CONTENTS. The contact person for the Sponsor is Mr Bernard Lui (Telephone number: (65) , address: morganlewis.com).

Transcription

1 2016 ANNUAL REPORT E C OW I S E H O L D I N G S L I M I T E D ecowise Holdings Limited Co. Reg: C 17 Kallang Junction #04-03 Singapore A N N UA L R E P O R T Tel: Fax: LOW CARBON ECONOMY THROUGH INNOVATIVE RESOURCES

2 CONTENTS 02 CORPORATE PROFILE 06 CHAIRMAN S STATEMENT 10 FINANCIAL HIGHLIGHTS 12 FINANCIAL AND OPERATIONS REVIEW 16 BUSINESS OVERVIEW 19 SUSTAINABILITY REPORT AND CORPORATE SOCIAL RESPONSIBILITY ( CSR ) 21 BOARD OF DIRECTORS 24 MANAGEMENT 26 SUBSIDIARIES MANAGEMENT 28 CORPORATE STRUCTURE 29 CORPORATE INFORMATION 30 CORPORATE GOVERNANCE 60 FINANCIAL STATEMENTS This annual report has been prepared by the Company and its contents have been reviewed by the Company s sponsor, Stamford Corporate Services Pte Ltd (the Sponsor ), for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the SGX-ST ). The Company s Sponsor has not independently verified the contents of this annual report. This annual report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this annual report, including the correctness of any of the statements or opinions made or reports contained in this annual report. The contact person for the Sponsor is Mr Bernard Lui (Telephone number: (65) , address: bernard.lui@ morganlewis.com).

3 ecowise Holdings Limited Annual Report VISION To be the preferred environmental solutions and renewable energy provider with high integrity, corporate social responsibility and to create value for all stakeholders. MISSION To establish successful operations and management of renewable energy projects that contribute to social, economic and environmental benefits to stakeholders. To establish awareness, propagate, promote and encourage use of environmentally friendly products derived from recycled waste. To establish best practices in the manufacture and distribution of innovative value-added products that are in harmony with ecological principles. To emphasise on research and development to provide environmentally friendly solutions to industrial processes.

4 02 ecowise Holdings Limited Annual Report 2016 CORPORATE PROFILE Founded in 1979, ecowise Group is a Singapore-based company that focuses on three core business segments namely, Resource Recovery, Renewable Energy and Integrated Environmental Solutions Provider. The Group has been listed on the Singapore Stocks Exchange since RR RE IEMS

5 ecowise Holdings Limited Annual Report RESOURCE RECOVERY Great emphasis is placed on the Group s Resource Recovery business segment in all its regions of operation, namely, Singapore, Malaysia and China. In Singapore, the Group is involved in the collection and processing of spent copper slag from various shipyards. The processed copper slag is then used majorly as raw material by ready-mix concrete suppliers in the production of eco-concrete TM. The Group also prepares its own fuel feedstock for its biomass power plants in Singapore through the collection and processing of horticultural and wood wastes at our Sarimbun Recycling Park ( SRP ). SRP also houses the Group s unique in-vessel composting bays using the Group s proprietary thermophilic process in the manufacturing of organic compost from the collected horticultural waste. Finally, using steam generated from our biomass power plant in Sungei Kadut, the Group is able to recover and repurpose waste food materials such as wet spent barley grains and wet soya beans waste, collected from major food and beverages manufacturers, into higher value animal feed materials. The Group s wholly-owned subsidiary, Sunrich Resources Sdn. Bhd. ( SRR and together with its subsidiaries, the SRR Group ) is one of the largest rubber compound manufacturer and tyre retreading group in Malaysia. SRR Group s vertically integrated business model spans from upstream manufacturing of mainstream and specialised rubber compounds to downstream manufacturing of retread tyres market under the established brand names of Suntex, Winner, Autoways and Trakar. In addition to supply of retread tyres, SRR also focuses on the provision of package services including total tyre management to local or regional end-users in a bid to increase awareness and confidence in retread tyres as greener alternatives to new tyres. In China, through its joint venture company, Chongqing eco-ctig Rubber Technology Co., Ltd, and a franchise agreement with SRR, the Group has utilised its technological know-how acquired in Malaysia to develop a tyre retreading facility in the city, adopting state-of-the-art technologies, and also implement total tyre management for its main customer Chongqing Municipal Transport Development and Investment (Group) Co., Ltd. RENEWABLE ENERGY In the Renewable Energy segment, the Group s biomass co-generation power plant in Sungei Kadut is one of the first in Singapore. In addition to generating electricity for its own consumption, the waste steam produced is also used in a wide array of industrial applications ranging from drying of waste food materials to providing heating services to ISO-tankers of major logistic companies. The waste steam application from the plant was the first Singapore registered company to successfully register its first Clean Development Mechanism ( CDM ) project with United Nations Framework Convention on Climate Change. The Group s second biomass co-generation power plant in Singapore, situated at the iconic Gardens by the Bay commenced operation in November The power plant supplies renewable energy in the form of electricity and heat to Gardens by the Bay, powering and providing cooling services to the Garden s two conservatories. The biomass co-generation power plant was constructed under a Design, Build and Operate (DBO) agreement entered into with Gardens by the Bay for a fifteen-year period. INTEGRATED ENVIRONMENTAL MANAGEMENT SOLUTIONS (IEMS) In the segment of Integrated Environmental Management Solutions (IEMS), the Group provides low carbon environmental solutions targeted at addressing issues related to clean energy as well as waste and resources management. This includes a wide array of technical and consultative services ranging from process design and optimisation; engineering, procurement and construction; testing and commissioning to operation and maintenance of the engineering facilities. Further to actual implementations of sizeable commercial projects, the Group also participates actively in the R&D as well as test-bedding works, either in collaboration with Government agencies, education institutions or private technological and investment partners.

