cn asia corporation bhdcnasia.com/web/wp-content/uploads/arcnasia2008.pdf · empowered to obtain...

1ANNUAL REPORT 2008 CN ASIA Corporation Bhd(399442-A)

NOTICE OF ANNUAL GENERAL MEETING

CONTENTS02 Notice of Annual General Meeting04 Statement Accompanying Notice

of Annual General Meeting05 Corporate Information06 Group Structure07 The Group’s Business08 Profile of Directors10 Audit Committee Report13 Statement on Corporate Governance17 Statement of Directors’ Responsibilities

for Preparing the Financial Statements

18 Statement on Corporate Social Responsibility19 Additional Compliance Information20 Statement on Internal Control21 Chairman’s Statement23 Financial Statements75 Properties of the Group76 Analysis of Shareholdings79 Appendix 1

Form of Proxy

2 ANNUAL REPORT 2008 CN ASIA Corporation Bhd(399442-A)

NOTICE IS HEREBY GIVEN that the Thirteenth Annual GeneralMeeting of CN Asia Corporation Bhd will be held at Hang TuahRoom, Level 3, Palace Beach & Spa, Jalan Dulang, MINES ResortCity, 43300 Seri Kembangan, Selangor Darul Ehsan on Wednesday,27 May 2009 at 10.00 a.m. for the following purposes:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 31 December2008 together with the Reports of the Directors and the Auditors thereon.

2. To approve the payment of Directors’ fees in respect of the financial year ended31 December 2008.

3. To re-elect the following Directors who are retiring in accordance with Article 84 of theCompany’s Articles of Association and being eligible have offered themselves forre-election:-

i) Mr. Ho Cheng San

ii) Mr. Chong Ying Choy

4. To re-appoint Messrs CK & Associates as Auditors of the Company for the ensuing year and to authorise the Board of Directors to fix their remuneration.

As Special Business

To consider, and if thought fit, to pass the following resolutions:-

5. ORDINARY RESOLUTIONAuthority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965

“That pursuant to Section 132D of the Companies Act, 1965 and subject to theapproval of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit provided that the aggregate number of shares issuedpursuant to this resolution does not exceed ten percentum (10%) of the issued sharecapital of the Company for the time being and the Directors be and are hereby alsoempowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued and that such authority shallcontinue in force until the conclusion of the next Annual General Meeting of theCompany.”

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)




6. Proposed Amendments to the Articles of Association of the Company

“That the deletions, alterations, modifications, variations and additions to the Articles of Association of the Company as set out in Appendix 1 attached with the Annual Report for the financial year ended 31 December 2008 be and are herebyapproved.”

BY ORDER OF THE BOARD

KOH MUI TEE (LS 03057)Company Secretary

Selangor Darul Ehsan30 April 2009

Notes:1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him.

A proxy may but need not be a member of the Company provided that the provisions of Section 149(1)(b) of the Companies Act, 1965 are complied with.

2. Where a member appoints two proxies, the appointment shall be invalid unless the member specifies the proportion of hisshareholding to be represented by each proxy.

3. The instrument appointing a proxy in the case of an individual shall be under the hand of the appointor or of his attorney duly authorised or if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at Lot 7907, Batu 11,Jalan Balakong, 43300 Seri Kembangan, Selangor Darul Ehsan, not less than 48 hours before the time set for holding themeeting or any adjournment thereof.

Explanatory Notes on Special Business

(i) Resolution 6 - Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965

The Resolution 6 proposed under item 5 of the agenda, if passed, will give the Directors of the Company authority from the date of the above meeting until the next Annual General Meeting, unless previously revoked or varied at a general meeting, to issue shares in the Company up to an aggregate number not exceeding 10% of the issued share capital of the Company for the time being for such purposes as they consider would be in the interest of the Company.

(ii) Special Resolution 1 - Proposed Amendments to the Articles of Association of the Company

The Special Resolution 1, if passed, will render the Articles of Association of the Company to be consistent with the requirementsto the Listing Requirements of Bursa Malaysia Securities Berhad and any prevailing laws, rules, regulations, orders, guidelines or requirements of the relevant authorities.

(SpecialResolution 1)

1. NAME OF DIRECTORS WHO ARE STANDING FOR RE-ELECTION

i. Mr Ho Cheng Sanii. Mr Chong Ying Choy

2. DETAILS OF ATTENDANCES OF DIRECTORS AT BOARD MEETINGS

Five (5) Board Meetings were held during the financial year from 1 January 2008 to 31 December 2008. Details of attendanceof Directors at the Board Meetings are as follows:-

Name of Directors No. of Meetings PercentageAttended (%)

Dato’ Hilmi Bin Mohd Noor 5/5 100Ho Cheng San 5/5 100Ariffin bin Khalid 5/5 100Chong Ying Choy 5/5 100Ab. Razak bin Idris 5/5 100

3. PLACE, DATE AND TIME OF THE THIRTEENTH ANNUAL GENERAL MEETING

The Thirteenth Annual General Meeting of the Company will be held at Hang Tuah Room, Level 3, Palace Beach & Spa, JalanDulang, MINES Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan on Wednesday, 27 May 2009 at 10.00 a.m.

4. PROFILE OF DIRECTORS WHO ARE STANDING FOR RE-ELECTION

Details of the Directors who are standing for re-election are set out in the Profile of Directors appearing on pages 8 to 9 ofthis Annual Report. In addition, Mr Ho Cheng San’s securities holding is set out in Analysis of Shareholdings-Directors’Shareholdings on page 78 of this Annual Report. Mr Chong Ying Choy does not hold any shares, directly or indirectly in theCompany and its subsidiaries as at 8 April 2009.


STATEMENT ACCOMPANYINGNOTICE OF ANNUAL GENERAL MEETING


CORPORATE INFORMATION

Board of Directors

Dato’ Hilmi bin Mohd Noor(Non-Executive Chairman)

Ho Cheng San(Managing Director)

Ir. Ariffin bin Khalid(Executive Director)

Chong Ying Choy(Independent Non-Executive Director)

Ab. Razak bin Idris(Independent Non-Executive Director)

Audit Committee

Chong Ying Choy (Chairman)Ab. Razak bin IdrisDato’ Hilmi bin Mohd Noor

Nomination Committee

Dato’ Hilmi bin Mohd Noor (Chairman)Chong Ying ChoyAb. Razak bin Idris

Remuneration Committee

Chong Ying Choy (Chairman)Ab. Razak bin IdrisHo Cheng San

Company Secretary

Koh Mui Tee (LS 03057)

Registered Office

Lot 7907, Batu 11, Jalan Balakong43300 Seri KembanganSelangor Darul EhsanTel : +603-8942 6888Fax : +603-8942 3365

Auditors

CK & Associates (AF 1598)Chartered AccountantsUnit A-5-2, Wisma Yoon Cheng 726, Batu 4 1/2, Jalan Ipoh51200 Kuala Lumpur

Principal Bankers

Public Bank BerhadAmbank (M) BerhadHSBC Bank Malaysia BerhadHong Leong Bank BerhadAlliance Bank Malaysia BerhadStandard Chartered Bank Malaysia BerhadCIMB Bank Berhad

Solicitors

Dennis Nik & WongHarun Idris, Yeoh & PartnersIza Ng Yeoh & Kit

Registrars

Tenaga Koperat Sdn BhdLevel 17, The Gardens North TowerMid Valley CityLingkaran Syed Putra59200 Kuala LumpurTel : +603-2264 3883Fax : +603-2282 1886

Stock Exchange Listing

Second BoardBursa Malaysia Securities Berhad


GROUP STRUCTURE

Investment Holding & ProvidingManagement Services

CHIP NGAI ENGINEERINGWORKS SDN BHDManufacturing and tradingof underground and skidtanks, dish ends, pressurevessels, road tankers,piping for the petroleumindustry and that ofspecialised engineeringworks and fabrication works

PICN ENGINEERINGSDN BHDFabrication and trading of tanks for specialisedindustries

100%

100%

100%

100%

ZHUHAI CN ENGINEERINGWORKS CO., LTD.(Incoporated in People's Republic of China)

Manufacturing and trading of storage tanks and relatedproducts

CN ASIA CAPITALSDN BHDInvestment Holding

DOUWIN SDN BHDInvestment Holding

ASIA TANK CONTAINERS(MALAYSIA) SDN BHDManufacturing, repairing andrenting of transportablecontainers for hazardouschemicals

49%

100%


THE GROUP’S BUSINESS

CN Asia Corporation Bhd (“CN”) was incorporated in Malaysia on 23 August 1996 as an investment holding company. The mainactivities of the Group can be categorized under 5 divisions as follows:

1. Manufacturing of underground and aboveground storage tanks for the petroleum and general process industries for the local and global market.

2. Manufacturing of dish heads and provision of plate rolling services for the food and beverage processing, petrochemical, energy and heavy engineering industries in the Asian region.

3. Manufacturing of all types of road tankers such as:

• Co2 Road Tankers• Vacuum Tankers• Combination Units• High Pressure Cleaners and Jetters• LPG and Chemical Tankers

4. Provision of engineering, procurement and construction (EPC) services for the following industries:-

• Petrochemical : carbon and cladded steel pressure vessels, heat exchangers• Food and Beverage Plant : stainless steel vessels, sterilizers and etc• Power Generation : supply and erection of flue stacks and heat recovery steam generator (HRSG) pressure vessels• Bulking Terminal : API 620,650 bulk vertical storage tanks inclusive of

- piling works- civil foundation- laying of pipes- pigging and pump system- loading station- office and warehouse

• Civil engineering and construction works is carried out in conjunction with the above products.

5. IMO Type 1 stainless steel transportable tanks

• Manufacturing• Repairs• Leasing to International Maritime Operators


PROFILE OF DIRECTORS

Dato’ Hilmi bin Mohd Noor, a Malaysian, aged 67, is the Non-Executive Chairman of the Company and wasappointed to the Board on 1 January 1999. He is the Chairman of the Nomination Committee and a memberof the Audit Committee. He graduated with a Bachelor of Arts (Hons.) degree from the University of Malaya in1966 and obtained his MBA from Marshall University, USA. In addition, he is presently a member of theChartered institute of Purchasing and Supply (United Kingdom). Upon graduation, he held the position ofAssistant Secretary/Principal Assistant Secretary in the Administration Division of the Finance Division, Ministryof Finance until 1977, after which he was appointed as a Deputy Secretary (Contract and Supply ManagementDivision) in the same Ministry until 1980. Between 1981 and 1982 he served as a Director of the EconomicPlanning Unit, Prime Minister’s Department. Subsequently, he was Secretary (Contract and Supply Division),Ministry of Finance between 1982 and 1986. Thereafter, he served as the Deputy Director General of theEconomic Planning Unit, Prime Minister’s Department between 1987 and 1989, as Secretary General, Ministryof Energy, telecommunications and Post between 1989 and 1994, and as Secretary General, Ministry ofNational and Rural Development Department from 1994, until his retirement in May 1997. Between 1970 and1997, he served as a Board Member of several companies/organisations such as Bank Pertanian MalaysiaBerhad, Keretapi Tanah Melayu, Lembaga Pelabuhan Bintulu, Heavy Industries Corporation of Malaysia Berhad,Tenaga Nasional Berhad (Founder Director) and Telekom Malaysia Berhad. Currently he is also a Board Memberof Kramat Tin Dredging Berhad and Integrated Rubber Corporation Berhad.

Dato’ Hilmi does not have any family relationship with any other Directors and/or major shareholders of theCompany. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interestwith the Company. He has not been convicted of any offences within the past 10 years.

Ho Cheng San, was a Malaysian, aged 56, is the Managing Director of the Company and was appointed tothe Board on 5 April 1997. He is currently a member of the Remuneration Committee and the Chairman of theOption Committee. He obtained his Diploma in Mechanical Engineering in 1978. He has more than 30 years ofhand-on experiences in engineering, procurement, construction and commissioning of palm oil mills,construction of retail petrol stations, petrochemical, food and beverage plants, building and construction inMalaysia, Indonesia, Thailand and Burma having served various divisions of the Group.

Mr Ho does not have any family relationship with any other Directors of the Company. He is a substantialshareholder of the Company. There is no conflict of interest with the Company except for those disclosed inNote 32(ii) to the Financial Statements of this Annual Report. He has not been convicted of any offences withinthe past 10 years.

Ariffin bin Khalid, a Malaysian, aged 64, is an Executive Director of the Company and was appointed to theBoard on 1 February 2005. He graduated with a Bachelor of Science (Hons.) degree in Mechanical Engineeringfrom the University of Nottingham, United Kingdom in 1968 and obtained his Professional Engineering statusfrom Lembaga Jurutera Malaysia in 1974. He was also a Fellow of the Institute of Petroleum (United Kingdom)from 1969 to 2000. Upon graduation in 1968, he held the position of L.P.Gas Engineer in Shell Malaysia Tradingand progressed in other positions such as Construction and Maintenance Engineer, Depot Manager, DistributionOperations Manager Sabah and Sarawak, Lubricant Marketing Manager, Quality Manager and General Manager(Distribution Operations). He was promoted to serve in Shell Companies in Malaysia in 1994 as Team Member(Re-Engineering Project), Adviser (Business Improvement) and Chief Adviser of Corporate Affairs, until hisretirement at the end of 1999. After his retirement from Shell, he worked as Chief Executive Officer and Directorof Rotary-MEC and as an Environmental and Oil and Gas Consultant. From 1990 until the present, Encik Ariffinhas served as Chairman of the National Industrial Standardisation Committee ‘Y’ (Quality Management & QualityAssurance-ISO 9000). In 2004, he was a member of the Organising Committee and Delegation Leader to the22nd ISO/TC 176 Annual Conference, which was held in Kuala Lumpur. He also holds the position of Hon.Treasurer, International Erosion Control Association (Malaysian Chapter) since 2001


PROFILE OF DIRECTORS

Encik Ariffin does not have any family relationship with any other Directors and/or major shareholders of theCompany. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interestwith the Company. He has not been convicted of any offences within the past 10 years.

Chong Ying Choy, a Malaysian, aged 54, is an Independent Non-Executive Director of the Company and wasappointed to the Board on 5 April 1997. He is the Chairman of the Audit Committee as well as the RemunerationCommittee and is a member of the Nomination Committee and the Option Committee. He has been anassociate member of the Institute of Chartered Secretaries And Administrators since 1982, a fellow of theChartered Association of Certified Accountants since 1987, a member of the Malaysian Association of CertifiedPublic Accountants since 1988 and member of Certified Practicing Accountant, Australia since 2008. He is alsoa chartered accountant having been registered with the Malaysian Institute of Accountants since 1982. He hasmany years of experience in auditing, taxation and financial advisory. From 1980 to 1988, he was attached witha firm of public accountants, Hanafiah Raslan & Mohamad. Thereafter, he set up his own practice under thename of Y C Chong & Co. He is a board member of Infortech Alliance Berhad and is also a Director of severalother private companies.

Mr Chong does not have any family relationship with any other Directors and/or Major Shareholders of theCompany. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interestwith the Company. He has not been convicted of any offences within the past 10 years.

Ab. Razak bin Idris, a Malaysian, aged 53, is an independent Non-Executive Director of the Company and wasappointed to the Board on 21 March 2000. He is a member of the Audit Committee, Nomination Committeeand Remuneration Committee. He obtained his Bachelor of Architecture from the University of TechnologyMalaysia in 1981. He was the Appointed Member of the State of Selangor Foreign Investment Committee from1988 to 1999. He commenced his career with Jabatan Kerja Raya Malaysia as a Technical Assistant. Hesubsequently worked as a Project Architect with Urban Development Authority from 1982 to 1984 and later onwith Kumpulan Pembina Arkitek from 1984 to 1987. After that he joined Majlis Perbandaran Klang as Directorof Building Department from 1987 to 1999. He is also a Director of several other private companies.

Encik Ab. Razak does not have any family relationship with any other Directors and/or Major Shareholders ofthe Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict ofinterest with the Company. He has not been convicted of any offences within the past 10 years.

