Registered holders of the Shares except that where the registered holder is CDP, the term Shareholders shall, in relation to such Shares, mean the Depositors into whose Securities Accounts those Shares are credited. Any reference to Shares held by Shareholders shall include Shares standing to the credit of the respective Shareholders Securities Accounts Ordinary shares in the capital of the Company A discretionary trust established on 15 July 2010 in Jersey, the United Kingdom Singapore dollars and cents respectively, unless otherwise stated Per centum

Shares The Pacific Trust

: :

$or S$ and cents %

: :

86 RADIANCE GROUP LIMITED ANNUAL REPORT 2010

RADIANCE GROUP LIMITED


(Incorporated in Singapore) (Co. Reg. No: 200202428H)

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

IMPORTANT: 1. For investors who have used their CPF monies to buy Radiance Group Limiteds shares, this Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. 2. This Proxy Form is 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. 3. CPF investors who wish to vote should contact their CPF Approved Nominees.

*I/We, of being a member/members of RADIANCE GROUP LIMITED (the Company), hereby appoint: Name Address NRIC/Passport No. Proportion of Shareholdings No. of Shares %

and/or (delete as appropriate) Name Address NRIC/Passport No. Proportion of Shareholdings No. of Shares %

or failing *him/her, the Chairman of the Meeting as *my/our *proxy/proxies to vote for *me/us on *my/our behalf at the Annual General Meeting (the Meeting) of the Company to be held on Wednesday, 27 April 2011 at 10.00 a.m. and at any adjournment thereof. *I/We direct *my/our *proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the *proxy/proxies will vote or abstain from voting at *his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll. (Please indicate your vote For or Against with a tick [] within the box provided.) No. Resolutions relating to: 1 2 3 4 5 6 7 8 9 10 11 Directors Report and Audited Accounts for the year ended 31 December 2010 Re-election of Mr Anthony Brian Taylor as a Director Re-election of Mr Gary Patrick Stafford as a Director Re-election of Mr Malcolm John Burrell as a Director Re-election of Mr John Lim Yew Kong as a Director Approval of Directors fees for FY2010 amounting to S$158,230 Approval of Directors fees for FY2011 amounting to S$280,000 Re-appointment of Moore Stephens LLP as Auditors Authority to allot and issue new shares Authority to allot and issue shares under the Radiance Electronics Share Option Scheme 2003 Renewal of Shareholders Mandate for Interested Person Transactions For Against

* Delete where inapplicable Dated this day of 2011

Total Number of Shares in: (a) CDP Register (b) Register of Members Signature of Shareholder(s)/ and, Common Seal of Corporate Shareholder

No. of Shares

Notes: 1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 9 Temasek Boulevard, #32-02A Suntec Tower Two, Singapore 038989 not less than forty-eight (48) hours before the time appointed for the Meeting. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

2.

3.

4.

5.

6.

General: The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at forty-eight (48) hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

Radiance Group Limited


Company Registration No. 200202428H 9 Temasek Boulevard #32-02A Suntec Tower Two Singapore 038989 Tel: 68848270 Fax: 68848273 www.radiance-sin.com.sg www.radiance-sin.com.sg
(65) 6578 6522 Designed and produced by