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24 October 2008 Company Announcements Australian Stock Exchange Limited Level 8, Exchange Plaza 2 The Esplanade Perth WA 6000 Dear Sirs, ANNOUNCEMENT: CMA Annual Report 2008 We attach an Announcement for immediate release to the Market. Herewith is a copy of the CMA Annual Report 2008 which is being sent to shareholders today. Yours faithfully,

Trevor Schmitt Company Secretary CMA Corporation Ltd Enc

CMV20081024-169

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ANNUAL REPORT 2008ABN 40 113 329 016

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Contents

Chairman’s Letter 3

CMA Board 4

Managing Director’s Report 7

Introduction 7

Business Expansion 7

Operational Activity 8

Corporate 9

Outlook 9

Financial Report 11

Corporate Governance Statement 12

Directors’ Report 17

Lead Auditor’s Independence Declaration 29

Income Statement 30

Balance Sheet 31

Statement of Changes in Equity 32

Cash Flow Statement 33

Notes to the Financial Statements 34

Directors’ Declaration 87

Independent Auditor’s Report to the Members of CMA Corporation Limited 88

Shareholder Information 90

Corporate Directory 92

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Chairman’s Letter

29 September 2008

Dear Shareholders,

It is my pleasure to present CMA’s Annual Report for 2008.

It was a year of great progress for our Company, with a 177% rise in net profit to $18.1 million on the back of group revenue that rose 112% to

$503.3 million. Earnings per share rose 11% to 5 cents and for the first time since listing in July 2005 CMA paid shareholders a fully franked

dividend for the year of 1 cent per share.

However, the past year was also one of significant challenges for CMA, with turmoil in world financial markets, currency fluctuations and

commodity price changes.

The 2008 financial year proved challenging for many companies listed on the ASX and CMA was certainly one of those whose share price was

affected by the enormous volatility and weakness in the global equity markets. Ongoing fluctuations in commodity prices and currencies also

created uncertainty for CMA. These difficult conditions in debt and equity markets have carried over into the current financial year and will pose

many challenges for CMA in the months ahead.

However, I’m delighted to say that your Board believes the Company is in very good shape to perform strongly through this period, with an

outstanding network of operations and a healthy balance sheet to support continued growth.

Through 2008, CMA continued to grow the group through targeted acquisitions and through the expansion of our existing businesses. A major

focus for the year was the integration of recent acquisitions with the aim of maximising cost and revenue synergies and capturing scale benefits

from what is now an international network of operations.

CMA continued to apply strict disciplines to its acquisitions strategy, targeting opportunities that are synergistic with existing operations, fit the

CMA culture and are earnings accretive. While capturing enormous benefits from the size and scale of the expanded network, CMA has also

been careful to put in place a broader platform for revenue and earnings growth, and ensuring the group has some natural hedges against

fluctuations in any particular sector.

Positive developments during 2008 included the introduction of Transpacific Industries Group as a strategic investor in CMA and further

investment in head office management and financial reporting systems.

The Board also introduced a dividend reinvestment plan for shareholders which has been very successful and attracted strong participation from

our investors.

We continue to work through the issues associated with disputed contract terms with one project in our Contract Services Division. This has

been a significant issue for your Board but we are confident the matter can be resolved satisfactorily in the near future.

On behalf of CMA and my fellow directors, I would like to thank our shareholders for their ongoing support in the midst of difficult and

unpredictable market conditions. I would also like to extend a big thank you to all the CMA staff for their tireless hard work and dedication

throughout FY08.

We look forward to expanding on our FY08 success and continuing to deliver a profitable result in 2009.

Alan Good, ChairmanFor

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Alan Good is a qualified

Chartered Accountant

and was a Partner at

PricewaterhouseCoopers

(PwC) for 23 years until his

retirement from the practice

in 2003. From 1995 to 2002,

he was Managing Partner of

PwC in Perth. His main areas

of practice were corporate

finance and assurance.

Alan Good is Chairman

of the Nomination and

Remuneration Committees

and a member of the Audit

Committee.

Alan Good is Chairman of

Straits Resources Limited

(appointed July 2005).

Alan GoodChairman (non-ExECutivE indEpEndEnt)

Joseph Tong Hong ChungdirECtor (ExECutivE)

Joseph Chung was a founding

shareholder of the T & T Metal

Group, has over 20 years

experience in the recycling

and demolition industry and

holds a Bachelor of Arts

degree. Joseph is an expert in

project management and has

managed a number of high

value contracts with Australia’s

leading companies. Joseph

also has a number of years’

experience in exporting scrap

metal from major ports in

Australia to clients in South East

and North East Asia.

Robert Moltoni was a previous

Managing Director of Moltoni

Adams Pty Limited. Since

1975, Robert has established

and managed a substantial

group of companies involved

in demolition, construction,

waste management, land

remediation and farming.

Robert is a past winner

of the WA Ernst & Young

Entrepreneur of the Year

award.

Robert is a Director of Moltoni

Corporation Pty Limited, a

major shareholder in CMA

Corporation Limited.

Robert Moltoni is the

Chairman of the Audit

Committee.

Douglas Rowe’s career in

recycling commenced in

1977 at his family’s business

in Victoria. Having gained

several years experience

in the metals industry, he

undertook a management

role with the Poseidon Group

of Companies before moving

to the mining, mineral and

metal oxide area of business.

Douglas was a founder of the

Southern Rocycling business

in 1992.

Robert MoltonidirECtor (non-ExECutivE)

Douglas RowemanaGinG dirECtor (ExECutivE)

CMA BoardF

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Terry has over 10 years

experience in the waste

management, recovery and

recycling industries across

Australia and New Zealand

and holds a Bachelor of

Science degree. Terry is

the Managing Director for

Mergers & Acquisitions for

the Transpacific Industries

Group, a position he has held

for 2 years.

Terry has previously held

senior management positions

in the cement, concrete and

quarrying sectors.

Terry WoodsdirECtor (non-ExECutivE)

CMA’s goal is to add value through innovative and responsible metal recycling while growing an international business based around environmentally sustainable technologies

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Managing Director’s Report

introductionThe 2008 financial year was a period of continued expansion and success for CMA Corporation, with continued integration of new businesses,

strong organic growth and additional targeted acquisitions that consolidate the Group’s position in the market.

The major focus continued to be the Metals Recycling Division which has become an increasingly global business and maintained its strong

growth path through the year. Operating revenue for the year rose to $503.3 million (up 112% on 2007), confirming CMA’s emergence as a

significant corporate player in the recycling market.

Importantly, CMA maintained its operating margins through this period of exceptional growth, with net profit after tax rising 177% to $18.1 million.

A major focus during the year was the integration of newly acquired businesses and the capturing of synergies and the benefits of the increased

scale of the group. CMA’s strategy remains the targeting of growth around the Company’s core operational strengths of metal trading, processing

and recycling.

While market conditions are difficult, there is burgeoning demand for CMA’s services.

The work of the past year puts CMA in a strong position to tap into this growing demand and deliver satisfactory returns and value for our

shareholders.

Business Expansion2008 was a year of great achievement and development for CMA.

The Group continued to grow and expand its operations despite some challenging market conditions. CMA also continued to integrate its newly

acquired businesses into what is now an outstanding network across Australasia and South-East Asia.

2008 also saw CMA take its first step into the North American market with the acquisition of the Chicago-based Meretec steel de-zincing plant.

CMA later acquired the business and assets of Meretec Limited, the UK-based owner of the Meretec technology and its US operating

subsidiary Meretec Corporation. This opens up an exciting new growth opportunity for CMA, including arrangements in which CMA will license

the Meretec technology to joint venture partners.

During the 2008 financial year CMA completed several other key acquisitions that increased the total number of our operating facilities to

31 sites globally. Some of these key acquisitions saw CMA expand internationally into new territory such as Singapore, Malaysia and the

United States for the first time. CMA also underwent significant expansion in New Zealand acquiring five new operations.

A summary of CMA’s key acquisitions during FY08 is listed below.

AustraliaMelbourne-based Southern Rocycling in July 2007 -

Perth based Photographic Waste Management in September 2007 -

New ZealandHamilton-based Cableco Metal industries in December 2007 -

M & H Contractors in January 2008 -

Bowman Bulk Freight in February 2008 -

Steel Can Recycling in February 2008 -

Bay Scrap Metal in April 2008 -

InternationalSingapore-based Peakmore Enterprise Pte Ltd, a processor and trader of secondary metals products, in September 2007 – CMA’s first -

acquisition in the highly active Asian market

Malaysia-based Purata Keuntungan Sdn Bhd in May 2008 -

Chicago-based Meretec steel de-zincing plant in November 2007 -

UK-based Meretec Corporation in May 2008 (settled July 2008) -

The success of these acquisitions demonstrates the strength of the CMA growth strategy and the commitment of the Company to strict

disciplines in its targeting of new businesses. CMA will only target acquisitions where there is a genuine benefit measured by earnings accretion

and shareholder value.

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Managing Director’s Report (continued)To

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0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000TONNAGE

FY08FY07FY06

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30

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FY08FY07FY06

EBitdaSalES rEvEnuE

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100

200

300

400

500

600SALES REVENUE

FY08FY07FY06

operational activityCMA’s businesses had another strong year in 2008, with growth in activity in the vast majority of the group’s 31 operations. While CMA continues

to make targeted acquisitions, management is very focused on building the existing businesses that are the core of the group’s strength.

CMA’s metal recycling business is the engine room of the group, contributing $471.3 million or 94% of group revenue – up 133% on 2007.

The graphs below illustrate the strong growth in both ferrous and non-ferrous sales, and in CMA’s 3 principal markets of Australia, New

Zealand and Asia.

In 2008, CMA sold 748,767 tonnes of ferrous scrap, an increase of 154% on the 294,789 tonnes sold in 2007.

Sales of non-ferrous scrap in 2008 were 62,119 tonnes, up 101% on the 30,924 tonnes sold in the previous year.

A key factor in this growth has been the positive effect of the critical mass delivered by CMA’s acquisitions in the 2007 and 2008 financial

years. This has given CMA significantly enhanced ability to meet diverse client needs in terms of both product and volumes.

A major positive development during the year was the arrival on the CMA register of Transpacific Industries Group. Aside from being a strategic

investor with a stake of 13.91%, TPI has since become a major customer of CMA. We expect we will see the full force of the TPI relationship

during the 2009 financial year, with strong growth expected in the amount of business conducted between the two companies.

CMA is also pleased to have secured major new supply contracts during 2008 with a range of major corporate customers, including Telstra,

Holden, Visy, Amcor and Capral.

In contracting, CMA continues to seek a resolution to the dispute on work carried out on a major marine demolition project in Port Hedland,

Western Australia.

In managing growth moving forward, CMA has in place a range of measures to manage and mitigate risk on contracting projects.

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CorporateCMA’s corporate office has had another busy year of managing and bedding down new acquisitions.

The ability of the CMA team to identify new opportunities, executive acquisitions and successfully integrate new businesses is now well-

established and a great bonus to the Company. This experience and track record means that CMA – and its shareholders – can maximise the

benefit of these new businesses in the shortest possible timeframe.

Importantly, recent investment in CMA’s head office systems means that there is enhanced visibility and control over the group’s diverse

operations, which are now scattered around the globe. CMA’s reporting system delivers timely and accurate data to head office that allows the

senior management team instant visibility on opportunities and threats.

CMA also continues to invest heavily in a strong management team. On 12 May 2008, Trevor Schmitt commenced his position as Chief Financial

Officer and Company Secretary. Trevor has more than 20 years experience in the industry and brings a wealth of skills and knowledge to CMA.

outlookCMA’s earnings outlook remains positive despite difficult market conditions. We will look to pursue a mixed strategy of organic and acquisitive

growth in order to further leverage our network and infrastructure base in FY09.

We look forward to continuing to consolidate on our existing position and integrating the newly acquired assets in order to realise scale benefits

and synergies across the expanded group.

Though metal prices continue to be volatile, we expect the Australian dollar to trade at lower levels than in 2008. Thus offering a partial offset to

falling metal prices.

In addition, contracting now accounts for less than 10% of group revenues, reducing the risks that can flow from this activity.

We will continue to pursue potential new markets and work to create value for our shareholders.

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CMA Corporation and its associated companies

will recycle in excess of 800,000 tonnes of scrap

metal in the coming year which will help reduce

greenhouse gas emissions and demonstrates

CMA’s commitment to responsible recycling.

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Financial Report

Cma Corporation limitedABN 40 113 329 016

and Controlled Entities

Financial Statements for the Financial Year

Ended 30 June 2008

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Corporate GovernanceThe Board confirms its commitment to the adoption of the ten Principles of Good Corporate Governance and Best Practice Recommendations of

the ASX Corporate Governance Council - March 2003. During the first three years of operations following listing on the ASX, it has not yet been

practical to fully adopt all of these principles and practices. The following paragraphs set out the extent of compliance against each Principle.

Structure of the BoardBoard MembersAt the date of this report, the Board consists of five members. The names, status and date of appointment or resignation of all the directors of the

Company during the year are:

Alan Good Non-Executive Independent Chairman Appointed 25 July 2005

Douglas Rowe Executive Director Appointed 4 July 2007

Managing Director Appointed 1 February 2008

Joseph Tong Hong Chung Executive Director Appointed 11 March 2005

Robert Moltoni Non-Executive Director Appointed 11 March 2005

Terry Woods Non-Executive Director Appointed 3 December 2007

Peter Hatfull Appointed 11 March 2005

Resigned 31 January 2008

John Crabb Appointed 3 January 2006

Resigned 30 November 2007

This structure does not yet provide a majority of independent directors. Throughout the year the Nomination Committee and the Board of

Directors have regularly considered a number of candidates to fill the role of an additional independent director and it is anticipated that this

position will be filled once a suitable candidate is identified.

When determining whether a non-executive director is independent, the director must not fail any of the following materiality thresholds:

less than 10% of Company shares are held by the director and any entity or individual directly or indirectly associated with the director; -

no sales are made to or purchases made from any entity or individual directly or indirectly associated with the director; and -

none of the director’s income or the income of an individual or entity directly or indirectly associated with the director is derived from a -

contract with any member of the Economic Entity other than income derived as a director of the entity.

Independent directors have the right to seek independent professional advice at the Company’s expense in the furtherance of their duties as

directors. Written approval must be obtained from the Chairman prior to incurring any expense on behalf of the Company.

Board ExpertiseThe Board collectively has the appropriate range of expertise to properly fulfil its responsibilities, including:

accounting; -

finance; -

business; -

scrap metal, metal trading, recycling and demolition industries; -

risk management; -

public company experience; -

legal skills; and -

Managing Director – level of experience. -

The Board periodically reviews the range of expertise of its members to ensure that it has operational and technical expertise relevant to the

operation of the Company.

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Nomination CommitteeThe Board has established a Nomination Committee. The role and responsibilities, composition, structure and membership requirements of the

Nomination Committee are documented in a separate Nomination Committee Charter approved by the Board.

The Nomination Committee consists of a minimum of three members, the majority of whom should be independent. An independent director is

chair of the Nomination Committee.

Currently the Board contains one independent director and two non-executive directors. The Nomination Committee therefore consists of:

Mr Alan Good (Chairman) -

Mr Doug Rowe -

Mr Terry Woods -

The responsibilities of the Nomination Committee include:

assessment of the necessary and desirable competencies of Board members; -

review of Board succession plans; -

evaluation of the Board’s performance; and -

recommendations for the appointment and removal of directors. -

Audit CommitteeThe Board has established an Audit Committee. The role and responsibilities, composition, structure and membership requirements of the Audit

Committee are documented in a separate Audit Committee Charter.

The Audit Committee will consist of:

only non-executive directors; -

a majority of independent directors; -

an independent chair, who is not the Chair of the Board; and -

at least three members. -

At the date of this report, the members of the Audit Committee are:

Mr Robert Moltoni (Chairman) -

Mr Alan Good -

Mr Terry Woods -

The Audit Committee reviews the integrity of the Company’s financial reporting and oversees the independence of the external auditors.

The qualifications of those appointed to the Audit Committee and their attendance at meetings of the committee are included in the Directors’ Report.

Remuneration CommitteeThe Board has established a Remuneration Committee. The role and responsibilities, composition, structure and membership requirements of

the Remuneration Committee are set out in detail in a Remuneration Committee Charter approved by the Board.

The Remuneration Committee must consist of a minimum of three members, the majority of whom should be independent and should be chaired

by an independent director.

Currently the Board contains one independent director and two non-executive directors. The Remuneration Committee consists of:

Mr Alan Good (Chairman) -

Mr Doug Rowe -

Mr Terry Woods -

Mr Trevor Schmitt is Secretary of the Committee.

The responsibilities of the Remuneration Committee include:

executive remuneration and incentive policies; -

the remuneration packages of senior management; -

final approval of the Company’s overall salary increase levels; -

the Company’s recruitment, retention and termination policies and procedures for senior management; -

incentive schemes, including bonuses and employee equity plans; -

superannuation arrangements; and -

the remuneration framework for directors. -

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Delegation of AuthorityThe Company’s statement of delegated authority sets out the Company’s policy relevant to the delegation of authority to management to conduct

the day-to-day management of the Company.

Directors have no individual authority to make representations or enter agreements on behalf of the Company unless such authority is expressly

delegated by the Board.

responsibilities of the Board The Board Charter has been adopted by the Board and governs various aspects of the Board.

The Board is responsible for, and has the authority to determine, all matters relating to the strategic direction, policies, practices, establishing

goals and responsibilities and levels of authority for management and the operation of the Company. Without intending to limit this general role of

the Board, the specific functions and responsibilities of the Board include:

oversight of the Company, including its control and accountability systems; -

appointing and removing the Managing Director, including approving remuneration of the Managing Director and the remuneration policy and -

succession plans for the Managing Director;

ratifying the appointment and, where appropriate, the removal of the Chief Financial Officer/Company Secretary; -

input into and final approval of management’s corporate strategy and performance objectives; -

reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and legal compliance; -

monitoring senior management’s performance and implementation of strategy, and ensuring appropriate resources are available; -

approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures; and -

approving and monitoring financial, operational, health, safety and environmental and other reporting. -

To assist with the execution of its responsibilities, the Board has established an Audit Committee, Remuneration Committee and Nomination

Committee. Each Board committee has in place a charter, approved by the Board, setting out its responsibilities.

Code of Conduct for directors and officersTo promote ethical and responsible decision-making, the Board has approved a Code of Conduct for Directors and Officers (the Managing

Director, the Chief Financial Officer/Company Secretary and other key executives) as to the practices necessary to maintain confidence in the

Company’s integrity and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

The Code of Conduct for Directors and Officers deals with the following main areas:

conflicts of interest; -

confidentiality; -

fair dealing; -

compliance with laws and regulations; -

corporate opportunities; -

protection and proper use of the Company’s assets; and -

encouraging the reporting of unlawful, unethical behaviour. -

Directors and the senior management team must comply with the Code of Conduct and demonstrate commitment to the Code and consistency

in its execution. Adherence to the Code of Conduct is periodically evaluated and action taken where necessary.

Share TradingThe Company’s share trading policies (Share trading policies) document the Company’s policy relevant to trading in company securities by

directors, officers and employees.

Each of the Share Trading Policies clearly identifies those individuals who are restricted from trading, the relevant laws relating to trading, and

includes a coherent strategy for trading.

