SAR1212003 Ecowise Holdings()The Group owns a leading rubber compound manufacturing and tyre...

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ecoWise Holdings LimitedCo. Reg: 200209835C

17 Kallang Junction #04-03 | Singapore 339274

Tel: 65 - 6536 2489 | Fax: 65 - 6536 7672 | www.ecowise.com.sg

printed on environmentally friendly paper

PURSUING SUSTAINABLE

GROWTHGROWTH

ANNUAL REPORT 2012

CONTENTS

02 CORPORATE PROFILE

06 CHAIRMAN’S STATEMENT

10 FINANCIAL HIGHLIGHTS

12

FINANCIAL AND OPERATIONS

REVIEW

16 BUSINESS OVERVIEW

19

CORPORATE SOCIAL

RESPONSIBILITY

20 BOARD OF DIRECTORS

22 MANAGEMENT TEAM

24 CORPORATE INFORMATION

25 CORPORATE GOVERNANCE

42 FINANCIAL STATEMENTSDesigned and produced by

(65) 6578 6522

To be the preferred environmental

solutions and renewal energy

provider with high integrity,

corporate social responsibility and

to create value for all stakeholders.

To emphasize on research

and development to provide

environmentally friendly solutions

to industrial processes.

To establish successful operations

and management of renewable

energy projects that contribute to

social, economic and environmental

benefi ts to stakeholders.

To establish awareness, propagate,

promote and encourage use of

environmentally friendly products

derived from recycled organic

waste.

To establish best practices in the

manufacture and distribution of

environmentally friendly recycled

products that are in harmony with

ecological principles.

VISION

MISSION

ecoWise Holdings Limited

annual report 2012 01

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RESOURCE RECOVERY The Group owns a leading rubber compound

manufacturing and tyre retreading group under Sunrich

Integrated Sdn. Bhd and its subsidiaries (“SRIT

Group”) based in Malaysia. SRIT Group engages in

the manufacturing of rubber compound and custom

made compound as well as retread tyres under brand

names such as Suntex, Winner, Autoways and Trakar.

The Group will be expanding its total tyre management

business into Chongqing, China, through a 65% held

joint venture company established in December 2012

with Chongqing Municipal Transport Development

and Investment (Group) Co., Ltd. which is Chongqing

municipal’s largest state owned transport logistic group.

In China, the Group engages in electrical and electronic

waste recycling business through a 15% investment

in Chongqing Zhongtian Electronic Waste Co.,

Ltd. (“CZEW”) under a joint venture with Zhongtian

Environment Protection Industrial Group Co., Ltd. CZEW

has an exclusive e-waste license awarded by the local

government in the business of collection, recovering,

processing and disposal of electrical and electronic

waste in Chongqing.

In Singapore, the Group is an appointed term contractor

for collection of used copper slag and general waste

for certain shipyards and fabrication yards. A large

portion of the recycled copper slag is used by ready mix

concrete suppliers for the production of eco-concrete.

The Group’s patented composting technology,

ecoACTTM, employs the unique in-vessel thermophilic

composting technology to manufacture quality organic

compost in the shortest possible time.

Founded in 1979, ecoWise Group

is a Singapore based resource

recovery, renewable energy and

integrated environmental solutions

provider. The Group was listed on

SGX-SESDAQ in 2003 and moved

to SGX Mainboard on 9 May 2008.

02 ecoWise Holdings Limited

annual report 2012

CORPORATE PROFILE

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RENEWABLE ENERGYIn Singapore, the Group’s first biomass co-

generation power plant in Sungei Kadut supplies

waste steam for a number of industrial applications.

The waste steam application from the plant was

the first registered Clean Development Mechanism

(“CDM”) project in Singapore.

The Group’s second biomass co-generation power

plant in Singapore at the iconic Gardens by the Bay

(Marina South) commenced operation in November

2011 for the supply of energy to the National Parks

Board. This newly completed biomass co-generation

power plant was constructed under a Design, Build

and Operate agreement entered with National Parks

Board for a fifteen years period.

In China, the Group’s 49% held subsidiary in

Wuhan, Wuhan ecoWise Energy Co., Ltd., currently

owns a 25MW coal-fired power plant which ceased

operation in 2010 pending for the commencement

of the process to convert it into a 25MW biomass

co-generation power plant.

INTEGRATED ENVIRONMENTAL MANAGEMENT SOLUTIONSThe Group provides resources management and

integrated environmental engineering solutions

for industrial waste and energy management.

The Group focuses on providing ‘low carbon’

environmental solutions. It offers a range of

services including process design and optimisation;

engineering, procurement, fabrication construction;

commissioning, operation and maintenance of the

facilities.



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集團簡介


annual report 2012

绿科集团于1979年在新加坡成立。主营业务包括资源再循环、再

生能源和提供综合性环境解决方案。集团于2003年在新加坡交

易所创业板挂牌上市，并于2008年5月9日晋升主板交易。

资源再循环

绿科集团旗下以马来西亚为基地的日升集团及其子公司在橡胶复合材料制造和轮胎翻新业务上领

先同行业。日升集团从事橡胶复合材料和特制橡胶复合材料的生产，并在Suntex，Winner，Autoway

以及Trakar四大品牌下生产翻新轮胎。集团在2012年12月，与重庆市最大的国有运输物流企业重庆

城市交通开发投资(集团)有限公司设立了合资企业－重庆绿科开投橡胶科技有限公司，绿科集团控

股65%。集团冀望通过此合资企业在重庆扩展综合轮胎管理业务。

在中国，绿科集团与中天环保产业(集团)有限公司共同设立了合资公司－重庆中天电子废物管理有

限公司。合资公司拥有在重庆市的电器、电子产品废弃物再循环的特许经营权。

在新加坡，绿科集团是新加坡一些修船厂和造船厂废铜渣和其它工业废弃物指定回收商。大部分的

废铜渣在经过处理后成为生产环保水泥的主要材料。

绿科集团的专利堆肥技术，ecoACTTM，使用独特的仓内高温堆肥技术可以在极短的时间内生产出高

品质的有机肥料。

再生能源

绿科集团位于双溪加株的生物质热电厂为一些工业项目提供废蒸汽作为能源。生物质热电厂的热能

应用项目使得公司成为首家成功注册清洁发展机制项目的新加坡注册公司。

集团在新加坡地标性建筑“滨海湾花园”内设计、建造及运营一座生物质热电厂，为新加坡国家公园

局提供能源。

在中国，集团参股49%的合资企业武汉绿科有限公司，拥有一座25MW的燃煤热电厂。此燃煤热电厂将

改造为25MW的生物质热电厂。

提供综合环境管理方案

集团提供“低碳型”环境管理方案。服务范围涵盖工艺流程的设计和优化、工程采购和建设以及设

备安装、调试和维修等多个领域。

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CHAIRMAN’S STATEMENT

Dear shareholders,

On behalf of the Board of Directors, it is

my pleasure to present to you the Annual

Report for the Group for the financial year

ended 31 October 2012 (“FY2012”).

The Group achieved improved result in

FY2012 due to better performance in both

the Resource Recovery and Renewable

Energy segments. The Group’s revenue

grew by 13.4% to S$90.52 million in FY2012

and reported a net profit attributable to

owners of the Company of S$1.37 million

in FY2012 as compared to S$0.56 million

recorded in the previous financial year ended

31 October 2011.

The Resource Recovery segment posted a

7.9% increase in revenue to S$80.33 million

in FY2012. The increase was mainly due

to higher sales recorded by the Group’s

rubber compound manufacturing and

tyre retreading business under Sunrich

Integrated Sdn. Bhd. and its subsidiaries

(“SRIT Group”) in Malaysia. During the year,

SRIT Group has become a wholly owned

subsidiary of the Group after the Group

increased its investment by acquiring the

remaining 30% equity interests in Sunrich

Integrated Sdn. Bhd. in March 2012.

The outlook for SRIT Group remains stable,

as the Group expects steady demand

for retreaded tyres from truck and bus

operators as they attempt to contain rising

operating costs. To prepare for future growth

opportunity, SRIT Group will embark on

expansion plan to enhance its technological

capability and increase its manufacturing

capacity in the near term.

Through a 65% held joint venture company established in China

in December 2012, the Group is looking to expand its total tyre

management business into Chongqing, China by collaborating

with its joint venture partner, Chongqing Municipal Transport

Development and Investment (Group) Co., Ltd. which is Chongqing

municipal’s largest state owned transport logistic group.

The Group has also started to receive dividend income of S$0.41

million in FY2012 from its 15% investment stake in the electrical

and electronic waste management company in China, Chongqing

Zhongtian Electronic Waste Management Co.,Ltd., within two years

of initial investment in this business unit.

Revenue from our Renewable Energy segment grew by 92.9%

to S$9.91 million in FY2012 attributed to the commencement of

operation of the newly completed biomass co-generation power

plant at Gardens by the Bay (Marina South) and the stable income

from waste steam applications from the biomass co-generation

power plant at Sungei Kadut Singapore.

Constructed under a Design, Build and Operate agreement entered

with National Parks Board for a period of fifteen years, the newly

built biomass co-generation power plant at Gardens by the Bay

commenced operation in November 2011 and would continue to

contribute recurring income to the Group for the coming years.

The project to convert the Group’s 49% owned coal-fired power

plant in Wuhan to a biomass co-generation plant has been delayed

in view of the ownership changes experienced by the local partner

in China during the year. The Group will continue to discuss and

work with its local partner on the process of conversion. The

commencement of plant conversion shall be subject to further

capital injection by joint venture partners for purposes of securing

bank financing for the conversion.

The Group will continue to leverage on its experience and know

how in the renewable energy sector to develop the biomass energy

business. On 21 December 2012, the Group announced that it had


annual report 2012

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CHAIRMAN’S STATEMENTCCHAIRMAN’SSSSS STATEMENT

entered into a conditional sales and purchase agreement to acquire

Hivern Investments Pte Ltd (“Hivern”) which wholly owns a 24MW

biomass co-generation power plant situated in the industrial park

in Changyi Binhai (Lower) Economic Development Zone, Shandong,

China. The proposed acquisition of Hivern is conditional upon, inter

alia, the approval of shareholders of the Group, the approval of the

creditors of Hivern to enter a new scheme of arrangement for Hivern

and the approval and sanction by the High Court of Singapore.

In view of the growth potential in the clean-technology sector, the

Group had in February 2012 acquired a 20% equity interest in

China-UK Low Carbon Enterprise Co., Ltd. which engages in venture

capital and incubation management business in the cleantech sector

in China.

The Group shall continue to expand its capabilities to provide

comprehensive scope of services when offering environmental

solutions to our valued customers. The scope of service includes the

development of ‘low carbon’ and eco-friendly projects, technology

incubation, technology commercialization and low carbon solutions.

REWARDING OUR SHAREHOLDERS

On behalf of the Board, I would like to thank all shareholders for

your continued support and confidence in the Group. As a token

of appreciation, the Board is recommending a one-tier tax exempt

final dividend of 0.1 cent per share for shareholders’ approval at the

Annual General Meeting.

ACKNOWLEDGEMENT

We would like to take this opportunity to thank Mr Sunny Ong Keng

Hua who retired from the Board on 28 February 2012. We would

also like to express our heartfelt appreciation to all our business

associates, partners, customers as well as management and staff

for their continued support, dedication and confidence in the Group.

LEE THIAM SENG

Executive Chairman and CEO

January 2013



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annual report 2012

主席致辭

尊敬的股东们：尊敬的股东们：

我谨代表董事会在此荣幸地向您呈上集团截至2012年10月31日的财政年度报告。

集团的资源再循环和再生能源两大业务取得了较好的表现，推进了集团2012年的整体业绩。营业额增长了13.4%，

达9,052万元。净利在2011年56万元的基础上增长到137万元。

资源再循环业务的营业额在2012年增长7.9%，达8,033万元，主要归功于集团旗下在马来西亚的日升集团在橡胶复合

材料和轮胎翻新两大业务方面销售量的提高。2012年3月，集团增加了对日升集团的投资，使日升集团成为绿科集

团的全资子公司。

由于卡车和公共巴士营运者努力遏制不断上升的营运成本，市场对翻新轮胎的需求保持平稳。日升集团已着手实施

发展计划，以提高效力及扩大生产能力。

2012年12月，集团与重庆市最大的国有运输物流企业重庆城市交通开发投资(集团)有限公司设立了合资企业，重庆

绿科开投橡胶科技有限公司，绿科控股65%。集团冀望通过此合资企业在重庆扩展综合轮胎管理业务。

集团在重庆中天电子废弃物处理有限公司的投资也初见成效，两年内为集团的资源再循环业务取得41万元的股息

收入。

集团再生能源的收入在2012年增长了92.9%，达991万元。这主要归功于“滨海湾花园”生物质热电厂的竣工并顺利

投入运作。此生物质热电厂将在未来的15年内为集团带来稳定的营业收入。同时，双溪加株生物质热电厂的废汽供

热业务也为再生能源业务带来稳定的收入。

集团拥股49%的武汉燃煤热电厂，由于当地合资伙伴的股权变更，以至燃煤热电厂转换为生物质热电厂的改造工程

暂时延缓。我们将就改造工程与合资伙伴继续进行磋商和合作。

集团将继续发挥在再生能源方面的专长，努力发展生物质能源业务。2012年12月21日，集团与海闻投资有限公司

签订了一项有条件收购协议，收购海闻属下位于中国山东昌邑滨海(下营)经济开发区的24MW的生物质热电厂。此项

收购将在海闻与债权人签订新的债权人协议并获得新加坡高等法院的批准和裁定，以及集团在召开特别股东大

会后议决。

鉴于清洁技术领域的增长潜力，集团在2012年2月收购了中英低碳企业有限公司20％的股权。该公司在中国清洁技

术领域从事风险投资和企业孵化管理业务。

集团将不断提高自身的能力，扩大环保解决方案的业务范围，为我们的客户提供更全面的环保解决方案。我们的服

务范围将包括发展低碳和生态友好型项目、技术孵化、技术商业化和低碳解决方案等业务。

回馈股东回馈股东

我谨代表董事会，感谢所有股东对集团一直以来的支持和信心。作为答谢，董事会将在常年股东大会上，提议分发

每股0.1分的免税年终股息，并在获得股东批准后发放。

鸣谢鸣谢

我藉此机会鸣谢集团的创始人王庆华先生对集团不可磨灭的贡献。王先生于2012年2月28日辞去董事会的职务。我

也同样藉此机会衷心地感谢我们所有的股东、合作伙伴和尊敬的客户，诚谢您们对我们的不懈支持和坚强信心。

李添胜李添胜

执行主席和首席执行官

2013年1月

报报告。

集集团20012年的整整体体业体体绩绩。绩。营营营业额额额增长长了长了了长了13.44%，%

于集团团旗下下下在马马马在来西来西西西亚的亚的日升升日升集集团集集团在在橡橡橡胶胶复复合合

了了对日日升集集团集团的的投资资，使日使日日日升集集升集团成团成成为绿为绿为绿绿为绿绿绿科集科集科集科集

新轮胎胎的需需需求保保持持平平稳稳平平。日升集集团已已着手手手实施实施实

开开发投资(集集团团)有有限公公司公司公设设立设设立了合合资企企企企业，业，重庆重庆

重重庆扩展展综合合轮轮胎胎管胎理业业务。务。务

内内为集集团的资源源再循再环环业业务务取务取务取得得4得得得41万1万万万元的元的元的的的的股息股息息股

功于“滨滨海湾湾花花园园”园生物物生质热质热热热热电厂电厂厂电厂电厂厂的竣竣的工并并顺利顺利

业业收入入。同时时，双双溪加株生物物质物质热热电热热电热电厂厂厂的厂的废废汽废汽废供供

至至燃煤煤热电电厂转转换为换生物质质热热电电电厂电厂厂厂的的的改的的的改造造工程

。。2012年12月211日日，集集团与与海闻闻投投资资资有资有资有资有资资限限限公限公限限司

下下营)经经济开开发区区的的244MW的的生物物物物生物物物生物物生物物物物物生物生物生物物物生生生物生质质热质质质热质热质热质质热质热质热质热质质热质热质热质热质热质质热质热质热热热热热热质热电电厂电厂电厂电厂电电电厂电厂电电电电厂电厂电电厂电厂电电电厂电电电电电电电。此此此此此。。此此。。此此。此。此此项项项

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的的客户提户提提提提提户提户供供更更更更更供全全全全面全面面全面面面全全面全面面面面面面全面面面的的环的环的的环的环环的的的的的的环的环的环的的的环的环的的的环环环的的环环的环的环的的的的保保解解解解解解解解解保解保保保保保保保保保保决方决方决方方方决方决决方决方决决方决决方方方决方决方决方方决决决方方方方方方方方决方方方方方方方方案案。案。案。案案。案。案。案。案。案。案案案案案案案。案。案。案。案。案案案案案案案。案。案案案案案案案案案案案案案案案案案案案。案案案案案案案。案案案案案案案案案案案案案案案案案案我们我们我们我们们们我们我们我我们我们我们我们我我们我们们我我们我们我们我们我们我们我们我我我们我们我们我们我们们我们我我们我我们们们们们我们们我我我我我们们们我们我我们们们我们们我们我我们我我我我们我我我们们们们我们我们们们我我们我们们们们我们们们们们我们们们我们们我们我们我们们我我们我我我我我我我我我我们我的服的服的服的服的服的的的服的服的的的服的服的服的服的服的服的的服的的服的的服的的的的服的服的服的服的的服的服的服的服服的服的服的服的服的服的服的服服的服的的服的服的服的服的服的服的服的服的服的服的服的服服服服服服的服的服的服的服的的服的的的服的服服服服服服服的服的的的的的的的的的服的服的服服服的服服的的的的的服的服服服服的服的的的的的服服的服服服的的的的的服服的服的的的的服服的的的服服服服服的服的的的的的服服的服服服服的服服的服服服的的的服的的的服服服的的

解解决方案方案案案案等等业等业等业等业等等业等业业等等等业务务。务。务。务。务务务务务。务。务。务务务务。务。务。。

答谢，董董董董，事事事事事会事会事事事事事事会事会会会事将将将在在将在将在将在将将将将常常常常年常常常年常年常年常年常常年常常年年常年年常常常常常常年常常年常常常年常年常年常年年年年常常年常常股股股股股东股东股东东东东东东东东东东东东东东东股东东东股股东东股东股东东东东东东东东东东东东东东东东东东股东东股东东东东东东东东东东东东股东股股东东东东东东东东东大会会会会会会会会会会会大会会会会会会大会会会大会大会大会会大会大会会会会大会会会会会会会会会会会会会会大会大会会会会会大会大大大会会会会会大会会会会会会会会会会会会会会会会会会上，上，上上上上，上上上上，上上上上上上上，上上上，上上上上上上，上上，上上上上上上上，上，上上上上上上上，上上上，上上上，上，上上上上上上上上上上提议提议提议提议提议提议提议提议议议议提议议议议提议议提议议提议议议议提议议提议提议提议提提议议提提提提提议议提议提议议提提提提提提议议议议议提议议议提提议提提提提提提提议提议议提议议议提提提提议议议提议议议议议议议议议提议提议议提议议议议议议提议提议议议议议议议提议议议议提提议提提议提议议议提提议提议提提议议议提提议议分发分发分发分分分分发分发分发分发分发分分发分分分分发分发分发发分发分发分分分发分发发分发发分发分发发分发分分分分分发分发发分分发发发分分分分发分分分分分分分分发发发分分发分发分分分发分发分发分发分分发分发发发分发分分发发发分发发分分发分分分发发发发发分发分分分发发发分分发分分分分分分分分分分分分分分分分发分分分分发分发分发分发分分分分分分分分发分发分分发分发分发分发分分分分分发分发分发分分分分分分发分发分发发发发发发发发分分分分分发发发发

王王先生生生于2200112年22月2月月月月月月2 282828888888日日辞日辞日辞日日辞去去董去董去董去去董事事会事会事事事会事会会事事事事事事的的职的职的职的职职职的职职的职的职职职的的务务务务。务。务。务。务。务务务务务。务。务我我我我我我我我我我我我

谢谢您们对对对对我们我们们们们们的不不不的不的懈懈懈支懈支懈支懈懈懈支懈支持持持持和持和持和持和持和持持和持坚坚坚坚强坚强强坚强坚强坚强强强强坚强坚坚坚信心信信心信心心心心信心心心心心心心心信心心。。。。。。。

SAR1212003 • Ecowise Holdings • 01/02/2013 17:28 • 06_ecoWise_Chairman(Chinese).indd SAR1212003 • Ecowise Holdings • 01/02/2013 17:28 • 06_ecoWise_Chairman(Chinese).indd

主席致辭



主主主主席席席席席致致致致致致辭辭辭辭辭

ecoecoWisWisee HoHoldildingsngsgs LiLiL mitmitededed

annannannualualal rerereporporpo t 2t 2012012 000999

SAR1212003 • Ecowise Holdings • 01/02/2013 17:28 • 06_ecoWise_Chairman(Chinese).indd SAR1212003 • Ecowise Holdings • 01/02/2013 17:28 • 06_ecoWise_Chairman(Chinese).indd

5,136

FY2011

257

74,449

Financial Results ($’000) FY 2012 FY 2011 FY2010 FY2009 FY2008

Revenue 90,521 79,842 37,585 31,235 23,000

Gross Profi t 17,710 13,635 6,904 5,570 9,770

Profi t/(loss) before income tax 3,429 2,273 (1,479) (40) 6,898

Profi t/(loss) after income tax 1,718 932 (1,978) (589) 5,831

Non-controlling Interest 352 370 (630) (668) (50)

Profi t/(loss) attributable to Shareholders 1,366 562 (1,348) 79 5,881

Ratios FY 2012 FY 2011 FY2010 FY2009 FY2008

Current ratio (times) 1.77 1.81 1.81 4.81 3.17

Return on Equity, Attributable to Owners of the Company (%)* 2.94 1.41 (3.60) 0.27 32.58

Return on assets (%)* 1.44 0.65 (1.95) 0.19 21.23

Basic earnings per share (cents) 0.15 0.07 (0.16) 0.01 1.68

Net assets value per share (cents) 5.74 4.77 4.79 4.46 3.67

Statement of Financial Position ($’000) FY 2012 FY 2011 FY2010 FY2009 FY2008

Property, plant and equipment 29,162 37,743 33,111 14,089 7,022

Cash and cash equivalents 18,527 12,785 14,956 26,629 13,216

Current assets 50,267 43,822 47,043 34,732 23,976

Total assets 102,966 87,132 86,394 51,779 32,847

Current liabilities 28,405 24,152 25,951 7,215 7,575

Total liabilities 42,484 34,312 33,205 11,998 8,744

Working capital 21,862 19,670 21,092 27,517 16,401

Equity, Attributable to Owners of the Company 53,009 40,020 39,831 35,042 23,340

* In calculating return on Equity, Attributable to Owners of the Parent and return on assets, the average basis has been used.

9,907284

80,330

FY2012

REVENUE BY SEGMENTS ($’000)

2012 2011

Resource Recovery Segment 80,330 74,449

Renewable Energy Segment 9,907 5,136

Integrated Environmental 284 257

Management Solutions Segment

Total 90,521 79,842


annual report 2012

FINANCIAL HIGHLIGHTS

SAR1212003 • Ecowise Holdings • 31/01/2013 21:15 • 07_ecoWise_Highlights.indd SAR1212003 • Ecowise Holdings • 31/01/2013 21:15 • 07_ecoWise_Highlights.indd

REVENUE ($’000)

2012 90,521

2011

2010

2009

2008

79,842

37,585

31,235

23,000

EQUITY, ATTRIBUTABLE TO OWNERS OF THE COMPANY ($’000)

2012 53,009

2011

2010

2009

2008

40,020

39,831

35,042

23,340

NET ASSETS VALUE PER SHARE (cents)

2012 5.74

2011

2010

2009

2008

4.77

4.79

4.46

3.67

PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS ($’000)

2012 1,366

2011

2010

2009

2008

562

(1,348)

79

5,881

RETURN ON EQUITY, ATTRIBUTABLE TO OWNERS OF THE COMPANY (%)

2012

2011

2010

2009

2008

2.94

1.41

(3.60)

0.27

32.58

BASIC EARNINGS PER SHARE (cents)

2012

2011

2010

2009

2008

0.15

0.07

(0.16)

0.01

1.68



FINANCIAL HIGHLIGHTS

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The Group’s revenue increased by

13.4% from S$79.84 million in the

fi nancial year ended 31 October 2011

(“FY2011”) to S$90.52 million in the

fi nancial year ended 31 October 2012

(“FY2012”). The increase was mainly

due to improved performance in the

Resource Recovery and Renewable

Energy segments.

From top to bottom

• Tyre retread business

• NParks’ Gardens by the Bay

powered by green energy

• Copper slag processing plant


annual report 2012

FINANCIAL AND OPERATIONS REVIEW

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Revenue from the Renewable Energy segment increased by 92.9%

or S$4.77 million to S$9.91 million in FY2012. The increase was

mainly attributed to the commencement of operation of the Group’s

newly completed biomass co-generation power plant at Gardens by

the Bay (Marina South, Singapore) since the first quarter of FY2012.

Revenue of this segment included finance lease income attributed

to the biomass co-generation power plant at Gardens by the Bay

being classified as a finance lease.

Revenue from the Resource Recovery segment increased by 7.9%

or S$5.88 million to S$80.33 million in FY2012. The increase

was mainly due to higher sales of the Group’s rubber compound

manufacturing and tyre retreading businesses under Sunrich

Integrated Sdn. Bhd. and its subsidiaries (“SRIT Group”).

The Group’s overall gross profit margin increased from 17.1%

in FY2011 to 19.6% in FY2012 mainly due to higher gross profit

margin recorded by the Renewable Energy segment due to the

commencement of operation by the biomass co-generation power

plant at Gardens by the Bay since the first quarter of FY2012.

The Group’s rubber compound manufacturing and tyre retreading

businesses under the Resource Recovery segment also recorded

slightly better margin in FY2012.

Dividend income of S$0.41 million in FY2012 was received from

the Group’s 15% investment in the electrical and electronic waste

management company in China, Chongqing Zhongtian Electronic

Waste Management Co., Ltd.

Other credits decreased by 29.4% from S$0.78 million in FY2011

to S$0.55 million in FY2012 mainly due to absence of reversal of

impairment loss on property, plant and equipment recorded in

FY2011 partially offset by higher foreign exchange gains in FY2012.

Marketing and Distribution expenses increased by 16.4% from

S$3.29 million in FY2011 to S$3.83 million in FY2012. The increase

was mainly due to higher manpower costs and marketing expenses

incurred by the Group’s rubber compound manufacturing and tyre

retreading businesses in line with increased business activities.

Administrative expenses increased by 23%

from S$7.49 million in FY2011 to S$9.22

million in FY2012. The increase was mainly

due to higher staff costs (increased by

S$0.93 million), rental expenses, upkeep

and utilities as well as legal and consultancy

fees incurred. The Group incurred higher

legal fees mainly due to the acquisition

of land and leasehold property under

the Resource Recovery segment whilst

higher consultancy fees were incurred in

connection with business development in

venture capital and cleantech sectors.

Finance costs increased by 19.1% from S$0.87

million in FY2011 to S$1.04 million in FY2012

due to an increase in the Group’s loans and

borrowings. The increase was mainly attributed

to finance costs incurred on the Group’s

investment in the biomass co-generation

power plant at Gardens by the Bay (increased

by S$0.18 million), acquisition of land and

leasehold property by SRIT Group (increased

by S$0.05 million) and working capital of SRIT

Group (increased by S$0.03 million).

Depreciation of property, plant and

equipment increased by 12.2% to S$3.15

million in FY2012 mainly due to a general

increase in the Group’s depreciable

assets in FY2012 when compared to the

corresponding period in FY2011.

Other charges of S$0.85 million in FY2012

were mainly attributed to equity settled

share-based expenses of S$0.53 million,

impairment loss on property, plant and

equipment of S$0.19 million and other

financial assets of S$0.07 million.





Share of loss from associates increased

by S$0.06 million to S$0.35 million in

FY2012 mainly due to the lower quantity of

used copper slag processed by Geocycle

Singapore Pte. Ltd. and losses incurred

by the Group’s newly acquired associate,

China-UK Low Carbon Enterprise Co., Ltd.

Profit attributable to owners of the Company

improved from S$0.56 million in FY2011 to

S$1.37 million in FY2012. Basic earnings per

share increased from 0.067 cents in FY2011

to 0.153 cents in FY2012.

STATEMENT OF FINANCIAL POSITION

The Group’s non-current assets as at 31

October 2012 of S$52.70 million were

S$9.39 million higher as compared to 31

October 2011.

The Group’s investment in biomass co-

generation power plant at Gardens by the

Bay was reclassified as a finance lease

in FY2012. As at 31 October 2012, non-

current and current finance lease receivables

in connection with the Group’s investment

in the biomass co-generation power plant

amounted to S$13.73 million and S$0.84

million respectively.

