Greener - MalaysiaStock.Biz

annual report 2008

Greenerby innovation

EMAS KIARA INDUSTRIES BERHAD(485144-H)

missionAchieving excellence as Occupational

Environmentalists with unparalleled

environmental engineering solutions in

support of development and conservation

of nature while offering lasting rewards to

shareholders and employees

corporate profile 02marine and coastal protection 04

flood mitigation & riverbank protection 06slope reinforcement and stabilization 07

landfill & waste disposal 08transportation engineering 09

corporate info 10corporate structure 11

chairman’s statement 12managing director’s statement 15

board of directors 16director’s profile 17

20 corporate governance statement

24 additional compliance information

25 audit committee report

29 statement about the state of internal control

31 financial statements

101 list of properties

103 shareholders’ information

106 notice of the tenth annual general meeting

110 statement accompanying notice of the tenth annual general meeting

form of proxy

conten

ts

contents

CORPORATE PROFILE

In 1995, Emas Kiara pioneered the manufacturing of a comprehensive range of geosynthetic products in Malaysia. Today, the Group comprises several manufacturing companies specializing not only in the areas of manufacture but of design, development, fabrication and installation services of KIARATEX Geosynthetics. Our facilities include an accredited geosynthetic testing laboratory where our products are regularly tested to ensure product quality and specifications are met.

We have a diverse clientele base in the construction and engineering industry, many from different parts of the world. It is imperative for them to rely on proven civil engineering systems and designs to uphold their objectives of remaining the best in the field. In addition to our systems, our clients are supported by our experienced and qualified team of experts who provide technical designs to our clients’ projects. Installation services are also available to ensure effective installation methods are adopted.

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Our commitment to supporting our clients and our understanding of their needs, makes Emas Kiara the preferred integrated geotechnical solution provider and partner to the industry in areas characterized by our emphasis on professionalism, expertise, reliability, quality and efficiency without sacrificing safety or attention to the environment.

To meet the challenging needs of our clients, we have built a foundation and reputation shaped by our successful completion and delivery of projects in Malaysia and abroad. From conventional civil engineering, our focus is on providing feasible environmental engineering solutions to our clients while continuing to develop methods and systems for environmental conservation and rehabilitation.

Emas Kiara offers • Integrated ISO certified manufacturing and fabrication facilities• Specialized civil and geotechnical engineering products and solutions• Custom-made designs and specifications to address intricate site specific engineering needs• Technical expertise in design and consultancy services• Project management, turnkey contracting and installation services• Quality assurance with an accredited laboratory

Unmatched Expertise & ExperienceEmas Kiara has spent more than 15 years in the civil engineering industry committing itself to continuously set new benchmarks in providing the best products, services and solutions to infrastructure developments, land reclamation, slope protection, river and coastal protection and many more. The environment and its sustenance for the generations to come has become an important consideration to us.

As the conditions of the world continue to be affected by severe climatic changes and the impact of global warming, an increase in natural disasters in recent years has caused major destruction to the environment. Nature’s wrath has often been unrelenting and has depleted much land and marine life habitat. KIARATEX

Geosynthetics can provide solutions to minimize the severity of such destruction.

At Emas Kiara, we have built our competencies in offering feasible solutions that address complex engineering problems backed by our experts and partners in environmental, geotechnical and civil engineering with extensive proven track records over all continents of the globe. Research and development of new products, designs and innovative construction methods are a priority in our field, particularly on environmental protection and development.

Be Partners To The BestEmas Kiara is today an established public listed company that not only stands on solid ground, but also a valuable business partner and a solution provider to the players in the construction industry and the civil engineering sector. By leveraging experience, expertise, innovation and strengths on our products and solutions, Emas Kiara has moved itself up the value chain in the geosynthetic industry.

Our expertise and experience coupled with the optimum solutions offered by KIARATEX Geosynthetics makes Emas Kiara the preferred partner in the construction industry.

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Worldwide climatic changes have resulted in a significant increase of shoreline erosion globally. The Malaysian shoreline is in excess of 4,800 km, comprising of both sandy and mangrove-fringed mud coasts, with erosion reaching an alarming rate over the past 12 years affecting social and economic activities in these areas. Effective control measures are necessary to protect and rehabilitate these shorelines.

The shoreline at the East Coast beaches of Terengganu has suffered severe erosion due to the impact of high energy waves during the yearly North East monsoon. This perennial process has deteriorated the quality of

the beach and resulted in the loss of valuable land. Unlike conventional construction methods, Emas Kiara places its expertise in soft structural engineering systems such as Kiaratex Geodykes to rectify the erosion problems and arrest further erosion of the shoreline. The system was technically designed specific to site requirements, custom manufactured and installed effectively. The results were astounding. A significant deposition of sand restored and enhanced the profile of the beach naturally whilst preventing further erosion. The outcome was a beautiful wide sandy beach.

Kiaratex at Work for the EnvironmentErosion Protection of Shorelines


Kiaratex Geodyke acts as a breakwater and protects shorelines from erosion

A naturally widened sandy beach and calmer waves can be seen at the East Coast of Malaysia after the installation of Kiaratex Geodyke

Kiaratex Geodykes can be used in a variety of coastal environments in addition to protecting shorelines and enhancing beach fronts. They have also been used as near-shore breakwaters and as an escarpment and dune protection. Kiaratex Geodykes effectively creates an environment suitable for the regeneration and rehabilitation of coastal mangroves. While the mangrove forests balances our eco-system and is home to various land and marine species, it also plays a crucial role in protecting shorelines. It serves as a natural barrier against tsunamis and torrential storms, reducing the severity of nature’s destruction. There is an undeniable need to protect our mangroves from dwindling and heighten our support for nature conservation.

marine & coastal engineering

Kiaratex Silt Curtains keeps pollution at bay by preventing diffusion of sediments to seas, rivers and lakes during reclamation and construction works in nearshore, rivers and lakes. These silt curtains were used at reclamation projects such as the expansion of Phases 3 and 4 of the Pasir Panjang Terminal in Singapore.

Kiaratex Geodyke acts as a protective barrier against wave energy and prevents loss of soil, creating a suitable environment for coastal mangroves to regenerate and rehabilitate

Kiaratex Silt Curtain prevents diffusion of sediments in seas, rivers and lakes, minimizing pollution to the environment


Floods are caused by a variety of factors, both natural and man-made. In urban environments, heavy rain rapidly runs off roads and pavements into drainage systems that sometimes cannot cope. In mountainous areas, trees and soils absorb water. With deforestation, the land is vulnerable to erosion and excessive rainfall can lead to massive flooding, landslides, clogging up of rivers with debris washed off the hillsides and erosion of riverbanks. As climate change takes its course, wet areas are predicted to get wetter and storms are expected to increase in frequency and intensity, leaving flood-prone areas more vulnerable than ever.

Mankind has attempted to manage floods using a variety of methods with varying degrees of success. The inclining frequency of flash floods in Malaysia too calls for effective measures to be implemented. In the past, protection of


Kiaratex at Work for the EnvironmentFlood Mitigation & Erosion Protection of Riverbanks

river erosion either involved the use of large quantities of stone or concrete facing systems. With innovation, easily transportable geotechnical systems such as the flexible KiaraMat Sand Filled Mattress can be filled with locally derived sand or other material to form an environmentally friendly green structure to protect riverbanks from erosion.

Another proven success in earth slope protection and riverbank protection are biodegradable Coir Turf Reinforcement Mats (CTRM). CTRM comprises a unique three-dimensional netting matrix system which retains seeds and soil, stimulates seed germination and assists plant roots to be developed and integrated into the mesh system to prevent soil from being eroded by surface runoff water. CTRM was installed at the Sungai Damansara, Selangor flood retention pond project.

Flood retention pond is installed with Coir Turf Reinforcement Mat to vegetate and protect slopes from erosion

Vegetation is established with the assistance of Coir Turf Reinforcement Mat to protect riverbanks from erosion

KiaraMat Sand Filled Mattress installed at a retention pond

Erosion control of riverbanks with KiaraMat Sand Filled Mattress

environmental

Landslides usually result from the instabilities of slopes. Landslide calamities or slope failures can be caused by various factors some of which are geological, morphological, hydrological, physical as well as factors associated with human activity.

ExcelWeb Cellular Retention System is another effective solution which comprises a three dimensional honeycomb structure for slope reinforcement and earth retention applications

Kiaratex at Work for the EnvironmentSlope Reinforcement & Stabilization

Kiaragrid reinforces and stabilizes slopes from erosion and are further enhanced with vegetation growth using EcoBioMat and hydroseeding to prevent surface erosion


The stability of slopes depends mainly on its shear strength which is difficult to predict with a high degree of certainty. Several engineering applications have been developed to reinforce slopes to improve the factor of safety. Slope stability designs with geogrids have become widespread and accepted throughout the geotechnical engineering discipline. Kiaragrids are synthetic fabrics which are used to stabilize slopes and even road base to provide enhanced stability conditions, reduced erosion potential and improved bearing capacity. In steep mountainous terrain, Kiaragrids provide a practical cost effective solution for the construction of new embankment slopes and remedial works to failure of sidelong embankments.

In addition, biodegradable EcoBioMats are usually incorporated to prevent erosion and the formation of rills and gullies by reducing velocity of surface runoff. These environmentally friendly mats facilitate revegetation of newly cut slopes and disssipates energy released by heavy rainfall, minimizing downward migration of soil beneath. It is one of nature’s ways to heal erosion through the establishment of living matter and organisms.

Historically, landfills have been the most common methods of organized waste disposal worldwide. However, pollution of the local environment such as contamination of groundwater and aquifers by leakage as well as residual soil contamination during landfill usage and after landfill closure could lead to environmental and ecological problems.

Some landfills were not designed in accordance to safety and international standards resulting in contamination of soil and ground water in surrounding areas. With urbanization, public awareness and the need for sustainable development, it has become important to develop strategies to reuse land of completed landfills. Kiaratex Geosynthetic range of products such as Wovens, Nonwovens, Geocomposites and Clay Liners has been adopted as part of the landfill containment system to mitigate this problem.

Kiaratex Clay Liners are essentially high performance geocomposites consisting of granular sodium bentonite sandwiched between two layers of geotextile and are used for the lining of landfills. It has a very low hydraulic conductivity which allows the liners to effectively prevent seepage of contaminants. Thus its function is ideal as a barrier to fluids and leacheate to prevent pollution of soil and groundwater. They are also used in surface impoundments, secondary containment facilities, reservoirs, dams, ponds and lakes applications.

Kiaratex at Work for the EnvironmentLandfill and Waste Disposal

Kiaratex Geosynthetic Clay Liners are used as a landfill containment and barrier to fluids to prevent pollution of soil and ground water.


Hazardous wastes are contained at a landfill lined with Kiaratex Clay Liner in Kemaman, Terengganu

Kiaratex Clay Liner was installed to contain water in a retention pond

seaports roads airports

Kiaratex at WorkTransport Engineering

Transportation engineering, generally covers the aspects of railway and highway engineering as well as airports and seaports. The importance of transportation engineering has escalated as globalization demands a safe and efficient transport system. Therefore it is crucial for transport infrastructures to achieve a balance between investment and maintenance costs, logistics planning, safety, effective land use, consideration of environmental factors and an efficient transport system.

Kiaratex Pavetex is a synthetic geotextile used in pavement engineering to strengthen highway and airport pavements, retard reflective cracking and extend the pavement life whilst reducing its maintenance costs. Kiaratex Woven and Nonwoven Geotextiles are essential for effective basal reinforcement and drainage functions of railway tracks, roads, airport runways and seaport structures. ExcelWeb Cellular Retention System can be used for stabilization of pavements in ports and container

yards founded on soft ground. It is also used as basal reinforcement for railway track embankments.

Soft soil at seaports, container yards and coastal roads are treated to ensure that ground conditions are sufficiently consolidated to minimize ground settlement. While conventional ground treatment methods are extremely time-consuming, Kiaratex Prefabricated Vertical Drain Systems have been successful in accelerating the consolidation and settlement of soft soil by shortening the drainage path of pore water. To further enhance the speed of consolidation, Emas Kiara’s innovative product development have developed the Kiaratex Electric Vertical Drain System, a patented version of soft ground consolidation which accelerates the settlement of soft soil within a significantly shorter time using electro-osmosis principles.

railways

ExcelWeb Cellular Retention System strengthens the rail track ballast for KTM Double Track Project

Kiaratex Woven, Nonwoven and Geocomposite are essential for basal reinforcement, separation and drainage functions in transport engineering

Ground treatment works using ExcelWeb Cellular Retention System stabilizes the Northport Container Terminal Yard, Port Klang

Kiaratex Prefabricated Vertical Drain accelerates the consolidation of soft ground


CORPORATE INFORMATION

BOARD OF DIRECTORSTan Sri Dato’ Kamaruzzaman Bin Shariff Executive ChairmanMr. Wong Kong Foo Managing DirectorMr. Lim Yew Hoe Executive DirectorDatuk Yahya Bin Ya’acob Non-Independent Non-Executive DirectorTuan Haji Abd Talib Bin Baba Independent Non-Executive DirectorMr. Siew Kah Toong Independent Non-Executive Director


AUDIT COMMITTEEMr. Siew Kah ToongChairman • Independent Non-Executive Director

Tuan Haji Abd Talib Bin BabaMember • Independent Non-Executive Director

Datuk Yahya Bin Ya’acobMember • Non-Independent Non-Executive Director

JOINT COMPANY SECRETARIESMs. Lim Hooi MooiMAICSA 0799764

Mr. Tan Enk PurnMAICSA 7045521

OPTION COMMITTEETan Sri Kamaruzzaman Bin Shariff

Mr. Wong Kong Foo

Mr. Lim Yew Hoe

REGISTERED OFFICELevel 18, The Gardens North TowerMid Valley City , Lingkaran Syed Putra59200 Kuala LumpurTel 03 2264 8888Fax 03 2282 2733

AUDITORSBDO BinderChartered Accountants12th Floor, Menara Uni.Asia1008, Jalan Sultan Ismail50250 Kuala Lumpur

PRINCIPAL BANKERSAlliance Bank Malaysia BerhadCIMB Bank BerhadEON Bank BerhadHong Leong Bank BerhadHSBC Bank Malaysia BerhadOCBC Bank (Malaysia) Berhad

STOCK EXCHANGE LISTINGSecond Board of the Bursa Malaysia Securities Berhad

WEBSITEwww.kiaratex.com

SHARE REGISTRARSymphony Share Registrars Sdn BhdLevel 26, Menara Multi-PurposeCapital Square, No 8, Jalan Munshi Abdullah50100 Kuala LumpurTel 03 2721 2222Fax 03 2721 2530

CORPORATE STRUCTURE

100%

84%

Emas Kiara Sdn Bhd

100%Southcorp Holdings Sdn Bhd

100%Kiaratex Exports Pte Ltd

70%Kiara Tex Sdn Bhd

67%Fibre Innovation Technology Sdn Bhd

100%Advance Technical Fabric Sdn Bhd

Emas Kiara Vietnam Joint Venture Company 100%

Khidmat Edar (M) Sdn Bhd

100%Innovative Industrial Textiles Sdn Bhd

100%Emas Kiara Marketing Sdn Bhd

100%Emas Kiara Geo Services Sdn Bhd

EMAS KIARA INDUSTRIES BERHAD(485144-H)


CHAIRMAN’S STATEMENT

Dear Shareholders, The 2008 financial year has been challenging. Robust domestic demand and strong public spending supported growth during the year. While external demand was strong in the first half, deterioration in the global economic conditions and correction in commodity prices led to a sharp decline in the second half of 2008. As a result, growth expanded by only 2.4 % in the second half compared to 7.1% in the first half, registering a 4.6% growth in 2008 against a 6.3% growth in 2007.

With this brief introduction, I am pleased to present the Annual Report and the Audited Financial Statements for the year ended 31 December 2008 on behalf of the Board of Directors of Emas Kiara Industries Berhad.


Review of Operations

Operational HighlightsWith global warming issues becoming a major concern worldwide, there is an urgent need to address the increasing environmental problems. It is thus crucial that the Group continues with its research and development of innovative environmental engineering solutions that will help to rehabilitate and protect the environment while keeping the business profitable for the Group’s stakeholders. In February 2009, the Group secured a major international contract for the raising and strengthening of the Brahmaputra Dyke in the state of Assam, India. This project, valued at approximately RM72 million, involves the construction of an embankment to protect against flood devastation by the river Brahmaputra. Some 70% of the project scope involves geosynthetic-related work using Kiaratex Geodyke and KiaraMat Sand Filled mattress.

Product DevelopmentAs in previous years, our focus is on environmental engineering applications with Kiaratex Geodyke, a high-strength polypropylene woven geotextile system used for shoreline protection, beach enhancement and mangrove regeneration. To expand our range, we are also developing other geosynthetic products for environmental conservation. These include pollution containment products such as Kiaratex Clay Liner for landfills and KiaraMat Sand Filled Mattress for flood mitigation and Kiaratex Silt Curtain for the prevention of sediments from polluting seas, rivers and lakes

Corporate DevelopmentOn 2 June 2008, the Board of Directors of Emas Kiara terminated the sale and purchase agreement dated 27 November 2007 in relation to the acquisition of a 51% equity interest in Carimin Sdn Bhd.

Review of Financial PerformanceThe Group continued to turn in an encouraging performance in 2008 with revenue increasing by 46% to RM150.27 million while after tax profits more than doubled to RM10.48 million from RM3.92 million in the previous year.

Good progress was made in the implementation of infrastructure projects from the Ninth Malaysia Plan (9MP) which contributed to domestic sales. In addition, revenue was also boosted by the implementation of a major international contract to supply of Kiaratex Geodykes and Silt Curtains for the reclamation at Pasir Panjang Terminal in Singapore.

The year also saw the Group making further efforts to improve cost efficiency from the integration of its woven manufacturing facilities in Senawang. This integration exercise led to a significant increase in capacity, efficiency and productivity. It is the Group’s intention to forge ahead with the integration of our plants to facilitate our expansion into new markets internationally. During the year, the Group significantly increased its local and international market coverage with our design and build, as well as comprehensive fabrication capabilities, especially in environmental engineering and ground development applications.

DividendThe Board of Directors of Emas Kiara Industries Berhad has proposed a first and final tax exempt dividend of 3% or 1.5 sen per ordinary share for the financial year ended 31 December 2008.

Corporate GovernanceThe Board remains committed to the practice of corporate governance throughout the Group to ensure transparency, accountability and the protection of shareholders’ interests and that of other stakeholders.

Our Corporate Governance Statement can be viewed at pages 20 to 23.


With greater awareness by regional governments on the detrimental effects of climate change and the importance of environmental conservation, the geosynthetic market is expected to expand. The Group will continue to build its capabilities and expertise in providing solutions to environmental protection using innovative engineering design and construction methods customized to different project requirements worldwide

Integration and upgrading of its facilities in woven, non-woven and fabrication segments will continue in 2009 to maximise cost efficiency whilst catering to the growing demand with its increased capacity

Acknowledgement On behalf of the Board of Directors, I would like to express our sincere appreciation to Datuk Fong Weng Phak for his contributions to the Group as an Independent Non-Executive Director and Audit Committee Chairman. Datuk Fong, who retired on 1 January 2009, has been with the Board since the Group’s listing on Bursa Malaysia.

In addition, I would like to welcome Mr David Siew Kah Toong who has been appointed on 28 April 2009 as an Independent Non-Executive Director and Audit Committee Chairman.

The Board would also like to thank our valued clients, suppliers, investors and shareholders for their continued support through the years. Our appreciation also goes to our employees for their commitment and dedication in the face of the tough and challenging business conditions and to my fellow Directors for their invaluable contributions and support throughout the year.

Tan Sri Dato’ Kamaruzzaman Bin ShariffChairman


On 4 November 2008, the Board of Directors of Emas Kiara announced that the proposed private placement of up to 10% of the company’s issued and paid up capital would lapse on 8 November 2008.

Research and DevelopmentThe Group is currently involved in a project to increase the production efficiency in Small-Holder Kenaf Production Systems for specific industrial applications. The project, implemented by the United Nations Industrial Development Organisation, entails developing new geosynthetic products and solutions with natural fibres in line with our theme of “Greener by Innovation”

The company is also working in collaboration with the University of Ontario and Curtin University to develop application science with Electric Vertical Drains.

Another project is our cooperation with the Government of Libya to conduct a joint study on mitigation and desertification effect, utilizing Kiaratex Geosynthetic products and materials. On completion of the study, the Group hopes to entrench itself as a pioneering research advocate for serious environmental issues locally and abroad.

Moving forward in 2009Despite the highly uncertain global economic conditions, countries are expected to pump prime their economies via infrastructure development projects.

Although the Malaysian economy is expected to experience the full impact of the global downturn in 2009, several policy measures have been put in place with the primary focus on supporting domestic demand as well as mitigating the impact of the global slowdown.

The Malaysian government has announced a RM7 billion stimulus package which has been supplemented by an additional RM60 billion. It is expected that this stimulus package would include infrastructure spending which would benefit the construction and civil engineering sectors.

The real GDP forecast by Bank Negara Malaysia for the construction sector is 3% in 2009 as compared to 2.1% in 2008. Meanwhile, projects implemented under the 9MP are expected to follow through in 2009. Thus, the domestic construction sector is expected to record stronger growth.

MANAGING DIRECTOR’S STATEMENT

2008 was a year heightened with activity. It was a year that had seen us through both our planned integration of plants and our push for greater market coverage. It was indeed a challenge not to sacrifice one for the other and that kept both management and staff busy almost every day of the year.

We have completed the integration of our weaving and knitting facilities whilst the integration of our non-woven production facilities is in progress. We expect to complete the integration exercise in 2009 which entails the upgrading of all our existing facilities. With the completion of this exercise, the Group will be more competitive; we will double our capacity in volume and specialist products and expand customer coverage with our enhanced technical design support and turnkey capability. This will ultimately bring us to a new level of market presence.

Looking ahead, we find 2009 exciting. The task we have given ourselves in 2009, among others, is to increase our technical offerings to the customer beyond just manufactured products. Our niche will include new designs, tailored products and innovative construction methods.

R&D is expected to bring new Kiaratex products into the market with new specifications. Certainly, the integration of our plants has enhanced our capability in this direction.

We have grown amid a recession in our early years and we are used to looking for opportunities within. Our integration and upgrading exercise has now made us competitively broad-based in products and entrenched both volume and strategic markets in time to buffer any serious downturn that is anticipated in the months ahead. Stimulus packages implemented by local and international governments also include primarily infrastructure spending. Moreover, in the last few decades, environmental concerns generally lacked recognition. Now, pressure is mounting on governments to rectify and rehabilitate the destruction caused by global warming and development, particularly on eroded slopes, riverbanks and coastlines. While the damage in the past needs to be corrected, construction in the future would have to take into account environmental issues. Kiaratex Geosynthetic incorporated construction designs would significantly address these aspects. We are therefore confident of an increased demand for our complete geosynthetic solutions in the years ahead.

