ECOFIRS-AnnualReport2008 (2.9MB)

Ann
ual R
epo
rt 20
08
Building On
A Strong Foundation
Contents
Our Mission & Vision Notice of Annual General Meeting Statement Accompanying Notice of Annual General Meeting Corporate Information Chairmans Statement Board of Directors Directors Profile Management Team Business Divisions Corporate Governance Statement
01 02 - 03 03 04 06 - 10 12 13 - 16 18 - 20 21 - 24 25 - 28
Other Information Statement on Internal Control Audit Committee Report Financial Statements Particulars of Group Properties Statistical Report of Holders of Shares and Warrants 2004/2009 Analysis of Shareholdings Analysis of Warrantholdings Statement on Directors Interests in the Company and Related Corporations Form of Proxy
29 30 31 - 34 35 - 89 90 91 92 - 93 94 - 95 96
Our mission & vision
Leveraging 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.
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EcoFirst Consolidated Bhd (15379-V) Annual Report 2008
Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Thirty-Fifth Annual General Meeting of the Company will be held at Grand Ballroom, Level 5, The Summit Hotel, Subang USJ, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan on Monday, 24 November 2008 at 3.00 p.m. to transact the following business:
AGENDA
As Ordinary Business 1. To receive and adopt the Audited Financial Statements for the financial period ended 31 May 2008 together with the Directors and Auditors Reports thereon. (Ordinary Resolution 1) 2. To approve the payment of Directors fee. (Ordinary Resolution 2) 3. To re-elect the following Directors who retire in accordance with the Companys Articles of Association: a) Tan Sri DatoDr. Syed Jalaludin bin Syed Salim (Ordinary Resolution 3) b) Dato (Dr.) Teoh Seng Foo (Ordinary Resolution 4) 4. To re-appoint Messrs. Russell Bedford LC & Company as Auditors of the Company and authorise the Directors to fix their remuneration. (Ordinary Resolution 5) AS SPECIAL BUSINESS To consider and, if thought fit, to pass the following resolution: 5. Ordinary Resolution Authority To Allot And Issue Shares Pursuant To Section 132D Of The Companies Act, 1965 THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and approvals of the Bursa Malaysia Securities Berhad and any other relevant governmental or regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965 to allot and issue shares in the Company from time to time upon such terms and conditions and for such purposes as the Directors may in their discretion deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. (Ordinary Resolution 6)
6. To transact any other business of which due notice shall have been given. By Order of the Board
HEW LING SZE (MAICSA 7010381) Secretary Subang Jaya, Selangor 31 October 2008
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Notice of Annual General Meeting

NOTES: 1. 2. 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. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
3. In the case of a corporate body, the proxy appointed must be in accordance with the Memorandum and Articles of Association, and the instrument appointing a proxy shall be given under the Companys Common Seal or under the hand of an officer or attorney duly authorised. 4. The Form of Proxy must be deposited at the Companys Registered Office at 17th Floor, Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan not less than 48 hours before the time set for the meeting or any adjournment thereof. Explanatory Notes To Special Business 1. Ordinary Resolution No. 6 The proposed Ordinary Resolution, if passed, will give authority to the Directors of the Company the power to issue shares in the Company up to an aggregate amount not exceeding ten percent (10%) of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and cost involved in convening a general meeting to specifically approve such an issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.
Statement Accompanying Notice of Annual General Meeting

1. Directors Standing For Re-Election The Directors who are standing for re-election at the Thirty-Fifth Annual General Meeting are:1.1 Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim 1.2 Dato (Dr.) Teoh Seng Foo The profiles of the above Directors are set out in the Directors Profile on page 13 of this Annual Report.
2. Attendance Of Board Meetings The attendance of the Directors are set out on page 25 in the Corporate Governance Statement in this Annual Report.
3. Thirty-Fifth Annual General Meeting Place : Date : Time : Grand Ballroom, Level 5, The Summit Hotel, Subang USJ, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan 24 November 2008 3.00 p.m.
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Corporate Information
BOARD OF DIRECTORS Chairman Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim Executive Deputy Chairman Dato (Dr.) Teoh Seng Foo Group Managing Director Dato Clement Hii Chii Kok Directors Dato Syed Ariff Fadzillah bin Syed Awalluddin Dato Philip Chan Hon Keong Amos Siew Boon Yeong Oh Hong Choon Tiong Kwing Hee
(Alternate Director to Dato Clement Hii Chii Kok) (Appointed on 18 September 2008)
AUDITORS Russell Bedford LC & Company 10th Floor, Bangunan Yee Seng 15, Jalan Raja Chulan 50200 Kuala Lumpur
SHARE REGISTRAR Symphony Share Registrars Sdn. Bhd. Level 26, Menara Multi-Purpose Capital Square No. 8, Jalan Munshi Abdullah 50100 Kuala Lumpur Tel : 03-2721 2222 Fax : 03-2721 2530 / 2721 2531
STOCK EXCHANGE LISTING Bursa Malaysia Securities Berhad Main Board
SECRETARY Hew Ling Sze
WEBSITE www.ecofirst.com.my
REGISTERED OFFICE 17th Floor, Menara Summit Persiaran Kewajipan, USJ 1 47600 UEP Subang Jaya Selangor Darul Ehsan Tel : 03-8024 8899 Fax : 03-8025 3003
FROM CONCEPT . . .
TO REALITY
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Chairmans Statement
Dear Shareholders, On behalf of the Board of Directors of EcoFirst Consolidated Bhd, I hereby present the Annual Report and Financial Statements of the Group and the Company for the financial period ended 31 May 2008.
Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim
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Chairmans Statement
Overview
The global macroeconomic and credit market conditions are getting very uncertain with downside bias due to the deepening global credit crisis. Given the increasing external uncertainties, including the slowdown of the US economy, the Malaysian economy is confronting one of the most challenging years and at the same time we are not spared from the contagion effect from the US and EU financial meltdown.
Operational Review
I am pleased to report that the Group has secured a contract to construct and upgrade the National Youth Training Institute (IKBN) at Peretak, Kuala Kubu Bharu, Selangor during the period under review. The IKBN project in Kuala Kubu Bharu, Selangor is progressing smoothly and ahead of schedule. In line with the Governments call to raise the capacity for knowledge and innovation, the Group plans to re-align South City Plaza (South City) into an education mall. A number of private institutions of higher education and training centres have set up or agreed to set up their centres at South City. We expect the student numbers to grow, thus providing significant crowd presence at South City. This will benefit the retailers directly and South City indirectly in terms of better yields in the near future. On the property front, the Group plans to launch its two blocks of residential towers in South City in the near future to provide accommodation for the incoming students. We expect to enjoy full occupancy rate for our residential towers. Its strategic location in Seri Kembangan and close proximity to the KL-Seremban Highway and Besraya Highway has potential for South City to become a vibrant investment and preferred location for living.
Financial Performance Review

In April 2008, the Board approved the change in the financial year end from 31 July to 31 May for administrative and financial reporting purposes. As a result, the financial statements for this year are for a ten-month period starting from 1 August 2007 to 31 May 2008. The Group recorded a turnover of RM30.46 million for the ten-month period ended 31 May 2008 and a loss before tax of RM22.20 million for the same period under review. The revenue recorded was mainly derived from the Plantation and Mills Division as well as Property and Construction Division while the loss before tax was mainly attributable to the adjustment made to the fair value of the properties.
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Chairmans Statement
Operational Review (Contd)

Our Network Marketing Division is progressing well in accordance with expectations. The sales trend is optimistic. We have commenced business in Indonesia and in the process of establishing our presence in the Philippines. The Group plans to venture into Thailand and Vietnam thereafter. We are confident that our quality products will be able to sell well in both local and overseas markets. The contribution from our Food Services Division in Summit is improving. The management is confident that it should be able to break even in the next financial year. During the period under review, the Food Services Division commenced operations of its new cafe in SEGi College Subang Jaya. The Group plans to set up an outlet at South City in the near future. Barring any unforeseen circumstances, the above mentioned core business divisions are expected to contribute positively to the Groups overall earnings in the next financial year.
Corporate Development
On behalf of the Board, I am pleased to announce that the Company has acquired a wholly owned subsidiary company, namely, EcoFirst Products Worldwide Sdn Bhd, to enable us to venture into regional markets for our Network Marketing Division. The Company completed the disposals of 51% equity interest in Cross Continental Investments and 1.14% equity interest in Palm Tech India Limited during the financial period under review. Proceeds of the disposals have been utilised to reduce bank borrowings and also reinvested in core businesses. Your Board looks forward to the continued support of shareholders and employees in this transitional period as the Group seeks to restructure itself into a leaner and more focused organisation.
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Chairmans Statement
Corporate Social Responsibility (CSR)

While the pursuit of our corporate goals is important, the Group has been mindful of its CSR. Our business models have taken cognizance of our CSR to our employees, shareholders, our business partners and the communities in which we do our business as well as the environment we operate in. We also seek every opportunity to play a pivotal role for the betterment of the society at large via our efforts in extending our hands and heart to numerous charitable causes. As a progressive employer, the Group believes that the provision of training to nurture future leaders is crucial for the Group to improve its performance. Through our associate company, SEG International Berhad, scholarships and sponsorships have been arranged to widen the talent pool of human resources for the Group and the nation.
The Group also remains committed to ensure the occupational safety and health of all employees at their workplace through increased awareness, accountability and continual training geared towards the conduct of all activities in an environmentally responsible, safe and healthy manner.
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Chairmans Statement
Future Prospects
The Groups prospects for the ensuing year are set against an increasingly challenging global and domestic outlook. Global growth in 2008 and 2009 are expected to moderate and its recovery would largely depend on the extent of the US financial turmoil, which is seeing further downward pressure from escalating global credit crunch. Despite the current challenging economic environment, the Group will continue with its cost efficient measures in the running of operations and prudent expansion plans in seeking new business ventures. The Group will continue to pursue and strengthen its core businesses under the Construction, Property, Network Marketing and Food Services Divisions as well as continue to seek business opportunities both locally and overseas.
Acknowledgment
On behalf of the Board, I would like to take this opportunity to convey my thanks and appreciation to the management and staff of the Group for their commitment and dedication. I also wish to acknowledge our valued shareholders, business associates, clients and bankers for their unwavering support and confidence in the Group. The Group values and looks forward to this continued support as we progress towards new undertakings. We welcome Mr. Tiong Kwing Hee (the Alternate Director to Dato Clement Hii), who joined us in September 2008. We are confident that his wealth of knowledge and experience will bring value to the Group. Last but certainly not the least, I wish to extend my sincere thanks to my fellow Board members for their valuable contribution to the Group.
Tan Sri Dato Dr. Syed Jalaludin Syed Salim Chairman 30 September 2008
FROM PLANNING . . .
TO FRUITION
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Board of Directors
Amos Siew Boon Yeong Dato Syed Ariff Fadzillah bin Syed Awalluddin Tiong Kwing Hee Oh Hong Choon
Dato Philip Chan Hon Keong
Dato Clement Hii Chii Kok Dato (Dr.) Teoh Seng Foo
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Directors Profile

Chairman (Independent Non-Executive Director) Malaysian
Dato (Dr.) Teoh Seng Foo
Executive Deputy Chairman (Non-Independent Executive Director) Malaysian Dato (Dr.) Teoh Seng Foo, aged 52 was appointed to the Board on 5 May 1997. An accountant by profession, Dato (Dr.) 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 (Dr.) Teoh has wide corporate experience, having held senior management positions in multi-nationals such as Intel Technology, Woodward & Dickerson Inc., PricewaterhouseCoopers and Esquel Group. Dato (Dr.) Teoh was conferred the Honorary Doctorate in Business Administration by University of Abertay Dundee, United Kingdom. Currently, Dato (Dr.) Teoh is also a Patron of the University of Abertay Foundation based in United Kingdom. Locally, Dato (Dr.) Teoh is the Senior Advisor to Yayasan Pendidikan Bistari and Centre for Education Opportunities Bhd. He is also the Chairman of Eduspec Sdn Bhd and Youtheme Online Sdn Bhd, both involved in the promotion of e-learning in schools. In addition, Dato (Dr.) Teoh also holds current board positions in the following public listed companies: Meda Inc. Berhad Chairman/Non-Executive Director SEG International Bhd Executive Deputy Chairman/ President He is the Chairman of the Executive and Remuneration Committees. He has direct and indirect interest in 28,171,600 and 17,370,065 ordinary shares of RM0.50 each respectively in 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 in the Company. He is a brother to Teoh Seng Aun and Teoh Seng Kian, who are substantial shareholders of the Company. Apart from the above, he has no other family relationship with any other Director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company, other than those disclosed in the Notes to the Financial Statements, and has no convictions for offences within the past ten (10) years.
Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim, aged 64, a National Science Laureate as well as a founder fellow of the Academy of Sciences Malaysia, was appointed to the Board on 27 January 2006 as the Chairman of the Company. He had a long illustrious academic career in both University Malaya and University Putra Malaysia (UPM) before retiring as Vice Chancellor of UPM in April 2001. He was responsible for transforming UPM into one of the leading centres of higher education. Recently, he was awarded the National Academic Laureate for 2007. As an accomplished academician, he has helped found many academic societies and associations, and has published over 350 papers in journals and proceedings in the fields of animal science, university management and education. For his meritorious career and services, he has received numerous awards, decorations and honours nationally as well as internationally. He is currently the Chairman of Bank Kerjasama Rakyat Malaysia Berhad and Kejuruteraan Samudra Timur Berhad, as well as a Director of Esso Malaysia Berhad and TAFI Industries Berhad. He is the Chairman of the Nominating Committee of the Company and does not have any interest in the shares of the Company or its subsidiaries. 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 within the past ten (10) years.
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Directors Profile
Dato Clement Hii Chii Kok
Group Managing Director (Non-Independent Executive Director) Malaysian Dato Clement Hii Chii Kok, aged 50, was appointed to the Board on 27 January 2006 as the Group Managing Director of the Company. He holds a Bachelor of Laws degree from the United Kingdom. He is a former journalist holding senior positions in several local newspapers, including Chief Editor of Borneos leading English daily, The Borneo Post. He had also served in senior positions with management consultancy and marketing firms. He is also the Managing Director/ Chief Executive Officer of main board-listed company, SEG International Bhd, having served in that position since 2001. He was conferred the Honorary Doctorate of Business Administration by the University of Sunderland, United Kingdom, in early 2006. In 2007, he was conferred an Honorary Doctorate of Laws by the University of Wolverhampton, United Kingdom. He is also a Justice of Peace. He is a member of the Executive Committees and Chairman of the Risk Management Committee of the Company. He has direct interest in 60,492,266 ordinary shares of RM0.50 each in the Company. 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 to the Financial Statements, and has no convictions for offences within the past ten (10) years.
Dato Syed Ariff Fadzillah bin Syed Awalluddin

