ECOFIRS-AnnualReport2012 (1.2MB)

Strengthening

foundationour

Annual Report 2012

our ViSion& MiSSionLeveraging on the experience and expertise amassed over the years and constantly acquiring new knowledge, we strive to achieve success in our business undertakings and are committed to deliver exceptional value to our customers, business partners, shareholders and other stakeholders.

Cover Rationale

At EcoFirst, we stand steadfast and resilient against economic and environmental challenges. Over the years, we have made commitments to make a genuine difference – going the extra mile for our customers, shareholders and stakeholders. Through our Group’s diversification, success comes from synergies and the strengthening of our foundation. And without understanding our past, we cannot build a better future.

Strengthening

foundationour

Annual Report 2012

contentS Notice of Annual General Meeting

Statement Accompanying Notice of Annual General Meeting

Corporate Information

Chairman’s Statement

Board of Directors

Directors’ Profile

Five-Year Group Statistics

Corporate Governance Statement

Statement of Directors’ Responsibility

Other Information

Audit Committee Report

Statement on Internal Control

Financial Statements

Particulars of Group Properties

Analysis of Shareholdings

Form of Proxy

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ECOFIRST CONSOLIDATED BHD (15379-V) • Annual Report 20122

notice of thirtY-ninth annuaL generaL Meeting

AGENDA

ORDINARY BUSINESS1. To receive the Audited Financial Statements for the financial year ended 31 May 2012 together with the Directors’

and Auditors’ Reports thereon.

2. To approve the Directors’ Fees for the financial year ended 31 May 2012.

3. To re-elect the following Directors who will be retiring pursuant to Article 113 of the Company’s Articles of Association:3.1 Dato’ (Dr.) Teoh Seng Foo3.2 Dato’ Boey Chin Gan

4. To re-appoint Messrs Russell Bedford LC & Company, the retiring Auditors as Auditors of the Company and to authorize the Directors to determine their remuneration.

SPECIAL BUSINESSTo consider and if thought fit, to pass the following resolution, with or without modifications, as an Ordinary Resolution of the Company: -

5. ORDINARY RESOLUTION AUTHORITY 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 Malaysia Securities Berhad (“Bursa Securities”) and the approvals of the relevant governmental and/or regulatory authorities (if any), the Directors be and are hereby authorized to issue shares in the Company at any time, upon such terms and conditions, for such purposes and to such person or persons as the Directors may deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company at the time of issue AND THAT the Directors be also empowered to obtain the approval of Bursa Securities for the listing of and quotation for the additional shares so issued on Bursa Securities AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

6. To transact any other business for which due notice shall have been given in accordance with the Companies Act, 1965 and the Company’s Articles of Association.

BY ORDER OF THE BOARD

YEOH CHONG KEAT (MIA 2736)REBECCA LEONG SIEW KWAN (MAICSA 7045547)Secretaries

Kuala Lumpur2 November 2012

(Resolution 1)

(Resolution 2)(Resolution 3)

(Resolution 4)

(Resolution 5)

NOTICE IS HEREBY GIVEN that the Thirty-Ninth 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 Monday, 26 November 2012 at 10.00 a.m. to transact the following business:-

3ECOFIRST CONSOLIDATED BHD (15379-V) • Annual Report 2012

NOTICE OF THIRTY-NINTHANNUAL GENERAL MEETING

Notes:-

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 19 November 2012 (General Meeting Record of Depositors) shall be eligible to attend, speak and vote at this meeting.

(ii) 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.

(iii) WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

(iv) 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 is a corporation, either undersealorunderthehandofanofficerorattorneydulyauthorised.

(v) Theoriginalinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissignedoranotariallycertifiedcopyofthatpowerorauthorityshallbedepositedattheRegisteredOfficeoftheCompanyatSuite11.1A,Level11,MenaraWeld,76JalanRajaChulan,50200KualaLumpurnotlessthanforty-eight(48)hoursbeforethetimeforholdingthemeetingoradjournedmeeting.

Explanatory notes on Special Business:

Resolution 5The Ordinary Resolution proposed under this resolution 5, if passed, will renew the authority given to the Directors of the Company to issue and allot new shares in the Company at any time, to such person or persons, upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit (“General Mandate”), provided that the number of shares issued pursuant to this General Mandate, when aggregated with the nominal value of any such shares issued during the preceding twelve (12) months, does not exceed 10% of the nominal value of total issued share capital of the Company at the time of issue. This renewed General Mandate, unless revoked or varied at 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 2011 which was not exercised by the Company during the year, will expire at the forthcoming Thirty-Ninth 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 opportunities or needs arise.

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StateMent accoMPanYing noticeof annuaL generaL MeetingFurther 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) Dato’ Boey Chin Gan


BOARD OF DIRECTORSCHAIRMAN1. Dato’ Syed Ariff Fadzillah bin Syed

Awalluddin

PRESIDENT2. Dato’ (Dr.) Teoh Seng Foo

GROUP CHIEF EXECUTIVE OFFICER / EXECUTIVE DIRECTOR3. Dato’ Tiong Kwing Hee

DIRECTORS4. Amos Siew Boon Yeong5. Dato’ Boey Chin Gan6. Lim Een Hong7. Teoh Seng Kian (Alternate Director to

Dato’ (Dr.) Teoh Seng Foo)

SECRETARIESYeoh Chong KeatRebecca Leong Siew Kwan

AUDITORSRussell Bedford LC & Company10th Floor, Bangunan Yee Seng15, Jalan Raja Chulan50200 Kuala Lumpur

SHARE REGISTRARSymphony Share Registrars Sdn. Bhd.Level 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul EhsanTel : 03 – 7841 8000Fax : 03 – 7841 8151/8152

corPorateinforMation

REGISTERED OFFICESuite 11.1A, Level 11Menara Weld76, Jalan Raja Chulan50200 Kuala LumpurTel : 03 – 2031 1988Fax : 03 – 2031 9788

STOCK EXCHANGE LISTINGBursa Malaysia Securities BerhadMain Market

WEBSITEwww.ecofirst.com.my

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StrategYAdvancing Progress


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 2012.

chairMan’S StateMent


CHAIRMAN’SSTATEMENT

Performance Review

I am pleased to report that the Group continued its positive performance for the financial year ended 31 May 2012. With a profit before tax of RM15.4 million against a revenue of RM160.5 million, this represents an increase of 63% and 543% respectively against the preceding year’s performance.

The Group’s commercial development project, Taipan@Ipoh Cybercentre in Daerah Kinta, Jelapang, Perak contributed substantially to the Group’s revenue and profitability with the early completion of the first phase consisting of 102 units of 3-storey shop-offices and the on-going second phase consisting of 147 units of 2-storey shop-offices. Total revenue registered from this project during the year under review was RM110.8 million.

The Group’s joint-venture development for two blocks of service apartments situated on top of the Group’s existing mall, South City Plaza in Seri Kembangan, Selangor realized RM40.0 million in terms of revenue recognition. The proceeds were utilized to repay bank borrowings which resulted in substantial interest cost savings.

Recurring rental income and property management fees for the Group’s investment properties totaled RM9.8 million in revenue during the financial year 2012. The income derived was basically from South City Plaza as the newly completed 1Segamat Mall in Segamat, Johor was opened for business only in the last quarter of financial year 2012.

A revaluation surplus of RM22.4 million was recognized during the year in respect of

...financial year ended 31 May 2012. With a profit before tax of RM15.4 million against a revenue of RM160.5 million, this represents an increase of 63% and 543% respectively against the preceding year’s performance.

1Segamat Mall which was fully constructed and completed during the financial year under review.

Operational Review

The development of South City Apartments which is situated on top of South City Plaza was constructed within a year and was completed in July 2012. The two blocks of 13-storey towers consists of 416 units of fully-furnished apartments, with built-up areas ranging from 566 to 1,241 square feet per unit.

The South City Apartments is located within easy reach of several educational institutions within South City Plaza itself and around the vicinity. Due to high demand for student accommodation in the area,

The newly built South City Apartments consisting of 2 blocks of 13-storey service apartments situated on top of South City Plaza.

Taipan@Ipoh Cybercentre soon-to-be completed 2-storey shop-offices.


the launching was successful with units being fully sold. The South City Apartments can accommodate up to 2,000 students. Together with students from education providers at South City Plaza namely Asia-Pacific University College of Technology and Innovation (UCTI), SEGI Training Centre and International College of Health Sciences (ICHS), retail business at South City Plaza is expected to expand and grow.

As par t a lso of the per formance transformation plan for South City Plaza, we have converted the Lower


Ground Floor into a commercial platform for wholesalers which is known as “The Scope@SCP”. It is specially designed to increase the trade mix in South City Plaza. The idea was successfully accepted by wholesalers and as at todate, more than 90% of the lettable area of Lower Ground Floor has been leased.

The Group is proud that its newly opened shopping complex, the 1Segamat Mall, is recognized as the “go to place” for shopping, entertainment, dining and relaxing for the people of Segamat town and neighbouring areas. Being the first and only retail mall in Segamat with the most modern amenities, the mall has steadily attracted more than 100,000 patrons every month since its soft opening in April 2012.

The mall is situated just next to the Segamat bus station and taxi terminal, and is directly linked to the transportation hub via a purpose-built overhead pedestrian bridge.

The mall comprises three shopping levels with a gross built-up area of 480,000 square feet including two levels of car park bays. The mall has within half a year since its soft launch reached an occupancy rate of 95% with anchor tenants UO Superstore occupying 70,000 square feet and Lotus Five Star Cinema occupying 30,000 square feet comprising an 8-hall Cineplex. Other notable tenants at 1Segamat Mall include Guardian, Watsons, Kamdar, Popular Bookstore, Old Town White Coffee, Big Apple Donuts & Coffee, Tempura Snack Bar, Nanyang Kopitiam, Shihlin Taiwan Street Snacks and many more.

Just next to 1Segamat Mall, the Group is developing seven units of commercial shops for sale. The three and four storey shops have built-up areas ranging from 4,666 to 20,165 square feet, whereby a corner and two adjoining lots have been built specifically to cater for an 81-room budget hotel.

...within half a year since its soft launch reached an occupancy rate of 95% with anchor tenants UO Superstore occupying 70,000 square feet and Lotus Five Star Cinema occupying 30,000 square feet comprising an 8-hall Cineplex.

Newly opened 1Segamat Mall – the first and only retail mall in Segamat, Johor.

The Scope@SCP



With the entire project in Segamat targeted to be completed by end 2012, the Group believes that it will bring greater vibrancy to the town and enhance its real estate value. It will also definitely be a push factor in the economic activity in the area.

In the Ipoh, Perak region, the Group’s development project known as Taipan@Ipoh Cybercentre saw the completion of the first phase which comprised 102 units of 3-storey shop-offices which was fully sold. We are proud to report that the project was completed ahead of the scheduled delivery date. The second phase of the project consisting of 147 units of shop-offices is on-going and will continue to contribute positively to the financial performance of the Group in the coming financial year.

With the softening of global iron ore prices and the introduction of export taxes by the Indonesian authorities, the Group expects a challenging year ahead for the iron ore mining business and on a prudent basis has made a fifty percent provision for its mining investment cost.

With regards to the Network Marketing and the Agro-Biotechnology Divisions, the Group has made the decision to exit from these businesses due to its non-core and non-significant business impact to the Group.

Industry Overview And Prospects

The stable growth in the Malaysian economy in the first half of 2012 was largely supported by firm domestic demand and sustained fixed investment which compensated for slower export growth as a result of weaker demand from the Eurozone and the US economies. For the remaining part of 2012, major domestic economic sectors are projected to register growth, albeit at a slower pace.

Regulatory reforms in the financial sector have also helped attract investors to the country. Numbers in the investment activities show improvement, particularly in the private sector and projects that were initiated by the government.

Overall, domestic demand during the next year is expected to remain resilient on the back of supportive policy measures, and hence the Group expects to maintain its performance level which is largely domestic driven.

Corporate And Social Responsibilities

Mindful of our corporate social responsibilities (“CSR”), the Group integrates socially responsible initiatives into its everyday business activities.

Over the year, the Group utilized its network and hosted at South City Plaza and 1Segamat Mall several activities which included, amongst others, “No

...the Group’s development project known as Taipan@Ipoh Cybercentre saw the completion of the first phase which comprised 102 units of 3-storey shop-offices which was fully sold. We are proud to report that the project was completed ahead of the scheduled delivery date.

Completed 3-storey shop-offices under the first phase of Taipan@Ipoh Cybercentre development in Jelapang, Perak.



More Hunger” 30 Hour Famine jointly organized with World Vision, several blood donation campaigns hosted together with the Lions Club, Persatuan E-Kuan Tao and Pusat Bimbingan Ajaran Confucius and festivity celebrations including singing competition for underprivileged children and orphans. The Group also co-organized health screening programmes with National Kidney Foundation of Malaysia, health talks and charity drive by a medical centre and the State Welfare Department as well as a cancer awareness campaign with MAKNA.

As part of our wider commitment to the society, we also provided venue sponsorship for activities such as fund raising for children’s society, donation drives, community singing contest and pet shows.

Human capital is always a significant factor to the success of an organization. As such,

we will continue to focus on providing our personnel with training and development opportunities, enhancing staff welfare in terms of health and security matters and providing a conducive working environment.

Acknowledgement

On behalf of the Board of Directors, I wish to express my appreciation to the management team and all employees of the Group for their perseverance and dedication over the past year. We seek this continued commitment to work together to achieve our mission of growth and excellence.

