CBS Sdn Bhd

8/13/2019 CBS Sdn Bhd

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CBS TECHNOLOGY BERHAD (537337M)

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CBS Technology Berhad (537337M)

15, Jalan Ara SD7/3A,

Bandar Sri Damansara,

52200 Kuala Lumpur,

Malaysia.

www.cbs.com.my

Tel: 603-6277 7018

Fax: 603-6277 6018 A n n u a l R e p o r t

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C B S T E C H N O L O G Y B ER H A D (537337M ) 1 A n n u a l R e p o r t 2 0 0 8

2 CO RPO RATE INFOR M ATION3 CO RPO RATE STRUC TURE AND 5-YEAR FINANCIAL HIGHLIGHTS

4 CHAIRM ANS STATEM ENT7 DIRECTO RS PRO FILE

10 STATEMENT ON CO RPO RATE GO VERNANCE

14 STATEMENT ON INTERNAL CO NTRO L15 DIRECTO RS RESPON SIBILITY STATEMENT 15 OTHER C OM PLIANCE INFOR M ATION 16 AUDIT CO M M ITTEE REPORT20 FINANCIAL STATEM ENTS 57 LIST O F PR O PERTIES58 ANALYSIS OF SHAREHOLDINGS60 NO TICE OF ANNUAL GENERAL M EETING 62 STATEMENT ACC OM PANYING THE NOT ICE O F ANNUAL G ENERAL M EETING FOR M OF PRO XY

CONTENTS


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C O R P O R A T E INFORMATION

BOARD OF DIRECTORSG eneral Dato Seri Panglima Mohd AzumiBin M ohamed (Rtd)Chairman and Independent Non-Executive Director

Sun Chee KongManaging Director

Tan Chong C hew @ Tan Ying YingExecutive Director

C hoo K ok LiongIndependent Non-Executive Director

Anthony PowerNon-Independent N on-Executive Director

Fong Wai LeongIndependent Non- Executive Director(appointed on 30.01 .2009)

Lai Soon O nnAlternate Director t o Tan Chong Chew @ Tan Ying Ying

Wong K ang SaiExecutive Director (deceased on 21.10.2008)

Lee Siew K enAlternate Director to Wong Kang Sai(ceased on 21.10 .2008)

AUDIT C OM M ITTEE G eneral Dato Seri Panglima Mohd AzumiBin M ohamed (Rtd)Chairman

C hoo K ok LiongMember

Fong Wai LeongMemb er (appointed on 30.01.2009)

Tan Chong C hew @ Tan Ying YingMemb er (resigned on 3 0.01.2009)

COMPANY SECRETARIESSeow Fei SanM AISC A 7009732

Wong Siew YeenM AISC A 7018749

REG ISTERED O FFICE312, 3rd Floor, B lock C ,K elana Square,17 Jalan SS 7/2647301 P etaling JayaSelangor Darul EhsanM alaysiaTel: +603-7803 1126Fax: +603-7806 1387

PRINCIPAL PLACE OF BUSINESS

15, Jalan Ara SD 7/3ABandar Sri Damansara52200 K uala LumpurM alaysiaTel: +603-6277 7018Fax: +603-6277 6018Website: www.cbs.com.my

AUDITORSSJ Grant Thornton(M ember of G rant Thornton International)C hartered AccountantsLevel 11, Faber Imperial CourtJalan Sultan IsmailM alaysia50250 Kuala LumpurTel: +603-2692 4022Fax: +603-2732 5119Website: www.gt.com.my

SHARE REGISTRAREpsilon Registration Services Sdn BhdLevel 17, The Gardens North TowerM id Valley C ityLingkaran Syed Putra

59200 K uala LumpurM alaysiaTel: +603-2264 3883Fax: +603-2282 1886Website: www.tricorglobal.com

PRINC IPAL BANK ERMalayan Banking Berhad7 & 8, Jalan Tanjung SD13/1Bandar Sri Damansara52200 K uala LumpurM alaysia

STOC K EXCHANGE LISTINGM ESD AQ M arket of Bursa M alaysia Securities BerhadStock Name: C BSTEC HStock Code: 0041


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C O R P O R A T E STRUCTURE

100% 100% 100%CYBER BUSINESS

SOLUTIONS SDN BHDCBS MSCSDN BHD

5 - Y E A R FINAN CIAL HIGHLIGHTS

R evenue

(RM 000)

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P rofit Before Tax

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RM000 2004(1) 2005 (2) 2006 2007 2008

Revenue 11,075 14,897 15,887 20,852 23,024

Prot Before Taxation 4,257 4,319 5,344 6,897 6,561

Prot Attributable To Equity HoldersO f The C ompany 3,519 4,005 4,995 6,421 5,617

Net Assets 18,778 22,874 28,105 25,203 30,949

Basic Earnings Per Share (Sen) 4.1 4.1 5.1 6.5 3.7

Dividend Per Share (Sen) - net of tax - - - 10.0 -

Net Assets Per Share (Sen) 19.3 23.5 28.6 24.9 20.4

(1) The nancial period is from 19 January 2004 to 31 December 2004

(2) R estated to comply with new and revised FRS s.

CBS TECHNOLOGY BERHAD (537337M)

CBS SYNERGYSDN BHD

49%

51%CASD SOLUTIONS

SDN BHD

CBS TECHNOLOGYGmbH


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C H A I R M A N S STATEMENT

On behalf of the Board of Directors( Board ), I am pleased to present theAnnual Report and Financial Statementsof CBS Technology Berhad ( CBS ) for the nancial year ended 31 December 2008( FY2008 ).

REVIEW OF FINANCIAL PERFORMANCEAgainst the backdrop of a weakening market in FY2008, the G roup continued to maintain business growth momentum with theG roups revenue increased by RM 2.17 million or 10.42% to RM 23.02 million compared to RM 20.85 million in the nancial yearended 31 December 2007 (FY2007). With the escalating costs and increased manpower expenses, the overall gross protmargin had reduced and as a result, the Groups gross prot grew slightly by RM 0.13 million or 1.15% to RM 11.82 million. The Groups pre-tax prot for the FY2008 has declined by 4.87% to RM 6.56 million from R M 6.90 million reported in the FY 2007.This was mainly attributable to higher administrative expenses relating to the share based payment under the employees shareoption scheme of C BS and higher depreciation and amortisation expenses. O ther expenses incurred in FY2008 were due to

allowance for diminution in value of investment in a jointly controlled entity.

Despite the lower pre-tax prot achieved, the Groups taxation for FY 2008 increased by RM 0.47 million resulted from the incometax provision made by C BS s wholly owned subsidiary, C BS M SC Sdn Bhd (C BS M SC ). C BS M SC was granted P ioneer Statuswith tax exemption for a period of ve (5) years until 25 September 2008. The extension of the P ioneer Status for another ve(5) years was only approved on 23 M arch 2009 which was after the nalisation of the nancial statements of CB S M SC for theFY 2008. Hence, the adjustments for the tax provision will only be reected in the next nancial year.

As a result of higher taxation, the Groups net prot for the FY 2008 has decreased by 12.52% from R M 6.42 million in FY2007 toRM 5.62 million in FY2008.

The G roup maintained a strong and healthy balance sheet with net current assets of RM 19.72 million, total assets of RM 46.90million and shareholders funds of RM 30.95 million. The overall nancial position of the G roup remained sound with no bankborrowings. T he G roups total cash and cash equivalents plus short term investments stood at RM 19.49 million as at 31 December2008.

Based on the weighted average number of 151,739,187 shares in C BS, the G roups basic earnings per share for FY 2008 was3.70 sen, as compared to 4.32 sen in FY 2007.

Dear Shareholders,


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C H A I R M A N S STATEMENT (contd )

REVIEW OF OPERATIONDuring the year, C BS continued to make signicant progress to be the leading R adio Frequency Identication (RFID) solutionsprovider. C BSs wholly owned subsidiary, C yber Business Solutions Sdn Bhd was awarded a project by a national utility company,Tenaga Nasional Berhad (T NB ) to implement CB S proprietary Solmate RFID Warehouse M anagement System (R WM S ) atone of TN Bs warehouses. S olmate R WM S is a web-based solution that will enable tagging, storage, retrieval and tracking ofwarehouse materials to enhance operational efciencies and warehouse effectiveness. The project is the rst of its kind undertak enby a utility company in M alaysia to deploy the R FID technology in warehouse management system. C BS is proud to lead anotherRFID pilot site for a national utility company proven to improve its operational efciencies and effectiveness for its long termbusiness value. C BS will leverage on its success in the implementation of RWM S project for TNB to seek new opportunities in theother sectors and new markets. We believe CBS is well positioned to exploit these opportunities by extending our RFID solutionsto address more complex business requirements.

