ecofirs-annualreport2011 (2.6mb)

7/30/2019 ECOFIRS-AnnualReport2011 (2.6MB)

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02 Notice o Annual General Meeting

03 Statement AccompanyingNotice o Annual General Meeting

04 Corporate Inormation

06 Chairmans Statement

12 Board o Directors

13 Directors Prole

21 Business Divisions

24 Five-Year Group Statistics

25 Corporate Governance Statement

29 Statement o Directors Responsibility

30 Other Inormation

31 Audit Committee Report

34 Statement on Internal Control

35 Financial Statements

95 Particulars o Group Properties

96 Analysis o Shareholdings

Form o Proxy

Abu he ver image

The cover depicts a man careully shapinga piece o pottery. And in the same analogy,it takes the same expertise, patience andperseverance to shape a Company tobecome a successul Organization. TheGroup personies these traits along with the

passion and careul approach taken to mouldeach Division into an exemplary Organizationo admirable quality.


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ECOFIRST CONSOLIDATED BHD (15379-V)

NOTICE IS HEREBY GIVEN that the Thirty-Eighth Annual General Meeting o 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

Thursday, 24 November 2011 at 10.00 a.m. to transact the ollowing business:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements or the nancial year ended 31 May 2011 together with

the Directors and Auditors Reports thereon.

2. To approve the Directors Fees or the nancial year ended 31 May 2011. (Resolution 1)

3. To re-elect the ollowing Directors who will be retiring pursuant to Article 113 o the Companys

Articles o Association:

3.1 Dato Syed Ari Fadzillah Bin Syed Awalluddin

3.2 Dato Tiong Kwing Hee

(Resolution 2)

(Resolution 3)

4. To re-appoint Messrs Russell Bedord LC & Company, the retiring Auditors as Auditors o the

Company and to authorize the Directors to determine their remuneration. (Resolution 4)

SPECIAL BUSINESS

To consider and i thought t, to pass the ollowing resolution, with or without modications, as an

Ordinary Resolution o the Company: -

5. ORDINARY RESOLUTIONAUTHORITY FOR DIRECTORS TO ISSUE SHARES

RESOLVED:THAT pursuant to Section 132D o the Companies Act, 1965, and subject to the Main Market Listing

Requirements o Bursa Malaysia Securities Berhad (Bursa Securities) and the approvals o

the relevant governmental and/or regulatory authorities (i any), the Directors be and are hereby

authorized to issue shares in the Company at any time, upon such terms and conditions, or such

purposes and to such person or persons as the Directors may deem t, provided that the aggregate

number o shares issued pursuant to this resolution does not exceed 10% o the issued share capital

o the Company at the time o issue AND THAT the Directors be also empowered to obtain the

approval o Bursa Securities or the listing o and quotation or the additional shares so issued on

Bursa Securities AND THAT such authority shall continue to be in orce until the conclusion o the

next Annual General Meeting o the Company. (Resolution 5)

6. To transact any other business or which due notice shall have been given in accordance with the

Companies Act, 1965 and the Companys Articles o Association.

BY ORDER OF THE BOARD

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

Kuala Lumpur

2 November 2011

Notice of THIRTY-EIGHTH ANNUAL GENERAL MEETING


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ANNUAL REPORT 2011

Notes:-

(i) A member entitled to attend and vote at the meeting is entitled to appoint not more than one (1) proxy to attend and

vote in his stead. A proxy need not be a member o the Company and Section 149(1) o the Companies Act, 1965 shallnot apply.

(ii) Where a member o the Company is an authorised nominee as defned under the Securities Industry (Central

Depositories) Act 1991, it may appoint at least one (1) proxy in respect o each securities account it holds with ordinary

shares o the Company standing to the credit o the said securities account.

(iii) The instrument appointing a proxy shall be in writing under the hand o the appointer or o his attorney duly authorised

in writing or i the appointer is a corporation, either under seal or under the hand o an ofcer or attorney duly

authorised.

(iv) The original instrument appointing a proxy and the power o attorney or other authority, i any, under which it is signed

or a notarially certifed copy o that power or authority shall be deposited at the Registered Ofce o the Company

at Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan, 50200 Kuala Lumpur not less than orty-eight (48) hours

beore the time or holding the meeting or adjourned meeting.Explanatory notes on Special Business:

Resolution 5

The Ordinary Resolution proposed under this resolution 5, i passed, will renew the authority given to the Directors o

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 or such purposes as the Directors may, in their absolute discretion, deem t (General Mandate),

provided that the number o shares issued pursuant to this General Mandate, when aggregated with the nominal value o

any such shares issued during the preceding twelve (12) months, does not exceed 10% o the nominal value o total issued

share capital o the Company at the time o issue. This renewed General Mandate, unless revoked or varied at a general

meeting, will expire at the conclusion o the next annual general meeting (AGM) o the Company.

The General Mandate procured and approved in the preceding year 2010 which was not exercised by the Company during

the year, will expire at the orthcoming Thirty-Eighth AGM o the Company.

With this renewed General Mandate, the Company will be able to raise unds expeditiously or the purpose o unding

uture investment, working capital and/or acquisition(s) without having to convene a general meeting to seek shareholders

approval when such opportunities or needs arise.

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

StAteMeNt AccoMPANYiNG Notice of ANNUAL GeNeRAL MeetiNG

Further details o the ollowing Directors standing or re-election are set out in the Directors Prole Section o the Annual

Report:

(a) Dato Syed Ari Fadzillah Bin Syed Awalluddin

(b) Dato Tiong Kwing Hee

Notice of THIRTY-EIGHTH ANNUAL GENERAL MEETING (contd)


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boARd of

diRectoRS

CHAIRMAN

Dato Syed Ari Fadzillah bin Syed Awalluddin

PREsIdENT

Dato (Dr.) Teoh Seng Foo

GRoUP CHIEf ExECUTIvE offICER /ExECUTIvE dIRECToR

Dato Tiong Kwing Hee

dIRECToRs

Amos Siew Boon Yeong

Dato Boey Chin Gan

Lim Een Hong

Teoh Seng Kian (Alternate Director to Dato (Dr.) Teoh

Seng Foo)

sECRETARIEs

Yeoh Chong Keat

Rebecca Leong Siew Kwan

AUdIToRs

Russell Bedord LC & Company

10th Floor, Bangunan Yee Seng

15, Jalan Raja Chulan

50200 Kuala Lumpur

sHARE REGIsTRAR

Symphony Share Registrars Sdn. Bhd.

Level 6, Symphony House

Pusat Dagangan Dana 1

Jalan PJU 1A/46

47301 Petaling Jaya

Selangor Darul Ehsan

Tel : 03 7841 8000

Fax: 03 7841 8151/8152

REGIsTEREd offICE

Suite 11.1A, Level 11

Menara Weld

76, Jalan Raja Chulan

50200 Kuala Lumpur

Tel : 03 2031 1988

Fax: 03 2031 9788

sToCk ExCHANGE LIsTING

Bursa Malaysia Securities Berhad

Main Market

WEbsITE

www.ecorst.com.my

coRPoRAte INfoRMATIoN


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cHAiRMANS StAteMeNt

On behal o the Board o Directors o Ecorst Consolidated

Bhd (the Company), I hereby present to you the Annual

Report and the Audited Financial Statements o the

Company and the Group or the Financial Year Ending 31May 2011.


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ANNUAL REPORT 2011

Performance Review

I am pleased to report that the Group has turned the corner during this nancial year ended 31 May 2011. With a prot

beore tax o RM9.4 million recorded against a revenue o RM25.0 million, eorts to turnaround the Group have culminated

in positive results which compare avourably to losses incurred over the previous years. Going orward, I believe theGroup is poised to sustain this healthy perormance as it enters an exciting growth phase.

The Groups retail complex, South City Plaza (SCP) at Seri Kembangan, Selangor, generated 37% to Groups revenue at

RM9.4 million in terms o recurring rental income and property management ees. This recurring source o revenue will

be expanded in the next nancial year as the Groups newly completed 5-storey retail complex, known as 1Segamat, in

Segamat, Johor will commence business in the rst quarter o next year. 1Segamat, being the only mall in Segamat town,

will be an exciting addition to the Groups portolio o prime assets.

