Annual Report 2012 - ecoWise Holdings Limited

ANNUAL REPORT 2012PURSUINGSUSTAINABLEGROWTH

CONTENTS02 CORPORATE PROFILE06 CHAIRMAN’S STATEMENT10 FINANCIAL HIGHLIGHTSFINANCIAL AND OPERATIONS12 REVIEW16 BUSINESS OVERVIEWCORPORATE SOCIAL19 RESPONSIBILITY20 BOARD OF DIRECTORS22 MANAGEMENT TEAM24 CORPORATE INFORMATION25 CORPORATE GOVERNANCE42 FINANCIAL STATEMENTS

ecoWise Holdings Limitedannual report 2012 01VISIONTo be the preferred environmentalsolutions and renewal energyprovider with high integrity,corporate social responsibility andto create value for all stakeholders.MISSIONTo emphasize on researchand development to provideenvironmentally friendly solutionsto industrial processes.To establish successful operationsand management of renewableenergy projects that contribute tosocial, economic and environmentalbenefi ts to stakeholders.To establish awareness, propagate,promote and encourage use ofenvironmentally friendly productsderived from recycled organicwaste.To establish best practices in themanufacture and distribution ofenvironmentally friendly recycledproducts that are in harmony withecological principles.

02ecoWise Holdings Limitedannual report 2012CORPORATE PROFILEFounded in 1979, ecoWise Groupis a Singapore based resourcerecovery, renewable energy andintegrated environmental solutionsprovider. The Group was listed onSGX-SESDAQ in 2003 and movedto SGX Mainboard on 9 May 2008.RESOURCE RECOVERYThe Group owns a leading rubber compoundmanufacturing and tyre retreading group under SunrichIntegrated Sdn. Bhd and its subsidiaries (“SRITGroup”) based in Malaysia. SRIT Group engages inthe manufacturing of rubber compound and custommade compound as well as retread tyres under brandnames such as Suntex, Winner, Autoways and Trakar.The Group will be expanding its total tyre managementbusiness into Chongqing, China, through a 65% heldjoint venture company established in December 2012with Chongqing Municipal Transport Developmentand Investment (Group) Co., Ltd. which is Chongqingmunicipal’s largest state owned transport logistic group.In China, the Group engages in electrical and electronicwaste recycling business through a 15% investmentin Chongqing Zhongtian Electronic Waste Co.,Ltd. (“CZEW”) under a joint venture with ZhongtianEnvironment Protection Industrial Group Co., Ltd. CZEWhas an exclusive e-waste license awarded by the localgovernment in the business of collection, recovering,processing and disposal of electrical and electronicwaste in Chongqing.In Singapore, the Group is an appointed term contractorfor collection of used copper slag and general wastefor certain shipyards and fabrication yards. A largeportion of the recycled copper slag is used by ready mixconcrete suppliers for the production of eco-concrete.The Group’s patented composting technology,ecoACT TM , employs the unique in-vessel thermophiliccomposting technology to manufacture quality organiccompost in the shortest possible time.

ecoWise Holdings Limitedannual report 2012 03RENEWABLE ENERGYIn Singapore, the Group’s first biomass cogenerationpower plant in Sungei Kadut supplieswaste steam for a number of industrial applications.The waste steam application from the plant wasthe first registered Clean Development Mechanism(“CDM”) project in Singapore.The Group’s second biomass co-generation powerplant in Singapore at the iconic Gardens by the Bay(Marina South) commenced operation in November2011 for the supply of energy to the National ParksBoard. This newly completed biomass co-generationpower plant was constructed under a Design, Buildand Operate agreement entered with National ParksBoard for a fifteen years period.INTEGRATED ENVIRONMENTALMANAGEMENT SOLUTIONSThe Group provides resources management andintegrated environmental engineering solutionsfor industrial waste and energy management.The Group focuses on providing ‘low carbon’environmental solutions. It offers a range ofservices including process design and optimisation;engineering, procurement, fabrication construction;commissioning, operation and maintenance of thefacilities.In China, the Group’s 49% held subsidiary inWuhan, Wuhan ecoWise Energy Co., Ltd., currentlyowns a 25MW coal-fired power plant which ceasedoperation in 2010 pending for the commencementof the process to convert it into a 25MW biomassco-generation power plant.

04ecoWise Holdings Limitedannual report 2012绿 科 集 团 于 1979 年 在 新 加 坡 成 立 。 主 营 业 务 包 括 资 源 再 循 环 、 再生 能 源 和 提 供 综 合 性 环 境 解 决 方 案 。 集 团 于 2003 年 在 新 加 坡 交易 所 创 业 板 挂 牌 上 市 , 并 于 2008 年 5 月 9 日 晋 升 主 板 交 易 。资 源 再 循 环绿 科 集 团 旗 下 以 马 来 西 亚 为 基 地 的 日 升 集 团 及 其 子 公 司 在 橡 胶 复 合 材 料 制 造 和 轮 胎 翻 新 业 务 上 领先 同 行 业 。 日 升 集 团 从 事 橡 胶 复 合 材 料 和 特 制 橡 胶 复 合 材 料 的 生 产 , 并 在 Suntex,Winner,Autoway以 及 Trakar 四 大 品 牌 下 生 产 翻 新 轮 胎 。 集 团 在 2012 年 12 月 , 与 重 庆 市 最 大 的 国 有 运 输 物 流 企 业 重 庆城 市 交 通 开 发 投 资 ( 集 团 ) 有 限 公 司 设 立 了 合 资 企 业 - 重 庆 绿 科 开 投 橡 胶 科 技 有 限 公 司 , 绿 科 集 团 控股 65%。 集 团 冀 望 通 过 此 合 资 企 业 在 重 庆 扩 展 综 合 轮 胎 管 理 业 务 。在 中 国 , 绿 科 集 团 与 中 天 环 保 产 业 ( 集 团 ) 有 限 公 司 共 同 设 立 了 合 资 公 司 - 重 庆 中 天 电 子 废 物 管 理 有限 公 司 。 合 资 公 司 拥 有 在 重 庆 市 的 电 器 、 电 子 产 品 废 弃 物 再 循 环 的 特 许 经 营 权 。在 新 加 坡 , 绿 科 集 团 是 新 加 坡 一 些 修 船 厂 和 造 船 厂 废 铜 渣 和 其 它 工 业 废 弃 物 指 定 回 收 商 。 大 部 分 的废 铜 渣 在 经 过 处 理 后 成 为 生 产 环 保 水 泥 的 主 要 材 料 。绿 科 集 团 的 专 利 堆 肥 技 术 ,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 。

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06ecoWise Holdings Limitedannual report 2012CHAIRMAN’S STATEMENTDear shareholders,On behalf of the Board of Directors, it ismy pleasure to present to you the AnnualReport for the Group for the financial yearended 31 October 2012 (“FY2012”).Through a 65% held joint venture company established in Chinain December 2012, the Group is looking to expand its total tyremanagement business into Chongqing, China by collaboratingwith its joint venture partner, Chongqing Municipal TransportDevelopment and Investment (Group) Co., Ltd. which is Chongqingmunicipal’s largest state owned transport logistic group.The Group achieved improved result inFY2012 due to better performance in boththe Resource Recovery and RenewableEnergy segments. The Group’s revenuegrew by 13.4% to S$90.52 million in FY2012and reported a net profit attributable toowners of the Company of S$1.37 millionin FY2012 as compared to S$0.56 millionrecorded in the previous financial year ended31 October 2011.The Resource Recovery segment posted a7.9% increase in revenue to S$80.33 millionin FY2012. The increase was mainly dueto higher sales recorded by the Group’srubber compound manufacturing andtyre retreading business under SunrichIntegrated Sdn. Bhd. and its subsidiaries(“SRIT Group”) in Malaysia. During the year,SRIT Group has become a wholly ownedsubsidiary of the Group after the Groupincreased its investment by acquiring theremaining 30% equity interests in SunrichIntegrated Sdn. Bhd. in March 2012.The outlook for SRIT Group remains stable,as the Group expects steady demandfor retreaded tyres from truck and busoperators as they attempt to contain risingoperating costs. To prepare for future growthopportunity, SRIT Group will embark onexpansion plan to enhance its technologicalcapability and increase its manufacturingcapacity in the near term.The Group has also started to receive dividend income of S$0.41million in FY2012 from its 15% investment stake in the electricaland electronic waste management company in China, ChongqingZhongtian Electronic Waste Management Co.,Ltd., within two yearsof 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 ofoperation of the newly completed biomass co-generation powerplant at Gardens by the Bay (Marina South) and the stable incomefrom waste steam applications from the biomass co-generationpower plant at Sungei Kadut Singapore.Constructed under a Design, Build and Operate agreement enteredwith National Parks Board for a period of fifteen years, the newlybuilt biomass co-generation power plant at Gardens by the Baycommenced operation in November 2011 and would continue tocontribute recurring income to the Group for the coming years.The project to convert the Group’s 49% owned coal-fired powerplant in Wuhan to a biomass co-generation plant has been delayedin view of the ownership changes experienced by the local partnerin China during the year. The Group will continue to discuss andwork with its local partner on the process of conversion. Thecommencement of plant conversion shall be subject to furthercapital injection by joint venture partners for purposes of securingbank financing for the conversion.The Group will continue to leverage on its experience and knowhow in the renewable energy sector to develop the biomass energybusiness. On 21 December 2012, the Group announced that it hadentered into a conditional sales and purchase agreement to acquireHivern Investments Pte Ltd (“Hivern”) which wholly owns a 24MWbiomass co-generation power plant situated in the industrial park

ecoWise Holdings Limitedannual report 2012 07CHAIRMAN’S STATEMENTin Changyi Binhai (Lower) Economic Development Zone, Shandong,China. The proposed acquisition of Hivern is conditional upon, interalia, the approval of shareholders of the Group, the approval of thecreditors of Hivern to enter a new scheme of arrangement for Hivernand the approval and sanction by the High Court of Singapore.In view of the growth potential in the clean-technology sector, theGroup had in February 2012 acquired a 20% equity interest inChina-UK Low Carbon Enterprise Co., Ltd. which engages in venturecapital and incubation management business in the cleantech sectorin China.The Group shall continue to expand its capabilities to providecomprehensive scope of services when offering environmentalsolutions to our valued customers. The scope of service includes thedevelopment of ‘low carbon’ and eco-friendly projects, technologyincubation, technology commercialization and low carbon solutions.REWARDING OUR SHAREHOLDERSOn behalf of the Board, I would like to thank all shareholders foryour continued support and confidence in the Group. As a tokenof appreciation, the Board is recommending a one-tier tax exemptfinal dividend of 0.1 cent per share for shareholders’ approval at theAnnual General Meeting.ACKNOWLEDGEMENTWe would like to take this opportunity to thank Mr Sunny Ong KengHua who retired from the Board on 28 February 2012. We wouldalso like to express our heartfelt appreciation to all our businessassociates, partners, customers as well as management and stafffor their continued support, dedication and confidence in the Group.LEE THIAM SENGExecutive Chairman and CEOJanuary 2013

