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contentsNotice of Annual General Meeting 01
Statement AccompanyingNotice of Annual General Meeting 01
Annexure I 03
Corporate Information 05
Chairman’s Statement 07
Letter to Shareholders on eDividend 13
Board of Directors 15
Directors’ Profile 17
Business Divisions 21
Corporate Governance Statement 25
Statement Of Directors’ Responsibility 29
Other Information 30
Audit Committee Report 31
Statement on Internal Control 35
Financial Statements 36
Particulars of Group Properties 96
Analysis of Shareholdings 97
Form of Proxy
Notice Of Thirty-Seventh Annual General Meeting
1ecofirst consolidated bhd (15379-V)
NOTICE IS HEREBY GIVEN that the Thirty-Seventh Annual General Meeting of the Company will be held at Ballroom 1, Level 5,The Summit Hotel, Subang USJ, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan on Wednesday,24 November 2010 at 10.00 a.m. to transact the following business:-
AGENDA
ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 May 2010 together with the Directors’ and Auditors’Reports thereon.
2. To re-elect the following Directors who will be retiring pursuant to Article 113 of the Company’s Articles of Association:2.1 Dato’ (Dr.) Teoh Seng Foo (Resolution 1)2.2 Siew Boon Yeong (Resolution 2)
3. To re-elect Lim Een Hong, who will be retiring pursuant to Article 93 of the Company’s Articles of Association. (Resolution 3)
4. To re-appoint Messrs Russell Bedford LC & Company, the retiring Auditors as Auditors of the Company and to authorize theDirectors to determine their remuneration. (Resolution 4)
SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions, with or without modifications, as Ordinary and Special Resolutions of theCompany:-
5. ORDINARY RESOLUTION NO. 1APPROVAL OF DIRECTORS’ FEES
RESOLVED:“THAT the Directors’ Fees for the financial year ended 31 May 2010 be hereby approved.” (Resolution 5)
6. ORDINARY RESOLUTION NO. 2AUTHORITY FOR DIRECTORS TO ISSUE SHARES
RESOLVED:“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the Main Market Listing Requirements of Bursa MalaysiaSecurities Berhad (“Bursa Securities”) and the approvals of the relevant governmental and/or regulatory authorities (if any), theDirectors be and are hereby authorized to issue shares in the Company at any time, upon such terms and conditions, for suchpurposes and to such person or persons as the Directors may deem fit, provided that the aggregate number of shares issuedpursuant to this resolution does not exceed 10% of the issued share capital of the Company at the time of issue AND THAT theDirectors be also empowered to obtain the approval of Bursa Securities for the listing of and quotation for the additional shares soissued on Bursa Securities AND THAT such authority shall continue to be in force until the conclusion of the next Annual GeneralMeeting of the Company.” (Resolution 6)
7. SPECIAL RESOLUTIONPROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION
RESOLVED:“THAT the deletion, alterations, modifications, variations and additions to the Articles of Association of the Company, more particularlyset out in Annexure I, be and is hereby approved.” (Resolution 7)
8. To transact any other business for which due notice shall have been given in accordance with the Companies Act, 1965 and theCompany’s Articles of Association.
Notice Of Thirty-Seventh Annual General Meeting (cont’d)
Statement AccompanyingNotice of Annual General Meeting
2annual report 2010
BY ORDER OF THE BOARD
YEOH CHONG KEAT (MIA 2736)REBECCA LEONG SIEW KWAN (MAICSA 7045547)Secretaries
Kuala Lumpur2 November 2010
Notes:-(i) A member entitled to attend and vote at the meeting is entitled to appoint not more than one (1) proxy to attend and vote in his stead. A proxy
need not be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply.(ii) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may
appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of thesaid securities account.
(iii) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or if theappointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised.
(iv) The original instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certifiedcopy of that power or authority shall be deposited at the Registered Office of the Company at Suite 11.1A, Level 11, Menara Weld, 76 JalanRaja Chulan, 50200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting.
Explanatory notes on Special Business:
(a) Resolution 5The Ordinary Resolution No. 1 proposed under this resolution 5, if passed, will authorize the payment of Directors’ Fees to the Directors ofthe Company for their services rendered during the financial year ended 31 May 2010.
(b) Resolution 6The Ordinary Resolution No. 2 proposed under this resolution 6, if passed, will renew the authority given to the Directors of the Company toissue and allot new shares in the Company at any time, to such person or persons, upon such terms and conditions and for such purposesas the Directors may, in their absolute discretion, deem fit (“General Mandate”), provided that the number of shares issued pursuant to thisGeneral Mandate, when aggregated with the nominal value of any such shares issued during the preceding twelve (12) months, does notexceed 10% of the total issued share capital of the Company at the time of issue. This renewed General Mandate, unless revoked or variedat a general meeting, will expire at the conclusion of the next annual general meeting (“AGM”) of the Company.
The General Mandate procured and approved in the preceding year 2009 which was not exercised by the Company during the year, will expireat the forthcoming Thirty-Seventh AGM of the Company.
With this renewed General Mandate, the Company will be able to raise funds expeditiously for the purpose of funding future investment,working capital and/or acquisition(s) without having to convene a general meeting to seek shareholders’ approval when such opportunitiesor needs arise.
(c) Resolution 7The Special Resolution proposed under this resolution 7, is for the purpose of streamlining the Company’s Articles of Association in line withthe provisions of the Main Market Listing Requirements, in particularly relating to electronic dividend as well as for housekeeping purposes.With the shareholders’ approval, the proposed amendments as per Annexure I attached together with the 2010 Annual Report of the Companywill be incorporated into the Company’s Articles of Association.
Further details of the following Directors standing for re-election are set out in the Directors’ Profile Section of the Annual Report:
(a) Dato’ (Dr.) Teoh Seng Foo(b) Siew Boon Yeong(c) Lim Een Hong
Annexure I
3ecofirst consolidated bhd (15379-V)
67
82
118
DETAILS OF THE PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION
Business of Annual Meeting
The business of an Annual General Meeting shall be to
receive and consider the Profit and Loss Accounts, the
Balance Sheet and the Reports of the Directors and of
the Auditors, to elect Directors, Auditors and other office
in the place of those retiring by rotation or otherwise, to
declare dividends and to transact any other business
which under these Articles ought to be transacted at an
Annual General Meeting. All other business transacted
at an Annual General Meeting and all business
transacted at an Extraordinary General Meeting shall be
deemed Special.
How votes may be given and who can act as proxy
Subject and without prejudice to any special privileges
or restrictions as to voting for the time being attached to
any special class of shares for the time being forming
part of the capital of the Company, every member
present in person or by proxy or represented by
attorney shall have one vote and upon a poll every such
member shall have one vote for every share held by him.
A proxy or attorney need not be a member of the
Company, and shall be entitled to vote on a show of
hands on any question at any general meeting.
Quorum and Votes
The Directors may meet together for the despatch of
business, adjourn and otherwise regulate their
meetings, as they think fit. The quorum necessary for
the transaction of business may be fixed by the
Directors, and unless so fixed shall be four Directors.
Questions arising at any meeting shall be decided by a
simple majority of votes. The Chairman shall have a
second or casting vote in case of an equality of votes.
Where two Directors form a quorum, the Chairman of a
meeting at which only such a quorum is present, or at
which only two Directors are competent to vote on the
question at issue, shall not have a casting vote.
67
82
118
Business of Annual Meeting
The business of an Annual General Meeting shall be to
receive the Profit and Loss Accounts, the Balance Sheet
and the Reports of the Directors and of the Auditors, to
elect Directors and other office in the place of thoseretiring by rotation or otherwise, to considerDirectors’ fees, to appoint Auditors and to determinetheir remuneration, to declare dividends and to
transact any other business which under these Articles
ought to be transacted at an Annual General Meeting.
All other business transacted at an Annual General
Meeting and all business transacted at an Extraordinary
General Meeting shall be deemed Special.
How votes may be given and who can act as proxy
Subject and without prejudice to any special privileges
or restrictions as to voting for the time being attached to
any special class of shares for the time being forming
part of the capital of the Company, every member
present in person or by proxy or represented by
attorney shall have one vote and upon a poll every such
member shall have one vote for every share held by him.
A proxy or attorney need not be a member of the
Company (the provisions of Section 149(1) of the Actshall not apply), and shall be entitled to vote on a showof hands on any question at any general meeting.
Quorum and Votes
The Directors may meet together for the despatch of
business, adjourn and otherwise regulate their
meetings, as they think fit. The quorum necessary for
the transaction of business may be fixed by the
Directors, and unless so fixed shall be two Directors.Questions arising at any meeting shall be decided by a
simple majority of votes. The Chairman shall have a
second or casting vote in case of an equality of votes.
Where two Directors form a quorum, the Chairman of a
meeting at which only such a quorum is present, or at
which only two Directors are competent to vote on the
question at issue, shall not have a casting vote.
EXISTING ARTICLES PROPOSED AMENDMENTS
4annual report 2010
118A
125
134
DETAILS OF THE PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION (CONT’D)
Not applicable
Resolution by Circulation
A resolution in writing signed or approved by letter ortelegram by all the Directors who may at the time bepresent in Malaysia and who are sufficient to constitutethe majority of the Directors shall be as valid andeffectual as if it had been passed at a meeting ofDirectors duly called and constituted, provided that,where a Director is not so present but has an alternatewho is so present, then such resolution must also besigned by his alternate. When signed, a resolution mayconsist of several documents each signed by one ormore of the persons aforesaid. All such resolutions shallbe described as “Directors’ Circular Resolutions” andshall be forwarded or otherwise delivered to theSecretary without delay, and shall be recorded by him inthe Company’s Minute Book.
Dividend warrants to be sent to members by post
Every dividend warrant may, unless otherwise directed,be sent by post to the last registered address of themember entitled thereto, and the receipt of the personwhose name at the date of the declaration of thedividend appears on the register of members as theowner of any share, or in the case of joint holders, ofany one of such joint holders, shall be a good dischargeto the Company for all payment made in respect of suchshare. No unpaid dividend or interest shall bear interestas against the Company.
118A
125
134
Participation at meetings vide technological means
All or any of the members of the Board or anycommittee of the Board may participate in ameeting of the Board or that committee by means ofa telephone conference, video conference or anycommunication equipment which allow all personsto participate in the meeting. A person soparticipating shall be deemed to be present inperson at the meeting and shall be entitled to voteor to be counted in a quorum accordingly. Such ameeting shall be deemed to take place where thelargest group of those participating is assembled, orif there is no such group, where the chairman of themeeting then is.
Resolution by Circulation
A resolution in writing signed or approved by all theDirectors who may at the time be present in Malaysiaand who are sufficient to constitute the majority of theDirectors shall be as valid and effectual as if it had beenpassed at a meeting of Directors duly called andconstituted, provided that, where a Director is not sopresent but has an alternate who is so present, thensuch resolution must also be signed by his alternate.When signed, a resolution may consist of severaldocuments each signed by one or more of the personsaforesaid. The expressions “in writing” and “signed”include approval by legible confirmed transmissionby facsimile, telex, cable, telegram or other writtenelectronic means. All such resolutions shall bedescribed as “Directors’ Circular Resolutions” and shallbe forwarded or otherwise delivered to the Secretarywithout delay, and shall be recorded by him in theCompany’s Minute Book.
Mode of Payment of Dividend
Any dividend, interest, or other money payable incash in respect of shares may be paid by cheque orwarrant sent through the post directed to theregistered address of the holder or paid viaelectronic or other methods of funds transfer tosuch account as designated by such holder. Everysuch cheque or warrant or electronic transfer shallbe made payable to the order of the person to whomit is sent. Every such cheque or warrant or electronictransfer shall be sent at the risk of the personentitled to the money represented thereby. No unpaiddividend or interest shall bear interest as against theCompany.
EXISTING ARTICLES PROPOSED AMENDMENTS
Annexure I (cont’d)
secretaries
Yeoh Chong Keat
Rebecca Leong Siew Kwan(both appointed on 28 April 2010)
auditors
Russell Bedford LC & Company
10th Floor, Bangunan Yee Seng
15, Jalan Raja Chulan
50200 Kuala Lumpur
share registrar
Symphony Share Registrars Sdn. Bhd.
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan
Tel : 03 - 7841 8000
Fax : 03 - 7841 8151/8152
registered office
Suite 11.1A, Level 11
Menara Weld
76, Jalan Raja Chulan
50200 Kuala Lumpur
Tel : 03 - 2031 1988
Fax : 03 - 2031 9788(changed with effect from 28 April 2010)
stock exchange listing
Bursa Malaysia Securities Berhad
Main Market
website
www.ecofirst.com.my
board ofdirectors
chairmanDato’ Syed Ariff Fadzillah bin Syed Awalluddin(re designated on 1 December 2009)
presidentDato’ (Dr.) Teoh Seng Foo(re designated on 1 December 2009)
group chief executive officer / executive directorTiong Kwing Hee
directorsAmos Siew Boon Yeong
Dato’ Boey Chin Gan
Lim Een Hong(appointed on 2 March 2010)
Teoh Seng Kian (Alternate Director to Dato’ (Dr.) Teoh Seng Foo)(appointed on 1 December 2009)
Corporate Information
5ecofirst consolidated bhd (15379-V)
thewisdomto succeed
dearshareholders,
On behalf of the Board of Directors
of Ecofirst Consolidated Bhd
(“the Company”), I hereby present
to you the Annual Report and the
Audited Financial Statements of the
Company and the Group for the
Financial Year Ended 31 May 2010.
Dato’ Syed Ariff Fadzillahbin Syed Awalluddin
Chairman
7ecofirst consolidated bhd (15379-V)
Chairman’s Statement
8annual report 2010
Overview
The global economic crisis which widened and deepened from
the sub-prime financial turmoil in the United States (“US”) to the
sovereign debt crisis in Europe is beginning to recover although
at a sluggish pace. With the help of large economic stimulus
packages rolled-out by developed countries running into trillions
of US Dollars, including substantial amounts to bail out their
financial institutions and large corporations, some improvement is
seen in consumer and investor confidence. However, the possible
withdrawal of fiscal stimulus by respective governments continues
to present risks to the global economic recovery.
The Malaysian stimulus packages are focused mainly on high
impact infrastructural projects, reducing unemployment and
increasing job and training opportunities as well as assisting the
private sector in facing the crisis and building capacity for the
future.
Going forward, the Group remains optimistic about the future
alongside the fiscal stimulus packages introduced by the
Government in an effort to increase the pace of economic
activities.
Financial Performance Review
The Group recorded a revenue of RM21.1 million and a loss of
before tax of RM41.4 million for the financial year ended 31May
2010.
The revenue recorded was derived from the construction, property
and network marketing divisions while the loss before tax was
mainly attributable to impairment loss on property development
cost and high finance cost.
Operational Review
The year under review was a challenging year as the Group strived
to make-up for the lower revenue contribution due to the tail-end
of the construction project of the National Youth Training Institute
(“IKBN”) at Kuala Kubu Baru, Selangor. Revenue from the said
project was lower by by 60% in the year under review as
compared to the previous financial year as a result of the
abovementioned. The Group is continuing to seek opportunities
to secure new construction projects to boost the Division’s future
revenue and profit contribution.
1 Segamat Artist Impression
Chairman’s Statement (cont’d)
9ecofirst consolidated bhd (15379-V)
Since the re-branding of South City Plaza in Seri Kembangan as
an Education Mall in the previous financial year, the mall has
enjoyed a reasonable stream of income. More areas have been
tenanted out to education providers. The Group plans to bring
the mall to the next level with the construction of 2 blocks of 13
storey service apartments/commercial space, which will help to
generate a bigger crowd to patronize the mall. The launching of
this development is expected to be in the first quarter of 2011.
In addition to the abovementioned development, next year will
also be an exciting phase for the Property Division as the Group
has recommenced the construction of its 5-storey shopping mall
in Segamat, Johor. Known as “1Segamat”, the mall consisting of
3 levels of retail space and 2 levels of carpark bays, will be the
one and only mall in the town of Segamat. Targeted to be opened
for business in the second half of 2011, 1Segamat is expected to
be a major revenue contributor to the Group.
Our Network Marketing Division is currently undergoing internal
restructuring and revamping to equip ourselves to face the
challenges in this highly competitive industry. The Division is
exploring and developing with affiliated scientists and
researchers, the commercial production of various health
products to meet the growing demand for nature inspired eco
friendly health care and beauty products. The Group sees
potential in this Division given the time and resources to groom
the business.
The Agro-Biotechnology Division has opened up more land for
the cultivation of organic crops. We are currently exploring the
planting of organic Agarwood on our 1,000 acres farm in Desaru,
Johor. The Group is positively bullish on the long term
contributions expected from this Division as the oil from
Agarwood is well sought after for its herbal, health and cosmetic
values.
One of the main highlights of the Group’s business plans is the
entry into mineral resources via our wholly-owned subsidiary,
Opal Horizon Sdn Bhd (“Opal”). Opal had on 5 August 2010
entered into a co-operation agreement with CV Geo Mineral
Resources (“CV Geo”) for the exploitation of an iron ore mine in
South Kalimantan, Indonesia. Opal and CV Geo will co-operate
to carry out exploitation activities on the iron ore mine located in
Tanah Laut Regency, South Kalimantan.
The Group’s entry into mineral resources will allow us to
participate in the booming global mineral resources industry
fuelled by the high growth and demand from China, India and its
surrounding regions. Given that mineral resources are non-
renewable in nature and the recent consolidation of global
players, global price levels are expected to remain stable despite
the economic downturn in the US and European markets.
Operational Review (cont’d)
Opening Ceremony of EcoFirst Product’s New Office at South City Plaza
10annual report 2010
Corporate Social Responsibility
The Group is committed to the importance of its corporate
and social responsibilities whilst pursuing its corporate
goals.
During the year, several activities were organized at South
City Plaza which included amongst others an organ donation
drive, several blood donation campaigns hosted together
with the National Blood Bank, Lions Club, Pusat Bimbingan
Ajaran Confucion, Pusat Perubatan Universiti Malaya and
several others, a re-cycling campaign to create awareness
amongst the community and many other community related
activities such as calligraphy, pet rearing and health talks.
Our network marketing division has also formed a
collaboration with Majlis Kanser Nasional, more commonly
known as MAKNA, to promote health awareness
programmes whereby awareness of cancer and methods of
prevention will be disseminated to the public. In addition, for
every item of Nu3 AcaiFiber sold (a health product marketed
under this division), the company will donate RM1.00 to
MAKNA to help fund its programmes.
Chairman’s Statement (cont’d)
Children’s Calligraphy Event
Blood Donation Campaign
Adopt a Pet Campaign
11ecofirst consolidated bhd (15379-V)
Chairman’s Statement (cont’d)
Future Prospects
Despite the current challenging economic environment, the Groupwill continue to pursue and strengthen its core businesses underproperty management, network marketing, construction,agro-biotechnology and new businesses under mineral resources.The Group will continue with its cost efficient measures in therunning of the operations and prudent expansion plans.
Going forward, the Board is optimistic about the Group’sprospects and look forward to the challenges in 2010 and beyond.Barring unforeseen circumstances, the Board expects theperformance of the Group to be better for the next financial yearending 31 May 2011.
Acknowledgement
On behalf of the Board, I would like to take this opportunity tothank our previous Chairman, Tan Sri Dato’ Dr. Syed Jalaludin binSyed Salim and Independent Director, Dato’ Philip Chan for theirinvaluable contribution to the Board during the tenure of theirdirectorship. We also take this apportunity to extend a warmwelcome to our new board member, Lim Een Hong who joined usas Independent Non-Executive Director and Teoh Seng Kian whowas appointed as an Alternate Director to our President. At thesame time, my appreciation also goes to the management teamand entire staff of the Group for their committed and dedicatedservices rendered and let us continue to work harder to chart abrighter future for the Group.