Our development project, Taipan @ Ipoh Cybercentre in Daerah Kinta, Jelapang, Perak generated RM6.2 million or 25%

to Group revenue. The development o 102 units o 3-storey shop-oces is progressing smoothly and is in act, ahead

o schedule. The development is expected to be completed by the next nancial year, approximately 1 year ahead o the

scheduled delivery date.

The Groups construction activity contributed RM9.3 million in revenue representing 37% o the Groups total revenue. The

revenue was derived rom the construction project o the National Youth Training Institute at Peretak, Kuala Kubu Baru,

Selangor which was completed during the nancial year under review. The Group is continuing to seek opportunities to

secure new construction projects to boost the Divisions uture revenue and prot contribution.

During the nancial year under review, the Group through concentrated eorts, was able to recover RM38.4 million o

debts and hence wrote-back provisions or doubtul debts made in prior years which were no longer required. The eect

o the write-back o provisions was partly mitigated by losses o RM23.7 million incurred on revocation o retail units sold.

cHAiRMANS StAteMeNt

Newly completed 1Segamat retail complex in Segamat, Johor.


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Operational Review

In my statement last year, I mentioned about plans to construct 2 blocks o 13-storey service apartments as a continuing

development o SCP. I would now like to report that construction works began in mid-2011 and the project which is known

as Academia is targeted to be completed by August 2012. The cash fow generated rom this development will be used

to pare down our bank borrowings.

With more innovative and concerted marketing strategies, rental income derived rom SCP registered a slight improvement

during this nancial year ended 31 May 2011 as compared to the previous year. With the anticipated completion o

Academia apartments and the launching o a cineplex coupled with various upgrading works, the retail outlook at SCP

should improve accordingly.

The Group anticipates a promising uture or 1Segamat with a good tenant mix. The Group is ortunate to be able to

resume and complete this project which will provide a steady income stream and enhance the Groups perormance in

the uture. 1Segamat is a modern and vibrant mall right in the heart o Segamat town and is located adjacent to the bus/taxi terminal and the train station. The opening o 1Segamat is expected to be by the rst quarter o next year.

The Groups commercial development in Taipan @ Ipoh Cybercentre which commenced this year contributed signicantly

to the Groups perormance with the development o 102 units o shop-oces under the rst phase which were ully sold.

Plans are also underway or the development o the second phase consisting o 147 units o shop-oces which will

generate positive income to the Group over the coming nancial years.

Both the Network Marketing and Agro-Biotechnology Divisions continue to ace a challenging environment.

Revenue rom the Network Marketing Division decreased in the nancial year under review as compared to the previous

nancial year. As part o plans to revamp the business, we have re-assessed and re-aligned our product line to include

only product ranges that are unique to the Groups brand and most importantly that benet the ultimate consumer. As theGroup believes there is good business potential in the business o network marketing, with the correct product lines and

a strong distributor base supported by a visionary and eective management team, we will continue intensied eorts to

turnaround this Division.

Under the Agro-Biotechnology Division, we have a mixed basket o organic crops at our arm in Desaru, Johor. The Group

is positively bullish on the long-term contributions rom this Division as we enter the next phase o collaboration with

various scientists to produce sustainable higher value bio-technology and bio-organic agro ood products.

The mining operations via the Groups co-operation agreement with CV Geo Mineral Resources or the exploitation o

an iron ore mine in South Kalimantan, Indonesia is expected to commence contribution in the next nancial year. During

the year under review, the setting up o the machineries and equipment was completed. The necessary testing andcommissioning are being done to ensure smooth running o the mining operations.

cHAiRMANS StAteMeNt (contd)


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ANNUAL REPORT 2011


Industry Overview and Prospects

The Malaysian economy continued to expand albeit at a slower pace o 4% during the second quarter o 2011 as compared

to 4.9% in the rst quarter o 2011. The slower growth rate was also refected in the domestic demand which grew

5.2% in the second quarter o 2011 as compared to 6.9% in the rst quarter which was largely driven by strong private

consumption and investment activities.

The growth momentum is expected to be sustained in the remaining quarters o 2011, emanating mainly rom private

consumption and investment activities as well as acceleration o public expenditure, underpinned by strengthening

domestic demand amid continued policy support.

The uture economic growth on the domestic ront is however susceptible to eects o global developments such as theEurozone debt crisis, eeble recovery o the US economy and global infationary pressures uelled by increasing energy

prices.

Nevertheless, with supportive government initiative and policies inused on the local ront to help spur investment activities

and private consumption growth which augur well or the domestic sector, the Group looks orward to a promising year

ahead in 2012.

Winners o the Save The Earth Sculpture Designing Competition organised at South City Plaza.

Our employees donated ood items and spent time with orphans and underprivileged children at Pusat Jagaan Ragarenthirar Karunai Illam in Balakong, Selangor.


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Corporate and Social Responsibility

The Group is committed to the importance o its corporate and social responsibilities whilst pursuing its corporate goals.

During the year, the Group played host at SCP to several activities which included, amongst others, several blood donation

campaigns hosted together with the Lions Club, Persatuan Pendaki Gunung and several others, und raising campaign or

a shelter home and religious society, health screening programmes under the umbrella o the National Kidney Foundation,

college activities and many other community related activities such as pet rearing, music entertainment shows, chess

competition and health talks.

As part o our contribution to society, we also participated in charitable programmes and activities involving orphans and

children rom single parent homes.

Taking cognisance o the act that human capital is an essential element o the Groups success, we strive to promote

opportunities to enhance the skills and prociency o our employees whilst ensuring their wellbeing. Team building eventsand inormal get-togethers are also organised regularly to create better working relationships between employees.

Acknowledgement

On behal o the Board o Directors, I wish to thank, rstly, the management team and all employees o the Group or

their remarkable commitment and spirited dedication in responding and rising to the challenges. We look orward to this

continued eort which is so essential or the uture growth o the Group.

I also wish to express our sincere appreciation to our valued shareholders, clients, bankers and business associates or

their steadast support and condence in the Group. The Group values and looks orward to this continued support as we

progress towards sustainable success in the years ahead.

To my ellow Board members, I wish to thank each and every one or their invaluable guidance and contribution towards

the betterment o the Group.

Dato Syed Ari Fadzillah Bin Syed Awalluddin

Chairman



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Dato Boey Chin Gan

Independent Non-Executive

Director

Malaysian

Mr. Teoh Seng Kian

Alternate Director to Dato

(Dr.) Teoh Seng Foo

Malaysian

Mr. Amos Siew Boon Yeong


Director

Malaysian

Mr. Lim Een Hong


Director

Malaysian

Dato Syed Ariff Fadzillahbin Syed Awalluddin

Chairman/Independent

Non-Executive Director

Malaysian

Dato (Dr.) Teoh Seng Foo

President/Non-Independent

Executive Director

Malaysian

Dato Tiong Kwing Hee

Group Chie Executive Ofcer/

Executive Director

Malaysian

01

01

05 06 07

03 04

03

0405

07

06

02

02


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ANNUAL REPORT 2011

Dato Syed Ariff Fadzillah bin Syed Awalluddin, aged 68, was appointed to the Board on 27 January 2006. He wasre-designated to Chairman/Independent Non-Executive Director on 1 December 2009. He is also the Chairman o the

Nomination Committee and a member o the Remuneration Committee.

He holds a Bachelor o Arts degree in History rom University Malaya. He also holds a Diploma in DevelopmentAdministration and a Master o Arts in International Relations.

He started his career as an Assistant District Ocer in Kulim, Kedah in 1967. He was an Assistant Secretary in the Public

Service Commission, Kuala Lumpur between 1970 and 1972 beore being transerred to the Ministry o Foreign Aairs.

Prior to retiring in November 2001, he served as the Ambassador o Malaysia to the Kingdom o Thailand rom 1996 to 2001,

Ambassador to the Republic o Korea with joint accreditation to Mongolia (1992 to 1995) and Ambassador o Malaysia to

Fiji with concurrent accreditations to Tuvalu, Tonga, Western Samoa, Kiribati and Nauru (1998 and 1991). His other oreign

assignments include postings to Indonesia, Libya and Canada. He was also the Deputy Permanent Representative o

the Permanent Mission o Malaysia to the United Nations between 1982 and 1986. From 1991 to 1992, he served as the

Undersecretary at the Ministry o Foreign Aairs in charge o Southeast Asia and South Pacic.

