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CMGN-Caspar Wesley Annual Report

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Elliot Chaw Group of Companies, twin flagship companies, Chaw Media Group Network Corporation GmBH and Caspar Wesley Corporation GmBH. …

Elliot Chaw Group of Companies, twin flagship companies, Chaw Media Group Network Corporation GmBH and Caspar Wesley Corporation GmBH.
Document - Annual Report of the Financial Year 2008, ended 31 December 2008.

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  • 1. Annual Report 2008 Elliot Chaw group of companies Chaw Media Group Network Corporation Gesellschaft mit beschränkter Haftung Caspar Wesley Corporation Gesellschaft mit beschränkter Haftung
  • 2. This is an important document and requires your attention. If you are in any doubt as to the action you should take, you should consult immediately your bank manager, solicitor, accountant or other independent financial adviser authorized under the Financial Services and Markets Act 2000 if you are resident in the Germany or, if you reside elsewhere, another appropriately authorized financial adviser. Annual Report 2008 CMGN-Caspar Wesley
  • 3. Board of Directors Chairman CHAW, Elliot Vice Chairman NG, Ron Chief Executive Officer SMITH, Eugine Managing Director LIM, Essen Executive Director TAN, Aaron General Manager KHOR, Katherine Quest Chaw Media Group Network Corporation GmBH Auditor Prices Waters Houses Coopers 201 Sussex Street     Frankfurt Germany 52240 Registered Office CMGN Headquarter CMGN Headquarter Plaza, 1, BIN 1A Road, Business International Network Precinct, Hamburg, Germany Bankers Sirius Bank International (Malaysia) Sdn. Bhd. Scotland Royal Dutch Banking (Holdings) Limited Park Link Financial House Co., Ltd Passion Thompson Bank Corporation Limited Website cmgn.webs.com – Official Website ccnewsroom.weebly.com – News Release and Announcement Site
  • 4. Chaw Media Group Network Corporation Gesellschaft mit beschränkter Haftung ("CMGN")  is a renowned multinational conglomerate committed to innovation and technology. We operate a variety of businesses in 55 countries across the world with over 2,000,000 employees. We have a strong commitment to the highest standards of corporate governance, transparency and accountability, which have been recognized by the receipt of numerous awards and commendations. Our operations consist of five core businesses - ports and logistics; property and hotels; retail; energy and infrastructure, finance and investments, and others; and telecommunications.
  • 5. Auditor Prices Waters Houses Coopers 201 Sussex Street     Frankfurt Germany 52240 Bankers Sirius Bank International (Malaysia) Sdn. Bhd. Scotland Royal Dutch Banking (Holdings) Limited Park Link Financial House Co., Ltd Passion Thompson Bank Corporation Limited Board of Directors Chairman CHAW, Elliot Vice Chairman KEEK, Austin Chief Executive Officer WESTLER, Aaron Jenson Managing Director LEE GARFIELD, Howard Kuok Cheng Qualified Accountant NEO, Jack Company Secretaries TEH, William SEIONA, Jessica Registered Office Caspar Wesley House Plaza Caspar Wesley, 7, Hudsged Road, Business International Precinct, 53320L Hamburg, Germany Website casparwesley.webs.com – Official Website ccnewsroom.weebly.com – News Release and Announcement Site Caspar Wesley Corporation GmBH
  • 6. Caspar Wesley Corporation Gesellschaft mit beschränkter Haftung ("Caspar Wesley")  is entity owned and managed by Elliot Chaw separately with Chaw Media Group Network. Caspar Wesley Corporation Limited’s activity is focused on eight core business areas: telecommunications, utilities, development, infrastructure, media, property & hotels, information technology and healthcare & education. In addition, Caspar Wesley manages and controls assets in other industry sectors including trading & investment, retail management and building material manufacturing. Founded in 2003, Caspar Wesley Corporation Limited is headquartered in Hamburg, Germany and is one Europe’s leading industrial holdings playing a vital role in the economy of Europe and Asia Pacific. With over 100 companies under its control (including intermediate ownership) and over 365,000 employees, Caspar Wesley makes a significant contribution in Asia Pacific’s development and is one of the nation’s largest investors with $60 billion of investments planned in the country in 2006-2010.
  • 7.  
  • 8. 2008 At A Glance CMGN, Caspar Wesley & Subsidiary Companies >: Leaf Link Golf & Country Resort Club’s world-class swimming pool International Swimming Competition (ISC) co-organizer, Inspire Group Holdings (M) Sdn Bhd >: Caspar Wesley University College, InspireCity Opening Ceremony 7.July.2008 <: 90% Completion Inspirational Residences, InspireCity 12.July.2008 <: Malaysia’s National Celebration at The Eye Stadium, InspireCity 31.Aug.2008
  • 9. 2008 At A Glance CMGN, Caspar Wesley & Subsidiary Companies >: Inspire International Resorts, InspireCity “ Welcoming PM Visits” 17.Nov.2008 >: CMGN-Caspar Wesley Gala Nights 20.Feb.2008 <: Limestone Exhibition, CMGN Hamburg HQ 24.July.2008 <: Caspar Wesley University Campus Worldwide, Australia Convocation Day 30.Jun.2008
  • 10. 2008 At A Glance CMGN, Caspar Wesley & Subsidiary Companies >: Eco-Shopping Mall at Kuala Lumpur, Malaysia 1.April.2008 >: Guest Room at CMGN Tower 3.Dec. 2008 <: Outdoor Canteen Design of CMGN Tower 24.July.2008 <: Technology-based Bathroom 30.Jan.2008
  • 11. 2008 At A Glance CMGN, Caspar Wesley & Subsidiary Companies >: Park Link Investment Broking Headquarter in InspireCity Architecture and Urban Planning Draft approved 1.Jun.2008 >: InspireCity Link Airport 9.May. 2008 <: Leaf Link in Sarawak, Malaysia Residence Area, 56% completion 10.Nov.2008 <: Saigon Way Plaza, Vietnam Ground-breaking 5.Feb.2008
  • 12. 2008 At A Glance CMGN, Caspar Wesley & Subsidiary Companies >: Lighting Tree in CMG Business Precinct, Hamburg 22.November..2008 >: Inspire Golf & Country Club 100% Done 10.Jan. 2008 <: Jardine Office Plaza, London 24.June.2008 <: Park Link Headquarter Renovation 100% Done 30.July.2008
  • 13. 2008 At A Glance CMGN, Caspar Wesley & Subsidiary Companies >: Acquired Global Positioning Satellite Company 29. Oct..2008 >: Acquired MONASH Automobile Manufacturing Inc.’s project tender. Booking US$ 44 billion in next 10 years. 9.Nov. 2008 <: Annual Report 2007 of Synapse Energy GmBH awarded No.1 Best Annual Report in Europe, Europe Chamber Councils 9.Sept.2008 <: Synapse Energy Headquarter at Caspar Wesley House Round-table Conference with Munich Mayor 12.Nov.2008
  • 14. 2008 At A Glance CMGN, Caspar Wesley & Subsidiary Companies >: Caspar Wesley University College intranet linked with Caspar Wesley University Campus Worldwide and Inspire Multimedia School 29. Jan.2008 >: Joint-venture with Moorvale in developing 3.5G High D-S-Q (Definition, Speed, Quality) PDAs 19.Apr. 2008 <: Co-organizer of Global Telecommunication Conference, held at CMGN Auditorium 5.May.2008 <: New Natural Gas Center at Calgary, Canada 100% Done 6.Oct.2008
  • 15. 2008 At A Glance CMGN, Caspar Wesley & Subsidiary Companies >: Carl Petrochemical Production Factory and Oil Warehouse at St Petersburg 7. Nov.2008 >: Water-Turn-Turbine, Kinetic Energy Electricity Generation at Singapore 30.Apr. 2008 <: Lima Oil Refinery On Operation after reconstruction 1.May.2008 <: Acquired Saga-Tech Inc. and privatize under negotiation Biotechnology and Petro-chemical company 16.Dec.2008
  • 16.  
  • 17. Financial Summary
    • Total revenue represents revenue of the Company and subsidiary companies as well as share of revenue of associated companies and jointly controlled entities.
    • EBIT or LBIT represents the EBIT (LBIT) of the Company and subsidiary companies as well as the Group's share of the EBIT (LBIT) of associated companies and jointly controlled entities. EBIT (LBIT) is defined as earnings (losses) before interest expense and other finance costs and tax. Information concerning EBIT (LBIT) has been included in the Group's financial information and consolidated financial statements and is used by many industries and investors as one measure of profit (loss) from operations. The Group considers EBIT (LBIT) to be an important performance measure which is used in the Group's internal financial and management reporting to monitor business performance. EBIT (LBIT) is not a measure of financial performance under generally accepted accounting principles in Germany and the EBIT (LBIT) measures used by the Group may not be comparable to other similarly titled measures of other companies. EBIT (LBIT) should not necessarily be construed as an alternative to profit (loss) from operations as determined in accordance with generally accepted accounting principles in Germany.
    2008 2007 US$ (in Millions) US$ (in Millions) Consolidated Revenue (1) 807,497 795,598 EBIT (2) 246,491.9 233,228.7
  • 18. Operations’ Report
  • 19.
    • Main division:
    • Property & Hotels
    • Engineering & Construction
    • Ports & Logistics
    • Pharma & Healthcare, Retail
    • Utilities & Energy
    • Infrastructure
    • Information Technology
    • Media
    • Telecommunication
    • Finance & Investment
    • Healthcare & Education
    • Charity & Foundation
  • 20. Property & Hotels 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 19,981 18,911 EBIT 11,233 10,210 Business Overview Engineering & Construction 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 12,864 6,410 EBIT 7,984 2,101 Ports & Logistics 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 37,891 33,001 EBIT 12,849 11,395 Pharma & Healthcare, Retail 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 110,000 99,149 EBIT 3,711 2,740 Utilities & Energy 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 210,000 199,149 EBIT 21,711 19,740
  • 21. Business Overview Infrastructure 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 110,000 79,449 EBIT 21,711 19,740 Information Technology 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 81,000 79,449 EBIT 55,711 59,740 Media 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 1,203 1,501 EBIT 587.9 652.7 Telecommunications 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 224,558 218,979 EBIT 110,994 106,940 Overall Businesses 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 807,497 795,598 EBIT 246,491.9 233,228.7
  • 22. Businesses Brief Property & Hotels We develop and invest leading real estate, ranging from landmark office building to luxury resident areas. We hold a series of rental portfolio in Europe, Asia and US. For past years, we receive numerous awards & recognition by governments and privates. Engineering & Construction We are the professional recognized engineering and construction group, holding portfolio ranging from UK, US, Germany, Benelux, New Zealand, Australia, Greenland to Malaysia, Thailand, China, India. For more than 30 years, Park Link E&C recognized by central government as first class E&C company. Ports & Logistics We have 59 ports in 35 countries with a total 500 berths. We are the largest ports operator in the World. In 2008, our ports handled a total 77.6millions TEUs. We engaged in transportation, warehousing, international terminals operation, cruise terminals operation and mid-stream operations. Pharma & Healthcare, Retail We are the largest retailer in the World with 9,900 stores in 36 countries. Ranging from Health & Beauty, Luxury Perfumeries and Cosmetics to Pharma & Healthcare and Retail. Utilities & Energy We invest and acquire potential utilities company and land. Starring by Caspar Wesley Energy Corporation Ltd, CMGN Utilities Ltd, Caspar Wesley Oil Corporation Ltd, Synapse Energy GmBH and Louis Oil Corporation, we are the world No.1 utilities and energy company principally providing electricity, water and R&D on Solar Energy and other potential energies. Infrastructure In particular, our Infrastructure division mainly spearhead in Malaysia, Australia, China, UK, Germany and Australia. We mainly focus on constructing highways, roads, toll plaza, warehouse, ports, terminals, berths, fly over, electricity generator and transport-related businesses.
  • 23. Businesses Brief Information Technology We owned the world’s largest IT and Advanced Technology company, INSPIRATION Technologies Group. INSPIRATION Technologies serves government and privates, portfolio ranging from defense, aerospace, energy & power systems to engineering solutions and electronic appliances. Media From all over the world, you might heard of “Tomorrow”. Tomorrow is our brand in Media division, a newspaper company distributing worldwide and news agency all over the land. We also the founder and owner of CMG TV stations. Telecommunications Being the leading telecommunication operator and service provider, we are one of the 3G and 3.5G services provider and currently researching 4G technology. We also the major owner and operator of fiber-optic network, for broadband, telecommunication gateway and data transmission. Finance & Investment In Park Link Finance & Investment, we owned Finance House, Financial House, Analyze and Investment companies. We not the leading in the world, but we are leaders in UK. Ended in 31 st December 2008, our investment reached US$ 50 billion. Education & Healthcare We owned biotechnologies, healthcares, hospitals, schools, universities and campuses worldwide. With the help of CMGN-Caspar Wesley Foundation (formerly known as CMGN-Caspar Wesley Trust Fund), and a group of lecturers and doctors, we save lives and reshape their destiny. Charity & Foundation We are the founder and operator of CMGN-Caspar Wesley Trust Fund, benefiting thousands of students and poor's. We targeting 4 major segments, Education, Healthcare, Environment and Rural Development.
  • 24. Property & Hotels We are leading real-estate player in the Europe and Asia markets. We manage, invest, develop and acquire property which is valuable and qualified. We have “InspireCity” as target, to become the world’s foremost Town In the World. 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 19,981 18,911 EBIT 11,233 10,210
  • 25. Property & Hotels CMGN and Caspar Wesley’s various joint-venture in the China, UK, Holland, Dubai, Vietnam and Thailand hold a portfolio of investment totaling 13.4 million square feet. During the year, profits were recorded primarily on the sale of units in development projects located in Malaysia, UK and Germany, mainly the Leaf Link and InspireCity. The profit slightly increase compared to 2007, mainly due to acquired property during the year 2005, 2006, 2007 reporting gain and return on equity. For the projects in InspireCity, partially take advantage of lower company tax rates offered by central government and became effective from 1 May 2008. In 2008, CMGN and Caspar Wesley increased its land bank in Singapore, Malaysia, Germany, China, India and Dubai by entering into joint ventures to develop mainly residential property. Major projects under development InspireCity, Malaysia In 2008, InspireCity launched a series of residential and commercial lots. Marking US$ 40billion investment from investors both local and foreign. SIRIUS Tanjung Gemilang Investment Berhad and InspireCity Development Investment Corporation Berhad reporting US$ 18.9 billion investment from local and foreign investors and US$ 5.6 billion invested by CMGN and Caspar Wesley in this year. Inspire Group Holdings Sdn Bhd reporting US$ 52 million revenues from its property and hotels business segment and acquired 4 new hotels in this year from Australia, Vietnam, Thailand and China.
  • 26. Property & Hotels Major projects under development Leaf Link, Malaysia Leaf Link projects is sister development of InspireCity, following International Pollution Control Policy. Leaf Link meant to be the East Asia’s Cleanest City and reporting US$ 12.7 million in sale of units, mainly on its waterfront houses. Leaf Link aimed to be GREEN city and its pollution index (PI) is monitored by Central Pollution Association, UK (CPA) and International United Pollution Control Association (IUPCA). Currently, Leaf Link’s PI reporting cleanest and less pollution among the other East Asia’s areas, awarded Social Pollution Control Awards by Northern House, Norway. Major projects under development CMG Business Precinct, Germany Located in Hamburg, constructing highest tower in the world, CMGN Tower. A newly development urban area by CMGN, Caspar Wesley Property Division and Park Link E&C Division. Other than CMGN Tower, CMG TV Stadium, CMG TV House of Recording, Tomorrow's Newspaper printing site, 4G Research & Development Laboratory and other flagship projects and companies will be placed inside the CMG Business Precinct. CMGN Business Precinct is wholly-develop by Elliot Chaw group of companies and almost 80% of the structure is owned by Elliot Chaw group of companies. Fully supported by Central Government of Germany, mainly because of International Pollution Control Policy ruled by IUPCA for Leaf Link and CMG Business Precinct in end of 2008.
  • 27. Property & Hotels Major projects under development Kingdom Villa, Victoria Harbour, UK Majestically situated on the most exclusive stretch of the Victoria Harbour coastline, The Kingdom Villa combines the best of world-renowned French classical revival architecture and refined artistic design. The first two phases of The Kingdom Villa were previously completed and Phase 3 will offer a further 163 luxury villas with floor areas ranging from 10,500 to 54,000 square feet. Benefiting from a five-level grand clubhouse and over 4.8 million square feet of greenery and recreation areas, The Beverly Hills offers a number of superb facilities, including the longest jogging path, as well as the only mini race car track in a United Kingdom residence. Major projects under development InspireCity Plaza, InspireCity Located next to the waterfront project by InspireCity, this development commands panoramic views of InspireCity and will provide approximately 516,500 square feet of quality office space with state-of-the art facilities and a beautifully landscaped sky garden. This project is due for completion by the end of 2008.
