CBS SDN BHD

CBS TECHNOLOGY BERHAD
(537337M)
CBS Technology Berhad
(537337M)
15, Jalan Ara SD7/3A, Bandar Sri Damansara, 52200 Kuala Lumpur, Malaysia.
Annual Report 2008
www.cbs.com.my
Tel: 603-6277 7018 Fax: 603-6277 6018
Annual Report 2008
CBS TECHNOLOGY BERHAD (537337M)
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CONTENTS
2 3 4 7 10 14 15 15 16 20 57 58 60 62
CORPORATE INFORMATION CORPORATE STRUCTURE AND 5-YEAR FINANCIAL HIGHLIGHTS CHAIRMANS STATEMENT DIRECTORS PROFILE STATEMENT ON CORPORATE GOVERNANCE STATEMENT ON INTERNAL CONTROL DIRECTORS RESPONSIBILITY STATEMENT OTHER COMPLIANCE INFORMATION AUDIT COMMITTEE REPORT FINANCIAL STATEMENTS LIST OF PROPERTIES ANALYSIS OF SHAREHOLDINGS NOTICE OF ANNUAL GENERAL MEETING STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING FORM OF PROXY
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CORPORATE INFORMATION
BOARD OF DIRECTORS
General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) Chairman and Independent Non-Executive Director Sun Chee Kong Managing Director Tan Chong Chew @ Tan Ying Ying Executive Director Choo Kok Liong Independent Non-Executive Director Anthony Power Non-Independent Non-Executive Director Fong Wai Leong Independent Non-Executive Director (appointed on 30.01.2009) Lai Soon Onn Alternate Director to Tan Chong Chew @ Tan Ying Ying Wong Kang Sai Executive Director (deceased on 21.10.2008) Lee Siew Ken Alternate Director to Wong Kang Sai (ceased on 21.10.2008)
REGISTERED OFFICE
312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS 7/26 47301 Petaling Jaya Selangor Darul Ehsan Malaysia Tel: +603-7803 1126 Fax: +603-7806 1387
PRINCIPAL PLACE OF BUSINESS

15, Jalan Ara SD 7/3A Bandar Sri Damansara 52200 Kuala Lumpur Malaysia Tel: +603-6277 7018 Fax: +603-6277 6018 Website: www.cbs.com.my
AUDITORS
SJ Grant Thornton (Member of Grant Thornton International) Chartered Accountants Level 11, Faber Imperial Court Jalan Sultan Ismail Malaysia 50250 Kuala Lumpur Tel: +603-2692 4022 Fax: +603-2732 5119 Website: www.gt.com.my
SHARE REGISTRAR AUDIT COMMITTEE

General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) Chairman Choo Kok Liong Member Fong Wai Leong Member (appointed on 30.01.2009) Tan Chong Chew @ Tan Ying Ying Member (resigned on 30.01.2009) Epsilon Registration Services Sdn Bhd Level 17, The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Malaysia Tel: +603-2264 3883 Fax: +603-2282 1886 Website: www.tricorglobal.com
PRINCIPAL BANKER
Malayan Banking Berhad 7 & 8, Jalan Tanjung SD13/1 Bandar Sri Damansara 52200 Kuala Lumpur Malaysia
COMPANY SECRETARIES
Seow Fei San MAISCA 7009732 Wong Siew Yeen MAISCA 7018749
STOCK EXCHANGE LISTING

MESDAQ Market of Bursa Malaysia Securities Berhad Stock Name: CBSTECH Stock Code: 0041
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CORPORATE STRUCTURE
CBS TECHNOLOGY BERHAD

(537337M)
100%
CYBER BUSINESS SOLUTIONS SDN BHD
100%
CBS MSC SDN BHD
100%
CBS SYNERGY SDN BHD
49%
CBS TECHNOLOGY GmbH
51%
CASD SOLUTIONS SDN BHD
5-YEAR FINANCIAL HIGHLIGHTS

RM000 Revenue Prot Before Taxation Prot Attributable To Equity Holders Of The Company Net Assets 2004 (1) 11,075 4,257 3,519 18,778 2005 (2) 14,897 4,319 4,005 22,874 2006 15,887 5,344 4,995 28,105 2007 20,852 6,897 6,421 25,203 2008 23,024 6,561 5,617 30,949
Basic Earnings Per Share (Sen) Dividend Per Share (Sen) - net of tax Net Assets Per Share (Sen)
4.1 19.3
4.1 23.5
5.1 28.6
6.5 10.0 24.9
3.7 20.4
(1) The nancial period is from 19 January 2004 to 31 December 2004 (2) Restated to comply with new and revised FRSs.
Revenue
Profit Before Tax
20,852
25
23,024
(RM 000)
(RM 000)
10
6,897
14,897
15,887
20 15 10 5 0
11,075
4 2 0
2004
2005
2006
2007
2008
2004
4,257
2005
4,319
2006
5,344
2007
2008
6,561
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CHAIRMANS STATEMENT
Dear Shareholders,
On behalf of the Board of Directors (Board), I am pleased to present the Annual Report and Financial Statements of CBS Technology Berhad (CBS) for the nancial year ended 31 December 2008 (FY2008).
REVIEW OF FINANCIAL PERFORMANCE Against the backdrop of a weakening market in FY2008, the Group continued to maintain business growth momentum with the Groups revenue increased by RM2.17 million or 10.42% to RM23.02 million compared to RM20.85 million in the nancial year ended 31 December 2007 (FY2007). With the escalating costs and increased manpower expenses, the overall gross prot margin had reduced and as a result, the Groups gross prot grew slightly by RM0.13 million or 1.15% to RM11.82 million. The Groups pre-tax prot for the FY2008 has declined by 4.87% to RM6.56 million from RM6.90 million reported in the FY2007. This was mainly attributable to higher administrative expenses relating to the share based payment under the employees share option scheme of CBS and higher depreciation and amortisation expenses. Other 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 FY2008 increased by RM0.47 million resulted from the income tax provision made by CBSs wholly owned subsidiary, CBS MSC Sdn Bhd (CBS MSC). CBS MSC was granted Pioneer Status with tax exemption for a period of ve (5) years until 25 September 2008. The extension of the Pioneer Status for another ve (5) years was only approved on 23 March 2009 which was after the nalisation of the nancial statements of CBS MSC for the FY2008. 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 FY2008 has decreased by 12.52% from RM6.42 million in FY2007 to RM5.62 million in FY2008. The Group maintained a strong and healthy balance sheet with net current assets of RM19.72 million, total assets of RM46.90 million and shareholders funds of RM30.95 million. The overall nancial position of the Group remained sound with no bank borrowings. The Groups total cash and cash equivalents plus short term investments stood at RM19.49 million as at 31 December 2008. Based on the weighted average number of 151,739,187 shares in CBS, the Groups basic earnings per share for FY2008 was 3.70 sen, as compared to 4.32 sen in FY2007.
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CHAIRMANS STATEMENT (contd)
REVIEW OF OPERATION During the year, CBS continued to make signicant progress to be the leading Radio Frequency Identication (RFID) solutions provider. CBSs wholly owned subsidiary, Cyber Business Solutions Sdn Bhd was awarded a project by a national utility company, Tenaga Nasional Berhad (TNB) to implement CBS proprietary Solmate RFID Warehouse Management System (RWMS) at one of TNBs warehouses. Solmate RWMS is a web-based solution that will enable tagging, storage, retrieval and tracking of warehouse materials to enhance operational efciencies and warehouse effectiveness. The project is the rst of its kind undertaken by a utility company in Malaysia to deploy the RFID technology in warehouse management system. CBS is proud to lead another RFID pilot site for a national utility company proven to improve its operational efciencies and effectiveness for its long term business value. CBS will leverage on its success in the implementation of RWMS project for TNB to seek new opportunities in the other sectors and new markets. We believe CBS is well positioned to exploit these opportunities by extending our RFID solutions to address more complex business requirements. CBSs strategy in adapting quickly to the fast changing business environment and offering innovative products and services that meet 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 RFID applications with the aim to assist our customers in increasing the operational efciency through reduction in costs. Our RFID applications developed for the supply chain management will be potential breakthrough for many enterprises in conserving if not, reducing their costs of operations. We believe that the Group could seek new business opportunities during this challenging economic environment, as more enterprises will look into products and services that can increase the efciency of their business operations to weather the economic downturn. FY2008 was also an exciting year for the Group. CBS had acquired 100% equity interest in CBS Synergy Sdn Bhd (CBS Synergy), which owns 51% equity interest in CASD Solutions Sdn Bhd (CASD), in October 2008. CASD is a value-added distributor for CA Inc. (CA), one of the worlds leading information technology (IT) management software group. CASD provides the primary sales interface for CAs portfolio of enterprise IT solutions in Malaysia. With this new line of business, we envisage the Group to sustain its business growth in the coming years. During the year, the Group achieved Capability Maturity Model Integration (CMMI) Level 2 rating. CMMI is a process improvement approach that provides organisations with the essential elements of effective processes. The processes have been implemented throughout the Group and have resulted in better project performance and high quality products as well as improvement in customer 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 strive to enhance and improve our RFID solutions in line with the latest technology innovations in the market. We collaborate with technology partners and industry leaders in order to deliver technology enabled innovations to our customers. Our R&D team will continue to be focused on the RFID applications for the supply chain. In the FY2008, the total R&D expenditure incurred by the Group was RM0.68 million. CORPORATE DEVELOPMENTS (i) On 8 August 2008, the Company announced that it was uplifted from being classied as Cash Company pursuant to Rule 8.14(2) of the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market. (ii) On 15 October 2008, CBS has acquired two (2) ordinary shares of RM1.00 each in CBS Synergy, representing 100% of the issued and paid-up share capital of CBS Synergy for a total consideration of RM2.00. CBS Synergy is an investment holding company and owns 51 ordinary shares of RM1.00 each in CASD, representing 51% of the issued and paid-up share capital of CASD. The principal activity of CASD is dealing in computer equipment and software. CBS has proposed to undertake a special issue of up to 67,798,000 new ordinary shares of RM0.10 each in CBS to Bumiputera investors to be identied and approved by the Ministry of International Trade and Industry (MITI) to comply with the Bumiputera equity shareholding condition (Proposed Special Issue). On 30 April 2009, the Company sought the approval of the Securities Commission (SC) and MITI for an extension of time for a period of twelve (12) months until 31 May 2010 for CBS to comply with the Bumiputera equity shareholding condition. The applications are presently pending the approval of the SC and MITI.
(iii)
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CHAIRMANS STATEMENT
CORPORATE SOCIAL RESPONSIBILTY The Group is committed to fullling its social responsibilities to the society. During the year, the Group has sponsored Every Child Every Year In School Program which was organised by the Rotary Club of Damansara-West. The Program provides funding for breakfast, uniform and stationery for underprivileged children from two schools in Selangor and Melaka, respectively. The Group will continue to support such community events to reach out to the less privileged in Malaysia. During the year, the Group also made some donation to Mercy Humanitarian Fund to provide assistance to the victims of Myanmar Cyclone Nargis. The Group continues to contribute to the society through providing internship training programs to the students from local universities as trainees to enhance their work experiences outside academia. The trainees receive the necessary on-the-job training needed to improve their skill sets which the Group believes such training program will further enrich students and expand their knowledge to be better prepared for the working environment upon graduation. PROSPECTS With the current global economic downturn, the Group foresees deteriorating market conditions and greater challenges ahead in the nancial year ending 31 December 2009. In response to the uncertain economic situation, we will maintain our prudent approach to business management and continue to adopt measures focusing on stringent cost control, continuous improvements in the Groups operation as well as prudent management of head count and close monitoring of staff performance. On the business front, we will continue to deploy appropriate strategies and resources to meet the challenges ahead. We strive to enhance and extend our product applications to address more complex business requirements as well as exploit new business opportunities 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 sales efforts towards new markets and segments. On the regional front, we will maintain our focus on continuing to expand market share in the South East Asia and Middle East region and will continue to leverage on our partners strength to penetrate further and widen the Groups regional market coverage. BOARD OF DIRECTORS On behalf on the Board, I express my condolences on the demise of Mr. Wong Kang Sai who passed away on 21 October 2008. He was an Executive Director and Business Development Director of CBS and had served the Group for more than 8 years. I would like to record the Boards appreciation for his loyalty, valuable contributions and commitment to the Group during his tenure of ofce. The Board also warmly welcomes on Board our newly appointed Independent Non-Executive Director, Mr. Fong Wai Leong, who has more than 19 years of working experience in banking and nance sector. ACKNOWLEGEMENT On behalf of the Board, I would like to take this opportunity to express our sincere gratitude and appreciation to the management and staff for their dedication and commitment and to our valued customers, shareholders, business associates for their continued condence and support throughout the year. I would also like to convey my sincere appreciation and gratitude to my fellow Directors for their invaluable guidance and contributions 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
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DIRECTORS PROFILE
General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd)

Chairman and Independent Non-Executive Director 61 years of age, Malaysian General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) was appointed to the Board as the Chairman and Independent Non-Executive Director on 15 February 2008. He is also the Chairman of the Audit Committee, Nominating Committee and Remuneration Committee. He holds a Master of Science in National Resources Strategy from the National Defense University Washington DC US. He received his early military training at the Ofcer Cadet School Port sea Australia in 1968 and continued to receive advanced military training at the Australian Army Infantry Centre, the United States Army Infantry Centre Fort Benning and the Australian Joint Services Staff College. General Dato Seri Panglima Mohd Azumi (Rtd) joined the private sector in November 2004 following his retirement as Chief of the Malaysian Army after an illustrious military carrier of 37 years. Highlights of his military career includes service with the United Nations Observation Mission following the First Gulf War where he assisted the Foran Commission in the return of war property and the policing plan of the demilitarized zone. He was also given the responsibility for the deployment of Malaysias observers and peacekeeping troops to Somalia, Cambodia and Bosnia Herzegovina. He also represented Malaysia at the UN Troop Contributing Nations Meeting at Zagreb. General Dato Seri Panglima Azumi (Rtd) is also a Director of the following public listing companies and a subsidiary of a public listed company: Atlan Holdings Berhad Halim Mazmin Berhad Kenangan Cergas (M) Sdn Bhd, a subsidiary of Idaman Unggul Berhad.
Mr. Sun Chee Kong

