Challenger

Ascent of Strength
Challenger Technologies Limited

ANNUAL REPORT ‘04
01 Mission Statement
02 Corporate Profile
03 Challenger Group of Companies
04 Chief Executive’s Message
06 Profile of Board of Directors
07 Profile of Key Management
08 Corporate Information
09 Financial Highlights
10 Operations Review
12 Corporate Governance
contents 19
22
Report of The Directors
Statement of Directors
23 Auditors’ Report
24 Audited Financial Statements
28 Notes to Financial Statements
47 Statistics of Shareholdings
49 Notice of Annual General Meeting

01challenger front pages.fh.fh9 17/3/05 5:55 pm Page 2
C M Y CM MY CY CMY K
mission
statement
TO ENSURE ALL CUSTOMERS GET THE VALUE FOR
ALL PRODUCTS AND SERVICES PROVIDED BY US,
AND HAVE A PLEASANT SHOPPING EXPERIENCE.
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02 CHALLENGER TECHNOLOGIES LIMITED

03 ANNUAL REPORT 2004
Challenger Group
of Companies
Matrix Integration Pte Ltd

100% Singapore Challenger Infortech (Beijing) Co. , Ltd
[Small Format Outlet - Retail] People’s Republic of China 40%
[Marketing and Development of Anti-Virus Software]
Itechcare (S) Pte Ltd

100% Singapore
[IT Service Provider]

Singapore
[Superstore - Retail]
OA Supplies Pte Ltd

Singapore 55%
[Supplying Office Supplies]
Challenger Technologies (M) Sdn Bhd*
80% Malaysia
[Superstore - Retail]
CBD eVision Pte Ltd
Singapore 100%
[Electronic Signage]
CBD eVision (M) Sdn Bhd

60% Malaysia
CBD eVision (Thailand)

Company Limited*
52%
Thailand
* = Currently dormant
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Chief Executive’s Message

“
revenue of “Werevenue
$75.5 million
believe our t
superstoresincreased
and
12.2%
small-
by t
profit of
format outlets will w
$3.7million
remain profitable.” s
The Group registered revenue of $75.5 million and profit before taxation of
$3.7 million for the financial year ended 31 December 2004. Group revenue
increased by 12.2%. 83% of group revenue was derived from providing IT
products and services by our superstores. 10% revenue was derived from
our small-format outlets, Matrix IT Gallery. The office supplies segment
contributed 5% of the group revenue. Itechcare and CBD eVision group of
companies contributed less than 2% to the total group revenue.
Challenger Superstore and Matrix IT Gallery To increase operational efficiency and productivity as well as
FY2004 saw some changes in our outlet structure. Our core to reduce operational costs, Matrix IT Gallery, which is a
business in providing IT products and services by our two business unit of Matrix Integration Pte Ltd, will be transferred
superstores remained strong, while our two small-format in FY2005 to Challenger Technologies Limited, which operates
outlets in Sim Lim Square closed down due to expiry of leases Challenger Superstores.
and poor business conditions.
CBD eVision Pte Ltd
Retailing in Singapore is a challenge with many chain store The company’s principal activities are the supplying, installing
operators paying a premium on leases. In turn, mall owners and maintenance of electronic signage and services. CBD
charge higher rentals as a result of higher rent expectations. eVision’s expansion in Thailand and Malaysia in FY2004 were
in line with our listing prospectus. The establishment of CBD
Despite this and other retail challenges, going forward, we eVision’s Malaysia and Thailand subsidiaries in FY2004 are
believe our superstores and small-format outlets will remain expected to contribute to higher sales in FY2005. CBD eVision
profitable. Matrix IT Gallery’s remaining two outlets in Funan is expected to be profitable in FY2005.
The IT Mall are also expected to perform well and remain
profitable in the coming year. There is also the possibility of OA Supplies Pte Ltd
opening more outlets provided strategic locations with The sales contribution from Office Supplies segment is likely
reasonable rentals are available. to be significantly reduced due to the Group’s intention of
disposing of OA Supplies in FY2005. This is due to a divergence
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“We will strive to achieve

r the
“Wehighest
will strive standards
to achieve the of
- transparency
highest standards ofas
transparency
as well as to increase
l well as to increase
shareholders’ value.”
” shareholders’ value.”
in strategy and differences in management culture between The company has been profitable in FY2004 and is expected
the management of OA Supplies and the Company, as well to remain profitable in FY2005.
as the additional capital required for commercial expansion
of OA Supplies’ business. The Group
As a listed company with the interest of our shareholders at
Challenger Infortech (Beijing) Co. Ltd stake, our group views corporate governance as a top priority.
The company was established as a joint venture with two Thus, we will strive to achieve the highest standards of
Chinese nationals in Q2 FY2004, with 40% of shareholdings transparency as well as to increase shareholders’ value.
held by Challenger Technologies Limited. The principal
activities are the development and marketing of anti-virus, Barring unforeseen circumstances, our Directors are of the
anti-spamming and data recovery software under the “Oriental view that the group will continue to be profitable for the
Guard” brand name. current financial year based on our performance achieved
to-date.
With manpower of about 16 employees, the company has
progressed into providing free online downloads of anti-virus The final gross dividend declared was 3 cents per ordinary
software as an initial marketing program to more than 400,000 share, subject to shareholders' approval at the Annual General
subscribers in People’s Republic of China (”PRC”) as at 31 Meeting to be held on 12 April 2005. The company had earlier
December 2004. The English version of this software is declared and paid out an interim gross dividend on 10
marketed under the “Hercules” brand name, which is now September 2004 of 0.7 cents per ordinary share, bringing the
available in single-user version for distribution outside the total gross dividend to 3.7 cents per ordinary share for FY2004.
PRC. The network version will be available in FY2005.
I would like to thank my fellow directors, management team
Currently, the company is developing anti-virus software for and all employees for their hard work and commitment to
mobile phone users and online game operators, which will the company, as well as suppliers and business associates
be ready in FY2005 to cater to a wider market base. for their invaluable support.
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Profile of Key Management

- FY2004
Mr Chia Kang Whye Ms Lim Kim Huay

General Manager of CBD eVision Pte Ltd Operations Manager
He is responsible for the day-to-day management of She is responsible for the day-to-day operations of
the electronic signage business, which includes the marketing the Challenger Superstore at Funan The IT Mall and also
of electronic signage products and overseeing turnkey projects assists in merchandising. She joined the company in 1985
for the supply and installation of electronic signage. He also and has more than 19 years of experience in the IT industry.
oversees the CBD eVision group of companies. He joined CBD She holds a diploma in retail management from the
eVision in 1986 and has more than 18 years of experience in Singapore Retailers’ Association.
the electronic signage business.
Ms Ding Tsui Eng

Ms Chua Leh Suan Finance Manager
Administration Director
She joined the group in April 2003 as finance manager
She is responsible for the day-to-day operations of the and has been the overall in-charge of matters relating to
accounts and human resource department for the Singapore accounting, financial and funding requirements of the group,
group of companies where she handles group accounts and ad hoc investment project evaluations, compliance and
human resource matters. She is also in charge of the reporting requirements of Singapore stock exchange
management information system (MIS) department of the requirements. She is a fellow member of the Association of
Singapore group companies. She joined the company in 1984 Chartered Certified Accountants (United Kingdom) and a
and has more than 20 years of experience in the IT industry. certified public accountant with the Institute of Certified Public
Accountants of Singapore.
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Corporate Information
BOARD OF DIRECTORS AUDIT COMMITTEE REGISTERED OFFICE

109 North Bridge Road
Loo Leong Thye Ho Boon Chuan Wilson (Chairman) #06-00 Funan The IT Mall
Chief Executive Choo Swee Cher Singapore 179097
Ng Leong Hai Tel: (65) 6336 7747
Ong Sock Hwee Fax: (65) 6337 2588
Executive Director Email: corp-affair@challenger.com.sg
NOMINATING COMMITTEE
Ng Leong Hai
Non-Executive Director Choo Swee Cher (Chairman) SHARE REGISTRAR AND
Ho Boon Chuan Wilson SHARE TRANSFER OFFICE
Ng Kian Teck Ng Leong Hai
Alternate Director to Ng Leong Hai Lim Associates (Pte) Ltd
10 Collyer Quay
Ho Boon Chuan Wilson REMUNERATION COMMITTEE #19-08 Ocean Building
Independent Director Singapore 049315
Choo Swee Cher (Chairman)
Choo Swee Cher Ho Boon Chuan Wilson
Independent Director Ng Leong Hai AUDITORS
Chio Lim & Associates

COMPANY SECRETARY Certified Public Accountants
(a member of Horwath International)
Wee Woon Hong, LLB (Hons) 18 Cross Street #08-01
Marsh & McLennan Centre
Singapore 048423
Partner In-charge: Lim Lee Meng
(since financial year ended 31 December 2003)
PRINCIPAL BANKER
United Overseas Bank Limited

80 Raffles Place
UOB Plaza 1
Singapore 048624
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Financial Highlights
For The Year Ended 31 December 2004
FY2004 FY2003 FY2002 FY2001 FY2000

$'000 $'000 $'000 $'000 $'000
Revenue 75,478 67,265 59,058 56,095 61,323
Profit/(Loss) Before Tax 3,715 4,024 2,190 1,610 (4,011)
Profit/(Loss) After Tax 2,798 3,169 1,839 1,225 (3,993)
Earnings/(Loss) Per Share (cents) 1.88 2.61 1.51 1.01 (3.29)
Shareholders' Funds 14,573 6,129 4,649 9,368 9,982
Net Tangible Assets Per Share (cents) 9.48 5.01 3.83 7.71 8.22
Key Financial Ratios
Net Profit Margin (%) 4% 5% 3% 2% -7%
Inventory Turnover (days) 36 40 37 39 27
Trade Receivable Turnover (days) 10 10 14 10 18
Return on Equity (%) 19% 52% 40% 13% -40%
Quick Ratio (times) 1.93 0.87 0.79 1.51 1.80
Current Ratio (times) 2.69 1.73 1.45 2.20 2.45
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Operations Review
- FY2004
31.12.2004 31.12.2003 Inc/(Dec)

$'000 $'000 $'000 %
Revenue 75,478 67,265 8,213 12% Revenue increased by 12% mainly due to:
(1) small format outlets (i.e. Matrix), which were established in
second half FY2003, being fully operational in FY2004;
(2) Itechcare (established in March 2003) being fully operational
in FY2004;
(3) higher revenue achieved at the four IT shows in FY2004; and
(4) acquisition of a new subsidiary, OA Supplies in April 2004.
Other operating income 303 95 208 219% Increase mainly due to interest income from fixed deposits.
Changes in inventories (421) 1,171 (1,592) n.m.
Cost of goods purchased (60,326) (55,226) 5,100 9% Increase in cost of goods purchased of 9% was in line with higher
revenue and was attributable to:
(1) higher purchase of inventories in line with increased small
format outlets and IT shows; and
(2) new acquisition of OA Supplies in FY2004.
Other consumables used (229) (111) 118 106% Increase in other consumable used by 106% was in line with
higher volume of trading and purchase transactions.
Staff costs (4,891) (3,998) 893 22% Staff costs increased by 22% mainly due to higher number of
staff recruited to cater for expansion of small format outlets and
higher commission paid in line with achievement of higher
revenue.
Depreciation expense (526) (470) 56 12%
Other operating expenses (5,231) (4,774) 457 10% Other operating expenses increased by 10% mainly due to:
(1) increase in rental expense in line with full year operations
of small format outlets and increase in rental rates for
superstores; and
(2) increase in travelling expenses for overseas expansion
programme.
Other (charges) / credits (407) 75 (482) n.m.
Profit from operations 3,750 4,027 (277) -7%
Finance costs (39) (3) 36 n.m. Finance costs increased mainly due to higher interest expense
incurred by OA Supplies on short-term borrowings.
Profit before share of profit 3,711 4,024 (313) -8%

of associate
Share of profit of associate 4 - 4 n.m. Increase due to share of profit in investment in associated
company in People’s Republic of China, Beijing.
Profit before income tax 3,715 4,024 (309) -8%
Income tax expense (917) (855) 62 7% Income tax increased by 7% mainly due to underprovision of
income tax in prior years and higher income tax provision for
FY2004.
Net profit for the year 2,798 3,169 (371) -12%
Minority interest 76 - 76 n.m.
Net profit attributable 2,874 3,169 (295) -9%

to shareholders
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Operations Review
- FY2004
31.12.2004 31.12.2003 Inc/(Dec)

$'000 $'000 $'000
Non-Current Assets
Plant and equipment 1,208 1,139 69
Investments in subsidiaries - - -
Investment in associate 313 - 313 Increase due to new investment in Challenger Infortech (Beijing), in the
People’s Republic of China.
Other assets 22 39 (17)

1,543 1,178
Current Assets
Cash and cash equivalents 12,737 3,519 9,218 Increase mainly due to proceeds from the issue of new shares to public from
the Company's IPO on 14 January 2004.
Trade receivables 2,011 1,764 247 Increase mainly due to trade receivables from a new subsidiary in the Group.
Other receivables and 435 809 (374) Decrease mainly due to partial prepayments of IPO expenses in FY2003.
prepayments
Inventories 5,976 6,063 (87)

21,159 12,155
Total Assets 22,702 13,333
Current Liabilities
Short-term borrowings 852 - 852 Increase in short-term borrowings drawn down by a subsidiary, OA Supplies
for working capital purposes.
Trade payables and 5,713 5,651 62

accrued liabilities
Other payables 318 518 (200)
Deferred franchise fee income 13 14 (1)
Income tax payable 963 854 109
Current portion of finance leases 16 3 13