6 04 ecowise Holdings Limited Annual Report 2016 集团简介 绿科集团于 1979 年在新加坡成立 主营业包括资源再生 再生能源和提供综合性环境解决方案 集团于 2003 年起开始在新加坡交易所挂牌上市 资源再生绿科集团在所有运营地区, 即新加坡, 马来西亚和中国都十分重视资源回收业务 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的指定回收商 大部分的废铜渣在经过处理后成为生产环保水泥 ( eco-concrete TM ) 的主要材料 集团还通过在莎琳汶的再循环园收集和处理园艺木材废料, 为集团在新加坡的生物质电厂提供燃料 再循环园还拥有独特的仓式堆肥隔间, 使用专有的仓内高温堆肥技术处理园艺废料, 生产有机肥料 最后, 集团利用新加坡双溪加株的生物质热电厂生产的蒸汽作为能源, 将从大型食品饮料制造商回收的如大麦 谷物 大豆 酒糟等食品废料进行烘干处理, 生产高品质的动物饲料 集团的全资子公司日升集团是马来西亚最大的橡胶制品制造商和轮胎翻新公司之一 日升集团的垂直式综合管理商业模式, 从事橡胶复合材料和特制橡胶复核材料的生产, 并在 SunTex, Winner, Autoway 以及 Trakar 四大品牌下生产翻新轮胎 除此之外, 日升集团还致力于为当地或区域最终用户提供综合轮胎管理服务, 以提升当地社会对把翻新轮胎作为新轮胎的更环保的替代品的认识和信心 在中国市场, 通过集团下属合资公司重庆绿科开投橡胶科技有限公司, 与日升集团签订了特许经营协议, 利用在马来西亚的专有技术在该市投产轮胎翻新设备, 并为其主要客户重庆公共交通有限公司提供综合轮胎管理服务 再生能源在可再生能源领域, 集团在双溪加株的第一个生物质热电厂也是新加坡的第一个生物质热电厂 除了生产自用电力之外, 所产生的废蒸汽也被广泛利用, 比如烘干废食物废料, 及向大型物流公司的 ISO 储罐提供加热服务 生物质热电厂的热能应用项目使得公司成为首家成功在 UNFCCC 注册清洁发展机制项目的新加坡注册公司 集团在新加坡的第二个生物质热电厂坐落在新加坡地标性建筑滨海湾花园, 于 2011 年 11 月投产运行 该生物质热电厂以设计 建造及营运为模式, 为滨海湾花园两个冷却温室馆提供电力及制冷所需的再生能源 集团拥有这座热电厂 15 年的营运权 综合环境管理方案 (IEMS) 集团提供 低碳型 环境解决方案, 旨在解决与清洁能源以及废物和资源管理相关的问题 广泛的服务范围涵盖技术和咨询服务, 工艺流程设计及优化, 工程设计 采购和施工, 运行测试和调试及设备维护等多个领域 除了主要商业项目的实际实施外, 集团也与政府机构, 教育机构以及私人技术和投资公司合作, 积极参与环保研究和项目开发的研发和临床试验

7 ecowise Holdings Limited Annual Report

8 06 ecowise Holdings Limited Annual Report 2016 CHAIRMAN S STATEMENT Dear Shareholders, 2016 proved to be a challenging year to the Group amid the weak global economic recovery. A general slowdown in Singapore s renewable energy and resource recovery industries, coupled with the persistent weak Malaysian Ringgit and the severe business environment in Malaysia have reduced the Group s revenue and affected its overall performance. Key Events in 2016 Notwithstanding the challenges faced by the Group, the Group managed to execute the following key objectives, which will put us in greater stead for improved performance for the financial year ending 31 October 2017 ( FY 2017 ): Diversification in goods and services rendered by the Group to minimise the potential risks Completion of organisational restructuring with greater efficiency in Malaysia; Adjustment and strengthening of current businesses in China to increase profit margin; Appointment of new management team with a special focus on development of new technology and advanced manufacturing equipment. Outlook for 2017 Market sentiment is expected to remain bleak for Uncertain global events and the U.S. federal interest rate hike will take a toll on global markets. More pertinent to the Group is the recent rallying gains of the United States dollar. The uncertainties in foreign exchange may be a main interference to the Group s growth due to our significant investment in Malaysia and China.

9 ecowise Holdings Limited Annual Report Notwithstanding strong economic headwinds, the Group will strive to further synergise operations amongst the Group s various business units for reduced operating cost, improved sales and profit margins. This will ensure that the Group operates efficiently. In specific, we will continue our efforts to broaden our revenue stream through new projects in Singapore. In addition to the steady growth in retreaded tyre business, we are also looking at expanding to the raw rubber market outside Malaysia to further enhance the Group s competency in the global market. In relation to our China operations, we are actively working on improving the infrastructure at affordable price to further increase the value of our assets as well as their market appeal. Meanwhile, we will explore new viable revenue streams in China with our cutting-edge technology. Another initiative we plan to push through in 2017 is the application of advanced technologies within the Group to achieve higher productivity. The initiative will begin with our Singapore operations, with plans to gradually roll out in Malaysia and China. Acknowledgement On behalf of the Board, I would like to express my deepest gratitude to our shareholders, clients, business associates and suppliers for their continuing and loyal support through the years. I believe that FY 2017 will be a better year for all of us. I seek your kind understanding as we work hard to pull through this difficult time. I would also like to take this opportunity to thank Mr Ong Tai Tiong Desmond, who resigned from the Board on 2 June 2016, and Mr Ng Cher Yan and Mr Low Kian Beng, who will be retiring from the Board following the AGM, for their dedicated and commendable services rendered to the Group. I would also like to welcome Ms Pok Mee Yau, who joined the Board on 19 August I am confident that with her expertise in corporate services, she will greatly contribute to the Group s future growth. To the management team and employees, I would like to thank you for your dedication and contribution to the Group. Please continue your good work and I am sure we will see better results in the coming year. Finally yet importantly, I would also like to express a big thank you to the Board for their leadership and prompt inputs, which have steered the Group through the years. LEE THIAM SENG Executive Chairman and CEO January 2017