Dear Shareholders, in signing off, I would like to reiterate our Mission Statement:

“Achieving excellence as Occupational Environmentalists with unparalleled environmental engineering solutions in support of development and conservation of nature while offering lasting rewards to shareholders and employees”.

Roger WongManaging Director


BOARD OF DIRECTORS14 2

3 576

BOARD OF DIRECTORS1. Tan Sri Dato’ Kamaruzzaman Bin Shariff Executive Chairman2. Mr. Wong Kong Foo Managing Director3. Mr. Lim Yew Hoe Executive Director4. Datuk Yahya Bin Ya’acob Non-Independent Non-Executive Director5. Tuan Haji Abd Talib Bin Baba Independent Non-Executive Director6. Mr. Siew Kah Toong Independent Non-Executive Director

KIARATEX EXPORTS PTE LTD7. Mr. Richard Sandanasamy Douglas Managing Director



A Malaysian aged 49, is the founder and Managing Director of the EKIB Group of Companies and was appointed to the Board of EKIB on 22 November 1999. He is also a member of the Option Committee.

Mr. Wong is the key strategist for EKIB Group, having first recognised the huge potential of geosynthetics and industrial textiles in the early 1990s. Equipped with 20 years of experience in management and business development, he belongs in a league of his own as a self-made entrepreneur for his keen business acumen and foresight.

Having started as an importer of geotextiles, he believed that the Malaysian market is ready for home production of such materials. His significant and still on-going contribution is his ability in leading the diligent team of EKIB group personnel to set-up the required manufacturing plants completely without any dependence on foreign technical support. This provide the freedom to tailor manufacturing plants to meet the niche goals of the Group and enable the Group to export products without market boundaries.

Since the beginning of the first plant in 1995, Mr. Wong has taken direct management of the in-house laboratory facilities and standards. His drive has been instrumental in EKIB gaining branding recognition diagonally across the global market. Having set-up the plants, his knowledge of the machinery and the vast experience of our operators and technicians have pushed the production capability to world class standard.

Mr. Wong holds directly 15,559,028 ordinary shares or 18.52 % interest in the Company. He is deemed to have an interest in 10,170,804 ordinary shares or 12.11 % interest by virtue of his interest in Intan Kuala Lumpur Sdn Bhd and Impiana Venture Sdn Bhd pursuant to Section 6A of the Companies Act,1965 and his spouse’s indirect interest in EKIB.

Mr. Wong has no family relationship with any director and/or major shareholder of the Company other than those disclosed above.

Mr. Wong also has no conflict of interest with the Company and has never been convicted for offences which will disqualify him from being a director to a public-listed company.

DIRECTORS’ PROFILE

TAN SRI DATO’ KAMARUZZAMAN BIN SHARIFF

WONG KONG FOO

A Malaysian aged 67, is the Executive Chairman of EKIB. He was appointed to the Board of EKIB on 26 June 2002 and is a member of the Option Committee.

He holds a Bachelor of Arts Degree from the University of Malaya. He also holds a Diploma in Public Administration from the Carleton University, Canada and a Masters in Public Administration (MPA) from the Syracuse University, USA.

Tan Sri Dato’ Kamaruzzaman held various senior positions in the Federal and State Government during his thirty-eight (38) years tenure in the government Service. He was engaged with the Ministry of Education and the Public Services Department from 1964 to 1972 and from 1972 to 1980, respectively. For the period from 1980 to 1987, he served in the Prime Minister’s Department where he was the Director of External Assistance and General Affairs for the Economic Planning Unit from 1980 to 1983 and the Secretary of the Cabinet Division from 1983 to 1987. From 1988 to 1992, he was the Penang State Secretary. He rejoined the Public Services Department as the Deputy Director General in 1992 and from 1992 to 1995, he held the post of Secretary General in the Ministry of Defence. He served his last six (6) years in the government Service as the Mayor of Kuala Lumpur.

He currently sits as the Executive Chairman of Metronic Global Berhad and the Non-Executive Chairman of Bintai Kinden Corporation Berhad. He is also a director of Kontena Nasional Berhad.

Tan Sri Dato’ Kamaruzzaman holds directly 6,431,411 ordinary shares or 7.65 % interest in the Company. He is deemed to have an interest in 1,645,000 ordinary shares or 1.96 % interest by virtue of his spouse’s and daughter’s indirect interest in EKIB.

Tan Sri Dato’ Kamaruzzaman has no family relationship with any director and / or major shareholder of the Company.

Tan Sri Dato’ Kamaruzzaman also has no conflict of interest with the Company and has never been convicted for offences which will disqualify him from being a director of a public listed company.

greener by innovation 17director's profile

greener by innovation 18 director's profile

A Malaysian aged 65, was appointed to the Board of EKIB as a Non-Independent Non-Executive Director on 15 March 2003. He is also a member of Audit Committee.

He holds a Bachelor of Arts (Honours) Degree and a Diploma in Public Administration from the University of Malaya, as well as Masters in Business Management from the Asian Institute of Management, Manila.

Datuk Yahya’s thirty-two (32) years experience in the Malaysian Civil Service started with his employment as the Deputy Secretary of the Finance Division of the Federal Treasury from 1967 to 1969. He rejoined the division from 1976 to 1986. Other than the Finance Division, he was also the Deputy Secretary of the Tax Division from 1971 to 1974. From 1986 to 1988, he served in the Prime Minister’s Department as the Deputy Director of the Implementation and Coordination Unit. His other postings include being the Secretary General of the Ministry of Information from 1991 to 1994 and Secretary of the Contract Division of Federal Treasury from 1988 to 1991. He retired in 1999 after having served five (5) years as the Secretary General of the Ministry of Works.

He currently sits as the Independent Non-Executive Director of IJM Corporation Berhad, LBI Capital Berhad, UDA Holdings Bhd and Damansara Realty Bhd. He is also the director of Pelaburan Johor Berhad, and acts as the Chairman of Selia Equity Berhad.

Datuk Yahya holds directly 25,000 ordinary shares or 0.03 % interest in the Company. He is deemed to have an interest in 5,453,000 ordinary shares or 6.49 % interest by virtue of his spouse’s indirect interest in EKIB. His spouse is a deemed major shareholder of the Company.

Datuk Yahya has no family relationship with any director and / or major shareholder of the company other than those disclosed above.

Datuk Yahya has no conflict of interest with the Company and has never been convicted for offences which will disqualify him from being a director of a public listed company.

DATUK YAHYA BIN YA’ACOB

LIM YEW HOE

A Malaysian aged 40, is the Executive Director of the EKIB Group of Companies. He was appointed to the Board of EKIB on 22 November 1999. He is also a member of the Option Committee.

He holds a Bachelor of Science Degree in Accounting from Summit University, USA and a Masters Degree in Business Administration from Greenwich University, Australia.

Mr. Lim has more than ten (10) years experience in the geosynthetics industry and joined the EKIB Group since its inception as Finance Manager. Promoted to Senior Operations Manager and later Chief Operating Officer, he was responsible for the finance and operations of the Group. In 2000 he was assigned to Emas Kiara Marketing Sdn Bhd, the marketing and sales business unit of the Group as Executive Director and currently continues to oversee all operational matters of the Group.

Mr. Lim holds directly 4,000,920 ordinary shares or 4.76 % interest in the Company. He is deemed to have an interest in 51,600 ordinary shares or 0.06 % interest by virtue of his spouse’s indirect interest in EKIB.

Mr. Lim has no family relationship with any director and / or major shareholder of the Company.

Mr. Lim also has no conflict of interest with the Company and has never been convicted for offences which will disqualify him from being a director of a public listed company.

A Malaysian aged 54 , is the Independent Non-Executive Director of EKIB. He was appointed to the Board of EKIB on 28 April 2009. He is also the Chairman of the Audit Committee.

He is a member of the Malaysian Institute of Accountants (MIA), the Malaysian Institute of Certified Public Accountants (MICPA) and CPA Australia. He qualified as a Certified Public Accountant with MICPA in 1976. Beginning of year 2009, Mr. Siew joined Sekhtar & Tan as its Managing Partner. Previously he had served as the Managing Partner of one of the leading accounting firms in Malaysia.

Besides having extensive experience in public accounting practice, Mr. Siew had served for 4 years as the chief financial officer of a major diversified corporation that was listed on the Main Board of Bursa Malaysia where he was involved in the reorganization of the Group, restructuring of banking and financing arrangements and mergers and acquisition besides improving the financial reporting systems.

He had also been appointed as a Special Administrator for various public listed companies pursuant to the Pengurusan Danaharta Nasional Berhad Act, 1998 and successfully restructured them.

He is a member of the Developing Nations Committee of the International Federation of Accountants (IFAC), a member of the Practice Review Committee of the MIA and the Public Practice, Technical and Financial Statement Review Committees of MICPA. He had served for 2 terms as a member of the Financial Reporting Foundation.

Mr. Siew does not hold shares in the Company. He has no family relationship with any director and / or major shareholder of the Company.

Mr. Siew also has no conflict of interest with the Company and has never been convicted for offences which will disqualify him from being a director of a public listed company.

SIEW KAH TOONG

TUAN HAJI ABD TALIB BIN BABA

A Malaysian aged 63, is the Independent Non-Executive Director of EKIB. He was appointed to the Board of EKIB on 10 September 2007. He is also a member of Audit Committee.

He is a Fellow member of the Chartered Association of Certified Accountants (ACCA), United Kingdom and a registered member of the Malaysian Institute of Accountant (MIA).

Upon obtaining his professional qualification, he worked with Petronas Berhad as its Group Internal Auditor for six years and subsequently as Finance Manager with Petronas Penapisan (T) Sdn. Bhd for nine years before moving on to Petronas Berhad’s Corporate Head Office as Senior Manager Accounts and Financial Services. He was with Petronas Mitco Sdn Bhd as Senior Manager – Finance and Planning when he retired in October 1999.

He currently sits as the Independent Non-Executive Director, Member of the Audit, Nomination and Remuneration Committee of UDA Holdings Berhad. He is also the Chairman of the Internal Audit Committee of Bank Kerjasama Rakyat Malaysia Berhad, Independent Non-Executive Director and Chairman of Audit Committee of Mesiniaga Berhad.

Tuan Haji Abd Talib Bin Baba does not hold shares in the Company. He has no family relationship with any director and / or major shareholder of the Company.

Tuan Haji Abd Talib Bin Baba also has no conflict of interest with the Company and has never been convicted for offences which will disqualify him from being a director of a public listed company.

greener by innovation 19director's profile

greener by innovation 20 corporate governance statement

CORPORATE GOVERNANCE STATEMENTThe Board recognises the importance of instituting high standards of corporate governance in conducting the business and affairs of the Group to protect and enhance stakeholders’ value and to safeguard the Group’s assets. The Board continually takes steps to improve upon the Group’s best practices within the framework of the Malaysian Code of Corporate Governance (“Code”).

Pursuant to Paragraph 15.26 of the Bursa Securities Listing Requirements, the Board is pleased to provide a statement which summarises the Group’s commitment towards observing high standards of transparency, accountability and integrity in managing the Group’s business and the extent to which it has complied with the Principles and Best Practices of the Code.

BOARD OF DIRECTORS

The BoardThe Company is headed by an effective Board, comprising individuals, who possess a balanced mix of skills, core competencies and experience in business, construction, marketing, finance, economics, corporate and general management. The Board provides the overall leadership and control of the Group. The Company recognizes the important role played by the Board in the stewardship of its direction and operations, to act in the best interest of the Group and ultimately the enhancement of shareholder’s value. All Board members bring their judgement to bear on issues of strategy, performance, resources and standards of conduct.

MeetingsThe Board meets quarterly to consider the quarterly results of the Group and, additionally as and when required with due notice of issues to be discussed. Proceedings of the Board meetings are recorded by the Company Secretary. During the financial year 2008, the Board met five (5) times. Details of attendance of the Directors at Board meetings are as follows:-

Directors Attendance

Tan Sri Dato’ Kamaruzzaman Bin Shariff 5/5

Mr. Wong Kong Foo 5/5

Mr. Lim Yew Hoe 5/5

Datuk Yahya Bin Ya’acob 5/5

Datuk Fong Weng Phak (Resigned w.e.f. 01 January 2009) 5/5

Tuan Haji Abd Talib Bin Baba 5/5

Mr. Siew Kah Toong (Appointed w.e.f. 28 April 2009) N/A

The Head of Operations and Head of Finance were invited to attend the Board meetings to provide the Board with their views and to explain agenda items and to clarify issues that may be raised by the Directors.

Board BalanceCurrently, the Board consists of six (6) members comprising an Executive Chairman, a Managing Director, an Executive Director, a Non-Independent Non-Executive Director and two (2) Independent Non-Executive Directors. In compliance with Paragraph 15.02 of the Bursa Securities Listing Requirements, the independent non-executive directors comprise one third (1/3) of the Board. All the independent directors are independent of management and are free from any relationship that could materially affect the exercise of their independent judgment. With the composition of the Board and their wide range of experience, the Board believes that the interests of the Company’s minority shareholders and the public are adequately protected and advanced. A brief description of the background of each Director is presented on pages 17 to 19.

greener by innovation 21corporate governance statement

BOARD OF DIRECTORS (continued)

Board Balance (continued)

There is clear division of responsibilities at the head of the Company to ensure a balance of power and authority, This clear division of roles also promotes objective and considered decision making. The Board continues to be headed by the Executive Chairman, Tan Sri Dato’ Kamaruzzaman Bin Shariff and the Managing Director, Mr. Wong Kong Foo.

Supply of InformationThe Board recognizes that the decision making process is highly dependent on the adequacy and quality of information furnished. As such, in discharging their duties, the Directors have full and unrestricted access to all information pertaining to the Company.

Prior to each Board meeting, the agenda and Board papers would be circulated to all the Directors. The Board papers are issued in advance with sufficient time for the Directors to enable effective discussions and decision making during Board meetings. Proceedings of Board meetings are recorded and draft minutes are circulated to all directors prior to being approved. The minutes are kept by the Company Secretary and are open to inspection by the Directors.

The Directors have full and unrestricted access to the advice and services of the Company Secretary and the external auditors at all times in the discharge of their duties and responsibilities. The Board may also obtain independent professional advice on specific issues.

Appointments to the BoardIn view of the relatively small composition of the Board, the Board as a whole takes up the responsibility of the Nomination Committee in proposing new nominees for the Board and for assessing the effectiveness of the Board and the contribution of each individual director of the Company.

Directors’ TrainingAll the Directors of the Company have completed the Mandatory Accreditation Programme (“MAP”) conducted by the Research Institute of Investment Analysts’ Malaysia (“RIIAM”).

The Company recognizes the importance of the Directors in keeping abreast with the latest developments in accounting and corporate governance standards and regulatory requirements in order to discharge their duties in an effective manner. The Company will on a continuous basis evaluate and determine the training needs of its directors.

Apart from the MAP, the Directors have during the financial period ended 31 December 2008 attended the following training programme:

Name of Director Title

Tan Sri Dato’ Kamaruzzaman Bin Shariff

• India & Vietnam – Overview of the Tax and Regulatory Environment held on 28 February 2008• Boardroom Agenda, comprising the following modules which was held on 26 November 2008: Emerging Issues for Public Companies – Malaysian Code on Corporate Governance, Emerging Issues for Public Companies – Corporate Social Responsibility Framework, Strategic Risk, Blue Ocean Strategy – An Overview, Understanding Strategic Waves, Case Studies and Strategic Thinking

Datuk Yahya Bin Ya’acob • Update on Liability Insurance Cover and Claims Against Directors & Officers held on 15 January 2008

• Financial Reporting Standards (FRS) Workshop held on 10 June 2008

Tuan Haji Abdul Talib Bin Baba

• 3rd CFO Summit 2008 held on 10 to 11 June 2008• National Accountants Conference 2008 held on 25 to 26 November 2008

greener by innovation 22 corporate governance statement

BOARD OF DIRECTORS (continued)

Re-electionThe Company’s Articles of Association provide for all Directors to retire once every three (3) years and such retiring Director shall be eligible for re-election. Directors appointed during the year are required to retire at the following Annual General Meeting subsequent to their appointment.

The details of Directors who will retire at the forthcoming AGM are disclosed in the Statement Accompanying Notice of the Tenth Annual General Meeting on page 110.

DIRECTORS’ REMUNERATION

The Board has not recommended the establishment of a Remuneration Committee. Given its size, the Board believes that all the directors must be equally responsible for the duties of such a committee to recommend the remuneration of the executive directors and to determine the remuneration packages of non-executive directors. The Board deliberates this during the normal proceedings of the Board of Directors’ Meeting. Individual Directors do not participate in the discussion of their own remuneration.

Disclosure – Details of Directors’ RemunerationThe details of the remuneration of the Directors for the financial year 2008 are as follows:-

Executive Non-Executive(RM) (RM)

Fees 501,000 126,000

Salaries and Allowances 230,000 14,500

Bonus and Incentives 26,500 -

Other Benefits 113,390 -

Total 870,890 140,500

The number of Directors whose total remuneration during the financial year 2008 falling within the following bands is as follows:-

Executive Non-Executive(RM) (RM)

Less than RM50,001 - 2

RM50,001 – RM100,000 - 1

RM100,001 – RM150,000 1 -

RM250,001 – RM300,000 1 -

RM450,000 – RM500,000 1 -

Total 3 3

SHAREHOLDERS

Dialogue between the Company and InvestorsThe Board recognizes the importance of maintaining an effective two-way communication that enables the Directors and Management to communicate effectively with shareholders, other stakeholders and the public generally. Disclosure of information is important in maintaining effective communication. As such, public announcements and quarterly announcements of financial results are made on a timely basis through Bursa Securities. The Company also communicates with its shareholders and other stakeholders through the Company’s Annual Report and Annual General Meeting.

greener by innovation 23corporate governance statement

SHAREHOLDERS (continued) Annual General Meeting (“AGM”)The shareholders’ meetings, particularly the AGM is the principal forum for dialogue with the shareholders of the Company by providing an opportunity for the shareholders to attend and participate in an open discussion on any issue with regards to the Group. The Company’s external auditors attend the shareholders’ meetings by invitation and are available to answer shareholders’ questions, where appropriate. Proceedings of the shareholders’ meetings are recorded by the Company Secretary.

ACCOUNTABILITY AND AUDIT

Audit CommitteeThe composition, terms of reference and the summary of activities of the Audit Committee during the financial year 2008 are detailed on pages 25 to 28.

Financial ReportingIn presenting the annual financial statements and quarterly announcements of financial results, the Board recognizes the importance to ensure that the requirements of the accounting standards and relevant regulations are fully complied with in order to present a balanced and fair assessment of the Group’s position and prospects. The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting processes and the quality of its financial reporting.

Internal ControlThe Statement on Internal Control furnished on pages 29 to 30 of this Annual Report provides an overview of the state of internal control within the Group.

Relationship with AuditorsThe Group has established a transparent and professional relationship with the external auditors through the Audit Committee.

Directors’ Responsibility Statement for preparation of Financial StatementsThe Directors are required under the Companies Act, 1965, to prepare the Company’s annual financial statements in accordance with the applicable approved accounting standards which aim to give a true and fair view of the state of affairs of the Group and Company at the end of each financial year.

In preparing the financial statements, the Group and Company has:-• complied with applicable approved Financial Reporting Standards, requirements of Bursa Securities and other

statutory requirements;• made judgements and estimates that are reasonable and prudent; and• adopted and consistently applied appropriate accounting policies and practices.

Corporate Social ResponsibilityThe Group practices Corporate Social Responsibility through the continued promotion and education of environmental engineering with geosynthetics to conserve, rehabilitate and regenerate the environment. During the year, we have actively organized presentations to delegates on environmental engineering solutions namely marine and coastal protection, rehabilitation of mangroves, erosion control of riverbanks, flood mitigation, pollution containment and slope engineering.

The Group working jointly in support of Malaysian Nature Society’s efforts to promote environmental awareness and nature conservation, in particular mangrove forests. Mangrove forests have an important role as it protects coastlines and serve as natural barriers against coastal erosion and torrential storms by reducing the severity of devastation. The aftermath of Cyclone Nargis left a catastrophic destruction of Myanmar’s Irrawaddy Delta. A donation was made to the victims of Cyclone Nargis through the Malaysian Red Crescent Society for relief items and medical aid.

While we continue to promote and support nature conservation, we acknowledge our continued responsibility to our employees and community at large. We strive to maintain a safe working condition for our employees as well as contribute to the well being of the community.

greener by innovation 24 additional compliance information

ADDITIONAL COMPLIANCE INFORMATION

1. Share Buybacks The Company does not have any scheme to buy back its own shares.

2. Options, Warrants or Convertible Securities The Company did not issue any options, warrants or convertible securities during the financial year ended

31 December 2008.

During the financial year ended 31 December 2008 there were no options exercised pursuant to the Company’s ESOS.

3. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme The Company did not sponsor any ADR or GDR programme during the financial year ended 31 December 2008.

4. Imposition of Sanctions and / or Penalties There were no sanctions and / or penalties imposed on the Company and / or its subsidiaries, directors or

management by any regulatory bodies during the financial year ended 31 December 2008.

5. Non-Audit Fees During the financial year ended 31 December 2008, there were non-audit fees paid by the Company to the

external auditors, Messrs. BDO Binder amounting to RM 48,100.00.

6. Variation in Results For the financial year ended 31 December 2008, there was no variation in results by 10% or more from the

unaudited results previously announced. The Company did not, during the financial year, announced any profit estimate, forecast or projection of any results.

7. Profit Guarantee During the financial year ended 31 December 2008, no profit guarantee was received by the Company.

8. Material Contracts On 27 November 2007, Emas Kiara Industries Berhad (“EKIB”) entered into a Conditional Sale and Purchase

Agreement with Cipta Pantas Sdn Bhd and Mokhtar Bin Hashim to acquire 51% equity interest in Carimin Sdn Bhd for a total purchase consideration of RM25,500,000. This agreement had since been mutually cancelled and the proposed acquisition aborted. Save as above there were no other material contracts entered into by the Company and / or its subsidiaries during the financial year ended 31 December 2008, which involved the interest of Directors and / or major shareholders.

9. Revaluation Policy on Landed Properties The Group does not have a policy on revaluation of its landed properties and neither has the Group revalued

its landed properties during the financial year ended 31 December 2008.