(Independent Non-Executive Director) Malaysian
Dato Syed Ariff Fadzillah bin Syed Awalluddin, aged 65, was appointed to the Board on 27 January 2006. 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 and South Pacific. He is currently the Chairman of LCL Corporation Berhad and Directors of MNRB Holdings Berhad, MNRB Retakaful Berhad and Malaysian Reinsurance Berhad. He is a member of the Audit and Nominating Committees of the Company and does not have any interest in the shares of the Company or its subsidiaries. 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 within the past ten (10) years.
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Directors Profile
Dato Philip Chan Hon Keong
Amos Siew Boon Yeong
Dato Philip Chan Hon Keong, aged 43, was appointed to the Board on 12 April 2006. He graduated with a Bachelor of Economics and a Bachelor of Laws from the University of Sydney. He has experience in various areas of practice including banking and corporate finance, asset based financing, commercial law, energy, natural resources & utilities, project financing, venture capital and real estate. He currently practices as an Advocate & Solicitor and is the co-head of the Banking and Property Unit in Skrine. He is also a Director of Scope Industries Berhad, Eksons Corporation Berhad and JF Technology Berhad. He does not have any interest in shares of the Company or its subsidiaries. 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 within the past ten (10) years.
Amos Siew Boon Yeong, aged 50, was appointed to the Board on 27 October 2005. 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 Malaysian Institute of Taxation. 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 over 30 years of experience in the field of the accounting profession specializing in auditing, taxation and management consultancy services. He has done numerous assignments in valuation, due diligence and related services on merger and acquisition, project and corporate finance engagements and insolvency services. He is also a Director of SEG International Bhd, TMC Life Sciences Bhd and Petra Energy Bhd. He is the Chairman of the Audit Committee and a member of the Remuneration Committee of the Company. He does not have any interest in the shares of the Company or its subsidiaries. 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 within the past ten (10) years.
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Directors Profile
Oh Hong Choon
(Independent Non-Executive Director) Australian
Tiong Kwing Hee
(Alternate Director to Dato Clement Hii Chii Kok) Malaysian
Oh Hong Choon, aged 67, was appointed to the Board on 15 July 2004. He obtained an honours degree in History and Economics from University Malaya. He has held senior government positions in the Malaysian Industrial Development Authority and the Industrial Development Division of the Ministry of Trade & Industry, Government of Malaysia. He has also substantial top-level managerial experience in the MUI Group having held positions such as Advisor of Malayan United Industries Berhad, President of MUI Philippines Inc., Executive Director of MUI (HK) Limited, Executive Director of MUI (UK) Limited; and has been based in London, Hong Kong and Manila. As such, he has extensive and wide-ranging international corporate experience. Currently, he is also a Director of Pan Malaysia Capital Berhad. He is a member of the Audit, Nominating and Remuneration Committees of the Company. He does not have any interest in shares of the Company or its subsidiaries. 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 within the past ten (10) years.
Tiong Kwing Hee, aged 50, was appointed as Alternate Director to Dato Clement Hii Chii Kok on 18 September 2008. He obtained a Bachelor of Arts (Honours) 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 takeover of 190,000 acres of virgin timber concession in Kapit, Sarawak and was a shareholder cum Director of marketing in Wansuria Sdn Bhd. He was a substantial shareholder in London Pacific Ltd, a company listed in 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 to Pan Pacific Asia Berhad. In 1995, he joined D-Systems Pte Ltd, Singapore as Chief Executive Officer before being given a two (2) years contract as Executive Director of Pancaran Ikrab Berhad in October 1997. In 2000, Mr. Tiong was appointed as Executive Director of Mercury Industries Bhd. He joined EcoFirst Consolidated Berhad on 2 September 2008. He is a member of the Risk Management Committee of the Company. Mr. Tiong has more than 25 years of hands-on experience, extensive knowledge and exposure in international business, corporate finance and corporate planning. He does not have any interest in the shares of the Company or its subsidiaries. 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 within the past ten (10) years.
FROM OUR BASE . . .
TO SOARING NEW HEIGHTS
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Management Team
3 7 10
6 5
8 9
2 1
Group Managing Director Executive Director
Dato Clement Hii Chii Kok
6 Nellie Lee

General Manager, Procurement & Quality Assurance Senior Manager, Legal Services
2 Tiong Kwing Hee 3 4 5 Cheryl Chong
7 8

Cindy Khaw Wu Jin Hou
Group Vice President General Manager, Finance & Accounts Director, Group Human Resource
Manager, Internal Audit & Risk Management Company Secretary Manager, Human Resource & Administration
Caroline Wambeck Lilaine Lee
Hew Ling Sze
10 Julie Cheah
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Management Team
CONSTRUCTION DIVISION
Director, Projects
Haji Mazlan Bin Md. Zain
2 1
2 Ashley Tan

Senior Manager, Contracts Assistant General Manager
Ng Puck Mun
PROPERTY DIVISION
Cheryl Chong Group Vice President

Complex Manager
2 Janice Loh
3 Hong Jing Hong 4 Tan Wen Miin

Maintenance Manager Finance Manager
5 Terence Toh 6 Joe Hue
Advertising & Promotion Manager Marketing Manager
3 1
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Management Team
NETWORK MARKETING DIVISION
Senior Vice President
Willy Chan Foo Weng Sunny Lee
2 3 4 5
Vice President, Business Development Assistant General Manager, Marketing Manager, Distributor Services Manager, Finance
Bryan Lee Boon Kiang Evelyn Goh
Cheong Kuan Ying Masrur Bin Tarmuji
Manager, Business Development
FOOD SERVICES DIVISION
General Manager
Josephine Lee Choong Ming Hon
3 1
Assistant Manager, Operations & Sales Assistant Chef
Ruzilawati Binti Ujang
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Business Divisions
Construction Division
Through this Division, the Group has ventured into the following endeavours: Private Finance Initiative (PFI) Projects The Division has submitted a few proposals to the relevant authorities for projects worth approximately RM600 million using the Private Finance Initiative (PFI). Bidding Contracts The Division is expected to secure some sizeable construction projects in the coming year based on bidding contracts submitted during the year. Joint Ventures (JV) A few joint ventures with a few established companies were formed to bid for and undertake a few selected upcoming projects. IKBN Peretak The Division managed to secure a contract to construct and upgrade Institute Kemahiran Belia Negara at Peretak.
Property Division
SOUTH CITY PLAZA (SOUTH CITY) EcoFirst owns and manages South City, a commercial and retail complex in Seri Kembangan, Selangor. The complex is strategically located in southern Kuala Lumpur, between the KL-Seremban Highway and Besraya Highway. In operation since 2003, South City is a hive of activity which includes appearances of international and local artistes. The 1.2 million square feet complex houses major tenants, a wide variety of restaurants to satisfy most gastronomic preferences and a few educational institutions. The design of South City includes two blocks of commercial/residential towers which are yet to be built. The Group plans to launch these towers in the near future.
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Business Divisions
Agro-biotechnology Division
This Division is tasked to handle modern agricultural initiatives especially in the production of novelty fruits, medicinal plants, herbs and other crops through the application of the latest techniques in agrobiotechnology. The vision of this Division is to be a leading integrated agrobiotechnology entity engaged in modern agriculture, downstream processing, productisation, marketing and distribution of agro-biotechnological produce. Towards this end, the Group is developing key initiatives in areas such as plant breeding and developing biofertilizers and biopesticides using the latest technological advances in biotechnology. The Group has set up J-Biotech EcoFirst Agro Sdn Bhd which specialises in organic farming using high end and environmentally friendly technology. This company is a joint venture company between J-Biotech Sdn Bhd (a subsidiary of a government-linked corporation of the Johor State, Johor Biotechnology and Biodiversity Corporation) and EcoFirst Agro-Industries Sdn Bhd (a subsidiary of EcoFirst Consolidated Bhd). In this joint venture, J-Biotech EcoFirst Agro Sdn Bhd will develop 1,000 acres of land in Kota Tinggi, Johor with Johor Biotechnology and Biodiversity Corporation to set up and run greenhouses and open crop farms.
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Business Divisions
Network Marketing Division

EcoFirst Products Sdn Bhd (EcoFirst Products) represents the Groups expansion into the network marketing industry. Its core business is tasked with marketing and distributing proprietary products through an online network marketing channel. Expanding its product range from nutraceuticals, healthcare, nutritional supplements to home care and personal care, EcoFirst Products ensures its products are strictly researched and developed and under stringent quality control standards. In addition to its presence in Malaysia, Indonesia and soon the Philippines, EcoFirst Products is having plans for expansion in the region namely Thailand and Vietnam. Its plan of expansion will also be localized to suit each local business environment. EcoFirst Products is dedicated to providing its consumers innovative services and proprietary products that will enhance their well being and lifestyle.
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Business Divisions
Food Services Division

HARTZ CHICKEN Hartz survived low months in January and February 2008, but fared better in the later part of the year due to festive celebrations such as Hari Raya, Deepavali and Christmas. During the low months, we took cues from customers feedback and changed a few of the recipes to cater more to Asian taste. In the month of Ramadhan, we had a daily menu change to cater to the regular Muslim and corporate crowds. During the second half of the year, Hartz at Summit increased its publicity efforts through a few events. Hartz provided the press conference venue for the finalists of Miss Malaysia Universe 2008, hosted Miss Malaysia Tourism 2008 and sponsored a Childrens Colouring Contest. MARVELICIOUS This caf is set up in SEGi College Subang Jaya, which is adjacent to The Summit, where Hartz restaurant is located. Marvelicious is intended to be a contemporary and vibrantly coloured low-cost caf for SEGi College students. The response from students has been overwhelming so far. We are confident this caf will continue to spread its wings to other colleges.
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Corporate Governance Statement

Introduction
The Board of Directors (Board) of EcoFirst Consolidated Bhd (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 a Non-Executive Chairman, comprises seven (7) members of which two (2) are Executive Directors and five (5) are Independent Non-Executive Directors. The Directors profiles are set out on pages 13 to 16. The Boards 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 Groups growth and future direction. There is 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 Managing Director to ensure that there is a balance of power and authority. The Chairman is responsible for ensuring Board effectiveness whilst the Group Managing Director 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 Groups 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. 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 period ended 31 May 2008, five (5) board meetings were held. The summary of attendance by the Board from 1 August 2007 to 31 May 2008 is as follows: Name of Directors Total Attendance Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim Dato (Dr.) Teoh Seng Foo Dato Clement Hii Chii Kok Dato Syed Ariff Fadzillah bin Syed Awalluddin Dato Philip Chan Hon Keong Amos Siew Boon Yeong Oh Hong Choon 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. 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. 5/5 4/5 5/5 4/5 5/5 5/5 5/5 % of Attendance 100 80 100 80 100 100 100
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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 Companys expense, in order to discharge their duties and responsibilities more effectively. Board Committees The Board has delegated specific responsibilities to four (4) committees, which operate within approved terms of reference, to assist 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) Nominating Committee The Nominating Committee, which comprises wholly of Non-Executive Directors, recommends candidates with an optimal mix of qualifications, skills and experience to the Board. The Nominating Committee also carries out annual evaluation on the effectiveness of the whole Board, the various Committees and individual Directors contribution to the Boards decision-making process. The present members of the Nominating Committee comprises: Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim - Chairman / Independent Non-Executive Director Dato Syed Ariff Fadzillah bin Syed Awalluddin - Member / Independent Non- Executive Director Oh Hong Choon - 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. 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. The Remuneration Committee comprises the following members: Dato (Dr.) Teoh Seng Foo Amos Siew Boon Yeong Oh Hong Choon - - - Chairman / Non-Independent Executive Director Member / Independent Non-Executive Director Member / Independent Non-Executive Director
c) Audit Committee The terms of reference and further information on the Audit Committee are outlined in the ensuing pages.
d) Risk Management Committee The Risk Management Committee oversees the implementation of the risk management system in the Group. The Committee reports directly to the Board and assists the Board in overseeing the management of risk issues and reviews the efficacy of internal controls within the Company. The Risk Management Committee consists of the following members: Dato Clement Hii Chii Kok Tiong Kwing Hee Cheryl Chong Poh Yee Nur Arina Caroline Wambeck Binti Abdullah - - - - Chairman Member Member Member
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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. Directors Training The Directors have attended the Mandatory Accreditation Programme organised by Bursa Malaysia Securities Berhad (BMSB). They also continued to attend other training and seminars to keep abreast with developments in the market place. During the financial period, the Directors have attended training programmes in respect of relevant new laws and regulations, financial reporting standards and leadership courses. The Directors will continue to undergo other relevant training, as appropriate, to further enhance their skills and knowledge. DIRECTORS REMUNERATION The details of the remuneration of the Directors of the Company for the financial period under review are as follows: 1. Aggregate remuneration of the Directors categorised into appropriate components: Executive Directors Non-Executive Directors Fees Remuneration and others Total (RM) (RM) (RM) - 188,100 577,325 - 577,325 188,100
2. The number of Directors whose total remuneration fall within the following bands: Range of Remuneration Number of Directors Below RM50,000 RM50,001 to RM100,000 RM250,001 to RM300,000 Executive Non-Executive - - 2 4 1 -
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 Groups performance and major developments via appropriate channels of communication. Dissemination of information includes the convening of Annual General Meetings (AGM) and Extraordinary General Meetings (EGM), distribution of Annual Reports and relevant circulars, issuance of press releases and press conferences. The financial performance of the Group is communicated to the public via its quarterly report to BMSB. To further enhance the transparency and communication with the shareholders and all concerned, the Company set up an internet website at www.ecofirst.com.my and investor relation channel at http://ecofirst.investor.net.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 Y.Bhg Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim, or any of the other Independent Non-Executive Director should there be any concerns relating to the Company.
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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 In preparing the financial statements, the Directors have complied with Section 169(15) of the Companies Act, 1965 and applicable accounting standards in Malaysia so as to give a true and fair view of the state of affairs and the results of the Group and the Company. The Group presents its year-end financial results on an annual basis through its annual report and its interim results, on a quarterly basis via its submissions to the BMSB. The Audit Committee assists the Board in reviewing the information disclosed to ensure accuracy and adequacy. Internal Control The Statement on Internal Control furnished on page 30 of the 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 Companys auditors, both internal and external. Compliance Statement The Company has been in compliance with the Code during the financial period under review save for the disclosure of details of the remuneration of each Director. The Company complies with the disclosure requirements under the Listing Requirements of BMSB, i.e. disclosure of Directors remuneration by applicable bands of RM50,000. 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 on page 27. This statement was approved by the Board of Directors on 18 September 2008. STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT OF THE AUDITED FINANCIAL STATEMENTS The Directors are legally required to prepare financial statements, which present a true and fair view of the state of affairs of the Group and the Company and is pleased to announce that in preparing the financial statements for the financial period ended 31 May 2008, the Group has: 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 the Companies Act, 1965. In addition, the Board is responsible for the proper safeguarding of the Groups assets and to take reasonable steps for the prevention and detection of fraud and other irregularities.
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Other Information
Material contracts Save as disclosed below, there were no material contracts entered into by the Company and its subsidiaries, involving the interest of directors and major shareholders, either still subsisting at the end of the financial year or entered into since the end of the previous financial year. Settlement Agreement dated 24 March 2008 entered into between the Company (hereinafter referred to as the Guarantor) and SEG International Berhad (SEGi) in relation to a Profit Guarantee Agreement dated 22 October 1999 and three Supplemental Agreements thereto. The salient terms of the Settlement Agreement are as follows: (i) the shortfall of the guaranteed profit up to the year ended 31 December 2005 amounting to RM3,380,000.00 shall be paid by the Guarantor to SEGi via monthly payment over a period of 34 months at RM100,000.00 each month from January 2008 until September 2010 and the final RM80,000.00 in October 2010; (ii) the guaranteed profit for the year ended 31 December 2006 shall be calculated based on the cumulative pretax profits of SEGi for the years of 2006, 2007, and 2008, and all and any shortfall then shall be payable by the Guarantor to SEGi; and (iii) the outstanding amounts payable by the Guarantor to SEGi as stated in (i) and (ii) above shall be secured by an assignment in escrow of properties owned by the Guarantors subsidiary in favour of SEGi. The Guarantor, Dato (Dr) Patrick Teoh Seng Foo and Dato Clement Hii Chii Kok are substantial shareholders of SEGi. Dato (Dr) Patrick Teoh Seng Foo, Dato Clement Hii Chii Kok and Mr. Amos Siew Boon Yeong, the Directors of the Company, are also Directors of SEGi. Non-audit fee No non-audit fee was paid to external auditors during the financial period. Share buy-backs The Company did not make any share buy-back transactions during the financial period. American Depository Receipt (ADR) or Global Depository Receipt (GDR) programme The Company did not sponsor any ADR or GDR programme during the financial period. 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 for the financial year There was no material variation between the audited results and the unaudited results previously released for the financial period ended 31 May 2008. Revaluation policy on landed properties The Group has adopted a 5-year revaluation policy with regards to its landed properties. Profit guarantee The Company did not make any arrangement during the financial period which requires profit guarantee. Options, warrants or convertible securities There were no options, warrants 2004/2009 or convertible securities being exercised during the financial period. Utilisation of proceeds from corporate proposal The Company did not implement any fundraising exercise during the period 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 period. Internal audit function The Company has an internal audit department. During the financial period, the cost incurred for the internal audit function amounting to RM67,000.00.
30
Statement on Internal Control