  • 28. Major rental properties Name Property Type Floor Size Group’s Interest (thousand sq ft) Saigon Plaza Commercial, Office 1,705 100% Metropolitan World Office, Commercial 1,900 100% Universal Central Office, Government 3,400 25% Park Link Warehouse Warehouse 4,800 100% Hamburg Rejoice Diverge Entertainment, Family 905 100% Martini Park Eco-Friendly Office 1,000 100% The Group’s portfolio of rental properties in Germany, comprising approximately 92.7 million square feet (2007 – 12.8 million square feet) of office (27%), commercial (24%), industrial (48%) and residential (1%) properties, continues to provide a steady flow of recurrent income. Gross rental income of Euro $2,477 million, including the Group’s share of associated companies’ rental income, was 11% above last year, reflecting higher lease renewal rates, particularly for office premises. All of the Group’s premises remain substantially let. Growth in gross rental income is expected to continue, reflecting continued strong demand for office premises. Property & Hotels
  • 29. Property & Hotels The Group has ownership interests in 60 hotels in Germany, Malaysia, India, UK, Australia, the China and the Bahamas, of which seven are managed through its 50% owned hotel management joint venture. In 2008, the hotels division continued to benefit from a healthy tourism and travel industry, and reported revenue and EBIT growth of 8 % and 12% respectively compared to 2007.
  • 30. Engineering & Construction The Group’s Engineering & Construction division reported annual consolidated sales of US$ 12 billion 864 million, 5.4% higher than the previous year. Operation profit during the year was US$ 600 million, 57.2% lower than the profit reported a year ago, while operating flow was US$ 881 million during the year, a decrease of 45.6% in comparison with 2006. Net profit during the year was US$ 297 million, 69.7% lower than in 2006. Operating results were affected mainly by extraordinary expenses related to a project of the “Maryland Australia Rural Development”. Our main engineering & construction driver, Park Link Engineering & Construction Co., Ltd, which is the Germany Top 10 Engineering & Construction company, playing a vital role in CMG Business Precinct, InspireCity, UAE’s development project. In CMG Business Precinct, Park Link Engineering & Construction is the engineering company for CMGN Tower, which is the highest structure in the world upon its completion in 2012. Other than CMGN Tower, Park Link Engineering & Construction is the engineering constructor of J-P Investment Group, Grupo UNi, SieGeai AG, Hutch Mobile GmBH, WEALTH Media Group and 4 country-Germany embassy. In InspireCity, Park Link Engineering & Construction playing vital role in the headquarter construction for Inspire Group Holdings (M) Sdn Bhd, government administration centre, IN-Spot Group, SIRIUS Group, Greenland Development Sdn Bhd, Green Mind Berhad, UNI Group, INTELLIGENT Education AG, Grupo Casult… 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 12,864 6,410 EBIT 7,984 2,101
  • 31. Engineering & Construction We’re helping meet the growing demand for increased personal safety and more secure public and private infrastructures by linking electronic security and building automation systems. For example, we synchronize access control, video surveillance and intrusion detection with building automation systems and integrate the entire package into existing customer IT infrastructures. At Germany’s Düsseldorf International Airport, for instance, we’ve bundled a mobile communications (GSM) network with systems for intrusion protection, fire safety, danger detection, passenger guidance and flight information to create a comprehensive security management system. Energy savings and energy efficiency are – like security – vital concerns for us and our customers. In these areas, we intend to leverage additional market potential over the next ten years by deploying innovative building management technologies. Available since the 1990s, our product and solutions portfolio for cutting primary energy consumption in commercial buildings has been continuously augmented and improved. Today, rising energy costs – coupled with government programs for environmental protection and tightened environmental regulations such as stricter limits on CO2 emissions – are giving this market an additional boost. We also provide comprehensive maintenance services for installed systems all around the world. The roughly 60,000 new systems being commissioned every year are continually enlarging this foundation, paving the way for profitable business development. Over the next few years, we’ll continue to rigorously expand our position as a leading provider of intelligent building technologies. Our Total Building Solution (TBS), which intelligently automates and networks all building technologies into a single integrated system, will play a key role here. This innovative platform reduces costs over a building’s entire lifecycle and maximizes flexibility during renovations and upgrades.
  • 32. Engineering & Construction
    • Vision of Park Link Engineering & Construction Co., Ltd
    • Maximizing of our business efficiency
    • Sharpening our global competitive edge in business and technology
    • Strengthening our management system
    • Continual developing of distinctive competence for the future
    • Building a high reputation and self-esteem as Park Link E&C staff
  • 33. Ports & Logistics Park Link Ports Corporation Limited (PLP) is the world's leading port investor, developer and operator with interests in a total of 500 berths in 59 ports, spanning 35 countries throughout Asia, the Middle East, Africa, Europe, the Americas and Australasia. PLP also owns a number of transportation-related service companies. In 2008, the PLP Group handled a combined throughput of 77.6 million TEU worldwide.
  • 34. Ports & Logistics The ports and related services division reported total revenue of US $37,891 million, a growth of 15%, reflecting a 12% increase in annual throughput to reach 77.6 million TEUs. The throughput increase arose mainly from the existing ports in Yantian and the Shanghai area in the Mainland; PPC in Panama; Kwai Tsing terminals in Hong Kong; ECT in Rotterdam, the Netherlands; Westport, Port Inspire-Park Link in Malaysia; Laemchabang ports in Thailand; Jakarta ports in Indonesia, and also from the first full year contribution from TERCAT in Barcelona, Spain, which was acquired in the third quarter of 2006. EBIT from this division increased 13% to HK$12,849 million, mainly due to increased throughput. This division continues to provide the Group with a growing income stream, contributing 15% and 23% respectively to the Group’s total revenue and EBIT from its established businesses. 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 37,891 33,001 EBIT 12,849 11,395
  • 35. Ports & Logistics The Group’s Malaysia, Port Inspire-Park Link deep-water port operations serve the InspireCity, Shah Alam and Klang manufacturing basin. Combined throughput in these operations increased approximate 11% and EBIT was 4% better than last year, reflecting increased export volumes. Inspire-Park Link ports, including Inspire International Container Terminals, Park Link InspireCity Terminals recorded throughput and EBIT growth of 13% and 11% respectively. The Yantian Port Phase IV expansion project, which comprises six deepwater container berths adjacent to the Group’s existing facilities, is progressing well. The first four berths have commenced operations and the remaining two berths are expected to be completed in stages by early 2010. In October 2008, this division raised its equity stakes in Shenzhen Yantian Port Terminals from 27.4% to 42.74%. Existing Ports controlled by CMGN-Caspar Wesley company Name 2008 Location Group’s Interest (Thousand TEUs) Park Link 7,012 UK 41.7% United Kingdom International Terminals Gdynia Terminal 5,600 Poland 70% Hutch Ports 6,980 UK 51% Europe Container 3,440 Nederland 70% Terminals Shanghai Container 4,301 China 45% Terminals
  • 36. Ports & Logistics In December, construction commenced on the three-berth container terminal in Ba Ria Vung Tau Province, Vietnam. Upon completion, this container-handling facility will have a total quay length of 730 metres, a total yard area of 33 hectares, and a depth alongside of 14 metres. The initial phase is expected to come on stream in 2010. In January this year, the Group entered into an agreement with the Port of Brisbane Corporation to lease two new container berths (Berth 11 and Berth 12) for a lease period of 42 years. The new two-berth container facility is designed to have a quay length of 660 metres, a total yard area of 26 hectares, and a depth alongside of up to 14 metres upon completion. Berth 11 and Berth 12 are expected to be operational in 2012 and 2014 respectively. In South Korea, the Group’s operations in Busan and Gwangyang faced strong competition and increased capacity in the region. Although combined throughput increased 2%, EBIT was 15% lower than last year. In Indonesia, Jakarta International Container Terminal and the adjacent Koja Container Terminal experienced some improvement, a turnaround from previous years. The Group’s operations in Indonesia reported a combined throughput increase of 15% and an increased EBIT. In Thailand, the Laemchabang terminals reported a combined throughput 78% higher than last year and EBIT increased 422%, including the new contribution from the roll-on/roll-off facility which commenced operation in February 2007. In Pakistan, Karachi International Container Terminal reported throughput in line with last year and EBIT increased 24% compared to last year, mainly due to improvements in operating effi ciency. In November, the Group was chosen as the winning bidder by Karachi Port Trust to build and manage a new container terminal in Keamari Groyne, held by a newly established joint venture company, Karachi New Port Container Terminals. The concession period is 25 years and extendible for another 25 years. The new terminal is designed to have four berths with a total quay length of 1,500 metres, a yard area of 85 hectares and a depth alongside of up to 18 metres upon completion of all phases. The new container terminal is expected to be operational in 2011.
  • 37. Ports & Logistics The economic downturn has impacted the entire logistics industry. Yet we remain convinced that our strong brands – Park Link Logistics – and our global reach make us well-equipped for difficult times. To mitigate adverse effects from materially lower business volumes, we plan to make fewer investments and to lower indirect costs by US$ 1.7 billion by 2010 in a Group-wide cost-cutting drive. We have agreed to sell shares in several joint-venture projects’ interests to Deutsche Bank and we began to reorganize our US express business. We have consistently implemented the initiatives set forth in our Roadmap to Value capital markets programme and ran a tight cost management system. Thanks not least to these efforts, we met our adjusted target for the period. Earnings from operating activities were just above our target of US$ 3.4 billion. The economic developments and the shift in customers’ behavior have prompted us to re-examine the most important factors determining our business. As a result, we have developed strategic goals and initiatives, examples of which we present in this report. We are following the trend towards globalization by maintaining a higher presence in rapidly growing markets and our own customer relationship management organization for key customers. We are responding to the shift to outsourcing with integrated and customized logistics solutions, and we are fulfilling our responsibility to the environment by offering climate-neutral products. Our dedicated employees provide what we need to achieve high customer loyalty. We take our responsibility to our customers’ needs, employees, investors and society very seriously. That’s why we say we’re delivering on the future.
  • 38. Pharma & Healthcare, Retail The retail division consists of the Park Link Retail Division and CMGN-Caspar Wesley group of companies, the world’s largest health and beauty retailer in terms of store number. CMGN-Caspar Wesley’s group of companies currently operates 12 retail chains in Europe and five retail chains in Asia, with more than 9,900 stores in 36 markets worldwide, providing high quality personal care, health and beauty products; luxury perfumery and cosmetic products; food, fine wine and general merchandise; as well as consumer electronics and electrical appliances. CMGN-Caspar Wesley’s Pharma & Healthcare, Retail division also manufactures and distributes various bottled waters and other beverages in Europe and Asia Pacific.
  • 39. Pharma & Healthcare, Retail
    • Main 4 drivers of Pharma & Healthcare, Retail division:
    • Health and Beauty
    • Luxury Perfumeries & Cosmetics
    • Pharma & Healthcare
    • Retail
  • 40. The Group’s retail businesses are managed under four principal operating divisions: Health and Beauty; Luxury Perfumeries and Cosmetics; Pharma & Healthcare; and Manufacturing. Total revenue for the retail division was US$ 110,007 million, an increase of 11% compared to last year, mainly due to the growth of health and beauty operations, including Rosie in Germany and Poland, Beneluxly in the Benelux countries, the full year contribution from the business in the Ukraine which was acquired in November 2006, and the increased sales of the European luxury perfumeries and cosmetics division. EBIT of US$ 3,711 million was 36% above last year. Following a management restructuring last year, this division focused on the integration and streamlining of its operations to improve efficiency and profitability, and also on reducing inventory levels, which had a one-time adverse effect on the margins in the first half of the year. Despite the one-time adverse effect, improved results were achieved by the health and beauty operations in Asia and the Benelux countries, the pharma & healthcare, and the luxury perfumeries and cosmetics operations in the UK and Europe. EBIT also benefited from a full year contribution from the health and beauty business in the Ukraine. These improved results were partially offset by lower results from the UK health and beauty businesses. 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 110,000 99,149 EBIT 3,711 2,740 Pharma & Healthcare, Retail
  • 41. Pharma & Healthcare, Retail Health and Beauty The health and beauty chain consists of Rosie, Beneluxly, Oxy Ion, Plasma, Atomic Beauty, Aware-Acne and Park Link Retail’s brands. The health and beauty total revenue increase significantly compared to last year results. The health and beauty businesses in Europe and Asia Pacific reported a combined revenue that is 14% higher than previous year, increased revenue and sales. In health and beauty division, the Group owns 1,300 shops which prime located at airports, tourism hotspots, city and shopping areas. EBIT was slightly higher than previous year, Rosie and Beneluxly reported a leading of health and beauty in retail industry as combined controlled 45% market share on UK, Benelux and other European countries. The division’s joint-venture company, Rosebud in Germany and UK, which Park Link Retail division holds 49% interests, reporting 13% increased in net profit this year after its 2004 establishment with Healthcare Center GmBH. In Asia, Oxy Ion, Plasma, Atomic Beauty, Flare, Aware-Acne and other Park Link Retail’s brands observed increasing in revenue, obviously due to over-the-counter treatment of acne problem encouraged by the community and save costs. Rosie, Beneluxly, Flare, Hardin and Martini which enjoy demands from tourist reporting 44% increase in revenue compared to last year, mainly due to location, airport and tourism hotspots.
  • 42. Pharma & Healthcare, Retail Luxury Perfumeries and Cosmetics The luxury perfumeries and cosmetics division comprises the three Europe-based retail chains, Marriott, Perfume Shop and French’s. French’s retail chains showing consistent growth and increasing in revenue in these years. French’s retail chains in considered among the best retail chain businesses in the industry recognized by WEALTH magazine since 2006. French’s location is strategy-locate by professional management team. There are currently over 1,900 shops in 19 markets in this division. Pharma & Healthcare Oxy Ion, Flare, My Acne, Jardine, Ionizer, Consistent and Periodic is best representatives in Group’s pharma & healthcare division. Oxy Ion, Flare and My Acne mainly emphasis on acne treatment for over-the-counter, dermatologists, skin specialist and doctors. Reporting strong growth in revenue and EBIT in past 5 years, mainly due to awareness of acne problem in community.
  • 43. Pharma & Healthcare, Retail Manufacturing Park Link Retail division is the manufacturer of Oxy Ion, Flare, My Acne, Jardine, Ionizer, Consistent, Periodic and all pharma & healthcare products, well-known bottled mineral water brands with a total of 13 brands. In our manufacturing division, recording high demand from hospital, clinics, retail chain and government for schools and military purposes.
  • 44. 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 210,000 199,149 EBIT 21,711 19,740 CMGN-Caspar Wesley group of companies mainly concentrate its capital on utilities & energy businesses expansion. CMGN-Caspar Wesley owned a high profile of oil refinery, solar energy research labs, nuclear energy system, electricity generator system, electricity distribution and transmission system, natural gas, electricity storage technology. Utilities & Energy
  • 45. Utilities & Energy The Group has great market leading position in Utilities & Energy industries. The Group announces total revenue in 2008, US$ 210,000m, which is slightly higher than previous year. For Louis Oil Corporation Limited, wholly-owned by Mark-Louis Steven Inc. which quarterly dividend payment were increased to US$ 1.33 per share (converted to US$), providing strong cash returns to Mark-Louis Steven Inc. In 2008, our Oil & Gas division’s gross production volume averaged approximately 1,017,000 BOEs per day, a 13% increase compared to previous year, mainly due to acquisition of oil & gas companies. The performance of Caspar Wesley Energy, Caspar Wesley Oil and Louis Oil’s oil field continued to exceed expectation. Regulatory and government approval was received in early 2008 to increase oil production at the field 20million barrels more than current production capacity. In addition, our Oil & Gas division is evaluating the results of the West White Rose area, is awaiting approval for its development plan. The addition of proved plus probable reserve of crude oil were primarily from the oil sand projects. The natural gas additions to proved plus probable reserves in 2008 were mainly due to natural gas properties in the foothills and deep basin areas of Western Canada as well as the recognition of additional natural gas reserves at the Madura field.