My appreciation also goes to our valued shareholders, clients, bankers and business associates for their continued support and assistance to create better value for all concerned.

Last but not least, I wish to extend my sincere thanks to my fellow Board members for their invaluable counsel and contribution towards the betterment of the Group.

Dato’ Syed Ariff Fadzillah Bin Syed AwalluddinChairman

CSR activities held at South City Plaza and 1Segamat Mall.

teaMworkTogether As One


Board of directorS

7 Dato’ Boey Chin Gan

(IndependentNon-Executive Director)

Malaysian

3 Dato’ Tiong Kwing Hee

(GroupChiefExecutiveOfficer/ExecutiveDirector)

Malaysian

2 Dato’ (Dr.) Teoh Seng Foo

(President/Non-IndependentExecutiveDirector)

Malaysian

1 Dato’ Syed Ariff Fadzillah bin Syed Awalluddin

(Chairman/IndependentNon-ExecutiveDirector)

Malaysian

6 Mr. Lim Een Hong

(IndependentNon-Executive Director)

Malaysian

7

6 54

3

2 1

4 Mr. Amos Siew Boon Yeong

(IndependentNon-ExecutiveDirector)

Malaysian

5 Mr. Teoh Seng Kian

(Alternate Director to Dato’ (Dr.) Teoh Seng Foo) Malaysian


Dato’ Syed Ariff Fadzillah bin Syed Awalluddin, aged 69, was appointed to the Board on 27 January 2006. He was re-designated to Chairman/Independent Non-Executive Director on 1 December 2009. He is also the Chairman of the Nomination Committee 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 a Master of Arts in International Relations.

He started his career as an Assistant District Officer in Kulim, Kedah in 1967. He was an Assistant Secretary in the Public Service Commission, Kuala Lumpur between 1970 and 1972 before being transferred to the Ministry of Foreign Affairs. Prior to retiring in November 2001, he served as the Ambassador of Malaysia to the Kingdom of Thailand from 1996 to 2001, Ambassador to the Republic of Korea with joint accreditation to Mongolia (1992 to 1995) and Ambassador of Malaysia to Fiji with concurrent accreditations to Tuvalu, Tonga, Western Samoa, Kiribati and Nauru (1998 and 1991). His other foreign assignments include postings to Indonesia, Libya and Canada. He was also the Deputy Permanent Representative of the Permanent Mission of Malaysia to the United Nations between 1982 and 1986. From 1991 to 1992, he served as the Undersecretary at the Ministry of Foreign Affairs in charge of Southeast Asia and South 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 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 all five (5) Board meetings held during the financial year ended 31 May 2012.

Dato’ Syed Ariff Fadzillah bin Syed Awalluddin(Chairman/IndependentNon-ExecutiveDirector)Malaysian

directorS’ProfiLe


Dato’ (Dr.) Teoh Seng Foo, aged 56 was appointed to the Board on 5 May 1997. He was re-designated from the position of an Executive Deputy Chairman to President/Non-Independent Executive Director on 1 December 2009. He is also the Chairman of the Executive and Remuneration Committees.

An accountant by profession, Dato’ Teoh is a Chartered Accountant of the Malaysian Institute of Accountants, a Chartered Management Accountant and Fellow Member of the Chartered Institute of Management Accountants, United Kingdom.

Dato’ Teoh has wide corporate experience, having held senior management positions in multi-nationals such as Intel Technology, Woodward & Dickerson Inc., Coopers & Lybrand and Esquel Group.

Dato’ Teoh was conferred the Honorary Doctorate in Business Administration by University of Abertay Dundee, United Kingdom. He is also a Patron of the University of Abertay Foundation based in United Kingdom.

Dato’ Teoh currently holds board position as the President of Meda Inc. Berhad.

He is a brother to Teoh Seng Aun and Teoh Seng Kian (who is also his alternate director), who are major 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.

He has attended all the five (5) Board meetings held during the financial year ended 31 May 2012.

Dato’ (Dr.) Teoh Seng Foo(President/Non-IndependentExecutiveDirector)Malaysian

DIRECTORS’PROFILE


DIRECTORS’PROFILE

Dato’ Tiong Kwing Hee, aged 54, first joined the Board as an Alternate Director on 18 September 2008 and subsequently appointed as Executive Director/Chief Executive Officer on 2 January 2009. He is currently the Group Chief Executive Officer of the Company. He is also a member of the Executive Committee.

He obtained a Bachelor of Arts (Hons) majoring in Business Administration from Hanover College, United States of America in 1982 and a Master Degree in Business Economics from Miami University, United States of America in 1983.

He started his career with Sim Lim Holdings Berhad in 1983 as Executive Officer in charge of corporate finance and was promoted to Manager in 1984 and General Manager in 1985. He left Sim Lim Holdings Berhad in 1987 following his venture into the timber industry and became a shareholder cum director of marketing in Wansuria Sdn Bhd. He was a substantial shareholder in London Pacific Ltd, a company listed on the New Zealand Stock Exchange between 1988 and 1994. In 1994, he left the timber industry when he sold off his stake in Wansuria Sdn Bhd. In 1995, he joined D-Systems Pte Ltd, a Singapore based company with exclusive distribution rights of drywall system from United States of America for Asia Pacific region, as the Chief Executive Officer. In 1997, he was head hunted on a two (2) years contract as an Executive Director of a listed company to prepare that company for a corporate restructuring.

During the course of his career, he has been directly involved in various industrial sectors including corporate finance, financial services, manufacturing, plantations, property, construction, education, leisure, entertainment and mineral resources. He has extensive hands-on experience, knowledge and exposure in international business, corporate planning, restructuring and corporate turnaround.

Dato’ Tiong is also currently the Executive Director of Mercury Industries Berhad.

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, 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.


Dato’ Tiong Kwing Hee(GroupChiefExecutiveOfficer/ExecutiveDirector)Malaysian


DIRECTORS’PROFILE

Mr. Amos Siew Boon Yeong, aged 54, was appointed to the Board on 27 October 2005. He is also the Chairman of the Audit Committee and a member of the Remuneration Committee.

He qualified as a Certified Public Accountant in 1984 and is currently a member of the Malaysian Institute of Certified Public Accountants, a Chartered Accountant with the Malaysian Institute of Accountants and an associate member of the Chartered Tax Institute of Malaysia. He is also a Certified Financial Planner and is a member of the Financial Planning Association of Malaysia.

He started his auditing career and professional training with the accounting firm, Coopers & Lybrand in 1978 before establishing his own practice in 1988. He is currently the sole practitioner of the public accounting firm, Messrs. Siew Boon Yeong & Associates. He has vast experience in auditing, tax planning, corporate finance and financial planning and has been involved in numerous assignments on merger and acquisitions, debt restructuring and liquidation.

He is also a Director of SEG International Bhd.



Mr. Amos Siew Boon Yeong(IndependentNon-ExecutiveDirector)Malaysian


DIRECTORS’PROFILE

Dato’ Boey Chin Gan, aged 47, was appointed to the Board on 1 April 2009. He is also a member of the Audit and Nomination Committees.

He obtained the Bachelor of Arts (Honours) from University Kebangsaan Malaysia (UKM).

Dato’ Boey is very active in the social economic development of the country. He has served as the Press Secretary to the Minister of Housing and Local Government of Malaysia for 11 years from 1993 to 2004. In 2004, Dato’ Boey was the Kedah State Assemblyman. Dato’ Boey has vast experiences and extensive knowledge in administrative and strategic planning by virtue of his long service in government sectors.



Dato’ Boey Chin Gan(IndependentNon-ExecutiveDirector)Malaysian


Mr Lim Een Hong, aged 45, was appointed to the Board on 29 March 2010. He is also a member of the Audit and Nomination Committees.

He was 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.

He started his career as a litigation lawyer handling banking and civil litigation cases from 1992 to 1996. He was 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 stopped his legal practice and joined Eduspec Holdings Berhad in year 2010 as the Chief Executive Officer and Director.


He has attended four (4) out of five (5) Board meetings held during the financial year ended 31 May 2012.

Mr. Lim Een Hong(IndependentNon-ExecutiveDirector)Malaysian

DIRECTORS’PROFILE


DIRECTORS’PROFILE

Mr. Teoh Seng Kian, aged 52, was appointed as Alternate 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 Executive Director of Meda Inc. Berhad.

He is a major 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, the President of the Company and Teoh Seng Aun, who is a major shareholder 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.

Mr. Teoh Seng Kian(Alternate Director to Dato’ (Dr.) Teoh Seng Foo)Malaysian


fiVe-Year grouP StatiSticS

* 10 months period from 1.8.2007 to 31.5.2008 due to change in financial year end from 31 Jul to 31 May.

Period ended Year ended 31 May 31 May

2012 2011 2010 2009 2008*

Revenue (RM Million) 160.5 25.0 21.1 44.0 30.5

Profit / (Loss) Before Taxation and

Minority Interests (RM Million) 15.4 9.5 (41.4) (90.3) (22.2)

Profit / (Loss) Attributable to Shareholders (RM Million) 10.9 8.8 (41.4) (90.6) (33.4)

Shareholders’ Funds (RM Million) 130.0 118.6 105.2 145.3 232.0

Total Assets Employed (RM Million) 440.2 414.4 358.7 433.6 515.2

Earnings / (Loss) Per 50 Sen Share (Sen) 1.7 1.4 (6.4) (13.9) (5.1)

Net Assets Per 50 Sen Share (RM) 0.18 0.18 0.16 0.22 0.36

Weighted Average Number of Shares

(50 Sen Per Share) in Issue During the Year (‘000) 650,148 650,148 650,148 650,148 650,148

(RM’000)Revenue

(RM’000)Profit / (Loss) Before Taxation and Minority

Interests

(RM’000)Shareholders’ Fund

20,000-100,000

40,00050,000-90,000

60,000

-80,000

80,000

100,000-70,000

100,000

-60,000

120,000

150,000

-50,000

140,000

-40,000

160,000

200,000

-30,000

180,000

-20,000

200,000 300,000

250,000

-10,000

0

10,000

20,000

30,000

2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012


corPorate goVernance StateMent

INTRODUCTION

The Board of Directors (“Board”) of EcoFirst Consolidated Bhd (“ECB”) takes cognizance of the Malaysian Code of Corporate Governance 2012 (“MCCG 2012”) issued by the Securities Commission Malaysia (SC) in which the Company will be required to report its extent of compliance with the MCCG 2012 in the annual report to be published in 2013. The MCCG 2012 will supersede the Malaysian Code on Corporate Governance [Revised 2007] (“the Code”).

Prior to transiting to the principles and recommendations of MCCG 2012 (where appropriate), the Board of ECB subscribes to the fundamental principles of good corporate governance 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 to enhance 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 appointed Alternate 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 to effectively discharge its stewardship responsibilities in spearheading the Group’s growth and future direction. There is a clear segregation of responsibilities between the Directors to ensure a balance of power and authority. Generally, the Executive Directors are responsible for making and implementing operational and corporate decisions. Non-Executive Directors play a pivotal role in corporate accountability by providing unbiased and independent views in the sharing of knowledge and experience, towards the formulation of policies and in the decision-making process. Where a potential conflict of interest may arise, it is mandatory practice for the Director concerned to declare his 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 of power and authority. The Chairman is responsible for ensuring Board effectiveness whilst the Group Chief Executive Officer has overall responsibility for the operating units, organizational effectiveness and implementation of Board policies and decisions. Although all the Directors have an equal responsibility for the Group’s operations, the role of these Independent Non-Executive Directors is important as they 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 studied and 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 operational performance. Additional meetings are convened as and when necessary. During the financial year ended 31 May 2012, five (5) Board meetings were held and the summary of attendance by the Directors is as follows:


Name of Directors Total Attendance % of Attendance

Dato’ (Dr.) Teoh Seng Foo 5/5 100(AlternateDirector:TeohSengKian)

Dato’ Tiong Kwing Hee 5/5 100

Dato’ Syed Ariff Fadzillah bin Syed Awalluddin 5/5 100

Amos Siew Boon Yeong 5/5 100

Dato’ Boey Chin Gan 5/5 100

Lim Een Hong 4/5 80

The Company Secretary also attended all the Board meetings held during the financial year under review.

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 to discharge their duties and responsibilities effectively. Board papers, which provide updates on operational, financial and corporate developments, 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 independent professional 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 three (3) committees, which operate within approved terms of reference, to assist in the effective discharge of its principal responsibilities. Notwithstanding the above, the ultimate responsibility for the final decision lies with the full Board. These committees are:

a) Nomination Committee

The Nomination Committee, which comprises wholly of Non-Executive Directors, recommends candidates with an optimal mix of qualifications, skills and experience to the Board. The Nomination Committee also carries out annual evaluation on the effectiveness of 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 Director Dato’ Boey Chin Gan - Member/Independent Non-Executive Director Lim 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 and to make recommendations to the Board on the remuneration packages of the Executive Directors. The Executive Directors do not participate in decisions relating to their remuneration packages. The Board as a whole determines the remuneration of Non-Executive Directors with the Director concerned abstaining from participating in decisions in respect of his individual remuneration.

CORPORATE GOVERNANCESTATEMENT



The Remuneration Committee comprises of the following members:

Dato’ (Dr.) Teoh Seng Foo - Chairman/President/Executive Director Amos Siew Boon Yeong - Member/Independent Non-Executive Director Dato’ 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 this Annual Report.