Corporate Governance Statement (continued)

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Financial reporting integrityManaging Director and Chief Financial Officer/Company Secretary AssurancesIt is the responsibility of both the Managing Director and the Chief Financial Officer/Company Secretary to provide written assurances to the

Board that in all material respects:

the financial reports submitted to the Board present a true and fair view of the Company’s financial condition and operational results; and -

the Company’s risk management and internal compliance and control system is operating efficiently and effectively. -

Audit CommitteeThe Board has established an Audit Committee. The role and responsibilities, composition, structure and membership requirements are set out in

detail in the previous Structure of the Board paragraph.

Continuous disclosureThe Board has adopted a Disclosure Policy that is designed to ensure compliance with ASX Listing Rules, disclosure requirements and to ensure

accountability at a senior management level for that compliance.

The Company Secretary is the Disclosure Officer appointed in accordance with the policy. The Disclosure Officer is responsible for the lodgement

of all announcements with the ASX during the year after receiving appropriate approvals for the content of each announcement.

Under the policy the Board conducts regular reviews to ensure that all relevant information that should have been provided to the ASX, including

the company accounts:

has been prepared and lodged in a timely manner; -

is factual; -

does not omit material information; and -

is expressed in a clear and objective manner that allows the input of the information when making investment decisions. -

ShareholdersCommunications Strategy with ShareholdersThe Company’s shareholder communications strategy (Communications Strategy) is designed to promote effective communication with

shareholders and encourage participation at general meetings.

The Communications Strategy includes regular and continuous disclosure to the ASX and policies and procedures relating to use of the ASX and

the Company’s websites as a means of communicating with shareholders.

risk managementThe Company’s risk management policy (risk management policy) describes the roles and respective accountabilities of the Board, the Audit

Committee (or other appropriate committee) and management.

The Risk Management Policy also covers a risk profile, which includes an assessment of the risks facing the Company, compliance and control

and an assessment of effectiveness of the above policies.

In its first three years of operation the Board has not established a specific Risk Management Committee but a Charter for a Risk Management

Committee has been adopted for future use. In lieu of the establishment of a specific Risk Management Committee the full Board, on a monthly

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performance and remuneration policyThe Board has established a Remuneration Committee. The role and responsibilities, composition, structure and membership requirements are

set out in detail in the previous Structure of the Board paragraph.

This committee met for the first time on 23 August 2005 to review the processes in place for the Economic Entity in the remuneration year

commencing on 1 October 2005. The committee determined that it was appropriate to put the implementation of an employee share option plan to

provide an employee incentive scheme for performance enhancement to the Annual General Meeting of shareholders held on 18 November 2005.

The shareholders approved the implementation of four Employee Remuneration Schemes as follows:

Tax Exempt Plan -

Tax Deferred Plan -

Performance Share Plan -

Share Option Plan -

In November 2006, the committee approved the first issue of shares to employees under the Employee Remuneration Schemes. Further details

regarding the issue are contained in Note 27.

Further details regarding remuneration are contained in the Remuneration Report on pages 22 to 26, which forms part of the Directors’ Report.

Code of Conduct covering obligations to StakeholdersThe Board has established a code of conduct (Code) to guide compliance with legal and other obligations to legitimate stakeholders including

shareholders.

The Code includes:

responsibilities to shareholders and the financial community generally; -

responsibilities to clients, customers and consumers; -

employment practices; -

obligations relative to fair trading and dealing; -

responsibilities to the individual; -

responsibilities to the community; -

how the Company complies with legislation affecting its operations; and -

how the Company monitors and ensures compliance with the Code of Conduct towards stakeholders. -

other informationFurther information relating to the Company’s corporate governance practices and policies has been made publicly available on the Company’s

website at www.cmacorp.net.

Corporate Governance Statement (continued)

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Your directors present their report on the Company and its controlled entities for the financial year ended 30 June 2008.

directors and Company SecretaryThe names of directors and the company secretary in office at any time during or since the end of the financial year are:











Trevor Schmitt Company Secretary Appointed 12 May 2008

Kate King Appointed 20 March 2008

Resigned 18 June 2008

Patrick Raper Appointed 31 March 2005

Resigned 28 March 2008

principal activities The principal activities of the Economic Entity during the financial year were:

Metals recycling; and -

Demolition and Remediation Contract Services. -

The following significant changes in the nature of the principal activities occurred during the financial year;

CMA Corporation Limited acquired 100% of the voting shares of Universal Metals Pty Limited and Advanced Recycling Australasia Pty -

Limited (collectively referred to as Southern Rocycling).

CMA Peakmore Pte Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the assets and business of Peakmore -

Enterprise Pte Limited.

CMA Recycling Pty Limited (formerly CMA Metals (Qld) Pty Limited), a wholly owned subsidiary of CMA Corporation Limited, acquired the -

assets and business of Photographic Waste Management.

Scrap Metal Recyclers (Waikato) Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business and assets of -

Cableco Metal Industries Limited.

Scrap Metal Recyclers Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business and assets of the Bin Service -

and Bulk Scrap Transport divisions of M & H Contractors Limited.

Scrap Metal Recyclers Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business and assets of Bowman Bulk -

Freight Limited.

CMA Corporation Limited acquired 100% of the voting shares of Steel Can Recycling Limited. -

CMA Corporation Limited acquired the business and assets of Meretec Corporation. Meretec Corporation is engaged in the business of -

developing proprietary commercially viable methods of removing and recovering zinc coatings from galvanized scrap metal.

Scrap Metal Recyclers (Waikato) Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business and assets of Bay -

Scrap Metal, a metal recycling business based in Tauranga, New Zealand.

CMA Corporation Limited increased its holding in the Malaysian based metal processing company Purata Keuntungan Sdn Bhd (“Purata”) to -

100% ownership.

Directors’ ReportF

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operating results The consolidated profit of the Economic Entity after providing for income tax amounted to $18,076,000 (2007: $6,517,000) as measured under

the Australian equivalents to International Financial Reporting Standards (AIFRS).

dividends paid or recommendedThe Directors have declared a fully franked final dividend of 0.5 cents per issued ordinary share in relation to the full year ended 30 June 2008,

payable on 31 October 2008. This matches the fully franked interim dividend of 0.5 cents per issued ordinary share in relation to the half year

ended 31 December 2007, which was paid on 30 April 2008.

There was no interim or final dividend paid in relation to the financial year ended 30 June 2007.

Expansion of operations Review of Operations

Group OperationsCMA has undergone major growth during the past financial year, and this expansion has enabled the group to report a record profit result for

the year ended 30 June 2008.

The CMA group has made a number of important acquisitions during the past year which have broadened the operational footprint across

Australia, New Zealand and in the growing Asian recycling market in Singapore and Malaysia, as well as the first foray into the US market

through the acquisition of the Meretec Steel Recycling Plant in Chicago. Pleasing progress has been made and progress towards their full

integration and further efficiencies are expected to benefit the group’s financial result in the coming twelve months.

A major highlight for the company during the year was the strategic investment secured from the waste management company Transpacific

Industries Group Limited (ASX: TPI). TPI became a strategic investor in December 2007 after it subscribed for 49.8 million shares, giving it a

13.1% stake in the expanded capital of CMA. TPI has since become a key customer of CMA and it is expected that further synergies and

benefits will be captured from the relationship in the future.

TPI has also contributed to the strength of CMA’s Board of Directors with the appointment of Terry Woods in December 2007, following

John Crabb’s retirement at the last AGM. Further changes in the CMA Board occurred in January 2008, with the retirement of Managing

Director Peter Hatfull who has been succeeded by Doug Rowe.

CMA’s development during the past year and its post balance date acquisition of the assets of Meretec Limited and its subsidiaries will

provide the group with an expanded infrastructure base. This provides a solid platform for further increases in activity levels and higher

earnings in the coming year.

RecyclingThe recycling division processes ferrous and non-ferrous metals for sale to the Australian, New Zealand, Asian and US markets. A significant

portion of sales from Australia and New Zealand are exports to the Asian markets.

During the past year there has been continued strong growth in the recycling division’s throughput and sales revenues. This has been aided

by the acquisition of new businesses domestically and abroad. Also, activity levels at pre-existing recycling operations in Australia increased,

with total sales tonnages and revenues from these sites reaching new highs.

In Australia, the acquisition of Southern Rocycling which completed on 4 July 2007 has significantly expanded CMA’s local recycling network

and boosted output.

The Melbourne Meretec plant was officially opened in September 2007. Production volumes will be ramped up over the coming financial year

and are planned to reach effective capacity by June 2009. On 31 January 2008, CMA completed its acquisition of a further Meretec plant in

Chicago, USA. This provides an opportunity to further capitalise on the demand for innovative and responsible recycling processes.

Growth in New Zealand has continued and was driven by a high demand for export sales and by acquiring five new businesses. The

acquisitions of three recycling businesses and two trucking businesses took place in late December 2007, February and April 2008. These

acquisitions have improved CMA’s operational footprint and competitive position in the New Zealand market.

Directors’ Report (continued)

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CMA also established a foothold in the growing Asian recycling market, with its acquisitions in Singapore and Malaysia during the past year.

The acquisition of the Singapore-based Peakmore Enterprise business which trades and processes secondary metals was completed on

3 September 2007. Peakmore has been successfully integrated into the group during the past year delivering pleasing earning contributions.

Additionally, further expansion into Asia occurred, with an investment made in a Malaysian joint venture. Initially an investment for 40% of the entity took

place in September 2007 and in May 2008 the remaining 60% was acquired. This business processes and exports mill residues to the Asian markets.

ContractingCMA’s contracting division provides end-to-end services in demolition, remediation and hazardous waste removal, and has undertaken plant

deconstruction on behalf of some of Australia’s leading industrial companies.

The division has successfully completed a number of projects during the year, with further contracts currently in progress. The results of the

division for the reporting period continue to demonstrate improved project management and greater cost control.

The year ended 30 June 2008 has seen the completion of the Port Hedland marine demolition project. CMA Corporation Limited now has a

claim against John Holland Limited in the amount of $20.4m and has taken advice and considers that its claim against John Holland Limited

has proper legal basis and is recoverable. Whereas the counterclaim by John Holland of $16.5m is presently unclear and unsubstantiated

and CMA Corporation Limited considers it does not have merit.

There is a consistent pipeline for future tenders by the division and management remains confident of winning its share of available contracts.

Financial Position The net assets of the Economic Entity at 30 June 2008 were $174.6 million (2007: $58.5 million).

The directors believe the Economic Entity has sufficient financial resources to steadily expand and grow its current operations.

Significant Changes in State of affairs On 4 July 2007, CMA Corporation Limited acquired 100% of the voting shares of Universal Metals Pty Limited and Advanced Recycling 1.

Australasia Pty Limited (collectively referred to as Southern Rocycling). CMA Corporation Limited has paid $47,031,000, comprising

46,875,000 issued ordinary shares in CMA Corporation Limited with a fair value of 47 cents each, and $25 million in cash.

On 13 September 2007, CMA Peakmore Pte Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the assets and 2.

business of Peakmore Enterprise Pte Limited. CMA Peakmore Pte Limited has paid $5,413,000 comprising 9,464,624 issued ordinary

shares in CMA Corporation Limited with a fair value of 49 cents each and $775,000 in cash. In addition, the vendors of Peakmore

Enterprise Pte Limited will receive additional deferred consideration up to $2.3 million, subject to the achievement of certain financial targets.

On 30 September 2007, CMA Recycling Pty Limited (formerly CMA Metals (Qld) Pty Limited), a wholly owned subsidiary of CMA 3.

Corporation Limited, acquired the assets and business of Photographic Waste Management. Photographic Waste Management is a non-

ferrous metal recycling business located in Perth, Western Australia. In connection with the business combination, CMA Recycling Pty

Limited has paid $300,000 in cash.

On 21 December 2007, Scrap Metal Recyclers (Waikato) Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the 4.

business and assets of Cableco Metal Industries Limited. Scrap Metal Recyclers (Waikato) Limited has paid $4,853,000, comprising

2,961,172 issued ordinary shares in CMA Corporation Limited with a fair value of 74.5 cents each, and cash payments totalling $2,647,000.

On 31 January 2008, Scrap Metal Recyclers Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business and 5.

assets of the Bin Service and Bulk Scrap Transport divisions of M & H Contractors Limited. M & H Contractors Limited is a transportation

business located in New Zealand. Scrap Metal Recyclers Limited has paid $1,051,000 in cash.

On 1 February 2008, CMA Corporation Limited acquired 100% of the voting shares of Steel Can Recycling Limited. CMA Metals Pty Limited 6.

has paid $286,255.

On 4 February 2008, Scrap Metal Recyclers Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business and 7.

assets of Bowman Bulk Freight Limited. Scrap Metal Recyclers Limited has paid $2,276,000 comprising 611,920 issued ordinary shares in

CMA Corporation Limited with a fair value of 64 cents each, and cash payments totalling $1,884,000.

On 8 February 2008 CMA Corporation Limited acquired the business and assets of Meretec Corporation. Meretec Corporation is engaged 8.

in the business of developing proprietary commercially viable methods of removing and recovering zinc coatings from galvanized scrap

metal, and is based in Chicago. CMA Corporation Limited has paid $6,938,000 comprising 11,012,266 issued ordinary shares in CMA

Corporation Limited with a fair value of 63 cents each.

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On 3 April 2008, Scrap Metal Recyclers (Waikato) Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business 9.

and assets of Bay Scrap Metal, a metal recycling business based in Tauranga, New Zealand. Scrap Metal Recyclers (Waikato) Limited has

paid $2,742,000 comprising 1,394,495 issued ordinary shares in CMA Corporation Limited with a fair value of 56 cents each, and cash

payments totalling $1,900,000.

On 7 May 2008, CMA Corporation Limited increased its holding in the Malaysian based metal processing company Purata Keuntungan Sdn 10.

Bhd (“Purata”) to 100% ownership. Purata was established in September 2007 as a joint venture in which CMA held a 40% stake. CMA

Corporation Limited has paid $1,097,000 in cash to acquire 100% of interest in Purata.

after Balance date Events On 13 August 2008, CMA Corporation Limited has issued 37,500,000 ordinary shares as consideration for the assets from Meretec Corporation.

Future developments, prospects and Business Strategies The Economic Entity will continue to develop the following strategies and opportunities to deliver long term goals and grow shareholder wealth.

Expand the Economic Entity’s network of metal trading scrap yard facilities in key areas in Australia, New Zealand, Singapore, Malaysia 1.

and USA.

Expand the Economic Entity’s metal processing, recycling and transportation facilities to ensure the maximisation of profit margins from 2.

tonnages handled and add additional value where opportunities can be identified.

Fully integrate the acquisitions with CMA’s existing businesses and crystallise the potential synergies across the Economic Entity to improve 3.

the efficiency and quality of operations.

Continue to develop and implement first class systems and procedures in the areas of planning, financial reporting and control, occupational 4.

health and safety, and employee development and remuneration.

Leverage expertise from the Economic Entity’s demolition projects around Australia to establish long-term, profitable relationships with key 5.

customers in Australia and overseas.

Expand and develop the remediation business within the demolition and remediation contract services division. 6.

Continue to appraise and pursue strategic acquisitions that create value for shareholders and are earnings accretive. 7.

Environmental issues and occupational health and Safety The Economic Entity’s operations are subject to significant environmental regulation under the laws of the Commonwealth and States of Australia,

and those countries where CMA has a direct presence.

The Economic Entity is subject to environmental regulations in relation to its scrap metal trading business locations and its demolition and -

remediation contract services sites, which require certain standards be met and adhered to in relation to matters such as drainage and the

storage and disposal of hazardous materials. Where necessary, actions have been taken in relation to businesses and subsidiaries acquired

during the financial year to ensure that they comply with such regulations.

The Economic Entity’s New Zealand subsidiaries are advanced in addressing environmental issues and have received an award recognising -

these standards.

Executive management and key technical personnel regularly visit metal yards and contracting sites to monitor and improve environmental -

and occupational health and safety performance against the Economic Entity’s stringent standards.


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information on directors

Alan Good Chairman (Non-Executive Independent)

Qualifications and Experience Alan Good is a qualified Chartered Accountant and was a Partner at PricewaterhouseCoopers (PwC)

for 23 years until his retirement from the practice in 2003. From 1995 to 2002, he was Managing

Partner of PwC in Perth. His main areas of practice were corporate finance and assurance.

Interest in Shares and Options 70,654 Ordinary Shares in CMA Corporation Limited.

Special Responsibilities Alan Good is Chairman of the Nomination and Remuneration Committees and a member of the

Audit Committee.

Directorships held in other listed entities Alan Good is Chairman of Straits Resources Limited (appointed July 2005).

Douglas Rowe Managing Director

Qualifications and Experience Douglas Rowe’s career in recycling commenced in 1977 at his family’s business in Victoria. Having

gained several years experience in the metals industry, he undertook a management role with the

Poseidon Group of Companies before moving to the mining, mineral and metal oxide area of business.

Douglas was a founder of the Southern Rocycling business in 1992.

Interest in Shares and Options 53,311,300 Ordinary Shares in CMA Corporation Limited.

Special Responsibilities Douglas Rowe is a member of the Nomination Committee.

Joseph Tong Hong Chung Director (Executive)

Qualifications and Experience Joseph Chung was a founding shareholder of the T & T Metal Group, has over 20 years experience

in the recycling and demolition industry and holds a Bachelor of Arts degree. Joseph is an expert

in project management and has managed a number of high value contracts with Australia’s leading

companies. Joseph also has a number of years’ experience in exporting scrap metal from major

ports in Australia to clients in South East and North East Asia.


Special Responsibilities Special Projects

Robert Moltoni Director (Non-Executive)

Qualifications and Experience Robert Moltoni was a previous Managing Director of Moltoni Adams Pty Limited. Since 1975,

Robert has established and managed a substantial group of companies involved in demolition,

construction, waste management, land remediation and farming.

Robert is a past winner of the WA Ernst & Young Entrepreneur of the Year award.

Robert is a Director of Moltoni Corporation Pty Limited, a major shareholder in CMA Corporation

Limited.


Special Responsibilities Robert Moltoni is the Chairman of the Audit Committee. For

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Terry Woods Director (Non-Executive)

Qualifications and Experience Terry Woods has over 10 years experience in the waste management, recovery and recycling

industries across Australia and New Zealand and holds a Bachelor of Science degree. Terry is the

Managing Director for Mergers & Acquisitions for the Transpacific Industries Group, a position he

has held for 3 years.

Terry has previously held senior management positions in the cement, concrete and

quarrying sectors.

Interest in Shares and Options Terry Woods does not hold any shares or options in CMA Corporation Limited.

Special Responsibilities Terry Woods is a member of the Nomination Committee, Remuneration Committee and Audit

Committee.

Trevor Schmitt Company Secretary

Qualifications and Experience Trevor Schmitt is a qualified Chartered Accountant, as well as being a member of Financial Services

Institute of Australia.

Trevor has held a number of senior management positions at a number of ASX listed entities over

the last twenty years. Most recently, as Chief Operating Officer for Rinker Group Limited for the

company’s Concrete and China division. Prior to those responsibilities, he was Chief Financial

Officer for the company’s Readymix business division. Trevor has also held a number of senior

financial roles in Pioneer International Limited.

Interest in Shares and Options Trevor Schmitt does not hold any shares or options in CMA Corporation Limited.

Special Responsibilities Chief Financial Officer and Company Secretary

remuneration reportThis report details the nature and amount of remuneration for each director of CMA Corporation Limited and for key specified executives having

the most influence over the direction and management of the Economic Entity.

Remuneration PolicyCMA Corporation Limited has now completed its first three full years of operations. The Company has previously developed and formalised

remuneration policies, and has implemented those policies throughout all business units within the Economic Entity during the financial year

ended 30 June 2008.

