ECOFIRS-AnnualReport2010 (3MB)

contentsNotice of Annual General Meeting 01

Statement AccompanyingNotice of Annual General Meeting 01

Annexure I 03

Corporate Information 05

Chairman’s Statement 07

Letter to Shareholders on eDividend 13

Board of Directors 15

Directors’ Profile 17

Business Divisions 21

Corporate Governance Statement 25

Statement Of Directors’ Responsibility 29

Other Information 30

Audit Committee Report 31

Statement on Internal Control 35

Financial Statements 36

Particulars of Group Properties 96

Analysis of Shareholdings 97

Form of Proxy

Notice Of Thirty-Seventh Annual General Meeting

1ecofirst consolidated bhd (15379-V)

NOTICE IS HEREBY GIVEN that the Thirty-Seventh Annual General Meeting of the Company will be held at Ballroom 1, Level 5,The Summit Hotel, Subang USJ, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan on Wednesday,24 November 2010 at 10.00 a.m. to transact the following business:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 May 2010 together with the Directors’ and Auditors’Reports thereon.

2. To re-elect the following Directors who will be retiring pursuant to Article 113 of the Company’s Articles of Association:2.1 Dato’ (Dr.) Teoh Seng Foo (Resolution 1)2.2 Siew Boon Yeong (Resolution 2)

3. To re-elect Lim Een Hong, who will be retiring pursuant to Article 93 of the Company’s Articles of Association. (Resolution 3)

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

SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions, with or without modifications, as Ordinary and Special Resolutions of theCompany:-

5. ORDINARY RESOLUTION NO. 1APPROVAL OF DIRECTORS’ FEES

RESOLVED:“THAT the Directors’ Fees for the financial year ended 31 May 2010 be hereby approved.” (Resolution 5)

6. ORDINARY RESOLUTION NO. 2AUTHORITY FOR DIRECTORS TO ISSUE SHARES

RESOLVED:“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the Main Market Listing Requirements of Bursa MalaysiaSecurities Berhad (“Bursa Securities”) and the approvals of the relevant governmental and/or regulatory authorities (if any), theDirectors be and are hereby authorized to issue shares in the Company at any time, upon such terms and conditions, for suchpurposes and to such person or persons as the Directors may deem fit, provided that the aggregate number of shares issuedpursuant to this resolution does not exceed 10% of the issued share capital of the Company at the time of issue AND THAT theDirectors be also empowered to obtain the approval of Bursa Securities for the listing of and quotation for the additional shares soissued on Bursa Securities AND THAT such authority shall continue to be in force until the conclusion of the next Annual GeneralMeeting of the Company.” (Resolution 6)

7. SPECIAL RESOLUTIONPROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

RESOLVED:“THAT the deletion, alterations, modifications, variations and additions to the Articles of Association of the Company, more particularlyset out in Annexure I, be and is hereby approved.” (Resolution 7)

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

Notice Of Thirty-Seventh Annual General Meeting (cont’d)

Statement AccompanyingNotice of Annual General Meeting

2annual report 2010

BY ORDER OF THE BOARD

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

Kuala Lumpur2 November 2010

Notes:-(i) A member entitled to attend and vote at the meeting is entitled to appoint not more than one (1) proxy to attend and vote in his stead. A proxy

need not be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply.(ii) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may

appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of thesaid securities account.

(iii) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or if theappointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised.

(iv) The original instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certifiedcopy of that power or authority shall be deposited at the Registered Office of the Company at Suite 11.1A, Level 11, Menara Weld, 76 JalanRaja Chulan, 50200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting.

Explanatory notes on Special Business:

(a) Resolution 5The Ordinary Resolution No. 1 proposed under this resolution 5, if passed, will authorize the payment of Directors’ Fees to the Directors ofthe Company for their services rendered during the financial year ended 31 May 2010.

(b) Resolution 6The Ordinary Resolution No. 2 proposed under this resolution 6, if passed, will renew the authority given to the Directors of the Company toissue and allot new shares in the Company at any time, to such person or persons, upon such terms and conditions and for such purposesas the Directors may, in their absolute discretion, deem fit (“General Mandate”), provided that the number of shares issued pursuant to thisGeneral Mandate, when aggregated with the nominal value of any such shares issued during the preceding twelve (12) months, does notexceed 10% of the total issued share capital of the Company at the time of issue. This renewed General Mandate, unless revoked or variedat a general meeting, will expire at the conclusion of the next annual general meeting (“AGM”) of the Company.

The General Mandate procured and approved in the preceding year 2009 which was not exercised by the Company during the year, will expireat the forthcoming Thirty-Seventh AGM of the Company.

With this renewed General Mandate, the Company will be able to raise funds expeditiously for the purpose of funding future investment,working capital and/or acquisition(s) without having to convene a general meeting to seek shareholders’ approval when such opportunitiesor needs arise.

(c) Resolution 7The Special Resolution proposed under this resolution 7, is for the purpose of streamlining the Company’s Articles of Association in line withthe provisions of the Main Market Listing Requirements, in particularly relating to electronic dividend as well as for housekeeping purposes.With the shareholders’ approval, the proposed amendments as per Annexure I attached together with the 2010 Annual Report of the Companywill be incorporated into the Company’s Articles of Association.

Further details of the following Directors standing for re-election are set out in the Directors’ Profile Section of the Annual Report:

(a) Dato’ (Dr.) Teoh Seng Foo(b) Siew Boon Yeong(c) Lim Een Hong

Annexure I


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118

DETAILS OF THE PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION

Business of Annual Meeting

The business of an Annual General Meeting shall be to

receive and consider the Profit and Loss Accounts, the

Balance Sheet and the Reports of the Directors and of

the Auditors, to elect Directors, Auditors and other office

in the place of those retiring by rotation or otherwise, to

declare dividends and to transact any other business

which under these Articles ought to be transacted at an

Annual General Meeting. All other business transacted

at an Annual General Meeting and all business

transacted at an Extraordinary General Meeting shall be

deemed Special.

How votes may be given and who can act as proxy

Subject and without prejudice to any special privileges

or restrictions as to voting for the time being attached to

any special class of shares for the time being forming

part of the capital of the Company, every member

present in person or by proxy or represented by

attorney shall have one vote and upon a poll every such

member shall have one vote for every share held by him.

A proxy or attorney need not be a member of the

Company, and shall be entitled to vote on a show of

hands on any question at any general meeting.

Quorum and Votes

The Directors may meet together for the despatch of

business, adjourn and otherwise regulate their

meetings, as they think fit. The quorum necessary for

the transaction of business may be fixed by the

Directors, and unless so fixed shall be four Directors.

Questions arising at any meeting shall be decided by a

simple majority of votes. The Chairman shall have a

second or casting vote in case of an equality of votes.

Where two Directors form a quorum, the Chairman of a

meeting at which only such a quorum is present, or at

which only two Directors are competent to vote on the

question at issue, shall not have a casting vote.

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118

Business of Annual Meeting

The business of an Annual General Meeting shall be to

receive the Profit and Loss Accounts, the Balance Sheet

and the Reports of the Directors and of the Auditors, to

elect Directors and other office in the place of thoseretiring by rotation or otherwise, to considerDirectors’ fees, to appoint Auditors and to determinetheir remuneration, to declare dividends and to

transact any other business which under these Articles

ought to be transacted at an Annual General Meeting.

All other business transacted at an Annual General

Meeting and all business transacted at an Extraordinary

General Meeting shall be deemed Special.

How votes may be given and who can act as proxy

Subject and without prejudice to any special privileges

or restrictions as to voting for the time being attached to

any special class of shares for the time being forming

part of the capital of the Company, every member

present in person or by proxy or represented by

attorney shall have one vote and upon a poll every such

member shall have one vote for every share held by him.

A proxy or attorney need not be a member of the

Company (the provisions of Section 149(1) of the Actshall not apply), and shall be entitled to vote on a showof hands on any question at any general meeting.

Quorum and Votes

The Directors may meet together for the despatch of

business, adjourn and otherwise regulate their

meetings, as they think fit. The quorum necessary for

the transaction of business may be fixed by the

Directors, and unless so fixed shall be two Directors.Questions arising at any meeting shall be decided by a

simple majority of votes. The Chairman shall have a

second or casting vote in case of an equality of votes.

Where two Directors form a quorum, the Chairman of a

meeting at which only such a quorum is present, or at

which only two Directors are competent to vote on the

question at issue, shall not have a casting vote.

EXISTING ARTICLES PROPOSED AMENDMENTS

4annual report 2010

118A

125

134

DETAILS OF THE PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION (CONT’D)

Not applicable

Resolution by Circulation

A resolution in writing signed or approved by letter ortelegram by all the Directors who may at the time bepresent in Malaysia and who are sufficient to constitutethe majority of the Directors shall be as valid andeffectual as if it had been passed at a meeting ofDirectors duly called and constituted, provided that,where a Director is not so present but has an alternatewho is so present, then such resolution must also besigned by his alternate. When signed, a resolution mayconsist of several documents each signed by one ormore of the persons aforesaid. All such resolutions shallbe described as “Directors’ Circular Resolutions” andshall be forwarded or otherwise delivered to theSecretary without delay, and shall be recorded by him inthe Company’s Minute Book.

Dividend warrants to be sent to members by post

Every dividend warrant may, unless otherwise directed,be sent by post to the last registered address of themember entitled thereto, and the receipt of the personwhose name at the date of the declaration of thedividend appears on the register of members as theowner of any share, or in the case of joint holders, ofany one of such joint holders, shall be a good dischargeto the Company for all payment made in respect of suchshare. No unpaid dividend or interest shall bear interestas against the Company.

118A

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134

Participation at meetings vide technological means

All or any of the members of the Board or anycommittee of the Board may participate in ameeting of the Board or that committee by means ofa telephone conference, video conference or anycommunication equipment which allow all personsto participate in the meeting. A person soparticipating shall be deemed to be present inperson at the meeting and shall be entitled to voteor to be counted in a quorum accordingly. Such ameeting shall be deemed to take place where thelargest group of those participating is assembled, orif there is no such group, where the chairman of themeeting then is.

Resolution by Circulation

A resolution in writing signed or approved by all theDirectors who may at the time be present in Malaysiaand who are sufficient to constitute the majority of theDirectors shall be as valid and effectual as if it had beenpassed at a meeting of Directors duly called andconstituted, provided that, where a Director is not sopresent but has an alternate who is so present, thensuch resolution must also be signed by his alternate.When signed, a resolution may consist of severaldocuments each signed by one or more of the personsaforesaid. The expressions “in writing” and “signed”include approval by legible confirmed transmissionby facsimile, telex, cable, telegram or other writtenelectronic means. All such resolutions shall bedescribed as “Directors’ Circular Resolutions” and shallbe forwarded or otherwise delivered to the Secretarywithout delay, and shall be recorded by him in theCompany’s Minute Book.

Mode of Payment of Dividend

Any dividend, interest, or other money payable incash in respect of shares may be paid by cheque orwarrant sent through the post directed to theregistered address of the holder or paid viaelectronic or other methods of funds transfer tosuch account as designated by such holder. Everysuch cheque or warrant or electronic transfer shallbe made payable to the order of the person to whomit is sent. Every such cheque or warrant or electronictransfer shall be sent at the risk of the personentitled to the money represented thereby. No unpaiddividend or interest shall bear interest as against theCompany.

EXISTING ARTICLES PROPOSED AMENDMENTS

Annexure I (cont’d)

secretaries

Yeoh Chong Keat

Rebecca Leong Siew Kwan(both appointed on 28 April 2010)

auditors

Russell Bedford LC & Company

10th Floor, Bangunan Yee Seng

15, Jalan Raja Chulan

50200 Kuala Lumpur

share registrar

Symphony Share Registrars Sdn. Bhd.

Level 6, Symphony House

Pusat Dagangan Dana 1

Jalan PJU 1A/46

47301 Petaling Jaya

Selangor Darul Ehsan

Tel : 03 - 7841 8000

Fax : 03 - 7841 8151/8152

registered office

Suite 11.1A, Level 11

Menara Weld

76, Jalan Raja Chulan

50200 Kuala Lumpur

Tel : 03 - 2031 1988

Fax : 03 - 2031 9788(changed with effect from 28 April 2010)

stock exchange listing

Bursa Malaysia Securities Berhad

Main Market

website

www.ecofirst.com.my

board ofdirectors

chairmanDato’ Syed Ariff Fadzillah bin Syed Awalluddin(re designated on 1 December 2009)

presidentDato’ (Dr.) Teoh Seng Foo(re designated on 1 December 2009)

group chief executive officer / executive directorTiong Kwing Hee

directorsAmos Siew Boon Yeong

Dato’ Boey Chin Gan

Lim Een Hong(appointed on 2 March 2010)

Teoh Seng Kian (Alternate Director to Dato’ (Dr.) Teoh Seng Foo)(appointed on 1 December 2009)

Corporate Information


thewisdomto succeed

dearshareholders,

On behalf of the Board of Directors

of Ecofirst Consolidated Bhd

(“the Company”), I hereby present

to you the Annual Report and the

Audited Financial Statements of the

Company and the Group for the

Financial Year Ended 31 May 2010.

Dato’ Syed Ariff Fadzillahbin Syed Awalluddin

Chairman


Chairman’s Statement

8annual report 2010

Overview

The global economic crisis which widened and deepened from

the sub-prime financial turmoil in the United States (“US”) to the

sovereign debt crisis in Europe is beginning to recover although

at a sluggish pace. With the help of large economic stimulus

packages rolled-out by developed countries running into trillions

of US Dollars, including substantial amounts to bail out their

financial institutions and large corporations, some improvement is

seen in consumer and investor confidence. However, the possible

withdrawal of fiscal stimulus by respective governments continues

to present risks to the global economic recovery.

The Malaysian stimulus packages are focused mainly on high

impact infrastructural projects, reducing unemployment and

increasing job and training opportunities as well as assisting the

private sector in facing the crisis and building capacity for the

future.

Going forward, the Group remains optimistic about the future

alongside the fiscal stimulus packages introduced by the

Government in an effort to increase the pace of economic

activities.

Financial Performance Review

The Group recorded a revenue of RM21.1 million and a loss of

before tax of RM41.4 million for the financial year ended 31May

2010.

The revenue recorded was derived from the construction, property

and network marketing divisions while the loss before tax was

mainly attributable to impairment loss on property development

cost and high finance cost.

Operational Review

The year under review was a challenging year as the Group strived

to make-up for the lower revenue contribution due to the tail-end

of the construction project of the National Youth Training Institute

(“IKBN”) at Kuala Kubu Baru, Selangor. Revenue from the said

project was lower by by 60% in the year under review as

compared to the previous financial year as a result of the

abovementioned. The Group is continuing to seek opportunities

to secure new construction projects to boost the Division’s future

revenue and profit contribution.

1 Segamat Artist Impression

Chairman’s Statement (cont’d)


Since the re-branding of South City Plaza in Seri Kembangan as

an Education Mall in the previous financial year, the mall has

enjoyed a reasonable stream of income. More areas have been

tenanted out to education providers. The Group plans to bring

the mall to the next level with the construction of 2 blocks of 13

storey service apartments/commercial space, which will help to

generate a bigger crowd to patronize the mall. The launching of

this development is expected to be in the first quarter of 2011.

In addition to the abovementioned development, next year will

also be an exciting phase for the Property Division as the Group

has recommenced the construction of its 5-storey shopping mall

in Segamat, Johor. Known as “1Segamat”, the mall consisting of

3 levels of retail space and 2 levels of carpark bays, will be the

one and only mall in the town of Segamat. Targeted to be opened

for business in the second half of 2011, 1Segamat is expected to

be a major revenue contributor to the Group.

Our Network Marketing Division is currently undergoing internal

restructuring and revamping to equip ourselves to face the

challenges in this highly competitive industry. The Division is

exploring and developing with affiliated scientists and

researchers, the commercial production of various health

products to meet the growing demand for nature inspired eco

friendly health care and beauty products. The Group sees

potential in this Division given the time and resources to groom

the business.

The Agro-Biotechnology Division has opened up more land for

the cultivation of organic crops. We are currently exploring the

planting of organic Agarwood on our 1,000 acres farm in Desaru,

Johor. The Group is positively bullish on the long term

contributions expected from this Division as the oil from

Agarwood is well sought after for its herbal, health and cosmetic

values.

One of the main highlights of the Group’s business plans is the

entry into mineral resources via our wholly-owned subsidiary,

Opal Horizon Sdn Bhd (“Opal”). Opal had on 5 August 2010

entered into a co-operation agreement with CV Geo Mineral

Resources (“CV Geo”) for the exploitation of an iron ore mine in

South Kalimantan, Indonesia. Opal and CV Geo will co-operate

to carry out exploitation activities on the iron ore mine located in

Tanah Laut Regency, South Kalimantan.

The Group’s entry into mineral resources will allow us to

participate in the booming global mineral resources industry

fuelled by the high growth and demand from China, India and its

surrounding regions. Given that mineral resources are non-

renewable in nature and the recent consolidation of global

players, global price levels are expected to remain stable despite

the economic downturn in the US and European markets.

Operational Review (cont’d)

Opening Ceremony of EcoFirst Product’s New Office at South City Plaza

10annual report 2010

Corporate Social Responsibility

The Group is committed to the importance of its corporate

and social responsibilities whilst pursuing its corporate

goals.

During the year, several activities were organized at South

City Plaza which included amongst others an organ donation

drive, several blood donation campaigns hosted together

with the National Blood Bank, Lions Club, Pusat Bimbingan

Ajaran Confucion, Pusat Perubatan Universiti Malaya and

several others, a re-cycling campaign to create awareness

amongst the community and many other community related

activities such as calligraphy, pet rearing and health talks.

Our network marketing division has also formed a

collaboration with Majlis Kanser Nasional, more commonly

known as MAKNA, to promote health awareness

programmes whereby awareness of cancer and methods of

prevention will be disseminated to the public. In addition, for

every item of Nu3 AcaiFiber sold (a health product marketed

under this division), the company will donate RM1.00 to

MAKNA to help fund its programmes.