Managing Director and Chief Executive Ofcer 46 years of age, Malaysian He was appointed to the Board as the Managing Director since 19 January 2001. He is the Chief Executive Ofcer (CEO) and the founder of the CBS Group. As the CEO, he is responsible for the overall management and strategic planning functions of the Group. He is also a member of the Remuneration Committee. He graduated from the University of Louisiana, USA, with a Degree in Computer Science. He began his career with IBM Malaysia in 1987 and has acquired a wealth of experience, knowledge and invaluable contacts along the way. After he left IBM, he founded Cyber Business Solutions Sdn Bhd in 1996 with the primary focus in providing specialized Enterprise Solutions Development projects. With a keen eye on market opportunities, Mr. Sun has since steered CBS towards more lucrative sectors that involve higher, more cutting-edge technology in e-security systems and RFID solutions. CBS MSC Sdn Bhd was incorporated in year 2000 to undertake the research and development activities for the Group of potential new products in e-security and RFID. His creative ideas for business technologies and innovation have put CBS Group in the forefront of the industry, resulting in the successful listing of the Company on the MESDAQ Market of Bursa Malaysia Securities Bhd in 2004. He has direct shareholding of 18,545,295 ordinary shares of RM0.10 each in the Company. Mr. Suns spouse, Madam Tan Chong Chew @ Tan Ying Ying, is an Executive Director of the Company and the Marketing Director of the CBS Group. He has no conict of interest in any business arrangement involving the Company. He has no convictions for any offences within the past 10 years. He attended all four (4) Board meetings of the Company held during the nancial year.
He does not have any interest in shares in the Company. General Dato Seri Panglima Azumi (Rtd) does not have any family relationship with any director and/or major shareholder of the Company, nor any conict of interest in any business arrangement involving the Company. He has no convictions for any offences within the past 10 years. General Dato Seri Panglima Azumi (Rtd) has attended all four (4) Board meetings of the Company held during the nancial year.
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DIRECTORS PROFILE (contd)
Madam Tan Chong Chew @ Tan Ying Ying

Executive Director and Marketing Director 44 years of age, Malaysian She was appointed to the Board as an Executive Director on 23 June 2003 and she is also the Marketing Director of the CBS Group. As the Marketing Director, she is responsible for the Groups marketing strategies, planning and promotional activities. She holds a Degree in Business Administration from the University of Louisiana, USA. She began her career as a consultant with Deloitte & Touche KassimChan in 1987 and subsequently joined ABACUS Travel as a pioneer member of the management team and headed the marketing department. Barely ve years later, she joined the International Air Travel Association (IATA) as the supervisor of their newly established data centre. In 1994, she joined Cinema International Corporation Sdn. as the Marketing Manager and was later promoted to the Managing Director in 1997. From business consultancy to air travel management and the entertainment industry, Madam Tans career moves have seen her racking up professional experience in diverse industries for the better part of two decades. She has a direct shareholding of 6,568,245 ordinary shares of RM0.10 each in the Company. She is the spouse of Mr. Sun Chee Kong, the Managing Director and a substantial shareholder of the Company. She has no conict of interest in any business arrangement involving the Company. She has no conviction for any offences within the past 10 years. Madam Tan attended three (3) out of four (4) Board meetings of the Company held during the nancial year.
Accountant of Malaysian Institute of Accountants. Currently he operates his own practice which offers management and consultancy services. Prior to this, he was an accountant with the Hyatt Regency Saujana Hotel. He has direct shareholding of 50,000 ordinary shares of RM0.10 each in the Company. Mr. Choo does not have any family relationship with any director and/or major shareholders of the Company, nor any conict of interest in any business arrangement involving the Company. He has no convictions for any offences within the past 10 years. Mr. Choo attended all four (4) Board meetings of the Company held during the nancial year.
Mr. Anthony Power

Non-Independent & Non-Executive Director 42 years of age, American Mr. Anthony Power was appointed to the Board as NonIndependent Non-Executive Director on 14 December 2007. He holds a Master in Civil Engineering & Bachelors Degree in Mechanical Engineering from the State University of New York at Buffalo, U.S.A. Mr. Power is backed by 16 years of experience in key international markets such as Asia, Europe, the United States and the Middle East in business and funding strategy. He joined Emirates Investment and Development PSC (Emivest), Dubai as General Manager of Business Development in 2003 and was promoted to the Chief Investment Ofcer of Emivest in June 2007. Prior to joining Emivest, he was the Chief Operating Ofcer of SITA International for Malaysia, Singapore and Brunei and was later promoted to Country General Manager (Dubai) for SITA International from 2001 to 2003. He is also a Director of ETI Tech Corporation Berhad. He does not have any interest in shares in the Company.
Mr. Choo Kok Liong

Independent Non-Executive Director 44 years of age, Malaysian He was appointed to the Board as an Independent NonExecutive Director on 20 January 2004. He is also a member of Audit Committee, Nominating Committee and Remuneration Committee. He graduated from Deakin University of Australia and holds a Bachelor of Business Degree majoring in Accounting and Economics. He is a Certied Public Accountant from CPA Australia and had undergone his training in one of the big four international accounting rms. He is also a Chartered
Mr. Power does not have any family relationship with any director and/or major shareholder of the Company, nor any conict of interest in any business arrangement involving the Company. He has no convictions for any offences within the past 10 years. Mr. Power has attended all four (4) Board meetings of the Company held during the nancial year.
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DIRECTORS PROFILE (contd)
Mr. Fong Wai Leong

Independent Non-Executive Director 39 years of age, Malaysian Mr. Fong Wai Leong was appointed to the Board as an Independent Non-Executive Director on 30 January 2009. He is also a member of the Audit Committee. He holds a professional qualication from Malaysia Institute of Certied Public Accountants. He is a Chartered Accountant. Mr. Fong has over 19 years of working experience in banking and nance which includes advising on a number of successful public listings, mergers and acquisitions in various countries including Malaysia, China, Thailand, Singapore, South Africa, and part of South America. Mr. Fong is currently the Managing Director of Devonshire Capital Kuala Lumpur Sdn Bhd (Devonshire Capital). Prior to joining Devonshire Capital in 2000, he was the General Manager of Kuala Lumpur City Securities (now known as Alliance Investment Bank) where he headed the rms corporate nance Division. He also worked in CIMBs Corporate Finance Division from 1993 to 1997. He began his career at an International Accounting Firm as an auditor from 1989 to 1997. He has direct shareholding of 78,100 ordinary shares of RM0.10 each in the Company. Mr. Fong does not have any family relationship with any director and/or major shareholder of the Company, nor any conict of interest in any business arrangement involving the Company. He has no convictions for any offences within the past 10 years. Mr. Fong has not attended any Board meetings of the Company held during the nancial year as he was appointed to the Board after the nancial year.
Mr. Lai Soon Onn