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 accordance with 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”). The Board acknowledges the importance of continuous training and they have attended various training programmes and seminars to keep abreast with developments in the business environment as well as with the new relevant regulatory and statutory requirements, to further enhance their skills and knowledge.

During the financial year ended 31 May 2012, the Directors have attended the following training programmes:-

No. Directors Title of Training Programmes Date

1. Dato’ Syed Ariff Fadzillah Bin Syed • Financial Institutions Directors 05/07/2011 to 08/07/2011 Awalluddin Education (FIDE) Programme • Actuarial Valuation of Family & General 31/07/2011 Insurance / Takaful Business and Performance Management • BNM’s Guidelines on Shariah 26/04/2012 Governance Framework and Takaful Operators’ Framework

2. Dato’ (Dr.) Teoh Seng Foo • Practical Guide to Establishing a Risk 24/04/2012 Management Handbook

3. Dato’ Tiong Kwing Hee • Practical Guide to Establishing a Risk 24/04/2012 Management Handbook

4. Amos Siew Boon Yeong • National Tax Conference 2011 19/07/2011 to 20/07/2011 • Seminar Percukaian Kebangsaan 2011 12/10/2011 • 7th Tricor Tax & Corporate Seminar 19/10/2011

5. Dato’ Boey Chin Gan • Practical Guide to Establishing a Risk 24/04/2012 Management Handbook

6. Lim Een Hong • Practical Guide to Establishing a Risk 24/04/2012 Management Handbook

7. Teoh Seng Kian (Alternate Director • Practical Guide to Establishing a Risk 24/04/2012 to Dato’ (Dr.) Teoh Seng Foo) Management Handbook


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 - 901,780 901,780

Non-Executive Directors 145,200 - 145,200

2. The number of Directors whose total remuneration fall within the following bands:

Range of Remuneration

Number of Directors

Executive Non-Executive

Nil 1* -

Below RM50,000 - 4

RM400,001 to RM450,000 1 -

RM450,001 to RM500,000 1 -

*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.



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 31 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’.

The Board is committed and will continue to enhance compliance with the MCCG 2012 within the Company and the Group.

This statement was approved by the Board of Directors on 24 September 2012.

**************************************************************************************************

StateMent of directorS’ reSPonSiBiLitY in PreParing the annuaL financiaL StateMentSThe 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 2012, 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.



Material Contracts

Except as disclosed in Note 27 (a) of the Financial Statements, 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.

Non-Audit Fee

No non-audit fee was paid to external auditors during the financial year.

Share Buy-backs

The Company did not implement any share buy-back scheme during the financial year.

Depository Receipt Programme

The Company did not sponsor any depository receipt programme during the financial year.

Sanctions and/or Penalties

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies.

Variation in Results

There was no material variation between the audited results and the unaudited results previously released for the financial year ended 31 May 2012.

Profit Guarantee

The Company did not make any arrangement during the financial year which requires profit guarantee.

Options, Warrants or Convertible Securities

There were no options or convertible securities issued or exercised during the financial year.

Utilisation of Proceeds Raised from Corporate Proposal

There 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 Nature

There was no recurrent related party transaction of a revenue nature, which requires shareholders’ mandate during the financial year.

other inforMation


audit coMMitteerePort

MEMBERSHIP

The Audit Committee (“the Committee”) comprises wholly of Independent Non-Executive Directors as follows:-

Amos Siew Boon Yeong - Chairman/Independent Non-Executive DirectorDato’ Boey Chin Gan - Member/Independent Non-Executive DirectorLim Een Hong - Member/Independent Non-Executive Director

Meetings & Attendances

A total of five (5) meetings of the Audit Committee were held during the financial year ended 31 May 2012. 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 4/5 80

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. 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;

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.

AUDIT COMMITTEEREPORT



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 over-seas 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 internal audit programme and reports, which highlighted the audit issues, recommendations and management’s re-sponse. The members of the Audit Committee were briefed on pertinent audit issues findings and observations by the Internal Auditors at the meetings of the Audit Committee. 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 systems and procedures.

• Reviewed the quarterly unaudited financial results for announcements purposes 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.

• Reviewed related party transactions entered into by the Group.

• Reviewed the Audit Committee Report and the Statement on Internal Control for insertion into the Company’s Annual Report.

• Met with the External Auditors, in the absence of management, to discuss problems and reservations (if any) arising from their audits.

• Reviewed the applicability of certain new accounting standards on the financials of the Group.


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 internal audit function is outsourced to an independent professional consultancy firm entrusted with the role of providing independent and systematic reviews on the systems of internal control of the Group. The Internal Audit function provides an independent and objective feedback to the Audit Committee and the Board on the adequacy, effectiveness and efficiency of the internal control system within the Group.

Throughout the financial year under review, the Internal Auditors had carried out the internal audit works on the main business operations of the Group i.e. property investment, property management and property development, assignments which were in accordance with the annual internal audit plan approved by the Audit Committee. The Internal Auditors also carried out ad-hoc assignments as and when requested by the Audit Committee.

Upon completion of each audit cycle, the Internal Auditors would report to the Audit Committee on their audit findings, their recommendations of corrective actions to be taken by the management together with the management’s responses in relation thereto. The Internal Auditors would also conduct follow-up reviews on previously reported issues during the audit cycles and the results of their observations would be reported to the Audit Committee accordingly. At the request of the Audit Committee, the Internal Auditors may re-visit previously audited business operations to further assess the system of internal controls and the procedures implemented.

There was no material internal control failure that was reported in respect of internal audit works carried out during the financial year under review that would have resulted in any significant loss to the Group.



StateMent oninternaL controL

In compliance with Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board is committed to maintain a sound system of internal control in the Group and is pleased to provide the following statement, which outlines the state, nature and scope of internal control of the Group during the financial year ended 31 May 2012.

Board Responsibilities

The Board maintains a system of internal control to safeguard shareholders’ investment and the Group’s assets. The Board is committed to establish an appropriate control environment and also to review the adequacy and integrity of the system of internal control. Due to the limitations inherent in any system of internal control, these systems, though implemented, are designed to manage, rather than to eliminate the risk of failure to achieve corporate objectives. Accordingly, the system can only provide reasonable but not absolute assurance 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 its significant risks. The Board further confirmed that these processes are being regularly reviewed and accords with the Statement of Internal Control: Guidance for Directors of Public Listed Companies.

Enterprise Risk Management Framework

Risk management is an integral part of the Group’s business operations. The Board confirms that there is an on-going process of identifying, evaluating, monitoring and managing significant risks which is embedded in various operational processes and procedures of the respective operational functions and management team. The process was regularly reviewed and discussed at management meetings, quarterly Audit Committee and Board of Directors meetings.

Internal Audit Function

The internal audit function which is outsourced to an independent professional firm reports directly to the Audit Committee to provide feedback regarding the adequacy and integrity of the Group’s system of internal control. The internal audit function reviews the key activities of the Group based on the annual audit plan approved by the Audit Committee.

The Audit Committee reviews the audit plan, together with internal audit reports to obtain the necessary level of assurance with respect to the adequacy of the internal controls as required by the Board. The Audit Committee presents its findings to the Board on a quarterly basis or as appropriate.

During the financial year, the internal auditor reviewed critical business processes, identified risks and internal control gaps, assessed the effectiveness and adequacy of the existing state of internal control of the major subsidiaries and recommended possible improvements to the internal control process. This is to provide reasonable assurance that such system continue to operate satisfactorily and effectively within the Group.

During the financial year, the cost incurred for the internal audit function amounted to approximately RM 33,150.00.


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 defined lines of responsibility and delegation of authority, allowing internal checks and balances. This includes a Procurement & Quality Assurance standard operational procurement manual. These procedures are relevant to the Group and provide continuous assurance to top management 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 the performance of the Group. Management meetings, which involve Executive Directors and selected executive personnel, are regularly held in order to identify and address any problems encountered by the Group, so that appropriate actions could be taken to address the issues.

Review of Statement by External Auditors

The External Auditors have reviewed this statement for inclusion in the Annual Report 2012 and reported to the Board that nothing has come to their attention that causes them to believe that this statement is inconsistent with their understanding of the process adopted by 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 24 September 2012.

STATEMENT ONINTERNAL CONTROL

Financialstatementscontents

Directors’ Report

Statement by Directors

Statutory Declaration

Report of the Independent Auditors

Statements of Comprehensive Income

Statements of Financial Position

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

38

42

46

38

41

44

34

39

43

34 ECOFIRST CONSOLIDATED BHD (15379-V) • Annual Report 2012

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 2012.

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 profit/(loss) for the year 10,207 (5,374)

Attributable to: Owners of the Company 10,920 (5,374)Non-controlling interests (713) -

10,207 (5,374)

In the opinion of the directors, 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.

share oPtions

No options have been granted by the Company to any parties 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’ rePort

Directors

The directors of the Company in office since the date of the last report are:

Dato’ Syed Ariff Fadzillah Bin Syed AwalluddinDato’ (Dr.) Teoh Seng FooTeoh Seng Kian (Alternate to Dato’ (Dr.) Teoh Seng Foo) Dato’ Tiong Kwing HeeAmos Siew Boon Yeong Dato’ Boey Chin GanLim Een Hong

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 1.6.2011 bought sold 31.5.2012

Direct interestDato’ (Dr.) Teoh Seng Foo 20,290,500 - 9,100,000 11,190,500Teoh Seng Kian (Alternate to Dato’ (Dr.) Teoh Seng Foo) 79,602,632 1,900,000 - 81,502,632Dato’ Tiong Kwing Hee 14,554,600 2,986,800 - 17,541,400

other shareholdings in which directors are deemed to have interests #Dato’ (Dr.) Teoh Seng Foo - 3,000,000 - 3,000,000Teoh Seng Kian (Alternate to Dato’ (Dr.) Teoh Seng Foo) 2,495,300 - - 2,495,300

# Disclosure of interest pursuant to Section 134(12) of the Companies Act, 1965.

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.

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 27 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 allowance for doubtful debts and had satisfied themselves that all known bad debts had been written off and that adequate allowance 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 allowance 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


auDitors

The auditors, Messrs Russell Bedford LC & Company, have indicated their willingness to continue in office.

Signed on behalf of the Boardin accordance with a resolution of the directors,

Dato’ (Dr.) teoh senG Foo

Dato’ tionG KWinG hee

Seri Kembangan, Selangor Darul Ehsan

Dated: 24 September 2012

Directors’ rePort


statementBY DiRectoRs

statutoRYDeclaRation

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 2012, and of their financial performance and their cash flows for the year ended on that date.

The supplementary information set out in Note 34, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No.1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed on behalf of the Boardin accordance with a resolution of the directors,

Dato’ (Dr.) teoh senG Foo

Dato’ tionG KWinG hee

Seri Kembangan, Selangor Darul Ehsan


I, DATO’ 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 DATO’ TIONG KWING HEE at Kuala Lumpur in Wilayah Persekutuan on 24 September 2012. Dato’ tionG KWinG hee Before me, Mohan a.s. ManiaM No. W521 COMMISSIONER FOR OATHS

Kuala Lumpur, Wilayah Persekutuan


RePoRt oF tHeinDePenDent auDitoRs

to the MeMbers oF ecoFirst consoliDateD bhD (Incorporated in Malaysia)

1. Reportonthefinancialstatements

We have audited the accompanying financial statements which comprise the statements of financial position of the Group and of the Company as at 31 May 2012, and the related statements of comprehensive 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’responsibilityforthefinancialstatements

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, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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 2012, and of their financial performance and their cash flows for the year ended on that date.

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 have been properly kept in accordance with the provisions of the Act.

(b) 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.