Children’s Calligraphy Event

Blood Donation Campaign

Adopt a Pet Campaign



Future Prospects

Despite the current challenging economic environment, the Groupwill continue to pursue and strengthen its core businesses underproperty management, network marketing, construction,agro-biotechnology and new businesses under mineral resources.The Group will continue with its cost efficient measures in therunning of the operations and prudent expansion plans.

Going forward, the Board is optimistic about the Group’sprospects and look forward to the challenges in 2010 and beyond.Barring unforeseen circumstances, the Board expects theperformance of the Group to be better for the next financial yearending 31 May 2011.

Acknowledgement

On behalf of the Board, I would like to take this opportunity tothank our previous Chairman, Tan Sri Dato’ Dr. Syed Jalaludin binSyed Salim and Independent Director, Dato’ Philip Chan for theirinvaluable contribution to the Board during the tenure of theirdirectorship. We also take this apportunity to extend a warmwelcome to our new board member, Lim Een Hong who joined usas Independent Non-Executive Director and Teoh Seng Kian whowas appointed as an Alternate Director to our President. At thesame time, my appreciation also goes to the management teamand entire staff of the Group for their committed and dedicatedservices rendered and let us continue to work harder to chart abrighter future for the Group.

I also wish to express our sincere appreciation to our valuedshareholders, business associates, clients and bankers for theirsteadfast support and confidence in the Group. The Group valuesand looks forward to this continued support as we progresstowards new undertakings.

To my fellow Board members, I wish to thank each and every onefor their invaluable guidance and contribution towards thebetterment of the Group.

Dato’ Syed Ariff Fadzillah bin Syed AwalluddinChairman

1 October 2010Signing of Cooperation Agreement in respect of Tanah Laut Iron Ore Project

IKBN Project Completed Multi Purpose Hall

reaching out,making adifference

Letter To Shareholders On eDividend


Dear Shareholders,

RE: IMPLEMENTATION OF ELECTRONIC DIVIDEND PAYMENT

Pursuant to the directive by Bursa Malaysia Securities Berhad on the implementation of electronic dividend (“eDividend”) payment systemwhich became effective 1 September 2010, we wish to inform that as a listed issuer, Ecofirst Consolidated Bhd, is required to pay cashdividends declared to shareholders by directly crediting the shareholders’ cash dividend entitlements into their respective bank accountsto shareholders who have provided their bank account information to Bursa Malaysia Depository Sdn Bhd (“Bursa Depository”). One ofthe main objectives of implementing eDividend is to promote greater efficiency in the payment system which is aligned to the nationalagenda of migrating to electronic payment.

1. Benefits of eDividend

(a) eDividend is applicable to all public companies listed on Bursa Malaysia Securities Berhad (“listed issuers”) and providesamongst others, faster access to your cash dividends, eliminates the inconvenience of having to deposit the dividend chequesand problems such as misplaced, lost or expired cheques and unauthorized deposit of dividend cheques.

(b) Shareholders who register for eDividend will enjoy the following additional benefits:-i. The convenience of a one-off registration for entitlement to eDividend from all listed issuers; andii. The option to consolidate the dividends from all your Central Depository System (“CDS”) accounts into one bank account

for better account management.

2. Registration for eDividend

(a) Registration for eDividend has commenced on 19 April 2010 for a period of one (1) year until 18 April 2011, at no cost toshareholders. If you register after the one (1) year period, an administrative charge will be imposed.

To register for eDividend, you are required to provide to Bursa Depository through your stock broker, your bank account numberand other information by completing the prescribed form. This form can be obtained from your stock broker’s office where yourCDS account is maintained, or downloaded from Bursa Malaysia’s website at http:// www.bursamalaysia.com.

(b) You need to submit to your stock broker’s office where your CDS account is maintained, the duly completed prescribed formand the following for registration :-

i. Individual Depositor• Copy of identification documents i.e. NRIC, passport, Authority Card or other acceptable identification documents.

Original documents must be produced for your stock broker’s verification;

ii. Corporate Depositor• Certified true copy of the Certificate of Incorporation/Certificate of Registration; and

iii. Copy of your bank statement/bank savings book/details of your bank account obtained from your bank’s website that hasbeen certified by your bank/ copy of letter from your bank confirming your bank account particulars.

For individuals, original documents must be produced for your stock broker’s verification.

For Corporate entities, a certified true copy is to be submitted.

(c) If the CDS account is held in the name of a nominee, the nominee will register for the eDividend.

(d) If you are not able to be present at your stock broker’s office to submit the prescribed form and supporting documents, pleaseensure that the signing of the prescribed form and the supporting documents have been witnessed by an acceptable witnessspecified by Bursa Depository. In this regards, an acceptable witness includes an Authorised Officer of your stock broker,a Dealer’s Representative, a notary public or an Authorised Officer of the Malaysian Embassy/ High Commission.


Letter To Shareholders On eDividend (cont’d)

3. Notification

You are encouraged to provide in the prescribed form to Bursa Depository both your mobile phone number and e-mail address,if any. This is to enable the Company to issue electronic notification to you either via e-mail or SMS, at the discretion of the Company,once the Company has paid the cash dividend out of its account. Please note that if you provide only your mobile phone, you mayonly be notified of the cash dividend payment when you receive your dividend warrant or tax certificate.

4. Additional Information for shareholders

(a) Your savings or current account, must be an active bank account, maintained with a local bank under your name or in the caseof a joint account, has your name as one of the account holders. The bank account must be with a financial institution that is amember of the Malaysian Electronic Payment System Inter-Bank GIRO (IBG) as listed below. For an up-todate listing, you areadvised to refer to the website at http//www.meps.com.my/faq/interbank giro.sap?id=2#answer

1. Affin Bank Berhad 12. EON Bank Berhad2. Alliance Bank Malaysia Berhad 13. Hong Leong Bank Berhad3. AmBank (M) Berhad 14. HSBC Bank Malaysia Berhad4. Bank Islam Malaysia Berhad 15. Malayan Banking Berhad5. Bank Muamalat Malaysia Berhad 16. OCBC Bank (Malaysia) Berhad6. Bank Kerjasama Rakyat Malaysia Berhad 17. Public Bank Berhad7. Bank of America Malaysia Berhad 18. RHB Bank Berhad8. Bank Simpanan Nasional 19. Standard Chartered Bank Malaysia Berhad9. CIMB Bank Berhad 20. The Royal Bank of Scotland Berhad10. Citibank Berhad 21. United Overseas Bank (Malaysia) Berhad11. Deutsche Bank (Malaysia) Berhad

(b) Your bank account particulars and other related information is protected under the Securities Industry (Central Depository) Act,1991 which strictly prohibits disclosure of such information to any person unless you expressly authorise the disclosure inwriting. For eDividend purpose, you will be authorising disclosure of your bank account particulars and other related informationto persons necessary to facilitate the eDividend such as the Company, the share registrar and the appointed paying banks.

(c) Once you have registered for eDividend, any cash dividend entitlement of which the books closure date is announced by theCompany on or after 1st September 2010, shall be paid to you via eDividend.

We look forward to the successful implementation of eDividend through your active participation, and to serving you better as our valuedshareholders. If you have any query relating to our eDividend service, please do not hesitate to contact our share registrar officer:

En. Mokhzani ShariffHelpdeskSymphony Share Registrars Sdn BhdLevel 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/ 4647301 Petaling JayaSelangor Darul Ehsan

Direct Line : 03 - 7849 0777Fax : 03 - 7841 8151 / 8152Email : [email protected]

Thank you.

Yours faithfully,for ECOFIRST CONSOLIDATED BERHAD

TIONG KWING HEEGroup Chief Executive Officer

Board Of Directors


Dato’ Syed Ariff Fadzillah binSyed Awalluddin

Chairman(Independent Non-Executive Chairman)Malaysian

Dato’ (Dr.) Teoh Seng Foo

President(Non-Independent Executive Director)Malaysian(Alternate: Teoh Seng Kian)

Tiong Kwing Hee

(Group Chief Executive Officer/ ExecutiveDirector)Malaysian


Amos Siew Boon Yeong

(IndependentNon-Executive Director)Malaysian



Lim Een Hong


Teoh Seng Kian

(Alternate Director toDato’ (Dr.) Teoh Seng Foo)Malaysian

Board Of Directors (cont’d)

Directors’ Profile


Dato’ Syed Ariff Fadzillah bin Syed Awalluddin, aged 67, wasappointed to the Board on 27 January 2006. He wasre-designated to Chairman/Independent Non-Executive Director on1 December 2009. He is also the Chairman of the NominationCommittee and a member of the Remuneration Committee.

He holds a Bachelor of Arts degree in History from University Malaya.He also holds a Diploma in Development Administration and aMaster of Arts in International Relations.

He started his career as an Assistant District Officer in Kulim, Kedahin 1967. He was an Assistant Secretary in the Public ServiceCommission, Kuala Lumpur between 1970 and 1972 before beingtransferred to the Ministry of Foreign Affairs. Prior to retiring inNovember 2001, he served as the Ambassador of Malaysia to theKingdom of Thailand from 1996 to 2001, Ambassador to theRepublic of Korea with joint accreditation to Mongolia (1992 to 1995)and Ambassador of Malaysia to Fiji with concurrent accreditations toTuvalu, Tonga, Western Samoa, Kiribati and Nauru (1998 and 1991).His other foreign assignments include postings to Indonesia, Libyaand Canada. He was also the Deputy Permanent Representative ofthe Permanent Mission of Malaysia to the United Nations between1982 and 1986. From 1991 to 1992, he served as the Undersecretaryat the Ministry of Foreign Affairs in charge of Southeast Asia andSouth Pacific.

He also sits as director on the boards of MNRB Holdings Berhad,MNRB Retakaful Berhad and Malaysian Reinsurance Berhad.

He has no family relationship with any other Director and/or majorshareholder of the Company. He has not entered into anytransaction, whether directly or indirectly, which has a conflict ofinterest with the Company and has no convictions for offences, otherthan traffic offences (if any), within the past ten (10) years.

He has attended four (4) out of five (5) Board meetings held duringthe financial year ended 31 May 2010.

Dato’ (Dr.) Teoh Seng Foo, aged 54 was appointed to the Boardon 5 May 1997. He was re-designated from the position of anExecutive Deputy Chairman to President/Non-IndependentExecutive Director on 1 December 2009. He is also the Chairman ofthe Executive and Remuneration Committees.

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

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

Dato’ Teoh was conferred the Honorary Doctorate in BusinessAdministration by University of Abertay Dundee, United Kingdom.Currently, he is also a Patron of the University of Abertay Foundationbased in United Kingdom.

Dato’ Teoh is the Chairman of Eduspec Sdn Bhd and YouthemeOnline Sdn Bhd, both involved in promotion of e-learning in schools.He is also the President of Meda Inc. Berhad andPresident/Executive Deputy Chairman of SEG International Bhd.

He is a substantial shareholder of the Company and is deemed tohave an interest in all the shares held by the Company in thesubsidiaries by virtue of his substantial interest in shares of theCompany. He is a brother to Teoh Seng Aun and Teoh Seng Kian(who is also his alternate director, appointed on 1 December 2009),who are also substantial shareholders of the Company. Apart fromthe above, he has no other family relationship with any other Directorand/or major shareholder of the Company.

He has not entered into any transaction, whether directly or indirectly,which has a conflict of interest with the Company, other than thosedisclosed in the notes accompanying the financial statements, andhas no convictions for offences, other than traffic offences (if any),within the past ten (10) years.

He has attended all the five (5) Board meetings held during thefinancial year ended 31 May 2010.

Dato’ Syed Ariff Fadzillahbin Syed Awalluddin

ChairmanndependentNon Executive Director)Malaysian

Dato’ (Dr.) Teoh Seng Foo

President(Non IndependentExecutive Director)

Malaysian


Tiong Kwing Hee, aged 52, first joined the Board as an AlternateDirector on 18 September 2008 and subsequently appointed asExecutive Director/Chief Executive Officer on 2 January 2009. He iscurrently the Group Chief Executive Officer of the Company. He isalso a member of the Executive Committee and the Chairman of theRisk Management Committee.

He obtained a Bachelor of Arts (Hons) majoring in BusinessAdministration from Hanover College, United States of America in1982 and a Master Degree in Business Economics from MiamiUniversity, United States of America in 1983.

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

In 2000, Mr. Tiong was appointed as an Executive Director ofMercury Industries Berhad and subsequently he joined the Companyon 2 September 2008. During the course of his career, he has beendirectly involved in various industrial sectors including corporatefinance, financial services, manufacturing, plantations, property,construction, education, leisure, entertainment and mineralresources. He has extensive hands-on experience, knowledge andexposure in international business, corporate planning, restructuringand turnaround.

He has no family relationship with any other Director and/or majorshareholder of the Company. He has not entered into anytransaction, whether directly or indirectly, which has a conflict ofinterest with the Company and has no convictions for offences, otherthan traffic offences (if any), within the past ten (10) years.


Amos Siew Boon Yeong, aged 52, was appointed to the Board on27 October 2005. He is also the Chairman of the Audit Committeeand a member of the Remuneration Committee.

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

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

He is also a Director of SEG International Bhd and TMC LifeSciences Bhd.

He has no family relationship with any other Director and/or majorshareholder of the Company. He has not entered into anytransaction, whether directly or indirectly, which has a conflict ofinterest with the Company and has no convictions for offences, otherthan traffic offences(if any), within the past ten (10) years.


iong Kwing Hee

Group Chief Executive Officer/xecutive Director)Malaysian


(IndependentNon Executive Director)

Malaysian

Directors’ Profile (cont’d)

Directors’ Profile (cont’d)


Dato’ Boey Chin Gan, aged 45, wasappointed to the Board on 1 April 2009. He isalso a member of the Audit and NominationCommittees.

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

Dato’ Boey is very active in the socialeconomic development of the country. He hasserved as the Press Secretary to the Ministerof Housing and Local Government of Malaysiafor 11 years from 1993 to 2004. In 2004, Dato’Boey was the Kedah State Assemblyman.Dato’ Boey has vast experiences andextensive knowledge in administrative andstrategic planning by virtue of his long servicein government sectors.

He has no family relationship with any otherDirector and/or major shareholder of theCompany. He has not entered into anytransaction, whether directly or indirectly,which has a conflict of interest with theCompany and has no convictions foroffences, other than traffic offences (if any),within the past ten (10) years.

He has attended all the five (5) Boardmeetings held during the financial year ended31 May 2010.

Lim Een Hong, aged 43, was appointed to theBoard on 29 March 2010. He is also a member

of the Audit and Nomination Committees.

He is a lawyer by profession and holds a

Bachelor of Law (Hons) from University of

Malaya. Presently, he is the Chief Executive

Officer and Director of Eduspec Holdings Bhd

(formerly known as Litespeed Education

Technologies Bhd).

He started his career as a litigation lawyer

handling banking and civil litigation cases from

1992 to 1996. He was a partner of Eugene Tan

& Co from 1994 to 1998 before setting up his

own firm, Messrs EH Lim, Lee & Partners. He is

exposed to property and land conveyancing

transactions, property financing and land

dealings. He has vast experience in land

dealings negotiations, corporate restructuring,

joint venture participation, acquisition,

investment management and general

corporate representation.

He has no family relationship with any other

Director and/or major shareholder of the

Company. He has not entered into any

transaction, whether directly or indirectly, which

has a conflict of interest with the Company and

has no convictions for offences, other than

traffic offences (if any), within the past ten (10)

years.

He has attended one (1) Board meeting of the

Company held during the financial year ended

31 May 2010, subsequent to his appointment

to the Board on 29 March 2010.

Teoh Seng Kian, aged 50, was appointed asAlternate Director to Dato’ (Dr.) Teoh Seng Foo,

the President, on 1 December 2009.

He graduated with a Bachelor of Engineering

(Mechanical) degree from Australia in 1984. He

started his career with an Australian company

specializing in manufacturing of building

materials. Upon returning to Malaysia, he

served as a director in a company involved in

quarrying and infrastructure construction. He

is currently the Group Project Director of Meda

Inc. Berhad.

He is a substantial shareholder of the Company

and is deemed to have an interest in all the

shares held by the Company in the subsidiaries

by virtue of his substantial interest in shares of

the Company. He is a brother to Dato’ (Dr.)

Teoh Seng Foo and Teoh Seng Aun, who are

also substantial shareholders of the Company.

Apart from the above, he has no other family

relationship with any other Director and/or

major shareholder of the Company.

He has not entered into any transaction,

whether directly or indirectly, which has a

conflict of interest with the Company, other

than those disclosed in the notes

accompanying the financial statements, and

has no convictions for offences, other than

traffic offences (if any), within the past ten (10)

years.

ato’ Boeyhin Gan

ndependenton Executiveirector)alaysian

Teoh SengKian

(AlternateDirector)Malaysian

Lim EenHong

(IndependentNon Executive

Director)Malaysian

the visionof abrighter future

constructiondivision

The Division’s current construction and upgrading

project of the National Youth Training Institute

(“IKBN”) at Kuala Kubu Baru, Selangor is as at

todate 96% completed. The government funded

training centre which can accommodate up to

800 students consists of academic blocks,

student residences, staff quarters and faculty

facilities.

The Division is seeking opportunities to secure

new construction projects from both the private

and public sectors to boost its future contribution

to the Group.

Business Divisions


IKBN Academic BlocksIKBN Staff Semi Detached Quarters

propertydivision

Under this Division, the Group has two main properties.

The first is a 5-storey commercial and retail complex in Seri Kembangan, Selangor, known as

South City Plaza which currently houses several established vocational and technical education

providers with a population of approximately 5,000 students. Other tenants in South City Plaza

are those in the food & beverage business, hypermarket operator, personal care stores, fashion

retailers, telecommunication providers, entertainment outlets, imported furniture retailers etc.

which provide a wide range of services and facilities to students, shoppers and communities

alike. On-going efforts are being carried out to further improve its tenant base and investment

yield.