Alternate Director to Madam Tan Chong Chew @ Tan Ying Ying 40 years of age, Malaysian He was appointed to the Board as the Alternate Director to Madam Tan Chong Chew @ Tan Ying Ying on 20 January 2004. He is one of the pioneer management team of the CBS Group and is the Director of Enterprise Solutions of the CBS Group. He is responsible for the designing and converting clients requirements into an architecture and design blueprint for the solutions created. He holds a Masters in Business Administration from Preston University, USA. Beginning with RHB Bank Bhd in 1990, Mr. Lai applied his considerable skills in various technical and corporate management positions within the Bank, most notably in the technical and operations management of the RHB Data Centre. His stint with RHB allowed him to garner specialized IT experience primarily in the elds of Finance and Insurance, and in dealing with Government sectors. Within RHB, he specialises in Systems & Business Management, and subsequently promoted to the position of Head of Automation and R&D for its IT Division. He has direct shareholding of 720,000 ordinary shares of RM0.10 each in the Company. Mr. Lai does not have any family relationship with any director and/or major shareholder of the Company, nor any conict of interest in any business arrangement involving the Company. He has had no convictions for any offences within the past 10 years. Mr. Lai attended all four (4) Board meetings of the Company held during the nancial year.
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STATEMENT ON CORPORATE GOVERNANCE
The Board of Directors (the Board) of CBS Technology Berhad (CBS) is fully committed to ensure the fulllment of the highest standards of Corporate Governance as set out in Part 2 of the Malaysian Code on Corporate Governance, which highlights the principles and best practices on structures and processes that the Company may use in their operations towards achieving the optimal governance framework. A. i. Directors The Board The Board believes that good corporate governance is fundamental to the Board in discharging its duciary duties and responsibilities and enhances high standard of business integrity, corporate performance and corporate accountability with the aim of realising shareholders value. The Company is led and managed by an experienced Board, with wide mix of knowledge, business acumen, management skills and industry expertise from various background which is an invaluable asset for the stewardship of the Companys direction and operation. During the nancial year ended 31 December 2008, the Board had met at four (4) occasions. All proceedings from the meetings are minuted and signed by the Chairman 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 Non-Independent Non-Executive Director. This is in compliance with Rule 15.02 of the Listing Requirements of Bursa Malaysia Securities Berhad for MESDAQ Market 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 are chaired by the Chairman whom is the Independent Non-Executive Director whose role is clearly separated from the role of the Managing Director. This 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 the Board. 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) Board meetings were held during the nancial year under review. The record of attendance is as follows: Directors General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) Mr. Sun Chee Kong Madam Tan Chong Chew @ Tan Ying Ying Mr. Wong Kang Sai (deceased on 21.10.2008) Mr. Choo Kok Liong Mr. Anthony Power Mr. Fong Wai Leong (appointed on 30.01.2009) Number of Meetings Attended by Directors 4/4 4/4 3/4 2/3 4/4 4/4 -
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STATEMENT ON CORPORATE GOVERNANCE (contd)
iv.
Supply of Information The Chairman 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 the Board 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 Company Secretaries who are responsible for ensuring that Board meeting procedures are adhered to and that applicable rules and regulations are complied with. The Directors will be updated 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 Mandatory Accreditation Programme, prescribed by Bursa Malaysia Securities Berhad. Directors are encouraged to attend seminars and/or conferences organized by relevant regulatory authorities and professional bodies to keep abreast with latest developments in the market place and new statutory and regulatory requirements. The Board is also regularly updated by the Company Secretaries on the latest update and amendments to the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market. Details of trainings attended by the Directors for the nancial year ended 31 December 2008 are as follows: Name of Directors General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) Training Programmes Governance and Board Effectiveness by Malaysian Institute of Corporate Governance Code of Corporate Governance and Ethical Conduct 4th Annual Growth, Innovation and Leadership 2008 Tax Planning on Current Tax Issues & Business Succession Solution Workshop National Tax Conference 2008 2008 Budget Talk 2008 Budget Seminar Mandatory Accreditation Programme for Director of PLC
Mr. Sun Chee Kong Madam Tan Chong Chew @ TanYing Ying
Mr. Choo Kok Liong
Mr. Anthony Power
The Board will on a continuing basis evaluate and determine the training needs of each Director, particularly on relevant new law and regulations and essential practices for effective corporate governance and risk management to enable the Directors to 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. Prior to the establishment of the Nominating Committee, the Board itself functions as a Nominating Committee. The Committee comprises two (2) Independent Non-Executive Directors. The members are: Chairman: General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) (Independent Non-Executive Director) Mr. Choo Kok Liong (Independent Non-Executive Director)
Member:
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vi. Appointment to the Board (contd) The terms of reference of the Nominating Committee are as follows:i. ii. iii. iv. v. vi. to recommend the nomination of a person or persons for all directorships to be lled by the shareholders or the board; to consider, in making its recommendations, candidates for directorships proposed by the Managing Director and, within the bounds of practicability, by any other senior executive or any director or shareholder; to recommend to the board, directors to ll the seats on board committees; identify, evaluate and recommend candidates for appointment as Company Secretary; 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 to review annually the required mix of skills and experience and other qualities, including core competencies which nonexecutive directors should bring to the board and thereafter, recommend its ndings to the board.
vii. Re-election The Companys 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 Groups policy on Directors remuneration is to ensure that the Group attracts and retains Directors with the relevant skills and knowledge to run the Group successfully. The Remuneration Committee 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. The remuneration 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 Company at annual general meetings. The Remuneration Committee comprises three (3) members of which one (1) is Executive Director and two (2) are Independent Non-Executive Directors. The members of the Committee are: Chairman: General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) (Independent Non-Executive Director) Mr. Choo Kok Liong (Independent Non-Executive Director) Mr. Sun Chee Kong (Executive Director) The breakdown of the remuneration of the Directors in the Company during the nancial year is as follow: Fees RM Executive Directors Non-Executive Directors 45,000 Salaries and Other Emolument RM 501,526 Benet-in-kind RM 53,100 Total RM 554,626 45,000
Members:
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B.
Directors Remuneration (contd) The number of Directors of the Company whose total remuneration fall within the respective band are as follows: Remuneration band (RM) RM50,000 and below RM50,001 RM100,000 RM100,001 RM150,000 RM200,001 RM250,000 Executive Directors 2 1 Non-executive Directors 3 -
C.
Relation with Shareholders and Investors The Company recognises the importance of keeping shareholders and investors informed of the Groups business and corporate developments. Such information is disseminated via the Companys annual reports, various disclosures to Bursa Malaysia Securities Berhad including quarterly nancial results, research reports and various announcements made from time to time. The Group maintains a website at www.cbs.com.my where shareholders or investors may access for the latest information on the Group. The Annual General Meeting remains the principal forum for dialogue with shareholders where they are provided with an opportunity to raise questions pertaining to issues in the Annual Report, Audited Financial Statements and corporate developments in the Group, the resolutions being proposed and/or on the business of the Group. Shareholders who are unable to attend are allowed to appoint proxies to attend and vote on their behalf. Members of the Board as well as Auditors of 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 Groups nancial position and prospect to the Companys shareholders through the annual nancial statements and quarterly announcements. The quarterly results and annual nancial statements are reviewed by the Audit Committee and recommended to the Board for approval before its release to Bursa Malaysia Securities Berhad. Internal Control The Board has the overall responsibility in maintaining a sound and effective system of internal controls for the Group 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 the state of internal controls within the Group. iii. Relationship with Auditors The Board has established formal and transparent relationships with both the external and internal auditors through the Audit Committee. The relationship between the Audit Committee and both the external and internal auditors are described in the terms of reference of the Audit Committee Report.
ii.
E.
Compliance with the Code The Board strives to ensure that the Company complies with the Principles and Best Practices of the Code. The Board will endeavour to improve and enhance the procedures from time to time.
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STATEMENT ON INTERNAL CONTROL
The Board of Directors of CBS (the Board) is pleased to present the statement on internal control of the Group in accordance with the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market and as guided by the Statement on Internal Control: Guidance for Directors of Public Listed Companies.
Board Responsibility The Board acknowledges its responsibility in maintaining a sound and effective system of internal controls and in seeking regular assurance on the adequacy and integrity of the internal control systems to safeguard shareholders investments and the Groups assets. The Board also acknowledges that due to the limitations that are inherent in any system of internal controls, the internal control system can only reduce but cannot totally eliminate risks that impede the achievement of the Groups 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 Groups internal control system include: Formal organization structure with clearly dened roles and lines of responsibilities, authority and accountability within the Group; 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 prevent human errors, fraud and abuses; Adoption of Capability Maturity Model Integration methodologies that enhance and improve the organisation processes and 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 monitoring of signicant variances and deviation from the target and business objective; Establishment of the internal policies and procedures for key functional units within the Group; Weekly management meetings chaired by the CEO of the Group to discuss business performance and key operational issues. Other matters being discussed are collection issues, marketing strategy, progress of projects undertaken by the Group 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 any corporate exercise undertaken by the Group.
The Board remains committed towards operating a sound internal control system. The internal control system will continue to be reviewed and updated to meet the changing and challenging business environment. The Board will seek regular assurance on the continuity 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 the requirement of the Group at the existing level of operation and safeguard the Groups interest. During the year, there were no material losses incurred as a result of weaknesses in the system of internal control that would require disclosure in the Companys Annual Report.
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DIRECTORS RESPONSIBILITY STATEMENT
The Directors of the Company are required to ensure that the nancial statements for each nancial year are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and the Company as at the end of the nancial year and of the results and cash ows of the Group 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, the Group had used appropriate accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards are adhered to in the preparation of the nancial statements. The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities.
OTHER COMPLIANCE INFORMATION
Share Buy-backs The Company did not carry out any share buybacks for the nancial year under review. Options, Warrants or Convertibles Securities During the nancial year, the Company issued 150,000 ordinary shares of RM0.10 each pursuant to the exercise of options granted under the Companys Employee Share Option 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 Company did not sponsor any ADR or GDR Programme. Imposition of Sanctions and/or Penalty There was no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory 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 RM5,300. Variation in Results There was no material deviation between the audited results of the Group for the nancial year ended 31 December 2008 and the unaudited results announced on 24 February 2009. Prot Forecast / Prot Guarantee The Company did not provide any prot forecast / guarantee in any public documents during the nancial year. Material Contracts During the nancial year, there were no material contracts entered into by the Company and its subsidiaries involving Directors and major shareholders interests which were still subsisting at the end of the nancial year. Recurrent Related Party Transactions During the nancial year, the Company did not enter into any recurrent related party transactions of revenue or trading nature. Revaluation Policy The Company has not adopted any policy of regular revaluations for its landed properties.
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AUDIT COMMITTEE REPORT
COMPOSITION As of the date of this Annual Report, the composition of the Audit Committee is as follows:
Chairman:
General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) (Independent Non-Executive Director) Mr. Choo Kok Liong (Independent Non-Executive Director) Mr. Fong Wai Leong (appointed on 30.1.2009) (Independent Non-Executive Director)
Members:
The composition of the Audit Committee complies with Rules 15.09 and 15.10 of the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market.
TERMS OF REFERENCE Terms of Reference of the Committee are as follows: 1. Composition 1.1 The Committee shall comprise of at least three (3) directors, a majority of whom shall be independent directors. There shall be at least one member who is:a) b) a member of the Malaysian Institute of Accountants, or 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 i. ii. a degree/masters/doctorate in accounting or nance and at least 3 years post qualication experience in accounting or nance; or at least 7 years experience being a chief nancial ofcer of a corporation or having the function of being primarily responsible for the management of the nancial affairs of a corporation.
c)
1.2 No alternate director shall be appointed as a member of the Audit Committee. 1.3 In the event of any vacancy with the result that the number of members is reduced to below three (3), the vacancy shall be lled within two (2) months but in any case not later than three (3) months. Therefore a member of the Audit Committee who wishes to retire or resign should provide sufcient written notice to the Company so that a replacement may be appointed before he leaves. 2. Chairman The Chairman, who shall be elected by the Audit Committee, shall be an independent director. 3. Secretary The Company 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 Committee and circulating them to the Committee Members. The Committee Members may inspect the minutes of the Audit Committee at the Registered Ofce or such other place as may be determined by the Audit Committee.
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AUDIT COMMITTEE REPORT (contd)
4.
Meetings The Committee 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 Committee may call for a meeting as and when required with reasonable notice as the Committee Members 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 Committee when required to do so by the Committee. The external auditors may also request a meeting if they consider it necessary. Other directors or employees may attend any particular Audit Committee Meeting only at the Audit Committees invitation, specic to the relevant meeting.
5.
Rights and Authority The Audit Committee 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 Chief Executive Ofce and the Chief Financial Ofcer 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 Companys 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 Malaysia 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 Group; and the assistance given by the ofcers of the Company to external auditors, including any difculties or disputes with Management encountered during the audit.
(b) To review the adequacy of the scope, functions, competency and resources and setting of performance standards of the internal audit function. (c) To provide assurance to the Board of Directors on the effectiveness of the system of internal controls and risk management practices of the Group.
(d) To review the internal audit programme, processes the results of the internal audit programme, processes or investigation undertaken 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 Company to external auditors. To meet with the external auditors and internal auditors without executive board members present whenever deemed necessary.
(f)
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6.
Duties and Functions (contd) (g) To monitor related party transactions entered into by the Company or the Group to be undertaken on an arms length basis and normal commercial terms and on terms not more favourable to the related parties than those generally available to the public, and to ensure that the Directors report such transactions annually to shareholders via the annual report, 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. To review the quarterly reports on consolidated results and annual nancial statements prior to submission to the Board of 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. To assist the Board of Directors in preparing an audit committee report at the end of each nancial year, to be clearly set out in the annual report of the Company, comprising the following : i. The composition of the Audit Committee, including the name, designation (indicating the chairman) and directorship of the members (indicating whether the directors are independent or otherwise). The terms of reference of the audit committee. The number of audit committee meetings held during the nancial year and details of attendance of each audit committee member. A summary of the activities of the Audit Committee in the discharge of its functions and duties for that nancial year of the company. The existence of an internal audit function or activity and where there is such a function or activity, a summary of the activities of the function or activity. Where such a function or activity does not exist, an explanation of the mechanisms that exist to enable the Audit Committee to discharge its functions effectively.
(h)
(i)
ii. iii.
iv.
v.
(j)
To consider the appointment of auditors, the audit fee and any questions of resignation or dismissal including recommending the nomination of person or persons as auditors. To review the allocation of options pursuant to the employees share option scheme and make such statement to be included in the annual report of the Company in relation to share scheme for employees To review all areas of signicant nancial risk and to ensure that the arrangements are in place to contain these risks to acceptable levels.
(k)
(l)
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE The Audit Committee held four (4) meetings during the nancial year ended 31 December 2008. The record of attendance by each member at the Audit Committee meetings held during the year is as follows:-
Name of Directors General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) (Chairman) Mr. Choo Kok Liong Madam Tan Chong Chew @ Tan Ying Ying (resigned on 30.1.2009) Mr. Fong Wai Leong (appointed on 30.1.2009)
Status of Directorship Independent Non-Executive Director Independent Non-Executive Director Executive Director Independent Non-Executive Director
Number of Meetings Attended 4/4 4/4 3 /4 -
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SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE (contd) The Audit Committee has carried out its duties in accordance with its terms of reference during the year. These include: Reviewed the quarterly nancials results and annual report of the Group and the Company before recommending to the Board of Directors for consideration and approval; Reviewed with the external auditors on the audit planning memorandum of the Group for the nancial year ended 31 December 2008; Review the year-end nancial statements together with external auditors management letter in relation to the audit and accounting 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, audit recommendations 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 to report any weakness or inadequacy to the Board; and Reviewed the Statement on Internal Control.
STATEMENT OF EMPLOYEES SHARE OPTION SCHEME (ESOS) BY THE AUDIT COMMITTEE Pursuant to Rule 8.24(2) of the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market, the Audit Committee is required to verify the allocation of options to eligible employee of the Company and the Group at the end of each of the nancial year. There were no new options granted under the ESOS to the eligible Executive Directors and employees of the Group during the nancial year ended 31 December 2008. There were no options granted under the ESOS to the Non-Executive Directors since the implementation of the ESOS on 30 May 2005.
INTERNAL AUDIT FUNCTION The Group outsourced its internal audit function to an external professional rm. The role of the internal auditors is to perform regular and systematic review of the internal control systems and to provide the Audit Committee with independent reviews and objective 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 prioritizing business 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 based internal audit plan approved by the Audit Committee. Audit ndings and recommendations highlighted in the audit reports were presented and discussed during the Audit Committee meetings. The action plans are reviewed and followed up by the internal auditors 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 December 2008 is RM20,000.
FINANCIAL STATEMENTS
21 25 26 27 28 29 30 32
Directors Report Statement by Directors and Statutory Declaration Independent Auditors Report Balance Sheets Income Statements Statements of Changes in Equity Cash Flow Statements Notes to the Financial Statements
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DIRECTORS REPORT
The Directors of CBS Technology Berhad have pleasure in submitting their report together with the audited nancial statements of the Group and of the Company for the nancial year ended 31 December 2008.
PRINCIPAL ACTIVITY The Company operates as an investment holding Company. The principal activities of its subsidiary companies and jointly controlled entity are disclosed in Note 11 and 12 to the Financial Statements. There have been no signicant changes in the nature of the principal activities of the Company and its subsidiary companies during the nancial year. Jointly controlled entity is under members voluntary liquidation process as mentioned in Note 12 to the Financial Statements.
FINANCIAL RESULTS Group RM Prot/(Loss) for the nancial year Attributable to:Equity holders of the Company 5,617,208 Company RM (47,427)
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 shares Par value RM 0.10 0.10 Number of shares
Date of issue
Purpose of issue
16.6.2008 18.8.2008
Ordinary Ordinary
84,000 66,000
Issued pursuant to the exercise of ESOS options. Issued pursuant to the exercise of ESOS options.
There were no debentures issued during the nancial year.
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DIRECTORS REPORT
(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 order to accommodate to the rst granting of the ESOS which falls on 29 May 2005, as allowed under the provisions of the ESOS By-Law upon the recommendation of the Committee who administer the ESOS, the ESOS Option has been extended to 29 May 2010 with the approval from the Board of Directors on 30 May 2005. The movement of options over unissued shares of the Company granted under the ESOS during the nancial year are as follows:Option price^ RM First Grant Second Grant 0.15 0.26 At Bonus issue 1.1.2008 entitlement At 31.12.2008
Retracted *
Exercised
1,877,600 2,472,000 4,349,600
894,800 1,212,000 2,106,800
(280,000) (210,000) (490,000)
(84,000) (66,000) (150,000)
2,408,400 3,408,000 5,816,400
* ^
due to resignation/rejected offer price adjusted after bonus issue entitlement
The salient features and other terms of the ESOS are disclosed in Note 27 to the Financial Statements. The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose in this report the names 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 Companies Act, 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 Directors are disclosed in the section on Directors interest in this report.
INFORMATION ON THE FINANCIAL STATEMENTS Before the nancial statements of the Group and of the Company 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 debts and satised themselves that adequate allowance had been made for doubtful debts and there were no bad debts to be written off; and to ensure that any current assets which were unlikely to be authorised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise.
(b)
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 nancial statements of the Group and of the Company inadequate to any substantial extent; or which would render the values attributed to current assets in the nancial statements of the Group and of the Company misleading; or which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
(b)
(c)
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the nancial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet its obligations as and when they fall due.
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DIRECTORS REPORT
(contd)
INFORMATION ON THE FINANCIAL STATEMENTS (contd) At the date of this report, there does not exist:(a) any charge on the assets of the Group and of the Company which has arisen since the end of the nancial year which secures the liability of any other person; or any contingent liability of the Group and of the Company which has arisen since the end of the nancial year.
(b)
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 statements which would render any amount stated in the nancial statements misleading. In the opinion of the Directors:(a) the results of operations of the Group and of the Company during the nancial year were not substantially affected by any item, transaction or event of a material and unusual nature; and there has not arisen in the interval between the end of the nancial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of operations of the Group and of the Company for the current nancial year in which this report is made.
(b)
DIRECTORS The Directors in ofce since the date of the last report are as follows:General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd) (Chairman and Independent Non- Executive Director) Sun Chee Kong (Managing Director) Tan Chong Chew @ Tan Ying Ying (Executive Director) Choo Kok 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 Kang Sai (Executive Director) (deceased on 21.10.2008) Lee Siew Ken (Alternate Director to Wong Kang Sai) (ceased on 21.10.2008) In accordance with the Articles 93 of the Companys Articles of Association, Madam Tan Chong Chew @ Tan Ying Ying and Mr. Choo Kok Leong retire from the Board at the forthcoming Annual General Meeting and, being eligible, Madam Tan Chong Chew @ Tan Ying Ying and Mr. Choo Kok Liong offer themselves for re-election. Mr Fong Wai Leong, who was appointed on 30 January 2009 retires in accordance with the Articles 99 of the Companys Articles of Association, and being eligible, Mr. 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 nancial year 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 Chee Kong Tan Chong Chew @ Tan Ying Ying Choo Kok Liong Lai Soon Onn 12,086,330 4,378,830 10,000 480,000 6,043,165 2,189,415 13,500 240,000 415,800 26,500 18,545,295 6,568,245 50,000 720,000
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DIRECTORS REPORT
(contd)
DIRECTORS (contd) The interest in ESOS of those who were Directors at the end of the nancial year were as follows:Unexercised at 1.1.2008 Sun Chee Kong Tan Chong Chew @ Tan Ying Ying Lai Soon Onn 266,800 266,800 200,000 Bonus issue entitlement 133,400 133,400 100,000 Unexercised at Exercised 31.12.2008 400,200 400,200 300,000
No other Directors at the end of the nancial year held any interest in shares of the Company or its related corporations during the nancial 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 objects of enabling Directors of the Company to acquire any benets by means of the acquisition of shares in the Company or any other body corporate. Since the end of the previous nancial year, no Director has received or become entitled to receive any benet (other than as disclosed in the Note 23 to the Financial Statements) by reason of a contract made by the Company or a related corporation with the Director or with a rm of which he is a member, or with a company in which he has a substantial nancial interest.
AUDITORS Messrs SJ Grant Thornton have expressed their willingness to continue in ofce.
On behalf of the Board
.......................................................................... SUN CHEE KONG
.......................................................................... TAN CHONG CHEW @ TAN YING YING Kuala Lumpur 20 March 2009
) ) ) ) ) ) ) ) ) )
DIRECTORS
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STATEMENT BY DIRECTORS/ STATUTORY DECLARATION
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 Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the nancial position of the Group and of the Company as at 31 December 2008 and of its nancial performance and cash ows of the Group and of the Company for the nancial year then ended. On behalf of the Board
................................................................ SUN CHEE KONG
..................................................................... TAN CHONG CHEW @ TAN YING YING
Kuala Lumpur 20 March 2009
STATUTORY DECLARATION
I, Lai Fong Ling, being the Ofcer primarily responsible for the nancial management of CBS Technology Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the nancial statements set out on pages 27 to 56 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory this day of 20 March 2009
) ) ) )
...................................................................... LAI FONG LING
Before me:
Commissioner for Oaths
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INDEPENDENT AUDITORS REPORT