10ecoWise Holdings Limitedannual report 2012FINANCIAL HIGHLIGHTSFinancial Results ($’000) FY 2012 FY 2011 FY2010 FY2009 FY2008Revenue 90,521 79,842 37,585 31,235 23,000Gross Profi t 17,710 13,635 6,904 5,570 9,770Profi t/(loss) before income tax 3,429 2,273 (1,479) (40) 6,898Profi t/(loss) after income tax 1,718 932 (1,978) (589) 5,831Non-controlling Interest 352 370 (630) (668) (50)Profi t/(loss) attributable to Shareholders 1,366 562 (1,348) 79 5,881Statement of Financial Position ($’000) FY 2012 FY 2011 FY2010 FY2009 FY2008Property, plant and equipment 29,162 37,743 33,111 14,089 7,022Cash and cash equivalents 18,527 12,785 14,956 26,629 13,216Current assets 50,267 43,822 47,043 34,732 23,976Total assets 102,966 87,132 86,394 51,779 32,847Current liabilities 28,405 24,152 25,951 7,215 7,575Total liabilities 42,484 34,312 33,205 11,998 8,744Working capital 21,862 19,670 21,092 27,517 16,401Equity, Attributable to Owners of the Company 53,009 40,020 39,831 35,042 23,340Ratios FY 2012 FY 2011 FY2010 FY2009 FY2008Current ratio (times) 1.77 1.81 1.81 4.81 3.17Return on Equity, Attributable to Owners of the Company (%)* 2.94 1.41 (3.60) 0.27 32.58Return on assets (%)* 1.44 0.65 (1.95) 0.19 21.23Basic earnings per share (cents) 0.15 0.07 (0.16) 0.01 1.68Net assets value per share (cents) 5.74 4.77 4.79 4.46 3.67* 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)2849,9072575,1362012 2011Resource Recovery Segment 80,330 74,449FY2012FY2011Renewable Energy Segment 9,907 5,136Integrated Environmental 284 257Management Solutions Segment80,33074,449Total 90,521 79,842

ecoWise Holdings Limitedannual report 2012 11FINANCIAL HIGHLIGHTSREVENUE ($’000)2012 90,521201179,842201037,585200931,235200823,000PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS ($’000)2012 1,3662011201020092008562(1,348)795,881EQUITY, ATTRIBUTABLE TO OWNERS OF THE COMPANY ($’000)2012 53,009201120102009200823,34040,02039,83135,042RETURN ON EQUITY, ATTRIBUTABLE TO OWNERS OF THE COMPANY (%)201220112010200920082.941.41(3.60)0.2732.58BASIC EARNINGS PER SHARE (cents)201220112010200920080.150.07(0.16)0.011.68NET ASSETS VALUE PER SHARE (cents)2012 5.7420112010200920083.674.774.794.46

12ecoWise Holdings Limitedannual report 2012FINANCIAL AND OPERATIONS REVIEWThe Group’s revenue increased by13.4% from S$79.84 million in thefi nancial year ended 31 October 2011(“FY2011”) to S$90.52 million in thefi nancial year ended 31 October 2012(“FY2012”). The increase was mainlydue to improved performance in theResource Recovery and RenewableEnergy segments.From top to bottom• Tyre retread business• NParks’ Gardens by the Baypowered by green energy• Copper slag processing plant

ecoWise Holdings Limitedannual report 2012 13FINANCIAL AND OPERATIONS REVIEWRevenue from the Renewable Energy segment increased by 92.9%or S$4.77 million to S$9.91 million in FY2012. The increase wasmainly attributed to the commencement of operation of the Group’snewly completed biomass co-generation power plant at Gardens bythe Bay (Marina South, Singapore) since the first quarter of FY2012.Revenue of this segment included finance lease income attributedto the biomass co-generation power plant at Gardens by the Baybeing 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 increasewas mainly due to higher sales of the Group’s rubber compoundmanufacturing and tyre retreading businesses under SunrichIntegrated 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 profitmargin recorded by the Renewable Energy segment due to thecommencement of operation by the biomass co-generation powerplant at Gardens by the Bay since the first quarter of FY2012.The Group’s rubber compound manufacturing and tyre retreadingbusinesses under the Resource Recovery segment also recordedslightly better margin in FY2012.Dividend income of S$0.41 million in FY2012 was received fromthe Group’s 15% investment in the electrical and electronic wastemanagement company in China, Chongqing Zhongtian ElectronicWaste Management Co., Ltd.Other credits decreased by 29.4% from S$0.78 million in FY2011to S$0.55 million in FY2012 mainly due to absence of reversal ofimpairment loss on property, plant and equipment recorded inFY2011 partially offset by higher foreign exchange gains in FY2012.Marketing and Distribution expenses increased by 16.4% fromS$3.29 million in FY2011 to S$3.83 million in FY2012. The increasewas mainly due to higher manpower costs and marketing expensesincurred by the Group’s rubber compound manufacturing and tyreretreading businesses in line with increased business activities.Administrative expenses increased by 23%from S$7.49 million in FY2011 to S$9.22million in FY2012. The increase was mainlydue to higher staff costs (increased byS$0.93 million), rental expenses, upkeepand utilities as well as legal and consultancyfees incurred. The Group incurred higherlegal fees mainly due to the acquisitionof land and leasehold property underthe Resource Recovery segment whilsthigher consultancy fees were incurred inconnection with business development inventure capital and cleantech sectors.Finance costs increased by 19.1% from S$0.87million in FY2011 to S$1.04 million in FY2012due to an increase in the Group’s loans andborrowings. The increase was mainly attributedto finance costs incurred on the Group’sinvestment in the biomass co-generationpower plant at Gardens by the Bay (increasedby S$0.18 million), acquisition of land andleasehold property by SRIT Group (increasedby S$0.05 million) and working capital of SRITGroup (increased by S$0.03 million).Depreciation of property, plant andequipment increased by 12.2% to S$3.15million in FY2012 mainly due to a generalincrease in the Group’s depreciableassets in FY2012 when compared to thecorresponding period in FY2011.Other charges of S$0.85 million in FY2012were mainly attributed to equity settledshare-based expenses of S$0.53 million,impairment loss on property, plant andequipment of S$0.19 million and otherfinancial assets of S$0.07 million.

14ecoWise Holdings Limitedannual report 2012FINANCIAL AND OPERATIONS REVIEWShare of loss from associates increasedby S$0.06 million to S$0.35 million inFY2012 mainly due to the lower quantity ofused copper slag processed by GeocycleSingapore Pte. Ltd. and losses incurredby the Group’s newly acquired associate,China-UK Low Carbon Enterprise Co., Ltd.Profit attributable to owners of the Companyimproved from S$0.56 million in FY2011 toS$1.37 million in FY2012. Basic earnings pershare increased from 0.067 cents in FY2011to 0.153 cents in FY2012.STATEMENT OF FINANCIAL POSITIONThe Group’s non-current assets as at 31October 2012 of S$52.70 million wereS$9.39 million higher as compared to 31October 2011.The Group’s investment in biomass cogenerationpower plant at Gardens by theBay was reclassified as a finance leasein FY2012. As at 31 October 2012, noncurrentand current finance lease receivablesin connection with the Group’s investmentin the biomass co-generation power plantamounted to S$13.73 million and S$0.84million respectively.The Group’s property, plant and equipmentdecreased by S$8.58 million to S$29.16million as at 31 October 2012 mainlyattributed to the reclassification of capitalexpenditure totaled S$14.60 million tofinance lease receivables for the Group’sinvestment in biomass co-generationpower plant at Gardens by the Bay. Duringthe year, the Group incurred total capitalexpenditure of S$9.89 million including the Group’s investment inbiomass co-generation power plant at Gardens by the Bay, partiallyoffset by depreciation charges of S$3.15 million, disposal of assetsof S$0.20 million, impairment loss on assets of S$0.19 million andforeign exchange translation adjustment of S$0.33 million.The Group’s investment in associates increased by S$3.65 million toS$5.00 million as at 31 October 2012 mainly due to the acquisitionof 20% equity interests in China-UK Low Carbon Enterprise Co.,Ltd. in FY2012. Other financial assets were S$0.76 million higherattributed to the increase in equity contribution by the Groupfor its 15% investment in the electrical and electronic wastemanagement company in China, Chongqing Zhongtian ElectronicWaste Management Co., Ltd.The Group’s current assets increased by S$6.45 million to S$50.27million as at 31 October 2012 mainly attributed to increase ininventories, finance lease receivables, cash and cash equivalents.Inventories were S$0.30 million higher mainly due to increase insemi-finished goods and raw materials of SRIT Group for its rubbercompound manufacturing and tyre retreading businesses.The Group’s non-current liabilities increased by S$3.92 million mainlydue to loan drawdown to finance the construction of the biomassco-generation power plant at the Gardens by the Bay and acquisitionof land and leasehold property by SRIT Group; partially offset by loanrepayment and reclassification of a portion of loan and borrowingsto current liabilities.The Group’s current liabilities increased by S$4.25 million to S$28.41million as at 31 October 2012 mainly attributable to an increase inthe Group’s loans and borrowings, trade and other payables andincome tax payable. Trade and other payables increased by S$1.35million mainly attributed to the capital expenditure incurred for theGroup’s biomass co-generation power plant at the Gardens by theBay and general increase in business activities.The Group’s total loans and borrowings increased by S$6.56 millionto S$25.84 million as at 31 October 2012. The increase was mainly