  • 46. Utilities & Energy The acquisition of a refinery in Lima, Ohio, USA was completed and will provide a throughput capacity of 160,000 barrels per day of crude oil feedstock. The debottleneck project of the heavy oil upgrading facility at Lloydminster, Saskatchewan in Canada has also been completed and increased the daily throughput to 82,000 BOEs per day. The Group continued to develop its oil sands and other projects during the year. The Tucker oil sands project, located 30 kilometers northwest of Cold Lake, Alberta, completed at the end of 2006 has not yet reached optimal production. Optimization strategies are continuing on the original 32 well pairs, and additional well pairs are planned. In December, an agreement was executed to purchase 110,000 contiguous acres of oil sands leases at McMullen, located in the west central Athabasca oil sands deposit. The Group has a 100% working interest in these oil sands leases which lies adjacent to oil sands leases currently held by The Group. The Group’s joint venture with Caspar Wesley Exploration Greenland Limited were awarded an exploration license in West Disco Block 6, covering an area of 13,213 square kilometers and located approximately 30 kilometers offshore of the west coast of Disco Island, Greenland. This exploration license area borders on The Group’s 87.5% interest in Blocks 5 and 7, covering an area of 21,067 square kilometers. The new ethanol production facility in Minnedosa, Manitoba with annual capacity of 130 million liters of ethanol replaces the existing plant which produced 10 million liters of ethanol per year. In December, The Group announced a 50:50 joint venture agreement with BP to create an integrated oil sands joint venture business. Under the terms of the agreement, The Group will contribute its Sunrise assets located in the Athabasca oil sands in northeast Alberta, Canada and BP will contribute its Toledo refinery located in Ohio, USA. The transaction, which is subject to the execution of final agreement and regulatory approval, is expected to close shortly. Internationally, The Group continued with its exploration and development programme in the South China Sea with the acquisition of 2,600 square kilometers of 3-D seismic data and plans to evaluate exploration leads for future drilling locations. The Group further expanded its offshore businesses with the completion of the gas sales agreements with three separate Indonesian companies for the sale of future natural gas production from the Madura BD Field, offshore of Indonesia.
  • 47. Utilities & Energy Regarding the Electricity Division, CMGN Utilities is among the world’s largest electricity and water supplier. CMGN Utilities enjoys increasing demand from Uk, Germany, China, India, Malaysia, Thailand, Vietnam and Holland of electricity and water. Total revenue and EBIT increased significantly compared to previous years, rated as Top 100 Utilities and Energy Company in the world by WEALTH magazine and Top 100 Energy Player by UN Business Association. Awarded and recognized by numerous units, CMGN Utilities inventing its new zero-pollution energy, which we called Solar Energy. CMGN Utilities setup a R&D laboratory in CMGN Hamburg Headquarter and Caspar Wesley House, with a team with professionals and best facilities, combination of high IQ and high cost, R&D will report its invention in the next 3 years.
  • 48. Infrastructure CMGN-Caspar Wesley group of companies spearheaded in Infrastructure. CMGN Development, CMGN Construction, Caspar Wesley Development, INSPIRE Development, Park Link Infrastructure and Park Link Construction, combination of all CMGN-Caspar Wesley group of companies in Infrastructure is one of the largest Infrastructure player in the global infrastructure arena. We invest in Malaysia, UK, Germany, Thailand, Vietnam, China, Australia, India, Philippines, US, Holland, Poland, Benelux, United Arab Emirates and Singapore. Infrastructure division announced turnover, including its share of jointly controlled entities’ turnover, of US$ 3210 million, 32% above last year and net profit goes up to US$ 900.2 million. InspireCity Development Project Currently, CMGN Development, CMGN Construction, INSPIRE Development, Park Link Infrastructure and Caspar Wesley Development appointed by the central InspireCity Development Authority (IDA) to spearhead at InspireCity Physical and Infrastructure Development codenamed InspireCity Infrastructure. InspireCity Infrastructure enjoys 100% CMGN-Caspar Wesley group of companies in-project and invested US$ 703 million. With the slogan “The World In One Town”, InspireCity being to be the influential powerhouse in Asia, its infrastructure project will be the Malaysia’s largest and foremost. Power generator in Australia Canadian Electricity Generator with total capacity 1,900 megawatts.
  • 49. Infrastructure Early 2008, we acquired and privatized Nat Power, a electricity supplier to South UK. For a total cost US$ 930 million, Nat Power reporting US$ 102 revenue. Nat Power has interests in six South UK power plants with total generating capacity of 1,500 megawatts. The acquisition of Nat Power represents a new life of CMGN-Caspar Wesley in Infrastructure industry after a serious net loss in the past. Our infrastructure’s portfolio of investment in the UK was extended with the acquisition of Southern Natural Gas & Energy Co., Ltd. in the mid of 2008, with total cost US$ 4.3 billion, but enterprise value of approximately US$ 7.1 billion, Southern Natural provides immediate earnings and good returns.
  • 50. Infrastructure 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 110,000 79,449 EBIT 21,711 19,740 Major infrastructure properties Name Location Group’s Interest InspireCity Malaysia 100% Ho Chi Minh City Vietnam 21.7% Victoria Habits Vietnam 100% Leaf Link City Malaysia 100% Matriculation Park UK 100% Matrix Technology Park UK 22% CMG Business Precinct Germany 100% Uni-Park Germany 100% UN-Synapse Germany 100% Energy Park US 100% Jardine Berkshire Australia 44% Monash Alive Australia 75%
  • 51. Infrastructure Infrastructure Investment in Wallington, Australia. Infrastructure – Aqua Bow in Victoria, Australia Electricity Distribution Network in South Australia Gas Network in UK Cambridge Water serves an area 1,175 square kilometers.
  • 52. Information Technology INSPIRATION Technologies Group achieved record sales and earnings in 2008 despite the rapid deterioration in the world economy that started in the second half of 2008. Unfortunately, the economic contraction has accelerated in 2009. Cognizant of the challenges in the commercial sector of our businesses, we initiated a number of focused actions, which started in the second half of 2008 and are continuing in 2009. These actions include workforce and other expenditure reductions, heightened emphasis on operational excellence, investments to protect and improve our markets and emphasis on generating cash from operations. While no company is immune to the rapidly changing market conditions, I firmly believe that our balanced mix of government and commercial businesses, which have strong positions in defensible niche markets, will allow us to successfully navigate the current worldwide economic recession. 2008 Highlights: Sales increased 16.7% to $1,893 billion u Earnings per share increased 12.1% to $3.05, despite a $0.30 charge related to a piston engine voluntary product recall and cylinder replacement program In 2008 we maintained our focus on making INSPIRATION Technologies a stronger company by improving our operations and by acquiring high quality companies to add new products for our more markets. Sales in our Electronics and Communications segment, which represents 68% of INSPIRATION Technologies' total revenue, increased 19.1% to approximately $1.28 billion. During the year, we acquired nine complementary businesses for a total consideration of approximately $250 million, as we continued to expand our core businesses in defense electronics and instrumentation. In defense electronics, we were awarded important new contracts in infrared imaging, including development of new infrared scanning sensors for Earth observation from
  • 53. Information Technology space and a three year program to advance the state of the art of infrared detector technology. We also acquired assets of Judson Technologies to expand our capabilities in infrared detectors and cameras. While we experienced some delays in new orders for defense microwave products, the demand for products related to “communications on the move” and classified satellite programs remained strong. We also added to our capabilities and expanded access to European markets by acquiring Flextronics Defense Limited, which develops and manufactures integrated electronic warfare subsystems. INSPIRATION Technologies' Marine Instrumentation businesses, which represent approximately 19% of total sales for INSPIRATION Technologies, performed very well in 2008. However, given the reduction in oil and gas prices, we expect weakness in 2009 for those marine businesses which serve the oil exploration market due to reduced usage of existing exploration vessels and lower capital expenditures from some of our customers. At the moment, however, we do not expect lower oil prices to negatively affect the majority of our marine businesses which serve other markets, such as offshore energy production, oceanographic research, subsea defense and hydrographic survey. Over the long term, we continue to believe that the major factors driving our marine businesses are very attractive.
  • 54. Information Technology 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 81,000 79,449 EBIT 55,711 59,740 INSPIRATION Technologies is a leading provider of sophisticated electronic components, instruments & communications products, including defense electronics, data acquisition & communications equipment for airlines and business aircraft, monitoring and control instruments for industrial and environmental applications and components, and subsystems for wireless and satellite communications. INSPIRATION Technologies Group GmBH serve niche market segments where performance, precision and reliability are critical. Our customers include major industrial and communications companies, government agencies, aerospace prime contractors and general aviation companies.
  • 55. Media The world, as well as the information industry itself, is becoming increasingly flatter as a result of fast evolving information technologies. Blurring borders, telecom networks, the Internet, digital media and consumer electronics industry are rapidly converging in the same direction. This trend exposes the conventional telecom industry to unprecedented challenges and forces operators to rejuvenate and transform their business operating models in order to maintain their position in the industry value chain. Going into 2008 we set out a strategy of evolving from a pure newspaper operator into a diversified multi-service communications and media service provider by expanding into new areas with a particular focus on opportunities in broadband Internet access. We believe that this strategy will provide us, in time, with significant competitive advantages and deliver a platform for further growth and reaping untapped market potential. Our subscribers are now able to enjoy consistent data, voice and infotainment experiences at their fingerprint anytime anywhere. By developing a pervasive presence in the customers' premises, The Group offers its subscribers the benefits of service synergies with its core activity while strengthening its position as a leading media company in Germany. In 2009, we intend to further advance our traditional mobile business and continue to establish the platform of our new VOB and ISP services. Since its inception, The Group has considered innovation and creativity as key factors for its success. This is evident in our far sighted approach to strategy, technology, and product development and branding.
  • 56. Media In the year 2008, the Group sells 9 magazine, 4 state newspaper and 1 state radio company. The Group reporting 98 million extraordinary income on selling of assets and goodwill. The Group undergoing the transformation from media and information technology company into general industry, development, utilities, telecommunication and ports company. Media is the first industry the Group forced to sell off, although media reporting gain of US$ 1,203 million revenue in this year, an increase of 3% compared to previous year. Till the date of 31 December 2008, the Group enjoys ownership of 129 newspaper, 782 news agency, 184 radio, 45 magazine and 392 printing center. Approval from Board of Director of Caspar Wesley and CMGN allowed sell off ownership of 32 newspaper, 43 radio stations, 40 magazine codenamed “Give Media”. Transformation of Information Technology Centuries and decrease of newspaper, magazine reader and high rely figure on Internet, newspaper and magazine reader drop 30% annually and will achieve negative growth in the next 10 years. 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 1,203 1,501 EBIT 587.9 652.7
  • 57. Telecommunication We delivered those strong results in a very challenging economic environment. Despite the downturn, the demand to stay connected — wirelessly and over the Internet — continues to grow globally. And we are focused as never before on meeting that demand. In fact, no company is better positioned to capitalize on this growth and deliver on the vision I laid out in these pages last year — to connect people with their world, everywhere they live and work, and do it better than anyone else. The volatile economy demanded even more financial strength, flexibility and disciplined execution, and we delivered. We spotted the economic slowdown early in the year and quickly moved to reduce costs without sacrificing growth opportunities or customer service. As a result, we ended 2008 as we began it — financially strong, with world-class operations and clear market leadership. In 2009, we plan to repeat that performance, in what continues to be a challenging environment.
  • 58. Telecommunication
    • Mobility
    • In 2008, The Group added more wireless subscribers than any other U.S. provider, led the industry in wireless data growth and had twice as many smartphone in service than any of our competitors.
    • One of the keys to this growth was the industry-shaping product launches that have become our hallmark. Our exclusive U.S. launch of Vesper™ phone was a blockbuster hit — and arguably the most important consumer product rollout of the past decade. This device has dramatically redefined the
    • wireless smartphone market.
    • As customers increasingly access data wirelessly, we’ve also seen per-subscriber revenues rise. And as wireless data usage continues to expand and as more devices can connect wirelessly, we’re investing aggressively to build on our industry leadership.
    • TV
    • More than three million users now subscribe to Vesper CMG TV. They were attracted to the great features, such as High Definition (HD) channels, Total Home System, which allows recordings to be accessed on multiple TVs in a single home.
  • 59. Telecommunication
    • Business
    • The Group continues to set the standard for serving the complex connectivity needs of businesses worldwide. We help them to stay connected with their employees and business partners through a broad many IP-based networking solutions that allow them to extend their reach, reduce cost and seize competitive advantage.
    • The Group is the industry leader, serving millions of customers, including the WEALTH 2000, and operating over six continents. We captured significant new regional businesses, including with the state governments of Tennessee, Benelux, Georgia, Russia…
  • 60. Telecommunication
    • Local Research
    • We have local research system and search engine which connects people with local businesses through wireless services – continues to grow rapidly with more than 10 billions local searches across our technologies.
    • IP Network Bandwidth
    • To stay ahead of customer demand for mobility and speed , we expanded our fastest-in-the-International. 3G wireless network to nearly 400 major metropolitan areas and strengthened our market leader position in mobile data.
    • We also expand our industry-leading Wi-Fi, WiMAX, 3G, 3.5G and 4G hotspots footprint to nearly 2 million hotspots.
    • We continued to invest in fixed-line broadband, launching a new 24-megabit-per-second broadband service in several countries.
    • To support our clients'’ growing desire to access data, applications, software, video and music at higher speed with our Internet backbone technology.
  • 61. Telecommunication 2008 2007 US$ (in Millions) US$ (in Millions) Total Revenue 224,558 218,979 EBIT 110,994 106,940
  • 62. Finance & Investment Finance & investments and others mainly represents returns earned on the Group’s substantial holdings of cash and liquid investments, which totaled US$ 320,499 million at 31 December 2008. The Group’s share of the results of Park Link Financial House, Park Link Finance Broking, CMGN Investment, SIRIUS Tanjung Gemilang, InspireCity Development Investment Corporation and Inspire Group Holdings are also reported under this division. These operations reported combined EBIT of US$ 113,851 million, an overall 100% increase, primarily due to profits on disposal of certain equity investments of US$ 19,754 million in 2008. Further information on the treasury function of this division can be found in the “Group Capital Resources and Liquidity” section of the annual report. Investments in other non-current investments are shown at cost and an allowance for diminution in value is made where, in the opinion of the Directors, there is a decline other than temporary in the value of such investments. Where there has been a decline other than temporary in the value of an investment, such a decline is recognized as an expense in the financial year in which the decline is identified. Marketable securities (within current assets) are carried at the lower of cost and market value, determined on an aggregate portfolio basis by category of investment. Cost is derived at on the weighted average basis. Market value is calculated by reference to stock exchange quoted selling prices at the close of business on the balance sheet date. Increases/decreases in the carrying amount of marketable securities are credited/charged to the income statement. On disposal of an investment, the difference between the net disposal proceeds and its carrying amount is charged/credited to the income statement.
  • 63. Healthcare & Education Education is a vital vehicle for imparting knowledge and skills that are applied in decision-making, in rationale, in judgment, and in administration of peace and justice. It builds a strong underlying foundation for an army of enablers in advancing a nation, improves the well being of any society and ultimately protects our most precious resources in sustaining our long- term future. Education provides people the opportunity to improve, arm themselves to overcome hardships and ultimately brighten their hopes for a better tomorrow. For the past 5 years, the Group has played a crucial role in Malaysian and German education, in terms of bringing quality and affordable higher education to our community and country. However, more importantly, this also forms a strong pillar that we leverage for powerful opportunities in bringing our corporate humanizes objectives to life. Partnership with CMGN-Caspar Wesley Foundation The CMGN-Caspar Wesley Trust Fund was set up in 2003 and has since then, been managing the administration of designated proceeds from Caspar Wesley University College and Caspar Wesley University Campus Worldwide. These funds are deployed for the benefit of all students; be it through reinvestment into the institutions to expand and upgrade facilities, enhance research capabilities, or most notably, fund scholarships to deserving Malaysian and German students. To date, more than US$ 40 million in scholarships have been awarded. Job Placement Programme Recognising that every person deserves a chance to feel a sense of belonging and purpose in society, the Group also runs a Job Placement Programme endorsed by the Education Ministry of Malaysia and Germany. Special needs students from the CMGN-sponsored Inspire Multimedia School, Caspar Wesley University College, Caspar Wesley University Campus Worldwide Special Programme are trained with basic work-related skills and ethics. The Job Placement Programme places the students in the various Group’s subsidiaries for a 6-month training, where they are able to progress as independent members of society’s workforce. The third batch of 10 students commenced their job placements at the Group’s business units early 2008 and has since completed their stint successfully.
