our vision & mission - malaysiastock.biz our vision & mission. ... usj 1, 47600 uep subang...

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

Cover Rationale

The cover of this year’s Annual Report represents the hard work that we assert into building an empire. This is how we convey the spirit of our organization, working dynamically in cohesion towards a common goal. We have dreams, we achieve them, and we continue to build even bigger dreams to realise bigger goals. EcoFirst has thus far, gained remarkable success under the new management and will continue to dream big.

CONTENTS2 Notice of Annual General Meeting

3 Statement Accompanying Notice of Annual General Meeting

6 Corporate Information

8 Chairman’s Statement

14 Board of Directors

15 Directors’ Profile

22 Five-Year Group Statistics

23 Corporate Governance Statement

29 Statement of Directors’ Responsibility

30 Other Information

31 Audit Committee Report

35 Statement on Risk Management and Internal Control

37 Financial Statements

95 Particulars of Group Properties

96 Analysis of Shareholdings

Form of Proxy

2 ECOFIRST CONSOLIDATED BHD (15379-V)Annual Report 2013

NOTICE OF FORTIETHANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN that the Fortieth 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 Friday, 22 November 2013 at 10.00 a.m. to transact the following business:-

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 May 2013 together with the Directors’ and Auditors’ Reports thereon.

2. To approve the Directors’ Fees for the financial year ended 31 May 2013. (Resolution 1)

3. To re-elect the following Directors who retire by rotation in accordance with Article 113 of the Company’s Articles of Association:-

3.1 Mr Amos Siew Boon Yeong3.2 Mr Lim Een Hong

(Resolution 2)(Resolution 3)

4. To consider and, if thought fit, to pass the following Ordinary Resolution pursuant to Section 129 (6) of the Companies Act, 1965:-

“THAT Dato’ Syed Ariff Fadzillah Bin Syed Awalluddin who had attained the age of seventy (70) years and retires pursuant to Section 129 of the Companies Act, 1965, be and is hereby re-appointed as Director of the Company to hold office until the conclusion of the next Annual General Meeting.”

(Resolution 4)

5. To re-appoint Messrs Russell Bedford LC & Company as Auditors of the Company to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

(Resolution 5)

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following Ordinary Resolution :-

6. ORDINARY RESOLUTION AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

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

(Resolution 6)

To consider and, if thought fit, to pass the following Special Resolution :-

7. SPECIAL RESOLUTIONPROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY (Resolution 7)

“THAT the alterations, modifications, additions or deletions to the Articles of Association of the Company detailed in Appendix A be and are hereby approved.”

8. To transact any other business of the Company which due notices shall be given in accordance with the Company’s Articles of Association and the Companies Act, 1965.

BY ORDER OF THE BOARD

WONG SIEW YEEN (MAICSA 7018749)CHEONG CHOON YIN (MAICSA 7019120)Secretaries

Kuala Lumpur 30 October 2013

3ECOFIRST CONSOLIDATED BHD (15379-V)Annual Report 2013

Notes:-

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 15 November 2013 (General Meeting Record of Depositors) shall be eligible to attend, speak and vote at this meeting.

(ii) A member entitled to attend and vote at the meeting is entitled to appoint not more than one (1) proxy to attend and vote in his stead. A proxy need not be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply.

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

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

(v) The original instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Registered Office of the Company at Level 8, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting.

EXPLANATORY NOTES ON SPECIAL BUSINESS:

1. Ordinary Resolution 6 – Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965

The Ordinary Resolution proposed under Resolution 6, if passed, will renew the authority given to the Directors of the Company to issue and allot new shares in the Company at any time, to such person or persons, upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit (“General Mandate”), provided that the number of shares issued pursuant to this General Mandate, when aggregated with the nominal value of any such shares issued during the preceding twelve (12) months, does not exceed 10% of the nominal value of total issued share capital of the Company at the time of issue. This renewed General Mandate, unless revoked or varied at a general meeting, will expire at the conclusion of the next annual general meeting (“AGM”) of the Company.

The General Mandate procured and approved in the preceding year 2012 which was not exercised by the Company during the year, will expire at the forthcoming Fortieth AGM of the Company.