10. Recurrent Related Party Transactions of a Revenue or Trading Nature At the Extraordinary General Meeting held on 28 May 2008, the Company obtained a renewal of the mandate

from its shareholders for the Company and / or its subsidiaries to enter into recurrent related party transactions of a revenue and / or trading nature which are necessary for the day-to-day operations of the Group, with certain related parties.

Pursuant to Paragraph 10.09(1)(b) and Section 4.1.5 of Practice Note 12/2001 of the Bursa Securities Listing Requirements, the details of the transactions conducted pursuant to the mandate during the financial year ended 31 December 2008 are disclosed in Note 35 on pages 88 and 90 of this Annual Report.

greener by innovation 25audit committee report

AUDIT COMMITTEE REPORT

The Board of Directors is pleased to present the following report by the Audit Committee on its activities during the financial year ended 31 December 2008, pursuant to Paragraph 15.16 of the Bursa Securities Listing Requirements.

MEMBERSHIP

The Audit Committee (“Committee”) consists of three (3) members, the majority of whom are independent non-executive directors. The Committee comprises:-

a) Datuk Fong Weng Phak (Resigned w.e.f. 01 January 2009) - Chairman, Independent Non-Executive Director

b) Mr. Siew Kah Toong (Appointed w.e.f. 28 April 2009) - Chairman, Independent Non-Executive Director

c) Tuan Haji Abd Talib Bin Baba - Independent Non-Executive Director

d) Datuk Yahya Bin Ya’acob - Non-Independent Non-Executive Director

TERMS OF REFERENCE

The Terms of Reference of the Committee are as follows:-

ObjectivesThe Committee is to serve as a focal point for communication among the Directors, external and internal auditors and the Management on matters relating to financial accounting, reporting and controls.

The Committee is to assist the Board in fulfilling its fiduciary responsibilities in respect of accounting policies, reporting practices and auditing of the Group.

The Committee also serves as the Board’s principal agent to ensure the independence of the external auditors and the adequacy of disclosure of financial information.

CompositionThe Committee shall be appointed by the Board and comprises at least three (3) members all of which must be Non-Executive Directors with a majority of them being Independent Directors including the Chairman.

At least one (1) member of the Committee must be a member of the Malaysian Institute of Accountants (“MIA”) or have a degree / masters / doctorate in accounting or finance and at least three (3) years post qualification experience in accounting or finance, or fulfils such other requirements as prescribed or approved by Bursa Securities.

If a member of the Committee resigns or ceases to be a member resulting in the number being reduced to below three (3), the Board shall fill the vacancy within three (3) months of the event.

MeetingsThe Committee shall meet at least four (4) times per year. The quorum for each meeting shall be two (2) members and a majority of members present must be independent directors.

greener by innovation 26 audit committee report

TERMS OF REFERENCE (continued)

SecretaryThe Company Secretary shall be appointed as the Secretary of the Committee. The Committee Secretary shall draw up the agenda for the meeting, which shall be circulated together with the relevant meeting papers, to all the members of the Committee and to any other persons who may be required to attend, at least seven (7) days prior to the meeting. Shorter notice is permitted subject to the agreement of all Committee members. The Head of Operations, the Head of Finance, the internal and external auditors shall attend by invitation. At least once a year, the Committee shall meet with the internal and external auditors and with the external auditors only, both meetings without the presence of the Management, Committee members who are executives of the Company or other Directors and employees of the Company, whenever deemed necessary.

The Committee Secretary shall record and circulate the minutes of the Committee meetings to its members and to the Directors at their Board meetings. The minutes must be signed by the Chairman and properly kept at the Registered Office.

AuthorityThe Committee is authorised by the Board to investigate any matter within its objectives and functions. The Committee have full and unrestricted access to any information pertaining to the Company and have direct communication channels with the external auditors, person(s) carrying out the internal audit function or activity and all employees of the Company.

The Committee is also authorised by the Board to obtain independent professional advice as necessary.

FunctionsThe Committee shall discharge the following functions:- a) To recommend for approval of the Board the appointment and dismissal of the external auditor, and their

audit fees;

b) To review the quality and effectiveness of the accounting and internal control systems and to review the adequacy of the scope, functions, competency and resources of the internal audit functions that it has the necessary authority to carry out its work;

c) To review the audit plan and scope of examination and audit observations of the internal and external auditors and to ensure that appropriate action is taken by the Management to address the audit observations and the recommendations of the Committee;

d) To review the quarterly and year-end financial statements of the Group prior to submission to the Board for approval. The review should focus primarily on compliance with accounting standards as well as regulatory requirements and the adequacy of information disclosure for a fair presentation of the financial affairs of the Group;

e) To review press releases on financial information which is of material importance;

f) To review any related party transactions and conflict of interest situation that may arise within the Group, including transactions, procedure on conduct which raises questions of management integrity;

g) To ensure that the internal audit function reports directly to the Committee;

h) To verify the basis of allocation of the options under the Employees’ Share Option Scheme in accordance with the By-Laws of the ESOS; and

i) To perform such other duties, if any, as may be directed by the Board.

greener by innovation 27audit committee report

ACTIVITIES OF THE COMMITTEE

During the financial year ended 31 December 2008, a total of five (5) meetings were held. Details of attendance of the Committee members are as follows:-

Name of Committee Members AttendanceDatuk Fong Weng Phak (Resigned w.e.f. 01 January 2009) 5/5 Tuan Haji Abd Talib Bin Baba 5/5 Datuk Yahya Bin Ya’acob 4/4 Mr. Siew Kah Toong (Appointed w.e.f 28 April 2009 ) N/A

The Head of Finance and the Company Secretary were present at all meetings. The External and Internal Auditors were also present at meetings requiring their input and advice.

The activities of the Committee during the financial year were as follows:-

a) Discussed and reviewed the quarterly results, including the announcements to Bursa Securities, for each quarter, focusing particularly on the financial reporting and compliance with the disclosure requirements of the relevant authorities, prior to the submission to the Board of Directors for consideration and approval;

b) Discussed and reviewed the statutory financial statements for the previous financial year end;

c) Reviewed the related party transactions entered into by the Company and its subsidiaries and the Circular to Shareholders on the proposed renewal of shareholders’ mandate for recurrent related party transactions;

d) Reviewed the External Auditors’ Audit Review Memorandum for the Group’s statutory audit for the financial year ended 31 December 2008 focusing on the areas that would affect the Company’s financial statements and the recent amendments to acts and accounting standards applicable to the Group;

e) Reviewed the External Auditor’s Audit Planning Memorandum in relation to the statutory audit of the Group for the financial year ended 31 December 2008 covering the audit approach, audit risk areas, the application of the applicable accounting standards and the audit timetable;

f) Reviewed the Internal Audit function of the Company and reviewed and received the Internal Auditors’ Audit Reports on the state of internal control of the Group, the Internal Audit Plans and Internal Audit Universe highlighting the core auditable areas and scheduled timing for audit;

g) Reviewed the Terms of Reference of the Committee; and

h) Reviewed the draft Internal Control Statement and Corporate Governance Statement, prepared in accordance with the relevant provisions of the Bursa Securities Listing Requirements and the Malaysian Code on Corporate Governance, for inclusion in the Company’s 2008 Annual Report.

greener by innovation 28 audit committee report

STATEMENT ON EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”) BY THE COMMITTEE

The Committee noted that there were no allocations of options granted during the financial year ended 31 December 2008.

A breakdown of the option offered to and exercised by non-executive directors pursuant to the ESOS are as follows:

Name of Director Option Offered Option ExercisedDatuk Yahya Bin Ya’acob Nil Nil

INTERNAL AUDIT FUNCTION

The Group recognizes the importance of an internal audit function in maintaining a sound system of internal control within the Group to safeguard shareholders’ investment and the Group’s assets and to assure the overall effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable law and regulations. The Group’s internal audit function has been outsourced to an independent professional accounting and consulting firm, Messrs. UHY Diong.

The internal audit function adopts a risk-based approach in developing its internal audit plan which addresses the potential principal risks associated with the core business processes of the Group. Scheduled internal audits are carried out by the internal auditors based on the internal audit plan and internal audit universe, presented to and approved by the Committee. On a quarterly basis or earlier as appropriate, the internal auditors will submit a report to the Committee highlighting the areas for improvement and will subsequently follow up to review the extent of implementation by the Group of their recommendations. It is the role of the Committee to ensure that the high risk areas are effectively mitigated by controls. The internal audit plan are continuously evaluated and updated to take into account the status of implementation of recommendations by the internal auditors.

greener by innovation 29statement about the state of internal control

STATEMENT ABOUT THE STATE OF INTERNAL CONTROL

Pursuant to Paragraph 15.27(b) of Bursa Securities Listing Requirements, the Board of Directors of Emas Kiara Industries Berhad is pleased to provide the following statement on the state of internal control of the Group, which has been prepared in accordance with the Statement on Internal Control: Guidance for Directors of Public Listed Companies (‘Internal Control Guidance’) issued by the Institute of Internal Auditors Malaysia and adopted by Bursa Securities.

RESPONSIBILITY FOR RISK AND INTERNAL CONTROL

The Board recognises the importance of a structured risk management framework and a risk-based internal audit to establish and maintain a sound system of internal control. The Board affirms its overall responsibility for the Group’s systems of internal control and for reviewing the adequacy and integrity of those systems. Because of the limitations that are inherent in any system of internal control, those systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced, or potentially exposed to, by the Group in pursuing its business objectives. This process has been in place throughout the financial year and up to the date of approval of the annual report. The adequacy and effectiveness of this process have been continually reviewed by the Board and are in accordance with the Internal Control Guidance.

RISK MANAGEMENT

The Board and management practice proactive significant risks identification on a quarterly basis or earlier as appropriate, particularly any major proposed transactions, changes in nature of activities and/or operating environment, or venturing into new operating environment which may entail different risks, and put in place the appropriate risk response strategies and controls until those risks are managed to, and maintained at, a level acceptable to the Board.

INTERNAL AUDIT FUNCTION

The Board acknowledges the importance of internal audit function and has engaged the services of an independent professional accounting and consulting firm, Messrs UHY Diong to provide much of the assurance it requires regarding the effectiveness as well as the adequacy and integrity of the Group’s systems of internal control.

The internal audit function adopts a risk-based approach in developing its audit plan which addresses all the core auditable areas of the Group based on their risk profile. Scheduled internal audits are carried out by the internal auditors based on the audit plan presented to and approved by the Audit Committee. The audit focuses on areas with high risk and inadequate controls to ensure that an adequate action plan has in place to improve the controls. For those areas with high risk and adequate controls, the audit ascertains that the risks are effectively mitigated by the controls. On a quarterly basis or earlier as appropriate, the internal auditors report to the Audit Committee on areas for improvement and will subsequently follow up to determine the extent of their recommendations that have been implemented.

greener by innovation 30 statement about the state of internal control

INTERNAL CONTROL

Apart from risk management and internal audit, the Group has put in place the following key elements of internal control:-

• An organisation structure with defined scopes of responsibility, clear lines of accountability, and appropriate levels of delegated authority;

• A set of documented internal policies and procedures for operational, financial and human resource management, which is subject to regular review and improvement;

• Regular and comprehensive information provided to management, covering financial and operational performance and key business indicators, for effective monitoring and decision making;

• A comprehensive business planning and detailed budgeting process where operating units prepare budgets for the coming year which are approved both at operating unit level and by the Board;

• Monthly monitoring of results against budget, with major variances being followed up and management action taken, where necessary;

• Regular visits to operating units by members of the Board and senior management; and• Audit by the internal auditors to ensure compliance with the requirements of ISO 9001, a quality assurance

certification which assures continuous delivery of the highest quality products by the Group.

Based on the internal auditors’ report, there is a reasonable assurance that the Group’s systems of internal control are generally adequate and appear to be working satisfactorily. A number of internal control weaknesses were identified during the financial period, all of which have been, or are being, addressed. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group’s annual report.

The Board continues to review and implement measures to strengthen the internal control environment of the Group. This statement has been reviewed by the external auditors in compliance with Paragraph 15.24 of Bursa Securities Listing Requirements.


FINANCIAL STATEMENTS

32 directors’ report

37 statement by directors

37 statutory declaration

38 independent auditors’ report40 balance sheets

42 income statements

43 statements of changes in equity

46 cash flow statements

48 notes to the financial statements

greener by innovation 32 directors' report

DIRECTORS’ REPORTThe Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2008.

PRINCIPAL ACTIVITIES

The Company is principally an investment holding company. The principal activities of the subsidiaries are set out in Note 10 to the financial statements. There have been no significant changes in the nature of the principal activities of the Group and of the Company during the financial year.

RESULTS

Group(RM)

Company(RM)

Profit for the financial year attributable to:Equity holders of the Company 11,195,188 1,680,292

Minority interest (708,883) -

Profit for the financial year 10,486,305 1,680,292

DIVIDENDS

No dividend has been paid or declared by the Company since the end of the previous financial year.

The Directors propose a first and final tax exempt dividend of 3% per ordinary share of RM0.50 each amounting to RM1,260,240 in respect of the financial year ended 31 December 2008, subject to the approval of members at the forthcoming Annual General Meeting.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

ISSUE OF SHARES AND DEBENTURES

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

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year apart from the issue of options pursuant to the Employees’ Share Options Scheme.

The Employees’ Share Options Scheme (“ESOS”) of the Company came into effect on 1 July 2004. The ESOS shall be in force for a period of five years until 30 June 2009 (“the option period”). The salient features of the ESOS as per the By-Laws are as follows:

greener by innovation 33directors' report

OPTIONS GRANTED OVER UNISSUED SHARES (continued)

(a) The ESOS is made available to eligible Directors and employees of the Group who are employed on a full time basis and are at least eighteen (18) years of age on the date of offer;

(b) The maximum number of options to be offered under the ESOS shall not exceed 15% of the total issued and paid-up share capital of the Company at any point in time during the existence of the ESOS;

(c) The options granted may be exercised anytime within the option period from the date of offer;

(d) The subscription price for the new shares under the ESOS is determined based on the weighted average market price of the Company’s shares as quoted and shown in the Daily Official List issued by Bursa Malaysia Securities Berhad for the (5) five market days immediately preceding the date of offer subject to a discount, if any, of not more than 10%, or at the par value of the shares of RM0.50 each, whichever is higher; and

(e) No Director or employee shall participate at any time in more than (1) one employees’ share option scheme implemented by any company within the Group.

The movements of the offered options over unissued ordinary shares of RM0.50 each and the option prices during the financial year were as follows:

Number of options over ordinary shares of RM0.50 each

Outstanding Movement during the financial year Outstanding ExercisableOption as at as at as at

price 1.1.2008 Granted Retracted* Exercised 31.12.2008 31.12.2008

20082004 options RM0.62 8,817,000 - (272,000) - 8,545,000 8,545,000

2005 options RM0.50 2,131,000 - (89,000) - 2,042,000 2,042,000

2007 options RM0.50 990,000 - (45,000) - 945,000 945,000

11,938,000 - (406,000) - 11,532,000 11,532,000

* Retracted due to resignations

The Company has been granted exemption by the Companies Commission of Malaysia from having to comply with Section 169(11) of the Companies Act, 1965, to disclose the names of options holders who have been granted with number of options below 300,000 ordinary shares of RM0.50 each.

The option holders with share options granted of 300,000 ordinary shares of RM0.50 each and above at the end of the financial year were as follows:

Number of options over ordinary shares of RM0.50 each in the Company

Option As at As atDate of offer Name of option holder price 1.1.2008 Granted 31.12.2008

13 September 2004 Sandanasamy Richard Douglas RM0.62 500,000 - 500,000

13 September 2004 Oh Ewe Peng RM0.62 300,000 - 300,000

13 September 2004 Chang Kheng Fatt RM0.62 210,000 - 210,000

13 September 2004 Lung Hien Ying RM0.62 200,000 - 200,000

13 September 2004 Neoh Cheng Aik RM0.62 300,000 - 300,000

13 September 2004 Ng Huey Ting RM0.62 100,000 - 100,000


OPTIONS GRANTED OVER UNISSUED SHARES (continued)

Number of options over ordinary shares of RM0.50 each in the Company

Option As at As atDate of offer Name of option holder price 1.1.2008 Granted 31.12.2008

8 December 2005 Sandanasamy Richard Douglas RM0.50 300,000 - 300,000

8 December 2005 Oh Ewe Peng RM0.50 250,000 - 250,000

8 December 2005 Chang Kheng Fatt RM0.50 100,000 - 100,000

20 January 2006 Ng Huey Ting RM0.50 26,000 - 26,000

13 September 2007 Ng Huey Ting RM0.50 220,000 - 220,000

13 September 2007 Lung Hien Ying RM0.50 100,000 - 100,000

13 September 2007 Chang Kheng Fatt RM0.50 15,000 - 15,000

DIRECTORS

The Directors who have held office since the date of the last report are:

Tan Sri Dato’ Kamaruzzaman Bin ShariffDatuk Fong Weng Phak (resigned on 1 January 2009)Datuk Yahya Bin Ya’acobWong Kong FooLim Yew HoeTuan Haji Abd Talib Bin Baba

DIRECTORS’ INTERESTS

The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares of the Company and of its related corporations during the financial year ended 31 December 2008 as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965 were as follows:

Number of ordinary shares of RM0.50 eachBalance Balance

as at as at1.1.2008 Bought Sold 31.12.2008

Shares in the Company

Direct interests

Tan Sri Dato’ Kamaruzzaman Bin Shariff 6,431,411 - - 6,431,411

Wong Kong Foo 15,559,028 - - 15,559,028

Lim Yew Hoe 4,000,920 - - 4,000,920

Datuk Yahya Bin Ya’acob 25,000 - - 25,000

Indirect interests

Tan Sri Dato’ Kamaruzzaman Bin Shariff 1,645,000 - - 1,645,000

Datuk Yahya Bin Ya’acob 5,453,000 - - 5,453,000

Wong Kong Foo 10,170,804 - - 10,170,804

Lim Yew Hoe 46,600 5,000 - 51,600

greener by innovation 35directors' report

DIRECTORS’ INTERESTS (continued)

By virtue of his interests in the ordinary shares of the Company, Wong Kong Foo is also deemed to have interest in the ordinary shares of all the subsidiaries to the extent that the Company has an interest.

None of the other Directors holding office at the end of the financial year held any interest in the ordinary shares of the Company or its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the Directors has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest except for any benefits which may be deemed to have been derived by certain Directors by virtue of the significant related party transactions as disclosed in Note 35 to the financial statements.

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate except for the share options granted pursuant to the ESOS mentioned in Note 33 to the financial statements.

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY:

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and have satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature except for:

(i) the effects arising from the allowance for doubtful debts resulting in a decrease in the Group’s profit for the financial year by RM2,578,405 as disclosed in Note 28 to the financial statements; and

(ii) the effects arising from impairment loss on investment in a subsidiary resulting in a decrease in the Company’s profit for the financial year by RM3,562,409 as disclosed in Note 28 to the financial statements.

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:

(i) which would render the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any material extent; or

(ii) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and

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


OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY: (continued)

(d) In the opinion of the Directors:

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve months after the end of the financial year which will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial year.

(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year are disclosed in Note 38 to the financial statements.

EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

The events subsequent to the balance sheet date are disclosed in Note 39 to the financial statements.

AUDITORS

The auditors, BDO Binder, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the Directors.

Tan Sri Dato’ Kamaruzzaman Bin Shariff Wong Kong FooGroup Executive Chairman Group Managing Director

Kuala Lumpur21 April 2009

greener by innovation 37statement by directors / statutory declaration

In the opinion of the Directors, the financial statements set out on pages 40 to 100 have been drawn up in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2008 and of the results of the operations of the Group and of the Company and of the cash flows of the Group and of the Company for the financial year then ended.

On behalf of the Board,

Tan Sri Dato’ Kamaruzzaman Bin Shariff Wong Kong FooGroup Executive Chairman Group Managing Director


STATEMENT BY DIRECTORS

STATUTORY DECLARATIONI, Lim Yew Hoe, being the Director primarily responsible for the financial management of Emas Kiara Industries Berhad, do solemnly and sincerely declare that the financial statements set out on pages 40 to 100 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly )declared by the abovenamed at )Kuala Lumpur this )21 April 2009 ) Lim Yew Hoe

Before me:

No. W451S. IderajuPesuruhjaya Sumpah(Commissioner for Oaths)Kuala Lumpur

greener by innovation 38 independent auditors' report

INDEPENDENT AUDITORS’ REPORT to the members of Emas Kiara Industries Berhad

Report on the Financial Statements

We have audited the financial statements of Emas Kiara Industries Berhad, which comprise the balance sheet as at 31 December 2008 of the Group and of the Company, and the income statement, statement of changes in equity and cash flow statement of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 40 to 100 .

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act 1965. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the 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 financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the 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 applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2008 and of the results of the operations of the Group and of the Company and of the cash flows of the Group and of the Company for the financial year then ended.

greener by innovation 39independent auditors' report

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act 1965, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly 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 financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 10 to the financial statements.