He also sits as director on the boards o MNRB Holdings Berhad, MNRB Retakaul Berhad and Malaysian Reinsurance

Berhad.

He has no amily relationship with any other Director and/or major shareholder o the Company. He has not entered into

any transaction, whether directly or indirectly, which has a confict o interest with the Company and has no convictions

or oences, other than trac oences (i any), within the past ten (10) years.

He has attended our (4) out o ve (5) Board meetings held during the nancial year ended 31 May 2011.

Dato Syed Ariff Fadzillahbin Syed Awalluddin(Chairman/Independent

Non-Executive Director)

Malaysian

diRectoRS PRofILE


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Dato (Dr.) Teoh Seng Foo(President/Non-Independent

Executive Director)

Malaysian

diRectoRS PRofILE (contd)

Dato (Dr.) Teoh Seng Foo, aged 55 was appointed to the Board on 5 May 1997. He was re-designated rom the positiono an Executive Deputy Chairman to President/Non-Independent Executive Director on 1 December 2009. He is also the

Chairman o the Executive and Remuneration Committees.

An accountant by proession, Dato Teoh is a Chartered Accountant o the Malaysian Institute o Accountants, a CharteredManagement Accountant and Fellow Member o the Chartered Institute o 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 conerred the Honorary Doctorate in Business Administration by University o Abertay Dundee, United

Kingdom. He is also a Patron o the University o Abertay Foundation based in United Kingdom.

Dato Teoh currently holds board positions as the President o Meda Inc. Berhad and President/Executive Deputy Chairman

o SEG International Bhd.

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

o the Company. Apart rom the above, he has no other amily relationship with any other Director and/or major shareholdero the Company. He has ceased to be a substantial shareholder o the Company on 13 April 2011.

He has not entered into any transaction, whether directly or indirectly, which has a confict o interest with the Company,

other than those disclosed in the notes accompanying the nancial statements, and has no convictions or oences,

other than trac oences (i any), within the past ten (10) years.

He has attended all the ve (5) Board meetings held during the nancial year ended 31 May 2011.


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ANNUAL REPORT 2011

Dato Tiong Kwing Hee(Group Chie Executive

Ofcer/Executive Director)

Malaysian


Dato Tiong Kwing Hee, aged 53, rst joined the Board as an Alternate Director on 18 September 2008 and subsequentlyappointed as Executive Director/Chie Executive Ocer on 2 January 2009. He is currently the Group Chie Executive

Ocer o the Company. He is also a member o the Executive Committee and the Chairman o the Risk Management

Committee.

He obtained a Bachelor o Arts (Hons) majoring in Business Administration rom Hanover College, United States o

America in 1982 and a Master Degree in Business Economics rom Miami University, United States o America in 1983.

He started his career with Sim Lim Holdings Berhad in 1983 as Executive Ocer in charge o corporate nance and was

promoted to Manager in 1984 and General Manager in 1985. He let Sim Lim Holdings Berhad in 1987 ollowing his venture

into the timber industry and became a shareholder cum director o marketing in Wansuria Sdn Bhd. He was a substantial

shareholder in London Pacic Ltd, a company listed on the New Zealand Stock Exchange between 1988 and 1994. In 1994,

he let the timber industry when he sold o his stake in Wansuria Sdn Bhd to Pan Pacic Asia Berhad. In 1995, he joined

D-Systems Pte Ltd, a Singapore based company with exclusive distribution rights o drywall system rom United States o

America or Asia Pacic region, as the Chie Executive Ocer. In 1997, he was head hunted on a two (2) years contract as

an Executive Director o a listed company to prepare that company or a corporate restructuring.

In 2000, Dato Tiong was appointed as an Executive Director o Mercury Industries Berhad and subsequently he joined the

Company on 2 September 2008. During the course o his career, he has been directly involved in various industrial sectors

including corporate nance, nancial services, manuacturing, 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 turnaround.






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Mr. Lim Een Hong(Independent Non-Executive

Director)

Malaysian

Mr. Lim Een Hong, aged 44, was appointed to the Board on 29 March 2010. He is also a member o the Audit and NominationCommittees.

He is a lawyer by proession and holds a Bachelor o Law (Hons) rom University o Malaya. Presently, he is the Chie

Executive Ocer and Director o Eduspec Holdings Bhd.

He started his career as a litigation lawyer handling banking and civil litigation cases rom 1992 to 1996. He was partner

o Eugene Tan & Co rom 1994 to 1998 beore setting up his own rm, Messrs EH Lim, Lee & Partners. He is exposed

to property and land conveyancing transactions, property nancing and land dealings. He has vast experience in land

dealings negotiations, corporate restructuring, joint venture participation, acquisition, investment management and

general corporate representation.




He has attended our (4) out o ve (5) Board meetings held during the nancial year ended 31 May 2011.



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ANNUAL REPORT 2011

Mr. Amos Siew Boon Yeong(Independent Non-Executive

Director)

Malaysian

Mr. Amos Siew Boon Yeong, aged 53, was appointed to the Board on 27 October 2005. He is also the Chairman o the AuditCommittee and a member o the Remuneration Committee.

He qualied as a Certied Public Accountant in 1984 and is currently a member o the Malaysian Institute o Certied

Public Accountants, a Chartered Accountant with the Malaysian Institute o Accountants and an associate member othe Chartered Tax Institute o Malaysia. He is also a Certied Financial Planner and is a member o the Financial Planning

Association o Malaysia.

He started his auditing career and proessional training with the accounting rm, Coopers & Lybrand in 1978 beore

establishing his own practice in 1988. He is currently the sole practitioner o the public accounting rm, Messrs. Siew

Boon Yeong & Associates. He has vast experience in auditing, tax planning, corporate nance and nancial planning and

has been involved in numerous assignments on merger and acquisitions, debt restructuring and liquidation.

He is also a Director o SEG International Bhd.







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Mr. Teoh Seng Kian(Alternate Director to Dato

(Dr.) Teoh Seng Foo)

Malaysian

Mr. Teoh Seng Kian, aged 51, was appointed as Alternate Director to Dato (Dr.) Teoh Seng Foo, the President, on 1December 2009.

He graduated with a Bachelor o Engineering (Mechanical) degree rom Australia in 1984. He started his career with

an Australian company specializing in manuacturing o building materials. Upon returning to Malaysia, he served asa director in a company involved in quarrying and inrastructure construction. He is currently the Executive Director o

Meda Inc. Berhad.

He is a substantial shareholder o the Company and is deemed to have an interest in all the shares held by the Company

in the subsidiaries by virtue o his substantial interest in shares o the Company. He is a brother to Dato (Dr.) Teoh Seng

Foo, the President o the Company and Teoh Seng Aun, who is a substantial shareholder o the Company. Apart rom the

above, he has no other amily relationship with any other Director and/or major shareholder o the Company.

He has not entered into any transaction, whether directly or indirectly, which has a confict o interest with the Company,

other than those disclosed in the notes accompanying the nancial statements, and has no convictions or oences,

other than trac oences (i any), within the past ten (10) years.



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ANNUAL REPORT 2011

Dato Boey Chin Gan(Independent Non-Executive

Director)

Malaysian


Dato Boey Chin Gan, aged 46, was appointed to the Board on 1 April 2009. He is also a member o the Audit and NominationCommittees.

He obtained the Bachelor o Arts (Honours) rom the University Kebangsaan Malaysia (UKM).

Dato Boey is very active in the social economic development o the country. He has served as the Press Secretary to the

Minister o Housing and Local Government o Malaysia or 11 years rom 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 o his long service in government sectors.






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ANNUAL REPORT 2011

bUSiNeSS dIvIsIoNs

CONSTRUCTION DIVISION

The Divisions construction and upgrading project o the

National Youth Training Institute in Peretak, Selangor has

been successully completed. The government unded

training centre which can accommodate up to 800 studentsconsists o academic blocks, student residences, sta

quarters and aculty acilities.

The Division is seeking opportunities to secure new

construction projects rom both the private and public

sectors to boost its uture contribution to the Group.