I also wish to express our sincere appreciation to our valuedshareholders, business associates, clients and bankers for theirsteadfast support and confidence in the Group. The Group valuesand looks forward to this continued support as we progresstowards new undertakings.
To my fellow Board members, I wish to thank each and every onefor their invaluable guidance and contribution towards thebetterment of the Group.
Dato’ Syed Ariff Fadzillah bin Syed AwalluddinChairman
1 October 2010Signing of Cooperation Agreement in respect of Tanah Laut Iron Ore Project
IKBN Project Completed Multi Purpose Hall
reaching out,making adifference
Letter To Shareholders On eDividend
13ecofirst consolidated bhd (15379-V)
Dear Shareholders,
RE: IMPLEMENTATION OF ELECTRONIC DIVIDEND PAYMENT
Pursuant to the directive by Bursa Malaysia Securities Berhad on the implementation of electronic dividend (“eDividend”) payment systemwhich became effective 1 September 2010, we wish to inform that as a listed issuer, Ecofirst Consolidated Bhd, is required to pay cashdividends declared to shareholders by directly crediting the shareholders’ cash dividend entitlements into their respective bank accountsto shareholders who have provided their bank account information to Bursa Malaysia Depository Sdn Bhd (“Bursa Depository”). One ofthe main objectives of implementing eDividend is to promote greater efficiency in the payment system which is aligned to the nationalagenda of migrating to electronic payment.
1. Benefits of eDividend
(a) eDividend is applicable to all public companies listed on Bursa Malaysia Securities Berhad (“listed issuers”) and providesamongst others, faster access to your cash dividends, eliminates the inconvenience of having to deposit the dividend chequesand problems such as misplaced, lost or expired cheques and unauthorized deposit of dividend cheques.
(b) Shareholders who register for eDividend will enjoy the following additional benefits:-i. The convenience of a one-off registration for entitlement to eDividend from all listed issuers; andii. The option to consolidate the dividends from all your Central Depository System (“CDS”) accounts into one bank account
for better account management.
2. Registration for eDividend
(a) Registration for eDividend has commenced on 19 April 2010 for a period of one (1) year until 18 April 2011, at no cost toshareholders. If you register after the one (1) year period, an administrative charge will be imposed.
To register for eDividend, you are required to provide to Bursa Depository through your stock broker, your bank account numberand other information by completing the prescribed form. This form can be obtained from your stock broker’s office where yourCDS account is maintained, or downloaded from Bursa Malaysia’s website at http:// www.bursamalaysia.com.
(b) You need to submit to your stock broker’s office where your CDS account is maintained, the duly completed prescribed formand the following for registration :-
i. Individual Depositor• Copy of identification documents i.e. NRIC, passport, Authority Card or other acceptable identification documents.
Original documents must be produced for your stock broker’s verification;
ii. Corporate Depositor• Certified true copy of the Certificate of Incorporation/Certificate of Registration; and
iii. Copy of your bank statement/bank savings book/details of your bank account obtained from your bank’s website that hasbeen certified by your bank/ copy of letter from your bank confirming your bank account particulars.
For individuals, original documents must be produced for your stock broker’s verification.
For Corporate entities, a certified true copy is to be submitted.
(c) If the CDS account is held in the name of a nominee, the nominee will register for the eDividend.
(d) If you are not able to be present at your stock broker’s office to submit the prescribed form and supporting documents, pleaseensure that the signing of the prescribed form and the supporting documents have been witnessed by an acceptable witnessspecified by Bursa Depository. In this regards, an acceptable witness includes an Authorised Officer of your stock broker,a Dealer’s Representative, a notary public or an Authorised Officer of the Malaysian Embassy/ High Commission.
14annual report 2010
Letter To Shareholders On eDividend (cont’d)
3. Notification
You are encouraged to provide in the prescribed form to Bursa Depository both your mobile phone number and e-mail address,if any. This is to enable the Company to issue electronic notification to you either via e-mail or SMS, at the discretion of the Company,once the Company has paid the cash dividend out of its account. Please note that if you provide only your mobile phone, you mayonly be notified of the cash dividend payment when you receive your dividend warrant or tax certificate.
4. Additional Information for shareholders
(a) Your savings or current account, must be an active bank account, maintained with a local bank under your name or in the caseof a joint account, has your name as one of the account holders. The bank account must be with a financial institution that is amember of the Malaysian Electronic Payment System Inter-Bank GIRO (IBG) as listed below. For an up-todate listing, you areadvised to refer to the website at http//www.meps.com.my/faq/interbank giro.sap?id=2#answer
1. Affin Bank Berhad 12. EON Bank Berhad2. Alliance Bank Malaysia Berhad 13. Hong Leong Bank Berhad3. AmBank (M) Berhad 14. HSBC Bank Malaysia Berhad4. Bank Islam Malaysia Berhad 15. Malayan Banking Berhad5. Bank Muamalat Malaysia Berhad 16. OCBC Bank (Malaysia) Berhad6. Bank Kerjasama Rakyat Malaysia Berhad 17. Public Bank Berhad7. Bank of America Malaysia Berhad 18. RHB Bank Berhad8. Bank Simpanan Nasional 19. Standard Chartered Bank Malaysia Berhad9. CIMB Bank Berhad 20. The Royal Bank of Scotland Berhad10. Citibank Berhad 21. United Overseas Bank (Malaysia) Berhad11. Deutsche Bank (Malaysia) Berhad
(b) Your bank account particulars and other related information is protected under the Securities Industry (Central Depository) Act,1991 which strictly prohibits disclosure of such information to any person unless you expressly authorise the disclosure inwriting. For eDividend purpose, you will be authorising disclosure of your bank account particulars and other related informationto persons necessary to facilitate the eDividend such as the Company, the share registrar and the appointed paying banks.
(c) Once you have registered for eDividend, any cash dividend entitlement of which the books closure date is announced by theCompany on or after 1st September 2010, shall be paid to you via eDividend.
We look forward to the successful implementation of eDividend through your active participation, and to serving you better as our valuedshareholders. If you have any query relating to our eDividend service, please do not hesitate to contact our share registrar officer:
En. Mokhzani ShariffHelpdeskSymphony Share Registrars Sdn BhdLevel 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/ 4647301 Petaling JayaSelangor Darul Ehsan
Direct Line : 03 - 7849 0777Fax : 03 - 7841 8151 / 8152Email : [email protected]
Thank you.
Yours faithfully,for ECOFIRST CONSOLIDATED BERHAD
TIONG KWING HEEGroup Chief Executive Officer
Board Of Directors
15ecofirst consolidated bhd (15379-V)
Dato’ Syed Ariff Fadzillah binSyed Awalluddin
Chairman(Independent Non-Executive Chairman)Malaysian
Dato’ (Dr.) Teoh Seng Foo
President(Non-Independent Executive Director)Malaysian(Alternate: Teoh Seng Kian)
Tiong Kwing Hee
(Group Chief Executive Officer/ ExecutiveDirector)Malaysian
16annual report 2010
Amos Siew Boon Yeong
(IndependentNon-Executive Director)Malaysian
Dato’ Boey Chin Gan
(IndependentNon-Executive Director)Malaysian
Lim Een Hong
(IndependentNon-Executive Director)Malaysian
Teoh Seng Kian
(Alternate Director toDato’ (Dr.) Teoh Seng Foo)Malaysian
Board Of Directors (cont’d)
Directors’ Profile
17ecofirst consolidated bhd (15379-V)
Dato’ Syed Ariff Fadzillah bin Syed Awalluddin, aged 67, wasappointed to the Board on 27 January 2006. He wasre-designated to Chairman/Independent Non-Executive Director on1 December 2009. He is also the Chairman of the NominationCommittee and a member of the Remuneration Committee.
He holds a Bachelor of Arts degree in History from University Malaya.He also holds a Diploma in Development Administration and aMaster of Arts in International Relations.
He started his career as an Assistant District Officer in Kulim, Kedahin 1967. He was an Assistant Secretary in the Public ServiceCommission, Kuala Lumpur between 1970 and 1972 before beingtransferred to the Ministry of Foreign Affairs. Prior to retiring inNovember 2001, he served as the Ambassador of Malaysia to theKingdom of Thailand from 1996 to 2001, Ambassador to theRepublic of Korea with joint accreditation to Mongolia (1992 to 1995)and Ambassador of Malaysia to Fiji with concurrent accreditations toTuvalu, Tonga, Western Samoa, Kiribati and Nauru (1998 and 1991).His other foreign assignments include postings to Indonesia, Libyaand Canada. He was also the Deputy Permanent Representative ofthe Permanent Mission of Malaysia to the United Nations between1982 and 1986. From 1991 to 1992, he served as the Undersecretaryat the Ministry of Foreign Affairs in charge of Southeast Asia andSouth Pacific.
He also sits as director on the boards of MNRB Holdings Berhad,MNRB Retakaful Berhad and Malaysian Reinsurance Berhad.
He has no family relationship with any other Director and/or majorshareholder of the Company. He has not entered into anytransaction, whether directly or indirectly, which has a conflict ofinterest with the Company and has no convictions for offences, otherthan traffic offences (if any), within the past ten (10) years.
He has attended four (4) out of five (5) Board meetings held duringthe financial year ended 31 May 2010.
Dato’ (Dr.) Teoh Seng Foo, aged 54 was appointed to the Boardon 5 May 1997. He was re-designated from the position of anExecutive Deputy Chairman to President/Non-IndependentExecutive Director on 1 December 2009. He is also the Chairman ofthe Executive and Remuneration Committees.
An accountant by profession, Dato’ Teoh is a Chartered Accountantof the Malaysian Institute of Accountants, a Chartered ManagementAccountant and Fellow Member of the Chartered Institute ofManagement Accountants, United Kingdom.
Dato’ Teoh has wide corporate experience, having held seniormanagement positions in multi-nationals such as Intel Technology,Woodward & Dickerson Inc., Coopers & Lybrand and Esquel Group.
Dato’ Teoh was conferred the Honorary Doctorate in BusinessAdministration by University of Abertay Dundee, United Kingdom.Currently, he is also a Patron of the University of Abertay Foundationbased in United Kingdom.
Dato’ Teoh is the Chairman of Eduspec Sdn Bhd and YouthemeOnline Sdn Bhd, both involved in promotion of e-learning in schools.He is also the President of Meda Inc. Berhad andPresident/Executive Deputy Chairman of SEG International Bhd.
He is a substantial shareholder of the Company and is deemed tohave an interest in all the shares held by the Company in thesubsidiaries by virtue of his substantial interest in shares of theCompany. He is a brother to Teoh Seng Aun and Teoh Seng Kian(who is also his alternate director, appointed on 1 December 2009),who are also substantial shareholders of the Company. Apart fromthe above, he has no other family relationship with any other Directorand/or major shareholder of the Company.
He has not entered into any transaction, whether directly or indirectly,which has a conflict of interest with the Company, other than thosedisclosed in the notes accompanying the financial statements, andhas no convictions for offences, other than traffic offences (if any),within the past ten (10) years.
He has attended all the five (5) Board meetings held during thefinancial year ended 31 May 2010.
Dato’ Syed Ariff Fadzillahbin Syed Awalluddin
ChairmanndependentNon Executive Director)Malaysian
Dato’ (Dr.) Teoh Seng Foo
President(Non IndependentExecutive Director)
Malaysian
18annual report 2010
Tiong Kwing Hee, aged 52, first joined the Board as an AlternateDirector on 18 September 2008 and subsequently appointed asExecutive Director/Chief Executive Officer on 2 January 2009. He iscurrently the Group Chief Executive Officer of the Company. He isalso a member of the Executive Committee and the Chairman of theRisk Management Committee.
He obtained a Bachelor of Arts (Hons) majoring in BusinessAdministration from Hanover College, United States of America in1982 and a Master Degree in Business Economics from MiamiUniversity, United States of America in 1983.
He started his career with Sim Lim Holdings Berhad in 1983 asExecutive Officer in charge of corporate finance and was promotedto Manager in 1984 and General Manager in 1985. He left Sim LimHoldings Berhad in 1987 following his venture into the timberindustry and became a shareholder cum director of marketing inWansuria Sdn Bhd. He was a substantial shareholder in LondonPacific Ltd, a company listed on the New Zealand Stock Exchangebetween 1988 and 1994. In 1994, he left the timber industry when hesold off his stake in Wansuria Sdn Bhd to Pan Pacific Asia Berhad.In 1995, he joined D-Systems Pte Ltd, a Singapore based companywith exclusive distribution rights of drywall system from UnitedStates of America for Asia Pacific region, as the Chief ExecutiveOfficer. In 1997, he was head hunted on a two (2) years contract asan Executive Director of a listed company to prepare that companyfor a corporate restructuring.
In 2000, Mr. Tiong was appointed as an Executive Director ofMercury Industries Berhad and subsequently he joined the Companyon 2 September 2008. During the course of his career, he has beendirectly involved in various industrial sectors including corporatefinance, financial services, manufacturing, plantations, property,construction, education, leisure, entertainment and mineralresources. He has extensive hands-on experience, knowledge andexposure in international business, corporate planning, restructuringand turnaround.
He has no family relationship with any other Director and/or majorshareholder of the Company. He has not entered into anytransaction, whether directly or indirectly, which has a conflict ofinterest with the Company and has no convictions for offences, otherthan traffic offences (if any), within the past ten (10) years.
He has attended all the five (5) Board meetings held during thefinancial year ended 31 May 2010.
Amos Siew Boon Yeong, aged 52, was appointed to the Board on27 October 2005. He is also the Chairman of the Audit Committeeand a member of the Remuneration Committee.
He qualified as a Certified Public Accountant in 1984 and is currentlya member of the Malaysian Institute of Certified Public Accountants,a Chartered Accountant with the Malaysian Institute of Accountantsand an associate member of the Chartered Tax Institute of Malaysia.He is also a Certified Financial Planner and is a member of theFinancial Planning Association of Malaysia.
He started his auditing career and professional training with theaccounting firm, Coopers & Lybrand in 1978 before establishing hisown practice in 1988. He is currently the sole practitioner of thepublic accounting firm, Messrs. Siew Boon Yeong & Associates. Hehas vast experience in auditing, tax planning, corporate finance andfinancial planning and has been involved in numerous assignmentson merger and acquisitions, debt restructuring and liquidation.
He is also a Director of SEG International Bhd and TMC LifeSciences Bhd.
He has no family relationship with any other Director and/or majorshareholder of the Company. He has not entered into anytransaction, whether directly or indirectly, which has a conflict ofinterest with the Company and has no convictions for offences, otherthan traffic offences(if any), within the past ten (10) years.
He has attended all the five (5) Board meetings held during thefinancial year ended 31 May 2010.
iong Kwing Hee
Group Chief Executive Officer/xecutive Director)Malaysian
Amos Siew Boon Yeong
(IndependentNon Executive Director)
Malaysian
Directors’ Profile (cont’d)
Directors’ Profile (cont’d)
19ecofirst consolidated bhd (15379-V)
Dato’ Boey Chin Gan, aged 45, wasappointed to the Board on 1 April 2009. He isalso a member of the Audit and NominationCommittees.
He obtained the Bachelor of Arts (Honours)from the University Kebangasaan Malaysia(UKM).
Dato’ Boey is very active in the socialeconomic development of the country. He hasserved as the Press Secretary to the Ministerof Housing and Local Government of Malaysiafor 11 years from 1993 to 2004. In 2004, Dato’Boey was the Kedah State Assemblyman.Dato’ Boey has vast experiences andextensive knowledge in administrative andstrategic planning by virtue of his long servicein government sectors.
He has no family relationship with any otherDirector and/or major shareholder of theCompany. He has not entered into anytransaction, whether directly or indirectly,which has a conflict of interest with theCompany and has no convictions foroffences, other than traffic offences (if any),within the past ten (10) years.
He has attended all the five (5) Boardmeetings held during the financial year ended31 May 2010.
Lim Een Hong, aged 43, was appointed to theBoard on 29 March 2010. He is also a member
of the Audit and Nomination Committees.
He is a lawyer by profession and holds a
Bachelor of Law (Hons) from University of
Malaya. Presently, he is the Chief Executive
Officer and Director of Eduspec Holdings Bhd
(formerly known as Litespeed Education
Technologies Bhd).
He started his career as a litigation lawyer
handling banking and civil litigation cases from
1992 to 1996. He was a partner of Eugene Tan
& Co from 1994 to 1998 before setting up his
own firm, Messrs EH Lim, Lee & Partners. He is
exposed to property and land conveyancing
transactions, property financing and land
dealings. He has vast experience in land
dealings negotiations, corporate restructuring,
joint venture participation, acquisition,
investment management and general
corporate representation.
He has no family relationship with any other
Director and/or major shareholder of the
Company. He has not entered into any
transaction, whether directly or indirectly, which
has a conflict of interest with the Company and
has no convictions for offences, other than
traffic offences (if any), within the past ten (10)
years.
He has attended one (1) Board meeting of the
Company held during the financial year ended
31 May 2010, subsequent to his appointment
to the Board on 29 March 2010.
Teoh Seng Kian, aged 50, was appointed asAlternate Director to Dato’ (Dr.) Teoh Seng Foo,
the President, on 1 December 2009.
He graduated with a Bachelor of Engineering
(Mechanical) degree from Australia in 1984. He
started his career with an Australian company
specializing in manufacturing of building
materials. Upon returning to Malaysia, he
served as a director in a company involved in
quarrying and infrastructure construction. He
is currently the Group Project Director of Meda
Inc. Berhad.
He is a substantial shareholder of the Company
and is deemed to have an interest in all the
shares held by the Company in the subsidiaries
by virtue of his substantial interest in shares of
the Company. He is a brother to Dato’ (Dr.)
Teoh Seng Foo and Teoh Seng Aun, who are
also substantial shareholders of the Company.
Apart from the above, he has no other family
relationship with any other Director and/or
major shareholder of the Company.
He has not entered into any transaction,
whether directly or indirectly, which has a
conflict of interest with the Company, other
than those disclosed in the notes
accompanying the financial statements, and
has no convictions for offences, other than
traffic offences (if any), within the past ten (10)
years.
ato’ Boeyhin Gan
ndependenton Executiveirector)alaysian
Teoh SengKian
(AlternateDirector)Malaysian
Lim EenHong
(IndependentNon Executive
Director)Malaysian
the visionof abrighter future
constructiondivision
The Division’s current construction and upgrading
project of the National Youth Training Institute
(“IKBN”) at Kuala Kubu Baru, Selangor is as at
todate 96% completed. The government funded
training centre which can accommodate up to
800 students consists of academic blocks,
student residences, staff quarters and faculty
facilities.
The Division is seeking opportunities to secure
new construction projects from both the private
and public sectors to boost its future contribution
to the Group.
Business Divisions
21ecofirst consolidated bhd (15379-V)
IKBN Academic BlocksIKBN Staff Semi Detached Quarters
propertydivision
Under this Division, the Group has two main properties.
The first is a 5-storey commercial and retail complex in Seri Kembangan, Selangor, known as
South City Plaza which currently houses several established vocational and technical education
providers with a population of approximately 5,000 students. Other tenants in South City Plaza
are those in the food & beverage business, hypermarket operator, personal care stores, fashion
retailers, telecommunication providers, entertainment outlets, imported furniture retailers etc.
which provide a wide range of services and facilities to students, shoppers and communities
alike. On-going efforts are being carried out to further improve its tenant base and investment
yield.
The Group is ready to embark on the second phase development of South City Plaza
considering the maturity of the surrounding area and its community, attained over the years.
