PURSUING SUSTAINABLE. ecowise Holdings Limited Co. Reg: C ANNUAL REPORT 2012

Transcription

1 ecowise Holdings Limited Co. Reg: C 17 Kallang Junction #04-03 Singapore Tel: Fax: printed on environmentally friendly paper ANNUAL REPORT 2012 ECOWISE HOLDINGS LIMITED PURSUING SUSTAINABLE GROWTH ANNUAL REPORT 2012 PURSUING SUSTAINABLE GROWTH

2 CONTENTS 02 CORPORATE PROFILE 06 CHAIRMAN S STATEMENT 10 FINANCIAL HIGHLIGHTS FINANCIAL AND OPERATIONS 12 REVIEW 16 BUSINESS OVERVIEW CORPORATE SOCIAL 19 RESPONSIBILITY 20 BOARD OF DIRECTORS 22 MANAGEMENT TEAM 24 CORPORATE INFORMATION 25 CORPORATE GOVERNANCE 42 FINANCIAL STATEMENTS Designed and produced by (65)

3 ecowise Holdings Limited 01 VISION To be the preferred environmental solutions and renewal energy provider with high integrity, corporate social responsibility and to create value for all stakeholders. MISSION 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. SAR Ecowise Holdings 01/02/ :11 02_ecoWise_Vision.indd

4 02 ecowise Holdings Limited CORPORATE PROFILE 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 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, ecoact TM, employs the unique in-vessel thermophilic composting technology to manufacture quality organic compost in the shortest possible time. SAR Ecowise Holdings 01/02/ :51 03_ecoWise_Corporate.indd

5 ecowise Holdings Limited 03 RENEWABLE ENERGY In Singapore, the Group s first biomass cogeneration 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. INTEGRATED ENVIRONMENTAL MANAGEMENT SOLUTIONS The 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. 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. SAR Ecowise Holdings 01/02/ :51 03_ecoWise_Corporate.indd

6 04 ecowise Holdings Limited 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,ecoACT TM, 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 SAR Ecowise Holdings 01/02/ :56 04_ecoWise_Group(Chinese).indd

7 SAR Ecowise Holdings 01/02/ :56 04_ecoWise_Group(Chinese).indd ecowise Holdings Limited 05

8 06 ecowise Holdings Limited CHAIRMAN S STATEMENT Dear shareholders, capacity in the near term. 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 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 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 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 SAR Ecowise Holdings 01/02/ :21 05_ecoWise_Chairman.indd

9 ecowise Holdings Limited 07 CHAIRMAN S 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 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 SAR Ecowise Holdings 01/02/ :21 05_ecoWise_Chairman.indd

10 08 ecowise Holdings Limited 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电厂的改暂时延缓 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 我们的服的环我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 务 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 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 李添胜执行主席和首席执行官 2013 年 1 月 SAR Ecowise Holdings 01/02/ :28 06_ecoWise_Chairman(Chinese).indd

11 ecowise Holdings Limited annual al report SAR Ecowise Holdings 01/02/ :28 06_ecoWise_Chairman(Chinese).indd

12 10 ecowise Holdings Limited FINANCIAL HIGHLIGHTS 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, (1,978) (589) 5,831 Non-controlling Interest (630) (668) (50) Profi t/(loss) attributable to Shareholders 1, (1,348) 79 5,881 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 Ratios FY 2012 FY 2011 FY2010 FY2009 FY2008 Current ratio (times) Return on Equity, Attributable to Owners of the Company (%)* (3.60) Return on assets (%)* (1.95) Basic earnings per share (cents) (0.16) Net assets value per share (cents) * In calculating return on Equity, Attributable to Owners of the Parent and return on assets, the average basis has been used. REVENUE BY SEGMENTS ($ 000) 284 9, , Resource Recovery Segment 80,330 74,449 FY2012 FY2011 Renewable Energy Segment 9,907 5,136 Integrated Environmental Management Solutions Segment 80,330 74,449 Total 90,521 79,842 SAR Ecowise Holdings 31/01/ :15 07_ecoWise_Highlights.indd

13 ecowise Holdings Limited 11 FINANCIAL HIGHLIGHTS REVENUE ($ 000) , , , , ,000 PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS ($ 000) , (1,348) 79 5,881 EQUITY, ATTRIBUTABLE TO OWNERS OF THE COMPANY ($ 000) , ,340 40,020 39,831 35,042 RETURN ON EQUITY, ATTRIBUTABLE TO OWNERS OF THE COMPANY (%) (3.60) BASIC EARNINGS PER SHARE (cents) (0.16) NET ASSETS VALUE PER SHARE (cents) SAR Ecowise Holdings 31/01/ :15 07_ecoWise_Highlights.indd