C BSs strategy in adapting quickly to the fast changing business environment and offering innovative products and services thatmeet the demands of customers are our key strength. In anticipation of the global economy crisis and inated costs of living,we have over the past one year focused on developing R FID applications with the aim to assist our customers in increasing theoperational efciency through reduction in costs. O ur RFID applications developed for the supply chain management will bepotential breakthrough for many enterprises in conserving if not, reducing their costs of operations. We believe that the G roupcould seek new business opportunities during this challenging economic environment, as more enterprises will look into productsand services that can increase the efciency of their business operations to weather the economic downturn.

FY2008 was also an exciting year for the Group. C BS had acquired 100% equity interest in CBS Synergy Sdn Bhd ( C BSSynergy), which owns 51% equity interest in C AS D Solutions Sdn Bhd (C AS D ), in O ctober 2008. C AS D is a value-addeddistributor for C A Inc. (C A), one of the worlds leading information technology (IT) management software group. C ASD providesthe primary sales interface for CAs portfolio of enterprise IT solutions in M alaysia. With this new line of business, we envisage theG roup to sustain its business growth in the coming years.

During the year, the Group achieved C apability M aturity M odel Integration (C M M I) Level 2 rating. C M M I is a process improvementapproach that provides organisations with the essential elements of effective processes. T he processes have been implementedthroughout the Group and have resulted in better project performance and high quality products as well as improvement incustomer satisfaction.

RESEARCH AND DEVELOPMENT (R&D)Innovation and technology are vital to the future growth of CBS. We will continue to strengthen our R& D capabilities and striveto enhance and improve our RFID solutions in line with the latest technology innovations in the market. We collaborate withtechnology partners and industry leaders in order to deliver technology enabled innovations to our customers. O ur R&D team willcontinue to be focused on the RFID applications for the supply chain.

In the FY2008, the total R& D expenditure incurred by the Group was RM 0.68 million.

CORPORATE DEVELOPMENTS(i) O n 8 August 2008, the Company announced that it was uplifted from being classied as C ash C ompany pursuant to Rule

8.14(2) of the Listing Requirements of Bursa M alaysia Securities Berhad for the M ESD AQ M arket.

(ii) O n 15 O ctober 2008, CBS has acquired two (2) ordinary shares of RM 1.00 each in C BS Synergy, representing 100% of theissued and paid-up share capital of CBS Synergy for a total consideration of RM 2.00. C BS Synergy is an investment holdingcompany and owns 51 ordinary shares of RM 1.00 each in C AS D, representing 51% of the issued and paid-up share capitalof CASD . T he principal activity of CASD is dealing in computer equipment and software.

(iii) C BS has proposed to undertake a special issue of up to 67,798,000 new ordinary shares of RM 0.10 each in CBS toBumiputera investors to be identied and approved by the M inistry of International Trade and Industry (M IT I) to comply

with the Bumiputera equity shareholding condition ( Proposed Special Issue).

O n 30 April 2009, the Company sought the approval of the Securities C ommission (S C ) and M IT I for an extension of timefor a period of twelve (12) months until 31 M ay 2010 for CBS to comply with the Bumiputera equity shareholding condition.The applications are presently pending the approval of the SC and M IT I.


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C B S T E C H N O L O G Y B ER H A D (537337M ) 6 A n n u a l R e p o r t 2 0 0 8C B S T E C H N O L O G Y B ER H A D (537337M ) 6 A n n u a l R e p o r t 2 0 0 8

CORPORATE SOCIAL RESPONSIBILTYThe Group is committed to fullling its social responsibilities to the society. D uring the year, the G roup has sponsored Every ChildEvery Year In S chool P rogram which was organised by the Rotary Club of D amansara-West. T he Program provides funding forbreakfast, uniform and stationery for underprivileged children from two schools in Selangor and M elaka, respectively. T he Groupwill continue to support such community events to reach out to the less privileged in M alaysia. During the year, the G roup alsomade some donation to M ercy Humanitarian Fund to provide assistance to the victims of M yanmar C yclone Nargis.

The G roup continues to contribute to the society through providing internship training programs to the students from localuniversities as trainees to enhance their work experiences outside academia. The trainees receive the necessary on-the-jobtraining needed to improve their skill sets which the Group believes such training program will further enrich students and expandtheir knowledge to be better prepared for the working environment upon graduation.

PROSPECTSWith the current global economic downturn, the G roup foresees deteriorating market conditions and greater challenges aheadin the nancial year ending 31 December 2009. In response to the uncertain economic situation, we will maintain our prudentapproach to business management and continue to adopt measures focusing on stringent cost control, continuous improvementsin the Groups operation as well as prudent management of head count and close monitoring of staff performance.

O n the business front, we will continue to deploy appropriate strategies and resources to meet the challenges ahead. We strive toenhance and extend our product applications to address more complex business requirements as well as exploit new businessopportunities by expanding into new line of businesses and services.

We have strengthened our sales and marketing force and will leverage on our technical expertise and continue to direct our salesefforts towards new markets and segments. O n the regional front, we will maintain our focus on continuing to expand market

share in the South East Asia and M iddle East region and will continue to leverage on our partners strength to penetrate furtherand widen the G roups regional market coverage.

BOARD OF DIRECTORSO n behalf on the Board, I express my condolences on the demise of M r. Wong K ang Sai who passed away on 21 O ctober 2008.He was an Executive Director and Business Development Director of CBS and had served the Group for more than 8 years. Iwould like to record the Boards appreciation for his loyalty, valuable contributions and commitment to the Group during his tenureof ofce.

The Board also warmly welcomes on Board our newly appointed Independent Non-Executive Director, M r. Fong Wai Leong, whohas more than 19 years of working experience in banking and nance sector.

ACKNOWLEGEMENTO n behalf of the Board, I would like to take this opportunity to express our sincere gratitude and appreciation to the managementand staff for their dedication and commitment and to our valued customers, shareholders, business associates for their continuedcondence and support throughout the year.

I would also like to convey my sincere appreciation and gratitude to my fellow Directors for their invaluable guidance andcontributions throughout the year. We look forward to better performance in the coming years.

General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd)Chairman and Independent Non-Executive Director


C H A I R M A N S STATEMENT


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C B S T E C H N O L O G Y B ER H A D (537337M ) 7 A n n u a l R e p o r t 2 0 0 8C B S T E C H N O L O G Y B ER H A D (537337M ) 7 A n n u a l R e p o r t 2 0 0 8

D I R E C T O R S PROFILE

General Dato Seri Panglima Mohd AzumiBin Mohamed (Rtd)Chairman and Independent Non-Executive Director61 years of age, M alaysian

G eneral Dato Seri Panglima M ohd Azumi Bin M ohamed (Rtd)was appointed to the Board as the Chairman and IndependentNon-Executive Director on 15 February 2008. He is also theC hairman of the Audit Committee, Nominating Committeeand R emuneration C ommittee.

He holds a M aster of Science in N ational Resources Strategyfrom the National Defense University Washington DC US. Hereceived his early military training at the O fcer Cadet SchoolPort sea Australia in 1968 and continued to receive advancedmilitary training at the Australian Army Infantry C entre, theUnited States Army Infantry C entre Fort Benning and theAustralian Joint S ervices Staff C ollege.

G eneral Dato Seri Panglima M ohd Azumi (Rtd) joined theprivate sector in November 2004 following his retirement asC hief of the Malaysian Army after an illustrious military carrierof 37 years. H ighlights of his military career includes servicewith the United Nations Observation M ission following theFirst Gulf War where he assisted the Foran Commission in thereturn of war property and the policing plan of the demilitarizedzone. H e was also given the responsibility for the deploymentof M alaysias observers and peacekeeping troops to Somalia,C ambodia and Bosnia Herzegovina. H e also representedM alaysia at the UN Troop Contributing N ations M eeting atZagreb.

G eneral Dato S eri P anglima A zumi (R td) is also a Director ofthe following public listing companies and a subsidiary of apublic listed company:

- Atlan Holdings Berhad- Halim M azmin Berhad- K enangan C ergas (M ) Sdn Bhd, a subsidiary of Idaman

Unggul Berhad.

He does not have any interest in shares in the C ompany.

G eneral Dato Seri Panglima Azumi (R td) does not have anyfamily relationship with any director and/or major shareholderof the C ompany, nor any conict of interest in any businessarrangement involving the Company. He has no convictionsfor any offences within the past 10 years. G eneral Dato SeriPanglima Azumi (Rtd) has attended all four (4) Board meetingsof the Company held during the nancial year.

Mr. Sun Chee KongManaging Director and Chief Executive Ofcer46 years of age, M alaysian

He was appointed to the Board as the M anaging Directorsince 19 January 2001. H e is the Chief Executive O fcer(C EO ) and the founder of the CBS G roup. As the CEO ,he is responsible for the overall management and strategicplanning functions of the G roup. H e is also a member of theRemuneration C ommittee.

