cwt limited annual report 2008

What drives us at CWT is the passionfor offering the best and mostcomprehensive logistics solutions fordifferent business needs. Undauntedby any challenges that may comeour way, we are committed to goingthe extra mile to provide the lift tolive one’s dreams, strive foraspirations and achieve the potentialfor infinite possibilities.

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About The CWT Group

Group Financial Highlights

Group At A Glance

Chairman’s Message

The Board

Executive Team

Highlights of the Year

Group CEO’s Report

Global Presence

Corporate Data

Corporate Directory

Financial Calendar

table of contents

CWT Limited was set up in 1970 andlisted on the Singapore Exchange in1993. CWT has since grown and theprincipal businesses of CWT currentlycomprise integrated logistics solutions,international freight forwarding andengineering maintenance and facilitiesmanagement services.

Our integrated logistics solutions caterto cus tomers ’ spec i f i c log i s t i c srequirements and provide the boost theyneed to pursue even loftier dreams andaspirations. As one of the largest listedlogistics company in Southeast Asia,CWT facilitates and creates possibilitiesfor some of the world’s leading brandsin the chemica l , commod i t i e s ,automotive, marine, oil & gas andindustrial sectors. We enable and playa part in realising our customers’ goalsby providing an entire spectrum ofsupply chain logistics services. Whateveri t takes to propel them to theirdestination, at CWT, we go the extramile.

In international freight forwarding, CWTis involved in the Non-Vessel OperatingCommon Carrier (“NVOCC”) services.Our NVOCC business specializes inconsolidation of loose cargoes fromfreight forwarders/shippers and deliversthem to specified destinations throughour comprehensive network of deliverypoints around the world. With officesspanning across 21 countries, the CWTGroup has a vast network of deliverypoints that connects customers to 120ports and over 1,200 destinations.

In addition, CWT’s engineering businessprovides engineering maintenance andfacilities management services forequipment and faci l i t ies owners.From companies in the governmentsector and s ta tutory/governmentlinked organizations to commercialestablishments, our ever growing poolof clients is a testament to our dedicationand mission to meet all of our customers’needs.

about the CWT group

vision:to be a world-class corporation withglobal logistics capabilities.

mission:to excel as a leading logistics solutionsprovider delivering best value tocustomers.

CWT Limited Annual Report 2008

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Dreams, Aspirations, Possibilities

group financial highlights

NTA(S$’000)

earnings per share(cents)

2004 2005 2006 2007 2008

revenue(S$’000)

PAT(S$’000)

219,417

176,366

101,19384,401

2004 2005 2006 2007 2008

602,708534,907

326,739248,176239,687

2004 2005 2006 2007 2008

72,777

37,13928,389

9,8823,455

2004 2005 2006 2007 2008

12.87

6.655.90

2.290.53

108,459

For the year (S$ million)

Revenue 602.7 534.9 +12.7

Profit

EBITDA 97.9 55.4 +76.7

Operating 88.0 35.2 +150.0

Before tax 77.6 41.0 +89.3

PATMI 73.9 34.8 +112.4

Per share

Earnings (cents)

Before tax 13.5 7.8 +73.1

PATMI 12.9 6.7 +92.5

Net assets (S$ million) 283.1 216.6 +30.7

Net tangible assets (S$ million) 219.4 176.4 +24.4

Weighted average number of issued shares (million) 574.3 522.9 +9.8

Number of issued shares as at 31 Dec (million) 574.3 574.3 -

At year-end (S$ million)

Shareholders’ funds 266.7 204.9 +30.2

Minority interests 16.5 11.7 +41.0

Capital employed 283.1 216.6 +30.7

Net borrowings 62.1 65.7 -5.5

Net gearing (times) 0.2 0.3 -33.3

Return on shareholders’ funds (%)

Profit before tax 29.1 20.0 +45.5

PATMI 27.7 17.0 +62.9

Shareholders’ value

Distribution (cents per share paid & proposed)

Interim dividend (net) 0 14.0 NM

Final dividend (net) 2.0 2.0 -

Total distribution 2.0 16.0 -87.5

Share price as at 31 Dec (S$) 0.305 1.130 -73.0

% change2008 2007

Note:

PATMI- Profit After Tax & Minority Interests

NM- Not Meaningful


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Focus on providing integratedlogistics solutions.

logistics business

international freight forwarding business

engineering business

Focus on providing cargoconsolidation services.

Focus on providing quality facilities maintenance &management & automotive maintenance services.

Logistics Infrastructure &Supply Chain Logistics

Commodities Logistics

Container Logistics

Marine Engineering Logistics

group at a glance


100% Indeco Engineers Pte Ltd

100% CWT Globelink Pte Ltd

100% CWT Engineering Pte Ltd

100% OCWS Logistics Pte Ltd

100% CWT Commodities Pte Ltd

100% CWT Logistics Pte Ltd


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Dreams are what keep us going, so we dream and we dream big. We dream of overcoming barriers. We dream

of becoming the world’s superhighway connecting people and cultures all across the globe with our ever

evolving and enhanced technological expertise. At CWT, not even the sky is the limit because we dare to dream.


chairman’s message

Dear Shareholders,

2008 presented many challenges. Recordhigh oil prices, sub-prime crisis in theUnited States, followed by credit crunchglobally, has affected all the majoreconomies in the world. Undeterred,the Group continued to make progressand turn in good results.

The Group achieved a profit after taxand minority interests (“PATMI”) ofS$73.9 million, an increase of 112% over2007. Earnings per share (“EPS”) grew93% to 12.9 cents br inging thecompounded annual growth rate of ourEPS to 122% over the past five years.The Group’s Return on Equity (“ROE”)reached 28% in 2008 from 17% in 2007.

During the year, we completed twosignificant transactions with substantialgains.

– The sale and leaseback of CWT Logistics Hub 2 for a total proceeds

of S$115.2 million realized a total gain of S$85.9 million, of which S$69.2 million was booked in 2008.

– The disposal of our entire 20%interest in Cambridge Industrial Trust

Management Limited and the entire 50% interest in Cambridge Industrial Property Management Pte Ltd for a total consideration of S$9.2 million, represented a gain of S$6.7 million.

In view of the economic downturn whichhas adversely affected investment andassets value in general, the Group hasmade the necessary provision totalingS$25.0 million to write down the affectedinvestments/properties to their marketvalue. This included a mark to marketadjustment of S$18.2 mil l ion forCambridge REIT units held. As a prudentmeasure, several other provisions werealso made.

We are cautiously optimistic that ourinvestments will drive growth in theforeseeable future. This will includethe completion of Phase 2 of CWTCommodity Hub, the largest logisticsfacility in Singapore and Southeast Asiaand the acquisition of commoditylogistics businesses in Europe. We

“We will continue our relentless effort toseek and develop new engines of growthas well as the development of the supplychain management and logistic capabilitiesin niche areas.”


Loi Kai Meng

Chairman


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acquired a 100% stake in HNN LogisticsN.V. in Belgium and a 60% and 30%stake in Sitos Group B.V. and LMLProperties B.V. in the Netherlands.These acquisitions will increase ourcommodity logistics market share andstrengthened our global network. Weare now in a better position to capturecommodity flow in the relevant region.

Our acquisit ion strategies remainunaltered, that is to acquire synergisticbusinesses that would expand ourfootprint and network eff icientlythroughout the world. We will continueour relentless effort to seek and developnew engines of growth as well as thedevelopment of the supply chainmanagement and logistic capabilities inniche areas.

Outlook for 2009

The global f inancial turmoil andrecession is affecting the world economyand impacting all businesses. Amidstthis downturn, management pursuesprudent cost management and is workinghard to position the Group to takeadvantage of available opportunities. Aslong as the Group does not lose sightof its visions and aspirations to beSingapore’s first multi-national logisticscompany, we should be able tocontinually create possibilities and growour future.

Shareholder’s Value

We thank our shareholders for thecontinued support and confidence inthe Company. With prudent managementand sound policies under the guidanceof a committed and dedicated Board ofDirectors, we will continue to delivervalue to our shareholders.

Maintaining our Dividend Payout

To thank our loyal shareholders, theBoard has recommended a final one-tier cash dividend of 2 cents per share,amounting to a net dividend of S$11.5million.

The proposed first and final dividend,if approved by shareholders at theforthcoming Annual General Meeting,will be paid on 15 May 2009.

Corporate Governance

We advocated for a strong governanceright from the beginning and made surethat our conviction was indeed carriedout.

Ou r Boa rd i s i ndependen t o fmanagement. Half of the Board isindependent and no major shareholderor Director dominates our discussionsand decision-making processes. Directorsare encouraged to surface issues fordiscussion and review. The Board playsits part by laying down strategy anddirections.

The Group CEO reports to the Boardpromptly on major issues and presentsmajor issues for discuss ion andconsideration. He keeps the Boardinformed of the Group’s financialperformance. The Board’s two standingcommittees – Audit and Nominating cumRemunera t ion Commi t tees mee tfrequently to discuss the various issuesunder their charge. Quarterly results arereleased promptly. Annual GeneralMeetings are also held promptly withinthe prevailing laws.

We are transparent in all our businessundertakings and we believe this willbenefit all stakeholders in the Company.

Sincere Gratitude

Mr Lim Ho Kee, an independent directorretired from the Board during the year.On behalf of the Board, I would like tothank Mr L im for h i s va luab lecontributions to CWT and welcomeProfessor Tan Wee Liang, our new Boardmember.

I would also like to express my deepestappreciation to my fellow directors fortheir wise counsel and guidance. I feelprivileged to work with a team ofdirectors who are committed to theCompany’s long-term best interests, andshareholders can be confident that theBoard’s commitment to their interestsis absolute.

In closing, I want to sincerely thank the4,000+ CWT employees world-wide fortheir outstanding commitment andefforts. I thank our customers forentrusting us with more of their business.And I thank you, our shareholders,investors, bankers, business partnersand associates for your confidence inCWT as well as sharing our aspirationsas we begin yet another challengingyear.

Loi Kai MengChairman24 March 2009

Loi Kai MengChairman

Mr Loi joined the Board as Chairman inNovember 2004. He is an accountant byprofession and has been in the logisticssector for over 38 years. Mr Loi is alsothe Group Managing Director of C&PHoldings Pte Ltd and a Director of anumber of private companies.

Jimmy Yim Wing KuenLead Independent Director

Mr Yim joined the Board as anIndependent Director in May 2003. Heis a senior director of one of Singapore’smost established law firms, Drew &Napier LLC. Mr Yim was admitted to theSingapore Bar in 1983 and wasappointed Senior Counsel in 1998. Hislegal practice covers most areas of civiland commercial law, criminal law andinternational commercial arbitrations.His various appointments include Fellowof the Singapore Institute of Arbitrations,regional arbitrator with the SingaporeInternational Arbitration Centre andmember of the Competition AppealBoard appointed by Ministry of Tradeand Industry.

Liao Chung LikDirector

Mr Liao joined the Board in November2004. He is the Deputy Group ManagingDirector of C&P Holdings Pte Ltd anda Director of a number of privatecompanies. He graduated from theNational University of Singapore with adegree in Bachelor of BusinessAdministration.

Loi Pok YenDirector & Group CEO

Mr Loi joined the Board in November2004. He is also CWT’s Group CEO.With his extensive experience in strategicand logistics business management, MrLoi led the Execut ive Team instrengthening the Group’s businessesand competitiveness for the long-termsuccess of the CWT Group. Mr Loigraduated from National University ofSingapore with a Bachelor of BusinessAdministration (Honours) degree.

Hu Jian PingIndependent Director

Dr Hu was appointed to the Board inDecember 2004. He is the Chairman ofShenzhen Bus Group Company Ltd, aChina based company that owns thelargest bus network in the ShenzhenSpecial Economic Area. He has morethan 17 years of experience in thetransportation industry. Prior to this, hewas the Executive Deputy GeneralManager of Shenzhen Metro Co., Ltdand the Shenzhen Transportation Bureaufrom 1992 to 2001. Dr Hu was also theCivil Engineer, Project Manager andDeputy Division-Chief of the Departmentof Construction from 1992 to 1996. DrHu did a research study in theTranspor ta t ion Research Centre ,University of Kansas, USA, beforereturning to Shenzhen TransportationBureau as Division-Chief for HumanResource from 1997 to 1999. He wasthe Senior Manager for Transportationfrom 1999 to 2001.

Tan Wee LiangIndependent Director

Mr Tan joined the Board in June 2008.He i s A s so c i a t e P r o f e s s o r o fEntrepreneurship and Law at theSingapore Management University,where he is programme coordinator forthe MSc.(Management) by research. Hehas previously taught at NationalUniversity of Singapore and NanyangTechnological University of Singapore.Mr Tan served as the InternationalPresident of the Institute of CharteredSecretaries and Administrators, U.K. in2004. He currently also serves on theboard of St. Luke’s Hospital andexecutive committee of the PresbyterianCommunity Services. He was educatedat the National University of Singapore,University of Cambridge and MIT.

the board


Tan Choon WeiCEO, NVOCC Business & ExecutiveChairman of CWT Globelink Pte Ltd

Mr Tan has been with the Companysince 1988. Prior to his appointment asCEO, NVOCC of CWT in January 2005,Mr Tan has held various senior positionsin the Group. He led the Company’sregional development in the past 17years and was appointed as ExecutiveChairman of CWT Globelink group sinceJanuary 2002, overseeing the Non-VesselOperating Common Carrier (“NVOCC”)business of the CWT group.

Adam SlaterCEO, Commodity Logistics Business& Managing Director of CWTCommodities Pte Ltd

Mr Slater has more than 11 years ofexperience in the commodity logisticsindustry. As Managing Director of CWTCommodities Pte Ltd, a wholly-ownedsubsidiary of CWT, he oversees thecommodity logistics business of the CWTGroup which consists of London MetalExchange (“LME”) and col lateralmanagement business across Asia andEurope. Prior to working in thecommodity logistics industry, he workedas a metal trader in China for 5 years.He has a Bachelor of Art in East AsianStudies from McGill University and alsostudied Chinese language at FudanUniversity.

Lynda GohDeputy Group CEO & Chief FinancialOfficer

Mrs Goh has more than 27 years ofworking experience in accounting,financial and corporate management of

which 17 years were spent holdingsenior positions within the CWT Group.As Deputy Group CEO and ChiefFinancial Officer of the Company, herkey role is to assist the Group CEO inthe corporate development and strategicexpansion, corporate finance and generalmanagement of the CWT Group ofcompanies . Other ro les inc ludemanaging the Group’s engineeringbusiness, new business start-up, treasury,financial, human resource and corporateaffairs. Mrs Goh is a Certified PublicAccountant and Fellow of CharteredCertified Accountant (U.K).

Thong Jian JenDirector, NVOCC Business

Mr Thong graduated with a Bachelor ofEngineering degree and worked in theport & marine sector prior to joiningthe CWT Group. As Director of NVOCCBusiness, he is responsible for thestrategic development and expansionof CWT’s freight forwarding subsidiary,CWT Globelink and its group ofcompanies.

Eric HermanCEO, Contract Logistics Business

Mr Herman has over 14 years ofexperience in the logistics industry. Priorto CWT, he was employed by AP MollerMaersk in various senior positions inthe United States, Latin America andacross Asia, where he optimized supplychain solutions for multi-nationalcompanies. As CEO of Contract Logistics,Mr Herman manages the global logisticspor t fo l io inc luding forming andimplementing strategies for creatingsynergies and expanding the globallogistics business for CWT. He earned

a Bachelor of Arts from the StateUniversity of New York at Albany.

Foo Say ChuangManaging Director, Infrastructure &Business Development

Mr Foo has more than 25 years oflogistics experience in local and multi-national corporations. As ManagingDirector of Infrastructure & BusinessDevelopment, he is responsible for thedevelopment and expansion of theGroup’s logistics business in Singaporeand the regional market, includingRussia, India, Malaysia and Thailand.He has a Bachelor of Business inTransport from the Royal MelbourneInstitute of Technology, a Diploma inShipping Management (Maritime Studies)and a Diploma in Sales & Marketing.

Kay Kong SwanCEO, Container Logistics Business &Managing Director of OCWS LogisticsPte Ltd

Mr Kay has more than 13 years oflogistics experience. He is responsiblefor the container transportation andcontainer depot operation which includespecialized services such as reefer repairsand ISO tank cleaning. Prior to workingin the logistics industry, he was involvedin management consultancy and businessdevelopment. He has a Master’s degreein Business Analysis (with distinction)from the University of Lancaster, U.K.


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executive team

highlights of the year

March 2008

Official opening of CWT Logistics Hub1 & 2.

Acquired the container depot business& assets from C&P Holdings Pte Ltdmaking CWT the largest container depotoperator in Singapore.

Embarked on the construction of Phase2 of the CWT Commodity Hub.

April 2008

July 2008

Conferred with the Total Defence Awardin recognition of our support andparticipation in 2008 Total Civil Defenceexercise.

June 2008

Disposed its entire 20% interest inCambridge Industrial Trust ManagementLimited and the entire 50% interest inCambr i dge I ndu s t r i a l P rope r t yManagement Pte Ltd for a tota lconsideration of S$9.2 million.

Completed the construction of Phase 1of the CWT Commodity Hub.


Offcial opening of CWT Logistics

Hub 1 & 2 by Mr Lim Hng Kiang,

Minister for Trade and Industry


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August 2008 October 2008

November 2008

September 2008

Completed the sale and leaseback ofCWT Logistics Hub 2 for a total proceedsof S$115.2 million.

Entered into a joint venture withTamadam Bonded Warehouse Berhadto pursue and develop logis t icsopportunities in Malaysia.

Acquired a 100% stake in HNN LogisticsN.V. further enhancing and broadeningCWT’s scope of commodity logisticsservices.

Acquired a 60% and 30% stake in SitosGroup B.V. and LML Properties B.V.further expanding CWT’s commoditylogistics business in terms of breadthand depth.

Obtained ISO 28000:2007 certificationby TUV Rheinland.

Awarded BizSAFE Star certification byWorkplace Safety and Health Council ofMinistry of Manpower.

Became one of Singapore International100 companies for i ts success ininternationalization.

Became a member of the ResponsibleCare Community in Singapore.

Singapore International

100 Awards

We place our goals and aspirations in front of us and we make a beeline to them. We know nothing can deter

us from what we have set our minds to. Fulfilling aspirations is at the core of our business, ever spurring us

on to greater heights of service and achievements.


The only certainty about business cyclesis its unpredictability. After the “boom”years from 2005 to 2007, the world is nowfaced with an economic crisis thatdoomsayers have compared with the GreatDepression of the 1930s and coiningphrases such as “econocalpse”. Whilstprecipitated by the destruction of the sub-prime industry in the United States, it hasled to global liquidity contraction and thecollapse of the financial industry and evencountries. As in previous crisis, the shockhas led our clients to rethink their overallstrategy. Thus, this crisis may once againpresent opportunities for CWT to make atransformational breakthrough and improveour market position. I remain cautiouslyoptimistic about 2009 as we wade into anew realm of possibilities.

Logistics Business

Our focus on providing niche logisticsservices has worked well. We are nowwell-established, profitable and growingin Singapore, Asia and Europe andcontinuing to gain market share andincrease our logistics capabilities in allmarkets.

2008 was another year of steady growthfor our Logistics Business. Revenue hasgrown by 26.5% from S$169.9 million toS$215.0 million.

“2008 is another year of improvedreturns and progress towards makingour dreams and aspirations of becomingthe first multi-national logisticscompany to emerge from Singapore apossibility.”

group CEO’s report

+26.5%


Loi Pok Yen

Group CEO

Logistics Revenue (S$’m)

2007 2008

169.9

215.0


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“Our focus on providing niche logisticsservices has worked well. We are now

well-established, profitable andgrowing in Singapore, Asia and

Europe”

Logistics Infrastructure

In the year, we have increased ourwarehousing capacity by 1.6 million sqft with the commissioning of two newlogistics facilities, CWT Logistics Hub 2in January and Phase 1 of CWTCommodity Hub in April. Of which,CWT Logistics Hub 2 was sold andleaseback in September realizing totalproceeds of S$115.2 million.

Due to overwhe lming demand,construct ion of Phase 2 of CWTCommodity Hub has begun, providingan additional 1.2 million sq ft of logisticscapacity. When completed in first half2009, the 2.3 mil l ion sq ft CWTCommodity Hub will be the largestlogistics facility in Southeast Asia andprobably among the three largestwarehouses in the world.

However, in view of the prevailingeconomic conditions, development oflogistics facilities in China, Ukraine andVietnam have been scaled back andpaced according to demand.

Chemical Logistics

We have been able to take advantageof the extensive network we have builtover the years to enhance our customers’supply chains. A significant amount ofour growth in this past year comes fromproviding full supply chain logisticsserv ices to major mul t i -nat ionalcorporations.

A conscious effort to focus on thechemical sector by our wholly-ownedsubsidiary, CWT Logistics Pte Ltd hasseen a level of expertise that is attractingnew business.

An example of this is the award of a10-year Southeast Asia Logistics Hubcontract in January 2009 from Borouge,a leading provider of innovative andvalue creating plastics solutions. TheGroup combines its extensive network,strong supply chain knowledge andinnovation of warehousing to providethe most robust supply chain solutionfor Borouge, meeting their future growthplans by bringing them closer to theirmarkets and delivering a best in classservice to their customers in the region.

In the year, CWT Logistics also becameone of the first companies to be awardedthe ISO 28000 certification by TUVRheinland, which focused primarily onthe distribution, storage and disposalservices of hazardous chemicals. Thecertificate represented a significantmilestone in CWT’s chemical logisticsbusiness that endorses the Group tooffer a high quality supply chainsolutions to its customers across theregions without compromising safetyrequirements.


logistics business

CWT Logistics Hub 2

CWT Commodity Hub

Commodity Logistics

CWT Commodities Pte Ltd, a wholly-owned subsidiary, provides storage,handling and related services for a widerange of commodities including hardand soft commodities. The past year hasseen a significant increase in ourcommodity logistics reach & capabilitiesas a result of acquisitions in Belgium,Netherlands, the United Kingdom andGhana.

These acquisitions are part of theGroup’s strategic plan to further expandits commodity business in terms ofbreadth and depth providing CWTCommodities with an excellent platformto establish a firm foothold in Europeas well as to capture a significant portionof the commodity flows between Asiaand Europe.

Our strategy is to continue to focus onexpanding the niche logistics sector weoperate in, in order to become a marketleader and dominate. CWT Commoditiesis a leading collateral manager in Asia,providing services in Korea, China,Vietnam, Thailand, Malaysia, Indonesia,India and the United Arab Emirates.CWT Commodities is also a prominent

London Metal Exchange (“LME”)warehouse provider in Singapore, Korea,Dubai, Belgium, Holland, Germany, NewOrleans, the Netherlands, and UnitedArab Emirates. Through its subsidiary,CWT Sitos, CWT Commodities offers awide range of logistics services for softcommodities in Europe and Africa. Thecompany is LIFFE approved and hasEKO license to store and handle organiccommodities.