PROPERTY DIVISION

This Division has two investment properties under its

stable.

The rst is a 5-storey commercial and retail complex in Seri

Kembangan, Selangor, known as South City Plaza (SCP)

which currently houses several established vocational

and technical education providers. Other tenants in SCP

are those in the ood & beverage business, hypermarket

operator, personal care stores, ashion retailers,

telecommunication providers, entertainment outlets,

imported urniture retailers etc. which provide a wide

range o services and acilities to students, shoppers and

communities alike. On-going eorts are being carried out

to urther improve its tenant base and investment yield.

Construction has commenced or 2 tower blocks consisting

o 416 units o service apartments on top o the existing

SCP. The development known as Academia would,

upon completion, enhance the value o the retail complex

in terms o being part o an integrated development with

synergistic benets attributable to the population present

at both the complex and the residential towers. The

Academia has been ully sold and construction is expected

to be completed and handed over by the third quarter o

next year.

The second property is a 5-storey commercial andretail complex in Segamat, Johor known as 1Segamat.

Construction o this complex has been completed this year

and the complex is targeted to be opened or business by

the rst quarter o next year.

The approximately 450,000 sq. t. complex will house major

tenants consisting o a supermarket, an eight hall Cineplex,

a book store, ood and beverage outlets, ashion and

liestyle retailers and many others.

Being the only modern shopping mall in the town o

Segamat, we are optimistic o a signicant contributionrom 1Segamat in the years ahead.

The completed construction and upgrading o the National Youth

Training Institude in Peretak, Selangor.

Artist impression o the Academia Project consisting o 2 tower blocks

o service apartments in Seri Kembangan, Selangor.


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bUSiNeSS dIvIsIoNs (contd)

PROPERTY DIVISION (contd)

The Groups commercial development project in Mukim

o Hulu Kinta, Ipoh, Perak consists o 2 and 3 storey shop-

oces and is known as Taipan @ Ipoh Cybercentre.

With easy access rom the North-South Highway (exit

Jelapang/Chemor), the development is located within

the most convenient prime area o Ipoh, surrounded by

other intensive developments consisting o government

oces, business centers, hypermarket, transportation hub,

education centers, housing estates etc.. The Group has

recently added on another 4.33 acres in the same vicinity

or the development o 67 units o shop-oces which is

currently 75% sold. Construction o this development is

expected to commence early next year.

NETWORK MARKETING DIVISION

Under this Division, recent research has identied a

major breakthrough product in the orm o Black Garlic,

a ermented garlic derived rom resh garlic which has

long been known as a herbal wonder ood. Based on

Japanese technology, the Black Garlic is a unique product

resulting rom prolonged extraction o resh garlic at high

temperature or a period o 50-60 days and through this

process, the garlic turns black naturally.

The Black Garlic is a powerul antioxidant which

eectiveness is at least 22 times more than resh garlic.

This advanced bio-technology process which is a rst in the

world is able to produce black garlic with numerous health

benets key amongst which is enhancing the body immune

system, anti-infammatory eects, anti-aging, improves

blood circulation and brain perormance, regulates blood

sugar levels, revitalizes and improves stamina and many

other health benets.

Other products oered range rom health to beauty care,

personal to home care, bodywear to jewelry and waterequipment to car care. Each product is manuactured

under stringent Good Manuacturing Practices (GMP) and

Hazard Analysis and Critical Control Point (HACCP) quality

standards and are all syariah compliant.

A group o committed leaders has been identied to work

closely with the marketing team to promote our innovative

services and proprietary products or optimal health to

capture the local and global wellness market.

Black Garlic - a unique product with numerous health benefts produced using an advanced bio-technology process.


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ANNUAL REPORT 2011

bUSiNeSS dIvIsIoNs (contd)

AGRO-BIOTECHNOLOGY DIVISION

This Division operates a biotechnology-based organic arm

at Desaru, Johor via a joint-venture with a Johor state

government-linked corporation.

Currently, the land is under cultivation with various types

o organic vegetables and ruit crops such as sweet

corn, sweet potato, chilly, green leay vegetables, radish,

sesame, groundnuts, pineapple and many others. Backed

by our SOM (Sijil Organik Malaysia) certication, theacceptance o our organic arm produce by organic

wholesalers and retailers has been very encouraging. The

next phase is to move into higher value bio-technology

and bio-organic ood products in collaboration with ood/

nutrition scientists.

MINERAL RESOURCE DIVISION

This Division represents the Groups new business entry

into mineral resources; more specically the exploitation

o iron ore in South Kalimantan, Indonesia.

The ully set-up mining processing plant is currently

undergoing testing and commissioning. Mining activities

are expected to be ully operational by the end o the year.

The Group is optimistic that this Division will start tocontribute signicantly in terms o revenue and prot in the

next nancial year.

Organic produce rom our Desaru arm.

Organic produce rom our Desaru arm.

Setting-up o the mining processing plant in South Kalimantan, Indonesia.

Iron ore area in Tanah Laut Regency, South Kalimantan, Indonesia.


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five-YeAR GRoUP sTATIsTICs

Year ended 31 May

Periodended 31

May

Year ended

31 July2011 2010 2009 2008* 2007

Revenue (RM Mil) 25.0 21.1 44.0 30.5 93.2

Prot / (Loss) Beore Taxation and

Minority Interests (RM Mil) 9.5 (41.4) (90.3) (22.2) (33.6)

Prot / (Loss) Attributable to Shareholders (RM Mil) 8.8 (41.4) (90.6) (33.4) (36.4)

Shareholders Funds (RM Mil) 118.6 105.2 145.3 232.0 269.9

Total Assets Employed (RM Mil) 414.4 358.7 433.6 515.2 582.6

Earnings / (Loss) Per 50 Sen Share (Sen) 1.4 (6.4) (13.9) (5.1) (5.6)

Net Asset Per 50 Sen Share (RM) 0.18 0.16 0.22 0.36 0.42

Weighted Average Number o Shares

(50 Sen Per Share) in issue during the year (000) 650,148 650,148 650,148 650,148 650,148

100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

_

2007 2008 2009 2010 2011

(RM000)

ReveNUe

20,000

10,000

-10,000

-20,000

-30,000

-40,000

-50,000

-60,000

-70,000

-80,000

-90,000

-100,000

2007 2008 2009 2010 2011

(RM000)

PRofit / (LoSS) befoRe tAxAtioN ANd MiNoRitY iNteReStS

300,000

250,000

200,000

150,000

100,000

50,000

_

2007 2008 2009 2010 2011

(RM000)

SHAReHoLdeRS fUNd

* 10 mh peri rm 1.8.2007 31.5.2008 ue hage i faial year e rm 31 July 31 May.


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ANNUAL REPORT 2011

INTRODUCTION

The Board o Directors (Board) o EcoFirst Consolidated Bhd (ECB) subscribes to the undamental principles o 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 saeguard the interests o all stakeholders andto enhance shareholders value.

BOARD OF DIRECTORS

Constitution o the Board and Board Balance

The Board, led by an Independent Non-Executive Chairman, comprises o six (6) members o whom two (2) are Executive Directors,our (4) are Non-Executive Directors all o whom are Independent, including the Chairman. One (1) o the Executive Directors has anappointed Alternate Director. The prole o each Director is set out in the Directors Prole Section o the Annual Report.

The Boards composition brings to the Group a diverse wealth o skills, knowledge and a balanced mix o experience and expertise

to eectively discharge its stewardship responsibilities in spearheading the Groups growth and uture direction. There is a clearsegregation o responsibilities between the Directors to ensure a balance o power and authority. Generally, the Executive Directorsare responsible or making and implementing operational and corporate decisions. Non-Executive Directors play a pivotal role incorporate accountability by providing unbiased and independent views in the sharing o knowledge and experience, towards theormulation o policies and in the decision-making process. Where a potential confict o interest may arise, it is mandatory practiceor the Director concerned to declare his interest and abstain rom the decision-making process.