The policies adopted are summarised as follows:

The remuneration for key specified executives of the Economic Entity has been set by the Board and was reviewed in September 2007 as -

part of the annual performance and remuneration review process. Specified key executives include the CFO and Company Secretary and

the General Managers of each of the Scrap Metal Trading Division and the Demolition and Remediation Contract Services Division.

The Board has appointed a Remuneration Committee consisting of Alan Good (Chairman), Douglas Rowe and Terry Woods. Mr Trevor -

Schmitt is Secretary of the Committee.

The committee sponsored the implementation of employee share and option arrangements to provide an employee incentive scheme for -

performance enhancement at the Annual General Meeting held on 18 November 2005. The plans were agreed by shareholders at the

meeting. During the financial year ended 2008, the shares under these schemes were issued; details of the issue are contained in Note 27.


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The Board’s current policy for determining the nature and amount of remuneration for senior executives of the Economic Entity is as follows:

The initial remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by -

the Board after seeking professional advice from independent external consultants.

All executives receive a base salary (which is based on factors such as qualifications and experience relating to their specific roles) and -

superannuation. The Remuneration Committee will review the current policy and executive packages annually by reference to the Economic

Entity’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries.

The performance of executives is measured against criteria agreed annually with each executive and is based predominantly on the -

forecast growth of the Economic Entity’s profits and shareholders’ value, and individual performance. All bonuses and incentives are linked

to predetermined performance criteria. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and

options, and can recommend changes to the committee’s recommendations. Any changes must be justified by reference to measurable

performance criteria. The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-

term growth in shareholder wealth.

Executives will also be entitled to participate in the employee share and option arrangements that were approved by members at the Annual -

General Meeting held on 18 November 2005. During the financial year ended 30 June 2008, some executives received shares under the

Employee Equity Scheme; details are contained in Note 27.

The executive director and executives receive a superannuation guarantee contribution required by law, which is currently 9%, and do not -

receive any other retirement benefits. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards

superannuation.

All remuneration paid to directors and executives is valued at the cost to the Company and expensed. -

The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities.

The Remuneration Committee determines payments to the non-executive directors and reviews their remuneration on 1 October annually, based

on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate remuneration

payable to non-executive directors was increased from $400,000 to $600,000 by shareholder resolution at the 2007 AGM.

Fees for non-executive directors are not linked to the performance of the Economic Entity. However, to align directors’ interests with shareholder

interests, the directors are encouraged to hold shares in the Company.

Performance Based RemunerationA part of each executive director’s and executive’s remuneration package is performance-based, and is measured against key performance

indicators (KPIs). The intention of this program is to facilitate goal congruence between directors/executives and that of the business and

shareholders. KPIs are set each year on 1 October, with a significant level of consultation with directors/executives to ensure agreement.

The measures will be specifically tailored to the areas that each director/executive is involved in and has a level of control over. The KPIs target

areas the Board believes hold greater potential for group expansion and profit, covering financial and non-financial as well as short- and long-

term goals. The level set for each KPI is based on budgeted figures for the Economic Entity and respective industry standards.

Performance in relation to the financial KPIs is assessed annually, with bonuses being awarded depending on the number and deemed difficulty

of the KPIs achieved. Following the assessment, the KPIs will be reviewed by the Remuneration Committee in light of the desired and actual

outcomes, and their efficiency assessed in relation to the Economic Entity’s goals and shareholder wealth, before the KPIs are set for the

following year.

In determining whether or not a financial KPI has been achieved, the Remuneration Committee of CMA Corporation Limited will base the

assessment on audited figures.

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Company Performance, Shareholder Wealth and Directors’ and Executives’ RemunerationThe Remuneration Policy was developed to increase goal congruence between shareholders and directors and executives. The methodology

applied in achieving this objective is to provide performance bonuses based on key performance indicators, and payable by the issue

of shares and/or options. This policy is to apply to the majority of directors and executives to encourage the alignment of personal and

shareholder interests.

The following table shows the gross revenue, profits and dividends for the last four years for the listed entity, as well as the basic earnings

per share at the end of the respective financial years. Analysis of the actual figures shows an increase in profits each year, with the exception

of 2006.

2008 2007 2006 2005

$000 $000 $000 $000

Revenue 503,280 237,287 116,748 21,195

Net profit 18,076 6,517 1,696 3,006

Cents Cents Cents Cents

Basic earnings per share 5.0 4.5 1.3 3.6

Dividends declared 0.1 - - 0.1

The Company believes this policy will be effective in increasing shareholder wealth in the coming years.

Details of RemunerationDetails of the remuneration for each director and each of the key management personnel of the Economic Entity are set out in the tables below.

The key management personnel of the Economic Entity include, in addition to the directors, the specified executives. The specified executives

are the members of senior management who report directly to the Managing Director and are responsible for directing, planning and controlling

the Economic Entity’s operations.

Performance Income as a Proportion of Total RemunerationPerformance based bonuses were paid to some executive directors and executives during the financial year ended 30 June 2008 which were

based on performance against pre-determined key performance indicators, the progress against which were assessed by the Board of Directors.

Options Issued as Part of Remuneration for the Financial Year Ended 30 June 2008825,000 options were issued to directors and executives as part of their remuneration by the Economic Entity during the financial year, details are

as below and contained in Note 27 (2007: none).


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Options Granted As Remuneration

Key management

personnel

vested &

Grant

no.

option

value

$

Exercise

price

$

Grant date &

First Exercise

date

last Exercise

date

Peter Hatfull 700,000 0.37 0.4 30 November 2007 30 June 2012

Patrick Raper 50,000 0.37 0.4 30 November 2007 30 November 2012

Shaun Clarke 50,000 0.37 0.4 30 November 2007 30 November 2012

Bruce Nix 25,000 0.37 0.4 30 November 2007 30 November 2012

825,000

Employment Contracts of Directors and Senior ExecutivesThe employment conditions of the Managing Director, the executive directors and specified executives are formalised in contracts of employment.

CMA Corporation Limited has the following key employees:

Doug Rowe, Managing Director; -

Bruce Nix, Group Head of Human Resources; -

Trevor Schmitt, Chief Financial Officer and Company Secretary; and -

Shaun Clarke, General Manager Demolition and Remediation Contract Services Division. -

The key employees (except the Managing Director):

have no contracted entitlement to annual bonus payments but are included in the Performance Based Remuneration Policy of the -

Economic Entity;

have standard leave entitlements; -

may terminate their employment or have their employment terminated by CMA Corporation Limited, by giving appropriate notice; -

receive total remuneration as follows: -

Bruce Nix, $190,000 per annum; -

Shaun Clarke, $272,064 per annum; -

Trevor Schmitt, $325,000 per annum; -

are entitled to participate in any employee share or option arrangements; and -

are subject to restrictive covenants during their employment or following termination of their employment. -

The Managing Director:

has no contracted entitlement to annual bonus payments but is included in the Performance Based Remuneration Policy of the -

Economic Entity;

has standard leave entitlements; -

may terminate his employment or have his employment terminated by CMA Corporation Limited, by giving appropriate notice; -

receives total remuneration of $436,000; -

is entitled to participate in the employee share and option arrangements; and -

is subject to restrictive covenants during his employment, or following termination of his employment. -

For all these key employees, either party may terminate the employment by giving appropriate notice, and CMA Corporation Limited may also

terminate with payment in lieu of notice. Rights of summary dismissal are preserved.

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Remuneration of Directors and Key Management Personnel

Short-term Benefits post-employment Benefits Share-based payments

Salaries Cash Bonus Super-annuation

termination Benefits

options Shares total performance related

2008 $ $ $ $ $ $ $ %

directors

Alan Good 100,000 - 9,000 - - - 109,000 -

Peter Hatfull 250,000 240,000 24,752 25,020 259,000 44,800 843,572 64.5

Joseph Tong Hong Chung 275,000 - 24,750 - - - 299,750 -

John Crabb 27,083 - 2,438 - - - 29,521 -

Robert Moltoni 55,000 - 4,950 - - - 59,950 -

Douglas Rowe 324,969 - 29,247 - - - 354,216 -

Terry Woods 29,167 - 2,625 - - - 31,792 -

1,061,219 240,000 97,762 25,020 259,000 44,800 1,727,801

2008 $ $ $ $ $ $ $ %

Specified Executives

Trevor Schmitt 42,049 - 3,784 - - - 45,833 -

Bruce Nix 162,675 - 14,746 - 9,250 6,400 193,071 8.1

Shaun Clarke 280,039 - 25,662 - 18,500 16,000 340,201 10.1

Former Specified Executives

Mike Keenan 61,415 - 6,300 155,246 - - 222,961 -

Patrick Raper 187,200 - 18,421 15,557 18,500 72,000 311,678 29.0

733,378 - 68,913 170,803 46,250 94,400 1,113,744

2007 $ $ $ $ $ $ $ %

directors

Alan Good 75,000 - 6,750 - - - 81,750 -

Peter Hatfull 385,732 75,000 34,716 - - - 495,448 15.1

Joseph Tong Hong Chung 50,000 - 4,500 - - - 54,500 -

John Crabb 50,000 - 4,500 - - - 54,500 -

Robert Moltoni 50,000 - 4,500 - - - 54,500 -

Douglas Rowe - - - - - - - -

610,732 75,000 54,966 - - - 740,698

2007 $ $ $ $ $ $ $ %


Mike Keenan 308,676 - 23,850 - - 150,002 482,528 -

Shaun Clarke 247,196 - 22,248 - - - 269,444 -

Patrick Raper 247,196 - 22,248 - - - 269,444 -

803,068 - 68,346 - - 150,002 1,021,416

No non-cash benefits were provided to the Directors or Key Management Personnel in both years.


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meetings of directors During the financial year ended 30 June 2008, 11 meetings of the Board of Directors were held. Attendances by each director during the

financial year were as follows:

director

directors’ meetings Eligible

to attend

directors’ meetings attended

audit Committee meetings Eligible

to attend

audit Committee meetings attended

Alan Good 11 10 4 4

Peter Hatfull 7 7 - -

Joseph Tong Hong Chung 11 11 - -

John Crabb 6 5 2 2

Robert Moltoni 11 7 4 4

Douglas Rowe

Terry Woods

9

5

9

4

-

-

-

-

director

remuneration Committee

meetings Eligible to attend

remuneration Committee meetings attended

nomination Committee

meetings Eligible to attend

nomination Committee meetings attended

Alan Good 1 1 2 2

Peter Hatfull 1 1 2 2

Joseph Tong Hong Chung - - - -

John Crabb - - 2 2

Robert Moltoni 1 1 - -

Douglas Rowe

Terry Woods

-

-

-

-

-

-

-

-

indemnifying officersDuring or since the end of the financial year, the Company has paid or agreed to pay insurance premiums in relation to its directors and officers.

The terms of the insurance policy prevent disclosure of the amount of the premium paid, or the specific coverage that it provides.

proceedings on Behalf of CompanyNo person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company

is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the financial year.

non-audit ServicesThe Board of Directors, in accordance with advice from the Audit Committee, is satisfied that the provision of non-audit services during the

financial year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are

satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

PKF East Coast Practice and Ross Melville PKF provided due diligence and tax compliance services during the financial year. -

all non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the auditor. -

the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with -

APES110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

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rounding amountsThe Company is an entity to which ASIC Class Order 98/100 applies and, accordingly, amounts in the Directors’ Report and financial report have

been rounded to the nearest thousand dollars, where rounding is applicable.

auditor’s independence declarationThe lead auditor’s independence declaration for the financial year ended 30 June 2008 has been received and is set out on page 29.

Change of name of legal EntitiesThe following wholly owned subsidiaries of the Economic Entity had a change of name during the year:

CMA Recycling Pty Limited (formerly known as CMA Metals (QLD) Pty Limited) -

CMA Recycling Victoria Pty Limited (formerly known as Universal Metals Pty Limited) -

CMA Contracting Pty Limited (formerly known as Moltoni Adams Group Pty Limited) -

CMA Recycling Australia Pty Limited (formerly known as CMA Metals Pty Limited) -

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

douglas rowe

managing director

dated this 22 September 2008


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Lead Auditor’s Independence Declaration

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726 Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia DX 10173 | Sydney Stock Exchange | New South Wales

PKF East Coast Practice is a member of PKF Australia Limited a national association of independent chartered accounting and consulting firms each trading as PKF. The East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice is also a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

Auditor's Independence Declaration

As lead auditor for the audit of CMA Corporation Limited for the year ended 30 June 2008, I declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of CMA Corporation Limited and the entities it controlled during the year.

PKF

Arthur Milner Partner

Sydney, 22 September 2008

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Economic Entity parent Entity

note 2008 2007 2008 2007

$000 $000 $000 $000

Revenue from continuing operations 2 501,585 237,095 15,417 5,138

Other income 2 1,695 192 (255) 885

Changes in inventories of finished goods and work in progress 35,876 5,659 - -

Inventories used (367,791) (144,213) - -

Employee benefits expense (47,304) (26,664) (4,244) (2,758)

Contractors, consultants and professional fees expense (12,644) (10,260) (1,606) (532)

Equipment expense (24,269) (17,356) (80) (69)

Transport expense (18,115) (14,862) - -

Office and yard rent expense (11,384) (4,341) (437) (197)

Travel expense (6,873) (3,250) (681) (344)

Communications and IT expense (2,001) (1,181) (525) (265)

Insurance expense (1,782) (1,949) (90) (61)

Other general and administration expense (2,384) (802) (337) (203)

Depreciation and amortisation expense (11,133) (4,949) (141) (127)

Finance costs 3 (9,935) (3,311) (1,188) (675)

Profit before income tax 23,541 9,808 5,833 792

Income tax expense 4 (5,465) (3,291) (1,619) 31

Profit for the financial year 18,076 6,517 4,214 823

Profit attributable to members of the parent entity 18,076 6,517 4,214 823

Basic earnings per share (cents per share) 7 5.0 4.5

Diluted earnings per share (cents per share) 7 5.0 4.5

The accompanying notes form part of these financial statements.

Income Statement For the Financial Year ended 30 June 2008

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note 2008 2007 2008 2007$000 $000 $000 $000

aSSEtS

Current assets

Cash and cash equivalents 8 3,348 21,276 112 18,957

Trade and other receivables 9 80,594 32,543 103,512 16,305

Inventories 10 56,236 20,230 - -

Other assets 11 8,875 2,083 787 895

total Current assets 149,053 76,132 104,411 36,157

non-Current assets

Trade and other receivables 9 18,335 89 11 33

Financial assets 12 534 525 108,313 44,535

Property, plant and equipment 13 140,722 31,425 2,751 2,283

Deferred tax assets 4 3,404 1,482 799 471

Intangible assets 15 77,781 36,909 - -

total non-Current assets 240,776 70,430 111,874 47,322

total aSSEtS 389,829 146,562 216,285 83,479

liaBilitiES

Current liabilities

Trade and other payables 16 81,312 21,347 1,362 3,513

Short-term borrowings 17 34,117 5,978 6,788 211

Current tax liabilities 3,600 1,937 1,470 -

Short-term provisions 18 2,073 1,279 339 93

Other 19 - 21,265 - 21,265

total Current liabilities 121,102 51,806 9,959 25,082

non-Current liabilities

Trade and other payables 16 - 1,097 - -

Long-term borrowings 17 91,603 34,065 51,133 8,011

Deferred tax liabilities 4 1,801 895 58 58

Long-term provisions 18 741 206 - -

total non-Current liabilities 94,145 36,263 51,191 8,069

total liaBilitiES 215,247 88,069 61,150 33,151

nEt aSSEtS 174,582 58,493 155,135 50,328

EQuitY

Issued capital 20 150,788 48,420 150,788 48,420

Retained earnings 26,235 9,934 4,347 1,908

Other reserves 21 (2,441) 139 - -

total EQuitY 174,582 58,493 155,135 50,328


Balance Sheet As at 30 June 2008

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Statement of Changes in Equity For the Financial Year ended 30 June 2008

Economic Entity note issued

Capital

retained

Earnings

other

reserves

total

$000 $000 $000 $000

at 30 June 2006 42,282 3,417 (563) 45,136

Shares issued during the financial year 6,055 - - 6,055

Cost associated with shares issued during the financial year, net of tax 83 - - 83

Profit attributable to members of parent entity - 6,517 - 6,517

Exchange differences on translation of foreign operations - - 702 702

at 30 June 2007 48,420 9,934 139 58,493


Cost associated with shares issued during the financial year, net of tax (1,542) - - (1,542)

Dividends paid during the financial year 6 - (1,775) - (1,775)


Exchange differences on translation of foreign operations - - (2,580) (2,580)

at 30 June 2008 150,788 26,235 (2,441) 174,582

parent Entity issued

Capital

retained

Earnings

other

reserves

total

$000 $000 $000 $000

at 30 June 2006 42,282 1,085 - 43,367


Cost associated with shares issued during the financial year, net of tax 83 - - 83

Profit attributable to members of parent entity - 823 - 823

at 30 June 2007 48,420 1,908 - 50,328


Cost associated with shares issued during the financial year, net of tax (1,542) - - (1,542)

Dividends paid during the financial year 6 - (1,775) - (1,775)


at 30 June 2008 150,788 4,347 - 155,135


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Cash Flow Statement For the Financial Year ended 30 June 2008


note 2008 2007 2008 2007

$000 $000 $000 $000

Cash Flows from operating activities

Receipts from customers 439,574 244,995 642 (33)

Payments to suppliers and employees (421,434) (233,465) (9,905) 663

Interest received 1,601 162 47 6

Finance costs (7,504) (3,311) (1,188) (675)

Income tax paid (4,412) (1,928) (477) -

Net cash provided by / (used in) operating activities 24 7,825 6,453 (10,881) (39)

Cash Flows from investing activities

Proceeds from sale of property, plant and equipment 1,185 1,046 - -

Purchase of property, plant and equipment 13 (50,791) (10,052) (609) 35

Outlays in respect of acquisition of subsidiaries and businesses, net of cash acquired 26 (36,056) (8,530) (47,400) (6,663)

Dividends received - - - 879

Net cash (used in) investing activities (85,662) (17,536) (48,009) (5,749)

Cash Flows from Financing activities

Proceeds from issue of shares 43,839 6,055 43,839 6,055

Proceeds from Entitlement Offer for which shares not issued at reporting date - 18,816 - 18,816

Outlays in respect of share issue (2,019) - (2,019) -

Amounts advanced to controlled entities - - (49,700) -

Proceeds from borrowings 51,488 19,716 49,700 269

Repayment of borrowings (33,262) (15,277) - (404)

Dividends paid (1,775) - (1,775) -

Net cash provided by financing activities 58,271 29,310 40,045 24,736

Net (decrease) / increase in cash held (19,566) 18,227 (18,845) 18,948

Cash at beginning of financial year 19,501 861 18,957 9

Cash acquired with subsidiaries purchased 550 413 - -

Cash at end of financial year 8 485 19,501 112 18,957


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Notes to the Financial StatementsFor the Year ended 30 June 2008

note 1: Summary of Significant accounting policiesThe principal accounting policies adopted in the preparation of the financial report are set out below. The financial report includes separate financial

statements for CMA Corporation Limited as an individual entity, and the Economic Entity consisting of CMA Corporation Limited and its controlled entities.

a. Basis of preparation

This financial report is a general purpose financial report that has been prepared in accordance with the requirements of Australian

Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards

Board and the Corporations Act 2001.

CMA Corporation Limited is a company limited by shares, which is incorporated and domiciled in Australia. The shares of CMA

Corporation Limited are publicly traded on the Australian Securities Exchange following its listing on 8 July 2005.