Marine Engineering Logistics

Serving all the major shipyards inSingapore, our wholly-owned subsidiary,CWT Engineering Pte Ltd maintained itsleading position as the largest marineengineering operator in Singaporeoffering a one-stop, integrated marineengineering logistics solution whichentails transportation of metal materialsto our yard/warehouse for storage, toour workshop for blasting and paintingand delivery to customers both locallyand regionally upon completion.

Container Logistics

OCWS Logistics Pte Ltd, a wholly-ownedsubsidiary, acquired the container depotbusiness & its assets from C&P Holdings

Pte Ltd in April 2008 to further expandits storage capacity to 22,000 TEUs. Itis now one of the largest container depotoperators in Singapore and the onlyoperator with the capability to handleall types of containers which includeISO tanks, general purpose containersand reefer containers. OCWS is equippedwith environmentally friendly ISO tankcleaning station and state-of-the-art wastetreatment system for the cleaning ofchemicals in ISO tanks; widening itsscope of container logistics services toinclude storage, washing, repair andmajor overhaul.

Cold Chain Logistics

Owning the largest multi-temperature-controlled logistics facility in Singapore,we have expanded our logis t icscapabilities and competencies to coldchain logistics. Located at Fishery PortRoad, CWT Cold Hub offers freezer,chiller, air-conditioned and ambientstorage to meet the increasing demandand expectation of customers in theFood & Beverages Industry, as well asfood manufacturers and food retailers.

logistics business


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Antwerp, Belgium

Amsterdam, Netherlands


International Freight ForwardingBusiness

CWT’s international freight forwardingarm, CWT Globelink Pte Ltd specializesin consolidating loose cargoes intocontainers and moving them by sea totheir final destination anywhere in theworld.

2008 has been a good year for CWTGlobelink, recording a volume growthof 7% and a revenue growth of 8.1%.

CWT Globelink, an established neutralNon-Vessel Operating Common Carrier(“NVOCC”) consolidator in Asia hasreceived strong support from theforwarding community as it developsand expands its range of consolidatedsea freight services.

Asia remains key to developing ourworld-wide network. The past year hasseen the opening of several new branchoffices in China, India, Thailand andUnited Arab Emirates.

In 2008, the Chinese Customs Authoritystarted categorizing all customs brokersin China into four categories, namely,A, B, C & D. We are proud to announcethat all our offices in Tianjin have beenclassified under Category A.

Our service offering too has expandedto strengthen our trade lanes coverageinto Eastern Europe, South Americaand Africa. We continue to look atopportunities to enhance our servicecoverage.

We have widened our global footprintand strengthened our position as thelargest consolidator in Asia and amongthe top in the world. Going forward,we will continue to look at newopportunities for growth and build onour network of 75 offices which spansacross 14 countries with servicescovering 120 ports and more than 1,200inland destinations globally.

+8.1%

NVOCC Revenue (S$’m)

international freight forwarding business

2007 2008

281.0303.7


21


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“We have widened our global footprintand strengthened our position as thelargest consolidator in Asia and among

the top in the world.”

Engineering Business

Our engineering maintenance andmanagement subs id iary , IndecoEngineers Pte Ltd returned stableperformance last year. The businessgroup registered a turnover of S$84.0million.

During the year, Indeco securedmore than S$60.0 mil l ion wortho f f a c i l i t i e s a n d e q u i p m e n tmaintenance/management contract,increasing our total order book atS$100.0 million as at the end of 2008.

The business group continues to rideon its track records and competenciesto win more business contracts andtenders to expand the scale and scopeof its businesses.


engineering business

Engineering Revenue (S$’m)

2007 2008

Facilities Management

& Maintenance

Automotive

Maintenance

84.0 84.0

We strive to be a good corporate citizen both in Singaporeand in the overseas communities within which we operate.We believe in giving back and promoting a sustainableenvironment for future generations.

Throughout 2008, the Group increased its efforts in charitablecauses for underprivileged children in Singapore.

The Group has always attempted to reduce the environmentalimpact of its operations. In the year, we became a memberof the Responsible Care Community in Singapore and arefully committed to the core principles of Responsible Care:To protect our customers, our people and ourenvironment. We continually review and improve our safetyand environmental management systems, so as to optimizesafety in the planning and preparation, handling, storage andtransportation of clients’ chemical products.

We have also been recycling office and depot waste. Lastly,our new logistics facilities are designed and built with energysaving features. Drive up ramps, natural ventilation andambient lighting used in most part of the warehouses enableus to conserve electrical energy efficiently.

We are always committed to practise the best standards inhealth and safety. We believe such commitments enhanceour service quality and increase productivity. We take vigilantand proactive approaches towards safety, health and wellnessprograms, which offer our employees a positive benefit tolead healthy lives.

In recognition of our commitment to workplace safety andhealth (“WSH”) practices, we were accredited with bizSAFEcertification


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We have successfully launched a Behaviour Based SafetyProgram (“BBSP”) to promote safe habits in the workplace.The aim of this program is to inculcate a positive attitudeculture and reinforcement in the change of individual unsafebehaviour at work, towards achieving service excellence andto benchmark against best practices in the industry.

environment, safety & health

risk assessment & management at business level

social responsibilities

“Our people are the life and blood ofCWT. Many of them are the future

leaders of our business, as we continuetowards becoming a bigger and

stronger global company ”



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Our people are the life and blood of CWT. Many of them arethe future leaders of our business, as we continue towardsbecoming a bigger and stronger global company.

Providing the appropriate education, training and resourcesour staff needs is part of our continuous effort and keymotivator in people learning and development. In CWT, weprovide career opportunity while employees take responsibilityof their own value, career goal and achievement. In year2008, we conducted 134 training classes with a total of 885employees undergoing training to better equip our employeeswith the right competencies and positive attitude towardsthemselves and their jobs in order to move on in their career.

The Union and Management have always maintained a cordialrelationship. We shared key corporate concerns and vision.The result was a win-win approach to address businessrequirements while we established fair work place environmentand employment practices, enhance productivity throughretraining, upgrading and building new capabilities to meetthe changing needs of our business for long term employability.

people

industrial relations

2008 is another year of improved returns and progress towardsmaking our dreams and aspirations of becoming the firstmulti-national logistics company to emerge from Singaporea possibility.

Loi Pok YenGroup CEO

24 March 2009

dreams + aspirations = possibilities


CWT doesn’t believe anything’s impossible. We believe instead in working around obstacles with all the ingenuity

of our resources and technology. Let your imagination take flight with CWT and envisage a world full of infinite

potential made possible by flawless facilitation and execution of all your logistics solutions.


global presence

AustraliaAdelaideBrisbaneFremantleMelbourneSydney

ChinaBeijingChangshaChengduDalianFuzhouGuangzhouHanzhouHong KongJiangmenJinan

NanhaiNanjingNingboPanyuQingdaoShanghaiShantouShenzhenShijiazhuangShundeTaiyuanTianjinWeihaiXiamenXianXiaolanYangjiangYantai

ZhengzhouZhongshan

IndiaAhmedabadBangaloreBarodaCalcuttaChennaiCochinCoimbatoreGoaHyderabadIndoreJaipurJodhpurKandla/MundraKanpur

KarurLudhianaMumbaiNagpurNew DelhiNhava ShevaPuneTirupurTuticorin

IndonesiaBelawanJakartaSemarangSurabaya

MalaysiaJohor BahruKota KinabaluKuantanKuchingMelakaPenangPort KlangSibu

Singapore

South KoreaSeoul

Sri LankaColombo

ThailandBangkok

VietnamDanangHaiphongHanoiHiep PhoucHo Chi Minh

ASIA PACIFIC

United States of America

Canada

Peru Brazil

Chile

Argentina

Uruguay


Ghana BelgiumAntwerp

GermanyHamburg

NetherlandsRotterdamAmsterdam

SpainBarcelonaBilbaoMadridValencia

UkraineKiev

United KingdomLiverpool

United States ofAmericaNew Orleans

EgyptAlexandriaCairoPort Said

PakistanFaisalabadKarachi

United ArabEmiratesAbu DhabiDubai

EUROPE AMERICA MIDDLE EAST

Germany

Sweden

DenmarkUnited Kingdom

Netherlands

SpainItaly

EgyptSaudi Arabia

South Africa

Russia

Belgium

GreeceCyprus

Pakistan

Bangladesh

Fiji Island

New Zealand

MalaysiaCambodia

Vietnam

TaiwanKorea

Japan

China

Australia

SingaporeIndonesia

ThailandIndia

Sri Lanka

Dubai


29

AFRICA

corporate data

Audit Committee

Mr Jimmy Yim Wing Kuen (Chairman)Prof. Tan Wee LiangMr Liao Chung Lik

Nominating cum RemunerationCommittee

Mr Jimmy Yim Wing Kuen (Chairman)Dr Hu Jian PingMr Loi Kai Meng

Executive Council

Mr Loi Kai Meng (Chairman)Mr Liao Chung Lik (Vice Chairman)Mr Loi Pok YenMr Tan Choon WeiMr Adam SlaterMdm Lye Siew Hong (Mrs Lynda Goh)Mr Thong Jian JenMr Eric HermanMr Foo Say Chuang

Company Secretary

Mdm Lye Siew Hong (Mrs Lynda Goh)

Registered Address

38 Tanjong PenjuruCWT Logistics Hub 1Singapore 609039Tel: 6262 6888Fax: 6261 2373Email: [email protected]

Auditors and Reporting Accountants

Partner in-charge of the audit:Mr Kenny Tan Choon Wah(appointed since 31 December 2005)KPMG LLP16 Raffles Quay #22-00Hong Leong BuildingSingapore 048581

Principal Bankers

DBS Bank Ltd6 Shenton WayDBS BuildingSingapore 068809

Oversea-Chinese Banking CorporationLimited65 Chulia StreetOCBC CentreSingapore 049513

Malayan Banking Berhad2 Battery RoadMaybank TowerSingapore 049907

Standard Chartered Bank6 Battery RoadSingapore 049909

Solicitor

Rajah & Tann LLP4 Battery Road#26-01 Bank of China BuildingSingapore 049908

Drew & Napier LLC20 Raffles Place#17-00 Ocean TowersSingapore 048620

Share Registrar

Boardroom Corporate & AdvisoryServices Pte. Ltd3 Church Street#08-01 Samsung HubSingapore 049483



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corporate directory

Loi Pok YenGroup [email protected]

Lynda GohDeputy Group CEO &Chief Financial [email protected]

Infrastructure & BusinessDevelopment

CIS & IndiaFoo Say ChuangManaging [email protected]

IndochinaHenry [email protected]

ChinaOliver [email protected]

Seet Juay [email protected]

Dubai & Middle EastKen [email protected]

Logistics

Commodity LogisticsAdam [email protected]

Kitty HeeremansOperations [email protected]

Yang ShuguangDirector, [email protected]

Simon MaddocksDirector, [email protected]

Glen CreightonDirector, [email protected]

Contract LogisticsEric [email protected]

Leaw Tiew SanManaging Director, [email protected]

Jean WangManaging Director, [email protected]

Koh Pee KokDirector, [email protected]

Michael AwDirector, [email protected]

Defence LogisticsLoh LianGeneral [email protected]

Marine Engineering LogisticsTan Puay HuayGeneral [email protected]

Container LogisticsKay Kong [email protected]

Yeo Tiong JooGeneral [email protected]

Transportation LogisticsLee Soon HengGeneral [email protected]

International Freight Forwarding

Tan Choon [email protected]

Thong Jian [email protected]

Engineering

Lynda GohManaging [email protected]

Lim Fang ChekGeneral [email protected]

Finance & Corporate Services

Chan Chai LingFinance Director, Group [email protected]

Loh Chee MengFinance Director, Logistics [email protected]

Henry OwFinance Director, Commodity [email protected]

Luah Leng KahFinance Director, International FreightForwarding [email protected]

Chong Yin FenFinancial Controller,Engineering [email protected]

Joshua TanAudit [email protected]

Syazanna LeongHuman Resource [email protected]

Andrea ChongManager, Corporate [email protected]

Information Technology

Mark [email protected]

financial calendar

Announcement of 1st quarterresults 2008

Financial year end2007 final dividend paid

Announcement of full yearresults 2008

Announcement of 3rd quarterresults 2008

Announcement of 1st quarterresults 2009

Proposed payment date of2008 final dividend

Annual General Meeting

Announcement of half yearresults 2009

Announcement of half yearresults 2008

Announcement of 3rd quarterresults 2009

Announcement of full yearresults 2009

15 may2008

31 december2008

08 may2008

12 august2008

03 november2008

23 april2009

may2009

august2009

november2009

february2010

25 february2009

15 may2009


Corporate Governance Report 34Directors’ Report 55Statement by Directors 58Independent Auditors’ Report 59Balance Sheets 60Consolidated Income Statement 61Consolidated Statement of Changes in Equity 62Consolidated Statement of Cash Flows 64Notes to the Financial Statements 66Statistics of Shareholdings 130Share Prices and Monthly Volumes for 2008 132Notice of Annual General Meeting 133Proxy Form

corporate governance report

CWT Limited (CWT) believes in having high standards of corporate governance, and is committed to making sure that effective self-regulatory corporate practices exist to protect the interests of its shareholders and maximise long-term shareholder value.

This report describes CWT’s corporate governance practices with specific reference to the revised Code of Corporate Governance 2005 (Code).

PRINCIPLE 1: BOARD’S CONDUCT OF ITS AFFAIRS

Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board.

Guidelines Of The Code Compliance CWT Corporate Governance Practices Related To Principle

1.1 The Board’s role The Board oversees the business affairs of the Group, approves the financial objectives and the strategies to be implemented by management and monitors standards of performance and issues policy, both directly and through its committees.

1.2 Board to objectively take decisions in the interests of the Company

The Board shall objectively take decisions in the interests of the Company.

1.3 Disclosure on delegation of authority by Board to board committees

The Board supervises the management of business and affairs of the Group. Apart from its statutory responsibilities, the Board approves the Group’s strategic plans, key business initiatives, significant investments and funding decisions and it reviews and evaluates the Group’s financial performance and determines the compensation policies for senior management. These functions are carried out by the Board directly or through committees of the Board which have been set up to support its role.

To assist in the execution of its responsibilities, the Board has established 2 board committees, namely, the Audit Committee (“AC”) and Nominating cum Remuneration Committee (“NRC”). The terms of reference and composition of each board committee can be found in the Report.

1.4 Board to meet regularly The Board meets regularly and holds at least four meetings a year. Ad-hoc meetings are convened when circumstances require. The Company’s Articles of Association (the “Articles”) allow a board meeting to be conducted by way of a tele-conference. The frequency of meeting and the attendance of each director at every board and board committee meetings, are disclosed in this Report.

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1.5 Matters requiring Board approval Matters which specifically require the Board’s decision are those involving a conflict of interest for a substantial shareholder or a director (such transactions are subject to Audit Committee’s prior approval), material acquisitions and disposal of assets, corporate or financial restructuring and share issuances, dividends and other returns to shareholders and matters which require Board’s approval as specified under the Company’s interested person transaction policy. Specific Board’s approval is required for any investment or expenditure exceeding S$5 million per transaction.

1.6 Directors to receive appropriate training

The Company conducts orientation programme to familiarise new directors with the Group’s structure & organisation, businesses and governance policies. The aim of the orientation programme is to give directors a better understanding of the Company’s businesses and allow them to assimilate into their new roles.

The Company has adopted a policy that directors are welcome to request further explanations, briefings or informal discussions on any aspects of the Company’s operations or business issues from management. The Chairman or the Group CEO or the Company Secretary/Chief Financial Officer will make the necessary arrangements for the briefings, informal discussions or explanations required by the director.

1.7 Formal letter to be provided to directors, setting out duties and obligations

The Directors are aware of their duties and obligations and the requirements in respect of disclosure of interests in securities, disclosure of conflicts of interest in transactions involving CWT, prohibition on dealings in CWT’s securities and restrictions on the disclosure of price-sensitive information. Directors are also informed of regulatory changes affecting CWT.

1.8 First-time directors to receive training in areas such as accounting, legal and industry-specific knowledge

The Company has available budget for directors to receive further relevant training of their choice in connection with their duties. Relevant courses include programmes conducted by the Singapore Institute of Directors.

PRINCIPLE 2: BOARD COmPOSITION AND BALANCE

There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making.



2.1 One-third of directors to be independent

The Board comprises 1 executive director and 5 non-executive directors (“NEDs”) of whom 3 are considered as independent by the NRC.

Executive Director & Group CEOLoi Pok Yen

Non-Executive DirectorsLoi Kai Meng (Chairman)Liao Chung Lik

Independent Non-Executive Directors (“IDs”)Jimmy Yim Wing KuenHu Jian PingTan Wee Liang

2.2 Board to explain when it deems a non-independent director as independent

The independence of each independent director is reviewed annually by the NRC. The NRC adopts the Code’s definition of what constitutes an independent director in its review and it is satisfied that no individual or small group of individuals dominate the Board’s decision making process.

2.3 Board to determine its appropriate size

While the Company’s Articles allow for the appointment of a maximum of 15 directors, the Board is of the view that the present board size of 6 directors and number of committees facilitate effective decision making and are appropriate for the nature and scope of the Company’s operations.

2.4 Board to comprise directors with core competencies

Each director has been appointed on the strength of his calibre, experience and potential to contribute to the Company and its businesses. The directors bring valuable insights from different perspectives vital to the strategic interests of the Company. Please refer to page 10 of the Annual Report for the directors’ profiles.

The Board is of the view that its directors as a group possess the necessary competencies necessary to lead and govern the Company effectively.

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2.5 Role of NEDs The NEDs participate in board and board committees activities, provide necessary advice and guidance and contribute to the overall strategic development of the Group.

The LID/NRC/AC may, as it deems necessary, organise a formal executive session for the NEDs to meet without the presence of management or executive directors to review any matters that must be raised privately.

The NRC comprising only NEDs, reviews management’s performance and determines the rewards for such performance.

PRINCIPLE 3: ChAIRmAN AND GROUP ChIEF ExECUTIvE OFFICER

There should be a clear division of responsibilities at the top of the company – the working of the Board and the executive responsibility of the company’s business – which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.


3.1 Chairman and Group CEO should be separate persons

The Company has a separate Chairman and Group CEO. The roles of the Chairman and Group CEO are separate and their responsibilities are clearly defined to ensure a balance of power and authority within CWT.

3.2 Chairman’s role The Chairman ensures that board meetings are held when necessary and sets the board meeting agenda in consultation with the Group CEO. The Chairman reviews most board papers before they are presented to the Board and ensures that board members are provided with complete, adequate and timely information. The Chairman ensures that procedures are introduced to comply with the Code.

The Group CEO is the most senior executive in the Group and bears executive responsibility for the Group’s business, while the Chairman bears responsibility for the workings of the Board.

The Group CEO is the son of the Chairman.

3.3 Appointment of Lead Independent Director (“LID”) where Chairman and Group CEO are related by close family ties or where the Chairman and the Group CEO are both part of the executive management team

The board appointed Mr Jimmy Yim Wing Kuen as LID in 18 August 2008 to lead and co-ordinate the activities of the IDs of the company. The LID aids the IDs to constructively challenge business proposals and review business strategies put up by management and provide necessary advice and guidance to management.


PRINCIPLE 4: BOARD mEmBERShIP

There should be a formal and transparent process for the appointment of new directors to the Board.


4.1 NRC to comprise at least three directors, majority of whom are independent; chairman not associated with a substantial shareholder

The Company’s NRC comprises of 2 independent directors and a non-executive director:

Jimmy Yim Wing Kuen (Chairman) - Lead Independent directorHu Jian Ping - Independent directorLoi Kai Meng - Non-executive director

The NRC Chairman is an independent NED. He is not associated with a substantial shareholder.

The NRC covers dual roles in directors’ nomination/evaluation and remuneration.

The NRC’s principal functions in directors’ nomination/evaluation are: (a) to identify candidates and review all nominations for the appointment

or re-appointment of members of the board of directors and the various board committees, for the purpose of proposing such nominations to the Board for its approval;

(b) to determine the criteria for identifying candidates and reviewing nominations for the appointments referred in paragraph (a). One of the criteria for the appointment of a director is the independence status of the candidate;

(c) to decide how the Board’s performance may be evaluated and propose objective performance criteria for the Board’s approval;

(d) to determine annually whether or not a director is independent;

(e) to assess the effectiveness of the Board as a whole, and the contribution by each individual director to the effectiveness of the Board.

The NRC also considered the following matters:(a) review of the functions and effectiveness of the board; (b) board composition of the CWT group of companies;(c) salary review and variable bonus for senior executives.

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4.2 NRC responsible for re-nomination of directors

The NRC recommends all appointments and re-appointments of directors to the Board and board committees.

Article 92 of the Articles requires one-third of the Board to retire by rotation at every Annual General Meeting (“AGM”). In other words, no directors stay in office for more than 3 years without being re-elected by shareholders. New directors are at present appointed by way of a board resolution, after the NRC approves their appointment. Such new directors must submit themselves for re-election at the next AGM of the Company.

4.3 NRC to determine director’s independence annually

The NRC conducts an annual review of director independence. Based on the Code’s criteria for independence, the NRC has ascertained that all the non-executive directors are independent.

4.4 NRC to decide whether or not a director is able to and has been adequately carrying out his/her duties as director of the company in the event that a director has multiple board representation

The NRC considers whether directors who serve on many boards are able to commit the necessary time to discharge their responsibilities.

4.5 Description of process for selection and appointment of new directors to be disclosed.

Procedure for selection of new directors includes(a) The Board has delegated to the NRC the responsibility for

identifying and recommending to the Board new Board members, after considering the necessary and desirable competencies.

(b) Accordingly, in selecting potential new directors, the NRC will seek to identify the competencies required to enable the Board to fulfill its responsibilities. In so doing, the NRC will have regard to the results of the annual appraisal of the Board’s performance.

(c) The NRC may engage recruitment consultants to undertake research on, or assess, candidates for new positions on the Board, or to engage such other independent experts, as the Committee considers necessary to carry out its duties and responsibilities.

(d) Recommendations for new Board members are put to the Board for its consideration and approval.


4.6 Date of first appointment and last re-election as a director

The year of initial appointment and year of last re-election of each of the directors are set out below:

Name of Director

Position held on the Board

Date of first appointment to the Board

Date of last re-election as a Director

Loi Kai Meng Chairman 26 November 2004(as Director & Chairman)

24 April 2007

Liao Chung Lik

Director 26 November 2004

24 April 2006

Loi Pok Yen Director 26 November 2004

24 April 2006

Jimmy Yim Wing Kuen

Director 28 May 2003 24 April 2007

Hu Jian Ping Director 13 December 2004

24 April 2008

Tan Wee Liang

Director 15 June 2008

NA

PRINCIPLE 5: BOARD PERFORmANCE

There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.


5.1 Board to implement process to assess board performance and disclose the process in Annual Report

The Board and NRC will evaluate together the Board’s performance as a whole. The assessment process adopts an objective performance criteria such as comparison of the Company’s performance with its industry peers.

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5.2 Performance criteria should address how the Board has enhanced long term shareholders’ value

The Board performance targets include a measure aligned with shareholders’ interests, such as Total Shareholder Return (“TSR”), and a comparison of CWT’s TSR against industry peers.