TO THE MEMBERS OF CBS TECHNOLOGY BERHAD
Report on the Financial Statements We have audited the nancial statements of CBS Technology Berhad, which comprise the balance sheets of the Group and of the Company as at 31 December 2008, the income statements, statements of changes in equity and cash ow statements of the Group and 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 accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibilities Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform 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. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Companys preparation and fair presentation of the nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating 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 the Companies Act, 1965 in Malaysia so as to give a true and fair view of the nancial position of the Group and of the Company as of 31 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 Malaysia, 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 the Act. We are satised that the nancial statements of the subsidiary companies that have been consolidated with the Companys nancial statements are in form and content appropriate and proper for the purposes of the preparation of the nancial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. The auditors reports on the nancial statements of the subsidiary companies did not contain any qualication or any comment made under Section 174 (3) of the Act.
b)
c)
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, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
SJ GRANT THORNTON (NO. AF: 0737) CHARTERED ACCOUNTANTS 20 March 2009
DATO N. K. JASANI CHARTERED ACCOUNTANT (NO: 708/03/10(J/PH))
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BALANCE SHEETS
AS AT 31 DECEMBER 2008
Group Note 2008 RM 15,181,899 1,156,463 194,260 14,416,604 30,949,226 2007 RM 10,111,266 6,241,587 50,432 8,799,396 25,202,681
Company 2008 2007 RM RM 15,181,899 1,156,463 194,260 2,994,122 19,526,744 10,111,266 6,241,587 50,432 3,041,549 19,444,834
SHARE CAPITAL SHARE PREMIUM SHARE OPTION RESERVE UNAPPROPRIATED PROFIT Total equity NON-CURRENT LIABILITY Deferred taxation
5 6
46,000 30,995,226
63,000 25,265,681
19,526,744
19,444,834
REPRESENTED BY:NON-CURRENT ASSETS Property, plant and equipment Prepaid land lease payment Investment properties Investment in subsidiary companies Interest in jointly controlled entity Development cost Goodwill on consolidation Total non-current assets CURRENT ASSETS Trade receivables Other receivables Amount due from jointly controlled entity Amount due from subsidiary companies Investments Tax recoverable Fixed deposits with licensed banks Cash and bank balances Total current assets
8 9 10 11 12 13 14
2,008,810 7,121,654 626,727 1,514,405 11,271,596
2,570,153 255,000 107,038 486,000 1,514,405 4,932,596
5,723,228 5,723,228
5,723,226 54,456 5,777,682
15 16 12 11 17 18 19
11,728,270 4,390,553 14,403,623 13,039 609,359 4,479,146 35,623,990
4,020,627 1,527,481 500 36,525,342 106,481 2,000,000 711,566 44,891,997
74,904 6,164,505 7,547,021 13,039 42,681 13,842,150
86,153 500 2,514 23,573,405 10,786 187,189 23,860,547
LESS: CURRENT LIABILITIES Trade payables Other payables Dividend payable Tax payable Total current liabilities NET CURRENT ASSETS 20 21 3,663,045 11,876,620 360,695 15,900,360 19,723,630 30,995,226 2,607,790 11,840,779 10,110,256 87 24,558,912 20,333,085 25,265,681 38,634 38,634 13,803,516 19,526,744 83,139 10,110,256 10,193,395 13,667,152 19,444,834
The accompanying notes form an integral part of the nancial statements.
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INCOME STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008
Group Note 2008 RM 23,024,351 (11,204,052) 11,820,299 662,501 (569,830) (5,231,090) (120,740) 23 24 6,561,140 (943,981) 5,617,159 49 5,617,208 2007 RM 20,851,837 (9,165,865) 11,685,972 741,246 (639,216) (4,886,581) (4,721) 6,896,700 (475,304) 6,421,396 6,421,396
Company 2008 2007 RM RM 263,178 263,178 24,764 (282,666) (54,956) (49,680) 2,253 (47,427) (47,427) 14,363,383 14,363,383 (176,363) 14,187,020 (1,261,221) 12,925,799 12,925,799
Revenue Cost of sales Gross prot Other income Selling and distribution expenses Administration expenses Other expenses Share of results of jointly controlled entity Prot/(Loss) before taxation Taxation Prot/(Loss) after taxation Minority interest Prot/(loss) for the nancial year Attributable to:Equity holders of the Company Earnings per share attributable to equity holders of the Company (sen) - Basic - Fully diluted
22
5,617,208
6,421,396
(47,427)
25 25
3.70 3.65
4.32 4.26
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STATEMENTS OF CHANGES IN EQUITY

Attributable to equity holders of the Company Non-distributable Distributable Share Share Share option Unappropriated capital premium reserve prot RM RM RM RM Group Balance at 1 January 2007 Share based payment under ESOS Issuance of share capital Exercise of share option Interim dividends Prot for the nancial year Balance at 31 December 2007 Issuance of share capital Share based payment under ESOS Exercise of share option Bonus issue Bonus issue expenses Prot for the nancial year Balance at 31 December 2008 Company Balance at 1 January 2007 Share based payment under ESOS Issuance of share capital Exercise of share option Interim dividends Prot for the nancial year Balance at 31 December 2007 Issuance of share capital Share based payment under ESOS Exercise of share option Bonus issue Bonus issue expenses Loss for the nancial year Balance at 31 December 2008 9,838,806 272,460 10,111,266 15,000 5,055,633 15,181,899 5,732,937 448,278 60,372 6,241,587 14,760 4,200 (5,055,633) (48,451) 1,156,463 44,910 65,894 (60,372) 50,432 148,028 (4,200) 194,260 9,838,806 272,460 10,111,266 15,000 5,055,633 15,181,899 5,732,937 448,278 60,372 6,241,587 14,760 4,200 (5,055,633) (48,451) 1,156,463 44,910 65,894 (60,372) 50,432 148,028 (4,200) 194,260
Total Equity RM
12,488,256 28,104,909 65,894 720,738 -
(10,110,256) (10,110,256) 6,421,396 6,421,396
8,799,396 25,202,681 5,617,208 29,760 148,028 (48,451) 5,617,208
14,416,604 30,949,226
226,006 15,842,659 65,894 720,738 -
(10,110,256) (10,110,256) 12,925,799 12,925,799 3,041,549 19,444,834 (47,427) 29,760 148,028 (48,451) (47,427)
2,994,122 19,526,744
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CASH FLOW STATEMENTS

Group 2008 RM CASH FLOWS FROM OPERATING ACTIVITIES Prot/(Loss) before taxation Adjustments for:Allowance for doubtful debts Allowance for diminution in value of jointly controlled entity Amortisation of development cost Amortisation of prepaid land lease payment Depreciation Share-based payment under ESOS Property, plant and equipment written off Gain on disposal of investments Gain on disposal of investment properties Interest income Dividend income Share of result of jointly controlled entity Unrealised loss on foreign exchange Operating prot/(loss) before working capital changes Changes in working capital:Receivables Payables Subsidiary companies Cash (used in)/from operations Dividend received Dividend paid Interest received Tax refund Tax paid Net cash (used in)/from operating activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of share capital Bonus issue expense paid Net cash (used in)/from nancing activities 2007 RM
Company 2008 2007 RM RM
6,561,140
6,896,700
(49,680)
14,187,020
13,702 107,038 80,400 60,422 532,034 148,028 1,928 (41,874) (24,000) (647,701) 65,777
63,000 441,507 65,894 1,178 (154,210) (68,999) (781,376) 4,721 -
500 54,456 148,028 (24,764) (263,178) -
65,894 (376,619) (13,986,764) -
6,856,894
6,468,415
(134,638)
(110,469)
(10,583,665) 1,091,096 (2,635,675) (10,110,256) 647,498 (506,931) (12,605,364)
(87,317) 6,545,781 12,926,879 768,584 9,096 (121,597) 13,582,962
11,452 (44,505) (6,161,991) (6,329,682) (10,110,256) 262,975 (16,176,963)
(71,861) 13,396 (2,438,402) (2,607,336) 12,714,589 363,827 9,096 10,480,176
29,760 (48,451) (18,691)
720,738 720,738
29,760 (48,451) (18,691)
720,738 720,738
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CASH FLOW STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 (contd)
Group Note CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of subsidiary companies, net of cash acquired Payment for development cost Placement in investments Proceeds from disposal of investments Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment properties Purchase of property, plant and equipment Purchase of prepaid land lease Net cash from/(used in) investing activities CASH AND CASH EQUIVALENTS Net increase/(decrease) Effect of exchange rate differences Brought forward Carried forward 2008 RM 2007 RM
Company 2008 2007 RM RM
(221,127) (4,660,990) 26,824,583 149,000 278,000 (120,619) (7,182,076) 15,066,771
(180,000) (43,726,418) 32,097,898 69,000 (1,285,052) (13,024,572)
(2) (108,852) 16,160,000 16,051,146
(13,369,842) 2,000,000 (11,369,842)
2,442,716 (65,777) 2,711,566 5,088,505
1,279,128 1,432,438 2,711,566
(144,508) 187,189 42,681
(168,928) 356,117 187,189
NOTES TO THE CASH FLOW STATEMENTS A. ACQUISITION OF SUBSIDIARY COMPANIES During the nancial year, the Company paid RM2 in cash to acquire 100% equity interest in CBS Synergy Sdn. Bhd., a newly incorporated company.
B.
CASH AND CASH EQUIVALENTS Cash and cash equivalents included in the cash ow statements comprise the following balance sheets items:Group 2008 RM Fixed deposits with licensed banks Cash and bank balances 609,359 4,479,146 5,088,505 2007 RM 2,000,000 711,566 2,711,566 Company 2008 2007 RM RM 42,681 42,681 187,189 187,189
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NOTES TO THE FINANCIAL STATEMENTS