7,875 7,040
Non-Current Liabilities
Finance leases 92 - 92
Deferred taxation 127 164 (37)

219 164
Capital and Reserves
Share capital 6,140 4,860 1,280 Increased in line with the issuance of 32 million new ordinary shares at par
value $0.04 per share to public from the Company's IPO on 14 January 2004.
Share premium 5,155 - 5,155 Share premium arose from the issuance of 32 million new ordinary shares
at IPO price $0.23 per share and net of IPO expenses.
Accumulated profits 3,283 1,269 2,014
Translation reserve (5) - (5)
Total equity 14,573 6,129
Minority ineterests 35 - 35
14,608 6,129
Total liabilities and equity 22,702 13,333
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Corporate Governance
1. THE BOARD’S CONDUCT OF ITS AFFAIRS (cont’d)
To ensure new Directors have an insight to the workings of the Group, management or such other appropriate persons will brief these newly
appointed members to the Board on the Group’s business operations and corporate governance practices. From time to time, the Directors
will be informed of developments relevant to the Group, including changes in laws, regulations and risks that may impact the Group. The
Directors will be sent to certain external seminars to obtain the latest updates in business and regulatory changes from time to time.
2. BOARD COMPOSITION AND BALANCE
The Board has 5 Directors, comprising 2 Executive Directors, 1 Non-Executive Director and 2 Independent Directors. This composition
complies with the Code’s requirement that at least one-third of the Board should be made up of Independent Directors.
The independence of each director is reviewed annually by the NC. The NC is of the view that the current Board has an independent element
ensuring objectivity in the exercise of judgment on corporate affairs independently from the management. The NC is also of the view that
no individual or small group of individuals dominates the Board’s decision making process.
The Board is of the opinion that its current board size of 5 Directors is appropriate, taking into account the nature and scope of the Group’s
operations. The Board composition reflects the broad range of experience, skills and knowledge necessary for the effective stewardship of
the Group. The Board comprises business persons and professionals with industry and financial backgrounds and its composition enables
the management to benefit from a diverse and objective external perspective on issues raised before the Board. The profile of the Directors
are set out on page 6 of this Annual Report.
3. ROLE OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Mr Loo Leong Thye, is the Chief Executive Officer (“CEO”) of the Group. His responsibilities pertaining to the workings of the Board and his
executive responsibilities pertaining to the Group’s business are kept distinct, increasing the accountability and greater capacity of the Board
for independent decision making.
The chairman shall:
(i) in consultation with the management, schedule meetings that enable the Board to perform its duties responsibly while not interfering
with the flow of the company’s operations;
(ii) prepare meeting agenda in consultation with the management;
(iii) in consultation with the management, exercise control over quality, quantity and timeliness of the flow of information between the
management and the Board; and
(iv) assist in ensuring compliance with company’s guidelines on corporate governance.
However, the Company has not created a separate Chairman position as the Directors are of the view that the current Board composition
is appropriate and effective for the purposes for which the Board’s roles and responsibilities are set up. The Directors are satisfied that the
establishment of the three committees, namely AC, NC and RC would be sufficient to provide the necessary increased accountability and
independence for decision-making.
4. BOARD MEMBERSHIP
The NC comprises three members, two of whom are Independent Directors.
Chairman: Choo Swee Cher (Independent Director)

Members: Ho Boon Chuan Wilson (Independent Director)
Ng Leong Hai (Non-Executive Director)
The NC meets at least twice a year to discuss issues relating to Board appointments.
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4. BOARD MEMBERSHIP (cont’d)
The functions of the NC include the following:
i. recommendations to the Board on all Board appointments or re-appointments;
ii. assessment of the effectiveness of the Board as a whole and the contributions of each Director to the effectiveness of the Board;
iii. determination of the independence of the members of the Board; and
iv. determination of whether a Director is able to and has adequately carried out his duties as a director of the Company, in particular, where
the Director concerned has multiple Board representations.
Board appointments are made by way of a Board resolution after the NC has recommended such appointment to the Board, reviewed his or
her resume and conducted appropriate interviews. Pursuant to the Articles of Association of the Company, each Director is required to retire
at least once every three years by rotation and all newly appointed Directors would have to retire at the next Annual General Meeting following
their appointment. The retiring Directors are eligible to offer themselves for re-election.
The dates of initial appointment and re-election of the Directors are set out below:
Director Position Date of Initial Appointment Date of Last Re-election

Loo Leong Thye Chief Executive Officer 14 January 1984 21 April 2004
Ong Sock Hwee Executive Director 28 December 1994 30 June 2003
Ng Leong Hai Non-Executive Director 15 July 2003 21 April 2004
Ho Boon Chuan Wilson Independent Director 17 November 2003 21 April 2004
Choo Swee Cher Independent Director 17 November 2003 21 April 2004
The NC in determining whether to recommend a Director for re-appointment will have regard to such Director’s performance and contribution
to the Group and whether such Director has adequately carried out his or her duties as a Director.
The NC has nominated Ong Sock Hwee and Ng Leong Hai, who will be retiring as directors at the forthcoming Annual General Meeting, to
the Board for their re-election as directors at the forthcoming Annual General Meeting.
5. BOARD PERFORMANCE
The Board’s performance is ultimately reflected in the performance of the Group. The members of the Board shall, at all times, act honestly
and use reasonable diligence and care in the discharge of the duties of their office. They have to carry their duties in the best interests of
the Company and its shareholders. Board members must attend at least 75% of all Board Meetings.
The NC in considering the re-appointment of a Director evaluates such Director’s contribution and performance, such as his or her attendance
at meetings of the Board or Board committees, where applicable, participation, candour and any other special contributions.
The NC is tasked with the assessment of the Board’s performance and is in the process of adopting performance criteria which will take
into consideration quantitative and qualitative criteria such as the success of the strategic and long term objectives set by the Board.
6. ACCESS TO INFORMATION
The members of the Board in their individual capacities have complete access to information on a timely basis in the form and quality
necessary for the discharge of their duties and responsibilities. Prior to each Board meeting, the members of the Board are each provided
with the relevant documents and information to enable them to obtain a comprehensive understanding of the issues to be deliberated upon
to enable them to arrive at an informed decision. Management will update the Independent Directors on a regular basis on the Group’s
operations and performance.
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6. ACCESS TO INFORMATION (cont’d)
The Directors have direct access to management and the advice and services of the Company Secretary, who attends all Board meetings
and is responsible for ensuring that Board meeting procedures are followed and that applicable rules, acts and regulations are
complied with.
The Board (whether individually or as a Group), has direct access to the independent professional advisors to obtain advice. Any cost of
obtaining such professional advice will be borne by the Company.
7. REMUNERATION MATTERS
The RC comprises of 3 Directors, a majority of whom are Independent Directors.
Chairman: Choo Swee Cher (Independent Director)

Members: Ho Boon Chuan Wilson (Independent Director)
The RC meets at least twice a year to discuss matters relating to remuneration of the Board and key management personnel.
The main terms of reference of the RC are as follows:
i. recommendation to the Board of a framework of remuneration for the Board and key management personnel, which covers all aspects
of remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses and benefits in kind;
ii. recommend to the Board the remuneration of non-executive Directors (which should be appropriate to the level of contribution and the
responsibilities of the Directors);
iii. determine specific remuneration packages for each Executive Director; and
iv. determine targets for any performance-related pay schemes operated by the Company.
The recommendations of the RC should be submitted to the Board for endorsement.
The RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations,
the RC will take into consideration industry practices and norms in compensation in addition to the Company’s performance relative to the
industry and the performance of the individual Directors. No individual Director should be involved in deciding his or her own remuneration.
8. LEVEL AND MIX OF REMUNERATION
The remuneration, including an incentive bonus, of the Executive Directors, Mr Loo Leong Thye and Madam Ong Sock Hwee are based on
service agreements made on 15 September 2003 as disclosed to shareholders in the Company’s Prospectus dated 5 January 2004. The
service agreements are for an initial period of three years commencing on 1 October 2003 and thereafter shall be automatically renewed
for successive periods of two years each on such terms and conditions as the parties may agree. Either party may terminate the service
agreement by giving 3 months’ written notice or payment in lieu of notice. Both Mr Loo Leong Thye and Mdm Ong Sock Hwee are spousal
to each other.
The Independent Directors are each paid a director’s fee for their efforts and time spent, responsibilities and contribution to the Board,
subject to approval by the shareholders at the Annual General Meeting.
Future service contracts to be entered into by the Company with Directors shall have a fixed appointment period and shall not be excessively
long or contain onerous removal clauses. The RC will consider what compensation the Directors’ contracts of service would entail in the
event of early termination and will aim to be fair and avoid rewarding poor performance. The RC will also consider whether Directors should
be eligible for benefits under long-term incentive schemes, such as share option scheme. Currently, the Executive Directors do not have
long-term incentive schemes because they are also the major shareholders of the Company and their interests are aligned with the interests
of the Company.
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9. DISCLOSURE ON REMUNERATION
Remuneration is fixed in accordance with the experience of the person in question, the role performed, market comparison, the contribution
of the individual and/or the performance of the Company.
Breakdown of remuneration of each Director by % (financial year 31 December 2004).
Remuneration Band Variable or Performance

& Name of Directors Fixed Salary Directors’ Fees Related Income/Bonus Total
Below $250,000
Loo Leong Thye 92% - 8%* 100%
Ong Sock Hwee 92% - 8%* 100%
Ng Leong Hai - - - -
Ng Kian Teck 77% - 23% 100%
Ho Boon Chuan Wilson - 100% - 100%
Choo Swee Cher - 100% - 100%
* In view of the lower recorded Group profit in FY2004 as compared to FY2003, both Mr Loo Leong Thye and Mdm Ong Sock Hwee have
waived their incentive bonus entitlement as per their respective service agreements dated 15 September 2003.
The Company has no share option plans. Accordingly, no share option has been granted to the above Directors.
Breakdown of remuneration of each Key Executive (who are not Directors) by % (financial year 31 December 2004).
Remuneration Band & Name of Key Executives Fixed Salary Variable or Performance Related Income/Bonus Total
Below $250,000
Chia Kang Whye 89% 11% 100%
Chua Leh Suan 77% 23% 100%
Lim Kim Huay 70% 30% 100%
Ding Tsui Eng 86% 14% 100%
The Company has no share option plans. Accordingly, no share options have been granted to the above Key Executives.
No employee of the Company or its subsidiaries is an immediate family member of any Director or the CEO and whose remuneration has
exceeded $150,000 during the financial year ended 31 December 2004. “Immediate family member” means the spouse, child, adopted child,
stepchild, brother, sister and parent.
10. ACCOUNTABILITY
The Company recognises that the Board should provide shareholders with a balanced and understandable assessment of the Group’s
performance, position and prospects on a regular basis and adopts the practice of communicating major developments in its business
operations to the SGX-ST, its shareholders and its employees.
Management provides the Directors with balanced and understandable management accounts of the Group on a quarterly basis. The half-
year and full-year accounts will be provided to Directors prior to Board meetings. The Directors also have separate and independent access
to all levels of key personnel in the Group.
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11. AUDIT COMMITTEE
The AC comprises three non-executive Directors, two of whom are independent.
Chairman: Ho Boon Chuan Wilson (Independent Directors)