(c) 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 reporting responsibilities

The supplementary information set out in Note 34 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

4. 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 teoh Wuey sZeAF 1237 2831/01/14 (J)CHARTERED ACCOUNTANTS PARTNER

Kuala Lumpur


rePort oF the inDePenDent auDitorsto the MeMbers oF ecoFirst consoliDateD bhD (Incorporated in Malaysia)


statements oF comPReHensiVe income

For the year enDeD 31 May 2012

Group company 2012 2011 2012 2011 note rM’000 rM’000 rM’000 rM’000

Revenue 4 160,483 24,976 633 2,520Cost of sales 5 (125,362) (19,387) - -

Gross profit 35,121 5,589 633 2,520Other operating income 27,993 50,527 3,779 1,396Distribution costs (7,803) (499) - -Administration expenses (19,373) (9,864) (2,576) (3,221)Other operating expenses (14,003) (28,058) (5,352) (4,378)

Profit/(Loss)fromoperations 21,935 17,695 (3,516) (3,683)Finance costs 6 (6,525) (8,243) (1,858) (2,957)

Profit/(Loss)beforetax 7 15,410 9,452 (5,374) (6,640)Income tax expense 8 (5,203) (959) - -

Netprofit/(loss)fortheyear 10,207 8,493 (5,374) (6,640)

other comprehensive income:

Available-for-sale financial assets: - Gain on fair values changes 3,669 3,420 3,349 3,200- Reclassification adjustments relating of derecognition (3,239) - (3,239) -Exchange differences on translation of financial statements of foreign subsidiaries (4) 5 - -

Othercomprehensiveincomefortheyear,netoftax 426 3,425 110 3,200

Totalcomprehensiveincome/(loss)fortheyear 10,633 11,918 (5,264) (3,440)

Netprofit/(loss)attributableto: Owners of the Company 10,920 8,760 (5,374) (6,640)Non-controlling interests (713) (267) - -

10,207 8,493 (5,374) (6,640)

Totalcomprehensiveincome/(loss)attributableto: Owners of the Company 11,346 12,185 (5,264) (3,440)Non-controlling interests (713) (267) - -

10,633 11,918 (5,264) (3,440)

Basic earnings per share (sen) 9 1.68 1.35

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


Group company 2012 2011 2012 2011 note rM’000 rM’000 rM’000 rM’000

non current assets

Plant and equipment 10 2,732 1,660 449 658Investment properties 11 356,192 318,265 - -Investment in subsidiaries 12 - - 43,338 43,338Other financial assets 13 7,820 7,781 6,984 7,318Deferred tax assets 14 - 226 - -Intangible asset 15 - - - -Trade receivables 18 - 2,087 - -

366,744 330,019 50,771 51,314current assets

Inventories 16 44 329 - -Property development costs 17 17,866 56,830 - -Trade receivables 18 43,039 7,484 - -Amount due from subsidiaries 19 - - 302,677 278,258Other receivables, deposits and prepayments 20 10,109 16,029 1,125 130Tax recoverable 515 214 262 486Cash and bank balances 1,845 3,451 457 434

73,418 84,337 304,521 279,308

total assets 440,162 414,356 355,292 330,622

Share capital 21 325,074 325,074 325,074 325,074Reserves 22 (195,106) (206,452) (208,265) (203,001)

equity attributable to owners of the company 129,968 118,622 116,809 122,073

Non-controlling interests 14,038 14,751 - -

total equity 144,006 133,373 116,809 122,073

non current liabilities

Hire purchase liabilities 23 139 277 136 246Borrowings 24 96,458 104,644 40,583 17,957Trade payables 25 3,715 1,653 - -Other payables 26 6,100 - 377 471Tax payable 7,040 - - -

113,452 106,574 41,096 18,674current liabilities

Trade payables 25 30,529 23,302 - -Amount due to subsidiaries 19 - - 175,455 170,306Other payables and accruals 26 96,202 88,189 19,616 19,423Hire purchase liabilities 23 137 190 109 146Borrowings 24 23,514 28,370 2,207 -Tax payable 32,322 34,358 - -

182,704 174,409 197,387 189,875

total liabilities 296,156 280,983 238,483 208,549

total equity and liabilities 440,162 414,356 355,292 330,622


statements oF Financial Positionas at 31 May 2012


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statements oF casH FloWsFor the year enDeD 31 May 2012

Group company 2012 2011 2012 2011 rM’000 rM’000 rM’000 rM’000

Cashflowsfrom/(usedin)operatingactivities

Profit/(Loss) before taxation 15,410 9,452 (5,374) (6,640)Adjustments for: Accretion of implicit interest in retention sums receivable (87) (62) - -Adjustments on financial liabilities carried at amortised cost - (2,689) - -Amortisation of financial guarantee liabilities - - (106) (123)Amortisation of financial liabilities carried at amortised cost 2,328 131 - -Bad debts written off 9 - - -Depreciation 595 655 219 290Fair value adjustments on: - investment properties (22,793) (3,542) - - - quoted instrument designated as financial assets at fair value through profit or loss (28) - (27) -Gain from bonus issued by quoted investment in Malaysia (485) - (434) -Gross dividend income (58) (33) (58) (1,633)Impairment losses on - plant and equipment 270 1,230 - - - investment in subsidiaries - - - 1,577Interest expense 4,197 8,112 1,858 2,957Interest income (8) (339) (8) (339)Inventories written off 161 56 - -Loss on revocation of retail units sold 777 23,713 - -Plant and equipment written off 215 292 - 201Allowance for doubtful debts of - subsidiaries - - 5,352 1,350 - others 3,408 3,958 - 1,250Allowance for doubtful debts no longer required (766) (38,451) - (933)Provision for liquidated ascertained damages - 817 - -Provision for litigation damages 3,689 - - -Provision for liquidated ascertained damages no longer required - (2,054) - -Loss/(Gain) on disposal of - plant and equipment - 53 - - - other financial assets (3,000) - (3,000) -Waiver of term loan liabilities - (1,328) - -

Operatingprofit/(loss)beforeworkingcapitalchanges 3,834 (29) (1,578) (2,043)

Decrease in inventories 124 44 - -(Increase)/Decrease in trade and other receivables (29,566) (6,923) (431) 1,081Increase/(Decrease) in trade and other payables 19,375 5,172 205 (937)Decrease/(Increase) in development costs 38,964 (14,134) - -

Cashgeneratedfrom/(usedin)operations 32,731 (15,870) (1,804) (1,899)

Income tax (paid)/refunded – net (274) (12) 224 -

Netcashfrom/(usedin)operatingactivities 32,457 (15,882) (1,580) (1,899)




Cashflowsfrom/(usedin)investingactivities

Acquisition of a subsidiary (Note 12) - (3,641) - (4,500)Acquisition of quoted investment (21) (25) (20) (24)Net dividends received 12 32 12 32Increase in investment properties (15,911) - - -Interest received 8 279 8 279Proceeds from disposal of - other financial assets 3,971 - 3,971 - - plant and equipment 21 16 - -Payments for - additional shares in an existing subsidiary - - - (2,000) - plant and equipment (2,173) (501) (10) (324)

Netcash(usedin)/frominvestingactivities (14,093) (3,840) 3,961 (6,537) Cashflowsfrom/(usedin)financingactivities

Interest paid (4,197) (69) (1,858) (24)Repayments of revolving credits – net - (413) - -Repayments from/(Advances to) subsidiaries - - 378 (14,027)Repayments of hire purchase liabilities (191) (237) (147) (139)Repayments of term loans (15,582) (2,279) (731) -

Netcashusedinfinancingactivities (19,970) (2,998) (2,358) (14,190)

Net(decrease)/increaseincashandcashequivalents (1,606) (22,720) 23 (22,626)cash and cash equivalents at beginning of year 3,451 26,171 434 23,060

cash and cash equivalents at end of year 1,845 3,451 457 434

Cashandcashequivalentsarerepresentedbycashandbankbalances 1,845 3,451 457 434

stateMents oF cash FloWs For the year enDeD 31 May 2012



notes to tHeFinancial statements31 May 2012

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 24 September 2012.

2. Basisofpreparationofthefinancialstatements

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 (“MASB”).

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 judgments 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 judgment 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 reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year other than as follow:

(i) Property development

The Group recognises property development revenue and expenses in the profit or loss 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.

Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the property development costs. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists.

47

notes to the Financial stateMents 31 May 2012


2. Basisofpreparationofthefinancialstatements(continued)

(ii) Provision for litigation damages

A subsidiary of the Group, Pujian Development Sdn Bhd (“PDSB”) was served with a writ of summon by 24 purchasers seeking rescission of the Sale and Purchase Agreements entered into with PDSB in respect of the shop units in South City Plaza. The Court has awarded the plaintiff claims and have set 28 September 2012 as the case management date for assessment of damages. In determining the provision of damages to be paid to the purchasers, significant assumptions have been made in relation to the period covered and interest rate used to calculate the interest on the purchase consideration received for the shop units.

The carrying amount of the provision as at 31 May 2012 is RM3.69million as disclosed in Note 26 to the financial statements.

The Group and the Company had adopted the new and revised Financial Reporting Standards (“FRSs”) and IC Interpretations that become mandatory for the current financial year. The adoption of these new and revised FRSs and IC Interpretations does not result in significant changes in accounting policies of the Group and the Company other than as follow:

i. Revised FRS 3 Business Combinations and Revised FRS 127 Consolidated and Separate Financial Statements

The revised standards are effective for annual periods beginning on or after 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 revised FRS 127 requires 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 gain or loss. All earnings and losses of the subsidiary are attributed to the parent and the non controlling interest, even if the attribution of losses to the non-controlling interest results in a debit balance in the shareholders’ equity. Furthermore, the revised 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 revised FRS 127 will affect accounting treatment of future acquisitions or loss of control and transactions with non-controlling interests. The revised FRS 3 and revised FRS 127 have been applied prospectively in accordance with its transitional provisions.

ii. Amendments to FRS 7 Financial Instruments: Disclosures

Amendments to FRS 7 enhances the disclosure requirements on fair value measurement using three levels of fair value hierarchy and reinforces existing principles for disclosures about liquidity risk. It also requires qualitative disclosures to be made in the context of quantitative disclosures to enable users to link related disclosures and form an overall picture of the nature and extent of risks arising from financial instruments.

The Group has applied Amendments to FRS 7 in the current financial year. The new disclosures are included throughout the Group’s financial statements for the year ended 31 May 2012.

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 Company upon their initial application other than the following:

i. Malaysian Financial Reporting Standards (“MFRS”) Framework

MASB has issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards in conjunction with its plan to converge with the International Financial Reporting Standards (“IFRS”) in 2012. The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012 with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation 15 Agreements for Construction of Real Estate including its parent, significant investor and venturer (herein called “Transitioning Entities”).

48



2. Basisofpreparationofthefinancialstatements (continued)

i. Malaysian Financial Reporting Standards (“MFRS”) Framework (continued)

Transitioning Entities will be allowed to defer adoption of the new MFRS Framework for an additional two years. Consequently, adoption of the MFRS Framework by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2014. The Group falls within the scope definition of Transitioning Entities and accordingly will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31 May 2015.

In general, MFRS 1 requires comparative information to be restated as if the requirements of MFRSs under the new framework have always been applied, except when the standard prohibits retrospective application in some aspects or allows the first time adopter to use one or more of the exemptions or exceptions contained therein. The MFRS 1 requires an entity to provide extensive disclosures to explain how the transition from previous GAAP to MFRSs affected the reported financial position, financial performance and cash flows of the entity. In conjunction with the convergence, the financial statements will be having dual compliance framework. Entities would be required to make, in the notes, an explicit and unreserved statement of compliance with both MFRS and IFRS.

The Group is in the process of carrying out its assessment on the financial effects of the differences between FRSs and MFRS Framework. Accordingly, the financial statements for the year ended 31 May 2012 could be different if prepared under the MFRS Framework. The Group is expected to fully comply with the requirements of the MFRS Framework for the financial year ending 31 May 2015.

3. Significantaccountingpolicies

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 comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

49



3. Significantaccountingpolicies(continued)

basis of consolidation (continued)

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s net identifiable assets and liabilities is recorded as goodwill in the statement of financial position. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributable to owners of the parent.

revenue and income recognition

Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised in the profit or loss upon delivery of goods and when the risks and rewards of ownership have passed to the customers.

Revenue from management services rendered is recognised in the profit or loss 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 (using the effective interest rate method) unless collectability 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.

50




Foreign currencies (continued)

(ii) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for

the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income. Exchange differences arising from such non-monetary items are also recognised directly in other comprehensive income.

(iii) Foreign operations

The assets and liabilities of foreign operations are translated into Ringgit Malaysia at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

The principal exchange rates for every unit of foreign currency ruling at reporting date used are as follows:

2012 2011 rM rM

United States Dollar 3.18 3.01 Employeebenefits

(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 profit or loss as incurred.

51




Incometax

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 reporting date.

Deferred tax is provided for, using the ‘liability’ method, on temporary differences at the reporting 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 reporting date. Deferred tax is recognised in the profit or loss, except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised in equity or other comprehensive income.

Impairmentofnon-financialassets

The carrying amount of assets subject to accounting for impairment are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs exceeds its recoverable amount. Impairment losses are recognised in the profit or loss in the period in which it arises, unless, the asset is carried at a revalued amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does not exceed the amount held in asset revaluation reserve for the same asset.

The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. The reversal is recognised in the profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.

Plant and equipment and depreciation

Plant and equipment are stated at cost 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 profit or loss during the financial year in which they are incurred.

Gain or 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 profit or loss.

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Plant and equipment and depreciation (continued)

Depreciation on 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:

Machinery, equipment and vehicles 3 - 10 years Renovation and signage 5 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 plant and equipment.

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 profit or loss 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.

Any expected loss on a development project, including costs to be incurred over the defect 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 profit or loss over billings to purchasers is classified as accrued billings under trade receivables and the excess of billings to purchasers over revenue recognised in the profit or loss is classified as progress billings under trade payables.

53



3. Significantaccountingpolicies (continued)

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 profit or loss 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 classified 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.

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 reporting 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 comprise the cost of purchase plus the cost of bringing the inventories to their present location and condition.

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construction contracts

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 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 profit or loss 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.

All other leases which do not meet such criteria are classified as operating leases. Lease payments under operating leases are recognised as expense in the profit or loss on a straight line basis over the terms of the relevant lease.

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 profit or loss to give a constant periodic rate of interest on the remaining hire purchase liabilities.

Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that

an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

55




borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of the asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

segment information

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Financial instruments

Financial instruments are recognised in the statements of financial position when the Group and the Company have become a party to the contractual provisions of the instrument.

A financial instrument is recognised initially at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial 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 Company has legal enforceable right to offset and intends to settle either on a net basis or realise the asset and settle the liability simultaneously.

Financial assets are classified as either at fair value through profit or loss, loans and receivables, held to maturity investments, or available-for-sale as appropriate. Financial liabilities are classified as either at fair value through profit or loss (derivative financial liabilities) or at amortised cost (borrowings and trade and other payables), as appropriate.

(i) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

56




Financial instruments (continued)

(ii) Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

(iii) Available-for-sale financial assets

Available-for-sale are financial assets that are designated as available-for-sale or are not classified in any of the three preceding categories.