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

(d) The auditor reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Matters

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

BDO Binder Tan Lye ChongAF : 0206 1972/08/09 (J)Chartered Accountants Partner


greener by innovation 40 balance sheet as at 31 december 2008

BALANCE SHEETS as at 31 december 2008

Group Company2008 2007 2008 2007

Note RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 7 71,160,262 59,045,779 1 1

Prepaid lease payments 8 1,269,934 1,326,836 - -

Investment property 9 174,793 178,447 - -

Investment in subsidiaries 10 - - 32,077,395 35,639,804

Goodwill 11 3,185,873 3,185,873 - -

Deferred tax assets 12 320,000 448,000 - -

76,110,862 64,184,935 32,077,396 35,639,805

Current assets

Inventories 13 31,380,500 26,082,018 - -

Trade and other receivables 14 41,929,683 42,027,848 65,257,625 64,497,086

Current tax asset 459,640 676,873 - -

Cash and cash equivalents 15 25,430,912 16,359,789 9,372,936 3,565,947

99,200,735 85,146,528 74,630,561 68,063,033

TOTAL ASSETS 175,311,597 149,331,463 106,707,957 103,702,838

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company

Share capital 16 42,008,000 42,008,000 42,008,000 42,008,000

Reserves 17 27,563,162 16,437,660 7,809,384 6,129,092

69,571,162 58,445,660 49,817,384 48,137,092

Minority interest 2,422,885 3,131,768 - -

TOTAL EQUITY 71,994,047 61,577,428 49,817,384 48,137,092

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

greener by innovation 41balance sheet as at 31 december 2008

Group Company2008 2007 2008 2007

Note RM RM RM RM

LIABILITIES

Non-current liabilities

Borrowings 18 16,483,942 18,932,579 10,000,000 15,000,000

Deferred tax liabilities 12 3,330,460 2,528,765 - -

19,814,402 21,461,344 10,000,000 15,000,000

Current liabilities

Trade and other payables 23 19,448,810 15,062,205 1,797,107 500,045

Borrowings 18 63,315,905 50,962,705 45,000,000 40,000,000

Current tax payable 738,433 267,781 93,466 65,701

83,503,148 66,292,691 46,890,573 40,565,746

TOTAL LIABILITIES 103,317,550 87,754,035 56,890,573 55,565,746

TOTAL EQUITY AND LIABILITIES 175,311,597 149,331,463 106,707,957 103,702,838


greener by innovation 42 income statements for the financial year ended 31 december 2008

INCOME STATEMENTS for the financial year ended 31 december 2008

Group Company2008 2007 2008 2007

Note RM RM RM RM Revenue 26 150,257,792 102,939,927 6,805,000 -

Cost of sales (118,959,506) (83,705,680) - -

Gross profit 31,298,286 19,234,247 6,805,000 -

Other income 2,639,509 2,712,677 4,795,230 3,921,808

Distribution costs (2,746,684) (3,323,282) - -

Administration expenses (10,548,053) (7,932,060) (3,730,297) (153,125)

Other expenses (2,079,916) (1,283,243) (916,325) (643,477)

Profit from operations 18,563,142 9,408,339 6,953,608 3,125,206

Finance costs 27 (5,300,145) (4,194,955) (3,551,984) (3,015,869)

Profit before tax 28 13,262,997 5,213,384 3,401,624 109,337

Tax expense 29 (2,776,692) (1,294,355) (1,721,332) (70,950)

Profit for the financial year 10,486,305 3,919,029 1,680,292 38,387

Attributable to:Equity holders of the Company 11,195,188 4,593,075 1,680,292 38,387

Minority interest (708,883) (674,046) - -

10,486,305 3,919,029 1,680,292 38,387

Earnings per ordinary share (sen)- Basic 30 13.33 5.72


greener by innovation 43statements of changes in equity for the financial year ended 31 december 2008

Attributable to equity holders of the Company Non-distributable Distributable

Ordinary Exchangeshare Share translation Capital Retained Minority Total

capital premium reserve reserve earnings Total interest equityRM RM RM RM RM RM RM RM

Group

Balance at 31 December 2007 42,008,000 2,889,896 (201,019) 4,096 13,744,687 58,445,660 3,131,768 61,577,428

Currency translation differences - - (69,686) - - (69,686) - (69,686)

Loss recognised directly in equity - - (69,686) - - (69,686) - (69,686)

Profit for the financial year - - - - 11,195,188 11,195,188 (708,883) 10,486,305

Total recognised income and expense for the financial year - - (69,686) - 11,195,188 11,125,502 (708,883) 10,416,619



STATEMENTS OF CHANGES IN EQUITYfor the financial year ended 31 december 2008

greener by innovation 44 statements of changes in equity for the financial year ended 31 december 2008

Attributable to equity holders of the Company Non-distributable Distributable

Ordinary Exchangeshare Share translation Capital Retained Minority Total

capital premium reserve reserve earnings Total interest equityRM RM RM RM RM RM RM RM

Group


Acquisition of a subsidiary - - (199,767) - - (199,767) 242,319 42,552Currency translation differences - - (134) - - (134) - (134)

Loss recognised directly in equity - - (199,901) - - (199,901) 242,319 42,418

Profit for the financial year - - - - 4,593,075 4,593,075 (674,046) 3,919,029

Total recognised income and expense for the financial year - - (199,901) - 4,593,075 4,393,174 (431,727) 3,961,447

Issue of shares (Note 16) 2,000,000 - - - - 2,000,000 - 2,000,000



greener by innovation 45statements of changes in equity for the financial year ended 31 december 2008


Non-distributable Distributable

Ordinaryshare Share Retained

capital premium earnings TotalRM RM RM RM

Company

Balance at 31 December 2006 40,008,000 2,889,896 3,200,809 46,098,705

Profit for the financial year - - 38,387 38,387

Total recognised income for the financial year - - 38,387 38,387

Issue of shares (Note 16) 2,000,000 - - 2,000,000


Profit for the financial year - - 1,680,292 1,680,292

Total recognised income for the financial year - - 1,680,292 1,680,292


greener by innovation 46 cash flow statements for the financial year ended 31 december 2008

CASH FLOW STATEMENTS for the financial year ended 31 december 2008

Group Company2008 2007 2008 2007

Note RM RM RM RM CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 13,262,997 5,213,384 3,401,624 109,337

Adjustments for:

Amortisation of MUNIF/IMTN 28 98,571 98,571 98,571 98,571

Allowance for doubtful debts 28 2,578,405 863,596 - -

Allowance for doubtful debts no longer required 28 (340,550) (940,157) - -

Inventories written down 28 165,672 2,215 - -

Allowance for slow moving inventories no longer required 28 (117,423) - - -

Bad debts written off 28 3,311 453,287 - -

Depreciation of property, plant and equipment 7 5,565,208 4,936,828 - -

Depreciation of investment property 9 3,654 3,654 - -

Dividend income 28 - - (6,805,000) -

Gain on disposal of other investments 28 - (1,874) - -

Gain on disposal of property, plant and equipment 28 (69,953) (124,365) - -

Loss on disposal of property, plant and equipment 28 - 88,046 - -

Impairment loss on investment in a subsidiary 10 - - 3,562,409 -

Impairment loss on property, plant and equipment 7 348,000 - - -

Interest expense 28 1,456,353 1,014,526 - -

Interest income 28 (263,330) (283,910) (4,792,915) (3,921,808)

Expenses in relation to MUNIF/IMTN 28 3,544,776 3,015,311 3,544,776 3,015,311

Property, plant and equipment written off 7 54,440 20,678 - -

Unrealised (gain)/loss on foreign exchange 28 (33,481) 12,793 - -

Operating profit/(loss) before working capital changes 26,256,650 14,372,583 (990,535) (698,589)

Increase in inventories (5,346,731) (4,401,173) - -

(Increase)/Decrease in trade and other receivables (2,224,566) (16,386,851) 194,911 152,451

Increase/(Decrease) in trade and other payables 4,386,605 5,856,570 (70,938) (27,871)

Cash generated from/(used in) operations 23,071,958 (558,871) (866,562) (574,009)

Tax paid (1,159,112) (248,601) (184,265) (2,299)

Interest paid (717,281) (572,519) - -

Net cash from/(used in) operating activities 21,195,565 (1,379,991) (1,050,827) (576,308)


greener by innovation 47cash flow statements for the financial year ended 31 december 2008


Group Company2008 2007 2008 2007

Note RM RM RM RM CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment 7(a) (11,568,289) (4,325,516) - -

Proceed from disposal of other investments 299,546 61,874 - -

Dividend received - - 5,295,700 -

Acquisition of additional shares in a subsidiary - - - (4,000,000)

Acquisitions of subsidiaries - net of cash acquired 34 - (17,981) - -

Proceeds from disposal of property, plant and equipment 89,045 298,959 - -Withdrawal/(Placement) of pledged fixed deposits with licensed bank 1,847,881 (1,128,774) 662,396 (30,722)Interest received 150,532 120,780 69,045 65,394

Net advances to subsidiaries - - - (4,380,418)

Net repayment from subsidiaries - - 3,794,697 -

Net cash (used in)/from investing activities (9,181,285) (4,990,658) 9,821,838 (8,345,746)

CASH FLOWS FROM FINANCING ACTIVITIES

Advances from Directors 18,000 - 18,000 -

Repayment of hire-purchase and lease liabilities (2,118,123) (663,776) - -

Net drawdown of in short term borrowings 8,293,665 2,427,179 - -

Drawdown of MUNIF 4,850,842 9,722,740 4,850,842 9,722,740

Repayment of MUNIF (5,000,000) - (5,000,000) -

Proceed from issue of shares - 2,000,000 - 2,000,000

Repayment of term loans (2,654,722) (1,161,188) - -Interest paid (739,072) (442,007) - -Expenses in relation to MUNIF/IMTN paid (3,544,776) (3,015,311) (3,544,776) (3,015,311)

Advances from a subsidiary - - 1,350,000 152,451

Net cash (used in)/from financing activities (894,186) 8,867,637 (2,325,934) 8,707,429

Net increase/(decrease) in cash and cash equivalents 11,120,094 2,496,988 6,445,077 (214,625)

Effect of changes in exchange rates (12,816) (134) - -

Cash and cash equivalents at beginning of the year 10,981,962 8,485,108 2,414,835 2,629,460

Cash and cash equivalents at end of the year 15(c) 22,089,240 10,981,962 8,859,912 2,414,835

greener by innovation 48 notes to the financial statements 31 december 2008

NOTES TO THE FINANCIAL STATEMENTS31 december 2008

1. CORPORATE INFORMATION

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

The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.

The principal place of business of the Company is located at Lot 13A, Rawang Industrial Estate, 48000 Rawang, Selangor Darul Ehsan.

The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.

The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 21 April 2009.

2. PRINCIPAL ACTIVITIES

The Company is principally an investment holding company. The principal activities of the subsidiaries are set out in Note 10 to the financial statements. There have been no significant changes in the nature of these activities during the year.

3. BASIS OF PREPARATION

The financial statements of the Group and of the Company have been prepared in accordance with applicable approved Financial Reporting Standards (“FRSs”) in Malaysia and the provisions of the Companies Act 1965.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements.

The preparation of financial statements requires the Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying the accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on the Directors’ best knowledge of events and actions, actual results could differ from those estimates.

greener by innovation 49notes to the financial statements 31 december 2008

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries made up to the end of the financial year using the purchase method of accounting.

Under the purchase method of accounting, the cost of business combination is measured at the aggregate of fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business combination.

At the acquisition date, the cost of business combination is allocated to identifiable assets acquired, liabilities assumed and contingent liabilities in the business combination which are measured initially at their fair values at the acquisition date. The excess of the cost of business combination over the Group’s interest in the net fair value of the identifiable assets acquired, liabilities assumed and contingent liabilities is recognised as goodwill (see Note 4.7 to the financial statements on goodwill). If the cost of business combination is less than the interest in the net fair value of the identifiable assets, liabilities and contingent liabilities, the Group will:

(a) reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the combination; and

(b) recognise immediately in profit or loss any excess remaining after that reassessment.

When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiary’s identifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation.

Subsidiaries are consolidated from the acquisition date, which is the date on which the Group effectively

obtains control, until the date on which the Group ceases to control the subsidiaries. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the existence and effect of potential voting rights that are currently convertible or exercisable are taken into consideration.

Intragroup balances, transactions and unrealised gains and losses on intragroup transactions are eliminated in full. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. If a subsidiary uses accounting policies other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to its financial statements in preparing the consolidated financial statements.

The gain or loss on disposal of a subsidiary, which is the difference between the net disposal proceeds and the Group’s share of its net assets as of the date of disposal including the carrying amount of goodwill and the cumulative amount of any exchange differences that relate to the subsidiary, is recognised in the consolidated income statement.

Minority interest is that portion of the profit or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the Group. It is measured at the minority’s share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minority’s share of changes in the subsidiaries’ equity since that date.

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

Minority interest is presented in the consolidated balance sheet within equity and is presented in the consolidated statement of changes in equity separately from equity attributable to equity holders of the Company.

Minority interest in the results of the Group is presented in the consolidated income statement as an allocation of the total profit or loss for the financial year between minority interest and equity holders of the Company.



4.3 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has different useful life, is depreciated separately.

After initial recognition, property, plant and equipment except for freehold land and buildings are stated at cost less any accumulated depreciation and any accumulated impairment losses. The freehold land and buildings are stated at valuation, which is the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Depreciation is calculated to write off the cost or valuation of the assets to their residual values on a straight line basis over their estimated useful lives. The principal annual depreciation rates are as follows:

Buildings 2% Plant and machinery 4% - 12% Motor vehicles 20% Office equipment, furniture and fittings 8% - 40% Renovation 10% Computer equipment 40%

Freehold land is not depreciated. Building under construction is stated at cost and is not depreciated until such time when the asset is available for use.

At each balance sheet date, the carrying amount of an item of property, plant and equipment is assessed for impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see Note 4.8 to the financial statements on impairment of assets).

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, plant and equipment. If expectation differ from previous estimates, the changes are accounted for as a change in an accounting estimate.

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profit or loss and the revaluation surplus related to those assets, if any, is transferred directly to retained earnings.



4.4 Leases and hire-purchase

(a) Finance leases and hire-purchase

Assets acquired under finance leases and hire-purchase which transfer substantially all the risks and rewards of ownership to the Group are recognised initially at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the Group’s incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are depreciated on the same basis as owned assets.

The minimum lease payments are apportioned between the finance charges and the reduction of the outstanding liability. The finance charges are recognised in profit and loss over the period of the lease term so as to produce a constant periodic rate of interest on the remaining lease and hire-purchase liabilities.

(b) Operating leases

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.

(c) Leases of land and buildings

For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification 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 buildings, are allocated between the land and the buildings elements in proportion to the relative fair values of the leasehold interests in the land element and the buildings element of the lease at the inception of the lease.

Leasehold land that normally has an indefinite economic life and where the lease does not transfer substantially all the risk and rewards incidental to ownership is treated as an operating lease. The lump-sum upfront payments made on entering into or acquiring leasehold land are accounted for as prepaid lease payments and are amortised over the lease term on a straight line basis.

The buildings element is classified as a finance or operating lease in accordance with Note 4.4(a) or Note 4.4(b) to the financial statements. If the lease payment cannot be allocated reliably between these 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.

For a lease of land and buildings in which the amount that would initially be recognised for the land element is immaterial, the land and buildings are treated as a single unit for the purpose of lease classification and is accordingly classified as a finance or operating lease. In such a case, the economic life of the buildings is regarded as the economic life of the entire leased asset.



4.5 Investment properties

Investment properties are properties which are held to earn rental yields or for capital appreciation or for both and are not occupied by the Group. Investment properties are initially measured at cost, which includes transaction costs. After initial recognition, investment properties are stated at cost less accumulated depreciation and any impairment losses.

Depreciation is charged to the income statement on a straight line basis over the estimated useful life of 50 years for buildings.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from their disposal. The gains or losses arising from the retirement or disposal of investment property is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in profit or loss in the period of the retirement or disposal.

4.6 Investment in subsidiaries

A subsidiary is an entity in which the Group and the Company has power to control the financial and operating policies so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate financial statements at cost less impairment losses, if any. On disposal of such an investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.

4.7 Goodwill

Goodwill acquired in a business combination is recognised as an asset at the acquisition date and is initially measured at cost being the excess of the cost of business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

4.8 Impairment of non-financial assets

The carrying amount of assets, except for financial assets (excluding investment in subsidiaries), inventories, deferred tax assets and investment properties are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or more frequently if events or changes in circumstances indicate that the goodwill or intangible asset might be impaired.

The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash generating unit (CGU) to which the asset belongs. Goodwill acquired in a business combination is from the acquisition date, allocated to each of the Group’s CGU or groups of CGU that are expected to benefit from the synergies of the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units.



4.8 Impairment of non-financial assets (continued)

The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use.

In estimating the value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in the income statement when the carrying amount of the asset or the CGU, including the goodwill or intangible asset, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU.

The impairment loss is recognised in the income statement immediately except for the impairment on a revalued asset where the impairment loss is recognised directly against the revaluation reserve account to the extent of the surplus credited from the previous revaluation for the same asset with the excess of the impairment loss charged to the income statement.

An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets is reversed if, and only if, there has been a change in the estimates used to determine the assets’ recoverable amount since the last impairment loss was recognised.

An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Such reversals are recognised as income immediately in the income statement except for the reversal of an impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation increase and credited to the revaluation reserve account of the same asset. However, to the extent that an impairment loss on the same revalued asset was previously recognised in profit or loss, a reversal of that impairment loss is also recognised in profit or loss.

4.9 Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined using the first-in, first-out formula. The cost of raw materials and consumables comprises all costs of purchase plus the cost of bringing the inventories to their present location and condition. The cost of work-in-progress and finished goods includes the cost of raw materials, direct labour, other direct cost and a proportion of production overheads based on normal operating capacity of the production facilities.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

4.10 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially favourable to the Group.



4.10 Financial instruments (continued)

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the Group.

4.10.1 Financial instruments recognised on the balance sheets

Financial instruments are recognised on the balance sheet when the Group has become a party to the contractual provisions of the instrument.

Financial instruments are classified as, liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and losses and gains relating to a financial instrument or a component that is a financial liability shall be recognised as income or expense in profit or loss. Distributions to holders of an equity instrument are debited directly to equity, net of any related tax effect. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle on a net basis or to realise the asset and settle the liability simultaneously.

(a) Receivables

Receivables are carried at anticipated realisable value. Known bad debts are written off and specific allowance is made for debts considered to be doubtful of collection.

Receivables are not held for trading purposes.

(b) Cash and cash equivalents

Cash and cash equivalents include cash and bank balances, deposits and other short term, highly liquid investments which are readily convertible to cash and are subject to insignificant risk of changes in value.

(c) Payables

Liabilities for trade and other amounts payable, including amounts owing to related parties are recognised at fair value of the consideration to be paid in the future for goods and services received.

(d) Interest bearing loans and borrowings

All loans and borrowings are recognised at the fair value of the consideration received less directly attributable transaction costs.

(e) Equity instruments

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to the profit or loss.

Dividends to shareholders are recognised in equity in the period in which they are declared.

If the Company reacquires its own equity instrument, the consideration paid, including any attributable transaction costs is deducted from equity as treasury shares until they are cancelled. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Where such shares are issued by resale, the difference between the sales consideration and the carrying amount is shown as a movement in equity.



4.10 Financial instruments (continued)

4.10.2 Financial instruments not recognised on the balance sheets

The Group is a party to financial instruments that comprise foreign currency forward contracts which are not recognised in the financial statements on inception.

Foreign currency forward contracts are used to hedge foreign exposures as a result of receipts and payments in foreign currency. Any gains or losses arising from contracts entered into as hedges of anticipated future transactions are deferred until the dates of such transactions at which time they are included in the measurement of such transactions.

4.11 Borrowing costs

Borrowing cost that are directly attributable to the acquisition, construction or production of a qualified asset is capitalised as part of the cost of the asset until when substantially all the activities necessary to prepare the asset for its intended use or sale are complete, after which such expense is charged to profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended periods in which active development is interrupted.

The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the borrowing during the period less any investment income on the temporary investment of the borrowing.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

4.12 Income taxes

Taxes in the income statement comprises current tax and deferred tax.

(a) Current tax

Current tax is the amount of income taxes payable or receivable in respect of taxable profit or loss for a period.

Current tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that have been enacted or substantively enacted by the balance sheet date.

(b) Deferred tax

Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or liability in the balance sheet and its tax base.

Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit.

A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at each balance sheet date. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.



4.12 Income taxes (continued)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.

Deferred tax will be recognised as income or expense and included in the profit or loss for the period unless the tax relates to items that are credited or charged, in the same or a different period, directly to equity, in which case the deferred tax will be charged or credited directly to equity.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

4.13 Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the effect of the time value of money is material, the amount of a provision will be discounted to its present value at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision will be reversed.

Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

4.14 Contingent liabilities and contingent assets A contingent liability is a possible obligation that arises from past events whose existence will be confirmed

by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date, irrespective of the extent of any minority interest.



4.15 Employee benefits

4.15.1 Short term employee benefits

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are recognised as an expense in the financial year when employees have rendered their services to the Group.

Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render services that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments as a result of past events and when a reliable estimate can be made of the amount of the obligation.

4.15.2 Defined contribution plans

The Company and subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. The contributions are recognised as a liability after deducting any contributions already paid and as an expense in the period in which the employees render their services.

4.15.3 Share-based payments

The Group operates an equity-settled share-based compensation plan, allowing the employees of the Group to acquire ordinary shares of the Company at predetermined prices. The total fair value of share options granted to employees is recognised as an expense with a corresponding increase in the share options reserve within equity over the vesting period and taking into account the probability that the options will vest.

The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on the vesting date.

At each balance sheet date, the Group revises its estimates of the number of options that are expected to become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in profit or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share options reserve until the options are exercised, upon which it will be transferred to share premium, or until the options expires, upon which it will be transferred directly to retained earnings.

The proceeds received net of any directly attributable transaction costs are credited to equity when the options are exercised.



4.16 Foreign currencies

4.16.1 Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency.

4.16.2 Foreign currency translations and balances

Transactions in foreign currencies are converted into Ringgit Malaysia at the rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the balance sheet date are translated into Ringgit Malaysia at rates of exchange ruling at that date. All exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in the profit or loss in the period in which they arise. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition, and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined for presentation currency purposes.

4.16.3 Foreign operations

Financial statements of foreign operations are translated at financial year end exchange rates with respect to the assets and liabilities, and at exchange rates at the dates of the transactions with respect to the income statement. All resulting translation differences are recognised as a component of equity.

In the consolidated financial statements, exchange differences arising from the translation of net investment in foreign operations are taken to equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in profit or loss as part of the gain or loss on disposal.

Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation are treated as assets and liabilities of the acquired entity and translated at the exchange rate ruling at the balance sheet date.

4.17 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates.

Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the Group’s activities as follows:

(a) Sale of goods

Revenue from sale of goods is recognised when significant risk and rewards of ownership of the goods has been transferred to the customer and where the Group retains neither continuing managerial involvement over the goods, which coincides with delivery of goods and services and acceptance by customers.



4.17 Revenue recognition (continued)

(b) Installation services

Revenue in respect of the installation services is recognised when the stage of completion at the balance sheet date and the cost incurred can be reliably measured. The stage of completion is determined based on certified measurement of actual work performed.

(c) Dividend income

Dividend income is recognised when the right to receive payment is established.

4.18 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 return 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 resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment. Segment revenue, expense, assets and liabilities are determined before intragroup balances and intragroup transactions are eliminated as part of the consolidation process, except to the extent that such intragroup balances and transactions are between Group enterprises within a single element.

5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRS

5.1 Amendment to FRS and new FRSs adopted

(a) The following FRSs are mandatory for annual periods beginning on or after 1 July 2007:

FRS 107 Cash Flow Statements FRS 111 Construction Contracts FRS 112 Income Taxes FRS 118 Revenue FRS 120 Accounting for Government Grants and Disclosure of Government Assistance FRS 134 Interim Financial Reporting FRS 137 Provisions, Contingent Liabilities and Contingent Assets These FRSs align the Malaysian Accounting Standards Board (‘MASB’) FRSs with the equivalent

International Accounting Standards (‘IASs’), both in terms of form and content. The adoption of these Standards will only impact the form and content of disclosures presented in the financial statements.