Members: Choo Swee Cher (Independent Director)
The members of the AC have the relevant experience in the areas of business, accounting and finance, and are appropriately qualified
to discharge their responsibilities. The detailed profile of the members of the AC are set out in the “Profile of Board of Directors” section
on page 6 in this Annual Report.
The main terms of reference of the AC are as follows:
i. review the audit plans, the system of internal accounting controls, the audit report, the management letter and the management’s
response in conjunction with the external auditors;
ii. review the assistance given by the Company’s officers to the external auditors;
iii. ensure that the internal audit function is adequate and has appropriate standing within the Company, (such adequacy of the internal
audit function to be reviewed at least annually) and review the scope and results of the internal audit procedures;
iv. ensure a review of the effectiveness of the Company’s material internal controls, including financial, operational and compliance
controls, and risk management, is conducted at least annually by the external auditors;
v. review and discuss with the external auditors if necessary any suspected fraud or irregularity or suspected failure of internal controls,
which may have a material impact on the Group’s operating results;
vi. review the scope and results of the external audit and its cost effectiveness, as well as the independence and objectivity of the external
auditors annually;
vii. consider the appointment or re-appointment of the external auditors;
viii. review the financial statements of the Company, including the half-year and full-year results and the respective announcements
before the submission to the Board of Directors;
ix. approve internal control procedures and arrangements for all interested person transactions; and
x. give due consideration to the requirements of the Stock Exchange Listing Rules.
The AC has direct access to and enjoys the full co-operation of the Company’s management. It has full discretion to invite any Director
or executive officer to attend its meetings and has been given reasonable resources to enable it to discharge its functions.
The AC is to meet at least twice a year to review the announcements of the half-year and full-year results before being approved by the
Board for release to the SGX-ST. The AC also meets with the external auditors and reviews the scope and results of the external audit.
The AC may meet the external auditors at any time, without the presence of the Company’s management.
The aggregate amount of non-audit fees paid to the external auditors for the financial period review was approximately $7,000 in FY2004.
The AC having reviewed all non-audit services to the Group by the external auditors is satisfied that the nature and extent of such services
will not prejudice the independence and objectivity of the external auditors.
The AC has recommended to the Board the nomination of Chio Lim & Associates, for re-appointment as auditors of the Company at the
forthcoming Annual General Meeting.
12. INTERNAL CONTROLS
The Group’s internal controls and systems are designed to provide reasonable assurance as to the integrity and reliability of the financial
information and to safeguard and maintain accountability of its assets. Procedures are in place to identify major business risks and
evaluate potential financial effects, as well as for the authorisation of capital expenditure and investments. Comprehensive budgeting
systems are in place to develop annual budgets covering key aspects of the business. Actual performance is compared against budgets
and revised forecasts for the year are prepared on a regular basis.
The Board believes that the system of internal controls and risk management maintained by the Group is adequate to safeguard
shareholders’ investments and the Group’s assets.
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13. INTERNAL AUDIT
The Board recognises that it is responsible for maintaining a system of internal control processes to safeguard shareholders’ investments
and the Group’s business and assets. The effectiveness of the internal financial control systems and procedures are monitored by the
management and the internal audit function is out-sourced to a qualified CPA firm. The internal auditors report primarily to the Chairman
of the Audit Committee.
The internal auditor plans its internal audit schedules in consultation with, but independent of the management. The audit plan is submitted
to the Audit Committee for approval prior to the commencement of the audit. The Audit Committee reviews the activities of the internal
auditors on a regular basis, including overseeing and monitoring of the implementation of improvements required on internal control
weakness identified.
14. COMMUNICATIONS WITH SHAREHOLDERS
The Board is mindful of its obligations to provide timely disclosure of material information to shareholders and does so through:
i. annual reports issued to all shareholders. Non-shareholders may access the SGX-ST’s website for a soft copy of the annual report;
ii. announcement of half-year and full-year results on the SGXNET;
iii. other SGXNET announcements;
iv. press releases on major developments of the Company; and
v. company’s website through which shareholders can access information on the Company.
The Board regards the Annual General Meeting as an opportunity to communicate directly with shareholders and encourages greater
shareholder participation. The CEO and the other Directors attend the Annual General Meeting and are available to answer questions from
shareholders at the Annual General Meeting.
15. CODE ON SECURITIES TRANSACTIONS BY OFFICERS
In compliance with the Best Practices Guide, Directors and employees of the Company have been advised not to deal in the Company’s
shares on short term considerations or when they are in the possession of unpublished price-sensitive information. Dealings in the Company’s
shares during the period commencing one month before any announcement of the Company’s financial statements and ending on the date
of announcements of the results is prohibited.
16. INTERESTED PERSON TRANSACTIONS (“IPT”)
The Company has established internal control policies to ensure that transactions with interested persons are properly reviewed and
approved, and are conducted at arm’s length basis.
For the period under review, the Group carried out an interested person transaction with Columbia Computer Products, Inc (“Columbia”)
involving the sales of IT products to the Group. Mr Ng Leong Hai is the director of Columbia as well as the Company, and hence an
interested person.
The total value of all transactions with Columbia for the financial year ended 31 December 2004 was approximately $805,000.
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Report Of The Directors
The directors of the company are pleased to present their report together with the audited financial statements of the company and of the
group for the financial year ended 31 December 2004.
1. DIRECTORS AT DATE OF REPORT
The directors of the company in office at the date of this report are:
Loo Leong Thye (Chief Executive)

Ong Sock Hwee (Executive Director)
Ng Leong Hai (Non-Executive Director) (a) (b) (c)
Ng Kian Teck (Alternate Director to Ng Leong Hai)
Ho Boon Chuan Wilson (Independent Director) (a) (b) (c)
Choo Swee Cher (Independent Director) (a) (b) (c)
(a) Members of Audit Committee

(b) Members of Remuneration Committee
(c) Members of Nominating Committee
2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES
Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is
to enable the directors of the company to acquire benefits by means of the acquisition of shares or debentures in the company or any
other body corporate.
3. DIRECTORS' INTERESTS IN SHARES AND DEBENTURES
The directors of the company holding office at the end of the financial year had no interests in the share capital of the company and related
corporations as recorded in the register of directors' shareholdings kept by the company under section 164 of the Companies Act, Cap. 50
except as follows :
Name of directors and companies

in which interests are held At beginning of year At end of year
Challenger Technologies Limited Ordinary shares Ordinary shares

(the company) of $0.04 each of $0.04 each
Loo Leong Thye 64,175,000 65,693,000

Ong Sock Hwee 13,825,000 14,019,000
Ng Leong Hai 37,750,000 37,830,000
Ng Kian Teck 200,000 200,000
Ho Boon Chuan Wilson 100,000 100,000
Choo Swee Cher 100,000 100,000
By virtue of section 7 of the Companies Act, Cap. 50, Mr Loo Leong Thye and Mr Ng Leong Hai with the above shareholdings in the company
are deemed to have an interest in all the related corporations of the company.
The directors’ interests as at 21 January 2005 were the same as those at the end of the year.
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Report of the Directors
4. CONTRACTUAL BENEFITS OF DIRECTORS
Since the beginning of the financial year, no director of the company has received or become entitled to receive a benefit which is required
to be disclosed under section 201(8) of the Companies Act, Cap. 50 by reason of a contract made by the company or a related corporation
with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.
There were certain transactions (shown in the financial statements) with corporations in which certain directors have an interest.
5. OPTIONS TO TAKE UP UNISSUED SHARES
During the financial year, no option to take up unissued shares of the company or any corporation in the group was granted.
6. OPTIONS EXERCISED
During the financial year, there were no shares of the company or any corporation in the group issued by virtue of the exercise of an option
to take up unissued shares.
7. UNISSUED SHARES UNDER OPTION
At the end of the financial year, there were no unissued shares of the company or any corporation in the group under option.
8. AUDIT COMMITTEE
The members of the audit committee at the date of this report are as follows:
Ho Boon Chuan Wilson Chairman of audit committee and Independent Director

Choo Swee Cher Independent Director
Ng Leong Hai Non-Executive Director
The audit committee was established after the company became a listed company on 14 January 2004. The audit committee performs the
functions specified by section 201B (5) of the Companies Act, Cap. 50.
Among others, it performed the following functions:
• reviewed with the external auditors the external audit plan;

• reviewed with the external auditors their evaluation of the company’s internal accounting controls and their audit report;
• reviewed the adequacy of the assistance provided by the company’s officers to the external auditor;
• reviewed with the internal auditors the scope and results of the internal audit procedures;
• reviewed the financial statements of the group and the company prior to their submission to the directors of the company for adoption;
and
• reviewed the interested party transactions (as defined in Chapter 9 of the Listing Manual of the SGX).
The audit committee has recommended to the board of directors that the auditors, Chio Lim & Associates, be nominated for re-appointment
as auditors at the next annual general meeting of the company.
Other functions performed by the audit committee are described in the report on corporate governance included in the annual report.
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Report of the Directors
9. SUBSEQUENT DEVELOPMENTS
There are no significant developments subsequent to the release of the group’s and the company’s preliminary financial statements, as
announced on 22 February 2005, which would materially affect the group’s and the company’s operating and financial performance as of
the date of this report.
10. AUDITORS
The auditors, Chio Lim & Associates, have expressed their willingness to accept re-appointment.
ON BEHALF OF THE DIRECTORS
Loo Leong Thye Ong Sock Hwee

Chief Executive Executive Director
28 February 2005
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Statement Of Directors
In the opinion of the directors, the accompanying financial statements are drawn up so as to give a true and fair view of the state of affairs of
the company and of the group as at 31 December 2004 and changes in equity of the company and of the group, and of the results and cash flows
of the group for the financial year then ended and at the date of this statement there are reasonable grounds to believe that the company will
be able to pay its debts as and when they fall due.
ON BEHALF OF THE DIRECTORS
Loo Leong Thye Ong Sock Hwee

Chief Executive Executive Director
28 February 2005
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Auditors’ Report
AUDITORS’ REPORT TO THE MEMBERS OF CHALLENGER TECHNOLOGIES LIMITED
We have audited the accompanying financial statements of Challenger Technologies Limited for the year ended 31 December 2004. These
financial statements are the responsibility of the company’s directors. 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 plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by the directors, as well as evaluating the overall financial statements presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion,
a) the consolidated financial statements of the group and the balance sheet and statement of changes in equity of the company are properly
drawn up in accordance with the provisions of the Companies Act, Cap. 50 (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 2004 and the results, changes in equity
and cash flows of the group and the changes in equity of the company for the year ended on that date; and
b) the accounting and other records required by the Act to be kept by the company and by the subsidiaries incorporated in Singapore of which
we are the auditors have been properly kept in accordance with the provisions of the Act.
Chio Lim & Associates

Certified Public Accountants
Singapore
28 February 2005
Partner in charge : Lim Lee Meng
Effective from year ended 31 December 2003
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Balance Sheets
As at 31 December 2004
Group Company
Notes 2004 2003 2004 2003
$'000 $'000 $'000 $'000
ASSETS
Current assets
Cash and cash equivalents 5 12,737 3,519 12,269 3,381
Trade receivables 6 2,011 1,764 1,697 2,341
Other receivables and prepayments 7 435 809 294 893
Inventories 8 5,976 6,063 5,270 5,097
Total current assets 21,159 12,155 19,530 11,712
Non-current assets
Investment in associate 9 313 – 311 –
Investments in subsidiaries 10 – – 865 832
Plant and equipment 11 1,208 1,139 794 902
Other assets 12 22 39 – –
Goodwill 13 – – – –
Total non-current assets 1,543 1,178 1,970 1,734
Total assets 22,702 13,333 21,500 13,446
LIABILITIES AND EQUITY

Current liabilities
Short-term borrowings 14 852 – – –
Trade payables and accrued liabilities 15 5,713 5,651 4,910 5,597
Other payables 16 331 532 270 723
Income tax payable 963 854 954 836
Current portion of finance leases 17 16 3 – –
Total current liabilities 7,875 7,040 6,134 7,156
Non-current liabilities
Deferred tax 26 127 164 124 161
Finance leases 17 92 – – –
Total non-current liabilities 219 164 124 161
Minority interest 35 – – –
Capital and reserves

Issued capital 18 6,140 4,860 6,140 4,860
Reserves 8,433 1,269 9,102 1,269
Total equity 14,573 6,129 15,242 6,129
Total liabilities and equity 22,702 13,333 21,500 13,446
See accompanying notes to financial statements.
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Consolidated Income Statement

Year ended 31 December 2004
Group
Notes 2004 2003
$'000 $'000
Revenue 19 75,478 67,265

Other operating income 20 303 95
Changes in inventories (421) 1,171
Cost of goods purchased (60,326) (55,226)
Other consumables used (229) (111)
Staff costs 21 (4,891) (3,998)
Depreciation expense (526) (470)
Other operating expenses (5,231) (4,774)
Other (charges)/credits 23 (407) 75
Profit from operations 3,750 4,027
Finance costs 24 (39) (3)
Share of profit of associate 4 –
Profit before income tax 25 3,715 4,024
Income tax expense 26 (917) (855)
Profit after income tax 2,798 3,169
Attributable to:
Equity holders of the company 2,874 3,169
Minority interest (76) –
2,798 3,169
Earnings per share for profit attributable to the equity holders

of the company during the year 27
(expressed in cents per share of $0.04 each)
– Basic 1.88 2.61

– Diluted 1.88 2.61
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Statements Of Changes In Equity

Issued Share Translation Accumulated

Capital Premium Reserve Profit Total
$'000 $'000 $'000 $'000 $'000
Group
Balance at 31 December 2002 3,750 – – 909 4,659
Issue of share capital 1,110 – – (1,110) –
Dividends paid (Note 28) – – – (1,699) (1,699)
Net profit for the year – – – 3,169 3,169
Balance at 31 December 2003 4,860 – – 1,269 6,129
Issue of share capital (Note 18) 1,280 6,080 – – 7,360
Share issue expenses (b) – (925) – – ( 925)
Dividends paid (Note 28) – – – (860) ( 860)
Foreign currency translation differences (b) – – (5) – (5)
Balance at 31 December 2004 6,140 5,155 (5) 3,283 14,573
(a) (a)
Company
Balance at 31 December 2002 3,750 – – 909 4,659
Issue of share capital 1,110 – – (1,110) –
Dividends paid (Note 28) – – – (1,699) (1,699)
Balance at 31 December 2003 4,860 – – 1,269 6,129
Issue of share capital (Note 18) 1,280 6,080 – – 7,360
Share issue expenses (b) – (925) – – (925)
Dividends paid (Note 28) – – – (860) (860)
Balance at 31 December 2004 6,140 5,155 – 3,947 15,242
(a)
(a) Unrealised and not available for distribution as cash dividends.