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The accumulated gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

Investment in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

(iv) Payables

Payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. Payables are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(v) Interest bearing borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

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Financial instruments (continued)

(vi) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

(vii) Equity instruments

Equity instruments issued by the Company are recorded at the fair value of the proceeds received net of direct issue costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are approved.

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

Impairmentoffinancialassets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(i) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increased in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exist, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

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3. Significantaccountingpolicies (continued)

Impairmentoffinancialassets (continued)

(i) Trade and other receivables and other financial assets carried at amortised cost (continued)

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade and other receivables, where the carrying amount is reduced through the use of an allowance account. When a receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii) Available-for-sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.

If available-for-sale financial assets are impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost (fair value cannot be reliably determined) has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income.

Statementsofcashflows

Statements of cash flows are 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.

4. revenue


Construction income - 9,274 - - Dividends 58 33 58 1,633 Property development/investment 158,023 13,358 - - Sale of goods 401 585 - - Services 2,001 1,726 575 887

160,483 24,976 633 2,520

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5. cost of sales

Group 2012 2011 rM’000 rM’000

Construction costs - 7,979 Property development/investment 124,095 9,582 Sale of goods 518 1,191 Services 749 635

125,362 19,387

6. Finance costs


Amortisation of financial liabilites carried at amortised cost 2,328 131 - - Interest expenses on: - hire purchase 20 31 17 24 - others - 39 - 39 - term loan 4,177 8,042 1,841 2,894

6,525 8,243 1,858 2,957

7. Profit/(Loss)beforetax


Profit/(Loss) before tax is arrived at after charging: Auditors’ remuneration - auditors of the Company - current year 164 150 45 40 - over provision in prior year - (4) - - Bad debts written off 9 - - - Depreciation 595 655 219 290 Directors’ estimated cash value of benefits in kind 54 54 54 54 Directors’ fees 145 138 145 138 Directors’ other emoluments 848 780 632 780 Impairment losses on - plant and equipment 270 1,230 - - - investment in subsidiaries - - - 1,577 Inventories written off 161 56 - - Loss on disposal of plant and equipment - 53 - - Loss on revocation of retail units sold 777 23,713 - - Plant and equipment written off 215 292 - 201 Allowance for doubtful debts - subsidiaries - - 5,352 1,350 - others 3,408 3,958 - 1,250 Provision for liquidated ascertained damages - 817 - - Provision for litigation damages 3,689 - - -

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7. Profit/(Loss)beforetax (continued)


Profit/(Loss) before tax is arrived at after charging: Rental of - premises 243 103 77 98 - equipment 87 116 17 26 Staff costs 3,193 3,422 820 1,112 Tax penalty interest 14,287 - - -

And crediting: Accretion of implicit interest in retention sums receivable 87 62 - - Adjustments on financial liabilities carried at amortised cost - 2,689 - - Amortisation of financial guarantee liabilities - - 106 123 Fair value adjustments on - investment properties 22,793 3,542 - - - quoted instrument designated as financial assets at fair value through profit or loss 28 - 27 - Gross dividend income from - Malaysia - unquoted investment in a subsidiary - - - 1,600 - other unquoted investments 12 9 12 9 - Foreign - other quoted investments 46 24 46 24 Gain from bonus issues of warrants by quoted investment in Malaysia 485 - 434 - Gain on disposal of other financial assets 3,000 - 3,000 - Interest income from - short term deposits 8 279 8 279 - sundry receivables - 60 - 60 Provision for liquidated ascertained damages no longer required - 2,054 - - Allowance for doubtful debts no longer required - subsidiaries - - - 208 - others 766 38,451 - 725 Waiver of term loan liabilities - 1,328 - -

Staff costs comprise: Group company 2012 2011 2012 2011 rM’000 rM’000 rM’000 rM’000

Defined contribution plan 310 299 82 92 Salaries, wages and allowances 2,646 2,750 710 782 Other employee related expenses 237 373 28 238

3,193 3,422 820 1,112

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7. Profit/(Loss)beforetax(continued) The number of directors of the Company where total remuneration during the financial year falls within the following bands is analysed

as follows:

2012 2011

Executive directors: Nil 1 1 RM350,001 to RM400,000 - 1 RM400,001 to RM500,000 2 1

Non executive directors: Below RM50,000 4 4

Loss on revocation of retail units sold:

During the current and previous financial year:

a) Pujian Development Sdn Bhd, a subsidiary of the Group has revoked the sale and purchase agreements of certain retail units entered into with a purchaser due to fundamental breach in the terms of the sale and purchase agreements; and

b) The directors have decided to retain all retail units under construction in Segamat, Johor for leasing purposes. As a result, Tashima

Development Sdn Bhd, a subsidiary of the Group, has obtained mutual agreement with certain purchasers to revoke the sale and purchase agreements entered into previously and has refunded the purchase consideration received in respect of the said retail units.

The loss arising from the various revocation of retail units sold are as follows:

Group 2012 2011 rM’000 rM’000

Revenue reversed (1,132) (40,533) Cost reversed 355 13,220 Deposit forfeited - 3,600

(777) (23,713)

8. Incometaxexpense


Estimated income tax payable Malaysia - current (5,501) (360) - - - over/(under) provision in prior years 524 (13) - - Deferred tax (Note 14) (226) (586) - -

(5,203) (959) - -

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8. Incometaxexpense (continued)

A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory income tax rate to income tax expense at the effective income tax rate is as follows:


Profit/(Loss) before tax 15,410 9,452 (5,374) (6,640)

Income tax using Malaysian tax rate of 25% (2011: 25%) (3,852) (2,363) 1,343 1,660 Expenses not deductible for tax purposes (8,406) (759) (1,925) (1,103) Income not subject to tax 6,786 11,590 908 488 Deferred tax assets not recognised (1,135) (9,414) (326) (1,045) Utilisation of previously unrecognised deferred tax assets 880 - - - Over/(Under) provision in prior years - income tax 524 (13) - -

Income tax expense for the year (5,203) (959) - -

9. basic earnings per share

basic

Basic earnings per ordinary share is calculated based on the net profit attributable to ordinary shareholders and weighted average number of ordinary shares in issue as follows:

Group 2012 2011 rM’000 rM’000

Net profit attributable to owners of the Company 10,920 8,760

’000 ’000

Weighted average number of ordinary shares in issue 650,148 650,148

Basic earnings per ordinary share (sen) 1.68 1.35

Diluted

Diluted earnings per share is not presented in the financial statements since there are no dilutive potential ordinary shares as at 31 May 2012 and 2011.

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10. Plant and equipment

Machinery, renovation equipment Group and and 2012 signage vehicles total rM’000 rM’000 rM’000

cost

At beginning of year 1,211 12,922 14,133 Additions 1,673 500 2,173 Disposals - (56) (56) Write offs (237) (44) (281)

At end of year 2,647 13,322 15,969

accumulated depreciation

At beginning of year 596 6,519 7,115 Charge for the year 199 396 595 Disposals - (35) (35) Write offs (46) (20) (66)

At end of year 749 6,860 7,609

accumulated impairment losses

At beginning of year - 5,358 5,358 Impairment during the year - 270 270

At end of year - 5,628 5,628

Netbookvalue at 31 May 2012 1,898 834 2,732

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10. Plant and equipment (continued)

Machinery, renovation equipment Group and and 2011 signage vehicles total rM’000 rM’000 rM’000

cost

At beginning of year 1,196 13,876 15,072 Additions 417 141 558 Acquisition of a subsidiary (Note12) - 52 52 Disposals - (181) (181) Write offs (402) (966) (1,368)

At end of year 1,211 12,922 14,133


At beginning of year 678 6,970 7,648 Charge for the year 133 522 655 Disposals - (112) (112) Write offs (215) (861) (1,076)

At end of year 596 6,519 7,115

accumulated impairment losses

At beginning of year - 4,128 4,128 Impairment during the year - 1,230 1,230

At end of year - 5,358 5,358

Netbookvalue at 31 May 2011 615 1,045 1,660

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company equipment 2012 renovation and vehicles total rM’000 rM’000 rM’000

cost

At beginning of year 292 2,649 2,941 Additions - 10 10 Write offs - (147) (147)

At end of year 292 2,512 2,804


At beginning of year 24 2,259 2,283 Charge for the year 29 190 219 Write offs - (147) (147)

At end of year 53 2,302 2,355

Netbookvalue at 31 May 2012 239 210 449

company equipment 2011 renovation and vehicles total rM’000 rM’000 rM’000

cost

At beginning of year 375 2,899 3,274 Additions 320 4 324 Write offs (403) (254) (657)

At end of year 292 2,649 2,941


At beginning of year 179 2,270 2,449 Charge for the year 60 230 290 Write offs (215) (241) (456)

At end of year 24 2,259 2,283

Netbookvalue at 31 May 2011 268 390 658

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At the reporting date:

(i) Plant and equipment under hire purchase arrangements are:


At net book value Motor vehicles 210 451 160 335

During the financial year, plant and equipment of the Group and the Company were acquired by means of the following:


Total additions 2,173 558 10 324 Additions through hire purchase arrangements - (57) - -

Cash payments 2,173 501 10 324

11. investment properties

long term leasehold retail units, Group commercial space and car construction 2012 parkbays inprogress Total rM’000 rM’000 rM’000

At beginning of year 278,620 39,645 318,265 Additions during the year - 21,053 21,053 Transferred (to)/from property development costs (Note17) (6,146) 109 (6,037) Additions arising from revocation of retail units sold 118 - 118 Gain from fair value adjustment recognised in profit or loss 22,793 - 22,793 Reclassification 60,807 (60,807) -

At end of year 356,192 - 356,192

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11. investment properties (continued) long term leasehold retail units, Group commercial space and car construction 2011 parkbays inprogress Total rM’000 rM’000 rM’000

At beginning of year 263,247 - 263,247 Gain from fair value adjustment recognised in profit or loss 3,542 - 3,542 Transferred from property development costs (Note 17) - 39,645 39,645 Additions arising from revocation of retail units sold 11,831 - 11,831

At end of year 278,620 39,645 318,265

The investment properties of the Group with carrying amount of RM356.1 million (2011: RM318.3 million) have been pledged as collaterals to secure the banking facilities referred to in Note 24.

Fair value of investment properties of the Group were stated by the directors based on professional valuations carried out by Hj. Sukiman Bin Kasmin, a registered valuer with Henry Butcher Malaysia (Kluang) Sdn Bhd and Mr Long Tian Chek, a registered valuer with Henry Butcher Malaysia Sdn Bhd in July and August 2012 respectively using the market value basis.

12. investment in subsidiaries

company 2012 2011 rM’000 rM’000

Unquoted shares, at cost At beginning of year 309,922 302,722 Effect of adopting FRS 139 - 700

As restated 309,922 303,422 Acquisition of a subsidiary - 4,500 Subscription of additional shares in a subsidiary - 2,000

At end of year 309,922 309,922

Accumulated impairment losses At beginning of year (266,584) (265,007) Impairment loss for the year - (1,577)

At end of year (266,584) (266,584)

Carrying amount 43,338 43,338

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12. investment in subsidiaries (continued)

The details of the subsidiaries are as follows:

issued Group’s country of and paid up effective incorporation share capital interest Principal activities rM’000 2012 2011 (unless % % otherwise indicated)

subsidiaries of the company Pujian Development Sendirian Berhad Malaysia 6,200 100 100 Property development and property investment 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 Property development and property investment Gangsa Etnik Sdn Bhd Malaysia 500 68 68 Property development Panorama Tiara Sdn Bhd Malaysia 3,000 69 69 Property development EcoFirst Products Sdn Bhd Malaysia 1,500 70 70 Multilevel marketing Earth Revolution Sdn Bhd Malaysia # 51 51 Dormant EcoFirst Fibaloy Sdn Bhd Malaysia 1,700 51 51 Ceased operation Opal Horizon Sdn Bhd Malaysia # 100 100 Investment holding EcoFirst Biotech Sdn Bhd Malaysia 250 52 52 Dormant EcoFirst Laboratories Sdn Bhd Malaysia 250 100 100 Research and development EcoFirst Agro Holdings Sdn Bhd Malaysia 110 100 100 Investment holding EcoFirst Hartz Sdn Bhd Malaysia 500 100 100 Ceased operation KE Management & Training Sdn Bhd Malaysia 100 60 60 Ceased operation KE Management Services Sdn Bhd Malaysia # 100 100 General insurance agency

Hasil Rezeki (M) Sdn Bhd Malaysia 25 100 100 Dormant

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subsidiaries of the company Gaydon Resources Limited British Virgin Islands USD1 100 100 Dormant

Fantasy Bowl Sdn Bhd Malaysia # 100 100 Ceased operation (formerly known as Minat City Automotive Centre Sdn Bhd) Sawitani Sdn Berhad Malaysia 10,000 100 100 Investment holding Jiddi Joned Enterprises Sdn Bhd Malaysia 5,500 82.2 82.2 Ceased operation Berembang Sendirian Berhad Malaysia 2,800 98.1 98.1 Ceased operation

Mudek Sdn Bhd Malaysia 2,800 89.3 89.3 Ceased operation Seri Jasin Sdn Bhd Malaysia 1,946 98.3 98.3 Ceased operation Gabema Sdn Bhd Malaysia 26 97.7 97.7 Ceased operation EcoFirst Products Worldwide Sdn Bhd Malaysia # 100 100 Investment holding Curah Bahagia Sdn Bhd Malaysia 2,500 100 100 Property development subsidiary of Gabema sdn bhd Pengangkutan Gabema Sdn Bhd Malaysia 65 90.2 90.2 Ceased operation subsidiaries of Pujian Development sendirian berhad Kilat 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 Ceased operation Southern Utilities Corporation Sdn Bhd Malaysia # 100 100 Ceased operation SCP Management Sdn Bhd Malaysia 10 100 100 Provision of management services

70





subsidiaries of ecoFirst agro holdings sdn bhd EcoFirst Agro-Industries Sdn Bhd Malaysia 1,000 75 75 Investment holding EcoFirst-YPM Sdn Bhd Malaysia 250 70 70 Dormant subsidiary of ecoFirst Agro-IndustriesSdnBhd J-Biotech EcoFirst Agro Sdn Bhd Malaysia 1,000 52 52 Operation of agriculture related businesses subsidiary of ecoFirst Products Worldwide sdn bhd EcoFirst Products (S) Pte Ltd * Singapore # - 100 Ceased operations The financial statements of the subsidiary indicated by * are not audited by Russell Bedford LC & Company.