The Group’s property, plant and equipment

decreased by S$8.58 million to S$29.16

million as at 31 October 2012 mainly

attributed to the reclassification of capital

expenditure totaled S$14.60 million to

finance lease receivables for the Group’s

investment in biomass co-generation

power plant at Gardens by the Bay. During

the year, the Group incurred total capital

expenditure of S$9.89 million including the Group’s investment in

biomass co-generation power plant at Gardens by the Bay, partially

offset by depreciation charges of S$3.15 million, disposal of assets

of S$0.20 million, impairment loss on assets of S$0.19 million and

foreign exchange translation adjustment of S$0.33 million.

The Group’s investment in associates increased by S$3.65 million to

S$5.00 million as at 31 October 2012 mainly due to the acquisition

of 20% equity interests in China-UK Low Carbon Enterprise Co.,

Ltd. in FY2012. Other financial assets were S$0.76 million higher

attributed to the increase in equity contribution by the Group

for its 15% investment in the electrical and electronic waste

management company in China, Chongqing Zhongtian Electronic

Waste Management Co., Ltd.

The Group’s current assets increased by S$6.45 million to S$50.27

million as at 31 October 2012 mainly attributed to increase in

inventories, finance lease receivables, cash and cash equivalents.

Inventories were S$0.30 million higher mainly due to increase in

semi-finished goods and raw materials of SRIT Group for its rubber

compound manufacturing and tyre retreading businesses.

The Group’s non-current liabilities increased by S$3.92 million mainly

due to loan drawdown to finance the construction of the biomass

co-generation power plant at the Gardens by the Bay and acquisition

of land and leasehold property by SRIT Group; partially offset by loan

repayment and reclassification of a portion of loan and borrowings

to current liabilities.

The Group’s current liabilities increased by S$4.25 million to S$28.41

million as at 31 October 2012 mainly attributable to an increase in

the Group’s loans and borrowings, trade and other payables and

income tax payable. Trade and other payables increased by S$1.35

million mainly attributed to the capital expenditure incurred for the

Group’s biomass co-generation power plant at the Gardens by the

Bay and general increase in business activities.

The Group’s total loans and borrowings increased by S$6.56 million

to S$25.84 million as at 31 October 2012. The increase was mainly


annual report 2012


due to loans drawdown to finance the construction of the biomass

co-generation power plant at the Gardens by the Bay (increased

by S$4.05 million), acquisition of land and leasehold property by

SRIT Group (increased by S$2.12 million) and hire purchase loans

(increased by S$0.37 million).

STATEMENT OF CASH FLOWS

The Group’s cash and cash equivalents increased by S$6.17 million

in FY2012 mainly due to net cash flows generated from operating

activities of S$6.58 million and from financing activities of S$11.92

million partially offset by cash flows used in investing activities of

S$12.33 million.

Cash flows from financing activities comprised net cash proceeds

of S$5.20 million from ordinary shares issuance, receipt of S$1.28

million capital contribution from non-controlling interests of a

subsidiary and proceeds of S$6.14 million from borrowings net of

repayments and finance costs. Dividends of S$0.49 million were

paid to non-controlling interests.

Cash flows used in investing activities comprised approximately

S$3.99 million for acquisition of 20% equity interest in an associate,

China-UK Low Carbon Enterprise Co., Ltd. and S$0.84 million for

additional equity contribution for its 15% investment Chongqing

Zhongtian Electronic Waste Management Co., Ltd., partially offset

by dividend income of S$0.41 million received from the latter. Net

cash flows used for the Group’s capital expenditure amounted to

S$8.13 million in FY 2012.

STATUS OF THE USE OF PROCEEDS RAISED

FROM OFFERINGS

Gross proceeds from the shares issued during FY2012 amounted

to S$5.25 million. Net proceeds from the shares issued were

approximately S$5.23 million after deducting expenses. Net cash

proceeds of S$3.99 million have been applied by the Group to

finance its acquisition of 20% equity interest in China-UK Low

Carbon Enterprise Co., Ltd. and the remaining proceeds of S$1.24

million have been deployed as general working capital for the Group.

The Group has applied the remaining

proceeds of S$1.24 million as general

working capital mainly to finance the

operating costs for the Group’s subsidiaries

including the newly completed biomass

co-generation power plant during its initial

operating months in FY2012 and to finance

part of the Group’s administrative expenses

including staff costs, rental expenses,

upkeep and utilities as well as legal and

consultancy fees.





From top to bottom

• Dryer front view

• Copper slag processing plant

The Group’s rubber compound

manufacturing and tyre retreading

business are undertaken by

Sunrich Integrated Sdn. Bhd. and

its subsidiaries (“SRIT Group”)

based in Malaysia.

BUSINESS OVERVIEWRESOURCE RECOVERY SEGMENTThe Group has over thirty years of

experience in the Resource Recovery

business which handles a diverse

variety of industrial materials with

operations in Singapore, Malaysia and

China.


annual report 2012

BUSINESS OVERVIEW

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RUBBER COMPOUND MANUFACTURING AND TYRE

RETREADING BUSINESS

The Group’s rubber compound manufacturing and tyre retreading

business are undertaken by Sunrich Integrated Sdn. Bhd. and its

subsidiaries (“SRIT Group”) based in Malaysia. In March 2012,

Sunrich Integrated Sdn. Bhd. became a wholly owned subsidiary

of the Group following the acquisition of the balance 30% equity

interest in the company. The principal activities of SRIT Group are

as follows:

• Manufacturing of rubber compounds and custom made

compounds such as precured tread liners, cushion gum,

perforated sidewall veneer and masterbatch for tyre retreading,

industrial belting and other industries;

• Retreading of tyres and total tyre management services. The

Group manufactures retread tyres under brand names such

as Suntex, Winner, Autoways and Trakar through its marketing

arms; and

• Manufacturing of specialty rubber compounds for the IT,

automotive and other industries.

The integrated business model of SRIT Group allows operational

efficiency and cost savings to be achieved within its business

units. SRIT Group serves a variety of customers and continuously

engages on research and development program to evaluate the

manufacturing of economically viable ‘low carbon’ and environmental

friendly products for the rubber and tyre industries.

The Group will be extending its total tyre management business

into Chongqing, China, through a 65% held joint venture company

established in December 2012, Chongqing eco-CTIG Rubber

Technology Co., Ltd. under a joint venture agreement entered

with Chongqing Municipal Transport Development and Investment

(Group) Co., Ltd which is Chongqing municipal’s largest state owned

transport logistic group.

USED COPPER SLAG RELATED BUSINESS

The Group is a pioneer in repurposing the recycled copper slag

as an approved sand alternative used in the construction industry.

Geocycle Singapore Pte Ltd (“Geocycle

Singapore”), the Group’s joint venture with

Holcim Singapore, owns and operates

Singapore’s largest waste copper slag

processing plant with Holcim Singapore

providing exclusive offtake of all its products.

The main use of washed copper slag after

proper processing by Geocycle Singapore

is in ready-mix concrete for the production

of eco-concreteTM.

ELECTRICAL AND ELECTRONIC

WASTE MANAGEMENT

Under a joint venture with Zhongtian

Environment Protection Industrial Group

Co., Ltd, the Group holds a 15% stake

in Chongqing Zhongtian Electronic Waste

Management Co., Ltd which has the exclusive

license to operate special business concession

as the sole operator to carry out the business

of collection, recovery, processing and

disposal of electrical and electronic waste in

Chongqing, China for a period of 12 years

with effect from October 2010.

ORGANIC MATERIALS AND RESOURCES

The Group’s 15,000 m2 composting facility

at Sarimbun Recycling Park is capable

of processing more than 24,000 metric

tonnes of horticultural waste each year.

Using the Group’s proprietary in-vessel

technology, ecoWise Active Composting

Technology, ecoACTTM, the Group’s wholly

owned subsidiary ecoWise Resources Pte

Ltd produces compost that can be used as

organic fertilizer and also soil conditioner

that improves nutrients level, soil aeration

and nutrient retention capabilities and

prevents soil erosion.



BUSINESS OVERVIEW


The Group’s compost has been awarded

the Singapore Green Label by the Singapore

Environmental Council for “100% Natural

Organic Fertilizer”.

RENEWABLE ENERGY SEGMENT

The Group currently has three biomass co-

generation projects in Singapore and China:

SUNGEI KADUT BIOMASS

CO-GENERATION POWER PLANT,

SINGAPORE

The Group’s first biomass co-generation

power plant at Sungei Kadut has a capacity

to generate 1MW electricity and 15 tonnes

superheated steam per hour. Using

horticultural and wood waste as biomass

feedstock, the biomass co-generation

power plant is the first Singapore-based

Clean Development Mechanism (“CDM”)

project registered with the United Nations

Framework Convention on Climate Change.

The main applications of the waste steam

generated from the biomass co-generation

power plant are for ISO tank heating

services and drying of waste products such

as wet spent grains into raw materials for

the production of animal feed.

GARDENS BY THE BAY (MARINA

SOUTH) BIOMASS CO-GENERATION

POWER PLANT, SINGAPORE

The Group’s newly completed biomass

co-generation power plant situated at

the Gardens by the Bay (Marina South)

had commenced supplying energy to the

National Parks Board (“NParks”) for its iconic

project at the Gardens by the Bay since

November 2011. Using horticultural and wood waste as biomass

feedstock, the biomass co-generation power plant is designed with

a capacity to generate 0.9 MW of electricity and 5.4 MW of heat

exclusively for the Gardens by the Bay. The biomass co-generation

power plant is constructed under a Design, Build and Operate

agreement entered with NParks and will be operated by the Group

for a period of fifteen years after commissioning.

WUHAN 25MW BIOMASS CO-GENERATION POWER PLANT

PROJECT, CHINA

The Group’s 49% held subsidiary Wuhan ecoWise Energy Co., Ltd

had in 2010 closed the operation of its 25MW coal-fired power plant

in Wuhan, China pending for the commencement of the process

to convert it into a 25MW biomass co-generation power plant.

The Group is currently discussing with its joint venture partner in

China, Wuhan Jiabao Sugar Co., Ltd on the process of conversion.

The commencement of plant conversion shall be subject to further

capital injection by joint venture partners for purposes of securing

bank financing for the conversion.

CLEANTECH INCUBATION AND

VENTURE CAPITAL MANAGEMENT

In February 2012, the Group acquired a 20% stake in China UK Low

Carbon Enterprise Co., Ltd which is the technology incubation and

venture capital arm of China Energy Conservation and Environmental

Protection Group, the largest China state owned enterprise focusing

in the energy conservation and environmental protection sector.

INTEGRATED ENVIRONMENTAL MANAGEMENT

SOLUTIONS SEGMENT

ecoWise Technologists and Engineers Pte Ltd (“eWTE”) provides

consultancy services in the field of environmental solutions. eWTE

focuses on the development of ‘low carbon’ and eco-friendly

projects, technology incubation, technology commercialization and

low carbon solutions with an aim to provide holistic scope of

environmental solutions to customers while exploring partnership

opportunities in energy and waste management businesses.


annual report 2012

BUSINESS OVERVIEW


CORPORATE SOCIAL RESPONSIBILITY (CSR) STATEMENT

ecoWise Holdings Limited, its subsidiaries and associate companies

(the “Group”) view the principles of Corporate Social Responsibility

(“CSR”) as an integral part of our business. As a resource recovery,

renewable energy and environmental solutions provider, the Group

seeks to be a sustainable and profitable organization besides

improving the environment and society with like-minded partners.

ECOWORLD . BETTER WORLD

The Group endeavors to contribute to a sustainable and better

world by focusing on the environment and the well-being of

the community that it serves. CSR is fundamental to ecoWise

Holdings Limited’s culture and policies and reflects the corporate

social and environmental sustainability commitments we make

to our stakeholders such as shareholders, employees and to our

communities.

These commitments have enabled us to perform with high standards

of good governance and ethics; provide products and services that

meet the rising expectation of clients and business partners; attract

quality employees; provide meaningful support in our communities;

and improve the social and environmental impacts of our business

practices.

OUR CSR POLICIES AND COMMITMENTS

• Ensure sound corporate governance and compliance practices,

and increase transparency on reporting of those activities;

• Maintain ethical policies and providing training to ensure that all

employees perform with high standards of integrity and trust;

• Develop and enhance products and services that provide high

degree of socially and environmentally responsible options for

our stakeholders;

• Implement and/or expand environmentally sustainable

management and business practices; and

• Build relationships with stakeholders whose CSR goals and

activities are aligned with our expectations.

The Group endeavors to

contribute to a sustainable

and better world by focusing

on the environment and the

well-being of the community

that it serves.



CORPORATE SOCIAL RESPONSIBILITY

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BOARD OF DIRECTORS

From left to right

Mr Low Kian Beng, Mr Lee Thiam Seng, Mr Ng Cher Yan,

Mr Ang Mong Seng, Mr Ong Teck Ghee

MrMrMrMrMMrMr


annual report 2012

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BOARD OF DIRECTORS

LEE THIAM SENGExecutive Chairman and Chief Executive Officer

Mr Lee joined the Board in November 2002 and was appointed as Executive Chairman in April 2004 and Chief Executive Officer in March 2007.

Mr Lee has more than 20 years’ experience in the fields of waste management and environmental engineering solutions in the region. Mr Lee has been with the Group for more than 11 years and has extensive knowledge and experience in the industries in which the Group operates.

Mr Lee is responsible for setting strategic directions, formulating corporate strategies and overall management of the Group’s businesses in the resource recovery, use of sustainable resources and renewable energy segments. He has been instrumental in expanding and diversifying the Group’s businesses relating to waste recycling and biomass energy sectors.

Mr Lee holds a Diploma (Merit) in Electrical Engineering from Singapore Polytechnic. He is a Chartered Financial Consultant, accredited by the American College, USA.

LOW KIAN BENG Executive Director and Deputy CEO

Mr Low was appointed as an Executive Director on 1 January 2011 and Deputy Chief Executive Officer on 1 June 2010. Mr Low is responsible for the overall management of the operations of the Group’s companies, corporate planning as well as charting and implementation of the business strategies of the Group. He is also the Managing Director for the Group’s rubber compound manufacturing and tyre retreading business units under Sunrich Integrated Sdn. Bhd. and its subsidiaries since July 2010.

Mr Low has 22 years of senior management experience, covering various functions and countries in Asia, in the environmental, tyre and rubber, petrochemicals, energy and engineering services industries in the region. Prior to joining the Group, he was the Managing Director and CEO of Envipure Pte Ltd from 2006 till 2010 and SP Corporation Ltd., a SGX listed company, from 2000 to 2006.

He holds a Master of Business Administration Degree (with distinction) from Oklahoma City University, Texas (USA) and a B.SC. Degree (with honors) in Engineering from Imperial College of Science and Technology, London (UK).

NG CHER YANLead Independent Director

Mr Ng was appointed as an Independent Director in November 2004 and is the Chairman of the Audit Committee, a member of the Remuneration Committee, Nominating Committee and the Lead Independent Director.

He is a practicing public accountant and a fellow member of the Institute of Certified Public Accountants of Singapore and a member of the Institute of Chartered Accountants in Australia. Mr Ng holds a Bachelor degree in Accountancy from the National University of Singapore.

Mr Ng is also an Independent Director of Samko Timber Ltd., Kian Ann Engineering Ltd., Vicplas International Ltd., and Mermaid Maritime Public Company Ltd.

ANG MONG SENGIndependent Director

Mr Ang was appointed as an Independent Director in February 2004. He is the Chairman of the Remuneration Committee and a member of the Audit Committee and Nominating Committee respectively.

Mr Ang was a former Member of Parliament for Hong Kah GRC (Bukit Gombak) and Ex-Chairman of Hong Kah Town Council . Mr Ang has more than 35 years experience in estate management and holds a Bachelor of Arts from Nanyang University.

Mr Ang is currently serving as an Independent Director on the Boards of United Fiber System Ltd., Chip Eng Seng Corporation Ltd., AnnAik Ltd., Hoe Leong Corporation Ltd., and Gaylin Holdings Ltd.

ONG TECK GHEEIndependent Director

Mr Ong was appointed as an Independent Director in March 2003 and is the managing partner of Ong & Lau, a firm of advocates and solicitors. His areas of practice include corporate, commercial, property and banking law. He is the Chairman of the Nominating Committee and a member of the Audit Committee and Remuneration Committee respectively.

Mr Ong holds a degree in law from the National University of Singapore in 1984 and is an advocate and solicitor of the Supreme Court of Singapore, a Commissioner for Oaths and a Notary Public.

Mr Ong is also an Independent Director of Mary Chia Holdings Ltd.



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MANAGEMENT TEAM

LILIAN TAN YIN YENChief Financial Offi cer

ALOYSIUS CHAN BUANG HENGFinancial Controller

Ms Tan joined the Group in December 2011 and she is responsible for the overall

fi nancial management of the Group including accounting, treasury, debt and capital

market activities. She supports the CEO and the Deputy CEO in the Group’s strategic

business plans and investment initiatives. Ms Tan has more than 28 years fi nance

experience covering marine, construction, manufacturing and trading industries.

Ms Tan holds a Bachelor of Accountancy Degree from the National University of

Singapore. She is a fellow member of the Institute of Certifi ed Public Accountants of

Singapore.

Mr Chan joined the Group in January 2005 and is responsible for the administration,

accounting and fi nancial management of the Group. He has more than 30 years

experience covering auditing, accounting and fi nancial management in the

commercial, manufacturing sectors and public accounting. Mr Chan is a fellow

member of the Association of Chartered Certifi ed Accountants and a Certifi ed Public

Accountant with the Institute of Certifi ed Public Accountants of Singapore. He holds

a Master of Business Administration from the University of Hull (UK).

FONG SEOK PHOYDirector, ecoWise International Pte. Ltd.Head of Commercial, Sunrich Integrated Sdn. Bhd. and subsidiaries

Mr Fong joined the Group in July 2010 and is responsible for international marketing and procurement of products and services that are synergetic to the Group’s companies. He is also the Executive Director and Head of Commercial for the Group’s rubber compound manufacturing and tyre retreading business. Over his more than 39 years of career he has acquired vast experience in marketing and trading of rubber, chemicals and energy related products. His coverage includes the existing re-purposed environmental products, rubber compounding and tyre retreading business. He has also involved in the development of environmental related and clean technology projects in Malaysia and the region. He holds an honours degree in Chemical and Materials Engineering from University of Auckland, New Zealand under the Colombo Plan scholarship.


annual report 2012

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MANAGEMENT TEAM

DANIEL LIAO HONG HAIGeneral Manager, China Region

Mr Liao joined the Group in July 2009 and is responsible for the Group’s business

development in the China region. He has more than 20 years’ experience covering

project planning and management, international trade and co-operation, international

project fi nancing in China. He has extensive experience in the public relationship

dealing with the local governmental authorities in China. He holds a diploma in

Economics and Trade from the Sichuan International Studies University. He is a

state senator of Chongqing Municipality City, the Director of Federation of Returned

Overseas Chinese, Vice President of Chongqing Oversea Chinese Chamber of

Commerce, the member and senior investment consultant of Chongqing Association

of Enterprises with Foreign Investment and Chongqing Investment Promotion

Association. He is also the Vice Chairman of Youth Committee of China Federation of

Returned Overseas Chinese and Vice president of Singapore Chongqing Chamber

of Commerce.

CHIN HON MENGHead of Manufacturing, Sunrich Integrated Sdn. Bhd. and subsidiaries

Mr Chin is the Head of Manufacturing for the Group’s rubber compound manufacturing and tyre retreading business. He is responsible for the manufacturing operations of the Group’s subsidiaries under Sunrich Integrated Sdn. Bhd. based in Malaysia. He has more than 21 years’ experience in the manufacturing industry. Mr Chin joined Sun Rubber Industry Sdn. Bhd. as the General Manager of Manufacturing in 2001 and has been in-charge of manufacturing, quality management and research & development activities. He holds a Master of Business Administration from Universiti Malaya; a Bachelor of Science majoring in Chemistry from Universiti Sains Malaysia and a Diploma in Rubber Technology from the Plastics and Rubber Institute of Malaysia.

KENNY HUANG JIANFANGSenior Manager – Group Operations

Mr Huang joined the Group in July 2007 and is responsible for the operations of

the biomass co-generation plant at Sungei Kadut, used copper slag and compost

activities undertaken by the Group’s subsidiaries including Bee Joo Industries Pte Ltd

and Bee Joo Environmental Pte Ltd. He began his career in the waste management

business in 2003 on the application of recycle used copper slag for construction

aggregate (“Eco-Concrete”) and has more than 11 years’ experience in waste

management activities. He holds a Diploma of Business Administration and Marketing

from Murdoch University.



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CORPORATE INFORMATION


annual report 2012

BOARD OF DIRECTORS

Lee Thiam Seng (Executive Chairman)

Low Kian Beng (Executive Director)

Ng Cher Yan (Lead Independent Director)

Ang Mong Seng (Independent Director)

Ong Teck Ghee (Independent Director)

AUDIT COMMITTEE

Ng Cher Yan (Chairman)

Ang Mong Seng

Ong Teck Ghee

NOMINATING COMMITTEE

Ong Teck Ghee (Chairman)

Ang Mong Seng

Ng Cher Yan

REMUNERATION COMMITTEE

Ang Mong Seng (Chairman)

Ng Cher Yan

Ong Teck Ghee

COMPANY SECRETARY

Zhong Xiaowen

AUDITORS

RSM Chio Lim LLP

Public Accountants and

Certified Public Accountants

8 Wilkie Road

#03-08 Wilkie Edge

Singapore 228095

Partner-in-charge: Chan Weng Keen

Effective from reporting year ended 31 October 2012

SHARE REGISTRAR

Boardroom Corporate & Advisory Services Pte Ltd

50 Raffles Place

#32-01 Singapore Land Tower

Singapore 048623

PRINCIPAL BANKERS

DBS Bank Ltd

Malayan Banking Berhad

United Overseas Bank Limited

REGISTER OFFICE/CONTACT DETAILS

Co. Registration No.: 200209835C

17 Kallang Junction #04-03

Singapore 339274

Tel: 65 65362489

Fax: 65 65367672

Website: www.ecowise.com.sg

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25ecoWise Holdings Limited

annual report 2012

CORPORATE GOVERNANCE

The Board of Directors (the “Board”) is committed to maintaining a high standard of corporate governance within

ecoWise Holdings Limited and its subsidiaries (the “Group”). The Board recognises the importance of practicing

good corporate governance as a fundamental part of its responsibilities to protect and enhance shareholders’ value

and the financial performance of the Group.

This Report describes the Group’s corporate governance practices with specific reference to the Code of Corporate

Governance 2005 (the “Code”). Where there are deviations from the Code, appropriate explanations are provided.

BOARD MATTERS

Principle 1: Board’s Conduct of its Affairs

Every company should be headed by an effective board to lead and control the company. The Board is

collectively responsible for the success of the company. The Board works with Management to achieve

this and the Management remains accountable to the Board.

The principal functions of the Board are:

• Setting the strategic directions and overseeing the businesses and affairs of the Group;

• Reviewing and approving corporate plans, annual budgets, investment and divestment proposals, major

funding proposals and financial plans of the Group;

• Monitoring management performance towards achieving set organisational goals;

• Reviewing and evaluating the adequacy and integrity of the Group’s internal controls, risk management and

financial reporting systems;

• Ensuring the Group’s compliance with laws, regulations, policies, guidelines and internal code of conduct;

• Reviewing and approving interested person transactions and material transactions requiring announcement

under the listing rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”);

• Ensuring accurate and timely reporting in communication with shareholders; and

• Considering sustainability issues in the formulation of Group’s strategies.

The Board’s approval is also required for capital expenditure of amount exceeding certain threshold limit in

accordance with internal approval authority guidelines.

The Board has delegated specific responsibilities to three committees namely, the Audit Committee (“AC”),

the Nominating Committee (“NC”) and the Remuneration Committee (“RC”) to assist in the execution of its

responsibilities. Each committee has its own written Terms of Reference, which clearly sets out the objectives,

duties, powers, responsibilities as well as qualifications for committee membership.

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annual report 2012


The annual schedule of all Board and Board committees meetings and Annual General Meeting is planned ahead at

the beginning of each financial year, in consultation with the Directors. The Board meets at least once every quarter.

It also holds ad-hoc meetings as and when circumstances require. Telephonic attendance at Board meetings is

allowed under the Company’s Articles of Association. The Board and Board committees may also make decisions

by way of circulating resolutions.

The attendance of the Directors at Board and Board committee meetings during the financial year under review is

tabulated below:

Attendance at Meetings

Board Board Committees

Audit Nominating Remuneration

Scheduled Ad-hoc Scheduled Scheduled Scheduled Ad-hoc

No. of meetings held 4 1 4 1 1 1

Board Members No. of Meetings Attended

Lee Thiam Seng 4 1 4* 1** 1* –

Low Kian Beng 4 1 4* 1* 1* 1*

Ng Cher Yan 4 1 4 –** 1 1

Ang Mong Seng 4 1 4 1 1 1

Ong Teck Ghee 3 1 3 1 1 –

* by invitation

** Mr Ng Cher Yan was appointed as member of NC in place of Mr Lee Thiam Seng on 28 December 2012.

There was no new director appointment during FY2012. New director appointed to the Board will receive appropriate

induction briefings and orientations by the executive directors on the business activities and governance practices

of the Group.

The Directors participate in seminars and discussions to keep themselves updated on the latest changes and

developments concerning the Group and keep abreast of the latest regulatory changes. The Directors are also

provided with updates on the relevant new laws, regulations and changing commercial risks in the Group’s operating

environment through emails and regular meetings. They also have the opportunity to visit the Group’s operational

facilities and meet with management to obtain a better understanding of the business operations. In the case of

new investment proposal, where appropriate the Independent Non-Executive Directors are also invited for site visit

to the investee company so as to facilitate their evaluation of the proposal.



annual report 2012


Principle 2: Board Composition and Guidance

There should be a strong and independent element on the Board, which is able to exercise objective

judgement on corporate affairs independently, in particular, from Management. No individual or small

group of individuals should be allowed to dominate the Board’s decision making.

During the year under review, Mr Sunny Ong Keng Hua retired as Executive Director of the Board on 28 February

2012. Currently, the Board comprises two Executive Directors and three Independent Non-Executive Directors.

The Independent Non-Executive Directors making up more than half of the Board, hence there is strong and

independent element on the Board.

Name of Directors Board of Directors

Audit

Committee

Nominating

Committee

Remuneration

Committee

Lee Thiam Seng Executive Director (Chairman)

Low Kian Beng Executive Director

Ng Cher Yan Independent Director Chairman Member Member

Ang Mong Seng Independent Director Member Member Chairman

Ong Teck Ghee Independent Director Member Chairman Member

The criterion of independence is based on the guidelines provided in the Code. The Board considers an

“independent” director as one who has no relationship with the Company, its related companies or its officers that

could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent business

judgement of the conduct of the Group’s affairs.

The independence of each Independent Non-Executive Director is assessed at least annually by the NC. Particular

scrutiny is applied in assessing the continued independence of Directors having served with a long tenure, with

attention to ensuring their allegiance remains clearly aligned with shareholders’ interest.

The Board’s composition, size and balance are reviewed annually by the NC to ensure that the Board has the core

competencies for effective functioning and informed decision-making. Board renewal and tenure are considered

together and weighed for relevant benefit in the foreseeable circumstances which are appropriate for the size and

nature of activities of the Group’s businesses.

The Directors consider the Board’s present size and composition appropriate, taking into account the nature and

scope of the Group’s operations, the wide spectrum of skills and knowledge of the Directors.

The Board comprises of high caliber individuals who are suitably qualified with the necessary mix of expertise,

experience and knowledge. The profiles of the Directors are set out in this Annual Report.



annual report 2012


The Independent Non-Executive Directors participate actively in the Board meetings. With their professional

expertise and competency in their respective fields in the legal, finance, accounting, commercial and government

sectors, collectively the Independent Non-Executive Directors provide constructive advice and guidance for effective

discharge by the Board of its principal functions over the Group’s strategies, businesses and other affairs.

Where necessary, the Independent Non-Executive Directors meet and discuss on the Group’s affairs without the

presence of Management.

Principle 3: Chairman and Chief Executive Officer

There should be a clear division of responsibilities at the top of the company – the working of the Board

and the executive responsibility of the company’s business – which will ensure a balance of power and

authority, such that no one individual represents a considerable concentration of power.

Mr Lee Thiam Seng is currently the Chairman of the Board and the CEO of the Company. Given the scope and

nature of business activities of the Group, the Board is of the view that with Mr Lee’s extensive knowledge and

experience in the waste management, resource recycling and biomass energy business in the region, it is more

effective for him to guide the Board on the discussions on issues and challenges facing the Group and in view of the

strong element of independence of the Board, it is not pertinent to separate the functions of the Chairman and CEO.

As Chairman, Mr Lee is responsible for ensuring that Board meetings are held as scheduled and when necessary,

set agendas and ensuring adequate and timely information flow between the Board, Management and shareholders.

Mr Lee facilitates constructive discussions amongst the Directors and Management at Board meetings on pertinent

issues and affairs of the Group.

As CEO, Mr Lee is responsible for the Group’s business strategy and direction setting, the implementation of

Group’s corporate plans, policies and executive decision-makings.