5.3 Performance criteria should include company’s share price performance and benchmark index of industry peers

The performance criteria also consider the company’s share price performance over a three-year period vis-à-vis the Singapore Straits Times Index and a benchmark index of its industry peers.

5.4 There should be individual evaluation of directors’ effective contributions

The NRC, in considering the re-appointment of any director, will evaluate the performance of the director. The assessment of each director’s performance is undertaken by the Chairman and the NRC chairman. The criteria for assessment include but not limited to attendance record at meetings of the Board and Board committees, intensity of participation at meetings and the quality of contributions.

5.5 Other performance criteria Other performance criteria including Return on Total Assets (“ROTA”) and Return on Equity (“ROE”).

PRINCIPLE 6: ACCESS TO INFORmATION

In order to fulfil their responsibilities, Board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis.


6.1 Management obliged to provide Board with adequate and timely information; Board should have separate, independent access to senior management

Proposals to the Board for decision or mandate sought by management are in the form of memos/board papers that give the facts, analysis, resources needed, expected outcomes, conclusions and recommendations. As a general rule, board and board committee papers are sent to directors at least three days in advance and these are reviewed at the meeting.

Board interaction with, and independent access to, senior management is encouraged. The directors have also been provided with the contact details of the Company’s senior management and Company Secretary to facilitate separate and independent access.

6.2 Information provided to include background and explanatory information

Management staff who have prepared the papers, or who can provide additional insight into the matters to be discussed, are invited to present the paper or attend at the relevant time during the board and board committee meetings. All analysts’ reports on the Company are forwarded to the Board as and when received to keep the directors abreast of analysts’ views on the Company’s performance.


6.3 Directors to have access to Company Secretary; role of Company Secretary to be clearly defined

Directors have separate and independent access to the Company Secretary. The Company Secretary’s role is to advise the board on all governance matters, ensuring that legal and regulatory requirements as well as board policies and procedures are complied with; and facilitating and organising directors’ induction and training. The Company Secretary attends all board meetings.

6.4 Appointment and removal of the Company Secretary should be a matter for the Board as a whole

The Board is involved in the appointment and removal of the Company Secretary.

6.5 Procedure for Board to take independent professional advice at Company’s cost

Where directors, whether as a group or individually, need independent professional advice, the Company Secretary will, upon direction by the Board, appoint a professional advisor selected by the group or the individual, and approved by the Chairman, to render the advice. The cost of such professional advice will be borne by the Company.

PRINCIPLE 7: PROCEDURES FOR DEvELOPING REmUNERATION POLICIES

There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.


7.1 NRC to consist entirely of NEDs; majority, including NRC chairman, must be independent

Mr Jimmy Yim, an Independent Director, chairs the NRC. Mr Yim has a wealth of experience in corporate management. All NRC members are non-executive. No NRC member or director is involved in deliberations in respect of any remuneration, compensation or any form of benefits to be granted to him.

7.2 NRC to recommend remuneration of directors and Group CEO, and to review remuneration of senior management

The NRC has recommended, in consultation with the Board Chairman, to the Board a framework of director fees for the Company’s non-executive directors and has reviewed the compensation package for key executives, which is performance based. The Committee review regularly to seek enhancement to the compensation structure with the view to incentivise performance.

7.3 NRC should seek expert advice, if necessary

Where necessary, the NRC shall seek expert advice inside and/or outside the company on remuneration of all directors.

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PRINCIPLE 8: LEvEL AND mIx OF REmUNERATION & DISCLOSURE ON REmUNERATION

The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.


8.1 Package should align executive directors’ interests with shareholders’ interests

In determining the level of remuneration, the NRC shall:(a) give due consideration to the Code’s principles and guidance

notes on the level and mix of remuneration so as to ensure that the level of remuneration is appropriate to attract, retain and motivate the directors needed to run the Company successfully;

(b) ensure that proportion of the remuneration, especially that of key executives, is linked to corporate and individual’s performance;

(c) ensure that performance-related elements of remuneration should form a significant portion of the total remuneration package of executive director;

(d) remuneration packages should be designed to align interests of executive director with those of shareholders.


8.2 Remuneration to consider contribution, effort, time spent and responsibilities

In determining the remuneration for NEDs, the NRC shall take into ac-count factors such as efforts and time spent, and responsibilities of the NEDs.

Every director on the Board during FY2008 will receive a basic fee. In addition, he will receive the Chairman’s allowance if he is Chairman of the Board, as well as the relevant allowance (depending on whether he is Chairman or Member of the relevant board committee) for each position he holds on a board committee, subject to an overall cap on the total fees and allowances to be received by him. If he occupied a position for part of FY2008, the fee or allowance payable will be prorated accordingly.

The parameters for directors’ fees are as follows:(a) Board Chairman - S$80K(b) Lead Independent Director – S$20K(c) Basic fee - S$40K per annum;(d) Attendance fee - S$5K per meeting in excess of 4 meetings each

for Board, AC and NRC; (e) Committee fee as follows: (i) AC chairman - S$50K; (ii) AC member - S$10K; (iii) NRC chairman - S$30K; (iv) NRC member - S$10K; (v) Executive Council chairman - S$30K (vi) Executive Council member - S$10K

8.3 Fixed appointment period for all service contracts for executive directors should not be excessively long and there are no onerous removal clauses or early

termination clauses

The Group CEO does not have a fixed appointment period.

8.4 Long term incentive schemes are generally encouraged

The Company has yet implemented any long term incentive scheme for employees.

8.5 Company should be aware of pay and employment conditions within the industry and in comparable companies when setting remuneration packages

The Company shall review the pay and employment conditions within the industry and those from the peer companies to ensure that directors and key executives are adequately remunerated.

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PRINCIPLE 9: DISCLOSURE ON REmUNERATION

Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.


9.1 Remuneration of directors and at least the top 5 key executives (who are not also directors)

All directors will receive 100% fixed fees for their services in FY2008 in accordance with the approved fee structure. The fees payable to each of the directors fall within the S$250,000 band.

9.2 Disclose remuneration details of directors and at least the top 5 key executives (who are not also directors) earning which falls within bands of S$250,000 during the year

There are both fixed and variable components to executive pay. The variable components are tied to organisational performance. For FY2008, the average fixed and variable components paid for key executives including executive director were 57% and 43% respectively:-

Annual Remuneration No. of Executives

More than S$1,000,000 1

S$500,000 to $749,999 3

S$250,000 to S$499,999 4

Note: The annual remuneration includes fixed pay, variable bonus and other benefits-in-kind.

9.3 Disclose remuneration details of employees who are immediate family members of a director or the CEO, and whose remuneration exceed S$150,000 during the year

The Group CEO is the son of the Chairman. His remuneration package falls in the highest band in the above table and 76% of his package is variable.

9.4 Details of employee share scheme The Company does not have any employee share scheme.


PRINCIPLE 10: ACCOUNTABILITy

The Board should present a balanced and understandable assessment of the company’s performance, position and prospects.


10.1 Board’s responsibility to provide balanced, understandable assessment of company’s performance and position on interim basis

The Board provides shareholders with quarterly and annual financial reports. Results for the first three quarters are released to shareholders within 45 days of the end of the quarter. Annual results are released within 60 days of the financial year-end. In presenting the Company’s annual and quarterly financial statements to shareholders, the Board aims to provide shareholders with a balanced and understandable assessment of CWT’s position and prospects.

10.2 Management should provide Board with management accounts on a monthly basis

Management provides the Executive Council with a monthly financial and operational report within 20 days. Monthly meetings are conducted involving senior management and the business unit heads.

Management provides directors with a quarterly financial management report, which includes the quarterly management accounts, other financial statements and an analysis of those accounts and an update of business and development projects. The report is submitted within 45 days of the quarter end.

PRINCIPLE 11: AUDIT COmmITTEE

The Board should establish an Audit Committee (“AC”) with written terms of reference which clearly set out its authority and duties.


11.1 AC should comprise at least three directors, all non-executives, and the majority of whom, including the chairman, are independent

The AC comprises 2 independent non-executive directors including the Chairman of AC and 1 non-executive director. The members of the AC are:

Jimmy Yim Wing Kuen (Chairman) Tan Wee Liang Liao Chung Lik

11.2 Board to ensure AC members are qualified

The members of the AC, collectively, have expertise or experience in financial management and are qualified to discharge the AC’s responsibilities.

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11.3 AC to have explicit authority to investigate and have full access to management and reasonable resources

The AC has full access to and co-operation by the Company’s management and auditors, and has full discretion to invite any director or executive officer to attend its meetings. The auditors have unrestricted access to the AC. The AC has reasonable resources to enable it to discharge its functions properly.

11.4 Duties of AC The AC holds at least 4 meetings a year and performs the following functions:(a) reviews the quarterly financial results before submission to the

Board and announcement to the shareholders; (b) reviews the financial statements of the Company and the

consolidated financial statements of the Group before submission to the Board and the auditors’ report on those financial statements;

(c) reviews the scope and results of the external and internal audits, and to evaluate, with the assistance of internal and external auditors, the adequacy of the systems of internal and accounting controls, risk management and compliance;

(d) reviews the audit plans of the Company’s auditors and their evaluation of the systems of internal accounting controls arising from their audit examination;

(e) reviews that the system of internal controls maintained by the Company is sufficient to provide reasonable assurances that assets are safeguarded against loss from unauthorised use, transactions are properly authorised and proper accounting records are maintained;

(f) reviews the independence of the auditors;(g) reviews interested person transactions; and(h) recommends the nomination of auditors, approves the

compensation of the auditors, and reviews the scope and results of the audit and its cost-effectiveness.

The AC may examine whatever aspects it deems appropriate of the Group’s financial affairs, its internal reviews and external audits and its exposure to risks of a regulatory or legal nature. It keeps under review the effectiveness of the Company’s system of accounting and financial controls, for which the directors are responsible. It also keeps under review the Company’s programme to monitor compliance with its legal, regulatory and contractual obligations.


The AC has the explicit authority to conduct or authorise investigations into any matters within its terms of reference. Minutes of the AC meetings are regularly submitted to the Board for its information and review.

The AC reviews with the Chief Financial Officer and auditors all audit matters including:(a) Auditors’ report to management on significant audit findings and

recommendations for improvements in control systems; (b) The company’s quarterly and audited annual financial statements

and related footnotes, and the integrity of financial reporting of the Company and accounting principles, for recommendation to the board for approval; and

(c) The auditor’s audit of the annual financial statements and reports.

11.5 AC to meet internal and external auditors, without presence of management, annually

Where necessary, the AC meets with internal and external auditors – without the presence of management – to review any matters that might be raised privately.

11.6 AC to review independence of external auditors annually

The AC has received the requisite information from the external auditors evidencing the latter’s independence. It has also reviewed the volume and nature of non-audit services provided by the external auditors during the current financial year. Based on this information, the AC is satisfied that the financial, professional and business relationships between the Company and the external auditors will not prejudice the independence and objectivity of the external auditors.

The AC reviewed the performance of the existing auditors and decided to nominate for re-appointment, KPMG, as the Company’s auditors for the financial year 2009.

11.7 AC to review arrangements for staff to raise concerns/possible improprieties to AC

CWT has an open culture where there is no restriction for staff of the Company to access the AC, Chairman, Group CEO, members of the Executive Council, the Audit Controller, the Chief Financial Officer and the Manager of Human Resources to raise concerns about improprieties. Contact details of these persons are accessible to all staff.

11.8 Disclose the details of the AC’s activities in the company’s annual report

In the review of the financial statements for the year ended 31 December 2008, the AC discussed with management and the external auditors the accounting principles that were applied and their judgement of items that might affect the financial statements. Based on the review and discussions, the AC is of the view that the financial statements are fairly presented in conformity with the relevant Singapore Financial Reporting Standards in all material aspects.

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PRINCIPLE 12: INTERNAL CONTROLS

The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the company’s assets.


12.1 AC to review adequacy of financial, operational and compliance controls and risk management policies

The Company’s auditors, KPMG, carry out, in the course of their statutory audit, a review of the effectiveness of the Company’s material internal controls, including financial, operational and compliance controls, and risk management annually to the extent of their scope as laid out in their audit plan. Material non-compliance and internal control weaknesses noted during their audit, and the auditors’ recommendations, are reported to the AC. The Finance department follows up on KPMG’s recommendations as part of its role in the review of the Company’s internal control systems.

12.2 Board’s comment on the adequacy of the internal controls

The AC has reviewed the Company’s risk assessment, and based on the external auditors’ audit reports, management controls in place and management review reports, it is satisfied that there are adequate internal controls in the Company. The AC expects the risk assessment process to be a continuing process.

The Group uses its financial resources to perform cross review of the internal control systems of the group companies. The Group has also appointed an independent Audit Controller to conduct regular audit of internal control systems of the group companies and recommend necessary improvements and enhancement.

PRINCIPLE 13: INTERNAL AUDIT

The company should establish an internal audit function that is independent of the activities it audits.



13.1 IA to report to AC chairman, and to CEO administratively

The Audit Controller is an independent qualified resource reporting directly to the AC on audit matters, and to the Chief Financial Officer on administrative matters.

13.2 IA to meet or exceed the standards set out by nationally or internationally recognised professional bodies including Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors

The Audit Controller meets the standards set out by recognised professional bodies.

13.3 AC to ensure the internal audit function is adequately resourced and has appropriate standing within the company.

The Audit Controller operates within the framework stated in its Internal Audit Charter, which is approved by the AC. Its mission is to provide independent review, objective assessment of CWT’s internal control framework/systems to add value and improve CWT’s operations. It helps CWT achieve its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, controls and governance processes.

13.4 AC to ensure adequacy of IA function annually

The Audit Controller plans its internal audit schedules annually in consultation with, but independent of, management and its plan is submitted to and approved by the AC.

Its plans are aligned to the business objectives of the Company. The audit scope is driven primarily from a risk-based audit approach, with audit resources being focused on higher risk assignments.

The Audit Controller reports are distributed to the AC, management and the external auditors as and when issued. These reports are discussed with senior management periodically, and with the AC quarterly.

The Audit Controller works with the external auditors to discuss IA’s audit scope and findings as well as to co-ordinate their specific audit efforts to achieve maximum synergies.

Supervisory reports issued by the external auditors and the Audit Controller are actively followed up for implementation by management based on the agreed timelines.

51


PRINCIPLE 14: COmmUNICATION WITh ShAREhOLDERS

Companies should engage in regular, effective and fair communication with shareholders.


14.1 Company to regularly convey pertinent information

The Company strives to convey to shareholders pertinent information in a clear, forthcoming, detailed, timely manner and on a regular basis, take into consideration their views and inputs, and address shareholders’ concerns.

14.2 Company to disclose timely and non-selective information

The Company also monitors the dissemination of material information to ensure that it is made publicly available on a timely and non-selective basis.

All financial results are made available to the public and all shareholders by publishing it through the SGXNET, and the Company’s website www.cwtlimited.com. All information on the Company’s new initiatives are first disseminated via SGXNET followed by a news release, which is also available on the website.

The Company does not practise selective disclosure. Results and annual reports are announced or issued within the mandatory period and are available on the Company’s website.

PRINCIPLE 15: GREATER ShAREhOLDER PARTICIPATION

Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.



15.1 Shareholders should be allowed to vote in absentia

All shareholders of the Company receive the annual report and notice of AGM. The notice is also advertised in newspapers and made available on the website. At AGMs, shareholders are given the opportunity to air their views and ask directors or management questions regarding the Company. The Articles also allow a shareholder of the Company to appoint one proxy to attend and vote in place of the shareholder.

The Articles presently do not provide for shareholders to vote at General Meetings in absentia such as by mail, email or fax. The Company will consider implementing the relevant amendment to the Articles if the Board is of view that there is a demand for the same, and after the Company has evaluated and put in place the necessary security and other measures to facilitate absentia voting and protect against errors, fraud and other irregularities.

15.2 There should be separate resolutions at general meetings on each substantially separate issue

Each item of special business included in the notice of the general meetings is accompanied, where appropriate, by an explanation for the proposed resolution. Separate resolutions are proposed for each separate issue at the meeting.

15.3 Committee chairman and external auditors to be present at AGMs

Chairpersons of the AC and NRC as well as the external auditors will be present and available to address questions at General Meetings.

15.4 Companies encouraged to amend Articles to avoid imposing limit on the number of proxies for nominee companies

While CWT does not have a specific limit in the Articles on the number of proxy votes for nominee companies, there is a limit for the number of proxies. This is because CWT does not want to create separate classes of rights in shareholders. Also, under current law, on a show of hands, only one vote is counted.

15.5 Companies encouraged to pre-pare minutes and make minutes available upon request

Additionally, all minutes of general meetings, and a summary of the questions and answers raised at general meetings are publicly available to shareholders upon request.

16 CODE ON ShARE DEALING AND INTERESTED PERSON TRANSACTION (IPT) POLICy

16.1 Relevant management employees of the Group have been advised of the guideline on Share Dealings, the implications of insider trading and the recommendations of the Best Practices Guide issued by the Singapore Exchange Limited.

16.2 The Company has put in place an internal policy in respect of any interested person transactions of the Company (“IPT Policy”). All division heads are required to familiarise themselves with the IPT policy, and highlight any such transactions to the Company’s Corporate Services Division, where a register of the company’s interested person transactions is maintained. The IPT policy also sets out the levels and procedures to obtain approval for applicable transaction.

53


16.3 The transactions conducted for the year ended 31 December 2008 were as follows:

Aggregate ValueS$’000

Purchases- C&P Holdings Pte Ltd (Transfer of assets announced on 31 Mar 2008) 5,050- C&P Capital Pte Ltd 1,321- C&P Transport Pte Ltd 870

17 ExECUTIvE COUNCIL (ExCO)

17.1 The EXCO comprises 2 non-executive directors, Loi Kai Meng & Liao Chung Lik, 1 executive director, Loi Pok Yen and senior management members.

17.2 The EXCO oversees management of CWT and its group of companies. Its principal responsibilities are:

(a) reviews and strategizes CWT Group’s long term business objectives and direction, taking into account changing market trends and technological changes;

(b) reviews the organization and resource structure of the CWT Group and recommends appropriate changes for effective business management and development for sustainable growth;

(c) reviews revenue, profit and cost drivers of the Group business and guide and direct management with specific action/solutions for long term business success of the Group;

(d) reviews and monitors technological applications and systems to the Group business and monitors their progress to ensure competitiveness of the Group’s business solutions;

(e) reviews the Group’s on-going financial performance, cost management, business projects/proposals, major business concerns and pipelines for sustainable long term profitability;

(f) reviews corporate effectiveness of the Group companies including business management and control, Finance, HR and information processing.


18 mEETING ATTENDANCE REPORT

Name

CWT Board NRC Committee Audit CommitteeNo. of

Meetings Held

No. of MeetingsAttended

No. of Meetings

Held

No. of Meetings Attended

No. of Meetings

Held

No. of Meetings Attended

Loi Kai Meng 7 6 3 3Liao Chung Li 7 7 4 4Loi Pok Yen 7 7Jimmy Yim Wing Kuen 7 7 3 3 4 4Tan Wee Liang 7 *3 4 *2Hu Jian Ping 7 4 3 **- 4 **2

Note: *Tan Wee Liang was appointed as Independent Directors and as member of the Audit Committee of the Company with effect from 15 June 2008.

**Hu Jian Ping was appointed as member of the NRC and relinquished his role in the Audit Committee with effect from 4 June 2008.

55

directors’ report

We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended 31 December 2008.

DIRECTORS

The directors in office at the date of this report are as follows:

Loi Kai Meng (Chairman)Liao Chung LikLoi Pok YenJimmy Yim Wing KuenTan Wee Liang (Appointed on 15 June 2008)Hu Jian Ping

DIRECTORS’ INTERESTS

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares in the Company and in related corporations are as follows:

Name of director and corporation in which interests are held

holdings registered in the nameof director or nominee

holdings in which director isdeemed to have an interest

At

1/1/2008At

31/12/2008

At

21/1/2009

At

1/1/2008At

31/12/2008

At

21/1/2009

CWT Limited

Ordinary shares

Loi Kai Meng 32,280,000 45,650,000 45,650,000 270,850,000 262,590,000 262,590,000Liao Chung Lik 5,600,000 7,800,000 7,800,000 - 15,000,000 15,000,000Loi Pok Yen 6,000,000 9,000,000 9,000,000 15,820,000 16,000,000 16,000,000Jimmy Yim Wing Kuen 1,269,000 1,489,000 1,489,000 - - -

C & P holdings Pte Ltd

Ordinary shares

Loi Kai Meng - - - 2,790,551 2,790,551 2,790,551Liao Chung Lik - - - 3,331,735 3,331,735 3,331,735

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares of the Company, or of related corporations, either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year.

directors’ report

Neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Except for salaries, bonuses and fees and those benefits that are disclosed in note 28 to the financial statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

ShARE OPTIONS

During the financial year, there were:

(i) no options granted by the Company or its subsidiaries to any person to take up unissued shares in the Company or its subsidiaries; and

(ii) no shares issued by virtue of any exercise of option to take up unissued shares of the Company or its subsidiaries granted by the Company or its subsidiaries.

As at the end of the financial year, there were no unissued shares of the Company or its subsidiaries under option.

AUDIT COmmITTEE

The members of the Audit Committee at the date of this report are:

Jimmy Yim Wing Kuen (Chairman)Liao Chung LikTan Wee Liang

The Audit Committee performs the functions specified by section 201B of the Companies Act, the Listing Manual, the Code of Corporate Governance and the Best Practices Guide of the Singapore Exchange.

The Audit Committee held 4 meetings since the last directors’ report. In performing its functions, the Audit Committee met with the Company’s external and internal auditors to discuss the scope of their work and the results of their examination and evaluation of the Company’s internal accounting control system.

The Audit Committee also reviewed the following:

• assistanceprovidedbytheCompany’sofficerstotheexternalauditors;

• quarterlyfinancialinformationandannualfinancialstatementsoftheGroupandoftheCompanypriortotheirsubmissiontothe directors of the Company for adoption; and

• interestedpersontransactions(asdefinedinChapter9oftheSGXListingManual).

57

directors’ report

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.

AUDITORS

The auditors, KPMG LLP, have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

Loi Kai mengDirector

Jimmy yim Wing KuenDirector

24 March 2009

statement by directors

In our opinion:

(a) the financial statements set out on pages 60 to 129 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2008 and the results, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Board of Directors

Loi Kai mengDirector

Jimmy yim Wing KuenDirector

24 March 2009

59

independent auditors’ report to the members of the Company CWT Limited

We have audited the financial statements of CWT Limited (the Company) and its subsidiaries (the Group), which comprise the balance sheets of the Group and of the Company as at 31 December 2008, the income statement, statement of changes in equity and cash flow statement of the Group for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 60 to 129.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards. This responsibility includes:

(a) devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.