10 08 ecowise Holdings Limited Annual Report 2016 主席致辞 尊敬的股东 2016 财政年度对集团来说是充满挑战的一年 在全球经济复苏乏力态势的影响下, 集团在新加坡市场的可再生能源和资源回收业务放缓, 加上马来西亚令吉汇率的持续跌势和严峻的市场形势导致集团产业业务销售收入减少, 影响公司的总体业绩表现 回顾 2016 尽管面临多重挑战, 集团在 2016 年仍然达成了以下主要目标, 为我们在 2017 财政年度提升盈利能力奠定了坚实的基础 : - 增加集团运营模式和服务的多样性, 降低业务风险 - 重组马来西亚公司的组织架构, 提升经营效率 - 调整和优化中国项目现有的商业模式, 提升盈利水平 - 启用新的管理团队, 注重发展先进技术和设备 展望 年市场情绪预计仍将持续低迷 美联储加息及其他各种不确定的国际因素将对全球市场造成严重冲击 与集团更相关的是近期美元的强劲反弹涨势, 由于集团海外业务所占比例较大, 集团也面临着外汇汇率不确定性的严峻挑战 尽管经济逆势强劲, 集团仍将以加强各业务单位协同营运为目标, 降低营运成本, 提高销售额和利润率, 确保集团有效运作 在新加坡, 我们将致力于寻求新的投资项目, 扩展经营模式, 丰富我们的收入来源 在马来西亚, 在现有翻新胎业务的持续稳定增长之外, 我们也将积极拓展橡胶原料海外市场, 提升公司的国际市场竞争力

11 ecowise Holdings Limited Annual Report 在中国, 我们将以较低的价格重建基础设施, 提升我们的资产价值 ; 同时利用我们的技术优势寻求新的收入增长点 2017 年, 集团将逐步采纳先进技术和设备, 从新加坡本部开始, 逐步运用于马来西亚和中国市场, 使集团利益和社会价值最大化 鸣谢我谨代表董事会, 对多年来坚定支持我们的股东, 客户, 商务伙伴及供应商表达我们最诚挚的感谢 我相信 2017 年度集团业务将更上一层楼, 寄望股东们理解我们为度过艰难时期所做的努力 同时我也要感谢于 2016 年 6 月 2 日退任董事会的前董事王大忠先生, 以及将在本届年度股东大会后退任董事会的黄书轩先生和刘建民先生, 感谢他们在任期间对公司提出的宝贵指导 我也代表董事会热烈欢迎在 2016 年 8 月 19 日加入董事会的卜美佑女士 我深信她的丰富阅历及专业知识必将为董事会注入更强的活力 借此机会我也衷心地感谢集团的管理团队和员工们, 感谢大家对集团的辛勤工作和奉献 我相信大家的努力工作必将结出累累硕果 最后, 也向一直以来引领和支持集团的董事会表达我最诚挚的谢意 李添胜 执行主席和首席执行官 2017 年 1 月

12 10 ecowise Holdings Limited Annual Report 2016 FINANCIAL HIGHLIGHTS GROUP REVENUE ($ 000) (LOSS)/PROFIT ATTRIBUTABLE TO OWNERS OF THE COMPANY ($ 000) , (1,867) , , (6,736) , , , ,366 EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY ($ 000) RETURN ON EQUITY, ATTRIBUTABLE TO OWNERS OF THE COMPANY (%) , (4.27) , , (13.46) , , BASIC (LOSS)/EARNINGS PER SHARES (CENTS) NET ASSETS VALUE PER SHARE (CENTS) 2016 (0.20) (0.73)

13 ecowise Holdings Limited Annual Report FINANCIAL RESULTS ($ 000) FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Revenue 56,941 63,120 73,004 80,023 90,521 Gross profit 11,460 14,015 15,745 18,416 17,710 (Loss)/profit before income tax (1,791) 1,559 (8,960) 2,823 3,429 (Loss)/profit after income tax (1,811) 904 (10,019) 1,854 1,718 Non-controlling interest (3,283) (45) 352 (Loss)/profit attributable to owners of the Company (1,867) 610 (6,736) 1,899 1,366 STATEMENT OF FINANCIAL POSITION ($ 000) FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Property, plant and equipment 24,963 23,792 27,149 42,273 29,162 Cash and cash equivalents 8,174 7,732 11,402 15,271 18,527 Current assets 35,218 40,568 51,328 48,212 50,267 Total assets 83,804 88, , , ,966 Current liabilities 26,266 26,869 37,069 47,082 28,405 Total liabilities 38,424 41,096 54,532 60,060 42,484 Working capital 8,952 13,699 14,259 1,130 21,862 Equity attributable to owners of the Company 42,694 44,855 46,603 53,510 53,009 RATIOS FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Current ratio (times) Return on equity, attributable to owners of the Company (%)* (4.27) 1.33 (13.46) Return on assets (%)* (2.16) 0.63 (5.98) Basic (loss)/earnings per shares (cents) (0.20) 0.07 (0.73) Net assets value per share (cents) * In calculating return on equity, attributable to owners of the Company and return on assets, the average basis has been used.