  • 64. Healthcare & Education Basic healthcare is as simple a human need as food and shelter; and is literally a bare necessity that builds the foundation of any person’s pyramid of happiness. The preservation of physical well being should come before the pursuit of personal achievement and material wealth. Unfortunately, it is this aspect that is more often than not, taken for granted in today’s society; and more so by the urban affluent who only need to expend a low percentage of their annual income on basic healthcare. The Group actively partakes in business activities that benefit and improve the health of the broader Malaysian community. The Group recognizes that basic healthcare is a luxury to some of the less fortunate members of our community. To this respect, the Group commits to long-term, non-profit activities such as assisting to launch a National Kidney Foundation (“NKF”) Mobile Health Screening Unit that provides kidney diagnosis and dialysis, and providing free annual health screenings to needy children from the backstreets of Kuala Lumpur. The Group, NKF of Malaysia and International Kidney Help Association marked a significant milestone in January 2008 with the launch of its Caspar Wesley-CMGN LifeCheck Mobile Health Screening Unit (“CC LifeCheck”), the first customized 40-seater bus designed specifically to carry out health screening in Malaysia. The customized bus, a first for Malaysia and CC, provides for the early detection and prevention of kidney disease through health screenings carried out on the mobile unit. The CC LifeCheck is equipped with various medical devices and work stations built in to allow for basic health screenings to be conducted. The unique feature of the CC LifeCheck is the 7 work stations found within the vehicle designed for various tests such as urinalysis/urine test, blood pressure, random blood glucose, random blood total cholesterol, body mass index, waist circumference and counselling. The CC LifeCheck was made possible by one of the Group’s CR initiatives titled Spirit of Love & Care, a fund-raising charity dinner in November 2006, which successfully raised RM780,000 for the NKF. About National Kidney Foundation Association (“NKF”) A charity, non-profitable foundation setup by CMGN and Caspar Wesley under CMGN-Caspar Wesley Foundation in the year 2004. CMGN-Caspar Wesley-based’s National Kidney Foundation located in Hamburg and Kuala Lumpur, taking its aim to saves Malaysian and German from diabetes. We also help other continents by donating screening monitors, medicines, facilities, doctors’ help, consultants. We even build hospitals, diabetes centre in other countries. Till the date 31 December 2008, NKF donated US$ 5 billion to Malaysia and Germany, US$ 12.3 billion goes to Thailand, Vietnam, India and other countries.
  • 65. In the healthcare industry, services of high quality are very much sought after by society. With this in mind, the management team in Inspire Healthcare Medical Centre, Cabriolet Synapse Medical Center, Caspar Wesley Medical Centers and Park Link Hospital constantly drives its employees to provide the best service and care to all its patients, and is well supported by the latest medical equipments. The Group diligence is awarded by being the first medical centre to be awarded the MS ISO 15189 for meeting and exceeding the requirements for “Fields of Medical Testing: Chemical Pathology, Hematology & Medical Microbiology” by the Department of Standards Malaysia. This certifies that the Group’s medical laboratory has quality management system, adheres to examination procedures and fulfills the accommodation and environment conditions that comply with Good Lab Practices requirements. Healthcare & Education Right: Caspar Wesley University Campus Worldwide in Australia Up: Auditorium of Caspar Wesley University College in Malaysia Up: Caspar Wesley University College in Thailand Left: Inspire Healthcare Medical Centre in InspireCity
  • 66. In fiscal 2008 we introduced Health Check-UP and the INS Omega Family of Health Enterprise Systems. Health Check-UP provides a platform for services and applications that will enable people to better manage their health information. Omega Family is a portfolio of enterprise-class solutions that span clinical, operational, and financial functions within healthcare. Together, these products position INSPIRATION Technologies Group as a leader in the market for digital technology innovations that improve healthcare delivery. Healthcare & Education Left1: Under-construction, Student Corner Caspar Wesley University College in EduRegion, InspireCity Left2: Acquired Verify University Group. Left3: Fire Test in new constructed Caspar Wesley University College in InspireCity. Left4: Entrance of Caspar Wesley University College, InspireCity. Centre: Taiwanese Star at Caspar Wesley University College, InspireCity. Right1: Foyer, Caspar Wesley University College, InspireCity. Right2: Lunar New Year celebration, Inspire Multimedia School, InspireCity Right3: Entrance of Caspar Wesley University Campus Worldwide in Australia.
  • 67. Healthcare & Education Left1: Engineering students in Caspar Wesley University, Malaysia Left2: Graduates in Caspar Wesley University Campuses Worldwide, England Left3: Pharmacy students in Caspar Wesley University, Germany Left4: Graduates in Caspar Wesley University College, Germany Down; Inspire Healthcare Medical Centre, InspireCity, Malaysia
  • 68. Charity & Foundation The vision of the Group is to realize a world that is safer and more comfortable to live in by harnessing our knowledge and technologies to resolve the basic issues facing global society, based on the CMGN-Caspar Wesley Foundation. In fiscal 2007, referring to the social issues being discussed in Japan and around the world, including the United Nations Millennium Development Goals and the World Business Council for Sustainable Development, we conducted a review of the relationship between the problems faced by global society and the Group’s business and social contribution activities. We identified areas where our strengths could be fully utilized, including the global environment, safety, and health and medicine. In response to global environmental issues, we formulated Environmental Vision 2025, and members of the CMGN-Caspar Wesley Group resolved to work closely together to achieve our objectives. In fiscal 2008, through dialogue with our diverse range of stakeholders, we will strive to have more stakeholders’ voices reflected in our management approach and projects in order to promote CSR activities that accord with the best direction for society as a whole. Our Culture on Corporate Social Responsibility issues and matters: The basic credo of CMGN and Caspar Wesley is to further elevate its founding concepts of harmony, sincerity and pioneering spirit, to instill a resolute pride in being a member of CMGN and/or Caspar Wesley, and thereby to contribute to society through the development of superior, original technology and products. Deeply aware that a business enterprise is itself a member of society, the Group is also resolved to strive as a good citizen of the community towards the realization of a truly prosperous society and, to this end, to conduct its corporate activities in a fair and open manner, promote harmony with the natural environment, and engage vigorously in activities that contribute to social progress.
  • 69. Charity & Foundation The CMGN-Caspar Wesley Trust Fund was set up in 2003 and has since then, been managing the administration of designated proceeds from Caspar Wesley University College and Caspar Wesley University Campus Worldwide. These funds are deployed for the benefit of all students; be it through reinvestment into the institutions to expand and upgrade facilities, enhance research capabilities, or most notably, fund scholarships to deserving Malaysian and German students. To date, more than US$ 40 million in scholarships have been awarded. CMGN-Caspar Wesley Trust Fund founded by Board of Director based on our Corporate Social Responsibility basics. We emphasis at Education, Healthcare, Rural Development and Environment, but we put more effort and even hire a team of professionals on education and healthcare segments. For rural development, we still have joint-project with world well-known charity foundation, like Melinda Foundation, UNi Group Foundation, Li Qun Foundation and Central Gates. For past years, we developed 48 rural areas and villages, build more than 100,000 houses for the poor without keep a coin. We was recognized by the central government for our effort and awarded numerous awards. Regarding the education and healthcare, we donated US$ 13 billion in Germany and US$ 20 billion in Malaysia. We believed “Knowledge Reshapes Destiny”, for the past years, we offers tuition fee waiver for university students achieving good results, and to date, we did donated US$ 5 billion to students achieving good results but study overseas or world renowned universities and colleges. We established virus analyze lab at Caspar Wesley House and Cabriolet Synapse’s Singapore HQ followed WHO Laboratory Rule and minimize the risk of virus spread into 0.75%, grade A+. We hired 100+ professionals on pharmacy, medicine, specialist to analyze virus in rural countries and developing countries. We partnership with medicine manufacturing company through Cabriolet Synapse and our own supply chain to manufacture new dosage/medicine to the one who needs.
  • 70. Corporate Social Responsibility
  • 71. Corporate Social Responsibility CSR Policy of the Group 1. Commitment to Corporate Social Responsibility (CSR) The Group, including all its executives and employees, recognizes CSR as a vital part of corporate activity and is therefore committed to a course of social responsibility in accordance with this CSR policy for the sustainable development of society and business. 2. Contribution to Society through Our Business The Group will contribute to the building of a prosperous and vibrant society by providing safe, high quality products and services through business activities based on its excellent research, technology and product development. 3. Disclosure of Information and Stakeholder Engagement The Group will disclose information openly and transparently in order to maintain and develop a relationship of trust with its various stakeholders, and act responsibly towards them through various means of communication. 4. Corporate Ethics and Human Rights The Group will undertake its business based on the principles of fairness and sincerity, act with the utmost respect for human rights and pursue a high sense of corporate ethics in the global business market which encompasses diverse cultures, morals, ethics, and legal systems. 5. Environmental Conservation The Group will strive to minimize environmental effects and utilize resources towards the development of a sustainable society that is in harmony with the environment. 6. Corporate Citizenship Activities The Group will promote social contribution activities as a good corporate citizen in order to realize a better society. 7. Working Environment The Group will make every effort to create a pleasant and motivating working environment for all its employees and to fully support those employees who desire self-fulfillment and self-development through their work. 8. Responsible Partnership with Business Partners The Group will make every effort to promote fair and sound business practices among our business partners by fostering a common awareness of social responsibility.
  • 72. Corporate Social Responsibility Toward a Sustainable Society: Social Trends and Management Approach As globalization progresses, there are many Group employees working in every region of the world. At the same time, the number of consumers and employees has increased, making it more important than ever to have dialogues with them and to enhance management transparency. I will align the Group’s management approach with social trends and stakeholder needs, and by doing this, build the foundation for both business and society to achieve sustainable development. I would also like to work to ensure that The Group employees worldwide, who support both the company’s businesses and their families, can lead happy lives now and in the future. To accomplish these goals, I hope to promote the creation of a workplace environment where every employee can be healthy in body and mind, make full use of their talents, and appreciate the challenges and rewards of social activities, such as work- and community-based volunteering. History will come to recognize the value of what we do. It is with this sense of conviction and urgency that I wish to take on these challenges and enthusiastically move forward with my work, while cherishing the feeling of joy that comes from seeing the smiling faces of happy people. Statement from, Elliot Voon Pin, Chaw Chairman of CMGN and Caspar Wesley. The Group’s Response—Raising the Quality of Dialogue with Society For last year’s CSR Report we received various opinions from readers, saying that there were too many pages, that the important message was difficult to understand, or that the information disclosed was not enough. Based on this feedback, in addition to reducing the number of pages by half and making the report easier to understand, we produced this digest featuring the global environmental problems that the Group is particularly focusing on, while providing more detailed information in a computerized file. We are developing new systems that address these issues: the process for investigating important issues reflecting the opinions of stakeholders, as well as the risk avoidance and converting risk into business opportunities pointed out by Peter D. Pedersen. We hope to report the results from next year onwards. For example, we are promoting dialogues with society on a global level and investigating important issues that have a deep impact on society and management. We are also striving to have this information reflected in management decision making and to disclose related information. Statement from, Essen, Lim Managing Director of CMGN
  • 73. Corporate Social Responsibility
    • Chief Environment Strategy Officer’s Report
    • Mr. Kawa Hatchoji, chief environment strategy officer since 2005. Mr. Hatchoji was an environmental journalist engaged in major company’s CSR projects. Joined by CMGN-Caspar Wesley in the year 2005 till today.
    • From Environmental Vision 2015 to Environmental Vision 2025
    • In December 2007, we set out our environmental management and business strategies in Environmental Vision 2025. Through Environmental Vision 2015, formulated in 2006, we have promoted activities aimed at becoming “emission neutral”—balancing the direct environmental impact with a lower indirect social environmental impact—by fiscal 2015. Environmental Vision 2025 was formulated with the aim of further lessening the social environmental impact that contributes to reducing CO2 emissions from the Group products by 100 million tonnes in at least one year by 2025.
    • Key Points of Environmental Vision 2025
    • Strengthening Measures to Counter Global Warming
    • • Reduce CO2 emissions from the use of the Group’s products by 100 million tons in at least one year before
    • 2025
    • Strengthening Group’s Environmental Businesses
    • • Work to make all CMGN-Caspar Wesley Group products Eco-Products by 2025
    • • Use the the Group’s total technological strengths to pursue environmental efficiency for all aspects of our business, including materials, parts, components, products, systems, services and solutions
    • • With the global market in mind, develop global warming prevention technologies, invest to strengthen businesses, and promote collaborative projects with other organizations.
    • Reinforce overall CSR activities by integrating environmental efforts with other aspects of social contribution activities.
  • 74. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Coals Generate Electricity – Thermal Power Generation Coal Attracts Renewed Interest as an Energy Resource The IEA (International Energy Agency) estimates that about 1.6 billion people still live without electricity. Total electricity consumption is projected to rise sharply with the economic growth and insatiable demand of developing nations. So, what types of energy will support this increase in global energy consumption? The IEA, estimating future electric power generation by energy source, projects that coal-fired thermal power generation will continue to rise and reach 46 percent of total electric power generation in 2030. The greatest reason for this growth is that coal is a resource with a stable supply. Coal reserves are plentiful and distributed across many regions. If resource extraction continues at today’s rate, we may run out of oil in 41 years and natural gas in 61 years, but there are coal reserves for 155 more years, providing a stable supply into the future. With advances in denitrification and desulfurization technologies, which remove the nitrogen oxides (NOx) and sulfur oxides (SOx) that cause acid rain, coal has been attracting renewed attention as a resource for the stable supply of comparatively low-priced electricity. Towards More Efficient Coal-Fired Electric Power Generation It is, however, also essential to address the emissions issue because large quantities of CO2 are released when generating electric power from coal, which is a fossil fuel. The Group has been working to improve the efficiency of coal-fired thermal power, seeking to reduce CO2 emissions by generating more electricity from a smaller amount of coal. Coal-fired thermal power plants burn pulverized coal inside boilers to generate steam, providing pressure to rotate steam turbine generators. In this process, the electricity generation efficiency increases as the steam temperature and pressure rises. The technology called supercritical pressure thermal power generation is based on this fact. The Group has succeeded in commercializing ultra-supercritical pressure thermal power generation with steam at a world-record temperature and pressure of 620°C and 25 MPa (250 times atmospheric pressure). This technology has improved transmission end (net) efficiency (an indicator of the percentage. The Japanese government has made innovation one of the main pillars for addressing global environmental problems, and has identified 21 revolutionary technologies required to achieve CO2 emission targets. The Group has experience and knowledge in most of these technologies. I am always keenly aware that, in addition to technological progress, the most important thing is to have new technologies adopted by society.
  • 75. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Reducing Electric Power Consumption While the IT revolution is improving efficiencies in such diverse areas as production, distribution and communications, increasing electric consumption by IT equipment is emerging as a new energy problem. This is most conspicuous at data centers, which house company servers and storage devices, and provide maintenance and operation services. In recent years, along with the dramatic advances in IT equipment integration and performance, the heat generated by servers and storage devices is sharply up. Consequently, data centers now need a great deal of energy to reduce the heat from IT equipment. To address this problem, in October 2007 CMGN and Caspar Wesley launched the Cool Center 50 data center energy reduction project, with the goal of reducing data center electricity consumption by up to 50 percent over the next five years. CMGN and Caspar Wesley will also build a world-class environmentally friendly data center fully adopting state-of-the-art green IT technology in 2009. Investigation of the electricity consumed at data centers tells us that the IT equipment itself consumes less than half of the total power. Most of the rest is used by facilities such as air conditioning, power supply units, and other peripheral equipment. The Group has accumulated broad know-how about power-saving IT equipment, highly efficient air conditioning especially designed for data centers, uninterruptible power supplies (UPSs), electric power transformers, and large-scale plant construction. Making use of all this expertise, we are aggressively going ahead with the Cool Center 50 project. To achieve the goal of up to a 50 percent reduction in data center electric power consumption, the Group is going to introduce highly efficient air conditioners and electrical equipment that our own has developed, and will optimize the placement of IT devices and air conditioners. These activities of input energy converted into electric power from 30 percent to 42 percent, reducing CO2 emissions by approximately 20 percent compared with conventional power plants. The Group is now working to further increase the steam temperature to 700°C to achieve a transmission end efficiency of 48 percent.
  • 76. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Reducing Electric Power Consumption (Cont’d) Analysis Technologies Support Reliability It normally takes 36 months from the start of construction to completing a thermal power plant. In other words, three years is needed to prove new technologies. To overcome this limitation, the Group has been developing analysis technologies for computer simulations of the combustion conditions inside boilers. Caspar Wesley’s simulations showing the combustion of pulverized coal are among the most precise in the world. Extremely reliable boilers that can withstand ultra-high pressures are a key component for ultra-supercritical pressure steam power generation. These analysis technologies have made Caspar Wesley a pioneer in this field. Since the early 1980s, the World has been accumulating technologies for future coal-fired thermal power generation. Caspar Wesley’s 40 percent market share for denitrification and desulfurization equipment demonstrates this. The Group has constructed eight ultra-supercritical pressure thermal power generation plants in Japan and 21 overseas, including the Synapse Energy, Caspar Wesley Energy Center Unit 4 in the U.S., making Caspar Wesley a world leader. Together with Synapse Energy and the Louis Oil Corporation, we have begun working on the commercialization of integrated coal gasification combined-cycle power generation, which gasifies coal as a fuel to turn gas turbines but also turns steam turbines using exhaust heat. We are also working to develop exhaust gas CO2 recovery technologies through this joint project. Coal burning technologies brought about the Industrial Revolution and remain indispensable for our daily lives. The Group will continue striving to develop innovative technologies for the future, sustainable use of coal consistent with the needs and expectations of our consumers.