The Group is ready to embark on the second phase development of South City Plaza

considering the maturity of the surrounding area and its community, attained over the years.

Phase 2 which consists of two tower blocks of residential/commercial space is now in the final

stages of planning and barring unforeseen circumstances, is expected to commence

construction next year. The completed development of the two tower blocks which sits atop

South City Plaza would add value to the complex in terms of being part of an integrated

development with synergistic benefits attributable to the population present at both the

complex and the residential/commercial towers.

The second property is a 5-storey commercial and retail complex in Segamat, Johor. We are

pleased to report that we have revived the construction of this development with the re-

commencement of construction works in the third quarter of this year. The complex, now

known as 1Segamat, is expected to be completed and open for business by the second half

of 2011. Being the one and only shopping mall in the town of Segamat, we are optimistic of a

significant contribution from this development once operational.


Business Divisions (cont’d)

South City Plaza

1 Segamat Artist Impression



Through this Division, the Group markets a wide range of unique

products through a network marketing system which provides

an attractive income scheme to its consumers and distributors.

The products offered range from health to beauty care, personal

to home care, lingerie to jewelry and water equipment to car care.

Each product is manufactured under stringent Good

Manufacturing Practices (GMP) and Hazard Analysis and Critical

Control Point (HACCP) quality standards and are all syariah

compliant.

Amongst the new products launched this year are the Nu3

AcaiFiber, Nu3 VitaLiving and Ultima Acai Facial Bamboo Bar.

Nu3 AcaiFiber is a unique fiber drink enriched with 5 in 1 formula

which is good for the digestive system. It helps in food digestion,

food nutrient absorption and wastage excretion.

A cellular supplement beverage, Nu3 VitaLiving is formulated with

the finest quality of a combination of natural nutrients together

with antioxidants. Based on research and development by nobel

prize winners, this unique formulation helps to improve

cardiovascular and heart wellness.

The Ultima Acai Bamboo Facial Bar which is formulated for both

genders and contains no alcohol nor preservatives, is made up

of 65% Ghassoul clay which help prevent skin hydration, acai

extract and bamboo salt which contain high antioxidants and

minerals. Together, these ingredients aid the skin’s natural

recovery process to promote healthy skin in a natural way.

The Division is committed towards emerging as a lifestyle brand

aimed at enhancing one’s well being and lifestyle while

generating an attractive income stream.

network marketingdivision

Launching of EcoFirst Products New Office at South City Plaza



This Division operates a biotechnology-based organic farm at

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

linked corporation.

Currently, the land is under cultivation with various types of organic

vegetables and fruit crops such as sweet corn, sweet potato,

chilly, green leafy vegetables, radish, sesame, groundnuts,

pineapple and many others. The acceptance of our organic farm

produce by organic wholesalers and retailers has been very

encouraging. In the near future, the plan is to sell our produce

under our own brand name directly to consumers and to open our

market to Singapore which present attractive opportunities in

terms of pricing and margins.

For the longer term, the Division is exploring the planting of

organic Agarwood which is well sought after for its herbal, health

and cosmetic values.

This Division represents the Group’s new business entry into

mineral resource; more specifically the exploitation of iron ore at

Tanah Laut, South Kalimantan, Indonesia.

The infrastructure surrounding the mining site and the assembly of

the mining processing plant has been completed. Mining activities

are expected to be fully operational before the end of the year.

The Group is optimistic that this Division will start to contribute

significantly in terms of revenue and profit in the next financial year.

agro-biotechnologydivision

mineral resourcesdivision

Organic Produce

Signing of Corperation Agreement

Tanah Laut Iron Ore Site

Corporate Governance Statement


INTRODUCTION

The Board of Directors (“Board”) of EcoFirst Consolidated Bhd (“ECB”) subscribes to the fundamental principles of good corporategovernance and best practice provisions contained in the Malaysian Code on Corporate Governance (Revised 2007) (“the Code”).Compliance with the Code has always been recognised by ECB as the basic tenet to safeguard the interests of all stakeholders and toenhance shareholders’ value.

BOARD OF DIRECTORS

Constitution of the Board and Board Balance

The Board, led by an Independent Non-Executive Chairman, comprises of six (6) members of whom two (2) are Executive Directors, four(4) are Non-Executive Directors all of whom are Independent, including the Chairman. One (1) of the Executive Directors has an appointedAlternate Director. The profile of each Director is set out in the Directors’ Profile Section of the Annual Report.

The Board’s composition brings to the Group a diverse wealth of skills, knowledge and a balanced mix of experience and expertise toeffectively discharge its stewardship responsibilities in spearheading the Group’s growth and future direction. There is a clear segregationof responsibilities between the Directors to ensure a balance of power and authority. Generally, the Executive Directors are responsiblefor making and implementing operational and corporate decisions. Non-Executive Directors play a pivotal role in corporate accountabilityby providing unbiased and independent views in the sharing of knowledge and experience, towards the formulation of policies and inthe decision-making process. Where a potential conflict of interest may arise, it is mandatory practice for the Director concerned to declarehis interest and abstain from the decision-making process.

There is a clear division of responsibility between the Chairman and Group Chief Executive Officer to ensure that there is a balance ofpower and authority. The Chairman is responsible for ensuring Board effectiveness whilst the Group Chief Executive Officer has overallresponsibility for the operating units, organizational effectiveness and implementation of Board policies and decisions. Although all theDirectors have an equal responsibility for the Group’s operations, the role of these Independent Non-Executive Directors is important asthey provide independent views, advice and judgement on issues of strategy, business performance and controls. The Independent Non-Executive Directors provide independent and constructive views in ensuring that the strategies proposed by the management are studiedand deliberated to take account of the interests not only of the Group, but also of shareholders, and the public at large.

Meetings of the Board of Directors

At least four (4) board meetings are held annually; each meeting scheduled to consider the quarterly financial results and operationalperformance. Additional meetings are convened as and when necessary. During the financial year ended 31 May 2010, five (5) boardmeetings were held and the summary of attendance by the Directors is as follows:

Name of Directors Total Attendance % of Attendance

Tan Sri Dato’ Dr. Syed Jalaludin bin Syed Salim (resigned on 1 December 2009) 2/3 67

Dato’ (Dr.) Teoh Seng Foo(Alternate Director : Mr Teoh Seng Kian, appointed on 1 December 2009) 5/5 100

Tiong Kwing Hee 5/5 100

Dato’ Clement Hii Chii Kok (resigned on 16/9/2009) 1/1 100

Dato’ Syed Ariff Fadzillah bin Syed Awalluddin 4/5 80

Dato’ Philip Chan Hon Keong (resigned on 28 January 2010) 4/4 100

Amos Siew Boon Yeong 5/5 100

Dato’ Boey Chin Gan 5/5 100

Lim Een Hong (appointed on 29 March 2010) 1/1 100

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


Corporate Governance Statement (cont’d)

Access to Advice and Information

Board meetings are structured with a pre-set agenda, providing the Directors with relevant and timely information to enable them todischarge their duties and responsibilities effectively. Board papers, which provide updates on operational, financial and corporatedevelopments, are circulated to enable Directors to obtain further explanation where necessary in order to facilitate informed decision-making.

All Directors have access to all information within the Group and direct access to the advice and services of the Company Secretary,whether as a full Board or in their individual capacity. In addition, the Directors are also empowered to seek external and independentprofessional advice at the Company’s expense, in order to discharge their duties and responsibilities more effectively.

Board Committees

The Board has delegated specific responsibilities to four (4) committees, which operate within approved terms of reference, to assist inthe effective discharge of its principal responsibilities. Notwithstanding the above, the ultimate responsibility for the final decision lies withthe full Board. These committees are:

a) Nomination Committee

The Nomination Committee, which comprises wholly of Non-Executive Directors, recommends candidates with an optimal mix ofqualifications, skills and experience to the Board. The Nomination Committee also carries out annual evaluation on the effectivenessof the whole Board, the various Committees and individual Director’s contribution to the Board’s decision-making process.

The present members of the Nomination Committee are as follows:

Dato’ Syed Ariff Fadzillah bin Syed Awalluddin - Chairman/Independent Non-Executive DirectorDato’ Boey Chin Gan - Member/Independent Non- Executive DirectorLim Een Hong - Member/Independent Non-Executive Director

b) Remuneration Committee

The Remuneration Committee, comprising mainly Non-Executive Directors, is responsible for drawing up the policy framework andto make recommendations to the Board on the remuneration packages of the Executive Directors. The Executive Directors do notparticipate in decisions relating to their remuneration packages. The Board as a whole determines the remuneration of Non-ExecutiveDirectors with the Director concerned abstaining from participating in decisions in respect of his individual remuneration.

The Remuneration Committee comprises of the following members:

Dato’ (Dr.) Teoh Seng Foo - Chairman/President/Executive DirectorAmos Siew Boon Yeong - Member/Independent Non-Executive DirectorDato' Syed Ariff Fadzillah bin Syed Awalluddin - Member/Independent Non-Executive Director

c) Audit Committee

The terms of reference and further information on the Audit Committee are outlined in the Audit Committee Report Section of thisAnnual Report.

d) Risk Management Committee

The Risk Management Committee oversees the implementation of the risk management system within the Group. The Committeereports directly to the Board and assists the Board in overseeing the management of risk issues and reviews the efficacy of internalcontrols within the Group.



d) Risk Management Committee (cont’d)

The present members of the Risk Management Committee are as follows:

Tiong Kwing Hee (Group Chief Executive Officer) - ChairmanNur Arina Caroline Wambeck binti Abdullah (General Manager, Finance & Accounts) - MemberChris Loke Kam Foo (Operations Manager) - Member

Re-election

All Directors will retire at regular intervals by rotation once at least every three (3) years and shall be eligible for re-election in accordancewith the provisions of the Company’s Articles of Association.

Directors’ Training

All Directors have attended and completed the Mandatory Accreditation Programme as prescribed by Bursa Malaysia Securities Berhad(“Bursa Securities”), including Lim Een Hong and Teoh Seng Kian (alternate director), the Directors who were appointed during thefinancial year. The Board acknowledges the importance of continuous training and they have attended various training programmes andseminars to keep abreast with developments in the business environment as well as with the new relevant regulatory and statutoryrequirements, to further enhance their skills and knowledge.

During the financial year ended 31 May 2010, the Directors have attended the following training programmes:-

No. Directors Title of Training Programmes Date

1. Dato’ Syed Ariff • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010Fadzillah bin Syed DisclosuresAwalluddin

2. Dato’ (Dr.) • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010Teoh Seng Foo Disclosures

3. Tiong Kwing Hee • Blue Ocean Strategy 15/12/2009

4. Amos Siew Boon Yeong • Annual Conference 2009 - Shaping the Future Corporate Professional 06/07/2009 & 07/07/2009• National Tax Conference 2009 04/08/2009 & 05/08/2009• The National Accountants Conference 2009 13/10/2009 & 14/10/2009• National Seminar on Taxation 2009 27/10/2009• 2010 Budget & Tax Planning Seminar 29/10/2009• 5th Tricor Tax & Corporate Seminar 05/11/2009

5. Dato’ Boey Chin Gan • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010Disclosures

6. Lim Een Hong • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010Disclosures

7. Teoh Seng Kian • The Requirements of Bursa Malaysia Relating to Immediate 14/5/2010(Alternate Director to DisclosuresDato’ (Dr.)Teoh Seng Foo)



DIRECTORS’ REMUNERATION

The details of the remuneration for the Directors of the Company for the financial year under review are as follows:

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

Fees Remuneration and others Total(RM) (RM) (RM)

Executive Directors - 791,970 791,970

Non-Executive Directors 163,250 80,640 243,890

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

Number of Directors

Range of Remuneration Executive Non-Executive

Nil 1* -

RM1 to RM50,000 - 6

RM50,001 to RM100,000 1 -

RM350,001 to RM400,000 2 -*Alternate Director

RELATIONSHIP WITH SHAREHOLDERS

Shareholders Communication and Investors Relationship Policy

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

dissemination of information on the Group’s performance and major developments via appropriate channels of communication.

Platforms for dissemination of information include the Annual General Meetings (“AGM”) and Extraordinary General Meetings (“EGM”),

if any, distribution of Annual Reports and relevant circulars, issuance of press releases and press conferences. Information on the financial

performance of the Group is communicated to the public via the announcement of its financial results to Bursa Securities on a quarterly

basis.

To further enhance the transparency and communication with the shareholders and other stakeholders, the Company has an official

website at www.ecofirst.com.my for the timely dissemination of business related information for the benefit of all interested parties.

Shareholders could be given the opportunity to communicate directly with Dato' Syed Ariff Fadzillah bin Syed Awalluddin, or any of the

other Independent Non-Executive Directors should there be any concerns relating to the Company.

AGM

The AGM is the principal forum for communicating with shareholders. Henceforth, the Chairman and the Board encourage shareholders

to attend and participate in an open discussion during the AGM. Shareholders who are unable to attend are allowed to appoint a proxy

to attend and vote on their behalf. Shareholders are given the opportunity to seek clarification on any matter pertaining to the business

and financial performance of the Company.



ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible for ensuring the proper maintenance of accounting records of the Group. The Audit Committee assists the

Board in reviewing information for disclosure purposes such as the quarterly report for release to Bursa Securities in order to ensure its

accuracy, adequacy and completeness.

A Statement by Directors on their responsibility in preparing the Annual Financial Statements is set out below.

Internal Control

The Statement on Internal Control presented on page 35 of this Annual Report provides an overview of the state of internal controls

within the Group.

Relationship with Auditors

The Board through the establishment of an Audit Committee maintains a formal and transparent arrangement with the Company’s

auditors, both internal and external.

Compliance Statement

The Company has been in compliance with the Code during the financial year under review save for the disclosure of details of the

remuneration of each Director. The Board is of the view that the transparency and accountability aspects of Corporate Governance as

applicable to Directors’ Remuneration are appropriately served by the band disclosure made above under ‘Directors’ Remuneration’.

This statement was approved by the Board of Directors on 23 September 2010.

The Directors are legally required, in accordance with the Companies Act, 1965, to prepare financial statements, which present a true

and fair view of the state of affairs, and of the results of the operations of the Group and the Company and in preparing the financial

statements for the financial year ended 31 May 2010, the Directors have:

• ensured compliance with applicable accounting standards approved in Malaysia;

• adopted and consistently applied appropriate accounting policies; and

• made judgements and estimates that are prudent and reasonable.

The Directors are responsible for ensuring that proper accounting records are maintained, which disclose with reasonable accuracy, the

financial position of the Group and also to ensure that the financial statements comply with applicable approved accounting standards

in Malaysia. In addition, the Board is responsible for the proper safeguarding of the Group's assets and to take reasonable steps for the

prevention and detection of fraud and other irregularities.

Statement of Directors’ Responsibility inRespect of the Annual Financial Statements

Other Information


Material Contracts

There were no material contracts subsisting at the end of financial year or entered into since the end of the previous financial year by the

Company or its subsidiaries, which involved the interest of the Directors and major shareholders other than contracts entered into in the

normal course of business.

Non-Audit FeeNo non-audit fee was paid to external auditors during the financial year.

Share Buy-backsThe Company did not implement any share buy-back scheme during the financial year.

Depository Receipt ProgrammeThe Company did not sponsor any depository receipt programme during the financial year.

Sanctions and/or PenaltiesThere were no public sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant

regulatory bodies.

Variation in ResultsThere was no material variation between the audited results and the unaudited results previously released for the financial year ended

31 May 2010.

Revaluation Policy on Landed PropertiesThe Group has adopted a 5-year revaluation policy with regards to its landed properties.

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

Options, Warrants or Convertible SecuritiesThere were no options or convertible securities issued or exercised during the financial year.

Utilisation of Proceeds Raised from Corporate ProposalThere were no proceeds raised from any corporate proposal during the year under review. The Company did not implement any fund

raising exercise during the financial year under review.

Recurrent Related Party Transaction of a Revenue NatureThere was no recurrent related party transaction of a revenue nature, which requires shareholders’ mandate during the financial year.

Audit Committee Report


Membership

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

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

Dato’ Boey Chin Gan - Member/Independent Non-Executive Director

Lim Een Hong (appointed on 29 March 2010) - Member/Independent Non-Executive Director

Dato’ Syed Ariff Fadzillah bin Syed Awalluddin (resigned on 29 March 2010) - Member/Independent Non-Executive Director

Meetings and Attendances

A total of five (5) meetings of the Audit Committee were held during the financial year ended 31 May 2010. The meetings were appropriately

structured through the use of agendas, which were distributed in advance to all the members of the Audit Committee. Attendances of

each member were as follows and the Company Secretary attended all the meetings during the year:-

Members Total Attendance % of Attendance

Amos Siew Boon Yeong 5/5 100

Dato’ Boey Chin Gan 5/5 100

Lim Een Hong (appointed on 29 March 2010) 1/1 100

Dato' Syed Ariff Fadzillah bin Syed Awalluddin (resigned on 29 March 2010) 4/4 100

Terms Of Reference Of The Audit Committee

Constitution

The Terms of Reference of the Audit Committee was established by the Board on 26 April 1994. Subsequently, amendments were made

to the terms of reference and approvals were sought at the Company’s Board Meetings held on 29 March 2001 and 26 March 2008.

Membership

The Audit Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than three

members. All the Audit Committee members must be Non-Executive Directors, with a majority of them being Independent Directors. At

least one member of the Audit Committee:

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

2. if he is not a member of the Malaysian Institute of Accountants, he must have at least three years’ working experience and:

(i) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

(ii) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act

1967; or

(iii) fulfils such other requirements as prescribed or approved by the Exchange.

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

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


Audit Committee Report (cont’d)

If a member of the Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members

is reduced below three, the Board shall, within three months of that event, appoint such number of new members as may be required to

make up the minimum number of three members.

The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every

three years to determine whether the Audit Committee and its members have carried out their duties in accordance with their terms of

reference.

Authority

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

1. have authority to investigate any matter within its terms of reference;

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

3. have full and unrestricted access to any information pertaining to the Company;

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

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

6. be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and

employees of the Company, whenever deemed necessary.