14 12 ecowise Holdings Limited Annual Report 2016 FINANCIAL AND OPERATIONS REVIEW equipment of S$0.04 million, gains from derivative financial instruments of S$0.03 million and lower reversal of doubtful debts of S$0.02 million in FY2016, partially offset by absence of bad debts recovered of S$0.08 million and higher government grant income of S$0.06 million in FY2015. Marketing and distribution expenses decreased by 11.0% to S$2.94 million in FY2016 mainly due to lower petrol expenses, commission, upkeep of motor vehicles, depreciation, travelling expenses and advertising expenses. The lower petrol expenses were mainly due to lower petrol prices. STATEMENT OF COMPREHENSIVE INCOME The Group s revenue for the year ended 31 October 2016 ( FY2016 ) of S$56.94 million was S$6.18 million or 9.8% lower as compared to the last financial year ( FY2015 ). FY2016 revenue decreased by 9.8% mainly due to lower revenue recorded by the Group s renewable energy segment and resource recovery segment. There was a decrease in sales from the Group s renewable energy segment attributable to an unscheduled maintenance performed in February 2016 for the biomass cogeneration power plant at Gardens by the Bay and there was also a decrease in tipping fees for the collection of tree and wood waste starting from Q2 FY2016. The decrease in sales from the Group s resource recovery segment was mainly attributable to lower sales recorded by the Group s retreaded tyres business under SRR Group in FY2016 as compared to FY2015. Administrative expenses increased by 4.5% to S$8.06 million in FY2016 mainly due to increase in manpower cost attributable to higher headcount, depreciation expenses and travelling expenses partially offset by lower legal and professional fees, listing expenses, operating lease expenses and equity-settled sharebased expenses. Depreciation expenses decreased by 1.5% to S$2.74 million in FY2016 mainly due to the Group s renewable energy segment s change of depreciation calculation for the reinstatement cost and plant and equipment as a result of the lease extension in Sungei Kadut in Q4 FY2016, partially offset by higher depreciable assets (new advance rubber compound mixing plant and building which was commissioned at the end of Q2 FY2015) attributable to the Group s resource recovery segment. The Group s gross profit of S$11.46 million in FY2016 was lower as compared to S$14.02 million in FY2015. This was mainly attributable to the decrease in sales from the Group s renewable energy segment due to the unscheduled maintenance performed in February 2016 for the biomass co-generation power plant at Gardens by the Bay, overall higher depreciation expenses due to the new advance rubber compound mixing plant and building and overall production cost declining slower than the decrease in sales of the Group. Other gains decreased by S$0.53 million to S$0.27 million in FY2016 mainly due to the absence of forfeited deposit from a potential investor of S$0.07 million, waiver of interest of S$0.04 million, foreign exchange gains of S$0.47 million, gains on disposal of plant and

15 ecowise Holdings Limited Annual Report Finance costs decreased by 3.2% in FY2016 to S$1.16 million in FY2016 mainly due to lower loans and borrowings in the Group s resource recovery segment and ecowise Holdings Limited. Share of losses from associates and jointly-controlled entity of S$1.14 million in FY2016 was mainly due to the Group s share of losses incurred by Chongqing eco-ctig Rubber Technology Co. Ltd., Geocycle Singapore Pte. Ltd. and China-UK Low Carbon Enterprise Co. Ltd. The Group recorded loss before tax of S$1.79 million in FY2016 as compared to profit before tax of S$1.56 million in FY2015 mainly due to lower revenue, share of losses from associates and jointly-controlled entity and higher administrative expenses. The Group recorded income tax expense of S$0.02 million in FY2016 as compared to income tax expense of S$0.66 in FY2015, mainly due to taxation charges from taxable profit and partially offset with deferred tax assets of the Group s resource recovery segment and renewable energy segment. Due to the above factors, the Group recorded a loss of S$1.81 million in FY2016 as compared to a profit of S$0.90 million in FY2015. STATEMENT OF FINANCIAL POSITION The Group s non-current assets increased by 0.98% or S$0.47 million to S$48.6 million as at 31 October The Group s property, plant and equipment increased by S$1.17 million to S$24.96 million as at 31 October 2016 mainly attributable to the reclassification of assets held for sale to property, plant and equipment of S$2.71 million, acquisition of plant and equipment of S$1.09 million and movements in foreign exchange rates gain of S$0.15 million partially offset by depreciation charges of S$2.74 million and disposal of plant and equipment of S$0.04 million. Investments in associates and jointly-controlled entity collectively decreased by S$1.74 million mainly attributable to the Group s share of losses from associates and jointly-controlled entity of S$1.14 million and the effects of movements in foreign exchange rates loss of S$0.60 million. Finance lease receivables as at 31 October 2016 is mainly attributable to the Group s investment in biomass co-generation power plant at Gardens by the Bay which is accounted for as a finance lease. Total non-current and current finance lease receivables decreased from S$12.57 million as at 31 October 2015 to S$11.96 million as at 31 October 2016 is mainly attributable to billings to and collections from customer. The Group s current assets decreased by S$5.35 million to S$35.22 million as at 31 October 2016 mainly due to decrease in trade and other receivables by S$0.78 million, inventories by S$0.48 million, reclassification of assets held for sale by S$5.07 million, derivative financial instruments by S$0.04 million partially offset by increased cash and cash equivalents by S$0.44 million, other assets of S$0.45 million, income tax receivables