# issued and paid up share capital of less than RM1,000

During the financial year, EcoFirst Products (S) Pte Ltd, a direct subsidiary of Ecofirst Products Worldwide Sdn Bhd, has been de-registered from the Accounting and Corporate Regulatory Authority of Singapore. The Company also further subscribed for additional 100 ordinary shares of RM1 each in Curah Bahagia Sdn Bhd (“CURAH”) for a cash consideration of RM100.

In the previous financial year, the Company acquired 100% equity interest in CURAH for a total cash consideration of RM4,500,000. Upon acquisition, CURAH become a subsidiary of the Group. CURAH is a company incorporated in Malaysia and is principally involved in property development activities. Subsequently, the Company further subscribed for additional 2,000,000 ordinary shares of RM1 each in CURAH for a cash consideration of RM2,000,000.

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The fair value of the identifiable assets and liabilities of CURAH as at the date of acquisition is as follows: 2011 rM’000

non current assets Plant and equipment 52 current assets Property development costs 15,045 Trade receivables 12,573 Other receivables, deposits and prepayments 6,003 Cash and bank balances 859

total assets 34,532

current liabilities Trade payables 16,961 Other payables and accruals 12,682 Tax payables 389

total liabilities (30,032)

Identifiable net assets acquired /Purchase consideration 4,500

The effect of the acquisition on cash flows is as follows: Group 2011 rM’000

Total cash consideration paid 4,500 Less: Cash and cash equivalents of subsidiary acquired (859)

Net cash outflow on acquisition 3,641

The acquired subsidiary had contributed the following results to the Group: Group 2011 rM’000

Revenue 6,191 Net profit after tax for the year 223

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13. Otherfinancialassets


Financial assets at fair value through profit or loss: - Quoted equity instruments in Malaysia, at cost 505 - 453 -

Available-for-sale financial assets: Quoted equity instruments, at cost - Malaysia 11,316 13,859 2,218 4,761 - Foreign 296 249 296 249

11,612 14,108 2,514 5,010

Accumulated impairment losses At beginning of year (11,855) (11,855) (2,942) (2,942) Disposals 1,572 - 1,572 -

At end of year (10,283) (11,855) (1,370) (2,942)

Fair value adjustments At beginning of year 4,390 - 4,150 - Opening balance adjustment for FRS 139 - 970 - 950 Changes for the year - recognised in - profit or loss 28 - 27 - - statement of other comprehensive income 3,669 3,420 3,349 3,200 - reclassification adjustment relating to derecognition (3,239) - (3,239) -

458 3,420 137 3,200

At end of year 4,848 4,390 4,287 4,150

carrying amount of quoted equity instruments 6,682 6,643 5,884 6,218

Unquoted equity instruments, at cost: At the beginning/end of year 16,148 16,148 16,110 16,110 Less: Accumulated impairment losses (15,010) (15,010) (15,010) (15,010)

carrying amount of unquoted equity instruments 1,138 1,138 1,100 1,100

Totalcarryingamountofotherfinancialassets 7,820 7,781 6,984 7,318

Market value of quoted equity shares 6,682 6,643 5,884 6,218

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14. Deferredtaxassets

Group 2012 2011 rM’000 rM’000

At beginning of year 226 812 Recognised in profit or loss (Note 8) - current year (226) (586)

At end of year - 226

Presented after appropriate offsetting as follows: Deferred tax assets 13,940 13,135 Deferred tax liabilities (13,940) (12,909)

- 226

Deferred tax assets of the Group are in respect of the following:

Group 2012 2011 rM’000 rM’000

Tax effects of unabsorbed capital allowances and unutilised tax losses 13,940 13,135

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.

Deferred tax liabilities of the Group are in respect of the following:

Group 2012 2011 rM’000 rM’000

Tax effects of excess of tax capital allowances over related depreciation of property, plant and equipment (13,940) (12,909)

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


Tax effects of: Unabsorbed capital allowances and unutilised tax losses 34,511 33,738 5,198 4,125 Other deductible temporary differences 12,332 15,563 - -

46,843 49,301 5,198 4,125

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.

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15. intangible asset

Group 2012 2011 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

Accumulated impairment losses At beginning and end of year 538 538

Carrying amount - -

16. inventories

Group 2012 2011 rM’000 rM’000

Trading merchandise, at cost 44 329

17. Property development costs

Group 2012 2011 rM’000 rM’000

At beginning of year: Long term leasehold land 98,338 103,046 Freehold land 26,282 - Development costs 60,041 108,451

184,661 211,497

Costs incurred during the year: Acquisition of subsidiary (Note12) - Freehold land - 14,100 - Development costs - 945

- 15,045

Freehold land 6,602 12,182 Development costs 65,240 18,199

71,842 30,381 Disposal of a parcel of freehold land (1,058) -

70,784 45,426

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17. Property development costs (continued)

Group 2012 2011 rM’000 rM’000

Transferred (to)/from investment properties (Note 11) - Long term leasehold land (19) (4,708) - Development cost 6,056 (67,554)

6,037 (72,262)

Reversal for completed projects: Long term leasehold land (97,696) - Developments costs (52,881) - Freehold land (379) -

(150,956) -

Costs recognised in profit or loss: At beginning of year (50,675) (46,780) Recognised during the year (132,185) (3,895) Reversal for completed projects 90,200 -

At end of year (92,660) (50,675)

Accumulated expected losses: At beginning of year (77,156) (109,773) Reversal during the year 16,400 - Reversal for completed projects 60,756 - Transferred to investment properties (Note 11) - 32,617

At end of year - (77,156)

Property development costs at end of year 17,866 56,830

Property development costs of the Group with carrying value of RM2.8 million (2011: RM32.2 million) have been charged as collaterals to secure the banking facilities as referred to in Note 24.

18. trade receivables

Group 2012 2011 rM’000 rM’000

Trade receivables 65,770 30,776 Accrued billings for property development - 1,146

65,770 31,922 Less: Allowance for doubtful debts (22,731) (22,351)

43,039 9,571 Less: Portion due within one year (43,039) (7,484)

Non current portion - 2,087

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18. trade receivables (continued)

Group 2012 2011 rM’000 rM’000

The non current portion of trade receivables is receivable as follows: Later than 1 year and not later than 2 years - 2,087

The Group’s normal trade credit term is 30 days (2011: 30 days). The following table provides information on the trade receivables’ credit risk exposure.

Group 2012 2011 rM’000 rM’000

Not impaired or past due 27,928 2,100 1 - 30 days past due not impaired 6,694 3,514 31 - 60 days past due not impaired 5,457 3,078 61 - 90 days past due not impaired 2,304 463 More than 90 days past due not impaired 656 416

43,039 9,571 Impaired 22,731 22,351

65,770 31,922

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

The movements in the allowance for doubtful debts accounts for trade receivables that are individually impaired at reporting date are as follows:

Group 2012 2011 rM’000 rM’000

At beginning of year 22,351 57,589 Allowance for the year 1,146 2,083 Allowance no longer required (766) (36,497) Written off - (824)

At end of year 22,731 22,351

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

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19. Amountduefrom/(to)subsidiaries

company 2012 2011 rM’000 rM’000

Amount due from subsidiaries 350,058 320,287 Less: Allowance for doubtful debts (47,381) (42,029)

302,677 278,258

The movements in the allowance for doubtful debts accounts for amount due from subsidiaries that are individually impaired at reporting date are as follows:

company 2012 2011 rM’000 rM’000

At beginning of year 42,029 40,887 Allowance for the year 5,352 1,350 Allowance no longer required - (208)

At end of year 47,381 42,029

The amounts due from/(to) subsidiaries comprise unsecured interest free advances receivable/(repayable) on demand.

20. other receivables, deposits and prepayments


Other receivables 43,706 43,675 33,706 33,300 Deposits and prepayments 8,602 12,291 719 130

52,308 55,966 34,425 33,430 Less: Allowance for doubtful debts (42,199) (39,937) (33,300) (33,300)

10,109 16,029 1,125 130


Included under other receivables, deposits and prepayments are: - deposits and advances paid in relation to the acquisition of mining rights 4,852 4,172 - - Less: allowance for doubtful debts (2,262) - - -

2,590 4,172 - - - Prepayment for term loan installments 564 - 564 - - Funds placed at stakeholder for settlement of purchase consideration in relation to acquisition of freehold land used for property development 981 5,759 - -

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20. other receivables, deposits and prepayments (continued)

The movements in the allowance for doubtful debts accounts for other receivables and deposits that are individually impaired at reporting date are as follows:


At beginning of year 39,937 41,114 33,300 32,775 Allowance for the year 2,262 1,875 - 1,250 Allowance no longer required - (1,954) - (725) Written off - (1,098) - -

At end of year 42,199 39,937 33,300 33,300

Other receivables and deposits that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

21. share capital

Group and company 2012 2011 no. of no. of ordinary ordinary shares of shares of Group and company rM0.50 each rM0.50 each 2012 2011 ’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

22. reserves


Accumulated losses (495,660) (506,580) (508,252) (502,878) Non distributable:

Share premium 295,727 295,727 295,727 295,727 Fair value adjustment reserve 4,820 4,390 4,260 4,150 Foreign exchange translation reserve 7 11 - -

300,554 300,128 299,987 299,877

(195,106) (206,452) (208,265) (203,001)

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22. reserves (continued)

Share premium represents the excess of the consideration received over the nominal value of the shares issued by the Company.

The Group’s fair value adjustment reserve represents the cumulative fair value changes, net of tax, of available-for-sale financial assets until they are disposed of or impaired.

23. hire purchase liabilities


Amount outstanding 305 516 273 437 Less: Interest in suspense (29) (49) (28) (45)

Principal portion 276 467 245 392 Less: Portion due within one year (137) (190) (109) (146)

Non current portion 139 277 136 246


The non current portion of the hire purchase obligations are payable as follows: Later than 1 year and not later than 2 years 29 137 26 110 Later than 2 years and not later than 5 years 86 56 86 53 Later than 5 years 24 84 24 83

139 277 136 246

The weighted average effective interest rate implicits in the hire purchase obligations is 4.99% (2011: 5.26%) per annum.

24. borrowings


Term loans - secured 118,972 132,014 42,790 17,957 Non convertible preference shares issued by a subsidiary to its minority shareholder 1,000 1,000 - -

119,972 133,014 42,790 17,957 Less: Current portion included under current liabilities (23,514) (28,370) (2,207) -

Non current portion 96,458 104,644 40,583 17,957

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24. borrowings (continued)


The non current portion of borrowings is payable as follows: Later than 1 year and not later than 2 years 5,152 56,411 3,444 1,600 Later than 2 years and not later than 5 years 20,927 16,116 14,219 10,200 Later than 5 years 70,379 32,117 22,920 6,157

96,458 104,644 40,583 17,957

The weighted average effective interest rate per annum is as follows:

Group company 2012 2011 2012 2011 % % % %

Term loans - secured 8.19% 8.48 7.47% 8.60

Secured borrowings are secured by way of:

carrying amount Group company 2012 2011 2012 2011 rM’000 rM’000 rM’000 rM’000

Investment properties (Note 11) 356,192 318,265 - - Property development costs (Note 17) 2,811 32,223 - -

Certain bank borrowings of the subsidiaries are also guaranteed by the Company. The Company’s term loans are secured by the investment properties and property development costs of its subsidiaries.

25. trade payables

Group 2012 2011 rM’000 rM’000

Trade payables 25,572 24,955 Progress billings for property development 8,672 -

34,244 24,955 Less: Portion due within one year (30,529) (23,302)

Non current portion 3,715 1,653

Group 2012 2011 rM’000 rM’000

The non current portion of trade payables are repayable as follows: Later than 1 year and not later than 2 years 3,715 1,653

The normal trade credit period granted to the Group is 30 days (2011: 30 days).