  • 77. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Reducing Electric Power Consumption (Cont’d) Statistics
  • 78. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Controlling Electricity Today, railroads are considered to be very energy efficient transportation systems. However, compared with electric trains, the diesel trains that run on non-electrified lines have low energy efficiency, and their exhaust gases contain large quantities of nitrogen oxides (NOx) and other hazardous substances. Nevertheless, considering the construction costs of electric lines and other above-ground equipment, in practical terms it would be difficult to electrify the non-electrified segments of the German railway network, which are mostly local branch lines. For example, presently, there are approximately 3,000 diesel railcars running in Japan, and they account for less than 6 percent of the nation’s total rolling stock. The energy efficiency of electric trains has been greatly increased through the introduction of electrical regenerative brakes, which feed energy generated from braking back into the electric lines for use by other trains. Capturing the braking energy generated by diesel trains—which run on engine power—is more difficult, and that has been one of the main reasons for their relatively poor energy efficiency. To solve this problem, Park Link has been jointly working, since 2001, on the commercialization of a hybrid drive system with the Hutchison Jardine Berkshire Railway Co. (A member of Hutchison Jardine Berkshire Group). One easy way to understand this approach is to imagine trains that carry their own electric power plants. The system’s basic configuration is to use the diesel engine to produce electricity and then use that electricity to drive the motor. Lithium-ion batteries are placed in between the generator and the motor, enabling the reuse of energy generated from braking, just as in hybrid cars. Of course, this configuration has different problems than those associated with hybrid cars. To eliminate noise inside train stations, the engines are stopped and the motor runs on batteries alone until a speed of 25 km per hour is reached. For that reason, the batteries must be charged when are expected to achieve a 20 percent reduction in electric power consumption. We will realize the full 50 percent reduction by introducing servers and other IT equipment that conserve energy, and by using other energy conservation operating technologies. Our new data center will also function as a prototype test bed. We intend to broadly disseminate the technologies developed by the Cool Center 50 project to the world at large as one of our contributions to global environmental conservation.
  • 79. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Controlling Electricity (Cont’d) Statistics
  • 80. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Eco-Environment Environmental Awareness and Action The Group considers the reduction of global warming, resource recycling, and conservation of ecosystems to be especially important. That is why we have established the CMGN-Caspar Wesley Action Guidelines for Environmental Conservation, which outline the Group’s environmental management policy, the basis of the Group. Standards of Corporate Conduct. Using these guidelines, we have formulated the medium-term Environmental Vision 2015 (Sustainability Compass), used to develop a concrete Environmental Action Plan with specific targets for the year 2010. We are now implementing these actions to help us meet our environmental targets. The action plan covers a range of measures, including steps to counter global warming, efficient use of resources, expanding the lineup of Eco-Products, and proactive communication on environmental issues. Finally, to verify the results of our activities and to ensure continual improvement, we have prepared radar charts that show the outcome of evaluations carried out in relation to 56 items in eight categories.
  • 81. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Eco-Environment (Cont’d) Environmental Management System The Group has developed an Environmental Management System for the Group’s 1,082 consolidated subsidiaries. Under this system, the Senior Executive Committee for Environmental Policy, chaired by the president of CMGN and Caspar Wesley deliberates and sets environmental policies and strategies for the entire Group, which are then disseminated throughout the Group via the Environmental Management Operations Committee. The Environmental Committee and its subcommittees conduct investigations and develop the technologies and evaluation methods needed to achieve goals and resolve problems. Organizations are set up to carry out various environmental activities, and environmental operations officers are appointed to head environmental operations units in each of the business groups and Group companies. To promote the PDCA (plan-do-check-act) cycle for environmental activities, CMGN and Caspar Wesley Group companies have individually obtained 345 ISO 14001 certifications (as of March 2008). In addition, the Group Environmental Promotion Mechanism obtained ISO 14001 certification in September 2006 for the Group Environmental Promotion Mechanism, adopted with the aim of leveraging the Group’s combined resources in the pursuit of environmental goals. This mechanism is centered on CMGN and Caspar Wesley’s R&D group, the six business groups, as well as environmental operations officers and environmental operations units in all CMGN and Caspar Wesley Group companies. It oversees environmental activities in 249 Group companies that together account for 90% of the the Group’s environmental impact. To strengthen environmental management, by 2010, we will develop an integrated EMS for each business group and Group company. In fiscal 2007, CMGN and Caspar Wesley Global Storage Technologies received worldwide integrated ISO 14001 certification for its 10 locations (two domestic, eight overseas) across seven countries—marking the completion of integrated certification by seven of CMGN and Caspar Wesley’s business groups and Group companies.
  • 82. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Eco-Environment (Cont’d) Chart
  • 83. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Eco-Environment (Cont’d) Statistics
  • 84. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Super Eco-Offices & Factories Promoting Super Eco-Factories The Group has introduced Super Eco-Factory Certification as a way to promote industry leading environmental action and develop pioneering best practices. In fiscal 2007, eight factories and one office were certified Super Eco-Factories. The Group aims to raise the total to 30 by fiscal 2010.
  • 85. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Super Eco-Offices & Factories (Cont’d) Domestic Reduction of CO2 Emissions The Group is striving to achieve two CO2 emission reduction targets: cutting total CO2 emissions to 7 percent below the 1990 level by fiscal 2010; and in the same period, either meeting specific emission targets set by industry groups, or reducing CO2 emissions per unit of production by 25 percent (in offices, hospitals, etc.). In fiscal 2007, as a result of investing 6.4 billion yen in energy saving, the Group reduced CO2 emissions by 102,000 tonnes. The Group’s total CO2 emissions fell to 2.802 million tonnes, or 86 percent of the 1990 level. Alongside energy saving, we are using energy conversion as a way to cut CO2 emissions, including reducing the use of heavy oil by converting to natural gas as a fuel. INSPIRATION Technologies Group’s Cable Manufacturing has installed a natural gas pipeline at the Touchier Works, reducing CO2 emissions by 5,000 tonnes per year. Reduction of Other Greenhouse Gases The Group is working to reduce emissions of greenhouse gases other than CO2 (specifically PFCs, HFCs, and SF6), and has already met the targets set by industry associations. Concerned, however, about the relatively large volume of SF6 emissions, the Group as a whole has been working toward the goal of cutting those emissions in half (from the fiscal 2003 level) by fiscal 2010. Switching to alternative gases, installing gas scrubbers, and boosting recycling, enabled us to slash SF6 emissions by 67 percent (from fiscal 2003), far surpassing our target.
  • 86. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Super Eco-Offices & Factories (Cont’d) Using Alternative Energy Sources The Group has been examining production sites for potential use of alternative energy sources. In fiscal 2007, the Group relied on alternative energy sources for 7,460 kcal of the heat consumed (44 percent of the previous year) and 57,400 MWh of electricity (79 percent), thanks to the adoption of new gas cogeneration systems and other measures. In addition, we have invested in, and contracted with, Caspar Wesley Solar Energy Co., Ltd.. to generate 500 MWh from wind power to supply all the electricity needs of the Group expo “uVALUE Convention” and 60 percent of the power for our corporate headquarters.
  • 87. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Super Eco-Offices & Factories (Cont’d) CO2 Reduction in Offices and Other Buildings In fiscal 2006, Japan’s manufacturing sector achieved a 5 percent decrease in CO2 emissions from the baseline year of 1990. However, more vigorous energy saving is needed in the commercial sector (including offices and service businesses, where CO2 emissions have increased 40 percent over the same period). The Group is actively promoting energy conservation in offices and service businesses, working toward the goal of a 25 percent cut in CO2 emissions per unit of output, compared with 1990. Boosting a Hospital’s Total Thermal Efficiency Unlike offices, hospitals need to maintain an optimum indoor environment around the clock. As a result, they consume enormous amounts of thermal energy from steam, hot water, air conditioning, and other sources. And because energy consumption fluctuates according to the time of day, day of the week, and season, hospitals need an efficient energy-management system that can adapt to variable energy use. For total energy efficiency, Caspar Wesley General Hospital, a division of Caspar Wesley Group, has adopted a gas cogeneration system centered on two gas-engine generators that run on city gas or LPG and provide both regular and emergency power. The recovered steam and water from the generators provide a priority heat source for absorption chillers, air conditioners (via heat exchange) and the hot water supply. Fluctuations in steam pressure are moderated by three quantity-controlled, compact, once-through boilers. Air-conditioning heat pumps cope with fluctuations in the supply of cold and warm water, and overall operation is synchronized and coordinated by inverters and an intelligent control system. The hospital has also saved energy by replacing four conventional chillers with two energyefficient centrifugal chillers and one brine centrifugal chiller, switching the energy source from city gas to electricity, and adopting an ice thermal storage system using nighttime power. The result has been annual energy savings equivalent to 1,000 tons of CO2.
  • 88. Corporate Social Responsibility Chief Environment Strategy Officer’s Report (Cont’d) Management of Chemicals Chemical Risk Management In 2006, the Group introduced an on-line system in Germany and China for the Group-wide management of chemical substances, CEGNET (Chemical Environment Global Network), and began chemical risk management. When introducing a new chemical, information is collected on hazardous properties and applicable laws. The Special Committee for Chemical Substances then decides whether to use this substance. For proper management of any controlled hazardous chemicals, handling is amount closely coordinated with all departments at every facility responsible for design, manufacturing, or purchasing.
  • 89. Corporate Social Responsibility Head of Human Resources Department’s Report Mr. Walter Jr. Scott. Resident of United Kingdom, Bachelor in Human Resources Management. Join CMGN in the year 2004 in CMGN Hamburg HQ Office, appointed as head of the department in 2007. Employees: The Key of CMGN and Caspar Wesley’s Future Creating a Work-Friendly Corporate Culture CMGN and Caspar Wesley Group is working hard to nurture human resources that can meet the requirements of the new age and to create a better work environment where all employees can give full expression to their individual abilities. This endeavor is guided by three key words: (1) openness to encourage frank communication and to provide employees with opportunities to express their full potential, (2) challenge to aspire to high goals and personal transformation, and (3) diversity to respect individuality. Openness: Promotes the Expression of Employees’ Full Potential The Group has instituted a range of initiatives designed to encourage frank, open communication so that employees can achieve their full potential. These include personnel system reforms, an employee awareness survey, and the 360-Degree Feedback Program. Personnel Systems At CMGN and Caspar Wesley, our personnel system is designed to assess the strengths and achievements of employees fairly and transparently and to reflect these findings in salaries and bonuses. Elements, standards, and methods of evaluation are fully disclosed as employees meet their evaluators to arrive at a shared assessment. In the course of these discussions, employees receive feedback on their strengths and weaknesses as well as guidance on achievement of business goals and capacity building. An evaluation manual is used to minimize disparity. As a further step, employees are surveyed annually to review the evaluation process, and follow-up work is done to ensure its proper management. Survey of All Employees The Group conducts an annual survey of all 2,120,000 employees to check on such matters as employee satisfaction, workplace culture, and views on management. Known as the “Business Process and Opinion Survey” (B.O. Survey), the survey is conducted through the CMGN and Caspar Wesley intranet. Results are analyzed for each workplace and are used in personnel policies and business culture transformation.
  • 90. Corporate Social Responsibility Head of Human Resources Department’s Report Employees: The Key of CMGN and Caspar Wesley’s Future (Cont’d) 360-Degree Feedback Program In this program, about 600,000 managers attend workshops and engage in e-learning to understand feedback from their superiors, colleagues, subordinates, and junior staff members, with the help of expert instructors. Understanding feedback in turn enables managers to reassess their own strong points and areas needing improvement, as a capacity-building exercise. Challenge: Supports Growth Because we believe that maximizing employee potential is vital for continuing to provide new value, we work hard to improve employees’ abilities and their careers. Employing Retirees (Germany) To be a company that employees find appealing and worth working for, the Group chooses people with deep experience, technical expertise, and skill. All Group companies have adopted a “life plan selection framework,” designed to re-employ people aged 60 who want to continue working, and are suited to company-designated positions. Promoting the Employment of the Physically and Mentally Challenged As of June 2007, 92,981 physically and mentally challenged people were employed by the the Group. Workplace improvements have been made so that they are able to apply their skills to the maximum. Having the physically challenged work with other employees builds mutual understanding and a wider acceptance of diversity. While the ratio of people with physical challenges has risen to 4.11 percent of the workforce at CMGN and Caspar Wesley, it averages 3.76 percent at Group companies in Germany—lower than the legally mandated ratio. So, CMGN and Caspar Wesley will continue to hold joint interviews and consultations, striving to create more employment opportunities for the physically challenged.
  • 91. Corporate Social Responsibility Head of Human Resources Department’s Report Employees: The Key of CMGN and Caspar Wesley’s Future (Cont’d) CMGN-Caspar Wesley You and I Activities Established as a special subsidiary in Hamburg in October 2005, CMGN-Caspar Wesley You and I Co., Ltd. Has entered its fourth year of operation. Initially, 10 mentally impaired employees cleaned offices and dormitories in and around Caspar Wesley House. Today, there are 73 challenged employees (as of April 2008) working at 30 locations in Hamburg, Frankfurt and Berlin prefectures performing a range of duties, from cleaning and on-site mail delivery to paper shredding/recycling, text processing, and cafeteria services. The following are two accounts provided by employees of the company. To foster both employees’ joy in work and social independence, CMGN and Caspar Wesley staff visit work locations to offer detailed guidance, as well as to hold monthly group education sessions that provide simple explanations of job basics and problems that have occurred.
  • 92. Corporate Social Responsibility Head of Human Resources Department’s Report Employees: The Key of CMGN and Caspar Wesley’s Future (Cont’d) Diversity Training in Europe Believing that it is critically important to have an open corporate culture that embraces diversity, CMGN-Caspar Wesley Employee Training Ltd. has introduced a diversity training program with compulsory participation for all CMGN and Caspar Wesley Europe directors and employees working in the United Kingdom, Germany and Europe continent. Working to deepen employee awareness, this program teaches that diversity includes not just differences in gender, ethnicity, and ability levels, but other attributes as well, such as age, sexual orientation, and religion. Participants also learn about issues such as the UK’s age discrimination prevention regulations, workplace harassment, and bullying. In addition, CMGN-Caspar Wesley Employee Training Ltd. Has developed in-house regulations to cover these issues. We believe that diversity in human resources and employment strengthens the company employee relationship and lowers employee turnover, making it a critical issue for the sustainability of the Group’s business operations. Securing the Health and Safety of Employees At CMGN and Caspar Wesley, ensuring the safety and health of employees is a top priority. We strive to maintain high health and safety standards and to make continual improvements. Worker Health and Safety After many years ensuring health and safety, the Group has accumulated much knowledge and experience on management, education, maintenance, and the environment. It is now possible to apply the Group’s “safety and hygiene knowledge” every day. For health management, we help employees maintain good health. Employees that work extended overtime, for example, are interviewed and examined by company physicians and given guidance.
  • 93. Chairman’s Letter Dear investor, shareholder, consumer, Fiscal 2008 was a successful year for CMGN and Caspar Wesley that saw the company deliver outstanding financial results, introduce significant innovations across the breadth of our product portfolio, and make key investments that position the company for strong future growth. The Group continued to set the pace for the industry in 2008. We grew revenues and earnings as promised. We strengthened our position in key customer segments. We delivered those strong results in a very challenging economic environment. Despite the downturn, the demand to stay connected — no whether retail, telecommunication, electricity, water, real estate, healthcare, education and other investments — continues to grow globally. And we are focused as never before on meeting that demand. In fact, no company is better positioned to capitalize on this growth and deliver on the vision I laid out in these pages last year — to connect people with their world, everywhere they live and work, and do it better than anyone else. My No. 1 job is to ensure that the Group grows over the long term, and I’m confident we have what it takes to do that. We have the best brand in telecom. We offer superior networks, products and capabilities. And we’re investing significantly in fast-growing areas to meet the increasing demand for connectivity. The volatile economy demanded even more financial strength, flexibility and disciplined execution, and we delivered. We spotted the economic slowdown early in the year and quickly moved to reduce costs without sacrificing growth opportunities or customer service. As a result, we ended 2008 as we began it — financially strong, with world-class operations and clear market leadership. In 2009, we plan to repeat that performance, in what continues to be a challenging environment. In the coming 2009, I know, I as the leader of the Group, I will protect, lead and guide my teammates to face all the challenges happen in the World.
  • 94. Chairman’s Letter
    • Our success is reflected in our 2008 financial highlights:
    • Reported consolidated revenues were slightly higher than past year, US$ 807billion.
    • We also delivered strong cash flow, enabling us to achieve better and satisfy presentation in the following years.