In compliance with paragraph 15.27(b) of the LR, 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 year. Board responsibilities The Board maintains a system of internal control to safeguard shareholders investment and the company 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 The Board recognises that risk management is an integral part of the Groups business operations and has put in place the Enterprise Risk Management Framework within the Group as an on-going process for identifying, evaluating, monitoring and managing the significant risk affecting the achievement of its business objectives. The Group established its risk framework with the aim of mitigating or minimising such risks. A database of risk records was compiled and risk mitigating action plans were communicated to the Risk Management Committee (RMC), which in turn identified and communicated to the Board the critical risks (present and future) the Group faced and management action plans to manage these risks. Internal Audit Function The Board has complied with the Code, Part - 2 Best Practice in Corporate Governance Provision BB VII &VIII, through the establishment of its internal audit function. The internal audit function reports directly to the Audit Committee to provide feedback regarding the adequacy and integrity of the Groups system of internal control. The internal audit function reviews the key activities of the Group on the basis of an 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. 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. 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 problems. This statement is made in accordance with the minutes of the Board of Directors Meeting held on 18 September 2008.
31
Audit Committee Report

Membership The Audit Committee (the Committee) comprises mainly of Independent Directors as follows:Amos Siew Boon Yeong Dato Syed Ariff Fadzillah bin Syed Awalluddin Oh Hong Choon Meetings The Audit Committee convened five (5) meetings for the financial period ended 31 May 2008. The meetings were appropriately structured through the use of agendas, which were distributed to members. Attendances of each member were as follows: Members Total Attendance Amos Siew Boon Yeong Dato Syed Ariff Fadzillah bin Syed Awalluddin Oh Hong Choon 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 Companys 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. 5 / 5 4 / 5 5 / 5 % of Attendance 100 80 100 - Chairman / Independent Non-Executive Director - Member / Independent Non-Executive Director - Member / Independent Non-Executive Director
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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 Companys 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.
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Meetings Meetings shall be held not less than four (4) times a year. The external auditors may request a meeting if they consider that one is necessary. The Chairman shall convene a meeting whenever any member of the Audit Committee requests for a meeting by giving not less than three (3) clear days notice thereof unless such requirement is waived by all members. However, consent from member that is overseas is not required. Written notice of the meeting together with the agenda shall be given to the members of the Audit Committee. In order to form a quorum in respect of a meeting of an Audit Committee, the majority of members present must be Independent Directors and any decision shall be by a simple majority. The Chairman shall not have a casting vote. Reporting procedure The Secretary of the Committee shall circulate the minutes of meetings of the Committee to all members of the Board. Summary of activities during the financial year The Audit Committee carried out the following duties in accordance with its terms of reference: Reviewed the external auditors scope of work and audit plans for the year. Prior to the audit, representatives from the external auditors presented their audit strategy and plan. Reviewed with the external auditors, major issues arising from the audit. Reviewed the Groups internal audit plan. Reviewed the internal audit reports, which highlighted the audit issues, recommendations and managements response. The members of the Audit Committee were briefed on pertinent audit issues through the Summary of Pertinent Issues, which forms an integral part of the agenda papers. The Audit Committee also discussed the management actions taken to improve the system of internal control based on recommendations made in the internal audit reports. Recommended to the Board areas of improvement opportunities in internal control system, procedures and risk management. Reviewed the draft audited financial statements of the Group and of the Company prior to submission to the Board for their consideration and approval. The review was to ensure that the draft audited financial statements were drawn up in accordance with the provisions of the Companies Act, 1965 and the Financial Reporting Standards (FRS) for entities other than private entities issued by the Malaysian Accounting Standards Board (MASB). Reviewed the Groups and the Companys compliance in particular the quarterly and year-end financial statements with the Listing Requirements of the Bursa Malaysia Securities Berhad (BMSB), MASB and other relevant legal and regulatory requirements. Reviewed the quarterly unaudited financial results announcements before recommending them for the Boards approval. Reviewed related party transactions entered into by the Group. Reviewed the extent of the Groups compliance with the provisions set out under Part 2 Guideline BB of the Code for the purpose of preparing the Corporate Governance Statement and Statement on Internal Control pursuant to the Listing Requirements of BMSB. Recommended to the Board, action plans to address the identified gaps between the Groups existing corporate governance practices and the prescribed corporate governance principles and best practices under the Code.
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Statement on Employees Share Option Scheme (ESOS) The ESOS expired on 24 January 2007. Should the Company decide to allocate any options in future, the allocation shall be verified by the Committee at the end of the financial year. INTERNAL AUDIT FUNCTION The Audit Committee is assisted by the internal auditors in discharging its duties and responsibilities. The internal auditors undertake the audit using a risk-based approach of the Groups operating units, reviewing the units compliance to internal control procedures and making appropriate recommendations for improvement. The internal auditors carry out their duties according to the audit plan, and issue of concern are summarized and highlighted at the Audit Committee meetings. The Audit Committee reported the same to the Board after reviewing and deliberating on these reports. The Internal Auditors also highlighted the risk profile of the Group to the Audit Committee and followed up on implementation and disposition of previous significant findings and recommendations.
Financial Statements
Directors Report Statement By Directors Statutory Declaration Report of the Independent Auditors Income Statements Balance Sheets Statements of Changes in Equity Cash Flow Statements Notes to the Financial Statements
36 - 39 40 40 41-42 43 44 45-46 47-48 49-89
36
Directors Report
The directors submit their report and the audited financial statements of the Group and the Company for the financial period 1 August 2007 to 31 May 2008. Change in financial year end The Company changed its financial year end from 31 July to 31 May. Accordingly, the financial statements for the current financial period are drawn up for the period 1 August 2007 to 31 May 2008 or a period of ten months. 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 11 to the financial statements. During the financial period, the Company disposed of its 51% equity interest in Cross Continental Investments and 1.14% equity interest in PalmTech India Limited. Other than as stated, there have been no significant changes in the nature of these activities during the financial period. Financial results Group Company RM000 RM000 Net (loss)/profit for the period (32,399) 261 Attributable to: Equity holders of the Company Minority interests (33,404) 1,005 (32,399) 261 261
In the opinion of the directors, other than as disclosed in the financial statements, the results of the operations of the Group and the Company during the financial period 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 period. Reserves and provisions There were no material transfers to or from reserves or provisions during the financial period 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 period.
37
Directors Report
Share options No options have been granted by the Company to any persons during the financial period to take up unissued shares of the Company. During the financial period, none of the Companys warrants 2004/2009 were exercised. The unexercised options are as follows: Number of options for ordinary shares of RM0.50 each Balance as Balance as at 1.8.2007 Exercised Lapsed at 31.5.2008 Warrants 2004/2009 65,118,136 - - 65,118,136
The salient terms of the Warrants 2004/2009 are disclosed in Note 25 to the financial statements. Directors The directors of the Company in office since the date of the last report are: Tan Sri Dato Dr Syed Jalaludin Bin Syed Salim Dato (Dr) Teoh Seng Foo Dato Clement Hii Chii Kok Dato Syed Ariff Fadzillah Bin Syed Awalluddin Dato Philip Chan Hon Keong Amos Siew Boon Yeong Oh Hong Choon Tiong Kwing Hee (Alternate to Dato Clement Hii Chii Kok) (Appointed on 18 September 2008) Directors interests The interests in the Company and its related companies of those who were directors at the end of the financial period, 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 Balance as at 1.8.2007 Bought Sold at 31.5.2008 Direct interest Dato (Dr) Teoh Seng Foo Dato Clement Hii Chii Kok Indirect interest Dato (Dr) Teoh Seng Foo 34,522,933 32,850,733 55,970,065 - 25,219,333 - 5,334,333 1,900,000 24,187,500 29,188,600 56,170,066 31,782,565
Number of warrants for ordinary shares of RM0.50 each Balance as Balance as at 1.8.2007 Bought Sold at 31.5.2008 Direct interest Dato (Dr) Teoh Seng Foo Indirect interest Dato (Dr) Teoh Seng Foo 946,866 13,815,232 - - - - 946,866 13,815,232
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Directors Report
Directors interests (Contd) None of the other directors in office at the end of the financial period, had held shares or beneficial interest in shares of the Company and its related companies during the financial period, 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 33 to the financial statements. There were no arrangements during or at the end of the financial period, which had the object of enabling directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
Other statutory information Before the financial statements of the Group and the Company were made out, the directors took reasonable steps: (a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and had satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and (b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written down to their expected realisable values. At the date of this report, the directors are not aware of any circumstances: (a) which would render the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and the Company inadequate to any substantial extent; (b) which would render the values attributed to current assets in the financial statements of the Group and the Company misleading; and (c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and the Company misleading or inappropriate. In the interval between the end of the financial period 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 period 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.
39
Directors Report
Other statutory information (Contd) 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 period 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.
Auditors The auditors, Messrs Russell Bedford LC & Company, have indicated their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the directors,
DATO (DR) TEOH SENG FOO
DATO CLEMENT HII CHII KOK Subang Jaya, Selangor Darul Ehsan 18 September 2008
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Statement by Directors
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 2008, and of their financial performance and their cash flows for the period 1 August 2007 to 31 May 2008.
Signed on behalf of the Board in accordance with a resolution of the directors,
DATO (DR) TEOH SENG FOO
DATO CLEMENT HII CHII KOK Subang Jaya, Selangor Darul Ehsan 18 September 2008
Statutory Declaration
I, DATO (DR) TEOH SENG FOO, 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 (DR) TEOH SENG FOO at Subang Jaya in Selangor Darul Ehsan on 18 September 2008.
DATO (DR) TEOH SENG FOO Before me, CHOY YEE CHEONG (P.P.N) (No. B083) Commissioner for Oaths Subang Jaya, Selangor Darul Ehsan
41
Report of the Independent Auditors

to the members of EcoFirst Consolidated Bhd
1. Report on the financial statements We have audited the accompanying financial statements which comprise the balance sheet of the Group and of the Company as at 31 May 2008, and the related statements of income, changes in equity and cash flows for the period 1 August 2007 to 31 May 2008, and a summary of significant accounting policies and other explanatory notes. 1.1 Directors responsibility for the financial statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with the Companies Act 1965 (Act) and the Approved Accounting Standards for Entities Other Than Private Entities in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
1.2 Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Approved Standards on Auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors 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 entitys 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 entitys 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 2008, and of their financial performance and their cash flows for the period 1 August 2007 to 31 May 2008.
42
Report of the Independent Auditors

to the members of EcoFirst Consolidated Bhd
2. Report on other legal and regulatory requirements In accordance with the requirements of the Act, we also report on the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. We have considered the financial statements and the auditors reports thereon of the subsidiaries of which we have not acted as auditors, as indicated in Note 11 to the financial statements, being financial statements that have been included in the Groups financial statements. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys financial statements are in form and content appropriate and proper for the purposes of the preparation of the Groups financial statements and we have received satisfactory information and explanations required by us for those purposes. The auditors reports on the financial statements of the subsidiaries were not subject to any qualification material in relation to the Groups financial statements and did not include any comment made under Section 174(3) of the Act.
(b)
(c)
(d)
3. Other matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Act and for no other purpose. We do not assume responsibility to any other person for the content of this report.
RUSSELL BEDFORD LC & COMPANY LOH KOK LEONG AF 1237 1965/06/09 (J) CHARTERED ACCOUNTANTS PARTNER Kuala Lumpur 18 September 2008
Continuing Discontinued Group as Continuing Discontinued Group as operations operations a whole operations operations a whole Company 1.8.2007 to 1.8.2007 to 1.8.2007 to 1.8.2006 to 1.8.2006 to 1.8.2006 to 1.8.2007 to 1.8.2006 to 31.5.2008 31.5.2008 31.5.2008 31.7.2007 31.7.2007 31.7.2007 31.5.2008 31.7.2007 Note RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 10,011 (6,954) 3,057 21 - (749) (266) 2,063 (54) - 2,009 - 2,009 (37,928) 3,227 (32,399) (34,701) (22,195) (10,204) (38,989) 1,061 5,333 (2,106) (33,656) (1,045) (12,936) (10,529) 1,270 (26,611) (13,185) 807 5,686 (353) - (20,925) (13,538) 807 527 (2,915) - (2,388) 2,649 261 5,561 21,400 (899) (9,696) (29,302) 5,053 2,298 (1,193) (13,077) (19,692) 7,415 - - (802) (927) 12,468 2,298 (1,193) (13,879) (20,619) 2,023 18,942 - (3,947) (16,491) 3,755 3,041 (5,138) (5,169) (3,511) (4,500) (8,011) (8,011) 30,464 (24,903) 67,837 (62,784) 25,346 (17,931) 93,183 (80,715) 2,023 - 3,755 -
Revenue 4 Cost of sales
20,453 (17,949)
Gross profit Other operating income Distribution costs Administration expenses Other operating expenses
2,504 21,379 (899) (8,947) (29,036)
(Loss)/Profit from operations Finance costs Share in profit of associate
(14,999) (10,475) 1,270
(Loss)/Profit before tax Income tax expense
5 6
(24,204) (10,204)
Net (loss)/profit for the period/year
(34,408)
Attributable to: Equity holders of the Company (34,407) 1,003 (33,404) (37,984) 1,607 (36,377) 261 Minority interests (1) 1,006 1,005 56 1,620 1,676 - 2,009 (32,399) (37,928) 3,227 (34,701) (5.60) 261
(8,011) (8,011)
(34,408)
Basic loss per share (sen)
(5.14)
for the period 1 August 2007 to 31 May 2008
Income Statements
The accompanying notes form an integral part of the financial statements.
43
44
Balance Sheets
as at 31 May 2008
Group Company Note 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Non current assets Property, plant and equipment Investment properties Prepaid lease payments Investment in subsidiaries Investment in an associate Other long term investments Deferred tax assets Intangible asset Goodwill on consolidation 8 9 10 11 12 13 14 15 16 41,027 289,584 1,090 - 24,315 6,881 1,276 538 - 364,711 886 2,250 88,226 49,219 - 6,735 14 172 976 2,010 150,488 515,199 325,074 (93,047) 232,027 14,946 246,973 - 803 102,178 102,981 5,896 - 3,100 93,383 197 29,022 33,647 165,245 268,226 515,199 76,108 308,582 4,012 - 23,383 6,873 1,887 399 839 422,083 3,427 - 87,598 54,670 - 10,449 14 172 1,422 2,715 160,467 582,550 325,074 (55,131) 269,943 31,002 300,945 2,713 126 99,057 101,896 11,116 - 37 94,861 180 51,148 22,367 179,709 281,605 582,550 1,148 - - 39,184 21,032 5,978 - - - 67,342 - - - - 303,211 1,987 - 342 814 365 306,719 374,061 325,074 (190,916) 134,158 - 134,158 - 439 11,352 11,791 - 172,670 3,100 33,935 106 18,301 - 228,112 239,903 374,061 634 41,199 21,032 4,530 67,395 309,173 4,243 1,264 653 315,333 382,728 325,074 (191,177) 133,897 133,897 8,212 8,212 173,106 37 27,910 39,125 441 240,619 248,831 382,728
Current assets Inventories 17 Non current asset held for sale 18 Property development costs 19 Trade receivables 20 Amount due from subsidiaries 22 Other receivables, deposits and prepayments 23 Prepaid lease payments 10 Tax recoverable Fixed deposits with licensed banks 24 Cash and bank balances Total assets Share capital 25 Reserves 26 Shareholders equity Minority interests Total equity Non current liabilities Deferred tax liabilities Hire purchase liabilities Long term borrowings 14 27 28
Current liabilities Trade payables 29 Amount due to subsidiaries 22 Amount due to an associate 30 Other payables and accruals 31 Hire purchase liabilities 27 Short term borrowings 32 Tax payable Total liabilities Total equity and liabilities
Foreign exchange Share Share Revaluation translation Accumulated Shareholders Minority Total capital premium reserve reserve losses equity interests equity Group RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 295,727 7,111 (2,905) (318,229) 306,778 27,979 334,757
At 1 August 2006
325,074
Exchange differences on translation of financial statements of foreign subsidiaries Subscription of shares in subsidiaries Realisation of reserves on disposal of equity shares included under other long term investments - - - - - - (676) - - - (676) - 905 442 229 442 - - - 295,727 4,398 (3,581) (351,675) 269,943 - - (2,713) - (676) - 2,931 (36,377) (458) (36,377) - (2,713) - 2,931 218 - 1,347 1,676 31,002 218 889 (34,701) 300,945
Net (loss)/gain not recognised in income statement Net (loss)/profit for the year
At 31 July 2007
325,074
Exchange differences on translation of financial statements of foreign subsidiaries Disposal of subsidiaries - - - - 295,727 1,436 (5,131) - - (2,962) - (1,550) - - (33,404) (385,079) - - (15) (2,947) (510) (1,040) - -
(525) (3,987) (4,512) (33,404) 232,027
- (17,061) (17,061) 1,005 14,946
(525) (21,048) (21,573) (32,399) 246,973
Net loss not recognised in income statement Net (loss)/profit for the period
At 31 May 2008
325,074
Statements of Changes in Equity