There is a clear division o responsibility between the Chairman and Group Chie Executive Ocer to ensure that there is a balance opower and authority. The Chairman is responsible or ensuring Board eectiveness whilst the Group Chie Executive Ocer has overallresponsibility or the operating units, organizational eectiveness and implementation o Board policies and decisions. Althoughall the Directors have an equal responsibility or the Groups operations, the role o these Independent Non-Executive Directors isimportant as they provide independent views, advice and judgement on issues o strategy, business perormance and controls. TheIndependent Non-Executive Directors provide independent and constructive views in ensuring that the strategies proposed by themanagement are studied and deliberated to take account o the interests not only o the Group, but also o shareholders, and the

public at large.

Meetings o the Board o Directors

At least our (4) board meetings are held annually; each meeting scheduled to consider the quarterly nancial results andoperational perormance. Additional meetings are convened as and when necessary. During the nancial year ended31 May 2011, ve (5) board meetings were held and the summary o attendance by the Directors is as ollows:

Name o DirectorsTotal

Attendance% o

Attendance

Dato (Dr.) Teoh Seng Foo(Alternate Director : Teoh Seng Kian)

5/5 100

Dato Tiong Kwing Hee 5/5 100Dato Syed Ari Fadzillah bin Syed Awalluddin 4/5 80

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 nancial year under review.

CORpORATE gOvERNANCE statement


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Access to Advice and Inormation

Board meetings are structured with a pre-set agenda, providing the Directors with relevant and timely inormation to enable them to

discharge their duties and responsibilities eectively. Board papers, which provide updates on operational, nancial and corporatedevelopments, are circulated to enable Directors to obtain urther explanation where necessary in order to acilitate inormeddecision-making.

All Directors have access to all inormation within the Group and direct access to the advice and services o the Company Secretary,whether as a ull Board or in their individual capacity. In addition, the Directors are also empowered to seek external and independentproessional advice at the Companys expense, in order to discharge their duties and responsibilities more eectively.

Board Committees

The Board has delegated specic responsibilities to our (4) committees, which operate within approved terms o reerence, to assistin the eective discharge o its principal responsibilities. Notwithstanding the above, the ultimate responsibility or the nal decisionlies with the ull Board. These committees are:

a) Nomination Committee

The Nomination Committee, which comprises wholly o Non-Executive Directors, recommends candidates with an optimalmix o qualications, skills and experience to the Board. The Nomination Committee also carries out annual evaluation on theeectiveness o the whole Board, the various Committees and individual Directors contribution to the Boards decision-makingprocess.

The present members o the Nomination Committee are as ollows:

Dato Syed Ari 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 or drawing up the policy rameworkand to make recommendations to the Board on the remuneration packages o the Executive Directors. The Executive Directorsdo not participate in decisions relating to their remuneration packages. The Board as a whole determines the remunerationo Non-Executive Directors with the Director concerned abstaining rom participating in decisions in respect o his individualremuneration.

The Remuneration Committee comprises o the ollowing members:

Dato (Dr.) Teoh Seng Foo - Chairman/President/Executive Director

Amos Siew Boon Yeong - Member/Independent Non-Executive Director

Dato Syed Ari Fadzillah bin Syed Awalluddin - Member/Independent Non-Executive Director

c) Audit Committee

The terms o reerence and urther inormation on the Audit Committee are outlined in the Audit Committee Report Section o thisAnnual Report.

d) Risk Management Committee

The Risk Management Committee oversees the implementation o the risk management system within the Group. The Committeereports directly to the Board and assists the Board in overseeing the management o risk issues and reviews the ecacy ointernal controls within the Group.

CORpORATEgOvERNANCE statement (ConTd)


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ANNUAL REPORT 2011

d) Risk Management Committee (contd)

The present members o the Risk Management Committee are as ollows:

Dato Tiong Kwing Hee (Group Chie Executive Ofcer) - Chairman

Nur Arina Caroline Wambeck Binti Abdullah (General Manager, Finance & Accounts) - Member

Loke Kam Foo (General Manager, Operation) - Member

Re-election

All Directors will retire at regular intervals by rotation once at least every three (3) years and shall be eligible or re-election inaccordance with the provisions o the Companys Articles o Association.

Directors Training

All Directors have attended and completed the Mandatory Accreditation Programme as prescribed by Bursa Malaysia SecuritiesBerhad (Bursa Securities). The Board acknowledges the importance o continuous training and they have attended various trainingprogrammes and seminars to keep abreast with developments in the business environment as well as with the new relevant regulatoryand statutory requirements, to urther enhance their skills and knowledge.

During the nancial year ended 31 May 2011, the Directors have attended the ollowing training programmes:-

No. Directors Title o Training Programmes Date

1. Dato Syed Ari Fadzillah BinSyed Awalluddin

Prime Ministers 1Malaysia Economic TransformationProgramme (ETP)

27/04/2011

2. Dato (Dr.) Teoh Seng Foo Prime Ministers 1Malaysia Economic TransformationProgramme (ETP)

27/04/2011

3. Dato Tiong Kwing Hee Prime Ministers 1Malaysia Economic TransformationProgramme (ETP)

27/04/2011

4. Amos Siew Boon Yeong National Tax Conference 2010 Seminar Percukaian Kebangsaan 2010

06/07/2010 & 07/07/201019/10/2010

5. Dato Boey Chin Gan Prime Ministers 1Malaysia Economic TransformationProgramme (ETP)

27/04/2011

6. Lim Een Hong Prime Ministers 1Malaysia Economic TransformationProgramme (ETP)

27/04/2011

7. Teoh Seng Kian (AlternateDirector to Dato (Dr.) Teoh SengFoo)

Prime Ministers 1Malaysia Economic TransformationProgramme (ETP)

27/04/2011



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DIRECTORS REMUNERATION

The details o the remuneration or the Directors o the Company or the nancial year under review are as ollows:

1. Aggregate remuneration o the Directors categorised into appropriate components:

Fees(RM)

Remuneration and others(RM)

Total(RM)

Executive Directors 833,020 833,020

Non-Executive Directors 137,950 137,950

2. The number o Directors whose total remuneration all within the ollowing bands:

Range o RemunerationNumber o Directors

Executive Non-Executive

Nil 1*

Below RM50,000 4

RM350,001 to RM400,000 2

* Alternate Director

RELATIONSHIp WITH SHAREHOLDERS

Shareholders Communication and Investors Relationship Policy

The Group recognises the importance o establishing a direct line o communication with shareholders and investors through timely

dissemination o inormation on the Groups perormance and major developments via appropriate channels o communication.

Platorms or dissemination o inormation include the Annual General Meetings (AGM) and Extraordinary General Meetings(EGM), i any, distribution o Annual Reports and relevant circulars, issuance o press releases and press conerences. Inormationon the nancial perormance o the Group is communicated to the public via the announcement o its nancial results to BursaSecurities on a quarterly basis.

To urther enhance the transparency and communication with the shareholders and other stakeholders, the Company has an ocialwebsite at www.ecorst.com.my or the timely dissemination o business related inormation or the benet o all interested parties.

Shareholders could be given the opportunity to communicate directly with Dato Syed Ari Fadzillah bin Syed Awalluddin, or any othe other Independent Non-Executive Directors should there be any concerns relating to the Company.

AgM

The AGM is the principal orum or communicating with shareholders. Henceorth, the Chairman and the Board encourage shareholdersto attend and participate in an open discussion during the AGM. Shareholders who are unable to attend are allowed to appoint aproxy to attend and vote on their behal. Shareholders are given the opportunity to seek clarication on any matter pertaining to thebusiness and nancial perormance o the Group.



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29

ANNUAL REPORT 2011

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible or ensuring the proper maintenance o accounting records o the Group. The Audit Committee assists theBoard in reviewing inormation or disclosure purposes such as the quarterly report or release to Bursa Securities in order to ensureits 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 34 o this Annual Report provides an overview o the state o internal controlswithin the Group.

Relationship with Auditors

The Board through the establishment o an Audit Committee maintains a ormal and transparent arrangement with the Companysauditors, both internal and external.

Compliance Statement

The Company has been in compliance with the Code during the nancial year under review save or the disclosure o details o theremuneration o each Director. The Board is o the view that the transparency and accountability aspects o Corporate Governance asapplicable to Directors Remuneration are appropriately served by the band disclosure made above under Directors Remuneration.

This statement was approved by the Board o Directors on 27 September 2011.