Phase 2 which consists of two tower blocks of residential/commercial space is now in the final
stages of planning and barring unforeseen circumstances, is expected to commence
construction next year. The completed development of the two tower blocks which sits atop
South City Plaza would add value to the complex in terms of being part of an integrated
development with synergistic benefits attributable to the population present at both the
complex and the residential/commercial towers.
The second property is a 5-storey commercial and retail complex in Segamat, Johor. We are
pleased to report that we have revived the construction of this development with the re-
commencement of construction works in the third quarter of this year. The complex, now
known as 1Segamat, is expected to be completed and open for business by the second half
of 2011. Being the one and only shopping mall in the town of Segamat, we are optimistic of a
significant contribution from this development once operational.
22annual report 2010
Business Divisions (cont’d)
South City Plaza
1 Segamat Artist Impression
23ecofirst consolidated bhd (15379-V)
Business Divisions (cont’d)
Through this Division, the Group markets a wide range of unique
products through a network marketing system which provides
an attractive income scheme to its consumers and distributors.
The products offered range from health to beauty care, personal
to home care, lingerie to jewelry and water equipment to car care.
Each product is manufactured under stringent Good
Manufacturing Practices (GMP) and Hazard Analysis and Critical
Control Point (HACCP) quality standards and are all syariah
compliant.
Amongst the new products launched this year are the Nu3
AcaiFiber, Nu3 VitaLiving and Ultima Acai Facial Bamboo Bar.
Nu3 AcaiFiber is a unique fiber drink enriched with 5 in 1 formula
which is good for the digestive system. It helps in food digestion,
food nutrient absorption and wastage excretion.
A cellular supplement beverage, Nu3 VitaLiving is formulated with
the finest quality of a combination of natural nutrients together
with antioxidants. Based on research and development by nobel
prize winners, this unique formulation helps to improve
cardiovascular and heart wellness.
The Ultima Acai Bamboo Facial Bar which is formulated for both
genders and contains no alcohol nor preservatives, is made up
of 65% Ghassoul clay which help prevent skin hydration, acai
extract and bamboo salt which contain high antioxidants and
minerals. Together, these ingredients aid the skin’s natural
recovery process to promote healthy skin in a natural way.
The Division is committed towards emerging as a lifestyle brand
aimed at enhancing one’s well being and lifestyle while
generating an attractive income stream.
network marketingdivision
Launching of EcoFirst Products New Office at South City Plaza
24annual report 2010
Business Divisions (cont’d)
This Division operates a biotechnology-based organic farm at
Desaru, Johor via a joint-venture with a Johor state government-
linked corporation.
Currently, the land is under cultivation with various types of organic
vegetables and fruit crops such as sweet corn, sweet potato,
chilly, green leafy vegetables, radish, sesame, groundnuts,
pineapple and many others. The acceptance of our organic farm
produce by organic wholesalers and retailers has been very
encouraging. In the near future, the plan is to sell our produce
under our own brand name directly to consumers and to open our
market to Singapore which present attractive opportunities in
terms of pricing and margins.
For the longer term, the Division is exploring the planting of
organic Agarwood which is well sought after for its herbal, health
and cosmetic values.
This Division represents the Group’s new business entry into
mineral resource; more specifically the exploitation of iron ore at
Tanah Laut, South Kalimantan, Indonesia.
The infrastructure surrounding the mining site and the assembly of
the mining processing plant has been completed. Mining activities
are expected to be fully operational before the end of the year.
The Group is optimistic that this Division will start to contribute
significantly in terms of revenue and profit in the next financial year.
agro-biotechnologydivision
mineral resourcesdivision
Organic Produce
Signing of Corperation Agreement
Tanah Laut Iron Ore Site
Corporate Governance Statement
25ecofirst consolidated bhd (15379-V)
INTRODUCTION
The Board of Directors (“Board”) of EcoFirst Consolidated Bhd (“ECB”) subscribes to the fundamental principles of good corporategovernance and best practice provisions contained in the Malaysian Code on Corporate Governance (Revised 2007) (“the Code”).Compliance with the Code has always been recognised by ECB as the basic tenet to safeguard the interests of all stakeholders and toenhance shareholders’ value.
BOARD OF DIRECTORS
Constitution of the Board and Board Balance
The Board, led by an Independent Non-Executive Chairman, comprises of six (6) members of whom two (2) are Executive Directors, four(4) are Non-Executive Directors all of whom are Independent, including the Chairman. One (1) of the Executive Directors has an appointedAlternate Director. The profile of each Director is set out in the Directors’ Profile Section of the Annual Report.
The Board’s composition brings to the Group a diverse wealth of skills, knowledge and a balanced mix of experience and expertise toeffectively discharge its stewardship responsibilities in spearheading the Group’s growth and future direction. There is a clear segregationof responsibilities between the Directors to ensure a balance of power and authority. Generally, the Executive Directors are responsiblefor making and implementing operational and corporate decisions. Non-Executive Directors play a pivotal role in corporate accountabilityby providing unbiased and independent views in the sharing of knowledge and experience, towards the formulation of policies and inthe decision-making process. Where a potential conflict of interest may arise, it is mandatory practice for the Director concerned to declarehis interest and abstain from the decision-making process.
There is a clear division of responsibility between the Chairman and Group Chief Executive Officer to ensure that there is a balance ofpower and authority. The Chairman is responsible for ensuring Board effectiveness whilst the Group Chief Executive Officer has overallresponsibility for the operating units, organizational effectiveness and implementation of Board policies and decisions. Although all theDirectors have an equal responsibility for the Group’s operations, the role of these Independent Non-Executive Directors is important asthey provide independent views, advice and judgement on issues of strategy, business performance and controls. The Independent Non-Executive Directors provide independent and constructive views in ensuring that the strategies proposed by the management are studiedand deliberated to take account of the interests not only of the Group, but also of shareholders, and the public at large.
Meetings of the Board of Directors
At least four (4) board meetings are held annually; each meeting scheduled to consider the quarterly financial results and operationalperformance. Additional meetings are convened as and when necessary. During the financial year ended 31 May 2010, five (5) boardmeetings were held and the summary of attendance by the Directors is as follows:
Name of Directors Total Attendance % of Attendance
Tan Sri Dato’ Dr. Syed Jalaludin bin Syed Salim (resigned on 1 December 2009) 2/3 67
Dato’ (Dr.) Teoh Seng Foo(Alternate Director : Mr Teoh Seng Kian, appointed on 1 December 2009) 5/5 100
Tiong Kwing Hee 5/5 100
Dato’ Clement Hii Chii Kok (resigned on 16/9/2009) 1/1 100
Dato’ Syed Ariff Fadzillah bin Syed Awalluddin 4/5 80
Dato’ Philip Chan Hon Keong (resigned on 28 January 2010) 4/4 100
Amos Siew Boon Yeong 5/5 100
Dato’ Boey Chin Gan 5/5 100
Lim Een Hong (appointed on 29 March 2010) 1/1 100
The Company Secretary also attended all the Board meetings held during the financial year under review.
26annual report 2010
Corporate Governance Statement (cont’d)
Access to Advice and Information
Board meetings are structured with a pre-set agenda, providing the Directors with relevant and timely information to enable them todischarge their duties and responsibilities effectively. Board papers, which provide updates on operational, financial and corporatedevelopments, are circulated to enable Directors to obtain further explanation where necessary in order to facilitate informed decision-making.
All Directors have access to all information within the Group and direct access to the advice and services of the Company Secretary,whether as a full Board or in their individual capacity. In addition, the Directors are also empowered to seek external and independentprofessional advice at the Company’s expense, in order to discharge their duties and responsibilities more effectively.
Board Committees
The Board has delegated specific responsibilities to four (4) committees, which operate within approved terms of reference, to assist inthe effective discharge of its principal responsibilities. Notwithstanding the above, the ultimate responsibility for the final decision lies withthe full Board. These committees are:
a) Nomination Committee
The Nomination Committee, which comprises wholly of Non-Executive Directors, recommends candidates with an optimal mix ofqualifications, skills and experience to the Board. The Nomination Committee also carries out annual evaluation on the effectivenessof the whole Board, the various Committees and individual Director’s contribution to the Board’s decision-making process.
The present members of the Nomination Committee are as follows:
Dato’ Syed Ariff Fadzillah bin Syed Awalluddin - Chairman/Independent Non-Executive DirectorDato’ Boey Chin Gan - Member/Independent Non- Executive DirectorLim Een Hong - Member/Independent Non-Executive Director
b) Remuneration Committee
The Remuneration Committee, comprising mainly Non-Executive Directors, is responsible for drawing up the policy framework andto make recommendations to the Board on the remuneration packages of the Executive Directors. The Executive Directors do notparticipate in decisions relating to their remuneration packages. The Board as a whole determines the remuneration of Non-ExecutiveDirectors with the Director concerned abstaining from participating in decisions in respect of his individual remuneration.
The Remuneration Committee comprises of the following members:
Dato’ (Dr.) Teoh Seng Foo - Chairman/President/Executive DirectorAmos Siew Boon Yeong - Member/Independent Non-Executive DirectorDato' Syed Ariff Fadzillah bin Syed Awalluddin - Member/Independent Non-Executive Director
c) Audit Committee
The terms of reference and further information on the Audit Committee are outlined in the Audit Committee Report Section of thisAnnual Report.
d) Risk Management Committee
The Risk Management Committee oversees the implementation of the risk management system within the Group. The Committeereports directly to the Board and assists the Board in overseeing the management of risk issues and reviews the efficacy of internalcontrols within the Group.
27ecofirst consolidated bhd (15379-V)
Corporate Governance Statement (cont’d)
d) Risk Management Committee (cont’d)
The present members of the Risk Management Committee are as follows:
Tiong Kwing Hee (Group Chief Executive Officer) - ChairmanNur Arina Caroline Wambeck binti Abdullah (General Manager, Finance & Accounts) - MemberChris Loke Kam Foo (Operations Manager) - Member
Re-election
All Directors will retire at regular intervals by rotation once at least every three (3) years and shall be eligible for re-election in accordancewith the provisions of the Company’s Articles of Association.
Directors’ Training
All Directors have attended and completed the Mandatory Accreditation Programme as prescribed by Bursa Malaysia Securities Berhad(“Bursa Securities”), including Lim Een Hong and Teoh Seng Kian (alternate director), the Directors who were appointed during thefinancial year. The Board acknowledges the importance of continuous training and they have attended various training programmes andseminars to keep abreast with developments in the business environment as well as with the new relevant regulatory and statutoryrequirements, to further enhance their skills and knowledge.
During the financial year ended 31 May 2010, the Directors have attended the following training programmes:-
No. Directors Title of Training Programmes Date
1. Dato’ Syed Ariff • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010Fadzillah bin Syed DisclosuresAwalluddin
2. Dato’ (Dr.) • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010Teoh Seng Foo Disclosures
3. Tiong Kwing Hee • Blue Ocean Strategy 15/12/2009
4. Amos Siew Boon Yeong • Annual Conference 2009 - Shaping the Future Corporate Professional 06/07/2009 & 07/07/2009• National Tax Conference 2009 04/08/2009 & 05/08/2009• The National Accountants Conference 2009 13/10/2009 & 14/10/2009• National Seminar on Taxation 2009 27/10/2009• 2010 Budget & Tax Planning Seminar 29/10/2009• 5th Tricor Tax & Corporate Seminar 05/11/2009
5. Dato’ Boey Chin Gan • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010Disclosures
6. Lim Een Hong • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010Disclosures
7. Teoh Seng Kian • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010(Alternate Director to DisclosuresDato’ (Dr.)Teoh Seng Foo)
28annual report 2010
Corporate Governance Statement (cont’d)
DIRECTORS’ REMUNERATION
The details of the remuneration for the Directors of the Company for the financial year under review are as follows:
1. Aggregate remuneration of the Directors categorised into appropriate components:
Fees Remuneration and others Total(RM) (RM) (RM)
Executive Directors - 791,970 791,970
Non-Executive Directors 163,250 80,640 243,890
2. The number of Directors whose total remuneration fall within the following bands:
Number of Directors
Range of Remuneration Executive Non-Executive
Nil 1* -
RM1 to RM50,000 - 6
RM50,001 to RM100,000 1 -
RM350,001 to RM400,000 2 -*Alternate Director
RELATIONSHIP WITH SHAREHOLDERS
Shareholders Communication and Investors Relationship Policy
The Group recognises the importance of establishing a direct line of communication with shareholders and investors through timely
dissemination of information on the Group’s performance and major developments via appropriate channels of communication.
Platforms for dissemination of information include the Annual General Meetings (“AGM”) and Extraordinary General Meetings (“EGM”),
if any, distribution of Annual Reports and relevant circulars, issuance of press releases and press conferences. Information on the financial
performance of the Group is communicated to the public via the announcement of its financial results to Bursa Securities on a quarterly
basis.
To further enhance the transparency and communication with the shareholders and other stakeholders, the Company has an official
website at www.ecofirst.com.my for the timely dissemination of business related information for the benefit of all interested parties.
Shareholders could be given the opportunity to communicate directly with Dato' Syed Ariff Fadzillah bin Syed Awalluddin, or any of the
other Independent Non-Executive Directors should there be any concerns relating to the Company.
AGM
The AGM is the principal forum for communicating with shareholders. Henceforth, the Chairman and the Board encourage shareholders
to attend and participate in an open discussion during the AGM. Shareholders who are unable to attend are allowed to appoint a proxy
to attend and vote on their behalf. Shareholders are given the opportunity to seek clarification on any matter pertaining to the business
and financial performance of the Company.
29ecofirst consolidated bhd (15379-V)
Corporate Governance Statement (cont’d)
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board is responsible for ensuring the proper maintenance of accounting records of the Group. The Audit Committee assists the
Board in reviewing information for disclosure purposes such as the quarterly report for release to Bursa Securities in order to ensure its
accuracy, adequacy and completeness.
A Statement by Directors on their responsibility in preparing the Annual Financial Statements is set out below.
Internal Control
The Statement on Internal Control presented on page 35 of this Annual Report provides an overview of the state of internal controls
within the Group.
Relationship with Auditors
The Board through the establishment of an Audit Committee maintains a formal and transparent arrangement with the Company’s
auditors, both internal and external.
Compliance Statement
The Company has been in compliance with the Code during the financial year under review save for the disclosure of details of the
remuneration of each Director. The Board is of the view that the transparency and accountability aspects of Corporate Governance as
applicable to Directors’ Remuneration are appropriately served by the band disclosure made above under ‘Directors’ Remuneration’.
This statement was approved by the Board of Directors on 23 September 2010.
The Directors are legally required, in accordance with the Companies Act, 1965, to prepare financial statements, which present a true
and fair view of the state of affairs, and of the results of the operations of the Group and the Company and in preparing the financial
statements for the financial year ended 31 May 2010, the Directors have:
• ensured compliance with applicable accounting standards approved in Malaysia;
• adopted and consistently applied appropriate accounting policies; and
• made judgements and estimates that are prudent and reasonable.
The Directors are responsible for ensuring that proper accounting records are maintained, which disclose with reasonable accuracy, the
financial position of the Group and also to ensure that the financial statements comply with applicable approved accounting standards
in Malaysia. In addition, the Board is responsible for the proper safeguarding of the Group's assets and to take reasonable steps for the
prevention and detection of fraud and other irregularities.
Statement of Directors’ Responsibility inRespect of the Annual Financial Statements
Other Information
30annual report 2010
Material Contracts
There were no material contracts subsisting at the end of financial year or entered into since the end of the previous financial year by the
Company or its subsidiaries, which involved the interest of the Directors and major shareholders other than contracts entered into in the
normal course of business.
Non-Audit FeeNo non-audit fee was paid to external auditors during the financial year.
Share Buy-backsThe Company did not implement any share buy-back scheme during the financial year.
Depository Receipt ProgrammeThe Company did not sponsor any depository receipt programme during the financial year.
Sanctions and/or PenaltiesThere were no public sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant
regulatory bodies.
Variation in ResultsThere was no material variation between the audited results and the unaudited results previously released for the financial year ended
31 May 2010.
Revaluation Policy on Landed PropertiesThe Group has adopted a 5-year revaluation policy with regards to its landed properties.
Profit GuaranteeThe Company did not make any arrangement during the financial year which requires profit guarantee.
Options, Warrants or Convertible SecuritiesThere were no options or convertible securities issued or exercised during the financial year.
Utilisation of Proceeds Raised from Corporate ProposalThere were no proceeds raised from any corporate proposal during the year under review. The Company did not implement any fund
raising exercise during the financial year under review.
Recurrent Related Party Transaction of a Revenue NatureThere was no recurrent related party transaction of a revenue nature, which requires shareholders’ mandate during the financial year.
Audit Committee Report
31ecofirst consolidated bhd (15379-V)
Membership
The Audit Committee (“the Committee”) comprises wholly of Independent Non-Executive Directors as follows:-
Amos Siew Boon Yeong - Chairman/Independent Non-Executive Director
Dato’ Boey Chin Gan - Member/Independent Non-Executive Director
Lim Een Hong (appointed on 29 March 2010) - Member/Independent Non-Executive Director
Dato’ Syed Ariff Fadzillah bin Syed Awalluddin (resigned on 29 March 2010) - Member/Independent Non-Executive Director
Meetings and Attendances
A total of five (5) meetings of the Audit Committee were held during the financial year ended 31 May 2010. The meetings were appropriately
structured through the use of agendas, which were distributed in advance to all the members of the Audit Committee. Attendances of
each member were as follows and the Company Secretary attended all the meetings during the year:-
Members Total Attendance % of Attendance
Amos Siew Boon Yeong 5/5 100
Dato’ Boey Chin Gan 5/5 100
Lim Een Hong (appointed on 29 March 2010) 1/1 100
Dato' Syed Ariff Fadzillah bin Syed Awalluddin (resigned on 29 March 2010) 4/4 100
Terms Of Reference Of The Audit Committee
Constitution
The Terms of Reference of the Audit Committee was established by the Board on 26 April 1994. Subsequently, amendments were made
to the terms of reference and approvals were sought at the Company’s Board Meetings held on 29 March 2001 and 26 March 2008.
Membership
The Audit Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than three
members. All the Audit Committee members must be Non-Executive Directors, with a majority of them being Independent Directors. At
least one member of the Audit Committee:
1. must be a member of the Malaysian Institute of Accountants; or
2. if he is not a member of the Malaysian Institute of Accountants, he must have at least three years’ working experience and:
(i) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or
(ii) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act
1967; or
(iii) fulfils such other requirements as prescribed or approved by the Exchange.
No alternate director shall be appointed as a member of the Audit Committee. The members of the Audit Committee shall select a
Chairman from among their numbers who shall be an Independent Director.
32annual report 2010
Audit Committee Report (cont’d)
If a member of the Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members
is reduced below three, the Board shall, within three months of that event, appoint such number of new members as may be required to
make up the minimum number of three members.
The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every
three years to determine whether the Audit Committee and its members have carried out their duties in accordance with their terms of
reference.
Authority
The Audit Committee shall, in accordance with a procedure determined by the Board and at the cost of the Company:
1. have authority to investigate any matter within its terms of reference;
2. have the resources which are required to perform its duties;
3. have full and unrestricted access to any information pertaining to the Company;
4. have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;
5. be able to obtain independent professional or other advice; and
6. be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and
employees of the Company, whenever deemed necessary.
Functions
The functions of the Committee shall be to review the following and report the same to the Board:
1. with the external auditors, their audit plans;
2. with the external auditors, their evaluation of the system of internal controls;
3. with the external auditors, their audit reports;
4. the assistance given by the Company’s employees to the external auditors;
5. the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary
authority to carry out its works;
6. the internal audit programme, processes, the results of the internal audit programme, processes or investigations undertaken and
whether or not appropriate action is taken on the recommendations of the internal audit function;
7. the quarterly results and year end financial statements, prior to the approval by the Board, focusing particularly on:
(a) changes in or implementation of major accounting policy changes;
(b) significant and unusual events; and
(c) compliance with accounting standards and other legal requirements;
33ecofirst consolidated bhd (15379-V)
Audit Committee Report (cont’d)
8. any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction,
procedure or course of conduct that raises questions of management integrity;
9. any letter of resignation from the external auditors of the Company; and
10. to consider the nomination of a person or persons as external auditors together with such other functions as may be agreed to by
the Audit Committee and the Board.