45
46
Share Share Revaluation Accumulated capital premium reserve losses Total Company RM000 RM000 RM000 RM000 RM000
At 1 August 2006 As previously reported Effect of adopting FRS 127 325,074 - 325,074 - 325,074 - 325,074 295,727 - (486,643) 295,727 - - - (486,904) 261 133,897 261 134,158 295,727 - - - (478,893) (8,011) 141,908 (8,011) 295,727 - 155,397 (155,397) (478,893) - 297,305 (155,397)
As restated Net loss for the year
At 31 July 2007 Net profit for the period
Statements of Changes in Equity
At 31 May 2008
47
Cash Flow Statements

Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Cash flows from/(used in) operating activities Loss before taxation Adjustments for: Amortisation of intangible asset Depreciation Fair value adjustments - prepaid lease payments classified to non current asset held for sale - investment properties Gross dividend income Impairment losses on - property development costs - property, plant and equipment Interest expense Interest income Inventories written off Profit guarantee liabilities Plant and equipment written off Prepayment written off Provision for doubtful debts - subsidiaries - others Provision for liquidated ascertained damages Provision for slow moving inventories Share in profit of associate Loss/(Gain) on disposal of - property, plant and equipment - other long term investments - subsidiaries Loss on foreign exchange - unrealised Operating (loss)/profit before working capital changes Decrease/(Increase) in inventories Decrease/(Increase) in trade and other receivables Decrease in trade and other payables (Increase)/Decrease in development costs Cash (used in)/generated from operations Income tax refunded/(paid) net Net cash from/(used in) operating activities (22,195) 32 2,371 605 19,080 (29) - 4,185 10,529 (319) 21 - 1,099 374 - 1,688 395 24 (1,270) 21 - (19,713) - (3,102) 606 12,937 (11,234) (628) (1,421) 1,943 522 (33,656) - 3,947 - - (17) 16,000 - 13,538 (164) - 5,169 1,004 - - - 396 - (807) (73) (1,748) - 3 3,592 (543) (930) (2,018) 1,958 2,059 (144) 1,915 (2,388) - 195 - - (1,541) - - 2,915 (312) - - - - 13,557 2,925 - - - - - (18,562) - (3,211) - (669) (3,448) - (7,328) 1,980 (5,348) (8,011) 283 (784) 4,500 (1,215) 5,169 7 (73) (1,748) 3 (1,869) (610) (3,241) (5,720) 487 (5,233)
48
Cash Flow Statements

Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Cash flows from/(used in) investing activities Net dividends received Interest received Proceeds from disposal of - other long term investments - property, plant and equipment - subsidiaries Redemption of preference shares by a subsidiary Payments for - additional shares in existing and new subsidiaries - investment properties - other long term investments - trademark licence - property, plant and equipment Net cash from investing activities Cash flows from/(used in) financing activities Conversion of bank overdrafts to term loans Repayments of revolving credits net Interest paid Decrease/(Increase) in fixed deposits pledged Advances to subsidiaries (Repayments to)/Advances from an associate Repayments of hire purchase liabilities Proceeds from issue of shares to minority shareholders of subsidiaries Proceeds from term loans Repayments of term loans Net cash (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents Effects of exchange rate changes Cash and cash equivalents at beginning of period/year Foreign exchange differences on opening cash and cash equivalents Cash and cash equivalents at end of period/year 24 319 - 30 23,793 - - (82) (8) (171) (5,053) 18,852 15 164 5,679 73 6,160 - - (126) - (399) (8,135) 3,431 1,427 312 - - 25,434 1,912 - - (1,448) - (130) 27,507 670 1,215 5,679 73 6,160 2,580 (738) (53) 15,586
- (8,899) (6,025) 462 - (37) (258) - - (4,829) (19,586) (212) 1,171 (1,254) 10 (285)
17,104 (1,413) (9,484) (70) - 30 (170) 445 1,000 (2,545) 4,897 10,243 (19) (11,575) 97 (1,254)
- (8,898) (1,215) 467 (8,031) (37) (34) - - (3,300) (21,048) 1,111 - (2,845) - (1,734)
17,104 (1,772) (4,500) (35) (11,123) 30 (162) (458) 9,895 (12,740) (2,845)
Cash and cash equivalents comprise: Cash and bank balances Fixed deposits Bank overdrafts Less: Fixed deposits pledged 2,010 976 (2,331) 655 (940) (285) 2,715 1,422 (3,989) 148 (1,402) (1,254) 365 814 (2,116) (937) (797) (1,734) 653 1,264 (3,498) (1,581) (1,264) (2,845)
49
Notes to the Financial Statements