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

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

Opinion

In our opinion:

(a) the consolidated financial statements of the Group and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2008 and the results, changes in equity and cash flows of the Group for the year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

KPmG LLPPublic Accountants andCertified Public Accountants

Singapore24 March 2009

balance sheets as at 31 December 2008

Group CompanyNote 2008 2007 2008 2007

$’000 $’000 $’000 $’000Non-current assetsProperty, plant and equipment 3 322,330 220,869 71,478 99,519Intangible assets 4 47,259 28,548 209 175Subsidiaries 5 - - 184,737 141,247Associates 6 23,940 13,890 3,358 3,598Jointly-controlled entities 7 10,645 10,216 5,185 5,199Financial assets 8 12,429 32,004 6,882 17,757Non-current receivables 9 3,035 3,683 6,500 6,500Deferred tax assets 11 1,282 956 204 -Other non-current assets 93 93 3 3

421,013 310,259 278,556 273,998Current assetsInventories 12 1,921 1,263 725 379Trade and other receivables 14 133,127 130,591 125,731 97,199Cash and cash equivalents 18 77,690 51,775 4,585 366Tax recoverable 229 974 - 114

212,967 184,603 131,041 98,058Total assets 633,980 494,862 409,597 372,056

Equity attributable to equity holders of the Company

Share capital 19 149,390 149,390 149,390 149,390Reserves 20 117,286 55,524 56,270 14,723

266,676 204,914 205,660 164,113minority interests 16,460 11,682 - -Total equity 283,136 216,596 205,660 164,113

Non-current liabilitiesFinancial liabilities 21 98,951 90,577 95,369 88,955Deferred tax liabilities 11 9,204 3,795 - 150Deferred gain 23 44,729 36,835 31,736 23,649

152,884 131,207 127,105 112,754Current liabilitiesTrade and other payables 22 138,358 105,011 30,892 66,995Financial liabilities 21 40,882 26,895 37,568 23,639Current tax payable 6,432 6,765 345 -Deferred gain 23 10,194 6,500 7,592 4,250Provisions 24 2,094 1,888 435 305

197,960 147,059 76,832 95,189Total liabilities 350,844 278,266 203,937 207,943Total equity and liabilities 633,980 494,862 409,597 372,056

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

61

consolidated income statement year ended 31 December 2008

Note 2008 2007$’000 $’000

Revenue 26 602,708 534,907Cost of sales (535,771) (477,249)Gross profit 66,937 57,658Other income 78,936 18,034Administrative expenses (48,030) (37,473)Other operating expenses (9,803) (3,044)Profit from operations 88,040 35,175

Finance income 3,852 5,634Finance expenses (23,192) (4,668)Net finance (expenses)/income 29 (19,340) 966

Share of profit of jointly-controlled entities, net of tax 1,888 1,812Share of profit of associates, net of tax 7,061 3,036Profit before income tax 27 77,649 40,989Income tax expense 30 (4,872) (3,850)Profit for the year 72,777 37,139

Attributable to:Equity holders of the parent 73,912 34,786Minority interests (1,135) 2,353Profit for the year 72,777 37,139

Earnings per share (cents)Basic 31 12.87 6.65Diluted 31 12.87 6.65


consolidated statement of changes in equity year ended 31 December 2008

No

teS

hare

cap

ital

Fai

r va

lue

rese

rve

Cur

renc

ytr

ansl

atio

nre

serv

eS

tatu

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res

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sA

ccum

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edp

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Tota

l at

trib

utab

le t

o

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ty h

old

ers

of

the

par

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min

ori

ty

inte

rest

sTo

tal

2007

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

At

1 Ja

nuar

y 20

0765

,132

5,46

4(9

40)

252

67,6

5613

7,56

47,

838

145,

402

Tran

slat

ion

diffe

renc

es r

elat

ing

to fi

nanc

ial

stat

emen

ts o

f for

eign

ent

ities

--

(1,9

13)

--

(1,9

13)

(208

)(2

,121

)S

hare

of a

ssoc

iate

s’ c

hang

e in

fair

valu

e of

av

aila

ble-

for-

sale

fina

ncia

l ass

ets

-(7

6)-

--

(76)

-(7

6)Tr

ansf

er t

o in

com

e st

atem

ent

on d

ispo

sal

of a

vaila

ble-

for-

sale

fina

ncia

l ass

ets

-(7

85)

--

-(7

85)

-(7

85)

Cha

nge

in fa

ir va

lue

of a

vaila

ble-

for-

sale

fin

anci

al a

sset

s-

(3,4

28)

--

-(3

,428

)(6

14)

(4,0

42)

Net

loss

rec

ogni

sed

dire

ctly

in e

quity

-(4

,289

)(1

,913

)-

-(6

,202

)(8

22)

(7,0

24)

Pro

fit fo

r th

e ye

ar-

--

-34

,786

34,7

862,

353

37,1

39To

tal r

ecog

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com

e an

d ex

pens

e fo

r th

e ye

ar-

(4,2

89)

(1,9

13)

-34

,786

28,5

841,

531

30,1

15Is

sue

of s

hare

s19

84,2

58-

--

-84

,258

-84

,258

Inte

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end

paid

of 1

4.02

cen

ts

per

shar

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ss t

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t 18

%

in r

espe

ct o

f 200

7-

--

-(3

9,81

4)(3

9,81

4)-

(39,

814)

Fina

l div

iden

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id o

f 2 c

ents

pe

r sh

are

less

tax

at

18%

in

res

pect

of

2006

--

--

(5,6

78)

(5,6

78)

-(5

,678

)Tr

ansf

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o st

atut

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rese

rves

in c

ompl

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e w

ith fo

reig

n en

titie

s’ s

tatu

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requ

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--

-16

5(1

65)

--

-A

cqui

sitio

n of

sha

res

from

min

ority

sh

areh

olde

rs32

--

--

--

(828

)(8

28)

Acq

uisi

tion

of s

ubsi

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ies

32-

--

--

-26

26C

apita

l con

trib

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n by

min

ority

sh

areh

olde

rs-

--

--

-4,

602

4,60

2D

ivid

end

paid

to

min

ority

sha

reho

lder

s-

--

--

-(1

,487

)(1

,487

)A

t 31

Dec

embe

r 20

0714

9,39

01,

175

(2,8

53)

417

56,7

8520

4,91

411

,682

216,

596

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of

the

se fi

nanc

ial s

tate

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ts.

63

consolidated statement of changes in equity year ended 31 December 2008

No

teS

hare

cap

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Fai

r va

lue

res

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Cur

renc

ytr

ansl

atio

nre

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sA

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Tota

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old

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of

the

par

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min

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ty in

tere

sts

Tota

l20

08$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0

At

1 Ja

nuar

y 20

0814

9,39

01,

175

(2,8

53)

417

56,7

8520

4,91

411

,682

216,

596

Tran

slat

ion

diffe

renc

es r

elat

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to fi

nanc

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stat

emen

ts o

f for

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ities

--

506

--

506

(1,0

99)

(593

)S

hare

of a

ssoc

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s’ c

hang

e in

fair

valu

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ava

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nanc

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sset

s -

(116

)-

--

(116

)-

(116

)S

hare

of a

n as

soci

ate’

s fa

ir va

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rese

rve

tran

sfer

red

to in

com

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upon

di

spos

al o

f the

ass

ocia

te-

116

--

-11

6-

116

Cha

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in fa

ir va

lue

of a

vaila

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sale

fin

anci

al a

sset

s-

(16,

965)

--

-(1

6,96

5)(2

,610

)(1

9,57

5)Tr

ansf

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o in

com

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ent

aris

ing

from

im

pairm

ent

on a

vaila

ble-

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fin

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sset

s-

15,7

95-

--

1579

52,

430

18,2

25N

et (l

oss)

/gai

n re

cogn

ised

dire

ctly

in e

quity

-(1

,170

)50

6-

-(6

64)

(1,2

79)

(1,9

43)

Pro

fit fo

r th

e ye

ar-

--

-73

,912

73,9

12(1

,135

)72

,777

Tota

l rec

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sed

inco

me

and

expe

nse

for

the

year

-(1

,170

)50

6-

73,9

1273

,248

(2,4

14)

70,8

34Fi

nal o

ne-t

ier

divi

dend

pai

d of

2 c

ents

pe

r sh

are

in r

espe

ct o

f 200

7-

--

-(1

1,48

6)(1

1,48

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(11,

486)

Tran

sfer

to

stat

utor

y re

serv

es in

com

plia

nce

with

fore

ign

entit

ies’

sta

tuto

ry r

equi

rem

ents

--

-57

(57)

--

-A

cqui

sitio

n of

sha

res

from

min

ority

sh

areh

olde

rs32

--

--

--

(2)

(2)

Acq

uisi

tion

of s

ubsi

diar

ies

32-

--

--

-7,

616

7,61

6D

ivid

end

paid

to

min

ority

sha

reho

lder

s-

--

--

-(4

22)

(422

)A

t 31

Dec

embe

r 20

0814

9,39

05

(2,3

47)

474

119,

154

266,

676

16,4

6028

3,13

6

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of

the

se fi

nanc

ial s

tate

men

ts.

consolidated statement of cash flows year ended 31 December 2008

Note 2008 2007$’000 $’000

Operating activitiesProfit before income tax 77,649 40,989Adjustments for:Interest expense 29 2,915 3,526Interest income 29 (1,198) (1,456)Dividend income from available-for-sale financial assets (2,654) (3,045)Depreciation of property, plant and equipment 27 15,930 9,790Gain/(loss) on disposal or liquidation of:- Available-for-sale financial assets - (1,133)- Property, plant and equipment (69,965) (9,923)- Associate (5,421) -- Jointly-controlled entities (1,299) 85Gain on deconsolidation of a subsidiary (50) -Share of profit of:- Associates (7,061) (3,036)- Jointly-controlled entities (1,888) (1,812)Amortisation of:- Intangible assets 27 2,590 2,587- Deferred gain 27 (7,824) (6,085)Amounts written-off for:- Property, plant and equipment 11 16- Available-for-sale financial assets - 23Negative goodwill on acquisition of subsidiaries - (6,734)Impairment losses on:- Available-for-sale financial assets 27 18,225 -- Property, plant and equipment 27 3,014 -- Deposit for acquisition of property, plant and equipment 27 3,630 -

26,604 23,792Changes in working capital:Inventories (659) 1,414Trade and other receivables 15,618 (18,619)Trade and other payables 20,818 31,230Provisions 213 (365)Cash generated from operations 62,594 37,452Income taxes paid (5,674) (16,155)Cash flows from operating activities 56,920 21,297


65

consolidated statement of cash flows year ended 31 December 2008

Note 2008 2007$’000 $’000

Investing activitiesInterest received 1,017 1,456Dividends received from:- Associates 1,512 958- Jointly-controlled entities 1,125 845- Available-for-sale financial assets 2,654 3,045Purchases of:- Property, plant and equipment (112,667) (134,192)- Intangible assets 4 (227) (203)- Available-for-sale financial assets - (643)- Other non-current assets - (15)Proceeds from disposal of:- Property, plant and equipment 120,636 28,482- Available-for-sale financial assets - 6,142- Associates 7,332 -- Jointly-controlled entity 1,840 -Acquisitions of interests in:- Subsidiaries, net of cash acquired 32 (49,205) (26,124)- Associates (6,559) -- Jointly-controlled entities - (392)Acquisition of additional equity interest in an existing subsidiary (17) (2,000)Deposits paid for land leases - (16,331)Cash flows from investing activities (32,559) (138,972)

Financing activitiesInterest expense paid (2,915) (3,037)Dividends paid:- Shareholders of the Company (11,486) (45,492)- Minority shareholders of subsidiaries (422) (1,487)Repayment of hire purchase and finance lease obligations (652) (334)Repayment of loan granted to minority shareholder of a subsidiary 359 -Capital contributions from minority shareholders - 4,602Proceeds from issuance of new shares - 84,258Proceeds from:- Short-term bank borrowings 39,840 102,547- Long-term bank borrowings 75,252 108,318Repayments of:- Short-term bank borrowings (30,860) (99,250)- Long-term bank borrowings (67,787) (21,269)Changes in pledged fixed deposits (131) -Cash flows from financing activities 1,198 128,856

Net increase in cash and cash equivalents 25,559 11,181Cash and cash equivalents at beginning of the year 51,775 41,809Effect of exchange rate changes on balances held in foreign currencies (779) (1,215)Cash and cash equivalents at end of the year 18 76,555 51,775


notes to the financial statements year ended 31 December 2008

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 24 March 2009.

1 DOmICILE AND ACTIvITIES

CWT Limited (the Company) is incorporated in the Republic of Singapore and has its registered office at 38 Tanjong Penjuru, CWT Logistics Hub 1, Singapore 609039.

The principal activities of the Group and Company are those relating to the provision of warehousing and logistics services, transportation services, import and export cargo consolidation and freight forwarding services, engineering services, collateral management services, container depot operations and investment holding.

The consolidated financial statements relate to the Company and its subsidiaries (collectively referred to as the “Group”) and the Group’s interests in associates and jointly-controlled entities.

2 SUmmARy OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements are prepared in accordance with the Singapore Financial Reporting Standards (FRS).

The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which are stated at fair value and/or amortised cost as disclosed in the accounting policies set out below.

The financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial information presented in Singapore dollars have been rounded to the nearest thousand, unless otherwise stated.

The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in the following notes:

• Note 3 – Impairment assessment, provision for restoration costs, depreciation expense of property, plant andequipment and sale and leaseback of warehouse property

• Note4–Measurementofrecoverableamountsforgoodwillimpairmenttest

• Note5–Impairmentallowancesoninvestmentsinsubsidiaries

67


2 SUmmARy OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

• Note11–Measurementofdeferredtaxassets

• Note14–Measurementofallowancefortradereceivables

• Note24–Measurementofprovisions

• Note30–Assessmentofincometaxprovision

• Note32–Valuationofassets,liabilitiesandcontingentliabilitiesacquiredinbusinesscombinations

• Note33–Valuationoffinancialinstruments

The accounting policies set out below have been applied consistently by the Group. The accounting policies used by the Group have been applied consistently to all periods presented in these financial statements.

2.2 Basis of consolidation

Business combinations

Business combinations are accounted for under the purchase method. The cost of an acquisition is measured at fair value of the assets given and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

Any excess of the purchase consideration over the net fair value of the identifiable asset acquired and liabilities and contingent liabilities assumed is accounted for as goodwill (see note 2.6).

Negative goodwill in a business combination represents the excess of the Group’s interest in the net fair value of the identifiable assets acquired, liabilities and contingent liabilities assumed over the cost of acquisition. It is recognised directly in the income statement.

Subsidiaries

Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date control ceases.

Associates

Associates are companies in which the Group has significant influence, but not control, over the financial and operating policies. In the Group’s financial statements, they are accounted for using the equity method of accounting.

The consolidated financial statements include the Group’s share of the total recognised gains and losses of associates from the date that significant influence commences until the date that significant influence ceases. The accounting policies of associates have been changed where necessary to align them with the policies adopted by the Group.



2.2 Basis of consolidation (cont’d)

Associates (cont’d)

When the Group’s share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate.

Jointly-controlled entities

Jointly-controlled entities are enterprises whose activities the Group has joint control over, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. In the Group’s financial statements, they are accounted for using the equity method of accounting.

The consolidated financial statements include the Group’s share of the total recognised gains and losses of jointly-controlled entities from the date that joint control commences until the date that joint control ceases. The accounting policies of jointly-controlled entities have been changed where necessary to align them with the policies adopted by the Group.

When the Group’s share of losses exceeds the carrying amount of the jointly-controlled entity, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the jointly-controlled entity.

Transactions eliminated on consolidation

Intragroup balances and any significant unrealised gains and losses or income and expenses arising from intragroup transactions are eliminated in preparing the consolidated financial statements. Significant unrealised gains arising from transactions with associates and jointly-controlled entities are eliminated to the extent of the Group’s interest in the entity. Significant unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries, associates and jointly-controlled entities by the Company

Investments in subsidiaries, associates and jointly-controlled entities are stated in the Company’s balance sheet at cost less accumulated impairment losses.

2.3 Foreign currencies

Foreign currency balances and transactions

Transactions in foreign currencies are translated at the respective functional currencies of Group entities at the exchange rate at the date of the transaction. The functional currencies of the Group entities are mainly the Singapore dollars, United States dollars, Euro and the Chinese Yuan Renminbi. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined.

Foreign currency differences arising on retranslation are recognised in the income statement, except for differences arising on the retranslation of monetary items that in substance form part of the Group’s net investment in a foreign operation (see below) and available-for-sale equity instruments.

69



2.3 Foreign currencies (cont’d)

Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on the acquisition of foreign operations are translated to Singapore dollars for consolidation at the rates of exchange ruling at the balance sheet date. Revenue and expenses of foreign operations are translated at the average exchange rates for the year. Exchange differences arising on translation are recognised directly in equity. On disposal, the accumulated translation differences are recognised in the consolidated income statement as part of the gain or loss on sale.

Net investments in a foreign operation

Exchange differences arising from monetary items that in substance form part of the Group’s net investment in a foreign operation are recognised in the respective income statement of the Group entities. Such exchange differences are reclassified to equity in the consolidated financial statements. When the foreign operation is disposed of, the cumulative amount in equity is transferred to the consolidated income statement as an adjustment to the profit or loss arising on disposal.

2.4 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the cost of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment.

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

Depreciation is recognised in the income statement on a straight-line basis over their estimated useful lives (or lease term, if shorter) of each part of an item of property, plant and equipment. Freehold land and warehouse-under-construction are not depreciated.

The estimated useful lives are as follows:

Leasehold land and buildings remaining term of lease of 10 to 58 years Leasehold improvements 15 years Plant, machinery and equipment 5 to 10 years Motor vehicles and trailers 5 to 10 years Furniture, fittings, computers and office equipment 1 to 5 years



Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.

Warehouse-under-construction is stated at cost. Expenditure directly attributable to warehouse-under-construction is capitalised when incurred. Depreciation will commence when the warehouse is ready for use.

2.5 Leases

When entities within the Group are lessors of a finance lease

Amount due from lessees under finance leases are recorded as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant rate of return on the Group’s net investment outstanding in respect of the leases.

When entities within the Group are lessees of a finance lease

Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, property, plant and equipment acquired through finance leases are capitalised at the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between finance expense and reduction of the lease liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

When the entities within the Group are lessors of an operating lease

Assets subject to operating leases are included in leasehold buildings and are stated at cost less accumulated depreciation and impairment losses. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.

When the entities within the Group are lessees of an operating lease

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease.

2.6 Intangible assets

Goodwill

Goodwill is measured at cost less accumulated impairment losses. Goodwill arising from the acquisition of subsidiaries is presented as intangible assets. Goodwill arising from the acquisition of associates and jointly-controlled entities is presented together with interests in associates and jointly-controlled entities.

Goodwill is tested for impairment as described in note 2.9.

71



2.6 Intangible assets (cont’d)

Acquisitions of minority interest

Goodwill arising on the acquisition of minority interest in subsidiary represents the excess of cost of the additional investment over the net fair value of the identifiable net assets acquired and liabilities and contingent liabilities assumed at the date of exchange.

Computer software

Computer software which is acquired by the Group, where it is not an integral part of the related hardware, is treated as an intangible asset. This computer software is stated at cost less accumulated amortisation and impairment losses.

Computer software is amortised in the income statement using the straight-line method over its estimated useful life of 3 years.

Customer contracts

Customer contracts relate to the estimated contracts value acquired in a business combination; and have finite lives and are measured at cost less accumulated amortisation and impairment losses.

Customer contracts are amortised in the income statement using the straight-line method over the customers contract periods of 1 to 10 years.

London Metal Exchange (“LME”) licence

The licence relates to the estimated licence value acquired in a business combination; and has finite life and is measured at cost less accumulated amortisation and impairment losses.

LME licence is amortised in the income statement using the straight-line method over its estimated useful life of 30 years.

Port Concession Rights (“PCR”)

PCR relates to the estimated value of PCR arising from a foreign warehouse located and operated within a port concession area that was acquired in a business combination; and has finite life and is measured at cost less accumulated amortisation and impairment losses.

PCR is amortised in the income statement using the straight-line method over its estimated useful life of 36 years.

2.7 Government grants

Government grants received in relation to the purchase or construction of assets are deducted against the costs of the assets acquired. These government grants are recognised in the income statement on a straight-line basis over the useful lives of the assets by way of a reduced depreciation charge.



2.8 Financial instruments

Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity securities, non-current receivables, trade and other receivables, cash and cash equivalents, financial liabilities, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to the initial recognition, non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or transfers substantially all the risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and fixed deposits. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts which are repayable on demand and which form an integral part of the Group’s cash management.

Available-for-sale financial assets

The Group’s investment in equity securities is classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses, are recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to the income statement.

Interest-bearing liabilities

Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.

Others

Other non-derivative financial instruments are measured at amortised cost using effective interest method, less any impairment losses.

Impairment of financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

73



Impairment of financial assets (cont’d)

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its current fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in the income statement. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to the income statement.

Impairment losses in respect of financial assets measured at amortised cost are reversed if the subsequent increase in fair value can be related objectively to an event occurring after the impairment loss was recognised.

Impairment losses once recognised in the income statement in respect of available-for-sale equity securities are not reversed through the income statement. Any subsequent increase in fair value of such assets is recognised directly in equity.

Share capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

2.9 Impairment – non-financial assets

The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill, the recoverable amount is estimated at each reporting date, and as and when indicators of impairment are identified.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in the income statement unless it reverses a previous revaluation, credited to equity, in which case it is charged to equity. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro-rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.



2.10 Inventories

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

Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

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

2.11 Contract work-in-progress

Contract work-in-progress comprises uncompleted service contracts.

Contract work-in-progress at the balance sheet date is recorded in the balance sheet at cost plus attributable profit less recognised losses, net of progress billings and allowances for foreseeable losses, and is presented in the balance sheet as contract work-in-progress (as an asset) or as excess of progress billings over contract work-in-progress (as a liability), as applicable. Cost includes all expenditure related directly to specific contracts and an allocation of fixed and variable overheads incurred in the Group’s contract activities based on normal operating capacity.

Allowance is made where applicable for any foreseeable losses on uncompleted contracts as soon as the possibility of the loss is ascertained.

Progress claims not yet paid by the customer are included in the balance sheet under progress billings receivables.

2.12 Employee benefits

Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.

Short-term employee benefits

All short-term employee benefits, including accumulated compensated absences, are recognised in the income statement in the period in which the employees render their services.

2.13 Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

75



2.13 Provisions (cont’d)

Onerous contracts

A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting the obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.

2.14 Revenue recognition

Provision of logistics services

Provided it is probable that the economic benefits will flow to the Group, and that the revenue and costs can be measured reliably, revenues from the provision of logistic services are recognised as follows:

Freight forwarding

Export revenue is recognised when the cargos are delivered to the carriers and import revenue is recognised upon the arrival of cargos.

Distribution services, repair and maintenance services and surface preparation services

Revenues from distribution services, repair and maintenance services and surface preparation services are recognised as and when the services are rendered.

Sale of goods

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.

Warehouse rental income

Warehouse rental income receivable under operating leases is recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income to be received. Contingent rentals are recognised as income in the accounting period in which they are earned.