FRS 111 and FRS 120 are not relevant to the Group’s operations.


5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRS (continued)

5.1 Amendment to FRS and new FRSs adopted (continued)

(b) The following Amendment and IC Interpretations are mandatory for annual periods beginning on or after 1 July 2007:

Amendment to FRS 121 The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities IC Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments IC Interpretation 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds IC Interpretation 6 Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment IC Interpretation 7 Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinflationary Economies IC Interpretation 8 Scope of FRS 2

The above Amendment and the IC Interpretations are not relevant to the Group’s operations.

(c) Framework for the Preparation and Presentation of Financial Statements (‘Framework’), is effective for annual periods beginning on or after 1 July 2007.

The Framework sets out the concepts that underlie the preparation and presentation of financial statements for external users. It is not a MASB approved FRS as defined in paragraph 11 of FRS 101 Presentation of Financial Statements and hence, does not define standards for any particular measurement or disclosure issue.

5.2 New FRSs not adopted

(a) FRS 8 Operating Segment and the consequential amendments resulting from FRS 8 are mandatory for annual financial periods beginning on or after 1 July 2009.

FRS 8 sets out the requirements for disclosure of information on an entity’s operating segments, product and services, the geographical areas in which it operates and its customers.

The requirements of this standard are based on the information about the components of the entity that management uses to make decision about operating matters. The standard requires identification of operating segments on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker in order to allocate resources to the segment and assess its performance.

The standard also requires the amount reported for each operating segment item to be the measure reported to the chief operating decision maker for the purposes of allocating resources to the segment and assessing its performance. Segment information for prior years that is reported as comparative information for the initial year of application would be restated to conform to the requirements of this standard.

The adoption of this standard will only impact the form and content of disclosures presented in the financial statements.



5.2 New FRSs not adopted (continued)

(b) FRS 4 Insurance Contracts and the consequential amendments resulting from FRS 4 are mandatory for annual financial periods beginning on or after 1 January 2010. FRS 4 replaces the existing FRS 2022004 General Insurance Business and FRS 2032004 Life Insurances Business.

The standard applies to all insurance contracts, including reinsurance contracts that an entity issues and to reinsurance contracts that it holds. The standard prohibits provisions for potential claims under contracts that are not in existence at the reporting date, and requires a test for the adequacy of recognised insurance liabilities and an impairment test for reinsurance assets. The standard also requires an insurer to keep insurance liabilities in its balance sheet until they are discharged or cancelled, or expire, and to present insurance liabilities without offsetting them against related reinsurance assets.

FRS 4 is not relevant to the Group’s operations.

(c) FRS 7 Financial Instruments: Disclosures and the consequential amendments resulting from FRS 7 are mandatory for annual financial periods beginning on or after 1 January 2010. FRS 7 replaces the disclosure requirements of the existing FRS 132 Financial Instruments: Disclosure and Presentation.

The standard applies to all risks arising from a wide array of financial instruments and requires the disclosure of the significance of financial instruments for an entity’s financial position and performance.

The standard requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk. The qualitative disclosures describe the management’s objectives, policies and processes for managing those risks. The quantitative disclosures provide information on the extent to which the entity is exposed to risk, based on information provided internally to the entity’s key management personnel.

(d) FRS 139 Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 are mandatory for annual financial periods beginning on or after 1 January 2010.

The standard establishes the principles for the recognition and measurement of financial assets and financial liabilities including circumstances under which hedge accounting is permitted. By virtue of the exemption provided under paragraph 103AB of FRS 139, the impact of applying FRS 139 on the consolidated financial statements upon first adoption of the FRS as required by paragraph 30(b) of FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed.

(e) IC Interpretation 9 Reassessment of Embedded Derivatives is mandatory for annual financial periods beginning on or after 1 January 2010.

This Interpretation prohibits the subsequent reassessment of embedded derivatives unless there is a change in the terms of the host contract that significantly modifies the cash flows that would otherwise the required by the host contract.

IC Interpretation 9 is not relevant to the Group’s operations.



5.2 New FRSs not adopted (continued)

(f) IC Interpretation 10 Interim Financial Reporting and Impairment is mandatory for annual financial periods beginning on or after 1 January 2010.

This Interpretation prohibits the reversals of an impairment loss recognised in a previous interim period in respect of goodwill or an investment in either an equity instrument or a financial asset carried at cost.

The Group will apply this interpretation from financial periods beginning on 1 January 2010.

6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

6.1 Critical judgements made in applying accounting policies

There are no critical judgements made by the management in the process of applying the Group’s accounting policies that have the most significant effect on the amount recognised in these financial statements.

6.2 Key sources of estimation uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(a) Impairment of goodwill on consolidation

The Group determines whether goodwill on consolidation is impaired at least on an annual basis. This requires an estimation of the value-in-use of the subsidiaries to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from the subsidiaries and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further details are disclosed in Note 11 to the financial statements.

(b) Depreciation of plant and machinery

The cost of plant and machinery is depreciated on a straight-line basis over the assets’ useful lives. Management estimates the useful life of these plant and machinery to be within 8 to 25 years. These are common life expectancies applied in manufacturing industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(c) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the tax losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.


6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

6.2 Key sources of estimation uncertainty (continued)

(d) Allowance for doubtful debts

The Group makes allowances for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses historical bad debts, customer concentration, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of allowance for doubtful debts. Where expectations differ from the original estimates, the differences will impact the carrying amount of receivables.

(e) Write down for obsolete or slow moving inventories

The Group writes down its obsolete or slow moving inventories based on an assessment of their estimated net selling price. Inventories are written down where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses sales trend and current economic trends when making a judgement to evaluate the adequacy of the write down for obsolete or slow moving inventories. Where expectations differ from the original estimates, the differences will impact the carrying amount of inventories.


Office

Group equipment, Building

Freehold Plant and Motor furniture Computer under

land Buildings machinery vehicles and fittings Renovation equipment construction Total

RM RM RM RM RM RM RM RM RM

2008Carrying amount

At 1 January 2008 10,610,480 19,761,218 26,517,953 1,096,461 411,947 174,828 16,422 456,470 59,045,779

Reclassifications - 3,015,872 105,601 - (105,601) - - (3,015,872) -

Translation adjustment - - - - 32 - - - 32

Impairment loss (348,000) - - - - - - - (348,000)

Additions - 658,124 13,356,560 168,000 110,676 1,217,070 31,359 2,559,402 18,101,191

Disposals - - (10,318) (7,947) (827) - - - (19,092)

Written off - - (52,097) - (2,343) - - - (54,440)

Depreciation charge for the year - (475,570) (4,503,865) (358,657) (63,503) (141,521) (22,092) - (5,565,208)

At 31 December 2008 10,262,480 22,959,644 35,413,834 897,857 350,381 1,250,377 25,689 - 71,160,262

At 31 December 2008

Cost/Valuation 10,610,480 25,557,515 68,905,006 3,429,466 871,305 1,415,205 443,826 - 111,232,803

Accumulated impairment (348,000) - - - - - - - (348,000)

Accumulated depreciation - (2,597,871) (33,491,172) (2,531,609) (520,924) (164,828) (418,137) - (39,724,541)

Carrying amount 10,262,480 22,959,644 35,413,834 897,857 350,381 1,250,377 25,689 - 71,160,262

2007Carrying amount

At 1 January 2007 10,610,480 14,220,538 26,395,413 1,387,171 346,981 14,686 42,793 4,948,187 57,966,249

Reclassifications - 5,036,491 (88,304) - - - - (4,948,187) -

Additions - 930,095 4,439,068 161,979 129,836 178,317 3,911 456,470 6,299,676

Disposals - - (242,405) (18,188) - - (2,047) - (262,640)

Written off - - - (18,292) (2,386) - - - (20,678)

Depreciation charge for the year - (425,906) (3,985,819) (416,209) (62,484) (18,175) (28,235) - (4,936,828)

At 31 December 2007 10,610,480 19,761,218 26,517,953 1,096,461 411,947 174,828 16,422 456,470 59,045,779

At 31 December 2007

Cost/Valuation 10,610,480 21,883,519 55,584,520 3,469,123 887,071 198,135 524,340 456,470 93,613,658

Accumulated depreciation - (2,122,301) (29,066,567) (2,372,662) (475,124) (23,307) (507,918) - (34,567,879)

Carrying amount 10,610,480 19,761,218 26,517,953 1,096,461 411,947 174,828 16,422 456,470 59,045,779

7. PROPERTY, PLANT AND EQUIPMENT


7. PROPERTY, PLANT AND EQUIPMENT (continued)

Company Computerequipment Total

RM RM 2008Carrying amount

At 1 January 2008 1 1

Depreciation charge for the year - -

At 31 December 2008 1 1

At 31 December 2008Cost 2,698 2,698

Accumulated depreciation (2,697) (2,697)

Carrying amount 1 1

2007Carrying amount

At 1 January 2007 1 1

Depreciation charge for the year - -

At 31 December 2007 1 1

At 31 December 2007Cost 2,698 2,698

Accumulated depreciation (2,697) (2,697)

Carrying amount 1 1

(a) During the financial year, the Group made the following cash payments to purchase property, plant and equipment:

Group2008 2007

RM RM Purchase of property, plant and equipment 18,101,191 6,299,676

Financed by hire-purchase and lease arrangements (6,532,902) (1,974,160)

Cash payments on purchase of property, plant and equipment 11,568,289 4,325,516


7. PROPERTY, PLANT AND EQUIPMENT (continued)

As at 31 December 2008, the net carrying amount of the Group’s property, plant and equipment under finance leases are as follows:

Details of the terms and conditions of the finance lease arrangements are disclosed in Note 21 and Note 37 to the financial statements.

(b) As at 31 December 2008, the net carrying amount of the Group’s property, plant and equipment which have been charged to licensed financial institutions for credit facilities granted to the Group are as follows:

(c) The title deed of the freehold land with carrying amount of RM1,767,700 (2007: RM1,767,700) is still in the process of being transferred into the name of the Company.

8. PREPAID LEASE PAYMENTS

Group2008 2007

RM RM Plant and machinery 9,247,158 2,136,974

Motor vehicles 703,778 1,018,277

9,950,936 3,155,251

Group2008 2007

RM RM

Borrowings (other than hire-purchase)Freehold land and buildings 27,715,697 24,523,152

Plant and machinery 591,623 4,475,815

28,307,320 28,998,967

Group Acquisition AmortisationBalance as at of subsidiary charge for the Translation Balance as at

1.1.2008 (Note 10.3(a)) financial year adjustment 31.12.20082008 RM RM RM RM RM

Leasehold land and building 1,326,836 - - (56,902) 1,269,934

Acquisition AmortisationBalance as at of subsidiary charge for the Translation Balance as at

1.1.2007 (Note 10.3(a)) financial year adjustment 31.12.20072007 RM RM RM RM RM

Leasehold land and building - 1,326,836 - - 1,326,836


8. PREPAID LEASE PAYMENTS (continued) No amortisation of prepaid lease payments is made in the Group’s financial statements. The amount

to be amortised over the lease term of RM32,000 during the financial year was not material to the Group’s financial statements.

The uncertainty relating to the recoverable amount of prepaid lease payment of the leasehold land and building was mentioned in Note 10.2 to the financial statements. However, the Directors are confident that the recoverable amount will not be lower than the carrying amount.

9. INVESTMENT PROPERTY

Group DepreciationBalance as at charge for the Balance as at

1.1.2008 Additions financial year 31.12.20082008 RM RM RM RM

Carrying amount

Freehold apartment 178,447 - (3,654) 174,793

DepreciationBalance as at charge for the Balance as at

1.1.2007 Additions financial year 31.12.20072007 RM RM RM RM

Carrying amount

Freehold apartment 182,101 - (3,654) 178,447

As at the balance sheet date, the Group has yet to obtain the title deed from the property developer. The investment property represents a unit of medium-cost freehold apartment.

Based on the desktop valuation using the market information of similar properties available for sale in the vicinity, the current market value of the investment property does not significantly varied from the carrying amount as at 31 December 2008.

10. INVESTMENT IN SUBSIDIARIES

Group2008 2007

RM RM

Unquoted equity shares - at cost 35,897,804 35,897,804

Less: Accumulated impairment losses (3,820,409) (258,000)

32,077,395 35,639,804


10. INVESTMENT IN SUBSIDIARIES (continued)

Details of the subsidiaries are as follows:

Interest in equity held byName of Country of Company Subsidiariescompany incorporation 2008 2007 2008 2007 Principal activities

Emas Kiara Sdn. Bhd. Malaysia 100% 100% - - Manufacturing and trading of geosynthetic products and

technical fabrics for engineering and industrial applications

Emas Kiara Marketing Sdn. Bhd.*

Malaysia 100% 100% - - Marketing, trading and installation service of geosynthetic products

Khidmat Edar (M) Sdn. Bhd.

Malaysia 100% 100% - - Manufacturing and trading of non-woven geosynthetic products

for the construction and engineering use and industrial fabrics

Advance Technical Fabric Sdn. Bhd.

Malaysia 100% 100% - - Manufacturing, trading and marketing of industrial fabrics

and geosynthetic products

Kiaratex Exports Pte. Ltd.*

Singapore 100% 100% - - Sales and marketing of geosynthetic products and

materials to international market

Fibre Innovation Technology Sdn. Bhd.

Malaysia 67% 67% - - Manufacturing and trading of industrial fibres

Kiara Tex Sdn. Bhd. Malaysia 70% 70% - - Manufacturing of cellular confinement systems

Innovative Industrial Textiles Sdn. Bhd.*

Malaysia 100% 100% - - Manufacturing of woven industrial packaging

Southcorp Holdings Sdn. Bhd. Malaysia 100% 100% - - Provision of management services

Subsidiary of Emas Kiara Sdn. Bhd.

Emas Kiara Vietnam Joint Venture Company*

Vietnam - - 83.8% 82.7% Yet to commence business

Subsidiary of Emas Kiara Marketing Sdn. Bhd.

Emas Kiara Geo Services Sdn. Bhd.*

Malaysia - - 100% 100% General contracting work and trading

* Subsidiaries not audited by BDO Binder


10. INVESTMENT IN SUBSIDIARIES (continued)

10.1 An impairment loss in investments of RM3,562,409 relating to a subsidiary, Fibre Innovation Technology Sdn. Bhd. had been recognised during the financial year due to the declining business operations.

10.2 The financial statements of the subsidiary, Emas Kiara Vietnam Joint Venture Company have been prepared on a going concern basis despite the accumulated losses and net current liabilities. In addition, the auditors’ report of Emas Kiara Vietnam Joint Venture Company has a modification in respect of emphasis of matter which indicates that the carrying amount of the leasehold land and building of RM1,269,934, presently stated at historical cost, will be recovered through the disposal plan to close down the business operation in Vietnam. This condition contain uncertainty of timing and realisable value of leasehold land and building as a buyer has not been identified.

10.3 Acquisitions of subsidiaries/Additional investment in a subsidiary

In the previous financial year:

(a) the Company had reclassified the status of Emas Kiara Vietnam Joint Venture Company from other investment to subsidiary, upon satisfying the terms and conditions whereby control exists.

The effect of the acquisition of the subsidiary on the financial results of the Group was as follows:

The effect of the acquisition of the subsidiary on the financial position of the Group as at the end of the financial year was as follows:

(b) the Company’s wholly owned subsidiary, Emas Kiara Marketing Sdn. Bhd. acquired the entire issued share capital of Emas Kiara Geo Services Sdn. Bhd. formerly known as Southcorp Technical Textile Sdn. Bhd. comprising 2 ordinary shares of RM1.00 each, for a total cash consideration of RM2.00. Emas Kiara Geo Services Sdn. Bhd. has yet to commence its business operations. The acquisition has no material effect on the net assets of the Group.

(c) the Company further invested in Advance Technical Fabric Sdn. Bhd., its wholly owned subsidiary by the subscription of 4,000,000 ordinary shares of RM1.00 each at par for cash in the share capital of the subsidiary.

2007RM

Administration expenses (87,844)

Other expenses (2,574)

Decrease in Group’s net profit (90,418)

2007RM

Prepaid lease payments for land 1,326,836

Cash and bank balances 1,005

Increase in Group’s share of net assets 1,327,841


11. GOODWILL

Group2008 2007

RM RM

Balance as at 1 January 2,080,765 1,121,140

Recognised in the income statements (Note 29) 929,695 959,625

Balance as at 31 December 3,010,460 2,080,765

Presented after appropriate offsetting:

Deferred tax assets, net (320,000) (448,000)

Deferred tax liabilities, net 3,330,460 2,528,765

3,010,460 2,080,765

Goodwill is tested for impairment on an annual basis by comparing the carrying amount with the recoverable amount.

The recoverable amount of the goodwill was determined based on value-in-use calculations. Based on the calculation, there was no impairment loss allocated to the goodwill as the recoverable amounts was determined to be higher than their carrying amounts as at balance sheet date.

Value-in-use of goodwill was determined by management using discounted future cash flows and based on the following assumptions:

(i) Pre-tax cash flow projections based on the most recent financial budgets approved by the Directors covering a four-year period.

(ii) Revenue was projected to have an annual growth ranging from 3% to 5% per annum for the year 2009 to 2013; and

(iii) Pre-tax discount rate of 10% was applied based on the Group weighted average cost of capital.

With regard to the assessment of value-in-use of the goodwill, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value to materially exceed their recoverable amounts.

12. DEFERRED TAX

(a) The deferred tax assets and liabilities are made up of the following:

Group2008 2007

Cost RM RM

At beginning of the financial year 3,185,873 3,185,873

Arose from acquisition of a subsidiary - 6,131

Impairment of goodwill in subsidiary - (6,131)

At end of the financial year 3,185,873 3,185,873


12. DEFERRED TAX (continued)

(b) The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as follows:

UnabsorbedUnused tax capital

Provisions losses allowances TotalRM RM RM RM

Deferred tax assets of the Group

At 1 January 2008 33,600 507,757 1,140,673 1,682,030

Recognised in the income statement 343,691 (72,757) (699,254) (428,320)

At 31 December 2008 377,291 435,000 441,419 1,253,710

At 1 January 2007 15,452 803,700 1,767,700 2,586,852

Recognised in the income statement 18,148 (295,943) (627,027) (904,822)

At 31 December 2007 33,600 507,757 1,140,673 1,682,030

UnrealisedProperty, gain on

plant and foreignequipment exchange Total

RM RM RM

Deferred tax liabilities of the Group

At 1 January 2008 3,762,795 - 3,762,795

Recognised in the income statement 493,005 8,370 501,375

At 31 December 2008 4,255,800 8,370 4,264,170

At 1 January 2007 3,707,992 - 3,707,992

Recognised in the income statement 54,803 - 54,803

At 31 December 2007 3,762,795 - 3,762,795


12. DEFERRED TAX (continued)

(c) The amounts of temporary differences for which no deferred tax asset has been recognised in the balance sheets are as follows:

Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that future taxable profit of the subsidiaries will be available against which the deductible temporary differences can be utilised.

13. INVENTORIES

Group2008 2007

RM RM

Unused tax losses 3,243,000 2,057,000

Unabsorbed capital allowances 2,794,000 1,817,000

Other deductible differences 17,000 47,726

6,054,000 3,921,726

Group2008 2007

RM RM

At costRaw materials 11,041,134 8,256,196

Work-in-progress 3,588,520 4,650,644

Finished goods 14,080,886 10,996,462

Inventories in transit - 320,960

Consumables 2,430,995 1,718,014

31,141,535 25,942,276At net realisable valueFinished goods 238,965 139,742

31,380,500 26,082,018


14. TRADE AND OTHER RECEIVABLES

(a) Certain third parties trade receivables bear interest rate of 1.5% per month on overdue accounts. The normal credit terms granted by the Group range from 30 to 90 days from the date of invoice.

(b) The amounts owing by related parties are unsecured, interest-free and are repayable upon demand.

(c) The amounts owing by subsidiaries are unsecured, bear interest at rates ranging from 6.53% to 6.90% (2007: 6.30% to 6.44%) per annum and are repayable upon demand.

Included in the amounts owing by subsidiaries was RM55,000,000 (2007: RM55,000,000) relating to MUNIF/IMTN which was advanced to the subsidiaries for the purpose of capital expenditure and working capital purposes.

(d) Included in prepayments of the Group and of the Company at the end of the financial year are incidental costs and expense capitalised in relation to MUNIF/MTN amounting to RM1,747,863 (2007: RM1,861,917).

Group Company2008 2007 2008 2007

RM RM RM RM

Trade receivables

Third parties 39,917,343 39,183,346 - -

Related parties 2,102,277 27,649 - -

42,019,620 39,210,995 - -

Less: Allowance for doubtful debts - Third parties (4,736,906) (2,499,051) - -

37,282,714 36,711,944 - -

Other receivables, deposits and Prepayments

Amounts owing by subsidiaries - - 63,508,670 62,603,805

Other receivables 1,639,354 840,667 1,093 31,364

Deposits 506,003 1,333,422 - -

Prepayments 1,998,315 2,213,640 1,747,862 1,861,917

Advances paid to suppliers 503,297 928,175 - -

4,646,969 5,315,904 65,257,625 64,497,086

41,929,683 42,027,848 65,257,625 64,497,086


15. CASH AND CASH EQUIVALENTS

Group Company2008 2007 2008 2007

RM RM RM RM

Fixed deposits with licensed bank 15,131,672 9,477,827 9,303,024 3,251,112

Cash and bank balances 10,299,240 6,881,962 69,912 314,835

25,430,912 16,359,789 9,372,936 3,565,947

Less: Fixed deposits pledged to licensed banks

(3,341,672) (5,377,827) (513,024) (1,151,112)

22,089,240 10,981,962 8,859,912 2,414,835

16. SHARE CAPITAL

(a) The fixed deposits of the Group and of the Company amounting to RM3,341,672 (2007: RM5,377,827) and RM513,024 (2007:RM1,151,112) respectively are pledged to licensed banks as security for banking facilities granted to certain subsidiaries.

(b) Information on financial risks of cash and cash equivalents is disclosed in Note 37 to the financial statements.

(c) Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:

Group Company2008 2007 2008 2007

RM RM RM RM

Cash and bank balances 10,299,240 6,881,962 69,912 314,835

Fixed deposits with licensed banks 15,131,672 9,477,827 9,303,024 3,251,112

25,430,912 16,359,789 9,372,936 3,565,947

Group and Company 2008 2007

Number Numberof shares RM of shares RM

Ordinary shares of RM0.50 each

Authorised 100,000,000 50,000,000 100,000,000 50,000,000


16. SHARE CAPITAL (continued)

(a) Exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

Group and Company 2008 2007

Number Numberof shares RM of shares RM

Issued and fully paid:

Balance as at 1 January 84,016,000 42,008,000 80,016,000 40,008,000

Issued during the financial year - - 4,000,000 2,000,000

Balance as at 31 December 84,016,000 42,008,000 84,016,000 42,008,000

(a) In the previous financial year, the issued and fully paid-up share capital of the Company was increased from RM40,008,000 to RM42,008,000 by way of a private placement of 4,000,000 shares of RM0.50 each for cash.