MEMBERS OF THE AUDIT COMMITTEE

Chong Ying Choy (Chairman) (Independent Non-Executive Director)

Ab. Razak bin Idris (Member) (Independent Non-Executive Director)

Dato’ Hilmi bin Mohd. Noor (Member) (Non-Executive Chairman)

TERMS OF REFERENCE

Composition

The Committee shall be appointed by the Directors from among them and shall consist of not less than three (3) in numbers ofwhom shall not be:

(a) Executive Directors of the Company or any relevant corporation;(b) a spouse, parent, brother, sister, son or adopted son, daughter or adopted daughter of an executive director of the company

or of any related corporation; or(c) spouse of brother, sister, son or adopted son, daughter or adopted daughter of an executive director or of any related

corporation; or(d) any person having a relationship which, in the opinion of the Board of Directors, would interfere with the exercise of the

independent judgement in carrying out the functions of the committee.

The members of the Committee shall elect a Chairman from among their members shall be an Independent Non-Executive Directorof the Company or any related corporation. If a member of the Committee resigns, dies, or for any other reason ceases to be amember with the result that the number of members is reduced to two (2), the Board of Directors shall within three (3) months ofthat event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

The Committee shall have a majority of Independent Non-Executive Directors and at least one member who:-

(a) is a member of the Malaysian Institute of Accountants; or(b) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and

he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967 or he must be amember of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967.

The terms of office of the Committee shall be reviewed by the Board of Directors at least once every three (3) years to determinewhether the Committee has carried out their duties in accordance with their terms of reference.

No alternate director shall be appointed as an Audit Committee member.

Authority

The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek anyinformation it requires from any employees and all employees are directed to co-operate with any request made by the Committee.The Committee shall also have the authority to consult independent experts where they consider it necessary to carry out theirduties.


AUDIT COMMITTEE REPORT

Meeting

The Committee shall meet at least four (4) times a year and such meetings as the Chairman shall decide in order to fulfill its duties.The Secretary of the Committee shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulatingto the Committee prior to each meeting.

The Secretary will also be responsible for keeping the minutes of the meetings of the Committee, and circulating them to committeemembers and to other members of the Board of Directors.

A quorum shall consist of a majority of Committee members and in order to form a quorum, the majority of members present mustbe independent directors.

Functions

The function of the Committee are as follows:-

1. review the following and report the same to the Board of Directors:-

(a) with the external auditor, the audit plan;(b) with the external auditor, his evaluation of the system of internal controls and in particular review the external auditor’s

management letter and management’s response;(c) with the external auditor, his audit report;(d) the assistance given by the employees to the external auditor;(e) the adequacy of the scope, functions and resources of the internal audit functions and that it has the necessary authority

to carry out its work;(f) 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;(g) the quarterly results and year end financial statements, prior to the approval by the board of directors;(h) any related party transaction and conflict of interest situation that may arise within the Company or group including any

transaction, procedure or course of conduct that raises questions of management integrity;(i) any letter of resignation from the external auditors; and(j) whether there is reason (supported by grounds) to believe that the external auditor is not suitable for re-appointment.

2. recommend the nomination of a person or persons as external auditors.

3. recommend for approval of the Board the external audit fee.

MEETINGS

There were five (5) Audit Committee meetings held during the financial year ended 31 December 2008. Details of the members’attendances are as follows:-

Audit Committee Member Number of Meetings Attended

Chong Ying Choy 5/5Ab. Razak Bin Idris 5/5Dato’ Hilmi bin Mohd Noor 5/5

The Group Financial Controller and the outsourced internal auditors attended all these meetings upon invitation by the Committee.The previous external auditors, Messrs Moore Stephens were invited to attend the first and second audit committee meetings duringthe year.



SUMMARY OF ACTIVITIES

During the financial year, the Audit Committee carried out its duties in accordance with its terms of reference. The main activitiescarried out by the audit committee during the financial year included the following:-

• Review the quarterly unaudited financial results of the Group and ensure compliance with approved accounting standards,other legal and regulatory requirements prior to recommending to the Board for approval.

• Review with the external auditors their findings arising from audit. • Review the annual audited financial statements of the Group and recommend to the Board for approval.• Review internal audit plan and internal audit reports.• Consider the proposed audit fees of the Internal Auditors and the re-appointment of the Internal Auditors for recommendation

to the Board for their approval.• Discuss and consider the audit fees with the External Auditors for the financial year ended 31 December 2008.

INTERNAL AUDIT FUNCTIONS

The Group has outsourced the internal audit function to an independent professional consulting firm, who reports administrativelyto the Managing Director and functionally to the Audit Committee. The scope of internal audit covers the examination and evaluationof the adequacy and effectiveness of the Group’s system of internal control, the efficiency of operations and the quality ofperformance in carrying out assigned responsibilities. The Internal Auditors’ primary function is to submit audit reports that highlightrisk and control weaknesses and provide suitable recommendations for improvement to reassure senior management and the AuditCommittee on the state of internal control of the Group. The activities of the internal audit function during the financial year aresummarised as follows:-

• Developed the internal audit plan for the year.• Performed internal audit reviews to evaluate the adequacy of the internal control system over the human resource

management function.• Followed up on the implementation of audit recommendations and management actions plans, and reported to the Audit

Committee the status of their implementation.• Reviewed current system and key risk areas covering business process to ensure proper internal controls are embedded in

these process.

Further details on the internal audit functions are set out in the Statement On Internal Control of this Annual Report.



The Board of Directors of CN Asia Corporation Bhd (the “Board”) is pleased to report on the manner in which the Group has appliedthe principles and the extent of compliance with the best practices of corporate governance as set out in the Malaysian Code OnCorporate Governance (the “Code”) pursuant to paragraph 15.26 of the Listing Requirement of Bursa Malaysia Securities Berhad.

The Board recognizes that the practice of high standards of corporate governance throughout the Group as a fundamental part ofdischarging its responsibilities to safeguard the interests of the shareholders and to enhance shareholders’ value.

DIRECTORS

i. The Board & Board Balance

The Board has the overall responsibility for corporate governance, strategic direction and overseeing the investment andbusiness of the Company. Currently, the Board consists of five (5) members, comprising a Non-Executive Chairman, aManaging Director, one (1) Executive Director and two (2) Non-Executive Independent Directors. Together, the Directors withtheir different backgrounds and specialisation, collectively bring with them a wide range of business, management, financialand technical experiences. The profile of each Director is set out on pages 8 to 9 of this Annual Report.

The Chairman of the Board leads the discussion at the Board level, whilst the executive directors are responsible for theachievement of short term and long term objectives and day to day management and operation of the Group. The Non-Executive Independent Directors bring to bear objective and independent judgement to the decision making of the Board inorder to provide an efficient check and balance for the Executive Directors.

ii. Board Meetings

The Board met five (5) times in the financial year ended 31 December 2008. The details of the attendance of each memberof the Board is set out on page 4 of this Annual Report.

The agenda and Board papers for consideration are circulated to all Directors prior to every Board Meeting to enable theDirectors to obtain further explanation and clarification in order to be well informed of the matters before the Meetings. TheCompany Secretary was available at all times to provide the Directors with the appropriate advice and services and also toensure that the relevant proceedings are complied with in accordance with the rules and regulations of the relevant authorities.All decisions and conclusions of the Board are duly recorded in the Board minutes. Besides Board meetings, the Boardexercises control on matters that require Board’s approval through circulation of Directors’ Resolution.

iii. Appointment & Re-election To The Board

New candidate will be considered and evaluated by the Nomination Committee. Suitable candidate will then be nominated forappointment to the Board.

In accordance with the Company’s Articles of Association, newly appointed Directors shall hold office until the next followingannual general meeting and shall then be eligible for re-election by shareholders. The Articles also provide that one third ofthe Board are required to retire at every annual general meeting and be subject to re-election by shareholders and all directorsshall retire from office once at least in each three (3) years, but shall be eligible for re-election.

iv. Access To Information And Advice

All members of the Board have full and unlimited access to the advice and services of the Company Secretary, and wherenecessary, independent professional advisers may be engaged by the Directors at the Company’s expense to enable theBoard to discharge their duties.


STATEMENT ON CORPORATE GOVERNANCE



v. Directors’ Remuneration

The aggregate Directors’ remuneration paid or payable to all directors of the Company by the Group and categorised intoappropriate components for the financial year ended 31 December 2008 are as follows:-

Type of Remuneration Executive Directors Non-Executive DirectorsRM RM

Fees - 48,000Salaries 203,605 -Benefit-in-kind 25,000 -Other Emoluments 22,043 -Total 250,648 48,000

The number of Directors of the Company who served during the financial year and whose total remuneration from the Groupfalling within the respective bands are as follows:-

Range of Remuneration Number of DirectorsExecutive Non-Executive

RM50,000 and below 1 3RM50,001-RM100,000 - -RM100,001-RM150,000 - -RM150,001-RM200,000 - -RM200,001-RM250,000 1 -

vi. Directors’ Training

The Directors are encouraged to assess their own training needs and continue to undergo relevant training programmes,seminars, workshops, talks and conferences to keep abreast with new regulatory developments and relevant changes inbusiness environment on a continuous basis in compliance with the Listing Requirement of Bursa Malaysia Securities Berhad(“Bursa Securities”).

During the year, all the Directors have attended an in-house training course organised by the Company which entitled “BlueOcean Strategy”.

All Directors have attended and completed the Mandatory Accreditation Programme (“MAP”) prescribed by Bursa Securities.

BOARD COMMITTEES

The Board has established:-

i. Audit Committee

Terms and reference and further information on the Audit Committee are set out on pages 10 to 11 of this Annual Report.

ii. Nomination Committee

The Nomination Committee comprises exclusively of Non-Executive Directors, the majority of whom are independent. TheNomination Committee is responsible for proposing new nominees for the Board appointments and assessing directors on anon-going basis. In making these recommendations, the Nomination Committee will consider the required mix of skills andexperience of each member. The actual decision as to who shall be nominated should be the responsibility of the full boardafter considering the recommendations of the Committee.

The members of the Nomination Committee are:-

(1) Dato’ Hilmi Bin Mohd Noor - Non-Executive - Chairman(2) Chong Ying Choy - Independent Non-Executive - Member(3) Ab. Razak bin Idris - Independent Non-Executive - Member

The Committee shall meet as and when deemed necessary.

iii. Remuneration Committee

The Remuneration Committee comprises mainly of Non-Executive Directors, is responsible for making recommendations tothe Board on remuneration packages and benefits extended to the Executive Directors and to review the annual remunerationpackages of the Executive Directors. Remuneration package of Non-Executive Directors will be a matter to be decided by theBoard as a whole with the Directors concerned abstaining from deliberations and voting on decisions in respect of hisindividual remuneration. Fees payable to Non-Executive Directors is determined by the Board with the approval fromshareholders at the Annual General Meeting.

The members of the Remuneration Committee are:-

(1) Chong Ying Choy - Independent Non-Executive - Chairman(2) Ab. Razak bin Idris - Independent Non-Executive - Member(3) Ho Cheng San - Managing Director - Member

The Remuneration Committee held one (1) meeting during the financial year to review the remuneration package for ExecutiveDirectors and Non-Executive Directors.

INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION

The Board acknowledges the need for shareholders to be informed of the developments and performance of the Company. Thedistribution of annual report, announcements and release of financial results on a quarterly basis provide the shareholders and theinvesting public with an overview of the Group’s performance and operations. The principal forum for dialogue with shareholdersremains at the Annual General Meeting. Shareholders are encouraged to ask questions and seek clarification at Annual GeneralMeeting of the Company on both the resolutions being proposed and the Group’s business and performance. Alternatively,shareholders can seek additional information through the Group’s website: www.cnasia.com. The Share Registrar is available toattend to matters relating to shareholders’ interest.



ACCOUNTABILITY AND AUDIT

i. Financial Reporting

The Board aims to provide and present a balanced, clear and meaningful assessment of the Group’s financial performanceand prospects at the end of the financial year, primarily through the annual financial statements, quarterly announcement ofresults to shareholders as well as the Chairman Statement in the annual report. The Board is assisted by the Audit Committeeto ensure accuracy and adequacy of all information for disclosure.

A statement by the Directors of their responsibilities in respect of the audited financial statements is set out on page 17 ofthis Annual Report.

ii. Internal Control

The Statement On Internal Control set out on page 20 of this Annual Report provides an overview of the Group’s state ofinternal control.

iii. Relationship With Auditors

The Company maintains a transparent relationship with the auditors in seeking their professional advice and towards ensuringcompliance with the accounting standards.

The key features underlying the relationship between the Audit Committee and the external auditors are included in the AuditCommittee’s terms of reference as detailed on pages 10 to 11 of this Annual Report.

This Statement on Corporate Governance was made in accordance with a resolution of the Board of Directors at a meeting held on8 April 2009.



The Directors takes responsibilities in ensuring that the financial statements of the Group give a true and fair view of the state ofaffairs of the Group and of the Company as at 31 December 2008 and of the results and cash flows of the Group and of theCompany for the financial year then ended. The financial statements of the Group and the Company have been drawn up inaccordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.

In preparing the financial statements, the Directors have:-

• ensured that all applicable MASB approved accounting standards for entities other than private entities have been followed;• selected suitable accounting policies and applied them consistently;• made judgements and estimates that are prudent and reasonable; and• prepared the financial statements on the going concern basis, unless they consider that to be inappropriate.

The Directors have the responsibility for ensuring that the Company and the Group keep accounting records which disclose withreasonable accuracy the financial position of the Group and Company which enable them to ensure the financial statements complywith the provisions of the Companies Act 1965.

The Directors have overall responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Groupto prevent and detect fraud and other irregularities.

This Statement of Directors’ Responsibilities was made in accordance with a resolution of the Board of Directors at a meeting heldon 8 April 2009.

17ANNUAL REPORT 2008 CN ASIA Corporation Bhd (399442-A)

STATEMENT OF DIRECTORS’RESPONSIBILITIES FOR PREPARING THE FINANCIAL STATEMENTS

CN Asia Corporation Bhd (“CNASIA”) is mindful of the importance of its Corporate Social Responsibility (“CSR”) towards thecommunity, environment, its employees, customers, suppliers, shareholders and other stakeholders. CNASIA continued to promotequality, safe and healthy work environment of all its employees. Various in-house and external training were provided for theemployees to inculcate a better understanding on the importance of health and safety at the workplace. Enforcement is also carriedout to ensure the continuous compliance of all safety measures at all time.

During the year 2008, CNASIA has organised numerous activities to create a harmony work environment and promote team spiritamong the employees. Among others are the monthly event organized by the event committee to celebrate special occasions orbirthdays of employees on a monthly basis. A company trip with team building programmes and telematch took place in August2008 with the objectives to harmonize work relation of employees at all levels and departments in CNASIA.

Other CSR activities carried out during the financial year ended 31 December 2008 are as follows:

• Industrial training for undergraduates.• Regular replenishment of Personal Protection Equipment (“PPE”) for workers.• First Aid Drill and regular briefing for workers on health and safety procedures.• Charitable contributions in the form of cash to charitable organization and schools.

This Statement on Corporate Social Responsibility was made in accordance with a resolution of the Board of Directors at a meetingheld on 8 April 2009.


STATEMENT ON CORPORATESOCIAL RESPONSIBILITY

UTILISATION OF PROCEEDS

This was not applicable during the financial year.

SHARE BUYBACKS

The Company did not have a share buyback programme in place.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

The Company did not issue any options, warrants or convertible securities during the financial year.

AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT (GDR) PROGRAMME

The Company has not sponsored any ADR or GDR programme during the financial year.

IMPOSITION OF SANCTIONS/PENALTIES

There were no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or management by any relevantregulatory bodies during the financial year.