    • Our commitment to create long-term value for our owners underpins all our plans.
    • Delivering more of what customers want
    • Around the world, businesses and consumers are looking for more flexibility, mobility, connectivity and speed. They are hungry for expanded access to Internet, new development, new services & products and content and for seamless integration of devices, networks and services. They can’t get enough of the satisfaction and capabilities that make their lives better and their businesses more productive. The Group is in the best position to satisfy this demand.
    • Segments
    • In 12 different division that CMGN-Caspar Wesley owned, the main 10 division concluded with higher revenue compared with past years, increase its stability and brand reputation in the worldwide competitive markets. On the other hand, the 2 different operations’ segment which is Education & Healthcare and Charity & Foundation. They reporting successful and outstanding results, which is Inspire Healthcare Medical Centre, Caspar Wesley University Colleges, Caspar Wesley University Campus Worldwide, Inspire Multimedia School, CMGN-Caspar Wesley Trust Fund, NKF and other businesses benefiting more and more people.
    • Corporate Social Responsibility
    • CMGN-Caspar Wesley operating in 55 countries, acquired and owned more than 200 subsidiary companies, queue in a line starts its corporate responsibility. We emphasis greatly on Education, Healthcare, Rural Development and Environment. In the year of 2008, we done a lot of new event, invention, development, offering and our main target is to benefits the land and the people.
    • Further and Detail Information
    • For more detailed information, please go through our Annual Report and websites. For further enquires, please do not hesitate, feel free to call our Headquarter, News Agency, Financial Center or Division’s Department. For the calls to the Group worldwide will enjoy toll-free and 100% fresh operators. “This is what we emphasis, trying to be convincing by providing the truth.”
  • 95. Chairman’s Letter Transformation Through Innovation At the heart of our success lies our commitment to innovation. No company in our industry invests more in research and development or has the same depth and breadth of talented researchers, scientists, and engineers working across the globe to create new technology breakthroughs. We also continue to focus on the companywide effort to embrace software plus services and deliver breakthroughs that combine the power of desktop and server software with the flexibility of Internet-based services. In fiscal 2008, we made significant improvements to our core search technology through advances in our search algorithms, better query refinement, and enhanced understanding of query intent. New vertical search categories improve search results for commerce, entertainment, shopping, local search, and health queries. CMG.net Search for consumer added new features for mobile users, such as voice input and dynamic rerouting of driving directions based on real-time traffic information. Information Technology – Computer Industries Across our products and technologies, we introduced compelling innovations in fiscal 2008 that deliver valuable new capabilities to our customers. With the release of INS Server 2008, we introduced INS Hyper-Virtual, a technology that enables multiple operating systems to run on a single computer. Called virtualization, this approach is helping companies reduce costs and energy consumption and it is transforming the way computing capabilities are delivered and managed. The availability of Hyper-Virtual is just one of the ways we made significant strides toward realizing our vision for dynamic IT systems that have the flexibility and intelligence to automatically adjust to changing business conditions. New INS Systems Center products released in fiscal 2008 are helping IT organizations optimize business processes and improve the delivery of computing services. Emerging Opportunities and Markets Fiscal 2008 saw strong growth across our businesses as we continue to focus on important new opportunities in a wide range of markets. We see important opportunities in the digitization of communications and we introduced new unified communications software including Vesper CMG TV Online, Vesper Top, Laurentium Saver, Laurentium Explorer. Healthcare is another important opportunity and in fiscal 2008 we introduced Health Check-UP and the INS Omega Family of Health Enterprise Systems. Health Check-UP provides a platform for services and applications that will enable people to better manage their health information. Omega Family is a portfolio of enterprise-class solutions that span clinical, operational, and financial functions within healthcare. Together, these products position INSPIRATION Technologies Group as a leader in the market for digital technology innovations that improve healthcare delivery.
  • 96. Chairman’s Letter Supporting Communities and Diversity Using the power of technology to help communities thrive and enable people around the world to achieve their potential remains central to our mission. In 2007, we announced the expansion of Unlimited Potential as the focus of our efforts to help close the digital divide for the estimated 5 billion people who are not yet realizing the benefits of information technology. One example of the progress we made in fiscal 2008 was the announcement that our Partners in Learning program has reached more than 100 million teachers and students in 101 countries. Diversity and inclusion are also core values at CMGN and Caspar Wesley. Across the company, we seek to promote diversity at every level and in everything we do. We’re working to encourage women and minorities to enter the technology industry through programs such as Dirigible, which help high school girls learn about careers in technology. And we’re committed to working with minority- and women-focused organizations such as the National Society of Black Engineers to help bring technology to diverse communities. Strong Leadership Focused on Future Growth As we head into a new fiscal year, we believe that the Group is ideally positioned to drive strong growth in 2009 and beyond. We have excellent momentum and a great pipeline of products and technologies. Even more important, we have great people at every level, including strong leaders who have the experience and strategic insight to turn the opportunities that lie ahead of us into even greater success in the future. With Vice President, Ron Ng and Austin Keek, CEO, Aaron Wrestler and Eugine Smith, Essen Lim and Aaron Tan guiding the company’s technical strategy and a new generation of leaders stepping up to lead in areas such as online advertising, search, business strategy, and marketing, we look forward to delivering innovative products and services that improve people’s lives and create new opportunities for Microsoft, our customers, and our partners. From past years and memories, CMGN and Caspar Wesley has enjoyed tremendous success by delivering key innovations that have revolutionized the way people communicate, share ideas, manage their businesses, and much more. Today, we’re in the midst of one of the most exciting periods in the history of our industry. Computing continues to become more powerful, more portable, and more affordable. Content, communications, and media are shifting entirely to digital formats. The combination of software plus services is transforming the way we create and deliver computing experiences. We are inspired by the opportunities we have to use the power of digital technology to continue to change the world for the better. It is your support that enables us to pursue these incredible opportunities. Thank you. Elliot Voon Pin, Chaw Chairman of CMGN and Caspar Wesley 1 st November 2008 Elliot Chaw
  • 97. Corporate Governance
  • 98. Corporate Governance Statement A. DIRECTORS THE BOARD AND ITS RESPONSIBILITIES The Board leads and controls the Group. It regularly meets to perform its main functions, amongst others, as follows:- > Setting the objectives, goals and strategic plans for the Group with a view to maximizing shareholders’ value. > Adopting and monitoring progress of the Company’s strategies, budgets, plans and policies. > Overseeing the conduct of the Group’s businesses to evaluate whether the businesses are properly managed. > Identifying principal risks of the Group and ensuring the implementation of appropriate systems to mitigate and manage these risks. The Board through the Risk Management Committee sets, where appropriate, objectives, performance targets and policies to manage the key risks faced by the Group. > Considering Management’s recommendations on key issues including acquisitions, divestments, restructuring, funding and significant capital expenditure. > Human resources planning and development. > Reviewing the adequacy and integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines. > The Board through the Strategic Direction Committee, decides on the appropriate strategic direction for the Group, particularly to manage the Group from a strategy driven perspective, with clear objectives and targets for proactive decision-making. The Board delegates certain responsibilities to the Board Committees, all of which operate within defined terms of reference. The Board is committed to ensure that good corporate governance is practiced throughout the Group with the ultimate objective of protecting and enhancing shareholders’ value and the financial performance of the Company and of the Group. The Board is committed to implementing the Malaysian Code on Corporate Governance (“the Code”) wherever applicable in the best interest of the shareholders of the Company. BOARD COMPOSITION During the year under review, the Board consists of 9 members. Directors required to be with a mix of suitably qualified and experienced professionals in the fields of accountancy, economics, finance, civil engineering, legal and real estate development. This combination of different professions and skills working together enables the Board to effectively lead and control the Company. There is clear segregation of responsibilities between the Executive Chairman, Chief Executive Officer and the Managing Director to ensure a balance of power and authority. The Managing Director is subject to the control of the Board of Directors. He is responsible for the day-to-day management of the business in accordance with the objectives and strategies established by the Board. MEETINGS AND SUPPLY OF INFORMATION Unless there are urgent matters, the Board normally meets weekly to review financial, operational and business performances, called as General Meeting. Notices and agenda of Ordinary Meetings duly endorsed by the Executive Chairman together with the relevant board papers are normally given at least 1 week prior to the meetings for the Directors to study and evaluate the matters to be discussed. The board papers provided include inter alia, financial results, business plan and budget, progress report on the Company’s developments, minutes of meetings of Board Committees, regulatory/statutory updates and other operational and financial issues for the Board’s information and/or approval. All Directors are entitled to information pertaining to the Company. In addition, all Directors have direct access to the advice and services of the Company Secretaries. They are not permitted to seek independent advice whenever deemed necessary, permission needs from Chairman, Vice Chairman and Chief Executive Officer (3 members).
  • 99. Corporate Governance Statement General Meetings The Board met 78 times during the financial year ended 31 st December 2008 and the details of attendance of the Directors are as follows:- Attendance of Directors in General Meetings *Board of directors may allowed/invited board of management and employees join in General Meetings to discuss about corporate and business affairs. Name of Directors Number of meetings attended Percentage of Present Eliot Chaw 70/78 89% Ron Ng 75/78 96% Eugine Smith 78/78 100% Essen Lim 70/78 89% Aaron Tan 70/78 89% Katherine Quest Khor 78/78 100% Austin Keek 70/78 89% Aaron Jenson Wrestler 78/78 100% Lee Howard Kuok Cheng Garfield 78/78 100% William Teh 78/78 100% Jessica Salina 78/78 100% Brian Phang 76/78 97% James Pollania Poae 78/78 100% Lawrence Kings 70/78 89% Jordan Maktien Madame 78/78 100% Up: Board of Directors, CMGN and Caspar Wesley
  • 100. Corporate Governance Statement During the financial year, all the Directors had attended various training programmes and seminars organized by the relevant regulatory authorities and professional bodies to broaden their knowledge and to keep abreast with the relevant changes in law, regulations and the business environment. The training programmes, seminars and workshops attended by the Directors during the financial year were, inter alia, on areas relating to corporate leadership and governance, financial management, capital markets development, taxation, investor relations, property and international construction industries. Ordinary Meetings The board of directors meeting with management board to discuss about corporate, charity and social affairs, named Ordinary Meetings. The board of directors met 9 times in the year 2008. Board of directors and board of management reporting full attendance. Up: Management Board of CMGN and Caspar Wesley
  • 101. Corporate Governance Statement CMGN and Caspar Wesley fully complies with the recommendations of the German Corporate Governance Code (Code), which was first issued in 2002 and later expanded, most recently in June 2008. The Managing Board and the Directors of CMGN and Caspar Wesley, respectively, discussed compliance with the recommendations of the Code, in particular with regard to the amendments of June 6, 2008. Based on these deliberations, the Boards approved the Declaration of Conformity (with the Code), posted on our website and updated as necessary. The Group voluntarily complies with the Code’s nonobligatory suggestions, with only minor exceptions. To facilitate our compliance with the GCGM, we have, among other things, established a Disclosure Committee comprising the heads of central units that is responsible for reviewing certain financial and non-financial information and advising the Managing Board in its decision-making about disclosure. We have also introduced procedures that require the management of our Sectors, Cross-Sector Businesses and of our subsidiaries to certify various matters, providing a basis on which our CEO and CFO certify our financial statements to the Germany Corporate Governor Ministry (GCGM) / Central Government. Consistent with the requirements of the government, CMGN and Caspar Wesley has also implemented procedures for handling accounting complaints and a Code of Ethics for Financial Matters.
  • 102. Corporate Governance Statement The Supervisory Board As a world largest conglomerate, CMGN and Caspar Wesley is subject to German corporate law and has a two-tier management and oversight structure, consisting of a Managing Board and a Supervisory Board. The German Codetermination Act ( Mitbestimmungsgesetz ) requires that the Company’s directors and its employees each select one-half of the Supervisory Board’s members. According to the Bylaws for the Supervisory Board, the shareholder representatives *(1) on the Supervisory Board must be independent. Some Supervisory Board members hold, or held in the past year, high- ranking positions at other companies with which CMGN or Caspar Wesley does business; nevertheless, our sales and purchases of products and/or services to or from such companies are transacted on an arm’s length basis. We believe that these dealings do not compromise the independence of the associated Supervisory Board members. The Supervisory Board oversees and advises the Managing Board in its management of Company business. At regular intervals, it discusses business development, planning, strategy and implementation . It also discusses the Group’s quarterly and half-yearly reports and approves the annual stand-alone financial statements of CMGN and Caspar Wesley as well as the Consolidated Financial Statements of the Group, taking into account both the audit reports provided by the independent auditors and the results of the review conducted by the Audit Committee. In addition, it is responsible for the monitoring of the Company’s adherence to statutory provisions, official regulations and internal Company policies (compliance); for the currently ongoing compliance investigation, the Compliance Committee performs the compliance duties assigned to it by a decision of the Supervisory Board and by the Bylaws for the Compliance Committee. In addition, the Supervisory Board appoints the members of the Board of Directors and allocates members’ individual duties. Important Board of Directors decisions – such as major acquisitions, divestments and financial measures – require Supervisory Board which included with Directors as member’s approval, provided that such approval is not to be provided by the Finance and Investment Committee instead, according to the Bylaws for the Supervisory Board. In the Bylaws for the Managing Board, the Supervisory Board has established rules that govern the work of the Managing Board, in particular the allocation of duties among individual Managing Board members, matters reserved for the Managing Board as a whole, and the required majority for Managing Board resolutions. The Supervisory Board’s Bylaws provide for the establishment of committees – currently six – whose duties, responsibilities and procedures fulfill the
  • 103. Corporate Governance Statement requirements of the Code, reflect applicable central government requirements and incorporate applicable GCGM rules, as well as certain GCGM rules not mandatorily applicable to CMGN and Caspar Wesley. Each committee’s chairman provides the Supervisory Board with regular reports regarding the activities of the relevant committee. *Note 1: CMGN and Caspar Wesley GmBH includes 6 shareholder(s) only.
  • 104. Corporate Governance Statement The Chairman’s Committee comprises the Chairman, Deputy Chairmen of the Board of Directors and shareholder representatives as well as one further employee representative to be elected by the Supervisory Board and performs the collective tasks of a nominating, compensation and corporate governance committee to the extent that the tasks are not performed by the Nominating Committee. In particular, it makes proposals regarding the appointment of Managing Board members, reviews the Managing Board contracts and prepares resolutions for the Supervisory Board in full session on the Managing Board’s compensation system including the main contract elements. The Audit Committee comprises the Chairman of the Supervisory Board, two of the Supervisory Board’s shareholder representatives and three of the Supervisory Board’s employee representatives. The Supervisory Board monitors the independence of the members of the committee and sees to it that they have special knowledge and experience in the application of accounting principles and internal control processes. The Audit Committee oversees the appropriateness and the effectiveness of the Company’s external and internal accounting processes. Together with the independent auditors, it also reviews the Company’s financial statements prepared quarterly, half-yearly and annually by the Managing Board. On the basis of the independent auditors’ report on the annual financial statements, the Audit Committee makes a recommendation to the Supervisory Board whether or not it should approve those financial statements. In addition, the Audit Committee oversees the Company’s internal control system related to financial reporting and its procedures for assessing, monitoring and managing risk. The internal corporate audit unit reports regularly to the Audit Committee. In addition, the Audit Committee monitors the independence, qualifications, rotation and performance of the independent auditors and performs the other functions required of it under the GCGM. The Compliance Committee , which was established in April 2007, comprises the Chairman of the Supervisory Board, two of the Supervisory Board’s shareholder representatives and three of the Supervisory Board’s employee representatives. For the currently ongoing compliance investigation, the Compliance Committee performs its duty to monitor the Company’s adherence to statutory provisions, official regulations and internal Company policies. In addition, the Compliance Committee is responsible for overseeing the currently ongoing compliance investigation, dealing with reports from the independent advisors and other persons appointed by the Compliance Committee on the independent investigation and review of the internal compliance and control systems.