The financial report has been prepared on an accruals basis and is based on historical costs, modified when applicable by the revaluation

of selected non current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available

current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data,

obtained both externally and within the Economic Entity.

The financial report is presented in Australian dollars.

The financial statements were authorised for issue by the directors on 22 September 2008.

b. Statement of Compliance

The financial report complies with Australian Accounting Standards, which include Australian Equivalents to International Financial Reporting

Standards (“AIFRS”). Compliance with AIFRS ensures that the financial statements and notes of the Company and the Economic Entity

comply with International Financial Reporting Standards (“IFRS”).

c. Changes in accounting policy

Other than as noted below, the accounting policies applied by the Company and the Economic Entity during the financial year ended 30

June 2008 are consistent with those applied in the previous financial year.

Scrap metal included only the purchased cost on a weighted average basis in the past. The policy has been revised so that

costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories by the method most

appropriate to each particular class of inventory, with all categories being valued on weighted average cost basis. This change

in accounting policy has resulted in a decrease in cost of goods sold by $2,733,000 (2007: $436,000), increase in income tax

expense by $588,000 (2007: $125,000), increase in inventories by $2,733,000 (2007: $436,000), increase in tax liabilities by

$588,000 (2007: $125,000), increase in retained earnings by $2,145,000 (2007: $311,000), and an increase in both basic and

diluted EPS by 0.59 cents (2007: 0.22 cents). The comparatives have not been adjusted to reflect the effect of changes in the

accounting policy as this is considered immaterial to the Economic Entity.

The Economic Entity has adopted AASB 7 Financial Instruments: Disclosures, AASB 101: Presentation of Financial Statements (Revised

September 2006) and AASB 2008-4: Amendments to Australian Accounting Standards – “Key Management Personnel Disclosures by

Disclosing Entities”. Adoption of these standards has only affected the disclosures in these financial statements. There has been no affect

on profit and loss or the financial position of the entity.

d. Comparative Figures

The comparative figures in the financial report are for the financial year from 1 July 2006 to 30 June 2007.

Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.

e. rounding of amounts

The amounts contained in the Directors’ Report and the financial report have been rounded to the neared $1,000 (where rounding is applicable)

under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.

f. principles of Consolidation

The consolidated financial statements comprise the financial statements of CMA Corporation Limited (the Company) and its subsidiaries as

at 30 June each year (the Economic Entity).

The financial statements of subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies.

All intercompany balances and transactions within the Economic Entity, including any unrealised profits or losses, have been eliminated in

full upon consolidation.

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Subsidiaries are consolidated from the date on which control is acquired by the Economic Entity. Control exists where the acquiring

company within the Economic Entity has the capacity to dominate the decision-making in relation to the financial and operating policies of

the acquired entity so that the acquired entity operates with, and assists in achieving the objectives of, the Economic Entity.

Investments in subsidiaries are accounted for at cost in the individual financial statements of CMA Corporation Limited.

A list of the controlled entities is included in Note 14 to the financial statements.

g. Business Combinations

The purchase method of accounting is used to account for all business combinations, including business combinations involving entities

or businesses under common control, regardless of whether equity instruments or assets are acquired. Cost is measured at the fair

value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the

acquisition. Where equity instruments are issued in an acquisition, the fair value of the instruments is their published market price as at the

date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable

indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs

arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair

values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of

the Economic Entity’s share of the identifiable net assets acquired is recorded as goodwill (refer to Note 1p). If the cost of acquisition is

less than the Economic Entity’s share of the fair value of the identifiable net assets of the business acquired, the difference is recognised

directly in the Income Statement, but only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as

at the date of exchange.

Where any part of the consideration is dependent on the acquired business achieving certain future performance targets, this part of the

consideration is recognised only when it is probable that the targets will be achieved.

h. revenue recognition

Revenue is measured at the fair value of the consideration received or receivable.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Economic Entity and the revenue can be

reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of Goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be

measured reliably.

Demolition and Remediation Contracts and Work in Progress

Revenue from demolition and remediation contract services is recognised by reference to the stage of completion.

Stage of completion is measured by reference to actual work completed to date as a percentage of total work to be completed for

each contract.

Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses recognised that are

recoverable. Where losses are anticipated they are provided in full.

Consideration received for the performance of certain demolition, remediation or other contract services may consist of cash, scrap metal

and other intact items, and acquisition of the land where the services are being performed. The value of the scrap metal component

recognised as revenue is determined by reference to the wholesale price for scrap metal less a discount. Total consideration is not

recognised until the services are complete and all other conditions of the agreement have been satisfied.

Interest

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.

Dividends

Revenue is recognised when the shareholders’ right to receive the payment is established.

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i. Expenditure

Expenditure is brought to account on an accruals basis. The following specific recognition criteria must also be met before expenses

are recognised:

Demolition and Remediation Contracts and Work in Progress

Expenses from demolition and remediation contract services are recognised by reference to the stage of completion.

Stage of completion is measured by reference to actual work completed to date as a percentage of total work to be completed for

each contract.

Borrowing Costs

Borrowing costs are recognised as an expense when incurred.

j. income tax

The charge for current income tax expense is based on the profit for the financial year adjusted for any non-assessable or disallowed

items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of all taxable and deductible temporary differences

arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, except where the temporary

difference relates to the initial recognition of an asset or a liability in a transaction other than a business combination, where neither

accounting profit nor taxable profit or loss is affected at the time of the transaction.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible

temporary differences can be utilised. The carrying amount of deferred income tax assets is reviewed at balance date and reduced to the extent

that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.

Deferred tax is credited in the Income Statement except where it relates to items that may be recognised directly in equity, in which case

the deferred tax is adjusted directly against equity.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will

occur in income taxation legislation and the anticipation that the Economic Entity will derive sufficient future assessable income to enable

the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Tax consolidation

The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. CMA

Corporation Limited is the head entity in the tax-consolidated group. Tax expense / income, deferred tax liabilities and deferred tax assets

arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of

the members of the tax-consolidated group using the “separate taxpayer within group” approach by reference to the carrying amounts in

the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and

deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are recognised

by the Company (as head entity in the tax-consolidated group).

Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts are recognised as payable

to or receivable by the Company and each member of the group in relation to the tax contribution amounts paid or payable between the

parent entity and the other members of the tax-consolidated group in accordance with the arrangement.

k. Goods and Services tax (GSt)

Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST), except:

Where the GST incurred on a purchase of goods or services is not recoverable from the taxation authority, in which case the GST is -

recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

Receivables and payables are stated with the amount of GST payable or recoverable included. -

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the

Balance Sheet.

Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and

financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

Notes to the Financial Statements For the Year ended 30 June 2008 (continued)

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l. Cash and Cash Equivalents

Cash in the Balance Sheet comprises cash on hand and at banks, and in short-term deposits with an original maturity of three months

or less.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents per the Balance Sheet,

net of outstanding bank overdrafts. Bank overdrafts are shown within Borrowings in current liabilities on the Balance Sheet.

m. inventories

Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead

expenses, are assigned to inventories by the method most appropriate to each particular class of inventory, with all categories being

valued on weighted average cost basis.

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

Work In Progress

Demolition and remediation contracting work in progress is stated at the aggregate of contract costs incurred to date plus recognised

profits less recognised losses and progress billings. Contract costs include all costs directly related to specific contracts and costs that

are specifically chargeable to the customer under the terms of the contract.

n. property, plant and Equipment

Land held for use in the production or supply of goods or services, or for administrative purposes, is carried in the Balance Sheet at cost

less impairment.

Plant and equipment, leasehold improvements are stated at cost less accumulated depreciation and impairment. Construction in progress

is stated at cost less impairment. Cost includes expenditure that is directly attributable to the acquisition or construction of the item.

Depreciation

Depreciation methods and estimated useful lives are reviewed on a regular basis. On 1 January 2008, the estimated useful lives of assets

have been revised. This revision resulted in a positive impact on earnings of $1.02m.

Depreciation is provided on plant and equipment, but excluding land. Depreciation of plant and equipment is calculated on a straight-line

basis so as to write off the net cost of each asset over its expected useful life to its estimated residual value. Assets held under finance

leases are depreciated over their expected useful lives, but where shorter, the term of the relevant lease, using the reducing balance

method. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is shorter, using the

reducing balance method.

The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference between the sales

proceeds and the carrying amount of the asset and is recognised in profit or loss.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed asset depreciation rate

Leasehold improvements 10%

Plant and equipment 5%-33%

Leased plant Over the lease term

o. leases

Finance Leases

Leases of property, plant and equipment where substantially all the risks and benefits incidental to the ownership of the asset, but not legal

title, are transferred to entities in the Economic Entity, are classified as finance leases.

Finance leases are capitalised at the inception of the lease, recording an asset and a liability equal to the value of the minimum lease

payments, including any guaranteed residual values. Leased assets are depreciated over their estimated useful lives where it is likely that

the Economic Entity will obtain ownership of the asset, or over the term of the lease.

Lease payments are allocated between the reduction of the lease liability and the lease expense for the financial year.

Operating Leases

Leases where substantially all the risks and benefits remain with the lessor are classified as operating leases.

Operating lease payments are recognised as an expense in the Income Statement on a straight-line basis over the lease term.

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p. intangible assets

Goodwill

Goodwill is initially recognised at cost, being the excess of the cost of the business combination over the acquirer’s interest in the net

fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any

accumulated impairment losses. Goodwill is not amortised.

Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may not

be fully recoverable. As at the acquisition date, any goodwill arising is allocated to each of the cash-generating units expected to benefit

from the business combination. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment

loss is recognised. The recoverable amount is the higher of a cash-generating unit’s fair value less costs to sell and its value in use.

Intangible assets acquired separately

Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a

straight-line basis over their estimated useful lives. The estimated useful life and amortisation method is reviewed at the end of each annual

reporting period, with any changes in these accounting estimates being accounted for on a prospective basis.

At the end of the year, the intangible assets are not amortised as they have not been used.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the

definition of an intangible asset and their fair values can be measured reliably.

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation

and accumulated impairment losses, on the same basis as intangible assets acquired separately.

q. impairment of assets

At each reporting date, the Economic Entity reviews the carrying values of its tangible and intangible assets to determine whether there is

any indication that those assets may be impaired. If such an indication exists, a formal assessment of recoverable amount is made. The

recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's

carrying value. Where the carrying value of an asset exceeds its recoverable amount, the asset is considered to be impaired and the

excess is written off to the Income Statement.

Where it is not possible to estimate the recoverable amount of an individual asset, the Economic Entity estimates the recoverable amount

of the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects

current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

r. provisions

Provisions are recognised when the Economic Entity has a present legal, equitable or constructive obligation to make a future sacrifice of

economic benefits to other entities as a result of a past transaction or other past events, it is probable that a future sacrifice of economic

benefits will be required and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted to their present values.

s. Share Based payments

Share based compensation benefits are provided to employees via the employee equity plan. Information relating to this scheme is set out

in Note 27.

Shares issued to employees for no cash consideration vest immediately on grant date. On this date, the market value of the shares issued

is recognised as an employee benefits expense with a corresponding increase in equity.

Options are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of a black-scholes model.

The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,

exercise restrictions, and behavioural considerations.


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t. Foreign Currency translation

Functional and Presentation Currency

Both the functional and presentation currencies of CMA Corporation Limited and its Australian subsidiaries are Australian dollars.

The functional currency of the overseas subsidiaries (refer to Note 14 to the financial statements for a list of subsidiaries incorporated

outside Australia) are the currencies of the countries in which those subsidiaries were incorporated. The functional currencies applied by

overseas subsidiaries are New Zealand dollars, Papua New Guinean kina, Singaporean, Malaysian and United States dollars.

Transactions and Balances

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates prevailing at the dates of the

transactions. Monetary assets and liabilities denominated in foreign currencies are re-translated at the end of the reporting period using the

rate of exchange at the reporting date. All exchange differences arising are recognised in the Income Statement.

Group Companies

At the end of the reporting period, the assets and liabilities of overseas subsidiaries are translated into the presentation currency of CMA

Corporation Limited at the rate of exchange ruling at the reporting date, and the Income Statements are translated using the weighted

average exchange rates for the reporting period.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the

date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value

was determined.

The exchange differences arising on the re-translation of overseas subsidiaries are taken directly to a separate component of equity.

These differences are recognised in the Income Statement in the period in which the operation is disposed.

u. Financial instruments

Recognition

Financial instruments incorporate both financial assets and financial liabilities. Financial instruments are initially measured at cost on trade

date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these

instruments are measured as set out below:

Financial Assets at Fair Value through Profit and Loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by

management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Derivatives are also

categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in

the fair value of these assets are included in the Income Statement in the financial year in which they arise.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and

are stated at amortised cost using the effective interest rate method. Loans and receivables include current and non-current trade and

other receivables.

Held-to-maturity Investments

These investments have fixed maturities, and it is the Economic Entity's intention to hold these investments to maturity. Any held-to-

maturity investments held by the Economic Entity are stated at amortised cost using the effective interest rate method.

Financial Liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Financial liabilities include current and non-current trade and other payables.

Derivative Instruments

Derivative instruments are measured at fair value. Gains and losses arising from changes in the value of derivative financial instruments are

recognised immediately in the Income Statement unless they are designated as hedges. The Economic Entity does not hedge account.

Available for sale financial assets

Available for sale financial assets are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in the

investments revaluation reserve with the exception of impairment losses, interest calculated using effective interest method and foreign

exchange gains and losses on monetary assets which are recognised directly in profit or loss. Where the investment is disposed of or is

determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is included in profit or

loss for the period.

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Fair Value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value

for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models.

Impairment

At each reporting date, the Economic Entity assesses whether there is objective evidence that a financial instrument has been impaired.

Impairment losses are recognised in the Income Statement.

Derecognition of financial assets

The Economic Entity derecognises a financial asset only when the contractual rights to the cash flows from the asset expires, or it transfers

the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Economic Entity neither

transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Economic

Entity recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Economic Entity retains

substantially all the risks and rewards of ownership of a transferred financial asset, the Economic Entity continues to recognise the financial

asset and also recognises a collateralised borrowing for the proceeds received.

v. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Economic Entity’s accounting policies, management is required to make judgements, estimates and assumptions

about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions

are based on historical experience and other factors that are considered to be relevant.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in

the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the

revision affects both current and future periods.

Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date,

that have a risk of causing an adjustment to the carrying amounts of assets and liabilities within the next financial year.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has

been allocated. The value in use calculation requires the Economic Entity to estimate future cash flows expected to arise from the cash-

generating unit and a suitable discount rate in order to calculate present value.

The carrying amount of goodwill at the balance sheet date was $75.6m (2007: $36.9m). No impairment is identified in the current financial year.

Work in progress

The accurate calculation of work in progress relies upon accurate forecast of contract costs at completion, which generally are difficult to ascertain.

Property, plant and equipment

The cost of property, plant and equipment is depreciated over the estimated useful life, which is based on expected usage of the asset,

expected physical wear and tear, the repair and maintenance program and technological obsolescence arising from changes and the

residual value. The management has not considered any residual value as it is deemed immaterial.

Revenue Recognition

Revenue and expense are recognised in net profit by reference to the stage of completion of each identifiable component for demolition

and remediation contracts.

A fundamental condition for being able to estimate percentage of completion profit recognition is that project revenues and project costs

can be established reliably. This reliability is based on such factors as compliance with the Economic Entity’s system for project control

and that project management has the necessary skills. Project control also includes a number of estimates and assessments that depend

on the experience and knowledge of project management in respect of project control, industrial relations, risk management, training and

the prior management of projects.

w. Employee Benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick

leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their normal values using

the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured at the present value

of the estimated future cash outflows to be made by the Economic Entity in respect of services provided by the employees up to reporting date.


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x. Standards and interpretations issued not yet effective

At the date of authorisation of the financial report, the Standards and Interpretations listed below were issued but not yet effective.

Initial application of the following Standards and Interpretations is not expected to have any material impact on the financial report of the

Economic Entity and the Company:

Effective date (Annual reporting

periods beginning

on or after)

AASB 8 “Operating Segments” 1 Jan 2009

AASB 101 "Presentation of Financial Statements (Revised September 2007)” 1 Jan 2009

AASB 123 “Borrowing Costs (Amended)” 1 Jan 2009

AASB 3 “Business Combinations (Revised)” 1 Jul 2009

AASB 127 “Consolidated and Separate Financial Statements (Amended)” 1 Jul 2009

AASB 2008-1 “Amendments to Australian Accounting Standard - Share-based Payments: Vesting Conditions and Cancellations” 1 Jan 2009

AASB 2008-2 “Amendments to Australian Accounting Standards – Puttable Financial Instruments and Obligations arising on Liquidation” 1 Jul 2009

AASB 2008-3 “Amendments to Australian Accounting Standards arising from AASB 3 (Revised) and AASB 127 (Amended)” 1 Jan 2009

AASB 2008-5 “Amendments to Australian Accounting Standards arising from the Annual Improvements Project” 1 Jan 2009

AASB 2008-6 “Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project” 1 Jul 2009

AASB 2008-7 “Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate” 1 Jan 2009

AASB 2008-8 “Amendments to Australian Accounting Standards – Eligible Hedged Items” 1 Jul 2009

AASB Interpretation 4 "Determining whether an Arrangement contains a Lease (Revised)" 1 Jan 2008

AASB Interpretation 12 "Service Concession Arrangements" 1 Jan 2008

AASB Interpretation 13 "Customer Loyalty Programmes" 1 Jul 2009

AASB Interpretation 129 "Service Concession Arrangements: Disclosures (Revised)" 1 Jan 2008

AASB 15 “Agreements for the Construction of Real Estate” 1 Jan 2009

AASB 16 “Hedges of a Net Investment in a Foreign Operation” 1 Oct 2008

note 2: revenuesEconomic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Continuing Operations

Sale of goods and services 470,918 201,766 15,417 5,138

Contract revenue 30,667 35,329 - -

Total revenues from continuing operations 501,585 237,095 15,417 5,138

Other Income

Interest received from other persons 1,601 162 47 6

Dividends received from wholly owned subsidiaries - - - 879

Sundry revenue 381 76 (302) -

Loss on disposal of property, plant and equipment (287) (46) - -

Total other income 1,695 192 (255) 885

Total revenues 503,280 237,287 15,162 6,023

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note 3: Expenses Economic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Cost of sales 331,915 138,554 - -

Finance costs

- External 7,200 3,311 883 675

- Related Parties 304 - 304 -

Interest expense on financial assets 2,431 - - -

Total finance costs 9,935 3,311 1,188 675

The only significant revenue and expense items relevant in explaining the financial performance are project revenues and expenses in the normal

course of business already detailed above.

note 4: income tax Expensea. major components of income tax

expense comprise:

Current income tax expense 6,228 3,707 1,675 -

Deferred tax relating to the origination and reversal of temporary differences (770) (416) (56) (31)

Deferred tax relating to reduction in tax rate in New Zealand 7 - - -

Income tax expense 5,465 3,291 1,619 (31)

b. reconciliation between income tax expense and prima facie tax on accounting profit/(loss):

Accounting profit/(loss) 23,541 9,808 5,833 792

Tax at 30% 7,062 2,942 1,750 238

Tax effect of amounts not deductible (taxable) in calculating taxable income:

Non-deductible expenses 93 22 7 8

Exempt non-portfolio dividends - - - (264)

Research and development (714) - - -

Tax consolidation restatement of tax cost base assets (378) - - -

Other 102 (7) (138) (124)

International tax rate differential (673) 178 - -

Deferred tax asset not recognised 63 156 - 111

Under (over) provision from previous years – research and development (90) - - -

Income tax expense 5,465 3,291 1,619 (31)

The applicable weighted average effective tax rates are as follows: 23% 34% 28% 0%


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note 2008 2007 2008 2007

$000 $000 $000 $000

c. analysis of deferred tax assets:

Provisions

Opening balance 784 299 28 9

Charged to income 271 464 23 19

Acquisitions / Disposals - 21 - -

Closing balance 1,055 784 51 28

Accruals


Charged to income 94 138 - (3)

Acquisitions / Disposals - 2 - -

Closing balance 324 230 10 10

Foreign exchange fluctuations

Opening balance 35 41 - -

Charged to income 267 (6) 91 -

Closing balance 302 35 91 -

Losses


Charged to income 203 (4) (58) 11


IPO costs


Charged to equity 272 80 272 80


Plant and equipment

Opening balance - - - -

Charged to income 469 - - -

Closing balance 469 - - -

Deferred tax assets acquired 26 346 - - -

Total deferred tax assets 3,404 1,482 799 471

tax consolidation

relevance of tax consolidation to the Group

The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 4 July 2007 and are

therefore taxed as a single entity from that date. The head entity within the tax consolidated group is CMA Corporation Limited. The members of

the tax-consolidated group are identified at Note 14.

nature of tax funding arrangements

Entities within the tax-consolidated group have entered into a tax funding arrangement with the head entity. Under the terms of the tax funding

arrangement, CMA Corporation Limited and each of the entities in the tax-consolidated group has agreed to pay a tax equivalent payment to or

from the head entity, based on the current tax liabilities or current tax asset of the entity. Such amounts are reflected in amounts receivable from

or payment to other entities in the tax-consolidated group.