Contract revenue

When the outcome of the service contract can be estimated reliably, contract revenue and costs are recognised as income and expense using the percentage of completion method, measured by reference of the contract activity at the balance sheet date. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the outcome of a contract cannot be estimated reliably, contract costs are recognised as an expense in the period in which they are incurred and revenue is recognised only to the extent of contract costs incurred that can probably be recovered.



2.15 Finance income and expenses

Finance income comprises interest income on funds invested, dividend income, gain on disposal of available-for-sale financial assets and net foreign currency gains that are recognised in the income statement. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Group’s right to receive payment is established.

Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, loss on disposal of available-for-sale financial assets, net foreign currency losses and impairment losses recognised on financial assets. All borrowing costs are recognised in the income statement using effective interest method, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.

2.16 Income tax expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly-controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

77


3 PROPERTy, PLANT AND EqUIPmENT

Note

Leasehold land,

buildings and

improvementsFreehold

land

Plant,machinery

andequipment

motorvehicles

and trailers

Furniture, fittings,

computersand office

equipment

Warehouse-under-

construction TotalGroup $’000 $’000 $’000 $’000 $’000 $’000 $’000

CostAt 1 January 2007 42,771 - 14,905 11,238 8,055 43,315 120,284Additions 14,439 10,182 11,022 6,318 5,584 87,208 134,753Acquisition through

business combinations 32 20,770 - 480 3,747 411 1 25,409Transfers 34,272 - 8,672 - - (42,944) -Disposals (iii) (14,713) - (246) (1,905) (179) (22) (17,065)Write offs (21) - (36) (46) (314) (1) (418)Translation differences 50 - (7) (5) 30 (5) 63At 31 December 2007 97,568 10,182 34,790 19,347 13,587 87,552 263,026Additions 53,426 - 5,578 4,108 1,632 51,686 116,430Acquisition through

business combinations 32 32,442 - 4,095 186 460 - 37,183Transfers 89,618 - - - - (89,618) -Disposals (iii) (28,974) - (319) (1,266) (510) (2,849) (33,918)Write offs (13) - (15) - (276) - (304)Translation differences 1,172 (2,819) (336) (107) (301) 278 (2,113)At 31 December 2008 245,239 7,363 43,793 22,268 14,592 47,049 380,304


3 PROPERTy, PLANT AND EqUIPmENT (CONT’D)

Note

Leasehold land,

buildings andimprovements

Freeholdland

Plant,machinery

andequipment

motorvehicles

and trailers


computersand office

equipment

Warehouse-under-

construction TotalGroup $’000 $’000 $’000 $’000 $’000 $’000 $’000

Accumulated depreciation and impairment losses

At 1 January 2007 13,673 - 9,509 6,108 5,981 - 35,271Depreciation charge for

the year 4,082 - 2,359 2,099 1,250 - 9,790Disposals (538) - (47) (1,782) (139) - (2,506)Write offs (21) - (33) (46) (302) - (402)Translation differences (1) - (6) (5) 16 - 4At 31 December 2007 17,195 - 11,782 6,374 6,806 - 42,157Depreciation charge for

the year 7,714 - 3,738 2,812 1,666 - 15,930Impairment losses (iv) 1,068 1,946 - - - - 3,014Disposals (1,065) - (171) (1,081) (341) - (2,658)Write offs (9) - (15) - (269) - (293)Translation differences 32 - (46) (3) (159) - (176)At 31 December 2008 24,935 1,946 15,288 8,102 7,703 - 57,974

Carrying amountAt 1 January 2007 29,098 - 5,396 5,130 2,074 43,315 85,013At 31 December 2007 80,373 10,182 23,008 12,973 6,781 87,552 220,869At 31 December 2008 220,304 5,417 28,505 14,166 6,889 47,049 322,330

79



Leaseholdbuildings and

improvements

Plant,machinery

andequipment

motorvehicles

and trailers


computersand office

equipment

Warehouse-under-

construction TotalCompany $’000 $’000 $’000 $’000 $’000 $’000

CostAt 1 January 2007 19,713 3,712 7,558 3,251 38,701 72,935Additions 10,615 3,252 1,850 3,705 32,160 51,582Transfer 34,271 8,640 - - (42,911) -Disposals (38) (102) - - - (140)Write offs - - - (247) - (247)At 31 December 2007 64,561 15,502 9,408 6,709 27,950 124,130Additions 4,494 1,045 1,044 581 3,260 10,424Disposals (33,521) (228) (472) (2) - (34,223)Transfer 28,312 - - - (28,312) -At 31 December 2008 63,846 16,319 9,980 7,288 2,898 100,331

Accumulated depreciationAt 1 January 2007 11,463 3,493 3,946 3,065 - 21,967Depreciation charge for the year 1,495 693 492 213 - 2,893Disposals (4) - - - - (4)Write offs - - - (245) - (245)At 31 December 2007 12,954 4,186 4,438 3,033 - 24,611Depreciation charge for the

year 2,712 1,306 737 577 - 5,332Disposals (528) (92) (468) (2) - (1,090)At 31 December 2008 15,138 5,400 4,707 3,608 - 28,853

Carrying amountAt 1 January 2007 8,250 219 3,612 186 38,701 50,968At 31 December 2007 51,607 11,316 4,970 3,676 27,950 99,519At 31 December 2008 48,708 10,919 5,273 3,680 2,898 71,478

(i) During the year, the Group acquired property, plant and equipment with an aggregate cost of $116,430,000 (2007: $134,753,000) of which $375,000 (2007: $561,000) was acquired under finance lease arrangement. At the balance sheet date, the carrying amount of property, plant and equipment of the Group held under finance lease and hire purchase agreements amounted to $3,440,000 (2007: $1,491,000).

(ii) Property, plant and equipment of the Group with carrying amount of $58,052,000 (2007: $49,667,000) was pledged as security for bank loans and bank overdrafts granted to the Group.

(iii) Two leasehold buildings were disposed of under sale and leaseback arrangements completed during the year (see notes 23 and 27). In 2007, one leasehold building was also disposed of under such sale and leaseback arrangement.



(iv) The following are the significant accounting estimates on the Group’s property, plant and equipment and judgements used in applying accounting policies:

(a) Depreciation of property, plant and equipment

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives, after taking into account the estimated residual value. The Group reviews the estimated useful lives of the assets regularly in order to determine the amount of depreciation expense to be recorded at each financial year. Changes in the expected level of use of the assets and the Group’s historical experience with similar assets, after taking into account anticipated technological changes, could impact the economic useful lives and the residual values of the assets; therefore future depreciation charges could be revised. Any changes in the economic useful lives could impact the depreciation charge and consequently affect the Group’s results. The residual value is reviewed at each reporting date, with any change in estimate accounted for prospectively.

During the year, there were no changes in useful lives or residual values on the Group’s property, plant and equipment.

(b) Provision for restoration

In some lease agreements, the Group and Company are required to carry out site restoration work. At the balance sheet date, the Group and Company made provisions for site restoration amounting to $516,000 and $284,000 (2007: $506,000 and $284,000) respectively. The site restoration cost is based on estimated cost of dismantling and removing assets and restoring the premises to their original conditions provided by external contractors.

(c) Impairment assessment

The Group has substantial investments in property, plant and equipment for its logistics and warehousing businesses. Each of these warehouse properties (including land) and the related plant and equipment is a separate cash-generating unit (“CGU”). Due to the uncertain economy outlook, an impairment assessment was performed. The recoverable amount for a cash-generating unit is determined based on higher of fair value less costs to sell and value-in-use calculation.

The fair value is determined based on open market values on freehold and leasehold land and buildings appraised by independent professional valuers close to the balance sheet date.

The value-in-use calculation uses discounted cash flow projections based on contractual cash flows arising from rental of the warehouse properties over the lease term. These cash flows take into account contractual lease rentals (including any lease escalation clauses), projected occupancy and renewal rates by reference to the Group’s historical experience and expectations for market developments. The cash flows are then discounted at rates determined using the appropriate Weighted Average Cost of Capital.

Based on management’s assessment, no impairment has been identified, except for two parcels of land located in China and Europe. In this connection, the Group recognised an impairment loss of $3,014,000 comprising $1,068,000 for the CGU in China and $1,946,000 for the CGU in Europe, in the current year’s income statement and recorded it under “other operating expenses”. The recoverable amounts were determined based on fair value.

81



(d) Sales and leaseback

During the financial year, the Group completed two sale and leaseback transactions for leasehold buildings with third parties. In determining whether the leaseback transaction are operating leases, the Group compared the lease payments to market rent and the sale consideration of the leasehold building to their fair values; and also evaluated its share on the residual risk of the leasehold buildings. The Group believes that substantially all risks and rewards of the properties have been transferred to third parties. Based on these factors, the Group has accounted for the leaseback transactions as operating leases; and deferred the excess of sales consideration over the fair values of the leasehold buildings (see note 23).

(e) Expenses capitalised

The Group capitalised the following expenses in warehouse-under-construction and leasehold buildings:

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Operating lease expense 507 3,326 - 1,846Interest expense 643 1,278 - 454

1,150 4,604 - 2,300


4 INTANGIBLE ASSETS

Note

Goodwillon

consolidationComputer

software

Software development

costCustomercontracts

LmElicence

PortConcession

Rights Total

Group $’000 $’000 $’000 $’000 $’000 $’000 $’000

CostAt 1 January 2007 11,806 2,594 - 7,935 10,198 - 32,533Additions - 200 3 - - - 203Acquisition through business

combinations 32 656 - - - - - 656Acquisition of minority interest 32 1,172 - - - - - 1,172Translation differences (3) 17 - - - - 14At 31 December 2007 13,631 2,811 3 7,935 10,198 - 34,578Additions - 227 - - - - 227Acquisition through business

combinations 32 7,976 86 - - - 12,255 20,317Acquisition of minority interest 32 15 - - - - - 15Disposals - (4) - - - - (4)Write offs - (2) - - - - (2)Translation differences - (16) - - - 732 716At 31 December 2008 21,622 3,102 3 7,935 10,198 12,987 55,847

Accumulated amortisationAt 1 January 2007 741 2,252 - 349 85 - 3,427Amortisation charge for the

year - 250 - 1,997 340 - 2,587Translation differences - 16 - - - - 16At 31 December 2007 741 2,518 - 2,346 425 - 6,030Amortisation charge for the

year - 260 1 1,928 340 61 2,590Disposals - (4) - - - - (4)Write offs - (2) - - - - (2)Translation differences - (25) - - - (1) (26)At 31 December 2008 741 2,747 1 4,274 765 60 8,588

Carrying amountAt 1 January 2007 11,065 342 - 7,586 10,113 - 29,106At 31 December 2007 12,890 293 3 5,589 9,773 - 28,548At 31 December 2008 20,881 355 2 3,661 9,433 12,927 47,259

83


4 INTANGIBLE ASSETS (CONT’D)

Computersoftware

Company $’000CostAt 1 January 2007 2,149Additions 138At 31 December 2007 2,287Additions 222At 31 December 2008 2,509

Accumulated amortisationAt 1 January 2007 1,967Amortisation charge for the year 145At 31 December 2007 2,112Amortisation charge for the year 188At 31 December 2008 2,300

Carrying amountAt 1 January 2007 182At 31 December 2007 175At 31 December 2008 209

The amortisation charge is recognised in the following line items in the income statement:

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Administration expenses 222 190 188 145Cost of sales 38 60 - -Other operating expenses 2,330 2,337 - -

2,590 2,587 188 145

Impairment test for cash-generating units containing goodwill

For the purpose of annual impairment testing, goodwill is allocated to the following cash-generating units, which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes:

Group2008 2007

$’000 $’000

LME licence 11,916 3,925Collateral management (“CMA”) 6,113 6,113Freight forwarding 2,852 2,852

20,881 12,890


4 INTANGIBLE ASSETS (CONT’D)

The recoverable amount of the cash-generating unit is based on value-in-use calculations which was determined by discounting future cash flows generated from continuing use of the units. Key assumptions used for projecting future cash flows are as follows:

Freightforwarding

LMElicence CMA

Gross margin 15% 30% 62%Revenue growth rate (1%) - 5%* 3% 3%Discount rate 15% 12% 15%

* Average annual growth rate is 3%.

The budgeted gross margin is based on past performance trends and expectations for market developments. The average growth rate used is consistent with past performance trends and forecasts included in industry reports. The discount rates used are pre-tax and reflect the return that management expects to earn on its investment in the respective cash-generating units.

Cash flows are projected based on financial budgets approved by management covering a period of 1 year and are extrapolated using the growth rates and gross margins as described above for the next four years. The terminal value is estimated by extrapolating the fifth year cash flow at zero growth rate and discounting it.

The recoverable amount of each cash generating unit exceeds its respective carrying amount by an amount more than $10,000,000. The Group believes that any reasonably possible changes in the above key assumptions are not likely to cause any of the recoverable amounts to be materially lower than the related carrying amount.

5 SUBSIDIARIES

CompanyNote 2008 2007

$’000 $’000

Unquoted equity shares, at cost 99,231 103,151Quasi-equity loans (a) 101,135 42,835

200,366 145,986Less: Accumulated impairment lossesAt 1 January (4,739) (3,200)Impairment losses (b) (10,890) (1,539)At 31 December (15,629) (4,739)

184,737 141,247

(a) Quasi-equity loans to subsidiaries are interest-free and form part of the Company’s net investments in subsidiaries. The loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.

85


5 SUBSIDIARIES (CONT’D)

(b) Impairment losses in respect of investments in the following subsidiaries were recognised in the Company’s income statement:


$’000 $’000

CWT (Xian) Warehousing Development Co., Ltd (XIAN) (i) 1,207 -Xida Warehousing (Shanghai) Co., Ltd (XIDA) (i) 2,109 -CWT Distripark One LLC (CDO) (i) 1,505 -49 Pandan Pte Ltd (49P) (i) 460 -CWT China Logistics (Shanghai) Co., Ltd (CCL) (i) - 931CWT Logistics (Tianjin) Co., Ltd (LTJ) (i) - 608CWT Tianjin Logistic Hub Co., Ltd (TJH) (ii) 1,100 -Pryzma Ltd (PRYZMA) (ii) 4,128 -CWT Properties Sdn Bhd (CPP) (iii) 381 -

10,890 1,539

(i) In view of the present difficult operating conditions, management has decided to terminate the development projects planned for in these companies. The estimated recoverable amount as at 31 December 2008 is measured using “fair value less costs to sell” approach. Management considered the fair values of the underlying assets of these companies to approximate their carrying amounts due to the relative short-term nature of these assets; and the fair value of the liabilities were based on the estimated cash outflows to settle the obligations.

(ii) The open market values of TJH’s leasehold land and PRYZMA’s freehold land appraised by independent professional valuers close to the balance sheet date were lower than their carrying amounts as at 31 December 2008. This indicated that the investments in TJH and PRYZMA might be impaired and caused the Company to assess the recoverable amounts of the investments. The estimated recoverable amount as at 31 December 2008 is measured using the “fair value less costs to sell” approach.

(iii) In prior years, CPP paid a deposit of $410,000 for a leasehold land in Malaysia. Despite that the pre-sale conditions and warranties were met, the legal title over the land was not transferred to CPP. Therefore, CPP entered into a legal suit with the vendor in 2007 to obtain refund of the deposit and compensation from the vendor. As at 31 December 2008, no judgement has been passed. In view of the uncertainty in recovering the deposit of $410,000 the deposit has been fully impaired in the current year. CPP has been inactive since incorporation. These events indicated that the investment in CPP might be impaired and caused the Company to assess the recoverable amount of the investment. The estimated recoverable amount as at 31 December 2008 is based on the “fair value less costs to sell” approach.



Details of the significant subsidiaries are as follows:

Name of subsidiaries

Country of incorporation/

business

Effectiveinterest heldby the Group

2008 2007% %

1 Jurong Districentre Pte Ltd Singapore 70.0 70.0

1 CWT International Pte Ltd Singapore 100.0 100.0

1 CWT Engineering Pte Ltd Singapore 100.0 100.0

1 CWT Logistics Pte Ltd Singapore 100.0 100.0

1 Caddee Pte Ltd Singapore 100.0 100.0

1 CWT Globelink Pte Ltd Singapore 100.0 100.0

1 CWT Commodities Pte Ltd Singapore 100.0 100.0

1 OCWS Logistics Pte Ltd Singapore 100.0 100.0

1 Trident Districentre Pte Ltd Singapore 100.0 100.0

1 Singapore Commodity Hub Pte Ltd Singapore 100.0 100.0

1 CWT EDG Pte Ltd Singapore 72.0 72.0

1 Indeco Engineers (Pte) Ltd Singapore 100.0 100.0

1 CWT Commodities (Metals) Pte Ltd Singapore 100.0 100.0

1 CWT Commodities (China) Pte Ltd Singapore 100.0 100.0

1 CWT Commodities (SEA) Pte Ltd Singapore 100.0 100.0

1 CWT Commodities Warehousing Pte Ltd Singapore 100.0 100.0

87




Country ofincorporation/

business


2008 2007% %

2 Globelink Egypt Egypt 51.0 51.0

2 CWT Commodities (Antwerp) NV Belgium 100.0 -

2 Globelink International Pty Limited Australia 65.0 65.0

2 CWT Globelink Colombo (Pvt) Ltd Sri Lanka 51.0 51.0

2 Globelink WW India Pvt Ltd India 51.0 51.0

2 Globelink Korea Co., Ltd Korea 70.0 70.0

2 Globelink Uniexco S.L. Spain 56.0 56.0

2 Globelink - Trans (Tianjin) International Forwarding Co., Ltd People’s Republic of China 100.0 100.0

3 49 Pandan Pte Ltd Singapore 100.0 100.0

4 CWT China Logistics (Shanghai) Co., Ltd People’s Republic of China 100.0 100.0

4 CWT Logistics (Tianjin) Co., Ltd People’s Republic of China 75.0 75.0

4 CWT Warehousing Transportation (Shanghai) Development Co., Ltd

People’s Republic of China 100.0 100.0

4 CWT Tianjin Logistic Hub Co., Ltd People’s Republic of China 100.0 100.0

5 CWT SPL Distripark Vietnam Limited Vietnam 51.0 51.0

6 Globelink Container Lines (JB) Sdn. Bhd. Malaysia 90.0 90.0

6 Globelink Container Line (M) Sdn. Bhd. Malaysia 97.8 97.8

7 CWT Sitos Group B.V. The Netherlands 60.0 -

7 Sitos Commodities (Amsterdam) B.V. The Netherlands 100.0 -





business


2008 2007% %

8 CWT Commodities Shanghai Warehousing Management Co., Ltd

People’s Republic of China 51.0 51.0

9 CWT Commodities (Rotterdam) B.V. (formerly known as CWT Commodities (Europe) B.V.)

The Netherlands 80.0 80.0

9 Quality Logistic Warehousing B.V. The Netherlands 80.0 80.0

10 Sitos Commodities (Ghana) Ltd Ghana 100.0 -

11 Sitos Commodities (UK) Ltd United Kingdom 95.0 -

11 CWT Sitos Properties (UK) Ltd United Kingdom 100.0 -

12 CWT Logistics Sdn Bhd Malaysia 100.0 100.0

1 Audited by KPMG LLP, Singapore2 Audited by other member firms of KPMG International3 Audited by Lee Seng Chan & Co4 Audited by ShuLunPan CPAS Ltd International (A member of Horwath International)5 Audited by STT Audit & Advisory (A member of Mazars International)6 Audited by Horwath Malaysia7 Audited by Baker Tilly Berk BV8 Audited by Shanghai Huaxia Certified Public Accountants Co., Ltd9 Audited by Troost-Accountantskantoor v.o.f.10 Audited by Deloitte & Touche11 Audited by Baker Tilly UK Audit LLP12 Audited by RSM, Robert Teo Kuan & Co.

Significant subsidiaries include those considered significant as defined under the Singapore Exchange Limited listing manual if the Group’s share of net tangible assets represents 20% or more of the Group’s consolidated net tangible assets, or if the Group’s share of pre-tax profit accounts for 20% or more of the Group’s consolidated pre-tax profit.

89


6 ASSOCIATES

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Investments in associates 23,554 13,504 3,358 3,598Quasi-equity loans 386 386 - -

23,940 13,890 3,358 3,598

Investments in associates at 31 December 2008 include goodwill on acquisition of $2,142,000 (2007: $1,458,000).

The quasi-equity loans to an associate are interest-free and formed part of the Group’s net investment in associates. The loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.

Details of the significant associates are as follows:

Name of associates


business


2008 2007% %

1 Cambridge Industrial Trust Management Limited Singapore - 20.0

2 Globelink Westar Shipping LLC United Arab Emirates 49.0 49.0

3 WHA Alliance Company Limited Thailand 25.0 25.0

4 CWT Sitos B.V. The Netherlands 30.0 -

5 GLS Interfreight Co., Ltd Thailand 49.0 49.0

1 Audited by KPMG LLP, Singapore2 Audited by other member firms of KPMG International3 Audited by S S Auditing4 Audited by Baker Tilly Berk BV5 Audited by DIA International Accounting


6 ASSOCIATES (CONT’D)

Significant associates include those considered significant as defined under the Singapore Exchange Limited listing manual if the Group’s share of net tangible assets represent 20% or more of the Group’s consolidated net tangible assets, or if the Group’s share of pre-tax profit account for 20% or more of the Group’s consolidated pre-tax profit.

The summarised financial information relating to associates is not adjusted for the percentage of ownership held by the Group.

The financial information of associates is as follows:

Group2008 2007

$’000 $’000Income statementRevenue 234,570 190,432Expenses (216,747) (184,714)Profit after taxation 17,823 5,718

Balance sheetTotal assets 172,591 92,794Total liabilities 115,292 59,323

The Group’s share of the associates’ commitments is as follows:

2008 2007$’000 $’000

(a) Capital commitments Expenditure for property, plant and equipment:

Contracted but not provided for 2,171 4,249

(b) Non-cancellable operating lease commitments Payable: Within 1 year 346 860 After 1 year but within 5 years 1,433 321 After 5 years 11,030 2,747

12,809 3,928 Receivable: Within 1 year 2,531 911 After 1 year but within 5 years 8,378 4,610 After 5 years 7,216 8,518

18,125 14,039

91


7 JOINTLy-CONTROLLED ENTITIES

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Investments in jointly-controlled entities 9,275 8,832 3,815 3,815Quasi-equity loans 1,370 1,384 1,370 1,384

10,645 10,216 5,185 5,199

The quasi-equity loans to a jointly-controlled entity are interest-free and formed part of the Group’s net investment in jointly-controlled entities. The loans are unsecured and settlement is neither planned nor likely to occur in the foreseeable future.

Details of the significant jointly-controlled entities are as follows:

Name of jointly-controlled entities

Country of incorporation/

business


2008 2007% %

1 Cambridge Industrial Property Management Pte Ltd Singapore - 50.0

2 Fujian Alt-CWT Logistic Co., Ltd (formerly known as Fuzhou Harbour-CWT Co.,Ltd) People’s Republic of China 49.0 49.0

3 JIC Inspection Services Pte Ltd Singapore 22.0 22.0

4 CWT-SML Logistics LLC United Arab Emirates 40.0 40.0

1 Audited by KPMG LLP, Singapore2 Audited by other member firms of KPMG International3 Audited by Deloitte & Touche, Singapore4 Audited by Deloitte & Touche, United Arab Emirates

Significant jointly-controlled entities include those considered significant as defined under the Singapore Exchange Limited listing manual if the Group’s share net tangible assets represent 20% or more of the Group’s consolidated net tangible assets, or if the Group’s share pre-tax profit account for 20% or more of the Group’s consolidated pre-tax profit.