He graduated from the University of Louisiana, USA, with aDegree in C omputer Science. He began his career with IBMM alaysia in 1987 and has acquired a wealth of experience,knowledge and invaluable contacts along the way. After he leftIBM , he founded C yber Business Solutions Sdn Bhd in 1996with the primary focus in providing specialized EnterpriseSolutions Development projects. With a keen eye on marketopportunities, M r. S un has since steered C BS towards morelucrative sectors that involve higher, more cutting-edgetechnology in e-security systems and RFID solutions. CBSM SC Sdn B hd was incorporated in year 2000 to undertake theresearch and development activities for the G roup of potentialnew products in e-security and RFID . His creative ideas forbusiness technologies and innovation have put CBS G roup inthe forefront of the industry, resulting in the successful listingof the Company on the M ESD AQ M arket of Bursa M alaysiaSecurities Bhd in 2004.

He has direct shareholding of 18,545,295 ordinary shares ofRM 0.10 each in the C ompany.

M r. Suns spouse, M adam Tan Chong Chew @ Tan Ying Ying,is an Executive Director of the C ompany and the M arketingDirector of the CBS G roup. He has no conict of interest inany business arrangement involving the C ompany. H e has

no convictions for any offences within the past 10 years. Heattended all four (4) B oard meetings of the Company heldduring the nancial year.


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D I R E C T O R S PROFILE (contd )

Madam Tan Chong Chew @ Tan Ying YingExecutive Director and Marketing Director44 years of age, M alaysian

She was appointed to the Board as an Executive Director on23 June 2003 and she is also the M arketing D irector of theC BS G roup. As the M arketing Director, she is responsible forthe G roups marketing strategies, planning and promotionalactivities.

She holds a Degree in Business Administration from the

University of Louisiana, USA. She began her career as aconsultant with Deloitte & Touche KassimC han in 1987 andsubsequently joined ABAC US Travel as a pioneer member ofthe management team and headed the marketing department.Barely ve years later, she joined the International Air TravelAssociation (IATA) as the supervisor of their newly establisheddata centre. In 1994, she joined C inema InternationalC orporation Sdn. as the M arketing M anager and was laterpromoted to the M anaging Director in 1997. From businessconsultancy to air travel management and the entertainmentindustry, M adam Tans career moves have seen her rackingup professional experience in diverse industries for the betterpart of two decades.

She has a direct shareholding of 6,568,245 ordinary shares ofRM 0.10 each in the Company.

She is the spouse of M r. Sun C hee Kong, the M anagingDirector and a substantial shareholder of the C ompany.She has no conict of interest in any business arrangementinvolving the C ompany. S he has no conviction for any offenceswithin the past 10 years. M adam Tan attended three (3) outof four (4) Board meetings of the Company held during thenancial year.

Mr. Choo Kok LiongIndependent Non-Executive Director44 years of age, Malaysian

He was appointed to the Board as an Independent Non-Executive Director on 20 January 2004. H e is also a member ofAudit C ommittee, Nominating C ommittee and R emunerationC ommittee.

He graduated from Deakin University of Australia and holdsa Bachelor of Business Degree majoring in Accounting andEconomics. He is a C ertied Public Accountant from C PAAustralia and had undergone his training in one of the bigfour international accounting rms. He is also a C hartered

Accountant of M alaysian Institute of Accountants. C urrentlyhe operates his own practice which offers management andconsultancy services. P rior to this, he was an accountant withthe Hyatt Regency Saujana Hotel.

He has direct shareholding of 50,000 ordinary shares ofRM 0.10 each in the C ompany.

M r. C hoo does not have any family relationship with anydirector and/or major shareholders of the Company, nor anyconict of interest in any business arrangement involving theC ompany. H e has no convictions for any offences within thepast 10 years. M r. C hoo attended all four (4) Board meetingsof the Company held during the nancial year.

Mr. Anthony PowerNon-Independent & Non-Executive Director42 years of age, American

M r. A nthony Power was appointed to the Board as Non-Independent Non-Executive Director on 14 December 2007.

He holds a M aster in Civil Engineering & Bachelors Degree in

M echanical Engineering from the State University of New Yorkat Buffalo, U.S.A.

M r. Power is backed by 16 years of experience in k eyinternational markets such as Asia, Europe, the United Statesand the M iddle East in business and funding strategy. H e

joined Emirates Investment and Development PSC (Emivest),Dubai as G eneral M anager of Business Development in 2003and was promoted to the C hief Investment O fcer of Emivestin June 2007. P rior to joining Emivest, he was the ChiefO perating O fcer of SITA International for M alaysia, Singaporeand Brunei and was later promoted to C ountry General

M anager (Dubai) for SITA International from 2001 to 2003.

He is also a Director of ETI Tech C orporation Berhad.

He does not have any interest in shares in the C ompany.

M r. P ower does not have any family relationship with anydirector and/or major shareholder of the Company, nor anyconict of interest in any business arrangement involvingthe Company. H e has no convictions for any offences withinthe past 10 years. M r. Power has attended all four (4) B oardmeetings of the C ompany held during the nancial year.


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D I R E C T O R S PROFILE (contd )

Mr. Fong Wai LeongIndependent Non-Executive Director39 years of age, M alaysian

M r. Fong Wai Leong was appointed to the Board as anIndependent Non-Executive Director on 30 January 2009. Heis also a member of the Audit C ommittee.

He holds a professional qualication from M alaysia Institute ofC ertied Public Accountants. H e is a C hartered Accountant.

M r. Fong has over 19 years of working experience in bank ingand nance which includes advising on a number of successfulpublic listings, mergers and acquisitions in various countriesincluding M alaysia, C hina, Thailand, Singapore, S outh Africa,and part of South America.

M r. Fong is currently the M anaging Director of DevonshireC apital K uala Lumpur Sdn Bhd (Devonshire C apital).P rior to joining Devonshire Capital in 2000, he was theG eneral M anager of Kuala Lumpur City Securities (nowknown as Alliance Investment Bank) where he headed therms corporate nance Division. He also worked in CIM BsC orporate Finance Division from 1993 to 1997. He began hiscareer at an International Accounting Firm as an auditor from1989 to 1997.

He has direct shareholding of 78,100 ordinary shares ofRM 0.10 each in the Company.

M r. Fong does not have any family relationship with any directorand/or major shareholder of the C ompany, nor any conict ofinterest in any business arrangement involving the C ompany.He has no convictions for any offences within the past 10years. M r. Fong has not attended any Board meetings of theC ompany held during the nancial year as he was appointed

to the Board after the nancial year.

Mr. Lai Soon OnnAlternate Director to Madam Tan Chong Chew @ TanYing Ying40 years of age, M alaysian

He was appointed to the Board as the Alternate Director toM adam Tan Chong C hew @ Tan Ying Ying on 20 January2004. H e is one of the pioneer management team of the CB SG roup and is the Director of Enterprise Solutions of the C BSG roup. H e is responsible for the designing and convertingclients requirements into an architecture and design blueprint

for the solutions created.

He holds a M asters in Business Administration from P restonUniversity, U SA . Beginning with RHB B ank Bhd in 1990, M r.Lai applied his considerable skills in various technical andcorporate management positions within the Bank, mostnotably in the technical and operations management of theRHB Data Centre. H is stint with RH B allowed him to garnerspecialized IT experience primarily in the elds of Finance andInsurance, and in dealing with G overnment sectors. WithinRHB, he specialises in Systems & B usiness M anagement, andsubsequently promoted to the position of H ead of A utomationand R&D for its IT Division.

He has direct shareholding of 720,000 ordinary shares ofRM 0.10 each in the C ompany.

M r. Lai does not have any family relationship with any directorand/or major shareholder of the C ompany, nor any conict ofinterest in any business arrangement involving the C ompany.He has had no convictions for any offences within the past10 years. M r. Lai attended all four (4) Board meetings of theC ompany held during the nancial year.


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C B S T E C H N O L O G Y B ER H A D (537337M) 10 A n n u a l R e p o r t 2 0 0 8

STATEMENT ON C O R P O R A T E G O V E R N A N C E

The Board of D irectors (the Board) of C BS Technology Berhad (C BS ) is fully committed to ensure the fulllment of the higheststandards of Corporate Governance as set out in P art 2 of the M alaysian Code on C orporate Governance, which highlights theprinciples and best practices on structures and processes that the Company may use in their operations towards achieving theoptimal governance framework.

A. Directors

i. The Board The Board believes that good corporate governance is fundamental to the Board in discharging its duciary duties andresponsibilities and enhances high standard of business integrity, corporate performance and corporate accountability withthe aim of realising shareholders value.

The Company is led and managed by an experienced Board, with wide mix of knowledge, business acumen, managementskills and industry expertise from various background which is an invaluable asset for the stewardship of the Companysdirection and operation.

During the nancial year ended 31 December 2008, the Board had met at four (4) occasions. All proceedings from themeetings are minuted and signed by the C hairman of the meetings.