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note 2008 2007 2008 2007

$000 $000 $000 $000

d. analysis of deferred tax liabilities:

Plant

Opening balance (762) (683) - -

Charged to income (868) (79) - -

Closing balance (1,630) (762) - -

Leased assets

Opening balance (58) (65) (58) (65)

Charged to income - 7 - 7

Closing balance (58) (58) (58) (58)

Retentions

Opening balance (8) - - -


Closing balance (18) (8) - -

Prepayment

Opening balance - - - -


Closing balance (28) (67) - -

Foreign exchange fluctuations

Opening balance (67) - - -

Charged to income 67 (67) - -

Closing balance - (67) - -

Deferred tax liabilities acquired 26 (67) - - -

Total deferred tax liabilities (1,801) (895) (58) (58)

note 5: Key management personnel disclosureDetails of directors’ and executives’ remuneration are as below.

At the date of this report, the Board consists of five members. The names, status and date of appointment or resignation of all the directors of the

Company during the year are:












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Shareholdings of directors and Specified Executives

Number of Shares Held by Parent Entity Directors and Specified Executives as at 30 June 2008:

Balance at

30 June 2007

received as

remuneration

net Change

other

Balance at

30 June 2008

parent Entity directors

Alan Good 40,000 - 30,654 70,654

Peter Hatfull 1,106,000 70,000 (357,037) 818,963

Joseph Tong Hong Chung 25,500,001 - 16,631,250 42,131,251

John Crabb - - - -

Robert Moltoni 25,500,001 - (11,300,000) 14,200,001

Douglas Rowe - - 53,311,300 53,311,300

Terry Woods - - - -

JTH Chung and JTH Chung Superannuation Fund 575,000 - 431,250 1,006,250


Mike Keenan 327,515 - (327,515) -

Shaun Clarke - 25,000 50,000 75,000

Patrick Raper 20,000 125,000 5,456 150,456

Bruce Nix - 10,000 33,925 43,925

Trevor Schmitt - - - -

total 53,068,517 230,000 58,509,283 111,807,800

Number of Shares Held by Parent Entity Directors and Specified Executives as at 30 June 2007:

Balance at

30 June 2006

received as

remuneration

net Change

other

Balance at

30 June 2007

parent Entity directors

Alan Good 40,000 - - 40,000

Peter Hatfull 1,071,000 - 35,000 1,106,000

Joseph Tong Hong Chung 25,500,001 - - 25,500,001

John Crabb - - - -

Robert Moltoni 25,500,001 - - 25,500,001

Douglas Rowe - - - -

JTH Chung and JTH Chung Superannuation Fund 15,000 - 560,000 575,000


Mike Keenan - 327,515 - 327,515

Shaun Clarke - - - -

Patrick Raper 20,000 - - 20,000

total 52,146,002 327,515 595,000 53,068,517

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note 6: dividends Economic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Declared and paid during the year

Dividends on ordinary shares:

- Interim declared: 0.5 cent per share 1,775 - 1,775 -

Unrecognised amounts

Final dividend: 0.5 cent per share 2,201 - 2,201 -

The $1,775,000 interim dividend paid in 2008 was declared in relation to the financial period from 1 July 2007 to 31 December 2007.

On 28 August 2008, the directors declared a fully franked final dividend of 0.5 cents per share to the holders of fully paid ordinary shares in

respect of the financial year ended 30 June 2008, payable on 31 October 2008. This dividend has not been included as a liability in these

financial statements. The dividend will be paid to all shareholders on the Register of Members on 15 October 2008. The total estimated

dividend to be paid is $2,201,000 and is a contingent liability.

Franking credit balance

The amount of franking credits available for the subsequent

financial year are:

- Franking account balance as at the end of the financial year

at 30% 4,566 3,038 4,566 481

- Franking credits that will arise from the payment of income

tax payable as at the end of the financial year 1,421 1,484 1,421 -

- Franking debits that will arise from income tax refunds

receivable as at the end of the financial year - (60) - -

- Franking debits that will arise from the payment of dividends

as at the end of the financial year (761) - (761) -

The amount of franking credits available for future reporting

periods:

- Impact on the franking account of dividends proposed or

declared before the financial report was authorised for issue

but not recognised as a distribution to equity holders during

the financial year (943) - (943) -

The tax rate at which dividends have been franked is 30%.

Dividends proposed will be franked at the rate of 30%.


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note 7: Earnings per ShareEconomic Entity

2008 2007

$000 $000

a. reconciliation of earnings to net profit

Earnings used in the calculation of basic and diluted EPS

- Net profit after tax 18,076 6,517

2008 2007

Shares Shares

b. Basic weighted average number of ordinary shares 364,207,035 144,619,405

diluted weighted average number of ordinary shares 364,688,474 144,619,405

Weighted average number of options outstanding 481,439 -

c. Classification of shares

All shares included in the calculation of basic and diluted

EPS are classified as ordinary shares.

There are no instruments excluded from the calculation

of basic and diluted EPS due to their being anti-dilutive.

d. ordinary share transactions after the reporting date

Shares issued on 4 July 2007 as partial consideration

for acquisition of Universal Metals Pty Limited - 46,875,000

Shares issued on 4 July 2007 pursuant to an Entitlement

Offer to Eligible Shareholders in CMA Corporation Limited

as set out in a Prospectus dated 29 May 2007 - 115,869,961

Shares issued on 13 August 2008 as consideration for acquisition of the assets of UK-based Meretec Limited 37,500,000 -

note 8: Cash and Cash EquivalentsEconomic Entity parent Entity

note 2008 2007 2008 2007

$000 $000 $000 $000

Cash at bank and on hand (i) 3,348 21,276 112 18,957

reconciliation of Cash

Cash at the end of the financial year as shown in

the Cash Flow Statement is reconciled to items in

the Balance Sheet as follows:

Cash and cash equivalents (i) 3,348 21,276 112 18,957

Bank overdrafts 17 (2,863) (1,775) - -

485 19,501 112 18,957

(i) Effective interest rate is 5.66% p.a. (2007: 4.91%).

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note 9: trade and other receivablesEconomic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Current

Trade debtors (ii) 77,482 24,086 - -

Contracting trade debtors (ii) 3,636 5,413 - -

Provision for impairment of receivables (702) (81) - -

80,416 29,418 - -

Other debtors 178 2,557 12 549

Derivative asset - 568 - -

Amounts receivable from:

- Wholly owned subsidiaries (iii) - - 103,500 15,756

80,594 32,543 103,512 16,305

(ii) The average credit period on sales of goods and rendering of services is 60 days. No interest is charged on the past due trade

receivables. A provision has been made for estimated irrecoverable trade receivable amounts arising from the past sale of goods and

rendering of services, determined by reference to past default experience.

The average age of the total receivables is 41 days (2007: 42 days).

Before accepting any new customers, the Group assesses the potential customer’s credit quality and defines credit limits by customer.

Limits attributed to customers are reviewed on a regular basis. Of the trade receivables balance at the end of the year, $12m (2007:

$0.3m) is due from Smorgon Steel Recycling and $5m (2007: $2.8m) from Sims Pacific Metals, the Group’s largest customers. They

have subsequently paid the Group $11.5m and $5m respectively. There are no other customers who represent more than 5% of the total

balance of trade receivables.

Included in the Group’s trade receivable balance are debtors with a carrying amount of $5.1m (2007: $2.9m) which are past due at the

reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still

considered recoverable. The Group has subsequently received more than 53% of these receivables and 83% of the total receivables.

The Group does not hold any collateral over these balances but expects the receivables to be paid in full.

(iii) Receivables from entities within the wholly-owned group include amounts arising under internal management fee charges and funds

transferred. The intercompany loan receivable is repayable within 12 months and is not interest bearing.

ageing of past due but not impaired

60-90 days 1,802 1,350 - -

90-120 days 2,096 1,525 - -

120+days 1,248 - - -

Total 5,146 2,875 - -

movement in the provision for

impairment of receivables

Balance at the beginning of the year (81) - - -

Impairment loss recognised on receivables (621) (81) - -

Impairment loss reversed - - - -

Balance at the end of the year (702) (81) - -

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date

credit was initially granted up to the reporting date. The concentration of credit risk is limited due to prompt collections from major customers

and the remaining customer base being large and unrelated. Accordingly, the directors believe that there is no further credit provision required in

excess of the provision for impairment of receivables.


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2008 2007 2008 2007

$000 $000 $000 $000

ageing of impaired trade receivable

90-120 days 237 - - -

120+ days 465 81 - -

Total 702 81 - -

non-Current

Retentions and deposits (iv) 147 89 11 33

Claims receivable (v) 17,969 - - -

Sundry debtors (iv) 219 - - -

18,335 89 11 33

ageing of past due but not impaired

120+days 17,969 - - -

Total 17,969 - - -

(iv) The retention and deposits, and sundry debtors are not past due. They will be fully recovered upon the completion of the leases or on

provision of the services.

(v) CMA Corporation Limited has taken advice and considers that its claim against John Holland Limited of $20,400,000 before a time value

discount, which relates to contract variations and claims has proper legal basis and is fully recoverable. In coming to this view, the entity

has also considered the risks associated with the counterclaim lodged by John Holland Limited (refer Note 25). The time value discount of

$2,431,000 being a non tax effected interest charge has been calculated based on an expected settlement by 31 December 2009, using

an average interest borrowing costs applicable to CMA Corporation Limited of 8.765%.

note 10: inventoriesat cost

Work in progress - demolition and remediation

contract services 3,140 8,174 - -

Finished goods:

Scrap metal 52,283 10,124 - -

Manufactured ingots 813 1,932 - -

56,236 20,230 - -

demolition and remediation

Contracts Work in progress

Contract costs incurred 33,589 59,713 - -

Recognised profits 14,813 10,606 - -

48,402 70,319 - -

Less: Progress billings (45,262) (62,145) - -

3,140 8,174 - -

Amount due from customers for contract work 3,140 8,174 - -

Amount due to customers for contract work - - - -

3,140 8,174 - -

Retentions on construction contracts in progress - 27 - -

Progress billings and advances received and

receivable on construction contracts in progress - - - -

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note 11: other assets (Current)Economic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Prepayments 4,019 2,083 787 895

GST Receivable 4,856 - - -

8,875 2,083 787 895

note 12: other Financial assets (non-Current)unlisted investments, at cost

- Shares in controlled entities - - 108,313 44,535

- Shares in other entities 534 525 - -

534 525 108,313 44,535

The Economic Entity’s investment in other entities relates to a 7% interest held in CMA Engineering Pty Limited, a company established to hold

the distribution rights for Australasia for hydroxy based steel cutting equipment.

CMA Engineering Pty Ltd was registered on 3 July 2006, at which time the Economic Entity held 51% of the voting shares. On 31 December

2006, the Economic Entity’s interest in CMA Engineering was reduced from 51% to 7% through the injection of additional capital by other

shareholders.

The Economic Entity’s investment in CMA Engineering Pty Limited is recorded at cost.

note 13: property, plant and Equipmentland

At cost 664 - - -

plant and equipment

At cost 131,543 38,107 361 74

Accumulated depreciation (16,402) (10,640) (25) (19)

115,141 27,467 336 55

leasehold improvements

At cost 3,593 2,734 322 -

Accumulated amortisation (1,257) (1,046) (24) -

2,336 1,688 298 -

leased plant and equipment

Capitalised leased assets 24,969 2,545 2,500 2,500

Accumulated depreciation (3,926) (275) (383) (272)

21,043 2,270 2,117 2,228

Construction in progress

At cost 1,538 - - -

Total Property, Plant and Equipment 140,722 31,425 2,751 2,283


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2008 2007 2008 2007

$000 $000 $000 $000

(a) movements in Carrying amounts

Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the financial year:

land

Balance at the beginning of the financial year - - - -

Additions through acquisition of subsidiaries and businesses 664 - - -

Additions - - - -

Disposals - - - -

Net exchange differences on translation of foreign operation - - - -

Carrying amount at the end of the financial year 664 - - -

plant and equipment

Balance at the beginning of the financial year 27,467 21,947 55 30

Additions through acquisition of subsidiaries and businesses 64,420 2,092 - -

Additions 32,589 8,794 287 35

Disposals (1,223) (1,069) - -

Depreciation expense (7,155) (4,647) (6) (10)

Net exchange differences on translation of foreign operation (957) 350 - -

Carrying amount at the end of the financial year 115,141 27,467 336 55

leasehold improvements

Balance at the beginning of the financial year 1,688 978 - -

Additions through acquisition of subsidiaries and businesses - 21 - -

Additions 849 836 322 -

Disposals - (23) - -

Depreciation expense (254) (182) (24) -

Net exchange differences on translation of foreign operation 53 58 - -

Carrying amount at the end of the financial year 2,336 1,688 298 -

leased plant and equipment

Balance at the beginning of the financial year 2,270 2,345 2,228 2,345

Additions through acquisition of subsidiaries and businesses 6,931 33 - -

Additions 15,815 12 - -

Disposals (249) - - -

Depreciation expense (3,724) (120) (111) (117)


Carrying amount at the end of the financial year 21,043 2,270 2,117 2,228For

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2008 2007 2008 2007

$000 $000 $000 $000

Construction in progress


Additions through acquisition of subsidiaries and businesses - - - -

Additions 1,538 - - -

Disposals - - - -

Depreciation expense - - - -


Carrying amount at the end of the financial year 1,538 - - -

total

Balance at the beginning of the financial year 31,425 25,270 2,283 2,375

Additions through acquisition of subsidiaries and businesses 72,015 2,146 - -

Additions 50,791 9,642 609 35

Disposals (1,472) (1,092) - -

Depreciation expense (11,133) (4,949) (141) (127)

Net exchange differences on translation of foreign operation (904) 408 - -

Carrying amount at the end of the financial year 140,722 31,425 2,751 2,283

note 14: Controlled Entities and associatesCountry of

incorporation

percentage

owned

percentage

owned

2008 2007

CMA Corporation Limited (i) Australia

Subsidiaries of CMA Corporation Limited are:

CMA Contracting Pty Limited (formerly Moltoni Adams Group Pty Limited) (ii) Australia 100% 100%

CMA Recycling Australia Pty Limited (formerly CMA Metals Pty Limited) (ii) Australia 100% 100%

T & T Metal & Asbestos Services Pty Limited (ii) Australia 100% 100%

Asia Pacific Metals Pty Limited (ii) Australia 100% 100%

Asia Pacific Metals Unit Trust (ii) Australia 100% 100%

CMA Recycling Pty Limited (formerly CMA Metals (QLD) Pty Limited) (ii) Australia 100% 100%

CMA Recycling Victoria Pty Limited (formerly Universal Metals Pty Limited) (ii) Australia 100% -

Advanced Recycling Australasia Pty Limited (ii) Australia 100% -

RBP Trading Pty Limited Papua New Guinea 100% 100%

Scrap Metal Recyclers Limited New Zealand 100% 100%

Scrap Metal Recyclers (Waikato) Limited New Zealand 100% 100%

CMA Metals Limited New Zealand 100% 100%

CMA Metals (NZ) Limited New Zealand 100% 100%

The Scrap Metal Company Limited New Zealand 100% 100%


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Country of

incorporation

percentage

owned

percentage

owned

2008 2007

Scrap Steel Recyclers (Hamilton) Limited New Zealand 100% 100%

Steel Can Recycling Limited New Zealand 100% -

Peakmore Enterprise Pte Limited Singapore 100% -

Purata Keuntungan Sdn Bhd Malaysia 100% -

CMA Recycling Corporation, Ltd United States 100% -

(i) CMA Corporation Limited is the head entity within the tax-consolidated group.

(ii) These companies are members of the tax-consolidated group.

Controlled Entities Acquired

On 4 July 2007, the Company acquired all the issued equity of CMA Recycling Victoria Pty Limited (formerly Universal Metals Pty Limited) and

Advanced Recycling Australasia Pty Limited.

On 13 September 2007, CMA Peakmore Pte Limited, a wholly owned subsidiary of the Company, acquired all the issued equity of Peakmore

Enterprise Pte Limited.

On 1 February 2008, the Company acquired all the issued equity of Steel Can Recycling Limited.

The Company acquired 40% interest in Purata Keuntungan Sdn Bhd, a Malaysian based metal processing company, in November 2007. Then

on 7 May 2008, the Company increased its holding to 100%.

On 8 February 2008, CMA Recycling Corporation, Ltd was set up and acquired the business and assets of Meretec Corporation.

Associates of CMA Corporation Limited are:

CMA Industries (Singapore) Pte Limited Singapore 50% 50%

On 30 May 2007, the Company established CMA Industries (Singapore) Pte Limited. This new company has not traded during the period up to

the date of this report.

note 15: intangible assetsEconomic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Goodwill

Balance at the beginning of the financial year 36,909 29,660 - -

Additions - goodwill arising on acquisition of subsidiaries and businesses 38,444 7,249 - -

Net exchange differences on translation of foreign operations 210 - - -

Carrying amount at the end of the financial year 75,563 36,909 - -

other intangible assets


Additions

- Meretec licence 1,178 - - -

- Meretec intellectual property 1,040 - - -

Carrying amount at the end of the financial year 2,218 - - -

77,781 36,909 - -

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note 16: trade and other payablesEconomic Entity parent Entity

note 2008 2007 2008 2007

$000 $000 $000 $000

Current

Unsecured liabilities

Trade creditors (i) 71,041 14,086 1,022 626

Sundry creditors and accrued expenses 9,783 7,261 340 2,341

Amounts payable to:

- a related party (ii) 488 - - -

- Wholly owned subsidiaries - - - 546

81,312 21,347 1,362 3,513

(i) The average credit period on purchases of metal and non metal goods is between 30-45 days.