7 JOINTLy-CONTROLLED ENTITIES (CONT’D)

The Group’s share of the jointly-controlled entities’ results, assets and liabilities is as follows:

Group2008 2007

$’000 $’000Assets and liabilitiesNon-current assets 8,846 9,008Current assets 5,504 5,891Current liabilities (2,972) (3,127)Non-current liabilities (2,378) (2,940)Net assets 9,000 8,832Cumulative share of unrecognised losses * 275 -

9,275 8,832ResultsRevenue 14,401 14,003Expenses (12,513) (12,191)Profit after taxation 1,888 1,812

* At 31 December 2008, the Group’s cumulative share of unrecognised losses for a jointly-controlled entity had exceeded the Group’s cost of investment in this jointly-controlled entity.

The Group’s share of the jointly-controlled entities’ commitments is as follows:

2008 2007$’000 $’000

Non-cancellable operating lease commitments

Payable: Within 1 year 232 312 After 1 year but within 5 years 1,392 1,017 After 5 years 13,077 13,580

14,701 14,909Receivable: Within 1 year 15 132 After 1 year but within 5 years - 12

15 144

93


8 FINANCIAL ASSETS

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Quoted equity securities available-for-sale 30,606 31,956 17,007 17,757Less: Impairment losses (18,225) - (10,125) -

12,381 31,956 6,882 17,757Unquoted equity securities available-for-sale 48 48 - -

12,429 32,004 6,882 17,757

9 NON-CURRENT RECEIvABLES


$’000 $’000 $’000 $’000Non-current portion of:Loan to minority shareholder of a subsidiary 1,375 1,958 - -Loan to a jointly-controlled entity 16 440 - - -Loan to a subsidiary 15 - - 6,500 6,500Finance lease receivables 10 1,220 1,725 - -

3,035 3,683 6,500 6,500

The loan to minority shareholder of a subsidiary is unsecured, interest-free and repayable in March 2010. The loan is measured at an implied rate of 10.5% per annum since inception.

10 FINANCE LEASE RECEIvABLES

GroupNote 2008 2007

$’000 $’000Amounts receivable under finance leases:Gross investment 2,070 2,622Unearned interest income (219) (309)Net receivables 1,851 2,313

Current 14 631 588Non-current 9 1,220 1,725

1,851 2,313


10 FINANCE LEASE RECEIvABLES (CONT’D)

Gross investment

Unearned income

Net investment

$’000 $’000 $’0002008Within 1 year 697 (66) 631After 1 year but within 5 years 895 (119) 776After 5 years 478 (34) 444

2,070 (219) 1,851

2007Within 1 year 678 (90) 588After 1 year but within 5 years 1,308 (163) 1,145After 5 years 636 (56) 580

2,622 (309) 2,313

The Group entered into finance lease arrangements for certain of its plants and motor vehicles. The average term of finance leases entered into ranges from 3 to 10 years (2007: 3 to 10 years).

The interest rate inherent in the leases is fixed at the agreement date throughout the lease term. The average effective interest rate ranges from 3.7% to 5.7% (2007: 3.7% to 5.7%) per annum.

The Group recognised contingent rents of $46,000 (2007: $37,000) as “finance income”.

The carrying amount of the Group’s finance lease receivables at the balance sheet date approximates its fair value, based on discounting the estimated cash flows at the market rate.

95


11 DEFERRED TAx

Movements in deferred tax assets and liabilities (prior to offsetting of balances) during the year are as follows:

At1/1/2007

Translationdifferences

Acquisitionthrough

business combinations

(note 32)

Recognisedin income

statement(note 30)

At31/12/2007

Group $’000 $’000 $’000 $’000 $’000

Deferred tax liabilitiesFair value adjustment on leasehold building 296 - 990 (296) 990Property, plant and equipment 2,889 7 (306) (2,050) 540Intangible assets 2,040 - - - 2,040

5,225 7 684 (2,346) 3,570Deferred tax assetsTrade and other receivables (674) (1) - 483 (192)Trade and other payables (436) 1 - 195 (240)Provisions - (3) - (215) (218)Unutilised tax losses - 4 - (85) (81)

(1,110) 1 - 378 (731)Company

Deferred tax liabilitiesProperty, plant and equipment 1,255 - - (900) 355

Deferred tax assetsTrade and other receivables (142) - - - (142)Trade and other payables (63) - - - (63)

(205) - - - (205)


11 DEFERRED TAx (CONT’D)

At1/1/2008

Translationdifferences

Acquisitionthrough

business combinations

(note 32)

Recognisedin income

statement(note 30)

At31/12/2008

$’000 $’000 $’000 $’000 $’000Group

Deferred tax liabilitiesFair value adjustment on leasehold building 990 51 850 (207) 1,684Property, plant and equipment 540 (25) 161 1,415 2,091Intangible assets 2,040 243 4,166 (342) 6,107

3,570 269 5,177 866 9,882Deferred tax assetsTrade and other receivables (192) 45 - (170) (317)Trade and other payables (240) 15 - (178) (403)Provisions (218) 36 - (62) (244)Unutilised tax losses (81) 1 - (916) (996)

(731) 97 - (1,326) (1,960)Company

Deferred tax liabilitiesProperty, plant and equipment 355 - - 517 872

Deferred tax assetsTrade and other receivables (142) - - 142 -Trade and other payables (63) - - (15) (78)Unutilised tax losses - - - (998) (998)

(205) - - (871) (1,076)

Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxation authority. The amounts determined after appropriate offsetting are included in the balance sheets as follows:

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Deferred tax liabilities 9,204 3,795 - 150Deferred tax assets (1,282) (956) (204) -

97


11 DEFERRED TAx (CONT’D)

Deferred tax assets have not been recognised in respect of the following items:

Group2008 2007

$’000 $’000

Deductible temporary differences 18,848 18,147Unutilised tax losses 23,108 17,651

41,956 35,798

The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which certain subsidiaries operate. The deductible temporary differences do not expire under current tax legislation.

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the subsidiaries of the Group can utilise the benefits.

12 INvENTORIES

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Raw materials 867 272 - -Work-in-progress 93 236 - -Finished goods - 62 - -Consumables, equipment and spare parts 227 448 7 23Merchandise 734 364 718 356Allowance for inventory obsolescence - (119) - -

1,921 1,263 725 379

The inventory obsolescence of $119,000 was recognised in 2007 as the inventories belonging to the ceased business activities had become obsolete. In 2008, the allowance for inventory obsolescence was utilised by writing off the underlying inventories.

Raw materials and consumables and changes in finished goods and work-in-progress, recognised in cost of sales amounted to $11,126,000 (2007: $3,936,000).


13 CONTRACT WORK-IN-PROGRESS

GroupNote 2008 2007

$’000 $’000

Costs incurred and attributable profits 337,182 296,969Allowance for foreseeable losses (1,799) -

335,383 296,969Progress billings (340,316) (300,689)

(4,933) (3,720)Represented by:Progress billing receivables 14 2,320 3,904Accrued amount payable and advance billings 22 (7,253) (7,624)

(4,933) (3,720)

The change in allowance for foreseeable losses during the year is as follows:

Group2008 2007

$’000 $’000

At 1 January - -Allowance made during the year 1,799 -At 31 December 1,799 -

The Group assesses allowance for foreseeable losses by taking into account the contracted revenue, estimated costs to completion, project duration and overruns. It is possible that management estimate is not indicative of future losses that it will incur. Any increase or decrease would affect profit or loss in the future years. In 2008, the allowance for foreseeable losses included in cost of sales is $1,799,000.

99


14 TRADE AND OThER RECEIvABLES


$’000 $’000 $’000 $’000

Trade receivables 110,869 94,482 11,621 11,422Less: Impairment losses (1,930) (1,534) (269) (91)

108,939 92,948 11,352 11,331Amounts due from:Subsidiaries:- Trade and non-trade 17 - - 10,029 30,713- Loan 15 - - 99,049 51,422Related parties:- Trade 2,137 3,688 1,021 1,339- Non-trade - 10 - -Associates:- Trade 2,131 2,393 955 702- Non-trade 5 26 - -Jointly-controlled entities:- Trade 316 149 90 149- Non-trade 273 358 18 36- Loan 16 - - - -Minority shareholders of subsidiaries (non-trade) 352 140 - -Staff loans 111 284 8 -Finance lease receivables 10 631 588 - -Interest receivables 48 120 209 824Other receivables 5,471 2,559 2,070 -Progress billing receivables 13 2,320 3,904 - -Total loans and receivables 122,734 107,167 124,801 96,516Reimbursement for contingent liabilities assumed on business combinations 581 581 - -Deposits 2,914 2,608 172 238Prepayments 6,898 3,904 758 445Deposits for acquisition of property, plant and

equipment 3,630 16,331 - -Impairment losses (3,630) - - -

- 16,331 - -133,127 130,591 125,731 97,199

$4,403,000 (2007: $Nil) of the trade receivables have been pledged as security for bank loans granted to the Group.

The non-trade amounts due from, subsidiaries, related parties, associates, jointly-controlled entities and minority shareholders of subsidiaries are unsecured, interest-free and repayable on demand.

Owing to the termination of development projects, the Group recognised impairment losses of $3,630,000 (2007: $Nil) on the deposits for acquisition of property, plant and equipment in the current year’s income statement and recorded it under “other operating expenses”.


14 TRADE AND OThER RECEIvABLES (CONT’D)

The maximum exposure to credit risk for loans and receivables at the reporting date (business segment) is:

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000Business segmentLogistics 103,772 87,255 124,801 96,516Engineering 18,962 19,912 - -

122,734 107,167 124,801 96,516

The ageing of loans and receivables at the reporting date is:

GrossImpairment

losses GrossImpairment

losses2008 2008 2007 2007

$’000 $’000 $’000 $’000Group

Not past due 76,481 (13) 63,687 -Past due 0 – 30 days 19,632 (94) 17,292 (26)Past due 31 – 90 days 18,034 (60) 12,718 (52)Past due 91 – 180 days 4,814 (308) 6,212 (118)Past due more than 180 days 5,703 (1,455) 8,792 (1,338)

124,664 (1,930) 108,701 (1,534)Company

Not past due 115,978 - 83,829 -Past due 0 – 30 days 2,239 - 2,271 -Past due 31 – 90 days 1,468 - 1,963 -Past due 91 – 180 days 1,235 - 914 -Past due more than 180 days 4,150 (269) 7,630 (91)

125,070 (269) 96,607 (91)

The change in impairment loss in respect of trade receivables during the year is as follows:

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

At 1 January 1,534 3,795 91 649Impairment loss recognised/(reversed) 1,437 245 181 (537)Impairment loss utilised (863) (2,445) (3) (21)Translation differences (178) (61) - -At 31 December 1,930 1,534 269 91

The Group assessed collectibility based on historical default rates to determine the impairment loss to be recognised. Management reviewed trade receivables aging and believes that no impairment loss is necessary in respect of the remaining trade receivables due to the good track records and reputation of its customers.

101


14 TRADE AND OThER RECEIvABLES (CONT’D)

The Group’s primary exposure to credit risk arises through its trade and other receivables. Concentration of credit risk relating to these trade and other receivables is limited due to the Group’s many varied customers, which are internationally dispersed. The Group’s historical experience in the collection of accounts receivable falls within the recorded allowances. Due to these factors, management believes that no additional credit risk beyond the amounts provided for collection losses is inherent in the Group’s trade and other receivables.

15 LOANS TO SUBSIDIARIES


$’000 $’000Non-currentLoan to a subsidiary 9 6,500 6,500

CurrentLoan to subsidiaries 14 99,049 51,422

The non-current loan to a subsidiary is unsecured. The loan bears floating interest at a rate of 3.3% per annum as at 31 December 2008 (2007: 3.9%). The interest rate reprices on half yearly basis.

The current loans to subsidiaries are unsecured and repayable on demand. The loans bear floating interest from 2.5% to 3.5% per annum as at 31 December 2008 (2007: 3.6%). The interest rate reprices on monthly or quarterly basis.

16 LOAN TO JOINTLy-CONTROLLED ENTITIES

GroupNote 2008 2007

$’000 $’000Non-currentLoan to a jointly-controlled entity 9 440 -

CurrentLoan to a jointly-controlled entity 131 131Impairment loss (131) (131)

14 - -

The non-current loan to a jointly-controlled entity is unsecured, has no fixed term of repayment and bears fixed interest rate of 5% per annum.

The current loan to a jointly-controlled entity is unsecured and bears interest at an effective rate of 3.7% (2007: 3.7%) per annum. The interest rate reprices on an annual basis. The loan was originally repayable within two years from the date of disbursement of the loan but in 2006, the maturity date of the loan was extended to 25 February 2008. No further extension in maturity date has been granted. The Group recognised an impairment loss of $131,000 on this loan as a result of the jointly-controlled entity defaulting the loan repayment on extended maturity date.


17 AmOUNTS DUE FROm SUBSIDIARIES

Company2008 2007

$’000 $’000Amounts due from subsidiaries- trade 11,609 14,149- non-trade 599 18,584

12,208 32,733Impairment losses (2,179) (2,020)

10,029 30,713

All the balances with subsidiaries are unsecured, interest-free and repayable on demand.

The change in impairment losses in respect of amounts owing by subsidiaries during the year is as follows:

Company2008 2007

$’000 $’000

At 1 January 2,020 1,914Impairment losses 770 106Impairment losses utilised (611) -At 31 December 2,179 2,020

The Company assessed collectibility of the balances, having considered the financial conditions of the subsidiaries and their ability to make the required repayments. Management believes that no further impairment loss beyond the recorded allowances is necessary. If the financial conditions of the subsidiaries were to deteriorate subsequently, further impairment loss may then be required in future periods.

18 CASh AND CASh EqUIvALENTS


$’000 $’000 $’000 $’000

Fixed deposits 20,440 16,344 - -Cash and bank balances 57,250 35,431 4,585 366Cash and cash equivalents 77,690 51,775 4,585 366Less:Bank overdrafts 21 (1,003) -Fixed deposits pledged (132) -Cash and cash equivalents in the cash flow

statement 76,555 51,775

Included in bank overdrafts as at 31 December 2008 is an amount of $891,000 which is unsecured. The remainder of $112,000 is secured on certain fixed deposits, a lien on trade receviables and fixed and floating charges over certain property, plant and equipment.

103


18 CASh AND CASh EqUIvALENTS (CONT’D)

The weighted average effective interest rates per annum at the balance sheet date are as follows:

Group2008 2007

% %

Fixed deposits 3.82 3.89Bank overdrafts 5.24 -

Interest rates reprice at intervals of one week, one, three or six months.

19 ShARE CAPITAL

Note

Group and Company2008 2007

No. ofshares

No. ofshares

(’000) $’000 (’000) $’000Issued and fully paid, with no par value:Ordinary sharesAt 1 January 574,305 149,390 346,203 65,132Right issue of shares (i) - - 173,102 39,813*Issue of new ordinary shares (ii) - - 55,000 44,445*At 31 December 574,305 149,390 574,305 149,390

* Net of transaction cost amounting to $1,205,000, of which $75,000 was paid to a firm in which a director is a member.

The Company issued the following shares in 2007:

(i) On 7 June 2007, a total of 173,101,550 ordinary shares were allotted relating to the rights issue on the basis of one right share for every two existing shares held by the shareholders.

(ii) On 19 June 2007, the Company issued 55,000,000 new ordinary shares in the capital of the Company at an issued price of $0.83 per share.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.

Capital management

The Board defines “Capital” to include share capital, reserves and minority interests. The Board’s policy is to maintain a strong capital base to sustain the future development and expansion of the Group’s business, so as to maintain investor and creditor confidence in the Group. The Board of Directors monitors the level of dividend payment by taking into account the Group’s business expansion requirements.


19 ShARE CAPITAL (CONT’D)

The Board of Directors also seeks to maintain a healthy level of borrowings with a view to optimise financial return to shareholders. The Group targets to achieve a return on shareholders’ equity (“ROE”) of between 13.0% and 18.0%. In 2008, the Group achieved a ROE of 27.8% (2007: 17.0%).

The Group monitors capital on the basis of the debt to equity ratio. This ratio is calculated as total borrowings divided by equity. Total borrowings refer to “financial liabilities” as shown in the consolidated balance sheet; and equity refers to share capital, reserves and minority interests as shown in the consolidated balance sheet.

The Group’s strategy, which was unchanged from 2007, was to maintain the debt to equity ratio under 1.0. The debt to equity ratio at 31 December 2008 and 2007 were as follows:

Group2008 2007

$’000 $’000

Total borrowings 139,833 117,472Equity 283,136 216,596Debt to equity ratio 0.5 0.5

There were no changes in the Group’s approach to capital management during the year.

The Company and its subsidiaries are not subject to externally imposed capital requirements, except for certain financial covenants (including those relating to consolidated net assets) as stipulated by its bankers in respect of credit facilities drawn down.

20 RESERvES

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Fair value reserve 5 1,175 - 750Currency translation reserve (2,347) (2,853) - -Statutory reserves 474 417 - -Accumulated profits 119,154 56,785 56,270 13,973

117,286 55,524 56,270 14,723

The fair value reserve comprises the cumulative net changes in the fair values of available-for-sale financial assets.

The currency translation reserve of the Group comprises foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Company.

The statutory reserve relates to profits set aside in accordance with legislation in the countries of certain foreign entities and is non-distributable.

105


21 FINANCIAL LIABILITIES


$’000 $’000 $’000 $’000Current liabilitiesBank overdrafts 18 1,003 - - -Bank loans: Loan 1 (a) 11,279 2,300 11,279 2,300 Loan 2 (b) 1,889 1,889 1,889 1,889 Loan 3 (c) 4,600 4,600 4,600 4,600 Loan 4 (d) 19,800 14,850 19,800 14,850 Loan 6 (f) 750 3,000 - - Loan 7 (g) 252 - - - Loan 8 (h) 367 - - - Loan 9 (i) 58 - - -Hire purchase and finance lease liabilities (j) 884 256 - -Total 40,882 26,895 37,568 23,639

Non-current liabilitiesBank loans: Loan 2 (b) 8,906 10,794 8,906 10,794 Loan 3 (c) 8,733 11,731 8,733 11,731 Loan 4 (d) 21,230 28,430 21,230 28,430 Loan 5 (e) 56,500 38,000 56,500 38,000 Loan 6 (f) - 750 - - Loan 7 (g) 1,685 - - - Loan 9 (i) 185 - - -Hire purchase and finance lease liabilities (j) 1,712 872 - -Total 98,951 90,577 95,369 88,955

(a) Loan 1 is unsecured and repayable in full upon maturity in January 2009.

(b) Loan 2 is secured on:

(i) First all-monies Legal Mortgage over a leasehold land and building;

(ii) First fixed charge over the equipment and machineries financed;

(iii) The project account in relation to the development of the warehouse; and

(iv) The assignment of all insurance policies, lease payments, lease agreements and construction contract in respect of the construction of the warehouse development.

The loan is repayable over 15 consecutive quarterly instalments of $472,000 commencing from 31 March 2007 and a final instalment of $5,602,000.


21 FINANCIAL LIABILITIES (CONT’D)

(c) Loan 3 is secured by a deed of assignment of building agreement and mortgage-in-escrow in closed format in respect of a leasehold land and building and subsequently upon issuance of the title documents relating to the property, a first legal closed mortgage of the property. The loan is repayable over 19 quarterly instalments of $1,150,000 commencing from 7 October 2007 and a final instalment of the balance amount outstanding upon completion of construction of a warehouse development.

(d) Loan 4 is unsecured and repayable over 8 quarterly instalments of $4,950,000 commencing from 15 May 2008 and a final instalment of the balance amount outstanding.

(e) Loan 5 is unsecured and repayable upon maturity on 15 May 2010.

(f) Loan 6 is unsecured and repayable over 12 consecutive quarterly instalments commencing from 26 April 2006.

(g) Loan 7 is secured on property, plant and equipment with a carrying amount of $3,333,000 and repayable over 11 years from 1 January 2004.

(h) Loan 8 is secured by a change over a leasehold property, trade receivables and a cross-guarantee scheme of certain subsidiaries and repayable over 4 years from 1 December 2005.

(i) Loan 9 is secured by a change over certain property, plant and equipment, trade receivables and a cross-guarantee scheme of certain subsidiaries and repayable over 6 years from 1 February 2007.

(j) Hire purchase and finance lease liabilities

The Group has obligations under hire purchase and finance leases that are repayable as follows:

Principal Interest Payments$’000 $’000 $’000

Group

2008Repayable within 1 year 884 358 1,242Repayable after 1 year but within 5 years 1,651 396 2,047Repayable after 5 years 61 11 72

2,596 765 3,3612007Repayable within 1 year 256 96 352Repayable after 1 year but within 5 years 791 142 933Repayable after 5 years 81 2 83

1,128 240 1,368

107



Terms and debt repayment schedule

The terms and conditions of outstanding loans and borrowings are as follows:

Nominal 2008 2007interest

rateyear of

maturityFace value

Carrying amount

Face value

Carrying amount

Group % $’000 $’000 $’000 $’000

S$ floating rate loansSWAP +

0.5% - 0.7% 2010 - 2012 122,087 1 121,658 111,013 1 110,294

S$ floating rate loans SIBOR + 0.8% 2009 750 750 3,750 3,750

S$ floating rate loans 2.0% - 2.9% 2009 11,279 11,279 2,300 2,300

GBP fixed rate loans 6.5% 2015 1,937 1,937 - -

Euro fixed rate loans 4.7% - 5.7% 2009 - 2013 610 610 - -

Bank overdrafts 3.3% - 11.5% 2009 1,003 1,003 - -

Hire purchase and finance lease liabilities 2.5% - 17.3% 2008 - 2014 2,596 2,596 1,128 1,128

140,262 139,833 118,191 117,472Company

S$ floating rate loansSWAP +

0.5% - 0.7% 2010 - 2012 122,087 1 121,658 111,013 1 110,294

S$ floating rate loans 2.0% - 2.9% 2009 11,279 11,279 2,300 2,300133,366 132,937 113,313 112,594

1 Before the deduction of unamortised debt transaction costs of $720,000



The following are the expected contractual undiscounted cash inflows (outflows) of financial liabilities, including interest payments and excluding the impact of netting agreements:

Cash flowsCarrying amount

Contractual cash flows

Within1 year

Within1 to 5 years

more than5 years

Group $’000 $’000 $’000 $’000 $’0002008Floating rate loans 133,687 (138,659) (40,937) (97,722) -Fixed rate loans 2,547 (2,826) (820) (1,482) (524)Hire purchase and finance lease liabilities 2,596 (3,361) (1,242) (2,047) (72)Bank overdrafts 1,003 (1,007) (1,007) - -Trade and other payables* 130,242 (130,242) (130,242) - -

270,075 (276,095) (174,248) (101,251) (596)2007Floating rate loans 114,044 (125,272) (27,948) (97,324) -Fixed rate loans 2,300 (2,306) (2,306) - -Hire purchase and finance lease liabilities 1,128 (1,368) (352) (933) (83)Trade and other payables* 96,084 (96,084) (96,084) - -

213,556 (225,030) (126,690) (98,257) (83)

* Excluding accrued amount payable and advance billings, as well as deposits received

Cash flowsCarrying amount

Contractual cash flows

Within1 year

Within 1 to 5 years

$’000 $’000 $’000 $’000Company2008Floating rate loans 132,937 (137,909) (40,187) (97,722)Trade and other payables 30,892 (31,042) (31,042) -

163,829 (168,951) (71,229) (97,722)2007Floating rate loans 110,294 (121,470) (24,897) (96,573)Fixed rate loans 2,300 (2,306) (2,306) -Trade and other payables* 66,251 (66,251) (66,251) -

178,845 (190,027) (93,454) (96,573)

* Excluding deposits received

109


22 TRADE AND OThER PAyABLES


$’000 $’000 $’000 $’000

Trade payables and accrued operating expenses 128,388 93,935 16,572 14,155Accrued amount payable and advance billings 13 7,253 7,624 - -Deposits received 863 1,303 - 744Amounts due to:Subsidiaries:- Trade - - 2 50- Non-trade - - 1,388 19,430- Loan - - 12,500 32,300Related parties:- Trade 946 1,778 429 312- Non-trade 390 32 - -- Loan 9 - - -Associates:- Trade 255 112 1 -- Non-trade 1 2 - -Jointly-controlled entities:- Trade 26 21 - 4- Non-trade 227 204 - -

138,358 105,011 30,892 66,995

The non-trade amounts due to the subsidiaries, related parties, associates and jointly-controlled entities are unsecured, interest-free and repayable on demand.