ecoWise Holdings Limitedannual report 2012 15FINANCIAL AND OPERATIONS REVIEWdue to loans drawdown to finance the construction of the biomassco-generation power plant at the Gardens by the Bay (increasedby S$4.05 million), acquisition of land and leasehold property bySRIT Group (increased by S$2.12 million) and hire purchase loans(increased by S$0.37 million).STATEMENT OF CASH FLOWSThe Group’s cash and cash equivalents increased by S$6.17 millionin FY2012 mainly due to net cash flows generated from operatingactivities of S$6.58 million and from financing activities of S$11.92million partially offset by cash flows used in investing activities ofS$12.33 million.The Group has applied the remainingproceeds of S$1.24 million as generalworking capital mainly to finance theoperating costs for the Group’s subsidiariesincluding the newly completed biomassco-generation power plant during its initialoperating months in FY2012 and to financepart of the Group’s administrative expensesincluding staff costs, rental expenses,upkeep and utilities as well as legal andconsultancy fees.Cash flows from financing activities comprised net cash proceedsof S$5.20 million from ordinary shares issuance, receipt of S$1.28million capital contribution from non-controlling interests of asubsidiary and proceeds of S$6.14 million from borrowings net ofrepayments and finance costs. Dividends of S$0.49 million werepaid to non-controlling interests.Cash flows used in investing activities comprised approximatelyS$3.99 million for acquisition of 20% equity interest in an associate,China-UK Low Carbon Enterprise Co., Ltd. and S$0.84 million foradditional equity contribution for its 15% investment ChongqingZhongtian Electronic Waste Management Co., Ltd., partially offsetby dividend income of S$0.41 million received from the latter. Netcash flows used for the Group’s capital expenditure amounted toS$8.13 million in FY 2012.STATUS OF THE USE OF PROCEEDS RAISEDFROM OFFERINGSGross proceeds from the shares issued during FY2012 amountedto S$5.25 million. Net proceeds from the shares issued wereapproximately S$5.23 million after deducting expenses. Net cashproceeds of S$3.99 million have been applied by the Group tofinance its acquisition of 20% equity interest in China-UK LowCarbon Enterprise Co., Ltd. and the remaining proceeds of S$1.24million have been deployed as general working capital for the Group.

16ecoWise Holdings Limitedannual report 2012BUSINESS OVERVIEWThe Group’s rubber compoundmanufacturing and tyre retreadingbusiness are undertaken bySunrich Integrated Sdn. Bhd. andits subsidiaries (“SRIT Group”)based in Malaysia.From top to bottom• Dryer front view• Copper slag processing plantBUSINESS OVERVIEWRESOURCE RECOVERYSEGMENTThe Group has over thirty years ofexperience in the Resource Recoverybusiness which handles a diversevariety of industrial materials withoperations in Singapore, Malaysia andChina.

ecoWise Holdings Limitedannual report 2012 17BUSINESS OVERVIEWRUBBER COMPOUND MANUFACTURING AND TYRERETREADING BUSINESSThe Group’s rubber compound manufacturing and tyre retreadingbusiness are undertaken by Sunrich Integrated Sdn. Bhd. and itssubsidiaries (“SRIT Group”) based in Malaysia. In March 2012,Sunrich Integrated Sdn. Bhd. became a wholly owned subsidiaryof the Group following the acquisition of the balance 30% equityinterest in the company. The principal activities of SRIT Group areas follows:• Manufacturing of rubber compounds and custom madecompounds 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. TheGroup manufactures retread tyres under brand names suchas Suntex, Winner, Autoways and Trakar through its marketingarms; and• Manufacturing of specialty rubber compounds for the IT,automotive and other industries.The integrated business model of SRIT Group allows operationalefficiency and cost savings to be achieved within its businessunits. SRIT Group serves a variety of customers and continuouslyengages on research and development program to evaluate themanufacturing of economically viable ‘low carbon’ and environmentalfriendly products for the rubber and tyre industries.The Group will be extending its total tyre management businessinto Chongqing, China, through a 65% held joint venture companyestablished in December 2012, Chongqing eco-CTIG RubberTechnology Co., Ltd. under a joint venture agreement enteredwith Chongqing Municipal Transport Development and Investment(Group) Co., Ltd which is Chongqing municipal’s largest state ownedtransport logistic group.USED COPPER SLAG RELATED BUSINESSThe Group is a pioneer in repurposing the recycled copper slagas an approved sand alternative used in the construction industry.Geocycle Singapore Pte Ltd (“GeocycleSingapore”), the Group’s joint venture withHolcim Singapore, owns and operatesSingapore’s largest waste copper slagprocessing plant with Holcim Singaporeproviding exclusive offtake of all its products.The main use of washed copper slag afterproper processing by Geocycle Singaporeis in ready-mix concrete for the productionof eco-concrete TM .ELECTRICAL AND ELECTRONICWASTE MANAGEMENTUnder a joint venture with ZhongtianEnvironment Protection Industrial GroupCo., Ltd, the Group holds a 15% stakein Chongqing Zhongtian Electronic WasteManagement Co., Ltd which has the exclusivelicense to operate special business concessionas the sole operator to carry out the businessof collection, recovery, processing anddisposal of electrical and electronic waste inChongqing, China for a period of 12 yearswith effect from October 2010.ORGANIC MATERIALS AND RESOURCESThe Group’s 15,000 m 2 composting facilityat Sarimbun Recycling Park is capableof processing more than 24,000 metrictonnes of horticultural waste each year.Using the Group’s proprietary in-vesseltechnology, ecoWise Active CompostingTechnology, ecoACT TM , the Group’s whollyowned subsidiary ecoWise Resources PteLtd produces compost that can be used asorganic fertilizer and also soil conditionerthat improves nutrients level, soil aerationand nutrient retention capabilities andprevents soil erosion.

18ecoWise Holdings Limitedannual report 2012BUSINESS OVERVIEWThe Group’s compost has been awardedthe Singapore Green Label by the SingaporeEnvironmental Council for “100% NaturalOrganic Fertilizer”.RENEWABLE ENERGY SEGMENTThe Group currently has three biomass cogenerationprojects in Singapore and China:SUNGEI KADUT BIOMASSCO-GENERATION POWER PLANT,SINGAPOREThe Group’s first biomass co-generationpower plant at Sungei Kadut has a capacityto generate 1MW electricity and 15 tonnessuperheated steam per hour. Usinghorticultural and wood waste as biomassfeedstock, the biomass co-generationpower plant is the first Singapore-basedClean Development Mechanism (“CDM”)project registered with the United NationsFramework Convention on Climate Change.The main applications of the waste steamgenerated from the biomass co-generationpower plant are for ISO tank heatingservices and drying of waste products suchas wet spent grains into raw materials forthe production of animal feed.GARDENS BY THE BAY (MARINASOUTH) BIOMASS CO-GENERATIONPOWER PLANT, SINGAPOREThe Group’s newly completed biomassco-generation power plant situated atthe Gardens by the Bay (Marina South)had commenced supplying energy to theNational Parks Board (“NParks”) for its iconicproject at the Gardens by the Bay sinceNovember 2011. Using horticultural and wood waste as biomassfeedstock, the biomass co-generation power plant is designed witha capacity to generate 0.9 MW of electricity and 5.4 MW of heatexclusively for the Gardens by the Bay. The biomass co-generationpower plant is constructed under a Design, Build and Operateagreement entered with NParks and will be operated by the Groupfor a period of fifteen years after commissioning.WUHAN 25MW BIOMASS CO-GENERATION POWER PLANTPROJECT, CHINAThe Group’s 49% held subsidiary Wuhan ecoWise Energy Co., Ltdhad in 2010 closed the operation of its 25MW coal-fired power plantin Wuhan, China pending for the commencement of the processto convert it into a 25MW biomass co-generation power plant.The Group is currently discussing with its joint venture partner inChina, Wuhan Jiabao Sugar Co., Ltd on the process of conversion.The commencement of plant conversion shall be subject to furthercapital injection by joint venture partners for purposes of securingbank financing for the conversion.CLEANTECH INCUBATION ANDVENTURE CAPITAL MANAGEMENTIn February 2012, the Group acquired a 20% stake in China UK LowCarbon Enterprise Co., Ltd which is the technology incubation andventure capital arm of China Energy Conservation and EnvironmentalProtection Group, the largest China state owned enterprise focusingin the energy conservation and environmental protection sector.INTEGRATED ENVIRONMENTAL MANAGEMENTSOLUTIONS SEGMENTecoWise Technologists and Engineers Pte Ltd (“eWTE”) providesconsultancy services in the field of environmental solutions. eWTEfocuses on the development of ‘low carbon’ and eco-friendlyprojects, technology incubation, technology commercialization andlow carbon solutions with an aim to provide holistic scope ofenvironmental solutions to customers while exploring partnershipopportunities in energy and waste management businesses.

ecoWise Holdings Limitedannual report 2012 19CORPORATE SOCIAL RESPONSIBILITYCORPORATE SOCIAL RESPONSIBILITY (CSR) STATEMENTecoWise 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 Groupseeks to be a sustainable and profitable organization besidesimproving the environment and society with like-minded partners.The Group endeavors tocontribute to a sustainableand better world by focusingon the environment and thewell-being of the communitythat it serves.ECOWORLD . BETTER WORLDThe Group endeavors to contribute to a sustainable and betterworld by focusing on the environment and the well-being ofthe community that it serves. CSR is fundamental to ecoWiseHoldings Limited’s culture and policies and reflects the corporatesocial and environmental sustainability commitments we maketo our stakeholders such as shareholders, employees and to ourcommunities.These commitments have enabled us to perform with high standardsof good governance and ethics; provide products and services thatmeet the rising expectation of clients and business partners; attractquality employees; provide meaningful support in our communities;and improve the social and environmental impacts of our businesspractices.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 allemployees perform with high standards of integrity and trust;• Develop and enhance products and services that provide highdegree of socially and environmentally responsible options forour stakeholders;• Implement and/or expand environmentally sustainablemanagement and business practices; and• Build relationships with stakeholders whose CSR goals andactivities are aligned with our expectations.