16 14 ecowise Holdings Limited Annual Report 2016 FINANCIAL AND OPERATIONS REVIEW flow used in investing activities of S$0.85 million and net cash flow used in financing activities of S$6.67 million. Net cash flows from operating activities for FY2016 were S$6.38 million, higher compared to FY2015, mainly attributable to an increase in trade and other payables. In FY2016, inventories and trade and other receivables decreased due to the reduction in inventory holding period and improved collection of receivables from customers respectively. of S$0.06 million and finance lease receivables of $0.07 million. The decrease in trade and other receivables of S$0.78 million was mainly attributable to lower revenue and improved collections in FY2016 under the Group s resource recovery segment, partially offset by effects of movements in foreign exchange rates gain as at 31 October 2016 as compared with 31 October The increase in other assets were mainly due to deposits and prepayments. Cash flow used in investing activities of S$0.85 million comprised mainly the Group s capital expenditure on property, plant and equipment amounting to S$0.96 million offset by interest income received from finance lease receivables amounting to S$0.05 million, repayment from a jointly-controlled entity amounting to S$0.05 million and proceeds from disposal of property, plant and equipment amounting to S$0.03 million. The Group s capital expenditure were mainly in its resource recovery segment and renewable energy segment. Cash flow used in financing activities of S$6.67 million comprised mainly repayments of loans and borrowings of S$4.76 million, finance costs of S$1.13 million, dividends paid to non-controlling interest of subsidiaries of S$0.25 million, acquisition of non-controlling interests amounting to S$0.02 million and increase in restricted cash of S$0.52 million. The Group s non-current liabilities decreased by S$2.07 million mainly due to the transfer of loans due within the next 12 months from non-current liabilities to current liabilities and repayments of loans and borrowings. The Group s current liabilities decreased by S$0.60 million to S$26.27 million as at 31 October 2016 mainly due to decrease in loans and borrowings by S$1.36 million, income tax payable by S$0.46 million, reclassification of assets held for sale by S$2.03 million, derivative financial instruments by S$0.05 million, partially offset with increase in trade and other payables by S$3.16 million and other liabilities by S$0.14 million. STATEMENT OF CASH FLOW The Group s cash and cash equivalents decreased by S$1.14 million in FY2016 mainly due to net positive cash flow from operating activities of S$6.38 million, net cash

17 ecowise Holdings Limited Annual Report The Group is a pioneer in the renewable energy and recycling field and will aim to share its expertise with stakeholders and private corporations to develop systems that aids us in creating an eco-friendly world. The future as envisioned by the Group will be one that has lower carbon emissions when compared to the current level. To this end, the Group will continue to offer and promote low carbon initiatives that not only achieves the primary aim of reduced carbon emissions, but also offer innovative solutions to both personal and businesses practices for healthier living and improved productivity respectively.

18 16 ecowise Holdings Limited Annual Report 2016 BUSINESS OVERVIEW The Group has projects and operations in Renewable Energy, Resource Recovery and Integrated Environmental Management Solutions market segments which span across three (3) main regions China, Malaysia as well as Singapore being the Group s headquarters. In the Current Financial Year ( FY2016 ), the business focus is on the stabilisation of the business operations (through human resource optimisation, business operations review/reorganisation and process improvement as well as improved sales management) in each of the region and also to explore new opportunities in maximising returns for our shareholders. RENEWABLE ENERGY SEGMENT Singapore With the two (2) operating biomass co-generation power plants in Singapore, the co-generation biomass power plant located at Gardens by the Bay which started operation in 2011 is operating within the design capacity and remains to be one of the more profitable projects. The other co-generation biomass power plant located in Sungei Kadut operating since 2004 remains to be a reliable revenue stream with approximately 10% contribution to the overall Singapore income. China After a lapse of more than five (5) years for both the Changyi biomass power plant and Wuhan coal to biomass power plant, in 2016, the management has started some minor retrofitting works (office and/or power plant) with the main objectives of fulfilling our obligation to the local municipalities while maintaining and enhancing the value of the plants in RESOURCE RECOVERY SEGMENT Singapore The Group has recently clinched a three (3) years contract with a local renowned energy provider for the supply of biomass woodchip fuel. This contract expanded the production capacity which not only optimises the operation costs but also positions the resource recovery segment of the Group for greater growth. As a side

19 ecowise Holdings Limited Annual Report stream product, the Group is still producing high quality compost that can be used as organic fertilizer and conditioner that improves soil-nutrient level with the sources being the left-over horticultural waste fines that are not suitable as fuel. The ISO tanker heating capacity and revenue in the Sungei Kadut biomass power plant heat usage had been optimized and hence the ISO tanker heating capabilities had been expanded. The number of ISO tankers utilising the heating services at Sungei Kadut has grown at a 9.8% year on year ( YOY ). In addition, the commissioning of a new standby diesel boiler in Sungei Kadut has enhanced the reliability of the power generation capabilities and allowed for non-disruption of service provision during the annual shutdown for mandatory inspection. The Group s joint venture with Holcim Singapore, Geocycle Singapore Pte. Ltd., owns and operates Singapore s largest waste copper slag processing plant. The business had been challenging with the slower economic environment. Both the waste copper slag collection and sales of washed copper slag had been affected where revenue and profits remains low. China The Chongqing Zhongtian Electronic Waste Management Co., Ltd. production had been greatly reduced with the relocation of the factory since March The production capacity had also decreased due to the reduced availability of the electronic waste quantity and higher purchase prices for these electronic waste. FY2016 sees the stabilisation of the Total Tyre Management ( TTM ) model on more than 2,800 buses managed by Chongqing eco-ctig Rubber Technology Co. Ltd. ( CECRT ) (the cooperation/joint venture model between the Group and Chongqing Municipal Transport Development and Investment (Group) Co., Ltd., that owns about 10,000 buses. In 2016, CECRT had also started the trial of retread tyres on Chongqing city LRT trains (the first of its kind in China). These two businesses have attracted interests from other cities across China and we are looking at adopting similar arrangements so as