The loans due to subsidiaries are unsecured, bear interest at an effective rate of 1.5% (2007: 3.1%) per annum and are repayable on demand.

23 DEFERRED GAIN

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000Deferred gain:- current 10,194 6,500 7,592 4,250- non-current 44,729 36,835 31,736 23,649

54,923 43,335 39,328 27,899

Deferred gain relates to the excess of sales proceeds over the fair values of the leasehold buildings disposed of under sale and leaseback arrangements. Deferred gain is released to income statement using the straight-line basis over the leaseback period ranging from 5 to 8 years.


24 PROvISIONS

Warranties

Claims fordamage of goods and

services

Site restoration

cost Total$’000 $’000 $’000 $’000

Group

At 1 January 2008 131 1,251 506 1,888Provision made 60 820 10 890Reversal of provision - (499) - (499)Provision utilised - (178) - (178)Translation differences - (7) - (7)At 31 December 2008 191 1,387 516 2,094

Company

At 1 January 2008 - 21 284 305Provision made - 130 - 130At 31 December 2008 - 151 284 435

The provisions made by the Group and the Company are in respect of:

(i) warranty claims for completed projects. The provision is made based on estimates from historical warranty data and a weighting of all possible outcomes against their associated probabilities;

(ii) claims by customers for damage of goods and liquidated damages for services rendered in the course of business including third party claims for accident; and

(iii) obligations to carry out site restoration work on the leasehold buildings used for warehouse operations.

25 SEGmENT REPORTING

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segments), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

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

Inter-segment pricing is determined on an arm’s length basis.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise corporate expenses, interest income, interest expenses and related assets and liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.

111


25 SEGmENT REPORTING (CONT”D)

Business segments

The Group comprises the following main business segments:

(a) Logistics services(b) Engineering services(c) Other services

Logistics services mainly comprise warehousing, transportation, freight forwarding and cargo consolidation, collateral management services, surface preparation of metal materials for corrosion control and container depot operations.

Engineering services include maintenance and repairs of vehicles and buildings.

Other services of the Group comprise project management services and other investment-holding activities.

Geographical segments

The logistics services segment is managed on a worldwide basis and the Group operates principally in Singapore, China, Asia/Australia (excluding Singapore and China), Europe and other regions. Singapore is a major market for logistics and engineering service; Asia/Australia (excluding Singapore and China) and China are also major markets for logistics services.

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of the operations. Segment assets are based on the geographical location of the assets.


25 SEGmENT REPORTING (CONT’D)

Logistics services

Engineering services

Other services Total

2008 2007 2008 2007 2008 2007 2008 2007$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

(a) Business segments

Revenue and expenses

Revenue 518,658 450,937 84,050 83,970 - - 602,708 534,907Segmental results 63,555 53,741 3,382 3,917 - - 66,937 57,658Gain on disposal of property,

plant and equipment 69,965 9,223 - 700 - - 69,965 9,923Gain/(loss) on disposal

or liquidation of jointly-controlled entities - (85) 1,299 - - - 1,299 (85)

Gain on disposal of an associate 5,421 - - - - - 5,421 -

Gain on deconsolidation of a subsidiary 50 - - - - - 50 -

Impairment losses on property, plant and equipment (3,014) - - - - - (3,014) -

Impairment losses on deposits for acquisition of property, plant and equipment (3,630) - - - - - (3,630) -

Unallocated corporate expenses (48,988) (32,321)

Profit from operations 88,040 35,175Finance income 3,852 5,634Finance expense (23,192) (4,668)Share of profit of jointly-

controlled entities 1,141 1,056 747 756 - - 1,888 1,812Share of profit/(losses) of

associates 6,064 3,237 - - 997 (201) 7,061 3,036Income tax expense (4,872) (3,850)Profit after income tax 72,777 37,139Minority interests 1,135 (2,353)Profit attributable to equity

holders of the parent 73,912 34,786

113


25 SEGmENT REPORTING (CONT’D)

Logistics services

Engineering services

Other services Total

2008 2007 2008 2007 2008 2007 2008 2007$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

(a) Business segments

Assets and liabilities Segment assets 460,004 341,449 24,973 28,655 - - 484,977 370,104 Interests in associates 23,940 13,038 - - - 852 23,940 13,890 Interests in jointly-controlled

entities 9,610 8,455 1,035 1,761 - - 10,645 10,216 Unallocated assets - - - - - - 114,418 100,652 Total assets 493,554 362,942 26,008 30,416 - 852 633,980 494,862

Segment liabilities 172,564 127,113 22,136 21,852 - - 194,700 148,965 Unallocated liabilities - - - - - - 156,144 129,301 Total liabilities 172,564 127,113 22,136 21,852 - - 350,844 278,266

Other segmental information

Provisions 331 310 60 60 - - 391 370 Capital expenditure 113,016 134,736 253 220 - - 113,269 134,956 Depreciation of property,

plant and equipment (15,638) (9,438) (292) (352) - - (15,930) (9,790) Amortisation of: - Intangible assets (662) (590) (1,928) (1,997) - - (2,590) (2,587) - Deferred gain 7,824 6,085 - - - - 7,824 6,085 Gain on disposal of available-

for-sale financial assets - 1,133 - - - - - 1,133 Amounts written-off for: - Property, plant and

equipment (11) (16) - - - - (11) (16) - Available-for-sale financial

assets - (23) - - - - - (23) Negative goodwill on

acquisition of subsidiaries - 6,734 - - - - - 6,734 Impairment losses on

available-for-sale financial assets (18,225) - - - - - (18,225) -


25 SEGmENT REPORTING (CONT”D)

(b) Geographical segments

2008 2007$’000 $’000

Revenue

Singapore 321,369 290,614China 113,378 101,744Asia/Australia (excluding Singapore and China) 103,013 102,203Europe 54,217 32,065Other regions 10,731 8,281Total 602,708 534,907

Capital expenditure

Singapore 93,000 116,551China 14,950 5,439Asia/Australia (excluding Singapore and China) 2,410 2,089Europe 1,295 -Other regions 1,614 10,877Total 113,269 134,956

Total assets

Singapore 423,210 385,056China 61,903 45,650Asia/Australia (excluding Singapore and China) 30,936 32,973Europe 94,401 21,192Other regions 23,530 9,991Total 633,980 494,862

26 REvENUE

Group2008 2007

$’000 $’000

Rendering of services 594,325 528,528Sale of goods 8,383 6,379

602,708 534,907

115


27 PROFIT BEFORE INCOmE TAx

The following items have been included in arriving at profit before income tax:

Group2008 2007

$’000 $’000

Negative goodwill on acquisition of subsidiaries* - (6,734)Staff costs 105,803 86,031Contributions to defined contribution plan included in staff costs 7,384 6,216Operating lease expense 26,663 19,421Non-audit fees paid to:- Auditors of the Company 77 94- Other auditors 252 49Professional fees paid to a firm in which a director is a member 135 143Depreciation of property, plant and equipment 15,930 9,790Amortisation of:- Intangible assets 2,590 2,587- Deferred gain (7,824) (6,085)Amounts written-off for:- Property, plant and equipment 11 16- Bad debts 493 155- Available-for-sale financial assets - 23- Inventories 5 119Impairment losses on:- Property, plant and equipment 3,014 -- Available-for-sale financial assets 18,225 -- Deposits for acquisition of property, plant and equipment 3,630 -- Loan to a jointly-controlled entity - 131Gain on deconsolidation of a subsidiary (50) -(Gain)/loss on disposal or liquidation of:- Property, plant and equipment* (69,965) (9,923)- An associate (5,421) -- Jointly-controlled entity (1,299) 85

* Negative goodwill and gain on disposal of property, plant and equipment are recognised in “Other income” in the income statement.

The gain on disposal of property, plant and equipment in 2008 relates to the sale of leasehold buildings under sale and leaseback arrangements.


28 DIRECTORS’ AND ExECUTIvE OFFICERS’ REmUNERATION

The compensation paid/payable to key management personnel is as follows:

Group2008 2007

$’000 $’000

Directors’ fees 491 487Senior management team remuneration* 12,212 8,912Post-employment benefits 250 393

12,953 9,792

* Represents short-term employees benefits

29 FINANCE INCOmE AND ExPENSE

Group2008 2007

$’000 $’000

Gain on disposal of available-for-sale financial assets - 1,133Dividend income from available-for-sale financial assets 2,654 3,045Interest income:- Cash and cash equivalents 796 1,201- Finance lease 91 60- Jointly-controlled entities 4 2- Available-for-sale financial assets 28 -- Accretion of loan to minority shareholder of a subsidiary 181 185- Others 98 8Finance income 3,852 5,634

Exchange loss (net) (2,052) (1,142)Impairment loss on available-for-sale financial assets (18,225) -Interest expense:- Bank overdrafts (19) (1)- Bank loans (2,845) (4,025)- Finance leases (92) (46)- Implied discount on loan to minority shareholder of a subsidiary at inception - (672)- Others (602) (60)Less: Interest expense capitalised into property, plant and equipment 643 1,278Finance expenses (23,192) (4,668)Net finance income and expenses recognised in income statement (19,340) 966

117


30 INCOmE TAx ExPENSE

Group2008 2007

$’000 $’000Current tax expenseCurrent year 5,925 6,003Over provided in prior years (593) (185)

5,332 5,818Deferred tax expenseOrigination and reversal of temporary differences (1,110) (1,886)Under provided in prior years 1,046 -Reduction in tax rate (396) (82)

(460) (1,968)Total income tax expense 4,872 3,850

Reconciliation of effective tax rate

Group2008 2007

$’000 $’000

Profit before income tax 77,649 40,989

Tax calculated using Singapore tax rate of 18% (2007: 18%) 13,977 7,378Effect of different tax rates in other countries 405 147Effect of reduction in tax rates (396) (82)Income not subject to tax (16,996) (5,207)Effect of utilisation of tax losses and wear and tear allowances

not previously recognised as deferred tax assets (19) (255)Expenses not deductible for tax purposes 5,902 518Effect of tax benefits not recognised 1,546 1,536Under/(over) provided in prior years 453 (185)

4,872 3,850

Certain of the tax returns of the Group entities for prior years have not been finalised with the respective tax authorities. In arriving at the current tax expense of the Group, management made a best estimate of the expenditure required to settle its current tax liabilities based on its actual experience of similar transactions in the past, and in some cases, advice from its legal advisors on certain transactions.

In respect of the gain recognised on sale and leaseback of certain leasehold buildings, the Group continues to view the disposal of leasehold buildings as capital transactions and accordingly, the gain on disposal of leasehold buildings including the accretion of the deferred gain over the leaseback period are therefore not subject to corporate income tax.

Subsequent to the tax affairs being finalised by the tax authorities, there may be significant adjustments affecting the Group’s results in future periods.


31 EARNINGS PER ShARE

Group2008 2007

$’000 $’000Basic and diluted earnings per share

The basic and diluted earnings per share are based on: Profit for the year attributable to shareholders 73,912 34,786

No. of shares2008 2007(’000) (’000)

Issued ordinary shares at beginning of the year 574,304 346,203Effects of: Rights issue of shares - 98,644 Bonus element of rights issue of shares - 48,511 New shares issued - 29,534Weighted average number of shares issue during the year - 176,689Weighted average number of shares at end of the year 574,304 522,892

32 Acquisition of subsidiaries and minority interests

Acquisition of subsidiaries in FY2008

On 28 October 2008, the Group acquired 100% equity interest in CWT Commodities (Antwerp) NV (formerly known as HNN Logistics NV) (“Antwerp”), for a cash consideration of $32,776,000. In the two months to 31 December 2008, Antwerp contributed a net loss of $19,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 January 2008, Group revenue would have been $624,473,000 and net profit would have been $71,506,000.

On 28 October 2008, the Group acquired 60% equity interest in CWT Sitos Group B.V. (formerly known as Sitos Group B.V.) (“SitosG”), for a cash consideration of $17,119,000. In the two months to 31 December 2008, Sitos contributed a net profit of $454,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 January 2008, Group revenue would have been $643,188,000 and net profit would have been $75,275,000.

The acquisition of equity interest in Sitos was carried out concurrently with the Group’s acquisition of 30% equity interest in CWT Sitos B.V. (“Sitos”) and was negotiated with the same vendors. The sales and purchase agreement in respect of the acquisitions of equity interests in SitosG and Sitos provides for a contingent consideration payable to the vendors which is computed based on the extent the annual consolidated net profit of SitosG and Sitos exceeds Euro 2.3 million in the financial years ending 31 December 2009 and 2010 respectively. After taking into account the performance of SitosG and Sitos for the financial year ended 31 December 2008, as well as the profit projections for the financial year ending 31 December 2009 and having regard to the current economic conditions, management is of the view that the probability of paying the contingent consideration to the vendors is low. Hence, no provision for the contingent consideration has been made as at 31 December 2008.

The final allocation of the purchase price to the identifiable assets acquired and liabilities and contingent liabilities assumed in these business combinations are currently being determined and have not been completed. In the meantime, a provisional positive goodwill of $7,976,000, which results from the difference between the purchase consideration and the adjusted carrying amounts of the assets and liabilities acquired, is reported under “Intangible assets”.

119


32 ACqUISITION OF SUBSIDIARIES AND mINORITy INTERESTS (CONT’D)

The effects of acquisition of subsidiaries are provided below:

Carryingamounts

Fair value adjustments

Recognised values

Note 2008 2008 2008$’000 $’000 $’000

Property, plant and equipment 3 34,064 3,119 37,183Intangible assets 4 86 12,255 12,341Jointly-controlled entities (19) - (19)Non-current receivables 415 - 415Trade and other receivables 23,489 - 23,489Cash and cash equivalents 690 - 690Trade and other payables (14,102) - (14,102)Interest-bearing liabilities (4,651) - (4,651)Current tax payable (634) - (634)Deferred tax liabilities 11 (161) (5,016) (5,177)Minority interests (7,616) - (7,616)Net identifiable assets acquired and liabilities assumed 31,561 10,358 41,919Goodwill on acquisition 4 7,976Consideration paid * 49,895Less: Cash and cash equivalents of subsidiaries acquired (690)Cash flow on acquisition net of cash and cash equivalents acquired 49,205

* Include acquisition costs of $330,000

Pre-acquisition carrying amounts were determined based on applicable FRSs immediately before the acquisition. The values of assets, liabilities and contingent liabilities recognised on acquisition are their estimated fair values.

The provisional goodwill of $7,976,000 recognised on the acquisition of CWT Commodities (Antwerp) NV and CWT Sitos Group B.V. is attributable to the expected synergies and other benefits from integrating the newly acquired Europe operations with the Group’s existing operations and logistics network in Asia.

Acquisition of minority interest in FY2008

On 3 March 2008, the Group acquired the remaining 49% interests in C&P Commodity (India) Pvt Ltd (“CCI”) for a cash consideration of $17,000.



The carrying amount of the CCI’s net assets in the consolidated financial statements on the date of acquisition was $3,000. The share of net assets acquired, which comprise predominantly net monetary assets, approximates the fair values. Arising from this, the Group recognised a decrease in minority interest of $2,000; and the resulting positive goodwill of $15,000 is reported under “Intangible assets”.

The goodwill recognised on this acquisition is attributable to the ability to generate more future economic benefits from the provision of commodity logistics services in India.

Deconsolidation of subsidiary FY2008

During the current financial year, a subsidiary was deconsolidated following the voluntary liquidation of that subsidiary. The assets and liabilities of this subsidiary were not significant to the Group as the said subsidiary had not commenced business activities since its incorporation.

Acquisition of subsidiaries in FY2007

On 9 February 2007, the Group acquired all the shares in OCWS Logistics Pte Ltd (“OCWS”), for $20,094,000 satisfied by way of cash. In the 11 months to 31 December 2007, OCWS contributed a net profit of $2,007,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 January 2007, Group revenue would have been $537,653,000 and net profit would have been $37,352,000.

On 9 February 2007, the Group acquired all the shares in Trident Districentre Pte Ltd (“Trident”), for $10,500,003 satisfied by way of cash of $3 and an assignment of loan of $10,500,000 owing to the ex-vendor by Trident to the Company. In the 11 months to 31 December 2007, Trident contributed a net profit of $1,017,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 January 2007, Group revenue would have been $535,423,000 and net profit would have been $37,153,000.

On 31 October 2007, the Group acquired 80% shares in CWT Commodities Europe B.V. (“ComEur”, formerly known as JVT Shipping B.V.), for $565,000 satisfied by way of cash. In the two months to 31 December 2007, ComEur contributed a net profit of $91,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 January 2007, Group revenue would have been $540,139,000 and net profit would have been $37,344,000.

On 31 October 2007, the Group acquired 80% shares in Quality Logistic Warehousing B.V. (“QLW”), for $167,000 satisfied by way of cash. In the two months to 31 December 2007, QLW contributed a net loss of $29,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 January 2007, Group revenue would have been $536,014,000 and net profit would have been $37,176,000.

The positive and negative goodwill amounted to $656,000 and $6,734,000 which resulted from the difference between the purchase price and the adjusted carrying amounts of the assets and liabilities acquired and were reported under “Intangible assets” and “Other income” respectively.

The goodwill of $656,000 recognised on the acquisition of ComEur and QLW is attributable to the expected synergies and other benefits from integrating the newly acquired Europe operations and the Group’s existing major operations in Asia.

The negative goodwill represents a bargain purchase.

121



The effects of acquisition of subsidiaries are provided below:

Carryingamounts

Fair value adjustments

Recognised values

Note 2007 2007 2007$’000 $’000 $’000

Property, plant and equipment 3 20,449 4,960 25,409Financial assets 23 - 23Other non-current assets 40 - 40Deferred tax assets 11 385 - 385Inventories 305 - 305Trade and other receivables 14,529 - 14,529Cash and cash equivalents 5,203 - 5,203Trade and other payables (17,337) - (17,337)Interest-bearing liabilities (111) - (111)Current tax payable (446) - (446)Deferred tax liabilities 11 (79) (990) (1,069)Minority interests (26) - (26)Net identifiable assets and liabilities acquired 22,935 3,970 26,905Loan assignment deemed as purchase consideration 10,500Negative goodwill 27 (6,734)Goodwill on acquisition 4 656Consideration paid * 31,327Less: Cash and cash equivalents of subsidiaries acquired (5,203)Cash flow on acquisition net of cash and cash equivalents acquired 26,124

* Includes acquisition costs of $94,000

Acquisition of minority interest in FY2007

On 25 September 2007, the Group acquired the remaining 15% interests in CWT Commodities (China) Pte Ltd (formerly known as C & P Asia (China) Pte Ltd) (“CWTC”) from a key management personnel of CWTC, for a cash consideration of $2,000,000.

The carrying amount of the CWTC’s net assets in the consolidated financial statements on the date of acquisition was $5,795,000. The share of net assets acquired, which comprise predominantly net monetary assets, approximates the fair values. Arising from this, the Group recognised a decrease in minority interest of $828,000; and the positive goodwill of $1,172,000 is reported under “Intangible assets”.

The goodwill recognised on this acquisition is attributable to the ability to generate more future economic benefits from the collateral management services as a result of CWTC’s present market position in the industry.


33 FINANCIAL RISK mANAGEmENT

Overview

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

Credit risk

Credit risk is the potential financial loss resulting from the failure of a customer or a counter party to settle its financial and contractual obligations to the Group, as and when they fall due.

The Group has a credit policy in place whereby new customers are subject to credit evaluations based on available financial information and past experiences. The Group has established credit limits for customers and monitors their balances on an ongoing basis. Cash and fixed deposits are placed with banks and financial institutions, which are regulated.

At the balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheets.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalent and availability of funding as required. The Group monitors and maintains a level of cash and bank balances and credit facilities deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

The Group aims at maintaining flexibility in funding by keeping adequate liquidity available. Where necessary and at appropriate time, the Group would unlock cash from properties held to meet expansion needs.

The Group maintains adequate secured and unsecured loan facilities. As at 31 December 2008, the Group has unutilised loan facilities amounting to $144 million to fund its capital projects in progress and projects in the pipeline, as well as to meet working capital requirements and to service financing obligations.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and other price risk (including fuel/diesel prices and shipping freight rates) that affects the Group’s profit. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Interest rate risk

Certain of the Group’s term and other loans attract floating interest rate. The Group’s earnings are affected by changes in interest rates due to the impact such changes have on short-term cash deposits and debt obligations. The Group’s debt obligations are mainly denominated in Singapore dollars. Generally, the Group adopts a conservative approach in interest risk management. The Group’s policy is to maintain its borrowings such as to balance risks and cost effectiveness.

123


33 FINANCIAL RISK mANAGEmENT (CONT’D)

The Group does not use derivatives to hedge its interest rate risk.

Sensitivity analysis

In managing its interest rate risk, the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings. Over the longer term, however, any prolonged adverse change in interest rate can have a significant impact on profit.

For the variable rate bank loans, a change of 100 bp in interest rate at the reporting date would increase/(decrease) profit or loss (and the accumulated profits) by the amounts shown below. The analysis assumes that all other variables, in particular, foreign currency rates, remain constant.