(b) Recognised directly in equity.
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Consolidated Cash Flow Statement

2004 2003
$'000 $'000
Cash flows from operating activities :

Profit before income tax 3,715 4,024
Adjustments for :
Depreciation expense 526 470
Amortisation of goodwill on consolidation 15 –
Amortisation of master franchise fee 17 11
Impairment loss of goodwill on consolidation 388 –
Loss/(gain) on disposal of plant and equipment 33 (10)
Gain on disposal of other investments – (9)
Share of profit of associate (4) –
Interest income (247) (45)
Interest expense 39 3
Operating profit before working capital changes 4,482 4,444
Trade receivables 639 479
Other receivables and prepayments 398 (344)
Inventories 400 (1,111)
Trade payables and accrued liabilities (1,329) (92)
Other payables (201) 119
Cash generated from operations 4,389 3,495
Interest received 247 45
Interest paid (39) (3)
Income tax paid (843) (493)
Net cash from operating activities 3,754 3,044
Cash flows from investing activities :

Acquisition of subsidiary net of cash acquired (Note 29) 59 –
Increase in investment in associate (311) –
Payment of other assets – (50)
Disposal of other investments – 409
Disposal of plant and equipment 30 38
Purchase of plant and equipment (Note 5) (427) (613)
Net cash used in investing activities ( 649) ( 216)
Cash flows from financing activities :

Proceeds from issuing shares 7,360 –
Share issue expenses (925) –
Increase in short-term borrowings 478 –
Repayment in finance leases (Note 5 and 29) (46) (2)
Dividends paid (860) (1,699)
Increase in minority interest 112 –
Net cash from/(used in) financing activities 6,119 (1,701)
Net effect of exchange rate changes in consolidating

foreign subsidiaries (6) –
Net increase in cash 9,218 1,127

Cash at beginning of year 3,519 2,392
Cash at end of year (Note 2 and 5) 12,737 3,519
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Notes To Financial Statements

31 December 2004
1. GENERAL
The company is incorporated in Singapore. The financial statements are presented in Singapore dollars. They are drawn up in accordance
with the provisions of the Companies Act, Cap. 50 and the Singapore Financial Reporting Standards. The financial statements were approved
and authorised for issue by the board of directors on 28 February 2005.
The principal activities of the company are to provide IT products and services through the sale of IT and related products. It is listed on the
Stock Exchange of Singapore Dealing and Automated Quotation System ("SESDAQ"). The principal activities of the subsidiaries are disclosed
in Note 10 to the financial statements.
The registered office address of the company is 109 North Bridge Road, #06-00 Funan The IT Mall, Singapore 179097. The company domiciled
in Singapore.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING CONVENTION – The financial statements are prepared in accordance with the historical cost convention.
BASIS OF PRESENTATION – The consolidation accounting method is used for the consolidated financial statements which include the
financial statements made up to 31 December each year of the company and of those companies in which it holds, directly or indirectly
through subsidiaries, over 50 percent of the shares and voting rights. The consolidated financial statements are prepared using uniform
accounting policies for like transactions and other events in similar circumstances. All significant intercompany balances and transactions
have been eliminated on consolidation. The equity accounting method is used for associates in the group financial statements. The results
of the investees acquired or disposed of during the financial year are consolidated from the respective dates of acquisition or up to the dates
of disposal. On disposal the attributable amount of unamortised goodwill is included in the determination of the gain or loss on disposal.
REVENUE RECOGNITION – Revenue from sale of goods is recognised when significant risks and rewards of ownership are transferred to
the buyer and the amount of revenue and the costs of the transaction (including future costs) can be measured reliably. Revenue from
rendering of services that are of short duration is recognised when the services are completed. Franchise fee income is recognised on a
straight-line basis over the period of the franchise agreement. Interest revenue is recognised on a time-proportion basis using the effective
interest rate. Dividend revenue is recognised when the shareholder's right to receive the dividend is legally established. Revenue is measured
at the fair value of the consideration received or receivable, taking into account the amount of any trade discounts and volume rebates
allowed by the entity.
INVENTORIES – Inventories are measured at the lower of cost (first-in first-out method) and net realisable value.
GOODWILL – Goodwill or negative goodwill arising on acquisition is based on the purchase method. Goodwill arising on consolidation
represents the excess of cost of acquisition over the acquirer's interest in the fair value of the identifiable assets and liabilities of the subsidiary
or associate acquired as at the date of acquisition. Goodwill is carried at cost less any accumulated amortisation and any accumulated
impairment losses. It is amortised on the straight-line method over its useful life to reflect the best estimate of the period during which
future economic benefits are expected to flow to the acquirer. The group will adopt FRS 103 Business Combination with effect from 1 January
2005. FRS prohibits the amortisation of goodwill acquired in a business combination and instead requires the goodwill to be tested for
impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired, in accordance
with FRS 36 Impairment of Assets.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
MINORITY INTERESTS – Minority interests are stated at the appropriate proportion of the post-acquisition values of the identifiable assets
and liabilities of the subsidiaries.
SUBSIDIARIES – In the company's own financial statements, the investments in subsidiaries are carried at cost less any provision for
impairment in value. The book values of the subsidiaries are not necessarily indicative of the amounts that would be realised in a current
market exchange.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
ASSOCIATE – An associate is an entity in which the company has a substantial financial interest (usually not less than 20% of the voting
power), significant influence and that is neither a subsidiary nor a joint venture of the company. Significant influence is the power to participate
in the financial and operating policy decisions of the associate but is not control over those policies. The investment in associate is carried
in the group balance sheet at cost plus post-acquisition changes in the group's share of net assets of the associate, less any impairment
in value. The income statement reflects the group's share of the results of operations of the associate. The group's investment in its associate
includes goodwill (net of accumulated amortisation) on acquisition, which is treated in accordance with the accounting policy for goodwill
stated above. In the company's own financial statements, the investment in associate is stated at cost less any provision for impairment in
value. Profits and losses resulting from transactions between the group and an associate are recognised in the financial statements only
to the extent of unrelated investor's interests in the associate. Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency
with the policies adopted by the group. The net book value of the associate is not necessarily indicative of the amount that would be realised
in a current market exchange.
PLANT AND EQUIPMENT – Plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment
losses. Depreciation is provided on gross carrying amounts in equal annual instalments over the estimated useful lives of the assets.
The annual rates of depreciation are as follows:
Renovation – 12.5% to 33%

Plant and equipment – 10% to 33%
Fully depreciated assets still in use are retained in the financial statements.
The useful life of an item of plant and equipment is reviewed at least at each financial year end and, if expectations are significantly different
from previous estimates, the depreciation charge for the current and future periods are adjusted.
IMPAIRMENT OF ASSETS – At each reporting date an assessment is made as to whether there is any indication that a depreciable or
amortisable asset may be impaired. If any such indication exists, an estimate is made of the recoverable amount of the asset. A provision
is made for the excess of the carrying amount over the recoverable amount. The recoverable amount of an asset or a cash-generating unit
is the higher of its fair value less costs to sell and its value in use.
BORROWING COSTS – All borrowing costs are recognised as an expense in the period in which they are incurred.
FOREIGN CURRENCY TRANSACTIONS – The functional currency is the Singapore dollar as it reflects the primary economic environment
in which the entity operates. Transactions in foreign currencies are recorded in Singapore dollars at the rates ruling at the dates of the
transactions. At each balance sheet date, recorded monetary balances and balances measured at fair value that are denominated in foreign
currencies are reported at the rates ruling at the balance sheet and fair value dates respectively. All realised and unrealised exchange
adjustment gains and losses are dealt with in the income statement.
FOREIGN CURRENCY FINANCIAL STATEMENTS – The foreign entities determine the appropriate functional currency as it reflects the
primary economic environment in which the entities operate. In translating the financial statements of a foreign entity for incorporation in
the consolidated financial statements of the parent company the assets and liabilities denominated in currencies other than the functional
currency of the parent company are translated at year end rates of exchange and the income and expense items are translated at average
rates of exchange for the year. The resulting translation adjustments (if any) are accumulated in a separate component of shareholders'
equity until the disposal of the foreign entity.
INCOME TAX – The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable or
refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events that have been recognised
in the financial statements or tax returns. The measurements of current and deferred tax liabilities and assets are based on provisions of
the enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. The measurement of deferred tax assets is
reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realised. A deferred tax
liability is recognised for all taxable temporary differences, unless the deferred tax liability arises from (a) goodwill for which amortisation
is not deductible for tax purposes; or (b) the initial recognition of an asset or liability in a transaction which (i) is not a business combination;
and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
RETIREMENT BENEFITS COSTS – Contributions to defined contribution retirement benefit plans are recorded as an expense as they fall
due. Contributions made to government managed retirement benefit plan such as the Central Provident Fund in Singapore which specifies
the employer's obligations are dealt with as defined contribution retirement benefit plans.
FRANCHISE FEE – Acquired franchise is carried at acquisition cost less accumulated amortisation and any accumulated impairment losses.
The depreciable amount is allocated on a systematic basis over 3 years.
LEASES – A finance lease is recognised as an asset and a liability in the balance sheet at amounts equal at the inception of the lease to the
fair value of the leased asset or, if lower, at the present value of the lease payments based on the interest rate implicit in the lease. The
excess of the lease payments over the recorded lease obligations are treated as finance charges which are allocated to each lease term
so as to produce a constant rate of charge on the remaining balance of the obligations. The assets are depreciated as owned depreciable
assets. Leases where the lessor effectively retains substantially all the risk and benefits of ownership of the leased assets are classified
as operating leases. For operating leases, lease payments are recognised as an expense in the income statement on a straight line basis
unless another systematic basis is representative of the time pattern of the user's benefit, even if the payments are not on that basis.
ACCOUNTING ESTIMATES – The preparation of financial statements in conformity with generally accepted accounting principles requires
the directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Apart from those involving estimations, management has made judgements in the process
of applying the entity's accounting policies that have the most significant effect on the amounts recognised in the financial statements.
LIABILITIES AND PROVISIONS – A liability and provision is recognised when there is a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. It is measured at the amount payable.
CASH – Cash for the cash flow statement includes cash and cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying values of cash, accounts receivable, other current financial assets, short-term
borrowings, accounts payable and other current financial liabilities approximate their fair market values due to the short-term maturity of
these instruments. Those financial assets that have a fixed maturity are measured at amortised cost using the effective interest rate method.
Those that do not have a fixed maturity are measured at cost. All financial assets are subject to review for impairment.
RISK MANAGEMENT POLICIES FOR FINANCIAL INSTRUMENTS
CREDIT RISK ON FINANCIAL ASSETS – Financial assets that are potentially subject to concentrations of credit risks consist principally of
cash, cash equivalents and trade and other accounts receivable. The directors believe that the financial risks associated with these financial
instruments are minimal. The group places its cash with high credit quality institutions. The group performs ongoing credit evaluation of
its customers’ financial condition and maintains a provision for doubtful accounts receivables based upon the expected collectibility of all
account receivable. There is no significant concentration of credit risk, as the exposure is spread over a large number of counterparties and
customers unless otherwise disclosed in the note to the financial statements.
OTHER RISKS ON FINANCIAL INSTRUMENTS – The group monitors its interest, foreign exchange risks, and changes in fair values from
time to time and any gains and losses are included in the income statement. The group is exposed to interest rate price risk for financial
instruments with a fixed interest rate and to interest rate or cash flow risk for financial instruments with a floating interest rate that is reset
as market rates change. The group is also exposed to changes in foreign exchange rates and liquidity of businesses. The group does not
utilise forward contracts or other arrangements to minimise these risks nor for trading or speculative purposes. At 31 December 2004, there
were no such arrangements, interest rate swap contracts or other derivative instruments outstanding.
OTHER BUSINESS RISKS AND UNCERTAINTIES – The group is subject to a number of risks including the development and marketing of
unproven products, the need to maintain adequate financing, better capitalised competitors and dependence on essential personnel. The
industry is characterised by rapid technological developments, frequent products introductions, evolving industry standards, changes in
customer requirements and short product life cycles. Significant technological changes or the emergence of competitive products with new
capabilities could adversely affect the business plan and operating results of the group.
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3. RELATED COMPANY TRANSACTIONS
Related companies in these financial statements refer to members of the group.
Some of the group’s transactions and arrangements and terms thereof are arranged by or between members of the group. The intercompany
balances are without fixed repayment terms and interest unless stated otherwise.
4. RELATED PARTY TRANSACTIONS
Related parties are entities with common direct or indirect shareholders and or directors or management. Parties are considered to be
related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and
operating decision. They include the associates.
Some of the group’s transactions and arrangements and terms thereof are with related parties. The balances are without fixed repayment
terms and interest unless stated otherwise. It is impracticable to reliably estimate the fair values of the balances when there are no maturity
dates and interest.
Significant related party transactions:
In addition to the transactions and balances disclosed elsewhere in the notes to the financial statements, this item includes the following:
Group
2004 2003
$’000 $’000
Columbia Computer Products, Inc

Purchases of goods 803 665
Purchases of plant and equipment 2 –
On 17 November 2003, the shareholders approved an interested party transaction mandate for the company to purchase IT and related
products from Columbia Computer Products, Inc. The mandate took effect from 14 January 2004.
5. CASH AND CASH EQUIVALENTS
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Bank balances and cash 1,145 852 677 714

Fixed bank deposits 10,992 2,667 10,992 2,667
Restricted fixed bank deposits (a) 600 – 600 –
12,737 3,519 12,269 3,381
Analysis of above amount by currency:

Singapore dollars 6,645 2,868 6,297 2,730
Malaysian ringgit 30 – – –
Thailand baht 90 – – –
Australian dollars 5,972 651 5,972 651
12,737 3,519 12,269 3,381
(a) This is fixed bank deposits held by bankers for bank facilities granted to a subsidiary (see Note 14).
The rate of interest for the cash on interest earning accounts is between 0.7% and 5.1% (2003: 5%) per year receivable weekly, monthly,
quarterly and yearly.
NON-CASH TRANSACTIONS - Additions to plant and equipment during the year amounting to $120,000 were financed by new finance leases.
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6. TRADE RECEIVABLES
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Subsidiaries (Note 3 and 10) – – 436 841

Outside parties 2,012 1,765 1,261 1,500
Less provision for doubtful debts (1) (1) – –
2,011 1,764 1,697 2,341
Movements in above provision:
Balance at beginning and end of year 1 1 – –

2,011 1,764 1,697 2,341
The average credit period generally taken by customers is about 10 days (2003: 10 days). A provision for impairment of trade receivables is
established when there is objective evidence that management will not be able to collect all amounts due according to the original terms
of receivables. The carrying amount of trade receivables approximates to their fair value. Short-duration receivables with no stated interest
rate are normally measured at original invoice amount unless the effect of imputing interest would be significant.
Concentration of customers:
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Top 1 customer 578 421 569 841

Top 2 customers 719 659 993 1,244
Top 3 customers 829 823 1,099 1,481
7. OTHER RECEIVABLES AND PREPAYMENTS
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Subsidiaries (Note 3 and 10) – – 36 200