Functions

The functions of the Committee shall be to review the following and report the same to the Board:

1. with the external auditors, their audit plans;

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

3. with the external auditors, their audit reports;

4. the assistance given by the Company’s employees to the external auditors;

5. the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary

authority to carry out its works;

6. the internal audit programme, processes, the results of the internal audit programme, processes or investigations undertaken and

whether or not appropriate action is taken on the recommendations of the internal audit function;

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

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

(b) significant and unusual events; and

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



8. any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction,

procedure or course of conduct that raises questions of management integrity;

9. any letter of resignation from the external auditors of the Company; and

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

the Audit Committee and the Board.

Meetings

Meetings shall be held not less than four (4) times a year. The external auditors may request a meeting if they consider that one is

necessary. The Chairman shall convene a meeting whenever any member of the Audit Committee requests for a meeting by giving not

less than three (3) clear days notice thereof unless such requirement is waived by all members. However, consent from member that is

overseas is not required. Written notice of the meeting together with the agenda shall be given to the members of the Audit Committee.

In order to form a quorum in respect of a meeting of an Audit Committee, the majority of members present must be Independent Directors

and any decision shall be by a simple majority. The Chairman shall not have a casting vote.

Reporting procedure

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

Summary of Activities During the Financial Year

The Audit Committee carried out the following duties in accordance with its terms of reference:

• Reviewed the external auditors’ scope of work and audit plans for the year. Prior to the audit, representatives from the external

auditors presented their audit strategy and plan.

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

• Reviewed the Group’s internal audit plan.

• Reviewed the internal audit reports, which highlighted the audit issues, recommendations and management’s response. The

members of the Audit Committee were briefed on pertinent audit issues through the Summary of Pertinent Issues, which forms an

integral part of the agenda papers. The Audit Committee also discussed the management actions taken to improve the system of

internal control based on recommendations made in the internal audit reports.

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

• Reviewed the quarterly unaudited financial results announcements before recommending them for the Board’s approval.

• Reviewed the draft audited financial statements of the Group and of the Company prior to submission to the Board for their

consideration and approval. The review was to ensure that the draft audited financial statements were drawn up in accordance with

the provisions of the Companies Act, 1965 and the applicable approved accounting standards issued by the Malaysian Accounting

Standards Board.

• Reviewed related party transactions entered into by the Group.


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

Statement on Employees' Share Option Scheme ("ESOS")

The Committee will verify the ESOS allocation in compliance with the criteria as stipulated in the by-laws of ESOS of the Company, if

any.

Internal Audit Function

The Audit Committee is assisted by the in-house internal audit department (“IAD”) in discharging its duties and responsibilities. The IAD

carries out the audit using a risk-based approach of the Group’s operating units, reviewing the units’ compliance to internal control

procedures and making appropriate recommendations for improvement to the Management and the Audit Committee. The IAD also

carries out its duties according to the approved audit plan, and issues of concern are summarised and highlighted at Audit Committee

meetings. The Audit Committee reported the same to the Board after reviewing and deliberating on these internal audit reports. The IAD

also presents the risk profile of the Group to the Audit Committee and follow-up on implementation and disposition of previous significant

findings and recommendations.



Statement On Internal Control

In compliance with Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board iscommitted to maintain a sound system of internal control in the Group and is pleased to provide the following statement, which outlinesthe state, nature, and scope of internal control of the Group during the financial year ended 31 May 2010.

Board Responsibilities

The Board maintains a system of internal control to safeguard shareholders’ investment and the Group’s assets. The Board is committedto establish an appropriate control environment and also to review the adequacy and integrity of the system of internal control. Due tothe limitations inherent in any system of internal control, these systems, though implemented, are designed to manage, rather than toeliminate the risk of failure to achieve corporate objectives. Accordingly, the system can only provide reasonable but not absoluteassurance against material misstatement or loss.

The Board confirms that there is an underlying and ongoing process in the Group for the identification, evaluation and mitigation of itssignificant risks. The Board further confirmed that these processes are being regularly reviewed and accords with the Statement ofInternal Control: Guidance for Directors of Public Listed Companies.

Enterprise Risk Management Framework

The Board recognises that risk management is an integral part of the Group’s business operations and has put in place the EnterpriseRisk Management Framework within the Group as an on-going process for identifying, evaluating, monitoring and managing the significantrisk affecting the achievement of its business objectives.

The Group established its risk framework with the aim of mitigating or minimising such risks. A database of risk records was compiledand risk mitigating action plans were communicated to the Risk Management Committee ("RMC"), which in turn identified andcommunicated to the Board the critical risks (present and future) the Group faced and management action plans to manage these risks.

Internal Audit Function

The Group has in place an in-house internal audit function headed by an Audit & Risk Management Manager. The internal audit functionreports directly to the Audit Committee to provide feedback regarding the adequacy and integrity of the Group’s system of internalcontrol. The internal audit function reviews the key activities of the Group based on the annual audit plan approved by the AuditCommittee.

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

The Company has an internal audit department. During the financial year, the cost incurred for the internal audit function amounted toRM77,868.

Other Risks and Control Processes

In addition to the risk management and internal audit function, the Board has put in place an organisational structure with formally definedlines of responsibility and delegation of authority, allowing internal checks and balances. This includes a Procurement & Quality Assurancestandard operational procurement manual. These procedures are relevant to the Group and provide continuous assurance to topmanagement and the Board. The Group has also developed and made available to employees an Employee Handbook.

Quarterly updates of the financial results of the Group are provided to the Audit Committee and the Board for assessment of theperformance of the Group. Management meetings, which involve Executive Directors and selected executive personnel, are regularly heldin order to identify and address any problems encountered by the Group, so that appropriate actions could be taken to address theissues.

Review of Statement by External Auditors

The External Auditors have reviewed this statement for inclusion in the Annual Report 2010 and reported to the Board that nothing hascome to their attention that causes them to believe that this statement is inconsistent with their understanding of the process adoptedby the Board in reviewing the adequacy and integrity of the system of the internal controls.

This statement is made in accordance with the resolution passed by the Board of Directors on 23 September 2010.

Directors’ Report 37

Statement By Directors 41

Statutory Declaration 41

Report of the Independent Auditors 42

Income Statements 44

Balance Sheets 45

Statements of Changes in Equity 46

Cash Flow Statements 48

Notes to the Financial Statements 50

financialstatements


DIRECTORS’ REPORT

The directors submit their report and the audited financial statements of the Group and the Company for the financial year ended 31 May

2010.

PRINCIPAL ACTIVITIES

The principal activities of the Company consist of investment holding and provision of management services. The principal activities of

the subsidiaries are disclosed in Note 12 to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

FINANCIAL RESULTS

Group Company

RM’000 RM’000

Net loss for the year (41,468) (1,967)

Attributable to:

Equity holders of the Company (41,375) (1,967)

Minority interests (93) -

(41,468) (1,967)

In the opinion of the directors, other than as disclosed in the financial statements, the results of the operations of the Group and the

Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

No dividend has been paid or declared by the Company since the end of the previous financial year. The directors also do not recommend

any dividend payment in respect of the current financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial

statements.

ISSUE OF SHARES AND DEBENTURES

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

directors’ report


directors’ report (cont’d)

SHARE OPTIONS

No options have been granted by the Company to any persons during the financial year to take up unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company.

As at the end of the financial year, there were no unissued shares of the Company under options.

DIRECTORS

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

Dato’ Syed Ariff Fadzillah Bin Syed Awalluddin

Dato’ (Dr) Teoh Seng Foo

Teoh Seng Kian (Alternate to Dato’ (Dr) Teoh Seng Foo) - Appointed on 1 December 2009

Tiong Kwing Hee



Lim Een Hong - Appointed on 29 March 2010

Dato’ Philip Chan Hon Keong - Resigned on 28 January 2010

Tan Sri Dato’ Dr Syed Jalaludin Bin Syed Salim - Resigned on 1 December 2009

DIRECTORS' INTERESTS

The interests in the Company and its related companies of those who were directors at the end of the financial year, as recorded in the

Register of Directors’ Shareholdings kept under Section 134 of the Companies Act, 1965, are as follows:

Number of ordinary shares of RM0.50 each

Balance as at Balance as at

1.6.2009/ date of appointment Bought Sold 31.5.2010

Direct interest

Dato’ (Dr) Teoh Seng Foo 34,320,600 7,601,500 7,699,600 34,222,500

Teoh Seng Kian (Alternate to

Dato’ (Dr) Teoh Seng Foo) 65,088,632 14,764,000 250,000 79,602,632

Tiong Kwing Hee - 12,903,100 - 12,903,100

Indirect interest

Dato’ (Dr) Teoh Seng Foo 2,977,865 - 2,461,533 516,332

Teoh Seng Kian (Alternate to Dato’ (Dr) Teoh Seng Foo) 871,332 - 355,000 516,332

None of the other directors in office at the end of the financial year, had held shares or beneficial interest in shares of the Company and

its related companies during the financial year, according to the register required to be kept under Section 134 of the Companies Act,

1965.


DIRECTORS' BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit

included in the aggregate amount of emoluments received or due and receivable by the directors as shown in the financial statements

or the fixed salary of a full time employee of the Company) by reason of a contract made by the Company or a related corporation with

the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest

except for any benefit which may be deemed to have arisen by virtue of the transactions between the Group and the Company and a

company in which certain directors of the Company have interests as disclosed in Note 33 to the financial statements.

There were no arrangements during or at the end of the financial year, which had the object of enabling directors to acquire benefits by

means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and the Company were made out, the directors took reasonable steps:

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and

had satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful

debts; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written

down to their expected realisable values.

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

(a) which would render the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements

of the Group and the Company inadequate to any substantial extent;

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

and

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and the Company

misleading or inappropriate.

In the interval between the end of the financial year and the date of this report:

(a) no item, transaction or event of a material and unusual nature has arisen which, in the opinion of the directors, would substantially

affect the results of the operations of the Group and the Company for the financial year in which this report is made; and

(b) no charge has arisen on the assets of the Group and the Company which secures the liability of any other person nor have any

contingent liabilities arisen in the Group and the Company.

No contingent or other liability of the Group and the Company has become enforceable or is likely to become enforceable within the period

of twelve months after the end of the financial year which, in the opinion of the directors, will or may affect the ability of the Group and

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

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements,

which would render any amount stated in the financial statements misleading.



AUDITORS

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

Signed on behalf of the Board

in accordance with a resolution of the directors,

DATO’ (DR) TEOH SENG FOO

TIONG KWING HEE

Seri Kembangan, Selangor Darul Ehsan

27 September 2010


The directors of ECOFIRST CONSOLIDATED BHD state that, in the opinion of the directors, the accompanying financial statements are

drawn up in accordance with the provisions of the Companies Act, 1965 and the Approved Accounting Standards for Entities Other Than

Private Entities in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 May 2010,

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

Signed on behalf of the Board

in accordance with a resolution of the directors,

DATO’ (DR) TEOH SENG FOO

TIONG KWING HEE

Seri Kembangan, Selangor Darul Ehsan

27 September 2010

I, TIONG KWING HEE, being the director primarily responsible for the financial management of ECOFIRST CONSOLIDATED BHD, do

solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements are correct, and I

make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations

Act, 1960.

Subscribed and solemnly declared by the above named TIONG KWING HEE at Kuala Lumpur in Wilayah Persekutuan on

27 September 2010.

TIONG KWING HEE

Before me,

LEE CHOON HEI

(No. W549)

COMMISSIONER FOR OATHS

Kuala Lumpur, Wilayah Persekutuan

statement by directors

statutory declaration


report of the independent auditorsto the members of ecofirst consolidated bhd (incorporated in malaysia)


1. Report on the financial statements

We have audited the accompanying financial statements which comprise the balance sheet of the Group and of the Company as at

31 May 2010, and the related statements of income, changes in equity and cash flows for the year then ended, and a summary of

significant accounting policies and other explanatory notes.

1.1 Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements in

accordance with the Companies Act 1965 (“Act”) and the Approved Accounting Standards for Entities Other Than Private Entities

in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and

fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and

applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

1.2 Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in

accordance with the Approved Standards on Auditing in Malaysia. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of

the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal

control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

1.3 Opinion

In our opinion, the financial statements have been properly drawn up in accordance with the Act and the Approved Accounting

Standards for Entities Other Than Private Entities in Malaysia so as to give a true and fair view of the financial position of the

Group and of the Company as at 31 May 2010, and of their financial performance and their cash flows for the year ended on

that date.


2. Report on other legal and regulatory requirements

In accordance with the requirements of the Act, we also report on the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by its

subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports thereon of the subsidiary of which we have not acted as

auditors, as indicated in Note 12 to the financial statements, being financial statements that have been included in the Group’s

financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial

statements are in form and content appropriate and proper for the purposes of the preparation of the Group’s financial statements

and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material in relation to

the Group’s financial statements and did not include any comment made under Section 174(3) of the Act.

3. Other matters

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

purpose. We do not assume responsibility to any other person for the content of this report.

RUSSELL BEDFORD LC & COMPANY LOH KOK LEONG

AF 1237 1965/06/11(J)

CHARTERED ACCOUNTANTS PARTNER

Kuala Lumpur

27 September 2010

report of the independent auditors (cont’d)to the members of ecofirst consolidated bhd (incorporated in malaysia)

income statements


Group Company

Note 2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Revenue 4 21,073 44,018 3,919 7,279

Cost of sales 5 (17,824) (38,062) - -

Gross profit 3,249 5,956 3,919 7,279

Other operating income 25,716 23,253 15,896 23,657

Distribution costs (725) (850) - -

Administration expenses (5,870) (7,578) (3,388) (4,440)

Other operating expenses (50,414) (101,476) (13,161) (31,551)

(Loss)/Profit from operations (28,044) (80,695) 3,266 (5,055)

Finance costs (14,172) (11,716) (5,233) (2,573)

Share in profit of associate 826 2,082 - -

Loss before tax 6 (41,390) (90,329) (1,967) (7,628)

Income tax expense 7 (78) (382) - -

Net loss for the year (41,468) (90,711) (1,967) (7,628)

Attributable to:

Equity holders of the Company (41,375) (90,576) (1,967) (7,628)

Minority interests (93) (135) - -

(41,468) (90,711) (1,967) (7,628)

Basic loss per share (sen) 8 (6.36) (13.93)

for the year ended 31 May 2010

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

balance sheets


Group CompanyNote 2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Non current assetsProperty, plant and equipment 9 3,296 15,588 825 1,115Investment properties 10 263,247 263,247 - -Prepaid lease payments 11 - 1,277 - -Investment in subsidiaries 12 - - 37,715 39,531Investment in an associate 13 - 41,359 - 36,913Other long term investments 14 3,366 5,248 3,144 4,790Deferred tax assets 15 812 912 - -Intangible asset 16 - - - -

270,721 327,631 41,684 82,349Current assetsInventories 17 429 1,052 - -Non current asset held for sale 18 - 2,250 - -Property development costs 19 54,944 81,268 - -Trade receivables 20 1,516 16,497 - -Amount due from subsidiaries 22 - - 265,865 268,596Other receivables, deposits and prepayments 23 4,676 3,886 1,677 2,076Prepaid lease payments 11 - 19 - -Tax recoverable 227 226 485 482Cash and bank balances 24 26,171 752 23,060 178

87,963 105,950 291,087 271,332

Total assets 358,684 433,581 332,771 353,681

Share capital 25 325,074 325,074 325,074 325,074Reserves 26 (219,861) (179,811) (200,511) (198,544)

Shareholders’ equity 105,213 145,263 124,563 126,530Minority interests 15,018 15,111 - -

Total equity 120,231 160,374 124,563 126,530

Non current liabilitiesHire purchase liabilities 27 457 798 391 530Long term borrowings 28 77,085 103,909 3,500 9,608

77,542 104,707 3,891 10,138

Current liabilitiesTrade payables 29 6,127 9,206 - -Amount due to subsidiaries 22 - - 172,397 169,754Amount due to an associate 30 - 2,813 - 2,790Other payables and accruals 31 67,559 92,702 21,432 29,050Hire purchase liabilities 27 190 227 138 131Short term borrowings 32 53,413 29,884 10,350 15,288Tax payable 33,622 33,668 - -

160,911 168,500 204,317 217,013

Total liabilities 238,453 273,207 208,208 227,151

Total equity and liabilities 358,684 433,581 332,771 353,681


as at 31 May 2010

statements of changes in equity


Theaccompanyngnotesforman

ntegrapartofthefnancastatements.

for the year ended 31 May 2010

Foreign

exchange

Share

Share

Revaluation

translation

Accum

ulated

Shareholders’

Minority

Total

capital

premium

reserve

reserve

losses

equity

interests

equity

Group

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

At1June2008

325,074

295,727

1,436

(5,131)

(385,079)

232,027

14,946

246,973

Exchangedfferencesontransaton

offnancastatementsof

foregnsubsdares

--

-3,812

-3,812

-3,812

Subscrptonofshares

nsubsdares

--

--

--

300

300

Netproftnotecognzednncome

statement

--

-3,812

-3,812

300

4,112

Netossfortheyear

--

--

(90,576)

(90,576)

(135)

(90,711)

At31May2009

325,074

295,727

1,436

(1,319)

(475,655)

145,263

15,111

160,374

Exchangedfferencesontransaton

offnancastatementsof

foregnsubsdares

--

-(2,059)

-(2,059)

-(2,059)

Dsposaofasubsdary

--

-3,384

-3,384

-3,384

Netproftnotecognzednncome

statement

--

-1,325

-1,325

-1,325

Netossfortheyear

--

--

(41,375)

(41,375)

(93)

(41,468)

At31May2010

325,074

295,727

1,436

6(517,030)

105,213

15,018

120,231

statements of changes in equity (cont’d)for the year ended 31 May 2010


Theaccompanyngnotesforman

ntegrapartofthefnancastatements.