Profit or loss100 bp 100 bp

increase decrease$’000 $’000

Group

31 December 2008Variable rate bank loans (1,337) 1,337

31 December 2007Variable rate bank loans (1,140) 1,140

Foreign exchange risk

The Group operates internationally and is exposed to foreign currency risks arising from various currency exposures. The Group’s exposure to foreign currency receivables is significantly matched by its exposure to foreign currency payables, both predominantly denominated in United States dollars.

The Group seeks to minimise its foreign currency exposures in foreign subsidiaries, associates and jointly-controlled entities by repatriating their earnings, where practicable. The Group also requires the foreign subsidiaries, associates and jointly-controlled entities to maintain their borrowings in the relevant foreign currencies which match their respective functional currencies.

In respect of the other monetary assets and liabilities held in currencies other than the functional currencies, the Group reviews the balances periodically to ensure the net exposure is kept at an acceptable level.

The Group does not use derivatives to hedge its foreign exchange risk at 31 December 2008.



The Group’s and Company’s exposures to foreign currencies are as follows:

US dollarSingapore

dollarEuro

dollarU.A.E.

Dirham$’000 $’000 $’000 $’000

Group

2008Trade and other receivables 12,774 2,473 1,166 385Cash and cash equivalents 6,647 334 1,000 -Trade and other payables (8,232) (590) (796) -Financial liabilities - (46) - -Current tax payable - (1,427) - -

11,189 744 1,370 3852007Trade and other receivables 12,625 2,227 - 386Cash and cash equivalents 7,757 4,341 - -Trade and other payables (8,441) (514) (437) -Financial liabilities - (56) - -Current tax payable - (1,802) - -

11,941 4,196 (437) 386Company

2008Trade and other receivables 751 - 21 -Cash and cash equivalents 1,129 - 241 -Trade and other payables (1,577) - (10) -

303 - 252 -2007Trade and other receivables 1,466 - - -Cash and cash equivalents 95 - - -Trade and other payables (33) - - -

1,528 - - -

125



Sensitivity analysis

A 10% strengthening of the Group’s major functional currencies against the following currencies at the reporting date would increase (decrease) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

Group Company

EquityProfit

or loss EquityProfit

or lossGroup $’000 $’000 $’000 $’000

31 December 2008US dollar - (1,119) - 30Singapore dollar - (74) - -Euro dollar - (137) - (25)U.A.E. Dirham (39) - - -

(39) (1,330) - 531 December 2007US dollar - (1,194) - (152)Singapore dollar - (420) - -Euro dollar - 44 - -U.A.E. Dirham (39) - - -

(39) (1,570) - (152)

A 10% weakening of the Group’s major functional currency against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Fair values

The aggregate net fair value of financial assets and financial liabilities which are not carried at fair value in the balance sheets as at 31 December, are represented in the following table:

Carrying amount

Fairvalue

Carrying amount

Fairvalue

2008 2008 2007 2007Group $’000 $’000 $’000 $’000

Financial asset Loan to minority shareholder of a subsidiary 1,375 1,255 1,958 1,958

Financial liabilitiesFixed interest rate bank loans 2,547 2,549 2,300 2,300Finance lease liabilities 1 2,596 2,596 1,128 1,128

5,143 5,145 3,428 3,428

1 The fair value of finance lease liabilities is estimated as the present value of future cash flows, discounted at market interest rates for homogeneous lease agreements. The estimated fair value reflects change in interest rate. The carrying amount of finance lease liabilities closely approximates the fair value since the market interest rate as at the balance sheet date closely approximates the effective interest rate implicit in the finance lease.



The following methods and assumptions are used to estimate fair values of the following significant classes of financial instruments not included above:

Cash and cash equivalents, trade and other receivables, trade and other payables

The carrying amounts approximate the fair values due to the relatively short-term nature of these financial instruments.

Investment in equity securities

The fair value of available-for-sale financial assets is determined by reference to their quoted bid price at the reporting date.

Floating interest rate bank loans and loan to a subsidiary

No fair value is calculated as the carrying amounts of these floating interest-bearing loans, which are repriced within six months interval, reflect the corresponding fair values.

Interest rates used in determining fair values

The interest rates used to discount estimated cash flows, where applicable, are based on the 5-year loan rates plus adequate credit spread or actual average cost of debt, whichever is higher:

Group2008 2007

% %

Finance lease receivables 3.7 - 5.7 3.7 - 5.7Loan to minority shareholder of a subsidiary 13.0 10.5Bank loans 2.0 - 11.5 3.1Finance lease liabilities 2.5 - 17.3 2.5 - 4.5

34 COmmITmENTS

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000Capital commitments:- contracted for but not provided 43,741 103,851 1,112 315- authorised but not contracted for 1,807 101,010 - -

45,548 204,861 1,112 315

127


34 COmmITmENTS (CONT’D)

The Group and Company lease land, warehouse facilities, offices and motor vehicles under operating leases. The leases typically run for an initial period of 1 to 46 years, with an option to renew the lease after the expiry dates. Lease payments for land are revised on annual basis to reflect the market rental where other lease payments are revised at renewal of lease contract to reflect market rental. None of the leases include contingent rental.

At the balance sheet date, the Group and the Company had commitments for future minimum lease payments under non-cancellable operating leases as follows:

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Within 1 year 42,866 27,223 22,372 16,272After 1 year but within 5 years 143,234 89,443 84,877 58,465After 5 years 153,789 116,663 76,771 61,408

339,889 233,329 184,020 136,145

The Group and the Company sub-lease out part of its leasehold buildings to tenants under operating leases. The leases typically run for an initial period of 1 to 8 years. Lease payments are revised at renewal of lease contract to reflect market rental. None of the leases include contingent rental. The non-cancellable operating lease rental receivables are as follows:

Group Company2008 2007 2008 2007

$’000 $’000 $’000 $’000

Within 1 year 29,826 18,603 27,219 19,117After 1 year but within 5 years 30,511 25,314 51,403 33,279After 5 years - 1,052 4,809 7,374

60,337 44,969 83,431 59,770

35 RELATED PARTIES

Other than disclosed elsewhere in the financial statements, transactions with related parties are as follows:

Group2008 2007

$’000 $’000

Related partiesSales 8,844 8,873Purchases of services (4,094) (2,497)Rental paid - (2,304)Interest income from loan 181 -Purchases of leasehold property (4,570) -Purchase of forklift (480) -


35 RELATED PARTIES (CONT’D)

Group2008 2007

$’000 $’000

AssociatesSales 12,226 11,168Purchases of services (5,697) (5,019)Rental paid (988) (37)

Jointly-controlled entitiesSales 283 207Purchases of services (20) (100)Interest income from loan 4 2

Related parties refere to companies and their subsidiaries with a substantial shareholder in common with the company.

36 SUBSEqUENT EvENTS

The directors proposed a final one tier dividend of 2 cents per ordinary share amounting to $11,486,093 (2007: $11,486,093). The dividend has not been provided for in the financial statements as at 31 December 2008 and is subject to shareholders’ approval at the forthcoming Annual General Meeting of the Company.

37 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT yET ADOPTED

The Group has not applied the following accounting standards (including its consequential amendments) and interpretations that have been issued as of the balance sheet date but are not yet effective:

• FRS1(revised2008) Presentation of Financial Statements• FRS23(revised2007)Borrowing Costs• Amendments to FRS 32 Financial Instruments: Presentation and FRS 1 Presentation of Financial Statements –

Puttable Financial Instruments and Obligations Arising on Liquidation• AmendmentstoFRS39Financial Instruments: Recognition and Measurement – Eligible Hedged Items• Amendments to FRS 101 First-time Adoption of Financial Reporting Standards and FRS 27 Consolidated and

Separate Financial Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate• AmendmentstoFRS102Share-based Payment – Vesting Conditions and Cancellations• FRS108Operating Segments• ImprovementstoFRSs2008• INTFRS113Customer Loyalty Programmes• INTFRS116Hedges of a Net Investment in a Foreign Operation

129


37 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT yET ADOPTED (CONT’D)

FRS 1 (revised 2008) will become effective for the Group’s financial statements for the year ending 31 December 2009. The revised standard requires an entity to present, in a statement of changes in equity, all owner changes in equity. All non-owner changes in equity (i.e. comprehensive income) are required to be presented in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). Components of comprehensive income are not permitted to be presented in the statement of changes in equity. In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the reclassification of items in the financial statements. FRS 1 (revised 2008) does not have any impact on the Group’s financial position or results.

FRS 23 (revised 2007) will become effective for financial statements for the year ending 31 December 2009. FRS 23 (revised 2007) removes the option to expense borrowing costs and requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The Group’s current policy to capitalise borrowing costs is consistent with the requirement in the revised FRS 23.

FRS 108 will become effective for financial statements for the year ending 31 December 2009. FRS 108, which replaces FRS 14 Segment Reporting, requires identification and reporting of operating segments based on internal reports that are regularly reviewed by the Group’s chief operating decision maker in order to allocate resources to the segment and to assess its performance.

Improvements to FRSs 2008 will become effective for the Group’s financial statements for the year ending 31 December 2009, except for the amendment to FRS 105 Non-current Assets Held for Sale and Discontinued Operations which will become effective for the year ending 31 December 2010. Improvements to FRSs 2008 contain amendments to numerous accounting standards that result in accounting changes for presentation, recognition or measurement purposes and terminology or editorial amendments. The Group is in the process of assessing the impact of these amendments.

Other than changes in disclosures relating to FRS 1 and FRS 108, the initial application of these standards (including their consequential amendments) and interpretations is not expected to have any material impact on the Group’s financial statements.

statistics of shareholdings as at 16 March 2009

DISTRIBUTION OF ShAREhOLDINGS NO. OF NO. OF SIZE OF ShAREhOLDINGS ShAREhOLDERS % ShARES %

1-999 259 7.73 36,938 0.01 1,000-10,000 1,934 57.75 10,932,463 1.90 10,001-1,000,000 1,131 33.77 64,690,779 11.26 1,000,001 AND ABOVE 25 0.75 498,644,470 86.83 TOTAL : 3,349 100.00 574,304,650 100.00

ShAREhOLDING hELD IN ThE hANDS OF PUBLIC Based on information available to the Company as at 16 March 2009, 27.54% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual issued by SGX-ST is complied with.

TWENTy LARGEST ShAREhOLDERS NO. NAmE NO. OF ShARES %

1. C&P HOLDINGS PTE LTD 215,740,000 37.572. DBS NOMINEES PTE LTD 59,699,288 10.403. HSBC (SINGAPORE) NOMINEES PTE LTD 36,893,000 6.424. DBSN SERVICES PTE LTD 30,532,372 5.325. LOI KAI MENG (PTE) LIMITED 28,000,000 4.886. LOI KAI MENG 21,090,000 3.677. CITIBANK NOMINEES SINGAPORE PTE LTD 18,534,500 3.238. MAYBAN NOMINEES (S) PTE LTD 15,946,000 2.789. PENJURU CAPITAL PTE LTD 15,000,000 2.6110. LOI POK YEN 10,400,000 1.8111. UNITED OVERSEAS BANK NOMINEES PTE LTD 8,522,050 1.4812. STANLEY K K LIAO 6,540,000 1.1413. LIAO CHUNG LIK 5,967,000 1.0414. LOI WIN YEN 5,036,000 0.88 15. STANLEY LIAO PRIVATE LIMITED 3,581,000 0.62 16. OCBC NOMINEES SINGAPORE PTE LTD 3,103,000 0.54 17. LIM SOO SENG (PTE) LIMITED 2,624,000 0.46 18. LYE SIEW HONG 1,900,000 0.33 19. LIM LAY KHIA @ LIM LAY CHOO 1,850,000 0.32 20. KIM ENG SECURITIES PTE. LTD. 1,673,260 0.29 TOTAL : 492,631,470 85.79

131

statistics of shareholdings as at 16 March 2009

DIRECT DEEmEDNAmE INTEREST INTEREST TOTAL % C&P HOLDINGS PTE LTD(1) 215,740,000 - 215,740,000 37.57 LOI KAI MENG (PTE) LTD(1)(2) 28,000,000 215,740,000 243,740,000 42.44STANLEY LIAO PRIVATE LIMITED(1)(3) 18,581,000 215,740,000 234,321,000 40.80 LIM SOO SENG (PTE) LTD(1)(4) 2,624,000 215,740,000 218,364,000 38.02 LOI KAI MENG(5) 51,650,000 245,590,000 297,240,000 51.76 MORGAN STANLEY ENTITIES(6) - 56,240,736 56,240,736 9.79 (1) C&P Holdings Pte Ltd is majority-owned by Loi Kai Meng (Pte) Ltd, Stanley Liao Private Limited and Lim Soo Seng (Pte) Ltd,

each of whom owns more than 20% of its issued share capital.

(2) Loi Kai Meng (Pte) Ltd is deemed to be interested in the shares held by C&P Holdings Pte Ltd.

(3) Stanley Liao Private Limited is deemed to be interested in the shares held by C&P Holdings Pte Ltd.

(4) Lim Soo Seng (Pte) Ltd is deemed to be interested in the shares held by C&P Holdings Pte Ltd.

(5) Mr Loi Kai Meng is the legal and beneficial owner of 21,090,000 shares and is also the beneficial owner of 30,560,000 shares registered in the name of DBS Nominees Pte Ltd.

Mr Loi Kai Meng is deemed to be interested in the shares held by C&P Holdings Pte Ltd and Loi Kai Meng (Pte) Ltd. He is also deemed to be interested in 1,850,000 shares which are held by his spouse, Mdm Lim Lay Khia@Lim Lay Choo.

(6) This includes Morgan Stanley Investment Management Company, Morgan Stanley (Singapore) Holdings Pte Ltd, Morgan Stanley Asia Regional (Holdings) III LLC, Morgan Stanley Asia Pacific (Holdings) Limited, Morgan Stanley & Co. International plc, Morgan Stanley UK Group, Morgan Stanley Group (Europe), Morgan Stanley International Limited, Morgan Stanley International Holdings Inc., Morgan Stanley (together, the “Morgan Stanley Entities”).

share prices and monthly volumes for 2008

Jan Feb mar Apr may Jun Jul Aug Sep Oct Nov Dec

Closing Price 0.981 0.857 0.834 0.791 0.777 0.843 0.803 0.694 0.582 0.382 0.339 0.329

High 1.140 0.960 0.900 0.820 0.800 0.880 0.850 0.800 0.650 0.510 0.435 0.360

Low 0.800 0.755 0.775 0.765 0.760 0.750 0.755 0.605 0.430 0.280 0.300 0.300

Average 0.970 0.858 0.838 0.793 0.780 0.815 0.803 0.703 0.540 0.395 0.368 0.330

volume (‘000) 5,643 5,661 4,735 5,903 3,060 12,498 2,537 2,185 6,765 9,424 40,984 3,539

ST Index 3,179.90 3,021.59 2,899.11 3,136.36 3,186.39 3,040.14 2,903.33 2,786.21 2,542.38 1,961.09 1,751.86 1,744.54

Closing Price (S$)

Share Price and Straits Times Index (STI) Monthly Volume

volume (‘000)ST Index

STI

Closing Price

133

notice of annual general meeting

NOTICE IS HEREBY GIVEN THAT the Thirty-ninth Annual General Meeting of the Company will be held at 38 Tanjong Penjuru, CWT Logistics Hub 1, Singapore 609039 on 23 April 2009 at 5.00 pm to transact the following business:–

ORDINARy BUSINESS

1 To receive and adopt the Audited Accounts for the financial year ended 31 December 2008 and the Directors’ Report and the Auditors’ Report thereon. (Resolution 1)

2 To approve a final one-tier cash dividend of 2 cents per share (or a total net dividend of S$11,486,093) for the financial year

ended 31 December 2008. (Resolution 2) 3 To approve Directors’ fees of S$450,000 for the financial year ended 31 December 2008. (2007 – S$461,000). (Resolution 3) 4 To re-elect the following Directors pursuant to Article 92 of the Company’s Articles of Association and who, being eligible,

will offer themselves for re-election:- Loi Pok Yen (Resolution 4) Liao Chung Lik (Resolution 5) 5 To re-appoint KPMG as Auditors of the Company and to authorise the Directors to fix their remuneration. (Resolution 6)

SPECIAL BUSINESS

To consider and, if thought fit, to pass the following Resolutions with or without amendments as Ordinary Resolutions:

6 That pursuant to Section 161 of the Companies Act, Chapter 50 (“Act”) and the listing rules of the Singapore Exchange Securities Trading Limited (“SGx-ST”), authority be and is hereby given to the directors of the Company to:-

(A) (i) issue shares in the capital of the Company (“Shares”) (whether by way of rights, bonus or otherwise); and/or

(ii) make or grant offers, agreements, or options or awards (collectively, “Instruments”) that might or would require Shares to be issued, including but not limited to the creation and issue of warrants, debentures or other instruments convertible or exchangeable into Shares, at any time and upon such terms and conditions and for such purposes and to such persons as the directors may in their absolute discretion deem fit; and

(B) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue Shares in pursuance of any Instrument made or granted by the directors while this Resolution was in force,

provided that:

(1) the aggregate number of Shares to be issued pursuant to this Resolution (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution but excluding Shares which may be issued pursuant to any adjustments effected under any relevant Instrument) does not exceed 50 per cent. of the total number of issued Shares excluding any treasury shares (as calculated in accordance with sub-paragraph (2) below) of which the aggregate number of Shares to be issued other than on a pro-rata basis to shareholders of the Company (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution but excluding Shares which may be issued pursuant to any adjustments effected under any relevant Instrument) does not exceed 20 per cent. of the total number of issued Shares excluding treasury shares (as calculated in accordance with sub-paragraph (2) below); and


(2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (1) above:-

(i) the total number of issued Shares excluding treasury shares shall be calculated based on the total number of issued Shares excluding treasury shares at the time this Resolution is passed, after adjusting for:

(a) new Shares arising from the conversion or exercise of convertible securities;

(b) new Shares arising from the exercise of share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and

(c) any subsequent bonus issue, consolidation or subdivision of Shares;

(ii) in relation to an Instrument, the number of Shares shall be taken to be that number as would have been issued had the rights therein been fully exercised or effected on the date of the making or granting of the Instrument;

(3) the 50 per cent. limit in sub-paragraph (1) above may be increased to 100% for issues of Shares and/or Instruments by way of a renounceable rights issue where shareholders of the Company are entitled to participate in the same on a pro-rata basis(2);

(4) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the listing manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(5) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier. (Resolution 7)

7 That:-

(A) subject to and conditional upon the passing of Ordinary Resolution 7 above, approval be and is hereby given to the directors of the Company at any time to issue Shares (other than on a pro-rata basis to shareholders of the Company) at an issue price for each Share which shall be determined by the directors of the Company in their absolute discretion provided that such price shall not represent a discount of more than 20 per cent. to the weighted average price of a Share for trades done on the SGX-ST (as determined in accordance with the requirements of SGX-ST) (3); and

(B) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier. (Resolution 8)

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And to transact any other business which may be properly transacted at an Annual General Meeting.

Explanatory Notes:-

(1) Ordinary Resolution No. 7 if passed, will empower the Directors from the date of the Annual General Meeting until the date of the next Annual General Meeting to issue further Shares and Instruments in the Company, including a bonus or rights issue. The maximum number of Shares which the Directors may issue under this Resolution shall not exceed the quantum set out in the Resolution.

(2) This increased limit of up to 100% for renounceable rights issue will be effective up to 31 December 2010 pursuant to SGX-ST’s notification dated 19 February 2009 and the increased limit is subject to the conditions that the issuer makes periodic announcements on the use of the proceeds as and when the funds are materially disbursed and provides a status report on the use of proceeds in the annual report.

(3) The increase in the discount limit of up to 20% for the issue of shares on a non-pro rata issue basis is effective up to 31 December 2010 pursuant to SGX-ST’s notification dated 19 February 2009.

BY ORDER OF THE BOARD

Madam Lye Siew Hong (Mrs Lynda Goh)Company SecretarySingapore

8 April 2009

Notes:–1. A member of the Company entitled to attend and vote at the Annual General Meeting may appoint a proxy to attend and

vote in his/her stead. A proxy need not be a member of the Company.

2. If a proxy is to be appointed, the instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power of attorney, must be duly deposited at the registered office of the Company at 38 Tanjong Penjuru, CWT Logistics Hub 1, Singapore 609039 not less than 48 hours before the time appointed for the holding of the Annual General Meeting.

3. The instrument appointing a proxy must be signed by the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy is executed by a corporation, it must be executed either under its seal or under the hand of any official or attorney duly authorised.

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CWT LImITED(Company Registration Number 197000498M)(Incorporated in the Republic of Singapore)

I/We

of

being a *member/members of CWT LIMITED (the “Company”) hereby appoint

Name Address NRIC/PassportNumber

Proportion ofShareholdings (%)

and/or (delete as appropriate)

as *my/our *proxy/proxies, to attend and to vote for *me/us on *my/our behalf and, if necessary, to demand a poll at the Thirty-ninth Annual General Meeting (the “AGM”) of the Company to be held at 38 Tanjong Penjuru, CWT Logistics Hub 1, Singapore 609039 on 23 April 2009 at 5.00 p.m. and at any adjournment thereof.

Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the Ordinary Resolutions as set out in the Notice of AGM. In the absence of specific directions, the *proxy/proxies may vote or abstain as *he/they may think fit.

Ordinary Resolutions For Against

1. Approval and adoption of Audited Accounts for the financial year ended 31 December 2008 and the Directors’ Report and the Auditors’ Report thereon

2. Approval of final dividend for the financial year ended 31 December 2008

3. Approval of Directors’ fees for the financial year ended 31 December 2008

4. Re-election of Mr Loi Pok Yen as Director

5. Re-election of Mr Liao Chung Lik as Director

6. Re-appointment of Auditors and authorising the Directors to fix their remuneration

7. Authority to Directors to issue shares

8. Authority to Directors to issue Shares (other than on a pro-rata basis to shareholders of the Company) at a discount of not more than 20%

* Delete accordingly.

Dated this day of 2009.

Signature(s) of Member(s) or Common Seal

IMPORTANT: PLEASE READ NOTES OVERLEAF

proxy form

Total number of shares held:

ImPORTANT:

1. For investors who have used their CPF monies to buy CWT Limited shares, this Annual Report is forwarded to them at the request of their CPF Approved Nominee and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

Notes:–

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register as well as registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of the Company.

3. A member appointing more than one proxy shall specify the percentage of Shares to be represented by each proxy and if no percentage is specified, the first named proxy shall be deemed to represent 100 per cent. of the shareholding and the second named proxy shall be deemed to be an alternate to the first named.

4. This instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 38 Tanjong Penjuru, CWT Logistics Hub 1, Singapore 609039 not less than 48 hours before the time appointed for the AGM.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter of power of attorney or a duly certified copy thereof must be lodged with the instrument, failing which, the instrument may be treated as invalid.

6. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the Companies Act, Chapter 50 of Singapore.

7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instruments appointing a proxy or proxies. In addition, in the case of members whose Shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have Shares entered against their names in the Depository Register as at 48 hours before the time appointed for holding the AGM, as certified by The Central Depository (Pte) Limited to the Company.

cwt limited annual report 2008

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