Meetings
Meetings shall be held not less than four (4) times a year. The external auditors may request a meeting if they consider that one is
necessary. The Chairman shall convene a meeting whenever any member of the Audit Committee requests for a meeting by giving not
less than three (3) clear days notice thereof unless such requirement is waived by all members. However, consent from member that is
overseas is not required. Written notice of the meeting together with the agenda shall be given to the members of the Audit Committee.
In order to form a quorum in respect of a meeting of an Audit Committee, the majority of members present must be Independent Directors
and any decision shall be by a simple majority. The Chairman shall not have a casting vote.
Reporting procedure
The Secretary of the Committee shall circulate the minutes of meetings of the Committee to all members of the Board.
Summary of Activities During the Financial Year
The Audit Committee carried out the following duties in accordance with its terms of reference:
• Reviewed the external auditors’ scope of work and audit plans for the year. Prior to the audit, representatives from the external
auditors presented their audit strategy and plan.
• Reviewed with the external auditors, major issues arising from the audit.
• Reviewed the Group’s internal audit plan.
• Reviewed the internal audit reports, which highlighted the audit issues, recommendations and management’s response. The
members of the Audit Committee were briefed on pertinent audit issues through the Summary of Pertinent Issues, which forms an
integral part of the agenda papers. The Audit Committee also discussed the management actions taken to improve the system of
internal control based on recommendations made in the internal audit reports.
• Recommended to the Board areas of improvement opportunities in internal control system, procedures and risk management.
• Reviewed the quarterly unaudited financial results announcements before recommending them for the Board’s approval.
• Reviewed the draft audited financial statements of the Group and of the Company prior to submission to the Board for their
consideration and approval. The review was to ensure that the draft audited financial statements were drawn up in accordance with
the provisions of the Companies Act, 1965 and the applicable approved accounting standards issued by the Malaysian Accounting
Standards Board.
• Reviewed related party transactions entered into by the Group.
34annual report 2010
• Reviewed the Audit Committee Report and the Statement on Internal Control for insertion into the Company’s Annual Report.
Statement on Employees' Share Option Scheme ("ESOS")
The Committee will verify the ESOS allocation in compliance with the criteria as stipulated in the by-laws of ESOS of the Company, if
any.
Internal Audit Function
The Audit Committee is assisted by the in-house internal audit department (“IAD”) in discharging its duties and responsibilities. The IAD
carries out the audit using a risk-based approach of the Group’s operating units, reviewing the units’ compliance to internal control
procedures and making appropriate recommendations for improvement to the Management and the Audit Committee. The IAD also
carries out its duties according to the approved audit plan, and issues of concern are summarised and highlighted at Audit Committee
meetings. The Audit Committee reported the same to the Board after reviewing and deliberating on these internal audit reports. The IAD
also presents the risk profile of the Group to the Audit Committee and follow-up on implementation and disposition of previous significant
findings and recommendations.
Audit Committee Report (cont’d)
35ecofirst consolidated bhd (15379-V)
Statement On Internal Control
In compliance with Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board iscommitted to maintain a sound system of internal control in the Group and is pleased to provide the following statement, which outlinesthe state, nature, and scope of internal control of the Group during the financial year ended 31 May 2010.
Board Responsibilities
The Board maintains a system of internal control to safeguard shareholders’ investment and the Group’s assets. The Board is committedto establish an appropriate control environment and also to review the adequacy and integrity of the system of internal control. Due tothe limitations inherent in any system of internal control, these systems, though implemented, are designed to manage, rather than toeliminate the risk of failure to achieve corporate objectives. Accordingly, the system can only provide reasonable but not absoluteassurance against material misstatement or loss.
The Board confirms that there is an underlying and ongoing process in the Group for the identification, evaluation and mitigation of itssignificant risks. The Board further confirmed that these processes are being regularly reviewed and accords with the Statement ofInternal Control: Guidance for Directors of Public Listed Companies.
Enterprise Risk Management Framework
The Board recognises that risk management is an integral part of the Group’s business operations and has put in place the EnterpriseRisk Management Framework within the Group as an on-going process for identifying, evaluating, monitoring and managing the significantrisk affecting the achievement of its business objectives.
The Group established its risk framework with the aim of mitigating or minimising such risks. A database of risk records was compiledand risk mitigating action plans were communicated to the Risk Management Committee ("RMC"), which in turn identified andcommunicated to the Board the critical risks (present and future) the Group faced and management action plans to manage these risks.
Internal Audit Function
The Group has in place an in-house internal audit function headed by an Audit & Risk Management Manager. The internal audit functionreports directly to the Audit Committee to provide feedback regarding the adequacy and integrity of the Group’s system of internalcontrol. The internal audit function reviews the key activities of the Group based on the annual audit plan approved by the AuditCommittee.
The Audit Committee reviews the audit plan, together with internal audit reports to obtain the necessary level of assurance with respectto the adequacy of the internal controls as required by the Board. The Audit Committee presents its findings to the Board on a quarterlybasis or as appropriate.
The Company has an internal audit department. During the financial year, the cost incurred for the internal audit function amounted toRM77,868.
Other Risks and Control Processes
In addition to the risk management and internal audit function, the Board has put in place an organisational structure with formally definedlines of responsibility and delegation of authority, allowing internal checks and balances. This includes a Procurement & Quality Assurancestandard operational procurement manual. These procedures are relevant to the Group and provide continuous assurance to topmanagement and the Board. The Group has also developed and made available to employees an Employee Handbook.
Quarterly updates of the financial results of the Group are provided to the Audit Committee and the Board for assessment of theperformance of the Group. Management meetings, which involve Executive Directors and selected executive personnel, are regularly heldin order to identify and address any problems encountered by the Group, so that appropriate actions could be taken to address theissues.
Review of Statement by External Auditors
The External Auditors have reviewed this statement for inclusion in the Annual Report 2010 and reported to the Board that nothing hascome to their attention that causes them to believe that this statement is inconsistent with their understanding of the process adoptedby the Board in reviewing the adequacy and integrity of the system of the internal controls.
This statement is made in accordance with the resolution passed by the Board of Directors on 23 September 2010.
Directors’ Report 37
Statement By Directors 41
Statutory Declaration 41
Report of the Independent Auditors 42
Income Statements 44
Balance Sheets 45
Statements of Changes in Equity 46
Cash Flow Statements 48
Notes to the Financial Statements 50
financialstatements
37ecofirst consolidated bhd (15379-V)
DIRECTORS’ REPORT
The directors submit their report and the audited financial statements of the Group and the Company for the financial year ended 31 May
2010.
PRINCIPAL ACTIVITIES
The principal activities of the Company consist of investment holding and provision of management services. The principal activities of
the subsidiaries are disclosed in Note 12 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
FINANCIAL RESULTS
Group Company
RM’000 RM’000
Net loss for the year (41,468) (1,967)
Attributable to:
Equity holders of the Company (41,375) (1,967)
Minority interests (93) -
(41,468) (1,967)
In the opinion of the directors, other than as disclosed in the financial statements, the results of the operations of the Group and the
Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
No dividend has been paid or declared by the Company since the end of the previous financial year. The directors also do not recommend
any dividend payment in respect of the current financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial
statements.
ISSUE OF SHARES AND DEBENTURES
The Company has not issued any new shares or debentures during the financial year.
directors’ report
38annual report 2010
directors’ report (cont’d)
SHARE OPTIONS
No options have been granted by the Company to any persons during the financial year to take up unissued shares of the Company.
No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company.
As at the end of the financial year, there were no unissued shares of the Company under options.
DIRECTORS
The directors of the Company in office since the date of the last report are:
Dato’ Syed Ariff Fadzillah Bin Syed Awalluddin
Dato’ (Dr) Teoh Seng Foo
Teoh Seng Kian (Alternate to Dato’ (Dr) Teoh Seng Foo) - Appointed on 1 December 2009
Tiong Kwing Hee
Amos Siew Boon Yeong
Dato’ Boey Chin Gan
Lim Een Hong - Appointed on 29 March 2010
Dato’ Philip Chan Hon Keong - Resigned on 28 January 2010
Tan Sri Dato’ Dr Syed Jalaludin Bin Syed Salim - Resigned on 1 December 2009
DIRECTORS' INTERESTS
The interests in the Company and its related companies of those who were directors at the end of the financial year, as recorded in the
Register of Directors’ Shareholdings kept under Section 134 of the Companies Act, 1965, are as follows:
Number of ordinary shares of RM0.50 each
Balance as at Balance as at
1.6.2009/ date of appointment Bought Sold 31.5.2010
Direct interest
Dato’ (Dr) Teoh Seng Foo 34,320,600 7,601,500 7,699,600 34,222,500
Teoh Seng Kian (Alternate to
Dato’ (Dr) Teoh Seng Foo) 65,088,632 14,764,000 250,000 79,602,632
Tiong Kwing Hee - 12,903,100 - 12,903,100
Indirect interest
Dato’ (Dr) Teoh Seng Foo 2,977,865 - 2,461,533 516,332
Teoh Seng Kian (Alternate to Dato’ (Dr) Teoh Seng Foo) 871,332 - 355,000 516,332
None of the other directors in office at the end of the financial year, had held shares or beneficial interest in shares of the Company and
its related companies during the financial year, according to the register required to be kept under Section 134 of the Companies Act,
1965.
39ecofirst consolidated bhd (15379-V)
DIRECTORS' BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit
included in the aggregate amount of emoluments received or due and receivable by the directors as shown in the financial statements
or the fixed salary of a full time employee of the Company) by reason of a contract made by the Company or a related corporation with
the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest
except for any benefit which may be deemed to have arisen by virtue of the transactions between the Group and the Company and a
company in which certain directors of the Company have interests as disclosed in Note 33 to the financial statements.
There were no arrangements during or at the end of the financial year, which had the object of enabling directors to acquire benefits by
means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
OTHER STATUTORY INFORMATION
Before the financial statements of the Group and the Company were made out, the directors took reasonable steps:
(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and
had satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful
debts; and
(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written
down to their expected realisable values.
At the date of this report, the directors are not aware of any circumstances:
(a) which would render the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements
of the Group and the Company inadequate to any substantial extent;
(b) which would render the values attributed to current assets in the financial statements of the Group and the Company misleading;
and
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and the Company
misleading or inappropriate.
In the interval between the end of the financial year and the date of this report:
(a) no item, transaction or event of a material and unusual nature has arisen which, in the opinion of the directors, would substantially
affect the results of the operations of the Group and the Company for the financial year in which this report is made; and
(b) no charge has arisen on the assets of the Group and the Company which secures the liability of any other person nor have any
contingent liabilities arisen in the Group and the Company.
No contingent or other liability of the Group and the Company has become enforceable or is likely to become enforceable within the period
of twelve months after the end of the financial year which, in the opinion of the directors, will or may affect the ability of the Group and
the Company to meet their obligations as and when they fall due.
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements,
which would render any amount stated in the financial statements misleading.
directors’ report (cont’d)
40annual report 2010
AUDITORS
The auditors, Messrs Russell Bedford LC & Company, have indicated their willingness to continue in office.
Signed on behalf of the Board
in accordance with a resolution of the directors,
DATO’ (DR) TEOH SENG FOO
TIONG KWING HEE
Seri Kembangan, Selangor Darul Ehsan
27 September 2010
directors’ report (cont’d)
The directors of ECOFIRST CONSOLIDATED BHD state that, in the opinion of the directors, the accompanying financial statements are
drawn up in accordance with the provisions of the Companies Act, 1965 and the Approved Accounting Standards for Entities Other Than
Private Entities in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 May 2010,
and of their financial performance and their cash flows for the year ended on that date.
Signed on behalf of the Board
in accordance with a resolution of the directors,
DATO’ (DR) TEOH SENG FOO
TIONG KWING HEE
Seri Kembangan, Selangor Darul Ehsan
27 September 2010
I, TIONG KWING HEE, being the director primarily responsible for the financial management of ECOFIRST CONSOLIDATED BHD, do
solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements are correct, and I
make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations
Act, 1960.
Subscribed and solemnly declared by the above named TIONG KWING HEE at Kuala Lumpur in Wilayah Persekutuan on
27 September 2010.
TIONG KWING HEE
Before me,
LEE CHOON HEI
(No. W549)
COMMISSIONER FOR OATHS
Kuala Lumpur, Wilayah Persekutuan
statement by directors
statutory declaration
41ecofirst consolidated bhd (15379-V)
report of the independent auditorsto the members of ecofirst consolidated bhd (incorporated in malaysia)
42annual report 2010
1. Report on the financial statements
We have audited the accompanying financial statements which comprise the balance sheet of the Group and of the Company as at
31 May 2010, and the related statements of income, changes in equity and cash flows for the year then ended, and a summary of
significant accounting policies and other explanatory notes.
1.1 Directors’ responsibility for the financial statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements in
accordance with the Companies Act 1965 (“Act”) and the Approved Accounting Standards for Entities Other Than Private Entities
in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and
applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
1.2 Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with the Approved Standards on Auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1.3 Opinion
In our opinion, the financial statements have been properly drawn up in accordance with the Act and the Approved Accounting
Standards for Entities Other Than Private Entities in Malaysia so as to give a true and fair view of the financial position of the
Group and of the Company as at 31 May 2010, and of their financial performance and their cash flows for the year ended on
that date.
43ecofirst consolidated bhd (15379-V)
2. Report on other legal and regulatory requirements
In accordance with the requirements of the Act, we also report on the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by its
subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We have considered the financial statements and the auditors’ reports thereon of the subsidiary of which we have not acted as
auditors, as indicated in Note 12 to the financial statements, being financial statements that have been included in the Group’s
financial statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial
statements are in form and content appropriate and proper for the purposes of the preparation of the Group’s financial statements
and we have received satisfactory information and explanations required by us for those purposes.
(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material in relation to
the Group’s financial statements and did not include any comment made under Section 174(3) of the Act.
3. Other matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Act and for no other
purpose. We do not assume responsibility to any other person for the content of this report.
RUSSELL BEDFORD LC & COMPANY LOH KOK LEONG
AF 1237 1965/06/11(J)
CHARTERED ACCOUNTANTS PARTNER
Kuala Lumpur
27 September 2010
report of the independent auditors (cont’d)to the members of ecofirst consolidated bhd (incorporated in malaysia)
income statements
44annual report 2010
Group Company
Note 2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Revenue 4 21,073 44,018 3,919 7,279
Cost of sales 5 (17,824) (38,062) - -
Gross profit 3,249 5,956 3,919 7,279
Other operating income 25,716 23,253 15,896 23,657
Distribution costs (725) (850) - -
Administration expenses (5,870) (7,578) (3,388) (4,440)
Other operating expenses (50,414) (101,476) (13,161) (31,551)
(Loss)/Profit from operations (28,044) (80,695) 3,266 (5,055)
Finance costs (14,172) (11,716) (5,233) (2,573)
Share in profit of associate 826 2,082 - -
Loss before tax 6 (41,390) (90,329) (1,967) (7,628)
Income tax expense 7 (78) (382) - -
Net loss for the year (41,468) (90,711) (1,967) (7,628)
Attributable to:
Equity holders of the Company (41,375) (90,576) (1,967) (7,628)
Minority interests (93) (135) - -
(41,468) (90,711) (1,967) (7,628)
Basic loss per share (sen) 8 (6.36) (13.93)
for the year ended 31 May 2010
The accompanying notes form an integral part of the financial statements.
balance sheets
45ecofirst consolidated bhd (15379-V)
Group CompanyNote 2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Non current assetsProperty, plant and equipment 9 3,296 15,588 825 1,115Investment properties 10 263,247 263,247 - -Prepaid lease payments 11 - 1,277 - -Investment in subsidiaries 12 - - 37,715 39,531Investment in an associate 13 - 41,359 - 36,913Other long term investments 14 3,366 5,248 3,144 4,790Deferred tax assets 15 812 912 - -Intangible asset 16 - - - -
270,721 327,631 41,684 82,349Current assetsInventories 17 429 1,052 - -Non current asset held for sale 18 - 2,250 - -Property development costs 19 54,944 81,268 - -Trade receivables 20 1,516 16,497 - -Amount due from subsidiaries 22 - - 265,865 268,596Other receivables, deposits and prepayments 23 4,676 3,886 1,677 2,076Prepaid lease payments 11 - 19 - -Tax recoverable 227 226 485 482Cash and bank balances 24 26,171 752 23,060 178
87,963 105,950 291,087 271,332
Total assets 358,684 433,581 332,771 353,681
Share capital 25 325,074 325,074 325,074 325,074Reserves 26 (219,861) (179,811) (200,511) (198,544)
Shareholders’ equity 105,213 145,263 124,563 126,530Minority interests 15,018 15,111 - -
Total equity 120,231 160,374 124,563 126,530
Non current liabilitiesHire purchase liabilities 27 457 798 391 530Long term borrowings 28 77,085 103,909 3,500 9,608
77,542 104,707 3,891 10,138
Current liabilitiesTrade payables 29 6,127 9,206 - -Amount due to subsidiaries 22 - - 172,397 169,754Amount due to an associate 30 - 2,813 - 2,790Other payables and accruals 31 67,559 92,702 21,432 29,050Hire purchase liabilities 27 190 227 138 131Short term borrowings 32 53,413 29,884 10,350 15,288Tax payable 33,622 33,668 - -
160,911 168,500 204,317 217,013
Total liabilities 238,453 273,207 208,208 227,151
Total equity and liabilities 358,684 433,581 332,771 353,681
The accompanying notes form an integral part of the financial statements.
as at 31 May 2010
statements of changes in equity
46annual report 2010
Theaccompanyngnotesforman
ntegrapartofthefnancastatements.
for the year ended 31 May 2010
Foreign
exchange
Share
Share
Revaluation
translation
Accum
ulated
Shareholders’
Minority
Total
capital
premium
reserve
reserve
losses
equity
interests
equity
Group
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
At1June2008
325,074
295,727
1,436
(5,131)
(385,079)
232,027
14,946
246,973
Exchangedfferencesontransaton
offnancastatementsof
foregnsubsdares
--
-3,812
-3,812
-3,812
Subscrptonofshares
nsubsdares
--
--
--
300
300
Netproftnotecognzednncome
statement
--
-3,812
-3,812
300
4,112
Netossfortheyear
--
--
(90,576)
(90,576)
(135)
(90,711)
At31May2009
325,074
295,727
1,436
(1,319)
(475,655)
145,263
15,111
160,374
Exchangedfferencesontransaton
offnancastatementsof
foregnsubsdares
--
-(2,059)
-(2,059)
-(2,059)
Dsposaofasubsdary
--
-3,384
-3,384
-3,384
Netproftnotecognzednncome
statement
--
-1,325
-1,325
-1,325
Netossfortheyear
--
--
(41,375)
(41,375)
(93)
(41,468)
At31May2010
325,074
295,727
1,436
6(517,030)
105,213
15,018
120,231
statements of changes in equity (cont’d)for the year ended 31 May 2010
47ecofirst consolidated bhd (15379-V)
Theaccompanyngnotesforman
ntegrapartofthefnancastatements.