Share

Share

Accum

ulated

capital

premium

losses

Total

Company

RM’000

RM’000

RM’000

RM’000

At1June2008

325,074

295,727

(486,643)

134,158

Netossfortheyear

--

(7,628)

(7,628)

At31May2009

325,074

295,727

(494,271)

126,530

Netossfortheyear

--

(1,967)

(1,967)

At31May2010

325,074

295,727

(496,238)

124,563


Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Cash flows from/(used in) operating activitiesLoss before taxation (41,390) (90,329) (1,967) (7,628)Adjustments for:Amortisation of prepaid lease payments 9 19 - -Bad debt written off - 13 - 13Depreciation 1,154 1,632 309 320Fair value adjustments on investment properties - 26,337 - -Gross dividend income (16) (17) (3,021) (5,574)Impairment loss on- property, plant and equipment - 30,528 - -- property development costs 26,378 7,165 - -- intangible asset - 538 - -- investment in subsidiaries - - 1,816 1,453- investment in an associate 9,056 - 7,172 -

Interest expense 14,172 11,716 5,233 2,573Interest income (339) (100) (167) (95)Inventories written off 59 40 - -Plant and equipment written off 1,225 364 - 16Prepayment written off - 1,223 - -Provision for contingencies in respect of disposal of subsidiaries 337 - 337 -Provision for doubtful debts- subsidiaries - - 3,181 29,074- others 11,893 29,434 572 70

Provision for contingencies in respect ofdisposal of subsidiaries no longer required (11,331) - (11,331) -

Provision for doubtful debts no longer required (7,102) (219) (1,279) (194)Provision for liquidated ascertained damages 73 275 - -Provision for liquidated ascertained damages no longer required (1,392) - - -Profit guarantee liabilities no longer required - (5,153) - (5,153)Reversal of impairment loss on investment in an associate - (17,536) - (17,987)Share in profit of associate (826) (2,082) - -Loss on foreign exchange - unrealised 4 5 - -Loss/(Gain) on disposal of- an associate (2,565) 698 (2,557) 698- property, plant and equipment 44 (112) - (150)- other long term investments 92 348 79 193- a subsidiary (509) - (200) -

Operating loss before working capital changes (974) (5,213) (1,823) (2,371)Decrease/(Increase) in inventories 132 (206) - -Decrease/(Increase) in trade and other receivables 9,253 5,115 (173) 22(Decrease)/Increase in trade and other payables (7,580) 6,154 (1,071) (1,085)Increase in development costs (54) (207) - -

Cash from/(used in) operations 777 5,643 (3,067) (3,434)Income tax paid - net (20) (50) - -

Net cash from/(used in) operating activities 757 5,593 (3,067) (3,434)

cash flow statementsfor the year ended 31 May 2010



Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Cash flows from/(used in) investing activities

Net dividends received 11 16 3,018 5,434Interest received 339 100 167 95Proceeds from disposal of- an associate 35,700 1,408 32,583 1,408- other long term investments 1,790 1,297 1,567 1,007- property, plant and equipment 194 99 3 150- a subsidiary 194 - 200 -

Payments for- additional shares in an existing subsidiary - - - (1,800)- additional shares in investment in an associate - - (285) -- other long term investments - (12) - (12)- property, plant and equipment (958) (196) (22) (76)

Net cash from investing activities 37,270 2,712 37,231 6,206

Cash flows from/(used in) financing activitiesDecrease in fixed deposits pledged 69 871 69 728Interest paid (1,221) (991) (781) (414)Proceeds from issue of shares to minority shareholder of a subsidiary - 300 - -Repayments of revolving credits – net (2,636) (4,388) (2,665) (4,326)Repayments from subsidiaries - - 3,472 2,625Repayments to an associate (2,813) (287) (2,790) (310)Repayments of hire purchase liabilities (378) (202) (132) (111)Repayments of term loans (3,739) (3,234) (5,533) (1,974)

Net cash used in financing activities (10,718) (7,931) (8,360) (3,782)

Net increase/(decrease) in cash and cash equivalents 27,309 374 25,804 (1,010)

Effects of exchange rate changes 1,353 (2,580) - -

Cash and cash equivalents at beginning of year (2,491) (285) (2,744) (1,734)

Cash and cash equivalents at end of year 26,171 (2,491) 23,060 (2,744)

Cash and cash equivalents comprise:Cash and bank balances 3,880 661 769 107Fixed deposits - 91 - 71Short term deposits 22,291 - 22,291 -Bank overdrafts - (3,174) - (2,853)

26,171 (2,422) 23,060 (2,675)Less: Fixed deposits pledged - (69) - (69)

26,171 (2,491) 23,060 (2,744)

cash flow statements (cont’d)for the year ended 31 May 2010


notes to the financial statements


1. General information

The principal activities of the Company consist of investment holding and provision of management services. The principal activities

of the subsidiaries are disclosed in Note 12.

There have been no significant changes in the nature of these activities during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the main market of Bursa

Malaysia Securities Berhad.

The registered office is located at Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan, 50200 Kuala Lumpur.

The principal place of business is located at 1.61 First Floor, South City Plaza, Persiaran Serdang Perdana, Seksyen 1, 43300 Seri

Kembangan, Selangor Darul Ehsan.

The financial statements were approved and authorised for issue by the board of directors on 27 September 2010.

2. Basis of preparation of the financial statements

The financial statements of the Group and the Company have been prepared and presented in accordance with the provisions of

the Companies Act, 1965 and the Approved Accounting Standards for Entities Other Than Private Entities issued by the Malaysian

Accounting Standards Board.

In the preparation of the financial statements, the directors are required to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported

amounts of revenues and expenses during the financial year. Actual results could differ from those estimates.

Estimates and judgements are continually evaluated by the directors and are based on historical experience and other factors,

including expectations of future events that are believed to be reasonable under the circumstances.

In the process of applying the Group’s accounting policies, which are described below, management is of the opinion that there are

no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial

statements.

Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty

at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities

within the next financial year.

The Group and the Company had adopted new and revised Financial Reporting Standards (“FRSs”) and their related interpretations

that become mandatory for the current financial year. The adoption of these new and revised FRSs and their related interpretations

does not result in significant changes in accounting policies of the Group and the Company.

The Group and the Company has not adopted the new standards, amendments to published standards and interpretations that

have been issued but not yet effective. These new standards, amendments to published standards and interpretations do not result

in significant changes in accounting policies of the Group and the Company upon their initial application other than the following:

31 May 2010


2. Basis of preparation of the financial statements (cont’d)

(i) FRS 7 Financial Instruments: Disclosure and FRS 139 Financial Instruments: Recognition and Measurement (both effective for

the financial period beginning on 1 January 2010), and Amendments to FRS 7: Improving Disclosure about Financial Instruments

(effective for annual period beginning on 1 January 2011) which the Group and the Company will apply when effective. FRS 7

requires disclosures in financial statements that enable users to evaluate the significance of financial instruments of the entity

to which is exposed and how these risks are managed. FRS 139 establishes principles for recognising and measuring financial

assets, financial liabilities and some contracts to buy and sell non-financial items. Hedge accounting is permitted only under strict

circumstances. The impact of applying FRS 7 and FRS 139 on the financial statements upon its initial application is not disclosed

by virtue of the exemption given in the standards.

(ii) FRS 8 Operating Segments (effective for annual period beginning on or after 1 July 2009). FRS 8 replaces FRS 1142004 Segment

Reporting. The new standard requires a ‘management approach’, under which segment information is presented on the same

basis as that used for internal reporting purposes.

(iii) FRS 101 Presentation of Financial Statements (revised) (effective for annual period beginning on 1 January 2010). FRS 101 will

prohibit the presentation of items of income and expenses (that is, non owner changes in equity) in the statement of changes

in equity, requiring 'non-owner changes in equity' to be presented, separately from owner changes in equity. All non-owner

changes in equity will be required to be shown in a performance statement, but entities can choose whether to present one

performance statement (the statement of comprehensive income) or two statements (the income statement and statement of

comprehensive income). Where entities restate or reclassify comparative information, they will be required to present a restated

balance sheet as at the beginning comparative period in addition to the current requirement to present balance sheets at the

end of the current period and comparative period. The adoption of this standard introduces a new disclosure requirement to

the objectives, policies and processes for managing capital.

(iv) Revised FRS 3 Business Combinations and Amendments to FRS 127 Consolidated and Separate Financial Statements are

effective for annual periods beginning on 1 July 2010. The revised FRS 3 introduces a number of changes in the accounting for

business combinations occurring after 1 July 2010. These changes will impact the amount of goodwill recognised, the reported

results in the period that an acquisition occurs, and future reported results. The Amendments to FRS 127 require that a change

in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such

transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard

changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. The changes from

revised FRS 3 and Amendments to FRS 127 will affect future acquisitions or loss of control and transactions with non controlling

interest (“minority interests”).

(v) IC Interpretation 13 Customer Loyalty Programmes (effective for annual period beginning on or after 1 January 2010).

IC Interpretation 13 defines award credits as a separately identifiable component of the sales transaction and represent rights

granted to the customer, for which the customer implicitly paid. Therefore it is necessary to divide the initial sale into components

and apply the recognition criteria separately to each component in order to reflect the substance of the transaction.

(vi) IC Interpretation 15 Agreements for the Construction of Real Estate (effective for annual periods beginning on 1 January 2012)

clarifies when and how revenue and related expenses from the sale of a real estate unit should be recognised if an agreement

between a developer and a buyer is reached before the construction of the real estate is completed. Furthermore, the

Interpretation provides guidance on how to determine whether an agreement is within the scope of FRS 111 Construction

Contracts or FRS 118 Revenue. The Group currently recognises revenue arising from property development projects using the

stage of completion method. Upon the adoption of IC Interpretation 15, the Group may be required to change its accounting

policy to recognise such revenues at completion, or upon or after delivery. The Group is in the process of making an assessment

of the impact of this Interpretation.

notes to the financial statements (cont’d)31 May 2010


3. Significant accounting policies

Basis of accounting

The financial statements of the Group and the Company have been prepared under the historical cost convention and any other bases

described in the significant accounting policies as summarised below.

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries listed under Note 12

made up to the end of the financial year. The financial statements of subsidiaries are included in the consolidated financial statements

from the date that control effectively commences until the date that control effectively ceases. Subsidiaries are consolidated using

the acquisition method of accounting.

All significant inter company transactions, balances and unrealised gains on transactions between group companies are eliminated;

unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies for subsidiaries have

been changed to ensure consistency with the policies adopted by the Group.

Minority interests in the consolidated balance sheet consist of the minorities’ share of the fair value of the identifiable assets and

liabilities of the acquiree as at acquisition date and the minorities’ share of movements in the acquiree’s equity since then.

Revenue and income recognition

Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised in the income statement

upon delivery of goods and when the risks and rewards of ownership have passed to the customers.

Revenue from management and production services rendered is recognised in the income statement when the services are rendered.

Revenue from property development is recognised in accordance with the accounting policy disclosed under ‘development property

and costs’.

Revenue relating to construction contracts is recognised in accordance with the accounting policy disclosed under ‘construction

contracts’.

Dividend income is recognised when the shareholder’s right to receive payment is established.

Interest income is recognised as it accrues (taking into account the effective yield on the asset) unless collectibility is in doubt.

Rental income is recognised as it accrues unless collectibility is in doubt.

Foreign currencies

(i) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic

environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Ringgit

Malaysia (“RM”), which is also the Company’s functional currency and all values are rounded to the nearest thousand (RM’000)

except when otherwise indicated.



3. Significant accounting policies (cont’d)

Foreign currencies (cont’d)

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the

transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at

year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income

statement.

(iii) Foreign operations

Assets and liabilities of foreign operations are translated to Ringgit Malaysia at rates of exchange ruling at the balance sheet

date and the results of foreign operations are translated at the average rate of exchange for the financial year. Exchange

differences arising from the translation are recognised as a separate component of equity.

When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in

the income statement as part of the gain or loss on sale.

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

2010 2009RM RM

United States Dollar (“USD”) 3.25 3.51

Solomon Islands Dollar (“SBD”) 0.40 0.50

Singapore Dollar (“S$”) 2.32 2.42

Hong Kong Dollar 0.42 0.45

Employee benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated

services are rendered by employees of the Group and the Company. Short term accumulating compensated absences such

as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future

compensated absences. Short term non accumulating compensated absences such as sick leave are recognised when the

absences occur.

(ii) Defined contribution plans

Obligations for contributions to defined contribution plans such as Employees Provident Fund are recognised as an expense in

the income statement as incurred.

Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income

taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance

sheet date.




Income tax (cont’d)

Deferred tax is provided for, using the ‘liability’ method, on temporary differences at the balance sheet date between the tax bases

of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for

all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses

and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary

differences, unused tax losses and unused tax credits can be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability settled,

based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the

income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is

also charged or credited directly in equity.

Impairment of assets

The carrying amount of assets, other than investment properties, deferred tax assets, inventories, property development costs,

assets arising from construction contracts, and financial assets (other than investments in subsidiaries and associates and other long

term investments), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such

indication exists, the asset’s recoverable amount is estimated and an impairment loss is recognised whenever the recoverable

amount is less than the carrying amount of the asset.

The impairment loss is recognised in the income statement immediately except for the impairment on a revalued asset where the

impairment loss is recognised directly against the revaluation reserve account to the extent of the surplus credited from the previous

revaluation for the same asset with the excess of the impairment loss charged to the income statement.

All reversals of an impairment loss are recognised as income immediately in the income statement except for the reversal of an

impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation increase and credited to

the revaluation reserve account of the same asset.

The impairment loss in respect of goodwill is not reversed. Gains and losses on the disposal of an entity include the carrying amount

of goodwill relating to the entity sold. In respect of other assets, an impairment loss is reversed if there has been a change in estimates

used to determine the recoverable amount.

An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that would

have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and accumulated impairment losses,

if any.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is

probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured

reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income

statement during the financial year in which they are incurred.




Property, plant and equipment and depreciation (cont’d)

Gain and loss arising from the disposal of an asset is determined as the difference between the net disposal proceeds and the

carrying amount of the asset and is recognised in the income statement.

Depreciation on property, plant and equipment is calculated on a straight line basis to write off the cost of each asset to its residual

value over the estimated useful life, at the following annual rates:

Long term leasehold properties (leasehold buildings and leasehold plantations) 50 - 99 years

Logponds and roadworks 5 years

Machinery, equipment and vehicles 3 - 10 years

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method

and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic

benefits embodied in the items of property, plant and equipment.

Replanting expenditure is charged to the income statement in the year in which the expenditure is incurred.

Net planting expenditure incurred on land clearing and upkeep of trees to maturity is capitalised under leasehold plantation and

upon maturity is amortised by equal instalments over the remaining period of the lease.

Development property and costs

(i) Land held for property development

Land held for property development consists of land where no development activities have been carried out or where

development activities are not expected to be completed within the normal operating cycle. Such land is classified within non

current and is stated at cost less any impairment losses.

Land held for property development is reclassified as property development costs at the point when development actitivies

have commenced and where it can be demonstrated that the development activities can be completed within the normal

operating cycle.

(ii) Property development costs

Property development costs comprise all costs that are attributable to development activities or that can be allocated on a

reasonable basis to such activities.

When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses

are recognised in the income statement by using the stage of completion method. The stage of completion is determined by

the proportion that property development costs incurred for work performed to date bear to the estimated total property

development costs.

Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised

only to the extent of property development costs incurred that is probable will be recoverable, and property development costs

on properties sold are recognised as an expense in the year in which they are incurred.




Development property and costs (cont’d)

(ii) Property development costs (cont’d)

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as

an expense immediately.

Property development costs not recognised as an expense is recognised as an asset, which is measured at the lower of cost

and net realisable value.

The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings under trade

receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress

billings under trade payables.

Investment properties

Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties

are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair

value. Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is performed by

registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and

category of the properties having valued.

A gain or loss arising from a change in the fair value of investment properties is recognised in income statement for the year in which

it arises.

A property interest under an operating lease is classified and accounted for as an investment property on a property by property basis

when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease

classifies as an investment property is carried at fair value.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently

withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal

of an investment property are recognised in profit or loss in the year in which they arise.

Investment in subsidiaries

Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly,

to govern the financial and operating policies of a company so as to derive benefits from its activities.

The Company’s investment in subsidiaries is stated at cost less impairment losses, if any.

Investment in associates

An associate is a company in which the Group or the Company has significant influence and which is neither a subsidiary nor a joint

venture of the Group or the Company.

The Company’s investment in associates is stated at cost less impairment losses, if any.




Investment in associates (cont’d)

The Group’s investment in associates is accounted for under the equity method of accounting based on the audited or management

financial statements of the associates made up to the balance sheet date. Under this method of accounting, the Group’s interest

in the post acquisition profit of the associates is included in the consolidated results while dividend received is reflected as a reduction

of the investment in the consolidated balance sheet.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the

associates; unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred.

Where necessary, in applying the equity method, adjustments have been made to the financial statements of associates to ensure

consistency of accounting policies with the Group.

Other long term investments

Other long term investments in quoted and unquoted corporations are stated at cost less impairment losses, if any.

Intangible assets

Intangible assets including trademark licence acquired separately are measured on initial recognition at cost. Following initial

recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The

useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a

straight line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the

intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful

life are reviewed at least at each balance sheet date.

Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if the events or

changes in circumstances indicate that the carrying value may be impaired either individually or at the cash generating unit level.

The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment

continues to be supportable.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost of inventories is determined on the weighted average basis.

Net realisable value represents the estimated selling prices less all estimated costs to completion and costs to be incurred in

marketing, selling and distribution.

Costs of trading merchandise, raw materials and consumables comprise the cost of purchase plus the cost of bringing the inventories

to their present location and condition. Costs of finished goods comprise the cost of raw materials used, direct labour, other direct

costs and appropriate production overheads.

Non current asset held for sale

Non current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather

than through continuing use. The asset must be available for immediate sale in its present condition subject only to terms that are

usual and customary for sale of such asset and its sale must be highly probable.

Non current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.




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 Group’s business and geographical segments. The primary reporting segment

information is in respect of business segments as the Group’s risks and returns are affected predominantly by differences in the

products it produces and in the services it renders, while the secondary information is reported geographically.