20ecoWise Holdings Limitedannual report 2012BOARD OF DIRECTORSFrom left to rightMrLow Kian Beng, Mr Lee Thiam Seng, Mr Ng Cher Yan,Mr Ang Mong Seng, Mr Ong Teck Ghee

ecoWise Holdings Limitedannual report 2012 21BOARD OF DIRECTORSLEE THIAM SENGExecutive Chairman and Chief Executive OfficerMr Lee joined the Board in November 2002 and wasappointed as Executive Chairman in April 2004 andChief Executive Officer in March 2007.Mr Lee has more than 20 years’ experience in the fieldsof waste management and environmental engineeringsolutions in the region. Mr Lee has been with the Groupfor more than 11 years and has extensive knowledgeand experience in the industries in which the Groupoperates.Mr Lee is responsible for setting strategic directions,formulating corporate strategies and overall managementof the Group’s businesses in the resource recovery,use of sustainable resources and renewable energysegments. He has been instrumental in expanding anddiversifying the Group’s businesses relating to wasterecycling and biomass energy sectors.Mr Lee holds a Diploma (Merit) in Electrical Engineeringfrom Singapore Polytechnic. He is a Chartered FinancialConsultant, accredited by the American College, USA.LOW KIAN BENGExecutive Director and Deputy CEOMr Low was appointed as an Executive Director on1 January 2011 and Deputy Chief Executive Officeron 1 June 2010. Mr Low is responsible for theoverall management of the operations of the Group’scompanies, corporate planning as well as chartingand implementation of the business strategies of theGroup. He is also the Managing Director for the Group’srubber compound manufacturing and tyre retreadingbusiness units under Sunrich Integrated Sdn. Bhd. andits subsidiaries since July 2010.Mr Low has 22 years of senior management experience,covering various functions and countries in Asia, in theenvironmental, tyre and rubber, petrochemicals, energyand engineering services industries in the region. Priorto joining the Group, he was the Managing Directorand CEO of Envipure Pte Ltd from 2006 till 2010 andSP Corporation Ltd., a SGX listed company, from 2000to 2006.He holds a Master of Business Administration Degree(with distinction) from Oklahoma City University, Texas(USA) and a B.SC. Degree (with honors) in Engineeringfrom Imperial College of Science and Technology,London (UK).NG CHER YANLead Independent DirectorMr Ng was appointed as an Independent Directorin November 2004 and is the Chairman of the AuditCommittee, a member of the Remuneration Committee,Nominating Committee and the Lead IndependentDirector.He is a practicing public accountant and a fellowmember of the Institute of Certified Public Accountantsof Singapore and a member of the Institute of CharteredAccountants in Australia. Mr Ng holds a Bachelordegree in Accountancy from the National University ofSingapore.Mr Ng is also an Independent Director of Samko TimberLtd., Kian Ann Engineering Ltd., Vicplas InternationalLtd., and Mermaid Maritime Public Company Ltd.ANG MONG SENGIndependent DirectorMr Ang was appointed as an Independent Director inFebruary 2004. He is the Chairman of the RemunerationCommittee and a member of the Audit Committee andNominating Committee respectively.Mr Ang was a former Member of Parliament for HongKah GRC (Bukit Gombak) and Ex-Chairman of HongKah Town Council . Mr Ang has more than 35 yearsexperience in estate management and holds a Bachelorof Arts from Nanyang University.Mr Ang is currently serving as an Independent Directoron the Boards of United Fiber System Ltd., ChipEng Seng Corporation Ltd., AnnAik Ltd., Hoe LeongCorporation Ltd., and Gaylin Holdings Ltd.ONG TECK GHEEIndependent DirectorMr Ong was appointed as an Independent Directorin March 2003 and is the managing partner of Ong &Lau, a firm of advocates and solicitors. His areas ofpractice include corporate, commercial, property andbanking law. He is the Chairman of the NominatingCommittee and a member of the Audit Committee andRemuneration Committee respectively.Mr Ong holds a degree in law from the NationalUniversity of Singapore in 1984 and is an advocateand solicitor of the Supreme Court of Singapore, aCommissioner for Oaths and a Notary Public.Mr Ong is also an Independent Director of Mary ChiaHoldings Ltd.

22ecoWise Holdings Limitedannual report 2012MANAGEMENT TEAMMs Tan joined the Group in December 2011 and she is responsible for the overallfi nancial management of the Group including accounting, treasury, debt and capitalmarket activities. She supports the CEO and the Deputy CEO in the Group’s strategicbusiness plans and investment initiatives. Ms Tan has more than 28 years fi nanceexperience covering marine, construction, manufacturing and trading industries.Ms Tan holds a Bachelor of Accountancy Degree from the National University ofSingapore. She is a fellow member of the Institute of Certifi ed Public Accountants ofSingapore.LILIAN TAN YIN YENChief Financial Offi cerMr 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 yearsexperience covering auditing, accounting and fi nancial management in thecommercial, manufacturing sectors and public accounting. Mr Chan is a fellowmember of the Association of Chartered Certifi ed Accountants and a Certifi ed PublicAccountant with the Institute of Certifi ed Public Accountants of Singapore. He holdsa Master of Business Administration from the University of Hull (UK).ALOYSIUS CHANBUANG HENGFinancial ControllerFONG SEOK PHOYDirector,ecoWise International Pte. Ltd.Head of Commercial,Sunrich Integrated Sdn. Bhd.and subsidiariesMr Fong joined the Group in July 2010 and is responsible for internationalmarketing and procurement of products and services that are synergetic to theGroup’s companies. He is also the Executive Director and Head of Commercial forthe Group’s rubber compound manufacturing and tyre retreading business. Overhis more than 39 years of career he has acquired vast experience in marketing andtrading of rubber, chemicals and energy related products. His coverage includesthe existing re-purposed environmental products, rubber compounding and tyreretreading business. He has also involved in the development of environmentalrelated and clean technology projects in Malaysia and the region. He holds anhonours degree in Chemical and Materials Engineering from University of Auckland,New Zealand under the Colombo Plan scholarship.

ecoWise Holdings Limitedannual report 2012 23MANAGEMENT TEAMDANIEL LIAO HONG HAIGeneral Manager,China RegionMr Liao joined the Group in July 2009 and is responsible for the Group’s businessdevelopment in the China region. He has more than 20 years’ experience coveringproject planning and management, international trade and co-operation, internationalproject fi nancing in China. He has extensive experience in the public relationshipdealing with the local governmental authorities in China. He holds a diploma inEconomics and Trade from the Sichuan International Studies University. He is astate senator of Chongqing Municipality City, the Director of Federation of ReturnedOverseas Chinese, Vice President of Chongqing Oversea Chinese Chamber ofCommerce, the member and senior investment consultant of Chongqing Associationof Enterprises with Foreign Investment and Chongqing Investment PromotionAssociation. He is also the Vice Chairman of Youth Committee of China Federation ofReturned Overseas Chinese and Vice president of Singapore Chongqing Chamberof Commerce.Mr Chin is the Head of Manufacturing for the Group’s rubber compound manufacturingand tyre retreading business. He is responsible for the manufacturing operationsof the Group’s subsidiaries under Sunrich Integrated Sdn. Bhd. based in Malaysia.He has more than 21 years’ experience in the manufacturing industry. Mr Chinjoined Sun Rubber Industry Sdn. Bhd. as the General Manager of Manufacturing in2001 and has been in-charge of manufacturing, quality management and research& development activities. He holds a Master of Business Administration fromUniversiti Malaya; a Bachelor of Science majoring in Chemistry from UniversitiSains Malaysia and a Diploma in Rubber Technology from the Plastics and RubberInstitute of Malaysia.CHIN HON MENGHead of Manufacturing,Sunrich Integrated Sdn. Bhd.and subsidiariesMr Huang joined the Group in July 2007 and is responsible for the operations ofthe biomass co-generation plant at Sungei Kadut, used copper slag and compostactivities undertaken by the Group’s subsidiaries including Bee Joo Industries Pte Ltdand Bee Joo Environmental Pte Ltd. He began his career in the waste managementbusiness in 2003 on the application of recycle used copper slag for constructionaggregate (“Eco-Concrete”) and has more than 11 years’ experience in wastemanagement activities. He holds a Diploma of Business Administration and Marketingfrom Murdoch University.KENNY HUANG JIANFANGSenior Manager– Group Operations

24ecoWise Holdings Limitedannual report 2012CORPORATE INFORMATIONBOARD OF DIRECTORSLee 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 COMMITTEENg Cher Yan (Chairman)Ang Mong SengOng Teck GheeNOMINATING COMMITTEEOng Teck Ghee (Chairman)Ang Mong SengNg Cher YanREMUNERATION COMMITTEEAng Mong Seng (Chairman)Ng Cher YanOng Teck GheeCOMPANY SECRETARYZhong XiaowenAUDITORSRSM Chio Lim LLPPublic Accountants andCertified Public Accountants8 Wilkie Road#03-08 Wilkie EdgeSingapore 228095Partner-in-charge: Chan Weng KeenEffective from reporting year ended 31 October 2012SHARE REGISTRARBoardroom Corporate & Advisory Services Pte Ltd50 Raffles Place#32-01 Singapore Land TowerSingapore 048623PRINCIPAL BANKERSDBS Bank LtdMalayan Banking BerhadUnited Overseas Bank LimitedREGISTER OFFICE/CONTACT DETAILSCo. Registration No.: 200209835C17 Kallang Junction #04-03Singapore 339274Tel: 65 65362489Fax: 65 65367672Website: www.ecowise.com.sg

ecoWise Holdings Limitedannual report 201225CORPORATE GOVERNANCEThe Board of Directors (the “Board”) is committed to maintaining a high standard of corporate governance withinecoWise Holdings Limited and its subsidiaries (the “Group”). The Board recognises the importance of practicinggood corporate governance as a fundamental part of its responsibilities to protect and enhance shareholders’ valueand the financial performance of the Group.This Report describes the Group’s corporate governance practices with specific reference to the Code of CorporateGovernance 2005 (the “Code”). Where there are deviations from the Code, appropriate explanations are provided.BOARD MATTERSPrinciple 1: Board’s Conduct of its AffairsEvery company should be headed by an effective board to lead and control the company. The Board iscollectively responsible for the success of the company. The Board works with Management to achievethis 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, majorfunding 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 andfinancial 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 announcementunder 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 inaccordance 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 itsresponsibilities. 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.