20 18 ecowise Holdings Limited Annual Report 2016 BUSINESS OVERVIEW to attain low carbon and sustainable development for their huge logistic and transport industries. Malaysia The Group s wholly-owned subsidiary in Malaysia, Sunrich Resources Sdn. Bhd. ( SRR and its group of companies SRR Group ) business is also affected by the foreign exchanges risk with the weaker Malaysian Ringgit, depressed selling prices, influx of cheap new China tires and slow demand. Currently, the revenue is flat but profit margins remain acceptable. SRR Group remains as one of Malaysia s largest rubber compounder and tyre retreader, marketing its premium range of high quality products like retread tires, production of general rubber compounds and high value specialty rubber compounds for the IT, automotive industries and offices applications (though its subsidiary, Saiko Rubber (Malaysia) Sdn. Bhd.). Increased marketing and sales on the Off-The-Road ( OTR ) retread tyres owing to the uniqueness and relatively lucrative profit margin in comparison with Truck-Bus-Radial ( TBR ) retread tyres. Last but not least, SRR is also strengthening its new tyres sales department, (Sunrich Tyre and Auto Products Sdn. Bhd.) ( STAP ) and is currently the largest distributor for Giti in Peninsular Malaysia. With the product mix, SRR businesses had expanded beyond SEA into China, Africa, Europe and South America markets. On the Research and Development ( R&D ) and product development front, SRR has over the years been engaging the local government authority, Malaysia Rubber Board, in the development and use of the specialty epoxidised natural rubber compound known as Ekoprena. SRR had since successfully participated in piloting projects with major end-user logistic (lorry and bus) fleets and certifying the Suntex retread liners using Ekoprena as one of the key raw materials. Some of the major benefits realised by the use of Suntex brand retread liners includes increased durability of the retread tyres resulting in longer mileage and reduced rolling resistance resulting in improved fuel efficiency. SRR is exploring the possibility of further testing of the Suntex- Ekoprena tyres with major logistic fleet to ensure that SRR stays above its competitors in the manufacturing of high quality rubber products. Going forward, the Group will be bringing this innovative product along with our TTM services experiences and expand into other, transportation fleet owners. INTEGRATED ENVIRONMENTAL MANAGEMENT SOLUTIONS SEGMENT Singapore ecowise Solutions Pte Ltd ( EWS ) and its wholly owned subsidiary, (ecowise Technologists and Engineers Pte. Ltd.) had completed the supply and commissioning of the 3rd project of gas fired boilers for a reputable pharmaceutical company in Tuas Biomedical Park and this is a testimonial of continued key account management of high profile clienteles. EWS continues to pursue projects with esteem clients providing technological system, products and services in the field of environmental solutions. These two companies also focus on the development of low carbon and ecofriendly business and projects, technology incubation, technology commercialisation and low carbon solutions with the aim to provide a holistic scope of environmental solutions to customers. China With the investment in China UK Low Carbon Enterprise Co., Ltd. ( CULCEC ), the technology incubation and venture capital arm of China Energy Conservation and Environmental Protection Group, the largest Chinese State Owned Enterprise focusing in the energy conservation and environmental protection sector; there are returns in FY2016 and CULCEC had registered and started carbon emission trading in three of the seven trading centers in China and generated positive return. This preliminary investment paved the way forward on the enlarged government initiated carbon emission control that CULCEC is well placed to play a key role on the management & trading of these carbon emission quota in FY 2017.

21 ecowise Holdings Limited Annual Report SUSTAINABILITY REPORT AND CORPORATE SOCIAL RESPONSIBILITY ( CSR ) Sustainability at ecowise is about striving for continuous excellence improvement in identifying, understanding and responding to the dynamic environmental, social and governance challenges facing our businesses. As we are involved mainly in the business of resource recovery, waste to renewable energy and integrated environmental Low Carbon solution provider, the Group has consistently been promoting, developing and pursuing businesses that are sustainable, together with our environmental friendly and conscious partners, in the three key countries (Singapore, Malaysia and China) that we operate in. ecoworld better world

22 20 ecowise Holdings Limited Annual Report 2016 SUSTAINABILITY REPORT AND CORPORATE SOCIAL RESPONSIBILITY ( CSR ) SUSTAINABILITY STATEMENT ecowise Holdings Limited, its subsidiaries and associate companies (the Group ) view the principles of sustainability in business development as an integral part of our business. At ecowise, we believe in building sustainable businesses that deliver long-term shareholder value and growth. We believe that a truly sustainable business not only creates economic value, but performs so in a way that benefits its stakeholders. As a resource recovery, renewable energy and integrated environmental management solutions provider, we have embedded environmental, social and governance considerations in our business decisions and processes. We believe that taking these considerations into our business decisions and processes, helps us understand our risks and responsibilities in a holistic manner to be a sustainable and profitable organisation committed to improving the environment and well-being of the communities that we serve. ECOWORLD. BETTER WORLD The Group s Vision and Mission Statements is fundamental to ecowise Holdings Limited s sustainability culture and policies, which also reflects the corporate social and environmental sustainability commitments that we make to our relevant stakeholders such as shareholders, clients, employees and the general society. In the three key business segments, the Group contributes to the conservation of resources and reduction of carbon dioxide emission via the following areas: 1. assists the logistic and transport industries to reduce the consumption of new tyres by providing quality retreaded tyres and Total Tyre Management services; 2. as a valued waste management company to the food and beverages manufacturers by recovering their wastes, such as wet spent grain and soya bean waste into useful ingredients for animal feeds; 3. as a pioneer in repurposing the recycled washed copper slag, generated by the shipyards and fabrication yards, as an approved sand alternatives used in the construction industry; 4. contributes to the sustainability of Singapore as a City in a Garden by recovering horticultural wastes as organic fertilizer and by recycling wood wastes generated by industries, as biomass fuel for producing green renewable energy. ACHIEVEMENTS The Group recovered on average about 171,000 tons of solid waste and converted most of it into re-purposed eco-products per year over the past years and has helped to reduce the amount of wastes going to public incinerators and landfill at Pulau Semakau. Furthermore, the Group s green industrial processes are capable of reducing total carbon dioxide emission by approximately 36,000 tons per year. In 2015, the Company s biomass co-generation power plant at the iconic Gardens by the Bay won the 2015 Asean Energy Awards, 1st Runner Up in the Co-Generation Category. This Design, Build and Operate Agreement showcased an excellent Private-Public Partnership Renewable Energy Project that encompasses an environmentally friendly and efficient biomass power plant to power the Flower Dome and Cloud Forest at the iconic Gardens by the Bay. The Company is not only committed to sustainable development by its own, it is also fully supportive of communities efforts towards sustainability development. In the year under review, the Company donated to the Hong Kah North ( HKN ) Eco Community Fund and took part in the launch of HKN s Towards Zero Waste Community event on 20 December In addition, the Company also supports new initiatives and developments that shape the futures of Singapore, such as powering the Auto-Riders ( driverless vehicles ) with green electricity that are undergoing trial operations at Gardens by the Bay. These achievements and commitments have enabled us to perform with high standards of good corporate 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 SUSTAINABILITY AND CSR POLICIES AND COMMITMENTS Ensure robust 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, quality work and trust; Develop and enhance products and services that provide high degree of social and environment friendly to our stakeholders; Implement and/or expand environmental sustainable management and business practices; and Build relationships with stakeholders whom sustainability and CSR goals and activities are aligned with our expectations.