(b) The holders of ordinary shares are entitled to receive dividends as and when declared by the Company and are entitled to one vote per share at meetings of the Company. All ordinary shares rank parri passu with regard to the Company’s residual assets.

17. RESERVES

Group Company2008 2007 2008 2007

RM RM RM RM

Non-distributable:

Share premium 2,889,896 2,889,896 2,889,896 2,889,896

Exchange translation reserve (270,705) (201,019) - -

Capital reserve 4,096 4,096 - -

2,623,287 2,692,973 2,889,896 2,889,896

Distributable:

Retained earnings 24,939,875 13,744,687 4,919,488 3,239,196

27,563,162 16,437,660 7,809,384 6,129,092


17. RESERVES (continued)

(b) Retained earnings

Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system or continue to use its tax credit under Section 108 of the Income Tax Act 1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest by 31 December 2013.

The Company has not elected to move to the single tier system, therefore subject to the agreement of the Inland Revenue Board, the Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and the tax exempt account to frank the payment of net dividends out of its retained earnings as at the financial year end.

18. BORROWINGS

Group Company2008 2007 2008 2007

RM RM RM RM

Current liabilities

Short-term borrowings (Note 19) 15,788,179 9,410,975 - -Murabahah Underwritten Notes Issuance Facilities (“MUNIF”) (Note 20) 40,000,000 40,000,000 40,000,000 40,000,000Islamic Medium Term Notes (“IMTN”) (Note 20) 5,000,000 - 5,000,000 -

Hire-purchase and lease creditors (Note 21) 1,845,739 622,615 - -

Term loans (Note 22) 681,987 929,115 - -

63,315,905 50,962,705 45,000,000 40,000,000

Non-current liabilities

Islamic Medium Term Notes (“IMTN”) (Note 20) 10,000,000 15,000,000 10,000,000 15,000,000

Hire-purchase and lease creditors (Note 21) 4,926,715 1,735,060 - -

Term loans (Note 22) 1,557,227 2,197,519 - -

16,483,942 18,932,579 10,000,000 15,000,000

Total borrowings

Short-term borrowings (Note 19) 15,788,179 9,410,975 - -Murabahah Underwritten Notes Issuance Facilities (“MUNIF”) (Note 20) 40,000,000 40,000,000 40,000,000 40,000,000Islamic Medium Term Notes (“IMTN”) (Note 20) 15,000,000 15,000,000 15,000,000 15,000,000

Hire-purchase and lease creditors (Note 21) 6,772,454 2,357,675 - -

Term loans (Note 22) 2,239,214 3,126,634 - -

79,799,847 69,895,284 55,000,000 55,000,000


19. SHORT-TERM BORROWINGS

The short-term borrowings of the Group are secured by:

(i) a first party legal charge over freehold land and buildings and plant and machinery of certain subsidiary companies;

(ii) a debenture incorporating fixed and floating charges over the assets of certain subsidiary companies;

(iii) fixed deposits with a licensed financial institution of the Company and certain subsidiary companies; and

(iv) corporate guarantee by the Company.

Information on financial risks of short-term borrowings is disclosed in Note 37 to the financial statements.

20. MUNIF/IMTN

In 2005, the Company entered into a Notes Issuance Facility Agreement with MIDF Amanah Investment Bank Berhad (formerly known as Amanah Short Deposits Berhad) for the issuance of up to RM80,000,000 partially Underwritten Murabahah Notes/Islamic Medium Term Notes (“MUNIF/IMTN”) for a tenure of seven years from the date of the first issuance.

In connection with the MUNIF/IMTN facility, the Company has entered into the following significant covenants with the lenders:

(i) to maintain gearing ratio not greater than 1.50 times;

(ii) to maintain finance service cover ratio of not less than 1.50 times; and

(iii) to open and maintain Finance Service Accounts, Revenue Accounts and Operation Accounts (“Designated Accounts”) and make all payments from such accounts in accordance to the Deed of Assignment.

The MUNIF/IMTN is secured by:

(a) Legal assignment over the Designated Accounts and monies standing to the credit of the Designated Accounts including the Permitted Investment from the Designated Accounts; and

(b) Assignment by Emas Kiara Marketing Sdn. Bhd. and Advance Technical Fabric Sdn. Bhd. of all Ringgit

Malaysia sale proceeds from their present and future sale contracts, excluding export sales.

During the financial year, the Company issued RM5,000,000 (2007: RM10,000,000) MUNIF at discount with a profit rate of 5.90% per annum and made a repayment of RM5,000,000. In the previous financial year, the Company issued RM10,000,000 MUNIF at discount with a profit rate of 5.50% per annum.

Information on financial risks and repayment terms of borrowings is disclosed in Note 37 to the financial statements.

Group2008 2007

Cost RM RM

Current liabilities

Bankers’ acceptances 11,144,000 5,753,000

Trust receipts 1,844,179 1,357,975

Revolving credits 2,800,000 2,300,000

15,788,179 9,410,975


21. HIRE-PURCHASE AND LEASE CREDITORS

Group2008 2007

RM RM

Term loan II repayable by 144 monthly instalments of RM45,627 each commencing 1 March 2002 1,855,513 2,228,216

Term loan IV repayable by 12 monthly instalments of RM31,473 for the first year and RM15,737 for the remaining 72 monthly instalments each commencing 11 September 2001 - 20,176

Term loan V repayable by 84 monthly instalments of RM15,737 each commencing 5 October 2001 - 123,738

Term loan VI repayable by 60 monthly instalments of RM15,723 each commencing 13 February 2004 41,334 218,359

Term loan VII repayable by 84 monthly instalments of RM19,237 each commencing 8 July 2005 342,367 536,145

2,239,214 3,126,634

Group2008 2007

RM RM

Minimum hire-purchase and lease payments:- not later than one year 2,087,143 762,072

- later than one year and not later than five years 5,569,239 1,930,408

Total minimum hire-purchase and lease payments 7,656,382 2,692,480

Less: Future interest charges (883,928) (334,805)

Present value of hire-purchase and lease liabilities 6,772,454 2,357,675

Repayable as follows:

Current liabilities: - not later than one year 1,845,739 622,615

Non-current liabilities: - later than one year and not later than five years 4,926,715 1,735,060

6,772,454 2,357,675

Information on financial risks of hire-purchase and lease creditors is disclosed in Note 37 to the financial statements.

22. TERM LOANS - SECURED


(a) Trade payables are non-interest bearing and the normal trade credit terms of trade payables range from 30 to 90 days from date of invoice.

(b) The amounts owing to Directors represent payments made on behalf and advances which are unsecured,

interest-free and are repayable upon demand.

(c) The amounts owing to all related parties are unsecured, interest-free and are repayable upon demand.

22. TERM LOANS - SECURED (continued)

The term loans of the Group are secured by:

(i) a first party legal charge over freehold land and buildings and plant and machinery of certain subsidiary companies;

(ii) a debenture incorporating fixed and floating charges over the assets of certain subsidiary companies;

(iii) fixed deposits with licensed banks of certain subsidiary companies; and

(iv) a corporate guarantee by the Company.

There are no fixed repricing periods of these loans. Information on financial risks of borrowings and remaining maturity is disclosed in Note 37 to the financial statements.

23. TRADE AND OTHER PAYABLES

Group Company2008 2007 2008 2007

RM RM RM RM

Trade payables

Third parties 12,222,696 9,449,897 - -

Related parties 495,074 - - -

12,717,770 9,449,897 - -

Other payables and accruals

Amounts owing to Directors 90,000 72,000 90,000 72,000

Amounts owing to a subsidiary - - 1,350,000 -

Amounts owing to related parties 84,852 374,199 - -

Other payables 4,001,734 2,863,270 17,507 97,260

Accruals 1,956,237 2,036,685 339,600 330,785

Deposits received 598,217 266,154 - -

6,731,040 5,612,308 1,797,107 500,045

19,448,810 15,062,205 1,797,107 500,045


24. CAPITAL COMMITMENTS

Group Company2008 2007 2008 2007

RM RM RM RM

Dividend income - - 6,805,000 -

Sale of products 111,352,629 77,920,107 - -

Installation services 38,905,163 25,019,820 - -

150,257,792 102,939,927 6,805,000 -

Group2008 2007

RM RM

Capital expenditure in respect of purchase of property, plant and equipment: Contracted but not provided for 858,675 10,071,132

25. CONTINGENT LIABILITIES

Company2008 2007

RM RM

Unsecured

Corporate guarantee given to banks for credit facilities granted to subsidiaries 23,845,833 18,304,626

Bank guarantee facilities granted to subsidiaries 1,419,750 4,286,326

25,265,583 22,590,952

26. REVENUE


27. FINANCE COSTS

Group Company2008 2007 2008 2007

RM RM RM RM

Profit before tax is arrived at after charging:

Allowance for doubtful debts 2,578,405 863,596 - -

Inventories written down 165,672 2,215 - -

Amortisation of MUNIF/IMTN 98,571 98,571 98,571 98,571

Auditors’ remuneration- Statutory - current year 129,545 110,366 18,000 17,000

- under provision in prior year 8,500 5,300 4,500 -

- Non-statutory - 35,000 - 35,000

Bad debts written off 3,311 453,287 - -

Depreciation of investment property (Note 9) 3,654 3,654 - -Depreciation of property, plant and equipment (Note 7) 5,565,208 4,936,828 - -Directors’ remuneration- fees 651,000 608,000 86,000 68,000

- emoluments other than fees 1,166,836 946,744 14,500 10,000

Expenses in relation to MUNIF/IMTN 3,544,776 3,015,311 3,544,776 3,015,311

Impairment loss on investment in a subsidiary - - 3,562,409 -

Impairment loss on property, plant and equipment 348,000 - - -

Group Company2008 2007 2008 2007

RM RM RM RM

Bank charges 230,818 72,333 7,208 558

Bank guarantee charges 23,989 73,238 - -

Interest expense:- overdraft 26,316 3,076 - -

- term loans 227,607 315,560 - -

- trade financing 690,965 569,443 - -

- hire purchase 511,465 126,447 - -

- MUNIF/IMTN 3,544,776 3,015,311 3,544,776 3,015,311

Loan related expenses 44,209 19,547 - -

5,300,145 4,194,955 3,551,984 3,015,869

28. PROFIT BEFORE TAX


28. PROFIT BEFORE TAX (continued)

The estimated monetary value of benefits-in-kind received by the Directors other than in cash from the Group amounted to RM53,680 (2007: RM55,861).

Group Company2008 2007 2008 2007

RM RM RM RM

Interest expense- hire-purchase (Note 27) 511,465 126,447 - -

- overdrafts (Note 27) 26,316 3,076 - -

- term loans (Note 27) 227,607 315,560 - -

- trade financing (Note 27) 690,965 569,443 - -

Loss on foreign exchange- realised 363,636 220,739 - -

- unrealised 8,097 12,793 - -

Loss on disposal of property, plant and equipment - 88,046 - -

Property, plant and equipment written off (Note 7) 54,440 20,678 - -

Rental expense- factory 158,053 240,000 - -

- forklift 39,400 54,640 - -

- hostel 102,384 105,935 - -

- machinery 147,016 69,832 - -

- office 174,079 21,600 - -

- warehouse 123,309 10,626 - -

- office equipments 20,889 22,107 - -

- lease rental - 53,422 - -

- others 17,530 2,330 - -

And crediting:

Allowance for doubtful debts no longer required 340,550 940,157 - -Allowance for slow moving inventories no longer required 117,423 - - -

Bad debts recovered 25,338 - - -

Dividend income - - 6,805,000 -

Interest income from subsidiaries - - 4,699,561 3,815,290Gain on disposal of property, plant and equipment 69,953 124,365 - -

Gain on disposal of other investments - 1,874 - -

Gain on foreign exchange- realised 736,261 343,032 2,315 -

- unrealised 41,578 - - -

Interest income 263,330 283,910 93,354 106,518

Rental income - machinery 200,000 - - -


29. TAX EXPENSE

Group Company2008 2007 2008 2007

% % % %

Applicable tax rate 26 27 26 27

Tax effect in respect of:

Non-allowable expenses 1 12 31 35

Non-taxable income (4) (1) (7) -

Deferred tax assets not recognised 4 10 - -Utilisation of previously unrecognised capital allowances and tax losses (1) (10) - -

Tax incentives (4) (8) - -Reduction in deferred taxes resulting from reduction in tax rate (1) (3) - -

21 27 50 62

Group Company2008 2007 2008 2007

RM RM RM RM

Current year tax expense based on profit for the financial year - Malaysian income tax 1,499,876 342,261 1,693,331 68,000

Under/(Over) provision of tax in prior years

- Malaysian income tax 347,121 (7,531) 28,001 2,950

1,846,997 334,730 1,721,332 70,950

Deferred tax (Note 12)Relating to origination and reversal of temporary differences 1,417,232 1,132,377 - -Relating to changes in tax rates (132,578) (90,930) - -

Over provision in prior years (354,959) (81,822) - -

929,695 959,625 - -

Total tax expense 2,776,692 1,294,355 1,721,332 70,950

The Malaysian income tax is calculated at the statutory tax rate of 26% (2007: 27%) of the estimated taxable profit for the fiscal year. The Malaysian statutory tax rate has been reduced to 26% from the previous year’s rate of 27% for the fiscal year of assessment 2008 and to 25% for fiscal year of assessment 2009 onwards. The computation of deferred tax as at 31 December 2008 has reflected these changes.

Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.

The numerical reconciliation between the average effective tax rate and the applicable tax rate of the Group and of the Company are as follows:


29. TAX EXPENSE (continued)

Group2008 2007

RM RM

Consolidated profit after tax attributable to equity holders of the Company (RM) 11,195,188 4,593,075

Weighted average number of ordinary shares outstanding 84,016,000 80,366,685

Basic earnings per ordinary share (sen) 13.33 5.72

30 EARNINGS PER ORDINARY SHARE

(a) Basic earnings per ordinary share:

The basic earnings per ordinary share for the financial year has been calculated based on the consolidated profit after tax attributable to equity holders of the Company divided by the weighted average number of ordinary shares outstanding during the financial year.

Group Company2008 2007 2008 2007

% % % %

Under/(Over) provision in prior years - income tax 2 - 1 3

- deferred tax (2) (2) - -

Average effective tax rate 21 25 51 65

First and final tax exempt dividend in respect of the financial year ended 31 December 2008 of 3% per ordinary share of RM0.50 each amounting to RM1,260,240 has been proposed by the Directors after the balance sheet date for shareholders’ approval at the forthcoming Annual General Meeting. The financial statements for the current financial year do not reflect this proposed dividend. This dividend, if approved by shareholders, will be accounted for as an appropriation of retained earnings in the financial year ending 31 December 2009.

(b) Diluted earnings per ordinary share:

Diluted earnings per ordinary share are not presented for the current and previous financial year as there is an anti-dilutive effect on the conversion of all dilutive potential ordinary shares into ordinary shares.

31. DIVIDENDS

Group Company 2008 2007

Tax exempt Amount of Tax exempt Amount ofdividend tax exempt dividend tax exempt

per share dividend per share dividendsen RM sen RM

First and final dividend proposed 1.50 1,260,240 - -


32. EMPLOYEE BENEFITS

Number of options over ordinary shares of RM0.50 eachOutstanding Movement during the financial year Outstanding Exercisable

as at as at as at1.1.2008 Granted Retracted* Exercised 31.12.2008 31.12.2008

20082004 options 8,817,000 - (272,000) - 8,545,000 8,545,000

2005 options 2,131,000 - (89,000) - 2,042,000 2,042,000

2007 options 990,000 - (45,000) - 945,000 945,000

11,938,000 - (406,000) - 11,532,000 11,532,000

Included in the employee benefits of the Group and of the Company are the Executive Directors’ remuneration amounting RM1,663,896 (2007: RM1,427,304) and RM100,500 (2007: RM78,000) respectively.

33. EMPLOYEES’ SHARE OPTION SCHEME

The Employees’ Share Option Scheme (“ESOS”) of the Company came into effect on 1 July 2004. The ESOS shall be in force for a period of five (5) years until 30 June 2009 (“the option period”). The main features of the ESOS are as follows:

(a) The ESOS is made available to eligible Directors and employees are those who are employed on a full time basis and are at least eighteen (18) years of age on the date of offer;

(b) The maximum number of options to be offered under the ESOS shall not exceed 15% of the total issued and paid-up share capital of the Company at any point in time during the existence of the ESOS;

(c) The options granted may be exercised anytime within the option period from the date of offer;

(d) The subscription price for the new shares under the ESOS is determined based on the weighted average market price of the Company’s shares as quoted and shown in the Daily Official List issued by Bursa Malaysia Securities Berhad for the five (5) market days immediately preceding the date of offer subject to a discount, if any, of not more than 10%, or at the par value of the shares of RM0.50 each, whichever is higher; and

(e) No Director or employee shall participate at any time in more than one (1) employees’ share option scheme implemented by any Company within the Group.

The details of the options over ordinary shares of the Company were as follows:

Group Company2008 2007 2008 2007

RM RM RM RM

Salaries, wages, bonuses and allowances 12,697,984 10,735,716 86,000 68,000

Defined contribution plan 821,757 764,127 14,500 10,000

Other employee benefits 531,179 422,989 - -

14,050,920 11,922,832 100,500 78,000


Number of options over ordinary shares of RM0.50 eachOutstanding Movement during the financial year Outstanding Exercisable

as at as at as at1.1.2008 Granted Retracted* Exercised 31.12.2008 31.12.2008

2008Weighted average exercise prices (RM) 0.59 - - - 0.59 0.59

Weighted average remaining contractual life (months) 6

20072004 options 8,894,000 - (77,000) - 8,817,000 7,053,600

2005 options 2,321,000 - (190,000) - 2,131,000 2,131,000

2007 options - 1,000,000 (10,000) - 990,000 990,000

11,215,000 1,000,000 (277,000) - 11,938,000 10,174,600

2007Weighted average exercise prices (RM) 0.60 0.50 - - 0.59 0.58

Weighted average remaining contractual life (months) 18

* Retracted due to resignations

The details of share options outstanding at the end of the year were as follows:

Weighted averageexercise price

RM Exercise period

20082004 options 0.62 13.09.04 - 30.06.09

2005 options 0.50 18.12.05 - 30.06.09

2007 options 0.50 13.09.07 - 30.06.09

20072004 options 0.62 13.09.04 - 30.06.09

2005 options 0.50 18.12.05 - 30.06.09

2007 options 0.50 13.09.07 - 30.06.09

There were no share options granted in the current financial year.

33. EMPLOYEES’ SHARE OPTION SCHEME (continued)


The fair value of share options granted in the previous financial year was estimated by the Directors using the Black-Scholes-Merton option pricing model, taking into account the terms and conditions upon which the options were granted. The fair value of share options measured at grant date and the assumptions are as follows:

2007

Fair value of share options at the following grant date (RM): 13 September 2007 *

Weighted average share price (RM) 0.32

Weighted average exercise price (RM) 0.50

Expected volitality (%) 10.00

Expected life (years) 1.80

Risk free rate (%) 3.29

Expected dividend yield (%) 3.23

* Less than RM0.01

33. EMPLOYEES’ SHARE OPTION SCHEME (continued)

34. ACQUISITIONS OF SUBSIDIARIES

In the previous financial year, the Group acquired Emas Kiara Geo Services Sdn. Bhd. and Emas Kiara Vietnam Joint Venture Company. The fair values of the assets acquired and liabilities assumed were as follows:

Group2007

RM

Prepaid lease payments for land 1,326,836

Exchange translation reserve 199,767

Minority interest (242,319)

1,284,284

Cash paid for unquoted shares previously acquired (1,266,303)

Cash outflow on acquisition, net of cash and cash acquired 17,981


35. RELATEDPARTYDISCLOSURES

(a) Identitiesofrelatedparties

PartiesareconsideredtoberelatedtotheGroupiftheGrouphastheability,directlyorindirectly,tocontrolthepartyorexercisesignificantinfluenceoverthepartyinmakingfinancialandoperatingdecisions,orviceversa,orwheretheGroupandthepartyaresubjecttocommoncontrolorcommonsignificantinfluence.Relatedpartiesmaybeindividualsorotherparties.

TheCompanyhascontrollingrelatedpartyrelationshipwithitsdirectandindirectsubsidiaries.

TheGrouphasrelatedpartyrelationshipwiththefollowingparties:

SubstantialshareholderoftheCompany: -ExcelEngineering&ConstructionSdn.Bhd.(“Excel”)

AcompanyinwhichTanSriDato’KamaruzzamanBinShariffandLimYewHoeandasubstantialshareholderoftheCompany,Excel,havesubstantialfinancialinterest:

-InnovativeEcologicalSystemSdn.Bhd.

A company in whichWong Kong Foo is also a director and have substantial financial interest in thecompany:

-IntanKualaLumpurSdn.Bhd.

AcompanyinwhichasubstantialshareholderoftheCompany,SeeChiiWeiisadirector: -SeeYong&SonsConstructionSdn.Bhd.

AcompanyinwhichasubstantialshareholderoftheCompany,NeohChengAikisadirectorandsubstantialshareholder:

-E-GeoConsultantSdn.Bhd.

AcompanyinwhichDatukYahyaBinYa’acobisalsoadirector: -SeliaEquitySdn.Bhd.(formerlyknownasBumiHiway(M)Sdn.Bhd.)

AcompanyinwhichadirectorofcertainsubsidiariesoftheCompany,SandanasamyRichardDouglashassubstantialfinancialinterest:

-RaswillRepresentativePte.Ltd.

DirectorsoftheCompany -TanSriDato’KamaruzzamanBinShariff -DatukYahyaBinYa’acob -WongKongFoo -LimYewHoe


35. RELATEDPARTYDISCLOSURES(continued)

(b) Inadditiontothetransactionsdetailedelsewhereinthefinancialstatements,theGroupandtheCompanyhadthefollowingtransactionswithrelatedparties:

Therelatedpartytransactionsdescribedabovewerecarriedoutontermsandconditionsnegotiatedandmutuallyagreedwithrespectiverelatedparty.