26ecoWise Holdings Limitedannual report 2012CORPORATE GOVERNANCEThe annual schedule of all Board and Board committees meetings and Annual General Meeting is planned ahead atthe 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 isallowed under the Company’s Articles of Association. The Board and Board committees may also make decisionsby way of circulating resolutions.The attendance of the Directors at Board and Board committee meetings during the financial year under review istabulated below:Attendance at MeetingsBoardBoard CommitteesAudit Nominating RemunerationScheduled Ad-hoc Scheduled Scheduled Scheduled Ad-hocNo. of meetings held 4 1 4 1 1 1Board MembersNo. of Meetings AttendedLee Thiam Seng 4 1 4* 1** 1* –Low Kian Beng 4 1 4* 1* 1* 1*Ng Cher Yan 4 1 4 –** 1 1Ang Mong Seng 4 1 4 1 1 1Ong Teck Ghee 3 1 3 1 1 –* by invitation** Mr Ng Cher Yan was appointed as member of NC in place of Mr Lee Thiam Seng on 28 December 2012.There was no new director appointment during FY2012. New director appointed to the Board will receive appropriateinduction briefings and orientations by the executive directors on the business activities and governance practicesof the Group.The Directors participate in seminars and discussions to keep themselves updated on the latest changes anddevelopments concerning the Group and keep abreast of the latest regulatory changes. The Directors are alsoprovided with updates on the relevant new laws, regulations and changing commercial risks in the Group’s operatingenvironment through emails and regular meetings. They also have the opportunity to visit the Group’s operationalfacilities and meet with management to obtain a better understanding of the business operations. In the case ofnew investment proposal, where appropriate the Independent Non-Executive Directors are also invited for site visitto the investee company so as to facilitate their evaluation of the proposal.

ecoWise Holdings Limitedannual report 201227CORPORATE GOVERNANCEPrinciple 2: Board Composition and GuidanceThere should be a strong and independent element on the Board, which is able to exercise objectivejudgement on corporate affairs independently, in particular, from Management. No individual or smallgroup of individuals should be allowed to dominate the Board’s decision making.During the year under review, Mr Sunny Ong Keng Hua retired as Executive Director of the Board on 28 February2012. Currently, the Board comprises two Executive Directors and three Independent Non-Executive Directors.The Independent Non-Executive Directors making up more than half of the Board, hence there is strong andindependent element on the Board.Name of Directors Board of DirectorsAuditCommitteeNominatingCommitteeRemunerationCommitteeLee Thiam SengLow Kian BengExecutive Director (Chairman)Executive DirectorNg Cher Yan Independent Director Chairman Member MemberAng Mong Seng Independent Director Member Member ChairmanOng Teck Ghee Independent Director Member Chairman MemberThe criterion of independence is based on the guidelines provided in the Code. The Board considers an“independent” director as one who has no relationship with the Company, its related companies or its officers thatcould interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent businessjudgement of the conduct of the Group’s affairs.The independence of each Independent Non-Executive Director is assessed at least annually by the NC. Particularscrutiny is applied in assessing the continued independence of Directors having served with a long tenure, withattention to ensuring their allegiance remains clearly aligned with shareholders’ interest.The Board’s composition, size and balance are reviewed annually by the NC to ensure that the Board has the corecompetencies for effective functioning and informed decision-making. Board renewal and tenure are consideredtogether and weighed for relevant benefit in the foreseeable circumstances which are appropriate for the size andnature of activities of the Group’s businesses.The Directors consider the Board’s present size and composition appropriate, taking into account the nature andscope of the Group’s operations, the wide spectrum of skills and knowledge of the Directors.The Board comprises of high caliber individuals who are suitably qualified with the necessary mix of expertise,experience and knowledge. The profiles of the Directors are set out in this Annual Report.

28ecoWise Holdings Limitedannual report 2012CORPORATE GOVERNANCEThe Independent Non-Executive Directors participate actively in the Board meetings. With their professionalexpertise and competency in their respective fields in the legal, finance, accounting, commercial and governmentsectors, collectively the Independent Non-Executive Directors provide constructive advice and guidance for effectivedischarge by the Board of its principal functions over the Group’s strategies, businesses and other affairs.Where necessary, the Independent Non-Executive Directors meet and discuss on the Group’s affairs without thepresence of Management.Principle 3: Chairman and Chief Executive OfficerThere should be a clear division of responsibilities at the top of the company – the working of the Boardand the executive responsibility of the company’s business – which will ensure a balance of power andauthority, such that no one individual represents a considerable concentration of power.Mr Lee Thiam Seng is currently the Chairman of the Board and the CEO of the Company. Given the scope andnature of business activities of the Group, the Board is of the view that with Mr Lee’s extensive knowledge andexperience in the waste management, resource recycling and biomass energy business in the region, it is moreeffective for him to guide the Board on the discussions on issues and challenges facing the Group and in view of thestrong element of independence of the Board, it is not pertinent to separate the functions of the Chairman and CEO.As Chairman, Mr Lee is responsible for ensuring that Board meetings are held as scheduled and when necessary,set agendas and ensuring adequate and timely information flow between the Board, Management and shareholders.Mr Lee facilitates constructive discussions amongst the Directors and Management at Board meetings on pertinentissues and affairs of the Group.As CEO, Mr Lee is responsible for the Group’s business strategy and direction setting, the implementation ofGroup’s corporate plans, policies and executive decision-makings.In addition, as recommended by the Code, the Board has appointed Independent Non-Executive Director, Mr NgCher Yan, as the Lead Independent Director. Shareholders of the Company with serious concerns that could havea material impact on the Group, for which contact through the normal channels of the Chairman, CEO, DeputyCEO or the CFO have failed to resolve or is inappropriate, shall be able to contact Mr Ng Cher Yan or the AuditCommittee members of the Group.Principle 4: Board MembershipThere should be a formal and transparent process for appointment of new directors to the Board.The NC comprises Mr Ong Teck Ghee as the Chairman, Mr Ang Mong Seng and Mr Ng Cher Yan as members,whom are all Independent Non-Executive Directors. Mr Ng Cher Yan was appointed on 28 December 2012 in placeof Mr Lee Thiam Seng. The NC shall meet at least once a year.

ecoWise Holdings Limitedannual report 201229CORPORATE GOVERNANCEThe Board, through the delegation of its authorities to the NC, has used its best efforts to ensure that Directorsappointed to the Board possess the particular expertise, experience and knowledge in terms of business, financeand management skills relevant to the Group’s businesses and each Director, through his contributions, brings tothe Board an independent and objective perspective to enable balanced and well-considered decisions to be made.The NC also has at its disposal, professional search firms, personal contacts and recommendations in its searchand nomination process for the right candidates for appointment of new Directors.The NC is responsible for:• Re-nomination of Directors having regard to the Director’s contribution and performance;• Determining on an annual basis whether or not a Director is independent;• Deciding whether a Director, who has multiple board representation, is able to and has adequately carriedout his duties as Director; and• Making recommendations to the Board on all Board appointments’ and re-appointments’ matters includingthe composition of the Board and the balance between Executive and Non-Executive Directors’ appointments.The NC reviews annually the independence declarations made by the Company’s Independent Non-ExecutiveDirectors based on the criterion of independence under the guidelines provided in the Code. For the year underreview, the NC has ascertained the independence status of all three Independent Non-Executive Directors of theCompany. The Board has also reviewed the number of years served by each Independent Non-Executive Director(Mr Ong Teck Ghee has served for 9 years period, both Mr Ang Mong Seng and Mr Ng Cher Yan have served for 8years period). Having considered their in-depth knowledge of the Group’s business operations, past and continuouscontributions at Board level in terms of impartial and constructive advice, the Board is of the view that there is nomaterial conflict between their tenure and their ability to discharge their role as Independent Non-Executive Directors.All Directors shall submit themselves for re-nomination and re-election at regular intervals and at least every 3years. Article 107 of the Company’s Articles and Association provides that one third of the Board or the numbernearest to one third is to retire by rotation at every Annual General Meeting (“AGM”). In addition, Article 117 of theCompany’s Articles of Association also provides that newly appointed directors are required to submit themselvesfor re-nomination and re-election at the next AGM of the Company.At the forthcoming AGM, Mr Lee Thiam Seng and Mr Ng Cher Yan will be retiring by rotation pursuant to Article107 of the Company’s Articles and Association. Both of them, being eligible for re-election have offered themselvesfor re-election.