31 May 2008
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 11. During the financial period, the Company disposed of its 51% equity interest in Cross Continental Investments and 1.14% equity interest in PalmTech India Limited. Other than as stated, there have been no significant changes in the nature of these activities during the financial period. The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the main board of Bursa Malaysia Securities Berhad. The registered office and principal place of business of the Company is located at 17th Floor, Menara Summit, Persiaran Kewajipan USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan. The financial statements were approved and authorised for issue by the board of directors on 18 September 2008.
2. Basis of preparation of the financial statements The financial statements of the Group and the Company have been prepared and presented in accordance with the provisions of the Companies Act, 1965 and the Approved Accounting Standards for Entities Other Than Private Entities issued by the Malaysian Accounting Standards Board (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 period. Actual results could differ from those estimates. Estimates and judgements are continually evaluated by the directors and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the process of applying the Groups accounting policies, which are described below, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements. Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. At the beginning of the current financial period, the Group had adopted new and revised Financial Reporting Standards (FRS) which are mandatory for financial periods beginning on or before 1 August 2007. The principal changes in accounting policies and their effects resulting from the adoption of the new and revised FRSs are disclosed below: (i) FRS 117 Leases which requires an entity to treat a lease of land as an operating lease with its upfront payments being classified as prepaid lease payments which are to be amortised on a straight line basis over the lease term. In accordance with the transitional provisions of FRS 117, the reclassification of leasehold land from property, plant and equipment to prepaid lease payments has been accounted for retrospectively with its unamortised amount being retained as the surrogate carrying amount of the prepaid lease payments. The effects of adopting FRS 117 are set out in Note 40. These changes in presentation have no impact on the financial statements.
(ii) FRS 124 Related Party Disclosures which has affected the identification of related parties and certain related party disclosure requirements.
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31 May 2008
2. Basis of preparation of the financial statements (Contd) Other than FRS 139 Financial Instruments: Recognition and Measurement (effective date yet to be determined by MASB), the new standards, amendments to published standards and interpretations that are mandatory for financial periods beginning after 1 August 2007, but which the Group and the Company has not early adopted, would not result in changes in the accounting policies of the Group and the Company and the directors do not anticipate that the application of these standards and interpretations when they are effective will have a material impact on the results and financial position of the Group and of the Company. 3. Significant accounting policies Basis of accounting The financial statements of the Group and the Company have been prepared under the historical cost convention and any other bases described in the significant accounting policies as summarised below.
Basis of consolidation The consolidated financial statements include the financial statements of the Company and all its subsidiaries listed under Note 11 made up to the end of the financial period. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control effectively commences until the date that control effectively ceases. Subsidiaries are consolidated using the acquisition method of accounting. All significant inter company transactions, balances and unrealised gains on transactions between group companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group. Minority interests in the consolidated balance sheet consist of the minorities share of the fair value of the identifiable assets and liabilities of the acquiree as at acquisition date and the minorities share of movements in the acquirees equity since then.
Revenue and income recognition Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised in the income statement upon delivery of goods and when the risks and rewards of ownership have passed to the customers. Revenue from management and production services rendered is recognised in the income statement when the services are rendered. Revenue from property development is recognised in accordance with the accounting policy disclosed under development property and costs. Revenue relating to construction contracts is recognised in accordance with the accounting policy disclosed under construction contracts. Dividend income is recognised when the shareholders right to receive payment is established. Interest income is recognised as it accrues (taking into account the effective yield on the asset) unless collectibility is in doubt. Rental income is recognised as it accrues unless collectibility is in doubt.
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31 May 2008
3. Significant accounting policies (Contd) 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 Companys functional currency and all values are rounded to the nearest thousand (RM000) except when otherwise indicated. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. (iii) Group companies Assets and liabilities of foreign operation are translated to Ringgit Malaysia at rates of exchange ruling at the balance sheet date and the results of foreign operation are translated at the average rate of exchange for the financial period. Exchange differences arising from the translation are recognised as a separate component of equity. The principal exchange rates for every unit of foreign currency ruling at balance sheet date used are as follows:
31.5.2008 31.7.2007 RM RM United States Dollar (USD) Solomon Islands Dollar (SBD) Indian Rupee (INR) Singapore Dollar Hong Kong Dollar 3.24 0.42 - 2.38 0.42 3.46 0.44 0.0853 2.28 0.44
Employee benefits (i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the period in which the associated services are rendered by employees of the Group and the Company. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non accumulating compensated absences such as sick leave are recognised when the absences occur. (ii) Defined contribution plans Obligations for contributions to defined contribution plans such as Employees Provident Fund are recognised as an expense in the income statement as incurred. (iii) Equity compensation benefits The share option programme allows Group employees to acquire shares of the Company. In accordance with the transitional provisions of FRS 2, no compensation cost or obligation is recognised as the equity instruments under the ESOS were granted on or before 31 December 2004. When the options are exercised, equity is increased by the amount of the proceeds received.
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31 May 2008
3. Significant accounting policies (Contd) Income tax Income tax on the profit or loss for the period comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the period and is measured using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity.
Impairment of assets The carrying amount of assets, other than deferred tax assets, inventories, property development costs, assets arising from construction contracts, and financial assets (other than investments in subsidiaries and associates and other long term investments), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated and an impairment loss is recognised whenever the recoverable amount is less than the carrying amount of the asset. The impairment loss is recognised in the income statement immediately except for the impairment on a revalued asset where the impairment loss is recognised directly against the revaluation reserve account to the extent of the surplus credited from the previous revaluation for the same asset with the excess of the impairment loss charged to the income statement. All reversals of an impairment loss are recognised as income immediately in the income statement except for the reversal of an impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation increase and credited to the revaluation reserve account of the same asset. The impairment loss in respect of goodwill is not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. In respect of other assets, an impairment loss is reversed if there has been a change in estimates used to determine the recoverable amount. An impairment loss is only reversed to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Property, plant and equipment and depreciation Property, plant and equipment are stated at cost or valuation less accumulated depreciation and accumulated impairment losses, if any. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Gain and loss arising from the disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognised in the income statement. Land and buildings (other than those owned by a foreign subsidiary which are subject to regulatory restriction) are revalued at a regular interval of at least once in every five years with additional valuations in the intervening years where market conditions indicate that the carrying values of the revalued land and buildings materially differ from the market values.
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31 May 2008
3. Significant accounting policies (Contd) Property, plant and equipment and depreciation (Contd) An increase arising from revaluation is credited to equity as revaluation surplus. Any decrease arising is first offset against the revaluation surplus on an earlier valuation in respect of the same property and thereafter charged to the income statement. A revaluation increase is recognised as income to the extent that it reverses a revaluation decrease of the same property previously charged as an expense. Upon the disposal of revalued assets, the amounts in revaluation reserve relating to those assets are transferred directly to retained profits. No depreciation is provided on freehold land. Depreciation on all other property, plant and equipment is calculated on a straight line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates: Freehold buildings Long term leasehold properties (leasehold buildings and leasehold plantations) Logponds and roadworks Machinery, equipment and vehicles 20 - 50 years 50 - 99 years 5 years 3 - 10 years
The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. Replanting expenditure is charged to the income statement in the year in which the expenditure is incurred. Net planting expenditure incurred on land clearing and upkeep of trees to maturity is capitalised under leasehold plantation and upon maturity is amortised by equal instalments over the remaining period of the lease. Plantation development expenditure represents area expansion of oil palm cultivation, providing technical knowledge and training to farmers and providing infrastructural support for the existing farmers is amortised based on the benefits expected to be derived out of such plantations, which is estimated at about 20 years from the maturity of plantations.
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 activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle. (ii) Property development costs Property development costs comprise all costs that are attributable to development activities or that can be allocated on a reasonable basis to such activities. When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.
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31 May 2008
3. Significant accounting policies (Contd) Development property and costs (Contd) (ii) Property development costs (Contd) 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 period in which they are incurred. Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately. Property development costs not recognised as an expense is recognised as an asset, which is measured at the lower of cost and net realisable value. The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings under trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings under trade payables.
Investment properties Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is performed by registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and category of the properties having valued. A gain or loss arising from a change in the fair value of investment properties is recognised in income statement for the period in which it arises. A property interest under an operating lease is classified and accounted for as an investment property on a property by property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease classifies as an investment property is carried at fair value. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year in which they arise.
Investment in subsidiaries Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of a company so as to derive benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity. The Companys investment in subsidiaries is stated at cost less impairment losses.
Investment in associates An associate is a company in which the Group or the Company has significant influence and which is neither a subsidiary nor a joint venture of the Group or the Company. The Companys investment in associates is stated at cost less impairment losses, if any. The Groups investment in associates is accounted for under the equity method of accounting based on the audited or management financial statements of the associates made up to the balance sheet date. Under this method of accounting, the Groups interest in the post acquisition profit of the associates is included in the consolidated results while dividend received is reflected as a reduction of the investment in the consolidated balance sheet.
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31 May 2008
3. Significant accounting policies (Contd) Investment in associates (Contd) Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Groups interest in the associates; unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred. Where necessary, in applying the equity method, adjustments have been made to the financial statements of associates to ensure consistency of accounting policies with the Group.
Other long term investments Other long term investments in quoted and unquoted corporations are stated at cost less impairment losses, if any.
Intangible assets Intangible assets including trademark licence acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a straight line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each balance sheet date. Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash generating unit level. The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable.
Goodwill/Reserve on consolidation Goodwill arising on acquisition represents the excess of the cost of the acquisition over the Groups interest in the fair values of the net identifiable assets acquired. Goodwill arising on the acquisition of subsidiaries is presented separately in the balance sheet while goodwill arising on the acquisition of associates is included within the carrying amount of investment in associates. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Reserve arising from consolidation represents the excess of the sum of the fair values of the identifiable net assets of the subsidiaries acquired over the purchase consideration as at the date of acquisition and is recognised immediately in the income statement.
Inventories Inventories are stated at the lower of cost and net realisable value. Cost of inventories is determined on the weighted average basis except for properties held for sale where the specific identification basis is used. 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 raw materials and consumables comprise the cost of purchase plus the cost of bringing the inventories to their present location and condition. Costs of finished goods comprise the cost of raw materials used, direct labour, other direct costs and appropriate production overheads.
Non current asset held for sale Non current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. The asset must be available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset and its sale must be highly probable. Non current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
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31 May 2008
3. Significant accounting policies (Contd) Construction contracts and amount due from/to contract customers Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs. Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. Cost includes direct materials, labour, sub contract sum and attributable overheads paid or payable to date. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. Amount due from customers for construction contracts is the net amount of costs incurred plus recognised profits less the sum of recognised losses and progress billings for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceed progress billings. Amount due to customers for construction contracts is the net amount of costs incurred plus recognised profits less the sum of recognised losses and progress billings for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less recognised losses).
Leases Assets acquired under leases which transfer substantially all the risks and rewards incident to ownership of the assets are capitalised under property, plant and equipment. The assets and the corresponding lease obligations are recorded at their fair values or, if lower, at the present value of the minimum lease payments of the leased assets at the inception of the respective leases. Finance costs, which represent the difference between the total lease commitments and the fair values of the assets acquired, are charged to the income statement over the term of the relevant lease periods so as to give a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Leases of asset where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are amortised over the lease term in accordance with the pattern of benefits provided. Long term leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as operating lease. The prepaid land lease payments are amortised on the straight line basis over the lease period. Plant and equipment acquired under hire purchase arrangements Plant and equipment acquired under hire purchase arrangements are capitalised in the financial statements and the corresponding obligations treated as liabilities. Finance charges are allocated to the income statement to give a constant periodic rate of interest on the remaining hire purchase liabilities. Provisions A provision is recognised when a present legal or constructive obligation exists as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Segment information Segment information is presented in respect of the Groups business and geographical segments. The primary reporting segment information is in respect of business segments as the Groups risks and returns are affected predominantly by differences in the products it produces and in the services it renders, while the secondary information is reported geographically.
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31 May 2008
3. Significant accounting policies (Contd) Segment information (Contd) A segment with a majority of operating income earned from providing product or services to external clients and whose operating income, results or assets are 10 percent or more of all the segments is reported separately. Segment results, assets and liabilities include items that are directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one period. Financial instruments Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has legal enforceable right to offset and intends to settle either on a net basis or realise the asset and settle the liability simultaneously. (i) Receivables Receivables are carried at anticipated realisable value. All known bad debts are written off and specific provisions are made for debts that are considered to be doubtful with regards to collection. In addition, general provisions are made to cover possible debts which are not specifically identified. (ii) Payables Payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received. (iii) Interest bearing borrowings Interest bearing borrowings are recorded at the amount of proceeds received, net of transaction costs. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred. (iv) Equity instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are approved for payment. Cash flow statement Cash flow statement is prepared using the indirect method. Cash equivalents are short term, highly liquid investments that are readily convertible to known amount of cash and which are subject to insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts and pledged fixed deposits.
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31 May 2008
4. Revenue Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Construction income Dividends Property development/investment Sale of goods Services 3,866 29 6,058 19,674 837 30,464 45,417 17 10,232 36,476 1,041 93,183 - 1,541 - - 482 2,023 784 2,971 3,755
5. (Loss)/Profit before tax Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 (Loss)/Profit before tax is arrived at after charging: Amortisation of intangible asset Auditors remuneration - auditors of the Company - other auditors Depreciation Directors estimated cash value of benefits in kind Directors fees Directors other emoluments - directors of the Company Fair value adjustments - prepaid lease payments classified to non current asset held for sale - investment properties Impairment losses on - property development costs - property, plant and equipment Interest expense - bank overdrafts - hire purchase - others - revolving credits - term loans Inventories written off Loss on foreign exchange - realised - unrealised Loss on disposal of property, plant and equipment Plant and equipment written off Preliminary expenses Prepayment written off Provision for doubtful debts - subsidiaries - others Provision for liquidated ascertained damages Provision for slow moving inventories Profit guarantee liabilities 32 113 34 2,371 24 188 553 605 19,080 - 4,185 304 50 230 811 9,134 21 215 - 21 1,099 2 374 - 1,688 395 24 - - 105 40 3,947 23 171 751 - - 16,000 - 2,007 38 67 1,368 10,058 - 8 3 - 1,004 - - - - 396 - 5,169 - 35 - 195 24 188 553 - - - - 296 9 230 802 1,578 - 194 - - - - - 13,557 2,925 - - - 35 283 23 171 751 1,981 4 16 1,320 1,179 186 3 7 5,169
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31 May 2008
5. (Loss)/Profit before tax (Contd) Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Rental of - premises - equipment - motor vehicles Staff costs And crediting: Gross dividend income - Malaysian - quoted investment in an associate - unquoted investment in a subsidiary - other unquoted investments - other quoted investments - Foreign - unquoted investment in subsidiary - other quoted investments Gain on disposal of - property, plant and equipment - subsidiaries - other long term investments Interest income from - fixed deposits - sundry receivables - subsidiaries 697 54 38 4,632 589 38 56 5,372 108 7 38 1,397 122 8 56 1,380
- - 20 - - 9 - 19,713 - 260 59 -
- - 5 3 - 9 73 - 1,748 90 74 -
412 1,100 20 - - 9 - 18,562 - 253 59 -
412 5 3 355 9 73 1,748 80 74 1,061
Staff costs comprise: Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Defined contribution plan Salaries, wages and allowances Other employee related expenses 426 3,852 354 4,632 427 4,513 432 5,372 142 1,214 41 1,397 134 1,184 62 1,380
The number of directors of the Company where total remuneration during the financial period/year falls within the following bands is analysed as follows: Group 1.8.2007 1.8.2006 to to 31.5.2008 31.7.2007 Executive directors: RM250,001 to RM300,000 RM300,001 to RM350,000 RM400,001 to RM450,000 Non executive directors: Below RM50,000 RM50,000 to RM100,000 2 - - 4 1 1 1 4 1
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31 May 2008
6. Income tax expense Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Estimated income tax payable - current - (under)/overprovision in prior years Estimated deferred tax (Note 14) - current - over provision in prior years
(42) (9,550) (612) - (10,204)
(497) - (735) 187 (1,045)
- 2,649 - - 2,649
Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 In respect of current period/year: Malaysian income tax Foreign tax Deferred tax (Note 14) (Under)/Overprovision in respect of prior years: Malaysian income tax Deferred tax (Note 14)
(40) (2) (42) (612) (654) (9,550) - (9,550) (10,204)
- (497) (497) (735) (1,232) - 187 187 (1,045)
- - - - - 2,649 - 2,649 2,649
A reconciliation of income tax expense applicable to loss before tax at the statutory income tax rate to income tax expense at the effective income tax rate is as follows: Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Loss before tax Income tax using Malaysian tax rate of 26% (31.7.2007: 27%) Expenses not deductible for tax purposes Income not subject to tax Share of profit of an associate Deferred tax assets not recognised (Under)/Over provision in prior years - income tax - deferred tax Income tax expense for the period/year (22,195) 5,771 (8,067) 5,324 330 (4,012) (9,550) - (10,204) (33,656) 9,087 (8,745) 1,355 218 (3,147) - 187 (1,045) (2,388) 621 (5,366) 5,308 - (563) 2,649 - 2,649 (8,011) 2,163 (3,298) 1,135 -
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31 May 2008
7. Loss per share Basic loss per ordinary share is calculated based on the net loss attributable to ordinary shareholders and weighted average number of ordinary shares in issue as follows: Group 1.8.2007 1.8.2006 to to 31.5.2008 31.7.2007 RM000 RM000 Net loss attributable to ordinary shareholders (33,404) (36,377) 000 000 Weighted average number of ordinary shares Basic loss per ordinary share (sen) 650,148 (5.14) 650,148 (5.60)
There is no dilution in the loss per share of the Company as the average market value of the Companys ordinary shares during the financial period and the previous financial year was lower than the exercise price of the outstanding Warrants 2004/2009. Accordingly there would be no conversion of these outstanding instruments for the purposes of calculating the fully diluted loss per share.
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31 May 2008
8. Property, plant and equipment Long term Freehold Machinery, Freehold leasehold buildings Logponds equipment Long term Plantation land (at building (at and and leasehold development Group valuation) (at cost) valuation) roadworks vehicles plantation expenditure Total 31.5.2008 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
2,007 1,443 - - - (91) 3,359 - 2,970 24,407 28,173 - 4,525 - - (4,502) - (23) 3,112 - - - - (142) 44,505 2,048 (59) (20,078) (1,644) (365) 26,668 2,717 - - - (1,212) 9,307 128 - (9,387) - (48) -
Cost (unless otherwise indicated) At beginning of period Additions Disposals Disposal of subsidiaries Write offs Foreign exchange adjustment
8,573 - - (8,529) - (44)
98,697 6,336 (59) (42,496) (1,644) (1,925) 58,909
At end of period Accumulated depreciation At beginning of period Charge for the period Disposals Disposal of subsidiaries Write offs Foreign exchange adjustment - - - - - - - 809 - 295 12,593 550 284 - - - (25) 1,085 24 - (1,103) - (6) 274 33 - - - (12) 18,800 2,291 (8) (7,725) (545) (220) - - - - - - -
1,880 56 - (1,927) - (9) -
22,589 2,688 (8) (10,755) (545) (272) 13,697
At end of period Accumulated impairment losses At beginning of period Impairment for the period - - - - 2,550 - - - - 2,675 - - - - - -
- 4,185 4,185 7,629
- - - 28,173
- - - -
4,185 4,185 41,027
At end of period Net book value at 31 May 2008
8. Property, plant and equipment (Contd) Long term Long term leasehold Freehold Machinery, Freehold leasehold land and buildings Logponds equipment Long term Plantation land (at land (at building (at and and leasehold development Group valuation) valuation) (at cost) valuation) roadworks vehicles plantation expenditure Total 31.7.2007 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
Cost (unless otherwise indicated) At beginning of year - As previously reported - Effect of adopting FRS 117 (Note 10) 3,397 (3,397) - - - - - - 2,007 4,525 3,112 44,505 26,668 2,196 34 - - (223) 4,020 70 - - 435 3,324 - - - (212) 41,750 2,214 (654) (364) 1,559 23,273 4,881 - - (1,486) (1,298) - - - - - 8,062 1,358 - (986) 873 9,307 3,494 4,020 3,324 41,750 23,273 8,062
7,735
95,055 (4,695) 90,360 8,557 (654) (1,350) 1,784 98,697
- As restated Additions Disposals Write offs Foreign exchange adjustment
7,735 - - - 838
8,573
At end of year Accumulated depreciation At beginning of year - As previously reported - Effect of adopting FRS 117 (Note 10) - - - - - - - 203 367 - - (20) 848 145 - - 92 248 42 - - (16) (113) - - 316 848 248 15,747 - 15,747 3,468 (654) (346) 585
- - - - - - -
1,396 - 1,396 333 - - 151
18,555 (113) 18,442 4,355 (654) (346) 792 22,589
- As restated Charge for the year Disposals Write offs Foreign exchange adjustment
- - - - -
At end of year - - 550 1,085 274 18,800 - 1,880 Accumulated impairment losses At beginning of year - As previously reported - 542 - - - - - - - Effect of adopting FRS 117 (Note 10) - (542) - - - - - - - 2,838 - 25,705 - 26,668 - 7,427
542 (542) 76,108
31 May 2008
As restated/At end of year - - - - Net book value at 31 July 2007 8,573 - 1,457 3,440
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31 May 2008
8. Property, plant and equipment (Contd) Company Equipment and vehicles 31.5.2008 RM000 Cost At beginning of period Additions At end of period Accumulated depreciation At beginning of period Charge for the period At end of period Net book value at 31 May 2008 3,685 709 4,394 3,051 195 3,246 1,148
Company Equipment and vehicles 31.7.2007 RM000 Cost At beginning of year Additions Disposals Write offs At end of year Accumulated depreciation At beginning of year Charge for the year Disposals Write offs At end of year Net book value at 31 July 2007 At the balance sheet date: (i) Certain property, plant and equipment of the Group with aggregate carrying amount of RM36.2 million (31.7.2007: RM30.9 million) have been charged as collaterals to secure the banking facilities referred to in Note 28; 4,631 53 (651) (348) 3,685 3,760 283 (651) (341) 3,051 634
(ii) Plant and equipment under hire purchase arrangements are: Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 At net book value Motor vehicles 1,109 135 580 Machinery and equipment 66 279 - 1,175 414 580 -
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31 May 2008
8. Property, plant and equipment (Contd) During the financial period, cash payments made to purchase plant and equipment are as follows: Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Total additions Additions through hire purchase arrangement Capitalised in long term leasehold plantation - depreciation of plant and equipment - amortisation of prepaid lease payments 6,336 (952) (317) (14) 5,053 8,557 - (408) (14) 8,135 709 (579) - - 130 53 53
During the financial period, depreciation expenses are charged to the following: Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Income statement Long term leasehold plantation 2,371 317 2,688 3,947 408 4,355 195 - 195 283 283
Revaluation
The property of the Group was revalued by the directors on 31 July 2006 based on independent valuations using the market value basis carried out by P.S. Shankar Rao, a registered valuer with Er P.S. Shankar Rao in India.
Had these properties been carried at historical cost, the net book value of these assets that would have been included in the financial statements of the Group would have been as follows: Group 31.5.2008 31.7.2007 RM000 RM000 Freehold - land - 1,912 - buildings - 3,440
9. Investment properties Group 31.5.2008 31.7.2007 RM000 RM000 Long term leasehold retail units, commercial space and car park bays, at cost At beginning of period/year Additions Effect of adopting FRS 140 Fair value adjustment 308,582 82 - (19,080) 289,584 428,272 126 (119,816) 308,582
At end of period/year Accumulated impairment losses
At beginning of period/year Effect of adopting FRS 140 At end of period/year Carrying amount, at fair value
- - - 289,584
119,816 (119,816) 308,582
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31 May 2008
9. Investment properties (Contd) The investment properties of the Group with carrying amount of RM289.6 million (31.7.2007: RM308.6 million) have been pledged as collaterals to secure the banking facilities referred to in Note 28. Fair value of investment properties of the Group were stated by the directors based on professional valuations carried out by Mr Long Tian Chek, a registered valuer with Henry Butcher Malaysia Sdn Bhd in July 2008 using the market value basis.
10. Prepaid lease payments Group 31.5.2008 31.7.2007 RM000 RM000 Long term leasehold land: Surrogate carrying amount At beginning of period/year Effect of adopting FRS 117 (Note 8) Foreign exchange adjustment At end of period/year
4,040 - (59) 3,981 14 14 (6) 22 3,959 (2,250) (605) (2,855) 1,104 (14) 1,090
4,040 4,040 14 14 4,026 4,026 (14) 4,012
Accumulated amortisation At beginning of period/year Amortisation for the period/year ( capitalised in long term leasehold plantation) Foreign exchange adjustment At end of period/year Carrying amount Reclassification to non current asset held for sale - at fair value less costs to sell (Note 18) - fair value adjustment
Less: Portion due within one year Non current portion
Included under prepaid lease payments is leasehold land of the Group with carrying amount of RM1.1 million (31.7.2007: RM2.9 million) which has been charged as collateral to secure the banking facilities referred to in Note 28.
11. Investment in subsidiaries Company 31.5.2008 31.7.2007 RM000 RM000 Unquoted shares, at cost As previously reported Effect of adopting FRS 127 As restated Accumulated impairment losses 263,191 - 263,191 39,184 263,191 263,191 41,199 302,375 - 302,375 459,787 (155,397) 304,390
At beginning of period/year Impairment loss for the period/year At end of period/year Carrying amount
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31 May 2008
11. Investment in subsidiaries (Contd) The details of the subsidiaries are as follows: Issued and Groups paid up share effective Country of capital interest incorporation RM000 31.5.2008 31.7.2007 (unless otherwise % % indicated)
Principal activities
Subsidiaries of the Company Pujian Development Malaysia 6,200 100 100 Property Sendirian Berhad development and property investment EcoFirst Development Sdn Bhd Malaysia 100 100 100 Dormant EcoFirst Construction Sdn Bhd Malaysia 750 100 100 Construction Tashima Development Sdn Bhd Malaysia 500 100 100 Property development Gangsa Etnik Sdn Bhd Malaysia 500 68 68 Property development Panorama Tiara Sdn Bhd Malaysia 3,000 69 69 Property development Silvania Plantation Products Solomon SBD1.9 100 100 Development (S.I.) Limited * Islands million of oil palm plantation 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 Manufacturing and marketing of composite pellets and related products Opal Horizon Sdn Bhd Malaysia # 100 100 General trading EcoFirst Biotech Sdn Bhd Malaysia 250 52 52 Dormant EcoFirst Laboratories Sdn Bhd Malaysia 250 100 100 Research and development EcoFirst Agro Holdings Sdn Bhd Malaysia 110 100 100 Investment holding
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31 May 2008
11. Investment in subsidiaries (Contd) Issued and Groups paid up share effective Principal Country of capital interest activities incorporation RM000 31.5.2008 31.7.2007 (unless otherwise % % indicated) EcoFirst Hartz Sdn Bhd Malaysia 500 100 100 Food and beverage operation KE Management & Training Malaysia 100 60 60 Ceased Sdn Bhd operation KE Management Services Malaysia # 100 100 General Sdn Bhd insurance agency Hasil Rezeki (M) Sdn Bhd Malaysia 25 100 100 Dormant Gaydon Resources Limited British Virgin USD1 100 100 Dormant Islands Minat City Automotive Centre Malaysia # 100 100 Rental of Sdn Bhd commercial space 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 Cross Continental Investments* Republic of USD2,500 - 51 Investment Mauritius holding EcoFirst Products Worldwide Malaysia # 100 - Investment Sdn Bhd holding Subsidiary of Gabema Sdn Bhd Pengangkutan Gabema Sdn Bhd Malaysia 65 90.2 90.2 Ceased operation
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31 May 2008
11. Investment in subsidiaries (Contd) Issued and Groups paid up share effective Principal Country of capital interest activities incorporation RM000 31.5.2008 31.7.2007 (unless otherwise % % indicated) 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 Operation of departmental store Southern Utilities Corporation Malaysia # 100 100 Provision of Sdn Bhd management services SCP Management Sdn Bhd Malaysia 10 100 100 Provision of management services Subsidiaries of EcoFirst Agro Holdings Sdn Bhd EcoFirst Agro-Industries Sdn Bhd Malaysia 1,000 75 75 Operation of agriculture related businesses EcoFirst-YPM Sdn Bhd Malaysia 250 70 70 Dormant Subsidiary of EcoFirst Agro-Industries Sdn Bhd
J-Biotech EcoFirst Agro Sdn Bhd Malaysia # 70 100 Operation of agriculture related businesses Subsidiary of Cross Continental Investments PalmTech India Limited* India INR53.5 - 50.3 Provision of million agriculture advisory service to promote and develop oil palm and processing and marketing of oil palm products The financial statements of subsidiaries indicated by * are not audited by Russell Bedford LC & Company. # issued and paid up share capital of less than RM1,000
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31 May 2008
11. Investment in subsidiaries (Contd) During the financial period, the Company: (i) disposed of: (a) all its holding of 1,275 ordinary shares of USD1 each, representing 51% of the issued and paid up capital in a direct subsidiary, Cross Continental Investments, for a total cash consideration of RM31.492 million; and (b) all its holding of 61,000 ordinary shares of INR10 each, representing 1.14% of the issued and paid up capital in an indirect subsidiary, PalmTech India Limited, for a total cash consideration of RM0.102 million.
(ii) acquired 2 ordinary shares of RM1.00 each, representing the entire issued and paid up share capital of EcoFirst Products Worldwide Sdn Bhd (formerly known as Everise Growth Sdn Bhd), for a total cash consideration of RM2.00. (iii) subscribed additional 68 new ordinary shares of RM1.00 each representing 70% equity interest of the enlarged share capital of J-Biotech EcoFirst Agro Sdn Bhd via its indirect subsidiary, EcoFirst Agro-Industries Sdn Bhd. In the previous financial year: (i) the following subsidiaries issued new shares to their respective minority shareholders as follows: % of equity interest issued to minority Cash shareholders consideration % RM000 25 48 30 250 120 75
EcoFirst Agro-Industries Sdn Bhd EcoFirst Biotech Sdn Bhd EcoFirst-YPM Sdn Bhd
(ii) the Company subscribed for 100% equity interest in a newly incorporated subsidiary, EcoFirst Hartz Sdn Bhd, for a cash consideration of RM500,000. The disposal of subsidiaries had the following effects on the Groups assets and liabilities:
Group 31.5.2008 31.7.2007 RM000 RM000 Non current assets 31,741 Goodwill 903 Current assets 10,820 Current liabilities (7,821) Deferred tax liabilities (2,714) Revaluation reserve (2,947) Minority interest (17,061) Foreign exchange reserve (1,040) Net assets disposed of Gain on disposal Consideration received Cash and cash equivalents disposed of 11,881 19,713 31,594 (1,641) 29,953 (6,160) 23,793 6,160 6,160
Deposits received Proceeds from disposal of subsidiaries
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31 May 2008
12. Investment in an associate Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Quoted shares at cost Accumulated impairment losses At beginning of period/year Impairment loss for the period/year 46,616 25,278 - 25,278 21,338 2,977 24,315 14,170 46,616 25,278 - 25,278 21,338 2,045 23,383 17,827 21,639 - 21,639 21,032 - 21,032 12,784 21,639 21,639 21,032 21,032 16,084 42,671 42,671
At end of period/year Share in post acquisition profits Carrying amount Market value of quoted shares
The summarised financial information of the associate is as follows: 31.5.2008 31.7.2007 RM000 RM000 Assets and liabilities Current assets Non current assets Total assets Current liabilities Non current liabilities Total liabilities 89,500 125,605 215,105 27,651 27,525 55,176 60,292 243,264 303,556 66,337 83,606 149,943
1.8.2007 1.8.2006 to to 31.5.2008 31.7.2007 RM000 RM000 Results Revenue Profit for the period/year 73,835 7,932 81,582 3,082
The details of the associate are as follows: Issued and Groups paid up share effective Principal Country of capital interest activities Name of company incorporation RM000 31.5.2008 31.7.2007 SEG International Bhd Malaysia 83,444 27.4% 25.7% Investment holding and provision of education services and related management consultancy and property management and rental of premises and business advisory services
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31 May 2008
12. Investment in an associate (Contd) Quoted shares in the associate are pledged as follows: Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Secured advances included under other payables and accruals (Note 31) Secured borrowings (Note 28) Profit guarantee liabilities (Note 31) 790 22,977 - 23,767 790 17,182 4,928 22,900 790 19,830 - 20,620 790 15,040 4,928 20,758
The financial statements of the associate are not audited by Russell Bedford LC & Company.
13. Other long term investments Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Equity shares quoted, at cost - Malaysia - foreign Unquoted shares at cost Accumulated impairment losses At beginning of period/year Disposals At end of period/year Carrying amount Market value of quoted equity shares 37,504 206 16,148 53,858 46,977 - 46,977 6,881 6,792 37,504 198 16,148 53,850 50,095 (3,118) 46,977 6,873 12,907 24,078 - 24,078 5,978 6,022 24,078 24,078 4,530 8,355 13,740 206 16,110 30,056 12,300 198 16,110 28,608
Certain quoted shares in other investments are pledged as follows: Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Secured advances included under other payables and accruals (Note 31) 29 29 29 29 Secured borrowings (Note 28) 5,258 3,758 4,395 2,215 Profit guarantee liabilities (Note 31) - 1,500 - 1,500 5,287 5,287 4,424 3,744
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31 May 2008
14. Deferred tax assets/(liabilities) Group 31.5.2008 31.7.2007 RM000 RM000 At beginning of period/year Recognised in income statement (Note 6) - current period/year - over provision in prior years Disposal of subsidiaries (Note 11) Foreign exchange adjustment At end of period/year Presented after appropriate offsetting as follows: Deferred tax assets Deferred tax liabilities 1,276 - 1,276 1,887 (2,713) (826) (826) (612) - 2,714 - 1,276 (369) (735) 187 91 (826)
Deferred tax assets of the Group are in respect of the following: Group 31.5.2008 31.7.2007 RM000 RM000 Tax effects of unabsorbed capital allowances and unutilised tax losses 1,276 1,887
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 31.5.2008 31.7.2007 RM000 RM000 Tax effects of excess of tax capital allowances over related depreciation of property, plant and equipment - (2,713)
Deferred tax assets have not been recognised in respect of the following temporary differences: Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Tax effects of: 12,162 2 3,210 10,947 2,957 - - 2,701 -
Unabsorbed capital allowances and unutilised tax losses Excess of depreciation of plant and equipment over tax capital allowances Provisions
- 3,204
15,374 14,151 2,957 2,701 Portion of the unabsorbed capital allowances and unutilised tax losses have not been recognised as it is not probable that taxable profit will be available in the foreseeable future to utilise these unused tax credits and unused tax losses.
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31 May 2008
15. Intangible asset Group 31.5.2008 31.7.2007 RM000 RM000 Trademark licence at cost At beginning of period/year Additions At end of period/year Accumulated amortisation At beginning of period/year Amortisation for the period At end of period/year Carrying amount - 32 32 538 399 399 171 570 399 399
16. Goodwill on consolidation Group 31.5.2008 31.7.2007 RM000 RM000 Goodwill at cost At beginning of period/year Adjustments Effects of adopting FRS 3 Disposal and deemed disposal of subsidiaries At end of period/year Accumulated amortisation At beginning of period/year Effects of adopting FRS 3 At end of period/year Carrying amount - - - - 768 (768) 839 839 64 - (903) - 1,609 (768) (2) 839
17. Inventories Group 31.5.2008 31.7.2007 RM000 RM000 Raw materials Finished goods Spares and supplies Less: Slow moving provision 43 462 405 910 (24) 886 1,680 358 1,389 3,427 3,427
Spares and supplies and raw materials with a carrying value of RM405,000 (31.7.2007: RM2,161,000) are charged as collaterals for one of the banking facilities referred to in Note 28.
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31 May 2008
18. Non current asset held for sale On 10 June 2008, a subsidiary entered into a sale and purchase agreement to dispose of a piece leasehold land for a consideration of RM2.3 million. The disposal is expected to complete within the next twelve months upon the fulfilment of all conditions precedent of the sale and purchase agreement. Accordingly, the fair value less costs to sell of this piece of leasehold land is classified as non current asset held for sale. As at the balance sheet date, this piece of leasehold land has been charged as collateral to secure the banking facilities referred to in Note 28.
19. Property development costs Group 31.5.2008 31.7.2007 RM000 RM000 At beginning of period/year Long term leasehold land Development costs Costs incurred during the period/year: Development costs Costs recognised in income statement: At beginning of period/year Recognised during the period/year At end of period/year Accumulated expected losses: At beginning of period/year Expected loss for the period/year At end of period/year Property development costs at 31 May/31 July 103,046 107,686 210,732 628 (46,904) - (46,904) (76,230) - (76,230) 88,226 103,046 107,670 210,716 16 (44,930) (1,974) (46,904) (60,230) (16,000) (76,230) 87,598
Property development costs of the Group with carrying value of RM88.2 million (31.7.2007: RM87.6 million) have been charged as collaterals to secure the banking facilities as referred to in Note 28.
20. Trade receivables Group 31.5.2008 31.7.2007 RM000 RM000 Trade receivables Accrued billings for property development Amount due from contract customers (Note 21) 53,990 1,958 13,367 69,315 (20,096) 49,219 56,001 1,958 15,261 73,220 (18,550) 54,670
Less: Provision for doubtful debts The Groups normal trade credit term is 30 days (31.7.2007: 30 days).
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31 May 2008
21. Amount due from contract customers Group 31.5.2008 31.7.2007 RM000 RM000 Costs incurred to date Add: Attributable profits Work in progress Less: Progress billings received and receivable Amount due from contract customers (Note 20) 21,633 3,725 25,358 (11,991) 13,367 44,353 3,829 48,182 (32,921) 15,261
22. Amount due from/(to) subsidiaries Company 31.5.2008 31.7.2007 RM000 RM000 The amount due from subsidiaries - interest free - bears interest at the rate of 1% per annum Less: Provision for doubtful debts 342,216 - 342,216 (39,005) 303,211 54,305 280,316 334,621 (25,448) 309,173
Other than the interest bearing portion as disclosed above, the amounts due from/(to) subsidiaries comprise unsecured interest free advances with no fixed terms of repayment.
23. Other receivables, deposits and prepayments Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Other receivables Less: Provision for doubtful debts 25,739 (22,673) 3,066 3,669 6,735 25,767 (19,831) 5,936 4,513 10,449 5,124 (3,233) 1,891 96 1,987 4,450 (308) 4,142 101 4,243
Deposits and prepayments
24. Fixed deposits with licensed banks Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Fixed deposits with licensed banks 976 1,422 814 1,264
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31 May 2008
24. Fixed deposits with licensed banks (Contd) The weighted average effective interest rate and maturity of fixed deposits at the balance sheet date are as follows: Company 31.5.2008 31.7.2007 % % 3.2 3.2
Group 31.5.2008 31.7.2007 % % Weighted average effective interest rate 3.2 3.4
Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 Days Days Days Days Average maturity as at the end of the financial period/year 119 146 100 151
The fixed deposits of the Group and the Company with aggregate carrying amounts of RM0.9 million (31.7.2007: RM1.4 million) and RM0.8 million (31.7.2007: RM1.3 million) respectively have been pledged as collaterals to secure the banking facilities referred to in Note 28.
25. Share capital Group and Company 31.5.2008 31.7.2007 No. of No. of ordinary ordinary shares of shares of Group and Company RM0.50 each RM0.50 each 31.5.2008 31.7.2007 000 000 RM000 RM000 Authorised: At beginning/end of period/year Issued and fully paid: At beginning/end of period/year Warrants 2004/2009 In conjunction with the renounceable rights issue of 130,236,686 ordinary shares of RM0.50 each during the financial year ended 31 July 2004, the Company also issued 65,118,136 detachable warrants at no cost to its shareholders. The warrants are in registered form and constituted by a deed poll and entitle the registered holder to subscribe for one (1) new ordinary share of RM0.50 in the Company at a price of RM0.50 per ordinary share for every warrant held. It can be exercised at any time during the five years subscription period expiring on 18 March 2009. As at the end of the financial period, there were 65,118,136 (31.7.2007: 65,118,136) unexercised Warrants 2004/2009 in issue. 2,000,000 650,148 650,148 2,000,000 325,074 325,074 1,000,000 1,000,000
Employees Share Option Scheme The movements in the number of options for ordinary shares in the Company of RM0.50 each held by employees are as follows: Group and Company 31.5.2008 31.7.2007 000 000 Outstanding at 1 August - 2,671 Lapsed - (2,671) Outstanding at 31 May/31 July - -
The exercise price for these outstanding options was RM0.50 for each ordinary share of RM0.50 in the Company and the exercise period expired on 24 January 2007.
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31 May 2008
26. Reserves Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Accumulated losses Non distributable: Share premium Revaluation reserve - As previously reported - Effect of adopting FRS 127 Foreign exchange translation (385,079) 295,727 1,436 - (5,131) 292,032 (93,047) (351,675) 295,727 4,398 - (3,581) 296,544 (55,131) (486,643) 295,727 - - - 295,727 (190,916) (486,904) 295,727 155,397 (155,397) 295,727 (191,177)
Share premium represents the excess of the consideration received over the nominal value of the shares issued by the Company. The Groups revaluation reserve consists of revaluation surplus from freehold land and buildings and long term leasehold land. The Companys revaluation reserve is the surplus which arose from revaluation of investment in subsidiaries. Prior to 1 August 2006, the Companys cost of investment in certain subsidiaries was stated at valuation. In accordance with the provisions of FRS127, investment in subsidiaries is now stated at cost less impairment losses. The adoption of FRS127 resulted in a prior year adjustment to the investment in subsidiaries and revaluation reserve in the Companys financial statements.
27. Hire purchase liabilities Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Amount outstanding Less: Interest in suspense Principal portion Less: Portion due within one year Non current portion 1,117 (117) 1,000 (197) 803 360 (54) 306 (180) 126 608 (63) 545 (106) 439 -
Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 The non current portion of the hire purchase obligations is payable as follows: Later than 1 year and not later than 2 years Later than 2 years and not later than 5 years 208 595 803 126 - 126
112 327 439
The interest rates implicit in the hire purchase obligations range from 2.28% to 5.12% (31.7.2007: 3.30% to 4.45%) per annum.
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31 May 2008
28. Long term borrowings Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Bank overdrafts - secured Term loans - secured Revolving credits - secured - unsecured Non convertible preference shares issued by a subsidiary to its minority shareholder Less: Portion due within one year (Note 32) Non current portion 2,331 120,674 7,195 - 1,000 131,200 (29,022) 102,178 3,989 129,122 11,094 5,000 1,000 150,205 (51,148) 99,057 2,116 20,700 6,837 - - 29,653 (18,301) 11,352 3,498 28,104 10,735 5,000 47,337 (39,125) 8,212
Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 The non current portion of borrowings is payable as follows: Later than 1 year and not later than 2 years Later than 2 years and not later than 5 years Later than 5 years The average effective interest rates are as follows: Company 31.5.2008 31.7.2007 % % 9.25 - 9.14 8.30 - 9.08 9.69 9.25 8.95 6.01 24,212 35,785 42,181 102,178 20,686 38,994 39,377 99,057
11,352 - - 11,352
6,854 1,358 8,212
Group 31.5.2008 31.7.2007 % % Bank overdrafts Term loans Revolving credits - secured - unsecured - secured - secured - unsecured 10.22 - 9.13 8.32 - 9.49 9.69 9.26 9.64 6.27
Secured borrowings are secured by way of: Carrying amount Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Property, plant and equipment (Note 8) Investment properties (Note 9) Prepaid lease payments (Note 10) Quoted shares in an associate (Note 12) Quoted shares included under other long term investments (Note 13) Inventories (Note 17) Non current asset held for sale (Note 18) Property development costs (Note 19) Fixed deposits with licensed banks (Note 24) 36,187 289,584 1,104 22,977 5,258 405 2,250 88,226 940 30,904 308,582 2,855 17,182 3,758 2,161 - 87,598 1,402 - - - 19,830 4,395 - - - 797 15,040 2,215 1,264
Certain of the bank borrowings of the subsidiaries are also guaranteed by the Company.
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31 May 2008
29. Trade payables The normal trade credit period granted to the Company is 30 days (31.7.2007: 30 days).
30. Amount due to an associate The amount as at 31 May 2008 represents profit guarantee obligations payable (31.7.2008: unsecured interest free advances) with no fixed payment terms. 31. Other payables and accruals Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Included under other payables and accruals are: - deposits received for proposed disposal of a subsidiary - deposits received from tenants and purchasers of investment properties - unsecured advances from third parties - provision for contingencies in respect of disposal of subsidiaries - accrued interest - secured third party advances which bear interest between 8% and 10% (31.7.2007: 8% and 10%) per annum - provision for real property gains tax liabilities as required for accounting purposes - provision for liquidated ascertained damages in respect of property development projects - profit guarantee liabilities - provision for tax penalties as required for accounting purposes - 5,460 15,751 11,431 8,613 2,100 10,029 8,049 7,342 5,311 6,160 5,564 4,644 - 2,809 2,839 10,047 8,582 10,722 5,779 - - 510 11,431 8,613 1,600 616 - 7,342 - 6,160 510 2,809 2,339 616 10,722 -
The secured third party advances are secured by way of:
Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Quoted shares in an associate (Note 12) Quoted shares included under other long term investments (Note 13) 790 29 819 790 29 819 790 29 819 790 29 819
The profit guarantee liabilities are secured by way of:
Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Quoted shares in an associate (Note 12) Quoted shares included under other long term investments (Note 13) - - - 4,928 1,500 6,428 - - - 4,928 1,500 6,428
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31 May 2008
32. Short term borrowings Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Bank overdrafts Term loans Revolving credits - secured - secured - secured - unsecured 2,331 24,297 2,394 - 29,022 3,989 35,173 6,986 5,000 51,148 2,116 11,700 4,485 - 18,301 3,498 24,001 6,626 5,000 39,125
Current portion (Note 28)
33. Significant related party disclosures (a) Related party disclosures Group Company 1.8.2007 1.8.2006 1.8.2007 1.8.2006 to to to to Type of 31.5.2008 31.7.2007 31.5.2008 31.7.2007 transactions RM000 RM000 RM000 RM000 Significant transaction with a company in which certain directors have interests Name of company SEG International Bhd Profit guarantee expense - 5,169 - 5,169 Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Significant outstanding balances with companies in which certain directors have interests Name of companies Receivable Casa Andaman Sdn Bhd - construction contracts 2,202 7,877 - Payables Meda Inc Berhad - profit guarantee liabilities 2,189 2,189 2,189 2,189 SEG International Bhd (profit guarantee liabilities) - other payables and accruals 5,153 8,533 5,153 8,533 - amount due to an associate 3,100 - 3,100 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) Compensation of key management personnel The key management personnel comprises mainly executive directors of the Company whose remuneration is disclosed in Note 5.
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31 May 2008
34. Commitments Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Operating lease commitments The future minimum lease payments under non cancellable operating leases are as follows: Not later than 1 year 884 848 399 420 Later than 1 year and not later than 2 years 622 478 411 102 Later than 2 years and not later than 5 years 523 257 499 110 2,029 1,583 1,309 632
35. Contingencies Group Company 31.5.2008 31.7.2007 31.5.2008 31.7.2007 RM000 RM000 RM000 RM000 Guarantees relating to borrowings of: - subsidiaries (secured) - an affiliated company (secured) Bank guarantee given to third parties relating to utility facilities (unsecured) - 7,018 648 7,666 - 10,217 2,467 12,684 100,467 7,018 648 108,133 101,790 10,217 2,467 114,474
At 31 May 2008, the Company had contingent liabilities in respect of the following: (i) Two subsidiaries, Pujian Development Sendirian Berhad (PDSB) and Southern Utilities Corporation Sdn Bhd (SUC), have been served with a writ of summons by 56 purchasers of the South City Condominiums (the Project) seeking declarative orders, injunctive orders and general damages in respect of their purchase of the service apartments and shop units of the Project. The matter is now fixed for case management on 24 October 2008 and at this juncture, the loss arising therefore, if any, cannot be reasonably estimated. The solicitors are of the opinion that PDSB and SUC have reasonably good defence for the above matter subject to the availability of sufficient documentary evidence to substantiate its defence. Therefore, no provision has been made in the financial statements.
(ii) PDSB was served with a writ of summons by 24 purchasers seeking rescission of the Sale and Purchase Agreements entered into with PDSB in respect of the shop units in the South City Plaza. The estimated loss to the Group is RM2.4 million and the matter is now pending hearing on 24 October 2008. The solicitors are of the opinion that PDSB has reasonably good defence for the above matter subject to the availability of sufficient documentary evidence to substantiate its defence. Therefore, no provision has been made in the financial statements.
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31 May 2008
36. Material litigations and claims (i) The Inland Revenue Board (IRB) issued a writ of summons against each of the 4 subsidiaries, Mudek Sdn Bhd, Seri Jasin Sdn Bhd, Berembang Sendirian Berhad and Jiddi Joned Enterprises Sdn Bhd individually for real property gains tax owed by the subsidiaries. The 4 subsidiaries have also filed legal suits against certain parties for failure to release retention sums representing part of the real property gains tax as mentioned above. These legal suits are still on going and for accounting purposes all the amounts owed have been provided for in the financial statements.
(ii) IRB filed 4 separate legal suits against Pujian Development Sendirian Berhad (PDSB) for a total amount of RM32.5 million. The claims are for income tax outstanding for assessment years 1998 to 2000, 2001 and 2004. For the first action, PDSB succeeded in setting aside the judgement in default of appearance. IRB has since filed an appeal against the said decision. In relation to the second, third and fourth actions, PDSB has filed its defence. As for the fourth action, IRBs application for summary judgement was allowed with costs on 6 August 2008. PDSB has filed an appeal against the decision on 13 August 2008. For accounting purposes, PDSB has provided for the income tax, inclusive of penalties, of RM32.5 million in respect of these pending litigations.
(iii) IRB filed 2 legal suits against Tashima Development Sdn Bhd (Tashima), for the recovery of income tax outstanding totalling RM6.4 million for assessment years 2000, 2001 and 2002 including penalties. Tashima has filed its statement of defence for the first suit. In respect of the second suit, the court has allowed IRBs summary judgement application. Tashima has filed its appeal against the decision. The matter is now fixed for hearing on 14 October 2008 of Tashimas stay application. For accounting purposes, Tashima has provided for the income tax, inclusive of penalties, of RM6.4 million in respect of these pending litigations.
(iv) IRB filed a legal suit against Sawitani Sdn Bhd (Sawitani) for a total amount of RM1.0 million. The claims are for real property gains tax outstanding for assessment year 2000. Sawitani has filed its defence on 9 September 2008.
37. Discontinued operations The discontinued operations of the Group are in respect of the following subsidiaries that have been disposed of during the financial period:
Effective Principal Segment Geographical date of activities industry segment discontinuance PalmTech India Limited Provision of Plantation Rest of Asia November agriculture advisory and palm 2007 service to promote oil mills and develop oil palm and processing and marketing of oil palm products Cross Continental Investment Plantation Rest of Asia November Investments holding and palm 2007 oil mills
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31 May 2008
37. Discontinued operations (Contd) The effects of the discontinued operation on the results of the Group are presented in the income statements. The effects of the discontinued operation on the financial position of the Group are disclosed in Note 11. The cash flows attributable to the discontinued operations are as follows: Group 1.8.2007 1.8.2006 to to 31.5.2008 31.7.2007 RM000 RM000 Operating cash flows 2,935 7,079 Investing cash flows (132) (1,350) Financing cash flows (2,473) (5,595) Total cash flows 330 134
38. Segmental information Segmental information is presented in respect of the Groups business and geographical segments. The primary reporting segment information is in respect of business segments while the secondary information is reported as geographical segments. Inter-segment pricing is determined based on arms length basis. Segments results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The Group comprises the following main segments: Business segments Property and construction Plantation and palm oil mills Manufacturing Investment and others Geographical segments Malaysia Rest of Asia Solomon Islands Others
38. Segmental information (Contd) <-------------------- Continuing operations --------------------->
Discontinued operations
Plantation Plantation Property Investment and palm and palm and and oil mills oil mills construction Manufacturing others Eliminations Consolidated 31 May 2008 RM000 RM000 RM000 RM000 RM000 RM000 RM000 10,278 - 10,278 (20,734) 2,055 - 18,844 24,315 431,656 - (6,541) 12,779 (820) 1,270 (13,255) 319 91 12,356 (2,272) 91 - 10,084 2,272 - (2,272) 30,464 30,464 10,011 - 10,011 2,063 - - 36,881 - (2) - - -
Business Segments Revenue Revenue from external customers Inter-segment revenue
Results Segment results
Interest income
Loss from operations Finance costs Share in profit of associate
- -
(12,936) (10,529) 1,270 (22,195) (10,204) (32,399)
Loss before tax Income tax expense
Net loss for the period Other information Segment assets Investment in an associate
489,436 24,315 513,751 1,448 515,199
Unallocated corporate assets - - - 131 265 - 14 4,159 721 - 11,576 - 136,761 - 4,438 - 81,804 - - -
Segment liabilities Unallocated corporate liabilities
234,579 33,647 268,226 - 446 293 21,243 - 1 707 5,710 32 1,599 702 14,427 - - - (13,909) 46 6,336 2,688 27,471