A segment with a majority of operating income earned from providing product or services to external clients and whose operating

income, results or assets are 10 percent or more of all the segments is reported separately.

Segment results, assets and liabilities include items that are directly attributable to a segment as well as those that can be allocated

on a reasonable basis.

Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for

more than one period.

Financial instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the

instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest,

dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income.

Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset

when the Group has legal enforceable right to offset and intends to settle either on a net basis or realise the asset and settle the liability

simultaneously.

(i) Receivables

Receivables are carried at anticipated realisable value. All known bad debts are written off and specific provisions are made

for debts that are considered to be doubtful with regards to collection.

(ii) Payables

Payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received.

(iii) Interest bearing borrowings

Interest bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.




Financial instruments (cont’d)

(iii) Interest bearing borrowings (cont’d)

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that

necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those

assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred.

(iv) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are

approved for payment.

Cash flow statement

Cash flow statement is prepared using the indirect method.

Cash equivalents are short term, highly liquid investments that are readily convertible to known amount of cash and which are subject

to insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net

of bank overdrafts and pledged fixed deposits.

4. Revenue

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Construction income 11,041 27,122 - -

Dividends 16 17 3,021 5,574

Property development/investment 6,505 6,316 - -

Sale of goods 3,178 9,939 - -

Services 333 624 898 1,705

21,073 44,018 3,919 7,279



5. Cost of sales

Group2010 2009

RM’000 RM’000

Construction costs 8,924 24,663

Property development/investment 5,971 5,806

Sale of goods 2,674 6,285Services 255 1,308

17,824 38,062

6. Loss before tax

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Loss before tax is arrived at after charging:

Amortisation of prepaid lease payments 9 19 - -

Auditors’ remuneration

- auditors of the Company 130 148 39 37

- other auditors 4 11 - -

Bad debt written off - 13 - 13

Depreciation 1,154 1,632 309 320

Directors’ estimated cash value of benefits in kind 52 53 52 53

Directors’ fees 163 190 163 190

Directors’ other emoluments 821 927 821 927

Fair value adjustments on investment properties - 26,337 - -

Impairment losses on

- property, plant and equipment - 30,528 - -

- property development costs 26,378 7,165 - -

- intangible asset - 538 - -

- investment in subsidiaries - - 1,816 1,453

- investment in an associate 9,056 - 7,172 -

Interest expense

- bank overdrafts 183 296 183 236

- hire purchase 44 49 32 28

- others 399 151 399 151

- revolving credits 203 182 173 154

- term loans 13,343 11,038 4,446 2,004

Inventories written off 59 40 - -

Loss on foreign exchange

- realised 10 - - -

- unrealised 4 5 - -



6. Loss before tax (cont’d)

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Loss on disposal of

- an associate - 698 - 698

- other long term investments 122 378 109 223

- property, plant and equipment 47 38 - -

Plant and equipment written off 1,225 364 - 16

Prepayment written off - 1,223 - -

Provision for doubtful debts

- subsidiaries - - 3,181 29,074

- others 11,893 29,434 572 70

Provision for contingencies in respect of disposal of subsidiaries 337 - 337 -

Provision for liquidated ascertained damages 73 275 - -

Rental of

- premises 575 740 21 148

- equipment 100 91 47 14

Staff costs 2,786 3,337 1,128 1,403

And crediting:

Gross dividend income

- Malaysian

- quoted investment in an associate - - 5 557

- unquoted investment in a subsidiary - - 3,000 5,000

- other unquoted investments 8 5 8 5

- Foreign

- other quoted investments 8 12 8 12

Gain on disposal of

- property, plant and equipment 3 150 - 150

- a subsidiary 509 - 200 -

- other long term investments 30 30 30 30

- an associate 2,565 - 2,557 -

Interest income from

- fixed deposits - 29 - 24

- short term deposits 96 - 96 -

- sundry receivables 243 71 71 71

Profit guarantee liabilities no longer required - 5,153 - 5,153

Provision for liquidated ascertained damages no longer required 1,392 - - -

Provision for contingencies in respect of disposal of subsidiaries

no longer required 11,331 - 11,331 -

Provision for doubtful debts no longer required

- a subsidiary - - 1,279 -

- other receivables 7,102 219 - 194

Reversal of impairment loss on investment in an associate - 17,536 - 17,987



6. Loss before tax (cont’d)

Staff costs comprise:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Defined contribution plan 2,403 328 109 139

Salaries, wages and allowances 270 2,847 964 1,207

Other employee related expenses 113 162 55 57

2,786 3,337 1,128 1,403

The number of directors of the Company where total remuneration during the financial year falls within the following bands is analysed

as follows:

Group2010 2009

Executive directors:

Nil 1 -

RM50,001 to RM100,000 1 -

RM250,001 to RM300,000 - 1

RM350,001 to RM400,000 2 1

Non executive directors:

Below RM50,000 6 5

RM50,000 to RM100,000 - 1

RM300,001 to RM350,000 - 1

7. Income tax expense

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Estimated income tax payable

Malaysia

- current (18) (17) - -

- over/(under) provision in prior years 40 (1) - -

Estimated deferred tax (Note 15)

- current (100) (364) - -

(78) (382) - -



7. Income tax expense (cont’d)

A reconciliation of income tax expense applicable to loss before tax at the statutory income tax rate to income tax expense at the

effective income tax rate is as follows:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Loss before tax (41,390) (90,329) (1,967) (7,628)

Income tax using Malaysian tax rate of 25% (2009: 25%) 10,347 22,582 492 1,907

Expenses not deductible for tax purposes (7,124) (27,825) (4,441) (8,559)

Income not subject to tax 5,913 7,629 3,949 7,080

Share of profit of an associate - 520 - -

Deferred tax assets not recognised (9,305) (3,287) - (428)

Utilisation of previously unrecognised unutilised tax losses

and unabsorbed capital allowances 51 - - -

Over/(Under) provision in prior years

- income tax 40 (1) - -

Income tax expense for the year (78) (382) - -

8. Basic loss per share

Basic loss per ordinary share is calculated based on the net loss attributable to ordinary shareholders and weighted average number

of ordinary shares in issue as follows:

Group2010 2009

RM’000 RM’000

Net loss attributable to ordinary shareholders (41,375) (90,576)

’000 ’000Weighted average number of ordinary shares in issue 650,148 650,148

Basic loss per ordinary share (sen) (6.36) (13.93)

There were no unissued shares of the Company under options and therefore, the scenario of fully diluted loss per share does not

arise.




9.Property,plant

andequipment

Machinery,

Long

term

Logpond

sequipment

Long

term

Group

leasehold

and

and

leasehold

2010

building

roadworks

vehicles

plantation

Total

RM’000

RM’000

RM’000

RM’000

RM’000

Cost

Atbegnnngofyear

4,003

3,540

24,056

34,390

65,989

Addtons

--

392

936

1,328

Dsposas

--

(487)

-(487)

Dsposaofasubsdary

(3,667)

(3,244)

(6,009)

(32,447)

(45,367)

Wrteoffs

--

(2,331)

-(2,331)

Foregnexchangeadjustment

(336)

(296)

(549)

(2,879)

(4,060)

Atendofyear

--

15,072

-15,072

Accum

ulated

depreciation

Atbegnnngofyear

1,723

399

13,623

-15,745

Chargefortheyear

348

221,154

-1,524

Dsposas

--

(249)

-(249)

Dsposaofasubsdary

(1,927)

(387)

(5,310)

-(7,624)

Wrteoffs

--

(1,106)

-(1,106)


(144)

(34)

(464)

-(642)

Atendofyear

--

7,648

-7,648

Accum

ulated

impairm

entlosses

Atbegnnngofyear

--

4,128

30,528

34,656

Dsposaofasubsdary

--

-(30,528)

(30,528)

Atendofyear

--

4,128

-4,128

Net

bookvalue

At31

May

2010

--

3,296

-3,296



9.Property,plant

andequipment(cont’d)

Machinery,

Long

term

Logpond

sequipment

Long

term

Group

leasehold

and

and

leasehold

2009

building

roadworks

vehicles

plantation

Total

RM’000

RM’000

RM’000

RM’000

RM’000

Cost

Atbegnnngofyear

3,359

2,970

24,407

28,173

58,909

Addtons

--

412

817

1,229

Dsposas

--

(884)

-(884)

Wrteoffs

--

(934)

-(934)


644

570

1,055

5,400

7,669

Atendofyear

4,003

3,540

24,056

34,390

65,989

Accum

ulated

depreciation

Atbegnnngofyear

809

295

12,593

-13,697

Chargefortheyear

759

471,632

-2,438

Dsposas

--

(840)

-(840)

Wrteoffs

--

(570)

-(570)


155

57808

-1,020

Atendofyear

1,723

399

13,623

-15,745

Accum

ulated

impairm

entlosses

Atbegnnngofyear

--

4,185

-4,185

Imparmentfortheyear

--

-30,528

30,528

Dsposas

--

(57)

-(57)

Atendofyear

--

4,128

30,528

34,656

Net

bookvalue

At31

May

2009

2,280

3,141

6,305

3,862

15,588



9. Property, plant and equipment (cont’d)

Company Equipment and vehicles2010 RM’000

CostAt beginning of year 3,427

Additions 22

Disposals (114)

Write offs (61)

At end of year 3,274

Accumulated depreciationAt beginning of year 2,312

Charge for the year 309

Disposals (111)

Write offs (61)


Net book valueAt 31 May 2010 825

Company Equipment and vehicles2009 RM’000

CostAt beginning of year 4,394

Additions 303

Disposals (792)

Write offs (478)


Accumulated depreciationAt beginning of year 3,246

Charge for the year 320

Disposals (792)

Write offs (462)


Net book valueAt 31 May 2009 1,115



9. Property, plant and equipment (cont’d)

At the balance sheet date:

(i) Certain property, plant and equipment of the Group with aggregate carrying amount of RM1.5 million (2009: RM11.8 million) have

been charged as collaterals to secure the banking facilities referred to in Note 28;

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

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

At net book value

Motor vehicles 627 1,094 508 683

During the financial year, cash payments made to purchase plant and equipment are as follows:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Total additions 1,328 1,229 22 303

Additions through hire purchase arrangements - (227) - (227)

Capitalised in long term leasehold plantation

- depreciation of plant and equipment (370) (806) - -

958 196 22 76

During the financial year, depreciation expenses are charged to the following:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Income statement 1,154 1,632 309 320

Long term leasehold plantation 370 806 - -

1,524 2,438 309 320



10. Investment properties

Group2010 2009

RM’000 RM’000

Long term leasehold retail units, commercial space and car park bays

At beginning of year 263,247 289,584

Fair value adjustment - (26,337)

At end of year 263,247 263,247

The investment properties of the Group with carrying amount of RM263.2 million (2009: RM263.2 million) have been pledged as

collaterals to secure the banking facilities referred to in Note 28.

Fair value of investment properties of the Group were stated by the directors based on professional valuations carried out by Mr Long

Tian Chek, a registered valuer with Henry Butcher Malaysia Sdn Bhd in July 2010 using the market value basis.

11. Prepaid lease paymentsGroup

2010 2009RM’000 RM’000

Long term leasehold land:

Surrogate carrying amountAt beginning of year 1,363 1,126

Disposal of a subsidiary (1,239) -

Foreign exchange adjustment (124) 237

At end of year - 1,363

Accumulated amortisationAt beginning of year 67 22

Amortisation for the year 9 19

Disposal of a subsidiary (61) -

Foreign exchange adjustment (15) 26

At end of year - 67

Carrying amount - 1,296

Less: Portion due within one year - (19)

Non current portion - 1,277

Included under prepaid lease payments is leasehold land of the Group with carrying amount of RM Nil (2009: RM1.3 million) which

has been charged as collateral to secure the banking facilities referred to in Note 28.



12. Investment in subsidiariesCompany

2010 2009RM’000 RM’000

Unquoted shares, at cost


Additional subscription of shares in a subsidiary - 1,800

Disposals (1,453) -

At end of year 302,722 304,175

Accumulated impairment losses


Impairment loss for the year 1,816 1,453

Disposals (1,453) -

At end of year 265,007 264,644

Carrying amount 37,715 39,531

The details of the subsidiaries are as follows:Issued andPaid up Group’s

Country of share effective Principalincorporation capital interest activities

RM’000 2010 2009(unless otherwise % %

indicated)

Subsidiaries of the Company

Pujian Development Sendirian Berhad Malaysia 6,200 100 100 Propertydevelopmentand propertyinvestment

EcoFirst Development Sdn Bhd Malaysia 100 100 100 Dormant

EcoFirst Construction Sdn Bhd Malaysia 2,550 100 100 Construction

Tashima Development Sdn Bhd Malaysia 500 100 100 Propertydevelopment

Gangsa Etnik Sdn Bhd Malaysia 500 68 68 Propertydevelopment

Panorama Tiara Sdn Bhd Malaysia 3,000 69 69 Propertydevelopment

Silvania Plantation Products Solomon SBD1.9 - 100 Development of(S.I.) Limited Islands million oil palm plantation

EcoFirst Products Sdn Bhd Malaysia 1,500 70 70 Multilevelmarketing



12. Investment in subsidiaries (cont’d)

Issued andPaid up Group’s



indicated)


Earth Revolution Sdn Bhd Malaysia # 51 51 Dormant

EcoFirst Fibaloy Sdn Bhd Malaysia 1,700 51 51 Ceasedoperation

Opal Horizon Sdn Bhd Malaysia # 100 100 General trading

EcoFirst Biotech Sdn Bhd Malaysia 250 52 52 Dormant

EcoFirst Laboratories Sdn Bhd Malaysia 250 100 100 Research anddevelopment

EcoFirst Agro Holdings Sdn Bhd Malaysia 110 100 100 Investmentholding

EcoFirst Hartz Sdn Bhd Malaysia 500 100 100 Ceasedoperation

KE Management & Training Sdn Bhd Malaysia 100 60 60 Ceasedoperation

KE Management Services Sdn Bhd Malaysia # 100 100 Generalinsurance agency

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

Gaydon Resources Limited British Virgin USD1 100 100 Dormant

Island

Minat City Automotive Centre Sdn Bhd Malaysia # 100 100 Ceasedoperation

Sawitani Sdn Berhad Malaysia 10,000 100 100 Investmentholding

Jiddi Joned Enterprises Sdn Bhd Malaysia 5,500 82.2 82.2 Ceasedoperation

Berembang Sendirian Berhad Malaysia 2,800 98.1 98.1 Ceasedoperation







indicated)


Mudek Sdn Bhd Malaysia 2,800 89.3 89.3 Ceasedoperation

Seri Jasin Sdn Bhd Malaysia 1,946 98.3 98.3 Ceasedoperation

Gabema Sdn Bhd Malaysia 26 97.7 97.7 Ceasedoperation

EcoFirst Products Worldwide Sdn Bhd Malaysia # 100 100 Investmentholding

Subsidiary of Gabema Sdn BhdPengangkutan Gabema Sdn Bhd Malaysia 65 90.2 90.2 Ceased

operation

Subsidiaries of Pujian DevelopmentSendirian BerhadKilat Inspirasi Sdn Bhd Malaysia 180 100 100 Dormant

Efex Trade & Exhibitions Sdn Bhd Malaysia # 100 100 Dormant

Budaya Fokus Sdn Bhd Malaysia 500 100 100 Ceasedoperation

Southern Utilities Corporation Sdn Bhd Malaysia # 100 100 Provision of

management

services

SCP Management Sdn Bhd Malaysia 10 100 100 Provision of

management

services

Subsidiaries of EcoFirst Agro HoldingsSdn BhdEcoFirst Agro-Industries Sdn Bhd Malaysia 1,000 75 75 Investment

holding

EcoFirst-YPM Sdn Bhd Malaysia 250 70 70 Dormant







indicated)

Subsidiary of EcoFirst Agro-IndustriesSdn Bhd

J-Biotech EcoFirst Agro Sdn Bhd Malaysia 1,000 52 52 Operation ofagriculture relatedbusinesses

Subsidiary of EcoFirst Products WorldwideSdn Bhd

EcoFirst Products (S) Pte Ltd * Singapore # 100 100 Multilevelmarketing

The financial statements of the subsidiary indicated by * is not audited by Russell Bedford LC & Company.

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

During the financial year, the Company disposed of all its holding of 1,906,999 ordinary shares of SBD1 each in a direct subsidiary,

Silvania Plantation Products (S.I.) Limited (“SPPL”), representing 100% of the issued and paid up share capital of SPPL for a total

cash consideration of RM200,000.

The disposal of a subsidiary had the following effects on the Group’s assets and liabilities:

Group2010

RM’000

Non current assets 8,394

Current assets 689

Current liabilities (12,776)

Foreign exchange reserve 3,384

Net liabilities disposed of (309)

Gain on disposal 509

Consideration received 200

Cash and cash equivalents disposed of (6)

Proceeds from disposal of a subsidiary 194




In the previous financial year, the Company:

(i) disposed of its holding of 100 ordinary shares of RM1 each of the issued and paid up share capital in a direct subsidiary, EcoFirst

Fibaloy Sdn Bhd, for a total cash consideration of RM100.

(ii) further subscribed for additional 1,800,000 new ordinary shares of RM1.00 each representing 100% equity interest of the

enlarged share capital of EcoFirst Construction Sdn Bhd, for a total consideration of RM1,800,000.

(iii) via its indirect subsidiary, EcoFirst Agro-Industries Sdn Bhd, further subscribed for additional 699,930 new ordinary shares of

RM1.00 each representing 70% equity interest of the enlarged share capital of J-Biotech EcoFirst Agro Sdn Bhd.

(iv) via its wholly owned subsidiary, EcoFirst Products Worldwide Sdn Bhd, incorporated a wholly owned subsidiary EcoFirst

Products (S) Pte Ltd, a company incorporated in Singapore with an issued and paid up share capital of S$1. The intended

activity of EcoFirst Products (S) Pte Ltd is to carry on the business of multilevel marketing.