30ecoWise Holdings Limitedannual report 2012CORPORATE GOVERNANCEThe dates of first appointment and last re-election of each Director, together with their current and past precedingthree years’ directorship in other listed companies are set out below:Name ofDirectorsDate ofAppointmentDate ofLast Re-electionDirectorship in Listed CompaniesPresentPast Preceding 3 yearsLee Thiam Seng(Chairman and CEO)Low Kian Beng(Executive Directorand Deputy CEO)12 November 2002 28 February 2011 ecoWise Holdings Ltd Nil1 January 2011 28 February 2011 ecoWise Holdings Ltd NilNg Cher Yan(Lead IndependentDirector)Ang Mong Seng(Independent Director)Ong Teck Ghee(Independent Director)19 November 2004 26 February 2010 ecoWise Holdings LtdKian Ann Engineering LtdSamko Timber LtdVicplas International LtdMermaid Maritime Public Co Ltd16 February 2004 28 February 2012 ecoWise Holdings LtdUnited Fiber System LimitedChip Eng Seng Corporation LtdAnnaik LimitedHoe Leong Corporation LtdGaylin Holdings Limited3 March 2003 28 February 2011 ecoWise Holdings LtdMary Chia Holdings LimitedSerial System Ltd.Kinergy LtdWanxiang International LtdSinopipe Holdings LtdVicplas International LtdNilPrinciple 5: Board PerformanceThere should be a formal assessment of the effectiveness of the Board as a whole and the contributionby each director to the effectiveness of the Board.The NC is responsible for deciding how the Board’s performance may be evaluated against proposed objectiveperformance criteria for the Board’s approval and implementing corporate governance measures to achieve goodstewardship of the Group.The NC assesses and discusses the Board performance as a whole every year, and ascertains key areas forimprovement and requisite for follow-up actions. Board assessment checklists are disseminated to each memberof the NC for their evaluation of the Board’s performance. The Board assessment checklist includes the evaluationfactors such as Board structure concerning Board size and strong presence of independent element , the conductof meetings as to whether decisions are made after due consideration, corporate strategy and planning, risk

ecoWise Holdings Limitedannual report 201231CORPORATE GOVERNANCEmanagement and internal control, recruitment, financial reporting and communication with shareholders. Theassessment also includes measuring and monitoring performance as to whether objectives and targets set for theyear are met, return on equity and performance of share price. The results of evaluation were presented to the Board.In assessing the performance of the Directors, the NC evaluates each Director based on the following reviewparameters, which among others, include:• Attendance at board/committee meetings;• Participation at meetings;• Involvement in management;• Availability for consultation and advice, when required• Independence of the directors; and• Appropriate skill, experience and expertise.The above selected criteria will be changed if it is deemed necessary and approved by the Board.As an integral element of the process of appointing new Directors, the NC may act on the performance evaluationresult and where appropriate, proposes new members to be appointed to the Board or seeks resignation ofDirectors.Principle 6: Access to InformationIn order to fulfill their responsibilities, Board members should be provided with complete, adequate andtimely information prior to board meetings and on an on-going basis.Directors have unrestricted access to the Group’s records and information, all Board and Board committees’minutes, and shall receive management accounts so as to enable them to carry out their duties. Directors may alsoliaise with senior executives and other employees to seek additional information if required.Management acknowledges the importance of the complete, adequate and timely supply of information to Boardmembers. Agenda, board papers and related materials, background or explanatory information relating to mattersto be discussed at the Board meeting and Board committee meetings are distributed to all Directors in advanceto allow sufficient time for Directors to prepare for meetings and facilitate the effective discussion during meetings.Any additional materials or information requested by the Directors is promptly furnished.

32ecoWise Holdings Limitedannual report 2012CORPORATE GOVERNANCEManagement’s proposals submitting to the Board for approval are accompanied with detailed background andexplanatory information such as facts, resources requirement, projected outcomes, financial impact, risk analysis,disclosure requirements under the Listing Rules of the SGX-ST, conclusions and recommendations. Any materialvariance between the projections and the actual results against the budgets will be explained to the Board at therelevant time at the Board or Board committee meetings.Should Directors, whether as a group or individually, require professional advice, the Group, upon direction by theBoard, shall appoint a professional advisor selected by the group or the individual, approved by the Chairman, torender the advice. The cost of such service shall be borne by the Group.The Company Secretary attends all Board meetings and is responsible to the Board for advising on theimplementation of the Group’s compliance requirements pursuant to the relevant statutes and regulations. AllDirectors have separate and independent access to the advice and services of the Company Secretary. Theappointment and removal of the Company Secretary is subject to approval of the Board.REMUNERATION MATTERSPrinciple 7: Procedures for Developing Remuneration PoliciesThere should be a formal and transparent procedure for developing policy on executive remunerationand for fixing remuneration packages of individual directors. No director should be involved in decidinghis own remuneration.The RC comprises three Independent Non-Executive Directors, namely, Mr Ang Mong Seng, Mr Ng Cher Yan andMr Ong Teck Ghee. Mr Ang Mong Seng is the Chairman of the RC.The responsibilities of the RC include:• Recommend to the Board all matters relating to remuneration, including but not limited to Directors’ fees,salaries, allowances, bonuses, performance shares and benefits-in-kind, of the Directors and key executives;• Review and recommend to the Board the terms of the service agreements of the Directors;• Determine the appropriateness of the remuneration of the Directors; and• Administer the ecoWise Performance Share Plan.

ecoWise Holdings Limitedannual report 201233CORPORATE GOVERNANCEThe Executive Directors’ remuneration packages are based on service contracts. These include a profit sharingscheme that is performance related to align their interest with those of the shareholders. Independent Non-ExecutiveDirectors are paid yearly directors’ fees of an agreed amount and these fees are subject to shareholders’ approvalat AGM.No directors participate in decisions on their own remuneration.When required, the RC seeks professional advice externally pertaining to remuneration of Directors and KeyExecutives.The RC administers the ecoWise Performance Share Plan (“PSP”) adopted at the Extraordinary General Meetingheld on 23 March 2007. During the financial year ended 31 October 2012, the RC has reviewed and approved thegrant of 5,426,875 performance shares under the PSP of which 350,000 performance shares grant was cancelledduring the year. Details of the performance shares grant are set out on page 46 and 47 of this Annual Report.Principle 8: Level and Mix of RemunerationThe level of remuneration should be appropriate to attract, retain and motivate the directors neededto run the company successfully but companies should avoid paying more than is necessary for thispurpose. A significant proportion of executive directors’ remuneration should be structured so as to linkrewards to corporate and individual performance.The remuneration policy of the Group is to provide compensation packages at market rates, which reward successfulperformance and attract, retain and motivate Directors and employees.The Executive Directors do not receive directors’ fees. The remuneration for the Executive Directors and thekey executives comprises of fixed component and variable component. Fixed component is in the form of fixedmonthly salary whereas variable component is linked to the performance of the Group and individual. The currentservice agreements entered with Mr Lee Thiam Seng and Mr Low Kian Beng are on two-year and three-year basisrespectively.The Independent Non-Executive Directors receive directors’ fees, in accordance with their contributions, taking intoaccount factors such as responsibilities, effort and time spent for serving the Board and Board Committees. Forthe financial year ended 31 October 2012, directors’ fees of S$125,000 are recommended by the Board and aresubject to the approval of shareholders at the Company’s AGM to be held on 28 February 2013.In setting remuneration package, the RC ensures the Directors are adequately but not excessively remunerated ascompared to the industry and in comparable companies.

34ecoWise Holdings Limitedannual report 2012CORPORATE GOVERNANCEPrinciple 9: Disclosure on RemunerationEach company should provide clear disclosure of remuneration policy, level and mix of remuneration,and the procedure for setting remuneration in the company’s annual report. It should provide disclosurein relation to its remuneration policies to enable investors to understand the link between remunerationpaid to directors and key executives, and performance.Details of the remuneration of Executive Directors of the Company and top six executives of the Group for thefinancial year ended 31 October 2012 are set out below:Base/FixedSalary%Variable orPerformanceRelatedIncome/Bonus%Benefits inkind%ecoWisePSP (1)%Total%Executive Directors$500,000 to $749,999Lee Thiam Seng68.9 29.1 2.0 – 100.0Low Kian Beng 61.4 37.0 1.6 – 100.0Below $250,000Sunny Ong Keng Hua(retired on 28 February 2012) 43.8 56.2 – – 100.0Key Executives$250,000 to $349,999Lilian Tan Yin Yen 75.8 24.2 – – 100.0Below $250,000Aloysius Chan Buang Heng 87.7 12.3 – – 100.0Fong Seok Phoy 72.6 27.4 – – 100.0Daniel Liao Hong Hai 89.6 10.4 – – 100.0Chin Hon Meng 64.1 35.9 – – 100.0Kenny Huang JianFang 88.7 11.3 – – 100.0(1) Refer to performance shares vested under the PSP during the financial year.

ecoWise Holdings Limitedannual report 201235CORPORATE GOVERNANCEThe directors’ fees for Independent Non-Executive Directors for the financial year ended 31 October 2012 are setout below:Directors’ Fees(S$)Independent DirectorsNg Cher Yan 45,000Ang Mong Seng 40,000Ong Teck Ghee 40,000125,000There is no employee who is related to a Director for the financial year ended 31 October 2012.During the financial year ended 31 October 2012, a total of 5,426,875 performance shares were granted under thePSP of which 350,000 performance shares grant was cancelled. Details are set out below:ParticipantBalanceas at1.11.2011PerformanceShares grantedduring financialyear 2012Shares lapsed/cancelledduring financialyearPerformanceShares vestedduring financialyearBalanceas at31.10.2012DirectorsLee Thiam Seng – 1,096,875 – – 1,096,875Low Kian Beng – 1,500,000 – – 1,500,000Ng Cher Yan – 130,000 – – 130,000Ang Mong Seng – 100,000 – – 100,000Ong Teck Ghee – 100,000 100,000– 2,926,875 – – 2,926,875Other Staff – 2,500,000 (350,000) – 2,150,000– 5,426,875 (350,000) – 5,076,875