In addition, as recommended by the Code, the Board has appointed Independent Non-Executive Director, Mr Ng

Cher Yan, as the Lead Independent Director. Shareholders of the Company with serious concerns that could have

a material impact on the Group, for which contact through the normal channels of the Chairman, CEO, Deputy

CEO or the CFO have failed to resolve or is inappropriate, shall be able to contact Mr Ng Cher Yan or the Audit

Committee members of the Group.

Principle 4: Board Membership

There should be a formal and transparent process for appointment of new directors to the Board.

The NC comprises Mr Ong Teck Ghee as the Chairman, Mr Ang Mong Seng and Mr Ng Cher Yan as members,

whom are all Independent Non-Executive Directors. Mr Ng Cher Yan was appointed on 28 December 2012 in place

of Mr Lee Thiam Seng. The NC shall meet at least once a year.



annual report 2012


The Board, through the delegation of its authorities to the NC, has used its best efforts to ensure that Directors

appointed to the Board possess the particular expertise, experience and knowledge in terms of business, finance

and management skills relevant to the Group’s businesses and each Director, through his contributions, brings to

the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.

The NC also has at its disposal, professional search firms, personal contacts and recommendations in its search

and nomination process for the right candidates for appointment of new Directors.

The NC is responsible for:

• Re-nomination of Directors having regard to the Director’s contribution and performance;

• Determining on an annual basis whether or not a Director is independent;

• Deciding whether a Director, who has multiple board representation, is able to and has adequately carried

out his duties as Director; and

• Making recommendations to the Board on all Board appointments’ and re-appointments’ matters including

the composition of the Board and the balance between Executive and Non-Executive Directors’ appointments.

The NC reviews annually the independence declarations made by the Company’s Independent Non-Executive

Directors based on the criterion of independence under the guidelines provided in the Code. For the year under

review, the NC has ascertained the independence status of all three Independent Non-Executive Directors of the

Company. The Board has also reviewed the number of years served by each Independent Non-Executive Director

(Mr Ong Teck Ghee has served for 9 years period, both Mr Ang Mong Seng and Mr Ng Cher Yan have served for 8

years period). Having considered their in-depth knowledge of the Group’s business operations, past and continuous

contributions at Board level in terms of impartial and constructive advice, the Board is of the view that there is no

material conflict between their tenure and their ability to discharge their role as Independent Non-Executive Directors.

All Directors shall submit themselves for re-nomination and re-election at regular intervals and at least every 3

years. Article 107 of the Company’s Articles and Association provides that one third of the Board or the number

nearest to one third is to retire by rotation at every Annual General Meeting (“AGM”). In addition, Article 117 of the

Company’s Articles of Association also provides that newly appointed directors are required to submit themselves

for re-nomination and re-election at the next AGM of the Company.

At the forthcoming AGM, Mr Lee Thiam Seng and Mr Ng Cher Yan will be retiring by rotation pursuant to Article

107 of the Company’s Articles and Association. Both of them, being eligible for re-election have offered themselves

for re-election.



annual report 2012


The dates of first appointment and last re-election of each Director, together with their current and past preceding

three years’ directorship in other listed companies are set out below:

Name of

Directors

Date of

Appointment

Date of

Last Re-election

Directorship in Listed Companies

Present Past Preceding 3 years

Lee Thiam Seng

(Chairman and CEO)

12 November 2002 28 February 2011 ecoWise Holdings Ltd Nil

Low Kian Beng

(Executive Director

and Deputy CEO)

1 January 2011 28 February 2011 ecoWise Holdings Ltd Nil

Ng Cher Yan

(Lead Independent

Director)

19 November 2004 26 February 2010 ecoWise Holdings Ltd

Kian Ann Engineering Ltd

Samko Timber Ltd

Vicplas International Ltd

Mermaid Maritime Public Co Ltd

Serial System Ltd.

Kinergy Ltd

Wanxiang International Ltd

Sinopipe Holdings Ltd

Ang Mong Seng

(Independent Director)

16 February 2004 28 February 2012 ecoWise Holdings Ltd

United Fiber System Limited

Chip Eng Seng Corporation Ltd

Annaik Limited

Hoe Leong Corporation Ltd

Gaylin Holdings Limited

Vicplas International Ltd

Ong Teck Ghee

(Independent Director)

3 March 2003 28 February 2011 ecoWise Holdings Ltd

Mary Chia Holdings Limited

Nil

Principle 5: Board Performance

There should be a formal assessment of the effectiveness of the Board as a whole and the contribution

by each director to the effectiveness of the Board.

The NC is responsible for deciding how the Board’s performance may be evaluated against proposed objective

performance criteria for the Board’s approval and implementing corporate governance measures to achieve good

stewardship of the Group.

The NC assesses and discusses the Board performance as a whole every year, and ascertains key areas for

improvement and requisite for follow-up actions. Board assessment checklists are disseminated to each member

of the NC for their evaluation of the Board’s performance. The Board assessment checklist includes the evaluation

factors such as Board structure concerning Board size and strong presence of independent element , the conduct

of meetings as to whether decisions are made after due consideration, corporate strategy and planning, risk



annual report 2012


management and internal control, recruitment, financial reporting and communication with shareholders. The

assessment also includes measuring and monitoring performance as to whether objectives and targets set for the

year are met, return on equity and performance of share price. The results of evaluation were presented to the Board.

In assessing the performance of the Directors, the NC evaluates each Director based on the following review

parameters, which among others, include:

• Attendance at board/committee meetings;

• Participation at meetings;

• Involvement in management;

• Availability for consultation and advice, when required

• Independence of the directors; and

• Appropriate skill, experience and expertise.

The above selected criteria will be changed if it is deemed necessary and approved by the Board.

As an integral element of the process of appointing new Directors, the NC may act on the performance evaluation

result and where appropriate, proposes new members to be appointed to the Board or seeks resignation of

Directors.

Principle 6: Access to Information

In order to fulfill their responsibilities, Board members should be provided with complete, adequate and

timely information prior to board meetings and on an on-going basis.

Directors have unrestricted access to the Group’s records and information, all Board and Board committees’

minutes, and shall receive management accounts so as to enable them to carry out their duties. Directors may also

liaise with senior executives and other employees to seek additional information if required.

Management acknowledges the importance of the complete, adequate and timely supply of information to Board

members. Agenda, board papers and related materials, background or explanatory information relating to matters

to be discussed at the Board meeting and Board committee meetings are distributed to all Directors in advance

to allow sufficient time for Directors to prepare for meetings and facilitate the effective discussion during meetings.

Any additional materials or information requested by the Directors is promptly furnished.



annual report 2012


Management’s proposals submitting to the Board for approval are accompanied with detailed background and

explanatory information such as facts, resources requirement, projected outcomes, financial impact, risk analysis,

disclosure requirements under the Listing Rules of the SGX-ST, conclusions and recommendations. Any material

variance between the projections and the actual results against the budgets will be explained to the Board at the

relevant time at the Board or Board committee meetings.

Should Directors, whether as a group or individually, require professional advice, the Group, upon direction by the

Board, shall appoint a professional advisor selected by the group or the individual, approved by the Chairman, to

render the advice. The cost of such service shall be borne by the Group.

The Company Secretary attends all Board meetings and is responsible to the Board for advising on the

implementation of the Group’s compliance requirements pursuant to the relevant statutes and regulations. All

Directors have separate and independent access to the advice and services of the Company Secretary. The

appointment and removal of the Company Secretary is subject to approval of the Board.

REMUNERATION MATTERS

Principle 7: Procedures for Developing Remuneration Policies

There should be a formal and transparent procedure for developing policy on executive remuneration

and for fixing remuneration packages of individual directors. No director should be involved in deciding

his own remuneration.

The RC comprises three Independent Non-Executive Directors, namely, Mr Ang Mong Seng, Mr Ng Cher Yan and

Mr Ong Teck Ghee. Mr Ang Mong Seng is the Chairman of the RC.

The responsibilities of the RC include:

• Recommend to the Board all matters relating to remuneration, including but not limited to Directors’ fees,

salaries, allowances, bonuses, performance shares and benefits-in-kind, of the Directors and key executives;

• Review and recommend to the Board the terms of the service agreements of the Directors;

• Determine the appropriateness of the remuneration of the Directors; and

• Administer the ecoWise Performance Share Plan.



annual report 2012


The Executive Directors’ remuneration packages are based on service contracts. These include a profit sharing

scheme that is performance related to align their interest with those of the shareholders. Independent Non-Executive

Directors are paid yearly directors’ fees of an agreed amount and these fees are subject to shareholders’ approval

at AGM.

No directors participate in decisions on their own remuneration.

When required, the RC seeks professional advice externally pertaining to remuneration of Directors and Key

Executives.

The RC administers the ecoWise Performance Share Plan (“PSP”) adopted at the Extraordinary General Meeting

held on 23 March 2007. During the financial year ended 31 October 2012, the RC has reviewed and approved the

grant of 5,426,875 performance shares under the PSP of which 350,000 performance shares grant was cancelled

during the year. Details of the performance shares grant are set out on page 46 and 47 of this Annual Report.

Principle 8: Level and Mix of Remuneration

The level of remuneration should be appropriate to attract, retain and motivate the directors needed

to run the company successfully but companies should avoid paying more than is necessary for this

purpose. A significant proportion of executive directors’ remuneration should be structured so as to link

rewards to corporate and individual performance.

The remuneration policy of the Group is to provide compensation packages at market rates, which reward successful

performance and attract, retain and motivate Directors and employees.

The Executive Directors do not receive directors’ fees. The remuneration for the Executive Directors and the

key executives comprises of fixed component and variable component. Fixed component is in the form of fixed

monthly salary whereas variable component is linked to the performance of the Group and individual. The current

service agreements entered with Mr Lee Thiam Seng and Mr Low Kian Beng are on two-year and three-year basis

respectively.

The Independent Non-Executive Directors receive directors’ fees, in accordance with their contributions, taking into

account factors such as responsibilities, effort and time spent for serving the Board and Board Committees. For

the financial year ended 31 October 2012, directors’ fees of S$125,000 are recommended by the Board and are

subject to the approval of shareholders at the Company’s AGM to be held on 28 February 2013.

In setting remuneration package, the RC ensures the Directors are adequately but not excessively remunerated as

compared to the industry and in comparable companies.



annual report 2012


Principle 9: Disclosure on Remuneration

Each company should provide clear disclosure of remuneration policy, level and mix of remuneration,

and the procedure for setting remuneration in the company’s annual report. It should provide disclosure

in relation to its remuneration policies to enable investors to understand the link between remuneration

paid to directors and key executives, and performance.

Details of the remuneration of Executive Directors of the Company and top six executives of the Group for the

financial year ended 31 October 2012 are set out below:

Base/Fixed

Salary

%

Variable or

Performance

Related

Income/Bonus

%

Benefits in

kind

%

ecoWise

PSP(1)

%

Total

%

Executive Directors

$500,000 to $749,999

Lee Thiam Seng 68.9 29.1 2.0 – 100.0

Low Kian Beng 61.4 37.0 1.6 – 100.0

Below $250,000

Sunny Ong Keng Hua

(retired on 28 February 2012) 43.8 56.2 – – 100.0

Key Executives

$250,000 to $349,999

Lilian Tan Yin Yen 75.8 24.2 – – 100.0

Below $250,000

Aloysius Chan Buang Heng 87.7 12.3 – – 100.0

Fong Seok Phoy 72.6 27.4 – – 100.0

Daniel Liao Hong Hai 89.6 10.4 – – 100.0

Chin Hon Meng 64.1 35.9 – – 100.0

Kenny Huang JianFang 88.7 11.3 – – 100.0

(1) Refer to performance shares vested under the PSP during the financial year.



annual report 2012


The directors’ fees for Independent Non-Executive Directors for the financial year ended 31 October 2012 are set

out below:

Directors’ Fees

(S$)

Independent Directors

Ng Cher Yan 45,000

Ang Mong Seng 40,000

Ong Teck Ghee 40,000

125,000

There is no employee who is related to a Director for the financial year ended 31 October 2012.

During the financial year ended 31 October 2012, a total of 5,426,875 performance shares were granted under the

PSP of which 350,000 performance shares grant was cancelled. Details are set out below:

Participant

Balance

as at

1.11.2011

Performance

Shares granted

during financial

year 2012

Shares lapsed/

cancelled

during financial

year

Performance

Shares vested

during financial

year

Balance

as at

31.10.2012

Directors

Lee Thiam Seng – 1,096,875 – – 1,096,875

Low Kian Beng – 1,500,000 – – 1,500,000

Ng Cher Yan – 130,000 – – 130,000

Ang Mong Seng – 100,000 – – 100,000

Ong Teck Ghee – 100,000 100,000

– 2,926,875 – – 2,926,875

Other Staff – 2,500,000 (350,000) – 2,150,000

– 5,426,875 (350,000) – 5,076,875



annual report 2012


ACCOUNTABILITY AND AUDIT

Principle 10: Accountability and audit

The Board should present a balanced and understandable assessment of the company’s performance,

position and prospects.

The Board provides shareholders with financial statements for the first three quarters and full financial year within

the timeframe in line with Rule 705 of the Listing Manual of SGX-ST. In presenting the annual and quarterly financial

statements to shareholders, the Board aims to provide shareholders with a balanced and clear assessment of the

Group’s performance, financial position and prospects.

Management provides the Board with detailed management accounts, operation review and related explanation

and any other information as the Board may require together with the financial statements on a quarterly basis.

The Audit Committee reviews the financial statements and reports to the Board for approval. The Board authorises

the release of the results to the SGX-ST and the public via SGXNET. The quarterly and full year financial results are

also timely uploaded in the Company’s website at www.ecowise.com.sg.

The Board also provides negative assurance confirmation to shareholders for the quarterly financial statements in

accordance with Rule 705(5) of the Listing Manual of SGX-ST.

Principle 11: Audit Committee

The Board should establish an Audit Committee with written terms of reference which clearly set out

its authority and duties.

The AC is chaired by Mr Ng Cher Yan and comprises Mr Ang Mong Seng and Mr Ong Teck Ghee as members, all

of whom are Independent Non-Executive Directors. The AC has specific terms of reference and has met 4 times

during the financial year under review.

The AC assists the Board in maintaining a high standard of corporate governance, particularly by providing an

independent review of the effectiveness of the financial reporting system, management of financial, operational and

compliance risks, and monitoring of the internal control systems.

In performing its functions, the AC:

• Reviews the audit plans of the external auditors and ensures the adequacy of the Group’s system of

accounting controls and the co-operation given by Management to the external auditors;

• Review the internal audit plans of the Group and follow up actions for effective internal control functions of

the Group;



annual report 2012


• Reviews the financial statements of the Group before their submission to the Board, and before their

announcements;

• Reviews legal and regulatory matters that may have a material impact on the financial statements, related

compliance policies and programs and any reports received from regulators;

• Reviews the cost effectiveness and the independence and objectivity of the external auditors;

• Reviews the nature and extent of non-audit services provided by the external auditors;

• Reviews the assistance given by the Group’s officer to the auditors;

• Nominates external auditors for re-appointment;

• Reviews the Group’s compliance with such functions and duties as may be required under the relevant

statutes or the Listing Manual, and by such amendments made thereto from time to time;

• Reviews interested person transactions in accordance with the requirements of the Listing Rules of the

SGX-ST; and

• Reviews the adequacy of the Group’s internal controls.

Mr Ng Cher Yan is a practicing public accountant, who has years of extensive experience in accounting, auditing,

financial management and corporate governance. The Board is of the view that Mr Ng is well qualified to chair

the AC to collectively discharge its responsibilities. The Board is also of the view that the members of the AC are

appropriately qualified to discharge their responsibilities and they have the requisite accounting or related financial

management expertise or experience, as the Board exercises in its business judgment.

The AC has power to conduct or authorize investigations into any matters within the AC’s scope of responsibility.

For the year ended 31 October 2012, the aggregate amount of fees paid or payable to external auditors of the

Group amounted to S$428,240, including audit fees of S$319,552 and non-audit services fees of S$108,688.

The AC has reviewed all non-audit services provided by the external auditors and is satisfied that these non-audit

services would not affect the independence and objectivity of the external auditors.

The Group has complied with Rule 712 and Rule 715 of the Listing Manual of SGX-ST in the appointment of its

auditors. The AC recommends to the Board the re-appointment of Messrs RSM Chio Lim LLP as the external

auditors of the Group at the forthcoming AGM.

The Group had implemented the whistle blowing policy. The policy aims to provide avenue for employees to raise

concerns about misconducts in the Group and at the same time assure them that they will be protected from

victimization for whistle blowing in good faith. Cases that are significant are reviewed by the AC for adequacy and

independence of investigation actions and resolutions. Contact details of the AC have been made available to all

employees.



annual report 2012


Principle 12: Internal Controls

The Board should ensure that the Management maintains a sound system of internal controls to

safeguard the shareholder’s investment and the company’s assets.

The Board acknowledges that it is responsible for maintaining a sound system of internal control framework, but

recognises that no cost effective internal control system will preclude all errors and irregularities. Internal control

can provide only reasonable and not absolute assurance against material misstatement, losses, human errors,

fraud or other irregularities.

During the financial year, the Group’s external and internal auditors had conducted annual review of the effectiveness

of the Group’s internal controls. Any non-compliance and recommendation for improvement were reported to the AC.

Based on external and internal auditors’ report and various controls implemented by Management, the AC is satisfied

that the internal controls in place meet the needs of the Group in its current business environment.

Risk Management

As the Group does not have a risk management committee, the Board, AC and Management assume the

responsibility of the risk management function. Management reviews regularly the Group’s business and operational

activities to identify areas of significant risks as well as appropriate measures to control and mitigate these risks.

Management reviews all significant policies and procedures and highlights all significant matters to the Board and

the AC.

During the year under review, in addition to the work carried out by external auditors and internal auditors, the Board

also engaged an international accounting firm to document the framework that enables Management to address

the financial, operational and compliance risks of the key operating units. The process involved the identification

of major risks through workshops conducted for the Group’s rubber compound manufacturing and tyre retreading

business units, and the renewable energy and environmental management business units, whereby the business

units’ key risks of financial, operational and compliance nature, as well as the countermeasures in place or required

to mitigate these risks were summarized for review by the Board. The documentation provided an overview of

the Group’s key risks, how they are managed, the key personnel responsible for each identified risk type and the

various assurance mechanisms in place.



annual report 2012


Based on the internal controls established and maintained by the Group, work performed by the internal and external

auditors and the documentation on the Group’s key risks referred to above, reviews performed by Management,

AC and the Board, the AC and the Board are of the opinion that the Group’s internal controls, addressing financial,

operational and compliance risks, were adequate as at 31 October 2012. This is in turn supported by assurance

from the CEO, Deputy CEO and the CFO that:

(a) the financial records of the Company have been properly maintained and the financial statements give a true

and fair view of the company’s operations and finances and are in accordance with the relevant accounting

standards; and

(b) they have evaluated the effectiveness of the Company’s internal controls and have discussed with the

Company’s external and internal auditors of their reporting points and note that there have been no significant

deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability

to record, process, summarise or report financial data.

Principle 13: Internal Audit

The company should establish an internal audit function that is independent of the activities it audits.

The Board recognizes its responsibilities for maintaining a system of internal control processes to safeguard

shareholders’ investments and the Group’s assets and business.

Currently, the Chairman of the AC enquires and relies on reports from Management, internal and external auditors on

any material non-compliance and internal control weaknesses. The AC oversees and monitors the implementation of

any improvements thereto. The AC has reviewed with the internal and external auditors their findings of the existence

and adequacy of material accounting controls procedures as part of its audit for the financial year under review.

The Group has established an internal audit function which is independent of the activities it audits. The Group

engages external independent audit firms to perform the internal audit function and they report directly to the AC

which assists the Board in monitoring and managing risks and internal controls of the Group. The internal audit

function primarily focusing on whether the current system of internal control provides reasonable assurance on:

• compliance with applicable laws, regulations, policy and procedures;

• reliability and integrity of information; and

• safeguarding of assets.

On an annual basis, the AC reviews the internal audit program of the Group so as to align it to the changing needs

and risk profile of the Group’s activities.



annual report 2012


The findings of the internal auditors are discussed in details at the AC meeting including any internal control

weaknesses, non-compliance of policy and procedures as well as follow-up actions required to strengthen the

internal control system of the Group. A copy of the internal auditors’ findings is disseminated to the relevant business

units or departments for implementing follow-up actions and the monitoring of the improvement progress.

For the internal audit works carried out in FY2012, the engaging internal auditors have adopted assessment

methodology in accordance with the Internal Control Integrated Framework, published by the Committee of

Sponsoring Organisations of the Treadway Commission (“COSO”).

COMMUNICATION WITH SHAREHOLDERS

Principle 14: Companies should engage in regular, effective and fair communication with shareholders

The Group believes that prompt disclosure of pertinent information and high standard of disclosure are the keys to

raise the level of corporate governance. The Board believes in regular and timely communication with shareholders.

In line with continuous disclosure obligations of the Group pursuant to the Corporate Disclosure Policy of the SGX-

ST, the Group’s policy is that all shareholders should be equally and timely informed of all major developments

that impact the Group.

Information is communicated to shareholders on a timely basis and made through:

• Annual reports. The Board makes every effort to ensure that the annual report includes all relevant information

about the Group, including future developments, disclosures required by the Companies Act, and Financial

Reporting Standards;

• SGXNET and news releases;

• Press releases on major developments of the Group;

• Disclosures to the SGX-ST; and

• The Company’s website at www.ecowise.com.sg on which shareholders can access information relating to

the Group.

The Group has also engaged an external investor relations firm to enhance its communication with shareholders

and investment community at large.



annual report 2012


Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow

shareholders the opportunity to communicate their views on various matters affecting the company.

The AGM is the principal forum for dialogue with shareholders. The Group encourages shareholders to attend the

AGM to ensure a high level of accountability and to be kept informed of the Group’s strategies and goals.

All shareholders receive the annual report of the Company including notice of AGM by post within the mandatory

period. Notice of AGM is announced through SGXNET and published in the Business Times within the same period.

All registered shareholders are invited to participate and given the right to vote on resolutions at general meetings.

Every matter requiring shareholders’ approval is proposed as a separate resolution. Each item of special business

included in the notice of the meeting is accompanied, where appropriate, by an explanation for the proposed

resolution. Proxy form is sent with notice of general meeting to all shareholders. A shareholder may appoint up to two

proxies to attend and vote on his behalf at the meeting through proxy forms deposited 48 hours before the meeting.

The results of all shareholders’ meetings are disclosed through SGXNET and the Company’s website.

Internal Code on Dealings in Securities

The Group has put in place an internal code on dealings with securities (“Internal Code”). This Internal Code has

been issued to Directors and officers setting up the implications on insider trading.

The Internal Code prohibits the dealing in securities of the Company by Directors and officers while in possession

of price-sensitive information, and during the period commencing two weeks before the announcement of quarterly

results and one month before the announcement of full year results, and ending on the date of the announcement.

Further, Directors and officers are advised not to deal in the Company’s securities on short-term considerations.

Directors are required to notify the Company their securities dealings within two business days of such dealings

and the Company shall disseminate the notifications received to the market via SGXNET within one business day

of receiving such notifications.

In addition, Directors and officers are cautioned to observe insider trading laws at all times.

Interested Party Transactions

The Group has established procedures to ensure that all transactions with interested persons are reported in a

timely manner to the AC for review and the transactions are carried out on normal commercial terms and will not

be prejudicial to the interests of the Group and its minority shareholders.


CONTENTS

43 DIRECTORS’ REPORT

50 STATEMENT BY DIRECTORS

51

INDEPENDENT AUDITORS’

REPORT

53

CONSOLIDATED STATEMENT

OF COMPREHENSIVE INCOME

54

STATEMENTS OF FINANCIAL

POSITION

56

STATEMENTS OF CHANGES IN

EQUITY

59

CONSOLIDATED STATEMENT

OF CASH FLOWS

61

NOTES TO THE FINANCIAL

STATEMENTS

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annual report 2012

DIRECTORS’ REPORT

The directors of the Company are pleased to present their report together with the audited financial statements of

the Group and of the Company for the reporting year ended 31 October 2012.

1. DIRECTORS

The directors of the Company in office at the date of this report are as follows:

Executive Directors

Lee Thiam Seng

Low Kian Beng

Independent Directors

Ng Cher Yan

Ang Mong Seng

Ong Teck Ghee

2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE

ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the reporting year nor at any time during the reporting year did there subsist any

arrangement whose object is to enable the directors of the Company to acquire benefits by means of the

acquisition of shares or debentures in the Company or any other body corporate, except as disclosed in

Paragraph 5 in this report.

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annual report 2012

DIRECTORS’ REPORT

3. DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies

Act, Chapter 50 (the “Act”), particulars of interests of directors in office at the end of the reporting year in

shares and debentures in the Company and in related corporations (other than wholly-owned subsidiaries)

are as follows:

Direct Interests

Name of directors and corporations

in which interests are held

At

beginning of the

reporting year

At

end of the

reporting year

At

21 November

2012

The Company – ecoWise Holdings Limited Number of ordinary shares with no par value

Lee Thiam Seng 32,960,950 32,960,950 32,960,960

Low Kian Beng 3,000,000 4,500,000 5,500,000

Ng Cher Yan 1,166,500 1,166,500 1,166,500

Ang Mong Seng 796,905 796,950 796,950

Ong Teck Ghee 871,950 871,950 871,950

Number of ecoWise performance shares

Lee Thiam Seng – 1,096,875 1,096,875

Low Kian Beng – 1,500,000 1,500,000

Ng Cher Yan – 130,000 130,000

Ang Mong Seng – 100,000 100,000

Ong Teck Ghee – 100,000 100,000

Deemed Interests

Name of directors and corporations

in which interests are held

At

beginning of the

reporting year

At

end of the

reporting year

At

21 November

2012

The Company – ecoWise Holdings Limited Number of ordinary shares with no par value

Lee Thiam Seng 293,229,375 218,229,375 218,229,375

By virtue of Section 7 of the Act, Mr Lee Thiam Seng is deemed to have an interest in all related corporations

of the Company.



annual report 2012

DIRECTORS’ REPORT

4. CONTRACTUAL BENEFITS OF DIRECTORS

Except for salaries, bonuses and fees and those benefits that are disclosed in this report and Note 3 to the

financial statements, since the beginning of the reporting year, no director of the Company has received or

become entitled to receive a benefit, by reason of a contract made by the Company or a related corporation

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

financial interest.

5. SHARE OPTIONS AND SHARE PLAN

Share Option

During the reporting year, no option to take up unissued shares of the Company or any subsidiary was

granted and there were no shares of the Company or any subsidiary issued by virtue of the exercise of an

option to take up unissued shares.

At the end of the reporting year, there were no unissued shares of the Company or any subsidiary under

option.

ecoWise Performance Share Plan

The ecoWise Performance Share Plan (the “Share Plan”) was approved by the members of the Company at

an extraordinary general meeting held on 23 March 2007. The Share Plan provides for the grant of ordinary

shares of the Company, their equivalent cash value or combinations thereof, to selected employees of the

Company and its subsidiaries, including the directors of the Company, and other selected participants. Under

the Share Plan, the maximum number of ordinary shares to be awarded to eligible participants shall not

exceed 15% of the issued ordinary shares of the Company on the date preceding the grant of the award.

The Share Plan is administered by the Remuneration Committee comprising three independent directors,

Ang Mong Seng, Ng Cher Yan and Ong Teck Ghee. Ordinary shares are awarded when the Remuneration

Committee is satisfied that the prescribed performance target(s) have been achieved and the vesting period

(if any) has expired. The vesting periods may be extended beyond the performance achievement periods as

set out by the Remuneration Committee.



annual report 2012

DIRECTORS’ REPORT

5. SHARE OPTIONS AND SHARE PLAN (CONTINUED)

ecoWise Performance Share Plan (Continued)

The lapsing of the award is provided for upon the occurrence of certain events, which includes:

(a) the misconduct of an eligible participant;

(b) the termination of the employment of an eligible participant;

(c) the bankruptcy of an eligible participant;

(d) the retirement, ill health, injury, disability or death of an eligible participant; and/or

(e) a take-over, amalgamation, winding-up or restructuring of the Company.

The Share Plan shall continue in force at the discretion of the Remuneration Committee, subject to a

maximum period of 10 years commencing on 23 March 2007. The Share Plan may continue beyond the

above stipulated period with the approval of members of the Company by ordinary resolution in a general

meeting and of any relevant authorities which may then be required.

The Company may deliver ordinary shares pursuant to awards granted under the Share Plan by way of:

(a) Issuance of new ordinary shares;

(b) Delivery of existing ordinary shares purchased from the market or ordinary shares held in treasury;

and/or

(c) Cash in lieu of ordinary shares, based on the aggregate market value of such ordinary shares.