NON-AUDIT FEES

Non-audit fees amounting to RM2,100.00 was paid to the previous external auditors, Messrs Moore Stephens and there were nonon-audit fees paid or payable to the current external auditors, Messrs CK & Associates during the financial year ended 31December 2008.

PROFIT ESTIMATE, FORECAST OR PROJECTION

The Company did not release any profit estimates, forecasts or projections for the financial year. There were no variances of 10percent or more between the audited results for the financial year and the unaudited results previously announced.

PROFIT GUARANTEE

The Company did not give any profit guarantee to any parties during the financial year.

MATERIAL CONTRACTS OR LOANS INVOLVING DIRECTORS OR MAJOR SHAREHOLDERS

There were no material contracts of the Company and subsidiaries involving Directors’ and major shareholders’ interests during thefinancial year. There were no contracts relating to loans entered into by the Company and its subsidiaries which involve the Directors’and major shareholders’ interest during the financial year.

RECURRENT RELATED PARTY TRANSACTIONS STATEMENT

The Company did not incur any significant recurrent related party transactions of a revenue/trading nature during the financial yearended 31 December 2008. The details of related party transactions are disclosed in Note 32 to the Financial Statements of thisAnnual Report.

REVALUATION POLICY ON LANDED PROPERTIES

Group Policy on revaluation of land and buildings is set out on page 46 of this Annual Report.


ADDITIONAL COMPLIANCE INFORMATION

The Board of Directors of CN Asia Corporation Bhd (“the Board”) is pleased to present the Statement On Internal Control pursuantto Paragraph 15.27 (b) of the Bursa Malaysia Securities Bhd Listing Requirements.

Board Responsibility

The Board recognizes the importance of maintaining a sound system of internal control and an effective risk management to goodcorporate governance. This includes the establishment of an appropriate control environment and risk management framework andreviewing the said systems in order to safeguard shareholders’ investments and the Group’s assets.

Risk Management

The Board has an embedded process for identifying, evaluating, prioritizing and reporting the major business risks within the Group.Regular reviews and evaluation on the significant area of risks were carried out to ascertain the nature and extent of these risks.The Group’s key risk profile has been regularly updated and deliberated at the Audit Committee Meetings during the year.

On Internal Control Process

The Group’s system of internal controls comprises the following key elements:-

• Well-defined organization structure with clear lines of responsibilities and accountability including delegation of duties.• Documented standard operating procedures and policies are regularly reviewed and revised to meet operational needs and

made available and accessible by all employees.• Systematic and regular audits are carried out to ensure compliance of its ISO 9001:2000 Quality Management Systems of

its subsidiary company, Chip Ngai Engineering Works Sdn Bhd.• Centralised human resource function that sets out the policies for recruitment, training and appraisal of the employees within

the Group.• The outsourced internal audit function assists the Audit Committee in discharging its duties in respect of the internal controls

within the Group. • Quarterly Board and Audit Committee Meetings are carried out to review and asses the overall performance and internal

controls of the Groups.• Adequate reports are generated on a consistent basis for reviews on the operational and financial performance of the Group.• Regular operation and management meetings were held and attended by the Managing Director. Executor Directors and

departmental heads to discuss and resolve business and operational issues.

Internal Audit Function

The Group’s internal audit functions is outsourced to an independent consulting firm which reviews the Group’s system of internalcontrol and provides the Audit Committee with the assurance on the adequacy and effectiveness of the system of internal control.The audit reviews of the Group’s active operations were carried out based on the Audit Plan approved by the Audit Committee. Thefindings and audit recommendations were communicated to the management. The outsourced internal audit function provides theAudit Committee with periodic internal audit reports highlighting observations, recommendation and management action plan toimprove the system of internal control. Regular follow up audits were carried out to ensure that the remedial actions in respect ofinternal control deficiencies, highlighted in the internal audit reports have been adequately addressed by the management. Duringthe financial year ended 31 December 2008, internal audit reviews were focused on human resource management in particular aswell as follow up on state of implementations of audit recommendation of previous audit reviews.

Conclusion

The system of internal control, comprising the risk management framework, management processes, monitoring and reviewprocesses are considered appropriate for the Group’s business operations. There were no material losses incurred during thefinancial year as a result of weaknesses in the Group’s system of internal control. The Board together with the management willcontinue to take preventive measures and to take appropriate actions to further enhance the Group’s system of internal control.

The Statement on Internal Control was made in accordance with a resolution of the Board at a meeting held on 8 April 2009.


STATEMENT ONINTERNAL CONTROL


CHAIRMAN’S STATEMENT

Dear Shareholders,

On behalf of the Board of Directorsof CN Asia Corporation Bhd(“CNASIA”), I am pleased topresent you with our Annual Reportand Audited Financial Statementsfor the financial year ended31 December 2008.

FINANCIAL REVIEW

During the financial year under review, CNASIA registered a slightlylower turnover of RM28.7 million as compared to a turnover of RM29.3million in the previous financial year. The Group’s profit before taxationwas lower at RM683,495, representing 25.7% decrease over the year2007 mainly due to losses contributed by the new subsidiary company,namely Zhuhai CN Engineering Works Co., Ltd (“Zhuhai CN”) ofRM165,447 and the recognition of the unrecorded sum of RM216,797as a result of an out of court settlement as disclosed in Note 34 to theFinancial Statements of this Annual Report.

DIVIDEND

The Board does not propose any payment of dividend for thefinancial year ended 31 December 2008.

CORPORATE DEVELOPMENTS

During the year, CNASIA’s wholly-owned subsidiary, Chip NgaiEngineering Works Sdn Bhd (“CNEW”) has fully paid up the registered capital of USD 300,000, representing 100%shareholding in Zhuhai CN, a company incorporated in People’s Republic of China. Zhuhai CN has commenced itsoperation during the fourth quarter of year 2008 and hasregistered a total turnover of RM292,427 with a loss aftertaxation of RM165,447 during the financial year ended 31 December 2008.

INDUSTRY TREND AND PROSPECTS

The global financial crisis in 2008 is expected to dampen thegrowth prospects for all countries, followed by financial distressof many established organisations throughout the world.Consequently, over the near to middle term, there will besignificant curtailment of demand in the oil and gas,petrochemical, power and other industries for integratedengineering and fabrication services and products.Furthermore, the continued depressed price of crude oil isexpected to further reduce new oil and gas activities in both theupstream and downstream sectors.

For the year under review, revenue from fabrication ofunderground storage tanks and pressure vessels haveincreased by 61% from RM14.1 million in 2007 to RM22.7million in 2008. However, revenue from fabrication of roadtankers had reduced to RM1.3 million, representing 85%reduction in turnover over the year 2007. This was mainly dueto constraints on the availability of capital to finance the roadtanker projects in a neighbouring country.

However, for the immediate future, we believe that there will stillbe sufficient business opportunities arising from projects whichwere planned earlier and which will not be deferred orcancelled. Our strategy will be to target these activities, focuson our traditional customers and intensify efforts to seek newcustomers. On a bright note, we expect that Malaysian andIndonesian demand for underground storage tanks will bemaintained and stabilized.

Considering the adverse effect from the global financialmeltdown, CNASIA will continue to undertake various preventiveand cost control measures to mitigate these effects. Barringany unforeseen circumstances, the Directors are cautiouslyoptimistic that CNASIA’s performance will be at least maintainedfor the ensuing financial year.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to express my greatappreciation to the management and staff, at all levels for theirdedication, commitment and untiring contributions to the Group.

I would also like to take this opportunity to express my sinceregratitude to my fellow Board members for their valued counseland continuing support for the past year.

Lastly, I would like to thank our shareholders, bankers,customers, suppliers, advisors, business associates, therelevant authorities and government agencies for theircontinuous support to the Group.

DATO’ HILMI BIN MOHD NOORCHAIRMAN

15 April 2009


CHAIRMAN’S STATEMENT



ANNUAL REPORT 2008 CN ASIA Corporation Bhd(399442-A)

FINANCIAL STATEMENTS24 Directors’ Report28 Statement by Directors28 Statutory Declaration29 Independent Auditors’ Report to the Members31 Consolidated Balance Sheet32 Consolidated Income Statement33 Consolidated Statement of Changes in Equity34 Consolidated Cash Flow Statement

36 Balance Sheet 37 Income Statement38 Statement of Changes in Equity39 Cash Flow Statement40 Notes to the Financial Statements

The directors hereby submit their report together with the audited financial statements of the Group and of the Company for thefinancial year ended 31 December 2008.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and providing management services. The principal activities of thesubsidiary companies are disclosed in note 10 to the financial statements. There have been no significant changes in the nature ofthese activities during the financial year.

RESULTS Group Company

RM RM

Profit/(Loss) for the year after taxation 689,143 (65,275)

DIVIDENDS

Since the end of the previous financial year, the Company has paid a final tax exempt dividend of 0.5 sen per ordinary share of RM1 each amounting to RM226,913 in respect of the financial year ended 31 December 2007.

The Directors do not propose any dividend payment for the current financial year.

ISSUES OF SHARES OR DEBENTURES

The Company has not issued any shares or debentures during the financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.

BAD AND DOUBTFUL DEBTS

Before the income statement and balance sheet of the Group and the Company were made out, the directors took reasonable stepsto ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts andare satisfied that all known bad debts had been written off and that adequate provision had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would render the amount written off as bad debtsor provision for doubtful debts in the financial statements of the Group and the Company inadequate to any substantial extent.


DIRECTORS’ REPORT

CURRENT ASSETS

Before the income statement and balance sheet of the Group and the Company were made out, the directors took reasonable stepsto ascertain whether any current assets, other than debts, were unlikely to realise their values in the ordinary course of businessas shown in the accounting records of the Group and the Company and to the extent so ascertained no current assets were requiredto be written down as they are expected to realise their values as shown in the accounting records.

At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the currentassets in the financial statements of the Group and the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existingmethod of valuation of assets or liabilities in the financial statements of the Group and the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

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

(i) any charge on the assets of the Group and the Company that have arisen since the end of the financial year which securesthe liabilities of any other person; or

(ii) any contingent liability in respect of the Group and the Company that have arisen since the end of the financial year.

No contingent liability or other liability of the Group and the Company has become enforceable, or is likely to become enforceablewithin the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantiallyaffect the ability of the Group and the Company to meet their obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financialstatements of the Group and the Company that would render any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and the Company for the financial year were not, in the opinion of the directors,substantially affected by any item, transaction or event of a material and unusual nature.

EVENT SUBSEQUENT TO BALANCE SHEET DATE

There have not arisen since the end of the financial year and the date of this report any item, transaction or event of a material andunusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and theCompany for the financial year in which this report is made.


DIRECTORS’ REPORT

DIRECTORS

The directors who held office since the date of the last report are:-

DATO’ HILMI BIN MOHD. NOORHO CHENG SANCHONG YING CHOYAB. RAZAK BIN IDRISARIFFIN BIN KHALID

In accordance with the Company’s Articles of Association, Mr. HO CHENG SAN and Mr. CHONG YING CHOY retire from the Boardat the forthcoming Annual General Meeting and being eligible, offer themselves for re-election.

DIRECTORS’ INTEREST

According to the register of directors’ shareholdings, the directors held office at the end of the financial year and their beneficialinterests in the ordinary shares of the Company and its related corporations are as follows: -

Ordinary Shares of RM1 eachBalance at Balance at

01.01.08 Bought Sold 31.12.08

Ordinary shares of RM1 each inCN ASIA CORPORATION BHD.

Direct interest:HO CHENG SAN 14,622,385 - - 14,622,385

Indirect interest:HO CHENG SAN 2,619,759 - - 2,619,759

The Directors who have substantial interest in the shares of the Company are also deemed to have interest in the shares of therelated companies to the extent the Company has an interest.

The other directors in office at the end of the financial year do not have any interest in the ordinary shares of the Company and itsrelated corporation.

The Director who has substantial interests in the shares of the Company is deemed interested in the shares of the relatedcorporation to the extent of the Company has an interest.


DIRECTORS’ REPORT

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangement subsisted to which the Company is a party, with the object or objectsof enabling directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company orany other body corporate.

Since the end of previous financial year, none of the director of the Company has received or become entitled to receive a benefit(other than a benefit included in the aggregate amount of emoluments received or due receivable by the directors shown in thefinancial statements or the fixed salary of a full-time employee of the company) by reason of a contract made by the Company ora related corporation with the director or with a firm of which the director is a member, or with a company in which the director hasa substantial financial interest.

AUDITORS

The auditors, Messrs CK & Associates, have indicated their willingness to continue in office.

On behalf of the Board

HO CHENG SAN

ARIFFIN BIN KHALID

Kuala LumpurDated : 8 April 2009


DIRECTORS’ REPORT

We, HO CHENG SAN and ARIFFIN BIN KHALID being two of the directors of CN ASIA CORPORATION BHD., do hereby state onbehalf of the directors that, in our opinion, the accompanying financial statements together with the related notes thereto are drawnup in accordance with applicable approved accounting standards in Malaysia so as to give a true and fair view of the financialposition of the Group and of the Company as at 31 December 2008 and of their results, changes in equity and cash flow of theGroup and of the Company for the financial year ended on that date.

Signed at Kuala Lumpur this 8th day of April 2009

On behalf of the Board

HO CHENG SAN

ARIFFIN BIN KHALID

I, HO CHENG SAN (NRIC No. 531215-10-6199), being the director primarily responsible for the accounting records and financialmanagement of CN ASIA CORPORATION BHD., do solemnly and sincerely declare that the accompanying financial statementstogether with the related notes thereto are to the best of my knowledge and belief, correct and I make this solemn declarationconscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared at Kuala Lumpur in the Federal Territorythis 8th day of April 2009

HO CHENG SANBefore me,

MOHD RADZI BIN YASIN (W.327)Commissioner for Oaths


STATEMENT BY DIRECTORS(PURSUANT TO SECTION 169 (15) OF THE COMPANIES ACT, 1965)

STATUTORY DECLARATION(PURSUANT TO SECTION 169 (16) OF THE COMPANIES ACT, 1965)

Report on the Financial Statements

We have audited the financial statements of CN ASIA CORPORATION BHD., which comprise the balance sheets as at 31 December2008 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements ofthe Group and of the Company for the year then ended and a summary of accounting policies and other explanatory notes, as setout on pages 31 to 74.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewith approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financialstatements, whether due to fraud and error. In making those risk assessments, we consider internal control relevant to theCompany’s preparation and fair presentation of the financial statements in order to design audit procedures that are in appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Anaudit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimatesmade by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and theCompanies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at31 December 2008 and of their financial performance and cash flows for the 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 to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

b) We have considered the accounts and auditors’ report of all the subsidiaries of which we have not acted as auditors, which are indicated in note 10 to the financial statements.


INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF CN ASIA CORPORATION BHD.

c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements arein form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations as required by us for those purposes.

d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made underSection 174(3) of the Act.

Other Matters

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

CK & ASSOCIATES CHONG CHOONG KONGAF: 1598 No: 2226/01/10 (J)Chartered Accountants Partner

Kuala Lumpur8 April 2009


INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF CN ASIA CORPORATION BHD.