STATEMENT OF DIRECTORS RESpONSIBILITY INpREpARINg THE ANNUAL FINANCIAL STATEMENTS

The Directors are legally required, in accordance with the Companies Act, 1965, to prepare nancial statements, which present a trueand air view o the state o aairs, and o the results o the operations o the Group and the Company and in preparing the nancialstatements or the nancial year ended 31 May 2011, 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 or ensuring that proper accounting records are maintained, which disclose with reasonable accuracy,the nancial position o the Group and also to ensure that the nancial statements comply with applicable approved accountingstandards in Malaysia. In addition, the Board is responsible or the proper saeguarding o the Groups assets and to take reasonablesteps or the prevention and detection o raud and other irregularities.


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Material Contract

On 11 March 2011, the Company entered into a Sale and Purchase Agreement with Mr. Teoh Seng Aun, who is a substantial shareholder

o the Company and is also the brother o certain directors o the Company, namely Dato (Dr.) Teoh Seng Foo and Mr. Teoh Seng Kian(alternate director to Dato (Dr.) Teoh Seng Foo) or the acquisition o the entire issued and paid-up share capital o Curah BahagiaSdn Bhd comprising 500,000 ordinary shares o RM1.00 each, o which he is the registered and/or benecial owner, or a total cashconsideration o RM4,500,000.00 (Acquisition). The Acquisition was completed on 3 May 2011.

Other than the above mentioned, there were no material contracts subsisting at the end o nancial year or entered into since the endo the previous nancial year by the Company or its subsidiaries, which involved the interest o the Directors and major shareholders.

Non-Audit Fee

No non-audit ee was paid to external auditors during the nancial year.

Share Buy-backs

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

Depository Receipt Programme

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

Sanctions and/or Penalties

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

Variation in Results

There was no material variation between the audited results and the unaudited results previously released or the nancial yearended 31 May 2011.

Revaluation Policy on Landed Properties

The Group has adopted a 5-year revaluation policy with regards to its landed properties.

Prot Guarantee

The Company did not make any arrangement during the nancial year which requires prot guarantee.

Option, Warrants or Convertible Securities

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

Utilisation o Proceeds Raised rom Corporate Proposal

There were no proceeds raised rom any corporate proposal during the year under review. The Company did not implement any undraising exercise during the nancial year under review.

Recurrent Related Party Transaction o a Revenue Nature

There was no recurrent related party transaction o a revenue nature, which requires shareholders mandate during the nancialyear.

OTHERInFORmatIOn


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ANNUAL REPORT 2011

AUDIT COMMITTEE RePORt

MEMBERSHIp

The Audit Committee (the Committee) comprises wholly o Independent Non-Executive Directors as ollows:-

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 o ve (5) meetings o the Audit Committee were held during the nancial year ended 31 May 2011. The meetings wereappropriately structured through the use o agendas, which were distributed in advance to all the members o the Audit Committee.Attendances o each member were as ollows and the Company Secretary attended all the meetings during the year:-

Members Total Attendance % o 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 o Reerence o the Audit Committee was established by the Board on 26 April 1994. Subsequently, amendments were madeto the terms o reerence and approvals were sought at the Companys Board Meetings held on 29 March 2001 and 26 March 2008.

Membership

The Audit Committee shall be appointed by the Board rom amongst the Directors o the Company and shall consist o not lessthan three members. All the Audit Committee members must be non-executive directors, with a majority o them being IndependentDirectors. At least one member o the Audit Committee:

1. must be a member o the Malaysian Institute o Accountants; or

2. i he is not a member o the Malaysian Institute o Accountants, he must have at least three years working experience and:(i) he must have passed the examinations specied in Part I o the 1st Schedule o the Accountants Act 1967; or(ii) he must be a member o one o the associations o accountants specied in Part II o the 1st Schedule o the Accountants Act

1967; or(iii) ulls such other requirements as prescribed or approved by the Exchange.

No alternate director shall be appointed as a member o the Audit Committee. The members o the Audit Committee shall select a

Chairman rom among their numbers who shall be an Independent Director.

I a member o the Committee resigns, dies or or any other reason ceases to be a member with the result that the number o membersis reduced below three, the Board shall, within three months o that event, appoint such number o new members as may be requiredto make up the minimum number o three members.

The term o oce and perormance o the Audit Committee and each o its members shall be reviewed by the Board at least onceevery three years to determine whether the Audit Committee and its members have carried out their duties in accordance with theirterms o reerence.


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Authority

The Audit Committee shall, in accordance with a procedure determined by the Board and at the cost o the Company:

1. have authority to investigate any matter within its terms o reerence;

2. have the resources which are required to perorm its duties;

3. have ull and unrestricted access to any inormation pertaining to the Company;

4. have direct communication channels with the external auditors and person(s) carrying out the internal audit unction or activity;

5. be able to obtain independent proessional or other advice; and

6. be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance o other directorsand employees o the Company, whenever deemed necessary.

Functions

The unctions o the Committee shall be to review the ollowing and report the same to the Board:

1. with the external auditors, their audit plans;

2. with the external auditors, their evaluation o the system o internal controls;

3. with the external auditors, their audit reports;

4. the assistance given by the Companys employees to the external auditors;

5. the adequacy o the scope, unctions, competency and resources o the internal audit unctions and that it has the necessaryauthority to carry out its works;

6. the internal audit programme, processes, the results o the internal audit programme, processes or investigations undertaken andwhether or not appropriate action is taken on the recommendations o the internal audit unction;

7. the quarterly results and year end nancial statements, prior to the approval by the Board, ocusing particularly on:

(a) changes in or implementation o major accounting policy changes;

(b) signicant and unusual events; and

(c) compliance with accounting standards and other legal requirements;

8. any related party transactions and confict o interest situation that may arise within the Company or Group including anytransaction, procedure or course o conduct that raises questions o management integrity;

9. any letter o resignation rom the external auditors o the Company; and

10. to consider the nomination o a person or persons as external auditors together with such other unctions as may be agreed to by

the Audit Committee and the Board.

Meetings

Meetings shall be held not less than our (4) times a year. The external auditors may request a meeting i they consider that one isnecessary. The Chairman shall convene a meeting whenever any member o the Audit Committee requests or a meeting by givingnot less than three (3) clear days notice thereo unless such requirement is waived by all members. However, consent rom memberthat is overseas is not required. Written notice o the meeting together with the agenda shall be given to the members o the AuditCommittee.

In order to orm a quorum in respect o a meeting o an Audit Committee, the majority o members present must be IndependentDirectors and any decision shall be by a simple majority. The Chairman shall not have a casting vote.

AUDITCOMMITTEE RePORt (ConTd)


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ANNUAL REPORT 2011

Reporting procedure

The Secretary o the Committee shall circulate the minutes o meetings o the Committee to all members o the Board.

SUMMARY OF ACTIvITIES DURINg THE FINANCIAL YEAR

The Audit Committee carried out the ollowing duties in accordance with its terms o reerence:

Reviewed the external auditors scope of work and audit plans for the year. Prior to the audit, representatives from the externalauditors presented their audit strategy and plan.

Reviewed with the external auditors, major issues arising from the audit.

Considered the outsourcing of the internal audit function to an independent professional rm and reviewed the Groups internalaudit plan.

Reviewed the internal audit reports, which highlighted the audit issues, recommendations and managements responses. Themembers o the Audit Committee were brieed on pertinent audit issues ndings and observations by the Internal Auditors at themeetings o the Audit Committee. The Audit Committee also discussed the management actions taken to improve the system ointernal control based on recommendations made in the internal audit reports.

Recommended to the Board areas of improvement opportunities in internal control system, procedures and risk management.

Reviewed the quarterly unaudited nancial results for announcements purposes before recommending them for the Boards approval.

Reviewed the draft audited nancial statements of the Group and of the Company prior to submission to the Board for theirconsideration 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 Companys Annual Report.

Met with the External Auditors, in the absence of Management, to discuss problems and reservations (if any) arising from theiraudits.

Reviewed the applicability of certain new accounting standard on the nancials of the Group.

STATEMENT ON EMpLOYEES SHARE OpTION SCHEME (ESOS)

The Committee will veriy the ESOS allocation in compliance with the criteria as stipulated in the by-laws o ESOS o the Company, i any.