Deposits 326 318 216 211
Prepayments 49 34 22 25
Deferred expenditure – 445 – 445
Others 60 12 20 12
435 809 294 893

Singapore dollars 374 809 294 893
Thailand baht 1 – – –
435 809 294 893
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7. OTHER RECEIVABLES AND PREPAYMENTS (cont’d)
Deferred expenditure represents expenditure, stated at cost, incurred in connection with the listing of the company’s shares. This amount
has been set off against the share premium account upon receipts of the proceeds from the invitation of shares in January 2004. Included
in this amount is an amount of $138,000 being professional fees paid to the auditors of the company for the purpose of acting as Reporting
Accountants in the listing exercise.
8. INVENTORIES
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Goods for resale at cost 5,912 6,035 5,206 5,069

Inventories carried at net realisable value
after the provision shown below 64 28 64 28
5,976 6,063 5,270 5,097
Balance at beginning of year 60 - 60 -
Charge to income statement 27 60 27 60
Amount written off (60) - (60) -
Balance at end of year 27 60 27 60
9. INVESTMENT IN ASSOCIATE
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Unlisted equity shares at cost 311 - 311 -

Share of post-acquisition profits 2 - - -
313 - 311 -
Share of net book value of associate 300 - 300 -
Name of company, country of incorporation, Percentage of equity held by group

place of operations and principal activities and auditors 2004 2003
% %
Challenger Infortech (Beijing) Co., Ltd (a) (b) 40% -

People's Republic of China
Provision of software and installation services
(a) Other auditors. Audited by firms of accountants other than member firms of Howarth International of which Chio Lim & Associates,
Singapore is a member.
(b) The investment is in China renminbi.
The fair value of the associate as available-for-sale financial assets is deemed to be not reliably measurable as the probabilities of the
various estimates within the range cannot be reasonably assessed as used in estimating fair values. Consequently the investment is carried
at cost less provision for impairment.
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10. INVESTMENTS IN SUBSIDIARIES
Company
2004 2003
$’000 $’000
Unlisted equity shares at cost 2,086 1,985

Less provision for impairment (1,221) (1,153)
865 832

Balance at beginning of year 1,153 1,158
Charge to income statement 68 289
Amount written off - (294)
Balance at end of year 1,221 1,153
Net book value of subsidiaries 196 832

Singapore dollars 2,050 1,985
Malaysian ringgit 36 -
2,086 1,985
The fair value of the subsidiaries as available-for-sale financial assets is deemed to be not reliably measurable as the probabilities of the
various estimates within the range cannot be reasonably assessed as used in estimating fair values. Consequently the investment is carried
at cost less provision for impairment.
The details of the subsidiaries at the financial year end are as follows:
Name of subsidiary, country of incorporation, Cost in books Effective percentage

place of operations and principal activities of company of equity held by the company
2004 2003 2004 2003

$'000 $'000 % %
CBD eVision Pte Ltd (a) 1,500 1,500 100 100

Singapore
Electronic signage business
Matrix Integration Pte. Ltd. (a) 385 385 100 100

Singapore
Small format IT retailing
Itechcare (S) Pte Ltd (a) 100 100 100 100

Singapore
Provision of IT services and franchising of IT services
OA Supplies Pte Ltd (acquired in April 2004) (a) 65 - 55 -

Singapore
Provision of office supplies
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10. INVESTMENTS IN SUBSIDIARIES (cont’d)
Name of subsidiary, country of incorporation, Cost in books Effective percentage

place of operations and principal activities of company of equity held by the company
2004 2003 2004 2003

$'000 $'000 % %
Challenger Technologies (M) Sdn Bhd 36 - 80 -

(incorporated on 1 September 2004) (c)
Malaysia
Provision of IT products and services
Held by CBD eVision Pte Ltd
CBD eVision (M) Sdn Bhd (b) - - 60 -

Malaysia
CBD eVision (Thailand) Company Limited (c) - - 52 -

Thailand
2,086 1,985
(a) Audited by Chio Lim & Associates, a member of Horwath International.

(b) Other auditors. Audited by firms of accountants other than member firms of Howarth International of which Chio Lim & Associates,
Singapore is a member.
(c) Not audited as it is immaterial.
11. PLANT AND EQUIPMENT
Group Renovation Plant and equipment Total

$'000 $'000 $'000
Cost:
At beginning of year 521 3,242 3,763
Additions 37 510 547
Arising from acquisition of subsidiary 25 133 158
Disposals (37) (155) (192)
At end of year 546 3,730 4,276
Accumulated depreciation:
Depreciation for the year 68 458 526
Arising from acquisition of subsidiary 3 44 47
Disposals (5) (124) (129)
At end of year 384 2,684 3,068
Depreciation for last year 59 411 470
Net book value:

At beginning of year 203 936 1,139
At end of year 162 1,046 1,208
Certain items of plant and equipment are under finance lease agreements (see Note 17).
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11. PLANT AND EQUIPMENT (cont’d)
Company Renovation Plant and equipment Total

$'000 $'000 $'000
Cost:
Additions 14 336 350
Disposals - (71) (71)
At end of year 430 3,243 3,673
Accumulated depreciation:
Depreciation for the year 48 385 433
Disposals - (46) (46)
At end of year 337 2,542 2,879
Depreciation for last year 48 395 443
Net book value:

At beginning of year 127 775 902
At end of year 93 701 794
12. OTHER ASSETS
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Preliminary expenses
Arose in previous years - 2 - -
Written off - (2) - -
Net book value - - - -
Master franchise fee (a)

Cost:
At beginning and end of year 50 50 - -
Accumulated amortisation:
At beginning of year 11 - - -
Amortisation for the year 17 11 - -
At end of year 28 11 - -
Net book value 22 39 - -
Total 22 39 - -
(a) This relates to a prepayment for master franchise fee by a subsidiary to carry out certain IT product servicing activities for a period of
3 years commencing on 18 April 2003, with an option to extend it for a further 7 years upon payment of a renewal fee of $50,000. It is
amortised over 3 years.
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13. GOODWILL
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Cost:
Arising from acquisition of subsidiary 403 - - -
At end of year 403 - - -
Accumulated amortisation:
At beginning of year - - - -
Amortisation for the year (15) - - -
Impairment loss (388) - - -
At end of year (403) - - -
Net book value:

At end of year - - - -
14. SHORT-TERM BORROWINGS
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Bank loan (secured) 317 - - -

Trust receipts 89 - - -
Factoring creditors 446 - - -
852 - - -
The bank loan is covered by a pledge on the fixed deposits of the group and personal guarantee from a director of a subsidiary. The group's
other short-term borrowings are secured by joint and several guarantees from certain directors of a subsidiary and a floating charge over
the subsidiary's receivables.
The interest rates for the bank loans ranged from 1.5453% to 2.1465% per year.Trust receipts and factoring facilities are at interest rate of
5% (2003: 5%) per year.
15. TRADE PAYABLES AND ACCRUED LIABILITIES
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Subsidiaries (Note 3 and 10) - - 40 191

Related party (Note 4) 65 126 65 126
Outside parties 5,156 5,189 4,421 5,033
Accrued liabilities 492 336 384 247
5,713 5,651 4,910 5,597

United States dollars 65 126 65 126
Malaysian ringgit 19 - - -
5,713 5,651 4,910 5,597
The average credit period taken to settle payables by the group is about 35 days (2003 : 37 days).
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16. OTHER PAYABLES
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Directors (Note 4) 25 - - -
Subsidiaries (Note 3 and 10) - - 2 288
Deposits received 235 440 229 378
Deferred franchise fee income 13 14 - -
Others 58 78 39 57
331 532 270 723
Singapore dollars 304 532 270 723
Malaysian ringgit 27 - - -
331 532 270 723
17. OBLIGATION UNDER FINANCE LEASES
Group Minimum payments Finance charges Present value

2004 $'000 $'000 $'000
Minimum lease payments payable:

Due within one year 21 (5) 16
Due within 2 to 5 years 109 (17) 92
Total 130 (22) 108
Net book value of plant and equipment under finance leases 112
Group Minimum payments Finance charges Present value

2003 $'000 $'000 $'000
Minimum lease payments payable:

Due within one year 4 (1) 3
Total 4 (1) 3
Net book value of plant and equipment under finance leases -
It is the group's policy to lease certain of its plant and equipment under finance leases. The average lease term is 5 years. The rates of
interest for the finance lease during the year ranged from 3.3% to 6.3% (2003 : 6.3%) per year. The interest rates are fixed at the contract
date. All leases are on a fixed repayment basis and no arrangement has been entered into for contingent rental payments. The lease
obligations are denominated in Singapore dollars and Malaysian ringgit. The fair value of the lease obligations does not differ significantly
from their carrying amount. The obligations under the finance leases are secured by the lessor's charge over the leased assets.
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18. ISSUED CAPITAL
Company
2004 2003
$’000 $’000
Authorised:
2,500,000,000 ordinary shares of $0.04 each 100,000 100,000
Issued and fully paid:

153,500,000 ordinary shares of $0.04 each
(2003 : 121,500,000 ordinary shares of $0.04 each) 6,140 4,860
The changes in the company's issued capital during the year are as follows:
$'000
121,500,000 ordinary shares of $0.04 each as at 31 December 2003 4,860

Issue of 32,000,000 new shares of $0.04 each at premium of $0.19 per share 1,280
153,500,000 ordinary shares of $0.04 each as at 31 December 2004 6,140
On 14 January 2004, the company issued 32,000,000 new shares at a premium of $0.19 per share pursuant to the company's listing on SGX-
SESDAQ.
The new ordinary shares rank pari passu in all material respects with the existing shares of the company.
19. REVENUE
Group
2004 2003
$’000 $’000
IT products and services 70,852 66,298

Electronic signage services 987 967
Office supplies 3,639 -
75,478 67,265
20. OTHER OPERATING INCOME
Group
2004 2003
$’000 $’000
Interest income from financial institutions 247 45

Sundry income 56 50
303 95
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21. STAFF COSTS
Group
2004 2003
$’000 $’000
Staff costs including directors 4,433 3,602

Contributions to defined contribution plans 458 396
Total staff costs 4,891 3,998
22. NUMBER OF EMPLOYEES
Group
2004 2003
Number of staff (including directors) at end of year 244 213
23. OTHER (CHARGES)/CREDITS
Group
2004 2003
$’000 $’000
Amortisation of goodwill on consolidation (15) -

Amortisation of master franchise fee (17) (11)
Bad debts written off on trade receivables (23) -
Bad debts recovered on trade receivables 5 5
Foreign exchange adjustment gain 103 132
Gain on disposal of other investments - 9
(Loss)/ gain on disposal of plant and equipment (33) 10
Loss on deregistration of a subsidiary - (8)
Preliminary expenses written off - (2)
Provision for inventories (27) (60)
Inventories written off (12) -
Impairment loss of goodwill on consolidation (388) -
( 407) 75
24. FINANCE COSTS
Group
2004 2003
$’000 $’000
Interest expense to financial institutions 39 3
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25. PROFIT BEFORE INCOME TAX
In addition to the charges and credits disclosed elsewhere in the notes, this item includes the following charges:
Group
2004 2003
$’000 $’000
Auditors' remuneration
- auditors of the company 59 50
- overprovision in prior year (2) -
- other auditors 1 -
Other fees to auditors

- auditors of the company 7 8
Directors' fee
- current year 32 -
- underprovision in prior year 16 -
Directors' remuneration
- directors of the company 456 515
- other directors 325 168
26. INCOME TAX
Group
2004 2003
$’000 $’000
Current (952) (855)

Deferred 37 -
Income tax attributable to the company and subsidiaries ( 915) ( 855)
Share of income tax of associate (2) -
Total income tax expense (917) (855)
The income tax expense for the year varied from the amount of income tax expense determined by applying the Singapore income tax rate
of 20% (2003 : 22%) to profit before tax as a result of the following differences:
Group
2004 2003
$’000 $’000
Income tax expense at the statutory rate (743) (886)

Non (taxable)/allowable items (44) 8
Prior years' tax loss carried forward now utilised - 2
Underprovision in prior years (55) -
Tax exemptions 11 23
Reductions in tax rates 11 -
Share of income tax of associate (2) -
Losses of certain subsidiaries being unavailable for
set-off against the profit of other companies in the group (39) -
Deferred tax assets valuation allowance (56) (2)
Total income tax expense (917) (855)
At balance sheet date, the company had a balance of about $1,547,000 (2003 : $1,762,000) under section 44 of the Income Tax Act available
for declaration of dividends to shareholders in the next five years beginning from 1 January 2003. This amount is subject to agreement by
the Inland Revenue Authority of Singapore. Profits earned from 1 January 2003 are not subject to the section 44 charge.
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26. INCOME TAX (cont’d)
The net deferred tax amount in the balance sheet is as follows:
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Deferred tax liabilities:

Excess of net book value of plant and equipment 136 154 119 151
Interest receivable 5 10 5 10
Total deferred tax liabilities 141 164 124 161
Deferred tax assets:

Excess of tax written down value of plant and equipment 11 - - -
Tax losses carryforwards 116 47 - -
Tax losses carryforwards used in group relief (10) - - -
Deferred tax assets valuation allowance (103) (47) - -
Total deferred tax assets 14 - - -
Net total deferred tax liabilities 127 164 124 161
An allowance is made to the extent that it is not probable that taxable profit will be available against which the unused tax loss carryforwards
can be utilised. The realisation of the future income tax benefits from tax loss carryforwards and temporary differences from capital
allowances is available for an unlimited future period subject to the conditions imposed by law including the retention of majority shareholders
as defined. Where provision for deferred tax arising from temporary differences has been offset against the above tax loss carryforwards,
such provision for deferred tax will be required to be set up when the tax losses are utilised in the future.
There is no income tax consequence of dividends to shareholders of the company.
Temporary differences arising in connection with interests in subsidiaries and associate are insignificant.
27. EARNINGS PER SHARE
The basic earnings per share is calculated based on the group's profit attributable to shareholders of $2,874,000 (2003 : $3,169,000) and
the weighted average number of ordinary share of 152,447,945 (2003: 121,500,000) of $0.04 each.
There is no dilution because no option was granted to take up unissued shares of the company during the year.
28. DIVIDENDS
In financial year 2003, the company declared and paid a first interim dividend of 1.60 cents net of tax per ordinary share on the 75,000,000
issued ordinary shares of the company totalling $1,199,000 in June 2003 and a second interim dividend of 0.67 cents net of tax per ordinary
share on the 75,000,000 issued ordinary shares of the company totalling $500,000 in September 2003 in respect of financial year ended 31
December 2003.
In financial year 2004, the company declared and paid a first interim dividend of 0.56 cents net of tax per ordinary share on the 153,500,000
issued ordinary shares of the company totalling $860,000 in September 2004 in respect of financial year ended 31 December 2004.
In respect of the current year, the directors propose that a final dividend of 2.4 cents net of tax per ordinary shares be paid to shareholders
after the annual general meeting. This dividend is subject to approval by shareholders at the next annual general meeting and has not been
included as a liability in these financial statements.
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29. ACQUISITION OF SUBSIDIARY
The group acquired 55% of OA Supplies Pte Ltd in April 2004. The transaction was accounted for by the purchase method of accounting.
The fair value of net assets acquired are as follows:
Group
2004
$’000
Cash and bank balances 124

Trade receivables 886
Other receivables and prepayments 24
Inventories 313
Plant and equipment (net book value) 111
Goodwill 403
Trade payables and accrued liabilities (1,391)
Short-term borrowings (374)
Finance leases (31)
Consideration 65
Less cash taken over (124)
Net cash inflow from acquisition (59)
The contributions from the subsidiary for the period between the date of acquisition and the balance sheet date were as follows:
Revenue 3,709
Loss before income tax (218)
30. CAPITAL COMMITMENTS
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Estimated amounts committed for future

capital expenditure but not provided for
in the financial statements 84 - 84 -
31. OPERATING LEASE COMMITMENTS
At the balance sheet date the commitments in respect of operating leases with a term of more than one year were as follows:
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Within one year 2,452 3,117 2,094 2,759

Within 2 to 5 years 384 2,634 163 2,257
Rental expense for the year 3,185 2,845 2,759 2,675
Operating lease payments represent rentals payable by the group for its retail outlets and office space. The lease rental terms are negotiated
for an average of 3 years and rentals are subject to an escalation clause but the amount of the rent increase is not to exceed a certain
percentage. Such increase are not included in the above amounts.
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32. CONTINGENT LIABILITIES
Group Company
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Bankers' guarantee (secured) 643 544 643 544

Corporate guarantee for a subsidiary - - 350 350
643 544 993 894
33. FINANCIAL INFORMATION BY SEGMENT
For management purposes, the group is currently organised into three operating divisions - IT products and services, electronic signage
services and office supplies. These divisions are the basis on which the group reports its primary segment information.
Segment information about these business is presented below:

IT products Electronic Office
and services signage services supplies Elimination Total
$'000 $'000 $'000 $'000 $'000
REVENUE
External sales and services 70,852 987 3,639 - 75,478
Inter-segment sales and services - 4 69 (73) -
Total revenue 70,852 991 3,708 (73) 75,478
RESULTS
Segment results 4,199 (157) (225) - 3,817
Other operating income 303
Other (charges)/credits (407)
Finance costs (2)
Share of profit of associate 4
Profit before income tax 3,715
Income tax expense (917)
Profit after income tax 2,798
Minority interests 76
Net profit for the year 2,874
OTHER INFORMATION
Capital expenditure 383 118 46 - 547
Depreciation expense 466 28 32 - 526
Amortisation of master franchise fee 17 - - - 17
Amortisation of goodwill on consolidation 15 - - - 15
BALANCE SHEET
ASSETS
Segment assets 9,130 633 1,080 (46) 10,797
Investment in associate 313
Unallocated assets 11,592
Consolidated total assets 22,702
LIABILITIES
Segment liabilities 5,250 164 1,636 (46) 7,004
Unallocated liabilities 1,090
Consolidated total liabilities 8,094
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33. FINANCIAL INFORMATION BY SEGMENT (cont’d)

IT products Electronic
and services signage services Elimination Total
$'000 $'000 $'000 $'000
REVENUE
External sales and services 66,298 967 - 67,265
Inter-segment sales and services - 9 (9) -
Total revenue 66,298 976 (9) 67,265
RESULTS
Segment results 3,755 102 - 3,857
Other operating income 95
Other credits/(charges) 75
Finance costs (3)
Profit before income tax 4,024
Income tax expense (855)
Net profit for the year 3,169
OTHER INFORMATION
Capital expenditure 613 - - 613
Depreciation expense 454 16 - 470
Amortisation of master franchise fee 11 - - 11
BALANCE SHEET
ASSETS
Segment assets 12,949 640 (256) 13,333
Unallocated assets -
Consolidated total assets 13,333
LIABILITIES
Segment liabilities 6,090 96 - 6,186
Unallocated liabilities 1,018
Consolidated total liabilities 7,204
Geographical Segments
The group's operations are located in Singapore, Malaysia and Thailand. The group's IT products and services and office supplies divisions
are located in Singapore. Electronic signage service divisions are located in Singapore, Malaysia and Thailand.
The following table provides an analysis of the group's revenue by geographical market irrespective of the origin of goods/service:
Sales revenue by
geographical market
2004 2003
$’000 $’000
Singapore 75,367 67,265

Malaysia 111 -
Thailand - -
75,478 67,265
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33. FINANCIAL INFORMATION BY SEGMENT (cont’d)
The following is an analysis of the carrying amount of segment assets, and additions to plant and equipment, analysed by the geographical
area in which the assets are located:
Carrying amount Additions to plant

of segment assets and equipment
Year ended Year ended
2004 2003 2004 2003
$’000 $’000 $’000 $’000
Singapore 22,061 13,333 470 613

Malaysia 225 - 69 -
Thailand 103 - 8 -
22,389 13,333 547 613
Associate 313 -
22,702 13,333
34. CHANGES AND ADOPTIONS OF ACCOUNTING STANDARDS
For the year ended 31 December 2004 the following new accounting standards were adopted for the first time:
FRS 2 (revised 2004) Inventories

FRS 8 (revised 2004) Accounting Policies, Changes in Accounting Estimates and Errors
FRS 10 (revised 2004) Events after the Balance Sheet Date
FRS 16 (revised 2004) Property, Plant and Equipment
FRS 17 (revised 2004) Leases
FRS 21 (revised 2004) The Effects of Changes in Foreign Exchange Rates
FRS 27 (revised 2004) Consolidated and Separate Financial Statements
FRS 28 (revised 2004) Investments in Associates
FRS 32 (revised 2004) Financial Instruments: Disclosure and Presentation
FRS 33 (revised 2004) Earnings per Share
FRS 36 (revised 2004) Impairment of Assets
FRS 38 (revised 2004) Intangible Assets
The new standards did not require any material modifications of the measurement method or the presentation in the financial statements.
35. FUTURE CHANGES IN ACCOUNTING STANDARDS
The following Singapore Financial Reporting Standards will be effective from 1 January 2005. A few of the new standards may result in
material adjustments to the financial position, results of operations, or cash flows for the following year.
FRS 1 (revised 2004) Presentation of Financial Statements

FRS 24 (revised 2004) Related Party Disclosures
FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement
FRS 102 (issued 2004) Share-based Payments
FRS 103 (issued 2004) Business Combinations
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Statistics Of Shareholdings
As at 4 March 2005
Authorised share capital : $100,000,000

Issued and fully paid up capital : $6,140,000
Class of shares : Ordinary shares of $0.04 each
Voting rights : One vote per share
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings No. of Shareholders % No. of Shares %
1 - 999 0 0.00 0 0.00

1,000 - 10,000 458 45.26 2,363,000 1.54
10,001 - 1,000,000 548 54.15 30,110,000 19.62
1,000,001 and above 6 0.59 121,027,000 78.84
Total 1,012 100.00 153,500,000 100.00
SUBSTANTIAL SHAREHOLDERS
(As recorded in the Register of Substantial Shareholders as at 4 March 2005)
Direct Interest Direct Interest

Name of Shareholders No. of Shares % No. of Shares %
Loo Leong Thye 65,693,000 42.80 - -

Ong Sock Hwee 14,019,000 9.13 - -
Ng Leong Hai 37,830,000 24.64 - -
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Statistics Of Shareholdings
TWENTY LARGEST SHAREHOLDERS
No. Name No. of Shares %
1 Loo Leong Thye 64,355,000 41.93

2 Ng Leong Hai 37,830,000 24.64
3 Ong Sock Hwee 14,019,000 9.13
4 DBS Vickers Securities (S) Pte Ltd 1,918,000 1.25
5 United Overseas Bank Nominees Pte Ltd 1,793,000 1.17
6 OCBC Securities Private Ltd 1,112,000 0.72
7 DBS Nominees Pte Ltd 933,000 0.61
8 Phillip Securities Pte Ltd 645,000 0.42
9 Lim Peng Boon 536,000 0.35
10 Tan Teck Kiang 534,000 0.35
11 Hong Leong Finance Nominees Pte Ltd 505,000 0.33
12 Yeo Keng Huat 421,000 0.27
13 Lim Teck Guan 411,000 0.27
14 OCBC Nominees Singapore Pte Ltd 354,000 0.23
15 Choong Kien Siong 349,000 0.23
16 Kwan Sow Chee 300,000 0.20
17 Lim Kim Huay 280,000 0.18
18 Tan Wee Pheng 271,000 0.18
19 Ang Hao Yao 258,000 0.17
20 Chua Leh Suan 250,000 0.16
Total 127,074,000 82.79
PERCENTAGE OF SHAREHOLDINGS IN PUBLIC HANDS
23.01% of the company's shares are held in the hands of public. Accordingly, the company has compiled with Rule 723 of the Listing Manual of
the SGX-ST.
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(Incorporated in the Republic of Singapore)
NOTICE IS HEREBY GIVEN that the Annual General Meeting of CHALLENGER TECHNOLOGIES LIMITED will be held at Raffles City Convention Centre,
Level 4, Moor Room, 2 Stamford Road, Singapore 178882 on Tuesday, 12 April 2005 at 10.00 a.m. for the following purposes:
AS ORDINARY BUSINESS:
1. To receive and adopt the Directors' Report and the Audited Accounts for the year ended 31 December 2004 together with the Auditors' Report
thereon. (Resolution 1)
2. To declare a final dividend of 3 cents per ordinary share less income tax at 20% for the year ended 31 December 2004. (Resolution 2)
3. To re-elect the following Directors retiring pursuant to Article 107 of the Company's Articles of Association:
Mdm Ong Sock Hwee (Resolution 3)

Mr Ng Leong Hai (Resolution 4)
Mr Ng Leong Hai will, upon re-election as a Director of the Company, remain a member of the Audit Committee and will be considered non
independent for the purpose of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.
4. To approve the payment of Directors' fees of S$32,000 for the year ended 31 December 2004. (Resolution 5)
5. To re-appoint Chio Lim & Associates as Auditors of the Company and to authorise the Directors to fix their remuneration. (Resolution 6)
6. To transact any other ordinary business that may be properly transacted at an Annual General Meeting.
AS SPECIAL BUSINESS:
To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions:
7. That pursuant to Section 161 of the Companies Act, Cap. 50 and the Listing Manual of the Singapore Exchange Securities Trading Limited,
authority be and is hereby given to the Directors of the Company to allot and issue Shares or convertible securities from time to time (whether
by way of rights, bonus or otherwise) and upon such terms and conditions and for such purposes and to such person as the Directors may
in their absolute discretion deem fit, provided that the aggregate number of Shares and convertible securities which may be issued pursuant
to such authority shall not exceed 50% of the issued share capital of the Company, of which the aggregate number of Shares and convertible
securities which may be issued other than on a pro-rata basis to the existing Shareholders of the Company shall not exceed 20% of the
issued share capital of the Company (the percentage of issued share capital being based on the issued share capital at the time such authority
is given after adjusting for new shares arising from the conversion or exercise of any convertible securities or employee share options on
issue at the time such authority is given and any subsequent consolidation or subdivision of shares) and, unless revoked or varied by the
Company in general meeting, such authority shall continue in force until the conclusion of the Company's next Annual General Meeting.
[see Explanatory Note (i)] (Resolution 7)
8.(a) That approval be and is hereby given for the purposes of Chapter 9 of the Listing Manual of the SGX-ST, for the Company and its subsidiaries,
to enter into any of the transactions falling within the categories of interested person transactions set out in the Appendix to this Annual
Report of the Company dated 28 March 2005 (the "Appendix") with any party who is of the class of interested persons described in the
Appendix provided that such transactions are made on an arm's length basis and on normal commercial terms, not prejudicial to the interests
of the Company and its minority Shareholders and in accordance with the review procedures for such interested person transactions as
set out in the Appendix (the "Shareholders' Mandate");
(b) That the Shareholders' Mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the next Annual
General Meeting of the Company; and
(c) That the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such
documents as may be required) as they may consider expedient or necessary in the interests of the Company to give effect to the Shareholders'
Mandate and/or this Resolution." [see Explanatory Note (ii)] (Resolution 8)
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BY ORDER OF THE BOARD
WEE WOON HONG