The Board has scheduled at least four (4) meetings for the next nancial year to table its quarterly results.

ii. Board Balance As of the date of this statement, the Board consists of six (6) Directors of which two (2) are Executive Directors, three (3) are

Independent Non-Executive Directors and one (1) is N on-Independent Non-Executive Director. This is in compliance with

Rule 15.02 of the Listing Requirements of Bursa M alaysia Securities Berhad for M ESDAQ M arket which requires at least two(2) Independent Directors or one third of the Board, whichever is the higher.

The Board retains full control over the Company and monitors the management. The Board of Directors meetings arechaired by the Chairman whom is the Independent Non-Executive Director whose role is clearly separated from the role ofthe M anaging D irector. T his is to ensure a balance of power and authority.

The presence of the Independent Non-Executive Directors brings an additional element of check and balance to theBoard.

iii. Board Meetings and Attendance The Board ordinarily meets four (4) times a year at quarterly interval with additional meetings being convened when urgent

and important decisions need to be taken between the scheduled meetings.

A total of four (4) B oard meetings were held during the nancial year under review. T he record of attendance is as follows:

Directors Number of Meetings Attended by Directors

G eneral Dato Seri Panglima M ohd Azumi Bin M ohamed (Rtd) 4/4

M r. Sun C hee K ong 4/4

M adam Tan C hong C hew @ Tan Ying Ying 3/4

M r. Wong K ang Sai (deceased on 21.10.2008) 2/3

M r. C hoo K ok Liong 4/4

M r. Anthony Power 4/4 M r. Fong Wai Leong (appointed on 30.01.2009) -


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iv. Supply of Information The C hairman ensures that each Director is provided with timely notices for each Board meeting and Board papers are

issued prior to the Board meetings to enable the Directors to review and consider the agenda items to be discussed in theBoard meeting and where necessary, to obtain further explanations in order to be fully briefed before the meeting.

The Board has unrestricted access to timely and accurate information in furtherance of its duties.

All Directors have full access to the advice and services of the C ompany Secretaries who are responsible for ensuring thatBoard meeting procedures are adhered to and that applicable rules and regulations are complied with. The Directors will beupdated by the Company Secretaries on new statutory requirements relating to their duties and responsibilities.

v. Directors Training All members of the Board have attended the M andatory Accreditation Programme, prescribed by Bursa Malaysia Securities

Berhad. Directors are encouraged to attend seminars and/or conferences organized by relevant regulatory authoritiesand professional bodies to keep abreast with latest developments in the market place and new statutory and regulatoryrequirements. The Board is also regularly updated by the Company Secretaries on the latest update and amendments to theListing R equirements of Bursa M alaysia Securities Berhad for the M ESDA Q M arket.

Details of trainings attended by the Directors for the nancial year ended 31 December 2008 are as follows:

Name of Directors Training Programmes

G eneral Dato Seri Panglima M ohd Azumi G overnance and Board Effectiveness by M alaysianBin M ohamed (R td) Institute of C orporate G overnance

C ode of C orporate G overnance and Ethical C onduct

M r. Sun C hee K ong 4th Annual G rowth, Innovation and Leadership 2008

M adam Tan C hong C hew @ TanYing Ying Tax P lanning on C urrent Tax Issues& Business Succession Solution Workshop

M r. C hoo K ok Liong National Tax C onference 2008 2008 Budget Talk 2008 Budget Seminar

M r. Anthony Power M andatory Accreditation Programme for Director of PLC

The Board will on a continuing basis evaluate and determine the training needs of each Director, particularly on relevant newlaw and regulations and essential practices for effective corporate governance and risk management to enable the Directorsto effectively discharge their duties.

vi. Appointment to the Board The Nominating Committee was established on 28 February 2008 to assist the Board in its responsibilities in recommending

the right candidates with the required mix of skills and experience and other qualities to be appointed to the Board. P rior tothe establishment of the Nominating Committee, the Board itself functions as a Nominating C ommittee.

The Committee comprises two (2) Independent Non-Executive Directors. T he members are:

Chairman: G eneral Dato Seri Panglima M ohd Azumi Bin M ohamed (R td) (Independent Non-Executive Director)

Member: M r. C hoo K ok Liong (Independent Non-Executive Director)

STATEMENT ON C O R P O R A T E G O V E R N A N C E (contd )


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vi. Appointment to the Board (contd)

The terms of reference of the Nominating C ommittee are as follows:-

i. to recommend the nomination of a person or persons for all directorships to be lled by the shareholders or theboard;

ii. to consider, in mak ing its recommendations, candidates for directorships proposed by the M anaging Director and,within the bounds of practicability, by any other senior executive or any director or shareholder;

iii. to recommend to the board, directors to ll the seats on board committees; iv. identify, evaluate and recommend candidates for appointment as C ompany Secretary; v. to assess annually the effectiveness of the board as a whole, the committees of the board and the contribution of each

existing individual director and thereafter, recommend its ndings to the board; and vi. to review annually the required mix of skills and experience and other qualities, including core competencies which non-

executive directors should bring to the board and thereafter, recommend its ndings to the board.

vii. Re-election The C ompanys Articles of Association provides that one third (1/3) of the Directors to retire at least once in each three (3)

years and the retiring Director shall be eligible for re-election.

B. Directors Remuneration The objective of the G roups policy on Directors remuneration is to ensure that the G roup attracts and retains Directors with

the relevant skills and knowledge to run the G roup successfully.

The Remuneration C ommittee was established on 28 February 2008 to assist the Board in its responsibilities in developing

the remuneration policy and determining the remuneration packages of managing director and executive directors. Theremuneration packages of non-executive directors should be determined by the Board as a whole.

Directors fees are recommended by the Board for the approval by shareholders of the C ompany at annual generalmeetings.

The Remuneration Committee comprises three (3) members of which one (1) is Executive Director and two (2) are IndependentNon-Executive Directors. T he members of the Committee are:

Chairman: G eneral Dato S eri Panglima M ohd Azumi Bin M ohamed (Rtd) (Independent Non-Executive Director)

Members: M r. C hoo K ok Liong (Independent Non-Executive Director)

M r. Sun C hee K ong (Executive Director)

The breakdown of the remuneration of the Directors in the Company during the nancial year is as follow:

Fees Salaries andOther Emolument Benet-in-kind Total

RM RM RM RM

Executive Directors - 501,526 53,100 554,626

Non-Executive Directors 45,000 - - 45,000


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B. Directors Remuneration (contd)

The number of Directors of the C ompany whose total remuneration fall within the respective band are as follows:

Remuneration band (RM) Executive Directors Non-executive Directors

RM 50,000 and below - 3

RM 50,001 RM 100,000 - -

RM 100,001 RM 150,000 2 -

RM 200,001 RM 250,000 1 -

C. Relation with Shareholders and Investors

The C ompany recognises the importance of keeping shareholders and investors informed of the G roups business andcorporate developments. S uch information is disseminated via the C ompanys annual reports, various disclosures to BursaM alaysia Securities Berhad including quarterly nancial results, research reports and various announcements made fromtime to time.

The G roup maintains a website at www.cbs.com. my where shareholders or investors may access for the latest informationon the Group.

The Annual G eneral Meeting remains the principal forum for dialogue with shareholders where they are provided withan opportunity to raise questions pertaining to issues in the Annual Report, A udited Financial Statements and corporatedevelopments in the G roup, the resolutions being proposed and/or on the business of the G roup. S hareholders who areunable to attend are allowed to appoint proxies to attend and vote on their behalf. M embers of the Board as well as Auditorsof the Company are present to answer questions raised at the meeting.

D. Accountability and Audit

i. Financial Reporting The Board is responsible for presenting a balanced, clear and meaningful assessment of the G roups nancial position

and prospect to the C ompanys shareholders through the annual nancial statements and quarterly announcements.The quarterly results and annual nancial statements are reviewed by the Audit C ommittee and recommended to theBoard for approval before its release to Bursa M alaysia Securities Berhad.

ii. Internal Control The Board has the overall responsibility in maintaining a sound and effective system of internal controls for the G roup

which covers not only nancial controls but also operational and compliance controls as well as risk management.

The Statement on Internal Control is furnished on page 14 of this Annual Report, and this provides an overview of thestate of internal controls within the G roup.

iii. Relationship with Auditors The Board has established formal and transparent relationships with both the external and internal auditors through

the Audit C ommittee. T he relationship between the Audit C ommittee and both the external and internal auditors aredescribed in the terms of reference of the Audit C ommittee Report.

E. Compliance with the Code The Board strives to ensure that the C ompany complies with the Principles and Best Practices of the Code. T he Board will

endeavour to improve and enhance the procedures from time to time.


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STATEMENT ON I N T E R N A L C O N T R O L

The Board of Directors of CBS (the Board) is pleased to present the statement on internal control of the Group in accordancewith the Listing Requirements of Bursa M alaysia Securities Berhad for the M ESDAQ M arket and as guided by the Statement onInternal C ontrol: G uidance for Directors of Public Listed C ompanies.