INTERNAL AUDIT FUNCTION

In July 2010, the Company outsourced its internal audit unction to an independent proessional consultancy rm entrusted with therole o providing independent and systematic reviews on the systems o internal control o the Group. The Internal Audit unctionprovides an independent and objective eedback to the Audit Committee and the Board on the adequacy, eectiveness and eciencyo the internal control system within the Group.

Throughout the nancial year under review, the Internal Auditors had carried out the internal audit works on the three main businessoperations o the Group i.e. network marketing, property management and construction, assignments which were in accordance withthe annual internal audit plan approved by the Audit Committee.

Upon completion o each audit cycle, the Internal Auditors would report to the Audit Committee on their audit ndings, theirrecommendations o corrective actions to be taken by the management together with the managements responses in relation thereto.The Internal Auditors would also conduct ollow-up reviews on previously reported issues during the audit cycles and the results otheir observations would be reported to the Audit Committee accordingly. At the request o the Audit Committee, the Internal Auditorsmay re-visit previously audited business operations to urther assess the system o internal controls and the procedures implemented.

There was no material internal control ailure that was reported in respect o internal audit works carried out during the nancial yearunder review, that would have resulted in any signicant loss to the Group.

AUDITCOMMITTEE RePORt (ConTd)


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STATEMENTOn InteRnal cOntROl

In compliance with Paragraph 15.26(b) o the Main Market Listing Requirements o Bursa Malaysia Securities Berhad, the Boardis committed to maintain a sound system o internal control in the Group and is pleased to provide the ollowing statement, whichoutlines the state, nature, and scope o internal control o the Group during the nancial year ended 31 May 2011.

Board responsibilities

The Board maintains a system o internal control to saeguard shareholders investment and the Groups assets. The Board iscommitted to establish an appropriate control environment and also to review the adequacy and integrity o the system o internalcontrol. Due to the limitations inherent in any system o internal control, these systems, though implemented, are designed to manage,rather than to eliminate the risk o ailure to achieve corporate objectives. Accordingly, the system can only provide reasonable butnot absolute assurance against material misstatement or loss.

The Board conrms that there is an underlying and ongoing process in the Group or the identication, evaluation and mitigation o itssignicant risks. The Board urther conrmed that these processes are being regularly reviewed and accords with the Statement oInternal Control: Guidance or Directors o Public Listed Companies.

Enterprise Risk Management Framework

The Board recognises that risk management is an integral part o the Groups business operations and has put in place the EnterpriseRisk Management Framework within the Group as an on-going process or identiying, evaluating, monitoring and managing thesignicant risk aecting the achievement o its business objectives.

The Group established its risk ramework with the aim o mitigating or minimising such risks. A database o risk records was compiledand risk mitigating action plans were communicated to the Risk Management Committee (RMC), which in turn identied andcommunicated to the Board the critical risks (present and uture) the Group aced and management action plans to manage theserisks.

Internal Audit Function

The Group has out sourced the internal audit unction to an independent proessional rm. The internal audit unction reports directlyto the Audit Committee to provide eedback regarding the adequacy and integrity o the Groups system o internal control. The

internal audit unction reviews the key activities o 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 o assurance withrespect to the adequacy o the internal controls as required by the Board. The Audit Committee presents its ndings to the Board ona quarterly basis or as appropriate.

During the nancial year, the cost incurred or the internal audit unction amounted to approximately RM 70,500.00.

Other Risks and Control Processes

In addition to the risk management and internal audit unction, the Board has put in place an organisational structure with ormallydened lines o responsibility and delegation o 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 continuousassurance to top management and the Board. The Group has also developed and made available to employees an Employee Handbook.

Quarterly updates o the nancial results o the Group are provided to the Audit Committee and the Board or assessment o theperormance o the Group. Management meetings, which involve Executive Directors and selected executive personnel, are regularlyheld in order to identiy and address any problems encountered by the Group, so that appropriate actions could be taken to addressthe issues.

Review o Statement by External Auditors

The External Auditors have reviewed this statement or inclusion in the Annual Report 2011 and reported to the Board that nothing hascome to their attention that causes them to believe that this statement is inconsistent with their understanding o the process adoptedby the Board in reviewing the adequacy and integrity o the system o the internal controls.

This statement is made in accordance with the resolution passed by the Board o Directors on 27 September 2011.


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FINANCIAL

STATEMENTS

CONTENTS pAgES

DIRECTORS REpORT 36

STATEMENT BY DIRECTORS 40

STATUTORY DECLARATION 40

REpORT OF THE INDEpENDENT AUDITORS 41

STATEMENTS OF COMpREHENSIvE INCOME 43

STATEMENTS OF FINANCIAL pOSITION 44

STATEMENTS OF CHANgES IN EqUITY 45

STATEMENTS OF CASH FLOWS 46

NOTES TO THE FINANCIAL STATEMENTS 49


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The directors submit their report and the audited nancial statements o the Group and the Company or the nancial year ended31 May 2011.

pRINCIpAL ACTIvITIES

The principal activities o the Company consist o investment holding and provision o management services. The principal activitieso the subsidiaries are disclosed in Note 12 to the nancial statements.

There have been no signicant changes in the nature o these activities during the nancial year.

FINANCIAL RESULTS

Group Company

RM000 RM000

Net prot/(loss) or the year 8,493 (6,640)

Attributable to:

Owners o the Company 8,760 (6,640)

Minority interests (267)

8,493 (6,640)

In the opinion o the directors, the results o the operations o the Group and the Company during the nancial year have not beensubstantially aected by any item, transaction or event o a material and unusual nature other than those disclosed in Note 6 to thenancial statements.

DIvIDENDS

No dividend has been paid or declared by the Company since the end o the previous nancial year. The directors also do notrecommend any dividend payment in respect o the current nancial year.

RESERvES AND pROvISIONS

There were no material transers to or rom reserves or provisions during the nancial year other than those disclosed in the nancialstatements.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the nancial year.

SHARE OpTIONS

No options have been granted by the Company to any parties during the nancial year to take up unissued shares o the Company.

No shares have been issued during the nancial year by virtue o the exercise o any option to take up unissued shares o theCompany. As at the end o the nancial year, there were no unissued shares o the Company under options.

DIRECTORS RePORt


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ANNUAL REPORT 2011

DIRECTORS RePORt (ConTd)

DIRECTORS

The directors o the Company in oce since the date o the last report are:

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

DIRECTORS INTERESTS

The interests in the Company and its related companies o those who were directors at the end o the nancial year, as recorded inthe Register o Directors Shareholdings kept under Section 134 o the Companies Act, 1965, are as ollows:

Number o ordinary shares o RM0.50 each

Balance as at1.6.2010 Bought Sold

Balance as at31.5.2011

Direct interest

Dato (Dr.) Teoh Seng Foo 34,222,500 4,200,000 18,132,000 20,290,500

Teoh Seng Kian (Alternate to

Dato (Dr.) Teoh Seng Foo) 79,602,632 79,602,632

Dato Tiong Kwing Hee 12,903,100 1,651,500 14,554,600

Indirect interest **

Dato (Dr.) Teoh Seng Foo 516,332 516,332


Dato (Dr.) Teoh Seng Foo) 516,332 516,332

Other shareholdings in which directorsare deemed to have interests #

Dato (Dr.) Teoh Seng Foo 9,819,000 9,819,000


Dato (Dr.) Teoh Seng Foo) 2,495,300 2,495,300

** Deemed interest pursuant to Section 6A(4) o the Companies Act, 1965

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

None o the other directors in oce at the end o the nancial year, had held shares or benecial interest in shares o the Companyand its related companies during the nancial year, according to the register required to be kept under Section 134 o the CompaniesAct, 1965.


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DIRECTORS BENEFITS

Since the end o the previous nancial year, no director has received or become entitled to receive any benet (other than a benet

included in the aggregate amount o emoluments received or due and receivable by the directors as shown in the nancial statementsor the xed salary o a ull time employee o the Company) by reason o a contract made by the Company or a related corporationwith the director or with a rm o which the director is a member, or with a company in which the director has a substantial nancialinterest except or any benet which may be deemed to have arisen by virtue o the transactions between the Group and the Companyand a company in which certain directors o the Company have interests as disclosed in Notes 30 and 35 to the nancial statements.