Share
Share
Accum
ulated
capital
premium
losses
Total
Company
RM’000
RM’000
RM’000
RM’000
At1June2008
325,074
295,727
(486,643)
134,158
Netossfortheyear
--
(7,628)
(7,628)
At31May2009
325,074
295,727
(494,271)
126,530
Netossfortheyear
--
(1,967)
(1,967)
At31May2010
325,074
295,727
(496,238)
124,563
48annual report 2010
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Cash flows from/(used in) operating activitiesLoss before taxation (41,390) (90,329) (1,967) (7,628)Adjustments for:Amortisation of prepaid lease payments 9 19 - -Bad debt written off - 13 - 13Depreciation 1,154 1,632 309 320Fair value adjustments on investment properties - 26,337 - -Gross dividend income (16) (17) (3,021) (5,574)Impairment loss on- property, plant and equipment - 30,528 - -- property development costs 26,378 7,165 - -- intangible asset - 538 - -- investment in subsidiaries - - 1,816 1,453- investment in an associate 9,056 - 7,172 -
Interest expense 14,172 11,716 5,233 2,573Interest income (339) (100) (167) (95)Inventories written off 59 40 - -Plant and equipment written off 1,225 364 - 16Prepayment written off - 1,223 - -Provision for contingencies in respect of disposal of subsidiaries 337 - 337 -Provision for doubtful debts- subsidiaries - - 3,181 29,074- others 11,893 29,434 572 70
Provision for contingencies in respect ofdisposal of subsidiaries no longer required (11,331) - (11,331) -
Provision for doubtful debts no longer required (7,102) (219) (1,279) (194)Provision for liquidated ascertained damages 73 275 - -Provision for liquidated ascertained damages no longer required (1,392) - - -Profit guarantee liabilities no longer required - (5,153) - (5,153)Reversal of impairment loss on investment in an associate - (17,536) - (17,987)Share in profit of associate (826) (2,082) - -Loss on foreign exchange - unrealised 4 5 - -Loss/(Gain) on disposal of- an associate (2,565) 698 (2,557) 698- property, plant and equipment 44 (112) - (150)- other long term investments 92 348 79 193- a subsidiary (509) - (200) -
Operating loss before working capital changes (974) (5,213) (1,823) (2,371)Decrease/(Increase) in inventories 132 (206) - -Decrease/(Increase) in trade and other receivables 9,253 5,115 (173) 22(Decrease)/Increase in trade and other payables (7,580) 6,154 (1,071) (1,085)Increase in development costs (54) (207) - -
Cash from/(used in) operations 777 5,643 (3,067) (3,434)Income tax paid - net (20) (50) - -
Net cash from/(used in) operating activities 757 5,593 (3,067) (3,434)
cash flow statementsfor the year ended 31 May 2010
The accompanying notes form an integral part of the financial statements.
49ecofirst consolidated bhd (15379-V)
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Cash flows from/(used in) investing activities
Net dividends received 11 16 3,018 5,434Interest received 339 100 167 95Proceeds from disposal of- an associate 35,700 1,408 32,583 1,408- other long term investments 1,790 1,297 1,567 1,007- property, plant and equipment 194 99 3 150- a subsidiary 194 - 200 -
Payments for- additional shares in an existing subsidiary - - - (1,800)- additional shares in investment in an associate - - (285) -- other long term investments - (12) - (12)- property, plant and equipment (958) (196) (22) (76)
Net cash from investing activities 37,270 2,712 37,231 6,206
Cash flows from/(used in) financing activitiesDecrease in fixed deposits pledged 69 871 69 728Interest paid (1,221) (991) (781) (414)Proceeds from issue of shares to minority shareholder of a subsidiary - 300 - -Repayments of revolving credits – net (2,636) (4,388) (2,665) (4,326)Repayments from subsidiaries - - 3,472 2,625Repayments to an associate (2,813) (287) (2,790) (310)Repayments of hire purchase liabilities (378) (202) (132) (111)Repayments of term loans (3,739) (3,234) (5,533) (1,974)
Net cash used in financing activities (10,718) (7,931) (8,360) (3,782)
Net increase/(decrease) in cash and cash equivalents 27,309 374 25,804 (1,010)
Effects of exchange rate changes 1,353 (2,580) - -
Cash and cash equivalents at beginning of year (2,491) (285) (2,744) (1,734)
Cash and cash equivalents at end of year 26,171 (2,491) 23,060 (2,744)
Cash and cash equivalents comprise:Cash and bank balances 3,880 661 769 107Fixed deposits - 91 - 71Short term deposits 22,291 - 22,291 -Bank overdrafts - (3,174) - (2,853)
26,171 (2,422) 23,060 (2,675)Less: Fixed deposits pledged - (69) - (69)
26,171 (2,491) 23,060 (2,744)
cash flow statements (cont’d)for the year ended 31 May 2010
The accompanying notes form an integral part of the financial statements.
notes to the financial statements
50annual report 2010
1. General information
The principal activities of the Company consist of investment holding and provision of management services. The principal activities
of the subsidiaries are disclosed in Note 12.
There have been no significant changes in the nature of these activities during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the main market of Bursa
Malaysia Securities Berhad.
The registered office is located at Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan, 50200 Kuala Lumpur.
The principal place of business is located at 1.61 First Floor, South City Plaza, Persiaran Serdang Perdana, Seksyen 1, 43300 Seri
Kembangan, Selangor Darul Ehsan.
The financial statements were approved and authorised for issue by the board of directors on 27 September 2010.
2. Basis of preparation of the financial statements
The financial statements of the Group and the Company have been prepared and presented in accordance with the provisions of
the Companies Act, 1965 and the Approved Accounting Standards for Entities Other Than Private Entities issued by the Malaysian
Accounting Standards Board.
In the preparation of the financial statements, the directors are required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported
amounts of revenues and expenses during the financial year. Actual results could differ from those estimates.
Estimates and judgements are continually evaluated by the directors and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
In the process of applying the Group’s accounting policies, which are described below, management is of the opinion that there are
no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial
statements.
Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty
at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
The Group and the Company had adopted new and revised Financial Reporting Standards (“FRSs”) and their related interpretations
that become mandatory for the current financial year. The adoption of these new and revised FRSs and their related interpretations
does not result in significant changes in accounting policies of the Group and the Company.
The Group and the Company has not adopted the new standards, amendments to published standards and interpretations that
have been issued but not yet effective. These new standards, amendments to published standards and interpretations do not result
in significant changes in accounting policies of the Group and the Company upon their initial application other than the following:
31 May 2010
51ecofirst consolidated bhd (15379-V)
2. Basis of preparation of the financial statements (cont’d)
(i) FRS 7 Financial Instruments: Disclosure and FRS 139 Financial Instruments: Recognition and Measurement (both effective for
the financial period beginning on 1 January 2010), and Amendments to FRS 7: Improving Disclosure about Financial Instruments
(effective for annual period beginning on 1 January 2011) which the Group and the Company will apply when effective. FRS 7
requires disclosures in financial statements that enable users to evaluate the significance of financial instruments of the entity
to which is exposed and how these risks are managed. FRS 139 establishes principles for recognising and measuring financial
assets, financial liabilities and some contracts to buy and sell non-financial items. Hedge accounting is permitted only under strict
circumstances. The impact of applying FRS 7 and FRS 139 on the financial statements upon its initial application is not disclosed
by virtue of the exemption given in the standards.
(ii) FRS 8 Operating Segments (effective for annual period beginning on or after 1 July 2009). FRS 8 replaces FRS 1142004 Segment
Reporting. The new standard requires a ‘management approach’, under which segment information is presented on the same
basis as that used for internal reporting purposes.
(iii) FRS 101 Presentation of Financial Statements (revised) (effective for annual period beginning on 1 January 2010). FRS 101 will
prohibit the presentation of items of income and expenses (that is, non owner changes in equity) in the statement of changes
in equity, requiring 'non-owner changes in equity' to be presented, separately from owner changes in equity. All non-owner
changes in equity will be required to be shown in a performance statement, but entities can choose whether to present one
performance statement (the statement of comprehensive income) or two statements (the income statement and statement of
comprehensive income). Where entities restate or reclassify comparative information, they will be required to present a restated
balance sheet as at the beginning comparative period in addition to the current requirement to present balance sheets at the
end of the current period and comparative period. The adoption of this standard introduces a new disclosure requirement to
the objectives, policies and processes for managing capital.
(iv) Revised FRS 3 Business Combinations and Amendments to FRS 127 Consolidated and Separate Financial Statements are
effective for annual periods beginning on 1 July 2010. The revised FRS 3 introduces a number of changes in the accounting for
business combinations occurring after 1 July 2010. These changes will impact the amount of goodwill recognised, the reported
results in the period that an acquisition occurs, and future reported results. The Amendments to FRS 127 require that a change
in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such
transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard
changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. The changes from
revised FRS 3 and Amendments to FRS 127 will affect future acquisitions or loss of control and transactions with non controlling
interest (“minority interests”).
(v) IC Interpretation 13 Customer Loyalty Programmes (effective for annual period beginning on or after 1 January 2010).
IC Interpretation 13 defines award credits as a separately identifiable component of the sales transaction and represent rights
granted to the customer, for which the customer implicitly paid. Therefore it is necessary to divide the initial sale into components
and apply the recognition criteria separately to each component in order to reflect the substance of the transaction.
(vi) IC Interpretation 15 Agreements for the Construction of Real Estate (effective for annual periods beginning on 1 January 2012)
clarifies when and how revenue and related expenses from the sale of a real estate unit should be recognised if an agreement
between a developer and a buyer is reached before the construction of the real estate is completed. Furthermore, the
Interpretation provides guidance on how to determine whether an agreement is within the scope of FRS 111 Construction
Contracts or FRS 118 Revenue. The Group currently recognises revenue arising from property development projects using the
stage of completion method. Upon the adoption of IC Interpretation 15, the Group may be required to change its accounting
policy to recognise such revenues at completion, or upon or after delivery. The Group is in the process of making an assessment
of the impact of this Interpretation.
notes to the financial statements (cont’d)31 May 2010
52annual report 2010
3. Significant accounting policies
Basis of accounting
The financial statements of the Group and the Company have been prepared under the historical cost convention and any other bases
described in the significant accounting policies as summarised below.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and all its subsidiaries listed under Note 12
made up to the end of the financial year. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control effectively commences until the date that control effectively ceases. Subsidiaries are consolidated using
the acquisition method of accounting.
All significant inter company transactions, balances and unrealised gains on transactions between group companies are eliminated;
unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies for subsidiaries have
been changed to ensure consistency with the policies adopted by the Group.
Minority interests in the consolidated balance sheet consist of the minorities’ share of the fair value of the identifiable assets and
liabilities of the acquiree as at acquisition date and the minorities’ share of movements in the acquiree’s equity since then.
Revenue and income recognition
Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised in the income statement
upon delivery of goods and when the risks and rewards of ownership have passed to the customers.
Revenue from management and production services rendered is recognised in the income statement when the services are rendered.
Revenue from property development is recognised in accordance with the accounting policy disclosed under ‘development property
and costs’.
Revenue relating to construction contracts is recognised in accordance with the accounting policy disclosed under ‘construction
contracts’.
Dividend income is recognised when the shareholder’s right to receive payment is established.
Interest income is recognised as it accrues (taking into account the effective yield on the asset) unless collectibility is in doubt.
Rental income is recognised as it accrues unless collectibility is in doubt.
Foreign currencies
(i) Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of the primary economic
environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Ringgit
Malaysia (“RM”), which is also the Company’s functional currency and all values are rounded to the nearest thousand (RM’000)
except when otherwise indicated.
notes to the financial statements (cont’d)31 May 2010
53ecofirst consolidated bhd (15379-V)
3. Significant accounting policies (cont’d)
Foreign currencies (cont’d)
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income
statement.
(iii) Foreign operations
Assets and liabilities of foreign operations are translated to Ringgit Malaysia at rates of exchange ruling at the balance sheet
date and the results of foreign operations are translated at the average rate of exchange for the financial year. Exchange
differences arising from the translation are recognised as a separate component of equity.
When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in
the income statement as part of the gain or loss on sale.
The principal exchange rates for every unit of foreign currency ruling at balance sheet date used are as follows:
2010 2009RM RM
United States Dollar (“USD”) 3.25 3.51
Solomon Islands Dollar (“SBD”) 0.40 0.50
Singapore Dollar (“S$”) 2.32 2.42
Hong Kong Dollar 0.42 0.45
Employee benefits
(i) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated
services are rendered by employees of the Group and the Company. Short term accumulating compensated absences such
as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future
compensated absences. Short term non accumulating compensated absences such as sick leave are recognised when the
absences occur.
(ii) Defined contribution plans
Obligations for contributions to defined contribution plans such as Employees Provident Fund are recognised as an expense in
the income statement as incurred.
Income tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income
taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance
sheet date.
notes to the financial statements (cont’d)31 May 2010
54annual report 2010
3. Significant accounting policies (cont’d)
Income tax (cont’d)
Deferred tax is provided for, using the ‘liability’ method, on temporary differences at the balance sheet date between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for
all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses
and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, unused tax losses and unused tax credits can be utilised.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability settled,
based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the
income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is
also charged or credited directly in equity.
Impairment of assets
The carrying amount of assets, other than investment properties, deferred tax assets, inventories, property development costs,
assets arising from construction contracts, and financial assets (other than investments in subsidiaries and associates and other long
term investments), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such
indication exists, the asset’s recoverable amount is estimated and an impairment loss is recognised whenever the recoverable
amount is less than the carrying amount of the asset.
The impairment loss is recognised in the income statement immediately except for the impairment on a revalued asset where the
impairment loss is recognised directly against the revaluation reserve account to the extent of the surplus credited from the previous
revaluation for the same asset with the excess of the impairment loss charged to the income statement.
All reversals of an impairment loss are recognised as income immediately in the income statement except for the reversal of an
impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation increase and credited to
the revaluation reserve account of the same asset.
The impairment loss in respect of goodwill is not reversed. Gains and losses on the disposal of an entity include the carrying amount
of goodwill relating to the entity sold. In respect of other assets, an impairment loss is reversed if there has been a change in estimates
used to determine the recoverable amount.
An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that would
have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost or valuation less accumulated depreciation and accumulated impairment losses,
if any.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the financial year in which they are incurred.
notes to the financial statements (cont’d)31 May 2010
55ecofirst consolidated bhd (15379-V)
3. Significant accounting policies (cont’d)
Property, plant and equipment and depreciation (cont’d)
Gain and loss arising from the disposal of an asset is determined as the difference between the net disposal proceeds and the
carrying amount of the asset and is recognised in the income statement.
Depreciation on property, plant and equipment is calculated on a straight line basis to write off the cost of each asset to its residual
value over the estimated useful life, at the following annual rates:
Long term leasehold properties (leasehold buildings and leasehold plantations) 50 - 99 years
Logponds and roadworks 5 years
Machinery, equipment and vehicles 3 - 10 years
The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method
and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic
benefits embodied in the items of property, plant and equipment.
Replanting expenditure is charged to the income statement in the year in which the expenditure is incurred.
Net planting expenditure incurred on land clearing and upkeep of trees to maturity is capitalised under leasehold plantation and
upon maturity is amortised by equal instalments over the remaining period of the lease.
Development property and costs
(i) Land held for property development
Land held for property development consists of land where no development activities have been carried out or where
development activities are not expected to be completed within the normal operating cycle. Such land is classified within non
current and is stated at cost less any impairment losses.
Land held for property development is reclassified as property development costs at the point when development actitivies
have commenced and where it can be demonstrated that the development activities can be completed within the normal
operating cycle.
(ii) Property development costs
Property development costs comprise all costs that are attributable to development activities or that can be allocated on a
reasonable basis to such activities.
When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses
are recognised in the income statement by using the stage of completion method. The stage of completion is determined by
the proportion that property development costs incurred for work performed to date bear to the estimated total property
development costs.
Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised
only to the extent of property development costs incurred that is probable will be recoverable, and property development costs
on properties sold are recognised as an expense in the year in which they are incurred.
notes to the financial statements (cont’d)31 May 2010
56annual report 2010
3. Significant accounting policies (cont’d)
Development property and costs (cont’d)
(ii) Property development costs (cont’d)
Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as
an expense immediately.
Property development costs not recognised as an expense is recognised as an asset, which is measured at the lower of cost
and net realisable value.
The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings under trade
receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress
billings under trade payables.
Investment properties
Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties
are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair
value. Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is performed by
registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and
category of the properties having valued.
A gain or loss arising from a change in the fair value of investment properties is recognised in income statement for the year in which
it arises.
A property interest under an operating lease is classified and accounted for as an investment property on a property by property basis
when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease
classifies as an investment property is carried at fair value.
Investment properties are derecognised when either they have been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal
of an investment property are recognised in profit or loss in the year in which they arise.
Investment in subsidiaries
Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly,
to govern the financial and operating policies of a company so as to derive benefits from its activities.
The Company’s investment in subsidiaries is stated at cost less impairment losses, if any.
Investment in associates
An associate is a company in which the Group or the Company has significant influence and which is neither a subsidiary nor a joint
venture of the Group or the Company.
The Company’s investment in associates is stated at cost less impairment losses, if any.
notes to the financial statements (cont’d)31 May 2010
57ecofirst consolidated bhd (15379-V)
3. Significant accounting policies (cont’d)
Investment in associates (cont’d)
The Group’s investment in associates is accounted for under the equity method of accounting based on the audited or management
financial statements of the associates made up to the balance sheet date. Under this method of accounting, the Group’s interest
in the post acquisition profit of the associates is included in the consolidated results while dividend received is reflected as a reduction
of the investment in the consolidated balance sheet.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the
associates; unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred.
Where necessary, in applying the equity method, adjustments have been made to the financial statements of associates to ensure
consistency of accounting policies with the Group.
Other long term investments
Other long term investments in quoted and unquoted corporations are stated at cost less impairment losses, if any.
Intangible assets
Intangible assets including trademark licence acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The
useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a
straight line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the
intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful
life are reviewed at least at each balance sheet date.
Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if the events or
changes in circumstances indicate that the carrying value may be impaired either individually or at the cash generating unit level.
The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment
continues to be supportable.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost of inventories is determined on the weighted average basis.
Net realisable value represents the estimated selling prices less all estimated costs to completion and costs to be incurred in
marketing, selling and distribution.
Costs of trading merchandise, raw materials and consumables comprise the cost of purchase plus the cost of bringing the inventories
to their present location and condition. Costs of finished goods comprise the cost of raw materials used, direct labour, other direct
costs and appropriate production overheads.
Non current asset held for sale
Non current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use. The asset must be available for immediate sale in its present condition subject only to terms that are
usual and customary for sale of such asset and its sale must be highly probable.
Non current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
notes to the financial statements (cont’d)31 May 2010
58annual report 2010
3. Significant accounting policies (cont’d)
Construction contracts and amount due from/to contract customers
Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as
revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to
the proportion of contract costs incurred for work performed to date to the estimated total contract costs.
Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract
costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are
incurred.
Cost includes direct materials, labour, sub contract sum and attributable overheads paid or payable to date. When it is probable that
total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
Amount due from customers for construction contracts is the net amount of costs incurred plus recognised profits less the sum of
recognised losses and progress billings for all contracts in progress for which costs incurred plus recognised profits (less recognised
losses) exceed progress billings.
Amount due to customers for construction contracts is the net amount of costs incurred plus recognised profits less the sum of
recognised losses and progress billings for all contracts in progress for which progress billings exceed costs incurred plus recognised
profits (less recognised losses).
Leases
Assets acquired under leases which transfer substantially all the risks and rewards incident to ownership of the assets are capitalised
under property, plant and equipment. The assets and the corresponding lease obligations are recorded at their fair values or, if lower,
at the present value of the minimum lease payments of the leased assets at the inception of the respective leases.