(ii) Trade payable to a related party. The balance is not interest bearing and is at arm’s-length.

non-Current

Non-interest bearing borrowings - 1,097 - -

note 17: BorrowingsCurrent

Secured liabilities

Bank overdrafts (iii) 8 2,863 1,775 - -

Lease liability 526 351 111 211

Hire purchase liabilities 8,981 2,553 - -

Bank loans (iv) 15,070 1,299 - -


Loans from a related party (v) 6,677 - 6,677 -

34,117 5,978 6,788 211

non-Current

Secured liabilities

Lease liability 2,945 2,408 1,633 1,861


Bank loans (vi) 65,936 23,980 49,500 6,150

91,603 34,065 51,133 8,011

(iii) Bank overdraft has an average interest rate of 10.6% p.a. (2007: 9.75% p.a.)

(iv) Relates to the current portion of long-term borrowings.

(v) Amounts repayable to a related party of the Economic Entity. Average interest rate of 8% p.a. was charged on the outstanding loan

balance on an arm’s-length basis. The balance was fully settled at the date of this report.

(vi) The bank loans are with maturity periods not exceeding 3 years. Weighted average interest rate of 8.67% p.a. (2007: 8.23% p.a.)

applied on the loans.


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2008 2007 2008 2007

$000 $000 $000 $000

a. total Current and non-current

Borrowings

Secured liabilities

Bank overdraft 2,863 1,775 - -

Lease liability 3,472 2,759 1,744 2,072


Bank loans 81,006 25,279 49,500 6,150


Loans from a related party 6,677 - 6,677 -

125,720 40,043 57,921 8,222

note 18: provisionsEmployee Entitlements

Provision for employee entitlements 2,814 1,485 339 93

Analysis of Total Provisions

Current 2,073 1,279 339 93

Non-current 741 206 - -

2,814 1,485 339 93

provision for employee entitlements

Balance at the beginning of the year 1,485 973 93 27

Additional provisions recognised 1,329 512 246 66

Balance at the end of the year 2,814 1,485 339 93

provision for Employee Entitlements

A provision has been recognised for employee entitlements relating to annual leave, rostered days off, long service leave and, where required

under the terms of the workplace agreements in place, sick leave.

The measurement and recognition criteria relating to provisions of employee entitlements have been included in Note 1w to this report.

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note 19: other Current liabilitiesEconomic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Liability to issue shares under Entitlement Offer - 18,816 - 18,816

Liability to issue shares as deferred consideration for acquisitions - 2,449 - 2,449

Other - - - -

- 21,265 - 21,265

liability to issue Shares under Entitlement offer

CMA Corporation Limited issued a Prospectus on 29 May 2007 for a non-renounceable entitlement offer to eligible shareholders. Under the

entitlement offer, eligible shareholders were entitled to acquire three new shares in CMA Corporation Limited for every four existing shares held at

the record date, at a price of 32 cents per share. The gross proceeds of $37,078,388 raised by the entitlement offer were used to fund the cash

consideration payable by CMA Corporation Limited for its acquisition of Universal Metals Pty Limited, to meet the costs of that transaction, and to

fund the general working capital requirements of the Economic Entity. The entitlement offer closed on 29 June 2007.

At 30 June 2007, CMA Corporation Limited had received $18,816,094 from shareholders participating in the entitlement offer. Further funds

of $18,262,294 were received subsequent to year end from participating shareholders and underwriters. The issue of shares occurred on

4 July 2007 and consequently the cash received prior to the end of the financial year has been recorded as a liability to issue ordinary shares

in CMA Corporation Limited.

note 20: issued Capitalordinary Shares

Issued and fully paid 150,788 48,420 150,788 48,420

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

At shareholders meetings each ordinary share is entitled to one vote when a poll is called; otherwise each shareholder has one vote on a

show of hands.

2008 2007 2008 2007

$000 $000 Shares Shares

Movements in ordinary shares on issue

At the beginning of the financial year 48,420 42,282 154,513,105 142,454,649

Shares issued during the financial year

- 7 July 2006 - 100 - 343,520

- 20 October 2006 - 148 - 415,002

- 15 November 2006 - 800 - 2,469,233

- 7 December 2006 - 2 - 6,346

- 22 February 2007 - 426 - 930,355

- 11 May 2007 - 4,579 - 7,894,000

- 4 July 2007 59,110 - 162,744,961 -

- 13 September 2007 4,638 - 9,464,624 -

- 25 October 2007 3,263 - 5,826,323 -

- 23 November 2007 11,070 - 22,848,095 -


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2008 2007 2008 2007

$000 $000 Shares Shares

- 30 November 2007 305 - 825,000 -

- 5 December 2007 13,103 - 27,044,757 -

- 21 December 2007 2,206 - 2,961,172 -

- 4 February 2008 392 - 611,920 -

- 8 February 2008 6,938 - 11,012,266 -

- 8 February 2008 304 - 490,410 -

- 2 April 2008 66 - 100,000 -

- 2 April 2008 781 - 1,394,495 -

- 2 April 2008 1,735 - 3,723,240 -

Less transaction costs (1,542) 83 - -

At the end of the financial year 150,788 48,420 403,560,368 154,513,105

Shares issued subsequent to reporting date

- 4 July 2007 - 52,078 - 162,744,961

- 13 August 2008 16,875 - 37,500,000 -

Less transaction costs - (1,252) - -

16,875 50,826 37,500,000 162,744,961

Capital management

Management controls the capital of the Economic Entity in order to maintain a good debt to equity ratio, provide the shareholders with adequate

returns and ensure that the Economic Entity can fund its operations and continue as a going concern.

The Economic Entity’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

There are externally imposed capital requirements on the Economic Entity as noted in Note 24b.

Management effectively manages the Economic Entity’s capital by assessing the Economic Entity’s financial risks and adjusting its capital

structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to

shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Economic Entity since the prior year. This

strategy is to ensure that the Economic Entity’s gearing ratio remains between 35% to 55%. The gearing ratios for the year ended 30 June 2008

and 30 June 2007 are as follows.

Economic Entity

note 2008 2007

$000 $000

Total Borrowings 17 125,720 40,043

Less: Cash at bank and on hand 8 (3,348) (21,276)

Net Debt 122,372 18,767

Total Equity 174,582 58,493

Total Capital 296,954 77,260

Gearing Ratio 41% 24%

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note 21: reservesEconomic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

Foreign currency translation reserve 2,441 (139) - -

a. movement in reserves

Movements in reserves are detailed fully in the Statement of Changes in Equity.

b. nature and purpose of reserves

Foreign Currency Translation Reserve

Exchange differences arising on translation of the Company’s foreign subsidiaries are taken to the foreign currency translation reserve, as

described in Note 1t. The reserve is recognised in profit and loss at such time as the Company disposes of its net investment.

note 22: Segment reportinga. description of Segments

Business Segments

The Economic Entity is divided into the following two business segments:

Scrap Metal Trading Division

This division trades in both ferrous and non-ferrous metals, and its activities include the recovery, buying, processing, testing, analysis and

selling of scrap metal in domestic and export scrap metal markets. The division also manufactures and sells metal ingots.

Demolition and Remediation Contract Services Division

The services of this division include resource, industrial plant and marine deconstruction, large scale demolition and site clearance and

remediation.

Geographic Segments

The Economic Entity’s business segments are located in Australia, New Zealand and Asia.

Australia

The home country of the parent entity and to subsidiaries operating in both the Scrap Metal Trading Division and the Demolition and

Remediation Contract Services Division.

New Zealand

Comprises operations carried on solely in relation to the Scrap Metal Trading division.

Asia

Comprises operations in Singapore and Malaysia carried on solely in relation to the Scrap Metal Trading division.

The Economic Entity includes subsidiaries located in Papua New Guinea and United States, and an associated entity in Singapore.

However, for reporting purposes these businesses are not considered to be separate segments. Their revenues, assets and acquisitions

are unallocated.


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b. primary reporting Format – Business Segments

metals

recycling

Contract

Services

unallocated/

Elimination

total

2008 $000 $000 $000 $000

revenue

External sales 470,917 30,668 - 501,585

Other segments 21,628 9,315 (30,943) -

Total sales revenue from continuing activities 492,545 39,983 (30,943) 501,585

Other revenue 94 - - 94

Interest income 254 1,347 - 1,601

Total revenue 492,893 41,330 (30,943) 503,280

result

Segment result 28,537 4,960 (21) 33,476

Borrowing costs (6,875) (3,060) - (9,935)

Profit from continuing operations before income tax expense 23,541

Income tax expense (5,465)

Profit from continuing operations after income tax expense 18,076

assets & liabilities

Segment assets 289,688 37,553 62,588 389,829

Segment liabilities 124,001 30,095 61,151 215,247

other

Acquisitions of non-current segment assets 159,157 3,912 609 163,678

Depreciation and amortisation of segment assets 9,155 1,837 141 11,133

2007

revenue

External sales 202,283 34,812 - 237,095

Other segments 6,336 6,572 (12,908) -

Total sales revenue from continuing activities 208,619 41,384 (12,908) 237,095

Other revenue 102 (15) (57) 30

Interest income - - 162 162

Total revenue 208,721 41,369 (12,803) 237,287

result

Segment result 12,430 157 532 13,119

Borrowing costs (3,311) (3,311)

Profit from continuing operations before income tax expense 9,808

Income tax expense (3,291)

Profit from continuing operations after income tax expense 6,517

assets & liabilities

Segment assets 72,889 32,374 41,299 146,562

Segment liabilities 57,594 25,243 5,232 88,069

other

Acquisitions of non-current segment assets 15,510 3,491 36 19,037

Depreciation and amortisation of segment assets 2,102 2,720 127 4,949

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c. Secondary reporting Format – Geographic Segments

australia new Zealand asia unallocated /

Elimination

total

2008 $000 $000 $000 $000 $000

Segment revenues from sales to external customers 338,957 119,602 40,534 2,492 501,585

Segment assets 455,874 43,050 32,820 (141,916) 389,829

Acquisitions of non-current segment assets 130,191 16,369 7,358 9,760 163,678

2007

Segment revenues from sales to external customers 149,215 87,466 - 414 237,095

Segment assets 169,799 18,157 - (41,394) 146,562

Acquisitions of non-current segment assets 18,241 711 - 85 19,037

d. accounting policies

Segment information is prepared in conformity with the accounting policies of the Economic Entity as disclosed in Note 1 and accounting

standard AASB 114 “Segment Reporting”.

Segment revenues and expenses are those directly attributable to the segments and included any joint revenue and expenses where a

reasonable basis of allocation exists.

Segment assets include all assets used by a segment and consist principally of cash, receivables, inventories, intangibles and property,

plant and equipment, net of allowances and accumulated depreciation and amortisation.

While most such assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by more than

one segment is allocated to the segments on a reasonable basis.

Segment liabilities consist principally of accounts payable, accrued expenses, borrowings and provisions for employee entitlements.

Segment assets and liabilities do not include income taxes.

e. inter-Segment transfers

Segment revenues, expenses and result include transfers between segments. The prices charged on inter-segment transactions are the

same as those charged for similar goods to parties outside the Economic Entity on an arm’s length basis. These transfers are eliminated

on consolidation.

note 23: Events Subsequent to reporting datea. On 13 August 2008, CMA Corporation Limited acquired the assets from Meretec Corporation Limited, based in United States.

CMA Corporation Limited has issued 37,500,000 ordinary shares with fair value of 45 cents per share. The fair value of shares issued

reflects the share price on the date of settlement, 13 August 2008.


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note 24: Cash Flow informationEconomic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

a. reconciliation of cash flow from operations

with profit after income tax

Profit from ordinary activities after income tax 18,076 6,517 4,214 823

Non-cash flows in profit from ordinary activities

Depreciation and amortisation 11,133 4,949 141 127

Net loss/(gain) on disposal of property, plant and equipment 287 46 - -

Unrealised foreign exchange losses 582 (409) 302 -

Non cash interest expense 2,431 - - -

Dividend income - - - (879)

Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries

(Increase)/decrease in trade and other receivables (55,681) (9,475) (14,883) (2,568)

(Increase)/decrease in inventories 195 (5,368) - -

(Increase)/decrease in prepayments (6,424) 398 108 (874)

(Increase)/decrease in deferred tax assets (2,052) (674) (804) (107)

Increase/(decrease) in trade payables and accruals 36,904 8,036 (2,151) 3,297

Increase/(decrease) in income taxes payable 1,663 1,806 1,470 -

Increase/(decrease) in deferred taxes payable 458 147 - (7)

Increase/(decrease) in provisions (223) 441 246 66

Increase/(decrease) in other liabilities - (44) - -

Increase/(decrease) in deferred tax component of costs of equity 476 83 476 83

Net cash inflow/(outflow) from operating activities 7,825 6,453 (10,881) (39)

b. Credit Standby and loan Facility arrangements with Banks

At 30 June 2008 the Economic Entity had financing arrangements with the various banks in Australia, New Zealand, Singapore and

United States. These facility limits are unchanged at the date of this report.

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Australia

The Economic Entity’s facilities with the Commonwealth Bank of Australia at the date of this report are as follows:

2008 2007

$000 $000

Equipment Finance Line - 11,000 10,600

Trade Finance Facility - - 6,800

Bills Discount Facility - - 22,400

Business Card Facility - - 200

Fleet Lease Facility - - 500

At the date of this report the facilities are utilised as follows:

Equipment Finance Line - 10,307 9,942

Trade Finance Facility - - 4,091

Bills Discount Facility - - 22,366

Business Card Facility - - 200

Fleet Lease Facility - - -

Security has been provided as follows:

Assets financed by the Equipment Finance Line are secured by a fixed charge. -

The bank holds a guarantee from ANZ covering guarantees issued on behalf of the Economic Entity and a foreign exchange -

dealing facility.

Average interest rate is at 7.58% p.a. on the equipment finance facility.

The Economic Entity’s facilities with ANZ at the date of this report are as follows:

Overdraft Facilities - 5,000 11,000

Loan Note Facilities 1 - 49,500 -



Multi Option Facility - 10,000 -

Fully Drawn Advance - 5,400 -

Asset Finance Line - 2,600 -

Epay Facility - 5,000 -

Credit Card Limit - 500 -

Other Facility - 20,000 -


Overdraft Facilities - 419 9,917


Loan Note Facilities 2 - - -

Loan Note Facilities 3 - - -

Multi Option Facility - 10,000 -

Fully Drawn Advance - 5,538 -

Asset Finance Line - - -

Epay Facility - - -

Credit Card Limit - - -

Other Facility - - -


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First Registered Fixed and Floating Company Charge over all the Australian assets. -

Corporate Guarantee and Indemnity unlimited as to amount given by CMA Corporation Limited. -

ANZ requires the following financial covenants:

1. The interest cover ratio of CMA Corporation Limited will be not less than 3 times;

2. Debt to EBITDA ratio for CMA Corporation Limited will not exceed 3.5 times; and

3. Gearing ratio will not exceed 55%.

Average interest rate of 8.67% p.a. applied on above facilities.

New Zealand

The Economic Entity’s facilities with the Bank of New Zealand at the date of this report are as follows:

2008 2007

nZd$000 nZd$000

Equipment Finance - 1,563 2,333

Overdraft Facility - 1,000 5,000

Term Loan Facility - 5,000 250

Credit Plus - 2,500 -

Committed Cash Facilities - 6,000 -

Committed Cash Advance Facility - 3,000 -


Equipment Finance - 1,563 1,620

Overdraft Facility - 933 3,671

Term Loan Facility - 3,965 -

Credit Plus - 525 -

Committed Cash Facilities - 6,000 -

Committed Cash Advance Facility - 3,000 -


First register debenture over the assets and undertakings of Scrap Metal Recyclers Limited and Scrap Metal Recyclers (Waikato) Limited. -

A series of asset finance agreements over specific assets. -

Letter of comfort from CMA Corporation Limited. -

Interest rate is fixed at 9.78% p.a. on the asset finance facility. Other interest rates are variable, with an average of 9.99% p.a. and are

subject to adjustment.

BNZ requires the following financial undertakings:

1. the interest cover ratio will be not less than 2.5 times;

2. the minimum net worth will be not less than 40%;

3. dividends will not exceed more than 50% of net profit after tax without prior written consent; and

4. total stock plus debtors must be greater than 2 times the overdraft facility drawn balance.For

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Singapore

The Economic Entity’s facilities with the United Overseas Bank Limited at the date of this report are as follows:

2008 2007

SGd$000 SGd$000

Trade Finance Facility - 4,400 -

Credit Bills Discount Facility - 3,000 -

Bank Overdraft - 500 -


Trade Finance Facility - 4,335 -

Credit Bills Discount Facility - - -

Bank Overdraft - 436 -


Corporate guarantee from CMA Corporation Limited for amount of SGD$8,000,000 subject to foreign council opinion satisfactory to -

the Bank.

Joint and Several Guarantee for SGD$8,000,000 to be executed by Ng Lay Leng and Jagdish Prasad Jaiswal. -

Upon receipt of the duly executed Corporate Guarantee together with foreign council opinion satisfactory to the bank, the bank will

discharge this Joint and Several Guarantee of SGD$8,000,000.

Interest is charged at 0.50% p.a. over the Bank’s Prime Lending rate (currently at 5%) prevailing from time to time for all Singaporean

dollars denominated bills and 1.75% p.a. over Singapore inter bank offer rate prevailing from time to time for all foreign currency

denominated bills.

The Economic Entity’s facilities with the Hong Kong and Shanghai Banking Corporation Limited at the date of this report are as follows:

Trade Facilities - 6,000 -

Letter of Indemnity Line - 1,000 -

Treasury Facility - 500 -

Guarantee Facility - 150 -

Bills Purchase Facility - 1,000 -

At the date of this report, none of these facilities have been utilised.


Corporate guarantee from CMA Corporation Limited for amount of SGD$8,200,000 subject to foreign council opinion satisfactory to -

the Bank.

Interest is charged at 0.5% p.a. over the Bank’s Prime Lending rate (currently at 5%) prevailing from time to time for all Singaporean

dollars denominated bills and 1.5% p.a. over Singapore inter bank offer rate prevailing from time to time for all non-Singaporean dollars

denominated bills.


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United States

The Economic Entity’s facilities with the First Bank at the date of this report are as follows:

2008 2007

uS$000 uS$000

Revolving Line of Credit - 8,000 -

Term Loan - 2,889 -

Secured Over Formula Advance (“SOFA”) Term Loan - 611 -


Revolving Line of Credit - - -

Term Loan - 252 -

SOFA (Term) Loan - 611 -


Corporate guarantee from CMA Corporation Limited. -

The First Bank requires the following financial undertakings:

1. Maintenance of Consolidated Tangible Net Worth more than US$5m; and

2. Minimum fixed charge coverage ratio not less than 1.2.

The Economic Entity has met all these covenants as at reporting date.

note 25: Contingent liabilitiesa. third party Guarantees provided by the Economic Entity

The Economic Entity has provided guarantees to third parties in relation to the performance and obligations of entities in the Economic

Entity in relation to banking facilities, approved deeds and contracts, and property lease rentals.

The guarantees are for the terms of the facilities, deeds and contracts and leases.

The periods covered by the guarantees range from half a year to approximately three years.


2008 2007 2008 2007

$000 $000 $000 $000

5,875 2,410 5,259 260

Contract dispute

CMA Corporation Limited has taken advice and considers that its claim against John Holland Limited of $20.4 million, before the time

value adjustment, has a proper legal basis and is recoverable. Whereas the counterclaim by John Holland Limited of $16.5 million is

presently unclear and unsubstantiated and CMA Corporation Limited considers it does not have merit. This contract is now complete.

b. related party Guarantees provided by the Economic Entity

Cross guarantees have been provided between the Company and its wholly owned subsidiaries in Australia in relation to the banking

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note 26: Change in Composition of Entitya. acquisition of universal metals pty limited and advanced recycling australasia pty limited

On 4 July 2007, CMA Corporation Limited acquired 100% of the voting shares of Universal Metals Pty Limited and Advanced Recycling

Australasia Pty Limited (collectively referred to as Southern Rocycling). Southern Rocycling is a metal recycling and processing business

based in Melbourne, with operations across Australia. Subsequent to its acquisition by CMA Corporation Limited, Universal Metals Pty

Limited changed its name to CMA Recycling Victoria Pty Limited.