31 May 2008
Amortisation Capital expenditure Depreciation Non cash expenses other than depreciation and amortisation
85
86
38. Segmental information (Contd)
31 May 2008
Discontinued operations Plantation and palm oil mills RM000 Consolidated RM000 Property Investment and and construction Manufacturing others Eliminations RM000 RM000 RM000 RM000
<-------------------- Continuing operations --------------------->
31July 2007 Business Segments 25,346 - 25,346 5,686 8,470 16,285 - 23,383 455,494 - 42,158 - 12,474 - 1,672 1,568 986 - 34,701 - - (17,608) (1,786) (6,924) (457) (21,089) 164 807 - 56,069 738 15,291 (4,261) - - 56,069 - 738 - 11,030 4,261 - (4,261) 93,183 93,183
Plantation and palm oil mills RM000
Revenue
Revenue from external customers Inter-segment revenue
Results
Segment results
Interest income
Loss from operations Finance costs Share in profit of associate
- -
(20,925) (13,538) 807 (33,656) (1,045) (34,701)
Loss before tax Income tax expense
Net loss for the year Other information
Segment assets Investment in associate Unallocated corporate assets
557,108 23,383 2,059 582,550 256,525 25,080 281,605 14 8,557 4,355
Segment liabilities Unallocated corporate liabilities
5,198 138,518 4,948 95,387 - 14 - - - - 4,955 325 259 1,346 - 950 267 853 717 - 16,396 - 5,190 -
Amortisation Capital expenditure Depreciation Non cash expenses other than depreciation and amortisation
22,572
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31 May 2008
38. Segmental information (Contd) Rest of Solomon Malaysia Asia Islands Others Total 31 May 2008 RM000 RM000 RM000 RM000 RM000 Geographical Segments Revenue Carrying amount of segment assets Additions to property, plant, equipment and intangible asset 10,137 - 131 - 36,881 4,159 9 20 - 30,464 515,199 6,507
20,318 478,298 2,217
Rest of Solomon Malaysia Asia Islands Others Total 31 July 2007 RM000 RM000 RM000 RM000 RM000 Geographical Segments Revenue Carrying amount of segment assets Additions to property, plant, equipment and intangible asset 25,346 42,299 1,672 - 34,560 4,955 - 24 - 93,183 582,550 8,956
67,837 505,667 2,329
39. Financial instruments Financial risk management objectives and policies The Groups financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Groups businesses whilst managing its interest rate, liquidity, foreign exchange, market and credit risks. The Group operates within guidelines that are approved by the Board and the Groups policy is not to engage in speculative transactions. Interest rate risk The Groups 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. Liquidity risk The Group actively monitors its debt maturity profile, operating cash flows and the availability of funding so as to best ensure that all funding needs are met. As part of its overall liquidity management, the Group endeavours to maintain sufficient levels of cash or cash convertible investments to best meet its working capital requirements. Foreign exchange risk The Group operates internationally and is exposed to various currencies, mainly United States Dollars, Indian Rupees and Solomon Islands Dollars. Foreign currency denominated assets and liabilities together with expected cash flows from highly probable purchases and sales give rise to foreign exchange exposures. Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level. As at balance sheet date, there are no material unhedged financial assets and financial liabilities of the Group and the Company that are not denominated in their functional currencies. Market risk The Group is exposed to market risks arising from changes in the market prices of its quoted investments. The Group does not use derivative instruments to manage this risk as the Groups quoted investments are mainly held as long term investments.
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31 May 2008
39. Financial instruments (Contd) Credit risk Credit risks are managed by the application of credit approvals, limits and monitoring procedures. Credit risks are minimised and monitored via strictly limiting the Groups associations to business partners with high creditworthiness. Trade receivables are monitored on an ongoing basis via the Groups management reporting procedures. At balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset. Fair values The fair values of all financial assets and financial liabilities of the Group and the Company as at balance sheet date are not materially different from their carrying values other than as follows:
Group Company 31.5.2008 31.5.2008 Carrying Fair Carrying Fair amount value amount value RM000 RM000 RM000 RM000 Financial assets
Quoted shares included in other long term investments Unquoted shares included in other long term investments Amount due from subsidiaries Financial liabilities Amount due to subsidiaries Amount due to an associate 5,743 6,792 # - 4,878 1,100 303,211 6,022 # *
1,138 - - 3,100
- *
172,670 3,100
* *
Group Company 31.7.2007 31.7.2007 Carrying Fair Carrying Fair amount value amount value RM000 RM000 RM000 RM000
Financial assets 5,735 12,907 # - 3,430 1,100 309,173 8,355 # *
Quoted shares included in other long term investments Unquoted shares included in other long term investments Amount due from subsidiaries Financial liabilities Amount due to subsidiaries Amount due to an associate
1,138 - - 37
- *
173,106 37
* *
# It is not practicable to estimate the fair values of the unquoted investments due to the lack of quoted market prices and inability to estimate fair value without incurring excessive costs. * It is not practicable to estimate the fair values of the amounts due from/to related parties without incurring excessive costs due principally to a lack of repayment terms entered into by the parties.
The fair value of quoted shares is determined by reference to stock exchange quoted selling prices at the close of business on the balance sheet date.
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31 May 2008
40. Comparative figures The following comparative figures have been restated following the adoption of FRS 117 Leases:
As Effects of previously adopting As reported FRS 117 restated RM000 RM000 RM000 Group Balance Sheet 80,134 - - (4,026) 4,012 14 76,108 4,012 14
Property, plant and equipment Prepaid land lease payments - non current portion - current portion Income Statement Amortisation of prepaid lease payments Depreciation
- 4,369
14 (14)
14 4,355
41. Change in financial year end The Company changed its financial year end from 31 July to 31 May. The comparative figures relate to the previous 12 months ended 31 July 2007 are hence not comparable to that of the current 10 months ended 31 May 2008.
90
Particulars of Group Properties