2008 2007NOTE RM RM

ASSETS

Non current assetsProperty, plant and equipment 5 25,456,537 24,751,662Prepaid land lease payments 6 6,912,243 6,995,523Intangible assets 7 213,072 88,783Investment property 8 380,000 380,000 Capital work-in-progress 9 323,913 1,871,501Interest in associated company 11 21,754 31,444Goodwill on consolidation 12 136,126 136,126

33,443,645 34,255,039Current assets

Inventories 13 8,288,743 8,628,713 Trade receivables 14 6,966,107 11,023,145Other receivables,deposits and prepayment 15 614,684 563,549Tax assets 17 62,682 62,682Cash and bank balances 2,625,654 1,383,872

18,557,870 21,661,961

TOTAL ASSETS 52,001,515 55,917,000

EQUITY AND LIABILITIES

Equity attributable to equity holders of the CompanyShare capital 18 45,382,500 45,382,500Reserves 19 (8,179,496) (8,678,369)

TOTAL EQUITY 37,203,004 36,704,131

Non current liabilitiesDeferred taxation 20 607,900 615,100Hire purchase payables 21 982,329 1,765,347

1,590,229 2,380,447

Current liabilitiesAmount owing to customers for contract works 22 - 855,419Trade payables 23 6,926,187 6,898,756Other payables and accruals 24 346,768 298,586Bank borrowings 25 5,151,544 8,002,636Hire purchase payables 21 783,783 777,025

13,208,282 16,832,422

TOTAL LIABILITIES 14,798,511 19,212,869

TOTAL EQUITY AND LIABILITIES 52,001,515 55,917,000

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


CONSOLIDATED BALANCE SHEETAS AT 31 DECEMBER 2008

2008 2007NOTE RM RM

Revenue 26 28,680,784 29,275,086Cost of sales 27 (24,256,350) (24,349,861)Gross profit 4,424,434 4,925,225Other operating income 278,697 189,073Selling and distribution costs (206,250) (137,970)Administrative expenses (3,111,321) (2,910,375)Other operating expenses (116,671) (437,429)Profit/(Loss) from operations 1,268,889 1,628,524Finance costs (575,879) (714,585)Share of results of associated company (9,515) 6,514Profit before taxation 28 683,495 920,453Taxation 29 5,648 7,200Profit after taxation 689,143 927,653

Attributable to shareholders 689,143 927,653

Basic earnings per ordinary share (sen) 30 1.52 2.04



CONSOLIDATED INCOME STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

Share Share Revaluation Translation AccumulatedCapital Premium Reserve Reserve Losses Total

RM RM RM RM RM RM

Balance at 1 January 2007 45,382,500 3,491,965 630,860 - (13,501,934) 36,003,391

Final tax exempt dividend of0.5 sen per ordinary share - - - - (226,913) (226,913)

Net profit for the financial year - - - - 927,653 927,653

Balance at 31 December 2007 45,382,500 3,491,965 630,860 - (12,801,194) 36,704,131

Foreign exchange translationdifferences - - - 36,643 - 36,643

Final tax exempt dividend of0.5 sen per ordinary share - - - - (226,913) (226,913)

Net profit for the financial year - - - - 689,143 689,143

Balance at 31 December 2008 45,382,500 3,491,965 630,860 36,643 (12,338,964) 37,203,004



CONSOLIDATED STATEMENT OFCHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

Group2008 2007

RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 683,495 920,453

Adjustment for:-

Amortisation of intangible assets 63,133 44,391Amortisation of prepaid land lease payments 83,280 83,280Bad debts written off 28,000 -Depreciation of property, plant and equipment 1,280,999 1,303,582Gain on foreign exchange - unrealised (79,325) -Interest expenses 523,908 657,183 Interest income - (40,269)Loss on disposal of property, plant and equipment - 284,794Loss on foreign exchange - unrealised - 20,270Property, plant and equipment written off 1,602 -Revaluation deficit - 15,364Share of results of associated company 9,515 (6,514)Translation adjustment 36,643 -Write down of inventories 19,000 19,000

Operating profit before working capital changes 2,650,250 3,301,534

Decrease/(Increase) in inventories 320,970 (1,702,960)Decrease/(Increase) in trade and other receivables 4,061,904 (6,801,320)(Decrease)/Increase in amount owing to customer

for contract work (855,419) 1,437,351Increase in trade and other payables 70,937 1,411,286

Cash generated from/(used in) operations 6,248,642 (2,354,109)Interest paid (523,908) (657,183)Tax paid (1,377) -

Net cash generated from/(used in) operating activities carried down 5,723,357 (3,011,292)


CONSOLIDATED CASH FLOW STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

Group2008 2007

RM RM

Net cash generated from/(used in) operating activities brougth down 5,723,357 (3,011,292)

CASH FLOWS FROM INVESTING ACTIVITIES

Capital work-in-progress incurred (230,524) (651,843)Recovery of capital work-in-progress 345,010 -Interest income - 40,269Proceeds from disposal of property, plant

and equipment - 644,669Proceeds from refinancing of property, plant

and equipment - 740,000Purchase of intangible assets (187,422) -Purchase of property, plant and equipment (554,374) (675,395)

Net cash (used in)/generated from investing activities (627,310) 97,700

CASH FLOWS FROM FINANCING ACTIVITIES

Dividend paid (226,913) (226,913)Proceeds from trade financing facilities 7,776,000 13,395,000Repayments of hire purchase payables (776,260) (330,623)Repayments of trade financing facilities (9,848,000) (12,421,000)Withdrawal of pledged fixed deposits - 1,123,894

Net cash (used in)/generated from financing activities (3,075,173) 1,540,358

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 2,020,874 (1,373,234)

CASH AND CASH EQUIVALENTSBROUGHT FORWARD (2,057,764) (684,530)

CASH AND CASH EQUIVALENTSCARRIED FORWARD (36,890) (2,057,764)

Note:

Cash and Cash Equivalents:-

Cash and bank balances 2,625,654 1,383,872Bank overdraft (2,662,544) (3,441,636)

(36,890) (2,057,764)



CONSOLIDATED CASH FLOW STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

2008 2007NOTE RM RM

ASSETS

Non current assetsInvestments in subsidiary companies 10 28,298,215 28,298,215

Current assetsOther receivables,deposits and prepayment 15 1,000 1,000Amount owing by subsidiary companies 16 20,371,829 20,693,049Tax assets 17 26,409 26,409Cash and bank balances 8,608 5,350

20,407,846 20,725,808

TOTAL ASSETS 48,706,061 49,024,023

EQUITY AND LIABILITIES

Equity attributable to equity holders of the CompanyShare capital 18 45,382,500 45,382,500Reserves 19 3,310,129 3,602,317

TOTAL EQUITY 48,692,629 48,984,817

Current liabilitiesOther payables and accruals 24 13,432 39,206

13,432 39,206

TOTAL LIABILITIES 13,432 39,206

TOTAL EQUITY AND LIABILITIES 48,706,061 49,024,023



BALANCE SHEETAS AT 31 DECEMBER 2008

2008 2007NOTE RM RM

Revenue 26 60,000 519,794

Administrative expenses (123,823) (128,693)

(Loss)/Profit from operations (63,823) 391,101

Finance costs (75) (78)

(Loss)/Profit before taxation 28 (63,898) 391,023

Taxation 29 (1,377) -

(Loss)/Profit after taxation (65,275) 391,023



INCOME STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

Share Share AccumulatedCapital Premium Losses Total

RM RM RM RM

Balance at 1 January 2007 45,382,500 3,491,965 (53,758) 48,820,707

Final tax exempt dividend of0.5 sen per ordinary share - - (226,913) (226,913)

Net profit for the financial year - - 391,023 391,023

Balance at 31 December 2007 45,382,500 3,491,965 110,352 48,984,817

Final tax exempt dividend of0.5 sen per ordinary share - - (226,913) (226,913)

Net loss for the financial year - - (65,275) (65,275)

Balance at 31 December 2008 45,382,500 3,491,965 (181,836) 48,692,629



STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

2008 2007RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/Profit before taxation (63,898) 391,023

Adjustment for:-Dividend income - (459,794)

Operating loss before working capital changes (63,898) (68,771)(Decrease)/Increase in trade and other payables (25,774) 21,528

Cash used in operations (89,672) (47,243)Tax paid (1,377) -

Net cash used in operating activities (91,049) (47,243)

CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received - 459,794Repayment from/(Advances to) subsidiary companies 321,220 (182,546)

Net cash generated from investing activities 321,220 277,248

CASH FLOWS FROM FINANCING ACTIVITIES

Dividend paid (226,913) (226,913)Net cash used in financing activities (226,913) (226,913)

NET INCREASE IN CASH AND CASH EQUIVALENTS 3,258 3,092

CASH AND CASH EQUIVALENTS BROUGHT FORWARD 5,350 2,258

CASH AND CASH EQUIVALENTS CARRIED FORWARD 8,608 5,350

Note:

Cash and Cash Equivalents:-Cash and bank balances 8,608 5,350



CASH FLOW STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008

1. GENERAL INFORMATION

The Company is a public limited liability company domiciled in Malaysia and incorporated under the Companies Act, 1965 withits Shares listed on the Second Board of Bursa Malaysia Securities Berhad.

The Company’s registered office and principal place of business are located at Lot 7907, Batu 11, Jalan Balakong, 43300 Seri Kembangan, Selangor Darul Ehsan.

2. BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements of the Group and of the Company were authorised for issue in accordance with a Board of Directors’ resolution dated 8 April 2009.

The financial statements of the Group and the Company comply with the provisions of the Companies Act 1965 andapplicable Financial Reporting Standards (“FRS”) issued by the Malaysian Accounting Standards Board (“MASB”).

During the financial year, the Company adopted the following new and revised FRSs, Amendment to FRS and Issues Committee (“IC”) Interpretations issued by the MASB that are effective for financial periods beginning on or after 1 July2007:

FRS 107 Cash Flow StatementsFRS 111 Construction ContractsFRS 112 Income TaxesFRS 118 RevenueFRS 119 Employee Benefits - Actual Gains and Losses, Group Plans and DisclosuresFRS 120 Accounting for Government Grant and Disclosure of Government AssistanceAmendments to The effects of Changes in Foreign Exchange Rates

FRS 121 - net investment in foreign operation FRS 126 Accounting and Reporting by Retirement Benefit PlansFRS 129 Financial Reporting In Hyperinflationary EconomiesFRS 134 Interim Financial ReportingFRS 137 Provision, Contingent Liabilities and Contingent Assets

IC interpretation 1 Changes in Existing Decommissioning, Restoration and Similar LiabilitiesIC interpretation 2 Members’ Shares in Co-operative Entities and Similar InstrumentsIC interpretation 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation FundsIC interpretation 6 Liabilities arising from Participating in a Specific Market-Waste Electrical and Electronic EquipmentIC interpretation 7 Applying the Restatement Approach under FRS129 Financial Reporting in Hyperinflationary EconomiesIC interpretation 8 Scope of FRS 2

The adoption of FRS 107, 112, 118, 119, 134, 137 and Amendment to FRS 121 does not have any significant financialimpact on the results and the financial position of the Group and of the Company.


NOTES TO THE FINANCIAL STATEMENTS31 DECEMBER 2008

2. BASIS OF PREPARATION (Cont’d)

2.1 Statement of compliance (Cont’d)

The MASB has also issued the following new FRSs and IC interpretations that have not been early adopted in preparing these financial statements:

For financial periods beginning on or after

FRS 4 Insurance Contracts 1 January 2010FRS 7 Financial Instruments: Disclosures 1 January 2010FRS 8 Operating Segments 1 July 2009FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010IC interpretation 9 Reassessment of Embedded Derivatives 1 January 2010IC interpretation 10 Interim Financial Reporting and Impairment 1 January 2010

The adoption of FRS 7, 8 and 139 and IC Interpretation 10 are not expected to have any significant financial impact on the Group and the Company when the standards become effective.

FRS 4, 111, 120, 126, 129 and IC interpretation 1,2,5,6,7,8 and 9 are not relevant to the operations of the Group and of the Company.

By virture of the exemption in paragraph 103AB of FRS 139, the impact of applying FRS 139 on these financial statements upon first adoption of this standard as required by paragraph 30 (b) of FRS 108, Accounting Policies, Changes inAccounting Estimates and Errors is not disclosed.

2.2 Basis of measurement

The measurement bases applied in the preparation of the financial statements of the Group and the Company includedcost, recoverable amount, realisable value, fair value and revalued amount. Estimates are used in measuring these values.

2.3 Functional and presentation currency

These financial statements of the Group and the Company are presented in Ringgit Malaysia (“RM”), which is the Group’sand the Company’s functional currency. All financial information presented in RM has been rounded to the nearest RM,unless otherwise stated.

2.4 Significant accounting estimates and judgements

The preparation of the financial statements of the Group and of the Company requires management to make judgements,estimates and assumptions that affect the application of accounting policies and the reported amount of assets,liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis and arerecognised in the period in which the assumption or estimate is revised.

Significant areas of estimation, uncertainty and critical judgements in applying accounting principals that have significanteffect on the amount recognized in the financial statements are described in the following notes:

2.4.1 Depreciation of property, plant and equipment - property, plant and equipment are depreciated on a straightline basis over the assets’ useful lives. Management estimates the useful lives of these property, plant andequipments to be within 3 to 10 years. Changes in the expected level of usage and technological developmentscould impact the economic useful lives and the residual values of these assets resulting in revision of future depreciation charges.



2. BASIS OF PREPARATION (Cont’d)

2.4 Significant accounting estimates and judgements (Cont’d)

2.4.2 Annual testing for impairment of goodwill, other intangible assets and property, plant and equipment-the Groups’smeasurement of the recoverable amount of cash-generating units are determined based on the value-in-usemethod, which requires the use of cash flow projections provided by the management.

2.4.3 Fair value of investment properties - the measurement of the fair value for investment properties performed bymanagement is based on independent professional valuations with reference to current prices in an active market for similar properties in the same location and condition and subject to similar lease and other contracts.

2.4.4 Deferred tax assets - deferred tax assets are recognised for deductible temporary differences in respect of expenses, unutilised tax losses, unabsorbed industrial building allowances and unabsorbed capital allowances tothe extent that is probable that taxable profit will be available against which the temporary differences can beutilised. Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based on the future financial performance of the Group.

2.4.5 Allowance for doubtful debts - allowance for doubtful debts is made based on assessment, which involvejudgement, on the recoverability of receivables. Provisions are made to receivables where events or circumstances indicate that the carrying amounts may not be recoverable.

2.4.6 Inventories - the saleability of inventories is reviewed by management on a periodic basis. This review involvescomparison of the carrying value of the inventory items with the respective net realisable value. The purpose is to ascertain whether a write down to net realisable value is required to be made.

3. SIGNIFICANT ACCOUNTING POLICIES

3.1 Basis of consolidation

3.1.1 Subsidiary companies

The financial statements of subsidiary companies acquired or disposed off during the financial year are includedin the consolidated financial statements based on the purchase method from the effective date of acquisition orup to the effective date of disposal respectively. The assets, liabilities and contingent liabilities assumed of theacquired subsidiary are measured at their fair values at the date of acquisition and these values are reflected inthe consolidated balance sheet.

Any excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, arenot owned by the Company, whether directly or indirectly through subsidiary companies, are presented in theconsolidated balance sheet and statement of changes in equity, separately from equity attributable to the equityshareholders of the Company. Minority interests presented on the face of the consolidated income statement asan allocation of the total profit or loss for the year between minority interests and equity shareholders of the Company.

Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary company, theexcess, and any further losses applicable to the minority, are charged the Group’s interest except to the extent that the minority has a binding obligation to, and is able to, make additional investment to cover the losses. If thesubsidiary company subsequently reports profits, the Group’s interest is allocated all such profits until theminority’s share of losses previously absorbed by the Group has been recovered.



3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

3.1 Basis of consolidation (Cont’d)

3.1.2 Associated company

Associated company is accounted for in the consolidated financial statements using the equity method unless it isclassified as held for sale (or included in a disposal group that is classified as held for sale). The consolidated financial statements include the Group’s share of the income and expenses of the associates, after adjustmentsto align the accounting policies with those of the Group, from the date that significant influence commences untilthe date that the Group has an obligation or has made payments on behalf of the investee.

When the Group’s share of losses exceeds its interest in an associated company, the carrying amount of that interest (including any long-term investment) is reduced to nil and the recognition of further losses is discontinuedexcept to the extent that the Group has an obligation or has made payments on behalf of the investee. Should theassociated company subsequently report profits, the Group will only resume to recognise its share of profits after its share of profits equals to the share of losses previously not recognised.

Where the audited financial statements of the associated company are not co-terminous with those of the Group, the share of results is based on a limited review on the financial statements performed by auditors of the associate made up to the financial year end of the Group.