Finance costs, which represent the difference between the total lease commitments and the fair values of the assets acquired, are
charged to the income statement over the term of the relevant lease periods so as to give a constant periodic rate of charge on the
remaining balance of the obligations for each accounting period.
Leases of asset where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incentives received from the lessor) are amortised over the lease term
in accordance with the pattern of benefits provided.
Long term leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of
the lease term is treated as operating lease. The prepaid land lease payments are amortised on the straight line basis over the lease
period.
Plant and equipment acquired under hire purchase arrangements
Plant and equipment acquired under hire purchase arrangements are capitalised in the financial statements and the corresponding
obligations treated as liabilities. Finance charges are allocated to the income statement to give a constant periodic rate of interest
on the remaining hire purchase liabilities.
notes to the financial statements (cont’d)31 May 2010
59ecofirst consolidated bhd (15379-V)
3. Significant accounting policies (cont’d)
Provisions
A provision is recognised when a present legal or constructive obligation exists as a result of a past event and it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount
can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect
of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to
settle the obligation.
Segment information
Segment information is presented in respect of the Group’s business and geographical segments. The primary reporting segment
information is in respect of business segments as the Group’s risks and returns are affected predominantly by differences in the
products it produces and in the services it renders, while the secondary information is reported geographically.
A segment with a majority of operating income earned from providing product or services to external clients and whose operating
income, results or assets are 10 percent or more of all the segments is reported separately.
Segment results, assets and liabilities include items that are directly attributable to a segment as well as those that can be allocated
on a reasonable basis.
Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for
more than one period.
Financial instruments
Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the
instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest,
dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income.
Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset
when the Group has legal enforceable right to offset and intends to settle either on a net basis or realise the asset and settle the liability
simultaneously.
(i) Receivables
Receivables are carried at anticipated realisable value. All known bad debts are written off and specific provisions are made
for debts that are considered to be doubtful with regards to collection.
(ii) Payables
Payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received.
(iii) Interest bearing borrowings
Interest bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.
notes to the financial statements (cont’d)31 May 2010
60annual report 2010
3. Significant accounting policies (cont’d)
Financial instruments (cont’d)
(iii) Interest bearing borrowings (cont’d)
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those
assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred.
(iv) Equity instruments
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are
approved for payment.
Cash flow statement
Cash flow statement is prepared using the indirect method.
Cash equivalents are short term, highly liquid investments that are readily convertible to known amount of cash and which are subject
to insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net
of bank overdrafts and pledged fixed deposits.
4. Revenue
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Construction income 11,041 27,122 - -
Dividends 16 17 3,021 5,574
Property development/investment 6,505 6,316 - -
Sale of goods 3,178 9,939 - -
Services 333 624 898 1,705
21,073 44,018 3,919 7,279
notes to the financial statements (cont’d)31 May 2010
61ecofirst consolidated bhd (15379-V)
5. Cost of sales
Group2010 2009
RM’000 RM’000
Construction costs 8,924 24,663
Property development/investment 5,971 5,806
Sale of goods 2,674 6,285Services 255 1,308
17,824 38,062
6. Loss before tax
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Loss before tax is arrived at after charging:
Amortisation of prepaid lease payments 9 19 - -
Auditors’ remuneration
- auditors of the Company 130 148 39 37
- other auditors 4 11 - -
Bad debt written off - 13 - 13
Depreciation 1,154 1,632 309 320
Directors’ estimated cash value of benefits in kind 52 53 52 53
Directors’ fees 163 190 163 190
Directors’ other emoluments 821 927 821 927
Fair value adjustments on investment properties - 26,337 - -
Impairment losses on
- property, plant and equipment - 30,528 - -
- property development costs 26,378 7,165 - -
- intangible asset - 538 - -
- investment in subsidiaries - - 1,816 1,453
- investment in an associate 9,056 - 7,172 -
Interest expense
- bank overdrafts 183 296 183 236
- hire purchase 44 49 32 28
- others 399 151 399 151
- revolving credits 203 182 173 154
- term loans 13,343 11,038 4,446 2,004
Inventories written off 59 40 - -
Loss on foreign exchange
- realised 10 - - -
- unrealised 4 5 - -
notes to the financial statements (cont’d)31 May 2010
62annual report 2010
6. Loss before tax (cont’d)
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Loss on disposal of
- an associate - 698 - 698
- other long term investments 122 378 109 223
- property, plant and equipment 47 38 - -
Plant and equipment written off 1,225 364 - 16
Prepayment written off - 1,223 - -
Provision for doubtful debts
- subsidiaries - - 3,181 29,074
- others 11,893 29,434 572 70
Provision for contingencies in respect of disposal of subsidiaries 337 - 337 -
Provision for liquidated ascertained damages 73 275 - -
Rental of
- premises 575 740 21 148
- equipment 100 91 47 14
Staff costs 2,786 3,337 1,128 1,403
And crediting:
Gross dividend income
- Malaysian
- quoted investment in an associate - - 5 557
- unquoted investment in a subsidiary - - 3,000 5,000
- other unquoted investments 8 5 8 5
- Foreign
- other quoted investments 8 12 8 12
Gain on disposal of
- property, plant and equipment 3 150 - 150
- a subsidiary 509 - 200 -
- other long term investments 30 30 30 30
- an associate 2,565 - 2,557 -
Interest income from
- fixed deposits - 29 - 24
- short term deposits 96 - 96 -
- sundry receivables 243 71 71 71
Profit guarantee liabilities no longer required - 5,153 - 5,153
Provision for liquidated ascertained damages no longer required 1,392 - - -
Provision for contingencies in respect of disposal of subsidiaries
no longer required 11,331 - 11,331 -
Provision for doubtful debts no longer required
- a subsidiary - - 1,279 -
- other receivables 7,102 219 - 194
Reversal of impairment loss on investment in an associate - 17,536 - 17,987
notes to the financial statements (cont’d)31 May 2010
63ecofirst consolidated bhd (15379-V)
6. Loss before tax (cont’d)
Staff costs comprise:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Defined contribution plan 2,403 328 109 139
Salaries, wages and allowances 270 2,847 964 1,207
Other employee related expenses 113 162 55 57
2,786 3,337 1,128 1,403
The number of directors of the Company where total remuneration during the financial year falls within the following bands is analysed
as follows:
Group2010 2009
Executive directors:
Nil 1 -
RM50,001 to RM100,000 1 -
RM250,001 to RM300,000 - 1
RM350,001 to RM400,000 2 1
Non executive directors:
Below RM50,000 6 5
RM50,000 to RM100,000 - 1
RM300,001 to RM350,000 - 1
7. Income tax expense
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Estimated income tax payable
Malaysia
- current (18) (17) - -
- over/(under) provision in prior years 40 (1) - -
Estimated deferred tax (Note 15)
- current (100) (364) - -
(78) (382) - -
notes to the financial statements (cont’d)31 May 2010
64annual report 2010
7. Income tax expense (cont’d)
A reconciliation of income tax expense applicable to loss before tax at the statutory income tax rate to income tax expense at the
effective income tax rate is as follows:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Loss before tax (41,390) (90,329) (1,967) (7,628)
Income tax using Malaysian tax rate of 25% (2009: 25%) 10,347 22,582 492 1,907
Expenses not deductible for tax purposes (7,124) (27,825) (4,441) (8,559)
Income not subject to tax 5,913 7,629 3,949 7,080
Share of profit of an associate - 520 - -
Deferred tax assets not recognised (9,305) (3,287) - (428)
Utilisation of previously unrecognised unutilised tax losses
and unabsorbed capital allowances 51 - - -
Over/(Under) provision in prior years
- income tax 40 (1) - -
Income tax expense for the year (78) (382) - -
8. Basic loss per share
Basic loss per ordinary share is calculated based on the net loss attributable to ordinary shareholders and weighted average number
of ordinary shares in issue as follows:
Group2010 2009
RM’000 RM’000
Net loss attributable to ordinary shareholders (41,375) (90,576)
’000 ’000Weighted average number of ordinary shares in issue 650,148 650,148
Basic loss per ordinary share (sen) (6.36) (13.93)
There were no unissued shares of the Company under options and therefore, the scenario of fully diluted loss per share does not
arise.
notes to the financial statements (cont’d)31 May 2010
65ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
9.Property,plant
andequipment
Machinery,
Long
term
Logpond
sequipment
Long
term
Group
leasehold
and
and
leasehold
2010
building
roadworks
vehicles
plantation
Total
RM’000
RM’000
RM’000
RM’000
RM’000
Cost
Atbegnnngofyear
4,003
3,540
24,056
34,390
65,989
Addtons
--
392
936
1,328
Dsposas
--
(487)
-(487)
Dsposaofasubsdary
(3,667)
(3,244)
(6,009)
(32,447)
(45,367)
Wrteoffs
--
(2,331)
-(2,331)
Foregnexchangeadjustment
(336)
(296)
(549)
(2,879)
(4,060)
Atendofyear
--
15,072
-15,072
Accum
ulated
depreciation
Atbegnnngofyear
1,723
399
13,623
-15,745
Chargefortheyear
348
221,154
-1,524
Dsposas
--
(249)
-(249)
Dsposaofasubsdary
(1,927)
(387)
(5,310)
-(7,624)
Wrteoffs
--
(1,106)
-(1,106)
Foregnexchangeadjustment
(144)
(34)
(464)
-(642)
Atendofyear
--
7,648
-7,648
Accum
ulated
impairm
entlosses
Atbegnnngofyear
--
4,128
30,528
34,656
Dsposaofasubsdary
--
-(30,528)
(30,528)
Atendofyear
--
4,128
-4,128
Net
bookvalue
At31
May
2010
--
3,296
-3,296
66annual report 2010
notes to the financial statements (cont’d)31 May 2010
9.Property,plant
andequipment(cont’d)
Machinery,
Long
term
Logpond
sequipment
Long
term
Group
leasehold
and
and
leasehold
2009
building
roadworks
vehicles
plantation
Total
RM’000
RM’000
RM’000
RM’000
RM’000
Cost
Atbegnnngofyear
3,359
2,970
24,407
28,173
58,909
Addtons
--
412
817
1,229
Dsposas
--
(884)
-(884)
Wrteoffs
--
(934)
-(934)
Foregnexchangeadjustment
644
570
1,055
5,400
7,669
Atendofyear
4,003
3,540
24,056
34,390
65,989
Accum
ulated
depreciation
Atbegnnngofyear
809
295
12,593
-13,697
Chargefortheyear
759
471,632
-2,438
Dsposas
--
(840)
-(840)
Wrteoffs
--
(570)
-(570)
Foregnexchangeadjustment
155
57808
-1,020
Atendofyear
1,723
399
13,623
-15,745
Accum
ulated
impairm
entlosses
Atbegnnngofyear
--
4,185
-4,185
Imparmentfortheyear
--
-30,528
30,528
Dsposas
--
(57)
-(57)
Atendofyear
--
4,128
30,528
34,656
Net
bookvalue
At31
May
2009
2,280
3,141
6,305
3,862
15,588
67ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
9. Property, plant and equipment (cont’d)
Company Equipment and vehicles2010 RM’000
CostAt beginning of year 3,427
Additions 22
Disposals (114)
Write offs (61)
At end of year 3,274
Accumulated depreciationAt beginning of year 2,312
Charge for the year 309
Disposals (111)
Write offs (61)
At end of year 2,449
Net book valueAt 31 May 2010 825
Company Equipment and vehicles2009 RM’000
CostAt beginning of year 4,394
Additions 303
Disposals (792)
Write offs (478)
At end of year 3,427
Accumulated depreciationAt beginning of year 3,246
Charge for the year 320
Disposals (792)
Write offs (462)
At end of year 2,312
Net book valueAt 31 May 2009 1,115
68annual report 2010
notes to the financial statements (cont’d)31 May 2010
9. Property, plant and equipment (cont’d)
At the balance sheet date:
(i) Certain property, plant and equipment of the Group with aggregate carrying amount of RM1.5 million (2009: RM11.8 million) have
been charged as collaterals to secure the banking facilities referred to in Note 28;
(ii) Plant and equipment under hire purchase arrangements are:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
At net book value
Motor vehicles 627 1,094 508 683
During the financial year, cash payments made to purchase plant and equipment are as follows:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Total additions 1,328 1,229 22 303
Additions through hire purchase arrangements - (227) - (227)
Capitalised in long term leasehold plantation
- depreciation of plant and equipment (370) (806) - -
958 196 22 76
During the financial year, depreciation expenses are charged to the following:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Income statement 1,154 1,632 309 320
Long term leasehold plantation 370 806 - -
1,524 2,438 309 320
69ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
10. Investment properties
Group2010 2009
RM’000 RM’000
Long term leasehold retail units, commercial space and car park bays
At beginning of year 263,247 289,584
Fair value adjustment - (26,337)
At end of year 263,247 263,247
The investment properties of the Group with carrying amount of RM263.2 million (2009: RM263.2 million) have been pledged as
collaterals to secure the banking facilities referred to in Note 28.
Fair value of investment properties of the Group were stated by the directors based on professional valuations carried out by Mr Long
Tian Chek, a registered valuer with Henry Butcher Malaysia Sdn Bhd in July 2010 using the market value basis.
11. Prepaid lease paymentsGroup
2010 2009RM’000 RM’000
Long term leasehold land:
Surrogate carrying amountAt beginning of year 1,363 1,126
Disposal of a subsidiary (1,239) -
Foreign exchange adjustment (124) 237
At end of year - 1,363
Accumulated amortisationAt beginning of year 67 22
Amortisation for the year 9 19
Disposal of a subsidiary (61) -
Foreign exchange adjustment (15) 26
At end of year - 67
Carrying amount - 1,296
Less: Portion due within one year - (19)
Non current portion - 1,277
Included under prepaid lease payments is leasehold land of the Group with carrying amount of RM Nil (2009: RM1.3 million) which
has been charged as collateral to secure the banking facilities referred to in Note 28.
70annual report 2010
notes to the financial statements (cont’d)31 May 2010
12. Investment in subsidiariesCompany
2010 2009RM’000 RM’000
Unquoted shares, at cost
At beginning of year 304,175 302,375
Additional subscription of shares in a subsidiary - 1,800
Disposals (1,453) -
At end of year 302,722 304,175
Accumulated impairment losses
At beginning of year 264,644 263,191
Impairment loss for the year 1,816 1,453
Disposals (1,453) -
At end of year 265,007 264,644
Carrying amount 37,715 39,531
The details of the subsidiaries are as follows:Issued andPaid up Group’s
Country of share effective Principalincorporation capital interest activities
RM’000 2010 2009(unless otherwise % %
indicated)
Subsidiaries of the Company
Pujian Development Sendirian Berhad Malaysia 6,200 100 100 Propertydevelopmentand propertyinvestment
EcoFirst Development Sdn Bhd Malaysia 100 100 100 Dormant
EcoFirst Construction Sdn Bhd Malaysia 2,550 100 100 Construction
Tashima Development Sdn Bhd Malaysia 500 100 100 Propertydevelopment
Gangsa Etnik Sdn Bhd Malaysia 500 68 68 Propertydevelopment
Panorama Tiara Sdn Bhd Malaysia 3,000 69 69 Propertydevelopment
Silvania Plantation Products Solomon SBD1.9 - 100 Development of(S.I.) Limited Islands million oil palm plantation
EcoFirst Products Sdn Bhd Malaysia 1,500 70 70 Multilevelmarketing
71ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
12. Investment in subsidiaries (cont’d)
Issued andPaid up Group’s
Country of share effective Principalincorporation capital interest activities
RM’000 2010 2009(unless otherwise % %
indicated)
Subsidiaries of the Company
Earth Revolution Sdn Bhd Malaysia # 51 51 Dormant
EcoFirst Fibaloy Sdn Bhd Malaysia 1,700 51 51 Ceasedoperation
Opal Horizon Sdn Bhd Malaysia # 100 100 General trading
EcoFirst Biotech Sdn Bhd Malaysia 250 52 52 Dormant
EcoFirst Laboratories Sdn Bhd Malaysia 250 100 100 Research anddevelopment
EcoFirst Agro Holdings Sdn Bhd Malaysia 110 100 100 Investmentholding
EcoFirst Hartz Sdn Bhd Malaysia 500 100 100 Ceasedoperation
KE Management & Training Sdn Bhd Malaysia 100 60 60 Ceasedoperation
KE Management Services Sdn Bhd Malaysia # 100 100 Generalinsurance agency
Hasil Rezeki (M) Sdn Bhd Malaysia 25 100 100 Dormant
Gaydon Resources Limited British Virgin USD1 100 100 Dormant
Island
Minat City Automotive Centre Sdn Bhd Malaysia # 100 100 Ceasedoperation
Sawitani Sdn Berhad Malaysia 10,000 100 100 Investmentholding
Jiddi Joned Enterprises Sdn Bhd Malaysia 5,500 82.2 82.2 Ceasedoperation
Berembang Sendirian Berhad Malaysia 2,800 98.1 98.1 Ceasedoperation
72annual report 2010
notes to the financial statements (cont’d)31 May 2010
12. Investment in subsidiaries (cont’d)
Issued andPaid up Group’s
Country of share effective Principalincorporation capital interest activities
RM’000 2010 2009(unless otherwise % %
indicated)
Subsidiaries of the Company
Mudek Sdn Bhd Malaysia 2,800 89.3 89.3 Ceasedoperation
Seri Jasin Sdn Bhd Malaysia 1,946 98.3 98.3 Ceasedoperation
Gabema Sdn Bhd Malaysia 26 97.7 97.7 Ceasedoperation
EcoFirst Products Worldwide Sdn Bhd Malaysia # 100 100 Investmentholding
Subsidiary of Gabema Sdn BhdPengangkutan Gabema Sdn Bhd Malaysia 65 90.2 90.2 Ceased
operation
Subsidiaries of Pujian DevelopmentSendirian BerhadKilat Inspirasi Sdn Bhd Malaysia 180 100 100 Dormant
Efex Trade & Exhibitions Sdn Bhd Malaysia # 100 100 Dormant
Budaya Fokus Sdn Bhd Malaysia 500 100 100 Ceasedoperation
Southern Utilities Corporation Sdn Bhd Malaysia # 100 100 Provision of
management
services
SCP Management Sdn Bhd Malaysia 10 100 100 Provision of
management
services
Subsidiaries of EcoFirst Agro HoldingsSdn BhdEcoFirst Agro-Industries Sdn Bhd Malaysia 1,000 75 75 Investment
holding
EcoFirst-YPM Sdn Bhd Malaysia 250 70 70 Dormant
73ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
12. Investment in subsidiaries (cont’d)
Issued andPaid up Group’s
Country of share effective Principalincorporation capital interest activities
RM’000 2010 2009(unless otherwise % %
indicated)
Subsidiary of EcoFirst Agro-IndustriesSdn Bhd
J-Biotech EcoFirst Agro Sdn Bhd Malaysia 1,000 52 52 Operation ofagriculture relatedbusinesses
Subsidiary of EcoFirst Products WorldwideSdn Bhd
EcoFirst Products (S) Pte Ltd * Singapore # 100 100 Multilevelmarketing
The financial statements of the subsidiary indicated by * is not audited by Russell Bedford LC & Company.
# issued and paid up share capital of less than RM1,000
During the financial year, the Company disposed of all its holding of 1,906,999 ordinary shares of SBD1 each in a direct subsidiary,
Silvania Plantation Products (S.I.) Limited (“SPPL”), representing 100% of the issued and paid up share capital of SPPL for a total
cash consideration of RM200,000.