The properties of the Group as at 31 May 2008 and their net book values (NBV) are indicated below: Long-Term Leasehold Properties Date of Lease Expiry Acquisition/ NBV Size & Usage Title/Location Company Date Revaluation RM000 1. 2,653 sq. metres PN No. 00008659, EcoFirst Development 99-year lease 10.6.2008 2,250 of leasehold land Lot No. 0000027, Sdn. Bhd. expiring for commercial Bandar Kuantan, 16 Dec 2084 development Pahang. 2. 10,299 hectares Parcel No. 143-001-11 Silvania Plantation 75-year lease 29.7.1999 3,654 of oil palm estate on Lot 40 of LR 515, Products (S.I.) Ltd. expiring Vangunu Island, 29 Jul 2074 Western Province, Soloman Islands. Investment Properties Approximate Date of Age of Building Lease Expiry Acquisition/ NBV Size & Usage Title/Location Company (years) Date Revaluation RM000 1. 91 sq. metres B-04-10, Perdana Selatan, Pujian 8 99-year lease 3.8.2006 130 of office space Taman Serdang Perdana, Development expiring (Seksyen 1) Sendirian 9 Nov 2093 43300 Seri Kembangan, Berhad Selangor Darul Ehsan. 2. 150,417 sq. PN No. 7393, Lot No. 1, Pujian 5 99-year lease 29.7.2008 288,230 metres of Pekan Serdang, Development expiring commercial Daerah Petaling, Selangor. Sendirian 9 Nov 2093 space Berhad 3. 55 sq. metres PN No. 7393, Lot No. 1, Opal Horizon 5 99-year lease 29.7.2008 295 of commercial Pekan Serdang, Sdn Bhd expiring space Daerah Petaling, Selangor. 9 Nov 2093 4. 60 sq. metres PN No. 7393, Lot No. 1, Efex Trade & 5 99-year lease 29.7.2008 317 of commercial Pekan Serdang, Exhibitions expiring space Daerah Petaling, Selangor. Sdn Bhd 9 Nov 2093 5. 55 sq. metres PN No. 7393, Lot No. 1, EcoFirst 5 99-year lease 29.7.2008 295 of commercial Pekan Serdang, Development expiring space Daerah Petaling, Selangor. Sdn Bhd 9 Nov 2093 6. 60 sq. metres PN No. 7393, Lot No. 1, EcoFirst 5 99-year lease 29.7.2008 317 of commercial Pekan Serdang, Laboratories expiring space Daerah Petaling, Selangor. Sdn Bhd 9 Nov 2093 289,584 5,904
91
Statistical Report of Holders of Shares and Warrants 2004/2009