36ecoWise Holdings Limitedannual report 2012CORPORATE GOVERNANCEACCOUNTABILITY AND AUDITPrinciple 10: Accountability and auditThe Board should present a balanced and understandable assessment of the company’s performance,position and prospects.The Board provides shareholders with financial statements for the first three quarters and full financial year withinthe timeframe in line with Rule 705 of the Listing Manual of SGX-ST. In presenting the annual and quarterly financialstatements to shareholders, the Board aims to provide shareholders with a balanced and clear assessment of theGroup’s performance, financial position and prospects.Management provides the Board with detailed management accounts, operation review and related explanationand any other information as the Board may require together with the financial statements on a quarterly basis.The Audit Committee reviews the financial statements and reports to the Board for approval. The Board authorisesthe release of the results to the SGX-ST and the public via SGXNET. The quarterly and full year financial results arealso timely uploaded in the Company’s website at www.ecowise.com.sg.The Board also provides negative assurance confirmation to shareholders for the quarterly financial statements inaccordance with Rule 705(5) of the Listing Manual of SGX-ST.Principle 11: Audit CommitteeThe Board should establish an Audit Committee with written terms of reference which clearly set outits authority and duties.The AC is chaired by Mr Ng Cher Yan and comprises Mr Ang Mong Seng and Mr Ong Teck Ghee as members, allof whom are Independent Non-Executive Directors. The AC has specific terms of reference and has met 4 timesduring the financial year under review.The AC assists the Board in maintaining a high standard of corporate governance, particularly by providing anindependent review of the effectiveness of the financial reporting system, management of financial, operational andcompliance risks, and monitoring of the internal control systems.In performing its functions, the AC:• Reviews the audit plans of the external auditors and ensures the adequacy of the Group’s system ofaccounting controls and the co-operation given by Management to the external auditors;• Review the internal audit plans of the Group and follow up actions for effective internal control functions ofthe Group;

ecoWise Holdings Limitedannual report 201237CORPORATE GOVERNANCE• Reviews the financial statements of the Group before their submission to the Board, and before theirannouncements;• Reviews legal and regulatory matters that may have a material impact on the financial statements, relatedcompliance policies and programs and any reports received from regulators;• Reviews the cost effectiveness and the independence and objectivity of the external auditors;• Reviews the nature and extent of non-audit services provided by the external auditors;• Reviews the assistance given by the Group’s officer to the auditors;• Nominates external auditors for re-appointment;• Reviews the Group’s compliance with such functions and duties as may be required under the relevantstatutes or the Listing Manual, and by such amendments made thereto from time to time;• Reviews interested person transactions in accordance with the requirements of the Listing Rules of theSGX-ST; and• Reviews the adequacy of the Group’s internal controls.Mr Ng Cher Yan is a practicing public accountant, who has years of extensive experience in accounting, auditing,financial management and corporate governance. The Board is of the view that Mr Ng is well qualified to chairthe AC to collectively discharge its responsibilities. The Board is also of the view that the members of the AC areappropriately qualified to discharge their responsibilities and they have the requisite accounting or related financialmanagement expertise or experience, as the Board exercises in its business judgment.The AC has power to conduct or authorize investigations into any matters within the AC’s scope of responsibility.For the year ended 31 October 2012, the aggregate amount of fees paid or payable to external auditors of theGroup amounted to S$428,240, including audit fees of S$319,552 and non-audit services fees of S$108,688.The AC has reviewed all non-audit services provided by the external auditors and is satisfied that these non-auditservices would not affect the independence and objectivity of the external auditors.The Group has complied with Rule 712 and Rule 715 of the Listing Manual of SGX-ST in the appointment of itsauditors. The AC recommends to the Board the re-appointment of Messrs RSM Chio Lim LLP as the externalauditors of the Group at the forthcoming AGM.The Group had implemented the whistle blowing policy. The policy aims to provide avenue for employees to raiseconcerns about misconducts in the Group and at the same time assure them that they will be protected fromvictimization for whistle blowing in good faith. Cases that are significant are reviewed by the AC for adequacy andindependence of investigation actions and resolutions. Contact details of the AC have been made available to allemployees.

38ecoWise Holdings Limitedannual report 2012CORPORATE GOVERNANCEPrinciple 12: Internal ControlsThe Board should ensure that the Management maintains a sound system of internal controls tosafeguard the shareholder’s investment and the company’s assets.The Board acknowledges that it is responsible for maintaining a sound system of internal control framework, butrecognises that no cost effective internal control system will preclude all errors and irregularities. Internal controlcan provide only reasonable and not absolute assurance against material misstatement, losses, human errors,fraud or other irregularities.During the financial year, the Group’s external and internal auditors had conducted annual review of the effectivenessof the Group’s internal controls. Any non-compliance and recommendation for improvement were reported to the AC.Based on external and internal auditors’ report and various controls implemented by Management, the AC is satisfiedthat the internal controls in place meet the needs of the Group in its current business environment.Risk ManagementAs the Group does not have a risk management committee, the Board, AC and Management assume theresponsibility of the risk management function. Management reviews regularly the Group’s business and operationalactivities to identify areas of significant risks as well as appropriate measures to control and mitigate these risks.Management reviews all significant policies and procedures and highlights all significant matters to the Board andthe AC.During the year under review, in addition to the work carried out by external auditors and internal auditors, the Boardalso engaged an international accounting firm to document the framework that enables Management to addressthe financial, operational and compliance risks of the key operating units. The process involved the identificationof major risks through workshops conducted for the Group’s rubber compound manufacturing and tyre retreadingbusiness units, and the renewable energy and environmental management business units, whereby the businessunits’ key risks of financial, operational and compliance nature, as well as the countermeasures in place or requiredto mitigate these risks were summarized for review by the Board. The documentation provided an overview ofthe Group’s key risks, how they are managed, the key personnel responsible for each identified risk type and thevarious assurance mechanisms in place.

ecoWise Holdings Limitedannual report 201239CORPORATE GOVERNANCEBased on the internal controls established and maintained by the Group, work performed by the internal and externalauditors and the documentation on the Group’s key risks referred to above, reviews performed by Management,AC and the Board, the AC and the Board are of the opinion that the Group’s internal controls, addressing financial,operational and compliance risks, were adequate as at 31 October 2012. This is in turn supported by assurancefrom the CEO, Deputy CEO and the CFO that:(a)the financial records of the Company have been properly maintained and the financial statements give a trueand fair view of the company’s operations and finances and are in accordance with the relevant accountingstandards; and(b)they have evaluated the effectiveness of the Company’s internal controls and have discussed with theCompany’s external and internal auditors of their reporting points and note that there have been no significantdeficiencies in the design or operation of internal controls which could adversely affect the Company’s abilityto record, process, summarise or report financial data.Principle 13: Internal AuditThe company should establish an internal audit function that is independent of the activities it audits.The Board recognizes its responsibilities for maintaining a system of internal control processes to safeguardshareholders’ investments and the Group’s assets and business.Currently, the Chairman of the AC enquires and relies on reports from Management, internal and external auditors onany material non-compliance and internal control weaknesses. The AC oversees and monitors the implementation ofany improvements thereto. The AC has reviewed with the internal and external auditors their findings of the existenceand adequacy of material accounting controls procedures as part of its audit for the financial year under review.The Group has established an internal audit function which is independent of the activities it audits. The Groupengages external independent audit firms to perform the internal audit function and they report directly to the ACwhich assists the Board in monitoring and managing risks and internal controls of the Group. The internal auditfunction primarily focusing on whether the current system of internal control provides reasonable assurance on:• compliance with applicable laws, regulations, policy and procedures;• reliability and integrity of information; and• safeguarding of assets.On an annual basis, the AC reviews the internal audit program of the Group so as to align it to the changing needsand risk profile of the Group’s activities.

40ecoWise Holdings Limitedannual report 2012CORPORATE GOVERNANCEThe findings of the internal auditors are discussed in details at the AC meeting including any internal controlweaknesses, non-compliance of policy and procedures as well as follow-up actions required to strengthen theinternal control system of the Group. A copy of the internal auditors’ findings is disseminated to the relevant businessunits or departments for implementing follow-up actions and the monitoring of the improvement progress.For the internal audit works carried out in FY2012, the engaging internal auditors have adopted assessmentmethodology in accordance with the Internal Control Integrated Framework, published by the Committee ofSponsoring Organisations of the Treadway Commission (“COSO”).COMMUNICATION WITH SHAREHOLDERSPrinciple 14: Companies should engage in regular, effective and fair communication with shareholdersThe Group believes that prompt disclosure of pertinent information and high standard of disclosure are the keys toraise the level of corporate governance. The Board believes in regular and timely communication with shareholders.In line with continuous disclosure obligations of the Group pursuant to the Corporate Disclosure Policy of the SGX-ST, the Group’s policy is that all shareholders should be equally and timely informed of all major developmentsthat impact the Group.Information is communicated to shareholders on a timely basis and made through:• Annual reports. The Board makes every effort to ensure that the annual report includes all relevant informationabout the Group, including future developments, disclosures required by the Companies Act, and FinancialReporting Standards;• SGXNET and news releases;• Press releases on major developments of the Group;• Disclosures to the SGX-ST; and• The Company’s website at www.ecowise.com.sg on which shareholders can access information relating tothe Group.The Group has also engaged an external investor relations firm to enhance its communication with shareholdersand investment community at large.

ecoWise Holdings Limitedannual report 201241CORPORATE GOVERNANCEPrinciple 15: Companies should encourage greater shareholder participation at AGMs, and allowshareholders the opportunity to communicate their views on various matters affecting the company.The AGM is the principal forum for dialogue with shareholders. The Group encourages shareholders to attend theAGM to ensure a high level of accountability and to be kept informed of the Group’s strategies and goals.All shareholders receive the annual report of the Company including notice of AGM by post within the mandatoryperiod. Notice of AGM is announced through SGXNET and published in the Business Times within the same period.All registered shareholders are invited to participate and given the right to vote on resolutions at general meetings.Every matter requiring shareholders’ approval is proposed as a separate resolution. Each item of special businessincluded in the notice of the meeting is accompanied, where appropriate, by an explanation for the proposedresolution. Proxy form is sent with notice of general meeting to all shareholders. A shareholder may appoint up to twoproxies to attend and vote on his behalf at the meeting through proxy forms deposited 48 hours before the meeting.The results of all shareholders’ meetings are disclosed through SGXNET and the Company’s website.Internal Code on Dealings in SecuritiesThe Group has put in place an internal code on dealings with securities (“Internal Code”). This Internal Code hasbeen issued to Directors and officers setting up the implications on insider trading.The Internal Code prohibits the dealing in securities of the Company by Directors and officers while in possessionof price-sensitive information, and during the period commencing two weeks before the announcement of quarterlyresults and one month before the announcement of full year results, and ending on the date of the announcement.Further, Directors and officers are advised not to deal in the Company’s securities on short-term considerations.Directors are required to notify the Company their securities dealings within two business days of such dealingsand the Company shall disseminate the notifications received to the market via SGXNET within one business dayof receiving such notifications.In addition, Directors and officers are cautioned to observe insider trading laws at all times.Interested Party TransactionsThe Group has established procedures to ensure that all transactions with interested persons are reported in atimely manner to the AC for review and the transactions are carried out on normal commercial terms and will notbe prejudicial to the interests of the Group and its minority shareholders.