31 DECEMBER 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, 1965 in Malaysia and Financial Reporting Standards issued by Malaysian Accounting Standards Board (MASB).
2.
FINANCIAL RISK MANAGEMENT POLICIES The Groups nancial risk management policy seeks to ensure that adequate nancial resources are available for the development of the Groups business whilst managing its risks. The Group operates within policies that are approved by the Board and the Groups policy is not to engage in speculative transactions. The main areas of nancial risks faced by the Group and the policy in respect of the major areas of treasury activity are set out as follows:2.1 Foreign currency risk The Group is exposed to foreign currency risk as a result of its normal operating activities where the currency denomination differs from the local currency, Ringgit Malaysia (RM). The Groups policy is to minimise the exposure of overseas operating activities to transactions risk by matching local currency income against local currency costs. 2.2 Credit risk Credit risk is controlled by the application of credit evaluation and approvals, credit limits and monitoring procedures. An internal credit review is conducted if the credit risk is material. 2.3 Market risk For key product purchases, the Group establishes oating and xed price levels that the Group considers acceptable and enters into physical supply agreements, where necessary, to achieve these levels. The Group does not face signicant exposure from the risk of changes in price level. 2.4 Interest rate risk To manage interest rate risk, the Group relies on its managements experience to manage its funds to optimise its returns. 2.5 Liquidity and cash ow risks The Group adopts a prudent liquidity risk management in maintaining sufcient levels of cash and cash equipvalent to meet its working capital requirements. The Group does not face signicant exposure from the risk of insufcient cash ow to run the operations of the Group.
3.
SIGNIFICANT ACCOUNTING POLICIES 3.1 Accounting convention The nancial statements of the Group and of the Company are prepared under the historical cost convention, unless otherwise indicated in the other signicant accounting policies. The nancial statements are presented in Ringgit Malaysia (RM) which is the Groups and the Companys functional currency.
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31 DECEMBER 2008 (contd)
3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.2 Adoption of Revised Financial Reporting Standards (FRS) (a) The amendments to published standards and IC Interpretations to existing standards effective for the Group and the Company for the nancial period beginning on or after 1 January 2008 are as follows:(1) Amendment to FRS 121 The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation Changes in Existing Decommissioning, Restoration and Similar Liabilities Members Shares in Co-operative Entities and Similar Instruments Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds Liabilities arising from Participating in a Specic Market Waste Electrical and Electronic Equipment Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinationary Economies Scope FRS 2 Cash Flow Statements Construction Contracts Income Taxes Revenue Accounting for Government Grants and Disclosure of Government Assistance Interim Financial Reporting Provisions, Contingent Liabilities and Contingent Assets
(2) (3) (4)
IC Interpretation 1 IC Interpretation 2 IC Interpretation 5
(5)
IC Interpretation 6
(6)
IC Interpretation 7
(7) (8) (9)
IC Interpretation 8 FRS 107 FRS 111
(10) FRS 112 (11) FRS 118 (12) FRS 120 (13) FRS 134 (14) FRS 137
The initial application of the above FRS 107, 112, 118, 134 and 137 did not result in signicant changes to the accounting policies of the Group and of the Company. The above Amendment, Interpretations, FRS 111 and 120 are not applicable to the Group and the Company. (b) The following are the standards and IC Interpretations that are not yet effective and have not been early adopted by the Group and the Company:(1) (2) (3) (4) (5) (6) FRS 139 FRS 4 FRS 7 FRS 8 IC Interpretation 9 IC Interpretation 10 Financial Instruments: Recognition and Measurement Insurance contracts Financial Instruments: Disclosures Operating Segments Reassessment of Embedded Derivatives Interim Financial Reporting and Impairment
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3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.2 Adoption of Revised Financial Reporting Standards (FRS) (contd) (b) The following are the standards and IC Interpretations that are not yet effective and have not been early adopted by the Group and the Company (contd):The Company is exempted from disclosing the possible impact, if any, to the nancial statements upon the initial application of FRS 139. The above Interpretation 9 and FRS 4 are not applicable to the Group and the Company. The above standards and IC Interpretations shall be effective for accounting period beginning on or after 1 January 2010 except for FRS 8 Operating Segments, which shall apply to accounting period beginning on or after 1 July 2009. The initial application of the above standards and IC Interpretations are not expected to have any material impact on the nancial statements of the Group and the Company. 3.3 Signicant Accounting Estimates and Judgements Estimates, assumptions concerning the future and judgements are made in the preparation of the nancial statements. They affect the application of the Groups accounting policies and reported amounts of assets, liabilities, income, expenses and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have signicant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next nancial year are discussed below:Impairment of goodwill The Group determines whether goodwill is impaired at least once annually. This requires the estimation of the value in use of the Cash-Generating Units (CGU) to which goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash ows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash ows. Income taxes The Group is exposed to income taxes in numerous jurisdictions. Signicant judgement is involved in determining the Group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognised tax liabilities based on estimates of whether additional taxes will be due. Where the nal tax outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made. Depreciation of property, plant and equipment and investment properties Property, plant and equipment and investment properties are depreciated on a straight-line basis over their useful life. Management estimated the useful life of these assets to be within 3 to 50 years. Changes in the expected level of usage and technological developments could impact the economic useful life and the residual values of these assets, therefore future depreciation charges could be revised. Amortisation of development cost The development cost is amortised on a straight-line basis over the life span of the developed asset. Management estimated the useful life of this asset to be within 10 years. Changes in the technological developments could impact the economic useful life and the residual values of this asset, therefore future amortisation charges could be revised.
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3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.3 Signicant Accounting Estimates and Judgements (contd) Key sources of estimation uncertainty (contd) Impairment of development cost and property, plant and equipment The Group carried out impairment test based on a variety estimation including the value in use of CGU to which the development costs and property, plant and equipment are allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash ows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash ows. Shared based payment Equity settled share based payment (share option) is measured at fair value at the date they are granted. The assumptions used in the valuation to determine these fair values are explained in Note 27 to the Financial Statements. 3.4 Basis of consolidation The Group nancial statements consolidate the audited nancial statements of the Company and all of its subsidiary companies, which have been prepared in accordance with the Groups accounting policies. All intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated; unrealised losses are also eliminated on consolidation unless cost cannot be recovered. The nancial statements of the Company and its subsidiary companies are all drawn up to the same reporting date. Acquisition of subsidiary companies is accounted for using the purchase method. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. Any excess of the cost of the business combination over the groups interest in the net fair value of the identiable assets, liabilities and contingent liabilities represents goodwill. Goodwill is accounted for in accordance with the accounting policy for goodwill stated in Note 3.6. Any excess of the groups interest in the net fair value of the identiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income on the date of acquisition. Subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Groups share of its net assets together with any unamortised or unimpaired balance of goodwill on acquisition and exchange differences. 3.5 Subsidiary companies A subsidiary company is a company in which the Group or the Company has the power to exercise control over the nancial and operating policies so as to obtain benets therefrom. Investment in subsidiary companies is stated at cost. Where an indication of impairment exists, the carrying amount of the subsidiary companies is assessed and written down immediately to their recoverable amount.
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3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.6 Goodwill Goodwill represents the excess of the cost of acquisition over the Groups interest in the fair value of the identiable assets, liabilities and contingent liabilities of a subsidiary company at the date of acquisition. Goodwill arising on the acquisition of subsidiary companies is presented separately in the balance sheet. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying values may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groups cash-generating units, or groups of cash-generating units, that are expected to benet from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or group of units. Each unit or group of units to which the goodwill is so allocated:Represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and Is not larger than a segment based on either the Groups primary or the Groups secondary reporting format.
A cash-generating unit (or group of cash-generating units) to which goodwill has been allocated is tested for impairment annually and, whenever there is an indication that the unit may be impaired, by comparing the carrying amount of the unit, including goodwill, with the recoverable amount of the unit. Where the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. An impairment loss recognised for goodwill shall not be reversed in subsequent period. Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operations within that unit is disposed off, the goodwill associated with the operations disposed off is included in the carrying amount of the operations when determining the gain or loss on disposal of the operations. Goodwill disposed off in these circumstances is measured based on the relative values of the operations disposed off and portion of the cash-generating unit retained. 3.7 Interest in jointly controlled entity A joint venture is a contractual agreement whereby two or more parties undertake an economic activity that is subject to a joint control, and a jointly controlled entity is a joint venture that involves the establishment of a separate entity in which each venture has interest. The Groups interests in jointly controlled entity is brought to account in the consolidated nancial statements using the equity method. Under the equity method of accounting, the Groups share of prots less losses of jointly controlled entity during the nancial year is included in the consolidated income statement. The Groups interest in jointly controlled entity is carried in the consolidated balance sheet at cost plus the Groups share of post-acquisition unappropriated prots or accumulated losses and other reserves as well as goodwill on acquisition. Unrealised prots or losses arising from transactions between the Group and its jointly controlled entity are recognised only to the extent of that portion of the gain or loss which is attributable to the interests of other ventures. Unrealised losses are recognised in full when the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss. In the Groups nancial statements, investment in jointly controlled entity is stated at cost less accumulated impairment losses. On disposal of such investment, the difference between net disposal proceeds and its carrying amount is included in the income statements.
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3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.8 Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation on property, plant and equipment is computed on the straight line method so as to write off the cost of the assets over the estimated useful lives of the property, plant and equipment concerned. The principal annual depreciation rates used are as follows:Freehold building Computers Furniture and ttings Ofce equipment Motor vehicles Renovations Tools & equipment Freehold land is not depreciated. Restoration cost relating to an item of the property, plant and equipment is capitalised only if such expenditure is expected to increase the future benets from the existing property, plant and equipment beyond its previous assessed standard of performance. Property, plant and equipment are written down to recoverable amount if, in the opinion of the Directors, it is less than their carrying value. Recoverable amount is the net selling price of the property, plant and equipment i.e. the amount obtainable from the sale of an asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal. The residual values, useful life and depreciation method are reviewed at each nancial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benets embodied in the items of property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benets are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the income statements in the nancial year the asset is derecognised. 3.9 Receivables Receivables are carried at anticipated realisable value. Bad debts are written off in the year in which they are identied. An allowance is made for doubtful debts based on a review of all outstanding amounts at the nancial year end. 3.10 Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and service received. 3.11 Research and development cost Expenditure on research activities is recognised as an expense in the year in which it incurred. Research and development cost are expensed in the year in which they incurred except when the cost incurred on development project are recognised as development assets to the extent that such expenditure is expected to generate future economic benets. Development cost initially recognised as an expense is not recognised as an asset in subsequent periods. 2% 33.33% 8% 10%-12% 16% 20% 20%
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3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.11 Research and development cost (contd) Capitalised development cost is amortised on a systematic basis over their expected useful lives which is 10 years and assessed for impairment whenever there is an indication that the development cost may be impaired. The amortisation period and the amortisation method for the development cost with a nite useful life are reviewed at least at each nancial year end. 3.12 Foreign currency translation and balances Transactions in foreign currencies are recorded in Ringgit Malaysia at rates of exchange ruling at the date of the transactions. Foreign currency monetary assets and liabilities are translated at exchange rates ruling at balance sheet date. Gains and losses resulting from settlement of such transactions and conversion of monetary assets and liabilities, whether realised or unrealised, are included in the income statements as they arise. 3.13 Income tax Income tax on the prot or loss for the nancial year comprises current and deferred tax. Current tax expenses are the expected amount of income taxes payable in respect of the taxable prot for the nancial year and are measured using the tax rates that have been enacted by the balance sheet date. Deferred tax liabilities and assets are provided for under the liability method at the current tax rate in respect of all temporary differences at the balance sheet date between the carrying amount of an asset or liability in the balance sheet and its tax base including unused tax losses and capital allowances. Deferred tax assets are recognised only to the extent that it is probable that taxable prot will be available against which the deductible temporary differences can be utilised. The carrying amount of a deferred tax asset is reviewed at each balance sheet date. If it is no longer probable that sufcient taxable prot will be available to allow the benet of part or that entire deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufcient taxable prot will be available, such reductions will be reversed to the extent of the taxable prot. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the balance sheet date. 3.14 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, bank balances, short term demand deposits and highly liquid investments which are readily convertible to known amount of cash and which are subject to an insignicant risk of changes in value. 3.15 Financial instruments Financial instruments carried on the balance sheet include cash and bank balances, xed deposits with licensed banks, receivables, payables and highly liquid investments. The particular recognition methods adopted are disclosed in the individual accounting policy statement associated with each item. Financial instruments are offset when the Group or the Company has legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
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3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.16 Impairment of assets At each balance sheet date, the Group and the Company review the carrying amounts of its assets to determine whether there is any indication of impairment. Intangible asset with indenite useful life such as goodwill is tested for impairment at least once annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount is estimated and an impairment loss is recognised whenever the recoverable amount of the asset or a cash-generating unit is less than its carrying amount. 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. In assessing value in use, the estimated future cash ows are discounted to their present value using a pre-tax discount rate that reects current market assessments of the time value of money and the risks specic to the asset. Impairment losses of continuing operations are recognised in the income statements in those expense categories consistent with the function of the impaired asset. An impairment loss is recognised as an expense in the income statements immediately. An assessment is made at each balance sheet date as to whether there is any indication that previously recognised impairment losses for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. All reversals of impairment losses are recognised as income immediately in the income statement. After such a reversal, the depreciation charge is adjusted in future periods to allocate the revised carrying amount of the asset, less any residual value, on a systematic basis over its remaining useful life. An impairment loss recognised for goodwill shall not be reversed in a subsequent period. 3.17 Revenue recognition Revenue from sale of goods and services are recognised when the Group has transferred to the buyer the signicant risks and rewards of ownership of the goods and services. Revenue from maintenance fee is recognised on the provision of assessment and development services which is based on the fee income of time worked. Interest income is recognised in the income statements as it accrues, taking into account the effective yield on the asset. Dividend income is recognised when the Companys right to receive such payment is established. 3.18 Employee benets (i) Short term employee benets Wages, salaries, bonuses and social security contributions are recognised as expenses in the nancial year in which the associated services are rendered by the employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occurred.
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3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.18 Employee benets (contd) (ii) Dened contribution plan Dened contribution plans are post-employment benet plans under which the Group pays xed contributions into separate entities of funds and will have no legal or constructive obligation to pay further contribution if any of the funds do not hold sufcient assets to pay all employee benets relating to employee services in the current and preceding nancial years. Such contributions are recognised as expenses in the income statements as incurred. As required by law, companies in Malaysia make such contributions to the Employee Provident Fund (EPF). (iii) Equity compensation benets The Employee Share Option Scheme (ESOS) allows the Groups employees to acquire shares of the Company and none of the Groups plan features any options for a cash settlement. The fair value of the employee services received in exchange for the grant of the share options is recognised as expenses in the income statements over the vesting period of the grant with a corresponding increase in the share option reserve. The fair value of the employee services is measured using intrinsic value, which is the difference between the fair value of the shares to which counterparty has the right to subscribe or which it has the right to receive, and the price the counterparty is required to pay for those shares. No compensation cost or obligation is recognised. When the options are exercised, equity is increased by the amount of the proceeds received net of any directly attributable transaction costs. 3.19 Investments Investment classied as non-current assets are shown at cost and allowance is only made where, in the opinion of the Directors, there is a diminution in value. Diminution in the value of an investment is recognised as an expense in the year in which the diminution is identied. Investment classied as current assets are stated at the lower of cost and market value, determined on an aggregate portfolio basis by category of investment. Cost is derived using the weighted average basis. Market value is calculated by reference to quoted selling prices at the close of business on the balance sheet date. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the income statements. Fixed dividend endowments are shown at cost. Upon maturity, the excess of net proceeds over its cost is credited to the income statements. 3.20 Investment properties Investment properties consist of land and buildings held for capital appreciation or rental purpose and not occupied or only an in-signicant portion is occupied for use in the operations of the Group. The Group applies cost model for the investment properties. Investment properties are treated as long-term investment and are measured initially at cost, including transaction costs less any accumulated depreciation and impairment loss. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Investment properties are derecognised when they are disposed of or when they are permanently withdrawn from use and no future economic benet is expected from the disposal. Any gain or loss on the retirement or disposal of an investment properties is recognised in the income statements in the nancial year of retirement or disposal. Depreciation is provided on the straight line method at an annual rate of 2% on freehold building so as to write off the cost of the asset over its estimated useful life. Freehold land is not depreciated.
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3.
SIGNIFICANT ACCOUNTING POLICIES (contd) 3.21 Assets acquired under lease agreements Leases assets Leasehold land that normally has an indenite economic life and title is not expected to pass to the Company by the end of the lease term is treated as operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as prepaid land lease payment and is amortised on a straight line basis over the respective lease period of 99 years. 3.22 Dividends Dividends on ordinary shares are accounted for in shareholders equity as an appropriation of unappropriated prot in the year in which they are declared and approved. 3.23 Segmental results Segment revenues and expenses are those directly attributable to the segments and include any joint venture and expenses where a reasonable basis of allocation exists. Segments assets include all assets used by a segment and consist principally of cash, receivables, intangible assets and property, plant and equipment, net of allowances and accumulated depreciation and amortisation. The majority of the segment assets can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include tax recoverable and deferred income taxes. 3.24 Intersegment transfers Segment revenues, expenses and result include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties outside of the Group in an arms length transactions. These transfers are eliminated on consolidation. 3.25 Equity Instruments Ordinary shares are classied as equity which are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classied as equity. Dividends on ordinary shares are recognised as liabilities when declared. The transaction costs of an equity transaction which comprise only those incremental external costs directly attributable to the equity transaction are accounted for as a deduction from equity, net of tax, from the proceeds.
4.
PRINCIPAL ACTIVITIES AND GENERAL INFORMATION The Company operates as an investment holding company. The Company is a public limited liability company, incorporated and domiciled in Malaysia. The Company is listed on the MESDAQ Market of Bursa Malaysia Securities Berhad. The principal activities of the subsidiary companies and jointly controlled entity are disclosed in Note 11 and 12 to the Financial Statements. There have been no signicant changes in the nature of these activities of the Company and its subsidiary companies during the nancial year. Jointly controlled entity is under members voluntary liquidation process as mentioned in Note 12 to the Financial Statements. The registered ofce and the principal place of business of the Company are located at 312, 3rd Floor, Block C, Kelana Square, 17, Jalan SS 7/26, 47301 Petaling Jaya, Selangor Darul Ehsan and 15, Jalan Ara SD 7/3A, Bandar Sri Damansara, 52200 Kuala Lumpur respectively. The nancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 20 March 2009.
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5.
SHARE CAPITAL Group and Company 2008 2007 RM RM Authorised:Ordinary shares of RM0.10 Issued and fully paid:Ordinary shares of RM0.10 each:Brought forward Bonus issue Issued pursuant to the ESOS Carried forward 25,000,000 25,000,000
10,111,266 5,055,633 15,000 15,181,899
9,838,806 272,460 10,111,266
During the nancial year, the issued and paid-up capital of the Company was increased from RM10,111,266 to RM15,181,899 (2007: RM9,838,806 to RM10,111,266) by the issuance of 84,000 (2007: 2,136,600) new ordinary shares of RM0.10 each for options granted on 29 May 2005 and 66,000 (2007: 588,000) new ordinary shares of RM0.10 each for options granted on 18 June 2007 pursuant to the exercise of option granted under the Companys Employee Share Option Scheme (ESOS) at the exercise price of RM0.15 and RM0.26each per ordinary share respectively. The outstanding options of the ESOS for 5,816,400 (2007: 4,349,600) ordinary shares remained unexercised as at nancial year end. In addition, the Company issued 50,556,330 ordinary shares of RM0.10 each pursuant to the bonus issue during the nancial year.
6.
SHARE PREMIUM Group and Company 2008 2007 RM RM Non-distributable Brought forward Issued pursuant to the exercise of ESOS Transfer from share option reserve pursue to the exercise of ESOS Bonus issue Bonus issue expenses Carried forward
6,241,587 14,760 4,200 (5,055,633) (48,451) 1,156,463
5,732,937 448,278 60,372 6,241,587
7.
DEFERRED TAXATION Group 2008 RM Brought forward Transferred (to)/from income statements Carried forward The tax effect of the excess of property, plant and equipments carrying value over its tax base 63,000 (17,000) 46,000 2007 RM 29,000 34,000 63,000
46,000
63,000
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8.
PROPERTY, PLANT AND EQUIPMENT