Board Responsibility

The Board acknowledges its responsibility in maintaining a sound and effective system of internal controls and in seeking regularassurance on the adequacy and integrity of the internal control systems to safeguard shareholders investments and the G roupsassets.

The Board also acknowledges that due to the limitations that are inherent in any system of internal controls, the internal controlsystem can only reduce but cannot totally eliminate risks that impede the achievement of the G roups business objective. Therefore,the systems can only provide reasonable and not absolute assurance against material misstatement or fraud and losses.

Key Elements of Internal Control System

The key elements of the G roups internal control system include:

Formal organization structure with clearly dened roles and lines of responsibilities, authority and accountability within theG roup;

Recruitment of adequate experienced, skilled and professional staff with the necessary caliber to fulll the respective

responsibilities and ensuring that minimum controls are in place;

Establishment of an effective segregation of duties via independent checks, review and reconciliation activities to preventhuman errors, fraud and abuses;

Adoption of C apability M aturity M odel Integration methodologies that enhance and improve the organisation processesand quality control;

Periodic review of the adequacy and effectiveness of the system of internal control by the internal audit function;

Regular review of actual sales performance against target set by the management team. This enables effective monitoringof signicant variances and deviation from the target and business objective;

Establishment of the internal policies and procedures for key functional units within the G roup;

Weekly management meetings chaired by the C EO of the G roup to discuss business performance and key operationalissues. O ther matters being discussed are collection issues, marketing strategy, progress of projects undertaken by theG roup and highlights on shortcomings or problems together with proposed corrective actions; and

Engage and appoint solicitors, nancial advisors and other competent professional as may be required in respect of anycorporate exercise undertaken by the Group.

The Board remains committed towards operating a sound internal control system. The internal control system will continue to bereviewed and updated to meet the changing and challenging business environment. The Board will seek regular assurance on thecontinuity and effectiveness of the internal control system through independent appraisal by the internal auditors.

The Board is of the view that the system of internal control in place for the year under review is adequate to cater for therequirement of the G roup at the existing level of operation and safeguard the G roups interest.

During the year, there were no material losses incurred as a result of weaknesses in the system of internal control that wouldrequire disclosure in the C ompanys Annual Report.


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D I R E C T O R S R E S P O N S I B I L I T Y STATEMENT

The Directors of the Company are required to ensure that the nancial statements for each nancial year are properly drawn up inaccordance with the provisions of the C ompanies Act, 1965 and applicable approved accounting standards in M alaysia so as togive a true and fair view of the state of affairs of the Group and the C ompany as at the end of the nancial year and of the resultsand cash ows of the G roup and the Company for that period.

The Directors are satised that in preparing the nancial statements of the Group for the year ended 31 December 2008, theG roup had used appropriate accounting policies and applied them consistently, prudently and reasonably. T he Directors alsoconsider that all applicable approved accounting standards are adhered to in the preparation of the nancial statements.

The Directors have general responsibilities for tak ing such steps that are reasonably available to them to safeguard the assets ofthe Group, and to prevent and detect fraud and other irregularities.

O T H E R C O M P L I A N C E INFORM ATION

Share Buy-backsThe Company did not carry out any share buybacks for the nancial year under review.

Options, Warrants or Convertibles SecuritiesDuring the nancial year, the C ompany issued 150,000 ordinary shares of RM 0.10 each pursuant to the exercise of optionsgranted under the C ompanys Employee Share O ption Scheme.

The Company did not issue any warrants or convertible securities during the nancial year.

American Depository Receipt (ADR) or Global Depository Receipt (GDR)During the nancial year, the C ompany did not sponsor any ADR or GDR Programme.

Imposition of Sanctions and/or PenaltyThere was no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or management by the relevantregulatory bodies during the nancial year.

Non-Audit Fees

The amount of non-audit fees paid to the external auditors for the nancial year ended 31 December 2008 was RM 5,300.

Variation in ResultsThere was no material deviation between the audited results of the Group for the nancial year ended 31 December 2008 and theunaudited results announced on 24 February 2009. Prot Forecast / Prot GuaranteeThe Company did not provide any prot forecast / guarantee in any public documents during the nancial year.

Material ContractsDuring the nancial year, there were no material contracts entered into by the C ompany and its subsidiaries involving Directorsand major shareholders interests which were still subsisting at the end of the nancial year.

Recurrent Related Party TransactionsDuring the nancial year, the C ompany did not enter into any recurrent related party transactions of revenue or trading nature.

Revaluation PolicyThe Company has not adopted any policy of regular revaluations for its landed properties.


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A U D I T C O M M I T T E E REPORT

COMPOSITION

As of the date of this Annual Report, the composition of the Audit C ommittee is as follows:

Chairman: G eneral Dato Seri Panglima M ohd Azumi Bin M ohamed (Rtd) (Independent Non-Executive Director)

Members: M r. C hoo K ok Liong (Independent Non-Executive Director)

M r. Fong Wai Leong (appointed on 30.1.2009) (Independent Non-Executive Director)

The composition of the Audit C ommittee complies with Rules 15.09 and 15.10 of the Listing Requirements of Bursa M alaysiaSecurities Berhad for the M ESDA Q M arket.

TERMS OF REFERENCE

Terms of Reference of the C ommittee are as follows:

1. Composition

1.1 The C ommittee shall comprise of at least three (3) directors, a majority of whom shall be independent directors. Thereshall be at least one member who is:-

a) a member of the M alaysian Institute of Accountants, or

b) otherwise, he shall have at least 3 years working experience and i. he shall have passed the examinations specied in Part 1 of the First Schedule of the Accountants Act 1967;

or ii. he shall be a member of one of the associations of accountants specied in Part II of the First Schedule of

the Accountants Act 1967; or

c) i. a degree/masters/doctorate in accounting or nance and at least 3 years post qualication experience inaccounting or nance; or

ii. at least 7 years experience being a chief nancial ofcer of a corporation or having the function of beingprimarily responsible for the management of the nancial affairs of a corporation.

1.2 No alternate director shall be appointed as a member of the Audit C ommittee.

1.3 In the event of any vacancy with the result that the number of members is reduced to below three (3), the vacancyshall be lled within two (2) months but in any case not later than three (3) months. Therefore a member of the AuditC ommittee who wishes to retire or resign should provide sufcient written notice to the Company so that a replacementmay be appointed before he leaves.

2. Chairman

The C hairman, who shall be elected by the Audit C ommittee, shall be an independent director.

3. Secretary

The C ompany Secretary shall be the Secretary of the Committee and shall be responsible, in conjunction with the Chairman,for drawing up the agenda and circulating it prior to each meeting.

The Secretary shall also be responsible for keeping the minutes of meetings of the C ommittee and circulating them to theC ommittee M embers.

The C ommittee M embers may inspect the minutes of the Audit C ommittee at the Registered Ofce or such other place asmay be determined by the Audit C ommittee.


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A U D I T C O M M I T T E E REPORT (contd )

4. Meetings

The C ommittee shall meet at least four (4) times in each nancial year. The quorum for a meeting shall be two (2) members,provided that the majority of members present at the meeting shall be independent.

The C ommittee may call for a meeting as and when required with reasonable notice as the C ommittee M embers deem t.

All decisions at such meeting shall be decided on a show of hands on majority of votes.

The external auditors have the right to appear at any meeting of the Audit Committee and shall appear before the C ommitteewhen required to do so by the C ommittee. The external auditors may also request a meeting if they consider it necessary.

O ther directors or employees may attend any particular Audit Committee M eeting only at the Audit Committees invitation,specic to the relevant meeting.

5. Rights and Authority

The Audit C ommittee shall:

(a) have authority to investigate any matter within its terms of reference; (b) have the resources which are required to perform its duties; (c) have full and unrestricted access to the C hief Executive O fce and the C hief Financial O fcer and to any information

pertaining to the Group; (d) have direct communication channels with the external auditors and person(s) carrying out the internal audit function or

activity; (e) have the right to obtain independent professional or other advice at the C ompanys expense; (f) have the right to convene meetings with the external auditors, excluding the attendance of the executive members of

the audit committee, whenever deemed necessary; (g) promptly report to the Bursa M alaysia Securities Berhad matters which have not been satisfactorily resolved by the

Board of Directors resulting in a breach of the listing requirements.

6. Duties and Functions

(a) To review with the external auditors on: the audit plan, its scope and nature; the audit report; the results of their evaluation of the accounting policies and systems of internal accounting controls within the

G roup; and the assistance given by the ofcers of the C ompany to external auditors, including any difculties or disputes with

M anagement encountered during the audit.

(b) To review the adequacy of the scope, functions, competency and resources and setting of performance standards ofthe internal audit function.

(c) To provide assurance to the Board of Directors on the effectiveness of the system of internal controls and riskmanagement practices of the G roup.

(d) To review the internal audit programme, processes the results of the internal audit programme, processes or investigationundertaken and whether or not appropriate action is taken on the recommendations of the internal audit function.