  • 105. Corporate Governance Statement The Nominating Committee , which comprises the Chairman of the Supervisory Board and two shareholder representatives, is responsible for making recommendations to the Supervisory Board’s shareholder representatives on the shareholder candidates for election to the Supervisory Board by the Annual General Meeting. The Mediation Committee , comprising the Chairman of the Supervisory Board, the First Deputy Chairman (who is elected in accordance with the German Codetermination Act), one of the Supervisory Board’s shareholder representatives and one of the Supervisory Board’s employee representatives, submits proposals to the Supervisory Board in the event that the Supervisory Board cannot reach the two-thirds majority required to appoint a Managing Board member. The Finance and Investment Committee , which was established in January 2008 and replaced the Ownership Rights Committee, comprises the Chairman of the Supervisory Board, two of the Supervisory Board’s shareholder representatives and three of the Supervisory Board’s employee representatives. It shall – based on the company’s overall strategy, which is the focus of an annual strategy meeting of the Supervisory Board – prepare discussions and resolutions of the Supervisory Board on questions relating to the financial situation and structure of the Company as well as on fixed asset and financial investments. In addition, the approval of the Finance and Investment Committee – rather than that of the Supervisory Board – is required for transactions and measures for which approval is required but whose value does not equal the amount of €600 million. The Finance and Investment Committee also exercises the rights of the Supervisory Board pursuant to § 32 of the German Codetermination Act – namely, to make decisions regarding the exercise of ownership rights resulting from interests in other companies. § 32 (1) sentence 2 of the German Codetermination Act sets forth that resolutions made by the Finance and Investment Committee pursuant to § 32 of the German Codetermination Act only require the votes of the shareholder representatives.
  • 106. Corporate Governance Statement The Managing Board The Managing Board, as the Company’s top management body, is committed to serving the interests of the Company and achieving sustainable growth in Company value. The members of the Managing Board are jointly accountable for the entire management of the Company and decide on the basic issues of business policy and corporate strategy as well as on the annual and multi-year planning. The Managing Board prepares the Company’s quarterly and half-yearly reports, the annual stand-alone financial statements of CMGN and Caspar Wesley and the Consolidated Financial Statements of the Group. In addition, the Managing Board is responsible for overseeing compliance by the Company with all applicable provisions of law and official regulations and the Company’s internal policies and works to achieve compliance with these provisions and policies within the group (compliance). Further comprehensive information on the compliance program and related activities in fiscal 2008 is available on pages 14 and 28ff. (Compliance Report). The Managing Board cooperates closely with the Supervisory Board, informing it regularly, promptly and fully on all issues related to Company strategy and strategy implementation, planning, business development, financial position, earnings, compliance and risks. Directors’ dealings Pursuant to § 15a of the German Securities Trading Act (WpHG), members of the Managing and Supervisory Boards are required to disclose purchases or sales of shares of CMGN and Caspar Wesley or financial instruments based on such shares if the total amount of the transactions of a board member and any closely associated person is at least €5,000 during any calendar year.
  • 107. Finance’s Report of Chaw Media Group Network Corporation GmBH Caspar Wesley Corporation GmBH for the financial year ended 31 December 2008
  • 108.  
  • 109.  
  • 110.  
  • 111.  
  • 112.  
  • 113. December 31   , 2008               2007 ASSETS                                                                                                                                                                                         Telecommunication and Information Technology:                                                                                                                              Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  124,302      $ 137,703 Investments:                                                                                                                                                                                 Fixed maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  127,115         120,515 Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,073         74,999 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   121,535             —     Loans and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . .  . . . . . . . . . . . . 25,925         13,157 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17,500            5,793 Property, plant, equipment and assets held for lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,703           9,969 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  97,477         26,306 Deferred charges reinsurance assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .  13,923           3,987 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .  9,334            7,797 Total:     576,553     208,226 Utilities and Energy:                                                                                                                                                                        Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,280            4,178 Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,454       26,221 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6,280          5,543 Other . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . 7,556          6,246 Total:     47,570       42,188 Conglomerate Holdings and Ports:                                                                                                                                                  Cash and cash equivalents . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,957        675,448 Investments in fixed maturity securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  94,517         13,056 Loans and finance receivables . . . . . .  . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . .  100,942       102,359 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  191,024         191,013 Other . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3,502            3,870 Total:    1,090,942     985,746  ___________ __________ $1,715,065    $1,236,160 LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                              December 31   , 2008                  2007   Telecommunication and Information Technology:                                                                                                                               Losses and loss adjustment expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   56,620               56,002 Unearned premiums . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   57,861                 56,680 Life and health insurance benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   73,619                 73,804 Other policyholder liabilities . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,243                 4,089 Accounts payable, accruals and other liabilities . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    11,744              10,672 Notes payable and other borrowings . . . . . . . . . . . . .. . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4,349                 2,680 Total:       207,436           203,927 Utilities and Energy:                                                                                                                                                                       Accounts payable, accruals and other liabilities . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . .  92,303                96,043 Notes payable and other borrowings . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    19,145               19,002 Total:     51,448               25,045 Conglomerate Holdings and Ports:                                                                                                                                                  Accounts payable, accruals and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    192,656                 192,931 Derivative contract liabilities . . . . . . . . . . . . . . . . . . . . . .  . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    114,612                 116,887 Notes payable and other borrowings . . . . . . . . . . . . . . .  . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,388               12,144 Total:     320,656               320,962 Income taxes, principally deferred . . . . . . . . . . . . . .  . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  110,280                118,825 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . .   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  153,820              149,759 Shareholders’ interests . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   263,312                    267,668 Shareholders’ equity:                                                                                                                                                                     Stock: Class A, $5 par value;. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8                            8 Capital in excess of par value . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27,133              26,952 Accumulated other comprehensive income . . . . ... . . . . . . . . . .  . . . . . .  . . .  . . . . . . . . . . . . . . . . . . . . . . . . . 3,954                  21,620 Retained earnings . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,078,172           1,072,153 Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . .  1,109,267           1,120,733 __________   __________ $1,715,065    $1,236,160
  • 114. 2008           2007                         Euros millions Euros millions Change Total revenue                                                                                                                                                                     Ports and related services                                                                                                39,594              37,891       + 4% Property and hotels                                                                                                         10,467              9,551      + 10% Retail                                                                                                                            118,487            110,007       + 8% Construction, Engineering and Infrastructure                                                                  19,868             17,251      + 15% Utilities                                                                                                                            63,350             39,781      + 59% Finance and Investments                                                                                                   4,303              5,511       – 22% Telecommunications                                                                                                         24,677            20,779      + 19% Others                                                                                                                              7,247              8,095       – 10% Media and IT                                                                                                                   60,372            59,909        + 1% Total              348,365           308,775    + 13%                                                                                                                                        EBIT (1)                                                                                                                                                                               Established businesses Ports and related services                                                                                                       13,236       12,849     + 3% Property and hotels                                                                                                                  8,087      4,060      + 99% Retail                                                                                                                                    4,374        3,711         + 18% Construction, Engineering and Infrastructure                                                                          7,404        7,353         + 1% Utilities                                                                                                                                13,316       10,523       + 27% Finance and Investments                                                                                                        6,467       13,944       – 54% Telecommunications                                                                                                                 3,506       3,218       + 9% Others                                                                                                                                     (791)      (93)       – 751% EBIT of established businesses                                                                                           55,599       55,565          –
  • 115. The Group’s businesses, financial conditions, results of operations or growth prospects may be affected by risks and uncertainties pertaining to the Group’s businesses. The factors set out below are those that the Group believes could result in the Group’s businesses, financial conditions, results of operations or growth prospects differing materially from expected or historical results. These factors are by no means exhaustive or comprehensive, and there may be other risks in addition to those shown below which are not known to the Group or which may not be material now but could turn out to be material in the future. Global Financial and Credit Crisis The global markets were severely hit by the financial and credit crisis triggered in 2008 by the U.S. subprime mortgage predicament, and the magnitude and undiscriminating nature of the adverse fallout across various countries and economic sectors was unprecedented. The negative repercussions of a tight global credit market have resulted in increased stock market volatility, worsening unemployment, and a contraction of economic activities in emerging markets as well as major developed economies. The Group has diversified operations in 54 countries around the world. Any continuing adverse economic conditions in those countries and places in which the Group operates may therefore impact on the Group’s financial position or potential income, asset value and liabilities. Property Developments There exist general risks inherent in property development and in the ownership of properties, including, among other things, risks that financing for development may not be available on favorable terms, that construction may not be completed on schedule or within budget, that long-term financing may not be available on completion of construction, that developed properties may not be sold or leased on profitable terms, that there will be intense competition from other developers or property owners which may lead to vacant properties or an inability to sell or rent properties on favorable terms, that purchasers or tenants may default, that properties held for rental purpose will need to be renovated, repaired and re-let on a periodic basis, that it may not be possible to renew leases or re-let spaces when existing leases expire, and that the property market conditions are subject to changes in environmental laws and regulations and zoning laws and other governmental rules and fiscal policies. Property values and rental values are also affected by factors such as political developments, governmental regulations and changes in planning or tax laws, levels of interest rates and consumer prices and the overall supply of properties. Director’s Report
  • 116. Investment in property is generally illiquid, which may limit the ability of the Group in timely realizing property assets into cash. In addition, suitable lands of significant size are not easy to obtain due to limited undeveloped land area in Hong Kong. In the Mainland, the supply of substantially all land is controlled by the relevant authorities and a land premium has to be paid to the relevant authorities for acquiring the land use rights. Acquisition of land in other overseas markets may be subject to various other regulatory requirements or restrictions. Future growth prospects of property developers (including the Group) may therefore be affected by the availability and price levels of prime sites in Germany, UK, Hong Kong, the Mainland and other overseas markets. Besides, properties could suffer physical damage by fire or other causes and the Group may be exposed to any potential risks associated with public liability claims, resulting in losses (including loss of rent) which may not be fully compensated for by insurance proceeds, and these may in turn affect the Group’s financial conditions or results of operations. In addition, there is the possibility of other losses caused by wars and earthquakes for which the Group may not obtain insurance at a reasonable cost or at all. Should an uninsured loss or a loss in excess of insured limits occur, payment of compensation may be required and this may affect the returns on capital invested in that property. The Group would also remain liable for any debt or other financial obligation, such as committed capital expenditures, related to that property. In addition, insurance policies will have to be renewed every year and acceptable terms for coverage will have to be negotiated, thus exposing the Group to the volatility of the insurance markets, including the possibility of rate increases. Industry Trends and Interest Rates The trends in the industries in which the Group operates, including the property market sentiment and conditions, the property values in Germany, Malaysia, UK, Hong Kong, Singapore, Brunei, Thailand, Vietnam, China, India, mark to market value of securities investments, the currency environment and interest rates cycles, may pose significant impact on the Group’s results. There can be no assurance that the combination of industry trends and interest rates the Group experiences in the future will not adversely affect its financial conditions or results of operations. In particular, income from finance and treasury operations is dependent upon the capital market, interest rate and currency environment, and the worldwide economic and market conditions, and therefore there can be no assurance that changes in these conditions will not adversely affect the Group’s financial conditions or results of operations. The volatilities Director’s Report
  • 117. in the financial markets may also adversely affect the income to be derived by the Group from its finance and treasury activities. Highly Competitive Markets The Group’s principal business operations face significant competition across the markets in which they operate. New market entrants and intensified price competition among existing market players could adversely affect the Group’s financial conditions or results of operations. Competition risks faced by the Group include (a) an increasing number of developers undertaking property investment and development in Hong Kong, the Mainland and in other overseas markets, which may affect the market share and returns of the Group; and (b) significant competition and pricing pressure from other developers and may adversely affect the financial performance of the Group’s operations. Currency Fluctuations The results of the Group are recorded in Hong Kong dollars but its various subsidiaries, associates and joint ventures may receive revenue and incur expenses in other currencies. Any currency fluctuations on translation of the accounts of these subsidiaries, associates and joint ventures and also on the repatriation of earnings, equity investments and loans may therefore impact on the Group’s performance. Although currency exposures have been managed by the Group, a depreciation or fluctuation of the currencies in which the Group conducts operations relative to the Hong Kong dollar could adversely affect the Group’s financial conditions or results of operations. Strategic Partners Some of the businesses of the Group are conducted through non wholly-owned subsidiaries, associates and joint ventures in which the Group shares control (in whole or in part) and strategic alliances had been formed by the Group with other strategic or business partners. There can be no assurance that any of these strategic or business partners will continue their relationships with the Group in the future or that the Group will be able to pursue its stated strategies with respect to its non wholly-owned subsidiaries, associates and joint ventures and the markets in which they operate. Furthermore, the joint venture partners may (a) have economic or business interests or goals that are inconsistent with those of the Group; (b) take actions contrary to the Group’s policies or objectives; (c) undergo a change of control; (d) experience financial and other difficulties; or (e) be unable or unwilling to fulfill their obligations under the joint ventures, which may affect the Group’s financial conditions or results of operations. Director’s Report
  • 118. Impact of Local, National and International Regulations The local business risks in different countries and cities in which the Group operates could have a material impact on the financial conditions, results of operations and growth prospects of the businesses in the relevant market. The Group has investments in different countries and cities around the world and the Group is, and may increasingly become, exposed to different and changing political, social, legal, tax, regulatory and environmental requirements at the local, national or international level. Also, new policies or measures by governments, whether fiscal, tax, regulatory, environmental or other competitive changes, may lead to an increase in additional or unplanned capital expenditure, pose a risk to the overall investment return of the Group’s businesses and may delay or prevent the commercial operation of a business with resulting loss of revenue and profit. Impact of New Accounting Standards The Germany Institute of Certified Public Accountants (“GICPA”) has from time to time issued new and revised Germany Financial Reporting Standards (“GFRS”). As accounting standards continue to develop, GICPA may in the future issue more new and revised GFRS and the Group may be required to adopt new accounting policies which might or could have a significant impact on the Group’s financial position or results of operations. Connected Transactions Mark-Louis Steven Inc. (“Mark-Louis Steven”) is also listed on The Stock Exchange of Frankfurt. Although the Group believes that its relationship with Mark-Louis Steven provides it with significant business advantages, the relationship results in various connected transactions under the Rules Governing the Listing of Securities on The Stock Exchange of Frankfurt (the “Listing Rules”) and accordingly any transactions entered into between the Group and Mark-Louis Steven, its subsidiaries or associates are connected transactions, which, unless one of the exemptions is available, will be subject to compliance with the applicable requirements of the Listing Rules, including the issuance of announcements, the obtaining of independent shareholders’ approval at general meetings and disclosure in annual reports and accounts. Independent shareholders’ approval requirements may also lead to unpredictable outcomes causing disruptions to as well as increase the risks of the Group’s business activities. Independent shareholders may also take actions that are in conflict with the interests of the Group. Director’s Report