Group Freehold land RM Tools & Freehold ofce building equipment RM RM Furniture & ttings RM Motor vehicles Computers Renovations RM RM RM Total 2008 RM Total 2007 RM
Cost Brought forward Additions Disposal Written off Carried forward Accumulated depreciation Brought forward Charge for the nancial year Disposal Written off Carried forward Net carrying amount 31.12.2008 31.12.2007 Depreciation charge for the nancial year ended 31.12.2007 525,000 525,000 242,000 247,500 564,604 713,368 55,944 28,587 456,600 829,600 96,775 94,488 67,887 131,610 2,008,810 2,570,153 27,500 5,500 33,000 220,061 173,559 393,620 29,471 5,273 34,744 315,400 224,000 (51,000) 488,400 203,561 58,979 (742) 261,798 228,443 63,723 292,166 1,024,436 531,034 (51,000) (742) 1,503,728 849,928 438,507 (259,999) (4,000) 1,024,436 525,000 525,000 275,000 275,000 933,429 24,795 958,224 58,058 32,630 90,688 1,145,000 (200,000) 945,000 298,049 63,194 (2,670) 358,573 360,053 360,053 3,594,589 120,619 (200,000) (2,670) 3,512,538 2,574,715 1,285,052 (260,000) (5,178) 3,594,589
5,500
172,047
4,630
143,800
48,807
63,723
438,507
One of the motor vehicles with net carrying amount of RM211,200 (2007: RM307,200) is held in trust in the name of a Director.
9.
PREPAID LAND LEASE PAYMENT Group Cost Additions/Carried forward Accumulated amortisation Charged during the nancial year/Carried forward Net carrying amount 60,422 7,121,654 2008 RM 7,182,076 2007 RM -
10. INVESTMENT PROPERTIES Group Cost Brought forward Disposal Carried forward 150,000 (150,000) 120,000 (120,000) 270,000 (270,000) 270,000 270,000 Freehold building RM Freehold land RM 2008 RM 2007 RM
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10. INVESTMENT PROPERTIES (contd) Freehold building RM Accumulated depreciation Brought forward Charge for the nancial year Disposal Carried forward Net carrying amount Rental generated for investment properties Direct operating expenses for investment properties 15,000 1,000 (16,000) 15,000 1,000 (16,000) 12,000 3,000 15,000 255,000 6,500 820 Freehold land RM 2008 RM 2007 RM
The investment properties consist of freehold land and freehold building. 2008 RM Fair value - freehold land and building 2007 RM 300,000
In the previous year, the fair value is arrived from the agreed price as stated in the sales and purchase agreement.
11. INVESTMENT IN SUBSIDIARY COMPANIES (a) The particulars of subsidiary companies are as follows:Place of incorporation Effective interest 2008 2007 % % 100 100 100 100
Name of Company Cyber Business Solutions Sdn Bhd CBS MSC Sdn Bhd
Principal activities
Malaysia Malaysia
Dealing in computer equipment and software Business of software programming and dealer in computer Investment holding
CBS Synergy Sdn Bhd
Malaysia
100
Subsidiary company of CBS Synergy Sdn. Bhd.:CASD Solutions Sdn Bhd (b) Malaysia 51 Dealing in computer equipment and software
Investment in subsidiary companies:Company 2008 2007 RM RM Unquoted shares:At cost 5,723,228 5,723,226
The amount due from subsidiary companies is unsecured, bears no interest and no xed term of repayment has been arranged.
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12. INTEREST IN JOINTLY CONTROLLED ENTITY (a) The particulars of jointly controlled entity are as follows:Place of incorporation Effective interest 2008 2007 % % 49 49
Name of Company
Principal activities
CBS Tech GmbH (b)
Switzerland
Dormant
Details of interest in jointly controlled entity:Group 2008 RM Unquoted shares:At cost Less: Share of results Less: Allowance for diminution in value of jointly controlled entity Net investment 2007 RM Company 2008 2007 RM RM
200,000 (92,962) (107,038) -
200,000 (92,962) 107,038
200,000 (200,000) -
200,000 (145,544) 54,456
The nancial statements of the jointly controlled entity are not available in the current nancial year as this jointly controlled entity is under members voluntary liquidation process. The Companys share of the assets, liabilities, revenue and expense of the jointly controlled entity are as follows:Group 2008 RM Non-current assets Intangible assets Current assets Current liabilities Non-current liabilities Share of net assets Revenue Other income Expenses 2007 RM 2,449 100,842 1,885 (2,139) (53,302) 49,735 5 (4,518)
(Loss)/Prot before taxation (Loss)/Prot after taxation Represented by:Share of net assets of jointly controlled entity Goodwill on acquisition Net investment
(4,513) (4,721)
49,735 57,303 107,038
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12. INTEREST IN JOINTLY CONTROLLED ENTITY (contd) (c) Group 2008 RM Amount due from jointly controlled entity Less: Allowance for doubtful debts 500 (500) 2007 RM 500 500 Company 2008 2007 RM RM 500 (500) 500 500
The amount due from jointly controlled entity bears no interest and no xed term of repayment has been arranged.
13. DEVELOPMENT COST Group Cost Brought forward Additions Carried forward Accumulated amortisation Brought forward Charged during the nancial year Carried forward 144,000 80,400 224,400 81,000 63,000 144,000 2008 RM 630,000 221,127 851,127 2007 RM 450,000 180,000 630,000
Net carrying amount
626,727
486,000
The development cost were incurred for developing new products and enhancement of the existing product.
14. GOODWILL ON CONSOLIDATION Group 2008 RM Brought forward/Carried forward 1,514,405 2007 RM 1,514,405
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14. GOODWILL ON CONSOLIDATION (contd) The recoverable amount of the cash generating unit is determined based on value in use calculation using cash ow projections based on nancial budgets approved by the management covering a ve-year period. The key assumptions used for value in use calculations are:Gross prot margin Growth rate Discount rate 2009 2008 2009 2008 2009 2008 % % % % % % Computer equipments and software Software programming
33 67
33 67
5 5
5 5
10 10
10 10
The following describes each key assumption on which management has based its prot forecast to undertake impairment testing of goodwill:(i) Budgeted Earnings Before Interest, Tax and Amortisation (EBITA) The basis used to determine the value assigned to the budgeted EBITA is the average EBITA achieved in the year immediately before the budgeted year increased for expected efciency improvements. (ii) Growth rate The weighted average growth rates used are consistent with the long-term average growth rate for the industry. Management of the software development forecasted a growing of 5% for the ve-year period which is lower than the achieved growth rate in 2008 in terms of revenue growth. (iii) Discount rate The basis used to determine the discount rate is based on the borrowing rate and the expected rate of return of the shareholders.
15. TRADE RECEIVABLES The currency exposure prole of the trade receivables is as follows (foreign currency balances are unchanged):Group 2008 RM Ringgit Malaysia US Dollar Philippine Peso 11,592,061 126,329 9,880 11,728,270 2007 RM 3,966,119 54,508 4,020,627
The normal credit terms granted by the Group to the trade receivables ranging from 30 days to 60 days. Other credit terms are assessed and approved by the management on case-by-case basis.
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16. OTHER RECEIVABLES Group 2008 RM Advances to maintenance suppliers Advances to staff Deposits and prepayments Interest receivable Deposit for acquisition of prepaid land lease payment Non-trade receivables 4,216,594 28,351 127,818 12,995 17,997 4,403,755 (13,202) 4,390,553 2007 RM 31,951 836,021 12,792 629,774 16,943 1,527,481 1,527,481 Company 2008 2007 RM RM 61,909 12,995 74,904 74,904 67,216 12,792 6,145 86,153 86,153
Less: Allowance for doubtful debts
17. INVESTMENTS Group In Malaysia Quoted investments in trust funds, at cost Investment income by way of additional units 2008 RM 10,467,982 191,857 10,659,839 Fixed dividend endowments Foreign currencies investment 3,493,784 250,000 3,743,784 14,403,623 Market value of quoted investments 10,662,201 2007 RM 32,687,851 479,123 33,166,974 3,358,368 3,358,368 36,525,342 33,186,784 Company 2008 2007 RM RM 7,438,169 108,852 7,547,021 7,547,021 7,548,686 23,353,563 219,842 23,573,405 23,573,405 23,573,405
The xed dividend endorsements are held under the name of certain Directors of the Company. The subsidiary company, Cyber Business Solutions Sdn. Bhd., is the ultimate beneciary of the xed dividend endowments.
18. FIXED DEPOSITS WITH LICENSED BANKS Group The xed deposits with licensed banks of RM609,359 (2007: Nil) are pledged as security for bank guarantee for projects granted to a subsidiary company.
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19. CASH AND BANK BALANCES The currency exposure prole of the cash and bank balances is as follows (foreign currency balance are unhedged):Group 2008 RM Ringgit Malaysia EURO US Dollar 2,818,294 699 1,660,153 4,479,146 2007 RM 711,566 711,566 Company 2008 2007 RM RM 42,681 42,681 187,189 187,189
20. TRADE PAYABLES The currency exposure prole of the cash and bank balances is as follows (foreign currency balances are unhedged):Group 2008 RM Ringgit Malaysia EURO US Dollar 1,189,605 2,341,852 131,588 3,663,045 2007 RM 1,881,288 726,502 2,607,790 Company 2008 2007 RM RM 42,681 42,681 187,189 187,189
The normal credit term granted by trade payables ranging from 30-60 days.
21. OTHER PAYABLES Group 2008 RM Accrual of expenses Prepayments for maintenance contracts Advances received from projects customers Non-trade payables 1,080,556 9,877,544 845,168 73,352 11,876,620 2007 RM 748,580 4,653,020 5,910,449 528,730 11,840,779 Company 2008 2007 RM RM 33,900 4,734 38,634 69,550 13,589 83,139
The currency exposure prole of non-trade payables is as follows (foreign currency balances are unhedged):Group 2008 RM Ringgit Malaysia US Dollar 11,872,225 4,395 11,876,620 2007 RM 11,836,384 4,395 11,840,779
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22. REVENUE Group 2008 RM Software solutions and license Enhancement and maintenance Sales of hardware products Training services Others Interest income Dividend income 9,283,299 7,458,248 5,248,019 771,607 263,178 23,024,351 2007 RM 12,164,901 6,673,421 1,016,316 101,903 518,677 376,619 20,851,837 Company 2008 2007 RM RM 263,178 263,178 376,619 13,986,764 14,363,383
23. PROFIT/(LOSS) BEFORE TAXATION Prot/(Loss) before taxation has been determined after charging/(crediting) amongst other items the following:Group 2008 RM Auditors remuneration - Statutory audit - Others Allowance for doubtful debts Allowance for diminution in value of investments in jointly controlled entity Amortisation of development cost Amortisation of prepaid land lease payment Depreciation Directors remuneration Directors fee Rental of ofce Rental of ofce equipment Rental of accommodation Property, plant and equipment written off Share based payment under ESOS Unrealised loss on foreign exchange Interest income Rental income Realised gain on foreign exchange Gain on disposal of investments Gain on disposal of investment properties 30,800 6,300 13,702 107,038 80,400 60,422 532,034 623,606 45,000 44,405 168 10,080 1,928 148,028 65,777 (647,701) (191,658) (41,874) (24,000) 2007 RM 30,800 6,300 63,000 441,507 912,789 19,200 40,800 4,800 1,178 65,894 (781,376) (12,500) (100,780) (154,210) (68,999) Company 2008 2007 RM RM 10,000 500 54,456 45,000 148,028 (263,178) (295) (24,764) 10,000 19,200 65,894 (376,619) -
The details of remuneration receivable by Directors of the Group and of the Company during the nancial year are as follows:Group 2008 RM Executive:Salaries and other emoluments Bonus Dened contribution plan 534,606 29,000 60,000 623,606 2007 RM 822,517 29,000 61,272 912,789 Company 2008 2007 RM RM -
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23. PROFIT/(LOSS) BEFORE TAXATION (contd) The details of remuneration receivable by Directors of the Group and of the Company during the nancial year are as follows:(contd) Group Company 2008 2007 2008 2007 RM RM RM RM Non - Executive:Fees
45,000
19,200
45,000
19,200
The estimated monetary value of benet-in-kind received and receivable by the executive Directors otherwise than cash from the Group and the Company amounted RM53,100 (2007: RM54,750) and Nil (2007: RM35,840) respectively.
24. TAXATION Group 2008 RM Current nancial years provision Overprovision in prior years Transferred (from)/to deferred taxation 969,000 (8,019) (17,000) 943,981 2007 RM 441,313 (9) 34,000 475,304 Company 2008 2007 RM RM (2,253) (2,253) 1,261,758 (537) 1,261,221
Malaysian income tax is calculated at the statutory tax rate of 26% (2007: 27%) of the estimated taxable prots for the nancial year. The Malaysian statutory tax rate will be reduced to 25% effective from year of assessment 2009 from the current years rate of 26%. The computation of deferred tax as at 31 December 2008 has reected these changes. The Company has sufcient tax credit under Section 108 of the Income Tax Act, 1967 to frank the payment of dividends out of its entire unappropriated prot as at 31 December 2008. A reconciliation of income tax expenses applicable to prot/(loss) before taxation at the statutory tax rate to income tax expenses at the effective tax rate of the Group and of the Company is as follows:Group Company 2008 2007 2008 2007 RM RM RM RM Prot/(Loss) before taxation Income tax on rate of 26% (2007: 27%) Tax effect in respect of:Change in tax rate for the rst tranche of chargeable income Direct expenses capitalised Expenses not deductible for tax purposes Losses of subsidiary companies not allowable for group relief Effect of change in tax rates on opening deferred taxation Overprovision of taxation Income not subject to tax Tax saving from pioneer status Effective tax expenses 6,561,140 1,705,896 6,896,700 1,862,109 (49,680) (12,917) 14,187,020 3,830,495
(30,000) (10,140) 257,083 14,622 (2,423) (8,019) (121,414) (861,624) 943,981
(396) 128,329 (580) (9) (193,653) (1,320,496) 475,304
87,782 (2,253) (74,865) (2,253)
49,897 (537) (2,618,634) 1,261,221
However, the above amounts are subject to the approval of the Inland Revenue Board of Malaysia.
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25. EARNINGS PER SHARE Group (a) Basic Basic earnings per share is calculated by dividing prot for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue 151,739,187 (2007: 148,716,600) during the nancial year. (b) Diluted For the purpose of calculating diluted earnings per share, the prot for the nancial year attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares in issue during the nancial year have been adjusted for the dilutive effects of all potential ordinary shares i.e., Employees Share Option Scheme (ESOS). 2008 RM After tax effect of prot for the nancial year attributable to ordinary equity holders Interest income earned from the proceeds from exercise of the outstanding ESOS 5,617,208 37,420 5,654,628 2007 RM 6,421,396 41,878 6,463,274
Weighted average number of ordinary shares in issue Effect on dilution - share options Adjusted weighted average number of ordinary shares in issue and issuable
151,739,187 3,190,421 154,929,608 sen
148,716,600 3,115,077 151,831,677 sen 4.26
Diluted earnings per share
3.65
The calculation of the earning per share for the preceeding year has been restated with the allotment of the new ordinary shares issued during the nancial year pursuant to the bonus issue to conform with the current presentation.
26. EMPLOYEE BENEFITS EXPENSE Group 2008 RM Directors remuneration Salaries Contributions dened contribution plans Social security contributions Share based payment under ESOS Other staff related expenses 623,606 1,980,518 245,919 17,214 148,028 469,833 3,485,118 2007 RM 912,789 1,894,031 232,159 21,153 65,894 534,706 3,660,732
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27. EMPLOYEE BENEFITS Employee Share Option Scheme (ESOS). The main features of the ESOS are as follows:(a) (b) (c) (d) (e) (f) the eligible persons are employees who have been conrmed as an employee of the Group and the employee must have served for a continuous period of at least three (3) full months. the total number of shares to be offered shall not exceed 10% of the issued and paid-up ordinary share capital of the Company at any point of time during the existence of the ESOS. the ESOS shall be for a minimum of 100 ordinary shares and a maximum of 10% ordinary shares in multiples of 100 ordinary shares. the ESOS shall be in force for a period of ve (5) years and renewable for a further ve years (subject to the approval of the Board). the ESOS is personal to the grantee and is non-assignable. the option price shall be determined at a discount of not more than 10% from the weighted average market price of the Companys ordinary shares of RM0.10 each for ve (5) market days preceding the date of offer and shall in no event be less than the par value of the shares. The movement of options over unissued shares of the Company granted under the ESOS during the nancial years are as follows:Expiry date Option price^ Brought Bonus issue forward entitlement Carried forward
Grant date 2008 30.5.2005 18.6.2007
Exercised
Retracted
29.5.2010 29.5.2010
RM0.15 1,877,600 RM0.26 2,472,000
894,800 1,212,000
(84,000) (66,000)
(280,000) (210,000)
2,408,400 3,408,000
^ price adjusted after bonus issue entitlement 2008 Analysed as:Exercisable in nancial year 2007 Exercisable in nancial year 2008 Exercisable in nancial year 2009 66,000 1,936,200 3,814,200 5,816,400 2007 56,000 1,534,800 2,758,800 4,349,600
The fair value of scheme options granted during the year was estimated using a Binomial Model, taking into account the terms and conditions upon which the option were granted. The fair value of share options measured at grant date and the assumption are as follows:Grant date Grant date 30.5.2005 18.6.2007 Fair value of share option (RM) Weighted average share price (RM) Weighted average exercise price (RM) Expected volatility (%) Risk free rate (%) Expected average dividend yield (%) RM0.15 RM0.51 RM0.19 40% 3.365% 10% RM0.26 RM0.59 RM0.33 40% 3.455% 10%
Volatility is a measure of the variability of a companys share price and is often the most critical assumption when valuing long term incentives. It may be estimated from historical share price data. In addition, an implied volatility may be derived from prices of traded options on companys shares where these exist. Consideration of the business issues facing the company in the future may also be important in setting this assumption.
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28. EFFECT OF THE ACQUISITION OF SUBSIDIARY COMPANIES (a) The effects of the acquisition of subsidiary companies on the nancial results of the Group are as follows:2008 RM Revenue Other income Operating cost Loss before taxation Taxation Loss for the nancial year/Decrease in Groups prot (b) The effects of the acquisition on the nancial position at the nancial year end are as follows:Group 2008 RM Property, plant and equipment Receivables Cash and bank balances Payables Decrease in Groups net assets 2,475 649 54,132 (59,203) (1,947) (56,238) (56,238) (56,238)
29. FINANCIAL INSTRUMENTS (a) Interest rate risk The interest rate risk that nancial instruments values will uctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of nancial assets were as follows:Less than 1 year RM 2 to 5 years RM Effective interest rates during the nancial year
Group 2008 Financial assets Investments Fixed deposits with licensed banks 2007 Financial assets Investments Fixed deposits with a licensed bank Company 2008 Financial asset Investments 2007 Financial asset Investments
Total RM
14,403,623 609,359
- 14,403,623 609,359
2.95%-20.00% 3.40%-3.80%
36,525,342 2,000,000
- 36,525,342 - 2,000,000
2.40%-4.20% 2.30%-2.40%
7,547,021
7,547,021
3.30%-4.20%
23,573,405
- 23,573,405
2.40%-4.20%
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29. FINANCIAL INSTRUMENTS (contd) (b) Credit risk The maximum credit risk associated with recognised nancial assets is the carrying amount shown in the balance sheet. The Group and the Company have no signicant concentration of credit risk with any single counterparty except for:2008 52% of the Groups trade receivables as at balance sheet date was due from Precision Portal Sdn. Bhd.. 2007 30% of the Groups trade receivables as at balance sheet date was due from RHB Bank Berhad.. (c) Fair value The carrying amounts of all nancial assets and liabilities of the Group and of the Company at the balance sheet date approximate their fair values except as set out below:2008 Carrying amount RM Group Interest in jointly controlled entity Quoted investments Investment property Company Unquoted shares in subsidiary companies Quoted investments Interest in jointly controlled entity 2008 Fair value RM 2007 Carrying amount RM 2007 Fair value RM
10,659,839 -
10,662,201 -
107,038 33,166,974 255,000
* 33,186,784 300,000
5,723,228 7,547,021 -
* 7,548,686 -
5,723,226 23,573,405 54,456
* 23,573,405 *
At the nancial year end, the net assets reported by the wholly-owned subsidiary companies and the jointly controlled entity were RM15,660,272 (2007: RM9,914,086) and RMNil (2007: RM101,500).
It was not practicable to estimate the fair values reliably as the Directors of the Company are of the opinion that excessive cost would be incurred.
30. CAPITAL COMMITMENTS Group 2008 RM Authorised and contracted for:- purchase of a piece land located at Kota Damansara, Mukim of Sg. Buloh. 2007 RM
5,667,970
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31. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (i) During the nancial year, the Group acquired a piece of vacant industrial lot at cost price plus incidental expenses amounted to of RM7,182,076 which situated in the Mukim of Sungai Buloh and the acquisition was completed on 29 February 2008. On 14 August 2008, CBS announced that the Companys wholly-owned subsidiary, Cyber Business Solutions Sdn. Bhd. has been awarded a project amounted to RM2.53 million to implement the software namely Solmate Radio Frequency Identication (RFID) to a national utility company, Tenaga National Berhad (TNB). The project is scheduled to commence in August 2008 and to complete within 6 months. CBS Technology Berhad was uplifted from being classied as cash company pursuant to Rule 8.14(2) of the listing requirements of Bursa Malaysia Securities Berhad for MESDAQ Market on 8 August 2008.
(ii)
(iii)
(iv) On 15 October 2008, CBS had acquired two subsidiary companies namely CBS Synergy Sdn. Bhd., an investment holding company which in turn held 51% equity interest in CASD Solutions Sdn. Bhd., dealing in computer equipment and software.
32. SEGMENTAL REPORTING There is no business segment or geographical segments disclosure as all the business of the Group are generated from information technology segment and principally operates in Malaysia only.
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LIST OF PROPERTIES
As At 31 December 2008
Age of Current Location HS(D) 88291, PT25176 Mukim Sg. Buloh Daerah Petaling Negeri Selangor Description Intermediate 3-storey shop ofce use Ofce Building (Year) 13 years Date of Acquisition 30 June 2003 Tenure Freehold Land Area 163.5 sq. m
Net Book Value (RM) 767,000
HS(D) 241034, PT 9923 Pekan Baru Sungai Buloh Daerah Petaling Negeri Selangor
Industrial land
Vacant
Not applicable
29 February 2008
Leasehold 12,189 sq. m 7,121,654 99 years expiring on 18 October 2106
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ANALYSIS OF SHAREHOLDINGS
As at 21 April 2009
Share Capital Authorised Capital Issued and Fully Paid-up Capital Class of Shares Voting Rights : : : : RM25,000,000 RM15,181,899 Ordinary Shares of RM0.10 each One vote per share
Distribution of Shareholdings Size of Shareholdings 1 99 100 1000 1,001 - 10,000 10,000 - 100,000 100,001 7,590,948 7,590,949 and above (5% of issued securities) Total No. of shareholders 8 40 670 565 130 2 % 0.56 2.83 47.35 39.93 9.19 0.14 No. of Shares 424 19,600 3,149,000 17,841,926 74,762,745 56,045,295 % 0.00 0.01 2.07 11.75 49.25 36.92
1,415
100.00
151,818,990
100.00
Substantial Shareholders Direct Interest No. of Shares held 37,500,000 18,545,295 Indirect Interest No. of Shares held -
Name of shareholders Emirates Investment & Development Co Sun Chee Kong
% 24.70 12.22
% -
Directors Shareholdings Direct Interest No. of Shares held 18,545,295 6,568,245 720,000 78,100 50,000 Indirect Interest No. of Shares held -
Name of Directors Sun Chee Kong Tan Chong Chew @ Tan Ying Ying Lai Soon Onn Fong Wai Leong Choo Kok Liong General Dato Seri Panglima Mohd Azumi (Rtd) Anthony Power
% 12.22 4.33 0.47 0.05 0.03 -
% -
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ANALYSIS OF SHAREHOLDINGS
As at 21 April 2009 (contd)
30 Largest Securities Account Holders (without aggregating securities from different securities accounts belonging to the same person) No of Shares held 37,500,000 18,545,295 6,570,750 6,568,245 4,306,200 3,406,500 3,072,000 2,839,750 2,203,000 2,105,000 2,070,000 1,864,500 1,810,500 1,809,250 1,501,500 1,315,350 1,224,500 1,156,800 975,000 907,000 883,500 800,000 767,000 720,000 709,500 697,500 685,800 600,000 599,100 586,500 108,800,040
No. Name of Shareholders 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Emirates Investment & Development Co Sun Chee Kong HSBC Nominees (Asing) Sdn Bhd Qualier: Exempt An for Credit Suisse (SG BR-TST-Asing) Tan Chong Chew @ Tan Ying Ying CIMSEC Nominees (Tempatan) Sdn Bhd Qualier: CIMB Bank for Tan Tian Sin Phan Tje Mei On Thiam Chai Yong Mei Ping Nyuk Ying @ Chong Nyuk Ying Tan Chin Seoh Mayban Nominees (Tempatan) Sdn Bhd - Qualier: Pledged Securities Account for Tan Chin Seoh Lee Siew Ken Chin Chin Seong Inter-Pacic Equity Nominees (Tempatan) Sdn Bhd - Qualier : Inter-Pacic Asset Management Sdn Bhd for Lee Peng Leong Universal Trustee (Malaysia) Berhad - Qualier: CIMB-Principal Small Cap Fund 2 Ong Ing Har Phang Hock Yuen Universal Trustee (Malaysia) Berhad - Qualier: CIMB Islamic Small Cap Fund MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd - Qualier: Pledged Securities Account for Tan Boon Keong Mayban Securities Nominees (Tempatan) Sdn Bhd - Qualier : Pledged Securities Account for Low Kock Ching Tan Song Kwan Chang Sang Lee Boon Han Lai Soon Onn AIBB Nominees (Tempatan) Sdn Bhd - Qualier : Pledged Securities Account for Batu Bara Resources Corporation Sdn Bhd Poo Kok Keng Lim Lai Chun @ Lim Lai Chan ECML Nominees (Tempatan) Sdn Bhd - Qualier : DMG & Partners Securities Pte Ltd for Keen Capital Investments Ltd M.I.T Nominees (Tempatan) Sdn Bhd - Qualier: Pledged Securities Account For Chen Khai Voon Ng Inn Jwee Total
% 24.70 12.22 4.33 4.33 2.84 2.24 2.02 1.87 1.45 1.39 1.36 1.23 1.19 1.19 0.99 0.87 0.81 0.76 0.64 0.60 0.58 0.53 0.51 0.47 0.47 0.46 0.45 0.40 0.39 0.39 71.66
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NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of the Company will be held at Berjaya Hall, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Wednesday, 10 June 2009 at 10.00 a.m. to transact the following businesses: AGENDA As Ordinary Business :1. To receive the Audited Financial Statements for the nancial year ended 31 December 2008 and the Reports of Directors and Auditors thereon. To re-elect the following Directors retiring in accordance with Article 93 of the Companys Articles of Association:(i) (ii) 3. Madam Tan Chong Chew @ Tan Ying Ying Mr. Choo Kok Liong Ordinary Resolution 2 Ordinary Resolution 3
Ordinary Resolution 1
2.
To re-elect Mr. Fong Wai Leong retiring in accordance with Article 99 of the Companys Articles of Association. To appoint Auditors of the Company and authorise the Directors to determine their remuneration. As Special Business to consider and if thought t, to pass the following Ordinary Resolution, with or without modications: ORDINARY RESOLUTION - AUTHORITY TO ISSUE SHARES THAT subject always to the Companies Act, 1965 and the approvals of the relevant authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue and to allot shares in the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person or persons whomsoever as the Directors may in their absolute discretion deem t provided that the aggregate number of shares issued pursuant to this Resolution does not exceed 10% of the issued share capital of the Company for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.
4.
5.
6.
To transact any other business of which due notice shall have been received.
BY ORDER OF THE BOARD
SEOW FEI SAN WONG SIEW YEEN Secretaries Selangor Darul Ehsan Date : 16 May 2009
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NOTICE OF ANNUAL GENERAL MEETING