(e) To review: the audit reports and management letter issued by the external auditors and the implementation of audit

recommendations; the interim nancial information; and

the assistance given by the ofcers of the C ompany to external auditors.

(f) To meet with the external auditors and internal auditors without executive board members present whenever deemednecessary.


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6. Duties and Functions (contd)

(g) To monitor related party transactions entered into by the C ompany or the G roup to be undertaken on an arms lengthbasis and normal commercial terms and on terms not more favourable to the related parties than those generallyavailable to the public, and to ensure that the Directors report such transactions annually to shareholders via the annualreport, and to review conict of interest that may arise within the Company or the Group including any transaction,procedure or course of conduct that raises questions of management integrity.

(h) To review the quarterly reports on consolidated results and annual nancial statements prior to submission to the Boardof Directors, focusing particularly on:

changes in or implementation of major accounting policy and practices; signicant issues arising from the audit; the going concern assumption;

compliance with accounting standards and other legal requirements; and major judgemental areas.

(i) To assist the Board of Directors in preparing an audit committee report at the end of each nancial year, to be clearlyset out in the annual report of the C ompany, comprising the following :

i. The composition of the Audit C ommittee, including the name, designation (indicating the chairman) and directorshipof the members (indicating whether the directors are independent or otherwise).

ii. The terms of reference of the audit committee.

iii. The number of audit committee meetings held during the nancial year and details of attendance of each auditcommittee member.

iv. A summary of the activities of the Audit C ommittee in the discharge of its functions and duties for that nancialyear of the company.

v. The existence of an internal audit function or activity and where there is such a function or activity, a summaryof the activities of the function or activity. Where such a function or activity does not exist, an explanation of themechanisms that exist to enable the Audit Committee to discharge its functions effectively.

(j) To consider the appointment of auditors, the audit fee and any questions of resignation or dismissal includingrecommending the nomination of person or persons as auditors.

(k) To review the allocation of options pursuant to the employees share option scheme and mak e such statement to beincluded in the annual report of the C ompany in relation to share scheme for employees

(l) To review all areas of signicant nancial risk and to ensure that the arrangements are in place to contain these risks to

acceptable levels.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The Audit C ommittee held four (4) meetings during the nancial year ended 31 December 2008. T he record of attendance by eachmember at the Audit C ommittee meetings held during the year is as follows:-

Name of Directors Status of Directorship Number of Meetings Attended

G eneral Dato Seri Panglima M ohd AzumiBin M ohamed (R td) (C hairman) Independent Non-Executive Director 4/4

M r. C hoo K ok Liong Independent Non-Executive Director 4/4

M adam Tan C hong C hew @ Tan Ying Ying (resigned on 30.1.2009) Executive Director 3 /4

M r. Fong Wai Leong(appointed on 30.1.2009) Independent Non-Executive Director -



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SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE (contd)

The Audit C ommittee has carried out its duties in accordance with its terms of reference during the year. T hese include:

Reviewed the quarterly nancials results and annual report of the G roup and the C ompany before recommending to theBoard of Directors for consideration and approval;

Reviewed with the external auditors on the audit planning memorandum of the Group for the nancial year ended 31December 2008;

Review the year-end nancial statements together with external auditors management letter in relation to the audit andaccounting issues arising from the audit and managements response;

Reviewed the fees of the external auditors;

Reviewed with the internal auditors on the internal audit plan and programmes, the internal audit reports on ndings, auditrecommendations and the managements responses;

Reviewed the follow-up audit reports to ensure the audit recommendations and action plans have been implemented;

Reviewed and assessed the adequacy of the scope, functions and resources of the internal audit procedures in order toreport any weakness or inadequacy to the Board; and

Reviewed the Statement on Internal C ontrol.

STATEMENT OF EMPLOYEES SHARE OPTION SCHEME (ESOS) BY THE AUDIT COMMITTEE

Pursuant to Rule 8.24(2) of the Listing Requirements of Bursa M alaysia Securities Berhad for the MESDAQ M arket, the AuditC ommittee is required to verify the allocation of options to eligible employee of the Company and the G roup at the end of eachof the nancial year.

There were no new options granted under the ESO S to the eligible Executive Directors and employees of the Group during thenancial year ended 31 December 2008.

There were no options granted under the ESO S to the Non-Executive Directors since the implementation of the ESO S on 30M ay 2005.

INTERNAL AUDIT FUNCTION

The Group outsourced its internal audit function to an external professional rm. The role of the internal auditors is to performregular and systematic review of the internal control systems and to provide the Audit C ommittee with independent reviews andobjective reports on the state of internal control of the Group.

The internal auditors adopt the risk assessment based internal audit approach and methodology in identifying and prioritizingbusiness areas to be audited and the scope of the audit activities.

During the nancial year, periodical visits and internal audit reviews have been carried out according to the risk assessment basedinternal audit plan approved by the Audit C ommittee. A udit ndings and recommendations highlighted in the audit reports werepresented and discussed during the Audit Committee meetings. T he action plans are reviewed and followed up by the internalauditors on a periodical basis to ensure the recommendations are effectively implemented.

The cost incurred for the internal audit function for the nancial year ended 31 D ecember 2008 is RM 20,000.



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FIN AN C IAL S TATEM EN TS

21 Directors Report

25 Statement by Directors and Statutory Declaration

26 Independent Auditors Report

27 Balance Sheets

28 Income Statements

29 Statements of Changes in Equity

30 Cash Flow Statements

32 Notes to the Financial Statements


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CBS TECHNOLOGY BERHAD(537337M) 21 A n n u a l R e p o r t 2 0 0 8

D I R E C T O R S R E P O R T

The Directors of CBS Technology Berhad have pleasure in submitting their report together with the audited nancial statements ofthe G roup and of the C ompany for the nancial year ended 31 December 2008.

PRINCIPAL ACTIVITY

The Company operates as an investment holding C ompany.

The principal activities of its subsidiary companies and jointly controlled entity are disclosed in Note 11 and 12 to the FinancialStatements.

There have been no signicant changes in the nature of the principal activities of the Company and its subsidiary companies duringthe nancial year.

Jointly controlled entity is under members voluntary liquidation process as mentioned in Note 12 to the Financial Statements.

FINANCIAL RESULTS

Group Company RM RM Prot/(Loss) for the nancial year 5,617,208 (47,427)

Attributable to:-Equity holders of the C ompany 5,617,208 (47,427)

DIVIDENDS

There were no dividends paid or declared by the Company since the end of the previous nancial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the nancial year except as stated in the statements of

changes in equity.

ISSUE OF SHARES AND DEBENTURES

During the nancial year, the following shares were issued:-

Class of Par NumberDate of issue shares value of shares Purpose of issue RM

16.6.2008 O rdinary 0.10 84,000 Issued pursuant to the exercise of ESO S options. 18.8.2008 O rdinary 0.10 66,000 Issued pursuant to the exercise of ESO S options.

There were no debentures issued during the nancial year.


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D I R E C T O R S R E P O R T (contd)

EMPLOYEES SHARE OPTION SCHEME (ESOS)

The Employees Share Option Scheme was approved by the Securities Commission on 30 December 2003 and has a tenure of ve(5) years from the date of the launch or implementation of the scheme which shall expire on 29 December 2008. However, in orderto accommodate to the rst granting of the ESO S which falls on 29 M ay 2005, as allowed under the provisions of the ESO S B y-Lawupon the recommendation of the Committee who administer the ESO S, the ESO S O ption has been extended to 29 M ay 2010 withthe approval from the Board of Directors on 30 M ay 2005. The movement of options over unissued shares of the C ompany granted under the ESO S during the nancial year are as follows:-

Option At Bonus issue At price 1.1.2008 entitlement Retracted * Exercised 31.12.2008 RM

First G rant 0.15 1,877,600 894,800 (280,000) (84,000) 2,408,400Second G rant 0.26 2,472,000 1,212,000 (210,000) (66,000) 3,408,000

4,349,600 2,106,800 (490,000) (150,000) 5,816,400

* due to resignation/rejected offer^ price adjusted after bonus issue entitlement

The salient features and other terms of the ESO S are disclosed in Note 27 to the Financial Statements.

The Company has been granted exemption by the Companies C ommission of M alaysia from having to disclose in this report thenames of the persons to whom options have been granted during the nancial year and details of their shareholdings pursuant to

Section 169 (11) of the C ompanies A ct, 1965 except for eligible employees who were granted 650,000 share options and above.

There were no employees with allocation of 650,000 share options and above.

Details of options granted to D irectors are disclosed in the section on Directors interest in this report.