as at 30 September 2008
Class of securities Authorised share capital Issued and fully paid-up share capital No. of warrants issued Voting rights : : : : Ordinary shares of RM0.50 each Warrants 2004/2009 RM1,000,000,000.00 RM325,073,827.00
: :
65,118,136 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. : Warrantholders Every Warrantholder of the Company present in person or by proxy shall have one vote and upon a poll, every Warrantholder shall have one vote for each Warrant held. 31,497 3,419
No. of Shareholders No. of Warrantholders
: :
92
Analysis of Shareholdings
Number of Number Range of Shareholdings Shareholders of Shares Less than 100 100 - 1,000 1,001 - 10,000 10,001 - 100,000 100,001 - less than 5% of issued shares 5% and above of issued shares Total 1,721 5,136 18,646 5,528 466 0 31,497 41,812 4,669,687 85,156,557 150,779,620 409,499,978 0 650,147,654 Percentage (%) 0.01 0.72 13.10 23.19 62.98 0.00 100.00
LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS Name of Shareholders Number of Shares 1. RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Hii Chii Kok @ Hii Chee Kok (611002) 2. 3. 4. 5. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Purewise Sdn Bhd PM Nomineess (Tempatan) Sdn Bhd Pledged Securities Account for Hii Chii Kok @ Hii Chee Kok (D) Citigroup Nominees (Asing) Sdn Bhd UBS AG Singapore for Pacific Straits Ventures HSBC Nominees (Asing) Sdn Bhd BBH and Co Boston for Somerset Growth Fund (Bermuda) Ltd. 28,865,333 22,153,900 20,758,133 16,500,000 15,000,000 13,376,500 10,051,000 9,819,000 9,150,000 8,990,000 8,963,233 8,683,500 8,500,000 8,437,100 8,304,000 Percentage (%) 4.44 3.41 3.19 2.54 2.31 2.06 1.55 1.51 1.41 1.38 1.38 1.34 1.31 1.30 1.28
6. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Kian 7. Soh Chin Loong 8. M.I.T Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Cheam Shaw Fin (MG0033-325) 9. Brahmal a/l Vasudevan 10. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Aun 11. AMMB Nominees (Tempatan) Sdn Bhd AmBank (M) Berhad for Meda Capital Sdn Bhd (C. Andaman) 12. Malacca Equity Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Aun 13. Malacca Equity Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Foo 14. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Kian 15. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Foo
93
Analysis of Shareholdings
LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS (Contd) Name of Shareholders Number of Shares 16. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Foo 17. Jeyabalan a/l S. K. Parasingam 18. Foo San Kan 19. HLB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Hii Chii Kok @ Hii Chee Kok 20. HSBC Nominees (Asing) Sdn Bhd Exempt An For Clariden Leu AG 21. PM Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Hii Chii Kok @ Hii Chee Kok 22. Meda Capital Sdn Bhd 23. Malacca Equity Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Kian 24. OSK Nominees (Tempatan) Sdn Berhad Pledged Securities Account for Purewise Sdn Bhd 25. EB Nominees (Tempatan) Sendirian Berhad Pledged Securities Account for Teoh Seng Foo (BB) 26. Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Ooi Wooi Pheow (AO0011) 27. Purewise Sdn. Bhd. 28. UOBM Nominees (Temptan) Sdn Bhd Pledged Securities Account for Meda Capital Sdn Bhd (PJUptown-T261) 29. Affin Nominees (Temptan) Sdn Bhd Pledged Securities Account for Chung Kin Chuan (CHU0226C) 30. AllianceGroup Nominees (Temptan) Sdn Bhd Pledged Securities Account for Teoh Seng Aun (100386) SUBSTANTIAL SHAREHOLDERS According to the register required to be kept under Section 69L of the Companies Act, 1965, the following are the substantial shareholders (beneficial owners only) of the Company: Name of Number of Shares Substantial Shareholder Direct Interest (%) Indirect Interest (%) Total Interest (%) Dato Clement Hii Chii Kok 60,492,266 (9.30) Teoh Seng Kian 30,559,899 (4.70) Dato (Dr.) Teoh Seng Foo 28,471,600 (4.38) Teoh Seng Aun 21,615,188 (3.32) * Indirect interest held through Meda Capital Sdn Bhd - 18,405,065 (2.83)* 18,405,065 (2.83)* 18,405,065 (2.83)* 60,492,266 (9.30) 48,964,964 (7.53) 46,876,665 (7.21) 40,020,253 (6.16) 7,232,000 7,200,000 6,170,000 5,528,800 5,500,000 5,340,000 4,511,500 4,016,899 3,305,300 3,040,500 2,968,799 2,761,500 2,575,000 2,500,000 2,497,100 Percentage (%) 1.11 1.11 0.95 0.85 0.85 0.82 0.69 0.62 0.51 0.47 0.46 0.42 0.40 0.38 0.38
94
Analysis of Warrantholdings
Number of Number Range of Warrantholdings Warrantholders of Warrants Less than 100 100 - 1,000 1,001 - 10,000 10,001 - 100,000 100,001 - less than 5% of issued warrants 5% and above of issued warrants Total 206 1,049 1,697 398 67 2 3,419 10,543 837,335 6,280,146 14,148,749 24,441,497 19,399,866 65,118,136 Percentage (%) 0.02 1.29 9.64 21.73 37.53 29.79 100.00
LIST OF THIRTY LARGEST REGISTERED WARRANTHOLDERS Name of Warrantholders Number of Warrants 1. 2. AMMB Nominees (Tempatan) Sdn Bhd AmBank (M) Berhad for Meda Capital Sdn Bhd (C. Andaman) TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Purewise Sdn Bhd 13,267,166 6,132,700 2,334,000 1,916,900 1,193,700 1,000,000 1,000,000 816,666 750,000 716,400 700,000 630,900 599,500 566,500 548,066 542,000 500,000
Percentage (%) 20.37 9.42 3.58 2.94 1.83 1.54 1.54 1.25 1.15 1.10 1.07 0.97 0.92 0.87 0.84 0.83 0.77
3. Foo San Kan 4. AIBB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Kek Lian Lye 5. Yeong Siew Kwan 6. Yap Suit Mae 7. Soh Chin Loong 8. AllianceGroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Foo (100265) 9. Loo Geok Eng 10. Khor Ah An 11. Koh Chooi Lian 12. Khor Seow Ling 13. Soo Kee Chee 14. RHB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Sim Mui Khee (N02718M) 15. Meda Capital Sdn Bhd 16. Nur Arina Caroline Wambeck Bt Abdullah 17. Mayban Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tam Kian Kwang
95
Analysis of Warrantholdings
LIST OF THIRTY LARGEST REGISTERED WARRANTHOLDERS (Contd) Name of Warrantholders Number of Warrants 18. Soh Shuh Loo 19. Saw Lian Peck 20. Md Ramli Bin Manap 21. AllianceGroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teoh Seng Aun (100386) 22. Mayban Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Shew Poh 23. Low Chew Hong 24. Chen Fook Wah 25. Loo Geok Eng 26. Yong Jee Patt 27. Baharuddin Bin Salleh 28. Kong Oon Chee 29. Affin Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tan Song Seng (TAN6758C) 30. Teo Siew Lai 438,600 432,000 400,000 400,000 399,700 371,600 335,500 323,233 300,000 294,900 285,500 268,000 258,000
Percentage (%) 0.67 0.66 0.61 0.61 0.61 0.57 0.52 0.50 0.46 0.45 0.44 0.41 0.40
96
Statement on Directors Interests in the Company and Related Corporations

Number of Shares Name of Directors Direct (%) Indirect (%) Total Interest (%) In EcoFirst Consolidated Bhd Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim Dato (Dr.) Teoh Seng Foo Dato Clement Hii Chii Kok Dato Syed Ariff Fadzillah bin Syed Awalluddin Dato Philip Chan Hon Keong Amos Siew Boon Yeong Oh Hong Choon Tiong Kwing Hee
- 28,471,600 (4.38) 60,492,266 (9.30) - - - - -
- 18,405,065 (2.83)* - - - - - -
46,876,665 (7.21) 60,492,266 (9.30) -
Number of Warrants Name of Directors Direct (%) Indirect (%) Total Interest (%) In EcoFirst Consolidated Bhd Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim Dato (Dr.) Teoh Seng Foo Dato Clement Hii Chii Kok Dato Syed Ariff Fadzillah bin Syed Awalluddin Dato Philip Chan Hon Keong Amos Siew Boon Yeong Oh Hong Choon Tiong Kwing Hee
- 946,866 (1.45) - - - - - -
- 13,815,232 (21.22)* - - - - - -
14,762,098 (22.67) -
* Indirect interest held through Meda Capital Sdn Bhd
FORM OF PROXY
I/We,

(Full Name in Block Letters)
of
(Address)
being a member(s) of ECOFIRST CONSOLIDATED BHD hereby appoint

(Full Name in Block Letters)
of
(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-Fifth Annual General Meeting of the Company to be held at Grand Ballroom, Level 5, The Summit Hotel, Subang USJ, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan on Monday, 24th November 2008 at 3.00 p.m. or at any adjournment thereof. ORDINARY RESOLUTIONS 1. Adoption of Audited Financial Statements and Reports 2. Payment of Directors fee 3. Re-election of Tan Sri Dato Dr. Syed Jalaludin bin Syed Salim as Director 4. Re-election of Dato (Dr.) Teoh Seng Foo as Director 5. Re-appointment of Messrs. Russell Bedford LC & Company as Auditors and to authorise the Directors to fix their remuneration 6. Authority pursuant to Section 132D of the Companies Act, 1965 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.
*FOR
*AGAINST
Dated this
day of
2008.
Number of shares held
Signature of Shareholder(s) / Common Seal
Notes: 1. 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. 2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. 3. In the case of a corporate body, the proxy appointed must be in accordance with the Memorandum and Articles of Association, and the instrument appointing a proxy shall be given under the Companys Common Seal or under the hand of an officer or attorney duly authorised. 4. The Form of Proxy must be deposited at the Companys Registered Office at 17th Floor, Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan not less than 48 hours before the time set for the meeting or any adjournment thereof.
Then fold here
STAMP
The Company Secretary ECOFIRST CONSOLIDATED BERHAD (Co. No: 15379-V) 17th Floor, Menara Summit Persiaran Kewajipan, USJ 1 47600 UEP Subang Jaya Selangor Darul Ehsan Malaysia
1st fold here
www.ecofirst.com.my
17th Floor, Menara Summit, Persiaran Kewajipan, USJ1, 47600 UEP Subang Jaya, Selangor Darul Ehsan, Malaysia. Tel: +603-8024 8899 Fax: +603-8025 3003
EcoFirst Consolidated Bhd (15379-V)

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