(contd)
NOTES: 1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint up to two (2) proxies. A proxy need not be a member of the Company to attend and vote in his/her stead. When a member appoints two proxies, the appointments shall be invalid unless he/she species the proportions of his/her holdings to be represented by each proxy. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing, or if such appointor is a Corporation, either under its common seal or under the hand of an ofcer or attorney duly authorized. The instrument appointing a proxy must be deposited at the Registrar Ofce at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia at least forty eight (48) hours before the time for holding the Meeting or any adjournment thereof. Explanatory notes on Special Business: Ordinary Resolution 6 The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company to issue and allot not more than 10% of the issued share capital of the Company subject to the approvals of all the relevant authorities and for such purposes as the Directors consider would be in the interest of the Company. This authorisation will, unless revoked or varied by the Company in a general meeting, expire at the next Annual General Meeting of the Company.
2.
3.
4.
5.
62
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STATEMENT ACCOMPANYING
The Notice of Annual General Meeting
DIRECTORS STANDING FOR RE-ELECTION Names of Directors who are standing for re-election as in Ordinary Resolutions 2, 3 and 4 of the Notice of Annual General Meeting are: (i) (ii) (iii) Madam Tan Chong Chew @ Tan Ying Ying Mr. Choo Kok Liong Mr. Fong Wai Leong
Further details of the above Directors are set out in the Directors Prole on page 8 and 9 of the Annual Report.
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CBS TECHNOLOGY BERHAD (537337-M)