During the reporting year, the number of performance shares granted under the Share Plan are as follows:


Date of grant

At

1 November

2011 Granted Awarded

Cancelled/

lapsed

At

31 October

2012

21 March 2012 – 5,426,875 – (350,000) 5,076,875

Performance shares awarded at the vesting date are dependent on the level of achievement against the

pre-set performance conditions and targets.



annual report 2012

DIRECTORS’ REPORT

5. SHARE OPTIONS AND SHARE PLAN (CONTINUED)

ecoWise Performance Share Plan (Continued)

From the commencement date of the Share Plan to 31 October 2012, 43,232,225(1) performance shares

have been granted, of which 38,155,350(1) performance shares have been vested. As at 31 October 2012,

5,076,875(1) performance shares have not vested under the Share Plan.

Details of performance shares granted under the Share Plan to directors and participants who received 5%

or more of total performance shares available under the Share Plan are as follows:


Performance

shares granted

during reporting

year ended

31 October

2012

Aggregate

performance

shares

granted since

commencement

of Share Plan to

31 October

2012(1)

Aggregate

performance

shares

awarded since

commencement

of Share Plan to

31 October

2012(1)

Aggregate

performance

shares

outstanding at

31 October

2012

Executive directors

Lee Thiam Seng 1,096,875 11,767,825 10,670,950 1,096,875

Low Kian Beng 1,500,000 1,500,000 – 1,500,000

Independent directors

Ng Cher Yan 130,000 1,124,250 994,250 130,000

Ang Mong Seng 100,000 782,200 682,200 100,000

Ong Teck Ghee 100,000 782,200 682,200 100,000

Participants who received 5% or

more of total performance shares

available under the Share Plan

Sunny Ong Keng Hua(2) – 7,845,250 7,845,250 –

(1) After adjustments for rights cum warrants issue on 1 November 2007 and rights issue on 26 September 2008

and net of cancellations.

(2) Mr Sunny Ong Keng Hua retired as director on 28 February 2012.



annual report 2012

DIRECTORS’ REPORT

6. AUDIT COMMITTEE

The members of the Audit Committee during the reporting year and at the date of this report are as follows:

Ng Cher Yan (Chairman of Audit Committee and Lead Independent Director)

Ang Mong Seng (Independent Director)

Ong Teck Ghee (Independent Director)

The Audit Committee performs the functions specified by Section 201B (5) of the Act and the Listing Manual

of the Singapore Securities Exchange Trading Limited (“SGX-ST”).

Functions of the Audit Committee include the following:

(a) Review with the independent external auditors their audit plan;

(b) Review with the independent external auditors their evaluation of the Company’s internal accounting

controls that are relevant to their audit, their report on the financial statements and the assistance

given by the Company’s officers to them;

(c) Review with the internal auditors their scope and results of the internal audit procedures;

(d) Review the financial statements of the Group and the Company prior to their submission to the Board

of Directors of the Company for adoption; and

(e) Review the interested person transactions (as defined in Chapter 9 of the Listing Manual of the

SGX-ST).

Other functions performed by the Audit Committee are disclosed in the report on Corporate Governance

included in the Annual Report of the Company. It also includes a description of how auditors’ objectivity

and independence is safeguarded, where there are non-audit services provided by the independent external

auditors.

The Audit Committee has recommended to the Board of Directors that RSM Chio Lim LLP be nominated

for re-appointment as independent external auditors at the next annual general meeting of the Company.



annual report 2012

DIRECTORS’ REPORT

7. INDEPENDENT EXTERNAL AUDITORS

The independent external auditors, RSM Chio Lim LLP, have expressed their willingness to accept

re-appointment.

8. SUBSEQUENT DEVELOPMENTS

There are no significant developments subsequent to the release of the Group’s and the Company’s

preliminary financial statements as announced on 28 December 2012, which would materially affect the

Group’s and the Company’s operating and financial performance as of the date of this report.

On Behalf of the Board of Directors

........................................................

Lee Thiam Seng

Director

........................................................

Low Kian Beng

Director

11 January 2013



annual report 2012

STATEMENT BY DIRECTORS

In the opinion of the directors,

(a) the accompanying consolidated statement of comprehensive income, statements of financial position,

statements of changes in equity, consolidated statement of cash flows, and notes thereto are drawn up so

as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 October 2012

and of the results and cash flows of the Group and changes in equity of the Company and of the Group for

the reporting year then ended in accordance with the provisions of the Singapore Companies Act, Chapter

50 and Singapore Financial Reporting Standards; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay

its debts as and when they fall due.

On Behalf of the Board of Directors

........................................................

Lee Thiam Seng

Director

........................................................

Low Kian Beng

Director

11 January 2013

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annual report 2012

INDEPENDENT AUDITORS’ REPORTto the Members of ECOWISE HOLDINGS LIMITED (Registration No: 200209835C)

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of ecoWise Holdings Limited (the “Company”) and its

subsidiaries (collectively, the “Group”), which comprise the consolidated statement of financial position of the Group

and the statement of financial position of the Company as at 31 October 2012, and the consolidated statement of

comprehensive income, statement of changes in equity and statement of cash flows of the Group, and statement

of changes in equity of the Company for the reporting year then ended, and a summary of significant accounting

policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of the financial statements that give a true and fair view in

accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial

Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to

provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and

transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and

fair statement of comprehensive income and statements of financial position and to maintain accountability of assets.

AUDITORS’ RESPONSIBILITY

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

audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free from material misstatement.

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

statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,

the auditors consider internal control relevant to the entity’s preparation of financial statements that give a true and

fair view 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.

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annual report 2012

INDEPENDENT AUDITORS’ REPORTto the Members of ECOWISE HOLDINGS LIMITED (Registration No: 200209835C)

OPINION

In our opinion, the consolidated financial statements of the Group and the statement of financial position and

statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act

and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group

and of the Company as at 31 October 2012 and of the results, changes in equity and cash flows of the Group and

the changes in equity of the Company for the reporting year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those

subsidiaries incorporated in Singapore of which we are the independent auditors have been properly kept in

accordance with the provisions of the Act.

RSM Chio Lim LLP

Public Accountants and

Certified Public Accountants

Singapore

11 January 2013

Partner-in-charge: Chan Weng Keen

Effective from reporting year ended 31 October 2012

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annual report 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEYEAR ENDED 31 OCTOBER 2012

Notes 2012 2011

$’000 $’000

Revenue 5 90,521 79,842

Cost of Sales (72,811) (66,207)

Gross Profit 17,710 13,635

Other Items of Income

Finance Income 6 39 4

Dividend Income 7 411 1

Other Credits 8 551 781

Other Items of Expenses

Marketing and Distribution Expenses (3,831) (3,292)

Administrative Expenses (9,218) (7,493)

Finance Costs 9 (1,042) (875)

Other Charges 8 (846) (201)

Share of Results from Associates, Net of Tax (345) (287)

Profit Before Income Tax 3,429 2,273

Income Tax Expense 12 (1,711) (1,341)

Profit for the Year 1,718 932

Other Comprehensive Income/(Loss):

Exchange Differences on Translating Foreign Operations, Net of Tax (588) (614)

Effective Portion of Changes in Fair Value of Cash Flow Hedges 19 –

Other Comprehensive Loss for the Year, Net of Tax (569) (614)

Total Comprehensive Income for the Year 1,149 318

Profit for the Year Attributable to:

Owners of the Company 1,366 562

Non-Controlling Interests 352 370

1,718 932

Total Comprehensive Income for the Year Attributable to:

Owners of the Company 840 215

Non-Controlling Interests 309 103

1,149 318

Earnings Per Share

Basic Earnings Per Share (Cents) 13 0.15 0.07

Diluted Earnings Per Share (Cents) 13 0.15 0.07

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

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annual report 2012

STATEMENTS OF FINANCIAL POSITIONAS AT 31 OCTOBER 2012

Group Company

Notes 2012 2011 2012 2011

$’000 $’000 $’000 $’000

ASSETS

Non-Current Assets

Property, Plant and Equipment 14 29,162 37,743 507 501

Intangible Assets 15 1,980 2,119 – –

Land Use Rights 16 1,045 1,074 – –

Investments in Subsidiaries 17 – – 25,945 18,380

Investments in Associates 18 5,001 1,352 – –

Other Financial Assets 19 1,180 422 – –

Trade and Other Receivables 21 600 600 – –

Finance Lease Receivables 22 13,731 – – –

Total Non-Current Assets 52,699 43,310 26,452 18,881

Current Assets

Inventories 20 10,064 9,764 – –

Trade and Other Receivables 21 20,167 20,292 22,742 21,256

Finance Lease Receivables 22 840 – – –

Derivative Financial Instruments 31 35 20 – –

Other Assets 23 634 961 85 86

Cash and Cash Equivalents 24 18,527 12,785 3,356 3,805

Total Current Assets 50,267 43,822 26,183 25,147

Total Assets 102,966 87,132 52,635 44,028


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annual report 2012

STATEMENTS OF FINANCIAL POSITIONAS AT 31 OCTOBER 2012

Group Company

Notes 2012 2011 2012 2011

$’000 $’000 $’000 $’000

EQUITY AND LIABILITIES

Equity

Share Capital 25 45,927 37,050 45,927 37,050

Retained Earnings 5,383 4,017 3,438 2,220

Other Reserves 26 1,699 (1,047) 528 –

Equity Attributable to Owners

of the Company 53,009 40,020 49,893 39,270

Non-Controlling Interests 7,473 12,800 – –

Total Equity 60,482 52,820 49,893 39,270

LIABILITIES

Non-Current Liabilities

Provision for Retirement Benefit Obligations 28 584 542 – –

Loans and Borrowings 27 10,808 6,853 127 1,518

Deferred Tax Liabilities 12 2,622 2,700 – 20

Deferred Income 29 65 65 – –

Total Non-Current Liabilities 14,079 10,160 127 1,538

Current Liabilities

Income Tax Payable 335 – 120 –

Trade and Other Payables 30 13,021 11,668 1,104 1,894

Derivative Financial Instruments 31 14 51 – –

Loans and Borrowings 27 15,027 12,425 1,391 1,326

Deferred Income 29 8 8 – –

Total Current Liabilities 28,405 24,152 2,615 3,220

Total Liabilities 42,484 34,312 2,742 4,758

Total Equity and Liabilities 102,966 87,132 52,635 44,028


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annual report 2012

STATEMENTS OF CHANGES IN EQUITYYEAR ENDED 31 OCTOBER 2012

Non-

Total Controlling Parent Share Retained Other

Equity Interests Sub-Total Capital Earnings Reserves

$’000 $’000 $’000 $’000 $’000 $’000

Group

Current Year:

At 1 November 2011 52,820 12,800 40,020 37,050 4,017 (1,047)

Movements in Equity:

Total Comprehensive Income/

(Loss) for the Year 1,149 309 840 – 1,366 (526)

Issue of Ordinary Shares

(Note 25) 5,250 – 5,250 5,250 – –

Share Issue Expenses

(Note 25) (48) – (48) (48) – –

Capital Contribution from

Non-Controlling Interests

of a Subsidiary 1,275 1,275 – – – –

Equity Settled Share-Based

Expenses (Note 26) 528 – 528 – – 528

Issue of Ordinary Shares as

Consideration for Acquisition

of Non-Controlling Interests

without Change in Control

(Note 17B and Note 25) – (6,419) 6,419 3,675 – 2,744

Dividends Paid to Non-

Controlling Interests of

Subsidiaries (492) (492) – – – –

7,662 (5,327) 12,989 8,877 1,366 2,746

At 31 October 2012 60,482 7,473 53,009 45,927 5,383 1,699


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annual report 2012


Non-

Total Controlling Parent Share Retained Other

Equity Interests Sub-Total Capital Earnings Reserves

$’000 $’000 $’000 $’000 $’000 $’000

Group

Previous Year:

At 1 November 2010 53,189 13,358 39,831 36,375 3,455 1


Total Comprehensive Income/

(Loss) for the Year 318 103 215 – 562 (347)

Issue of Ordinary Shares

(Note 25) 98 – 98 98 – –

Issue of Performance Shares

(Note 25 and 26A) – – – 577 – (577)

Acquisition of Non-Controlling

Interests without Change

in Control (Note 17B) (160) (36) (124) – – (124)

Disposal of Non-Controlling

Interests without Change

in Control (Note 17C) 20 20 – – – –

Dividends Paid to Non-

Controlling Interests of

Subsidiaries (645) (645) – – – –

(369) (558) 189 675 562 (1,048)

At 31 October 2011 52,820 12,800 40,020 37,050 4,017 (1,047)




annual report 2012


Total Share Retained Other

Equity Capital Earnings Reserves

$’000 $’000 $’000 $’000

Company

Current Year:

At 1 November 2011 39,270 37,050 2,220 –


Total Comprehensive Income for the Year 1,218 – 1,218 –

Issue of Ordinary Shares (Note 25) 5,250 5,250 – –

Share Issue Expenses (Note 25) (48) (48) – –

Issue of Ordinary Shares as Consideration for

Acquisition of Non-Controlling Interests

(Note 17B and 25) 3,675 3,675 – –

Equity Settled Share-Based Expenses (Note 26) 528 – – 528

10,623 8,877 1,218 528

At 31 October 2012 49,893 45,927 3,438 528

Total Share Retained Other

Equity Capital Earnings Reserves

$’000 $’000 $’000 $’000

Company

Previous Year:

At 1 November 2010 39,256 36,375 2,304 577


Total Comprehensive Loss for the Year (84) – (84) –

Issue of Ordinary Shares (Note 25) 98 98 – –

Issue of Performance Shares (Note 25 and 26A) – 577 – (577)

14 675 (84) (577)

At 31 October 2011 39,270 37,050 2,220 –




annual report 2012

CONSOLIDATED STATEMENT OF CASH FLOWSYEAR ENDED 31 OCTOBER 2012

2012 2011

$’000 $’000

Cash Flows From Operating Activities

Profit Before Income Tax 3,429 2,273

Depreciation of Property, Plant and Equipment 3,153 2,810

Impairment Loss on Property, Plant and

Equipment – Made/(Reversed) 194 (502)

Loss/(Gain) on Disposal of Property, Plant and Equipment 40 (23)

Amortisation of Intangible Assets 104 105

Amortisation of Land Use Rights 23 22

Share of Results from Associates, Net of Tax 345 287

Impairment Loss on Other Financial Assets 67 76

Gain on Disposal of Other Financial Assets – (9)

Net Fair Value (Gain)/Loss on Derivative Financial Instruments (33) 108

Provision for Retirement Benefit Obligations Expenses, Net 34 19

Amortisation of Deferred Income (8) (8)

Finance Income (39) (4)

Finance Lease Income (1,079) –

Dividend Income (411) (1)

Finance Costs 1,042 875

Equity-Settled Share-Based Expenses 528 –

Operating Cash Flows Before Changes in Working Capital 7,389 6,028

Inventories (539) (367)

Trade and Other Receivables (339) 557

Finance Lease Receivables 27 –

Other Assets 327 178

Trade and Other Payables 961 (1,392)

Finance Lease Income Received 1,079 –

Retirement Benefit Obligations Paid (16) (54)

Increase in Cash Restricted in Use Over 3 Months (902) –

Net Cash Flows From Operations Before Income Tax 7,987 4,950

Income Tax Paid (1,407) (1,426)

Net Cash Flows From Operating Activities 6,580 3,524


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annual report 2012

CONSOLIDATED STATEMENT OF CASH FLOWSYEAR ENDED 31 OCTOBER 2012

2012 2011

$’000 $’000

Cash Flows From Investing Activities

Acquisition of a Subsidiary, Net of Cash (Note 17A) 2 –

Acquisition of an Associate (3,994) –

Acquisition of Property, Plant and Equipment (Note 24B) (8,125) (9,308)

Increase in Investment in Other Financial Assets (835) –

Dividend Income Received 411 1

Interest Income Received 39 4

Proceeds from Disposal of Other Financial Assets 7 135

Proceeds from Disposal of Property, Plant and Equipment 161 2,073

Proceeds from Government Grant to Acquire Property,

Plant and Equipment 9 –

Net Cash Flows Used In Investing Activities (12,325) (7,095)

Cash Flows From Financing Activities

Acquisition of Non-Controlling Interests without Change in Control – (160)

Capital Contribution from Non-Controlling Interests of a Subsidiary 1,275 –

Disposal of Non-Controlling Interests without Change in Control – 20

Dividends Paid to Non-Controlling Interests of Subsidiaries (492) (645)

Increase in Cash Restricted in Use Over 3 Months (206) (588)

Interest Expenses Paid (1,007) (875)

Proceeds from Issue of Ordinary Shares 5,202 98

Proceeds from Loans and Borrowings 9,324 5,877

Repayments of Loans and Borrowings (2,177) (2,295)

Net Cash Flows From Financing Activities 11,919 1,432

Net Increase/(Decrease) in Cash and Cash Equivalents 6,174 (2,139)

Effect of Exchange Rate Changes on Cash and Cash Equivalents (79) (1)

Cash and Cash Equivalents, Consolidated Statement of Cash Flows,

Beginning Balance 10,355 12,495

Cash and Cash Equivalents, Consolidated Statement of Cash Flows,

Ending Balance (Note 24A) 16,450 10,355


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annual report 2012

NOTES TO THE FINANCIAL STATEMENTS31 OCTOBER 2012

1. GENERAL

ecoWise Holdings Limited (the “Company”) is incorporated in Singapore with limited liability. It is listed on

the Singapore Exchange Securities Trading Limited. The registered office and principal place of business of

the Company is located at 17 Kallang Junction, #04-03, Singapore 339274.

The financial statements for the reporting year ended 31 October 2012 comprise those of the Company and

its subsidiaries (collectively, the “Group”) and the Group’s interests in associates. All financial information

presented in Singapore dollars have been rounded to the nearest thousand (“$’000”), unless otherwise stated.

The financial statements were approved and authorised for issue by the board of directors on the date of

statement by directors.

The principal activities of the Company are those of an investment holding company and provision of

management services to its subsidiaries. The principal activities of the subsidiaries are disclosed in Note 17

to the financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Convention

The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards

(“FRS”) and the related Interpretations to FRS (“INT FRS”) as issued by the Singapore Accounting Standards

Council and provisions in the Singapore Companies Act, Chapter 50. The financial statements are prepared

on a going concern basis under the historical cost convention except where a FRS requires an alternative

treatment (such as fair values) as disclosed where appropriate in these financial statements.

Basis of Preparation

The preparation of financial statements in conformity with generally accepted accounting principles requires

the management 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 the financial statements and the

reported amounts of revenues and expenses during the reporting year. Actual results could differ from these

estimates. The estimates and assumptions are reviewed on an on-going basis. Apart from those involving

estimations, management has made judgements in the process of applying the Group’s accounting policies.

The areas requiring management’s most subjective or complex judgements, or areas where assumptions

and estimates are significant to the financial statements, are disclosed at the end of this note to the financial

statements, where applicable.

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annual report 2012


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation

The consolidated financial statements include the financial statements of the Company and all its directly and

indirectly controlled subsidiaries made up to the end of the reporting year. Consolidated financial statements

are the financial statements of the Group presented as those of a single economic entity. The consolidated

financial statements are prepared using uniform accounting policies for like transactions and other events

in similar circumstances. All significant intra-group balances and transactions, including income, expenses

and dividends are eliminated in full upon consolidation. The results of any subsidiary acquired or disposed

off during the reporting year are accounted for from the respective dates of acquisition or up to the date of

disposal, which is the date on which effective control is obtained of the acquired business until that control

ceases. Upon disposal, the attributable amount of goodwill, if any, is included in the determination of the

gain or loss on disposal.

Changes in the Group’s equity interests in a subsidiary that do not result in the loss of control are accounted

for within equity as transactions with owners in their capacity as owners. The carrying amounts of the Group’s

and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.

When the Group ceases to control a subsidiary, it derecognises the assets and liabilities and related equity

components of the former subsidiary. Any gain or loss is recognised in profit or loss. Any investment retained

in the former subsidiary is measured at its fair value at the date when control has ceased and is subsequently

accounted for as an associate, joint venture or financial asset.

An investment in associate is accounted for in the consolidated financial statements using the equity method.

The Company’s financial statements have been prepared on the same basis, and as permitted by the

Singapore Companies Act, Chapter 50, no statement of comprehensive income is presented for the

Company.

Foreign Currency Transactions

The functional currency of the Company is the Singapore dollar as it reflects the primary economic

environment in which the Company operates in.

Transactions in foreign currencies are recorded in the functional currency at the exchange rates ruling at

the dates of the transactions. At the end of each reporting year, recorded monetary balances and balances

measured at fair value that are denominated in non-functional currencies are reported at the exchange

rates ruling at the end of the reporting year and fair value dates, respectively. All realised and unrealised

exchange adjustment gains and losses are dealt with in the profit or loss, except when recognised in other

comprehensive income.

The presentation currency is the functional currency.



annual report 2012



Translation of Financial Statements of Other Entities

Each entity in the Group determines its appropriate functional currency to reflect the primary economic

environment in which the entity operates in. In translating the financial statements of an investee for

incorporation in the consolidated financial statements to the presentation currency, the assets and liabilities

denominated in other currencies are translated at the exchange rates ruling at the end of the reporting year

and the profit or loss items are translated at average exchange rates for the reporting year. The resulting

translation adjustments (if any) are recognised in other comprehensive income and accumulated in a separate

component of equity until the disposal of that investee.

Segment Reporting

Reportable segments are operating segments or aggregations of operating segments that meet specified

criteria. Operating segments are components about which separate financial information is available that

is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in

assessing performance. Generally, financial information is reported on the same basis as is used internally for

evaluating operating segment performance and deciding how to allocate resources to operating segments.

Revenue Recognition

The revenue amount is the fair value of the consideration received or receivable from the gross inflow of

economic benefits during the reporting year arising from the course of the activities of the Group and it is

shown net of related sales taxes, estimated returns and rebates.

• Revenue from the sale of goods is recognised when significant risks and rewards of ownership are

transferred to the buyer, there is neither continuing managerial involvement to the degree usually

associated with ownership nor effective control over the goods sold, and the amount of revenue and

costs incurred or to be incurred in respect of the transaction can be measured reliably.

• Revenue from service income that is of short duration is recognised when the services are completed.

• The finance lease income from finance lease arrangement represents the interest income on the

finance lease receivables and is recognised using the effective interest method.

• Interest income is recognised using the effective interest method.

• Dividend income from equity instruments is recognised when the Group’s right to receive payment is

established.



annual report 2012



Employee Benefits

Short-Term Employee Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the

related services are provided.

A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive

obligation to pay this amount as a result of past service provided by the employee and the obligation can

be estimated reliably.

For employee leave entitlement, the expected cost of short-term employee benefits in the form of

compensated absences is recognised in the case of accumulating compensated absences when the

employees render service that increases their entitlement to future compensated absences; and in the case

of non-accumulating compensated absences, when the absences occur. A liability for bonuses is recognised

where the Group is contractually obliged or where there is constructive obligation based on past practice.

Defined Contribution Benefits

Contributions to defined contribution retirement benefit plans are recorded as an expense as they fall due.

The Group’s legal or constructive obligation is limited to the amount that it agrees to contribute to an

independently administered fund, such as the Central Provident Fund in Singapore and Employees Provident

Fund in Malaysia.

Defined Benefit Plan

The Group operates an unfunded defined benefit plan for qualifying employees of its subsidiaries in Malaysia.

In accordance with the terms of their employment contracts, the benefits are calculated based on the last

drawn salaries, length of services and the rates set out in the employment contracts. The Group’s obligations

under the defined benefit plan, calculated using the projected unit credit method, are determined based on

actuarial assumptions and computations. Actuarial assumptions are updated for any material transactions

and changes in circumstances at each end of the reporting year.



annual report 2012



Employee Benefits (Continued)

Share-Based Compensation

Benefits to employees, including the directors, are provided in the form of share-based payment

transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled

transactions”). The fair value of the employee services rendered is determined by reference to the fair value

of the shares awarded or granted, excluding the impact of any non-market vesting conditions. The fair

value is determined by reference to the fair value of the shares awarded or granted on grant date. This fair

value amount is charged to the profit or loss over the vesting period of the share-based payment scheme,

with the corresponding increase in equity. The value of the charge is adjusted in the profit or loss over the

remainder of the vesting period to reflect expected and actual levels of shares vesting, with the corresponding

adjustment made in equity. Cancellations of grants of equity instruments during the vesting period (other

than a grant cancelled by forfeiture when the vesting conditions are not satisfied) are accounted for as an

acceleration of vesting, therefore any amount unrecognised that would otherwise have been charged is

recognised immediately in the profit or loss.

Income Tax

Income tax expense comprises current tax and deferred tax. Current and deferred taxes are recognised as

an income or an expense in the profit or loss. The income taxes payables are accounted using the asset

and liability method that requires the recognition of taxes payable or refundable for the current year and

deferred tax liabilities and assets for the future tax consequence of events that have been recognised in the

financial statements or tax returns.

The measurements of current and deferred tax liabilities and assets are based on provisions of the enacted

or substantially enacted tax laws at the end of each reporting year; the effects of future changes in tax laws

or rates are not anticipated.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same income

tax authority.



annual report 2012



Income Tax (Continued)

A deferred tax asset or liability is recognised for all temporary differences, unless the temporary differences

arise from the initial recognition of an asset or liability in a transaction that (i) is not a business combination

and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred

tax liability or asset is recognised for all temporary differences associated with investments in subsidiaries and

associates, except where the Group is able to control the timing of the reversal of the temporary differences

and it is probable that the temporary differences will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting year and is reduced, if

necessary, by the amount of any tax benefits based on available evidence, are not expected to be realised.

Borrowing Costs

Borrowing costs comprise interest expenses on borrowings and unwinding of the discount on provisions

and contingent consideration that are recognised in the profit or loss.

Borrowing costs that are interest expenses and other costs incurred in connection with the borrowing of

funds that are directly attributable to the acquisition, construction or production of a qualifying asset 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 that asset until substantially all the activities necessary to prepare the qualifying asset for

its intended use or sale are completed.

Other borrowing costs are recognised as an expense in the period in which they are incurred.

Interest expenses are calculated using the effective interest method.



annual report 2012



Property, Plant and Equipment

Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost

less any accumulated depreciation and accumulated impairment losses.

Cost includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing the

asset to the location and condition necessary for it to be capable of operating in the manner intended by

management. Subsequent costs are recognised as an asset 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.

All other repair and maintenance costs are charged to the profit or loss when they are incurred.

Cost also includes the initial estimate of the costs of dismantling and removing the item and restoring the

site on which it is located, the obligation for which the Group incurs either when the item is acquired or as

a consequence of having used the item during a particular period.

Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets less

their residual values over their estimated useful lives of each part of an item of these assets as follows:

Leasehold land – Over remaining lease period of 65 and 68 years

Leasehold properties and improvements – Over remaining lease period of 11 and 25 years

Plant and equipment – 2.38% to 33.33%

Construction-in-progress – Not depreciated

Construction-in-progress is not depreciated as these are not available for use.

An asset is depreciated when it is available for use even if during that period the item is idle. Fully depreciated

assets still in use are retained in the financial statements.

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as

the difference between the net disposal proceeds, if any, and the carrying amount of the item of property,

plant and equipment and is recognised in the profit or loss.

The residual value and the useful life of an asset is reviewed at least at the end of each reporting year and,

if expectations differ significantly from previous estimates, the changes are accounted for as a change in an

accounting estimate and the depreciation charge for the current and future periods are adjusted.



annual report 2012



Leases

Whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the

inception date, that is, whether (a) fulfilment of the arrangement is dependent on the use of a specific asset

or assets (the asset); and (b) the arrangement conveys a right to use the asset.

Leases are classified as finance leases if substantially all the risks and rewards of ownership are transferred

to the lessee. All other leases are classified as operating leases.

Finance Leases

Under a finance lease, the lessor recognises a finance lease receivables and the lessee recognises the leased

asset and a liability for future lease payments.

(a) When the Group is a lessor:

When the Group is a lessor, it records a finance lease receivables at the amount of the Group’s net

investment in the lease, which comprises the present value of the minimum lease payments and any

unguaranteed residual value accruing to the Group. The present value is calculated by discounting

the minimum lease payments due and any unguaranteed residual value, at the interest rate implicit

in the lease.

The Group derecognised the leased assets and recognised the difference between the carrying

amount of the leased assets and the finance lease receivables in the profit or loss and recorded as

part of revenue under “finance lease income”.

The Group recognises finance lease income on the net investment over the lease term. The receipts

under the lease arrangement are allocated between reducing the net investment and recognising

finance income, so as to product a constant rate of return on the net investment.



annual report 2012



Leases (Continued)

Finance Leases (Continued)

(b) When the Group is a lessee:

At the commencement of the lease term, a finance lease is recognised as an asset and as a liability in

the statement of financial position at amounts equal to the fair value of the leased asset or, if lower,

the present value of the minimum lease payments, each determined at the inception of the lease.

The discount rate used in calculating the present value of the minimum lease payments is the interest

rate implicit in the lease, if this is impracticable to determine, the lessee’s incremental borrowing rate

is used.

Any initial direct costs of the lessee are added to the amount recognised as an asset. The excess of

the lease payments over the recorded lease liability are treated as finance costs which are allocated

to each reporting year during the lease term so as to produce a constant periodic rate of interest on

the remaining balance of the liability.