13. Investment in an associate

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Quoted shares at cost

At beginning of year 44,510 46,616 40,565 42,671

Additions - - 285 -

Disposals (44,510) (2,106) (40,850) (2,106)

At end of year - 44,510 - 40,565



Impairment loss during the year 9,056 - 7,172 -

Disposals (16,798) - (10,824) -

Reversal of an impairment loss - (17,536) - (17,987)

At end of year - 7,742 - 3,652

- 36,768 - 36,913

Share in post acquisition profits 5,417 4,591 - -

Disposals (5,417) - - -

Carrying amount - 41,359 - 36,913

Market value of quoted shares - 16,632 - 14,844

During the financial year, the Company disposed of all its direct shareholding of 18,885,025 ordinary shares and indirect shareholding

held through its wholly owned subsidiary, Sawitani Sdn Berhad of 1,905,000 ordinary shares of RM1 each in SEG International

Berhad for a total consideration of RM35.7 million.



13. Investment in an associate (cont’d)

The summarised financial information of the associate is as follows:

2010 2009RM’000 RM’000

Assets and liabilitiesCurrent assets - 97,514

Non current assets - 127,435

Total assets - 224,949

Current liabilities - 50,640

Non current liabilities - 8,406

Total liabilities - 59,046

2010 2009RM’000 RM’000

ResultsRevenue - 142,609

Profit for the year - 8,171

The details of the associate are as follows:

Issued andpaid up Group’s

Country of share effective PrincipalName of company incorporation capital interest activities

RM’000 2010 2009

SEG International Bhd Malaysia 89,093 - 25.1% Investment holding

and provision of

education services

and related

management

consultancy and

property

management and

rental of premises

and business

advisory services



13. Investment in an associate (cont’d)

Quoted shares in the associate are pledged as follows:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Secured advances included under other payables

and accruals (Note 31) - 1,541 - 1,541

Secured borrowings (Note 28) - 39,801 - 35,355

- 41,342 - 36,896

The financial statements of the associate are not audited by Russell Bedford LC & Company.

14. Other long term investments

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Equity shares quoted, at cost

- Malaysia 26,506 35,859 4,761 12,540

- Foreign 225 218 225 218

Unquoted shares at cost 16,148 16,148 16,110 16,110

42,879 52,225 21,096 28,868



Disposals (7,464) - (6,126) -

At end of year 39,513 46,977 17,952 24,078

Carrying amount 3,366 5,248 3,144 4,790

Market value of quoted equity shares 3,196 4,612 3,034 4,267


14. Other long term investments (cont’d)

Certain quoted shares in other investments are pledged as follows:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Secured advances included under other

payables and accruals (Note 31) - 29 - 29

Secured borrowings (Note 28) - 3,863 - 3,442

- 3,892 - 3,471

15. Deferred tax assets/(liabilities)

Group2010 2009

RM’000 RM’000

At beginning of year 912 1,276

Recognised in income statement (Note 7)

- current year (100) (364)

At end of year 812 912

Presented after appropriate offsetting as follows:

Deferred tax assets 14,334 16,355

Deferred tax liabilities (13,522) (15,443)

812 912

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

Group2010 2009

RM’000 RM’000

Tax effects of unabsorbed capital allowances and unutilised tax losses 14,334 16,355

The unused tax losses and unused tax credits are available indefinitely for offset against future taxable profit of the subsidiaries in

which those items arose.




15. Deferred tax assets/(liabilities) (cont’d)

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

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Tax effects of:

Unabsorbed capital allowances and unutilised tax losses 24,796 17,384 3,793 3,434

Excess of depreciation of plant and equipment over tax

capital allowances 2 1 - -

Provisions 15,950 2,371 - -

40,748 19,756 3,793 3,434

Portion of the deferred tax assets have not been recognised as it is not probable that taxable profit will be available in the foreseeable

future to utilise these deferred tax assets.

16. Intangible asset

Group2010 2009

RM’000 RM’000

Trademark licence at cost

At beginning and end of year 570 570

Accumulated amortisation

At beginning and end of year 32 32

Group2010 2009

RM’000 RM’000


At beginning of year 538 -

Impairment loss for the year - 538

At end of year 538 538

Carrying amount - -



17. Inventories

Group2010 2009

RM’000 RM’000

Raw materials - 3

Finished goods 417 578

Trading merchandise 12 -

Spares and supplies - 471

429 1,052

Spares and supplies with a carrying value of RM Nil (2009: RM471,000) are charged as collaterals for one of the banking facilities

referred to in Note 28.

18. Non current asset held for sale

In the previous financial year, a subsidiary entered into a sale and purchase agreement to dispose of the leasehold land for a

consideration of RM2.3 million. The subsidiary had entered into a supplementary sale and purchase agreement dated 19 June 2009

to allow the said property to be transferred to a new purchaser. Arising from this, applications have to be re-submitted to the relevant

authorities approving the transfer of the property to the new purchaser. The disposal is expected to complete within the next twelve

months upon the fulfilment of all conditions precedent of the sale and purchase agreement. Accordingly, the fair value less costs to

sell of this piece of leasehold land is classified as non current asset held for sale. In the previous financial year, this piece of leasehold

land has been charged as collateral to secure the banking facilities referred to in Note 28.

During the financial year, the above transaction has been completed.

19. Property development costs

Group2010 2009

RM’000 RM’000

At beginning of year

Long term leasehold land 103,046 103,046

Development costs 108,447 108,314

211,493 211,360

Costs incurred during the year:

Development costs 4 133

Costs recognised in income statement:

At beginning of year (46,830) (46,904)

Recognised during the year 50 74

At end of year (46,780) (46,830)



19. Property development costs (cont’d)

Group2010 2009

RM’000 RM’000

Accumulated expected losses:

At beginning of year (83,395) (76,230)

Expected loss for the year (26,378) (7,165)

At end of year (109,773) (83,395)

Property development costs at end of year 54,944 81,268

Property development costs of the Group with carrying value of RM54.9 million (2009: RM81.2 million) have been charged as

collaterals to secure the banking facilities as referred to in Note 28.

20. Trade receivables

Group2010 2009

RM’000 RM’000

Trade receivables 57,206 61,160

Accrued billings for property development 1,899 1,900

Amount due from contract customers (Note 21) - 238

59,105 63,298

Less: Provision for doubtful debts (57,589) (46,801)

1,516 16,497

The Group’s normal trade credit term is 30 days (2009: 30 days).

21. Amount due from contract customers

Group2010 2009

RM’000 RM’000

Costs incurred to date 34,590 25,904

Add: Attributable profits 4,567 2,450

Work in progress 39,157 28,354

Less: Progress billings received and receivable (39,157) (28,116)

Amount due from contract customers (Note 20) - 238



22. Amount due from/(to) subsidiaries

Company2010 2009

RM’000 RM’000

Amount due from subsidiaries 306,752 336,675

Less: Provision for doubtful debts (40,887) (68,079)

265,865 268,596

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

23. Other receivables, deposits and prepayments

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Other receivables 43,079 26,548 34,256 5,122

Less: Provision for doubtful debts (41,114) (25,183) (32,775) (3,109)

1,965 1,365 1,481 2,013

Deposits and prepayments 2,711 2,521 196 63

4,676 3,886 1,677 2,076

24. Cash and bank balances

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Cash at banks and on hand 3,880 661 769 107

Fixed deposits with licensed banks - 91 - 71

Short term deposits with licensed financial institutions 22,291 - 22,291 -

Cash and bank balances 26,171 752 23,060 178



24. Cash and bank balances (cont’d)

The weighted average effective interest rate and maturity of fixed deposits at the balance sheet date are as follows:

Group Company2010 2009 2010 2009

% % % %

Weighted average effective interest rate per annum - 2.9 - 3.1

Group Company2010 2009 2010 2009Days Days Days Days

Average maturity as at the end of the financial year - 137 - 141

The fixed deposits of the Group and the Company with aggregate carrying amounts of RM Nil (2009: RM0.1 million) and RM Nil (2009:

RM0.1 million) respectively have been pledged as collaterals to secure the banking facilities referred to in Note 28.

The weighted average effective interest rate of short term deposits at the balance sheet date are as follows:

Group Company2010 2009 2010 2009

% % % %

Weighted average effective interest rate per annum 2.51 - 2.51 -

The short term deposits have no fixed maturity period and can be withdrawn by giving advance notice.

25. Share capital

Group and Company2010 2009

No. of No. ofordinary ordinaryshares of shares of Group and Company

RM0.50 each RM0.50 each 2010 2009’000 ’000 RM’000 RM’000

Authorised:

At beginning and end of year 2,000,000 2,000,000 1,000,000 1,000,000

Issued and fully paid:

At beginning and end of year 650,148 650,148 325,074 325,074



25. Share capital (cont’d)

Warrants 2004/2009

In conjunction with the renounceable rights issue of 130,236,686 ordinary shares of RM0.50 each during the financial year ended 31

July 2004, the Company also issued 65,118,136 detachable warrants at no cost to its shareholders. The warrants are in registered

form and constituted by a deed poll and entitle the registered holder to subscribe for one (1) new ordinary share of RM0.50 in the

Company at a price of RM0.50 per ordinary share for every warrant held. It can be exercised at any time during the five year

subscription period. On 18 March 2009, the Warrants 2004/2009 expired and no warrant was exercised by then.

26. Reserves

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Accumulated losses (517,030) (475,655) (496,238) (494,271)

Non distributable:

Share premium 295,727 295,727 295,727 295,727

Revaluation reserve 1,436 1,436 - -

Foreign exchange translation 6 (1,319) - -

297,169 295,844 295,727 295,727

(219,861) (179,811) (200,511) (198,544)

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

The Group’s revaluation reserve consists of revaluation surplus from freehold land and buildings, long term leasehold land and

investments.

27. Hire purchase liabilities

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Amount outstanding 724 1,159 600 762

Less: Interest in suspense (77) (134) (71) (101)

Principal portion 647 1,025 529 661

Less: Portion due within one year (190) (227) (138) (131)

Non current portion 457 798 391 530



27. Hire purchase liabilities (cont’d)

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

The non current portion of the hire purchase obligations

is payable as follows:

Later than 1 year and not later than 2 years 200 240 146 139

Later than 2 years and not later than 5 years 147 422 135 255

Later than 5 years 110 136 110 136

457 798 391 530

The effective interest rates implicit in the hire purchase obligations range from 4.32% to 7.32% (2009: 4.32% to 7.32%) per annum.

28. Long term borrowings

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Bank overdrafts - secured - 3,174 - 2,853

Term loans - secured 129,085 126,570 13,850 19,378

Revolving credits - secured 413 3,049 - 2,665

Non convertible preference shares issued by asubsidiary to its minority shareholder 1,000 1,000 - -

130,498 133,793 13,850 24,896

Less: Portion due within one year (Note 32) (53,413) (29,884) (10,350) (15,288)

Non current portion 77,085 103,909 3,500 9,608

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

The non current portion of borrowings is payable as follows:

Later than 1 year and not later than 2 years 20,970 22,558 3,500 6,106

Later than 2 years and not later than 5 years 55,115 62,771 - 3,502

Later than 5 years 1,000 18,580 - -

77,085 103,909 3,500 9,608



28. Long term borrowings (cont’d)

The average effective interest rates per annum are as follows:

Group Company2010 2009 2010 2009

% % % %

Bank overdrafts - secured - 9.20 - 8.05

Term loans - secured 8.48 7.96 8.52 8.05

Revolving credits - secured 8.05 8.70 - 9.00

Secured borrowings are secured by way of:

Carrying amountGroup Company

2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000

Property, plant and equipment (Note 9) 1,500 11,797 - -

Investment properties (Note 10) 263,247 263,247 - -

Prepaid lease payments (Note 11) - 1,296 - -

Quoted shares in an associate (Note 13) - 39,801 - 35,355

Quoted shares included under other long term

investments (Note 14) - 3,863 - 3,442

Inventories (Note 17) - 471 - -

Non current asset held for sale (Note 18) - 2,250 - -

Property development costs (Note 19) 54,944 81,268 - -

Fixed deposits with licensed banks (Note 24) - 69 - 69

Certain of the bank borrowings of the subsidiaries are also guaranteed by the Company.

29. Trade payables

The normal trade credit period granted to the Group is 30 days (2009: 30 days).

30. Amount due to an associate

The amount represents profit guarantee obligations payable and is repayable on demand. The amount has been settled during the

financial year.



31. Other payables and accruals

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Deposits received from tenants and purchasers of

development properties 5,186 5,161 - -

Unsecured interest free advances from third parties 4,300 18,671 73 73

Provision for contingencies in respect of disposal

of subsidiaries 337 11,381 337 11,381

Accrued interest 14,413 9,966 14,413 9,966

Secured third party debts which bear interest between 8%

and 10% (2009: 8% and 10%) per annum - 1,039 - 1,039

Provision for real property gains tax liabilities as required

for accounting purposes 10,197 10,197 616 616

Provision for liquidated ascertained damages in respect of

property development projects 7,468 8,195 - -

Profit guarantee liabilities 2,189 2,189 2,189 2,189

Provision for tax penalties as required for accounting purposes 5,311 5,311 - -

Quit rent and assessment payables 4,024 2,361 - -

Contribution payable for local authority 2,741 2,741 - -

Other payables 10,193 13,834 3,576 3,528

66,359 91,046 21,204 28,792

Accruals 1,200 1,656 228 258

67,559 92,702 21,432 29,050

The secured third party debts are secured by way of:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Quoted shares in an associate (Note 13) - 1,541 - 1,541

Quoted shares included under other long term investments (Note 14) - 29 - 29

- 1,570 - 1,570

32. Short term borrowings

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Bank overdrafts - secured - 3,174 - 2,853

Term loans - secured 53,000 23,661 10,350 9,770

Revolving credits - secured 413 3,049 - 2,665

Current portion (Note 28) 53,413 29,884 10,350 15,288



33. Significant related party disclosures

(a) Related party disclosures

Group CompanyType of 2010 2009 2010 2009

transactions RM’000 RM’000 RM’000 RM’000

Significant transactions with a

company in which certain directors

have interests

Name of companySEG International Bhd Profit guarantee

expense no longer

required - (5,153) - (5,153)

The directors are of the opinion that the terms and conditions and prices of the above transactions are not materially different

from that obtainable in transactions with unrelated parties.

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Significant outstanding balances with companies

in which certain directors have interests

Name of companiesReceivableCasa Andaman Sdn Bhd

- construction contracts - 1,218 - -

PayablesMeda Inc Berhad

- profit guarantee liabilities 2,189 2,189 2,189 2,189

SEG International Bhd

(profit guarantee liabilities)

- amount due to an associate - 2,813 - 2,790

(b) Compensation of key management personnel

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

Note 6.



34. Commitments

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Operating lease commitmentsThe future minimum lease payments under non

cancellable operating leases are as follows:

Not later than 1 year 451 1,034 394 395

Later than 1 year and not later than 2 years 411 910 376 385

Later than 2 years and not later than 5 years 490 520 470 95

1,352 2,464 1,240 875

35. Contingencies

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Guarantees relating to borrowings of:

- subsidiaries (secured) - - 115,647 107,897

- an affiliated company (secured) 3,169 4,926 3,169 4,926

3,169 4,926 118,816 112,823

At 31 May 2010, the Company had contingent liabilities in respect of the following:

(i) Two subsidiaries, Pujian Development Sendirian Berhad (“PDSB”) and Southern Utilities Corporation Sdn Bhd (“SUC”), have been

served with a writ of summons by 56 purchasers of the South City Condominiums (“the Project”) seeking declarative orders,

injunctive orders and general damages in respect of their purchase of the service apartments and shop units of the Project. The

matter is now fixed for further case management on 27 October 2010 and at this juncture, the loss arising therefore, if any,

cannot be reasonably estimated.

The solicitors are of the opinion that PDSB and SUC have reasonably good defence for the above matter subject to the availability

of sufficient documentary evidence to substantiate its defence. Therefore, no provision has been made in the financial statements.

(ii) PDSB was served with a writ of summons by 24 purchasers seeking rescission of the Sale and Purchase Agreements entered

into with PDSB in respect of the shop units in the South City Plaza. The estimated loss to the Group is RM2.4 million and the

matter is now fixed for decision on 18 October 2010 in relation to the plaintiffs’ summary judgement application.

The solicitors are of the opinion that PDSB has reasonably good defence for the above matter subject to the availability of

sufficient documentary evidence to substantiate its defence. Therefore, no provision has been made in the financial statements.

(iii) A subsidiary, Silvania Plantation Products (S.I.) Limited (“SPPL”) was served with a judgement for cross guarantees and

indemnities whereby SPPL and 3 other companies have guaranteed payment of each other’s debts, interest and costs from time

to time owing to the claimant, Westpac Banking Corporation. The total claim sum is approximately RM5.0 million equivalent

together with interest at the claimant’s prevailing rate.

During the financial year, the Company has disposed of all its shareholdings in SPPL.



36. Material litigations and claims

(i) The Inland Revenue Board (“IRB”) issued a writ of summons against each of the 4 subsidiaries, Mudek Sdn Bhd, Seri Jasin Sdn

Bhd, Berembang Sendirian Berhad and Jiddi Joned Enterprises Sdn Bhd individually for real property gains tax owed by the

subsidiaries.

The 4 subsidiaries have also filed legal suits against certain parties for failure to release retention sums representing part of the

real property gains tax as mentioned above.

These legal suits are still on going and for accounting purposes all the amounts owed have been provided for in the financial

statements.

(ii) IRB filed 4 separate legal suits against Pujian Development Sendirian Berhad (“PDSB”) for a total amount of RM32.5 million. The

claims are for income tax outstanding for assessment years 1998 to 2000, 2001 and 2004. For the first action, IRB had

successfully reinstated the judgement in default against PDSB. PDSB is in the midst of preparing stay papers to file an appeal

against the decision. In relation to the second action, IRB has filed an application for summary judgement. The parties are in

the midst of exchanging affidavits and the matter is fixed for case management on 21 October 2010. In relation to the third action,

IRB has obtained a summary judgement application. PDSB has filed an appeal against the decision. As for the fourth action,

PDSB has filed an appeal against the summary judgement decision and it is now fixed for case management on 30 September

2010.