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

2. Special Resolution 7 – Proposed Amendments to the Articles of Association of the Company

The Special Resolution proposed under Resolution 7, if passed, will bring the Company’s Articles of Association in line with the amendments prescribed under the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

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

(a) Mr Amos Siew Boon Yeong(b) Mr Lim Een Hong(c) Dato’ Syed Ariff Fadzillah Bin Syed Awalluddin

NOTICE OF FORTIETHANNUAL GENERAL MEETING

STATEMENT ACCOMPANYING NOTICEOF ANNUAL GENERAL MEETING


Details of the proposed amendments to the Articles of Association (AA)

No. Existing AA Proposed amendments to AA

Article 2 – Interpretation

Authorised Nominee- A person who is authorised to act as nominee as

specified under the Rules.

Authorised Nominee- A person who is authorised to act as nominee as

specified under SICDA.

Central Depositories Act- The Securities Industry (Central Depositories)

Act 1991, including any statutory modification, amendment or re-enactment thereof for the time being in force.

SICDA- The Securities Industry (Central Depositories)

Act 1991, including any statutory modification, amendment or re-enactment thereof for the time being in force.

Central Depository - Bursa Malaysia Depository Sdn Bhd.

Depository- Bursa Malaysia Depository Sdn Bhd.

CMSA- No provision

CMSA - The Capital Markets and Services Act 2007.

Depositor - A holder of securities account as defined in the

Central Depositories Act.

Depositor - A holder of securities account established by the

Depository.

Records of Depositors - A record provided by Central Depository to the

Company under Chapter 24.0 of the Rules.

Records of Depositors - A record provided by Depository to the

Company under Chapter 24.0 of the Rules.

Rules- The Rules of the Central Depository and any

appendices thereto as may be amended or modified from time to time.

Rules- The Rules of the Depository and any appendices

thereto as may be amended or modified from time to time.

The Directors- The Directors for the time being of the Company.

The Directors- Has the meaning given in Section 2(1) of the

CMSA and includes :

(a) in the case of an issuer of structured warrants, a director of the issuer of the structured warrants ; or

(b) in the case of an applicant or listed issuer which is a collective investment scheme, a director of a management company or a director of the trustee-manager, as the case may be.

Member- Any person/persons for the time being holding

shares in the Company and whose name(s) appear in the Company’s Registrar of Members (except the Bursa Malaysia Depository Nominees Sdn Bhd) including Depositors whose names appear in the Record of Depositors.

Member- Includes a depositor who will be treated as if he

were a member pursuant to Section 35 of the Securities Industry (Central Depositories) Act 1991 but excludes the Central Depository in its capacity as a bare trustee.

Securities - As defined in the Central Depositories Act.

Securities- As defined in the CMSA.

Securities Account- An account established by the Central Depository

for a Depositor for the recording of deposit of securities and for dealing in such securities by the Depositor.

Securities Account- An account established by the Depository for a

Depositor for the recording of deposit of securities and for dealing in such securities by the Depositor.

APPENDIX A


Details of the proposed amendments to the Articles of Association (AA) (continued)

No. Existing AA Proposed amendments to AA

Article 76 - General

Meeting

If a poll is demanded as aforesaid it shall (subject to the provisions of the next succeeding Article hereof) be taken in such manner and at such time and place as the Chairman of the meeting directs and either at once or after an interval or adjournment or otherwise and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll may be withdrawn.

If a poll is demanded as aforesaid or if mandated under the Listing Requirements, it shall (subject to the provisions of the next succeeding Article hereof) be taken in such manner (by way of electronic voting or otherwise) and at such time and place as the Chairman of the meeting directs and either at once or after an interval or adjournment or otherwise and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll may be withdrawn.

Article 82 - Votes of

Members

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 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 Act shall not apply), and shall be entitled to vote on a show of hands on any question at any general meeting.

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 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 Act shall not apply), and shall be entitled to vote on a show of hands on any question at any general meeting. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting. There shall be no restriction as to the qualification of the proxy.

Article 88 (1)- Votes of

Members

A member entitled to attend and vote at the meeting is entitled to appoint not more than one proxy to attend and vote instead of him. Where a member of the Company is an authorised nominees as defined under the Central Depositories Act, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

A member entitled to attend and vote at the meeting is entitled to appoint not more than one proxy to attend and vote instead of him.