Contingent rents are charged as expenses in the reporting years in which they are incurred. The

assets are depreciated as owned depreciable assets.

Operating Leases

Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased

assets are classified as operating leases. For operating leases, lease payments are recognised as an expense

in the profit or loss on a straight-line basis over the term of the relevant lease unless another systematic

basis is representative of the time pattern of the user’s benefit, even if the payments are not on that basis.

Lease incentives received are recognised in the profit or loss as an integral part of the total lease expense.

Land Use Rights

Land use rights under operating leases are initially stated at cost. Following initial recognition, land use rights

are measured and carried at cost less accumulated amortisation. The land use rights are amortised on a

straight-line basis over the lease term 50 years.



annual report 2012



Intangible Assets

An identifiable non-monetary asset without physical substance is recognised as an intangible asset at

acquisition cost if it is probable that the expected future economic benefits that are attributable to the asset

will flow to the Group and cost of the asset can be measured reliably.

After initial recognition, an intangible asset with finite useful life is carried at cost less any accumulated

amortisation and accumulated impairment losses. An intangible asset with an indefinite useful life is not

amortised. An intangible asset is regarded as having an indefinite useful life when, based on an analysis

of all of the relevant factors, there is no foreseeable limit to the period over which the asset is expected to

generate net cash inflows for the Group.

Identifiable intangible assets acquired as part of a business combination are initially recognised separately

from goodwill if the asset’s fair value can be measured reliably, irrespective of whether the asset had been

recognised by the acquiree before the business combination. An intangible asset is considered identifiable

only if it is separable or if it arises from contractual or other legal rights, regardless of whether those rights

are transferable or separable from the Group or from other rights and obligations.

The amortisable amount of an intangible asset with finite useful life is allocated on a systematic basis over

the best estimate of its useful life from the point at which the asset is ready for use.

Trademarks

Trademarks acquired in a business combination are recognised at fair value at the acquisition date.

Trademarks have a finite useful life and are carried at cost less any accumulated amortisation and

accumulated impairment losses. Amortisation is calculated on a straight-line basis over the estimated useful

lives of 10 to 25 years.

Customer Relationships

Customer relationships acquired in a business combination are recognised at fair value at the acquisition

date. The customer relationships are carried at cost less any accumulated amortisation and accumulated

impairment losses. Amortisation is calculated on a straight-line basis over the expected life of the customer

relationships of 10 years.



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Intangible Assets (Continued)

Goodwill

Goodwill is recognised as of the acquisition date measured as the excess of (a) over (b) whereby (a) being

the aggregate of (i) the consideration transferred measured at acquisition date fair value; (ii) the amount of

any non-controlling interests in the acquiree measured either at fair value or at the non-controlling interests’

proportionate share of the acquiree’s net identifiable assets; and (iii) in a business combination achieved in

stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree; and

(b) being the net of the identifiable assets acquired and the liabilities assumed measured at acquisition date

fair values.

After initial recognition, goodwill acquired in a business combination is measured at cost less any

accumulated impairment losses. Goodwill is not amortised. Irrespective of whether there is any indication

of impairment, goodwill is tested for impairment at least annually. Impairment on goodwill is not reversed

in any circumstances.

For the purpose of impairment testing and since the acquisition date of the business combination, goodwill is

allocated to each cash-generating unit, or groups of cash-generating units that are expected to benefit from

the synergies of the business combination, irrespective of whether other assets or liabilities of the acquiree

were assigned to those units or groups of units. Each unit or group of units to which the goodwill is allocated

represents the lowest level within the Group at which the goodwill is monitored for internal management

purposes and is not larger than a segment.

Subsidiaries

A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the Group.

Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from

its activities accompanying a shareholding of more than one half of the voting rights or the ability to appoint

or remove the majority of the members of the board of directors or to cast the majority of votes at meetings

of the board of directors. The existence and effect of potential voting rights that are currently exercisable or

convertible are considered when assessing whether the Group controls another entity.

In the Company’s own separate financial statements, the investments in subsidiaries are stated at cost less

any allowance for impairment in value. Impairment loss recognised in the profit or loss for a subsidiary is

reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount

since the last impairment loss was recognised.



annual report 2012



Associates

An associate is an entity including an unincorporated entity in which the Group has a substantial financial

interest (usually not less than 20% of the voting power), significant influence and that is neither a subsidiary

nor a joint venture of the investor. Significant influence is the power to participate in the financial and

operating policy decisions of the investee but is not control or joint control over those policies.

The investment in associate is accounted using the equity method of accounting. The investment in associate

is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the

Group’s share of net assets of the associate less any allowance for impairment in value. The profit or loss

reflects the Group’s share of the results of operations of the associate. Losses of the associate in excess

of the Group’s interests in the relevant associate are not recognised, except to the extent that the Group

has an obligation. Profits and losses resulting from transactions between the Group and the associate are

recognised in the financial statements only to the extent of unrelated investors’ interests in the associate.

Unrealised losses are eliminated in the consolidated financial statements unless the transaction provides

evidence of an impairment of the asset transferred.

Accounting policies of the associate are changed where necessary to ensure consistency with the policies

adopted by the Group.

The Group discontinues the use of the equity method of accounting from the date that it ceases to have

significant influence over the associate and accounts for the remaining investment as financial assets. Any

gain or loss is recognised in the profit or loss. Any investment retained in the former associate is measured

at its fair value at the date that it ceases to be an associate.

Business Combinations

A business combination is a transaction or other event which requires that the assets acquired and liabilities

assumed to constitute a business. It is accounted for by using the acquisition method of accounting.

The cost of a business combination includes the fair values of assets given, liabilities incurred or assumed,

and equity instruments issued by the acquirer at the acquisition date. The acquisition related costs are

expensed in the periods in which the costs are incurred and the services are received, except for any costs

incurred to issue debts or equity securities are recognised in accordance with FRS 32 – Financial Instruments:

Presentation and FRS 39 – Financial Instruments: Recognition and Measurement.



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Business Combinations (Continued)

At acquisition date, the acquirer recognises, separately from goodwill, the identifiable assets acquired, the

liabilities assumed and any non-controlling interests in the acquiree measured at acquisition date fair values

as defined in and that meet the conditions for recognition under FRS 103 – Business Combinations.

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a

business combination that are not individually identified and separately recognised. If the acquirer has made

a gain from a bargain purchase, that gain is recognised in the profit or loss. For gain on bargain purchase, a

reassessment is made of the identification and measurement of the acquiree’s identifiable assets, liabilities

and contingent liabilities and the measurement of the cost of the business combination and any excess

remaining after this reassessment is recognised immediately in the profit or loss.

For business combinations achieved in stages, any equity interest held in the acquiree is remeasured

immediately before achieving control at its acquisition date fair value and any resulting gain or loss is

recognised in the profit or loss.

Goodwill and fair value adjustments resulting from the application of acquisition method of accounting at

the date of acquisition are treated as assets and liabilities of the acquired entity and are recorded at the

exchange rates prevailing at the acquisition date and are subsequently translated at the exchange rates

ruling at the end of the reporting year.

Where the fair values are estimated on a provisional basis, they are finalised within one year from the

acquisition date with consequent retrospective changes to the amounts recognised at the acquisition date

to reflect new information obtained about facts and circumstances that existed as of the acquisition date

and, if known, would have affected the measurement of the amounts recognised as of that date.



annual report 2012



Non-Controlling Interests

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interests in the acquiree

either at fair value or at the non-controlling interests’ proportionate share of the acquiree’s net assets. Where

the non-controlling interests are measured at fair value, the valuation techniques and key model inputs used

are disclosed in the relevant note. Profit or loss and each component of other comprehensive income are

attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income

is attributed to the owners of the Company and to the non-controlling interests even if this results in the

non-controlling interests having a deficit balance.

The non-controlling interests in the net assets and net results of a consolidated subsidiary are shown

separately in the appropriate components of the consolidated financial statements.

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group.

For acquisitions of non-controlling interests, the difference between any consideration paid and the relevant

share of the carrying amount of net assets of the subsidiary acquired is recorded in equity. Gains or losses

on disposals without loss of control are also recorded in equity.

Impairment of Non-Financial Assets

The carrying amounts of non-financial assets are reviewed at each end of the reporting year for indications

of impairment.

The impairment loss is the excess of the carrying amount over the recoverable amount and is recognised

in the profit or loss. The recoverable amount of an asset or a cash-generating unit is the higher of its fair

value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market assessments of

the time value of money and the risks specific to the asset. For the purposes of assessing impairment, assets

are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

At the end of each reporting year, non-financial assets, other than goodwill, with impairment loss recognised

in prior periods are assessed for possible reversal of the impairment. An impairment loss is reversed only

to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been

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



annual report 2012



Inventories

Inventories are measured at the lower of cost and net realisable value. The costs of raw materials,

work-in-progress and finished goods are measured using the first-in-first-out method and the costs of

consumables are measured using the weighted average method.

Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories

to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs

of completion and the estimated costs necessary to make the sale. A write down on inventories is made

where the cost is not recoverable or if the selling prices have declined.

Non-Derivative Financial Assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All

other financial assets (including assets designated at fair value through profit or loss) are recognised initially

on the trade date, which is the date that the Group becomes a party to the contractual provisions of the

instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset

expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in

which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest

in transferred financial assets that is created or retained by the Group is recognised as a separate asset or

liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position

when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net

basis or to realise the asset and settle the liability simultaneously.

The Group has three classes of non-derivative financial assets, as follows: financial assets at fair value through

profit or loss, loans and receivables and available-for-sale financial assets.



annual report 2012



Non-Derivative Financial Assets (Continued)

Financial Assets at Fair Value through Profit or Loss

A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is

designated as such upon initial recognition. Financial assets are designated at fair value through profit or

loss if the Group manages such investments and makes purchase and sale decisions based on their fair

value in accordance with the Group’s investment strategy.

Attributable transaction costs are recognised in the profit or loss as incurred. Financial assets at fair value

through profit or loss are measured at fair value, and changes therein are recognised in the profit or loss.

Financial assets designated at fair value through profit or loss comprise equity shares that otherwise would

have been classified as available-for-sale.

Loans and Receivables

Loans and receivables comprise trade and other receivables, cash and cash equivalents and finance lease

receivables.

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an

active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective

interest method less any impairment losses.

Cash and cash equivalents comprise cash balances and bank deposits. For the purpose of the consolidated

statement of cash flows, cash and cash equivalents exclude short-term deposits which are pledged to the

bank as security and cannot be withdrawn on demand. Bank overdrafts that are repayable on demand and

form an integral part of the Group’s cash management are included as a component of cash and cash

equivalents.

Available-For-Sale Financial Assets

The Group’s investments in certain equity shares are classified as available-for-sale financial assets.

Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment

losses, and foreign exchange gains and losses on available-for-sale monetary items, are recognised directly

in other comprehensive income. When an investment is derecognised, the cumulative gain or loss in other

comprehensive income and presented within equity in other reserves is transferred to the profit or loss.



annual report 2012



Non-Derivative Financial Liabilities

The Group’s non-derivative financial liabilities comprise trade and other payables and loans and borrowings.

Financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially

on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

Financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective

interest method.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position

when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net

basis or to realise the asset and settle the liability simultaneously.

Derivative Financial Instruments and Hedge Accounting

Derivatives are recognised initially at fair value and the attributable transaction costs are recognised in the

profit or loss as incurred. Subsequent to initial recognition, derivatives are measured and carried at fair value,

and changes therein are accounted for as described below.

Embedded derivatives are separated from the host contract and accounted for separately if the economic

characteristics and risks of the host contract and the embedded derivative are not closely related, a separate

instrument with the same terms as the embedded derivative would meet the definition of a derivative, and

the combined instrument is not measured at fair value through the profit or loss.

On initial designation of the derivative as the hedging instrument, the Group formally documents the

relationship between the hedging instrument and hedged item, including the risk management objectives

and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that will

be used to assess the effectiveness of the hedging relationship.

The Group makes an assessment, both at the inception of the hedge relationship as well as on an on-going

basis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes in

the fair value or cash flows of the respective hedged items attributable to the hedged risk, and whether the

actual effectiveness of each hedge are within an acceptable range. Transaction that is highly probable to

occur and addresses an exposure to variations in cash flows that could ultimately affect reported profit or

loss is accounted for as a cash flow hedge of a forecast transaction.



annual report 2012



Derivative Financial Instruments and Hedge Accounting (Continued)

Cash Flow Hedges

When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows

attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast

transaction that could affect the profit or loss, the effective portion of changes in the fair value of the derivative

is recognised (net of tax) in other comprehensive income and presented in the hedging reserve in equity. Any

ineffective portion of changes in the fair value of the derivative is recognised immediately in the profit or loss.

Other Non-Trading Derivatives

When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge

accounting, all changes in its fair value are recognised immediately in the profit or loss.

Financial Guarantee Contracts

Financial guarantee contracts are initially recognised at fair value and are subsequently measured at the

greater of (a) the amount determined in accordance with FRS 37 and (b) the amount initially recognised less,

where appropriate, cumulative amortisation recognised in accordance with FRS 18. All changes in fair value

relating to liabilities at fair value through profit or loss are recognised to profit or loss as incurred.

Fair Value of Financial Instruments

The carrying values of current financial instruments approximate their fair values due to the short-term

maturity of these instruments and the disclosures of fair value are not made when the carrying amount of

current financial instruments is a reasonable approximation of its fair value. The fair values of non-current

financial instruments may not be disclosed separately unless there are significant differences at the end of

the reporting year and in the event the fair values are disclosed in the relevant notes.

The fair value of a financial instrument is derived from an active market or by using an acceptable valuation

technique. The appropriate quoted market price for an asset held or liability to be issued is usually the current

bid price without any deduction for transaction costs that may be incurred on sale or other disposal and, for

an asset to be acquired or for liability held, the asking price. If there is no market, or the markets available

are not active, the fair value is established by using an acceptable valuation technique.



annual report 2012



Fair Value of Financial Instruments (Continued)

The fair value measurements are classified using a fair value hierarchy of 3 levels that reflects the significance

of the inputs used in making the measurements that is, Level 1 for the use of quoted prices (unadjusted)

in active markets for identical assets or liabilities; Level 2 for the use of inputs other than quoted prices

included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly

(i.e. derived from prices); and Level 3 for the use of inputs for the asset or liability that are not based on

observable market data (unobservable inputs). The level is determined on the basis of the lowest level input

that is significant to the fair value measurement in its entirety. Where observable inputs require significant

adjustment based on unobservable inputs, that measurement is a Level 3 measurement.

Equity

Equity instruments are contracts that give a residual interest in the net assets of the Company. Ordinary

shares are classified as equity. Equity instruments are recognised at the amount of proceeds received net

of incremental costs directly attributable to the transaction. Dividends on equity are recognised as liabilities

when they are declared. Interim dividends are recognised when declared by the directors.

Provisions

A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of

a past event, it is probable that an outflow of resources embodying economic benefits will be required to

settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are made using best estimates of the amount required in settlement and where the effect of the

time value of money is material, the amount recognised is the present value of the expenditures expected

to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the

time value of money and the risks specific to the obligation.

The increase in the provision due to passage of time is recognised as interest expense. Changes in estimates

are reflected in the profit or loss in the reporting year they occur.



annual report 2012



Government Grants

A government grant is recognised at fair value when there is reasonable assurance that the conditions

attaching to it will be complied with and that the grant will be received. A grant in recognition of specific

expenses is recognised as income in profit or loss over the periods necessary to match them with the

related costs that they are intended to compensate, on a systematic basis. A grant related to depreciable

assets is allocated to income over the periods in which such assets are used in the project subsidised by

the grant. A government grant related to assets, including non-monetary grants at fair value, is presented

in the statement of financial position as deferred income.

Critical Judgements, Assumptions and Estimation Uncertainties

The critical judgements made in the process of applying the accounting policies that have the most significant

effect on the amounts recognised in the financial statements and the key assumptions concerning the future,

and other key sources of estimation uncertainty at the end of the reporting year, that have a significant risk

of causing a material adjustment to the carrying amounts of assets and liabilities currently or within the next

reporting year are discussed below.

These estimates and assumptions are periodically monitored to ensure they incorporate all relevant

information available at the date when financial statements are prepared. However, actual figures may differ

from these estimates.

Impairment of Property, Plant and Equipment

An assessment is made at the end of each reporting year whether there is any indication that the assets may

be impaired. If any such indication exists, an estimate is made of the recoverable amounts of the assets.

The recoverable amounts of cash-generating units have been determined based on value in use calculations.

These calculations require the use of estimates.

Included in the property, plant and equipment of the Group is a coal-fired power plant with carrying amount

of $6,514,000 as at 31 October 2012 (2011: $7,008,000) of a non-wholly owned subsidiary, Wuhan

ecoWise Energy Co., Ltd.. This plant will be converted to a biomass co-generation plant. The coal-fired

power plant has ceased operations and the commencement of plant conversion is subject to the subsidiary

receiving additional capital injection from its shareholders for purposes of securing the bank financing for the

conversion. As at 31 October 2012, the Group has assessed the recoverable amount of the plant based on

its estimated value in use assuming the operation of a biomass co-generation plant, using a pre-tax discount

value of 12.8%. Based on management’s review, there is no impairment loss.



annual report 2012



Critical Judgements, Assumptions and Estimation Uncertainties (Continued)

Impairment of Property, Plant and Equipment (Continued)

It is impracticable to disclose the extent of the possible effects. It is reasonably possible, based on existing

knowledge, that outcomes within the next reporting year that are different from assumptions could require

a material adjustment to the carrying amount of the balances affected.

Useful Lives of Property, Plant and Equipment

The estimates for the useful lives and related depreciation charges for property, plant and equipment is based

on commercial and production factors which could change significantly as a result of technical innovations

and competitors’ actions in response to severe market conditions. When useful lives are less than previously

estimated useful lives, depreciation charges are increased or the carrying amounts written-off or written-down

for technically obsolete or non-strategic assets that have been abandoned. It is impracticable to disclose

the extent of the possible effects. It is reasonably possible, based on existing knowledge, that outcomes

within the next reporting year that are different from assumptions could require adjustments to the carrying

amounts of the property, plant and equipment (Note 14).

Impairment of Subsidiaries and Associates

When a subsidiary or associate is in net equity deficit and has suffered operating losses, the recoverable

amount of the investee is estimated to assess whether the investment in the investee has suffered any

impairment. This determination requires significant judgement. An estimate is made of the future profitability

of the investee, and the financial health of and near-term business outlook for the investee, including factors

such as industry and sector performance and operational and financing cash flows. It is impracticable to

disclose the extent of the possible effects. It is reasonably possible, based on existing knowledge, that

outcomes within the next reporting year that are different from assumptions could require adjustments to

the carrying amounts of the investments in subsidiaries and associates.

The specific assets at the end of the reporting year affected by the assumptions, which have carrying amounts

of $1,450,000 (2011: $1,450,000) have been fully impaired.



annual report 2012




Net Realisable Value of Inventories

A review is made periodically on inventories for obsolescence and excess inventory and declines in net

realisable value below cost and an allowance is recorded against the carrying amounts of inventories for

any such obsolescence, excess and declines. These reviews require management to consider the future

demands for the inventories. The realisable value represents the best estimate of the recoverable amount

and is based on the acceptable evidence available at the end of the reporting year and inherently involves

estimates regarding the future expected realisable value. The usual considerations for determining the amount

of allowance or write-down include expected usage, ageing analysis, technical assessment and subsequent

events. In general, such an evaluation process requires significant judgment and may affect the carrying

amount of inventories at the end of the reporting year. Possible changes in these estimates could result in

revisions to the carrying amounts of the inventories.

The carrying amounts of inventories of the Group at the end of the reporting year were $10,064,000 (2011:

$9,764,000).

Allowance for Doubtful Trade Receivables

An allowance is made for doubtful trade receivables for estimated losses resulting from the subsequent

inability of the customers to make required payments. If the financial conditions of the customers were

to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be

required in future periods. Management generally analyses trade receivables, historical bad debts, customer

concentrations, customer creditworthiness, and changes in customer payment terms when evaluating the

adequacy of the allowance for doubtful trade receivables. To the extent that it is feasible, impairment and

uncollectibility is determined individually for each specific customer. In cases where that process is not

feasible, a collective evaluation of impairment is performed. At the end of the reporting year, the trade

receivables carrying amount approximates its fair value and the carrying amount might change within the next

reporting year but the change would not arise from assumptions or other sources of estimation uncertainty

at the end of the reporting year (Note 21).



annual report 2012




Actuarial Assumptions on Retirement Benefit Obligations

Accounting for retirement benefit obligations involves actuarial assumptions required to measure the obligation

and the expenses, with the possibility that actual results differ from the assumed results. These differences

are known as actuarial gains and losses. Retirement benefit obligations are measured using the projected

unit credit method. According to this method, the Group has to make a reliable estimate of the amount of

benefits earned in return for services rendered in current and prior periods using actuarial techniques. In

addition, in cases where defined benefit plans are funded, the Group has to estimate the fair value of plan

assets based on the expected return on plan assets which is computed using the estimated long-term rate

of return. The use of the projected unit credit method involves a number of actuarial assumptions. These

assumptions include demographic assumptions such as mortality, employee turnover and retirement age,

and financial assumptions such as discount rates, salary and benefit levels. Such assumptions are subject

to judgements and actual results may develop differently than expected (Note 28).

3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS

FRS 24 defines a related party as a person or entity that is related to the reporting entity and it includes

(a) A person or a close member of that person’s family if that person (i) has control or joint control over

the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the key

management personnel of the reporting entity or of a parent of the reporting entity. (b) An entity is related to

the reporting entity if any of the following conditions apply: (i) The entity and the reporting entity are members

of the same group; (ii) One entity is an associate or joint venture of the other entity; (iii) Both entities are joint

ventures of the same third party; (iv) One entity is a joint venture of a third entity and the other entity is an

associate of the third entity; (v) The entity is a post-employment benefit plan for the benefit of employees

of either the reporting entity or an entity related to the reporting entity; (vi) The entity is controlled or jointly

controlled by a person identified in (a); or (vii) A person identified in (a) (i) has significant influence over the

entity or is a member of the key management personnel of the entity (or of a parent of the entity).



annual report 2012


3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)

3A. Related Parties

There are transactions and arrangements between the Group and related parties and the effects of these on

the basis determined between the parties are reflected in these financial statements. The sales with related

parties are based on the price lists in force with non-related parties. The current related party balances are

unsecured without fixed repayment terms and interest, unless stated otherwise. For non-current balances,

if significant, an interest is imputed, unless stated otherwise, based on the prevailing market interest rate for

similar debt less the interest rate, if any, provided in the agreement for the balance. For financial guarantees,

an amount is imputed and is recognised accordingly if significant where no charge is payable.

Intragroup transactions and balances that have been eliminated in these consolidated financial statements

are not disclosed as related party transactions and balances below.

In addition to the transactions and balances disclosed elsewhere in the notes to the financial statements,

significant related party transactions include the following:

Group

2012 2011

$’000 $’000

Non-Controlling Interests in Subsidiaries

Sale of goods (6,031) (6,472)

Service income – (7)

Rental income – (65)

Sale of property, plant and equipment – (28)

Purchase of goods 3,799 3,568

Purchase of services 311 242

Operating lease expenses 363 516

Purchase of property, plant and equipment 3,674 16

Associates

Service income – (73)

Management fee income (1,570) (1,359)

Purchase of services 1,223 1,429



annual report 2012


3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)

3B. Key Management Compensation

Key management are the directors and those persons having authority and responsibility over the activities

of the Group. Key management compensation comprised those of directors and other key management

personnel totalling 9 (2011: 6) persons. Key management compensation is included under employee benefits

expense.

Group

2012 2011

$’000 $’000

Salaries and other short-term employee benefits 2,991 1,923

Equity-settled share-based expense 421 –

Included in the above amounts are the following items:

Group

2012 2011

$’000 $’000

Remuneration of directors of the Company 1,327 870

Remuneration of directors of the subsidiaries 363 403

Fees to directors of the Company 125 110

Fees to directors of the subsidiaries 183 198

Equity-settled share-based expenses to directors of the Company 304 –

Equity-settled share-based expenses to directors of subsidiaries 83 –

Further information about the remuneration of directors of the Company is provided in the report on Corporate

Governance.



annual report 2012


4. FINANCIAL INFORMATION BY OPERATING SEGMENTS

4A. Information about Operating Segment Profit or Loss, Assets and Liabilities

Disclosure of information about operating segments, products and services, the geographical areas and the

major customers is made as required by FRS 108 – Operating Segments. This disclosure standard has no

impact on the reported results or financial position of the Group.

For management reporting purposes, the Group has three operating segments, which form the Group’s

strategic business units. The strategic business units offer different products and services and are managed

separately because they require different technologies and marketing strategies. For each of the strategic

business units, management reviews internal management reports on at least a quarterly basis.

The following summary describes the operations in each of the Group’s operating segments:

(a) Renewable Energy – Design, build and operate biomass co-generation systems, generate power for

sale and provision of services related to the applications of heat.

(b) Resource Recovery – Process, recycle and repurpose waste and salvageable materials into

environmentally friendly products for industrial applications, such as washed copper slag, compost

and retreaded tyres.

(c) Integrated Environmental Management Solutions – Provision of resource management and integrated

environmental engineering solutions for industrial waste and energy management, including designing,

optimising, engineering, procurement, fabricating, commissioning, managing and maintenance of

waste and energy management facilities.

Performance is measured based on segment results before allocation of corporate management fees, share

of results from associates, finance income, dividend income, finance costs and income tax, as included in

the internal management reports. Segment results is used to measure performance as management believes

that such information is the most relevant in evaluating the results of the operating segments relative to other

entities that operate in similar industries.

Inter-segment sales are based on agreed price lists. Internal transfer pricing policies of the Group are as far

as practicable based on market prices. The accounting policies of the operating segments are the same as

those disclosed in Note 2 to the financial statements.

The information about the operating segment profit or loss, assets and liabilities is set out below.



annual report 2012


4. FINANCIAL INFORMATION BY OPERATING SEGMENTS (CONTINUED)

4B. Profit or Loss Reconciliation

Renewable

Energy

Resource

Recovery

Integrated

Environmental

Management

Solutions Elimination Group

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Revenue

Revenue from external customers 9,907 5,136 80,330 74,449 284 257 – – 90,521 79,842

Inter-segment revenue 459 275 1,357 493 270 197 (2,086) (965) – –

Segment revenue 10,366 5,411 81,687 74,942 554 454 (2,086) (965) 90,521 79,842

Segment results before allocation

of corporate management fees 1,957 (469) 7,379 7,344 (597) (532) (4,258) (2,933) 4,481 3,410

Allocated corporate

management fees (2,472) (1,107) (1,786) (1,826) – – 4,258 2,933 – –

Segment results (515) (1,576) 5,593 5,518 (597) (532) – – 4,481 3,410

Share of results from associates,

allocated to operating segments (85) – (260) (287) – – – – (345) (287)

Unallocated corporate results (115) 20

Profit before dividend income,

finance income/(costs) and

income tax 4,021 3,143

Finance income 39 4

Dividend income 411 1

Finance costs (1,042) (875)

Income tax expense (1,711) (1,341)

Profit for the year 1,718 932



annual report 2012



4C. Assets, Liabilities Reconciliation

Renewable

Energy

Resource

Recovery

Integrated

Environmental

Management


2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Segment assets 33,932 32,424 66,152 65,506 7,523 7,995 (13,590) (24,552) 94,017 81,373

Investments in associates,

allocated to operating segments 3,909 – 1,092 1,352 – – – – 5,001 1,352

Unallocated corporate assets 3,948 4,407

Total assets 102,966 87,132

Segment liabilities 29,248 28,357 17,251 20,625 9,447 8,979 (43,297) (46,325) 12,649 11,636

Loans and borrowings

– Allocated to operating

segments 8,828 4,615 15,489 11,819 – – – – 24,317 16,434

– Unallocated corporate loans

and borrowings 1,518 2,844

Income tax payable 335 –

Deferred tax liabilities 2,622 2,700

Unallocated corporate liabilities 1,043 698

Total liabilities 42,484 34,312

Capital expenditure

Allocated to operating segments

– Property, plant and equipment 4,455 8,411 5,333 907 13 52 – – 9,801 9,370

– Other financial assets – – 835 – – – – – 835 –

Unallocated corporate capital

expenditure on property,

plant and equipment 86 14

Total capital expenditure 10,722 9,384



annual report 2012



4D. Other Material Items

Renewable

Energy

Resource

Recovery

Integrated

Environmental

Management


2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Depreciation of property,

plant and equipment

Allocated to operating segments 1,330 1,350 1,713 1,364 30 17 – – 3,073 2,731

Unallocated corporate depreciation 80 79

Total depreciation of property,

plant and equipment 3,153 2,810

Impairment loss on property,

plant and equipment

– (reversed)/made – (502) 194 – – – – – 194 (502)

Loss/(gain) on disposal of property,

plant and equipment 55 37 (15) (60) – – – – 40 (23)

Amortisation of land use rights 23 22 – – – – – – 23 22

Amortisation of intangible assets – – 104 105 – – – – 104 105

Impairment loss on other financial assets – – 67 76 – – – – 67 76

Gain on disposal of other financial assets – – – (9) – – – – – (9)

Net fair value (gain)/loss on

derivative financial instruments – – (33) 108 – – – – (33) 108

Provision for retirement benefit

obligations expenses (net) – – 34 19 – – – – 34 19

Amortisation of deferred income – – (8) (8) – – – – (8) (8)

Allowance for doubtful receivables

– (reversed)/made (264) (45) (249) 28 – – 530 – 17 (17)

Allowance for inventory obsolescence

– made/(reversed) 92 12 (6) (110) – – – – 86 (98)



annual report 2012



4E. Geographical Information

In presenting information based on geographical segments, segment revenue is based on geographical

location of the customers and segment assets are based on geographical location of the assets.