In connection with the business combination, CMA Corporation Limited has paid $47,031,000, comprising 46,875,000 issued ordinary

shares in CMA Corporation Limited with a fair value of 47 cents each, and $25 million in cash. The fair value of shares issued reflects the

share price on the date of acquisition.

The acquired business has contributed revenues of $160,286,000 and a net loss of $256,000 to the Economic Entity during the period

from 4 July 2007 to 30 June 2008.

Details of the fair value of the identifiable assets and liabilities as at the date of acquisition, and the goodwill acquired are as follows:

$000

Cash and cash equivalents 122

Receivables 8,702

Inventories 28,214

Prepayments 288

Financial assets 41

Property, plant and equipment 60,636

Deferred tax asset 346

Intangible assets 31

Payables and accruals (13,364)

Overdraft (14,565)

Borrowings (47,787)

Provisions (988)

Deferred tax liability (5)

Fair value of net assets 21,671

Licences 1,178

Goodwill arising on acquisition 25,087

Total 47,936

The assets arising from the acquisition of Southern Rocycling are recognised at fair values which are equal to their carrying value at

acquisition date. The goodwill is attributable to the high forecast profitability of the acquired business.

purchase Consideration

Ordinary shares issued 22,031

Cash consideration 25,000

Costs associated with the acquisition 905

Total consideration 47,936

The cash outflow on acquisition is as follows:

Net bank overdraft acquired with subsidiaries 14,443



Net cash outflow 40,348


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b. acquisition of Business from peakmore Enterprise pte limited

On 13 September 2007, CMA Peakmore Pte Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the assets and

business of Peakmore Enterprise Pte Limited. Peakmore Enterprise Pte Limited is a secondary metal trading and processing business

based in Singapore.

In connection with the business combination, CMA Peakmore Pte Limited has paid $5,413,000 comprising 9,464,624 issued ordinary

shares in CMA Corporation Limited with a fair value of 49 cents each and $775,000 in cash. The fair value of shares issued reflects

the share price on the date of acquisition. In addition, the vendors of Peakmore Enterprise Pte Limited will receive additional deferred

consideration up to $2.3 million, subject to the achievement of certain financial targets.

The acquired business has contributed revenues of $42,340,000 and a net profit of $6,030,000 to the Economic Entity during the period

from 13 September 2007 to 30 June 2008. The consolidated net profit and consolidated revenues that would have resulted had the

acquisition been made on 1 July 2007 have not been disclosed as their estimation is unreliable due to the impact of certain expenses of a

private company nature during the period prior to acquisition.


$000

Cash and cash equivalents 164

Receivables 3,211

Inventories 4,446

Prepayments 39

Property, plant and equipment 442

Payables and accruals (2,315)

Borrowings (4,011)

Provision for taxation (381)

Other provisions (56)

Deferred tax liability (62)

Foreign exchange difference (123)



Total 7,814

The assets arising from the acquisition are recognised at fair values which are equal to their carrying value at acquisition date. The goodwill

is attributable to the high profitability of the acquired business.



Deferred consideration 2,365

Cash consideration 775




Net cash acquired with business (164)



Net cash outflow 647

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c. acquisition of photographic Waste management

On 30 September 2007, CMA Recycling Pty Limited (formerly CMA Metals (Qld) Pty Limited), a wholly owned subsidiary of CMA

Corporation Limited, acquired the assets and business of Photographic Waste Management. Photographic Waste Management is a non-

ferrous metal recycling business located in Perth, Western Australia.

In connection with the business combination, CMA Recycling Pty Limited has paid $300,000 in cash.

The acquired business has contributed revenues of $934,000 and a net loss of $100,000 to the Economic Entity during the period from

30 September 2007 to 30 June 2008. The consolidated net profit and consolidated revenues that would have resulted had the acquisition

been made on 1 July 2007 have not been disclosed as their estimation is unreliable due to the impact of certain expenses of a private

company nature during the period prior to acquisition.


$000


Fair value of net assets 100

Goodwill arising on acquisition 200

Total 300


is attributable to the high forecast profitability of the acquired business.



Total consideration 300




d. acquisition of Business from Cableco metal industries limited

On 21 December 2007, Scrap Metal Recyclers (Waikato) Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the

business and assets of Cableco Metal Industries Limited. Cableco Metal Industries Limited is a scrap metal recycling business located in

New Zealand.

In connection with the business combination, Scrap Metal Recyclers (Waikato) Limited has paid $4,853,000, comprising 2,961,172

issued ordinary shares in CMA Corporation Limited with a fair value of 74.5 cents each, and cash payments totalling $2,647,000. The fair

value of shares issued reflects the share price on the date of the acquisition.

The acquired business has contributed revenues of $24,221,000 and a net profit of $844,000 to the Economic Entity during the period

from 21 December 2007 to 30 June 2008. The consolidated net profit and consolidated revenues that would have resulted had the

acquisition been made on 1 July 2007 have not been disclosed as their estimation is unreliable due to the impact of certain expenses of a

private company nature during the period prior to acquisition.


Property, plant and equipment 1,767

Foreign exchange difference (7)



Total 4,876


is attributable to the high forecast profitability of the acquired business.


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$000










e. acquisition of business from Bowman Bulk Freight limited

On 4 February 2008, Scrap Metal Recyclers Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business and

assets of Bowman Bulk Freight Limited. Bowman Bulk Freight Limited is a scrap metal transportation business located in New Zealand.

The effective date of acquisition was 31 January 2008.

In connection with the business combination, Scrap Metal Recyclers Limited has paid $2,276,000 comprising 611,920 issued ordinary

shares in CMA Corporation Limited with a fair value of 64 cents each, and cash payments totalling $1,884,000. The fair value of shares

issued reflects the share price on the date of settlement, 4 February 2008.


Motor vehicles 1,568



Total 2,297

The assets arising from the acquisition are recognised at fair values which are equal to their carrying value at acquisition date.

The goodwill is attributable to the high profitability of the acquired business.


Ordinary shares issued 392


Liabilities extinguished 1,490





Liabilities extinguished 1,490


Net cash outflow 1,905For

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f. acquisition of business from m & h Contractors limited

On 31 January 2008, Scrap Metal Recyclers Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business and

assets of the Bin Service and Bulk Scrap Transport divisions of M & H Contractors Limited. M & H Contractors Limited is a transportation

business located in New Zealand.

In connection with the business combination, Scrap Metal Recyclers Limited has paid $1,051,000 in cash.


$000

Motor vehicles 648



Total 1,063











g. acquisition of Business from meretec Corporation

On 8 February 2008 CMA Corporation Limited acquired the business and assets of Meretec Corporation. Meretec Corporation is

engaged in the business of developing proprietary commercially viable methods of removing and recovering zinc coatings from galvanized

scrap metal, and is based in Chicago.

In connection with the business combination, CMA Corporation Limited has paid $6,938,000 comprising 11,012,266 issued ordinary

shares in CMA Corporation Limited with a fair value of 63 cents each. The fair value of shares issued reflects the share price on the date of

settlement.

The acquired business is establishing during the period from 8 February 2008 to 30 June 2008, therefore, contributed no revenue.

Details of the fair value of the identifiable assets and liabilities as at the date of acquisition are as follows:

Fixed assets 5,890

Intangible asset 1,106

Total 6,996


The discount on acquisition is attributable to a fall in the share price of CMA Corporation Limited between the date the sale was

agreed and the date of settlement.







Net cash outflow 58


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h. acquisition of Steel Can recycling limited

On 1 February 2008, CMA Corporation Limited acquired 100% of the voting shares of Steel Can Recycling Limited.

In connection with the business combination, CMA Metals Pty Limited has paid $286,255.


$000

Cash and cash equivalent 106

Receivables 148


Liabilities (149)



Total 286




Cash 286

Total consideration 286




Costs associated with the acquisition -


i. acquisition of Business from Bay Scrap metal, new Zealand

On 3 April 2008, Scrap Metal Recyclers (Waikato) Limited, a wholly owned subsidiary of CMA Corporation Limited, acquired the business

and assets of Bay Scrap Metal, a metal recycling business based in Tauranga, New Zealand.

In connection with the business combination, Scrap Metal Recyclers (Waikato) Limited has paid $2,742,000 comprising 1,394,495 issued

ordinary shares in CMA Corporation Limited with a fair value of 56 cents each, and cash payments totalling $1,900,000. The fair value of

shares issued reflects the share price on the date of settlement, 3 April 2008.

The acquired business has contributed revenues of $1,285,000 and a net profit of $390,000 to the Economic Entity during the period

from 3 April 2008 to 30 June 2008. The consolidated net profit and consolidated revenues that would have resulted had the acquisition

been made on 1 July 2007 have not been disclosed as their estimation is unreliable due to the impact of certain expenses of a private

company nature during the period prior to acquisition.



Inventory 17



Total 2,742


is attributable to the high profitability of the acquired business.

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$000



Ordinary shares issued 781







j. acquisition of purata Keuntungan Sdn Bhd

On 7 May 2008, CMA Corporation Limited increased its holding in the Malaysian based metal processing company Purata Keuntungan

Sdn Bhd (“Purata”) to 100% ownership. Purata was established in September 2007 as a joint venture in which CMA held a 40% stake.

The company’s core operations are the processing and sale of steel mill residues.

In connection with the business combination, CMA Corporation Limited has paid $640,683 in cash to acquire the 60% of Purata it did not

already own. In total, CMA Corporation Limited has paid $1,097,000.

The acquired business has contributed revenues of $587,000 and a net profit of $307,000 to the Economic Entity during the period from

7 May 2008 to 30 June 2008.

Details of the fair value of the identifiable assets and liabilities as at the date of acquisition, and goodwill acquired are as follows:

Cash and cash equivalent 159

Receivables 986

Inventories 3,524


Liabilities (3,917)

Difference on foreign exchange (19)



1,097


The goodwill is attributable to the high profitability of the acquired entities.










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post balance sheet date acquisitions

k. acquisition of assets in meretec Corporation

On 13 August 2008, CMA Corporation Limited has issued 37,500,000 ordinary shares as consideration for the acquisition of the assets

from Meretec Corporation.

Details of the fair value of the identifiable assets and liabilities as at the date of acquisition, and goodwill acquired are as follows:

$000

Meretec licence 16,875

16,875




Cash consideration -



note 27: Share-based paymentsa. Employee Equity plans

The establishment of the Company’s employee equity plans was approved by shareholders at the 2005 Annual General Meeting.

The plans are of two types:

Employee Share plans 1.

The employee share plans enable employees to acquire shares in the Company through salary deductions on a tax-effective basis.

Employee Equity incentive plans 2.

The remuneration plans enable shares or options to be issued to senior management for no consideration as an incentive subject to

the achievement of individual, division and Company performance levels.

b. Expenses arising from Share-based payment transactions

At the inaugural Annual General Meeting of CMA Corporation Limited on 18 November 2005, shareholders approved four Employee

Remuneration Schemes, being:

Tax Exempt Plan -

Tax Deferred Plan -

Performance Share Plan -

Share Option Plan -

During the financial year ended 30 June 2008, the following shares were issued under Employee Remuneration Schemes:

Nil (2007: 423,890) in CMA Corporation Limited were issued under the Tax Exempt Plan; and -

590,410 ordinary shares (2007: 506,465) in CMA Corporation Limited were issued under the Performance Share Plan, with -

490,410 shares issued on 8 February 2008 and 100,000 shares on 3 April 2008.

The share issue under the Tax Exempt Plan was made to all Australian and New Zealand resident permanent employees of the Economic

Entity, excluding executive directors and the direct reports of the Managing Director, who have been continuously employed by the

Economic Entity for a period of at least three months.

Eligible employees were entitled to receive $1,000 worth of fully paid ordinary shares in CMA Corporation Limited. The number of

shares issued to participants in the Plan is the offer amount divided by the closing price of CMA Corporation Limited shares on the

day prior to the issue.

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The fair value of shares issued under the Plan, measured as the closing price of CMA Corporation Limited shares on the day prior to the

issue, is recognised in the Balance Sheet as issued capital and as part of employee benefits expense in the Income Statement in the

period the shares are granted.

The issue was made for no cash consideration by the employees, and the shares are exempt from the employees’ taxable income.

Shares issued under the Tax Exempt Plan are subject to a 12 month escrow period. In all other respects the shares rank equally with other

fully paid ordinary shares on issue.

Where shares are issued to employees of subsidiaries within the Economic Entity, the subsidiaries compensate CMA Corporation Limited

for the fair value of these shares.

The share issue under the Performance Share Plan related to incentive fees paid to certain employees in accordance with specific criteria

contained within their employment agreements.

Employee Share option plan

The Economic Entity has a compensation scheme for executives and senior employees of the Economic Entity. In accordance with the

provisions of the plan, as approved by shareholders at a previous annual general meeting, executives and senior employees may be

granted options to purchase parcels of ordinary shares at an exercise price of $0.40 per ordinary share.

Each employee share option converts into one ordinary share of CMA Corporation Limited on exercise. No amounts are paid or payable

by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any

time from the date of vesting to the date of their expiry.

During the year, 825,000 (2007: nil) options have been issued as compensation to executives and senior employees. They were all issued

on 30 November 2007, with 700,000 options expiring on 30 June 2012 and 125,000 options expiring on 30 November 2012.

The weighted average fair value of the options granted during the year was $0.37 (2007: nil). This price was calculated by using a black-

scholes option pricing model applying the following inputs:

Weighted average exercise price $0.4

Weighted average life of the option 5 years

Underlying share price $0.73

Expected share price volatility 60%

Risk free interest rate 6.32%

Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future tender,

which may not eventuate.

In accordance with the terms of the share-based arrangement, options issued during the year vest at the date of their issue. No options

were exercised during the year.

Total expenses arising from share-based payment transactions recognised during the period as part of the employee benefits expense in

the Income Statement were as follows:


2008 2007 2008 2007

$000 $000 $000 $000

Shares issued under Tax Exempt Plan - 194 - 6

Shares issued under Performance Share Plan 370 232 370 -

Options issued under Share Option Plan 305 - 305 -

675 426 675 6


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note 28: related party transactionsa. parent Entity

The parent entity of the Economic Entity is CMA

Corporation Limited. CMA Corporation Limited is also

the ultimate parent entity and ultimate controlling party.

b. Subsidiaries

Interests in subsidiaries are detailed in Note 14.

c. transactions with related parties

The following transactions between related parties are on normal commercial terms and conditions no more favourable than those

available to other parties unless otherwise stated.

directors and director related Entities


2008 2007 2008 2007

Purchase of goods and services $000 $000 $000 $000

Moltoni Corporation Pty Limited paid operating

expenses on behalf of the Economic Entity and was

reimbursed in full by way of deducting from amounts

owing by Moltoni Corporation Pty Ltd to the Economic

Entity.

Mr. Robert Moltoni is an employee and shareholder of

Moltoni Corporation Pty Limited. - 89 - -

The Economic Entity purchased labour and waste

disposal services from Moltoni Corporation Pty Limited. 163 - - -

The Economic Entity made payments to interests

associated with Mr Joseph Tong Hong Chung and

Mr Johnny Tung Hui Chung in relation to services

provided during the year. - 7 - -

The Economic Entity made payments to interests


Mr Johnny Tung Hui Chung in relation to expenses

incurred by them on behalf of the Economic Entity. - 56 - -

Sale of goods and services

The Economic Entity charged Moltoni Corporation Pty

Limited for the supply of labour and plant hire.

These funds have been applied to reduce the amount

owing by Moltoni Corporation Pty Limited to the

Economic Entity. 143 8 - -


The Economic Entity charged Moltoni Corporation Pty

Limited for expenses incurred on its behalf.

These funds have been applied to reduce the amount

owing by Moltoni Corporation Pty Limited to the

Economic Entity. - 1 - -

The Economic Entity charged interests associated with

Mr Joseph Tong Hong Chung and Mr Johnny Tung

Hui Chung for expenses incurred on its behalf. - 12 - -

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2008 2007 2008 2007

$000 $000 $000 $000

Rental of premises

The Economic Entity paid rent and related outgoings

to interests associated with Mr Joseph Tong Hong

Chung and Mr Johnny Tung Hui Chung in relation to

commercial premises occupied. 272 523 - -

The Economic Entity paid rent and related outgoings to

interests associated with Mr. Douglas Rowe in relation

to commercial premises occupied. 2,005 - - -

Interest

Interest was paid to interests associated with Mr Joseph

Tong Hong Chung and Mr Johnny Tung Hui Chung

in relation to a working capital loan provided to the

Economic Entity. - 20 - -

Interest was paid to WMR Investments Ltd. 304 - 304 -

Collection of receivables

The Economic Entity received payments from Moltoni

Corporation Pty Limited in relation to a trade receivable. 35 837 - -

Consolidated Economic Entity transactions

The Company charged management fees to its

subsidiaries. The management fees represent a

recovery for the costs of the parent entity associated

with the strategic, financial and operational management

of the operating divisions. - - 14,932 4,770

The Company charged the demolition and remediation

contract services division for the rent of a barge

that was owned by the Company but operated by a

subsidiary entity. - - - 368

The Company received dividends from subsidiaries. - - - 879

d. outstanding Balances with related parties

The following balances are outstanding at reporting date in relation to transactions with related parties:


Receivable by the Economic Entity

Trade receivable and other receivables owing to the

Economic Entity by Moltoni Corporation Pty Limited in

relation to payments for demolition services provided by

Moltoni Adams Pty Limited. 310 145 - -


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2008 2007 2008 2007

$000 $000 $000 $000

Payable by the Economic Entity

Amount owing in relation to operating expenses

and interest paid by the Economic Entity to interests


Mr Johnny Tung Hui Chung. - 50 - -

Interest bearing loan owing to WMR Investments Ltd a

company associated with Mr Douglas Rowe. 6,677 - 6,677 -

Trade payables owing by the Economic Entity to

Universal Metal (NZ) Limited. 488 - - -

Trade payables owing by the Economic Entity to

Moltoni Corporation Pty Limited in relation to labour and

associated services. 213 - - -

Amount owing by the Economic Entity in relation to a

loan to Mr Douglas Rowe. 285 - - -

Consolidated Economic Entity transactions

Balances receivable by the parent company from

its wholly owned subsidiaries in relation to internal

management fee charged and funds transferred. - - 103,501 15,756

e. other related party transactions

The Economic Entity occupies the following premises at normal market rentals:

48-62 Burrows Road, Alexandria, New South Wales Owned by interests associated with Mr Joseph Tong Hong Chung

and Mr Johnny Tung Hui Chung

Lot 1 Old Port Road, Port Kembla, New South Wales Owned by interests associated with Mr Joseph Tong Hong Chung

and Mr Johnny Tung Hui Chung

242 Canterbury Road, Bayswater, Victoria Owned by interests associated with Mr Douglas Rowe

3 / 81-85 Heatherdale Road, Ringwood, Victoria Owned by interests associated with Mr Douglas Rowe

73-79 Heatherdale Road, Ringwood, Victoria Owned by interests associated with Mr Douglas Rowe

16-20 Johansson Road, Wingfield, South Australia Owned by interests associated with Mr Douglas Rowe

52-54 Power Street, St Marys, New South Wales Owned by interests associated with Mr Douglas Rowe

252 George Town Road, Rocherlea, Tasmania Owned by interests associated with Mr Douglas Rowe

256 George Town Road, Rocherlea, Tasmania Owned by interests associated with Mr Douglas Rowe

Subsidiaries of the Economic Entity occupy these premises under lease arrangements at normal market rates.