The disposal of a subsidiary had the following effects on the Group’s assets and liabilities:
Group2010
RM’000
Non current assets 8,394
Current assets 689
Current liabilities (12,776)
Foreign exchange reserve 3,384
Net liabilities disposed of (309)
Gain on disposal 509
Consideration received 200
Cash and cash equivalents disposed of (6)
Proceeds from disposal of a subsidiary 194
74annual report 2010
notes to the financial statements (cont’d)31 May 2010
12. Investment in subsidiaries (cont’d)
In the previous financial year, the Company:
(i) disposed of its holding of 100 ordinary shares of RM1 each of the issued and paid up share capital in a direct subsidiary, EcoFirst
Fibaloy Sdn Bhd, for a total cash consideration of RM100.
(ii) further subscribed for additional 1,800,000 new ordinary shares of RM1.00 each representing 100% equity interest of the
enlarged share capital of EcoFirst Construction Sdn Bhd, for a total consideration of RM1,800,000.
(iii) via its indirect subsidiary, EcoFirst Agro-Industries Sdn Bhd, further subscribed for additional 699,930 new ordinary shares of
RM1.00 each representing 70% equity interest of the enlarged share capital of J-Biotech EcoFirst Agro Sdn Bhd.
(iv) via its wholly owned subsidiary, EcoFirst Products Worldwide Sdn Bhd, incorporated a wholly owned subsidiary EcoFirst
Products (S) Pte Ltd, a company incorporated in Singapore with an issued and paid up share capital of S$1. The intended
activity of EcoFirst Products (S) Pte Ltd is to carry on the business of multilevel marketing.
13. Investment in an associate
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Quoted shares at cost
At beginning of year 44,510 46,616 40,565 42,671
Additions - - 285 -
Disposals (44,510) (2,106) (40,850) (2,106)
At end of year - 44,510 - 40,565
Accumulated impairment losses
At beginning of year 7,742 25,278 3,652 21,639
Impairment loss during the year 9,056 - 7,172 -
Disposals (16,798) - (10,824) -
Reversal of an impairment loss - (17,536) - (17,987)
At end of year - 7,742 - 3,652
- 36,768 - 36,913
Share in post acquisition profits 5,417 4,591 - -
Disposals (5,417) - - -
Carrying amount - 41,359 - 36,913
Market value of quoted shares - 16,632 - 14,844
During the financial year, the Company disposed of all its direct shareholding of 18,885,025 ordinary shares and indirect shareholding
held through its wholly owned subsidiary, Sawitani Sdn Berhad of 1,905,000 ordinary shares of RM1 each in SEG International
Berhad for a total consideration of RM35.7 million.
75ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
13. Investment in an associate (cont’d)
The summarised financial information of the associate is as follows:
2010 2009RM’000 RM’000
Assets and liabilitiesCurrent assets - 97,514
Non current assets - 127,435
Total assets - 224,949
Current liabilities - 50,640
Non current liabilities - 8,406
Total liabilities - 59,046
2010 2009RM’000 RM’000
ResultsRevenue - 142,609
Profit for the year - 8,171
The details of the associate are as follows:
Issued andpaid up Group’s
Country of share effective PrincipalName of company incorporation capital interest activities
RM’000 2010 2009
SEG International Bhd Malaysia 89,093 - 25.1% Investment holding
and provision of
education services
and related
management
consultancy and
property
management and
rental of premises
and business
advisory services
76annual report 2010
notes to the financial statements (cont’d)31 May 2010
13. Investment in an associate (cont’d)
Quoted shares in the associate are pledged as follows:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Secured advances included under other payables
and accruals (Note 31) - 1,541 - 1,541
Secured borrowings (Note 28) - 39,801 - 35,355
- 41,342 - 36,896
The financial statements of the associate are not audited by Russell Bedford LC & Company.
14. Other long term investments
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Equity shares quoted, at cost
- Malaysia 26,506 35,859 4,761 12,540
- Foreign 225 218 225 218
Unquoted shares at cost 16,148 16,148 16,110 16,110
42,879 52,225 21,096 28,868
Accumulated impairment losses
At beginning of year 46,977 46,977 24,078 24,078
Disposals (7,464) - (6,126) -
At end of year 39,513 46,977 17,952 24,078
Carrying amount 3,366 5,248 3,144 4,790
Market value of quoted equity shares 3,196 4,612 3,034 4,267
77ecofirst consolidated bhd (15379-V)
14. Other long term investments (cont’d)
Certain quoted shares in other investments are pledged as follows:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Secured advances included under other
payables and accruals (Note 31) - 29 - 29
Secured borrowings (Note 28) - 3,863 - 3,442
- 3,892 - 3,471
15. Deferred tax assets/(liabilities)
Group2010 2009
RM’000 RM’000
At beginning of year 912 1,276
Recognised in income statement (Note 7)
- current year (100) (364)
At end of year 812 912
Presented after appropriate offsetting as follows:
Deferred tax assets 14,334 16,355
Deferred tax liabilities (13,522) (15,443)
812 912
Deferred tax assets of the Group are in respect of the following:
Group2010 2009
RM’000 RM’000
Tax effects of unabsorbed capital allowances and unutilised tax losses 14,334 16,355
The unused tax losses and unused tax credits are available indefinitely for offset against future taxable profit of the subsidiaries in
which those items arose.
notes to the financial statements (cont’d)31 May 2010
78annual report 2010
notes to the financial statements (cont’d)31 May 2010
15. Deferred tax assets/(liabilities) (cont’d)
Deferred tax assets have not been recognised in respect of the following temporary differences:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Tax effects of:
Unabsorbed capital allowances and unutilised tax losses 24,796 17,384 3,793 3,434
Excess of depreciation of plant and equipment over tax
capital allowances 2 1 - -
Provisions 15,950 2,371 - -
40,748 19,756 3,793 3,434
Portion of the deferred tax assets have not been recognised as it is not probable that taxable profit will be available in the foreseeable
future to utilise these deferred tax assets.
16. Intangible asset
Group2010 2009
RM’000 RM’000
Trademark licence at cost
At beginning and end of year 570 570
Accumulated amortisation
At beginning and end of year 32 32
Group2010 2009
RM’000 RM’000
Accumulated impairment losses
At beginning of year 538 -
Impairment loss for the year - 538
At end of year 538 538
Carrying amount - -
79ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
17. Inventories
Group2010 2009
RM’000 RM’000
Raw materials - 3
Finished goods 417 578
Trading merchandise 12 -
Spares and supplies - 471
429 1,052
Spares and supplies with a carrying value of RM Nil (2009: RM471,000) are charged as collaterals for one of the banking facilities
referred to in Note 28.
18. Non current asset held for sale
In the previous financial year, a subsidiary entered into a sale and purchase agreement to dispose of the leasehold land for a
consideration of RM2.3 million. The subsidiary had entered into a supplementary sale and purchase agreement dated 19 June 2009
to allow the said property to be transferred to a new purchaser. Arising from this, applications have to be re-submitted to the relevant
authorities approving the transfer of the property to the new purchaser. The disposal is expected to complete within the next twelve
months upon the fulfilment of all conditions precedent of the sale and purchase agreement. Accordingly, the fair value less costs to
sell of this piece of leasehold land is classified as non current asset held for sale. In the previous financial year, this piece of leasehold
land has been charged as collateral to secure the banking facilities referred to in Note 28.
During the financial year, the above transaction has been completed.
19. Property development costs
Group2010 2009
RM’000 RM’000
At beginning of year
Long term leasehold land 103,046 103,046
Development costs 108,447 108,314
211,493 211,360
Costs incurred during the year:
Development costs 4 133
Costs recognised in income statement:
At beginning of year (46,830) (46,904)
Recognised during the year 50 74
At end of year (46,780) (46,830)
80annual report 2010
notes to the financial statements (cont’d)31 May 2010
19. Property development costs (cont’d)
Group2010 2009
RM’000 RM’000
Accumulated expected losses:
At beginning of year (83,395) (76,230)
Expected loss for the year (26,378) (7,165)
At end of year (109,773) (83,395)
Property development costs at end of year 54,944 81,268
Property development costs of the Group with carrying value of RM54.9 million (2009: RM81.2 million) have been charged as
collaterals to secure the banking facilities as referred to in Note 28.
20. Trade receivables
Group2010 2009
RM’000 RM’000
Trade receivables 57,206 61,160
Accrued billings for property development 1,899 1,900
Amount due from contract customers (Note 21) - 238
59,105 63,298
Less: Provision for doubtful debts (57,589) (46,801)
1,516 16,497
The Group’s normal trade credit term is 30 days (2009: 30 days).
21. Amount due from contract customers
Group2010 2009
RM’000 RM’000
Costs incurred to date 34,590 25,904
Add: Attributable profits 4,567 2,450
Work in progress 39,157 28,354
Less: Progress billings received and receivable (39,157) (28,116)
Amount due from contract customers (Note 20) - 238
81ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
22. Amount due from/(to) subsidiaries
Company2010 2009
RM’000 RM’000
Amount due from subsidiaries 306,752 336,675
Less: Provision for doubtful debts (40,887) (68,079)
265,865 268,596
The amounts due from/(to) subsidiaries comprise unsecured interest free advances receivable/(repayable) on demand.
23. Other receivables, deposits and prepayments
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Other receivables 43,079 26,548 34,256 5,122
Less: Provision for doubtful debts (41,114) (25,183) (32,775) (3,109)
1,965 1,365 1,481 2,013
Deposits and prepayments 2,711 2,521 196 63
4,676 3,886 1,677 2,076
24. Cash and bank balances
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Cash at banks and on hand 3,880 661 769 107
Fixed deposits with licensed banks - 91 - 71
Short term deposits with licensed financial institutions 22,291 - 22,291 -
Cash and bank balances 26,171 752 23,060 178
82annual report 2010
notes to the financial statements (cont’d)31 May 2010
24. Cash and bank balances (cont’d)
The weighted average effective interest rate and maturity of fixed deposits at the balance sheet date are as follows:
Group Company2010 2009 2010 2009
% % % %
Weighted average effective interest rate per annum - 2.9 - 3.1
Group Company2010 2009 2010 2009Days Days Days Days
Average maturity as at the end of the financial year - 137 - 141
The fixed deposits of the Group and the Company with aggregate carrying amounts of RM Nil (2009: RM0.1 million) and RM Nil (2009:
RM0.1 million) respectively have been pledged as collaterals to secure the banking facilities referred to in Note 28.
The weighted average effective interest rate of short term deposits at the balance sheet date are as follows:
Group Company2010 2009 2010 2009
% % % %
Weighted average effective interest rate per annum 2.51 - 2.51 -
The short term deposits have no fixed maturity period and can be withdrawn by giving advance notice.
25. Share capital
Group and Company2010 2009
No. of No. ofordinary ordinaryshares of shares of Group and Company
RM0.50 each RM0.50 each 2010 2009’000 ’000 RM’000 RM’000
Authorised:
At beginning and end of year 2,000,000 2,000,000 1,000,000 1,000,000
Issued and fully paid:
At beginning and end of year 650,148 650,148 325,074 325,074
83ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
25. Share capital (cont’d)
Warrants 2004/2009
In conjunction with the renounceable rights issue of 130,236,686 ordinary shares of RM0.50 each during the financial year ended 31
July 2004, the Company also issued 65,118,136 detachable warrants at no cost to its shareholders. The warrants are in registered
form and constituted by a deed poll and entitle the registered holder to subscribe for one (1) new ordinary share of RM0.50 in the
Company at a price of RM0.50 per ordinary share for every warrant held. It can be exercised at any time during the five year
subscription period. On 18 March 2009, the Warrants 2004/2009 expired and no warrant was exercised by then.
26. Reserves
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Accumulated losses (517,030) (475,655) (496,238) (494,271)
Non distributable:
Share premium 295,727 295,727 295,727 295,727
Revaluation reserve 1,436 1,436 - -
Foreign exchange translation 6 (1,319) - -
297,169 295,844 295,727 295,727
(219,861) (179,811) (200,511) (198,544)
Share premium represents the excess of the consideration received over the nominal value of the shares issued by the Company.
The Group’s revaluation reserve consists of revaluation surplus from freehold land and buildings, long term leasehold land and
investments.
27. Hire purchase liabilities
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Amount outstanding 724 1,159 600 762
Less: Interest in suspense (77) (134) (71) (101)
Principal portion 647 1,025 529 661
Less: Portion due within one year (190) (227) (138) (131)
Non current portion 457 798 391 530
84annual report 2010
notes to the financial statements (cont’d)31 May 2010
27. Hire purchase liabilities (cont’d)
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
The non current portion of the hire purchase obligations
is payable as follows:
Later than 1 year and not later than 2 years 200 240 146 139
Later than 2 years and not later than 5 years 147 422 135 255
Later than 5 years 110 136 110 136
457 798 391 530
The effective interest rates implicit in the hire purchase obligations range from 4.32% to 7.32% (2009: 4.32% to 7.32%) per annum.
28. Long term borrowings
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Bank overdrafts - secured - 3,174 - 2,853
Term loans - secured 129,085 126,570 13,850 19,378
Revolving credits - secured 413 3,049 - 2,665
Non convertible preference shares issued by asubsidiary to its minority shareholder 1,000 1,000 - -
130,498 133,793 13,850 24,896
Less: Portion due within one year (Note 32) (53,413) (29,884) (10,350) (15,288)
Non current portion 77,085 103,909 3,500 9,608
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
The non current portion of borrowings is payable as follows:
Later than 1 year and not later than 2 years 20,970 22,558 3,500 6,106
Later than 2 years and not later than 5 years 55,115 62,771 - 3,502
Later than 5 years 1,000 18,580 - -
77,085 103,909 3,500 9,608
85ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
28. Long term borrowings (cont’d)
The average effective interest rates per annum are as follows:
Group Company2010 2009 2010 2009
% % % %
Bank overdrafts - secured - 9.20 - 8.05
Term loans - secured 8.48 7.96 8.52 8.05
Revolving credits - secured 8.05 8.70 - 9.00
Secured borrowings are secured by way of:
Carrying amountGroup Company
2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000
Property, plant and equipment (Note 9) 1,500 11,797 - -
Investment properties (Note 10) 263,247 263,247 - -
Prepaid lease payments (Note 11) - 1,296 - -
Quoted shares in an associate (Note 13) - 39,801 - 35,355
Quoted shares included under other long term
investments (Note 14) - 3,863 - 3,442
Inventories (Note 17) - 471 - -
Non current asset held for sale (Note 18) - 2,250 - -
Property development costs (Note 19) 54,944 81,268 - -
Fixed deposits with licensed banks (Note 24) - 69 - 69
Certain of the bank borrowings of the subsidiaries are also guaranteed by the Company.
29. Trade payables
The normal trade credit period granted to the Group is 30 days (2009: 30 days).
30. Amount due to an associate
The amount represents profit guarantee obligations payable and is repayable on demand. The amount has been settled during the
financial year.
86annual report 2010
notes to the financial statements (cont’d)31 May 2010
31. Other payables and accruals
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Deposits received from tenants and purchasers of
development properties 5,186 5,161 - -
Unsecured interest free advances from third parties 4,300 18,671 73 73
Provision for contingencies in respect of disposal
of subsidiaries 337 11,381 337 11,381
Accrued interest 14,413 9,966 14,413 9,966
Secured third party debts which bear interest between 8%
and 10% (2009: 8% and 10%) per annum - 1,039 - 1,039
Provision for real property gains tax liabilities as required
for accounting purposes 10,197 10,197 616 616
Provision for liquidated ascertained damages in respect of
property development projects 7,468 8,195 - -
Profit guarantee liabilities 2,189 2,189 2,189 2,189
Provision for tax penalties as required for accounting purposes 5,311 5,311 - -
Quit rent and assessment payables 4,024 2,361 - -
Contribution payable for local authority 2,741 2,741 - -
Other payables 10,193 13,834 3,576 3,528
66,359 91,046 21,204 28,792
Accruals 1,200 1,656 228 258
67,559 92,702 21,432 29,050
The secured third party debts are secured by way of:
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Quoted shares in an associate (Note 13) - 1,541 - 1,541
Quoted shares included under other long term investments (Note 14) - 29 - 29
- 1,570 - 1,570
32. Short term borrowings
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Bank overdrafts - secured - 3,174 - 2,853
Term loans - secured 53,000 23,661 10,350 9,770
Revolving credits - secured 413 3,049 - 2,665
Current portion (Note 28) 53,413 29,884 10,350 15,288
87ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
33. Significant related party disclosures
(a) Related party disclosures
Group CompanyType of 2010 2009 2010 2009
transactions RM’000 RM’000 RM’000 RM’000
Significant transactions with a
company in which certain directors
have interests
Name of companySEG International Bhd Profit guarantee
expense no longer
required - (5,153) - (5,153)
The directors are of the opinion that the terms and conditions and prices of the above transactions are not materially different
from that obtainable in transactions with unrelated parties.
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Significant outstanding balances with companies
in which certain directors have interests
Name of companiesReceivableCasa Andaman Sdn Bhd
- construction contracts - 1,218 - -
PayablesMeda Inc Berhad
- profit guarantee liabilities 2,189 2,189 2,189 2,189
SEG International Bhd
(profit guarantee liabilities)
- amount due to an associate - 2,813 - 2,790
(b) Compensation of key management personnel
The key management personnel comprises mainly executive directors of the Company whose remuneration is disclosed in
Note 6.
88annual report 2010
notes to the financial statements (cont’d)31 May 2010
34. Commitments
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Operating lease commitmentsThe future minimum lease payments under non
cancellable operating leases are as follows:
Not later than 1 year 451 1,034 394 395
Later than 1 year and not later than 2 years 411 910 376 385
Later than 2 years and not later than 5 years 490 520 470 95
1,352 2,464 1,240 875
35. Contingencies
Group Company2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Guarantees relating to borrowings of:
- subsidiaries (secured) - - 115,647 107,897
- an affiliated company (secured) 3,169 4,926 3,169 4,926
3,169 4,926 118,816 112,823
At 31 May 2010, the Company had contingent liabilities in respect of the following:
(i) Two subsidiaries, Pujian Development Sendirian Berhad (“PDSB”) and Southern Utilities Corporation Sdn Bhd (“SUC”), have been
served with a writ of summons by 56 purchasers of the South City Condominiums (“the Project”) seeking declarative orders,
injunctive orders and general damages in respect of their purchase of the service apartments and shop units of the Project. The
matter is now fixed for further case management on 27 October 2010 and at this juncture, the loss arising therefore, if any,
cannot be reasonably estimated.
The solicitors are of the opinion that PDSB and SUC have reasonably good defence for the above matter subject to the availability
of sufficient documentary evidence to substantiate its defence. Therefore, no provision has been made in the financial statements.
(ii) PDSB was served with a writ of summons by 24 purchasers seeking rescission of the Sale and Purchase Agreements entered
into with PDSB in respect of the shop units in the South City Plaza. The estimated loss to the Group is RM2.4 million and the
matter is now fixed for decision on 18 October 2010 in relation to the plaintiffs’ summary judgement application.
The solicitors are of the opinion that PDSB has reasonably good defence for the above matter subject to the availability of
sufficient documentary evidence to substantiate its defence. Therefore, no provision has been made in the financial statements.
(iii) A subsidiary, Silvania Plantation Products (S.I.) Limited (“SPPL”) was served with a judgement for cross guarantees and
indemnities whereby SPPL and 3 other companies have guaranteed payment of each other’s debts, interest and costs from time
to time owing to the claimant, Westpac Banking Corporation. The total claim sum is approximately RM5.0 million equivalent
together with interest at the claimant’s prevailing rate.
During the financial year, the Company has disposed of all its shareholdings in SPPL.
89ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
36. Material litigations and claims
(i) The Inland Revenue Board (“IRB”) issued a writ of summons against each of the 4 subsidiaries, Mudek Sdn Bhd, Seri Jasin Sdn
Bhd, Berembang Sendirian Berhad and Jiddi Joned Enterprises Sdn Bhd individually for real property gains tax owed by the
subsidiaries.