Revenue Non-Current Assets

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Singapore 16,071 11,638 21,569 18,410

Malaysia 50,547 45,427 19,417 16,634

Australia 19,457 18,670 – –

People’s Republic of China 256 484 11,713 8,266

Others 4,190 3,623 – –

90,521 79,842 52,699 43,310

4F. Information about Major Customers

Revenue from one customer of the Group’s resource recovery operating segment contributed approximately

$19,457,000 (2011: $18,450,000) of the Group’s total revenue.

5. REVENUE

Group

2012 2011

$’000 $’000

Sale of goods 77,552 71,039

Service income 10,131 6,751

Management fee income 1,570 1,359

Finance lease income 1,079 –

Others 189 693

90,521 79,842



annual report 2012


6. FINANCE INCOME

Group

2012 2011

$’000 $’000

Interest income from financial institutions 39 4

7. DIVIDEND INCOME

Group

2012 2011

$’000 $’000

Dividend income from quoted corporation – 1

Dividend income from unquoted corporation 411 –

411 1

8. OTHER CREDITS AND (OTHER CHARGES)

Group

2012 2011

$’000 $’000

Impairment loss on property, plant and equipment – (made)/reversed (194) 502

(Loss)/gain on disposal of property, plant and equipment (40) 23

Impairment loss on other financial assets (67) (76)

Gain on disposal of other financial assets – 9

Net fair value gain/(loss) on derivative financial instruments 33 (108)

Foreign exchange gain (net) 432 223

Equity-settled share-based expenses (528) –

Allowance for doubtful receivables – (made)/reversed (17) 17

Government grant income 47 7

Others 39 (17)

Net (295) 580

Presented in profit or loss as:

Other credits 551 781

Other charges (846) (201)

Net (295) 580



annual report 2012


9. FINANCE COSTS

Group

2012 2011

$’000 $’000

Interest expenses on bank loans 916 741

Interest expenses on finance lease liabilities 92 102

Interest expenses on retirement benefit obligations 34 32

1,042 875

10. EMPLOYEE BENEFITS EXPENSE

Group

2012 2011

$’000 $’000

Salaries, bonus and other wages 13,342 11,063

Contributions to defined contribution plans 1,052 789

Provision for retirement benefit obligations expense (net) 34 19

Equity-settled share-based expenses 528 –

Other benefits 557 427

15,513 12,298

11. ITEMS IN THE STATEMENT OF COMPREHENSIVE INCOME

In addition to items of profit or loss disclosed elsewhere in the notes to the financial statements, items in

the statement of comprehensive income include the following:

Group

2012 2011

$’000 $’000

Auditors’ remuneration:

Auditor of the Company 213 214

Member firms of the Auditor of the Company 97 97

Other auditors 10 4

Non-audit fees paid and payable to:

Auditors of the Company 93 48

Member firms of the Auditor of the Company 14 21

Other auditors 2 –



annual report 2012


12. INCOME TAX EXPENSE

12A. Components of Income Tax Expense Recognised in Profit or Loss

Group

2012 2011

$’000 $’000

Current tax expense

Current tax expense 1,875 951

Withholding tax expense 66 77

Adjustments to current tax in respect of prior years (186) 253

1,755 1,281

Deferred tax expense

Deferred tax expense (44) 60

(44) 60

Total income tax expense 1,711 1,341

The income tax in profit or loss varied from the amount determined by applying the Singapore income tax

rate of 17% (2011: 17%) to profit or loss before income tax as a result of the following differences:

Group

2012 2011

$’000 $’000

Profit before income tax 3,429 2,273

Add: Share of losses from associates 345 287

3,774 2,560

Income tax using Singapore’s income tax rate above 642 435

Effect of different tax rates in foreign jurisdictions 572 227

Withholding tax expense 66 77

Non-deductible items 556 469

Tax exempt income (317) (220)

Tax incentives (10) (41)

Adjustments to current tax in respect of prior years (186) 253

Deferred tax assets not recognised 419 126

Others (31) 15

Total income tax expense 1,711 1,341



annual report 2012


12. INCOME TAX EXPENSE (CONTINUED)

12B. Movements in Deferred Tax Liabilities in the Statements of Financial Position

At

1 November

2010

Recognised

in profit

or loss

Exchange

differences

At

31 October

2011

Recognised

in profit

or loss

Exchange

differences

At

31 October

2012

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Property, plant and

equipment (2,380) (158) 49 (2,489) 65 (242) (2,666)

Intangible assets (496) 26 13 (457) 26 7 (424)

Unutilised tax losses 577 337 – 914 201 88 1,203

Unutilised capital

allowances 371 (370) – 1 149 40 190

Other items 101 231 – 332 22 68 422

Deferred tax assets

valuation allowance (839) (126) (36) (1,001) (419) 73 (1,347)

(2,666) (60) 26 (2,700) 44 34 (2,622)

At

1 November

2010

Recognised

in profit

or loss

At

31 October

2011

Recognised

in profit

or loss

At

31 October

2012

$’000 $’000 $’000 $’000 $’000

Company

Property, plant and equipment (20) – (20) 20 –



annual report 2012


12. INCOME TAX EXPENSE (CONTINUED)

12C. Unrecognised Deferred Tax Assets

2012 2011

Gross

amount

Tax

effect

Gross

amount

Tax

effect

$’000 $’000 $’000 $’000

Group

Capital allowances carryforwards 760 190 179 43

Tax losses carryforwards 4,900 1,084 4,177 922

Others 297 73 146 36

5,957 1,347 4,502 1,001

No deferred tax asset has been recognised in respect of the above balance as the future profit streams are

not probable. Except for tax loss carryforwards in a subsidiary amounting to approximately $741,000 (2011:

$566,000) as at the end of the reporting year which expires between 1 to 5 years (2011: 1 to 5 years), the

realisation of the future income tax benefits from these tax loss carryforwards is available for an unlimited

future period subject to the conditions imposed by laws of the countries in which the companies in the Group

operates, including the retention of majority shareholders as defined.



annual report 2012


13. EARNINGS PER SHARE

The following table illustrates the numerators and denominators used to calculate basic and diluted earnings

per share.

2012 2011

$’000 $’000

Numerator: Earnings

Profit for the year attributable to owners of the Company

used in the basic and diluted earnings per share calculation 1,366 562

Weighted Average

Number of

Ordinary Shares

2012 2011

’000 ’000

Denominator: Shares

Weighted average number of ordinary shares in issue during

the reporting year used in the basic earnings per share calculation 890,020 836,555

Effect of dilutive performance shares 2,538 –

Weighted average number of ordinary shares in issue during

the reporting year used in the diluted earnings per share calculation 892,558 836,555

At 31 October 2011, the Group had no dilutive potential ordinary shares in issue.



annual report 2012


14. PROPERTY, PLANT AND EQUIPMENT

Construction-

in-progress

Leasehold

land

Leasehold

properties and

improvements

Plant and

equipment Total

$’000 $’000 $’000 $’000 $’000

Group

Cost

At 1 November 2010 2,673 1,513 7,169 33,214 44,569

Effects of movements in exchange rates 14 (27) (35) (364) (412)

Additions 8,344 – 50 990 9,384

Transfers (19) – – 19 –

Disposals – (950) (1,112) (621) (2,683)

At 31 October 2011 11,012 536 6,072 33,238 50,858

Effects of movements in exchange rates (13) (27) (67) (278) (385)

Additions 4,554 1,124 1,900 2,309 9,887

Transfers (14,770) – 36 14,734 –

Disposals – – – (331) (331)

Reclassified to finance lease receivables – – – (14,598) (14,598)

At 31 October 2012 783 1,633 7,941 35,074 45,431

Accumulated depreciation and impairment losses

At 1 November 2010 – 17 2,684 8,757 11,458

Effects of movements in exchange rates – (1) 2 (19) (18)

Depreciation for the year – 18 179 2,613 2,810

Disposals – (6) (31) (596) (633)

Reversal of impairment loss – – – (502) (502)

At 31 October 2011 – 28 2,834 10,253 13,115

Effects of movements in exchange rates – (1) (4) (58) (63)

Depreciation for the year – 6 192 2,955 3,153

Disposals – – – (130) (130)

Impairment loss – – – 194 194

At 31 October 2012 – 33 3,022 13,214 16,269

Carrying amounts

At 1 November 2010 2,673 1,496 4,485 24,457 33,111

At 31 October 2011 11,012 508 3,238 22,985 37,743

At 31 October 2012 783 1,600 4,919 21,860 29,162



annual report 2012


14. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Construction-

in-progress

Plant and

equipment Total

$’000 $’000 $’000

Company

Cost

At 1 November 2010 – 765 765

Additions – 14 14

Disposals – (2) (2)

At 31 October 2011 – 777 777

Additions 67 19 86


At 31 October 2012 67 785 852

Accumulated depreciation

At 1 November 2010 – 199 199

Depreciation for the year – 79 79


At 31 October 2011 – 276 276

Depreciation for the year – 80 80


At 31 October 2012 – 345 345

Carrying amounts

At 1 November 2010 – 566 566

At 31 October 2011 – 501 501

At 31 October 2012 67 440 507

14A. Impairment Loss on Plant and Equipment

Included in the property, plant and equipment of the Group is a coal-fired power plant with carrying amount

of $6,514,000 as at 31 October 2012 (2011: $7,008,000) owned by a non-wholly owned subsidiary, Wuhan

ecoWise Energy Co., Ltd.. This plant will be converted to a biomass co-generation plant. The coal-fired

power plant has ceased operations and the commencement of plant conversion is subject to the subsidiary

receiving additional capital injection from its shareholders for purposes of securing the bank financing for the

conversion. As at 31 October 2012, the Group has assessed the recoverable amount of the plant based on

its estimated value in use assuming the operation of a biomass co-generation plant, using a pre-tax discount

value of 12.8%. Based on management’s review, there is no impairment loss.



annual report 2012


14. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

14A. Impairment Loss on Plant and Equipment (Continued)

During the current reporting year, the Group has also assessed the recoverable amount of certain of its

plant and equipment in the resource recovery segment and recorded an impairment loss of $194,000. The

Group considered the amount and expected usage of the plant and equipment and assessed the recoverable

amount based on its estimated value in use at a pre-tax discount value of 12%. The impairment loss on

plant and equipment was recorded under other charges in the profit or loss.

In the previous reporting year, the Group assessed the recoverable amount of certain of its plant and

equipment in the renewal energy operating segment and reversed an impairment loss of $502,000 recognised

in previous reporting years. The reversal of impairment loss on plant and equipment was recognised under

other credits in the profit or loss.

14B. Plant and Equipment Acquired Under Finance Lease Arrangements

The Group and the Company acquired certain plant and equipment under finance lease agreements and the

carrying amounts of the plant and equipment are as follows:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Plant and equipment (Note 27B) 2,116 2,746 273 317

14C. Securities Pledged

As at the end of the reporting year, the carrying amounts of the Group’s property, plant and equipment that

are pledged as securities to secure loans and borrowings (Note 27A) are as follows:

Group

2012 2011

$’000 $’000

Leasehold land 1,600 511

Leasehold properties and improvements 3,455 1,573

Plant and equipment 11,317 13,042

16,372 15,126



annual report 2012


15. INTANGIBLE ASSETS

Trademarks

Customer

relationships Goodwill Total

$’000 $’000 $’000 $’000

Group

Cost

At 1 November 2010 1,939 55 487 2,481

Effects of movements in exchange rates (51) (2) (7) (60)

Written-off – – (198) (198)

At 31 October 2011 1,888 53 282 2,223

Effects of movements in exchange rates (32) (1) (5) (38)

At 31 October 2012 1,856 52 277 2,185

Accumulated amortisation and

impairment losses

At 1 November 2010 – – 198 198

Effects of movements in exchange rates (1) – – (1)

Amortisation for the year 100 5 – 105

Written-off – – (198) (198)

At 31 October 2011 99 5 – 104

Effects of movements in exchange rates (3) – – (3)

Amortisation for the year 99 5 – 104

At 31 October 2012 195 10 – 205

Carrying amounts

At 1 November 2010 1,939 55 289 2,283

At 31 October 2011 1,789 48 282 2,119

At 31 October 2012 1,661 42 277 1,980

The amortisation of trademarks and customer relationships were included in marketing and distribution

expenses.



annual report 2012


15. INTANGIBLE ASSETS (CONTINUED)

15A. Impairment Testing for Cash-Generating Units (“CGUs”) Containing Goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s CGUs identified through operating

subsidiaries as follows:

2012 2011

$’000 $’000

Name of subsidiary

Sunrich Resources Sdn. Bhd. (Resource Recovery segment) 277 282

The recoverable amount of goodwill allocated to the CGU, Sunrich Resources Sdn. Bhd., was based on its

value in use and was determined by discounting the future cash flows to be generated from the continuing

use of the CGU. These calculations use cash flow projections based on financial budgets.

Key assumptions used in value in use calculation

2012 2011

Growth rate 5% to 15% 5% to 16%

Discount rate 12% 12%

The growth rate used is based on management’s expectations on market performance. The discount rate

used is pre-tax and reflects specific risks relating to the specific industry in which the entity operates in

and cash flows beyond the periods covered by the financial budgets are projected on the assumptions of

constant revenue growth and gross margins.

SAR1212003 • Ecowise_AR • 01/02/2013 12:41 • 23 E_EcoWise_Notes b.indd SAR1212003 • Ecowise_AR • 01/02/2013 12:41 • 23 E_EcoWise_Notes b.indd


annual report 2012


16. LAND USE RIGHTS

Group

2012 2011

$’000 $’000

Cost

At beginning of the reporting year 1,136 1,123

Effects of movements in exchange rates (7) 13

At end of the reporting year 1,129 1,136

Accumulated amortisation

At beginning of the reporting year 62 39


Amortisation for the year 23 22

At end of the reporting year 84 62

Carrying amounts



Land use rights relate to a land in The People’s Republic of China (“PRC”). The land use rights expire on 14

June 2059 and are non-transferable. Amortisation of land use rights was charged as administrative expenses.



annual report 2012


17. INVESTMENTS IN SUBSIDIARIES

Company

2012 2011

$’000 $’000

Unquoted equity shares, at cost 19,524 19,524

Less: Allowance for impairment loss (1,450) (1,450)

18,074 18,074

Loans to subsidiaries 7,871 306

25,945 18,380

Movements in allowance for impairment loss:


Impairment loss recognised – 100


Loans to subsidiaries are unsecured and interest-free. The settlement of these amounts is neither planned

nor likely to occur in the future. As these amounts are in substance, a part of the Company’s net investments

in subsidiaries, they are stated at cost less impairment losses.



annual report 2012


17. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

The subsidiaries held by the Group are listed below:

Name of Subsidiary

Country of

Incorporation/

Place of Operations Principal Activities

Effective

Percentage of

Equity

Held by Group

2012 2011

% %

Held by the Company

Asia Cleantech Hub Pte. Ltd. (a) Singapore Investment holding 100 –

(Incorporated on 6 January 2012)

Bee Joo Environmental Pte. Ltd. (a) Singapore General waste management services 100 100

Bee Joo Industries Pte. Ltd. (a) Singapore Processing and recycling of used

copper slag, horticultural and other

waste and operating of biomass co-

generation plant

100 100

ecoWise Energy Pte. Ltd. (a) Singapore Renewable energy business 100 100

ecoWise International Pte. Ltd. (a) Singapore International procurement and trading

of rubber related goods and research

and experimental development on

environment and clean technologies

100 100

ecoWise Resources Pte. Ltd. (a) Singapore Processing and recycling of horticultural

and other waste

100 100

ecoWise Solutions Pte. Ltd. (a) Singapore Developing and commercialising

ecology solutions, research and

development of technologies relating to

environmental solutions

100 100

ecoWise Ventures Pte. Ltd. (a) Singapore Investment holding 100 100

Sunrich Resources Sdn. Bhd. (a) Malaysia Investment holding 100 100



annual report 2012



Name of Subsidiary

Country of

Incorporation/


Effective

Percentage of

Equity

Held by Group

2012 2011

% %

Held by subsidiaries

Eco Environmental (S) Pte. Ltd. (d) Singapore Dormant 100 100

ecoWise Technologists and

Engineers Pte. Ltd. (a)

Singapore Provision of environmental solutions

consultancy services

80 80

ecoWise Marina Power Pte. Ltd. (a) Singapore Operation and maintenance of biomass

co-generation plant

100 100

Envirox Pte. Ltd. (d) Singapore Dormant 100 100

ecoWise RubberTech Pte. Ltd.

(formerly known as Sunrich

Corporation Pte. Ltd) (a)

Singapore Processing of rubberised related goods

and investment holding

100 100

Chongqing ecoWise Investment

Management Co., Ltd. (b)

PRC Service provider for project and

investment consultancy and

management

100 100

Wuhan ecoWise Energy

Co., Ltd. (a)(c)

PRC Generation and sale of electricity and

steam

49 49

Sunrich Integrated Sdn. Bhd. (a) Malaysia Investment holding 100 70

Autoways Industries Sdn. Bhd. (a) Malaysia Trading of retread tyres and related

rubberised products

76 53

Ecogreen Products and

Services Sdn. Bhd. (a)

Malaysia Production, trading and consultancy

services related to biomass products

80 –



annual report 2012



Name of Subsidiary

Country of

Incorporation/


Effective

Percentage of

Equity

Held by Group

2012 2011

% %

Held by subsidiaries (Continued)

Gulf Rubber (M) Sdn. Bhd. (a) Malaysia Retreading of tyres, dealing in

rubberised products and investment

holding

84 59

Gulf Rubber Suntex Sdn. Bhd. (a) Malaysia Trading of retread tyres and related

rubberised products

71 49

Saiko Rubber (Malaysia) Sdn. Bhd. (a) Malaysia Manufacturing and trading of rubberised

products and investment holding

51 36

Sun Rubber Industry Sdn. Bhd. (a) Malaysia Manufacturing and trading of rubberised

products and investment holding

100 70

Sun Rubber Marketing Sdn. Bhd. (a) Malaysia Dormant 100 70

Sun Tyre & Auto Products

Sdn. Bhd. (a)

Malaysia Trading of new and retread tyres and

related rubber products

100 70

Sun Tyre Industries Sdn. Bhd. (a) Malaysia Retreading of tyres, dealing in

rubberised products and investment

holding

100 70

Sunrich Marketing Sdn. Bhd. (a) Malaysia Trading of retread tyres and related

rubberised products

100 70

Trakar Suntex Sdn. Bhd. (a) Malaysia Trading of retread tyres and related

rubberised products

43 30

Winner Suntex Sdn. Bhd. (a) Malaysia Trading of retread tyres and related

rubberised products

75 53



annual report 2012



(a) Audited by member firms of RSM International. RSM Chio Lim LLP in Singapore is the auditor for all significant

Singapore-incorporated subsidiaries. RSM Robert Teo, Kuan & Co. is the auditor for all Malaysia-incorporated

subsidiaries. RSM China CPA Firm, Shanghai International Division, is the auditor for all significant subsidiaries

established in the PRC.

(b) For the purpose of consolidation, the unaudited management financial statements at 31 October 2012 have been

used. The impact arising from the use of the subsidiaries’ unaudited management financial statements is not

expected to be significant to the financial statements of the Group.

(c) This entity is consolidated because the Group is able to govern the financial and operating policies of the entity by

virtue of an agreement with other shareholders of the entity although the Group does not own, directly or indirectly

through subsidiaries, more than half of the voting power of the entity.

(d) In the process of de-registration.

17A. Acquisition of a Subsidiary

In December 2011, the Group acquired 80% equity interests in Ecogreen Products and Services Sdn. Bhd.

for cash consideration of $1,000.

The fair values of identifiable assets and liabilities of Ecogreen Products and Services Sdn. Bhd. at the date

of acquisition are as follows:

Fair values

$’000

Cash and cash equivalents 3

Trade and other payables (2)

Net identifiable assets 1

The net cash inflows upon acquisition are as follows:

2012

$’000

Cash consideration paid (1)

Less: Cash and cash equivalents acquired 3

Net cash inflows upon acquisition 2



annual report 2012



17B. Acquisition of Non-Controlling Interests without Change in Control

In March 2012, the Company acquired an additional 30% equity interests in Sunrich Integrated Sdn. Bhd.

for consideration of $3,675,000 by way of issuance of 35,000,000 new ordinary shares in the capital of

the Company at $0.105 per ordinary share. After the acquisition, Sunrich Integrated Sdn. Bhd. became a

wholly-owned subsidiary of the Group. The carrying amount of Sunrich Integrated Sdn. Bhd.’s net assets

on the date of acquisition was $22,489,000. The Group recognised a decrease in non-controlling interests

of $6,419,000 and an increase in other reserves of $2,744,000.

In April 2011, the Company acquired an additional 27% equity interests in ecoWise Resources Pte. Ltd. for

$100,000 in cash. After the acquisition, ecoWise Resources Pte. Ltd. became a wholly-owned subsidiary

of the Group. The carrying amount of ecoWise Resources Pte. Ltd.’s net liabilities in the Group’s financial

statements on the date of acquisition was $1,689,000.

The Group recognised an increase in non-controlling interests of $8,000 and a decrease in other reserves

of $108,000.

In July 2011, the Group acquired an additional 30% equity interests in Eco Environmental (S) Pte. Ltd. for

$60,000 in cash. After the acquisition, Eco Environmental (S) Pte. Ltd. became a wholly-owned subsidiary

of the Group. The carrying amount of Eco Environmental (S) Pte. Ltd.’s net assets in the Group’s financial

statements on the date of acquisition was $168,000. The Group recognised a decrease in non-controlling

interests of $44,000 and a decrease in other reserves of $16,000.

17C. Disposal of Non-Controlling Interests without Change in Control

In February 2011, the Group disposed off 20% equity interests in ecoWise Technologists and Engineers Pte.

Ltd. for a cash consideration of $20,000.



annual report 2012


18. INVESTMENTS IN ASSOCIATES

Group

2012 2011

$’000 $’000

Unquoted equity shares, at cost 5,187 1,193

Share of profits or loss:


Share of loss for the reporting year (345) (287)

At end of the reporting year (186) 159

Share of carrying amount of associates 5,001 1,352

The associates held by the Group are listed below:

Name of Associate

Country of

Incorporation/


Effective

Percentage of

Equity

Held by Group

2012 2011

% %

Held by subsidiaries

Geocycle Singapore Pte. Ltd. Singapore Management and recycling of

industrial waste materials

50 50

China-UK Low Carbon

Enterprise Co., Ltd

PRC Investment holding 20 –

For the purpose of equity accounting for the associates, the unaudited management financial statements at

31 October 2012 have been used. The impact arising from the use of the associates’ unaudited management

financial statements is not expected to be significant to the financial statements of the Group.



annual report 2012


18. INVESTMENTS IN ASSOCIATES (CONTINUED)

The summarised unaudited financial information of the associates, not adjusted for the percentage ownership

held by the Group, is as follows:

Group

2012 2011

$’000 $’000

Assets 23,000 4,254

Liabilities (1,396) (1,516)

Revenue 1,904 1,743

Loss for the year (946) (574)

19. OTHER FINANCIAL ASSETS

Group

2012 2011

$’000 $’000

Unquoted equity shares in corporations as

available-for-sale financial asset, at cost 1,180 415

Quoted equity shares in corporations, at fair value – 7

1,180 422

The fair value of the unquoted investments as available-for-sale financial asset is deemed to be not reliably

measurable as the probabilities of the various estimates within the range cannot be reasonably assessed

and used in estimating fair value. Consequently, the investment is carried at cost less impairment losses.



annual report 2012


20. INVENTORIES

Group

2012 2011

$’000 $’000

Raw materials 3,605 4,135

Work-in-progress 802 618

Finished goods 4,613 4,016

Consumables 1,044 995

10,064 9,764

Inventories are stated after allowance for inventory obsolescence as follows:

Group

2012 2011

$’000 $’000


Effects of movements in exchange rates (2) (3)

Allowance for inventory obsolescence – made/(reversed) 86 (98)


At the end of the reporting year, the Group’s inventories with a carrying amount of $621,000 (2011:

$1,174,000) are pledged as security to secure loans and borrowings (Note 27A). Raw materials, consumables

and changes in finished goods and work-in-progress recognised as cost of sales during the reporting year

amounted to $51,859,000 (2011: $48,983,000).

The reversal of the allowance in the previous reporting year was for inventories sold.



annual report 2012


21. TRADE AND OTHER RECEIVABLES

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Trade receivables

Outside parties 19,094 19,715 – 14

Allowance for doubtful receivables (671) (665) – –

Factored trade receivables 373 255 – –

Related parties 119 332 – –

Subsidiaries – – 10,278 10,095

Associate 65 83 – –

Subtotal 18,980 19,720 10,278 10,109

Other receivables

Subsidiaries – – 12,464 11,147

Associate 600 600 – –


Other receivables 1,014 398 – –

Allowance for doubtful receivables (23) (23) – –

Subtotal 1,787 1,172 12,464 11,147

Total trade and other receivables 20,767 20,892 22,742 21,256

Presented in statements of financial position as:

Non-current 600 600 – –

Current 20,167 20,292 22,742 21,256

20,767 20,892 22,742 21,256

Movements in the allowance for doubtful receivables are as follows:

Group

2012 2011

$’000 $’000


Allowance for doubtful receivables – made/(reversed) 17 (17)





annual report 2012


21. TRADE AND OTHER RECEIVABLES (CONTINUED)

Other receivables from the subsidiaries are unsecured, bear interest at 2.75% (2011: 5%) per annum and

have no fixed terms of repayment.

Other receivables from an associate are unsecured, non-interest bearing and not expected to be repaid

within the next 12 months.

Other receivables from related parties are unsecured, non-interest bearing and have no fixed terms of

repayment.

There is no allowance for doubtful receivables on receivables due from related parties.

At the end of the reporting year, factored trade receivables of $373,000 (2011: $255,000) were transferred

to bank. The factoring facility is secured by a corporate guarantee provided by the Company. Since these

receivables did not meet the FRS 39 derecognition requirements, they were recognised as receivables even

though they were legally sold without recourse.

22. FINANCE LEASE RECEIVABLES

During the current reporting year, the Group completed the construction of a biomass co-generation plant

under a Design, Build and Operate Agreement (“DBO Agreement”) entered with a customer in previous

reporting years. Under the DBO Agreement, the Group will operate and maintain the biomass co-generation

plant to supply electricity and heat to the customer for a term of 15 years.

The Group assessed that the terms and conditions of the DBO Agreement contains a lease arrangement

under INT-FRS 104 – Determining whether an Arrangement contains a Lease. The lease is classified as a

finance lease as the present value of the minimum lease receivables amount to at least substantially all of

the fair value of the biomass co-generation plant at the inception of the lease. Consequently, the Group

reclassified its investment in the biomass co-generation plant from plant and equipment to finance lease

receivables. The Group continues to be the legal owner of the plant.



annual report 2012


22. FINANCE LEASE RECEIVABLES (CONTINUED)

Future minimum finance lease receivables under finance leases together with the present value of the net

minimum finance lease receivables are as follows:

Minimum

finance lease

receivables

Unearned

finance

income

Net finance

lease

receivables

2012 $’000 $’000 $’000

Receivable within one year 2,287 (1,447) 840

Receivable within 2 to 5 years 7,735 (5,240) 2,495

Receivable after 5 years 17,880 (6,644) 11,236

Total 27,902 (13,331) 14,571

The imputed finance income on the finance lease receivables was determined based on the interest rate

implicit in the lease. The effective interest rate is 10.2% per annum.

23. OTHER ASSETS

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Prepayments 383 405 42 42

Deposits to secure services 251 556 43 44

634 961 85 86



annual report 2012


24. CASH AND CASH EQUIVALENTS

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Not restricted in use 16,801 12,167 3,356 3,805

Restricted in use 1,726 618 – –

18,527 12,785 3,356 3,805

Interest earning balances 1,855 634 1,000 –

Details of restricted cash balances are as follows:

Group

2012 2011

Under Financing Activities $’000 $’000

Fixed deposits held by banks as security

deposits for loans and borrowings 706 500

Fixed deposits held by banks as security

deposits for performance bond 30 30

Bank balances held by banks as security

deposits for foreign currency contract facilities 88 88

Under Operating Activities

Bank balances set aside for payments to specific creditors 902 –

1,726 618

Other than the amount that is restricted in use, cash and cash equivalents represent amounts with less than

90 days maturity.