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26. other payables and accruals


Deposits received from tenants and purchasers of development properties 8,045 6,871 - - Financial guarantee liabilities - - 471 577 Unsecured interest free advances from third parties 46 445 46 50 Provision for contingencies in respect of disposal of subsidiaries 337 337 337 337 Accrued interest 13,400 13,231 13,400 13,231 Real property gains tax liabilities accrued for accounting purposes 10,197 10,197 616 616 Liquidated ascertained damages in respect of property development projects 3,101 6,125 - - Provision for litigation damages 3,689 - - - Profit guarantee liabilities 2,189 2,189 2,189 2,189 Tax penalties and interest accrued for accounting purposes 19,599 5,311 - - Quit rent and assessment payables 2,000 2,017 - - Contribution payable for local authority 2,598 3,198 - - Outstanding purchase consideration for freehold land acquired for property development 13,488 23,313 - - Other payables 17,906 12,797 2,749 2,683

96,595 86,031 19,808 19,683 Accruals 5,707 2,158 185 211

102,302 88,189 19,993 19,894 Less: Non current portion (6,100) - (377) (471)

Portion due within one year 96,202 88,189 19,616 19,423


The non current portion of other payables are repayable as follows: Later than 1 year and not later than 2 years 6,100 - 82 93 Later than 2 years and not later than 5 years - - 180 263 Later than 5 years - - 115 115

6,100 - 377 471

The movement of provision for litigation damages is as follows:


At beginning of year - - - - Provision during the year 3,689 - - -

At end of year 3,689 - - -

The provision was made in relation to the outstanding ligitations disclosed in Note 29(i).

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27. Significantrelatedpartydisclosures

(a) related party transactions

Significant transaction with related parties are as follows:

Group and company related parties type of transactions 2012 2011 rM’000 rM’000

A person connected to Dato’ (Dr) Teoh Seng Foo and Acquisition of a subsidiary - 4,500 Teoh Seng Kian, the directors of the Company Dato’ Tiong Kwing Hee Disposal of other financial assets 1,645 -

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.

(b) related party balances

Group and company 2012 2011 rM’000 rM’000

Significant outstanding balances with companies in which certain directors have interests name of company Payable Meda Inc Berhad - profit guarantee liabilities 2,189 2,189

(c) Compensationofkeymanagementpersonnel

The key management personnel comprises mainly executive directors of the Company whose remuneration is disclosed in Note 7.

28. commitments


operating lease commitments The future minimum lease payments under non cancellable operating leases are as follows: Not later than 1 year 461 311 236 236 Later than 1 year and not later than 2 years 84 249 51 235 Later than 2 years and not later than 5 years 34 54 9 60

579 614 296 531

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29. Material litigations and claims

(i) Pujian Development Sdn Bhd (“PDSB”), a subsidiary of the Group 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 Court has awarded the plaintiffs’ claims and PDSB has filed for appeal. The Court of Appeal dismissed PDSB’s appeal with cost on 3 October 2011. The plaintiff filed an application for assessment of damages at the High Court and it is now fixed for case management on 28 September 2012.

For accounting purposes, PDSB had made a provision of RM3.69 million for the payment of interest in relation to the purchase consideration received pending assessment of the High Court.

(ii) The Inland Revenue Board (“IRB”) issued a writ of summons against each of the 4 subsidiaries, Mudek Sdn Bhd (“Mudek”), Seri Jasin Sdn Bhd (“Seri Jasin”), Berembang Sendirian Berhad (“Berembang”) and Jiddi Joned Enterprises Sdn Bhd (“Jiddi Joned”) individually for real property gains tax owed by the subsidiaries.

The IRB has obtained a summary judgment against Mudek, Seri Jasin and Jiddi Joned. The subsidiaries appeals have been

dismissed by the Court of Appeal except for Mudek which has yet to be heard. The total real property gains tax claimed together with its interest and penalties for these three cases amounted to RM6.46 million.

In respect of Berembang’s suit, the IRB’s application for summary judgement was heard on 12 July 2010 whereby the application was dismissed on the basis that there are triable issues. The IRB has filed an appeal to the Court of Appeal which was dismissed. The case was referred to High Court for full trial on 5 March 2012. The Court dismissed the IRB’s suit for non-compliance of order given by the Court and the non-presence of the IRB’s lawyer at the time of trial. The IRB filed an application to re-instate the summons which is fixed for hearing on 9 October 2012. The total real property gain tax claimed together with its interest and penalties amounted to RM2.2 million.

For accounting purposes, all the amounts owed have been recognised for in the financial statements.

The said four subsidiaries have initiated another legal proceeding against two parties for failure to release retention sums representing part of the real property gains tax as mentioned above. The Court allowed the subsidiaries claim against one of the party but dismissed the action against the second defendant. Both the subsidiaries and the defendant filed an appeal against the said decision which is pending hearing date.

(iii) The IRB filed 4 separate legal suits against Pujian Development Sdn Bhd (“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 including penalties. The IRB obtained a summary judgment against PDSB for all the suits and PDSB’s appeals have been dismissed by the Court of Appeal. As a result, the IRB has imposed additional interest and penalties for the outstanding income tax of RM11.8 million. The amount was accrued in full in the financial statements.

(iv) The 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. The IRB obtained a summary judgment against Tashima for both suits. Tashima’s appeal on the summary judgment for assessment year 2000 was withdrawn whilst the appeal for assessment year 2001 and 2002 was dismissed by the Court of Appeal. As a result, the IRB have imposed additional interest and penalties for the outstanding income tax of RM1.0 million. The amount was accrued in full in the financial statements.

(v) The 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. The IRB filed an application for summary judgement which was allowed on 27 September 2011. Sawitani’s appeal to the Court of Appeal was dismissed on 15 May 2012. The amount was accrued in full in the financial statements.

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30. segmental information

For management purposes, the Group is organised into business units based on their nature of business and has four reportable operating segments as follows:

business segments Construction Property investment/management/development Network marketing Investment and others The above reportable segments mainly operate in Malaysia. Management monitors the operating results of its business units as well as relying on the segment information as disclosed below for

the purpose of making decision about resource allocation and performance assessment. The directors together with the management are of the opinion that all inter segment transactions have been entered into in the

normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

information about a major customer

Revenue from a major customer amounted to RM40 million (2011: RM Nil) arising from sales by the property investment/management/development segment.

Property investment/ Investment management/ Network and Construction development marketing others Eliminations Consolidated 31 May 2012 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

revenue Revenue from external customers - 158,023 298 2,162 - 160,483 Inter-segment revenue - 382 - 728 (1,110) -

- 158,405 298 2,890 (1,110) 160,483

results Profit/(Loss) from operations before interest income (96) 25,977 (844) (3,197) - 21,840 Interest income 87 - - 8 - 95

Profit/(Loss) from operations (9) 25,977 (844) (3,189) - 21,935 Finance costs (335) (4,329) - (1,861) - (6,525)

Profit/(Loss) before tax (344) 21,648 (844) (5,050) - 15,410 Income tax expense (11) (5,716) - 524 - (5,203)

Net profit/(loss) for the year (355) 15,932 (844) (4,526) - 10,207 Non-controllling interests - - - 713 713

Profit/(Loss) attributable to owners of the Company (355) 15,932 (844) (3,813) - 10,920

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30. segmental information (continued)


other information Segment assets 3,309 419,060 412 17,381 - 440,162 Segment liabilities 2,289 214,147 1,128 78,592 - 296,156 Additions to non-current assets - 23,051 8 167 - 23,226 Depreciation 55 179 90 271 - 595 Non cash expenses other than depreciation and amortisation - 3,918 368 2,554 - 6,840 Amortisation of financial liabilities carried at amortised cost 334 1,994 - - - 2,328 Interest income - - - (8) - (8) Dividend income - - - (58) - (58) Fair value adjustments on: - quoted instruments designated as financial assets at fair value through profit or loss - - - (28) - (28) - investment properties - (22,793) - - - (22,793) Allowance for doubtful debts no longer required - (766) - - - (766) Gain on disposal of other financial assets - - - (3,000) - (3,000)


revenue Revenue from external customers 9,274 14,858 451 393 - 24,976 Inter-segment revenue - 754 - 2,549 (3,303) -

9,274 15,612 451 2,942 (3,303) 24,976

results Profit/(Loss) from operations before interest income 720 23,462 (1,927) (4,961) - 17,294 Interest income 62 - - 339 - 401

Profit/(Loss) from operations 782 23,462 (1,927) (4,622) - 17,695 Finance costs (135) (5,149) - (2,959) - (8,243)

Profit/(Loss) before tax 647 18,313 (1,927) (7,581) - 9,452 Income tax expense (12) (348) (586) (13) - (959)

Net profit/(loss) for the year 635 17,965 (2,513) (7,594) - 8,493 Non-controllling interests - - - 267 - 267

Profit/(Loss) attributable to owners of the Company 635 17,965 (2,513) (7,327) - 8,760

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30. segmental information (continued)


other information Segment assets 4,957 397,525 1,066 10,808 - 414,356 Segment liabilities 4,000 226,302 1,229 49,452 - 280,983 Additions to non-current assets - 37 31 490 - 558 Depreciation 55 53 123 424 - 655 Non cash expenses other than depreciation and amortisation 270 25,340 157 3,427 - 29,194 Adjustments for financial liabilities carried at amortised cost - (2,689) - - - (2,689) Net amortisation of financial liabilities carried at amortised cost 69 - - - - 69 Dividend income - - - (33) - (33) Fair value adjustment on investment properties - (3,542) - - - (3,542) Allowance no longer required: - doubtful debts - (37,742) - (709) - (38,451) - liquidated ascertained damaged - (2,054) - - - (2,054) Waiver of term loan liabilities - - - (1,328) - (1,328)

31. event subsequent to the reporting date

Subsequent to the reporting date, the Group has disposed of its entire equity interest in a wholly owned subsidiary, SCP Management Sdn Bhd (‘‘SCP’’), for a total consideration of RM1,000. Accordingly, SCP has ceased to be a subsidiary of the Group.

32. Financialinstruments,financialrisksandcapitalriskmanagement

(a) Categoriesoffinancialinstruments

The following table sets out the financial instruments as at the reporting date:


Financial assets Fair value throught profit of loss: - other financial assets 533 - 480 - Available-for-sale: - other financial assets 7,287 7,781 6,504 7,318 Loans and receivables: - amount due from subsidiaries - - 302,677 278,258 - trade and other receivables excluding prepayments 50,136 23,155 561 130 - cash and bank balances 1,845 3,451 457 434

59,801 34,387 310,679 286,140

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32. Financialinstruments,financialrisksandcapitalriskmanagement (continued)

(a) Categoriesoffinancialinstruments (continued)


Financial liabilities Amortised cost: - amount due to subsidiaries - - 175,455 170,306 - borrowings 119,972 133,014 42,790 17,957 - hire purchase liabilities 276 467 245 392 - trade and other payables excluding statutory liabilities 95,937 95,555 19,377 19,232

216,185 229,036 237,867 207,887

(b) Financialriskmanagementobjectivesandpolicies

The Group’s overall financial risk management programme seeks to minimise potential adverse effects on financial performance of the Group.

The Group does not hold or issue derivative financial instruments for speculative purposes.

There has been no change in the Group’s exposure to these financial risks or the manner in which it manages and measures the risk.

Interestrateriskmanagement

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.

The sensitivity analysis below have been determined based on the exposure to interest rates for the banking facilities at the reporting date. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group and Company’s profit/(loss) before tax would decrease/increase by RM599,000 (2011: RM665,000) and RM214,000 (2011: RM90,000) respectively.

Liquidityriskmanagement

The Group and the Company maintains sufficient cash and bank balances, and internally generated cash flows to finance its activities. The Group and the Company finance their operations by a combination of equity and bank borrowings.

The following tables detail the remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay.

88




(b) Financialriskmanagementobjectivesandpolicies (continued)

Liquidityrisk

Group Contractualcashflows(includinginterestpayments) on demand carrying or within Within 1 to Within 2 to More than amount total 1 year 2 years 5 years 5 years 2012 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

Non interest bearing debts 95,937 96,257 92,222 4,035 - - Interest bearing debts 119,972 161,358 25,063 6,091 29,387 100,817 Hire purchase liabilities (fixed rate) 276 305 151 33 97 24

216,185 257,920 117,436 10,159 29,484 100,841

2011 Non interest bearing debts 95,555 95,696 93,902 1,794 - - Interest bearing debts 133,014 158,132 28,370 61,231 20,742 47,789 Hire purchase liabilities (fixed rate) 467 516 210 144 63 99

229,036 254,344 122,482 63,169 20,805 47,888

Company Contractualcashflows(includinginterestpayments) on demand carrying or within Within 1 to Within 2 to More than amount total 1 year 2 years 5 years 5 years 2012 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

Non interest bearing debts 194,832 194,915 194,455 89 211 160 Interest bearing debts 42,790 59,901 2,435 4,150 20,671 32,645 Hire purchase liabilities (fixed rate) 245 273 119 33 97 24

237,867 255,089 197,009 4,272 20,979 32,829

2011 Non interest bearing debts 189,538 189,538 189,538 - - - Interest bearing debts 17,957 24,012 - 1,733 13,106 9,173 Hire purchase liabilities (fixed rate) 392 437 146 144 63 84

207,887 213,987 189,684 1,877 13,169 9,257

Foreignexchangerisk

Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group and the Company operate mainly in Malaysia and transact predominantly in Ringgit Malaysia (“RM”). As such, its exposure to foreign exchange risk is minimal other than the quoted equity instrument which is denominated in Hong Kong Dollar.

89



32. Financialinstruments,financialrisksandcapitalriskmanagement(continued)

(b) Financialriskmanagementobjectivesandpolicies(continued)

Marketpricerisk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group and Company are exposed to equity price risk arising from its investment in quoted equity instruments. The quoted

equity instruments in Malaysia are listed on the Bursa Malaysia, whereas the quoted equity instrument outside Malaysia are substantially listed on Hong Kong Exchange and Clearing Limited are classified as available-for-sale and designated as fair value through profit or loss financial assets.

Management of the Group monitors the equity instruments on a portfolio basis. Material instruments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the managing director of the Group.