INFORMATION ON THE FINANCIAL STATEMENTS

Before the nancial statements of the G roup and of the C ompany were made out, the Directors took reasonable steps:-

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debtsand satised themselves that adequate allowance had been made for doubtful debts and there were no bad debts to be writtenoff; and

(b) to ensure that any current assets which were unlikely to be authorised in the ordinary course of business including their valuesas shown in the accounting records of the G roup and of the C ompany have been written down to an amount which they mightbe expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:-

(a) which would render it necessary to write off any bad debts or the amount of the allowance for doubtful debts in the nancialstatements of the G roup and of the C ompany inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the nancial statements of the Group and of the Companymisleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of theCompany misleading or inappropriate.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months afterthe end of the nancial year which, in the opinion of the D irectors, will or may affect the ability of the G roup and of the C ompany tomeet its obligations as and when they fall due.


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INFORMATION ON THE FINANCIAL STATEMENTS (contd)

At the date of this report, there does not exist:-

(a) any charge on the assets of the G roup and of the Company which has arisen since the end of the nancial year which securesthe liability of any other person; or

(b) any contingent liability of the G roup and of the Company which has arisen since the end of the nancial year.

OTHER STATUTORY INFORMATION

The Directors state that:-

At the date of this report, they are not aware of any circumstances not otherwise dealt with in this report or the nancial statementswhich would render any amount stated in the nancial statements misleading.

In the opinion of the Directors:-

(a) the results of operations of the G roup and of the C ompany during the nancial year were not substantially affected by any item,transaction or event of a material and unusual nature; and

(b) there has not arisen in the interval between the end of the nancial year and the date of this report any item, transaction or eventof a material and unusual nature likely to affect substantially the results of operations of the Group and of the Company for thecurrent nancial year in which this report is made.

DIRECTORS

The Directors in ofce since the date of the last report are as follows:-

G eneral Dato Seri Panglima M ohd Azumi Bin M ohamed (Rtd) (C hairman and Independent Non- Executive Director)Sun Chee K ong (M anaging Director)Tan Chong C hew @ Tan Ying Y ing (Executive Director)Choo K ok Liong (Independent Non-Executive Director)Lai Soon Onn (Alternate Director to Tan Chong Chew @ Tan Ying Ying)Anthony Power (Non-Independent Non-Executive Director)Fong Wai Leong (Independent Non-Executive Director) (appointed on 30.1.2009)Wong K ang Sai (Executive Director) (deceased on 21.10.2008)Lee Siew K en (Alternate Director to Wong Kang Sai) (ceased on 21.10.2008)

In accordance with the Articles 93 of the Companys Articles of Association, M adam Tan C hong Chew @ Tan Ying Ying and M r. ChooK ok L eong retire from the Board at the forthcoming Annual G eneral M eeting and, being eligible, M adam Tan C hong Chew @ Tan YingYing and M r. C hoo K ok Liong offer themselves for re-election.

M r Fong Wai Leong, who was appointed on 30 January 2009 retires in accordance with the Articles 99 of the C ompanys Articles ofAssociation, and being eligible, M r. Fong Wai Leong offers himself for re-election.

According to the Register of Directors Shareholdings, the benecial interests of those who were Directors at the end of the nancialyear in the shares of the Company were as follows:- Ordinary shares of RM0.10 each At Bonus At

1.1.2008 Issue Bought Sold 31.12.2008 Sun C hee K ong 12,086,330 6,043,165 415,800 - 18,545,295Tan Chong C hew @ Tan Ying Ying 4,378,830 2,189,415 - - 6,568,245Choo K ok Liong 10,000 13,500 26,500 - 50,000Lai Soon O nn 480,000 240,000 - - 720,000


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DIRECTORS (contd)

The interest in ESO S of those who were Directors at the end of the nancial year were as follows:-

Unexercised Bonus Unexercised at issue at 1.1.2008 entitlement Exercised 31.12.2008 Sun C hee K ong 266,800 133,400 - 400,200Tan Chong C hew @ Tan Ying Ying 266,800 133,400 - 400,200Lai Soon O nn 200,000 100,000 - 300,000

No other Directors at the end of the nancial year held any interest in shares of the Company or its related corporations during thenancial year.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The signicant events during the nancial year are disclosed in Note 31 to the Financial Statements.

DIRECTORS BENEFITS

During and at the end of the nancial year, no arrangements subsisted to which the Company is a party, with the object or objectsof enabling Directors of the Company to acquire any benets by means of the acquisition of shares in the Company or any otherbody corporate.

Since the end of the previous nancial year, no Director has received or become entitled to receive any benet (other than asdisclosed in the Note 23 to the Financial Statements) by reason of a contract made by the Company or a related corporation withthe Director or with a rm of which he is a member, or with a company in which he has a substantial nancial interest.

AUDITORS

M essrs SJ G rant Thornton have expressed their willingness to continue in ofce.

O n behalf of the Board

.......................................................................... )SUN CHEE KO NG ) ) ) ) ) DIRECTORS )

).......................................................................... )TAN CHONG CHEW @ TAN YING YING )

K uala Lumpur20 M arch 2009


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S T A T E M E N T B Y D I R E C T O R S /S T AT U T O R Y D E C L A R AT I O N

STATEMENT BY DIRECTORS

In the opinion of the Directors, the nancial statements set out on pages 27 to 56 are drawn up in accordance with FinancialReporting Standards and the Companies Act, 1965 in M alaysia so as to give a true and fair view of the nancial position of the Groupand of the C ompany as at 31 December 2008 and of its nancial performance and cash ows of the G roup and of the C ompany forthe nancial year then ended.

O n behalf of the Board

................................................................ ..................................................................... SUN CHEE KO NG TAN CHO NG CHEW @ TAN YING YING

K uala Lumpur20 M arch 2009

STATUTORY DECLARATION

I, Lai Fong Ling, being the Ofcer primarily responsible for the nancial management of CB S Technology Berhad, do solemnlyand sincerely declare that to the best of my knowledge and belief, the nancial statements set out on pages 27 to 56 are correctand I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the StatutoryDeclarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed at K uala Lumpur in )the Federal Territory this day of )20 M arch 2009 ) ...... ....... ...... ...... ....... ...... ....... ...... ...... ....... ...... LAI FONG LING

Before me:

Commissioner for O aths


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I N D E P E N D E N T A U D I T O R S R E P O R TTO TH E M EM BERS OF CBS TECHNO LOG Y BERHAD

Report on the Financial Statements

We have audited the nancial statements of C BS Technology Berhad, which comprise the balance sheets of the Group and of theCompany as at 31 D ecember 2008, the income statements, statements of changes in equity and cash ow statements of the G roupand of the Company for the nancial year then ended, and a summary of signicant accounting policies and other explanatory notes,as set out on pages 27 to 56.

Directors Responsibilities for the Financial Statements

The directors of the Company are responsible for the preparation and fair presentation of these nancial statements in accordancewith Financial Reporting Standards and the Companies Act, 1965 in M alaysia. T his responsibility includes: designing, implementingand maintaining internal control relevant to the preparation and fair presentation of nancial statements that are free from materialmisstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting

estimates that are reasonable in the circumstances.

Auditors Responsibilities

O ur responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordancewith approved standards on auditing in M alaysia. T hose standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance whether the nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nancial statements. Theprocedures selected depend on our judgment, including the assessment of risks of material misstatement of the nancial statements,whether due to fraud or error. In mak ing those risk assessments, we consider internal control relevant to the Companys preparationand fair presentation of the nancial statements in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the Companys internal control. A n audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well asevaluating the overall presentation of the nancial statements.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the nancial statements have been properly drawn up in accordance with Financial Reporting Standards and theCompanies Act, 1965 in M alaysia so as to give a true and fair view of the nancial position of the Group and of the Company as of31 December 2008 and of their nancial performance and cash ows for the nancial year then ended.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in M alaysia, we also report the following:-

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its

subsidiary companies of which we have acted as auditors have been properly kept in accordance with the provisions of theAct.

b) We are satised that the nancial statements of the subsidiary companies that have been consolidated with the C ompanysnancial statements are in form and content appropriate and proper for the purposes of the preparation of the nancialstatements of the Group and we have received satisfactory information and explanations required by us for those purposes.

c) The auditors reports on the nancial statements of the subsidiary companies did not contain any qualication or any commentmade under Section 174 (3) of the Act.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965in M alaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

SJ GR ANT THOR NTON DATO N. K. JASANI (NO. AF: 0737) CHAR TERED ACC O UNTANT CH AR TERED AC CO UNTA NTS (NO : 708/03/10(J/PH )) 20 M arch 2009


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B A L A N C E S H E E T SAS AT 31 DEC EM BER 2008

Group CompanyNote 2008 2007 2008 2007

RM RM RM RM SH AR E CAP ITA L 5 15,181,899 10,111,266 15,181,899 10,111,266SH AR E PR EM IUM 6 1,156,463 6,241,587 1,156,463 6,241,587SH AR E O PT IO N RESER VE 194,260 50,432 194,260 50,432UN AP PR O PR IATED PR O FIT 14,416,604 8,799,396 2,994,122 3,041,549