For accounting purposes, PDSB has provided for the income tax, inclusive of penalties, of RM32.5 million in respect of these

pending litigations.

(iii) IRB filed 2 legal suits against Tashima Development Sdn Bhd (“Tashima”), for the recovery of income tax outstanding totalling

RM6.4 million for assessment years 2000, 2001 and 2002 including penalties. IRB has served a sealed summary judgement

application and it is now fixed for case management on 21 October 2010 for the first suit. In respect of the second suit, the court

has allowed IRB’s summary judgement application. Tashima has filed its appeal against the decision. The matter is now fixed

for case management on 30 September 2010 of Tashima’s stay application.

For accounting purposes, Tashima has provided for the income tax, inclusive of penalties, of RM6.4 million in respect of these

pending litigations.

(iv) IRB filed a legal suit against Sawitani Sdn Bhd (“Sawitani”) for a total amount of RM1.0 million. The claims are for real property

gains tax outstanding for assessment year 2000. Sawitani has filed its defence. IRB’s summary judgement application was

fixed for case management on 13 July 2010 wherein parties are to file all affidavits and respective submissions on 21 October

2010.

For accounting purposes, Sawitani has provided for the income tax, inclusive of penalties, of RM1.0 million in respect of this

pending litigation.



37. Segmental information

Segmental information is presented in respect of the Group’s business and geographical segments. The primary reporting segment

information is in respect of business segments while the secondary information is reported as geographical segments.

Inter-segment pricing is determined based on arm’s length basis.

Segments results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a

reasonable basis.

The Group comprises the following main segments:

Business segmentsConstruction

Property

Network marketing

Investment and others

Geographical segmentsMalaysia

Rest of Asia

Solomon Islands

Others



37.Segmentalinform

ation(cont’d)

Investment

Network

and

Construction

Property

marketing

others

Elim

inations

Consolidated

31May

2010

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

BusinessSegments

Revenue

Revenuefrom

externacustomers

11,041

6,505

3,134

393

-21,073

Inter-segmentrevenue

--

54,116

(4,121)

-

11,041

6,505

3,139

4,509

(4,121)

21,073

Results

Segmentresuts

761

(25,613)

(1,463)

(2,074)

6(28,383)

Interestncome

339

Lossfrom

operatons

(28,044)

Fnancecosts

(14,172)

Sharenproftofassocate

826

826

Lossbeforetax

(41,390)

Incometaxexpense

(78)

Netossfortheyear

(41,468)

Other

inform

ation

Segmentassets

2,262

324,987

1,416

28,980

-357,645

Una

ocatedcorporateassets

1,039

358,684

Segmentab

tes

3,998

148,288

1,706

50,839

-204,831

Una

ocatedcorporateab

tes

33,622

238,453

Amortsaton

--

-9

-9

Captaexpendture

--

362

966

-1,328

Deprecaton

8155

197

1,191

-1,524

Noncashexpensesotherthandeprecaton

andamortsaton

1,371

40,430

1,198

14,207

(8,349)

48,857



37.Segmentalinform

ation(cont’d)

Investment

Network

and

Construction

Property

marketing

others

Elim

inations

Consolidated

31May

2009

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

BusinessSegments

Revenue

Revenuefrom

externacustomers

27,122

6,351

8,735

1,810

-44,018

Inter-segmentrevenue

--

-2,520

(2,520)

-

27,122

6,351

8,735

4,330

(2,520)

44,018

Results

Segmentresuts

219

(65,704)

(212)

(14,473)

(625)

(80,795)

Interestncome

100

Lossfrom

operatons

(80,695)

Fnancecosts

(11,716)

Sharenproftofassocate

2,082

2,082

Lossbeforetax

(90,329)

Incometaxexpense

(382)

Netossfortheyear

(90,711)

Other

inform

ation

Segmentassets

5,559

357,725

2,548

25,252

-391,084

Investmentnanassocate

--

-41,359

-41,359

432,443

Una

ocatedcorporateassets

1,138

433,581

Segmentab

tes

6,948

141,907

3,267

87,417

-239,539

Una

ocatedcorporateab

tes

--

--

-33,668

273,207

Amortsaton

--

-19

-19

Captaexpendture

--

881,141

-1,229

Deprecaton

117

161

180

1,980

-2,438

Noncashexpensesotherthandeprecaton

andamortsaton

-62,570

898

41,007

(30,527)

73,948



37. Segmental information (cont’d)

Rest of SolomonMalaysia Asia Islands Others TotalRM’000 RM’000 RM’000 RM’000 RM’000

31 May 2010Geographical Segments

Revenue 20,779 294 - - 21,073

Carrying amount of segment assets 358,673 10 - 1 358,684

Additions to property, plant, equipment and intangible asset 329 63 936 - 1,328

Rest of SolomonMalaysia Asia Islands Others TotalRM’000 RM’000 RM’000 RM’000 RM’000

31 May 2009Geographical Segments

Revenue 43,725 293 - - 44,018

Carrying amount of segment assets 421,215 - 12,345 21 433,581

Additions to property, plant, equipment and intangible asset 412 - 817 - 1,229

38. Events subsequent to the balance sheet date

Subsequent to the balance sheet date, a wholly owned subsidiary, Opal Horizon Sdn Bhd (“Opal”) has entered into a Cooperation

Agreement with a third party, CV GEOMineral Resources (“CVGMR”), a firm incorporated under the laws of the Republic of Indonesia

for the exploitation of an iron ore mine in South Kalimantan, Indonesia. Opal will provide a one-time exploitation fee of USD1,000,000

and in return CVGMR agrees to share 60% of the iron ore mine production with Opal.

39. Financial instruments

Financial risk management objectives and policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development

of the Group’s businesses whilst managing its interest rate, liquidity, foreign exchange, market and credit risks. The Group operates

within guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions.

Interest rate risk

The Group’s primary interest rate risk relates to interest bearing debts. The Group manages its interest rate exposure by maintaining

a prudent mix of fixed and floating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment

holding period and nature of its assets. The information on maturity dates and effective interest rates of financial liabilities are

disclosed in their respective notes.



39. Financial instruments (cont’d)

Liquidity risk

The Group actively monitors its debt maturity profile, operating cash flows and the availability of funding so as to best ensure that

all funding needs are met. As part of its overall liquidity management, the Group endeavours to maintain sufficient levels of cash or

cash convertible investments to best meet its working capital requirements.

Foreign exchange risk

The Group operates internationally and is exposed to various currencies, mainly United States Dollars and Solomon Islands Dollars.

Foreign currency denominated assets and liabilities together with expected cash flows from highly probable purchases and sales

give rise to foreign exchange exposures.

Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an

acceptable level.

As at balance sheet date, there are no material unhedged financial assets and financial liabilities of the Group and the Company that

are not denominated in their functional currencies.

Market risk

The Group is exposed to market risks arising from changes in the market prices of its quoted investments. The Group does not use

derivative instruments to manage this risk as the Group’s quoted investments are mainly held as long term investments.

Credit risk

Credit risks are managed by the application of credit approvals, limits and monitoring procedures. Credit risks are minimised and

monitored via strictly limiting the Group’s associations to business partners with high creditworthiness. Trade receivables are

monitored on an ongoing basis via the Group’s management reporting procedures. At balance sheet date, there were no significant

concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset.

Fair values

The fair values of all financial assets and financial liabilities of the Group and the Company as at balance sheet date are not materially

different from their carrying values other than as follows:

Group Company2010 2010

Carrying Fair Carrying Fairamount value amount valueRM’000 RM’000 RM’000 RM’000

Financial assets

Quoted shares included in other long term investments 2,229 3,196 2,044 3,034

Unquoted shares included in other long term investments 1,137 # 1,100 #



39. Financial instruments (cont’d)

Fair values (cont’d)

Group Company2009 2009

Carrying Fair Carrying Fairamount value amount valueRM’000 RM’000 RM’000 RM’000

Financial assets

Quoted shares included in other long term investments 4,110 4,612 3,690 4,253

Unquoted shares included in other long term investments 1,138 # 1,100 #

# It is not practicable to estimate the fair values of the unquoted investments due to the lack of quoted market prices and

inability to estimate fair value without incurring excessive costs.

The fair value of quoted shares is determined by reference to stock exchange quoted selling prices at the close of business on the

balance sheet date.


The properties of the Group as at 31 May 2010 and their net book values (“NBV”) are indicated below:

Investment Properties

ApproximateAge of Date ofBuilding Lease Expiry Acquisition/ NBV

Size & Usage Title/ Location Company (years) Date Revaluation RM'000

1. 91 sq. metres B-04-10, Perdana Selatan, Pujian 10 99-year lease 3.8.2006 130

of office space Taman Serdang Perdana, Development expiring

(Seksyen 1) Sendirian 9 Nov 2093

43300 Seri Kembangan, Berhad

Selangor Darul Ehsan.

2. 150,417 sq. PN No. 7393, Lot No. 1, Pujian 7 99-year lease 15.7.2009 262,003

metres of Pekan Serdang, Development expiring

commercial Daerah Petaling, Selangor. Sendirian 9 Nov 2093

space Berhad

3. 55 sq. metres PN No. 7393, Lot No. 1, Opal Horizon 7 99-year lease 15.7.2009 268

of commercial Pekan Serdang, Sdn Bhd expiring

space Daerah Petaling, Selangor. 9 Nov 2093

4. 60 sq. metres PN No. 7393, Lot No. 1, Efex Trade & 7 99-year lease 15.7.2009 289

of commercial Pekan Serdang, Exhibitions expiring

space Daerah Petaling, Selangor. Sdn Bhd 9 Nov 2093

5. 55 sq. metres PN No. 7393, Lot No. 1, EcoFirst 7 99-year lease 15.7.2009 268

of commercial Pekan Serdang, Development expiring


6. 60 sq. metres PN No. 7393, Lot No. 1, EcoFirst 7 99-year lease 15.7.2009 289

of commercial Pekan Serdang, Laboratories expiring


263,247

particulars of group properties


STATISTICAL REPORT OF HOLDERS OF SHARES AS AT 30 SEPTEMBER 2010 AS PER RECORD OF DEPOSITORS (“ROD”)

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

Authorised Share Capital : RM1,000,000,000.00

Issued and Paid-Up Capital : RM325,073,827.00

Voting Rights : Every member present in person or by proxy or represented by attorney shall have one vote and upona poll, every such member shall have one vote for every share held.

No. of Shareholders : 29,414

Number of Number PercentageRange of Shareholdings Shareholders of Shares (%)

Less than 100 1,822 46,317 0.00100 - 1,000 4,927 4,458,443 0.691,001 - 10,000 17,222 78,021,716 12.0010,001 - 100,000 5,027 138,136,954 21.25100,001 - less than 5% of issued shares 414 341,378,458 52.515% and above of issued shares 2 88,105 ,766 13.55

Total 29,414 650,147,654 100.00

LIST OF THIRTY LARGEST SHAREHOLDERS AS AT 30 SEPTEMBER 2010 AS PER ROD

No. Name of Shareholders No. of Shares Held Percentage (%)

1. TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Purewise Sdn. Bhd. 45,301,300 6.97

2. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Aun (STG) 42,804,466 6.58

3. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Kian (DHG) 26,951,432 4.15

4. TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Foo 23,415,500 3.60

5. Kenanga Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Kian 19,042,500 2.93

6. EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Teoh Seng Kian (SFC) 18,384,600 2.83

7. TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Aun 14,190,000 2.18

8. TA Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Kian 13,427,100 2.07

9. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Tiong Kwing Hee (DHG) 12,903,100 1.98

analysis of shareholdings


analysis of shareholdings (cont’d)

LIST OF THIRTY LARGEST SHAREHOLDERS AS AT 30 SEPTEMBER 2010 AS PER ROD (CONT’D)


10. Soh Chin Loong 9,900,000 1.52

11. M.I.T. Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Cheam Shaw Fin (MG0033-325) 9,819,000 1.51

12. Kenanga Nominess (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Foo 8,482,000 1.30

13. EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Teoh Seng Aun (SFC) 8,271,000 1.27

14. LT Travel & Tours (M) Sdn. Bhd. 6,717,300 1.03

15. M.I.T. Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Foo (MG0176-182) 6,525,000 1.00

16. EB Nominees (Tempatan) Sendirian BerhadPledged Securities Account For Tan Kim Seng (SFC) 5,842,000 0.90

17. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Wong Fon Ying (CEB) 5,237,000 0.81

18. Kenanga Nominees (Tempatan) Sdn. Bhd.Amara Investment Management Sdn. Bhd. For Teoh Seng Foo 3,982,999 0.61

19. M.I.T. Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Teoh Seng Aun (MG0177-182) 3,815,000 0.59

20. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Liew Lee Chin (CEB) 3,500,000 0.54

21. Mayban Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Tan Kim Seng 3,300,000 0.51

22. Affin Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Chung Kin Chuan (CHU0226C) 3,214,800 0.49

23. OSK Nominees (Tempatan) Sdn. BerhadPledged Securities Account For Purewise Sdn. Bhd. 2,454,300 0.38

24. AMSEC Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Wong Fon Ying 2,447,300 0.38

25. RHB Capital Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Chong Sun Nee (CEB) 2,315,700 0.36

26. Low Siew Fong 2,295,300 0.35

27. ECML Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account For Ng Wui Heong (MG0000140) 2,225,000 0.34


analysis of shareholdings (cont’d)

LIST OF THIRTY LARGEST SHAREHOLDERS AS AT 30 SEPTEMBER 2010 AS PER ROD (CONT’D)


28. Purewise Holdings Sdn. Bhd. 2,203,300 0.34

29. Kenanga Nominees (Tempatan) Sdn. Bhd.Amara Investment Management Sdn. Bhd. For Teoh Seng Aun 2,067,000 0.32

30. Tan Leng Pee Sendirian Berhad 1,944,720 0.30

SUBSTANTIAL SHAREHOLDERS' SHAREHOLDINGS AS AT 30 SEPTEMBER 2010(based on the Register of Substantial Shareholders' Shareholdings)

Name of No. of Shares HeldSubstantial Shareholder Direct Interest (%) Indirect Interest (%)

Teoh Seng Kian 79,602,632 (12.24) 516,332 (0.08)*

Teoh Seng Aun 69,080,554 (10.63) 516,332 (0.08)*

Dato’ (Dr.) Teoh Seng Foo 38,422,500 (5.91) 516,332 (0.08)*

Note:

* Indirect interest by virtue of Section 6A(4) of the Companies Act, 1965 through shareholdings held in Fulani Capital Sdn Bhd (formerly

known as Meda Capital Sdn Bhd).

DIRECTORS' SHAREHOLDINGS (IN THE COMPANY) AS AT 30 SEPTEMBER 2010(based on the Register of Directors' Shareholdings)

Name of No. of Shares HeldDirectors Direct Interest (%) Indirect Interest (%)

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

Dato’ (Dr.) Teoh Seng Foo 38,422,500 (5.91) 516,332 (0.08)*

Tiong Kwing Hee 12,903,100 (1.98) - -

Amos Siew Boon Yeong - - - -

Dato’ Boey Chin Gan - - - -

Lim Een Hong - - - -

Teoh Seng Kian

(Alternate Director to Dato’ (Dr.) Teoh Seng Foo) 79,602,632 (12.24) 516,332 (0.08)*

Others**

Dato’ (Dr.) Teoh Seng Foo’s spouse 9,819,000 (1.51) - -

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

Notes:

* Indirect interest by virtue of Section 6A(4) of the Companies Act, 1965 through shareholdings held in Fulani Capital Sdn Bhd (formerly

known as Meda Capital Sdn Bhd).

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

NO RESOLUTIONS FOR AGAINST

ORDINARY BUSINESS1. Re-election of Datoʼ (Dr.) Teoh Seng Foo as Director2. Re-election of Siew Boon Yeong as Director3. Re-election of Lim Een Hong as Director4. Re-appointment of Messrs Russell Bedford LC & Company as Auditors and to

authorise the Directors to fix their remunerationSPECIAL BUSINESS

5. Approval of Directorsʼ Fees6. Authority for Directors to issue shares7. Proposed Amendments to Articles of Association

Please indicate with “X” in the space provided how you wish your proxy to vote. If no specific direction as to voting is given, the proxy willvote or abstain from voting at his/her discretion.

Notes:(i) A member entitled to attend and vote at the meeting is entitled to appoint not more than one (1) proxy to attend and vote in his stead. A proxy need not

be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply.(ii) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint

at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securitiesaccount.

(iii) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or if the appointer isa corporation, either under seal or under the hand of an officer or attorney duly authorised.

(iv) The original instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy ofthat power or authority shall be deposited at the Registered Office of the Company at Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan,50200 Kuala Lumpur not less than forty eight (48) hours before the time for holding the meeting or adjourned meeting.

Signature of Shareholder(s) / Common Seal

Dated this day of 2010

FORM OF PROXYNumber of shares held

Central Depository System Account No.

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

of(ADDRESS)

being a member(s) of ECOFIRST CONSOLIDATED BHD, hereby appoint

of(FULL NAME IN BLOCK LETTERS) (ADDRESS)

or failing him/her, the CHAIRMAN OF THE MEETING* as my/our proxy to attend and vote for me/us on my/our behalf at the Thirty-SeventhAnnual General Meeting of the Company to be held at Ballroom 1, Level 5, The Summit Hotel, Subang USJ, Persiaran Kewajipan,USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan on Wednesday, 24 November 2010 at 10.00 a.m. or at any adjournment thereof.

* please delete if you do not wish to have this option in the absence of your proxy.

STAMP

The Company SecretaryECOFIRST CONSOLIDATED BERHAD (15379-V)

Suite 11.1A, Level 11, Menara Weld76 Jalan Raja Chulan50200 Kuala Lumpur

Malaysia

(Then fold here)

(1st fold here)

Documents

ECOFIRS-AnnualReport2010 (3MB)