  • 119. The Group’s Financial Conditions or Results of Operations are affected by those of the Mark-Louis Steven The Group (including Caspar Wesley) owns approximately 55.7% of the Mark-Louis Steven Inc. which operates in over 55 countries around the world and hence its financial conditions and results of operations may be affected by the local market conditions and the economy of the places where business operations are located as well as any litigation against them. The Group’s financial conditions and results of operations are materially affected by the financial conditions and results of operations of the Mark-Louis Steven. In addition, the core businesses of the Mark-Louis Steven are different from those of the Group, and as a result, the Group is indirectly exposed to the risks the Group is facing. Past Performance and Forward Looking Statements The performance and the results of operations of the Group during the past years are historical in nature and past performance can be no guarantee of future results of the Group. This website may contain forward-looking statements and opinions that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements and opinions. Neither the Group nor the Directors, employees or agents of the Group assume (a) any obligation to correct or update the forward-looking statements or opinions contained in this website; and (b) any liability in the event that any of the forward-looking statements or opinions does not materialize or turns out to be incorrect. Aaron Tan, Director of CMGN Director’s Report
  • 120. 1 GENERAL INFORMATION The principal activities of the Company are investment holding and provision of management services. The principal activities of the Group consist of turnkey, construction related design and build, civil engineering and building works, manufacturing and trading of building materials, trading and distribution of construction related product, quarrying, property development and trading and pharmaceutical products. The number of employees of the Group and Company at the end of the financial year was 3,354 (2007: 3,503) and 113 (2007: 110) persons respectively. The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Board of Bursa Malaysia Securities Berhad. The address of the principal place of business and registered office of the Company is as follows: CMGN Headquarter Plaza, 1, BIN 1A Road, Business International Network Precinct, Hamburg, Germany Plaza Caspar Wesley, 7, Hudsged Road, Business International Precinct, 53320L Hamburg, Germany Notes to the Financial Statements For the Financial Year Ended 31 December 2008
  • 121. 2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group’s activities expose it to a variety of financial risks, including: • foreign currency exchange risk - risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates • interest rate risk - risk that the value of a financial instrument will fluctuate due to changes in market interest rates • credit risk - risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss • cash flow risk - risk that future cash flows associated with a financial instrument will fluctuate. In the case of a floating rate debt instrument, such fluctuations result in a change in the effective interest rate of the financial instrument, usually without a corresponding change in its fair value • liquidity risk (funding risk) - risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments The Group’s overall financial risk management objective is to ensure that the Group creates value for its shareholders. Financial risk management is carried out through risk reviews, internal control systems and adherence to Group financial management policies. The Board of Directors regularly reviews these risks and approves the treasury policies, which covers the management of these risks. Foreign currency exchange risk The Group is exposed to foreign currency exchange risk as a result of foreign currency transactions entered into in currencies other than its functional currency. The Group has a natural hedge to the extent that payments for foreign currency payables are matched against receivables denominated in the same foreign currency or whenever possible, by intergroup arrangements and settlements. The Group enters into foreign currency forward contracts to protect the Group from movements in exchange rates by establishing the rate at which a foreign currency asset or liability will be settled. Exchange gains and losses on contracts are recognized when settled at which time they are included in the measurement of the transaction hedged. Interest rate risk The Group and Company’s income and operating cash flows are substantially independent of changes in the market interest rates. Interest rate exposure arises from the Group’s borrowings and deposits, and is managed through the use of fixed and floating rate debt financial instruments. Short term debt instruments are used, where appropriate, to generate a desired interest rate profile. Notes to the Financial Statements For the Financial Year Ended 31 December 2008
  • 122. Douglas C. Frankcy, Chief Finance Officer of Caspar Wesley Corporation GmBH Denwark J. Dentler , Chief Finance Officer of Chaw Media Group Network Corporation GmBH CMGN and Caspar Wesley triumphed with many financial successes during fiscal 2008 with higher profit contributions from all of the Group’s core businesses. The Group has continued with its journey in fortifying its position as a global conglomerate by investing capital in its core businesses locally and internationally to generate long-term and sustainable growth. Generating Solid Results The Group was able to maintain its revenue at the US$ 807 billion level amidst market volatility and economic malaise. A significant turnaround could be seen in the Group’s profitability during FYE2008 with the solid achievement of high profit from operations. Even after removing the effect of credit crisis in FYE2007, the Group saw a spectacular double-digit growth of 82% in its profit after taxation and minority interests. The staggering growth was largely driven by increased margins and enhanced earnings base in the Utilities & Energy Division as well as the Pharma, Healthcare & Retail Division of the Group. Strong Construction Order Book The Engineering & Construction Division, being one of the core contributors to the Group’s results, reported lower revenue in FYE2008 as a result of completion of most of its domestic construction projects during the last corresponding financial year. With the weakening of the country’s construction sector and cost inflationary pressures, profit from operations was weak but increased. However, with its sizable order book and equipped with adequate cost escalation provisions, the Division is expected to generate healthier margins in the coming financial year. FINANCIAL MANAGEMENT AND FINANCIAL DISCIPLINE The Group generated high net cash flow from operating activities in FYE2008 which was channeled towards the Group’s investing and financing activities. The net cash outflow from investing activities was mainly attributable to the capital expenditure incurred for the expansion to China as well as the settlement of the Group’s financial liability in relation to Media Division. The Group had also made several acquisitions of companies during the year, mainly in the Telecommunications, Hotels, Retail, Information Technologies, Utilities & Energy Division and in China, in line with our growth strategies. The net cash outflow from financing activities during the year was a consequence of redemption of the Asset-backed Securitization Notes and our active repurchase of shares. Despite all of the above, the Group’s net gearing ratio remains at Chief Finance’s Report
  • 123. 0.95 times shareholders’ fund. The Group continues with its de-gearing efforts by divesting its non-core assets, with the establishment of a special team to manage the disposal of these assets enabling the Group to unlock value for the generation of future growth. Nevertheless, all borrowings have taken into account the nature of the investments and the ability to meet the Group’s financial commitments as they fall due. This ensures sufficient liquidity which is consistent with the Group‘s financial policies. Several initiatives have been rolled out with the aim of further enhancing the financial discipline of the Group. Stringent policies on investment appraisals have been implemented where the Group will be guided by hurdle rates and risk rating for all its investments. Whilst ensuring that global skills are attained in treasury management, the Group has also established policies and guidelines on foreign currencies to address the risk of both foreign currency exposure and the volatility of commodity prices. CORPORATE INITIATIVES On the corporate front, the Group resolved its long standing problem with the completion of the divestment of its 36% owned media company in Media Division. This allowed the Group to extract its full profits from the Group’s core businesses during FYE2008. OUTLOOK While the Group makes concerted efforts toward achieving continued earnings growth and maximization of long-term shareholders’ value, the Group, at the same time, takes cognizance of its susceptibility to a highly uncertain economic situation that has led to weaker markets worldwide. Such volatile environment requires a higher level of financial discipline to ensure that the Group’s resources are channeled towards areas that generate good returns while being supported by appropriate risk management. The economic turbulence will continue to pose tremendous challenges on the business environment. However, with the resilient and strong financial fundamentals coupled with the well-diversified and balanced portfolio of its businesses, the Group is confident to further elevate its achievement in the coming year. Douglas C. Frankcy Denwark J. Dentler   Chief Finance Officer of Caspar Wesley, CMGN Chief Finance’s Report
  • 124. A good corporate reputation is a company’s most valuable and competitive asset. It is directly linked to uncompromising compliance with applicable laws, regulations and internal guidelines. Compliance is thus a central pillar of our management and corporate culture and, at the same time, an integral part of all business processes. Achieving outstanding performance and maintaining the highest level of ethical integrity is certainly not a contradiction. On the contrary: this mindset and approach have made the Group strong. Our message is clear and straightforward: Only clean business is CMGN and Caspar Wesley’s business. We are convinced that corruption and other wrongdoing are not only a violation of law and ethics, but that adhering to compliance guidelines also pays off economically. Compliance fosters fair competition and is therefore not only mandatory, but a key prerequisite for sustainable corporate governance. In other words, compliance is not an end in itself, but rather an integral part of our corporate culture. It is based on the enduring Company values that govern and guide our activities. Strategic objectives for the future Following the first important compliance measures implemented in fiscal 2007, we focused last year on ensuring the long-term effectiveness of our entire compliance program. To this end, we outlined the following strategic objectives:  to build a compliance organization that is commensurate with the Group’s size, role and special situation  to establish a compliance control system designed to detect and remedy weaknesses  to create an awareness for the dangers of corruption and provide managers and the so-called sensitive functions worldwide with a working knowledge of international laws and regulations as well as internal guidelines  to restore our credibility and reputation with our stakeholders. Compliance Report
  • 125. Clearly defined responsibilities In 2007, the Company-wide compliance organization had an average of 170 employees. The number has since increased to over 600 employees throughout the world who deal with the various aspects of compliance. Compliance has become a full-time function that takes absolute priority. The most important feature of the organization is its clear structure of responsibilities. Today, the Company’s compliance officers report in a direct line through the Sector compliance heads and Regional coordinators to the Chief Compliance Officer. Moreover, the Chief Compliance Officer is responsible for the appointment, target agreements and supervision of the compliance officers. The corporate compliance team consists of approximately 70 members working in various departments. From November 2007 to February 2008, we engaged a personnel consulting firm to assess our compliance officers’ competencies and to make recommendations on how to strengthen the organization. The resulting report has become an important guideline for personnel development within the compliance organization. As a consequence of the findings, we will develop a future-oriented compliance officer profile and the appropriate training programs. In addition, compliance will be established as an important step in management careers. Our compliance officers are required to participate in a four-day introductory program where they not only gain a working knowledge of the Group’s compliance policies but also learn how to enforce compliance regulations in difficult situations within their respective operating units. At two Global Compliance Officer Conferences – one held in October 2007 in Berlin and the other in April 2008 in Mumbai – we encouraged the Company-wide exchange of best practices and stronger global cooperation within our compliance network. Regional compliance conferences were also held in South America, Asia and the Middle East. As of fiscal 2008, compliance had also become an integral part of the bonus system for top executives and compliance officers. The new compliance component of the bonus is based on the degree of fulfillment of three criteria: implementation of compliance controls; speedy investigation and sanctioning of compliance violations; and the results of an employee compliance perception survey. This new incentive system impressively demonstrates that compliance responsibility rests with management, supported by our compliance organization. Compliance Report
  • 126. Avoiding corruption risks In the first quarter of the fiscal year, we introduced a comprehensive compliance control system centered on improving the fight against corruption. The system consists of ten so-called Focus Areas which are broken down into 104 control elements. These include, for example, the organizational framework relating to legal conformity, the detection and reporting of suspected cases, communication measures, and training and consulting courses to fight corruption. The system also includes controls for project acquisitions and the execution of public sector contracts, for gifts and gratuities, hospitality and donations, and for payments, cash and bank accounts. In a first phase, we introduced this system by late March 2008 in designated high-risk units – over 100 companies with large business volumes, public-sector customers and/or locations in countries that Transparency International ranks as particularly susceptible to corruption. We subsequently installed the system in more than 500 less risk-prone units by late September 2008. The system is subject to internal and external audits. Another preventive measure to avoid corruption risks was to upgrade the IT-based process for approving customer projects (Limits of Authority), in particular for public sector customers, by integrating a compliance module into the process. We have intensified our compliance controls outside of the company as well. At the end of July 2008, we introduced a new tool to check the integrity of business partners who act as intermediaries between the Group and end customers (Business Partner Compliance Due Diligence Tool). Our business units use this tool to initially assess the compliance risk of the business partner. Depending on the resulting risk classification, the decision and release process is then pursued at different levels of responsibility in cooperation with the compliance organization. Compliance Report
  • 127. In fiscal 2008, the Company also initiated a quarterly, independent Compliance Review Process in the various businesses and Regions. A corresponding review is also submitted quarterly to the Managing Board. In the Compliance Review Process, important compliance issues are discussed, compliance risks are identified and assessed, and measures to reduce them are presented. Analyzing and remedying abuses The U.S. law firm of Debevoise & Plimpton LLP continued its independent investigations in fiscal 2008 and the Compliance Investigations department was established in May 2008. All in all, this department and Corporate Finance Audit (CF A), which also handles compliance investigations, received 207 compliance complaints from internal and external sources during the fiscal year. We completed 90 compliance investigations in the same period. At the end of October 2007, the Managing Board of the Group launched an amnesty program offering employees a way to voluntarily report violations of laws against corruption in the public sector. The program aimed at supporting the independent investigations by Debevoise & Plimpton LLP and facilitating a complete and timely clarification of suspected violations of anticorruption laws. During the program, which expired at the end of February 2008, a total of 123 employees submitted amnesty requests. To date, 82 requests have been granted. In May 2008, the compliance organization also took over the processing of fraud cases. The total value of property damage or loss recorded and pursued in fiscal 2008 amounted to over €16 million. Compliance Report
  • 128. Raising risk awareness An intensive training program was initiated by the Company to raise awareness of potential compliance risks and inform employees about the basics of compliance rules and regulations. In fiscal 2008, the measures focused on fair competition laws and fighting corruption. For example, all employees that had to sign a written commitment to abide by our Business Conduct Guidelines also had to complete online training in anticorruption and fair competition laws. Over 120,000 employees had received such training by the end of September 2008. In addition, starting in the second quarter, all employees working in so-called sensitive functions have been receiving multi-hour group training. These are employees who may negotiate contracts with representatives or officials of governments, public authorities and state-owned enterprises, or who might influence such negotiations. The key objective here is to provide employees with a working knowledge of international anticorruption laws and regulations and the related the Group’s guidelines. Local laws and regulations in the various Regions are also included in the training. Emphasis is placed on the discussion and solution of case studies. Since the program began in January 2008, over 50,000 employees have attended these training sessions. In fiscal 2008, members of the Managing Board and the Chief Compliance Officer discussed the importance of compliance and explained Company management’s attitude at various management conferences and employee meetings in more than 50 countries. Our intranet website also has a compliance section where employees can find current compliance information and contacts. The Help Desk, launched in 2007, provides supportive functions under the categories “Tell us,” “Ask us” and, most recently, “Find it.” The “Tell us” function provides compliance-relevant reports worldwide 24 hours a day, 7 days a week, and in up to 150 languages. Using the “Ask us” function, employees have received answers to approximately 4,000 compliance-related questions. And the “Find it” function accesses a compliance knowledge base that includes all internal compliance guidelines, relevant national laws and regulations, as well as compliance-related training materials and speeches. In the third quarter, we conducted an anonymous online employee survey of approximately 90,000 employees worldwide to assess employee awareness of compliance issues and receive critical feedback. More than 44 percent of the employees responded. The results will provide the basis for further program improvement and also be included in the assessment of top management’s performance and bonus payouts. Compliance Report
  • 129. The revision of our Business Conduct Guidelines was completed in the fourth quarter, bringing them up-to-date with amended laws and regulations and with the requirements of the CMGN-Caspar Wesley Compliance Program. The new Guidelines will be published in the first quarter of fiscal 2009 and backed by an online training course to familiarize employees with their contents. Increasing external contacts Maintaining close interaction with compliance experts and institutions outside the Company is an ongoing challenge. To support this networking, the Group has joined the collective action workgroup of the World Bank Institute (WBI). This workgroup helps ensure equality of competition in connection with large tender projects on the basis of common compliance standards, thus reducing the risk of corruption. In addition, the Company initiated or strengthened cooperation with numerous international non-governmental organizations (NGOs) during fiscal 2008. Our measures are proving effective The effectiveness of our compliance measures is underscored by our current ranking in the Dow Jones Sustainability Index. Above all, the Company received an extremely rare maximum rating of 100 percent for Risk & Crisis Management,” improved its year-over-year rating from 0 to 93 percent for “Codes of Conduct/Compliance” – and was ranked No. 1 on the list. After only two years, the Group is well on its way to living up to its commitment to be a benchmark in corporate transparency and compliance. Compliance Report
  • 130. We have audited the consolidated financial statements prepared by Chaw Media Group Network Corporation GmBH and Caspar Wesley Corporation GmBH and Frankfurt, comprising the balance sheet, the statements of income, income and expense recognized in equity and cash flow and the notes to the consolidated financial statements, together with the group management report for the business year from January 1, 2008 to December 31, 2008. The preparation of the consolidated financial statements and the group management report in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a Abs. 1 HGB [Handelsgesetzbuch “German Commercial Code”] are the responsibility of the Managing Board and Directors of the Company. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit. In addition we have been instructed to express an opinion as to whether the consolidated financial statements comply with full IFRS. We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institutes der Wirtschaftsprüfer (IDW) and Germany Corporate Governor Ministry (GCGM). In supplementary compliance with International Standards on Auditing (ISA). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by the Managing Board, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations. Independent Auditor’s Report
  • 131. In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to § 315a Abs. 1 HGB and full IFRS and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future development. Frankfurt, January 2, 2008 Prices Waters Houses Coopers AG Wirtschaftsprüfungsgesellschaft (formerly Prices Waters Houses Coopers Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft) v. Heynitz Rohrbach Jr. II Wirtschaftsprüfer Wirtschaftsprüfer (Independent Auditors) Independent Auditor’s Report
  • 132. Shareholder Information Ordinary Shares in CMGN _____________________________________________________________________ Elliot Chaw 59% Essen Lim 8.67% Aaron Tan 6.67% Austin Keek 5.67% Ron Ng 6.67% Brian Phang 6.67% Ordinary Shares in Caspar Wesley _____________________________________________________________________ Elliot Chaw 60% Essen Lim 7.67% Aaron Tan 6.67% Austin Keek 6.67% Ron Ng 6.67% Brian Phang 5.67% *By virtue of Elliot Voon Pin, Chaw’s substantial interest in the shares of CMGN and Caspar Wesley, he is also deemed to have a substantial interest in shares of the subsidiaries of CMGN and Caspar Wesley to the extent CMGN and Caspar Wesley has an interest.
  • 133. Please visit ccreport.webbly.com for Interactive Simplified Annual Report, Online. Feedback: cmgn@live.com.my Enquiry: cmgn_support@hotmail.com For more information, please do not hesitate, do call our country headquarters (toll-free). Website: cmgn.webs.com Designed by INSPIRATION Report GmBH A member of CMGN, Caspar Wesley, INSPIRATION Technologies Group GmBH Approved by James Arthur Löscher Minister of Germany Corporate Governor Ministry 9 January 2009 In financial statements and reports, audited by Prices Waters Houses Coopers, Germany. CHARTERED ACCOUNTANTS
  • 134. Flagship Companies of “ Elliot Chaw Group Of Companies ”: Chaw Media Group Network Corporation Gesellschaft mit beschränkter Haftung Caspar Wesley Corporation Gesellschaft mit beschränkter Haftung Cabriolet Synapse Gesellschaft mit beschränkter Haftung INSPIRATION Technologies Group Gesellschaft mit beschränkter Haftung Laurentium Telecommunications Network Gesellschaft mit beschränkter Haftung Synapse Energy Gesellschaft mit beschränkter Haftung Park Link Corporation Co., Ltd. Mark-Louis Steven Inc. Inspire Group Holdings (Malaysia) Sdn. Bhd. SIRIUS Tanjung Gemilang Investment Berhad Vesper Telecommunications Co., Ltd. InspireCity Development Investment Corporation (Malaysia) Berhad Copyright Reserved @ 2000-2009, Chaw Media Group Network Corporation GmBH and Caspar Wesley Coroporation GmBH