3.1.3 Changes in group composition

Where a subsidiary issues new equity shares to minority interest for cash consideration and the issue price h a sbeen established at fair value, the reduction in the Group’s interest in the subsidiary is accounted for as a disposal of equity interest with the corresponding gain or loss recognised in the income statement.

When the Group acquires a subsidiary’s share from the minority for cash and the consideration has been established at fair value, the accretion of the Group’s interests in the subsidiary is accounted for as a purchaseof equity interest for which the acquisition accounting method is applied.

The Group treats all other changes in the group composition as equity transaction between the Group and theminority. Any difference between the Group’s share of net assets before and after the change, and anyconsideration received and paid, is adjusted against Group reserves.

3.1.4 Transactions eliminated on consolidation

Intra-group balances and unrealised gains and losses arising from intra-group transactions are eliminated in full.Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent the Group has interests. Unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment.




3.2 Foreign currency

3.2.1 Foreign currency transactions

Transactions in currencies other than the entity’s functional currency (‘foreign currencies’) are translated into therespective functional currencies of the Group at exchange rates prevailing at the date of transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currencies at the exchange rate ruling at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at the fair value are retranslated to the functional currencies at the exchange rate prevailing at the date that the fair value was determined. Foreign currency differences arising on retranslation arerecognised in the income statements. Non-monetary items that are measured at the historical cost in a foreigncurrency are not retranslated.

3.2.2 Operations denominated in functional currencies other than Ringgit Malaysia

The assets and liabilities of operations in functional currencies other than RM, including goodwill and fair value adjustment arising on acquisition, are translated to RM at exchange rates at the balance sheet date, except for goodwill and fair value adjustments arising from business combinations before 1 January 2006 which are reportedusing exchange rates at the dates of the acquisitions. The income and expenses of foreign operations, excludingoperations in hyperinflationary economies, are translated to RM at exchange rates at the dates of the transactions. On disposal, accumulated translation differences are recognised in the consolidated income statement as part ofthe gain or loss on disposal.

3.2.3 Net investment in foreign operations

Exchange differences arising from monetary items form part of the Company’s net investment in foreignoperations are recognised in equity and transfer to retained earnings upon disposal of the investment.

3.3 Property, plant and equipment

Property, plant and equipment are stated at cost or at valuation in accordance in the Groups revaluation policy stated innote 3.6 below, less accumulated depreciation and accumulated impairment losses, if any.

Depreciation of leasehold buildings is calculated on the straight line method over the remaining lease period. Depreciation of all other property, plant and equipment are calculated to write off the cost of property, plant and equipment on the reducing balance method over the estimated useful lives of the assets concerned. The principal annual rates used for this purpose are as follows:-




3.3 Property, plant and equipment (Cont’d)

Building Over the remaining period of lease rangedfrom 88 to 92.5 years

Plant and machinery- Heavy machinery 5%- Others 10%Renovation, electrical installation,furniture, fitting and equipment- Furniture and fittings 5%- Others 10%Motor vehicles 20%

The residual values, useful lives and depreciation method are reviewed at each financial 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 benefits embodied in the items of property and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expectedfrom its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amount isrecognised in the income statement.

Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use.

3.4 Prepaid land lease payments

For the purpose of leases of land, the land and buildings elements are considered separately for the purpose of leaseclassification and these leases are classified as operating or finance leases in the same way as leases of other assets.

The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and building are allocated between the land and the buildings elements in proportion to the relative fair values for leasehold interest in the land element and the buildings element of the lease at the inception of the lease.

Leasehold land that normally has indefinite economic life and where the lease does not transfer substantially all the risks and rewards incidental to ownership is treated as an operating lease. The lump-sum upfront lease payment made onentering into or acquiring leasehold land are accounted for as prepaid lease payments and are amortised over the leaseterm in accordance with the pattern of benefits provided.

The building element is classified as a finance or operating lease. If the lease payment cannot be allocated reliably betweenthese two elements, the entire lease is classified as a finance lease, unless it is clear that both elements are operating leases, in which case the entire lease is classified as an operating lease.

The Company has previously revalued its leasehold land and has retained the unamortised revalued amount as thesurrogate carrying amount of prepaid land lease payments in accordance with the transitional provisions in FRS 117. Suchprepaid lease payments is amortised over the lease term of 89 to 99 years.




3.5 Intangible assets

3.5.1 Goodwill on consolidation

Goodwill arises on the acquisition of subsidiaries and associates. The goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Goodwill is measured at cost and is not amortised but tested for impairment at least annually or more frequently when there is objective evidence of impairment. Goodwill is allocated to cashgenerating units and is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment. The entire carrying amount of the investment is tested for impairment when there is objective evidence of impairment.

3.5.2 Other intangible assets

Expenditure incurred to develop new products is capitalised when the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to completeand its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditure which does not meet the criteria is expensed when incurred.

Development cost consists of cost of patent, development cost and pre-production expenditure which will giverise to future economic benefits over several accounting periods.

These expenditures are amortised on a straight line basis over a period of 5 years from the year of commencement of commercial production of related products or the expected useful life, whichever is shorter.

3.6 Revaluation of buildings

It is the Group’s policy to appraise the buildings at least once in every 5 years based on valuations carried out byindependent professional valuers on the open market value basis. A surplus arising therefrom is credited to revaluationreserve. However, a surplus will be recognised as revenue to the extent that it reverses a revaluation deficit of the same asset previously recognised as an expense. A deficit arising thereform is recognised as an expense. However, a deficitwill be set-off against any related revaluation surplus to the extent that the deficit does not exceed the amount held inrevaluation reserve in respect of the same asset.

On disposals of these properties, any surplus in revaluatiion reserve relating to these assets will be transferred to retained earnings.

3.7 Investment properties

Investment properties are properties which are held either to earn rental income or for capital appreciation or for both.Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investmentproperties are stated at fair value.




3.7 Investment properties (Cont’d)

Fair values are based on market values, being the estimated amount for which a property could be exchanged on thedate of the valuations between a willing buyer and a willing seller in an arm’s length transaction. Fair values of investmentproperties are determined either by independent professional valuers or by management based on their judgement and estimates. Management’s estimates have been made with reference to current prices in an active market for similar properties in the same location and condition and subject to similar lease and other contracts.

Investment properties are derecognised when they have been disposed off or when the investment property ispermanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on theretirement or disposal of an investment property is recognised in the income statement.

3.8 Capital work in progress

Capital work in progress consists of expenditure incurred on construction of property, plant and equipment which take asubstantial period of time to be ready for their intended uses.

Capital work-in-progress is stated at cost during the period of construction. No depreciation is provided on capital work-in-progress and upon completion of the construction, the costs will be transferred to property, plant and equipment.

3.9 Investment in subsidiary company

A subsidiary company is a company in which a group has power to exercise control over the financial and operating policies so as to obtain benefits from it activities.

Investment in subsidiary companies, which are eliminated on consolidation are stated at cost less impairment losses, ifany, in the Company’s financial statements. An impairment loss is recognised when there is and impairment in the valueof the investments determined on and individual basis and is charged to the income statement as an expense. Thedifference between net disposal proceeds and its carrying amount is charged or credited to income statement upondisposal of the investment.

3.10 Investment in associated company

An associated company is defined as a company, not being a subsidiary company in which the Company has a long term equity interest and where it exercise significant influence over the financial and operating policies.

Investments in associated companies are stated at cost, less impairment losses, if any, in the Company’s financialstatements.

3.11 Inventories

Inventories comprising raw materials, work-in-progress and finished goods are stated at the lower of cost and net realisable value after due allowances are made for slow moving and obsolete inventories.

Cost is principally determined on a first-in-first-out basis. Cost of finished goods and work-in-progress includes the cost of raw materials, direct labour and an appropriate proportion of production and other overheads.




3.12 Property, plant and equipment under hire purchase arrangements

Property, plant and equipment acquired under hire purchase arrangements are capitalised in the financial statements andare depreciated in accordance with the policy set out on 3.3 above. The corresponding outstanding obligations due under the hire purchase after deducting financial expenses are included as liabilities in the financial statements. Finance expenses are charged to the income statement based on constant periodic rate of interest on the remaining hire-purchase liabilities.

3.13 Amount owing by/ (to) customers for contract works

Amount owing by customers for contract works is the net amount of costs incurred plus recognised profits less the sumof recognised losses and progress billings for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceed progress billings.

Amount owing to customers for contract works is the net amount of costs incurred plus recognised profits less the sum of recognised losses and progress billings for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less recognised losses).

Costs include direct materials, labour, sub-contract costs and attributable contract overheads. Allowance is made for all expected losses on the contract works.

3.14 Provision for liabilities

Provision for liabilities are recognised when the Company has present obligations as a result of past event and it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliableestimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

3.15 Foreign currencies conversion

Transactions in foreign currencies are converted into Ringgit Malaysia at the rates of exchange ruling at the time of thetransaction dates or at contracted rates, where applicable. Monetary assets and liabilities in foreign currencies at the balance sheet date are converted into Ringgit Malaysia at rates of exchange ruling at the date unless hedged by forward foreign exchange contracts are used. All exchange differences arising from the settlement of foreign currencytransactions and from the conversion of foreign currency monetary assets and liabilities are included in the income statement in the period in which they arise.

The principal closing rated used in translation of foreign currency amounts are as follows:

2008 2007RM RM

1 Euro Dollar 4.8757 4.87111 Singapore Dollar 2.4067 2.30331 Renminbi 0.5076 0.45341 United States Dollar 3.4638 3.3115




3.16 Revenue recognition

Revenue from sales of goods and services are recognised upon the delivery of products and customer’s acceptance, and if any, performance of services. Revenue is recognised when risks and rewards of ownership have been transferredto the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can beestimated reliably, and there is no continuing management involvement with the goods.

Revenue from contract work-in-progress is recognised on the percentage of completion method when the outcome of thecontracts can be reliably estimated. The percentage of completion basis is computed based on proportion of which the contract costs incurred for work performed to-date bear to the estimated total contract costs for each contract respectively.

3.17 Income taxes

Income tax on the profit or loss for the year comprises current and deferred tax and any adjustments to tax payable inrespect of previous year.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measuredusing the tax rates that have been enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is not recognisedif the temporary difference arises from goodwill or negative goodwill or from initial recognition of an asset or liability ina transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nortaxable profit. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will beavailable against which the asset can be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the year when the asset is realised or the liabilitysettled, based on tax rates that have been enacted or substantially enacted at the balance sheet date. It is recognisedin the income statement, except when it arises from a transaction which is recognised directly in equity, in which casethe deferred tax is also charged or credited directly in equity.

3.18 Impairment of assets

The carrying amount of the Company’s assets other than inventories, assets arising from construction contracts,deferred tax asset and financial assets (other than investment in subsidiaries, associates and joint ventures) are reviewedfor impairment where there is an indication that the assets might be impaired. Impairment is measured by comparing thecarrying values of the assets with their recoverable amounts and the impairment loss is recognised whenever therecoverable amount is less than the carrying amount of the asset.

The impairment loss is charged to the income statement immediately except for the impairment on a revalued assetwhere the impairment loss is recognised directly against the revaluation surplus account to the extent of the surpluscredited from the previous revaluation for the same assets with the excess of the impairment loss charged to the income statement. Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the assets that would have been determined had noimpairment loss been recognised. The reversal is recognised in the income statement immediately except for the reversal of an impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation increaseand credited to the revaluation surplus account of the same asset.




3.19 Employee benefits

3.19.1 Short term benefits

Wages, salaries, social security contributions and bonuses are recognised as an expense in the year in which the associated services are rendered by employees of the Company. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increasetheir entitlement to future compensated absences, and short term non-accumulating compensated absencessuch as sick leave are recognised when the absences occur.

3.19.2 Defined contribution plans

As required by law, companies in Malaysia make contributions to the state pension scheme, the EmployeeProvident Fund. Such contributions are recognised as an expense in the income statement as incurred.

3.20 Financial Instruments

Financial instruments are classified as assets, liabilities or equity in accordance with the substance of the contractualarrangement. Interest, dividends, losses and gains relating to financial instruments classified as assets or liabilities arereported as expense or income. Distributions to holders of financial instruments classified as equity are charged directlyto equity. Financial instruments are offset when the Company has a legally enforceable right to offset and intends eitherto settle on a net basis or to realise the asset and settle the liability simultaneously.

The recognised financial instruments comprise other non-current investments, cash and cash equivalents, trade andother receivables, trade and other payables, bank borrowings and ordinary shares. These instruments are recognised in the financial statements when a contract or contractual arrangement has been entered into with the counter-parties.

The unrecognised financial instruments comprise financial guarantee given to financial institution and third parties for banking and credit facilities granted to the subsidiaries. The financial guarantees would be recognized as liabilities whenobligations to pay the counter-parties are assessed as being probable.

3.20.1 Receivables

Receivables are carried at anticipated realisable value. Known bad debts are written off and due allowances are made for any debts which considered to be doubtful of collection.

3.20.2 Cash and cash equivalents

Cash and cash equivalents comprise cash, bank balances, bank overdraft, and highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of change in value.

3.20.3 Share capital

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.




3.20 Financial Instruments (Cont’d)

3.20.4 Bank borrowings

Bank borrowings include bank overdrafts and bankers’ acceptances are stated at the amount of proceedsreceived, net of transaction costs.

3.20.5 Payables

Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractualobligation to deliver cash or financial assets to another entity.

3.21 Segment reporting

Segment reporting is presented for enhanced assessment of the Group’s risks and returns. Business segments provide products or services that are subject to risks and returns that are different from those of other business segments. Geographical segments provide products or services within a particular economic environment that is subject to risks and returns that are different from those components operating in other economic environments.

Segment revenue, expense, assets and liabilities are those amounts arising from the operating activities of a segmentthat are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to thesegment. Segment revenue, expense, assets an liabilities are determined before intragroup balances and intragrouptransactions are eliminated as part of the consolidation process, except to the extent that such intragroup balances andtransactions are between Group enterprises within a single segment.

4. PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and providing management services. The principal activities of the subsidiary companies are disclosed in note 10 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

5. PROPERTY, PLANT AND EQUIPMENT

Furniture,GROUP Buildings Plant and Motor fittings and2008 - at valuation machinery vehicles equipment Total

RM RM RM RM RM

Cost/Valuation

Balance at 1.1.08 7,228,000 31,694,310 1,067,041 2,155,039 42,144,390Additions - 462,904 - 91,470 554,374Transferred (note 9) - 1,433,102 - - 1,433,102Written off - (5,180) - - (5,180)Balance at 31.12.08 7,228,000 33,585,136 1,067,041 2,246,509 44,126,686



5. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Furniture,GROUP Buildings Plant and Motor fittings and2008 - at valuation machinery vehicles equipment Total

RM RM RM RM RM

Accumulated depreciation

Balance at 1.1.08 - 15,616,522 610,519 1,165,687 17,392,728Charge for the year 86,048 1,008,533 91,304 95,114 1,280,999Written off - (3,578) - - (3,578)Balance at 31.12.08 86,048 16,621,477 701,823 1,260,801 18,670,149

Net book value 7,141,952 16,963,659 365,218 985,708 25,456,537

2007

Cost/Valuation

Balance at 1.1.07 7,267,883 32,564,064 1,067,041 2,080,092 42,979,080Additions 380,000 573,198 - 74,947 1,028,145Disposals - (1,442,952) - - (1,442,952)Adjustments on revaluation (419,883) - - - (419,883)Balance at 31.12.07 7,228,000 31,694,310 1,067,041 2,155,039 42,144,390

Accumulated depreciation

Balance at 1.1.07 320,917 15,119,352 496,389 1,070,497 17,007,155Charge for the year 83,602 1,010,660 114,130 95,190 1,303,582Disposals - (513,490) - - (513,490)Adjustment on revaluation (404,519) - - - (404,519)Balance at 31.12.07 - 15,616,522 610,519 1,165,687 17,392,728

Net book value 7,228,000 16,077,788 456,522 989,352 24,751,662

NET BOOK VALUEAccumulated Impairment

Cost Valuation depreciation loss 2008 2007RM RM RM RM RM RM

Buildings- valuation - 7,228,000 (86,048) - 7,141,952 7,228,000Plant and machinery 33,585,136 - (16,621,477) - 16,963,659 16,077,788Motor vehicles 1,067,041 - (701,823) - 365,218 456,522Furniture, fittings

and equipment 2,246,509 - (1,260,801) - 985,708 989,35236,898,686 7,228,000 (18,670,149) - 25,456,537 24,751,662



5. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

The buildings were revalued by the Directors based on independent professional valuations on the open market value basis dated 28 December 2007.