There were no arrangements during or at the end o the nancial year, which had the object o enabling directors to acquire benetsby means o the acquisition o shares in, or debentures o, the Company or any other body corporate.

OTHER STATUTORY INFORMATION

Beore the nancial statements o 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 o o bad debts and the making o provision or doubtul debts andhad satised themselves that all known bad debts had been written o and that adequate provision had been made or doubtuldebts; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course o business had beenwritten down to their expected realisable values.

At the date o this report, the directors are not aware o any circumstances:

(a) which would render the amount written o or bad debts or the amount o the provision or doubtul debts in the nancialstatements o the Group and the Company inadequate to any substantial extent;

(b) which would render the values attributed to current assets in the nancial statements o the Group and the Company misleading;and

(c) which have arisen which render adherence to the existing method o valuation o assets or liabilities o the Group and theCompany misleading or inappropriate.

In the interval between the end o the nancial year and the date o this report:

(a) no item, transaction or event o a material and unusual nature has arisen which, in the opinion o the directors, would substantiallyaect the results o the operations o the Group and the Company or the nancial year in which this report is made; and

(b) no charge has arisen on the assets o the Group and the Company which secures the liability o any other person nor have anycontingent liabilities arisen in the Group and the Company.

No contingent or other liability o the Group and the Company has become enorceable or is likely to become enorceable within theperiod o twelve months ater the end o the nancial year which, in the opinion o the directors, will or may aect the ability o the

Group and the Company to meet their obligations as and when they all due.

At the date o this report, the directors are not aware o any circumstances not otherwise dealt with in this report or the nancialstatements, which would render any amount stated in the nancial statements misleading.



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ANNUAL REPORT 2011

AUDITORS

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

Signed on behal o the Boardin accordance with a resolution o the directors,

DATO (DR.) TEOH SENG FOO

DATO TIONG KWING HEE

Seri Kembangan, Selangor Darul Ehsan

27 September 2011



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The directors o ECOFIRST CONSOLIDATED BHD state that, in the opinion o the directors, the accompanying nancial statements aredrawn up in accordance with the provisions o the Companies Act, 1965 and the Approved Accounting Standards or Entities OtherThan Private Entities in Malaysia so as to give a true and air view o the nancial position o the Group and o the Company as at

31 May 2011, and o their nancial perormance and their cash fows or the year ended on that date.

The supplementary inormation set out in Note 37, which is not part o the nancial statements, is prepared in all material respects,in accordance with Guidance on Special Matter No.1 Determination o Realised and Unrealised Prots or Losses in the Context oDisclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements as issued by the Malaysian Institute o Accountantsand the directive o Bursa Malaysia Securities Berhad.

Signed on behal o the Boardin accordance with a resolution o the directors,

DATO (DR.) TEOH SENG FOO


Seri Kembangan, Selangor Darul Ehsan

27 September 2011

STATUTORYDeclaRatIOnI, DATO TIONG KWING HEE, being the director primarily responsible or the nancial management o ECOFIRST CONSOLIDATEDBHD, do solemnly and sincerely declare that to the best o my knowledge and belie, the accompanying nancial statements arecorrect, and I make this solemn declaration conscientiously believing the same to be true and by virtue o the provisions o theStatutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named DATO TIONG KWING HEE at Kuala Lumpur in Wilayah Persekutuan on27 September 2011


Beore me,

ARSHAD ABDULLAH

No. W550

COMMISSIONER FOR OATHS

Kuala Lumpur, Wilayah Persekutuan.

STATEMENT BYDIRectORs


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ANNUAL REPORT 2011

1. Report on the nancial statements

We have audited the accompanying nancial statements which comprise the statements o nancial position o the Group and o

the Company as at 31 May 2011, and the related statements o comprehensive income, changes in equity and cash fows or theyear then ended, and a summary o signicant accounting policies and other explanatory notes.

1.1 Directors responsibility or the nancial statements

The directors o the Company are responsible or the preparation and air presentation o these nancial statements inaccordance with the Companies Act 1965 (Act) and the Approved Accounting Standards or Entities Other Than PrivateEntities in Malaysia, and or such internal control as the directors determine is necessary to enable the preparation onancial statements that are ree rom material misstatement, whether due to raud or error.

1.2 Auditors responsibility

Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit inaccordance with the Approved Standards on Auditing in Malaysia. Those standards require that we comply with ethical

requirements and plan and perorm the audit to obtain reasonable assurance whether the nancial statements are ree rommaterial misstatement.

An audit involves perorming procedures to obtain evidence about the amounts and disclosures in the nancial statements.The procedures selected depend on the auditors judgment, including the assessment o the risks o material misstatemento the nancial statements, whether due to raud or error. In making those risk assessments, the auditor considers internalcontrol relevant to the entitys preparation and air presentation o the nancial statements in order to design audit proceduresthat are appropriate in the circumstances, but not or the purpose o expressing an opinion on the eectiveness o the entitysinternal control. An audit also includes evaluating the appropriateness o accounting policies used and the reasonablenesso accounting estimates made by management, as well as evaluating the overall presentation o the nancial statements.

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

1.3 Opinion

In our opinion, the nancial statements have been properly drawn up in accordance with the Act and the Approved AccountingStandards or Entities Other Than Private Entities in Malaysia so as to give a true and air view o the nancial position o theGroup and o the Company as at 31 May 2011, and o their nancial perormance and their cash fows or the year ended onthat date.

REpORT OF THE InDePenDent aUDItORsTO THE MEMBERS OF ECOFIRST CONSOLIDATED BHD (Incorporated in Malaysia)


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2. Report on other legal and regulatory requirements

In accordance with the requirements o the Act, we also report on the ollowing:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by itssubsidiaries o which we have acted as auditors have been properly kept in accordance with the provisions o the Act.

(b) We have considered the nancial statements and the auditors reports thereon o the subsidiary o which we have not actedas auditors, as indicated in Note 12 to the nancial statements, being nancial statements that have been included in theGroups nancial statements.

(c) We are satised that the nancial statements o the subsidiaries that have been consolidated with the Companys nancialstatements are in orm and content appropriate and proper or the purposes o the preparation o the Groups nancialstatements and we have received satisactory inormation and explanations required by us or those purposes.

(d) The auditors reports on the nancial statements o the subsidiaries were not subject to any qualication material in relationto the Groups nancial statements and did not include any comment made under Section 174(3) o the Act.

3. Other reporting responsibilities

The supplementary inormation set out in Note 37 is disclosed to meet the requirement o Bursa Malaysia Securities Berhadand is not part o the nancial statements. The directors are responsible or the preparation o the supplementary inormationin accordance with Guidance on Special Matter No. 1 Determination o Realised and Unrealised Prots or Losses in theContext o Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements as issued by the Malaysian Instituteo Accountants (MIA Guidance) and the directive o Bursa Malaysia Securities Berhad. In our opinion, the supplementaryinormation is prepared, in all material respects, in accordance with the MIA Guidance and the directive o Bursa MalaysiaSecurities Berhad.

4. Other matters

This report is made solely to the members o the Company, as a body, in accordance with Section 174 o the Act and or no other

purpose. We do not assume responsibility to any other person or the content o this report.

RUSSELL BEDFORD LC & COMPANY TEOH WUEY SZE

AF 1237 2831/01/12 (J)

CHARTERED ACCOUNTANTS PARTNER

Kuala Lumpur27 September 2011

REpORT OF THE InDePenDent aUDItORsTO THE MEMBERS OF ECOFIRST CONSOLIDATED BHD (Incorporated in Malaysia) (ConTd)


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ANNUAL REPORT 2011

Note Group Company

2011 2010 2011 2010

RM000 RM000 RM000 RM000Revenue 4 24,976 21,073 2,520 3,919

Cost o sales 5 (19,387) (17,824)

Gross prot 5,589 3,249 2,520 3,919

Other operating income 50,527 25,716 1,396 15,896

Distribution costs (499) (725)

Administration expenses (9,864) (5,870) (3,221) (3,388)

Other operating expen

ecofirs-annualreport2011 (2.6mb)

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