Total equity 30,949,226 25,202,681 19,526,744 19,444,834

NON-CURRENT LIABILITY

Deferred taxation 7 46,000 63,000 - -

30,995,226 25,265,681 19,526,744 19,444,834REPRESENTED BY:-

NON-CURRENT ASSETSProperty, plant and equipment 8 2,008,810 2,570,153 - -Prepaid land lease payment 9 7,121,654 - - -Investment properties 10 - 255,000 - -Investment in subsidiary companies 11 - - 5,723,228 5,723,226Interest in jointly controlled entity 12 - 107,038 - 54, 456Development cost 13 626,727 486,000 - -G oodwill on consolidation 14 1,514,405 1,514,405 - -

Total non-current assets 11,271,596 4,932,596 5,723,228 5,777,682

CURR ENT ASSETSTrade receivables 15 11,728,270 4,020,627 - -O ther receivables 16 4,390,553 1,527,481 74,904 86,153Amount due from jointly controlled entity 12 - 500 - 500Amount due from subsidiary companies 11 - - 6,164,505 2,514Investments 17 14,403,623 36,525,342 7,547,021 23,573,405Tax recoverable 13,039 106,481 13,039 10,786Fixed deposits with licensed banks 18 609,359 2,000,000 - -Cash and bank balances 19 4,479,146 711,566 42,681 187,189

Total current assets 35,623,990 44,891,997 13,842,150 23,860,547

LESS: CUR RENT LIABILITIES

Trade payables 20 3,663,045 2,607,790 - -O ther payables 21 11,876,620 11,840,779 38,634 83,139Dividend payable - 10,110,256 - 10,110,256Tax payable 360,695 87 - -

Total current liabilities 15,900,360 24,558,912 38,634 10,193,395

NET C UR RENT AS SET S 19,723,630 20,333,085 13,803,516 13,667,152

30,995,226 25,265,681 19,526,744 19,444,834

The accompanying notes form an integral part of the nancial statements.


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I N C O M E S T A T E M E N T SFO R T HE FINANC IAL YEAR ENDED 31 DEC EM BER 2008

Group CompanyNote 2008 2007 2008 2007

RM RM RM RM

Revenue 22 23,024,351 20,851,837 263,178 14,363,383

Cost of sales (11,204,052) (9,165,865) - -

G ross prot 11,820,299 11,685,972 263,178 14,363,383

O ther income 662,501 741,246 24,764 -

Selling and distribution expenses (569,830) (639,216) - -

Administration expenses (5,231,090) (4,886,581) (282,666) (176,363) O ther expenses (120,740) - (54,956) -

Share of results of jointly controlled entity - (4,721) - -

Prot/(Loss) before taxation 23 6,561,140 6,896,700 (49,680) 14,187,020

Taxation 24 (943,981) (475,304) 2,253 (1,261,221)

Prot/(Loss) after taxation 5,617,159 6,421,396 (47,427) 12,925,799

M inority interest 49 - - -

Prot/(loss) for the nancial year 5,617,208 6,421,396 (47,427) 12,925,799

Attributable to:-Equity holders of the C ompany 5,617,208 6,421,396 (47,427) -

Earnings per share attributable toequity holders of the Company (sen)- Basic 25 3.70 4.32 - -

- Fully diluted 25 3.65 4.26 - -



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S T A T E M E N T S O F C H A N G E S I N E Q U I T YFO R T HE FINANC IAL YEAR ENDED 31 DEC EM BER 2008

Attributable to equity holders of the CompanyNon-distributable Distributable

Share Share Share option Unappropriated Total

capital premium reserve prot Equity RM RM RM RM RM Group

Balance at 1 January 2007 9,838,806 5,732,937 44,910 12,488,256 28,104,909

Share based payment under ESO S - - 65,894 - 65,894

Issuance of share capital 272,460 448,278 - - 720,738

Exercise of share option - 60,372 (60,372) - -

Interim dividends - - - (10,110,256) (10,110,256) Prot for the nancial year - - - 6,421,396 6,421,396

Balance at 31 December 2007 10,111,266 6,241,587 50,432 8,799,396 25,202,681




Bonus issue 5,055,633 (5,055,633) - - -

Bonus issue expenses - (48,451) - - (48,451) Prot for the nancial year - - - 5,617,208 5,617,208


Company

Balance at 1 January 2007 9,838,806 5,732,937 44,910 226,006 15,842,659




Interim dividends - - - (10,110,256) (10,110,256) Prot for the nancial year - - - 12,925,799 12,925,799





Bonus issue 5,055,633 (5,055,633) - - -

Bonus issue expenses - (48,451) - - (48,451) Loss for the nancial year - - - (47,427) (47,427) Balance at 31 December 2008 15,181,899 1,156,463 194,260 2,994,122 19,526,744



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C A S H F L O W S T A T E M E N T SFO R T HE FINANC IAL YEAR ENDED 31 DEC EM BER 2008

Group Company2008 2007 2008 2007

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProt/(Loss) before taxation 6,561,140 6,896,700 (49,680) 14,187,020

Adjustments for:-Allowance for doubtful debts 13,702 - 500 -Allowance for diminution in value of jointly controlled entity 107,038 - 54,456 -Amortisation of development cost 80,400 63,000 - -Amortisation of prepaid land lease payment 60,422 - - -Depreciation 532,034 441,507 - -Share-based payment under ESO S 148,028 65,894 148,028 65,894Property, plant and equipment written off 1,928 1,178 - -G ain on disposal of investments (41,874) (154,210) (24,764) -G ain on disposal of investment properties (24,000) (68,999) - -Interest income (647,701) (781,376) (263,178) (376,619)

Dividend income - - - (13,986,764) Share of result of jointly controlled entity - 4,721 - -Unrealised loss on foreign exchange 65,777 - - -

O perating prot/(loss) before working

capital changes 6,856,894 6,468,415 (134,638) (110,469) Changes in working capital:-Receivables (10,583,665) (87,317) 11,452 (71,861)

Payables 1,091,096 6,545,781 (44,505) 13,396Subsidiary companies - - (6,161,991) (2,438,402)

Cash (used in)/from operations (2,635,675) 12,926,879 (6,329,682) (2,607,336)

Dividend received - - - 12,714,589Dividend paid (10,110,256) - (10,110,256) -Interest received 647,498 768,584 262,975 363,827

Tax refund - 9,096 - 9,096Tax paid (506,931) (121,597) - -

Net cash (used in)/from operating activities (12,605,364) 13,582,962 (16,176,963) 10,480,176

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of share capital 29,760 720,738 29,760 720,738Bonus issue expense paid (48,451) - (48,451) -

Net cash (used in)/from nancing activities (18,691) 720,738 (18,691) 720,738


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C A S H F L O W S T A T E M E N T SFO R T HE FINA NC IAL YEAR END ED 31 DEC EM BER 2008 (contd)

Group Company2008 2007 2008 2007

Note RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of subsidiary companies,net of cash acquired A - - (2) -

Payment for development cost (221,127) (180,000) - -Placement in investments (4,660,990) (43,726,418) (108,852) (13,369,842)

Proceeds from disposal of investments 26,824,583 32,097,898 16,160,000 2,000,000Proceeds from disposal of property,plant and equipment 149,000 69,000 - -

Proceeds from disposal of investment properties 278,000 - - -Purchase of property, plant and equipment (120,619) (1,285,052) - -Purchase of prepaid land lease (7,182,076) - - -

Net cash from/(used in) investing activities 15,066,771 (13,024,572) 16,051,146 (11,369,842) CASH AND CASH EQUIVALENTSNet increase/(decrease) 2,442,716 1,279,128 (144,508) (168,928)

Effect of exchange rate differences (65,777) - - -Brought forward B 2,711,566 1,432,438 187,189 356,117

Carried forward 5,088,505 2,711,566 42,681 187,189

NOTES TO THE CASH FLOW STATEMENTS

A. ACQUISITION OF SUBSIDIARY COMPANIES

During the nancial year, the C ompany paid R M 2 in cash to acquire 100% equity interest in CBS S ynergy Sdn. B hd., a newlyincorporated company.

B. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash ow statements comprise the following balance sheets items:-

Group Company2008 2007 2008 2007

RM RM RM RM

Fixed deposits with licensed banks 609,359 2,000,000 - -Cash and bank balances 4,479,146 711,566 42,681 187,189

5,088,505 2,711,566 42,681 187,189



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N O T E S T O T H E F I N A N C I A L S T AT E M E N T S 31 DEC EM BER 2008

1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The nancial statements of the Group and of the Company have been prepared in accordance with the Companies Act, 1965in M alaysia and Financial Reporting Standards issued by M alaysian Accounting Standards Board (M ASB ).

2. FINANCIAL RISK MANAGEMENT POLICIES

The Groups nancial risk management policy seeks to ensure that adequate nancial resources are available for the developmentof the G roups business whilst managing its risks. The G roup operates within policies that are approved by the Board and theG roups policy is not to engage in speculative transactions.

The main areas of nanc

CBS Sdn Bhd

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