A 5% changes in the market price of the quoted equity instruments at the end of the reporting period with all other variables held constant would have the following changes on the performance of the Group and Company:


Profit or loss 27 - 24 - Other comprehensive income 307 327 270 307

Creditriskmanagement

The Group’s credit risk is primarily attributable to its trade and other receivables. 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. For other financial assets including cash and bank balances, the Group minimises credit risk by dealing exclusively with high credit rating counterparties. The Group performs ongoing credit evaluation of its customers and generally does not require collateral on account receivables. At the reporting date, there were no significant concentrations of credit risk other than an amount due from a customer of RM23,595,000 arising from property development revenue and an amount due from a subsidiary of RM269,000,000.

The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to a subsidiary. The Company monitors on an ongoing basis the results of the subsidiary and repayments made by the subsidiary. The maximum exposure to credit risk amounts to RM76,182,000 (2011: RM116,745,000) representing the outstanding banking facilities of the subsidiary as at reporting date.

Fair values

The carrying amounts of cash and cash equivalents, receivables and payables, and other liabilities approximate their respective fair values due to the respectively short-term maturity of these financial instruments.

The fair values of the Groups’ other financial assets, borrowings and hire purchase liabilities approximate their carrying amount.

The fair values of financial assets and financial liabilities are determined with standard terms and conditions.

90




(b) Financialriskmanagementobjectivesandpolicies(continued)

Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices); and

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Group 2012 level 1 level 2 level 3 total Financial assets rM’000 rM’000 rM’000 rM’000

Quoted shares 6,682 - - 6,682

There were no transfers between Levels 1 and 2 in the current year.

company 2012 level 1 level 2 level 3 total Financial assets rM’000 rM’000 rM’000 rM’000

Quoted shares 5,884 - - 5,884

There were no transfers between Levels 1 and 2 in the current year.

(c) capital structure and equity

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to the shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts.

91



32. Financialinstruments,financialrisksandcapitalriskmanagement(continued)

(c) capital structure and equity (continued)

The Group monitors capital using a gearing ratio, which is net debt (total borrowings less cash and cash equivalent) divided by total capital which comprises total equity plus net debt. The calculations of the Group’s and Company’s gearing ratios are as follows:


Borrowings 120,248 133,481 43,035 18,349 Less: cash and cash equivalents (1,845) (3,451) (457) (434)

Net Debt 118,403 130,030 42,578 17,915 Total equity 144,006 133,373 116,809 122,073

Total capital 262,409 263,403 159,387 139,988

Gearing ratio 0.45 0.49 0.27 0.13

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

33. Comparativefigures

The following comparative figures of the Group have been reclassified to conform with current year’s presentation.

as previously reported Reclassification Asrestated rM’000 rM’000 rM’000

statement of comprehensive income For the year ended 31 May 2011

Other operating expenses (28,189) 131 (28,058)Finance cost (8,112) (131) (8,243)

34. Supplementaryinformation–breakdownofretainedprofits/accumulatedlossesintorealisedandunrealised

The breakdown of the retained profits/accumulated losses of the Group and of the Company as at 31 May 2012 into realised and unrealised is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.


Total accumulated profits/(losses) of the Company and its subsidiaries - Realised (544,939) (562,140) (510,751) (502,878) - Unrealised (13,731) (2,357) 2,499 -

(558,670) (564,497) (508,252) (502,878) Less: Consolidation adjustments 63,010 57,917 - -

Accumulated losses as per financial statements (495,660) (506,580) (508,252) (502,878)


PaRticulaRs oFGRouP PRoPeRties

The properties of the Group as at 31 May 2012 and their net book values ("NBV") are indicated below:

investment Properties

1.

2.

3.

4.

5.

6.

7.

sizes & usage

91 sq. metresof office space

150,417 sq. metres of commercialspace

55 sq. metres ofcommercialspace




44,431 sq. metres of commercialspace

Title/Location

B-04-10, Perdana Selatan,Taman Serdang Perdana,(Seksyen 1)43300 Seri Kembangan,Selangor Darul Ehsan

PN No. 7393, Lot No. 1,Pekan SerdangDaerah Petaling, Selangor





PTD 1468, Mukim Gemerah,Segamat, Johor.PTB 1283, Bandar Segamat,Segamat, Johor.

company

Pujian DevelopmentSendirian Berhad

Pujian DevelopmentSendirian Berhad

Opal HorizonSdn Bhd

Efex Trade & ExhibitionsSdn Bhd

Ecofirst DevelopmentSdn Bhd

Ecofirst LaboratoriesSdn Bhd

Tashima DevelopmentSdn Bhd

Approximateage of

building (years)

12

9

9

9

9

9

1

LeaseExpiryDate

99-year leaseexpiring09 Nov 2093






99-year leaseExpiring04 Jul 2100

Date of Acquisition/revaluation

3.8.2006

14.8.2012

14.8.2012

14.8.2012

14.8.2012

14.8.2012

11.7.2012

nbv rM’000

130

271,348

268

289

268

289

83,600

356,192


analYsis oFsHaReHolDinGs

statistical report of holders of shares as at 28 september 2012as per record of Depositors (“roD”)

Class of Securities : Ordinary shares of RM0.50 each (“Shares”)

Authorised Share Capital : RM1,000,000,000.00

Issued and fully paid-up : RM325,073,827.00share capital

Voting Rights : shareholders 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.

No. of Shareholders : 27,023

analysis oF shareholDinGs as at 28 sePteMber 2012

number of number range of shareholdings shareholders of shares Percentage (%)

Less than 100 1,902 49,069 0.01100 – 1,000 4,522 4,067,561 0.631,001 – 10,000 15,201 68,774,292 10.5810,001 – 100,000 4,818 141,572,599 21.77100,001 – less than 5% of issued shares 580 435,684,133 67.015% and above of issued shares 0 0 0

Total 27,023 650,147,654 100.00

list oF thirty larGest reGistereD shareholDers as at 28 sePteMber 2012 as Per roD name of shareholders number of shares Percentage (%)

1. RHB Capital Nominees (Tempatan) Sdn Bhd 22,554,466 3.47 Pledged Securities Account For Teoh Seng Aun (STG) 2. Kenanga Nominees (Tempatan) Sdn Bhd 19,042,500 2.93 Pledged Securities Account For Teoh Seng Kian 3. RHB Capital Nominees (Tempatan) Sdn Bhd 17,551,432 2.70 Pledged Securities Account For Teoh Seng Kian (DHG) 4. Maybank Securities Nominees (Tempatan) Sdn Bhd 16,000,000 2.46 Pledged Securities Account For Teoh Seng Kian (Margin) 5. Maybank Securities Nominees (Tempatan) Sdn Bhd 15,000,000 2.31 Pledged Securities Account For Teoh Seng Aun 6. EB Nominees (Tempatan) Sendirian Berhad 14,384,600 2.21 Pledged Securities Account For Teoh Seng Kian (SFC)


analysis oF shareholDinGs

list oF thirty larGest reGistereD shareholDers as at 28 sePteMber 2012 as Per roD (continued)

name of shareholders number of shares Percentage (%)

7. Amsec Nominees (Tempatan) Sdn Bhd 13,711,300 2.11 Pledged Securities Account For One Sierra Sdn Bhd

8. EB Nominees (Tempatan) Sendirian Berhad 13,671,000 2.10 Pledged Securities Account For Teoh Seng Aun (SFC)

9. TA Nominees (Tempatan) Sdn Bhd 11,780,500 1.81 Pledged Securities Account For Wawasan Fokus Sdn Bhd 10. Alliancegroup Nominees (Tempatan) Sdn Bhd 11,000,000 1.69 Pledged Securities Account For Tiong Kwing Hee (8088854) 11. Soh Chin Loong 9,500,000 1.46

12. Alliancegroup Nominees (Tempatan) Sdn Bhd 8,619,300 1.33 Pledged Securities Account For Tiong Kwing Hee (8068389) 13. OSK Nominees (Tempatan) Sdn Bhd 7,500,000 1.15 Pledged Securities Account For Teoh Seng Aun 14. OSK Nominees (Tempatan) Sdn Berhad 7,500,000 1.15 Pledged Securities Account For Teoh Seng Kian 15. RHB Capital Nominees (Tempatan) Sdn Bhd 7,403,100 1.14 Pledged Securities Account For Tiong Kwing Hee (DHG) 16. HLIB Nominees (Tempatan) Sdn Bhd 6,525,000 1.00 Pledged Securities Account For Teoh Seng Foo (MG0176-182) 17. Maybank Nominees (Tempatan) Sdn Bhd 5,850,000 0.90 Yeoh Siok Choo 18. Kenanga Nominees (Tempatan) Sdn Bhd 5,101,200 0.78 Amara Investment Management Sdn Bhd For Teoh Seng Kian 19. Kenanga Nominees (Tempatan) Sdn Bhd 5,081,500 0.78 Amara Investment Management Sdn Bhd For Teoh Seng Aun 20. Kenanga Nominees (Tempatan) Sdn Bhd 3,982,999 0.61 Amara Investment Management Sdn Bhd For Teoh Seng Foo 21. HLIB Nominees (Tempatan) Sdn Bhd 3,715,000 0.57 Pledged Securities Account For Teoh Seng Aun (MG0177-182) 22. Mah Toe Hiong 3,564,300 0.55

23. HLIB Nominees (Tempatan) Sdn Bhd 3,000,000 0.46 Pledged Securities Account For Cheam Shaw Fin (MG0033-182) 24. Maybank Nominees (Tempatan) Sdn Bhd 2,998,500 0.46 Pledged Securities Account For Tang Sing Ling 25. Kenanga Nominees (Tempatan) Sdn Bhd 2,670,900 0.41 Pledged Securities Account For Wawasan Fokus Sdn. Bhd.


list oF thirty larGest reGistereD shareholDers as at 28 sePteMber 2012 as Per roD (continued)

name of shareholders number of shares Percentage (%)

26. Malacca Equity Nominees (Tempatan) Sdn Bhd 2,665,500 0.41 Pledged Securities Account For Teoh Seng Foo 27. Soh Shuh Yih 2,613,500 0.40 28. Low Siew Fong 2,545,300 0.39

29. HLB Nominees (Tempatan) Sdn Bhd 2,500,000 0.38 Pledged Securities Account For Tan Kim Seng 30. RHB Capital Nominees (Tempatan) Sdn Bhd 2,500,000 0.38 Pledged Securities Account For Liew Lee Chin (CEB)

substantial shareholDers’ shareholDinGs as at 28 sePteMber 2012(based on the register of substantial shareholders’ shareholdings)

no. of shares heldname of substantial shareholders Direct interest (%) indirect interest (%)

Teoh Seng Kian 78,502,632 (12.07) - -

Teoh Seng Aun 65,408,854 (10.06) - -

Purewise Sdn Bhd 48,104,300 (7.40) - -

Directors’ shareholDinGs (in the coMPany) as at 28 sePteMber 2012(based on the register of Directors’ shareholdings)

no. of shares heldname of Directors Direct interest (%) indirect interest (%)

Dato’ Syed Ariff Fadzillah bin Syed Awalluddin - - - -

Dato’ (Dr.) Teoh Seng Foo 9,190,500 (1.41) - -

Dato’ Tiong Kwing Hee 28,541,400 (4.39) - -

Amos Siew Boon Yeong - - - -

Dato’ Boey Chin Gan - - - -

Lim Een Hong - - - -

Teoh Seng Kian 78,502,632 (12.07) - -(Alternate Director to Dato’ (Dr.) Teoh Seng Foo) others ** Dato’ (Dr.) Teoh Seng Foo’s spouse 3,000,000 (0.46) - -

Teoh Seng Kian’s spouse 2,495,300 (0.38) - -

Notes:** Disclosure of direct interest held by their spouses, pursuant to Section 134(12)(c) of the Companies Act, 1965

analysis oF shareholDinGs

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I/We NRIC/Company No. (FULL NAME IN BLOCK LETTERS)

of (ADDRESS)

being a member 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-Ninth Annual 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 Monday, 26 November 2012 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.

ForM oF Proxynumber of shares held

central Depository system account no.

no resolutions For aGainst

orDinary business

1. Approval of Directors’ Fees

2. Re-election of Dato’ (Dr.) Teoh Seng Foo as Director

3. Re-election of Dato’ Boey Chin Gan as Director

4. Re-appointment of Messrs Russell Bedford LC & Company as Auditors and to authorise the Directors to fix their remuneration

sPecial business

5. Authority for Directors to issue shares

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 will vote or abstain from voting at his/her discretion.

Dated this ………….day of …………………………2012 ...................................................……………….. SignatureofShareholder/CommonSeal

Notes:

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 19 November 2012 (General Meeting Record of Depositors) shall be eligible to attend, speak and vote at this meeting.

(ii) 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.

(iii) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

(iv) 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 is a corporation, either under seal or under the hand of an officer or attorney duly authorised.

(v) 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 of that 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.

The Company SecretaryecoFirst consoliDateD bhD (15379-V) Suite 11.1A, Level 11, Menara Weld 76 Jalan Raja Chulan50200 Kuala LumpurMalaysia

STAMP

Fold here

Fold here

1.61, First Floor, South City Plaza,Persiaran Serdang Perdana,Seksyen 1, 43300 Seri Kembangan,Selangor Darul Ehsan, Malaysia.

Tel : +6 03 89381188Fax : +6 03 89381133Website : www.ecofirst.com.my

ECOFIRS-AnnualReport2012 (1.2MB)

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