The rate of interest for the cash on interest earning accounts is between 0.1% and 0.8% (2011: 0.1% and

0.8%) per annum.



annual report 2012


24. CASH AND CASH EQUIVALENTS (CONTINUED)

24A. Cash and Cash Equivalents in the Consolidated Statement of Cash Flows

Group

2012 2011

$’000 $’000

Cash and cash equivalents in the statement of financial position 18,527 12,785

Cash restricted in use (1,726) (618)

Bank overdrafts (351) (1,812)

Cash and cash equivalents for consolidated statement of

cash flows purposes at end of the reporting year 16,450 10,355

24B. Non-Cash Transactions

During the reporting year, the Group had the following major non-cash transactions:

Group

2012 2011

$’000 $’000

Acquisition of plant and equipment under

finance lease agreements 1,072 76

Issue of ordinary shares as consideration for acquisition of

non-controlling interests (Note 17B) 3,675 –

Issue of ordinary shares for the performance

shares awarded (Note 25) – 577



annual report 2012


25. SHARE CAPITAL

Number of ordinary

shares with no par value Share capital

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Group and Company

At beginning of the reporting year 839,159 832,072 37,050 36,375

Exercise of warrants – 2,802 – 98

Award of performance shares – 4,285 – 577

Issue of ordinary shares 85,000 – 8,925 –

Share issue expenses – – (48) –

At end of the reporting year 924,159 839,159 45,927 37,050

Ordinary Shares

The ordinary shares with no par value are fully paid and carry no right to fixed income. The holders of ordinary

shares are entitled to receive dividends when declared by the Company. All ordinary shares carry one vote

per share without restrictions at meetings of the Company.

Issue of ordinary shares:

During the reporting year, the Company issued new ordinary shares as follows:

(a) 50,000,000 new ordinary shares at S$0.105 per ordinary share for cash in pursuant to a Subscription

Agreement; and

(b) 35,000,000 new ordinary shares as consideration for the acquisition of the remaining 30% equity

interests in Sunrich Integrated Sdn. Bhd. (Note 17B).

In the previous reporting year, the Company issued new ordinary shares as follows:

(c) 85,500,000 warrants were exercised, resulting in the issuance of 2,802,000 new ordinary shares.

(d) 4,285,000 new ordinary shares were issued pursuant to the ecoWise Performance Share Plan.



annual report 2012


25. SHARE CAPITAL (CONTINUED)

Externally Imposed Capital Requirement

The Company is subject to externally imposed capital requirement which is to have share capital with a

free float of at least 10% of the shares to maintain its listing on the Singapore Exchange Securities Trading

Limited. The Company has met the externally imposed capital requirement.

Capital Management

The Company is committed to maintain an optimal capital structure to safeguard the Company’s ability to

continue as a going concern, to provide returns for owners and benefits for other stakeholders, and to provide

an adequate return to owners by pricing products and services commensurately with the level of risk. The

management sets the amount of capital in proportion to risk. There were no changes in the approach to

capital management during the reporting year.

The management manages the capital structure and makes adjustments to it where necessary or possible in

the light of changes in conditions and the risk characteristics of the underlying assets. In order to maintain

or adjust the capital structure, the management may adjust the amount of dividends paid to owners, return

capital to owners, issue new shares, or sell assets to reduce debts.

The management monitors the capital on the basis of the debt-to-adjusted capital ratio. This ratio is

calculated as net debt/adjusted capital. Net debt is calculated as total borrowings less cash and cash

equivalents. Adjusted capital comprises all components of equity (i.e. share capital and retained earnings).

The debt-to-adjusted capital ratio is set out below:

Group Company

2012 2011 2012 2011

Debt-to-adjusted capital ratio 14.2% 15.8% NM NM

(NM: Not meaningful as cash and cash equivalents exceed borrowings)



annual report 2012


26. OTHER RESERVES

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Equity-settled share-based

compensation reserve (Note 26A) 528 – 528 –

Foreign currency translation

reserve (Note 26B) (1,401) (923) – –

Hedging reserve (Note 26C) 19 – – –

Other reserve (Note 26D) 2,553 (124) – –

1,699 (1,047) 528 –

All reserves classified on the face of the statements of financial position as retained earnings represent past

accumulated earnings and are distributable. The other reserves are not available for cash dividends unless

realised.

26A. Equity-Settled Share-Based Compensation Reserve

ecoWise Performance Share Plan

The ecoWise Performance Share Plan (the “Share Plan”) was approved by the members of the Company at

an extraordinary general meeting held on 23 March 2007. The Share Plan provides for the grant of ordinary

shares of the Company, their equivalent cash value or combinations thereof, to selected employees of the

Company and its subsidiaries, including the directors of the Company, and other selected participants. Under

the Share Plan, the maximum number of ordinary shares to be awarded to eligible participants shall not

exceed 15% of the issued ordinary shares of the Company on the date preceding the grant of the award.

The Share Plan is administered by the Remuneration Committee comprising three independent directors,

Ang Mong Seng, Ng Cher Yan and Ong Teck Ghee. Ordinary shares are awarded when the Remuneration

Committee is satisfied that the prescribed performance target(s) have been achieved and the vesting period

(if any) has expired. The vesting periods may be extended beyond the performance achievement periods as

set out by the Remuneration Committee.



annual report 2012


26. OTHER RESERVES (CONTINUED)

26A. Equity-Settled Share-Based Compensation Reserve (Continued)

The lapsing of the award is provided for upon the occurrence of certain events, which includes:

(a) the misconduct of an eligible participant;

(b) the termination of the employment of an eligible participant;

(c) the bankruptcy of an eligible participant;

(d) the retirement, ill health, injury, disability or death of an eligible participant; and/or

(e) a take-over, amalgamation, winding-up or restructuring of the Company.

The Share Plan shall continue in force at the discretion of the Remuneration Committee, subject to a

maximum period of 10 years commencing on 23 March 2007. The Share Plan may continue beyond the

above stipulated period with the approval of members of the Company by ordinary resolution in a general

meeting and of any relevant authorities which may then be required.

The Company may deliver ordinary shares pursuant to awards granted under the Share Plan by way of:

(a) Issuance of new ordinary shares;

(b) Delivery of existing ordinary shares purchased from the market or ordinary shares held in treasury;

and/or

(c) Cash in lieu of ordinary shares, based on the aggregate market value of such ordinary shares.

From the commencement date of the Share Plan to 31 October 2012, 43,232,225 performance shares have

been granted (after adjustments for rights cum warrants issue on 1 November 2007 and rights issue on 26

September 2008).



annual report 2012



26A. Equity-Settled Share-Based Compensation Reserve (Continued)

At the end of the reporting year, the number of performance shares granted under the Share Plan are as

follows:


Date of Grant

At 1

November

2011 Granted Awarded

Cancelled/

lapsed

At 31

October

2012

21 March 2012 – 5,426,875 – (350,000) 5,076,875

The above number of performance shares represents the shares required if participants are awarded at 100%

of the grant. However, the performance shares awarded at the vesting date are dependent on the level of

achievement against the pre-set performance conditions and targets.

Group and Company

2012 2011

$’000 $’000

Equity-settled share-based compensation reserve

At beginning of the reporting year – 577

Equity-settled share-based expenses charged to profit or loss,

included in other charges 528 –

Transfer to share capital (Note 25) – (577)

At end of the reporting year 528 –

The equity-settled share-based compensation reserve is not available for distribution as cash dividends.

26B. Foreign Currency Translation Reserve

Group

2012 2011

$’000 $’000

At beginning of the reporting year (923) (576)

Exchange differences on translating foreign operations (478) (347)

At end of the reporting year (1,401) (923)



annual report 2012



26B. Foreign Currency Translation Reserve (Continued)

The foreign currency translation reserve represents exchange differences arising from the translation of the

financial statements of foreign operations whose functional currencies are different from the presentation

currency of the Group.

26C. Hedging Reserve

The hedging reserve relates to the effective portion of the cumulative net change in the fair value of cash

flow hedging instruments related to hedged transactions that have not yet occurred.

26D. Other Reserve

Other reserve relates to the difference between the change in non-controlling interests when acquiring

additional equity interests in subsidiaries and the fair value of the consideration given for the acquisitions.

27. LOANS AND BORROWINGS

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Non-current liabilities

Secured bank loans (Note 27A) 9,862 4,953 – –

Unsecured bank loans – 1,345 – 1,345

Finance lease liabilities (Note 27B) 946 555 127 173

10,808 6,853 127 1,518

Current liabilities

Secured bank loans (Note 27A) 1,886 75 – –

Secured bank overdrafts (Note 27A) 194 749 – –

Unsecured bank overdrafts 157 1,063 – –

Secured bankers’ acceptances (Note 27A) 8,560 8,484 – –

Secured trust receipts (Note 27A) 2,360 224 – –

Unsecured bank loans 1,345 1,280 1,345 1,280

Finance lease liabilities (Note 27B) 525 550 46 46

15,027 12,425 1,391 1,326

Total loans and borrowings 25,835 19,278 1,518 2,844



annual report 2012


27. LOANS AND BORROWINGS (CONTINUED)

The non-current portion is repayable as follows:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Due within 2 to 5 years 6,793 3,834 123 1,495

Due after 5 years 4,015 3,019 4 23

Total non-current portion 10,808 6,853 127 1,518

The range of floating interest rates per annum paid was as follows:

Group

2012 2011

Bank loans 2.2% to 7.4% 2.2%

Trust receipts 2.8% to 6.0% 2.3% to 2.4%

Bank overdrafts 6.1% to 8.1% 7.3% to 8.1%

The range of fixed interest rates paid was as follows:

Group

2012 2011

Bank loans 5.0% 5.0% to 10.4%

Bankers’ acceptances 4.0% to 5.5% 3.9% to 5.8%

Finance lease liabilities 2.5% to 10.9% 2.2% to 9.0%



annual report 2012



27A. Securities on Loans and Borrowings

The details of the securities for loans and borrowings amounting to $24,333,000 (2011: $15,590,000) are

as follows:

(a) Loans and borrowings of the Group comprising bank loans of $2,462,000 (2011: $424,000), bank

overdrafts of $80,000 (2011: 616,000) and bankers’ acceptances of $6,922,000 (2011: $8,205,000)

are secured by a charge over the leasehold land of $1,600,000 (2011: $511,000), leasehold properties

and improvements of $3,330,000 (2011: $1,573,000) and plant and equipment of $7,685,000

(2011: $8,449,000) of the Group as disclosed in Note 14C. As at 31 October 2011, these loans

and borrowings were also secured by a charge over leasehold land and leasehold properties and

improvements of non-controlling interests of a subsidiary.

(b) Loans and borrowings of the Group comprising bank loans of $634,000 (2011: Nil) and trust receipts

of $2,360,000 (2011: $224,000) are secured by pledges of fixed deposits amounting to $500,000

(2011: $500,000) of the Group as disclosed in Note 24. These bank loans and trust receipts are

guaranteed by the Company.

(c) Loans and borrowings of the Group comprising bankers’ acceptances of $1,353,000 (2011: Nil) are

secured by pledges of fixed deposits amounting to $206,000 (2011: Nil) of the Group as disclosed

in Note 24.

(d) A bank loan of the Group amounting to $8,652,000 (2011: $4,604,000) is secured by a legal

assignment of the DBO Agreement with a customer (Note 22) and a fixed and floating charge over

present and future undertakings, property assets, revenue and rights in relation to the biomass co-

generation plant of a subsidiary (Note 22). This bank loan is guaranteed by the Company.

(e) Loans and borrowings of the Group comprising bankers’ acceptances of $151,000 (2011: Nil) and

bank overdrafts of $114,000 (2011: $133,000) are secured by a pledge of inventories of the Group

amounting to $621,000 (2011: $1,174,000) as disclosed in Note 20.

(f) Loans and borrowings of the Group comprising bankers’ acceptances of $134,000 (2011: $279,000)

are secured by a charge over leasehold properties and improvements of $125,000 (2011: Nil), plant

and equipment of $1,516,000 (2011: $1,847,000) of the Group as disclosed in Note 14C.

(g) Financial lease liabilities of the Group and the Company amounting to $1,471,000 (2011: $1,105,000)

and $173,000 (2011: $219,000) respectively are secured by the lessors’ charge over the leased plant

and equipment as disclosed in Note 14B and Note 14C.



annual report 2012



27B. Finance Lease Liabilities

The finance lease liabilities are payable as follows:

Group

Minimum

lease

payments

Finance

costs Principal

2012 $’000 $’000 $’000

Due within one year 596 (71) 525

Due within 2 to 5 years 1,032 (90) 942

Due after 5 years 5 (1) 4

Total 1,633 (162) 1,471

2011


Due within 2 to 5 years 592 (60) 532


Total 1,233 (128) 1,105

Company

2012




Total 217 (44) 173

2011




Total 273 (54) 219

The Group leases certain of its plant and equipment under finance leases. The lease term is between 3 to

10 years. The fixed rate of interest for finance leases is approximately 2.5% to 10.9% (2011: 2.2% to 9.0%)

per annum. All leases are on a fixed repayment basis and no arrangements have been entered into for

contingent rental payments. The obligations under finance leases are secured by the lessor’s charge over

the leased assets (Note 14B and Note 14C).



annual report 2012


28. PROVISION FOR RETIREMENT BENEFIT OBLIGATIONS

The Group operates a defined benefit plan for qualifying employees of its subsidiaries in Malaysia. Under the

scheme, the employees are entitled to two weeks of their last drawn salary for every year of employment

served having fulfilled certain conditions. No other post-retirement benefits are provided. The scheme is not

held separately by an independent administrated fund as the scheme is not a funded arrangement. New

employees of the subsidiaries in Malaysia are not entitled to such retirement benefits.

Group

2012 2011

$’000 $’000

Provision for retirement benefit obligations 584 542

The movements in the provision for retirement benefit obligations and the amounts recognised in the profit

or loss during the reporting year are as follows:

Group

2012 2011

$’000 $’000


Effects of movements in exchange rates (10) (47)

Current service cost 45 30

Interest expenses on retirement benefit obligations 34 32

Actuarial gain (11) (11)

Benefits paid (16) (54)


The principal actuarial assumptions used in respect of the Group’s defined benefit plan were as follows:

Group

2012 2011

% %

Discount rate 6.24 6.24

Expected rate of salaries increase 4.00 4.00

The assumptions relating to longevity used to compute the retirement benefit obligations are based on the

published mortality tables commonly used by the actuarial professionals in Malaysia.



annual report 2012


29. DEFERRED INCOME

Group

2012 2011

$’000 $’000

Deferred government grant income 73 73

Presented in consolidated statements of financial position as:

Non-current 65 65

Current 8 8

73 73

30. TRADE AND OTHER PAYABLES

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Trade payables

Outside parties and accrued liabilities 12,726 11,507 1,040 1,755


Subsidiaries – – 61 136

Subtotal 12,745 11,522 1,101 1,891

Other payables

Outside parties 276 146 3 3

Total trade and other payables 13,021 11,668 1,104 1,894



annual report 2012


31. DERIVATIVE FINANCIAL INSTRUMENTS

Group

2012 2011

$’000 $’000

Forward foreign currency contracts 21 (31)

Presented in statement of financial position as:

Current assets 35 20

Current liabilities (14) (51)

21 (31)

At 31 October 2012, the notional principal amounts of the outstanding forward foreign currency contracts

were $4,014,000 (2011: $4,097,000). The outstanding forward foreign currency contracts are expected to

be settled within the next 12 months.

Forward foreign currency contracts are utilised to hedge against significant future transactions and cash

flows. They are used where possible to reduce the exposure in the fluctuations of foreign currency rates.

The forward foreign currency contracts are primarily denominated in the currencies of the Group’s principal

markets. The Group does not enter into derivative contracts for speculative purposes.

The forward foreign currency contracts are not traded in an active market. As a result, their fair values

are based on valuation techniques currently consistent with generally accepted valuation methodologies

for pricing financial instruments, and incorporate all factors and assumptions that knowledgeable, willing

market participants would consider in setting the price. The fair value of forward foreign currency contracts

is based on the current value of the difference between the contractual exchange rate and the market rate

at the end of the reporting year. The fair value is regarded as a Level 2 fair value measurement for financial

instruments (Note 32B2).



annual report 2012


32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS

32A. Classification of Financial Assets and Liabilities

The carrying amounts of financial assets and financial liabilities are as follows:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Financial assets

Loans and receivables:

Trade and other receivables (Note 21) 20,767 20,892 22,742 21,256

Finance lease receivables (Note 22) 14,571 – – –

Cash and cash equivalents (Note 24) 18,527 12,785 3,356 3,805

Financial assets at fair value through profit

or loss classified as held for trading:

Quoted equity shares (Note 19) – 7 – –

Available-for-sale financial assets:

Unquoted equity shares (Note 19) 1,180 415 – –

Derivative financial instruments at fair

value (Note 31) 35 20 – –

55,080 34,119 26,098 25,061

Financial liabilities

Financial liabilities at amortised cost:

Loans and borrowings (Note 27) 25,835 19,278 1,518 2,844

Trade and other payables (Note 30) 13,021 11,668 1,104 1,894

Derivative financial instruments at fair value (Note 31) 14 51 – –

38,870 30,997 2,622 4,738

Further quantitative disclosures are included throughout these financial statements.

32B. Fair Values of Financial Instruments

32B1. Fair value of financial instruments stated at amortised cost in the statements of financial position

The carrying amounts of financial assets and liabilities at amortised cost are reasonable approximation of

their fair values.



annual report 2012


32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)

32B. Fair Values of Financial Instruments (Continued)

32B2. Fair value measurements recognised in the consolidated statement of financial position

The fair value measurements are classified using a fair value hierarchy that reflects the significance of the

inputs used in making the measurements. The levels are (a) Level 1: quoted prices (unadjusted) in active

markets for identical assets or liabilities; (b) Level 2: inputs other than quoted prices included within Level 1

that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);

and (c) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable

inputs).

The Group recognised quoted equity shares of $Nil (2011: $7,000) (Note 19), derivative financial instruments

(assets) of $35,000 (2011: $20,000) (Note 31) and derivative financial instruments (liabilities) of $14,000

(2011: $51,000) (Note 31) at fair values in the consolidated statement of financial position. The quoted

equity shares and derivative financial instruments were measured at Level 1 and Level 2 of the fair value

hierarchy, respectively.

32C. Financial Risk Management

The board of directors has overall responsibility for the establishment and oversight of the Group’s risk

management framework. Risk management is carried out under policies approved by the board of directors.

Risks management policies are established to identify and analyse the risks faced by the Group, to set

appropriate risks’ limits and controls, and to monitor risks and adherence to limits. Risk management policies

and systems are reviewed regularly to reflect changes in the Group’s activities and market conditions.

The Group has exposure to the following financial risks:

• Credit risk;

• Liquidity risk;

• Foreign currency risk; and

• Interest rate risk

The Group’s overall financial risk management strategy seeks to minimise the potential material adverse

effects from these exposures. The information about the Group’s exposure to each of the above risks and

the Group’s objectives, policies and processes for measuring and managing risks are presented below.



annual report 2012



32D. Credit Risk on Financial Assets

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument

fails to meet its contractual obligations and arises principally from the Group’s receivables, cash and cash

equivalents and equity shares. The maximum exposure to credit risk is the total of the fair values of the

financial instruments.

Credit risk on cash balances with banks and financial institutions is limited because the counter-parties are

entities with acceptable credit ratings.

For credit risk on receivables, an on-going credit evaluation is performed on the financial conditions of

the debtors and an impairment loss is recognised in profit or loss. The Group’s exposure to credit risk on

trade and finance lease receivables is influenced mainly by the individual characteristics of each customer.

Management considers the demographics of the Group’s customer bases, including the default risk of the

industry and country which customers operate, as these factors may have an influence on credit risk.

The Group has established a credit policy, whereby each new customer is analysed individually for credit

worthiness. Each entity within the Group is responsible for managing and analysing the credit risk of each

of its new customers before standard payment and delivery terms and conditions are offered. For existing

customers, an on-going credit evaluation is performed on customers’ financial conditions. The exposure to

credit risk is controlled by setting credit limits to individual customers.

The credit terms granted to customers are generally between 14 to 90 days (2011: 14 to 90 days).

(a) Ageing analysis of trade receivables that are past due at the end of the reporting year but not impaired

is as follows:

Group

2012 2011

$’000 $’000

Past due less than 60 days 5,989 3,266

Past due 61 to 90 days 375 436

Past due 91 to 180 days 144 267

Past due over 180 days 726 819

7,234 4,788



annual report 2012



32D. Credit Risk on Financial Assets (Continued)

(b) Ageing analysis of trade receivables at the end of the reporting year that are impaired is as follows:

Group

2012 2011

$’000 $’000

Past due 61 to 90 days 12 –

Past due to 91 to 180 days 197 –

Over 180 days 462 665

671 665

The allowance for doubtful trade receivables as disclosed in Note 21 to the financial statements is

based on individual accounts totalling $671,000 (2011: $665,000) that are determined to be impaired

at the end of the reporting year.

(c) At end of the reporting year, approximately 23% (2011: 30%) of trade receivables are due from three

customers as follows:

Group

2012 2011

$’000 $’000

Top 1 customer 1,667 3,409

Top 2 customers 3,079 5,006

Top 3 customers 4,392 5,887

Other receivables are normally with no fixed terms and therefore there is no maturity.

Cash and cash equivalents disclosed in Note 24 represent amounts with less than 90-days maturity.



annual report 2012



32E. Liquidity Risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with

its financial liabilities that are settled by delivering cash or another financial assets. The Group’s approach

to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its

liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or

risking damage to the Group’s reputation.

The following table analyses the financial liabilities by remaining contractual maturity (contractual and

undiscounted cash flows at the end of the reporting year):

Less than

1 year

Due within

2 to 5 years

Due after

5 years Total

$’000 $’000 $’000 $’000

Group

2012

Loans and borrowings 15,390 7,232 4,455 27,077

Trade and other payables 13,021 – – 13,021

28,411 7,232 4,455 40,098

2011

Loans and borrowings 12,728 4,379 3,225 20,332


24,396 4,379 3,225 32,000

Company

2012

Loans and borrowings 1,437 156 5 1,598


2,541 156 5 2,702

2011

Loans and borrowings 1,438 1,567 32 3,037


3,332 1,567 32 4,931



annual report 2012



32E. Liquidity Risk (Continued)

The undiscounted amounts on the loans and borrowings with fixed and floating interest rates are determined

by reference to the conditions existing at the end of the reporting year.

The average credit period taken to settle trade payables is approximately 65 days (2011: 63 days). The other

payables are with short-term durations. In order to meet such cash commitments, the operating activities

are expected to generate sufficient cash inflows.

Derivative financial instruments in respect of the Group’s forward foreign currency contracts are expected

to be settled within the next 12 months. (Note 31)

The following table analyses the financial guarantee contracts based on the earliest dates in which the

maximum guaranteed amount could be drawn down:

Less than

1 year

Due within

2 to 5 years

Due after

5 years Total

$’000 $’000 $’000 $’000

Company

2012

Financial guarantee contracts 4,118 4,891 3,591 12,600

2011

Financial guarantee contracts 224 1,761 2,843 4,828

At the end of the reporting year, no claims on the financial guarantee contracts are expected.

The unutilised borrowing facilities available to the Group for its operating and investing activities are as

follows:

Group

2012 2011

$’000 $’000

Unutilised loans and borrowings 14,936 15,244

Unutilised factoring facilities 3,500 3,500

The unutilised borrowing facilities are available for the Group’s operating activities and to settle other

commitments. Borrowing facilities are maintained to ensure funds are available for the Group’s operations.



annual report 2012



32F. Interest Rate Risk

The Group’s exposure to interest rate risk relates primarily to interest-earning financial assets and interest-

bearing financial liabilities. Interest rate risk is managed by the Group on an on-going basis with the primary

objective of limiting the extent to which net interest expense could be affected by an adverse movement in

interest rates.

The interest rate risk exposure is mainly from changes in fixed and floating interest rates. The breakdown of

the significant financial instruments by type of interest rate is as follows:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Financial assets

Fixed rates 16,606 634 13,464 11,147

Financial liabilities

Floating rates 14,459 15,124 – –

Fixed rates 11,376 4,154 1,518 2,844

25,835 19,278 1,518 2,844

Sensitivity Analysis

For the variable rate financial assets and liabilities, a hypothetical increase of 100 basis points (2011: 100

basis points) in interest rate at the end of the reporting year would increase/(decrease) pre-tax profit for

the reporting year by the amounts shown below. A decrease in 100 basis points (2011: 100 basis points)

in interest rate would have an equal but opposite effect. This analysis assumes all other variables remain

constant.

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Pre-tax profit for the year (145) (151) – –

The hypothetical changes in basis points are not based on observable market data (unobservable inputs).



annual report 2012



32G. Foreign Currency Risk

The Group has exposure to foreign currency movements on financial assets and financial liabilities

denominated in foreign currencies. It also has foreign currency risk on sales and purchases that are

denominated in foreign currencies. The currencies giving rise to this risk is primarily the Australian dollar,

Chinese renminbi, United States dollar and Japanese yen. The Group hedges its foreign currency exposure

should the need arise through the use of forward foreign currency contracts.

Other than as disclosed elsewhere in the financial statements, the Group’s exposures to foreign currencies

are as follows:

Australian

Dollar

Chinese

Renminbi

Malaysian

Ringgit

Singapore

Dollar

United

States

Dollar

Japanese

Yen Euro Total

Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

2012

Financial Assets

Cash and cash equivalents 252 1 – 67 699 – 1 1,020

Trade and other receivables 5,283 196 4,401 6 4,437 – – 14,323

Total financial assets 5,535 197 4,401 73 5,136 – 1 15,343

Financial Liabilities

Trade and other payables 2,569 – – – 3,975 443 668 7,655

Loans and borrowings – – – – 2,993 – – 2,993

Total financial liabilities 2,569 – – – 6,968 443 668 10,648

Net financial assets/

(liabilities) 2,966 197 4,401 73 (1,832) (443) (667) 4,695

2011

Financial Assets

Cash and cash equivalents 68 – – – 69 – – 137

Trade and other receivables – 197 306 242 3,780 – – 4,525

Total financial assets 68 197 306 242 3,849 – – 4,662

Financial Liabilities

Trade and other payables – – – – 114 282 – 396

Loans and borrowings – – – – 224 – – 224

Total financial liabilities – – – – 338 282 – 620

Net financial assets/

(liabilities) 68 197 306 242 3,511 (282) – 4,042



annual report 2012



32G. Foreign Currency Risk (Continued)

Australian

Dollar

Chinese

Renminbi

Malaysian

Ringgit

Singapore

Dollar

United

States

Dollar

Japanese

Yen Euro Total

Company $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

2012

Financial Assets

Cash and cash equivalents – – – – – – – –

Trade and other receivables – – 4,401 – – – – 4,401

Net financial assets – – 4,401 – – – – 4,401

2011

Financial Assets

Cash and cash equivalents – – – – – – – –

Trade and other receivables – – 306 – – – – 306

Net financial assets – – 306 – – – – 306

Sensitivity Analysis

A hypothetical 10% (2011: 10%) strengthening of the above currencies against the functional currency of the

respective subsidiaries of the Group at the end of the reporting year would increase/(decrease) pre-tax profit

for the reporting year by the amounts shown below. A 10% (2011: 10%) weakening of the above currencies

against the functional currency of the respective subsidiaries would have an equal but opposite effect. This

analysis assumes all other variables remain constant.

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Pre-tax profit for the year 470 404 440 31

The hypothetical sensitivity rate used in the above table is the reasonably possible change in foreign exchange

rates.



annual report 2012


33. CAPITAL COMMITMENTS

At the end of the reporting year, the Group and the Company had the following capital commitments:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Contracted but not recognised

Acquisition of property,

plant and equipment 237 3,713 – –

Authorised but not contracted

Commitments to acquire equity interests – 3,994 – 3,994

34. OPERATING LEASE COMMITMENTS

The Group leases various offices, land and factory premises, plant and machinery, workers’ quarters under

non-cancellable operating lease arrangements. The lease terms are between 1 to 10 years. Majority of the

lease arrangements are renewable at the end of the lease periods at market rates.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Not later than one year 540 545 174 174

Later than one year and not later

than five years 810 825 85 242

Later than five years 351 421 – –

Operating lease expenses

for the reporting year 1,345 1,292 174 176



annual report 2012


35. EVENTS AFTER THE END OF THE REPORTING YEAR

Subsequent to the end of the reporting year, the following events took place:

(a) In November 2012, the entire share capital of Sunrich Corporation Pte. Ltd. held through another

wholly-owned subsidiary was transferred to the Company at a cash consideration of $100. Sunrich

Corporation Pte. Ltd. has also increased its issued and paid-up share capital from $100 to $1,000,000

and changed its name to ecoWise RubberTech Pte. Ltd.

(b) In December 2012, the Company incorporated a new wholly-owned subsidiary, ecoWise New Energy

Pte. Ltd. which in turn entered into a conditional Sale and Purchase Agreement with SDPC Pte Ltd

to acquire 100% equity interests in Hivern Investments Pte. Ltd. for a cash consideration of $90,000.