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

An exempt authorized nominee refers to an authorized nominee defined under SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

APPENDIX A


CORPORATEINFORMATION

SECRETARIESWong Siew YeenCheong Choon Yin

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

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

BOARD OF DIRECTORS

CHAIRMAN / INDEPENDENTNON-EXECUTIVE DIRECTORDato’ Syed Ariff Fadzillah bin Syed Awalluddin

PRESIDENT/ NON-INDEPENDENT EXECUTIVE DIRECTORDato’ (Dr.) Teoh Seng Foo

GROUP CHIEF EXECUTIVE OFFICER /EXECUTIVE DIRECTORDato’ Tiong Kwing Hee

INDEPENDENTNON-EXECUTIVE DIRECTORAmos Siew Boon Yeong

ALTERNATE DIRECTOR TO DATO’ (DR.) TEOH SENG FOOTeoh Seng Kian

INDEPENDENTNON-EXECUTIVE DIRECTORDato’ Boey Chin Gan

INDEPENDENTNON-EXECUTIVE DIRECTORLim Een Hong

REGISTERED OFFICELevel 8, Symphony House Pusat Dagangan Dana 1Jalan PJU 1A/46 47301 Petaling JayaSelangor Darul EhsanTel : 03 – 7841 8000Fax : 03 – 7841 8199

STOCK EXCHANGE LISTINGBursa Malaysia Securities BerhadMain Market

WEBSITEwww.ecofirst.com.my


DEDICATIONPersistence is Key


CHAIRMAN’SSTATEMENT

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 2013.

“”



Performance Review

During the financial year under review, the Group improved its financial performance, registering a profit before tax of RM26.7 million as compared to RM15.4 million in the preceding year. This was despite recording a lower turnover of RM76.4 million as compared to RM160.5 million in the preceding year.

A major portion of the profit contribution was due to gain on fair value adjustments of RM25.0 million on the Group’s mall in Segamat, Johor. The increase in the asset value is a result of the Group’s efforts in enhancing and growing the potential of the mall which is now fully tenanted and in full operations. The full impact of the gain was mitigated by other expenses such as provisions for receivables of RM6.1 million and provision for legal contingencies of RM5.1 million.

Apart from the effects of the gain on fair value adjustments, the operations of the Group has performed commendably with contribution from the Group’s commercial development project in Daerah Kinta, Jelapang, Perak. Known as Taipan@Ipoh Cybercentre, the project was fully completed during the financial year under review and has been fully sold.

Both the Group’s malls comprising South City Plaza (“SCP”) in Seri Kembangan, Selangor and 1Segamat Mall (“1Segamat”) in Segamat, Johor contributed recurring rental income and property management fees which totaled RM16.2 million for the financial year ended 31 May 2013, a leap of 65% over the preceding year.

1Segamat MallSouth City PlazaTaipan @ Ipoh Cybercentre

1Segamat Official Opening



Adjacent to 1Segamat Mall are seven units of 3- and 4-storey shop lots which the Group built and completed during the financial year under review. Five of these lots were sold during the financial year under review which included a corner and two adjoining lots built specifically to cater for an 81-room budget hotel which is now fully operational.

Being the most modern and only shopping mall in Segamat, 1Segamat brings greater commercial vibrancy to the township. By pushing economic activity such as employment opportunities, increment in per capita income etc., 1Segamat acts as an economic catalyst for the district as a whole.

The Group has during the financial year under review completed its development project known as Taipan@Ipoh Cybercentre in Ipoh, Perak. The total development which spanned over two and a half years comprised 102 units of 3-storey shop-offices and 147 units of shop-offices. The project was completed ahead of scheduled delivery dates and was fully sold.

With depressed iron ore market conditions and more restrictive conditions imposed by the local government, the Group has ceased further investment in this operation in Indonesia and has made a provision for the balance mining investment cost.

Operational Review

We are witnessing positive changes in the Group’s flagship retail mall at South City Plaza (“SCP”), Seri Kembangan, Selangor as the Group’s revamping plans take place. Progressing in stages, we have, early in the financial year under review, completed the development of two blocks of 13-storey towers consisting of 416 units of fully-furnished apartments on top of SCP. These apartments have been fully sold and the student population occupying these two blocks has a positive spin-off effect to the complex as we see additional footprint being generated.

The SCOPE@SCP, is a new tenancy concept covering approximately 105,000 sq.ft. at the lower ground floor of the 5 level retail mall. The SCOPE@SCP was established for the purpose of housing wholesale traders which is made up almost entirely of handphone accessories wholesalers, thus making the SCOPE@SCP the largest handphone accessories centre in the country. Also occupying a large area at the SCOPE@SCP are China porcelain, antique and tea traders.

A newly renovated 30 lane bowling centre with the state of the art facilities operated by the Group was opened towards the end of the financial year under review. This gives a totally new look and feel to the complex.

The next financial year would be an exciting year for SCP with the arrival of new tenants amongst which is an established fitness centre plus more exciting F&B and entertainment outlets.