The 4 subsidiaries have also filed legal suits against certain parties for failure to release retention sums representing part of the
real property gains tax as mentioned above.
These legal suits are still on going and for accounting purposes all the amounts owed have been provided for in the financial
statements.
(ii) IRB filed 4 separate legal suits against Pujian Development Sendirian Berhad (“PDSB”) for a total amount of RM32.5 million. The
claims are for income tax outstanding for assessment years 1998 to 2000, 2001 and 2004. For the first action, IRB had
successfully reinstated the judgement in default against PDSB. PDSB is in the midst of preparing stay papers to file an appeal
against the decision. In relation to the second action, IRB has filed an application for summary judgement. The parties are in
the midst of exchanging affidavits and the matter is fixed for case management on 21 October 2010. In relation to the third action,
IRB has obtained a summary judgement application. PDSB has filed an appeal against the decision. As for the fourth action,
PDSB has filed an appeal against the summary judgement decision and it is now fixed for case management on 30 September
2010.
For accounting purposes, PDSB has provided for the income tax, inclusive of penalties, of RM32.5 million in respect of these
pending litigations.
(iii) IRB filed 2 legal suits against Tashima Development Sdn Bhd (“Tashima”), for the recovery of income tax outstanding totalling
RM6.4 million for assessment years 2000, 2001 and 2002 including penalties. IRB has served a sealed summary judgement
application and it is now fixed for case management on 21 October 2010 for the first suit. In respect of the second suit, the court
has allowed IRB’s summary judgement application. Tashima has filed its appeal against the decision. The matter is now fixed
for case management on 30 September 2010 of Tashima’s stay application.
For accounting purposes, Tashima has provided for the income tax, inclusive of penalties, of RM6.4 million in respect of these
pending litigations.
(iv) IRB filed a legal suit against Sawitani Sdn Bhd (“Sawitani”) for a total amount of RM1.0 million. The claims are for real property
gains tax outstanding for assessment year 2000. Sawitani has filed its defence. IRB’s summary judgement application was
fixed for case management on 13 July 2010 wherein parties are to file all affidavits and respective submissions on 21 October
2010.
For accounting purposes, Sawitani has provided for the income tax, inclusive of penalties, of RM1.0 million in respect of this
pending litigation.
90annual report 2010
notes to the financial statements (cont’d)31 May 2010
37. Segmental information
Segmental information is presented in respect of the Group’s business and geographical segments. The primary reporting segment
information is in respect of business segments while the secondary information is reported as geographical segments.
Inter-segment pricing is determined based on arm’s length basis.
Segments results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a
reasonable basis.
The Group comprises the following main segments:
Business segmentsConstruction
Property
Network marketing
Investment and others
Geographical segmentsMalaysia
Rest of Asia
Solomon Islands
Others
91ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
37.Segmentalinform
ation(cont’d)
Investment
Network
and
Construction
Property
marketing
others
Elim
inations
Consolidated
31May
2010
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
BusinessSegments
Revenue
Revenuefrom
externacustomers
11,041
6,505
3,134
393
-21,073
Inter-segmentrevenue
--
54,116
(4,121)
-
11,041
6,505
3,139
4,509
(4,121)
21,073
Results
Segmentresuts
761
(25,613)
(1,463)
(2,074)
6(28,383)
Interestncome
339
Lossfrom
operatons
(28,044)
Fnancecosts
(14,172)
Sharenproftofassocate
826
826
Lossbeforetax
(41,390)
Incometaxexpense
(78)
Netossfortheyear
(41,468)
Other
inform
ation
Segmentassets
2,262
324,987
1,416
28,980
-357,645
Una
ocatedcorporateassets
1,039
358,684
Segmentab
tes
3,998
148,288
1,706
50,839
-204,831
Una
ocatedcorporateab
tes
33,622
238,453
Amortsaton
--
-9
-9
Captaexpendture
--
362
966
-1,328
Deprecaton
8155
197
1,191
-1,524
Noncashexpensesotherthandeprecaton
andamortsaton
1,371
40,430
1,198
14,207
(8,349)
48,857
92annual report 2010
notes to the financial statements (cont’d)31 May 2010
37.Segmentalinform
ation(cont’d)
Investment
Network
and
Construction
Property
marketing
others
Elim
inations
Consolidated
31May
2009
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
BusinessSegments
Revenue
Revenuefrom
externacustomers
27,122
6,351
8,735
1,810
-44,018
Inter-segmentrevenue
--
-2,520
(2,520)
-
27,122
6,351
8,735
4,330
(2,520)
44,018
Results
Segmentresuts
219
(65,704)
(212)
(14,473)
(625)
(80,795)
Interestncome
100
Lossfrom
operatons
(80,695)
Fnancecosts
(11,716)
Sharenproftofassocate
2,082
2,082
Lossbeforetax
(90,329)
Incometaxexpense
(382)
Netossfortheyear
(90,711)
Other
inform
ation
Segmentassets
5,559
357,725
2,548
25,252
-391,084
Investmentnanassocate
--
-41,359
-41,359
432,443
Una
ocatedcorporateassets
1,138
433,581
Segmentab
tes
6,948
141,907
3,267
87,417
-239,539
Una
ocatedcorporateab
tes
--
--
-33,668
273,207
Amortsaton
--
-19
-19
Captaexpendture
--
881,141
-1,229
Deprecaton
117
161
180
1,980
-2,438
Noncashexpensesotherthandeprecaton
andamortsaton
-62,570
898
41,007
(30,527)
73,948
93ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
37. Segmental information (cont’d)
Rest of SolomonMalaysia Asia Islands Others TotalRM’000 RM’000 RM’000 RM’000 RM’000
31 May 2010Geographical Segments
Revenue 20,779 294 - - 21,073
Carrying amount of segment assets 358,673 10 - 1 358,684
Additions to property, plant, equipment and intangible asset 329 63 936 - 1,328
Rest of SolomonMalaysia Asia Islands Others TotalRM’000 RM’000 RM’000 RM’000 RM’000
31 May 2009Geographical Segments
Revenue 43,725 293 - - 44,018
Carrying amount of segment assets 421,215 - 12,345 21 433,581
Additions to property, plant, equipment and intangible asset 412 - 817 - 1,229
38. Events subsequent to the balance sheet date
Subsequent to the balance sheet date, a wholly owned subsidiary, Opal Horizon Sdn Bhd (“Opal”) has entered into a Cooperation
Agreement with a third party, CV GEOMineral Resources (“CVGMR”), a firm incorporated under the laws of the Republic of Indonesia
for the exploitation of an iron ore mine in South Kalimantan, Indonesia. Opal will provide a one-time exploitation fee of USD1,000,000
and in return CVGMR agrees to share 60% of the iron ore mine production with Opal.
39. Financial instruments
Financial risk management objectives and policies
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development
of the Group’s businesses whilst managing its interest rate, liquidity, foreign exchange, market and credit risks. The Group operates
within guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions.
Interest rate risk
The Group’s primary interest rate risk relates to interest bearing debts. The Group manages its interest rate exposure by maintaining
a prudent mix of fixed and floating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment
holding period and nature of its assets. The information on maturity dates and effective interest rates of financial liabilities are
disclosed in their respective notes.
94annual report 2010
notes to the financial statements (cont’d)31 May 2010
39. Financial instruments (cont’d)
Liquidity risk
The Group actively monitors its debt maturity profile, operating cash flows and the availability of funding so as to best ensure that
all funding needs are met. As part of its overall liquidity management, the Group endeavours to maintain sufficient levels of cash or
cash convertible investments to best meet its working capital requirements.
Foreign exchange risk
The Group operates internationally and is exposed to various currencies, mainly United States Dollars and Solomon Islands Dollars.
Foreign currency denominated assets and liabilities together with expected cash flows from highly probable purchases and sales
give rise to foreign exchange exposures.
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an
acceptable level.
As at balance sheet date, there are no material unhedged financial assets and financial liabilities of the Group and the Company that
are not denominated in their functional currencies.
Market risk
The Group is exposed to market risks arising from changes in the market prices of its quoted investments. The Group does not use
derivative instruments to manage this risk as the Group’s quoted investments are mainly held as long term investments.
Credit risk
Credit risks are managed by the application of credit approvals, limits and monitoring procedures. Credit risks are minimised and
monitored via strictly limiting the Group’s associations to business partners with high creditworthiness. Trade receivables are
monitored on an ongoing basis via the Group’s management reporting procedures. At balance sheet date, there were no significant
concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset.
Fair values
The fair values of all financial assets and financial liabilities of the Group and the Company as at balance sheet date are not materially
different from their carrying values other than as follows:
Group Company2010 2010
Carrying Fair Carrying Fairamount value amount valueRM’000 RM’000 RM’000 RM’000
Financial assets
Quoted shares included in other long term investments 2,229 3,196 2,044 3,034
Unquoted shares included in other long term investments 1,137 # 1,100 #
95ecofirst consolidated bhd (15379-V)
notes to the financial statements (cont’d)31 May 2010
39. Financial instruments (cont’d)
Fair values (cont’d)
Group Company2009 2009
Carrying Fair Carrying Fairamount value amount valueRM’000 RM’000 RM’000 RM’000
Financial assets
Quoted shares included in other long term investments 4,110 4,612 3,690 4,253
Unquoted shares included in other long term investments 1,138 # 1,100 #
# It is not practicable to estimate the fair values of the unquoted investments due to the lack of quoted market prices and
inability to estimate fair value without incurring excessive costs.
The fair value of quoted shares is determined by reference to stock exchange quoted selling prices at the close of business on the
balance sheet date.
96annual report 2010
The properties of the Group as at 31 May 2010 and their net book values (“NBV”) are indicated below:
Investment Properties
ApproximateAge of Date ofBuilding Lease Expiry Acquisition/ NBV
Size & Usage Title/ Location Company (years) Date Revaluation RM'000
1. 91 sq. metres B-04-10, Perdana Selatan, Pujian 10 99-year lease 3.8.2006 130
of office space Taman Serdang Perdana, Development expiring
(Seksyen 1) Sendirian 9 Nov 2093
43300 Seri Kembangan, Berhad
Selangor Darul Ehsan.
2. 150,417 sq. PN No. 7393, Lot No. 1, Pujian 7 99-year lease 15.7.2009 262,003
metres of Pekan Serdang, Development expiring
commercial Daerah Petaling, Selangor. Sendirian 9 Nov 2093
space Berhad
3. 55 sq. metres PN No. 7393, Lot No. 1, Opal Horizon 7 99-year lease 15.7.2009 268
of commercial Pekan Serdang, Sdn Bhd expiring
space Daerah Petaling, Selangor. 9 Nov 2093
4. 60 sq. metres PN No. 7393, Lot No. 1, Efex Trade & 7 99-year lease 15.7.2009 289
of commercial Pekan Serdang, Exhibitions expiring
space Daerah Petaling, Selangor. Sdn Bhd 9 Nov 2093
5. 55 sq. metres PN No. 7393, Lot No. 1, EcoFirst 7 99-year lease 15.7.2009 268
of commercial Pekan Serdang, Development expiring
space Daerah Petaling, Selangor. Sdn Bhd 9 Nov 2093
6. 60 sq. metres PN No. 7393, Lot No. 1, EcoFirst 7 99-year lease 15.7.2009 289
of commercial Pekan Serdang, Laboratories expiring
space Daerah Petaling, Selangor. Sdn Bhd 9 Nov 2093
263,247
particulars of group properties
97ecofirst consolidated bhd (15379-V)
STATISTICAL REPORT OF HOLDERS OF SHARES AS AT 30 SEPTEMBER 2010 AS PER RECORD OF DEPOSITORS (“ROD”)
Class of Shares : Ordinary shares of RM0.50 each (“Shares”)
Authorised Share Capital : RM1,000,000,000.00
Issued and Paid-Up Capital : RM325,073,827.00
Voting Rights : Every member present in person or by proxy or represented by attorney shall have one vote and upona poll, every such member shall have one vote for every share held.
No. of Shareholders : 29,414
Number of Number PercentageRange of Shareholdings Shareholders of Shares (%)
Less than 100 1,822 46,317 0.00100 - 1,000 4,927 4,458,443 0.691,001 - 10,000 17,222 78,021,716 12.0010,001 - 100,000 5,027 138,136,954 21.25100,001 - less than 5% of issued shares 414 341,378,458 52.515% and above of issued shares 2 88,105 ,766 13.55
Total 29,414 650,147,654 100.00
LIST OF THIRTY LARGEST SHAREHOLDERS AS AT 30 SEPTEMBER 2010 AS PER ROD
No. Name of Shareholders No. of Shares Held Percentage (%)
1. TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Purewise Sdn. Bhd. 45,301,300 6.97
2. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Aun (STG) 42,804,466 6.58
3. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Kian (DHG) 26,951,432 4.15
4. TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Foo 23,415,500 3.60
5. Kenanga Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Kian 19,042,500 2.93
6. EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Teoh Seng Kian (SFC) 18,384,600 2.83
7. TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Aun 14,190,000 2.18
8. TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Kian 13,427,100 2.07
9. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Tiong Kwing Hee (DHG) 12,903,100 1.98
analysis of shareholdings
98annual report 2010
analysis of shareholdings (cont’d)
LIST OF THIRTY LARGEST SHAREHOLDERS AS AT 30 SEPTEMBER 2010 AS PER ROD (CONT’D)
No. Name of Shareholders No. of Shares Held Percentage (%)
10. Soh Chin Loong 9,900,000 1.52
11. M.I.T. Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Cheam Shaw Fin (MG0033-325) 9,819,000 1.51
12. Kenanga Nominess (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Foo 8,482,000 1.30
13. EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Teoh Seng Aun (SFC) 8,271,000 1.27
14. LT Travel & Tours (M) Sdn. Bhd. 6,717,300 1.03
15. M.I.T. Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Foo (MG0176-182) 6,525,000 1.00
16. EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Tan Kim Seng (SFC) 5,842,000 0.90
17. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Wong Fon Ying (CEB) 5,237,000 0.81
18. Kenanga Nominees (Tempatan) Sdn. Bhd.Amara Investment Management Sdn. Bhd. For Teoh Seng Foo 3,982,999 0.61
19. M.I.T. Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Aun (MG0177-182) 3,815,000 0.59
20. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Liew Lee Chin (CEB) 3,500,000 0.54
21. Mayban Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Tan Kim Seng 3,300,000 0.51
22. Affin Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Chung Kin Chuan (CHU0226C) 3,214,800 0.49
23. OSK Nominees (Tempatan) Sdn. BerhadPledged Securities Account For Purewise Sdn. Bhd. 2,454,300 0.38
24. AMSEC Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Wong Fon Ying 2,447,300 0.38
25. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Chong Sun Nee (CEB) 2,315,700 0.36
26. Low Siew Fong 2,295,300 0.35
27. ECML Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Ng Wui Heong (MG0000140) 2,225,000 0.34
99ecofirst consolidated bhd (15379-V)
analysis of shareholdings (cont’d)
LIST OF THIRTY LARGEST SHAREHOLDERS AS AT 30 SEPTEMBER 2010 AS PER ROD (CONT’D)
No. Name of Shareholders No. of Shares Held Percentage (%)
28. Purewise Holdings Sdn. Bhd. 2,203,300 0.34
29. Kenanga Nominees (Tempatan) Sdn. Bhd.Amara Investment Management Sdn. Bhd. For Teoh Seng Aun 2,067,000 0.32
30. Tan Leng Pee Sendirian Berhad 1,944,720 0.30
SUBSTANTIAL SHAREHOLDERS' SHAREHOLDINGS AS AT 30 SEPTEMBER 2010(based on the Register of Substantial Shareholders' Shareholdings)
Name of No. of Shares HeldSubstantial Shareholder Direct Interest (%) Indirect Interest (%)
Teoh Seng Kian 79,602,632 (12.24) 516,332 (0.08)*
Teoh Seng Aun 69,080,554 (10.63) 516,332 (0.08)*
Dato’ (Dr.) Teoh Seng Foo 38,422,500 (5.91) 516,332 (0.08)*
Note:
* Indirect interest by virtue of Section 6A(4) of the Companies Act, 1965 through shareholdings held in Fulani Capital Sdn Bhd (formerly
known as Meda Capital Sdn Bhd).
DIRECTORS' SHAREHOLDINGS (IN THE COMPANY) AS AT 30 SEPTEMBER 2010(based on the Register of Directors' Shareholdings)
Name of No. of Shares HeldDirectors Direct Interest (%) Indirect Interest (%)
Dato’ Syed Ariff Fadzillah bin Syed Awalluddin - - - -
Dato’ (Dr.) Teoh Seng Foo 38,422,500 (5.91) 516,332 (0.08)*
Tiong Kwing Hee 12,903,100 (1.98) - -
Amos Siew Boon Yeong - - - -
Dato’ Boey Chin Gan - - - -
Lim Een Hong - - - -
Teoh Seng Kian
(Alternate Director to Dato’ (Dr.) Teoh Seng Foo) 79,602,632 (12.24) 516,332 (0.08)*
Others**
Dato’ (Dr.) Teoh Seng Foo’s spouse 9,819,000 (1.51) - -
Teoh Seng Kian’s spouse 2,495,300 (0.38) - -
Notes:
* Indirect interest by virtue of Section 6A(4) of the Companies Act, 1965 through shareholdings held in Fulani Capital Sdn Bhd (formerly
known as Meda Capital Sdn Bhd).
** Disclosure of direct interest held by their spouses, pursuant to Section 134(12)(c) of the Companies Act, 1965.
NO RESOLUTIONS FOR AGAINST
ORDINARY BUSINESS1. Re-election of Datoʼ (Dr.) Teoh Seng Foo as Director2. Re-election of Siew Boon Yeong as Director3. Re-election of Lim Een Hong as Director4. Re-appointment of Messrs Russell Bedford LC & Company as Auditors and to
authorise the Directors to fix their remunerationSPECIAL BUSINESS
5. Approval of Directorsʼ Fees6. Authority for Directors to issue shares7. Proposed Amendments to Articles of Association
Please indicate with “X” in the space provided how you wish your proxy to vote. If no specific direction as to voting is given, the proxy willvote or abstain from voting at his/her discretion.
Notes:(i) A member entitled to attend and vote at the meeting is entitled to appoint not more than one (1) proxy to attend and vote in his stead. A proxy need not
be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply.(ii) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint
at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securitiesaccount.
(iii) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or if the appointer isa corporation, either under seal or under the hand of an officer or attorney duly authorised.
(iv) The original instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy ofthat power or authority shall be deposited at the Registered Office of the Company at Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan,50200 Kuala Lumpur not less than forty eight (48) hours before the time for holding the meeting or adjourned meeting.
Signature of Shareholder(s) / Common Seal
Dated this day of 2010
FORM OF PROXYNumber of shares held
Central Depository System Account No.
I/We NRIC/Company No.(FULL NAME IN BLOCK LETTERS)
of(ADDRESS)
being a member(s) of ECOFIRST CONSOLIDATED BHD, hereby appoint
of(FULL NAME IN BLOCK LETTERS) (ADDRESS)
or failing him/her, the CHAIRMAN OF THE MEETING* as my/our proxy to attend and vote for me/us on my/our behalf at the Thirty-SeventhAnnual General Meeting of the Company to be held at Ballroom 1, Level 5, The Summit Hotel, Subang USJ, Persiaran Kewajipan,USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan on Wednesday, 24 November 2010 at 10.00 a.m. or at any adjournment thereof.
* please delete if you do not wish to have this option in the absence of your proxy.
STAMP
The Company SecretaryECOFIRST CONSOLIDATED BERHAD (15379-V)
Suite 11.1A, Level 11, Menara Weld76 Jalan Raja Chulan50200 Kuala Lumpur
Malaysia
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