(Incorporated in Malaysia)
Number of shares held
FORM OF PROXY
I/We .............................................................................................................................................................................................
(Full Name in Capital Letters)
of .................................................................................................................................................................................................
(Full Address)
being a member/members of CBS Technology Berhad hereby appoint ................................................................................

of .................................................................................................................................................................................................
(Full Address)
or failing him/her .........................................................................................................................................................................

of .................................................................................................................................................................................................
(Full Address)
as my/our proxy to vote for my/our behalf at the Eighth Annual General Meeting of the Company to be held at Berjaya Hall, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Wednesday, 10 June 2009 at 10.00 a.m. and at any adjournment thereof.
FOR Ordinary Resolution 1 Ordinary Resolution 2 Ordinary Resolution 3 Ordinary Resolution 4 Ordinary Resolution 5 Ordinary Resolution 6 To receive the Audited Financial Statements for the year ended 31 December 2008 and the Reports of the Directors and Auditors thereon. To re-elect Madam Tan Chong Chew @ Tan Ying Ying who is retiring pursuant to Article 93 of the Companys Articles of Association. To re-elect Mr. Choo Kok Liong who is retiring pursuant to Article 93 of the Companys Articles of Association. To re-elect Mr. Fong Wai Leong who is retiring in accordance with Article 99 of the Companys Articles of Association To appoint Auditors of the Company and to authorise the Directors to x their remuneration. Authority to Issue Shares. AGAINST
Please indicate with an X in the space above on how you wish to cast your vote. In the absence of specic directions, your proxy will vote or abstain as he/she thinks t. Signed this ........................ day of ......................................................, 2009
.................................................................... Signature of Shareholder or Common Seal Notes: 1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy/proxies who may but need not be a member/members of the Company to attend and vote in his/her stead. 2. When a member appoints two proxies, the appointments shall be invalid unless he/she species the proportions of his/her holdings to be represented by each proxy. 3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing, or if such appointor is a Corporation, either under its common seal or under the hand of an ofcer or attorney duly authorized. 4. The instrument appointing a proxy must be deposited at the Registrar Ofce at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia at least forty eight (48) hours before the time for holding the Meeting or any adjournment thereof.
FOLD THIS FLAP FOR SEALING
FOLD HERE
Afx stamp
Share Registrar of CBS Technology Bhd Level 17, The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur
FOLD HERE

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CBS TECHNOLOGY BERHAD

CBS Technology Berhad

Tel: 603-6277 7018 Fax: 603-6277 6018

Annual Report 2008

CBS TECHNOLOGY BERHAD (537337M)

CBS TECHNOLOGY BERHAD (537337M)

CBS TECHNOLOGY BERHAD (537337M)

PRINCIPAL PLACE OF BUSINESS

SHARE REGISTRAR AUDIT COMMITTEE

STOCK EXCHANGE LISTING

CBS TECHNOLOGY BERHAD (537337M)

CBS TECHNOLOGY BERHAD

5-YEAR FINANCIAL HIGHLIGHTS

6.5 10.0 24.9

Profit Before Tax

CBS TECHNOLOGY BERHAD (537337M)

CBS TECHNOLOGY BERHAD (537337M)

CHAIRMANS STATEMENT (contd)

CBS TECHNOLOGY BERHAD (537337M)

CBS TECHNOLOGY BERHAD (537337M)

General Dato Seri Panglima Mohd Azumi Bin Mohamed (Rtd)

Mr. Sun Chee Kong

CBS TECHNOLOGY BERHAD (537337M)

DIRECTORS PROFILE (contd)

Madam Tan Chong Chew @ Tan Ying Ying

Mr. Anthony Power

Mr. Choo Kok Liong

CBS TECHNOLOGY BERHAD (537337M)

DIRECTORS PROFILE (contd)

Mr. Fong Wai Leong

Mr. Lai Soon Onn

CBS TECHNOLOGY BERHAD (537337M)

STATEMENT ON CORPORATE GOVERNANCE

CBS TECHNOLOGY BERHAD (537337M)

STATEMENT ON CORPORATE GOVERNANCE (contd)

Mr. Choo Kok Liong

Mr. Anthony Power

CBS TECHNOLOGY BERHAD (537337M)

STATEMENT ON CORPORATE GOVERNANCE (contd)

CBS TECHNOLOGY BERHAD (537337M)

STATEMENT ON CORPORATE GOVERNANCE (contd)

CBS TECHNOLOGY BERHAD (537337M)

STATEMENT ON INTERNAL CONTROL

CBS TECHNOLOGY BERHAD (537337M)

DIRECTORS RESPONSIBILITY STATEMENT

OTHER COMPLIANCE INFORMATION

CBS TECHNOLOGY BERHAD (537337M)

AUDIT COMMITTEE REPORT

CBS TECHNOLOGY BERHAD (537337M)

AUDIT COMMITTEE REPORT (contd)

CBS TECHNOLOGY BERHAD (537337M)

AUDIT COMMITTEE REPORT (contd)

Number of Meetings Attended 4/4 4/4 3 /4 -

CBS TECHNOLOGY BERHAD (537337M)

AUDIT COMMITTEE REPORT (contd)

CBS TECHNOLOGY BERHAD (537337M)

There were no debentures issued during the nancial year.

CBS TECHNOLOGY BERHAD (537337M)

1,877,600 2,472,000 4,349,600

894,800 1,212,000 2,106,800

(280,000) (210,000) (490,000)

(84,000) (66,000) (150,000)

2,408,400 3,408,000 5,816,400