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note 29: Financial risk managementa. Financial risk management policies

The Economic Entity’s financial instruments consist mainly of deposit funds with banks, accounts receivable and payable, bank

borrowings, loan from a related party and leases.

The main purpose of non-derivative financial instruments is to raise finance for the Economic Entity’s operations.

Forward Exchange Contracts are used by the Economic Entity for hedging purposes. The Economic Entity does not speculate in the

trading of derivative instruments.

(i) Financial risks

The main risks the Economic Entity is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity

risk, credit risk and price risk.

(ii) interest rate risk

The Economic Entity is exposed to interest rate risk as entities in the Economic Entity borrow funds at both fixed and floating interest

rates. The risk is managed by maintaining an appropriate mixture of fixed and floating rate borrowings.

(iii) Foreign Currency risk

The Economic Entity is exposed to fluctuations in foreign currencies arising from the purchase and sale of scrap metal in currencies

other than the Economic Entity’s measurement currency (usually USD). The exposure is managed by entering into contracts to buy

and sell the foreign currency receipts forward. The Economic Entity’s policy is that forward contracts will only be entered into for

known foreign currency risks.

(iv) liquidity risk

The Economic Entity manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by

continuously monitoring forecast and actual cash flows. Included in Note 24b is a listing of additional undrawn facilities that the

Economic Entity has at its disposal to further reduce liquidity risk.

(v) Credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial

assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the Balance Sheet and Notes

to the Financial Statements.

Other than as stated in Note 9, the Economic Entity does not have any material credit risk exposure to any single receivable or

group of receivables under financial instruments entered into by the Economic Entity.

(vi) price risk

The Economic Entity is exposed to commodity price fluctuations for metals in the Scrap Metals Trading Division. Risks are managed

through a margin trading policy such that wherever possible an appropriate spread is maintained between buy and sell transactions.

Short term spread narrowing or widening can cause short term fluctuations in profitability.

The Economic Entity is also exposed to contract price risk in the Demolition and Remediation Contracting Division. The risk is

managed through the implementation of detailed costing and checking of tenders and regular monitoring of costs against budgets

on site.


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(vii) Sensitivity analysis

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate borrowings.

At reporting date, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the effect on

profit and equity would be as follows:


2008 2007 2008 2007

$000 $000 $000 $000

Change in profit

Increase in interest rate by 0.5% (391) (137) (318) (31)

Decrease in interest rate by 0.5% 391 137 318 31

Change in equity

Increase in interest rate by 0.5% (391) (137) (318) (31)

Decrease in interest rate by 0.5% 391 137 318 31

Foreign currency sensitivity analysis

The Economic Entity is exposed to US, New Zealand and Singaporean dollars. An analysis has been performed on the Economic

Entity’s sensitivity to a 5% increase and decrease in the Australian Dollar against the foreign currencies. The sensitivity analysis

includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5%

change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the

wholly owned group where the denomination of the loan is in a currency other than the currency of the lender or the borrower.

Change in profit

Appreciation in AUD to USD by 5% (292) - (292) -

Appreciation in AUD to NZD by 5% 13 21 13 21

Appreciation in AUD to SGD by 5% (16) - (16) -

Depreciation in AUD to USD by 5% 323 - 323 -

Depreciation in AUD to NZD by 5% (15) (24) (15) (24)

Depreciation in AUD to SGD by 5% 18 - 18 -

Change in equity

Appreciation in AUD to USD by 5% (292) - (292) -

Appreciation in AUD to NZD by 5% 13 21 13 21

Appreciation in AUD to SGD by 5% (16) - (16) -

Depreciation in AUD to USD by 5% 323 - 323 -

Depreciation in AUD to NZD by 5% (15) (24) (15) (24)

Depreciation in AUD to SGD by 5% 18 - 18 -

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b. Financial instruments

(i) derivative Financial instruments

Derivative financial instruments are used by the Economic Entity to hedge exposure to exchange rate risk associated with foreign

currency transactions. Transactions for hedging purposes are undertaken without the use of collateral as only reputable institutions

with sound financial positions are dealt with.

Forward Exchange Contracts

The Economic Entity enters into forward exchange contracts to buy and sell specified amounts of foreign currencies in the future

at stipulated exchange rates. The objective in entering the forward exchange contracts is to protect the Economic Entity against

unfavourable exchange rate movements for the contracted future purchases and sales undertaken in foreign currencies.

The accounting policy in regard to forward exchange contracts is detailed in Note 1u.

At balance date, the details of outstanding forward exchange contracts are:

Buy australian dollars Sell uS dollars Exchange rate

2008 2007 2008 2007

$000 $000

Settlement less than 6 months 9,674 7,798 0.9265 0.8207

Buy nZ dollars Sell australian dollars average Exchange rate

2008 2007 2008 2007

$000 $000

Settlement less than 6 months - 410 - 1.1153

Buy nZ dollars Sell uS dollars average Exchange rate

2008 2007 2008 2007

$000 $000

Settlement less than 6 months 21,351 6,977 0.7645 0.7336

Buy uS dollars Sell nZ dollars average Exchange rate

2008 2007 2008 2007

$000 $000

Settlement less than 6 months 572 - 0.747 -

Buy australian dollars Sell nZ dollars average Exchange rate

2008 2007 2008 2007

$000 $000


Buy Euro Sell nZ dollars average Exchange rate

2008 2007 2008 2007

$000 $000



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(ii) interest rate risk

The Economic Entity’s exposure to interest rate risk on financial assets is limited to the amount of interest received on bank cheque

accounts.

The Economic Entity’s exposure to interest rate risk on financial liabilities is limited to the interest payable on new hire purchase and

lease agreements which are fixed for the life of the agreement at the time the lease or hire purchase agreement is entered in to,

plus interest payable to banks at bill rates plus a margin.

(iii) net Fair value

The directors consider that the carrying amounts of the financial assets and liabilities recorded in the financial statements

approximate their fair values.

Economic Entity average

interest

rate

Floating

interest

rate

Fixed

interest

rates

maturing

within 1

Year

Fixed

interest

rates

maturing

1 to 5

Years

non

interest

Bearing

total

2008 $000 $000 $000 $000 $000

Financial assets:

Cash 5.66% 3,348 - - - 3,348

Trade and other receivables 8.77% 17,969 - - 80,960 98,929

Total Financial Assets 21,317 - - 80,960 102,277

Financial liabilities:

Bank Loans and Overdrafts 8.56% 83,869 - - - 83,869

Trade and Sundry Payables - - - - 81,312 81,312

Lease and Hire Purchase Liabilities 7.58% - 9,507 25,667 - 35,174

Loans from a related party 8% 6,677 - - - 6,677

Total Financial Liabilities 90,546 9,507 25,667 81,312 207,032

2007

Financial assets:

Cash 4.91% 21,276 - - - 21,276

Trade and other receivables - - - - 32,632 32,632





Lease and Hire Purchase Liabilities 7.58% - 2,904 10,085 - 12,989

Loans from a related party 7.99% 7,510 - 17,769 - 25,279

Total Financial Liabilities 9,285 2,904 27,854 22,444 62,487For

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parent Entity average

interest

rate

Floating

interest

rate

Fixed

interest

rates

maturing

within 1

Year

Fixed

interest

rates

maturing

1 to 5

Years

non

interest

Bearing

total

2008 $000 $000 $000 $000 $000

Financial assets:

Cash 5.66% 112 - - - 112


Total Financial Assets 112 - - 103,523 103,635




Lease and Hire Purchase Liabilities 7.58% - 111 1,633 - 1,744

Loans from a related party 8% 6,677 - - - 6,677

Total Financial Liabilities 56,177 111 1,633 1,362 59,283

2007

Financial assets:

Cash 4.91% 18,957 - - - 18,957





Lease and Hire Purchase Liabilities 7.58% - 211 1,861 - 2,072

Bank Loans 7.99% 6,150 - - - 6,150

Total Financial Liabilities 6,150 211 1,861 3,513 11,735


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note 30: auditors’ remunerationEconomic Entity parent Entity

2008 2007 2008 2007

$ $ $ $

amounts received or due and receivable by

pKF East Coast practice for:

- An audit or review of the financial report of the entity 239,000 184,218 22,100 36,844

Other services in relation to the entity:

- Building Services Licence audit - 3,000 - -

- Due diligence procedures performed in relation to the acquisitions 19,841 313,838 19,841 313,838

- Tax compliance services - 5,375 - 4,125

258,841 506,431 41,941 354,807

amounts received or due and receivable by ross

melville pKF for:

- An audit or review of the financial reports of subsidiary entities 40,000

38,324 - -


- Tax compliance services 8,524 27,952 - -

- Tax advice in relation to mergers 39,575 - - -

88,099 66,276 - -

amounts received or due and receivable by Syed

mubarak & Co for:

- An audit or review of the financial reports of subsidiary entities 3,203 - - -


- Tax compliance services 1,281 - - -

4,484 - - -

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note 31: impairment tests for GoodwillGoodwill is allocated to the Economic Entity’s cash-generating units (CGUs), which have been identified in accordance with the business

segments classification.

The carrying amount of goodwill allocated to each of the segments is presented below:


2008 2007 2008 2007

$000 $000 $000 $000

Metal Recycling 62,917 24,263 - -

Contract Services 12,646 12,646 - -

75,563 36,909 - -

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections over a five-

year period plus a terminal value, and are based on the detailed financial budget and business plan approved by management and the Board

of Directors.

The growth rates applied in the cash flow projections represent management’s best estimate of likely economic conditions for the forecast

period, and are steady or declining over time. The growth rates may not be reflective of the general rates applicable to the scrap metal trading

and the demolition and remediation contract services sectors, given that the Economic Entity has only recently been established and is

forecast to increase at rates which may exceed those of the overall industries in which it operates due to the benefits that are expected to

flow to it as a result of capital expenditure and company structuring undertaken. The average growth rates applied to the CGUs are 15% for

the Scrap Metal Trading CGU (2007: 15%) and 8% for the Demolition and Remediation Contract Services CGU (2007: 8%).

In performing the value-in-use calculations for each CGU, the Company has applied a pre-tax discount rate to discount the forecast attributable

pre-tax cash flows. The discount rate was determined using the weighted average cost of capital (WACC), in which the cost of equity was

calculated using the capital asset pricing model (CAPM). The discount rate used in the value-in-use calculations was 10.87% for both CGUs

(2007: 13.16% for the Scrap Metal Trading CGU and 13.40% for the Demolition and Remediation Contract Services CGU).

As a result of the impairment testing performed, management and the Directors do not consider that any impairment write-down is necessary in

relation to the goodwill balances as at 30 June 2008.


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note 32: Capital and leasing CommitmentsEconomic Entity parent Entity

2008 2007 2008 2007

$000 $000 $000 $000

a. operating lease Commitments

Future minimum rentals payable under non-cancellable

operating leases at 30 June are as follows:

Within one year 8,054 2,853 359 223

After one year but not later than five years 25,121 6,528 988 725

After five years 9,155 799 - -

42,330 10,180 1,346 948

The majority of operating leases held by the Economic Entity relate to commercial premises in Australia and New Zealand where CMA’s

scrap metal trading yards and head office facilities are located. There are also some operating leases for temporary accommodation at

demolition and remediation sites, and for certain items of plant and equipment which the Economic Entity has determined are not in its

best interest to purchase.

b. Finance lease and hire purchase Commitments

Future minimum lease payments under finance leases

and hire purchase contracts together with the present

value of the net minimum lease payments are as follows:

Within one year 9,507 3,685 111 368

After one year but not later than five years 25,666 11,871 1,633 2,094

After five years - - - -

Total minimum lease payments 35,173 15,556 1,744 2,462

Less future finance charges (3,310) (2,380) (157) (390)

Present value of minimum lease payments 31,863 13,176 1,587 2,072

The Company has a finance lease for plant and equipment, which commenced in April 2005. This is a 5 year lease with an option to

refinance at the end. The equipment is being leased directly from CBFC Limited with lease payments paid monthly in advance.

The Economic Entity has a number of hire purchase agreements in place for plant and equipment used in both the Scrap Metal Trading

division and the Demolition and Remediation Contract Services division.

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note 33: Company detailsThe registered office of the Company is:

Level 5, 160 Sussex Street

Sydney NSW 2000

The principal places of business are:

australia

Level 5, 160 Sussex Street

Sydney NSW 2000

new Zealand

296 Neilson Street, Onehunga

Auckland, New Zealand

188 Ellis Street

Hamilton, New Zealand

Singapore

8 Gul Circle, Singapore 629564

malaysia

61-02 Medan Cahaya

Jalan Tun Abdul Razak


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Directors’ DeclarationThe directors of CMA Corporation Limited declare that:

(a) in the directors’ opinion the financial statements and notes on pages 11 to 86, and the remuneration disclosures that are contained in the

Remuneration Report in the Directors’ Report, set out on pages 22 to 26, are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the company’s and the consolidated entity’s financial position as at 30 June 2008 and of their

performance, for the financial year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001.

(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1b; and

(c) the remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report comply with Australian Accounting

Standard AASB 124 Related Party Disclosures, the Corporations Act 2001 and the Corporations Regulations 2001; and

(d) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

The Company and CMA Recycling Australia Pty Limited, T&T Metal & Asbestos Services Pty Limited and CMA Contracting Pty Limited, have

entered into a deed of cross guarantee under which the Company and its subsidiaries guarantee the debts of each other.

At the date of this declaration there are reasonable grounds to believe that the companies which are party to this deed of cross guarantee will be

able to meet any obligations or liabilities to which they are, or may have become subject to, by virtue of the deed.

The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2008,

required by Section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors.

dated at Sydney, 22 September 2008

douglas rowe

managing director

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Independent Auditor’s Report to the Members of CMA Corporation Limited

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726 Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia DX 10173 | Sydney Stock Exchange | New South Wales

PKF East Coast Practice is a member of PKF Australia Limited a national association of independent chartered accounting and consulting firms each trading as PKF. The East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice is also a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

INDEPENDENT AUDITOR’S REPORT

To the members of CMA Corporation Limited

Report on the Financial Report

We have audited the accompanying financial report of CMA Corporation Limited, which comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration for both the company and of the consolidated entity. The consolidated entity comprises the entity and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1b, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with Australian Equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, 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 report 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 report.

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

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s Opinion

In our opinion:

(a) the financial report of CMA Corporation Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the entity’s and consolidated entity’s financial position as at 30 June 2008 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1b.

Report on the Remuneration Report

We have audited the Remuneration Report included on pages 22 to 26 of the directors’ report for the year ended 30 June 2008. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of CMA Corporation Limited for the year ended 30 June 2008, complies with section 300A of the Corporations Act 2001.

PKF

Arthur MilnerPartner

Sydney, 22 September 2008For

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Shareholder Information

Substantial Shareholders as at 29 September 2008rank name units % issued Capital

1 ACN 122 808 324 Pty Ltd 61,231,507 13.91%

2 Mr Douglas Trevor Rowe 43,784,373 9.95%

3 Mr Joseph Tong Hong Chung 41,125,001 9.34%

4 Meretec Limited 37,500,000 8.52%

5 Souls Private Equity Limited 37,500,000 8.52%

6 Mr Tung Hui Chung 35,102,811 7.97%

top 20 holders of ordinary Shares as at 29 September 2008rank name units % of issued Capital

1 ACN 122 808 324 Pty Ltd 61,231,507 13.91%

2 Mr Douglas Trevor Rowe 43,784,373 9.95%

3 Mr Joseph Tong Hong Chung 41,125,001 9.34%

4 Meretec Limited 37,500,000 8.52%

5 Souls Private Equity Limited 37,500,000 8.52%

6 Mr Tung Hui Chung 35,102,811 7.97%

7 AMP Life Limited 11,139,687 2.53%

8 Moltoni Super Pty Ltd 8,695,650 1.98%

9 Mr Eugene Carl Storck / Mr Weston Clyde Colson 8,121,818 1.84%

10 Riverside Metal Industries Pty Ltd 6,782,946 1.54%

11 WMR Investments Pty Ltd 6,436,300 1.46%

12 ANZ Nominees Limited 5,771,036 1.31%

13 Mirrabooka Investments Limited 5,000,000 1.14%

14 P & M Adams Pty Limited 5,000,000 1.14%

15 P & W Adams Pty Limited 5,000,000 1.14%

16 K & M Adams Pty Ltd 4,860,000 1.10%

17 Moltoni Corporation Pty Limited 4,450,000 1.01%

18 Ms Antoinette Vivian Mann 3,947,000 0.90%

19 Mr Paul Walter Mann 3,947,000 0.90%

20 J P Morgan Nominees Australia Limited 3,765,416 0.86%

total 339,160,545 77.04%

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listed ordinary Shares with Full voting rightsDistribution of Shareholders as at 29 September 2008

range total holders units % issued Capital

1 - 1,000 116 83,167 0.02%

1,001 - 5,000 697 2,055,070 0.47%

5,001 - 10,000 453 3,615,375 0.82%

10,001 - 100,000 914 29,010,147 6.59%

100,001 - and over 153 405,471,787 92.10%

total 2333 440,235,546 100.00%

at 29 September 2008, 203 Shareholders held less than a marketable parcel of shares.

voting rightsEach Ordinary Share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a

show of hands.

on market Buy BackThere is no current on market buy back.

Shares held in Escrow as at 29 September 2008195 shareholders entered into voluntary escrow arrangements under which they will not sell in total 600,655 shares issued on 22 February 2007.

2 shareholders entered into voluntary escrow arrangements under which they will not sell in total 35,000 shares issued on 8 February 2008.

3 shareholders have provided acknowledgement and warranties that they will not sell 5,826,323 shares within 12 months of issue on

25 October 2007.

1 shareholder has provided acknowledgement and warranties that it will not sell 2,961,172 shares within 12 months of issue on 21 December 2007.

1 shareholder has provided acknowledgement and warranties that it will not sell 611,920 shares within 12 months of issue on 4 February 2008.

1 shareholder has provided acknowledgement and warranties that it will not sell 11,012,266 shares within 12 months of issue on 8 February 2008.

1 shareholder has provided acknowledgement and warranties that it will not sell 1,394,495 shares within 18 months of issue on 3 April 2008.

1 shareholder has provided acknowledgement and warranties that it will not sell 37,500,000 shares within 12 months of issue on 13 August 2008.

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Corporate Directory

DirectorsMr Alan Good - Chairman

Mr Douglas Rowe

Mr Joseph Tong Hong Chung

Mr Robert Moltoni

Mr Terry Woods

Managing DirectorMr Douglas Rowe

Chief Financial OfficerMr Trevor Schmitt

Company SecretaryMr Trevor Schmitt

Registered OfficeLevel 5, 160 Sussex Street

Sydney NSW 2000

Phone: +61 2 9200 3500

Head OfficeLevel 5, 160 Sussex Street

Sydney NSW 2000

Phone: +61 2 9200 3500

AuditorsPKF East Coast Practice

Level 10, 1 Margaret Street

Sydney NSW 2000

Share RegistryComputershare Investor Services Pty Ltd

Level 2, 45 St Georges Terrace

Perth WA 6000

Phone: +61 8 9323 2004

BankerANZ Banking Group Ltd

Level 3, 100 Queen Street

Melbourne VIC 3000

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