The Group’s second retail mall known as 1Segamat Mall, is the first and only lifestyle shopping destination in Segamat, Johor. A five level retail mall with modern facilities and a vibrant feel, the mall has been operating since June 2012 and has reached full occupancy since. The widely varied trade mix is operated by more than 200 tenants. 1Segamat held its official opening on 25 August 2013 and the Group was honoured to have the Sultan of Johor, Duli Yang Maha Mulia Sultan Ibrahim Ibni Almarhum Sultan Iskandar to officiate the opening. Several Corporate and Social Responsibility (“CSR”) activities were held on the day to commemorate the event which included treating underprivileged children and the handicapped to the movies at the Cineplex at 1Segamat Mall followed by lunch, promotion of local Segamat handicraft, art competition for children, paintball and basketball games for the youth as well as traditional dance performances.

Fantasy Bowling Centre at SCP

SCOPE @ SCP largesthandphone accessories centre

Completed 7 units shop lots at Segamat


Industry Overview and Prospects

The Malaysian economy is expected to sustain its growth momentum into the second half year of 2013. On the demand side, growth is expected to emanate from firm domestic demand and gradual improvement in external demand, whilst on the supply side, growth will be supported by continuing expansion in the services and construction sectors as well as some recovery in the manufacturing sectors. With private consumption expected to grow, we expect the retail business and property sector, which our Group is involved in, to maintain.

With the concerted efforts sowed by the new management team in the past couple of years, the Group is now able to reap its efforts. The previously abandoned retail mall in Segamat which has been revived and completed, is now a thriving place of activity and contributes positively to the Group’s bottom line. The Group completed the development of two blocks of service apartments on top of SCP and this contributed to the Group’s results and also raised the necessary cash to reduce bank borrowings substantially within a short time frame. The Group undertook a commercial development project in Ipoh, Perak which contributed profits and cashflow to the Group and it was completed ahead of the scheduled delivery dates. The cashflow generated from this project was instrumental in allowing the Group to complete the construction of the Segamat mall without any additional external funding.

The future looks promising as the Group is in negotiation to secure new lands for property development projects. With new retail entrants coming soon at SCP and the continued strength of 1Segamat Mall, we expect to see improvement in rental income from our two malls in the years ahead.

Corporate and Social Responsibility (“CSR”)

The Group is committed to achieving a high level of awareness in areas of ethical and commercial importance to the organisation and at the same time integrating corporate social responsibilities into its everyday business activities.

Mindful of giving back to the communities that it operates in, the Group has throughout the year, hosted at South City Plaza and 1Segamat Mall several activities which included, amongst others, fund raising activities for underprivileged children, Lion’s Club blood donation campaign, free health screening programmes with National Kidney Foundation of Malaysia and Sg. Long Hospital, WWF-Malaysia Earth Day campaign awareness, donation of beds and mattresses to Pertubuhan Kebajikan Mental Titian Kasih Selangor and a vegetarian carnival organized to raise funds for the less fortunate whilst promoting healthy living and community bonding. This year the Group again co-organised with World Vision the “No More Hunger” 30 Hour Famine, a global movement against hunger and poverty.

Human capital is always a significant factor to the success of an organization. It is one of our missions to continuously focus on employee development. We provide internal and external training to improve and upgrade staff competency and enhance personal development. Team bonding activities were arranged for staff to foster team spirit and teamwork, promote good camaraderie and improve communication between all levels of employees. Staff welfare is taken care of by providing a conducive working environment. We offer weekly wellness program for staff to reduce health risk and be physically and mentally fit for work. Safety, health and security of employees are in line with company policies and regulations at all times.


CSRactivities



Acknowledgement

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

My appreciation also goes to our valued shareholders, clients, bankers and business associates for your unwavering support over the years as we continue to build bigger and better dreams for the benefit of all stakeholders.

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

Dato’ Syed Ariff Fadzillah Bin Syed AwalluddinChairman

CSR activities

Staff team building

Staff development programme


Targeting VisionsFOCUS


BOARD OFDIRECTORS

1 Dato’ Syed Ariff Fadzillah bin Syed Awalluddin (Chairman/Independent Non-Executive Director) Malaysian

5 Mr. Teoh Seng Kian

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

3 Dato’ Tiong Kwing Hee

(Group Chief Executive Officer/Executive Director) Malaysian

7 Dato’ Boey Chin Gan

(Independent Non-Executive Director) Malaysian

2 Dato’ (Dr.) Teoh Seng Foo

(President/Non-Independent Executive Director) Malaysian

6 Mr. Lim Een Hong


4 Mr. Amos Siew Boon Yeong


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