Company Secretary
Singapore
28 March 2005
EXPLANATORY NOTES:
(i) The Ordinary Resolution proposed in item 7 above, if passed, will empower the Directors of the Company from the date of the above Meeting until
the next Annual General Meeting to allot and issue shares and convertible securities in the Company up to an amount not exceeding in total fifty per
cent (50%) of the issued share capital of the Company for such purposes as they consider would be in the interest of the Company, provided that the
aggregate number of shares to be issued other than on a pro-rata basis to existing shareholders pursuant to this Resolution shall not exceed twenty
per cent (20%) of the issued capital of the Company. The percentage of issued capital is based on the Company's issued capital at the time the proposed
Ordinary Resolution is passed after adjusting for (a) new shares arising from the conversion of convertible securities or employee share options on
issue at the time the proposed Ordinary Resolution is passed and (b) any subsequent consolidation or subdivision of shares. This authority will, unless
previously revoked or varied at a General Meeting, expire at the next Annual General Meeting of the Company.
(ii) The Ordinary Resolution 8 proposed in item 8 above, if passed, will authorise the interested person transactions as described in the Appendix and
recurring in the year and will empower the Directors to do all acts necessary to give effect to the Shareholders' 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.
NOTES:
(i) A member of the Company entitled to attend and vote at the above Meeting may appoint not more than two proxies to attend and vote instead of him.
(ii) Where a member appoints two proxies, he shall specify the proportion of his shareholding to be represented by each proxy in the instrument appointing
the proxies. A proxy need not be a member of the Company.
(iii) If the member is a corporation, the instrument appointing the proxy must be under its common seal or the hand of its attorney or a duly authorised
officer.
(iv) The instrument appointing a proxy must be deposited at the Registered Office of the Company at 109 North Bridge Road #06-00 Funan The IT Mall
Singapore 179097 not less than 48 hours before the time appointed for holding the above Meeting.
NOTICE OF BOOKS CLOSURE
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of Challenger Technologies Limited (the "Company") will be closed
on 20 April 2005 for the preparation of dividend warrants.
Duly completed registrable transfers received by the Company's Share Registrar, Lim Associates (Pte) Ltd at 10 Collyer Quay #19-08 Ocean Building,
Singapore 049315 up to 5.00 p.m. on 19 April 2005 will be registered to determine shareholders' entitlements to such dividend.
Members whose Securities Accounts with The Central Depository (Pte) Limited are credited with shares as at 5.00 p.m. on 19 April 2005 will be entitled
to the proposed dividend.
Payment of the dividend, if approved by shareholders at the Annual General Meeting to be held on 12 April 2005, will be made on 28 April 2005.
BY ORDER OF THE BOARD
WEE WOON HONG

Company Secretary
28 March 2005
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Appendix
28 March 2005
This Appendix is circulated to Shareholders of Challenger Technologies Limited ("the Company") together with the Company's annual
report. Its purpose is to explain to Shareholders the rationale and provide information to the Shareholders for proposed renewal of
the Interested Person Transactions Mandate to be tabled at the Annual General meeting to be held on 12 April 2005 at 10.00 am at
Raffles City Convention Centre, Level 4, Moor Room, 2 Stamford Road, Singapore 178882.
The Notice of Annual General Meeting and a Proxy Form are enclosed with the Annual Report.
The Singapore Exchange Securities Trading Limited takes no responsibility for the correctness of any of the statements made, reports
contained/referred to, or opinions expressed, in this Appendix.
CHALLENGER TECHNOLOGIES LIMITED

APPENDIX
IN RELATION
TO DETAILS OF THE PROPOSED RENEWAL OF THE SHAREHOLDERS'

MANDATE FOR INTERESTED PERSON TRANSACTIONS
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Appendix
DEFINITIONS
In this appendix ("Appendix"), the following definitions apply throughout unless otherwise stated:
"AGM" : The annual general meeting of the Company to be convened on 12 April 2005, notice of which is set out
in the Annual Report 2004 dispatched together with this Appendix
"CDP" : The Central Depository (Pte) Limited
"Columbia" : Columbia Computer Products, Inc
"Company" : Challenger Technologies Limited
"Companies Act" : Companies Act, Chapter 50 of Singapore
"Directors" : The directors of the Company as at the date of this Appendix
"Group" : The Company and its subsidiaries
"Interested Person" : A director, chief executive officer or controlling shareholder of the listed company or an associate of such
director, chief executive officer or controlling shareholder
"Interested Person Transaction" : Transactions proposed to be entered into between the Group and any interested person
"Latest Practicable Date" : The latest practicable date prior to the printing of the Appendix, being 21 March 2005
"Listing Manual" : The listing manual of the SGX-ST
"NTA" : Net tangible assets
"Securities Account" : A securities account maintained by a Depositor with CDP but does not include a securities sub-account
"SGX-ST" : Singapore Exchange Securities Trading Limited
"Shareholders" : Registered holders of Shares, except that where the registered holder is CDP, the term "Shareholders"
shall, where the context admits, mean the Depositors whose Securities Accounts are credited with Shares
"small format outlet" : Retail outlets of areas between 300 square feet to 2,000 square feet which carry a limited variety of
products and operate with low overheads.
"Superstore" : Retail outlets of areas more than 10,000 square feet which carry a wide variety of products in order to
provide one-stop solutions and services to the customers.
"Shares" : Ordinary shares of $0.04 each in the capital of the Company
"USA" : United States of America
"S$" and "cents" : Singapore dollars and cents, respectively
"%" or "per cent" : Per centum or percentage
The terms "Depositor" and "Depository Register" shall have the meanings ascribed to them respectively in Section 130A of the Companies Act.
Words importing the singular shall, where applicable, include the plural and vice versa. Words importing the masculine gender shall, where
applicable, include the feminine and neuter genders. References to persons shall include corporations.
Any reference in this Appendix to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined
under the Companies Act, the Listing Manual or any modification thereof and not otherwise defined in this Appendix shall have the same meaning
assigned to it under the Companies Act, the Listing Manual or any modification thereof, as the case may be.
Any reference to a time of day in this Appendix is made by reference to Singapore time unless otherwise stated.
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Appendix
CHALLENGER TECHNOLOGIES LIMITED

1. INTRODUCTION
The purpose of this Appendix is to provide Shareholders with the relevant information relating to, and to seek Shareholders' approval at
the AGM to renew the general mandate ("Shareholders' Mandate") that will enable the Group to enter into transactions with the Interested
Person in compliance with Chapter 9 of the Listing Manual.
Chapter 9 of the SGX-ST Listing Manual applies to transactions which a listed company or any of its unlisted subsidiaries or unlisted associated
companies proposes to enter into with an interested person of the listed company. An "interested person" is defined as a director, chief
executive officer or controlling shareholder of the listed company or an associate of such director, chief executive officer or controlling
shareholder.
Chapter 9 of the Listing Manual allows a listed company to seek a general mandate from its shareholders for recurrent transactions of
revenue or trading nature or those necessary for its day-to-day operations, which may be carried out with the listed company's "interested
persons".
Pursuant to Chapter 9 of SGX-ST Listing Manual, the general mandate, which was approved by the Shareholders on 17 November 2003,
and renewed on 21 April 2004, will continue in force until the forthcoming AGM. Accordingly, the Directors propose that the general mandate
be renewed at the AGM to be held on 12 April 2005, to take effect until the next AGM of the Company.
General information relating to Chapter 9 of the Listing Manual, including the meanings of term such as "interested person", "associate",
"associate company" and "controlling shareholder", are set out in the annexure of this Appendix.
2. SHAREHOLDERS' MANDATE FOR INTERESTED PERSON TRANSACTIONS
2.1 Classes of Interested Persons
2.1.1 The renewed Shareholders' Mandate will apply to the Interested Person Transactions (IPTs) (as described in paragraph 2.2
below) which are carried out with Columbia. Mr Ng Leong Hai, a non-executive director and controlling shareholder of the
Company, is a director and shareholder of Columbia.
2.2.2 Transactions with Interested Persons which do not fall within the ambit of the Shareholders' Mandate shall be subject to the
relevant provisions of Chapter 9 and/or other applicable provisions of the Listing Manual.
2.2 Scope of Interested Person Transactions
The Recurrent IPTs which will be covered by the Shareholders' Mandate are purchases of IT and related products from Columbia.
2.3 Rationale for and Benefits of the Shareholders' Mandate
Columbia sources and procures IT and related products in the USA and the Group purchases these IT and related products from
Columbia for sale at our Challenger Superstore and small format outlets. As the Group does not have a procurement office or presence
in the USA, the purchases from Columbia allow the Group to leverage on Columbia's connections and network and procure the latest
IT and related products from the USA.
The Recurrent IPTs set out above are transactions entered into or to be entered into by the Group in its ordinary course of business.
They are recurring transactions which are likely to occur with some degree of frequency and arise at any time and from time to time.
The Directors are of the view that it will be beneficial to the Group to transact or continue to transact with the Interested Person,
especially since the Recurrent IPTs are to be entered into at an arm's length basis and on normal commercial terms, and will not be
prejudicial to the interests of the Company and its minority Shareholders.
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6423 02challenger financi#275F9 18/3/05 10:07 am Page 43
Appendix
By renewing the Shareholders' Mandate at the forthcoming AGM and subsequently at every AGM, the Group would eliminate the need
to convene separate general meetings from time to time to seek Shareholders' approval as and when potential IPTs arise, provided
that the transactions are made on an arm's length basis and on normal commercial terms and are not prejudicial to the interests of
the Company and its minority Shareholders. This would reduce the administrative time and expenses in convening such meetings
substantially. In addition, it would not be feasible to obtain Shareholders' approval each and every time the Group enters into an IPT
as the transactions would be recurrent in nature.
2.4 Review Procedures for Interested Person Transactions
The Group has implemented the following procedures to ensure that the IPTs including those which fall within the scope of the
Shareholders' Mandate are undertaken on an arm's length basis and on normal commercial terms.
In general, the Audit Committee will ensure that the terms (including, inter alia, credit terms granted) of the IPTs are consistent with
the Group's usual business practices and procedures as follows:
(a) When purchasing any IT and related products from Columbia, two other quotations for each product will be obtained from unrelated
third parties for comparison to ensure that the interests of our Company and its minority Shareholders are not disadvantaged. The
purchase price offered by Colombia shall not be higher than the most competitive price of the two other quotations from unrelated
third parties. In determining the most competitive price, all pertinent factors, including but not limited to quality, delivery time and
track record will be taken into consideration; and
(b) In cases where it is not possible to obtain comparables from other unrelated third parties (for example, if there are no unrelated
third party vendors selling a similar type of product), the head of the respective category of product of the merchandising department
and corporate sales department will consider whether the pricing of the transaction is in accordance with usual business practices
and pricing policies of the Group to determine whether the relevant transactions is undertaken on an arm's length basis and on
normal commercial terms.
In addition, the Directors will monitor the IPTs entered into by the Group by categorising the transactions as follows:
(i) Transactions in value equal to or exceeding S$100,000 will be reviewed and approved by the Audit Committee; and
(ii) Where the aggregate value of all such transactions in the current financial year is equal to or exceeds 5% of our Group's latest audited NTA,
the latest and all future transactions will be reviewed and approved by the Audit Committee.
A register will be maintained by the Group to record all IPTs (and the basis on which they are entered into) which are entered into pursuant to
the Shareholders' Mandate.
The Company shall, on a half-yearly basis, report to the Audit Committee on all IPTs, and the basis of such transactions, entered into with
Columbia during the preceding half-year. The Audit Committee shall review such IPTs at its half-yearly meetings except where such IPTs are
required under the review procedures to be approved by the Audit Committee prior to the entry thereof.
The Company's annual audit plan shall incorporate a review of all IPTs, including the established review procedures for the monitoring of such
IPTs, entered into during the current financial year pursuant to the Shareholders' Mandate.
The Audit Committee shall review from time to time the guidelines and procedures to determine if they continue to be adequate and/or
commercially practicable in ensuring that transactions between Columbia and the Group are conducted on an arms' length basis and on normal
commercial terms.
In the event that a member of the Audit Committee or the Board, as the case may be, is deemed to have an interest in the Interested Person,
he or she will abstain from reviewing and voting on that IPT.
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Appendix
The Audit Committee will also carry out periodic reviews (not less than twice in a financial year) to ensure that the established guidelines and
procedures for IPTs have been complied with and the relevant approvals obtained. Further, if during these periodic reviews, the Audit Committee
is of the view that the above guidelines and procedures are not sufficient to ensure that these IPTs will be on an arm's length basis and on
normal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders, the Company will seek our
Shareholders' approval for a fresh mandate based on new guidelines and procedures for transactions with Columbia. During the period prior
to obtaining a fresh mandate from the Shareholders, all transactions with Columbia will be subject to prior review and approval by the Audit
Committee.
2.5 Audit Committee's Statements
2.5.1 The Audit Committee (currently comprising Mr Ho Boon Chuan Wilson, Mr Choo Swee Cher and Mr Ng Leong Hai) has reviewed the
terms of the Shareholders Mandate and is satisfied that the review procedures for IPTs, as well as the reviews to be made periodically
by the Audit Committee in relation thereto, are sufficient to ensure that IPTs will be made with the relevant class of Interested Persons
on normal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders.
2.5.2 If, during the periodic reviews by the Audit Committee, the Audit Committee is of the view that the established guidelines and procedures
are not sufficient to ensure that the IPTs will be on normal commercial terms and will not be prejudicial to the interests of the Company
and its minority Shareholders, the Company will seek our Shareholders for a fresh mandate based on new guidelines and procedures
for transactions with Interested Persons.
2.5.3 The Audit Committee will also ensure that all disclosure and approval requirements for IPTs, including those required by the prevailing
legislation, the Listing Manual and the applicable accounting standards, as the case may be, are complied with.
3. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS
The interests of the Directors and the substantial Shareholders in Shares as the Latest Practicable Date are set out below:
Number of Shares
Directors Direct Interest % Deemed Interest %
Loo Leong Thye 65,693,000 42.80 - -