Had the revalued assets been carried at cost less accumulated depreciation, the net book value would have been RM12,583,940 (2007: RM12,738,872)

The property, plant and equipment acquired under hire purchase arrangement are as follows: -Group

2008 2007RM RM

CostPlant and machinery 2,532,761 1,099,659Motor vehicles 550,300 815,315

3,083,061 1,914,974Net book valuePlant and machinery 2,341,236 1,022,962Motor vehicles 239,491 402,485

2,580,727 1,425,447

During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM554,374 (2007:RM1,028,145) of which Nil (2007: RM352,750) was acquired by means of hire purchase. Cash payments of RM554,374 (2007: RM675,395) were made to purchase the property, plant and equipment.

The buildings are pledged to licensed banks for banking facilities granted to the Group as mentioned in note 25 to the financial statements.

6. PREPAID LAND LEASE PAYMENTGroup

2008 2007RM RM

Long term leasehold land- At cost:-

At 1 January/31 December 7,162,083 7,162,083

- Accumulated amortisation:-At 1 January 166,560 83,280Amortisation charge for the year 83,280 83,280At 31 December (249,840) (166,560)

At 31 December 6,912,243 6,995,523

The long term leasehold land is pledged to licensed banks for banking facilities as disclosed in Note 25 to the financialstatements.

The leasehold land was revalued in 2007 by independent professional valuers to reflect the market value on open market value basis. As followed by the transitional provision of FRS 117, where the leasehold land had been previously revalued, theunamortised revalued amount of leasehold land is retained as the surrogate cost of prepaid land lease payments and isamortised over the remaining lease term of leasehold land.



7. INTANGIBLE ASSETSGroup

2008 2007RM RM

Development costs- At cost:-

At 1 January 1,147,575 1,147,575Additions 187,422 -At 31 December 1,334,997 1,147,575

- Accumulated amortisation:-At 1 January 1,058,792 1,014,401Amortisation for the year 63,133 44,391At 31 December (1,121,925) (1,058,792)

At 31 December 213,072 88,783

8. INVESTMENT PROPERTYGroup

2008 2007RM RM

Long term leasehold land, at fair valueInvestment property 380,000 380,000

(i) The long term leasehold land of the Group has unexpired lease period of more than 50 years.

(ii) The leasehold land was revalued by the Directors based on independent professional valuers on the open market value basis dated 28 December 2007.

9. CAPITAL WORK-IN-PROGRESSGroup

2008 2007Plant and machinery RM RM- At cost:-

At 1 January 1,871,501 -Additions 230,524 1,871,501Transfer to property, plant and equipment (Note 5) ( 1,433,102) -Recovery (345,010) -At 31 December 323,913 1,871,501

The capital work-in-progress is in respect of plant and machinery under commissioning.

The amount of capital work-in-progress under hire purchase is Nil (2007: RM1,219,658).



10. INVESTMENT IN SUBSIDIARY COMPANIESCompany

2008 2007RM RM

Unquoted shares, at cost 28,298,215 28,298,215

The subsidiary companies are as follows:

EffectiveCountry of equity

Name of Company incorporation interest Principal activity2008 2007

Asia Tank Containers Malaysia 100% 100% Manufacturing, repairing and renting (Malaysia) Sdn. Bhd. (ATC) of transportable containers

for hazardous chemicals

Chip Ngai Engineering Malaysia 100% 100% Manufacturing of tanks and relatedWorks Sdn. Bhd. products, specialised engineering(CNEW) and fabrication works

CN Asia Capital Sdn. Bhd. (CNAC) Malaysia 100% 100% Investment holding

Douwin Sdn. Bhd. (DSB) Malaysia 100% 100% Investment holding

Subsidiary company of CNEW

Zhuhai CN Engineering People’s Republic 100% 100% Manufacturing and trading ofWorks Co., Ltd # of China tanks for specialised industries

# Audited by other firm of chartered accountants

11. INTEREST IN ASSOCIATED COMPANYGroup

2008 2007RM RM

Unquoted shares, at cost 110,301 110,301Share of losses in associated company (88,547) (78,857)

21,754 31,444



11. INTEREST IN ASSOCIATED COMPANY (Cont’d)

The associated company is as follows:

EffectiveCountry of equity

Name of Company incorporation interest Principal activity2008 2007

PICN Engineering Sdn. Malaysia 49% 49% Fabrication and trading ofBhd.(“PICN”) tanks for specialised industries

The summarised financial information of the associated company is as follows:-

Group2008 2007

RM RM

Total assets 50,582 84,431Total liabilities 6,657 20,730Revenue 276,980 817,435(Loss)/Profit for the year (19,776) 13,924

12. GOODWILL ON CONSOLIDATIONGroup

2008 2007RM RM

At cost:-At 1 January/31 December 136,126 136,126

13. INVENTORIESGroup

2008 2007RM RM

At cost:-Raw materials 1,719,746 2,177,240Work-in-progress 3,886,535 3,625,291Finish goods 1,296,465 1,719,183Consumables 910,997 612,999

7,813,743 8,134,713At net realisable value:-Finish goods 570,000 570,000Less: Write down of inventories (95,000) (76,000)

475,000 494,0008,288,743 8,628,713

Finish goods amounting to RM475,000 (2007: RM494,000) are generating rental revenue while available for sale.



14. TRADE RECEIVABLESGroup

2008 2007RM RM

Balance outstanding 9,082,680 13,143,081Less: Allowance for doubtful debts (2,116,573) (2,119,936)

6,966,107 11,023,145

The Group’s normal trade credit term ranges from 30 to 90days.

Included in trade receivables are: -

(i) Retention sums amounting to RM1,733,670 (2007: RM2,797,727) in respect of completed contract works; and

(ii) Amount of Nil (2007: RM16,000) owing by an associated company, PICN.

The currency profile of trade receivables are as follows:Group

2008 2007RM RM

Malaysia Ringgit 3,102,921 5,082,362Euro Dollar 818,914 563,729Singapore Dollar 51,520 235,808United States Dollar 2,992,752 5,141,246

6,966,107 11,023,145

15. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTGroup Company

2008 2007 2008 2007RM RM RM RM

Other receivablesBalance outstanding 125,954 260,654 - -Less: Allowance for doubtful debts - (86,973) - -

125,954 173,681 - -Deposits 166,463 132,778 1,000 1,000Prepayment 322,267 257,090 - -

614,684 563,549 1,000 1,000

The allowance for doubtful debts of RM86,973 has been written off during the financial year.



16. AMOUNT OWING BY SUBSIDIARY COMPANIES

CompanyThis amount is non-trade in nature, unsecured, interest free and has no fixed terms of repayment.

17. TAX ASSETS

Group and CompanyThis is in respect of tax paid in advance to the Inland Revenue Board.

18. SHARE CAPITALGroup and Company2008 2007

RM RM

Authorised:-50,000,000 ordinary shares of RM1 each 50,000,000 50,000,000

Issued and fully paid:- 45,382,500 ordinary shares of RM1 each 45,382,500 45,382,500

19. RESERVESGroup Company

2008 2007 2008 2007RM RM RM RM

DistributableAccumulated losses (12,338,964) (12,801,194) (181,836) 110,352

Non-distributableShare premium 3,491,965 3,491,965 3,491,965 3,491,965Revaluation reserve 630,860 630,860 - -Translation reserve 36,643 - - -

4,159,468 4,122,825 3,491,965 3,491,965(8,179,496) (8,678,369) 3,310,129 3,602,317

20. DEFERRED TAXATION

Group2008 2007

RM RM

Balance as at 1 January 615,100 622,300Transfer to income statement (Note 29) (7,200) (7,200)Balance as at 31 December 607,900 615,100



20. DEFERRED TAXATION (Cont’d)

Presented after appropriate offsetting as follows:Group

2008 2007RM RM

Deferred tax assets, net (3,695,700) (3,850,500)Deferred tax liabilities, net 4,303,600 4,465,600Balance as at 31 December 607,900 615,100

The estimated deferred (tax assets)/liabilities arising from temporary differences are as follows:-Group

2008 2007RM RM

Deferred tax assetsDeductible temporary different in respect of expenses (90,100) (94,800)Unutilised tax losses (2,743,700) (2,715,500)Unabsorbed capital and industrial building allowances (861,900) (1,040,200)

3,695,700 (3,850,500)

Deferred tax liabilitiesDifferences between the carrying amount of property, plant

and equipment and its tax base 3,563,800 3,794,800Differences between the carrying amount of property, plant

and equipment under finance lease and its tax base 98,600 22,400Taxable temporary differences in respect of expenses 33,300 33,300Surplus on revaluation of leasehold land and buildings 607,900 615,100

4,303,600 4,465,600

The estimated temporary differences for which no deferred tax assets are recognised in the financial statement are as follows:-

Group Company2008 2007 2008 2007

RM RM RM RM

Unutilised tax losses 2,175,400 2,371,600 86,900 32,800Unabsorbed capital and

Industrial building 1,872,100 1,913,500 - -Deficit on revaluation of

leasehold land and building 1,722,300 1,722,300 - -5,769,800 6,007,400 86,900 32,800

The estimated unutilised tax losses, unabsorbed capital and industrial building allowances are not available for set-off as they arise from different taxable entities within the Group.



21. HIRE PURCHASE PAYABLESGroup

2008 2007RM RM

Total installment payments 1,960,054 2,881,627Less: Future interest charges (193,942) (339,255)Present value of hire purchase liabilities 1,766,112 2,542,372

Current liabilitiesPayable within one yearTotal installment payments 882,773 922,338Less: Future finance charges (98,990) (145,313)Present value of hire purchase liabilities 783,783 777,025

Non current liabilitiesPayable after one year but not later than five yearsTotal installment payments 1,054,977 1,869,821Less: Future finance charges (94,767) (191,419)Present value of hire purchase liabilities 960,210 1,678,402

Payable after five yearsTotal installment payments 22,305 89,468Less: Future finance charges (186) (2,523)Present value of hire purchase liabilities 22,119 86,945

982,329 1,765,347Present value of hire purchase liabilities 1,766,112 2,542,372

The hire purchase payables bear effective interest rates ranging from 4.18% to 4.90% (2007: 4.18% to 4.90%) per annum.

The maturity profile of hire purchase payables are as follows:-Group

2008 2007RM RM

Payable within one year 783,783 777,025Payable more than one year but less than two years 638,378 782,253Payable more than two years but less than three years 130,939 639,143Payable more than three years but less than four years 126,066 130,939Payable more than four years but less than five years 64,827 126,067Payable more than five years 22,119 86,945

1,766,112 2,542,372



22. AMOUNT OWING TO CUSTOMERS FOR CONTRACT WORKSGroup

2008 2007RM RM

Contract cost - 7,654,745Add: Attributable profit - 906,506

- 8,561,251Less: Progress billings - (9,416,670)

- (855,419)Represented by:-Amount owing to customers for contract works - (855,419)

23. TRADE PAYABLES

The normal trade credit term granted to the Group ranges from 30 to 90days.

The currency profile of trade payables are as follows:Group

2008 2007RM RM

Malaysia Ringgit 6,835,751 6,292,696Euro Dollar - 130,999Singapore Dollar 24,079 210,840Sterling Pound 46,929 -United States Dollar 19,428 264,221

6,926,187 6,898,756

Included in trade payables is an amount owing to an associated company, PICN amounting to RM35,670 (2007: Nil).

24. OTHER PAYABLES AND ACCRUALSGroup Company

2008 2007 2008 2007RM RM RM RM

Other payables 229,978 180,750 5,432 32,906Accruals 116,790 116,336 8,000 6,300Refundable deposits - 1,500 - -

346,768 298,586 13,432 39,206



25. BANK BORROWINGSGroup

2008 2007RM RM

Current liabilitiesBankers’ acceptance:-- Secured 2,381,000 3,978,000- Unsecured 108,000 583,000

2,489,000 4,561,000

Bank overdraft:-- Secured 2,478,582 3,286,626- Unsecured 183,962 155,010

2,662,544 3,441,6365,151,544 8,002,636

The secured and unsecured banker’s acceptance of the Group bear effective interest at rates ranging from 3.60% to 3.85%(2007.: 3.80% to 3.85%) per annum and 4.11% to 4.33% (2007: 4.13% to 4.27%) per annum respectively.

The bank overdrafts of the Group bear effective interest at rates ranging from 7.45% to 7.75% (2007: 7.50% to 7.75%) perannum.

The bank facilities are secured by:-

(i) First party legal charge over CNEW’s land and leasehold buildings;(ii) Third party charge over DSB’s leasehold land;(iii) Negative pledge over CNEW’s assets;(iv) Specific debenture over properties and fixtures and fittings attached to the properties owned by CNEW; and(v) Corporate guarantee by the Company.

26. REVENUEGroup Company

2008 2007 2008 2007RM RM RM RM

Sales of goods 27,595,604 19,563,345 - -Contract revenue 855,419 9,464,332 - -Tank rental revenue 229,761 247,409 - -Management fees - - 60,000 60,000Dividend income - - - 459,794

28,680,784 29,275,086 60,000 519,794



27. COST OF SALESGroup

2008 2007RM RM

Cost of sales 23,276,199 16,204,765Contract costs 980,151 8,145,096

24,256,350 24,349,861

28. PROFIT/(LOSS) BEFORE TAXATION

(a) Other ItemsGroup Company

2008 2007 2008 2007RM RM RM RM

This is stated after charging:-

Amortisation of intangible assets 63,133 44,391 - -Amortisation of prepaid

land lease payments 83,280 83,280 - -Auditors’ remuneration 33,000 36,200 8,000 6,000Bad debts written off 28,000 - - -Interest expenses 523,908 657,183 - -Depreciation of property,

plant and equipment 1,280,999 1,303,582 - -Empty cylinders rental 4,661 - - -

This is stated after charging:-

Loss on foreign exchange - unrealised - 20,270 - -Loss on disposal of property,

plant and equipment - 284,794 - -Property, plant and

equipment written off 1,602 - - -Rental of office equipment 14,744 - - -Rental of premises 446,160 437,660 - -Revaluation deficit on building - 15,364 - -Write down of inventories 19,000 19,000 - -

And crediting:-

Gain on foreign exchange - realised 178,867 130,234 - -Gain on foreign exchange - unrealised 79,325 - - -Interest income - 40,269 - -Rental income - 6,000 - -



28. PROFIT/(LOSS) BEFORE TAXATION (Cont’d)

(b) Staff CostsGroup Company

2008 2007 2008 2007RM RM RM RM

Staff costs 3,269,782 3,239,804 - -

Included in staff costs are:-

Employee’s Provident Fund 207,672 173,905 - -Social Security Contributions 18,669 20,877 - -

226,341 194,782 - -

Included in staff costs of the Group are remuneration of executive directors’ amounting to RM225,648 (2007: RM225,102) as disclosed in Note 28 (c) to the financial statements.

The number of employees (excluding directors) of the Group as at the end of the year was 57 (2007: 86).