23 ecowise Holdings Limited Annual Report BOARD OF DIRECTORS LEE THIAM SENG Chairman and Chief Executive Officer Executive and Non-Independent Director Date of first appointment as a director: 12 November 2002 Date of last re-election as a director: 27 February 2015 Date of next re-election as a director: 28 February 2017 Length of service as a director (as at 31 October 2016): 14 years Board committee(s) served on: Nil Academic & Professional Qualification(s): Chartered Financial Consultant, American College, USA. Diploma (Merit) in Electrical Engineering, Singapore Polytechnic Present Directorships (as at 31 October 2016): Other Listed companies Nil Other Principal Commitments Nil Past Directorships in listed companies held over the preceding 3 years (from 1 November 2013 to 31 October 2016) Nil LOW KIAN BENG Deputy Chief Executive Officer Executive and Non-Independent Director Date of first appointment as a director: 1 January 2011 Date of last re-election as a director: 29 February 2016 Length of service as a director (as at 31 October 2016): 5 years 9 months Board committee(s) served on: Nil Academic & Professional Qualification(s): Master of Business Administration (Distinction), Oklahoma City University, USA B.SC. (Honors) in Engineering, Imperial College of Science and Technology, London Present Directorships (as at 31 October 2016): Other Listed companies Nil Other Principal Commitments Nil Past Directorships in listed companies held over the preceding 3 years (from 1 November 2013 to 31 October 2016) Nil

24 22 ecowise Holdings Limited Annual Report 2016 BOARD OF DIRECTORS NG CHER YAN Non-Executive and Lead Independent Director Date of first appointment as a director: 19 November 2004 Date of last re-election as a director: 29 February 2016 Length of service as a director (as at 31 October 2016): 12 years Board committee(s) served on: Audit Committee (Chairman) 1 Remuneration Committee (Member) 2 Nominating Committee (Chairman) 3 Academic & Professional Qualification(s): Practicing Public Accountant, Fellow Chartered Accountant of Singapore Member of the Institute of Chartered Accountants in Australia Bachelor of Accountancy, National University of Singapore. Present Directorships (as at 31 October 2016) Other Listed companies Samko Timber Limited, Vicplas International Ltd., Mermaid Maritime Public Company Ltd MoneyMax Financial Services Ltd., Bull Will Co. Ltd. (listed in Taiwan) Other Principal Commitments Plus LLP, Chartered Accountants Partner Past Directorships in listed companies held over the preceding 3 years (from 1 November 2013 to 31 October 2016) Nil Notes: 1 Appointed on 19 November Appointed on 19 November Appointed on 19 August 2016 WONG JOO WAN Non-Executive and Independent Director Date of first appointment as a director: 26 May 2015 Date of last election as a director: 29 February 2016 Length of service as a director (as at 31 October 2016): 1 year 5 months Board committee(s) served on: Remuneration Committee (Chairman) 1 Audit Committee (Member) 2 Nominating Committee (Member) 3 Academic & Professional Qualification(s): Bachelor of Commerce, The University of Western Australia, Australia Certified Practising Accountant Australia, CPA Australia, Australia Chartered Accountant (Singapore), Institute of Singapore Chartered Accountants, Singapore Approved Liquidator, Accounting and Corporate Regulatory Authority, Singapore Present Directorships (as at 31 October 2016) Other Listed companies Lifebranz Limited, KLW Holdings Limited, Other Principal Commitments, Alternative Advisors Pte. Ltd. Director Past Directorships in listed companies held over the preceding 3 years (from 1 November 2013 to 31 October 2016) Nil 1 Notes: Appointed on 26 May Appointed on 26 May Appointed on 26 May 2015

25 ecowise Holdings Limited Annual Report POK MEE YAU Non-Executive and Independent Director Date of first appointment as a director: 19 August 2016 Date of election as a director: 28 February 2017 Length of service as a director (as at 31 October 2016): 2 months 13 days Board committee(s) served on: Nominating Committee (Member) 1 Audit Committee (Member) 2 Remuneration Committee (Member) 3 Academic & Professional Qualification(s): LL.B (Hons), University College London LL.M, University College London Legal Practice Course, BPP Law School Graduate Diploma in Singapore Law, National University of Singapore Postgraduate Practical Law Course, Board of Legal Education Present Directorships (as at 31 October 2016): Other Listed companies Zheng Li Holdings Limited (listed in Hong Kong) Other Principal Commitments JLC Advisors LLP Partner Past Directorships in listed companies held over the preceding 3 years (from 1 November 2013 to 31 October 2016) Transcorp Holdings Limited Notes: 1 Appointed on 19 August Appointed on 19 August Appointed on 19 August 2016

26 24 ecowise Holdings Limited Annual Report 2016 MANAGEMENT LEE THIAM SENG CEO 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 22 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 14 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 the growth and diversification of the Group s business over the years, which has evolved from waste management to biomass energy generation and environmental engineering. LOW KIAN BENG 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 in Malaysia. Mr. Low has more than 26 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-ST listed company, from 2000 to LAWRENCE CHEN TSE CHAU Assistant Group Financial Controller Mr Chen joined the Group in August 2016 and is responsible for the supervision of the Group s financial reporting, management of the finance team, compliance with listing and regulatory requirements, and review of internal controls. He has more than 8 years experience covering auditing and accounting in the commercial, manufacturing sectors and public accounting. Mr Chen is a member of the Association of Chartered Certified Accountants and a Chartered Accountant of Singapore. He also holds a Bachelor of Science Degree in Applied Accounting from Oxford Brookes University and a Diploma in Marine Engineering from Singapore Polytechnic.