Group2008 2007

RM RM

Salesto-ExcelEngineering&ConstructionSdn.Bhd. 4,753,589 2,000,098

-SeeYong&SonsConstructionSdn.Bhd. 317,411 140,008-SeliaEquitySdn.Bhd.(formerlyknownasBumiHiway(M)Sdn.Bhd.) - 1,190-InnovativeEcologicalSystemSdn.Bhd. 107,343 47,857

PurchasesfromInnovativeEcologicalSystemSdn.Bhd 2,898,720 -

MachinerentalpayabletoInnovativeEcologicalSystemSdn.Bhd. 147,016 64,582

ForkliftrentalpayabletoInnovativeEcologicalSystemSdn.Bhd. 18,300 14,300

CarrentalpayabletoInnovativeEcologicalSystemSdnBhd 13,600 -

Rentalchargedby-InnovativeEcologicalSystemSdn.Bhd. 15,254 -

-RaswillRepresentativePte.Ltd. 75,795 -

Commissionpayableto-RaswillRepresentativePte.Ltd. 150,256 425,812

(c) Compensationofkeymanagementpersonnel

TheremunerationofDirectorsandotherkeymanagementpersonnelwasasfollows:

Group Company2008 2007 2008 2007

RM RM RM RM

Shorttermemployeebenefits 1,628,610 1,415,840 86,000 68,000Contributionstodefinedcontributionplans 189,226 138,904 14,500 10,000

1,817,836 1,554,744 100,500 78,000


36.SEGMENTINFORMATION

(a) Reportingformat

Theprimary segment reporting format isdetermined tobebusiness segmentsas theGroup’s risksandreturnsareaffectedpredominantlybydifferencesintheproductsandservicesitproduces.

Secondaryinformationisreportedgeographically.

(b) Businesssegments

TheGroupcomprisesthefollowingmainbusinesssegments:

Trading : Tradingandmarketingofgeosyntheticproductsandtechnicalfabrics.

Manufacturing : Manufacturing of geosynthetic and technical fabrics for technical, engineering andindustrialapplications.

Others : Investmentholdingcompanyandprovidingmanagementservices.

(c) Geographicalsegments

TheGroupoperatesmainlyinMalaysiaandSingapore.Therevenuedisclosedingeographicalsegmentsarebasedonthegeographicallocationofitscustomers.Segmentassetsandcapitalexpenditurearebasedonthegeographicallocationofassets.Thecompositionofeachgeographicalsegmentisasfollows:

(i) Malaysia : Manufacturing,tradingandmarketingofgeosyntheticproductsandtechnicalfabricsfortechnical,engineeringandindustrialapplications.

(ii) Singapore : Tradingandmarketingofgeosyntheticproductsandtechnicalfabrics.

(d) Allocationbasisandinter-segmentpricing

Segment results, assets and liabilities include itemsdirectly attributable to a segment aswell as thosethatcanbeallocatedonareasonablebasis.Unallocateditemscomprisemainlycorporateassets,liabilitiesandexpenses.

Inter-segmentpricesbetweenbusinesssegmentsaresetonanarm’slengthbasisinamannersimilartotransactionswiththirdparties.Segmentrevenue,expensesandresultsincludetransferbetweenbusinesssegments.Thesesegmentsareeliminatedonconsolidation.


36.SEGMENTINFORMATION(continued)

ThefollowingtableprovidesananalysisoftheGroup’srevenue,results,assets,liabilitiesandotherinformationbybusinesssegment:

2008 Manufac- Consoli-Trading turing Others Elimination dation

RM RM RM RM RM

RevenueExternalsales 115,269,270 34,988,522 - - 150,257,792

Inter-segmentsales - 87,641,516 6,805,000 (94,446,516) -

Total 115,269,270 122,630,038 6,805,000 (94,446,516) 150,257,792

ResultsProfitfromoperations 4,719,155 10,238,548 3,359,675 245,764 18,563,142

Financecosts (5,300,145)

Taxexpense (2,776,692)

Profitforthefinancialyear 10,486,305

AssetsSegmentassets 43,423,767 88,719,455 43,024,407 (635,672) 174,531,957

Unallocatedassets 779,640

Totalassets 175,311,597

LiabilitiesSegmentliabilities 15,370,801 28,384,771 55,493,085 - 99,248,657

Unallocatedliabilities 4,068,893

Totalliabilities 103,317,550

OthersegmentinformationCapitalexpenditure 14,607 18,073,246 13,338 - 18,101,191Depreciationofproperty,plantandequipment 204,023 5,355,924 5,261 - 5,565,208Depreciationofinvestmentproperty 3,654 - - - 3,654AmortisationofMUNIF/IMTNexpenses - - 98,571 - 98,571Non-cashexpensesotherthandepreciation 2,270,626 33,262 - - 2,303,888


36.SEGMENTINFORMATION(continued)

ThefollowingtableprovidesananalysisoftheGroup’srevenue,segmentassetsandcapitalexpenditurebygeographicalsegment:

2007 Manufac- Consoli-Trading turing Others Elimination dation

RM RM RM RM RM

RevenueExternalsales 68,315,053 34,624,874 - - 102,939,927Inter-segmentsales 1,440,048 62,401,299 - (63,841,347) -

Total 69,755,101 97,026,173 - (63,841,347) 102,939,927

ResultsProfitfromoperations 3,341,578 6,580,038 (668,470) 155,193 9,408,339Financecosts (4,194,955)Taxexpense (1,294,355)

Profitforthefinancialyear 3,919,029

AssetsSegmentassets 43,237,477 64,479,346 41,281,092 (791,325) 148,206,590Unallocatedassets 1,124,873

Totalassets 149,331,463

LiabilitiesSegmentliabilities 12,358,831 16,989,325 55,609,333 - 84,957,489Unallocatedliabilities 2,796,546

Totalliabilities 87,754,035

OthersegmentinformationCapitalexpenditure 374,187 6,057,000 699 (132,210) 6,299,676Depreciationofproperty,plantandequipment 972,197 3,963,831 800 - 4,936,828Depreciationofinvestmentproperty 3,654 - - - 3,654AmortisationofMUNIF/IMTNexpenses - - 98,571 - 98,571Non-cashexpensesotherthandepreciation 1,285,736 154,879 - - 1,440,615

Revenue Segmentassets Capitalexpenditure2008 2007 2008 2007 2008 2007

RM RM RM RM RM RM

Malaysia 131,399,017 99,195,871 168,870,013 148,107,862 18,089,462 6,298,794Singapore 18,858,775 3,744,056 6,440,622 1,222,596 11,729 882Vietnam - - 962 1,005 - -

150,257,792 102,939,927 175,311,597 149,331,463 18,101,191 6,299,676


37. FINANCIALINSTRUMENTS

(a) Financialriskmanagementobjectivesandpolicies

The Group’s financial risk management objective is to optimise value creation for shareholders whilstminimisingthepotentialadverseimpactarisingfromfluctuationsinforeigncurrencyexchangeandinterestratesandtheunpredictabilityofthefinancialmarkets.

TheGroupoperateswithinanestablishedriskmanagementframeworkandclearlydefinedguidelinesthatare regularly reviewedby theBoard ofDirectors anddoesnot trade in derivativefinancial instruments.Financialriskmanagementiscarriedoutthroughriskreviewprogrammes,internalcontrolsystems,insuranceprogrammesandadherencetotheGroupfinancialriskmanagementpolicies.TheGroupisexposedmainlytoforeigncurrencyrisk,liquidityrisk,interestrateriskandcreditrisk.Informationonthemanagementoftherelatedexposuresisdetailedbelow.

(i) Foreigncurrencyrisk

The Group is exposed to foreign currency risk as a result of the Group’s transactionswith foreignsubsidiaries, trade and other receivables, and, trade and other payables. The Group monitors themovementinforeigncurrencyexchangeratescloselytoensureitsexposureisminimised.TheGroupusesforeignexchangecontractstohedgecertainexposures,butitdoesnottradeinfinancialinstruments.

Thenotionalamountandmaturitydateoftheforwardforeignexchangecontractsoutstandingwereasfollows:

Contract Expiry Contractdates amounts RMequivalent

RM

Asat31December2008Forwardcontractsusedtohedgetradereceivables 5 January 2009

USD3,585 12,431

Forwardcontractsusedtohedgetradereceivables 19 February 2009

USD67,500 234,056

Asat31December2007Forwardcontractsusedtohedgetradereceivables 19 February 2008

USD42,515 140,703


USD69,736 230,791


USD215,000 711,543


37. FINANCIALINSTRUMENTS(continued)

(a) Financialriskmanagementobjectivesandpolicies(continued)

(i) Foreigncurrencyrisk(continued)

ThefinancialassetsandliabilitiesoftheGroupandtheCompanythatarenotdenominatedintheirfunctionalcurrenciesareasfollows:

(ii) Interestraterisk

InterestrateriskmainlyarisefromtheGroup’sborrowings.TheGroupdoesnotusederivativefinancialinstrumentstohedgeitsrisk.

TheGroupactivelyreviewsitsborrowingsinordertocapitaliseoncheaperfundinginalowinterestrateenvironment.TheGroupobtainsitsexternalfinancingthroughlongtermandshorttermborrowingswhicharebasedonfloatingandfixedrates.

Group2008 2007

RM RM

Financialassetsandliabilitiesnotheldinfunctionalcurrency:

TradereceivablesUSDollar 567,517 3,449,700

SingaporeDollar - 193,663

Euro 157,645 -

725,162 3,643,363

CashandbankbalancesUSDollar 36,931 -

TradepayablesUSDollar 209,431 401,982

Euro 461,987 -

671,418 401,982

OtherpayablesandaccrualsUSDollar 184,895 236,296

SingaporeDollar - 166,681

BritishPound - 2,334

Euro 1,263 3,326

186,158 408,637


37.

FIN

ANCI

ALIN

STRU

MEN

TS(c

ontin

ued)

(a

)Fi

nanc

ialr

iskm

anag

emen

tobj

ectiv

esa

ndp

olici

es(c

ontin

ued)

(ii)

Inte

rest

rate

risk

(con

tinue

d)

TheGroup’sandtheCompany’sfinancialassetsthatbearinterestarefixeddepositsplacedwithlicensedbanks.

Thefollowingtablessetoutthecarryingamounts,theweightedaverageeffectiveinterestratesasatthebalancesheetdateandtheremainingmaturitiesof

theGroup’sandtheCompany’sfinancialinstrumentsthatareexposedtointerestraterisk:

Wei

ghte

d

aver

age

effe

ctiv

eW

ithin

Mor

eth

an

inte

rest

rate

1yea

r1-

2y

ears

2-3

yea

rs3

-4y

ears

4-5

yea

rs5

year

sTo

tal

Not

e%

RMRM

RMRM

RMRM

RM

Grou

p

At3

1Dec

embe

r200

8

Fixe

dra

tes

Fixeddepositswith

licensedbank

153.

2115

,131

,672

--

--

-15

,131

,672

Bankers’acceptances

194.

80(1

1,14

4,00

0)-

--

--

(11,

144,

000)

MUNIF

185.

90(4

0,00

0,00

0)-

--

--

(40,

000,

000)

IMTN

186.

96(5

,000

,000

)-

(10,

000,

000)

--

-(1

5,00

0,00

0)

Hire-purchaseandlease

creditors

215.

88(1

,845

,739

)(1

,840

,717

)(1

,835

,264

)(1

,130

,649

)(1

20,0

85)

-(6

,772

,454

)

Floa

ting

rate

s

Trustreceipts

197.

91(1

,844

,179

)-

--

--

(1,8

44,1

79)

Revolvingcredits

195.

74(2

,800

,000

)-

--

--

(2,8

00,0

00)

Termloans

228.

42(6

81,9

87)

(556

,449

)(4

83,0

52)

(517

,726

)-

-(2

,239

,214

)


37.

FIN

ANCI

ALIN

STRU

MEN

TS(c

ontin

ued)

(a

)Fi

nanc

ialr

iskm

anag

emen

tobj

ectiv

esa

ndp

olici

es(c

ontin

ued)

(ii)

Inte

rest

rate

risk

(con

tinue

d)

Wei

ghte

d

aver

age

effe

ctiv

eW

ithin

Mor

eth

an

inte

rest

rate

1yea

r1-

2y

ears

2-3

yea

rs3

-4y

ears

4-5

yea

rs5

year

sTo

tal

Not

e%

RMRM

RMRM

RMRM

RM

Grou

p

At3

1Dec

embe

r200

7

Fixe

dra

tes

Fixeddepositswith

licensedbank

153.

309,

477,

827

--

--

-9,

477,

827

Bankers’acceptances

194.

87(5

,753

,000

)-

--

--

(5,7

53,0

00)

MUNIF

185.

50(4

0,00

0,00

0)-

--

--

(40,

000,

000)

IMTN

186.

67-

(5,0

00,0

00)

-(1

0,00

0,00

0)-

-(1

5,00

0,00

0)

Hire-purchaseandlease

creditors

213.

73(6

22,6

15)

(618

,560

)(5

13,7

63)

(430

,662

)(1

72,0

75)

-(2

,357

,675

)

Floa

ting

rate

s

Trustreceipts

188.

43(1

,357

,975

)-

--

--

(1,3

57,9

75)

Revolvingcredits

195.

68(2

,300

,000

)-

--

--

(2,3

00,0

00)

Termloans

228.

45(9

29,1

15)

(682

,461

)(5

19,7

43)

(483

,521

)(4

79,4

40)

(32,

354)

(3,1

26,6

34)


37.

FIN

ANCI

ALIN

STRU

MEN

TS(c

ontin

ued)

(a

)Fi

nanc

ialr

iskm

anag

emen

tobj

ectiv

esa

ndp

olici

es(c

ontin

ued)

(ii)

Inte

rest

rate

risk

(con

tinue

d)

Wei

ghte

d

aver

age

effe

ctiv

eW

ithin

Mor

eth

an

inte

rest

rate

1yea

r1-

2y

ears

2-3

yea

rs3

-4y

ears

4-5

yea

rs5

year

sTo

tal

Not

e%

RMRM

RMRM

RMRM

RM

Com

pany

At3

1Dec

embe

r200

8

Fixe

dra

tes

Fixeddepositswith

licensedbank

153.

319,

303,

024

--

--

-9,

303,

024

MUNIF

185.

90(4

0,00

0,00

0)-

--

--

(40,

000,

000)

IMTN

186.

96(5

,000

,000

)-

(10,

000,

000)

--

-(1

5,00

0,00

0)

At31

Dec

embe

r200

7

Fixe

dra

tes

Fixeddepositswith

licensedbank

153.

603,

251,

112

--

--

-3,

251,

112

MUNIF

185.

50(4

0,00

0,00

0)-

--

--

(40,

000,

000)

IMTN

186.

67-

(5,0

00,0

00)

-(1

0,00

0,00

0)-

-(1

5,00

0,00

0)




(iii) Liquidityrisk

The Group activelymanages its debtmaturity profile, operating cash flows and the availability offunding so as to ensure that all operating, investing andfinancingneeds aremet. In liquidity riskmanagementstrategy,theGroupmeasuresandforecastsitscashcommitmentsandmaintainsalevelofcashandcashequivalentsdeemedadequatetofinancetheGroup’sactivities.Inaddition,theGroupalsomaintainsavailablebankingfacilitiessufficienttomeetitsoperationalneeds.

(iv) Creditrisk

Credit risk,which is the risk of counter parties defaulting, is controlled by the application of creditapprovals,limitandmonitoringprocedures.TheGroup’sprimaryexposuretocreditriskarisesthroughitstradereceivables.Creditevaluationsareperformedonallcustomersrequiringcreditoveracertainamount and strictly limiting to the Group’s associations to parties with high credit worthiness.TradereceivablesaremonitoredonanongoingbasistoensurethattheGroupisexposedtominimalcreditrisk.

The credit period is generally for a period of onemonth, extending up to threemonths formajorcustomers.EachcustomerhasamaximumcreditlimitandtheGroupseekstomaintainstrictcontrolover its outstanding receivables via a credit control department to minimise credit risk. Overduebalancesarereviewedregularlybyseniormanagement.

TheconcentrationofcreditriskislimitedduetotheGroup’slargenumberofcustomers.TheGroup’shistorical experience in collectionof trade receivables fallswithin the recorded allowances. Due tothesefactors,theDirectorsbelievethatnoadditionalcreditriskbeyondamountsprovidedfordoubtfuldebtsisinherentintheGroup’stradereceivables.

Inrespectofthedeposits,cashandbankbalancesplacedwithmajorfinancialinstitutionsinMalaysiaand Singapore, the Directors believe that the possibility of non-performance by these financialinstitutionsisremoteonthebasisoftheirfinancialstrength.

(v) Fairvalues

ThecarryingamountsofthefinancialinstrumentsoftheGroupandoftheCompanyasatthebalancesheet date approximate their fair values due to the relatively short termmaturity of the financialinstrumentsexceptassetoutbelow:




(v) Fairvalues(continued)

Group CompanyCarrying Fair Carrying Fairamount value amount value

RM RM RM RM

At31December2008RecognisedTermloans (2,239,214) (2,239,214) - -Hire-purchaseandleasecreditors (6,772,454) (7,129,047) - -IMTN (15,000,000) (12,846,785) (15,000,000) (12,846,785)

UnrecognisedForwardforeignexchangecontracts - 4,329 - -

At31December2007RecognisedTermloans (3,126,634) (3,126,634) - -Hire-purchaseandleasecreditors (2,357,675) (2,443,832) - -IMTN (15,000,000) (12,118,053) (15,000,000) (12,118,053)

UnrecognisedForwardforeignexchangecontracts - (262) - -

The methods and assumptions used by management to determine the fair values of financialinstrumentsareasfollows:

(i) Termloans

Thecarryingamountoftermloansasatthebalancesheetdateapproximatetheirfairvaluesastheyareonfloatingrates.

(ii) Borrowings

Fairvaluesofborrowingsotherthantermloanshavebeendeterminedusingdiscountedcashflowstechnique.Thediscountratesusedarebasedonthecurrentmarketrateofborrowingsofsimilarprofile.

(iii) Forwardforeignexchangecontracts

The fair value of a forward foreign exchange contract is the amount thatwould be payable orreceivableuponterminationoftheoutstandingpositionarisingandisdeterminedbyreferencetothedifferencebetweenthecontractedrateandtheforwardexchangerateasatthebalancesheetdateappliedtoacontractofsimilaramountandmaturityprofile.


38. SIGNIFICANTEVENTSDURINGTHEFINANCIALYEAR

On26February2008,theCompanyannouncedthatitisproposingtoextendthetimelineforsubmissionoftheapplicationspertaining to the ProposedAcquisition, Proposed Placement andProposed Increase inAuthorisedShareCapitaltotherelevantauthoritiesforafurtherthree(3)monthsfromthedateoftheannouncement.

On 2May 2008, the Securities Commission had, vide its letter dated 30 April 2008, approved the Company’sapplicationforanextensionoftimeupto8November2008tocompletetheProposedPrivatePlacement.

On2June2008,theCompanyannouncedthattheCompanyandthevendorsofCariminSdn.Bhd.hadon30May2008mutuallyagreedtoterminatethesaleandpurchaseagreementdated27November2007inrelationtotheacquisitionof51%equityinterestinCariminSdn.Bhd.

39.EVENTSUBSEQUENTTOTHEBALANCESHEETDATE

On26 February 2009, theGroup receiveda letterof acceptance from thegovernmentofAssam, India for theprojectofraisingandstrengtheningtheBrahmaputraDykewithavalueofapproximatelyRM72million.

greener by innovation 101list of properties as at 31 December 2008

Registeredowner Location

ApproximateLandArea/

Built-upAreaDescription/ExistingUse Tenure

DateofAcquisition

Netbookvalueasat31.12.2008

Ageofbuilding

(years)

EmasKiaraSdnBhd

Lot13A,RawangIndustrialEstate,48000Rawang,

Selangor

1.69acres(Land)

40,111sqft(Factorybuilding)

10,431sqft(Officebuilding)

Singlestoreyfactory

togetherwith3-storeyoffice

building

Freehold 01.06.2001 1,767,700(land)

3,685,695(building)

13

KhidmatEdar(M)SdnBhd

Lot32,RawangIndustrialEstate,48000Rawang,

Selangor

1.5acres(Land)


3,696sqft(Officebuilding)

Singlestoreyfactoryand

officebuilding

Freehold 25.09.1999 636,675(land)

2,575,947(building)

14

FibreInnovationTechnologySdnBhd

Lot33,RawangIndustrialEstate,48000Rawang,

Selangor

2acres(Land)


Singlestoreyfactorybuilding

Freehold 13.5.1997 2,529,063(land)

3,519,314(building)

7

InnovativeIndustrialTextilesSdnBhd

Lot6,JalanBungaTanjong,

SenawangIndustrialPark,

70400Seremban,NegeriSembilan

6.75acres(Land)

178,448sqft(FactoryBuilding)

11,633sqft(Office

building)

Singlestoreyfactory


building

Freehold 20.10.1998 3,600,000(land)

9,563,006(building)

11

LISTOFPROPERTIES31december2008

greener by innovation 102 list of properties as at 31 December 2008

Registeredowner Location

ApproximateLandArea/

Built-upAreaDescription/ExistingUse Tenure

DateofAcquisition

Netbookvalueasat31.12.2008

Ageofbuilding

(years)

InnovativeIndustrialTextilesSdnBhd

Lot4B,LorongBungaTanjong1/2,SenawangIndustrialPark,


1.85acres(Land)

39,360sqft(FactoryBuilding)

13,386sqft(OfficeBuilding)

Singlestoreyfactory


building

Freehold 16.5.2006 1,142,186(land)

2,987,812(building)

1

Lot4C,LorongBungaTanjong1/2,SenawangIndustrialPark,


1.50acres(Land)

Vacantindustrialland

Freehold 16.5.2006 1,563,117(land)

n/a

EmasKiaraVietnamJointVentureCompany

Industry4Street,B2Lot,

SaiDongB,IndustrialZone,

LongBien,Hanoi,

Vietnam

1.29acres(Land)

24,477sqft(Factoryandofficebuilding)

SingleStoreyfactoryand

officebuilding

Leasehold(ExpiryDate:2046)

6.4.2006 1,326,836(LandandBuilding)

6

greener by innovation 103shareholders' information as at 30 april 2009

SHAREHOLDERS’INFORMATIONasat30april2009

AuthorisedCapital : RM50,000,000.00IssuedandPaid-UpCapital : RM42,008,000.00No.ofShareholders : 1,106ClassofShares : OrdinarysharesofRM0.50eachVotingRights : One(1)voteperordinaryshare(onapoll)

DISTRIBUTIONSCHEDULEOFSHARESASAT30APRIL2009

No.ofHolders Holdings TotalHoldings %

2 Lessthan100 100 0.00

249 100to1,000 221,800 0.27

619 1,001to10,000 2,459,700 2.93

190 10,001to100,000 6,059,066 7.21

39 100,001tolessthan5%ofissuedshares 33,381,313 39.73

7 5%andaboveofissuedshares 41,894,021 49.86

1,106 84,016,000 100.00

THIRTYSECURITIESACCOUNTHOLDERSHAVINGTHELARGESTNUMBEROFORDINARYSHARESASAT30APRIL2009

Holdings %

1 WongKongFoo 15,559,028 18.52

2 SeeChiiWei 7,100,456 8.45

3 IntanKualaLumpurSdnBhd 6,810,804 8.11

4 TanSriDato’KamaruzzamanBinShariff 6,431,411 7.65

5 ExcelEngineering&ConstructionSdnBhd 5,453,000 6.49

6 NeohChengAik 4,669,322 5.56

7 ImpianaVentureSdnBhd 3,150,000 3.75

8 WanHamdanbinWanEmbong 2,807,700 3.34

9 RivieraCollectionSdnBhd 2,568,000 3.06

10 LimYewHoe 2,435,920 2.90

11 YapLinKiew 2,120,468 2.52

12 SandanasamyRichardDouglas 1,715,681 2.04

13 MidlaneEntitySdnBhd 1,645,000 1.96

14 AmsecNominees(Tempatan)SdnBhd 1,565,000 1.86

PledgedSecuritiesAccountforLimYewHoe15 KamTianYan 1,124,388 1.34

16 TemaMestikaSdnBhd 1,073,900 1.28

17 TeoCheowEain 921,000 1.10

greener by innovation 104 shareholders' information as at 30 april 2009

THIRTYSECURITIESACCOUNTHOLDERSHAVINGTHELARGESTNUMBEROFORDINARYSHARESASAT30APRIL2009(continued)

Holdings %

18 LeeChoonBoey 813,000 0.97

19 HoYuLon 775,000 0.92

20 LingMooiHong 718,295 0.85

21 TaiTsuLim 570,000 0.68

22 LeeKwaiSiew 489,100 0.58

23 MaybanNominees(Tempatan)SdnBhd 484,500 0.58

PledgedSecuritiesAccountforKamTianYan24 YongLeongSen 459,100 0.55

25 EdwardThanarajaha/lEasupathamsamuel 454,686 0.54

26 LeeEngSia 451,500 0.54

27 LowKianWee@HowKianWee 435,100 0.52

28 LimChinWui 322,200 0.38

29 CitigroupNominees(Tempatan)SdnBhd 284,900 0.34

PledgedSecuritiesAccountforKamTianYan30 KwunYoungHwan 260,200 0.31

Note:TheabovelistisaccordingtotheRecordofDepositors(withoutaggregatingthenumberofordinarysharesfromdifferentsecuritiesaccountsbelongingtothesameperson).