(c) Directors’ RemunerationGroup Company

2008 2007 2008 2007RM RM RM RM

Executive Directors:-- Ho Cheng San- Ariffin Bin Khalid

- Salaries 203,605 204,000 - -- Other emoluments 22,043 21,102 - -

Non-Executive Directors:-- Dato’ Hilmi Bin Mohd. Noor- Chong Ying Choy- Ab. Razak Bin Idris

- Fees 48,000 48,000 48,000 48,000

273,648 273,102 48,000 48,000

During the year, a director has acquired the benefit of using the Group’s motor vehicle, which is not included in directors’ remuneration, the estimated value of which amounted to RM25,000 (2007: RM25,000).



29. TAXATIONGroup Company

2008 2007 2008 2007RM RM RM RM

Deferred Tax- Reversal of temporary

differences (Note 20) (7,200) (7,200) - -(7,200) (7,200) - -

Income Tax- Under provision in prior year 1,377 - 1,377 -- Share of associated company 175 - - -Tax expense for the year (5,648) (7,200) 1,377 -

Reconciliation between tax expenses and the product of accounting profit multiplied by the applicable tax rate.

Group Company2008 2007 2008 2007

RM RM RM RM

Profit before taxation 683,495 920,453 (63,898) 391,023

Tax at Malaysianstatutory tax rate of 26%(2007: 27%) 177,709 255,100 (16,613) 105,600

Non allowable expenses 273,733 181,500 2,553 14,800Non taxable income - - - (124,100)Utilisation of deferred tax

assets unrecognised previously (458,642) (498,400) 14,060 -Deferred tax assets not

recognised during the year - 60,800 - 3,700Adjustment to deferred tax due to

reduction in tax rate - (6,200) - -(7,200) (7,200) - -

Income Tax:-Under provision in prior year 1,377 - 1,377 -Share of associated company 175 - - -

Tax expense for the year (5,648) (7,200) 1,377 -

The Group has utilised its brought forward unabsorbed capital allowances to set-off against chargeable income resulting in a tax saving of approximately RM279,000 (2007: RM498,400).



29. TAXATION (Cont’d)

The Group and the Company have estimated unutilised tax losses, unabsorbed capital allowances and industrial buildingsallowances and unutilised reinvestment allowances, available to be set-off against future taxable profits, as follows:-

Group Company2008 2007 2008 2007

RM RM RM RM

Unabsorbed capitalallowances 5,255,300 6,331,500 - -

Unabsorbed reinvestmentallowances 8,437,500 7,447,000 - -

Unabsorbed business losses 13,033,300 12,976,100 86,900 32,80026,726,100 26,754,600 86,900 32,800

The Company has estimated tax credit of approximately RM57,000 (2007: RM57,000) under Section 108 of the Income Tax Act, 1967, to frank future payment of dividend of approximately RM162,200 (2007: RM146,000) without incurring additional tax liability.

The Company has estimated tax exempt income account of RM811,000 (2007: RM811,000) and RM170,000 (2007: RM170,000) in respect of tax exempt dividend received from a subsidiary company and chargeable income of the Company on which income tax had been waived respectively. These tax exempt income are available for distribution by way of tax exemptdividend.

30. EARNING AND NET TANGIBLE ASSETS PER ORDINARY SHARE

Basic Earning Per Ordinary Share

Basic earnings per ordinary share is calculated by dividing the Group’s profit attributable to shareholders of RM689,143 (2007:RM927,653) by the number of ordinary shares in issue during the year of 45,382,500 (2007: 45,382,500) ordinary shares of RM1each.

Net Assets Per Ordinary Share

The net assets per ordinary share is calculated by dividing the shareholders’ equity with the number of ordinary shares in issue at the end of the financial year.

31. CASH AND CASH EQUIVALENTSGroup Company

2008 2007 2008 2007RM RM RM RM

Cash and bank balances 2,625,654 1,383,872 8,608 5,350Bank overdrafts (2,662,544) (3,441,636) - -

(36,890) (2,057,764) 8,608 5,350



31. CASH AND CASH EQUIVALENTS (Cont’d)

The currency profile of cash and cash equivalents are as follows: -Group Company

2008 2007 2008 2007RM RM RM RM

Cash in hand- Malaysia Ringgit 12,953 5 - -- Euro Dollar 1,562 - - -- Renminbi 7,047 789 - -- United State Dollar - 4,751 - -

21,562 5,545 - -Bank balances- Malaysia Ringgit 253,337 1,224,667 8,608 5,350- Euro Dollar 147,172 - - -- Renminbi 8,696 - - -- Seychelle Rupee 135,005 135,005 - -- United State Dollar 2,059,882 18,655 - -

2,604,092 1,378,327 8,608 5,350Bank overdrafts (2,662,544) (3,441,636) - -

(36,890) (2,057,764) 8,608 5,350

32. SIGNIFICANT RELATED PARTY TRANSACTIONS

(i) Significant intra-group transactions are as follows:-Company

2008 2007RM RM

Received and receivable from subsidiary company- Dividend income - 459,794- Management fees 60,000 60,000

(ii) Significant transactions with other related parties are as follows:-Group

2008 2007RM RM

Paid to a company in which Mr. Ho Cheng San, is also director and has substantial financial interest

Crystal Bond Sdn. Bhd.Rental of premises 96,000 96,000

Paid to a company in which Mdm. Hoo Shet Wan, the sister of Mr. Ho Cheng San, has substantial financial interests

Marvellous Production Sdn. Bhd.Rental of premises 336,000 336,000



32. SIGNIFICANT RELATED PARTY TRANSACTIONS (Cont’d)

(iii) Compensation of key management personnel: -

Key management personnel include personnel having authority and responsibility for planning, directing and controlling activities of the entity, including executive and non executive directors of the Company.

The remuneration of the key management personnel are as follows:-Group Company

2008 2007 2008 2007RM RM RM RM

Short term employee benefits 251,605 252,000 48,000 48,000Post-employment benefits 22,043 21,102 - -

273,648 273,102 48,000 48,000

33. SEGMENTAL INFORMATION

Segment information is presented in respect of the Group’s business and geographical segments. The primary format business segments, is based on the Group’s management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Segment result is segment revenue less segment expense. Segment expense does not include share of results of associated company, interest and tax expense.

Segment assets and liabilities do not include tax assets and tax liabilities respectively.

Inter-segment revenue are based on terms mutually agreed upon by the parties concerned.

(a) By ActivitiesManufacturing Repairing tanks & related and renting

products, ofengineering transportable

works & containers Investment fabrication for hazardous holdings and

works chemicals others Eliminations Consolidated2008 RM RM RM RM RM

RevenueExternal revenue 28,451,023 229,761 - - 28,680,784Inter-segment revenue 360,626 35,000 60,000 (455,626) -Total revenue 28,811,649 264,761 60,000 (455,626) 28,680,784



33. SEGMENTAL INFORMATION (Cont’d)

(a) By Activities (Cont’d)Manufacturing Repairing tanks & related and renting




ResultsSegment results 1,374,914 37,840 (132,703) - 1,280,051Unallocated expenses - - - - (63,133)Interest expenses (523,908) - - - (523,908)Share of result of

associated company - - - - (9,515)Taxation - - - - 5,648Profit attributable to

shareholders 689,143

Other informationSegment assets 45,392,863 3,469,122 2,705,896 - 51,567,881Unallocated assets - - - - 349,198Tax assets 36,273 - 26,409 - 62,682Investment in

associated company 21,754 - - - 21,754Consolidated total assets 52,001,515

Segment liabilities 7,250,993 7,530 14,432 - 7,272,955Interest bearing liabilities 6,917,656 - - - 6,917,656Deferred taxation liabilities - - 607,900 - 607,900Consolidated total liabilities 14,798,511

Capital expenditure 554,374 - - - 554,374Amortisation and

depreciation ofproperty, plant andequipment 1,214,049 118,512 31,718 - 1,364,279

Amortisation ofintangible assets 63,133 - - - 63,133




(a) By Activities (Cont’d)Manufacturing Repairing tanks & related and renting




RevenueExternal revenue 29,027,677 247,409 - - 29,275,086Inter-segment revenue - 3,351,913 519,794 (3,871,707) -Total revenue 29,027,677 3,599,322 519,794 (3,871,707) 29,275,086

ResultsSegment results 5,205,701 (3,451,880) (138,308) - 1,615,513Unallocated expenses - - - - (44,391)Interest expenses (657,183) - - - (657,183)Share of result of

associated company - - - - 6,514Taxation - - - - 7,200Profit attributable to

shareholders 927,653

Other informationSegment assets 49,365,578 3,529,818 2,702,569 - 55,597,965Unallocated assets - - - - 224,909Tax assets 36,273 - 26,409 - 62,682Investment in

associated company 31,444 - - - 31,444Consolidated total assets 55,917,000

Segment liabilities 7,993,379 17,526 41,856 - 8,052,761Interest bearing liabilities 10,545,008 - - - 10,545,008Deferred taxation liabilities - - 615,100 - 7400Consolidated total iabilities 19,212,869

Capital expenditure 1,028,145 - - - 1,028,145Amortisation and

depreciation ofproperty, plant andequipment 1,205,266 149,878 31,718 - 1,386,862

Amortisation ofintangible assets 44,391 - - - 44,391




(b) By Geographical Segment

The People’s Republic of

Malaysia China Eliminations Consolidated2008 RM RM RM RM

RevenueExternal revenue 28,680,784 - - 28,680,784Inter-segment revenue 163,199 292,427 (455,626) -Total revenue 28,843,983 292,427 (455,626) 28,680,784

ResultsSegment results 1,666,764 (386,713) - 1,280,051Unallocated expenses - - - (63,133)Interest expenses (523,908) - - (523,908)Share of result of associated company - - - (9,515)Taxation - - - 5,648Profit attributable to shareholders 689,143

Other informationSegment assets 50,797,784 770,097 - 51,567,881Unallocated assets - - - 349,198Tax assets 62,682 - - 62,682Investment in associated company 21,754 - - 21,754Consolidated total assets 52,001,515

Segment liabilities 7,272,955 1,050 - 7,272,955Interest bearing liabilities 6,917,656 - - 6,917,656Deferred taxation liabilities 607,900 - - 607,900Consolidated total liabilities 14,798,511

Capital expenditure 217,646 336,728 - 554,374Amortisation and depreciation of

property, plant and equipment 1,346,601 17,678 - 1,364,279Amortisation of intangible assets 63,133 - - 63,133




(b) By Geographical Segment (Cont’d)

The People’s Republic of

Malaysia China Eliminations Consolidated2007 RM RM RM RM

RevenueExternal revenue 29,275,086 - - 29,275,086Inter-segment revenue 3,871,707 - (3,871,707) -Total revenue 33,146,793 - (3,871,707) 29,275,086

ResultsSegment results 1,615,513 - - 1,615,513Unallocated expenses - - - (44,391)Interest expenses (657,183) - - (657,183)Share of result of associated company - - - 6,514Taxation - - - 7,200Profit attributable to shareholders 927,653

Other informationSegment assets 55,597,965 - - 55,597,965Unallocated assets - - - 224,909Tax assets 62,682 - - 62,682Investment in associated company 31,444 - - 31,444Consolidated total assets 55,917,000

Segment liabilities 8,052,761 - - 8,052,761Interest bearing liabilities 10,545,008 - - 10,545,008Deferred taxation liabilities 615,100 - - 615,100Consolidated total liabilities 19,212,869

Capital expenditure 1,028,145 - - 1,028,145Amortisation and depreciation of

property, plant and equipment 1,386,862 - - 1,386,862Amortisation of intangible assets 44,391 - - 44,391

34 CONTINGENT LIABILITIES

Group

In previous years, certain trade creditors have instituted legal proceedings against the subsidiary company, CNEW for recovery of amounts amounting to RM5,592,913 together with interest thereon of which RM3,283,303 has been accrued in the financial statements. During the year, an out of court settlement with the trade creditors have been agreed by both parties whereby asettlement sum of RM3,500,000 is to be paid to the trade creditors over fifteen (15) monthly installments commencing fromFebruary 2009. As a result, an unrecorded sum of RM216,797 has been provided for and recognised as expenditure in the financial statements during the financial year.



34 CONTINGENT LIABILITIES (Cont’d)

Company2008 2007

RM RM

Corporate guarantee for credit facilities granted to asubsidiary company - outstanding as at year end 8,104,433 12,562,066

35. FINANCIAL INSTRUMENTS

a) Financial risk management policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for thedevelopment of the Group’s businesses whilst managing its risks. The Group operates within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions.

The main risks and corresponding management policies arising from the Group’s normal course of business are as follows:-

i) Interest rate riskThe Group primary interest rate risk relates to interest-bearing liabilities such as bank borrowings and hire purchase payables. Majority of the Group’s financial liabilities are short term in nature and for working capital purposes. As such,exposure to interest rate risk is minimal.

ii) Foreign exchange riskThe Group is exposed to foreign currency risk as a result of its normal trade activities when the currency denominationdiffers from its functional currency. The Group does not enter into any hedging contracts. Foreign exchange exposuresin transactional currencies other than functional currencies of the Group are kept to an acceptable level.

iii) Liquidity and cash flow risksThe Group actively manages its operating cash flows and the availability of funding so as to ensure that all repayment and funding needs are met. In view of prudent liquidity management, the Group maintains sufficient levels of cash to meet its working capital requirements.

iv) Credit risksThe Group’s exposure to credit risk arises from its receivables and the maximum risk associated with recognizedfinancial assets is the carrying amount as presented in the balance sheet.

The Group has a credit policy in place and the exposure to credit risk is managned through the application of creditapprovals, credit limits and monitoring procedures.



35. FINANCIAL INSTRUMENTS (Cont’d)

b) Fair values

The methods and assumptions used to estimate the fair value of each class of financial instruments are as follows:-

i) Cash and bank balances, trade and other receivables and payablesThe carrying amounts approximate fair value due to the relatively short term maturity of these financial assets.

ii) BorrowingsThe carrying amounts of bank overdrafts and bankers’ acceptance approximates fair values due to the relatively shortterm maturities of these financial liabilities.

The fair values of hire purchase payables are estimated by using discounted cash flow analysis, based on current lending rates for similar types of borrowing arrangements.

The carrying amounts of the Group’s and of the Company’s financial assets and liabilities at balance sheet date approximatetheir fair values except as follows:-

Group2008 2007

Carrying Fair Carrying FairAmount Value Amount Value

Financial Liability RM RM RM RM

Hire purchase payables 1,766,112 1,560,850 2,542,372 1,904,279

The nominal amount and fair value of financial instruments not recognised in the balance sheet are as follows:-

2008 2007Carrying Fair Carrying FairAmount Value Amount Value

Group RM RM RM RM

Contingent liabilities 1,186,777 # 5,436,129 #

Company

Contingent liabilities 8,104,433 # 12,562,066 #

# It is not practical to estimate the fair values of the contingent liabilities due to uncertainties of timing, costs andeventual outcome.




THE PROPERTIES HELD BY THE GROUP AS AT 31 DECEMBER 2008 ARE AS FOLLOWS:-

TENURE / LAND / NETOWNER APPROXIMATE DESCRIPTION BUILT-UP BOOKAND AGE OF AND EXISTING AREA VALUELOCATION BUILDINGS USE (SQ.FT.) (RM)

1 CHIP NGAI ENGINEERING WORKS SDN BHD

a. PT No. 17040, Mukim 99 years lease Industrial land 104,004.05/ 11,421,607and District of Petaling expiring on constructed with 72,200State of Selangor 11 October 2091 / office block

16 years and plant

b. Lot 20, Jalan Zurah 1 99 years lease*/- Vacant Industrial 43,594/- 380,000Kawasan Perumahan LandZurah Rasa44200 RasaSelangor

2 DOUWIN SDN BHD

PT No. 17041, Mukim and 99 years lease Industrial land 70,596.86/- 2,632,588District of Petaling expiring on used as anState of Selangor 11 October 2091/- open storage

yard

* Expiring Date pending on an individual land title to be issued.