(c) In December 2012, the Group incorporated a 65% held subsidiary, Chongqing eco-CTIG Rubber

Technology Co., Ltd. in China to carry out total tyre management business. The Group’s initial

investment in the subsidiary amounted to approximately $2,560,000.

36. CHANGES AND ADOPTION OF FINANCIAL REPORTING STANDARDS

For the reporting year ended 31 October 2012, the following new or revised FRSs and INT FRSs were

adopted. The new or revised standards did not require any material modification of the measurement methods

or the presentation in the financial statements.

FRS No. Title

FRS 1 Presentation of Financial Statements Disclosures (Amendments to)

FRS 24 Related Party Disclosures (revised)

FRS 27 Consolidated and Separate Financial Statements (Amendments to)

FRS 32 Classification Of Rights Issues (Amendments to) (*)

FRS 34 Interim Financial Reporting (Amendments to)

FRS 103 Business Combinations (Amendments to)

FRS 107 Financial Instruments: Disclosures (Amendments to)

FRS 107 Financial Instruments: Disclosures (Amendments to) – Transfers of Financial Assets (*)

INT FRS 113 Customer Loyalty Programmes (Amendments to) (*)

INT FRS 114 Prepayments of a Minimum Funding Requirement (revised) (*)

INT FRS 115 Agreements for the Construction of Real Estate (*)

INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments(*)

(*) Not relevant to the entity.



annual report 2012


37. FUTURE CHANGES IN FINANCIAL REPORTING STANDARDS

The following new or revised Singapore Financial Reporting Standards that have been issued will be effective

in future. The transfer to the new or revised standards from the effective dates is not expected to result

in material adjustments to the financial position, results of operations, or cash flows for the following year.

FRS No. Title

Effective date

for periods

beginning

on or after

FRS 1 Amendments to FRS 1 – Presentation of Items of Other

Comprehensive Income

1 July 2012

FRS 1 Amendment to FRS 1 Presentation of Financial Statements (Annual

Improvements)

1 January 2013

FRS 16 Amendment to IAS 16 Property, Plant and Equipment (Annual

Improvements)

FRS 19 Employee Benefits (Revised) 1 January 2013

FRS 27 Consolidated and Separate Financial Statements (Amendments to) 1 July 2012

FRS 27 Separate Financial Statements (Revised) 1 January 2014

FRS 28 Investments in Associates and Joint Ventures (Revised) (*) 1 January 2014

FRS 32 Amendment to FRS 32 Financial instruments: Presentation (Annual

Improvements)

1 January 2013

FRS 107 Amendments to FRS 32 and 107 titled Offsetting Financial Assets

and Financial Liabilities (*)

1 January 2013

FRS 110 Consolidated Financial Statements 1 January 2014

FRS 111 Joint Arrangements (*) 1 January 2014

FRS 112 Disclosure of Interests in Other Entities (*) 1 January 2014

FRS 110 Amendments to FRS 110, FRS 111 and FRS 112 1 January 2014

FRS 113 Fair Value Measurements 1 January 2013

INT FRS 120 Stripping Costs in the Production Phase of a Surface Mine (*) 1 January 2013

(*) Not relevant to the entity.



annual report 2012

SHAREHOLDINGS STATISTICSAS AT 16 JANUARY 2013

SHARE CAPITAL

Number of shares : 924,158,877

Class of shares : Ordinary shares

Voting rights : One vote per share

DISTRIBUTION OF SHAREHOLDINGS

Range of Shareholdings

No. of

Shareholders % No. of Shares %

1 – 999 20 0.78 9,170 0.00

1,000 – 10,000 408 15.95 2,765,481 0.30

10,001 – 1,000,000 2,051 80.18 246,969,968 26.72

1,000,001 and above 79 3.09 674,414,258 72.98

2,558 100.00 924,158,877 100.00

SHAREHOLDING HELD BY THE PUBLIC

Based on the information available to the Company as at 16 January 2013, approximately 59.69% of the issued

ordinary shares of the Company is held by the public. Accordingly Rule 723 of the Listing Manual of Singapore

Exchange Securities Trading Limited has been complied with.

TOP TWENTY SHAREHOLDERS

No. Name No. of Shares %

1 Ecohub Pte. Ltd. 125,729,375 13.60

2 Ma Ong Kee 88,000,000 9.52

3 Hong Leong Finance Nominees Pte Ltd 46,400,000 5.02

4 SBS Nominees Pte Ltd 38,420,000 4.16

5 CIMB Securities (Singapore) Pte Ltd 30,530,000 3.30

6 OCBC Securities Private Ltd 28,038,750 3.03

7 Bank of Singapore Nominees Pte Ltd 26,711,512 2.89

8 Ong Keng Hua Sunny 25,042,125 2.71

9 Tan Tiong Beng 22,986,534 2.49

10 Phillip Securities Pte Ltd 18,359,190 1.99

11 Ong King Sun 15,769,375 1.71

12 UOB Kay Hian Pte Ltd 14,453,000 1.56

13 United Overseas Bank Nominees Pte Ltd 8,477,423 0.92

14 Chan Buang Heng 7,969,850 0.86

15 Lee Thiam Seng 7,460,950 0.81

16 Ching Wee Ling (Zhong Huiling) 7,318,000 0.79

17 DBS Nominees Pte Ltd 6,938,100 0.75

18 Citibank Nominees Singapore Pte Ltd 6,935,000 0.75

19 Ng Cheow Boo 6,252,000 0.68

20 Tang Fook Cheong 6,000,000 0.65

537,791,184 58.19

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annual report 2012

SHAREHOLDINGS STATISTICSAS AT 16 JANUARY 2013

SUBSTANTIAL SHAREHOLDERS AS AT 16 JANUARY 2013

No. Name of Shareholders

Direct Interest

No. of Shares

% of

Shares

Deemed Interest

No. of Share

% of

Shares

1 ecoHub Pte. Ltd. 218,229,375 23.61 – –

2 Ma Ong Kee 88,000,000 9.52 – –

3 Lee Thiam Seng 32,960,9501 3.57 218,229,3752 23.61

4 Sunny Ong Keng Hua 25,042,125 2.71 218,229,3753 23.61

Notes:

(1) 25,500,000 Shares of which are held through Bank of Singapore Nominees Pte Ltd.

(2) Lee Thiam Seng holds 49.3% in ecoHub Pte. Ltd. which in turn holds 218,229,375 shares (of which 45,000,000 are held

through Hong Leong Finance Nominees Pte Ltd, 22,500,000 shares are held through CIMB Nominees (S) Pte Ltd and

25,000,000 are held through SBS Nominees Pte Ltd), representing 23.61% of the issued share capital of the Company.

Accordingly, Lee Thiam Seng has a deemed interest in the 218,229,375 shares held by ecoHub Pte. Ltd.

(3) Sunny Ong Keng Hua holds 26.7% in ecoHub Pte. Ltd. which in turn holds 218,229,375 shares (of which 45,000,000 are

held through Hong Leong Finance Nominees Pte Ltd, 22,500,000 shares are held through CIMB Nominees (S) Pte Ltd and

25,000,000 are held through SBS Nominees Pte Ltd), representing 23.61% of the issued share capital of the Company.

Accordingly, Sunny Ong Keng Hua has a deemed interest in the 218,229,375 shares held by ecoHub Pte. Ltd.

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annual report 2012

ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2013 Annual General Meeting of the shareholders of the Company will be

held at 17 Kallang Junction #04-03 Singapore 339274 on Thursday, 28 February 2013 at 2.30 p.m. to transact

the following businesses:

ORDINARY BUSINESS

1. To receive and consider the Audited Financial Statements of the Company and the

reports of the Directors and Auditors for the year ended 31 October 2012.

Resolution 1

2. To declare a final dividend of 0.1 cent per ordinary share (one-tier tax exempt) for the

year ended 31 October 2012.

Resolution 2

3. To re-elect the following Directors retiring pursuant to the Company’s Articles of

Association:–

(a) Mr Lee Thiam Seng (Article 107) Resolution 3

(a) Mr Ng Cher Yan (Article 107) Resolution 4

Mr Ng Cher Yan shall, upon re-election as Director of the Company, remain as

Chairman of the Audit Committee and as a member of the Remuneration Committee

and Nominating Committee and shall be considered independent for the purpose of

Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

4. To approve the Directors’ fees of SGD 125,000/- for the year ended 31 October 2012. Resolution 5

5. To re-appoint Messrs RSM Chio Lim LLP as Auditors and to authorise the Directors to

fix their remuneration.

Resolution 6

SPECIAL BUSINESS

To consider and, if thought fit, to pass the following Resolutions as Ordinary Resolutions, with or without

amendments:

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annual report 2012


6. Authority to Allot and Issue Shares Resolution 7

That pursuant to Section 161 of the Companies Act, Cap. 50 and in accordance with Rule 806 of the Listing

Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), authority be and is hereby given

to the Directors to issue:–

(i) shares in the capital of the Company (whether by way of rights, bonus or otherwise) or;

(ii) convertible securities; or

(iii) additional convertible securities arising from adjustments made to the number of convertible securities

previously issued in the event of rights, bonus or capitalisation issues; or

(iv) shares arising from the conversion of convertible securities,

at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute

discretion deem fit provided that:–

(1) the aggregate number of shares and convertible securities that may be issued shall not exceed 50%

of the total number of issued shares (excluding treasury shares) in the capital of the Company, of

which the aggregate number of shares and convertible securities to be issued other than on a pro

rata basis to all shareholders of the Company shall not exceed 20% of the total number of issued

shares (excluding treasury shares) in the capital of the Company.

(2) for the purpose of determining the aggregate number of shares that may be issued under

sub-paragraph (1) above, the total number of issued shares (excluding treasury shares) shall be

calculated based on the total number of issued shares (excluding treasury shares) in the capital of

the Company as at the time of the passing of this Resolution after adjusting for:–

(a) new shares arising from the conversion or exercise of convertible securities;

(b) new shares arising from exercising share options or vesting of share awards outstanding or

subsisting at the time of the passing of this Resolution; and

(c) any subsequent bonus issue, consolidation or subdivision of shares.



annual report 2012


(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions

of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been

waived by the SGX-ST) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in general meeting, such authority shall continue in force

until the conclusion of the next Annual General Meeting of the Company or the date by which the

next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[see Explanatory Note(i)]

7. Authority to grant Awards in accordance with ecoWise Performance Share Plan Resolution 8

That approval be and is hereby given to the Directors to grant awards in accordance with the provisions of

the ecoWise Performance Share Plan (“Share Plan”) and to allot and issue or deliver from time to time such

number of fully paid-up Shares as may be required to be issued pursuant to the vesting of Awards under

the Share Plan, provided that the aggregate number of Shares to be allotted and issued pursuant to the

Share Plan shall not exceed 15% of the total number of issued shares of the Company from time to time.

[See Explanatory Note (ii)]

8. Proposed grant of Award of 2,000,000 Shares to Mr Lee Thiam Seng Resolution 9

To approve the grant of Award of 2,000,000 Shares to Mr Lee Thiam Seng, in accordance with the Share

Plan.

[See Explanatory Note (iii)]

9. And to transact any other business which may be properly transacted at an Annual General Meeting.

BY ORDER OF THE BOARD

Zhong Xiaowen

Company Secretary

Singapore

8 February 2013



annual report 2012


Explanatory Notes:

(i) The Ordinary Resolution proposed in Resolution 7 above, if passed, will empower the Directors of the Company, effective

until the conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General

Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general

meeting, whichever is earlier, to issue shares and convertible securities in the Company up to a number not exceeding,

in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which not

exceeding 20% may be issued other than on a pro rata basis to existing shareholders.

For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury

shares) will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the

Company at the time this Resolution is passed after adjusting for new shares arising from the conversion or exercise of

convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time when

this Resolution is passed and any subsequent bonus issue, consolidation or subdivision of shares.

(ii) The proposed Resolution 8 above, if passed, will empower the Directors of the Company to offer and grant awards, and

to allot and issue new ordinary shares in the capital of the Company, pursuant to the Share Plan (which was approved

by shareholders at the Extraordinary General Meeting held on 23 March 2007) as may be modified by the Remuneration

Committee from time to time, provided that the aggregate number of Shares to be allotted and issued pursuant to the

Share Plan shall not exceed 15% of the total number of issued ordinary shares of the Company from time to time.

(iii) The proposed Resolution 9 above, if passed, will empower the Remuneration Committee of the Company to grant a

total of 2,000,000 ordinary shares of the Company to Mr Lee Thiam Seng, a controlling shareholder of the Company, in

accordance with and for the duration of the Share Plan.

Proxies:

1. A member of the Company is entitled to attend and vote at the above Meeting and may appoint not more than two proxies

to attend and vote instead of him.

2. Where a member appoints two proxies, he shall specify the proportion of his shareholding to be represented by each

proxy in the instrument appointing the proxies. A proxy need not be a member of the Company.

3. If the member is a corporation, the instrument appointing the proxy must be under seal of the hand of an officer or attorney

duly authorised.

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 17 Kallang Junction

#04-03 Singapore 339274 not less than 48 hours before the time appointed for holding the above Meeting.



annual report 2012

ADDITIONAL EXPLANATORY STATEMENT TO ORDINARY RESOLUTION 9 AS SET OUT IN THE NOTICE OF ANNUAL GENERAL MEETING

(“ADDITIONAL EXPLANATORY STATEMENT”)

If you are in any doubt as to the contents herein or as to the course of action that you should take, you should

consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.

The Singapore Exchange Securities Trading Limited assumes no responsibility for the accuracy of any statements

or opinions made or reports contained in this Additional Explanatory Statement.

1. The Ordinary Resolution 9 proposed in item 8 of the Company’s Notice of Annual General Meeting dated

8 February 2013 (“Notice of AGM”), if passed, will empower the Remuneration Committee (the “Committee”)

of the Company to grant a total of 2,000,000 ordinary shares of the Company (“Shares” or “ecoWise shares”)

to Mr Lee Thiam Seng, a Controlling Shareholder, in accordance with and for the duration of the ecoWise

Performance Share Plan (“Share Plan”).

2. The participation of Mr Lee Thiam Seng in the Share Plan was approved and adopted by the shareholders

at the Extraordinary General Meeting convened on 23 March 2007.

3. Pursuant to Rule 853 of the Listing Manual, the specific grant of Award to Mr Lee Thiam Seng and any other

Controlling Shareholders or their Associates will have to be approved by independent Shareholders of the

Company in general meetings.

4. Rationale for grant of Award of 2,000,000 Shares to Mr Lee Thiam Seng under the Share Plan

(include also details of past awards and vested awards)

Mr Lee Thiam Seng is the Chief Executive Officer of the Company. He is responsible for the strategic

direction, business strategies and management of the Group.

The Directors are of the view that Mr Lee Thiam Seng’s contributions to the Group as its Chief Executive

Officer have been instrumental to the growth of the Group’s business over the years. The Directors believe

that there is substantial potential future development and contribution that may be made by Mr Lee Thiam

Seng towards steering the Company to be one of the leading renewable energy, waste management

services and environmental solutions provider in the region and towards enhancing the competitiveness of

the Company.

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annual report 2012

ADDITIONAL EXPLANATORY STATEMENT TO ORDINARY RESOLUTION 9 AS SET OUT IN THE NOTICE OF ANNUAL GENERAL MEETING(“ADDITIONAL EXPLANATORY STATEMENT”)

Under the leadership of Mr Lee Thiam Seng, over the last three years the Group has diversified its business

portfolio in the Resource Recovery segment with the acquisition of Sunrich Integrated Sdn. Bhd. and its

subsidiaries in July 2010, a leading rubber compound manufacturing and tyre retreading group based in

Malaysia. The Group has in March 2010 acquired a 15% interest in Chongqing Zhongtian Electronic Waste

Management Co., Ltd which holds an exclusive e-waste license for collection, recovering and disposal of

electrical and electronic waste in Chongqing, China. The Group’s businesses under its Renewable Energy

segment has also expanded with a new biomass co-generation plant at the Gardens by the Bay started

operation since November 2011.

As a result of the diversification and expansion plan, over the last three financial years from 1 November 2009

to 31 October 2012 (i.e. FY2010 to FY2012), the Group’s revenue grew from S$37.59 million in FY2010 to

S$90.52 million in FY2012 and the Group recorded a net profit of S$1.37 million in FY2012 as compared

to a loss of S$1.35 million in FY2010.

The Directors are of the view that the remuneration package of Mr Lee Thiam Seng is fair given his

contributions to the Company. The extension of the Share Plan to Mr Lee Thiam Seng is consistent with

the Company’s objectives to motivate its employees to achieve and maintain a high level of performance

and contribution which is vital to the success of the Company. Although Mr Lee Thiam Seng already has a

shareholding interest in the Company, the extension of the Share Plan to him will ensure that he is equally

entitled, with the other employees who are not Controlling Shareholders, to take part in and benefit from this

system of remuneration, thereby enhancing his long-term commitment to the Company. For the aforesaid

reasons, the Directors believe that Mr Lee Thiam Seng deserves, and should be allowed to participate in

the Share Plan.

Subject to Shareholders’ approval for Ordinary Resolution 9 as set out in the Notice of AGM at the AGM,

the Company proposes to grant an Award of 2,000,000 Shares (“Proposed 2013 Award”) to Mr Lee Thiam

Seng in accordance with the Share Plan and the proposed date of grant of Shares to be any time within

1 year from the date of the AGM to be held on 28 February 2013.

On 23 March 2007, Mr Lee Thiam Seng was awarded 1,500,000 fully paid-up ecoWise shares (“2007

Award”) subject to achieving performance targets at the end of the financial year ending 31 October 2007

and 31 October 2008 respectively under the Share Plan. 50% of the said grant or 3,442,500 fully paid-up

ecoWise shares (after adjusting for Rights cum Warrants Issues dated 7 November 2007) were vested and

issued to Mr Lee Thiam Seng for the financial year ended 31 October 2007. The balance 50% of the said

grant or 5,034,700 fully paid-up ecoWise shares (after adjusting for Rights cum Warrants Issues dated 7

November 2007 and further Rights Issues dated 26 September 2008) were vested and issued to Mr Lee

Thiam Seng for the financial year ended 31 October 2008.



annual report 2012



At the AGM held on 28 February 2008, shareholders had approved the Company’s grant of an Award of

2,250,000 Shares to Mr Lee Thiam Seng and the date of grant of Shares to be any time within 5 years from

the date of the EGM held on 23 March 2007. Subsequent to the AGM held on 28 February 2008, Mr Lee

Thiam Seng has been awarded a total of 2,250,000 fully paid-up ecoWise shares (“2008 Award”) (equivalent

to 3,290,625 fully paid-up ecoWise shares after adjusting for Rights Issues dated 26 September 2008) subject

to achieving the performance targets over performance periods up to 31 January 2013 under the Share Plan.

As at 29 January 2013 (“Latest Practicable Date”), a total of 2,193,750 fully paid-up ecoWise shares (after

adjusting for Rights Issues dated 26 September 2008) have been vested and issued to Mr Lee Thiam Seng

for performance periods ended 31 January 2011. The amount of ecoWise shares (after adjusting for Rights

Issues dated 26 September 2008) that has been awarded but has not been vested pending satisfaction of the

performance targets for performance period ending 31 January 2013 is 1,096,875 (“Unvested 2008 Award”).

Under the Listing Rules, the aggregate number of Shares which may be issued pursuant to Awards granted

under the Share Plan on any date, when added to the number of new Shares issued and/or issuable in

respect of all Awards granted under the Share Plan and any other share scheme which the Company may

implement from time to time, will not exceed 15% of the total issued Shares in the capital of the Company.

As at the Latest Practicable Date, the total number of issued Shares is 924,158,877 Shares. The total number

of Shares available under the Share Plan as at the Latest Practicable Date would be 138,623,832 Shares,

representing 15% of the total number of issued Shares. Accordingly, the total number of Shares available to

the controlling shareholders of the Company or their associates under the Share Plan is up to 34,655,958

Shares, being 25% of the total number of Shares available under the Share Plan and the total number of

Shares available to each controlling shareholder of the Company or his associate is up to 13,862,383 Shares,

being 10% of the total number of Shares available under the Share Plan.

For illustrative purposes, on the assumption that (i) there is no increase in the number of issued Shares; and

(ii) the Company does not buy back or otherwise acquire any of its Shares, and (iii) the proposed grant of

Unvested 2008 Award to Mr Lee Thiam Seng is fully granted, the aggregate number of Shares to be awarded

to Mr Lee Thiam Seng when aggregated with the 8,477,200 ecoWise shares vested and issued to him arising

from the 2007 Award, the 2,193,750 ecoWise shares vested and issued to him arising from the 2008 Award,

the Unvested 2008 Award and Proposed 2013 Award would be 13,767,825 Shares, representing 9.93%

of the number of Shares available under the Share Plan as at the Latest Practicable Date. Accordingly, the

proposed grant of Award to Mr Lee Thiam Seng as set out in the proposed Ordinary Resolution 9 of the

Notice of AGM would be within the limits prescribed under the Listing Manual.

As at the Latest Practicable Date, the Company has not implemented any share-based incentive scheme

other than the ecoWise Performance Share Plan.



annual report 2012


5. Criteria for the vesting of Awards to Mr Lee Thiam Seng

Awards are released once the Committee is satisfied that the prescribed performance target(s) have been

achieved and the vesting period (if any) has expired. There may be vesting periods beyond the performance

achievement periods, imposed by the Committee. The performance targets and criteria for the Awards are

determined by the Committee and these include targets such as total shareholders’ return and financial

performance of the Group.

6. Directors’ and Substantial Shareholders’ interests

As at the Latest Practicable Date (being 29 January 2013), the interests of Directors and Substantial

Shareholders of the Company in the Shares, based on the Company’s Register of Directors’ Shareholdings

and Register of Substantial Shareholders respectively are as follows:–

Direct Interest

No. of Shares

Deemed

Interest

No. of Shares

Number

of Shares

Comprised in

Outstanding

Performance

Shares(3)

Date of

grant of

outstanding

Performance

Shares

Total Interest

No. of Shares %

Directors

Lee Thiam Seng(1) 32,960,950 218,229,375 251,190,325 27.18 1,096,875 21-03-2012

Low Kian Beng 5,500,000 – 5,500,000 0.60 1,500,000 21-03-2012

Ng Cher Yan 1,166,500 – 1,166,500 0.13 130,000 21-03-2012

Ang Mong Seng 796,950 – 796,950 0.09 100,000 21-03-2012

Ong Teck Ghee 871,950 – 871,950 0.09 100,000 21-03-2012

Substantial Shareholders

ecoHub Pte. Ltd. 218,229,375 – 218,229,375 23.61 – –

Lee Thiam Seng(1) 32,960,950 218,229,375 251,190,325 27.18 1,096,875 21-03-2012

Ma Ong Kee 88,000,000 – 88,000,000 9.52 – –

Sunny Ong Keng Hua(2) 25,042,125 218,229,375 243,271,500 26.32 – –



annual report 2012



Notes:

(1) Mr Lee Thiam Seng holds 49.3% in ecoHub Pte Ltd which in turn holds 218,229,375 Shares in the Company.

Accordingly, by virtue of Section 4 of the Securities and Futures Act, Mr Lee Thiam Seng is deemed interested in

218,229,375 Shares held by ecoHub Pte. Ltd.

(2) Mr Sunny Ong Keng Hua holds 26.7% in ecoHub Pte Ltd which in turn holds 218,229,375 Shares in the Company.

Accordingly, by virtue of Section 4 of the Securities and Futures Act, Mr Sunny Ong Keng Hua is deemed interested

in 218,229,375 shares held by ecoHub Pte. Ltd.

(3) Including award of performance shares not vested and not issued.

7. Directors’ recommendation

As all the Directors of the Company are eligible to participate in the Share Plan, they have refrained from

making any recommendation relating to the Share Plan, and where they are also Shareholders, shall abstain

from voting in respect of the Ordinary Resolution 9 which relates to the proposed grant of Award of 2,000,000

Shares to Mr Lee Thiam Seng and will not accept any appointment as proxies or otherwise for voting on

Ordinary Resolution 9 unless specific instructions have been given in the proxy form(s) on how the votes

are to be cast.

Mr Lee Thiam Seng, as Director and Controlling Shareholder, who is an interested party to the above

proposal, has refrained from making any recommendation as to how Shareholders should vote and he will

abstain from voting in respect of Resolution 9. Mr Lee Thiam Seng will also decline to accept appointments as

proxies for voting at the AGM in respect of the said Resolutions unless specific instructions have been given

in the proxy instrument on how Shareholders wish their votes to be cast for each of the said Resolutions.

8. Action to be taken by shareholders

Shareholders who are unable to attend the AGM and wish to appoint a proxy to attend and vote on their

behalf should sign and return the Proxy Form attached to the Notice of AGM in accordance with the

instructions printed thereon as soon as possible and in any event so as to arrive at the registered office of

the Company at 17 Kallang Junction, #04-03, Singapore 339274, not later than 48 hours before the time

fixed for the AGM. The appointment of a proxy by a shareholder does not preclude him from attending and

voting in person at the meeting if he wishes to do so.

A Depositor shall not be regarded as a member of the Company entitled to attend the AGM and to speak

and vote thereat unless his name appears on the Depository Register at least 48 hours before the AGM.



annual report 2012


9. Directors’ responsibility statement

The Directors collectively and individually accept full responsibility for the accuracy of the information given

in this Additional Explanatory Statement and confirm after making all reasonable enquiries that, to the best

of their knowledge and belief, this Additional Explanatory Statement constitutes full and true disclosure of

all material facts about the proposed Ordinary Resolution 9 in the Notice of AGM, the Company and its

subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in

this Additional Explanatory Statement misleading. Where information in the Additional Explanatory Statement

has been extracted from published or otherwise publicly available sources or obtained from a named source,

the sole responsibility of the Directors has been to ensure that such information has been accurately and

correctly extracted from those sources and/or reproduced in the Additional Explanatory Statement in its

proper form and context.


PROXY FORM

IMPORTANT

1. For investors who have used their CPF monies to buy

the Company’s shares, this Annual Report is forwarded

to them at the request of their CPF Approved Nominees

and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and

shall be ineffective for all intents and purposes if used or

purported to be used by them.

I/We

of

being a member(s) of ecoWise Holdings Limited (the “Company”), hereby appoint:

Name Address

NRIC/Passport

Number

Proportion of

Shareholdings

and/or (delete as appropriate)

Name Address

NRIC/Passport

Number

Proportion of

Shareholdings

as *my/our *proxy/proxies to vote for *me/us on *my/our behalf at the 2013 Annual General Meeting of the Company

to be held 17 Kallang Junction #04-03, Singapore 339274 on Thursday, 28 February 2013 at at 2.30 p.m. and at any

adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions

as set out in the notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or

abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)

No. Resolutions For Against

1 Audited Financial Statements for the year ended 31 October 2012

together with the reports of Directors and Auditors

2 Declaration of proposed Final Dividend

3 Re-election of Mr Lee Thiam Seng as Director

4 Re-election of Mr Ng Cher Yan as Director

5 Approval of Directors’ fees for the year ended 31 October 2012

6 Re-appointment of Messrs RSM Chio Lim LLP as Auditors

7 Authority to allot and issue shares pursuant to Section 161 of the Companies

Act, Chapter 50 and Rule 806 of the Listing Manual of the Singapore

Exchange Securities Trading Limited

8 Approval of Awards in accordance with ecoWise Performance Share Plan

9 Approval of Award of 2,000,000 Shares to Lee Thiam Seng

Signed this day of 2013

Total number of shares held

Signature or Common Seal of shareholder

SAR1212003 • Ecowise_AR • 01/02/2013 12:16 • 28 E_EcoWise_Proxy.indd SAR1212003 • Ecowise_AR • 01/02/2013 12:16 • 28 E_EcoWise_Proxy.indd

NOTES:

1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository

Register (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number of shares. If

you have shares registered in your name in the Register of Members, you should insert that number of shares. If

you have shares entered against your name in the Depository Register and shares registered in your name in the

Register of Members, you should insert the aggregate number of shares. If no number is inserted, this form of

proxy will be deemed to relate to all the shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not more

than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company.

3. Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be

represented by each proxy.

4. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised

in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed

either under its common seal or under the hand of its attorney or duly authorised officer.

5. A corporation which is a member of the Company may authorise by resolution of its directors or other governing

body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its

Articles of Association and Section 179 of the Companies Act, Cap. 50.

6. The instrument appointing a proxy or proxies, together with the power of attorney or other authority (if any) under

which it is signed, or notarially certified copy thereof, must be deposited at the registered office of the Company at

17 Kallang Junction #04-03 Singapore 339274 not later than 48 hours before the time set for the Annual General

Meeting.

7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly

completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of

the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of the

Company whose shares are entered against their names in the Depository Register, the Company may reject any

instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against

their names in the Depository Register at 48 hours before the time appointed for holding the Annual General Meeting

as certified by The Central Depository (Pte) Limited to the Company.


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