INFORMATIONONSUBSTANTIALSHAREHOLDERSASAT30APRIL2009

DirectInterest DeemedInterestNationality/Country

NameofSubstantialShareholders ofincorporation No. % No. %

1 WongKongFoo Malaysian 15,559,028 18.52 10,170,8041 12.11

2 SeeChiiWei Malaysian 7,100,456 8.45 - -

3 IntanKualaLumpurSdnBhd Malaysian 6,810,8042 8.11 - -

4 TanSriDato’KamaruzzamanBinShariff Malaysian 6,431,411 7.65 1,645,0003 1.96

5 ExcelEngineering&ConstructionSdnBhd Malaysian 5,453,0002 6.49 - -

6 NeohChengAik Malaysian 4,669,322 5.56 - -

7 DatukYahyaBinYa’acob Malaysian 25,000 0.03 5,453,0004 6.49

8 PuanSriDatinSharifahBintiAhmad Malaysian - - 8,076,4115 9.61

9 SharizaBintiKamaruzzaman Malaysian - - 8,076,4116 9.61

10 DatinSalibah@ArfahBintiHjDaud Malaysian - - 5,478,0007 6.52

11 MohdAsbiBinOthman Malaysian - - 5,453,0008 6.49

12 EsterJamesMoiji Malaysian - - 5,453,0008 6.49

greener by innovation 105shareholders' information as at 30 april 2009

INFORMATIONONSUBSTANTIALSHAREHOLDERSASAT30APRIL2009(continued)

Notes:1 Deemed interest by virtue of his interest in Intan Kuala Lumpur Sdn Bhd and Impiana Venture Sdn BhdpursuanttoSection6AoftheCompaniesAct,1965andhisspouse’sdirectinterestinEKIBpursuanttoSection134oftheCompaniesAct,1965.

2 Sharesheldinownnameand/ornomineeaccount.3 Deemedinterestbyvirtueofhisspouse’sanddaughter’sindirectinterestinEKIBviaMidlaneEntitySdnBhdpursuanttoSection6AoftheCompaniesAct,1965.

4 Deemedinterestbyvirtueofhisspouse’sindirectinterestinEKIBviaExcelEngineering&ConstructionSdnBhdpursuanttoSection6AoftheCompaniesAct,1965.

5 Deemedinterestbyvirtueofher interest inMidlaneEntitySdnBhdandherspouse’sdirect interest inEKIBpursuanttoSection6AoftheCompaniesAct,1965.

6 Deemed interestbyvirtueofher interest inMidlaneEntitySdnBhdandher father’sdirect interest inEKIBpursuanttoSection6AoftheCompaniesAct,1965.

7 DeemedinterestbyvirtueofherinterestinExcelEngineering&ConstructionSdnBhdandherspouse’sinterestinEKIBpursuanttoSection6AoftheCompaniesAct,1965.

8 DeemedinterestbyvirtueoftheirinterestsinExcelEngineering&ConstructionSdnBhdpursuanttoSection6AoftheCompaniesAct,1965.

DIRECTORS’SHAREHOLDINGSASAT30APRIL2009

DirectInterest DeemedInterest

NameofDirectors No. % No. %

1 TanSriDato’KamaruzzamanBinShariff 6,431,411 7.65 1,645,0001 1.96

2 WongKongFoo 15,559,028 18.52 10,170,8042 12.11

3 LimYewHoe 4,000,9203 4.76 51,6004 0.06

4 DatukYahyaBinYa’acob 25,000 0.03 5,453,0005 6.49

5 SiewKahToong - - - -

6 HajiAbdTalibBinBaba - - - -

Notes:1. Deemedinterestbyvirtueofhisspouse’sanddaughter’sindirectinterestinEKIBviaMidlaneEntitySdnBhdpursuanttoSection6AoftheCompaniesAct,1965.

2 DeemedinterestbyvirtueofhisinterestinIntanKualaLumpurSdnBhdandImpianaVentureSdnBhdpursuanttoSection6AoftheCompaniesAct,1965andhisspouse’sdirectinterestinEKIBpursuanttoSection134oftheCompaniesAct,1965.

3 Sharesheldinownnameand/ornomineeaccount.4 Deemed interest by virtueofhis spouse’s direct interest in EKIBpursuant to Section 134of theCompaniesAct,1965.

5 Deemedinterestbyvirtueofhisspouse’sindirectinterestinEKIBviaExcelEngineering&ConstructionSdnBhdpursuanttoSection6AoftheCompaniesAct,1965.

greener by innovation 106 notice of the tenth annual general meeting

NOTICEOFTHETENTHANNUALGENERALMEETINGNOTICE IS HEREBY GIVEN THAT the Tenth Annual General Meeting of the Company will be held at SunriseAuditorium 1, Mont’ Kiara Business Centre, Suite D-03-01, Plaza Mont’ Kiara, No. 2, Jalan Kiara, Mont’ Kiara,50480KualaLumpuronMonday,29June2009at10.00a.m.,toconsiderthefollowingmatters:

AGENDA

1. To receive the Audited Financial Statements for the financial year ended31December2008togetherwiththeReportsoftheDirectorsandAuditorsthereon.(PleaserefertoNote.2below)

2. To re-electMr.WongKong Foo, thedirector retiringby rotationpursuant toArticle 109oftheCompany’sArticlesofAssociation. Resolution1

3. To re-elect Datuk Yahya Bin Ya’acob, the director retiring by rotation pursuant toArticle109oftheCompany’sArticlesofAssociation. Resolution2

4. To re-electMr. SiewKahToong, the director retiring pursuant to Article 114 of theCompany’sArticlesofAssociation. Resolution3

5. Toapprovethepaymentofafirstandfinaltaxexemptdividendof3%perordinaryshareforthefinancialyearended31December2008.(2007:NIL) Resolution4

6. ToapprovethepaymentofDirectors’feesamountingtoRM90,000.00inrespectofthefinancialyearended31December2008.(2007:RM68,000.00) Resolution5

7. ToappointnewAuditorsoftheCompanyandtoauthorisetheDirectorstofixtheirremuneration. Resolution6

“THATtheresignationofMessrsBDOBinderasAuditorsof theCompanybeandisherebyacceptedandinplacethereof,MessrsHorwathbeandareherebyappointedAuditorsoftheCompanyforthefinancialyearending31December2009andtoholdofficeuntiltheconclusionofthenextAnnualGeneralMeetingandthatauthoritybeandisherebygivenfortheDirectorstodeterminetheirremuneration.”

AsSpecialBusiness:

Toconsiderandifthoughtfit,topassthefollowingresolutions:

8. AuthoritytoAllotandIssueSharespursuanttotheEmployees’ShareOptionScheme

“THAT pursuant to the Emas Kiara Industries Berhad Employees’ Share OptionScheme(“theScheme”)whichwasapprovedattheExtraordinaryGeneralMeetingheldon28June2004,approvalbeandisherebygiventotheDirectorstoofferandgrantoptionstoeligibleDirectorsorEmployeesoftheCompanyanditssubsidiarycompanies (“the Group”) and pursuant to Section 132D of the Companies Act,1965 to allot and issue such number of new ordinary shares of RM0.50 each inthecapitaloftheCompanyfromtimetotimeinaccordancewiththeBy-LawsoftheScheme.” Resolution7

greener by innovation 107notice of the tenth annual general meeting

9. Authority to Allot and Issue Shares pursuant to Section 132D of the CompaniesAct,1965

“THATpursuant to Section 132Dof theCompaniesAct, 1965, theDirectors be andareherebyempowered toallot and issue shares in theCompanyat any timeanduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmay,intheirabsolutediscretiondeemfit,providedthattheaggregatenumberofsharesissuedpursuanttothisresolutiondoesnotexceed10%oftheissuedcapitaloftheCompanyatanypointoftimeandthattheDirectorsbeandarealsoempoweredtoobtaintheapprovalforthelistingofandquotationfortheadditionalsharessoissuedonBursaSecuritiesandthatsuchauthorityshallcontinuetobeinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany.” Resolution8

10. ProposedRenewalofShareholders’MandateforRecurrentRelatedPartyTransactionsofaRevenueorTradingNature

“THAT,approvalbeandisherebygivenfortheRenewaloftheShareholders’MandatefortheEmasKiaraIndustriesBerhadGroupofCompaniestoenterintothecategoriesofrecurrentrelatedpartytransactionsofarevenueortradingnaturefallingwithinthe nature of transactions set out in the table in Section 2.4 of the Circular toShareholdersdated3June2009withtherelatedpartiesfallingwithintheclassesofpersonssetoutinSection2.3intheCircular,suchtransactionswhicharenecessaryfortheGroup’sday-to-dayoperationsandcarriedoutintheordinarycourseofbusinessontermswhicharenotmorefavourabletotherelatedpartiesthanthosegenerallyavailabletothepublicandarenottothedetrimentoftheminorityshareholders.

AND THAT the authority conferred by such Mandate shall continue to be inforceuntil:

(i)

(ii)

(iii)

theconclusionof thenextAnnualGeneralMeetingof theCompany,atwhichtime itwill lapse,unlessby resolutionpassedat themeeting, theauthority isrenewed;

theexpirationof theperiodwithinwhichthenextAnnualGeneralMeeting isrequiredtobeheldpursuant tosection143(1)of theCompaniesAct, 1965(butshallnotextendtosuchextensionasmaybeallowedpursuanttosection143(2)oftheCompaniesAct,1965);or

revokedorvariedbyresolutionpassedbytheshareholdersingeneralmeeting,

whicheveristheearlier.

ANDTHATtheDirectorsoftheCompanybeandareherebyauthorisedtocompleteanddoallsuchactsandthingsastheymayconsiderexpedientornecessarytogiveeffecttothisOrdinaryResolution.” Resolution9

11. To transact any other business of the Company ofwhich due notice shall havebeengiven.

greener by innovation 108 notice of the tenth annual general meeting

NOTICEOFBOOKCLOSURE

NOTICEISALSOHEREBYGIVENthatafirstandfinaltaxexemptdividendof3%perordinaryshareforthefinancialyear ended 31 December 2008, if approved by the shareholders at the 10th Annual General Meeting, will bepaidon30July2009toDepositorswhosenamesappearintheRecordofDepositorsatthecloseofbusinesson15July2009.

ADepositorshallqualifyforentitlementtothedividendonlyinrespectof:-

i) SharestransferredintotheDepositor’sSecuritiesAccountbefore5.00p.m.on15July2009inrespectofordinaryshares;and

ii) SharesboughtonBursaMalaysiaSecuritiesBerhadonacumentitlementbasisaccordingtotheRulesofBursaMalaysiaSecuritiesBerhad.

ByOrderoftheBoard

LIMHOOIMOOI,MAICSA0799764TANENKPURN,MAICSA7045521CompanySecretaries

KualaLumpur3June2009

greener by innovation 109notice of the tenth annual general meeting

Notes:

1. AppointmentofProxy

(a) Amemberof theCompanyentitledtoattendandvoteat themeetingmayappointnotmorethantwo(2)proxiestoattendandvoteinhisstead.WhereamemberoftheCompanyisanauthorizednomineeasdefinedundertheSecuritiesIndustry(CentralDepositories)Act,1991,itmayappointatleastone(1)proxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.

(b) AproxymaybutneednotbeamemberoftheCompany.

(c) Theinstrumentappointingaproxyshallbeinwritingunderthehandsoftheappointerorofhisattorneydulyauthorisedinwritingor,iftheappointerisacorporationunderitscommonseal,orthehandofitsattorneydulyauthorised.

(d) Aninstrumentappointingaproxytovoteatthemeetingshallbedeemedtoincludethepowertodemandapollonbehalfoftheappointer.

(e) TheinstrumentappointingaproxyshallbeleftattheregisteredofficeoftheCompanysituatedatLevel18,TheGardensNorthTower,MidValleyCity,LingkaranSyedPutra,59200KualaLumpuratleastforty-eight(48)hoursbeforethetimeappointedforholdingthemeetingoranyadjournmentthereof.

2. AgendaItemNo.1

This itemof theAgenda ismeant for discussiononly.Theprovisions of Section 169of theCompaniesAct, 1965 and theArticlesofAssociationoftheCompanyrequirethattheAuditedFinancialStatementsandtheReportsoftheDirectorsandAuditors thereonbe laidbefore theCompanyat itsAnnualGeneralMeeting.Assuch thisAgenda item isnotabusinesswhichrequiresaresolutiontobeputtovotebyshareholders.

3. AgendaItemNo.7

MessrsBDOBinderhadon25May2009givennoticeinwritingtotheDirectorsoftheirintentiontoresignasauditorsoftheCompany.ThereforetheBoardofDirectorshadnominatedMessrsHorwathinreplacementthereof,toholdofficeuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompanyataremunerationtobedeterminedbytheDirectors.

4. ExplanatoryNoteonSpecialBusinesses

(a) AuthoritytoAllotandIssueSharespursuanttotheEmployees’ShareOptionScheme TheproposedResolutionNo.7,ifpassed,istoempowertheDirectorstoallotandissueordinarysharesfromtheunissued

capitaloftheCompanypursuanttotheEmasKiaraIndustriesBerhadEmployees’ShareOptionScheme.

(b) AuthoritytoAllotandIssueSharespursuanttoSection132DoftheCompaniesAct,1965 TheproposedResolutionNo.8, ifpassed,willgive theDirectorsof theCompany, from thedateof theaboveGeneral

Meeting,authority toallotand issueordinarysharesfromtheunissuedcapitalof theCompanyforsuchpurposesastheDirectorsconsiderwouldbeintheinterestoftheCompanyandalsoauthorisetheDirectorstoobtaintheapprovalof BursaMalaysia Securities Berhad for the listing and quotation of the additional shares so issued. This authoritywill,unlessrevokedorvariedbytheCompanyinGeneralMeeting,expireattheconclusionofthenextAnnualGeneralMeeting.

(c) ProposedRenewalofShareholders’MandateforRecurrentRelatedPartyTransactionofaRevenueorTradingNature TheproposedResolutionNo.9seekingaRenewaloftheShareholders’MandatetoallowtheCompanyanditssubsidiaries

toenterintoRecurrentRelatedPartyTransactionsofaRevenueorTradingNatureistoenabletheCompanytocomplywithParagraph 10.09, Part Eof the ListingRequirementsofBursaMalaysiaSecuritiesBerhad.Themandatewill takeeffectfromthedateofpassingtheOrdinaryResolutionuntilthenextAnnualGeneralMeetingoftheCompany.

5. StatementAccompanyingNoticeoftheTenthAnnualGeneralMeeting

TheStatementAccompanyingNoticeof theTenthAnnualGeneralMeetingof theCompany issetoutonpage110of theCompany’sAnnualReport.

greener by innovation 110 statement accompanying notice of the tenth annual general meeting

STATEMENTACCOMPANYINGNOTICEOFTHETENTHANNUALGENERALMEETINGThe information required pursuant to Paragraph 8.28(2) of the Bursa Securities Listing Requirements areappendedhereunder:-

1. NamesofDirectorsstandingforre-election

TheDirectorswhoarestandingforre-electionattheTenthAnnualGeneralMeetingoftheCompanyare:

a) WongKongFoo : RetiringpursuanttoArticle109oftheCompany’sArticlesofAssociation. b) DatukYahyaBinYa’acob : RetiringpursuanttoArticle109oftheCompany’sArticlesofAssociation. c) SiewKahToong : RetiringpursuanttoArticle114oftheCompany’sArticlesofAssociation.

FurtherdetailsofDirectorswhoarestandingforre-electionaresetoutintheirrespectiveprofilesonpages17,18and19oftheAnnualReportandtheirsecuritiesholdingsintheCompanyaresetoutonpages34and105.

FORMOFPROXYI/We, I.C./Passport/CompanyNo.

of

beingamemberofEMASKIARAINDUSTRIESBERHAD,herebyappoint

I.C./PassportNo.

oforfailinghim,theChairmanoftheMeetingasmy/ourproxytoattendandvoteforme/usonmy/ourbehalfattheTenthAnnualGeneralMeetingoftheCompanytobeheldatSunriseAuditorium1,Mont’KiaraBusinessCentre,SuiteD-03-01,PlazaMontKiara,No.2,JalanKiara,Mont’Kiara,50480KualaLumpuronMonday,29June2009at10.00a.m.andatanyadjournmentthereof.

My/OurProxyistovoteasindicatedbelow:

Pleaseindicatewithan“x”inthespacesprovidedhowyouwishyourvotetobecast.Ifnoinstructionastovotingisgiven,theProxywillvoteasheorshethinksfit,orabstainfromvoting,athisorherdiscretion.

Datedthisdayof2009

No.ofOrdinarySharesHeldCDSACNo.

Signature/CommonSealofShareholder(s)

NoResolution

1. To re-electMr.WongKongFoo, thedirector retiringby rotationpursuanttoArticle109oftheCompany’sArticlesofAssociation.

2. To re-elect Datuk Yahya Bin Ya’acob, the director retiring by rotationpursuanttoArticle109oftheCompany’sArticlesofAssociation.

3. Tore-electMr.SiewKahToong, thedirectorretiringpursuant toArticle114oftheCompany’sArticlesofAssociation.

4. Toapprove thepaymentofafirstandfinal taxexemptdividendof3%perordinaryshareforthefinancialyearended31December2008.

5. ToapprovethepaymentofDirectors’feesinrespectofthefinancialyearended31December2008.

6. ToappointnewAuditorsoftheCompanyandtoauthorisetheDirectorstofixtheirremuneration.

7. SpecialBusiness–ResolutionNo.7



For Against

Notes:1. AmemberoftheCompanyentitledtoattendandvoteatthemeetingmayappointnotmorethantwo(2)proxiestoattendandvoteinhisstead.WhereamemberoftheCompanyisanauthorizednomineeasdefinedundertheSecuritiesIndustry(CentralDepositories)Act,1991,itmayappointatleastone(1)proxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.

2. AproxymaybutneednotbeamemberoftheCompany.3. Theinstrumentappointingaproxyshallbeinwritingunderthehandsoftheappointerorofhisattorneydulyauthorisedinwriting,oriftheappointerisacorporationunderitscommonseal,orthehandofitsattorneydulyauthorised.

4. Aninstrumentappointingaproxytovoteatthemeetingshallbedeemedtoincludethepowertodemandapollonbehalfoftheappointer.5. The instrumentappointingaproxyshallbe leftat theregisteredofficeof theCompanysituatedatLevel 18,TheGardensNorthTower,MidValleyCity,LingkaranSyedPutra,59200KualaLumpur,atleastforty-eight(48)hoursbeforethetimeappointedforholdingthemeetingoranyadjournmentthereof.

TheCompanySecretary

EMASKIARAINDUSTRIESBERHAD(CompanyNo.485144-H)

Level18,TheGardensNorthTower,MidValleyCity,LingkaranSyedPutra,59200KualaLumpur,Malaysia

AFFIX

POSTAGE

STAMP

PleaseFoldHere

PleaseFoldHere

This is a recent photo of a tree nymph resting on an Ixora bush found in the premises

of Emas Kiara’s headquarters. It was a delightful surprise and indeed a rare sight

to behold in an industrialized area of Rawang. With a wingspan of 180mm, the

Idea Stolli is of the four species of genus Idea found in Malaysia. One of its very

rare species, the Idea Leuconoe, predominantly lives in the coastal mangroves of

Malaysia. This unusual visit has reminded us, once again, of the need to protect and

conserve our environment even as we progress in development and innovation.

A thing of Beauty is a Joy foreverJohn Keats

MALAYSIAEmas Kiara Marketing Sdn BhdLot 13A, Jalan RP3, Rawang Industrial Estate48000 Rawang, Selangor Darul EhsanMalaysiaTel 603 6092 9898Fax 603 6092 6602Email [email protected]

OVERSEASKiaratex Exports Pte Ltd510 Thomson Road#02-12 SLF BuildingSingapore 298135Tel 65 6353 5511Fax 65 6354 2668Email [email protected]

Greener - MalaysiaStock.Biz

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