Ong Sock Hwee 14,019,000 9.13 - -
Ng Leong Hai 37,830,000 24.64 - -
Ng Kian Teck 200,000 0.13 - -
Ho Boon Chuan Wilson 100,000 0.07 - -
Choo Swee Cher 100,000 0.07 - -
There are no substantial Shareholders (other than the Directors) as disclosed above s at the Latest Practicable date.
4. DIRECTORS RECOMMENDATIONS
The Directors who are considered independent for the purposes of the proposed renewal of the Shareholders’ Mandate are Mr Ho Boon
Chuan Wilson and Mr Choo Swee Cher (the “Independent Directors”). The Independent Directors are of the opinion that the entry into the
IPTs by the Group in the ordinary course of its business will enhance the efficiency of the Group and is in the best interests of the Company.
For the reasons set out in paragraph 2.3 of this Appendix, the Independent Directors recommend that Shareholders vote in favour of
Resolution 8, being the Ordinary Resolution relating to the proposed renewal of the Shareholders’ Mandate at the forthcoming AGM.
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Appendix
5. ANNUAL GENERAL MEETING
The AGM, notice of which is set out in the Annual Report 2004 of the Company, will be held on 12 April 2005 at 10.00 a.m. at Raffles City
Convention Centre, Level 4, Moor Room, 2 Stamford Road, Singapore 178882 for the purpose of considering and, if thought fit, passing
with or without any modifications, the Ordinary Resolution relating to the renewal of the Shareholders' Mandate at the AGM as set out in
the Notice of AGM.
6. ACTION TO BE TAKEN BY SHAREHOLDERS
If a Shareholder is unable to attend the AGM and wishes to appoint a proxy to attend and vote on his or her behalf, he or she should complete,
sign and return the Proxy Form attached to the Notice of AGM in accordance with the instructions printed thereon as soon as possible and,
in any event, so as to reach the Company at 109 North Bridge Road, #06-00 Funan The IT Mall, Singapore 179097 not later than 48 hours
before the time fixed for the AGM. Completion and return of the Proxy Form by a Shareholder will not prevent him or her from attending
and voting at the AGM if he or she so wishes.
7. INSPECTION OF DOCUMENTS
Copies of the audited financial statements of the Company for the last two financial years ended 31 December 2003 and 2004 are available
for inspection at the registered office of the Company at 109 North Bridge Road, #06-00 Funan The IT Mall, Singapore 179097 during normal
business hours from the date of the Appendix up to the date of AGM.
8. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Appendix and confirm,
having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and the opinions expressed in this
Appendix are fair and accurate and that there are no material facts the omission of which would make any statement in this Appendix
misleading.
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Annexure
GENERAL INFORMATION RELATING TO CHAPTER 9 OF THE LISTING MANUAL
Scope
Chapter 9 of the Listing Manual applies to transactions which a listed company or any of its subsidiaries (other than a subsidiary that is listed
on an approved stock exchange) or associated companies (other than an associated company that is listed on an approved stock exchange or
over which the listed group and/or its interested person(s) has no control) proposes to enter into with a counter-party who is an interested person
of the listed company.
Definitions
An "interested person" means a director, chief executive officer or controlling shareholder of the listed company or an associate of such director,
chief executive officer or controlling shareholder.
An "associate" includes an immediate family member (that is, the spouse, child, adopted child, step-child, sibling or parent) of such director,
chief executive officer, substantial shareholder or controlling shareholder, and any company in which the director/his immediate family, the
chief executive officer/his immediate family or substantial shareholder controlling shareholder/his immediate family has an aggregate interest
(directly or indirectly) of 30% or more, and, where a controlling shareholder is a corporation, its subsidiary or holding company or fellow subsidiary
or a company in which it and/or they have (directly or indirectly) an interest of 30% or more.
An "associated company" means a company in which at least 20% but not more than 50% of its shares are held by the listed company
or the group.
A "controlling shareholder" means a person who holds (directly or indirectly) 15% or more of the nominal amount of all voting shares in the
listed company or one who in fact exercises control over the listed company.
General Requirements
Except for certain transactions which, by reason of the nature of such transactions, are not considered to put the listed company at risk to its
interested person and are hence excluded from the ambit of Chapter 9 of the Listing Manual, immediate announcement, or, immediate
announcement and shareholders' approval would be required in respect of transactions with interested persons if certain financial thresholds
(which are based on the value of the transaction as compared with the listed company's latest audited consolidated NTA), are reached or
exceeded. In particular, shareholders' approval is required where:
(a) the value of such transaction is equal to or exceeds 5% of the latest audited consolidated NTA of the group; or
(b) the value of such transaction when aggregated with the value of all other transactions previously entered into with the same interested
person in the same financial year of the group is equal to or exceeds 5% of the latest audited consolidated NTA of the group.
Immediate announcement of a transaction is required where:
(a) the value of such transaction when aggregated with the value of all other transactions previously entered into with the same interested
person in the same financial year of the group is equal to or exceeds 3% of the latest audited consolidated NTA of the group; or
(b) the value of such transaction is equal to or exceeds 3% of the latest audited consolidated NTA of the group.
General Mandate
A listed company may seek a general mandate from its shareholders for recurrent transactions with interested persons of a revenue or trading
nature or those necessary for its day-to-day operations such as the purchase and sale of supplies and materials but not in respect of the purchase
or sale of assets, undertakings or businesses. A general mandate is subject to annual review.
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CHALLENGER TECHNOLOGIES LIMITED PROXY FORM

(Incorporated in the Republic of Singapore) ANNUAL GENERAL MEETING
I/We, (Name)
of (Address)
being a member/members of CHALLENGER TECHNOLOGIES LIMITED (the "Company") hereby appoint:
Name Address NRIC/Passport No. Proportion of

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

Shareholdings (%)
as my/our proxy/proxies to vote for me/us on my/our behalf, at the Annual General Meeting ("AGM") of the Company, to be held on
Tuesday, 12 April 2005 at 10.00 a.m., and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the
Resolutions to be proposed at the AGM as indicated hereunder. If no specific directions as to voting is given or in the event of any other
matter arising at the AGM and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/their discretion.
No. Resolutions relating to: For* Against*
1 Directors' Report and Audited Accounts for the year ended 31 December 2004
2 Payment of proposed final dividend
3 Re-election of Mdm Ong Sock Hwee as a Director
4 Re-election of Mr Ng Leong Hai as a Director
5 Approval of Directors' fees amounting to S$32,000
6 Re-appointment of Chio Lim & Associates as Auditors
7 Authority to allot and issue new shares
8 Approval for renewal of Shareholders' Mandate for Interested Person Transactions
* Please indicate your vote "For" or "Against" with a tick ( ) within the box provided.
Dated this day of , 2005.

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

Signature(s) of Member(s) or Common Seal
IMPORTANT: PLEASE READ NOTES OVERLEAF
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Notes
1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead.
2. Where a member appoints more than one proxy, the proportion of the shareholding to be represented by each proxy shall be
specified in this proxy form. If no proportion is specified, the Company shall be entitled to treat the first named proxy as representing
the entire shareholding and any second named proxy as an alternate to the first named or at the Company's option to treat this
proxy form as invalid.
3. A proxy need not be a member of the Company.
4. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register
(as defined in section 130A of the Companies Act, Cap. 50 of Singapore), you should insert that number of shares. If you have shares
registered in your name in the Register of Members of the Company, you should insert that number of shares. If you have shares
entered against your name in the Depository Register and registered in your name in the Register of Members, you should insert
the aggregate number of shares. If no number is inserted, this proxy form will be deemed to relate to all the shares held by you.
5. This proxy form must be deposited at the Company's registered office at 109 North Bridge Road #06-00 Funan The IT Mall Singapore
179097 not less than 48 hours before the time set for the Meeting.
6. This proxy form must be under the hand of the appointor or of his attorney duly authorised in writing. Where this proxy form is
executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised
officer.
7. Where this proxy form is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy
thereof must (failing previous registration with the Company) be lodged with this proxy form, failing which this proxy form shall
be treated as invalid.
Fold 2
Affix
Postage
Stamp
The Company Secretary

109 North Bridge Road
#06-00 Funan The IT Mall
Singapore 179097
Fold 1
General
The Company shall be entitled to reject a Proxy Form which is incomplete, improperly completed, illegible or where the true intentions
of the appointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. In addition, in the case of
shares entered in the Depository Register, the Company may reject a Proxy Form if the member, being the appointor, is not shown
to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting,
as certified by The Central Depository (Pte) Limited to the Company.
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RETAIL OUTLETS
Challenger Superstore Challenger Superstore Matrix IT Gallery

109 North Bridge Road 12 Tampines Central 109 North Bridge Road
#06-00 #02-02/03 #03-39 / #04-19
Funan The IT Mall DBS Tampines Centre Funan The IT Mall
Singapore 179097 Singapore 529537 Singapore 179097
Tel: (65) 6339 9008 Tel: (65) 6426 9123 Tel: (65) 6334 1741 / 6334 1802
Fax: (65) 6337 2588 Fax: (65) 6426 9128 Fax: (65) 6334 1917
Email: fc@challenger.com.sg Email: tp@challenger.com.sg Email: fim@mig.com.sg
Tel: (65) 6339 9008 Tel: (65) 6426 9123 Tel: (65) 6334 1741
CBD eVISION GROUP
CBD eVision Pte Ltd CBD eVision (M) Sdn Bhd CBD eVision (Thailand) Company Limited
69 Ubi Crescent Road No 9-1 Jalan USJ 21/7 No.1 Panjapat Building,
#02-02 47600 UEP Subang Jaya 8th Floor, Room 14,
CES Building Selangor Darul Ehsan Patpong Road, Suriyawong,
Singapore 408561 Malaysia Bangrak District,
Tel: (65) 6288 8223 Tel: (603) 5885 0313 Bangkok 10500,
Fax: (65) 6283 2828 Fax: (603) 8023 0177 Thailand
Email: johnny@cbd-evision.com Email: cjneoh@cbd-evision.com Tel: (66) 02 2331714-16
Tel: (65) 6288 822 Tel: (603) 5885 0313 Fax: (66) 02 632 9538
Email: thai@cbd-evision.com
Designed & Produced by C2 Design Studio Pte Ltd
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Challenger Technologies Limited 109 North Bridge Road #06-00 Funan The IT Mall Singapore 179097

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Ascent of Strength

Challenger Technologies Limited

03 Challenger Group of Companies

04 Chief Executive’s Message

06 Profile of Board of Directors

07 Profile of Key Management

24 Audited Financial Statements

28 Notes to Financial Statements

49 Notice of Annual General Meeting

02 CHALLENGER TECHNOLOGIES LIMITED

Matrix Integration Pte Ltd

Itechcare (S) Pte Ltd

Challenger Technologies Limited

OA Supplies Pte Ltd

CBD eVision (M) Sdn Bhd

CBD eVision (Thailand)

Chief Executive’s Message

04 CHALLENGER TECHNOLOGIES LIMITED

“We will strive to achieve

06 CHALLENGER TECHNOLOGIES LIMITED

Profile of Key Management

Mr Chia Kang Whye Ms Lim Kim Huay

Ms Ding Tsui Eng

BOARD OF DIRECTORS AUDIT COMMITTEE REGISTERED OFFICE

Chio Lim & Associates

United Overseas Bank Limited

08 CHALLENGER TECHNOLOGIES LIMITED

FY2004 FY2003 FY2002 FY2001 FY2000

Revenue 75,478 67,265 59,058 56,095 61,323

Profit/(Loss) Before Tax 3,715 4,024 2,190 1,610 (4,011)

Profit/(Loss) After Tax 2,798 3,169 1,839 1,225 (3,993)

Earnings/(Loss) Per Share (cents) 1.88 2.61 1.51 1.01 (3.29)

Shareholders' Funds 14,573 6,129 4,649 9,368 9,982

Key Financial Ratios

Net Profit Margin (%) 4% 5% 3% 2% -7%

Inventory Turnover (days) 36 40 37 39 27

Trade Receivable Turnover (days) 10 10 14 10 18

Return on Equity (%) 19% 52% 40% 13% -40%

Quick Ratio (times) 1.93 0.87 0.79 1.51 1.80

Current Ratio (times) 2.69 1.73 1.45 2.20 2.45

31.12.2004 31.12.2003 Inc/(Dec)

Changes in inventories (421) 1,171 (1,592) n.m.

Depreciation expense (526) (470) 56 12%

Other (charges) / credits (407) 75 (482) n.m.

Profit from operations 3,750 4,027 (277) -7%

Profit before share of profit 3,711 4,024 (313) -8%

Profit before income tax 3,715 4,024 (309) -8%

Net profit for the year 2,798 3,169 (371) -12%

Minority interest 76 - 76 n.m.

Net profit attributable 2,874 3,169 (295) -9%

10 CHALLENGER TECHNOLOGIES LIMITED

31.12.2004 31.12.2003 Inc/(Dec)

Other assets 22 39 (17)

Inventories 5,976 6,063 (87)

Trade payables and 5,713 5,651 62

Other payables 318 518 (200)

Deferred franchise fee income 13 14 (1)

Income tax payable 963 854 109

Current portion of finance leases 16 3 13

Deferred taxation 127 164 (37)

Accumulated profits 3,283 1,269 2,014

Translation reserve (5) - (5)

Total equity 14,573 6,129