27 ecowise Holdings Limited Annual Report RICHIE CAO SHIXUAN General Manager Asia Pacific Mr Cao joined the Group in January 2016 and he is responsible for the performance of the Group s business units in China and the development of synergistic businesses in the Asia Pacific region. Mr Cao has more than 20 years extensive experience in large scale real estate projects, financial investment, crisis management, IT, mass media and in the energy industry. He held senior positions in sizeable private and state-owned companies in Taiwan and China and his areas of expertise is in strategic planning and implementing of sophisticated plans. He also has wide experience in working with government bodies. Mr Cao holds an Executive Master of Business Administration from National University of Singapore and an Executive Master of Business Administration from Huazhong University of Science and Technology, China. ROBERT LIM ENG THIAM General Manager Business Development Mr Lim joined the group in September 2015 and is responsible for exploring new business opportunities in the Asia Pacific regions and he is also the Chief Operating Officer in the Group s China businesses and Director/Head of Sales & Marketing in the Group s Malaysia businesses. Mr Lim has more than 20 years of experience in the environmental and water industry, and held various key management positions in Hyflux Ltd, a world leading water company. Mr Lim holds a Diploma in Mechanical Engineering from Ngee Ann Polytechnic and a Masters of Business Administration from University of Leicester.

28 26 ecowise Holdings Limited Annual Report 2016 SUBSIDIARIES MANAGEMENT SINGAPORE MR KENNY HUANG JIANFANG Singapore Operations Assistant General Manager MR ONG KING SUN Singapore Operations Manager Maintenance & Engineer MR ALAGESAN MUTHUKUMARASAMY Singapore Operations Assistant General Manager MR ONG KHENG HOON Singapore Operations Assistant Manager Maintenance & Engineer MALAYSIA MR ROBERT LIM ENG THIAM Sunrich Integrated Sdn. Bhd. Executive Director Sales and Marketing MR CHIN HON MENG Sunrich Integrated Sdn. Bhd. Executive Director Operation MR NG YEONG HOCK, DEREK Sunrich Integrated Sdn. Bhd. Financial Controller MR SEIYA SEN Saiko Rubber (M) Sdn. Bhd. Technical Director MR LIM PENG KIAT Sun Rubber Industry Sdn. Bhd. General Manager Production MR MELVIN KHAW CHEAH JUEN Sun Tyre Industries Sdn. Bhd. General Manager Production MR LIE KIAN LEE Gulf Rubber (M) Sdn. Bhd. General Manager MR LOUIS LIEW CHEE WENG Winner Suntex Sdn. Bhd, & Trakar Suntex Sdn. Bhd. General Manager Sales and Marketing MR GOW JIEN LIANG, JOSEPH Sun Rubber Industries Sdn. Bhd. General Manager Sales and Marketing MR LAI JIH SHEN Sunrich Marketing Sdn. Bhd. General Manager Sales and Marketing MR STEVEN GAN SENG POE Sunrich Tyres and Auto Products Sdn. Bhd. General Manager MR CHEW TONY Sunrich Integrated Sdn. Bhd. Assistant General Manager QA/QC

29 ecowise Holdings Limited Annual Report CHINA MR ROBERT LIM ENG THIAM ( 林荣添 ) China Region Operations Chief Operating Officer MR WU YONG ZHI ( 吴永智 ) China Region Assistant Financial Controller MS ZHANG GAO PIN ( 张高频 ) China Region Financial Controller MR ZUO QING PING ( 左清平 ) Wuhan/Changyi Operations General Manager

30 28 ecowise Holdings Limited Annual Report 2016 CORPORATE STRUCTURE ecowise Holdings Limited ecowise New Energy Pte. Ltd. ecowise Energy Pte. Ltd. Bee Joo Industries Pte. Ltd. ecowise Ventures Pte. Ltd. Sunrich Resources Sdn. Bhd. ecowise International Pte. Ltd. Bee Joo Environmental Pte. Ltd. ecowise RubberTech Pte. Ltd. ecowise Resources Pte. Ltd. ecowise Solutions Pte. Ltd. Asia Cleantech Hub Pte. Ltd. 49% 65% 20% Hivern Investments Pte. Ltd. Wuhan ecowise Energy Co., Ltd. ecowise Marina Power Pte. Ltd. China-UK Low Carbon Enterprise Co., Ltd. Sunrich Integrated Sdn. Bhd. Ecogreen Products and Services Sdn. Bhd. Chongqing eco- CTIG Rubber Technology Co., Ltd. 51% 84% 15% 50% Changyi Enersave Biomass to Energy Co., Ltd. Sun Rubber Industry Sdn. Bhd. Sun Tyre Industries Sdn. Bhd. Saiko Rubber (Malaysia) Sdn. Bhd. Gulf Rubber (M) Sdn. Bhd. Sun Tyre & Auto Products Sdn. Bhd. Chongqing ecowise Investment Management Co., Ltd. Chongqing Zhongtian Electronic Waste Management Co., Ltd. Geocycle Singapore Pte. Ltd. ecowise Technologists And Engineers Pte. Ltd. 84% Sunrich Global Marketing Sdn. Bhd. Gulf Rubber Suntex Sdn. Bhd. 96% Sunrich Marketing Sdn. Bhd. Winner Suntex Sdn. Bhd. Autoways Industries Sdn. Bhd. 57% Trakar Suntex Sdn. Bhd. Renewable Energy Business Resource Recovery Business Integrated Environmental Management Solutions Business