14 12 ecowise Holdings Limited FINANCIAL AND OPERATIONS REVIEW 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 SAR Ecowise Holdings 01/02/ :18 08_ecoWise_Review.indd

15 ecowise Holdings Limited 13 FINANCIAL AND OPERATIONS REVIEW 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. SAR Ecowise Holdings 01/02/ :18 08_ecoWise_Review.indd

16 14 ecowise Holdings Limited FINANCIAL AND OPERATIONS REVIEW 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 cents in FY2011 to 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 The Group s investment in biomass cogeneration power plant at Gardens by the Bay was reclassified as a finance lease in FY2012. As at 31 October 2012, noncurrent 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 The increase was mainly SAR Ecowise Holdings 01/02/ :18 08_ecoWise_Review.indd

17 ecowise Holdings Limited 15 FINANCIAL AND OPERATIONS REVIEW 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. 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. 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 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. SAR Ecowise Holdings 01/02/ :18 08_ecoWise_Review.indd

18 16 ecowise Holdings Limited BUSINESS OVERVIEW 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. From top to bottom Dryer front view Copper slag processing plant BUSINESS OVERVIEW RESOURCE RECOVERY SEGMENT The 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. SAR Ecowise Holdings 01/02/ :35 09_ecoWise_Business.indd

19 ecowise Holdings Limited 17 BUSINESS OVERVIEW 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-concrete TM. 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 ORGANIC MATERIALS AND RESOURCES The Group s 15,000 m 2 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, ecoact TM, 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. SAR Ecowise Holdings 01/02/ :00 09_ecoWise_Business.indd

20 18 ecowise Holdings Limited 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 cogeneration 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 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. SAR Ecowise Holdings 01/02/ :00 09_ecoWise_Business.indd

21 ecowise Holdings Limited 19 CORPORATE SOCIAL RESPONSIBILITY 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. 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. 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. SAR Ecowise Holdings 30/01/ :36 10_ecoWise_Responsibility.indd

22 20 ecowise Holdings Limited 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 SAR Ecowise Holdings 01/02/ :45 11_ecoWise_Directors.indd

23 ecowise Holdings Limited 21 BOARD OF DIRECTORS LEE THIAM SENG Executive 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 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 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 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 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 YAN Lead 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 SENG Independent Director Mr Ang was appointed as an Independent Director in February 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 GHEE Independent 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. SAR Ecowise Holdings 01/02/ :45 11_ecoWise_Directors.indd

24 22 ecowise Holdings Limited MANAGEMENT TEAM 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. LILIAN TAN YIN YEN Chief Financial Offi cer 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). ALOYSIUS CHAN BUANG HENG Financial Controller FONG SEOK PHOY Director, 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. SAR Ecowise Holdings 01/02/ :13 12_ecoWise_Management.indd

25 ecowise Holdings Limited 23 MANAGEMENT TEAM DANIEL LIAO HONG HAI General 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. 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. CHIN HON MENG Head of Manufacturing, Sunrich Integrated Sdn. Bhd. and subsidiaries 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. KENNY HUANG JIANFANG Senior Manager Group Operations SAR Ecowise Holdings 01/02/ :13 12_ecoWise_Management.indd

26 24 ecowise Holdings Limited CORPORATE INFORMATION 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 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 PRINCIPAL BANKERS DBS Bank Ltd Malayan Banking Berhad United Overseas Bank Limited REGISTER OFFICE/CONTACT DETAILS Co. Registration No.: C 17 Kallang Junction #04-03 Singapore Tel: Fax: Website: SAR Ecowise Holdings 31/01/ :21 13_ecoWise_Information.indd

27 ecowise Holdings Limited 25 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. SAR Ecoswise_AR 31/01/ :10 14_ecoWise_CG.indd

28 26 ecowise Holdings Limited CORPORATE GOVERNANCE 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 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 ** 1 1 Ang Mong Seng Ong Teck Ghee * by invitation ** Mr Ng Cher Yan was appointed as member of NC in place of Mr Lee Thiam Seng on 28 December 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 s 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. SAR Ecoswise_AR 31/01/ :10 14_ecoWise_CG.indd