PROPERTIES OF THE GROUP

Authorised Share Capital : RM50,000,000Isued and Fully Paid-Up Capital : RM45,382,500Class of Shares : Ordinary Shares of RM1.00 eachVoting Rights : One Vote Per RM1.00 Share

Disturbution of Shareholdings

Size of No. of % of No. of % ofShareholdings Shareholders Shareholders Shares Held Isued Capital

1-99 349 11.63 17,225 0.04100-1,000 223 7.43 159,397 0.351,001-10,000 2,172 72.35 6,270,876 13.8210,001-100,000 235 7.83 6,172,069 13.60100,001-less than 5% of issued shares 19 0.63 6,954,196 15.325% and above of issued shares 4 0.13 25,808,737 56.87Total 3,002 100.00 45,382,500 100.00

Thirty Largest Shareholders

Name No. of % ofShares Held Isued Capital

1 Ho Cheng San 10,650,000 23.47

2 ABB Nominee (Tempatan) Sdn Bhd 9,192,090 20.25Pledged Securities Account For Solitude Heights Sdn Bhd (5742000042)

3 ABB Nominee (Tempatan) Sdn Bhd 3,347,385 7.38Pledged Securities Account For Ho Cheng San (5745000077)

4 ABB Nominee (Tempatan) Sdn Bhd 2,619,262 5.77Pledged Securities Account For CN Asia Engineering Sdn Bhd (Pdmaran)

5 Hoo Shet Wan 1,106,950 2.44

6 TA Nominees (Tempatan) Sdn Bhd 750,250 1.65Pledged Securities Account For Kong Kin Khong

7 HDM Nominees (Tempatan) Sdn Bhd 739,000 1.63Pledged Securities Account For Lim Kam Seng (M15)

8 RHB Capital Nominees (Tempatan) Sdn Bhd 625,000 1.38Pledged Securities Account For Ho Cheng San (CEB)

9 Tengku Ab Malek Bin Tengku Mohamed 509,000 1.12

10 Mayban Securities Nominees (Asing) Sdn Bhd 377,500 0.83UOB Kay Hian Private Limited For Tan Boon Chiau Benjamin


ANALYSIS OF SHAREHOLDINGSAS AT 8 APRIL 2009

Thirty Largest Shareholders (Cont’d)

Name No. of % ofShares Held Isued Capital

11 Hoo Soot Khing 370,888 0.82

12 Hoo Shet Wan 364,200 0.80

13 Citigroup Nominees (Tempatan) Sdn Bhd 353,750 0.78Pledged Securities Account For Angelina Chan Kit Fong (471670)

14 TA Nominees (Tempatan) Sdn Bhd 302,600 0.67Pledged Securities Account For Julie Yam

15 David Chua Kok Tee 286,250 0.63

16 Mayban Securities Nominees (Asing) Sdn Bhd 222,558 0.49UOB Kay Hian Private Limited For Ho Suit Fong

17 Hoo Shet Wan 187,500 0.41

18 Citigroup Nominees (Tempatan) Sdn Bhd 155,000 0.34Pledged Securities Account For Siow Wong Yen @ Siow Kwang Hwa (472602)

19 Goh Ah Kow @ Goh Bak Cheng 140,000 0.31

20 Citigroup Nominees (Asing) Sdn Bhd 122,000 0.27Exempt An For OCBC Securities Private Limited (Client A/C-NR)

21 Tan Yu Wei 121,500 0.27

22 Lim Kam Seng 120,000 0.26

23 Tan Thian Chai 100,250 0.22

24 Leong Tat Yin 100,000 0.22

25 Siow Loo Chin 100,000 0.22

26 Lee Ching Chik @ Lee See Kew 86,500 0.19

27 JF Apex Nominees (Tempatan) Sdn Bhd 80,500 0.18Pledged Securities Account For Lee Lai Thong (Margin)

28 Yong Pa Yin 80,000 0.18

29 Tai Jong Hua 78,400 0.17

30 How Giok Hoy 77,900 0.17

Total 33,366,233 73.52



Substantial Shareholders

No. of Shares Held % of Issued CapitalName Direct Indirect Direct Indirect

1 Ho Cheng San 14,622,385 2,619,759 * 32.22 5.77

2 Solitude Heights Sdn Bhd 9,192,090 - 20.25 -

3 CN Asia Engineering Sdn Bhd 2,619,759 - 5.77 -

* Deemed interested by virtue of his substantial shareholdings in CN Asia Engineering Sdn Bhd

Directors’ Shareholdings

No. of Shares Held % of Issued CapitalName Direct Indirect Direct Indirect

Dato’ Hilmi bin Mohd Noor - - - -

Ho Cheng San 14,622,385 2,619,759 * 32.22 5.77

Ariffin bin Khalid - - - -

Chong Ying Choy - - - -

Ab. Razak bin Idris - - - -

* Deemed interested by virtue of his substantial shareholdings in CN Asia Engineering Sdn Bhd



PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

That the Articles of Association of the Company be hereby amended as follows:-

1. Article 2

That the existing definitions in Article 2 be amended to read as follows and wherever appearing throughout the entire Articles:-

Existing New

Deleted

“Central Depository” means Bursa Malaysia Depository Sdn. Bhd.

“Depositor” means a holder of a securities account established by the Central Depository

“Exchange” means Bursa Malaysia Securities Berhad

“Market Day” means a day on which the stock market of the Exchange is open for trading in securities

“Securities” shall have the meaning given in Section 2 of the Capital Markets and Services Act 2007.

2. Article 5

THAT the existing Article 5 be amended by deleting the words “the total nominal value of the issued preference shares shall not exceed the total nominal value of the issued ordinary shares at any time and” in the first sentence and deleting the sentence “Preference shareholders shall have the right to a return of capital in preference to holders of ordinary shares when the Company is wound up.” in the last paragraph and it shall read as follows:-

“5. Subject to the Act, any preference shares may with the sanction of an ordinary resolution, be issued on the terms that they are, or at the option of the Company are liable, to be redeemed but the Company shall not issue preference shares ranking in priority above preference shares already issued, but may issue preference shares ranking equallytherewith. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving notices, reports and audited accounts and attending general meetings of the Company. PROVIDED always that preference shareholders shall not have the right to vote at any general meeting of the Company except on each of the followingcircumstances:

(a) when the dividend or part of the dividend on the share is in arrears for more than six (6) months; (b) on a proposal to reduce the Company’s share capital; (c) on a proposal for the disposal of the whole of the Company’s property, business and undertaking; (d) on a proposal that affects rights attached to the share; (e) on a proposal to wind up the Company; and (f) during the winding up of the Company.”


APPENDIX 1

“Approved Market Place” means a stock exchange which isspecified to be an approved market place in the SecuritiesIndustry (Central Depositories) (Exemption) (No. 2) Order 1998.

“Central Depository” means the Malaysian Central DepositorySdn. Bhd.

“Depositor” means a holder of a Central Depository Securitiesaccount

“the Exchange” means Kuala Lumpur Stock Exchange

“Market Day” means any day between Mondays and Fridayswhich is not a market holiday or Public Holiday

“Securities” shall have the meaning given in Section 2 of theSecurities Commission Act 1993.

3. Article 14

THAT the existing Article 14 be amended by deleting in its entirety and substituting with the following new Article 14:-

“14. Subject to the meaning given in Section 2 of the Securities Industry (Central Depositories) Act 1991 andwith respect to Deposited Security, the Company must allot and issue securities, dispatch notices ofallotment of securities to the allottees and make an application for the quotation of such securities withinsuch period as may be prescribed by the Stock Exchange.”

4. Article 36A

THAT the existing Article 36A be amended by deleting the words “Approved Market Place” in sub-Articles 36A(1)(a) and replacing by the words “another stock exchange” and deleting the words “Approved Market Place (hereinafter referred to as“the Foreign Register”)” and replacing by the words “other stock exchange” and deleting the words “(hereinafter referred to as“the Malaysian Register”) and inserting the words “and vice versa” between “in Malaysia” and “provided that” in last sentenceof Article 36A(1) and deleting Articles 36A(2) and to re-number Article 36A(1) as Article 36A and it shall read as follows:-

“36A Where:-

(a) the securities of the Company are listed on another stock exchange; and

(b) the Company is exempted from compliance with Section 14 of the Central Depository Act or Section 29 of theSecurities Industry (Central Depositories) (Amendment) Act 1998, as the case may be, under the Rules in respect of such securities,

the Company shall, upon request of a securities holder, permit a transmission of securities held by such securities holder from the register of holders maintained by the registrar of the Company in the jurisdiction of the other stock exchange, to the register of holders maintained by the registrar of the Company in Malaysia and vice versa provided that there shall be no change in the ownership of such securities.”

5. Article 59 (a)

THAT the existing Article 59(a) be amended by deleting in its entirety and substituting with the following new Article 59(a):-

“59(a). The notices convening meetings shall specify the place, day and hour of the meeting, and shall be givento all shareholders at least fourteen (14) days before the meeting or at least twenty-one (21) days beforethe meeting where any special resolution is to be proposed or where it is an annual general meeting. Anynotice of a meeting called to consider special business shall be accompanied by a statement regardingthe effect of any proposed resolution in respect of such special business. The length of notice in everycase shall be calculated exclusive of the day on which the notice is given. At least fourteen (14) days’notice or twenty-one (21) days’ notice in the case where any special resolution is proposed or where it isan annual general meeting, of every such meeting shall be given by advertisement in at least onenationally circulated Bahasa Malaysia or English daily newspaper and in writing to each stock exchangeupon which the Company is listed.”


APPENDIX 1

6. Article 59(b)

THAT the existing Article 59(b) be amended by deleting the words “a date” in sub-Articles 59(b)(ii) and replacing by the words “the latest date which is reasonably practicable which shall in any event be” and it shall read as follows:-

“59(b). (i) The Company shall request the Central Depository in accordance with the Rules, to issue a Record of Depositors to whom notices of general meetings shall be given by the Company.

(ii) The Company shall also request the Central Depository in accordance with the Rules, to issue a Record ofDepositors, as at the latest date which is reasonably practicable which shall in any event be not less thanthree (3) market days before the general meeting (hereinafter referred to as “the General Meeting Record of Depositors”).

(iii) Subject to the Securities Industry (Central Depositories) (Foreign Ownership) Regulations 1996 (where applicable), a depositor shall not be regarded as a member entitled to attend any general meeting and to speak and votethereat unless his name appears in the General Meeting Record of Depositors.”

7. Article 71


“71. Subject to any special rights or restrictions as to voting attached to any class or classes of shares by or in accordance with these Articles, on a show of hands every person present who is a holder of ordinaryshares or preference shares or a member’s representative or proxy or attorney and entitled to vote shall be entitled to one vote and in the case of a poll every member present in person or by proxy or by attorney or other duly authorised representative shall have one vote for every share held by him. A person entitled to more than one vote need not use all his votes or cast all the votes he uses on a poll in the same way.”

8. Article 83

THAT the existing Article 83 be amended by deleting the words “All the Directors of the Company shall be natural persons and”in the first sentence and it shall read as follows:-

“83. Until otherwise determined by general meeting the number of Directors (disregarding alternate directors) shall not be less than two (2) nor more than thirteen (13) but in the event of any casual vacancy occurring and reducing the number of Directors below the aforesaid minimum the continuing Director or Directors may, except in an emergency, act onlyfor the purpose of increasing the number of Directors to such minimum number or to summon a general meeting of the Company. The first directors of the Company shall be Messrs Woon Voon Hon and Teh Siew Yew.”

9. Article 95

THAT the existing Article 95 be amended by inserting the words “during his term of office” in Article 95(a) and 95(d) and amending the Article 95 (b) and inserting the words “unless approval is sought and obtained from the Exchange “ in Articles 95(g) and it shall read as follows:-

“95. The office of Director shall become vacant ipso facto if the Director:-

(a) becomes bankrupt or has a Receiving Order in Bankruptcy made against him or makes any arrangement or composition with his creditors generally during his term of office;


APPENDIX 1

(b) if he convicted by a court of law, whether in Malaysia or elsewhere, in relation to the offences under the Act or the securities laws as defined in the Listing Requirements;

(c) ceases to be a Director by virtue of the Act; (d) becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law

relating to mental disorder during his term of office and the Directors resolve that his office be vacated; (e) (not being an executive Director whose contract precludes resignation) resigns his office by notice in writing under

his hand left at the registered address for the time being of the Company; (f) is removed from his office of Director by resolution of the Company in general meeting of which special notice has been

given; (g) absent himself from more than fifty percent (50%) of the total Board of Directors’ meeting held during a financial

year unless approval is sought and obtained from the Exchange.”

10. Article 140


“140. The Directors shall from time to time in accordance with Section 169 of the Act cause to be prepared and laid before the Company in general meeting such financial statements and report as are referred to in the Section. The interval between the close of a financial year of the Company and the issue of the annualaudited financial statements, the directors’ and auditors’ reports relating to it shall not exceed four (4)months. A copy of each such documents which can be issued in the form of a printed copy or compactdisc read-only memory (CD-ROM) or any other form of electronic media, shall not less than twenty-one (21) days (or such other shorter period as may be agreed by all members entitled to attend and vote at the meeting) before the date of the meeting, be sent to every member of, and to every holder of debentureof the Company under the provisions of the Act or these Articles. The requisite number of copies of each such documents as may be required by the Exchange and Securities Commission provided that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any member to whom a copy of these documents has not been sent shall be entitled toreceive a copy free of charge on application at the Office.”


APPENDIX 1

I/We_________________________________________________________________________(name of shareholder as per NRIC)

IC No./ID No./ Company No.___________________________________________(new)___________________________________(old)

of_____________________________________________________________________________________________(full address)

being a member/members of CN ASIA CORPORATION BHD hereby appoint_________________________________

(name of proxy as per NRIC) IC No.______________________________________(new)__________________________________(old)

of_____________________________________________________________________________________________(full address)

or failing him/her,_______________________________________________________________________(name of proxy as per NRIC)

IC No._________________________________________________________(new)__________________________________(old)

of_____________________________________________________________________________________________(full address)

as my/our proxy to vote for me/us on my/our behalf at the Thirteenth Annual General Meeting of the Company to be held at HangTuah Room, Level 3, Palace Beach & Spa, Jalan Dulang, MINES Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan onWednesday, 27 May 2009 at 10.00 a.m. and at any adjournment thereof, and to vote as indicated below:-

Resolution For Against

Resolution 1 To receive the Audited Financial Statements for the financial year ended 31 December 2008 together with the Reports of the Directors and the Auditors thereon

Resolution 2 To approve payment of directors’ fees

Resolution 3 Re-election of Director - Mr. Ho Cheng San

Resolution 4 Re-election of Director - Mr. Chong Ying Choy

Resolution 5 Re-appointment of Messrs. CK & Associates as auditors and to authorise the Directors to fix their remuneration

Resolution 6 Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965

Special Proposed Amendments to the Articles of Association of the CompanyResolution 1

(Please indicate with an (X) in the spaces provided whether you wish your votes to be cast for or against the resolution. In theabsence of specific directions, your proxy will vote or abstain as he thinks fit.)

Number of shares held

Signature or Common Seal of Shareholder

Dated this__________day of____________2009

Notes:1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy may

but need not be a member of the Company provided that the provisions of Section 149(1)(b) of the Companies Act, 1965 are complied with.

2. Where a member appoints two proxies, the appointment shall be invalid unless the member specifies the proportion of his shareholding to be represented by each proxy.

3. The instrument appointing a proxy in the case of an individual shall be under the hand of the appointor or of his attorney duly authorised or if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorized.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at Lot 7907, Batu 11, Jalan Balakong, 43300 Seri Kembangan, Selangor Darul Ehsan, not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

FORM OF PROXY

Please fold here

The Company Secretary

CN ASIA CORPORATION BHD(399442-A)

Lot 7907, Batu 11Jalan Balakong

43300 Seri KembanganSelangor Darul Ehsan

Please fold here

AffixStamp

cn asia corporation bhdcnasia.com/web/wp-content/uploads/arcnasia2008.pdf · empowered to obtain...

Documents