CONTENTS43 DIRECTORS’ REPORT50 STATEMENT BY DIRECTORS515354565961INDEPENDENT AUDITORS’REPORTCONSOLIDATED STATEMENTOF COMPREHENSIVE INCOMESTATEMENTS OF FINANCIALPOSITIONSTATEMENTS OF CHANGES INEQUITYCONSOLIDATED STATEMENTOF CASH FLOWSNOTES TO THE FINANCIALSTATEMENTS

ecoWise Holdings Limitedannual report 201243DIRECTORS’ REPORTThe directors of the Company are pleased to present their report together with the audited financial statements ofthe Group and of the Company for the reporting year ended 31 October 2012.1. DIRECTORSThe directors of the Company in office at the date of this report are as follows:Executive DirectorsLee Thiam SengLow Kian BengIndependent DirectorsNg Cher YanAng Mong SengOng Teck Ghee2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THEACQUISITION OF SHARES AND DEBENTURESNeither at the end of the reporting year nor at any time during the reporting year did there subsist anyarrangement whose object is to enable the directors of the Company to acquire benefits by means of theacquisition of shares or debentures in the Company or any other body corporate, except as disclosed inParagraph 5 in this report.

44ecoWise Holdings Limitedannual report 2012DIRECTORS’ REPORT3. DIRECTORS’ INTERESTS IN SHARES AND DEBENTURESAccording to the register kept by the Company for the purposes of Section 164 of the Singapore CompaniesAct, Chapter 50 (the “Act”), particulars of interests of directors in office at the end of the reporting year inshares and debentures in the Company and in related corporations (other than wholly-owned subsidiaries)are as follows:Name of directors and corporationsin which interests are heldThe Company – ecoWise Holdings LimitedDirect InterestsAtAtAtbeginning of the end of the 21 Novemberreporting year reporting year 2012Number of ordinary shares with no par valueLee Thiam Seng 32,960,950 32,960,950 32,960,960Low Kian Beng 3,000,000 4,500,000 5,500,000Ng Cher Yan 1,166,500 1,166,500 1,166,500Ang Mong Seng 796,905 796,950 796,950Ong Teck Ghee 871,950 871,950 871,950Number of ecoWise performance sharesLee Thiam Seng – 1,096,875 1,096,875Low Kian Beng – 1,500,000 1,500,000Ng Cher Yan – 130,000 130,000Ang Mong Seng – 100,000 100,000Ong Teck Ghee – 100,000 100,000Name of directors and corporationsin which interests are heldThe Company – ecoWise Holdings LimitedDeemed InterestsAtAtAtbeginning of the end of the 21 Novemberreporting year reporting year 2012Number of ordinary shares with no par valueLee Thiam Seng 293,229,375 218,229,375 218,229,375By virtue of Section 7 of the Act, Mr Lee Thiam Seng is deemed to have an interest in all related corporationsof the Company.

ecoWise Holdings Limitedannual report 201245DIRECTORS’ REPORT4. CONTRACTUAL BENEFITS OF DIRECTORSExcept for salaries, bonuses and fees and those benefits that are disclosed in this report and Note 3 to thefinancial statements, since the beginning of the reporting year, no director of the Company has received orbecome entitled to receive a benefit, by reason of a contract made by the Company or a related corporationwith the director, or with a firm of which he is a member, or with a company in which he has a substantialfinancial interest.5. SHARE OPTIONS AND SHARE PLANShare OptionDuring the reporting year, no option to take up unissued shares of the Company or any subsidiary wasgranted and there were no shares of the Company or any subsidiary issued by virtue of the exercise of anoption to take up unissued shares.At the end of the reporting year, there were no unissued shares of the Company or any subsidiary underoption.ecoWise Performance Share PlanThe ecoWise Performance Share Plan (the “Share Plan”) was approved by the members of the Company atan extraordinary general meeting held on 23 March 2007. The Share Plan provides for the grant of ordinaryshares of the Company, their equivalent cash value or combinations thereof, to selected employees of theCompany and its subsidiaries, including the directors of the Company, and other selected participants. Underthe Share Plan, the maximum number of ordinary shares to be awarded to eligible participants shall notexceed 15% of the issued ordinary shares of the Company on the date preceding the grant of the award.The Share Plan is administered by the Remuneration Committee comprising three independent directors,Ang Mong Seng, Ng Cher Yan and Ong Teck Ghee. Ordinary shares are awarded when the RemunerationCommittee is satisfied that the prescribed performance target(s) have been achieved and the vesting period(if any) has expired. The vesting periods may be extended beyond the performance achievement periods asset out by the Remuneration Committee.

46ecoWise Holdings Limitedannual report 2012DIRECTORS’ REPORT5. SHARE OPTIONS AND SHARE PLAN (CONTINUED)ecoWise Performance Share Plan (Continued)The lapsing of the award is provided for upon the occurrence of certain events, which includes:(a)(b)(c)(d)(e)the misconduct of an eligible participant;the termination of the employment of an eligible participant;the bankruptcy of an eligible participant;the retirement, ill health, injury, disability or death of an eligible participant; and/ora take-over, amalgamation, winding-up or restructuring of the Company.The Share Plan shall continue in force at the discretion of the Remuneration Committee, subject to amaximum period of 10 years commencing on 23 March 2007. The Share Plan may continue beyond theabove stipulated period with the approval of members of the Company by ordinary resolution in a generalmeeting and of any relevant authorities which may then be required.The Company may deliver ordinary shares pursuant to awards granted under the Share Plan by way of:(a)(b)(c)Issuance of new ordinary shares;Delivery of existing ordinary shares purchased from the market or ordinary shares held in treasury;and/orCash in lieu of ordinary shares, based on the aggregate market value of such ordinary shares.During the reporting year, the number of performance shares granted under the Share Plan are as follows:Number of ecoWise performance sharesDate of grantAt1 November2011 Granted AwardedCancelled/lapsedAt31 October201221 March 2012 – 5,426,875 – (350,000) 5,076,875Performance shares awarded at the vesting date are dependent on the level of achievement against thepre-set performance conditions and targets.

ecoWise Holdings Limitedannual report 201247DIRECTORS’ REPORT5. SHARE OPTIONS AND SHARE PLAN (CONTINUED)ecoWise Performance Share Plan (Continued)From the commencement date of the Share Plan to 31 October 2012, 43,232,225 (1) performance shareshave been granted, of which 38,155,350 (1) performance shares have been vested. As at 31 October 2012,5,076,875 (1) performance shares have not vested under the Share Plan.Details of performance shares granted under the Share Plan to directors and participants who received 5%or more of total performance shares available under the Share Plan are as follows:Number of ecoWise performance sharesAggregate Aggregate20122012 (1) 2012 (1) 2012Performanceshares grantedperformancesharesgranted sinceperformancesharesawarded sinceAggregateperformanceduring reporting commencement commencement sharesyear ended of Share Plan to of Share Plan to outstanding at31 October 31 October 31 October 31 OctoberExecutive directorsLee Thiam Seng 1,096,875 11,767,825 10,670,950 1,096,875Low Kian Beng 1,500,000 1,500,000 – 1,500,000Independent directorsNg Cher Yan 130,000 1,124,250 994,250 130,000Ang Mong Seng 100,000 782,200 682,200 100,000Ong Teck Ghee 100,000 782,200 682,200 100,000Participants who received 5% ormore of total performance sharesavailable under the Share PlanSunny Ong Keng Hua (2) – 7,845,250 7,845,250 –(1) After adjustments for rights cum warrants issue on 1 November 2007 and rights issue on 26 September 2008and net of cancellations.(2) Mr Sunny Ong Keng Hua retired as director on 28 February 2012.

48ecoWise Holdings Limitedannual report 2012DIRECTORS’ REPORT6. AUDIT COMMITTEEThe members of the Audit Committee during the reporting year and at the date of this report are as follows:Ng Cher YanAng Mong SengOng Teck Ghee(Chairman of Audit Committee and Lead Independent Director)(Independent Director)(Independent Director)The Audit Committee performs the functions specified by Section 201B (5) of the Act and the Listing Manualof the Singapore Securities Exchange Trading Limited (“SGX-ST”).Functions of the Audit Committee include the following:(a)(b)(c)(d)(e)Review with the independent external auditors their audit plan;Review with the independent external auditors their evaluation of the Company’s internal accountingcontrols that are relevant to their audit, their report on the financial statements and the assistancegiven by the Company’s officers to them;Review with the internal auditors their scope and results of the internal audit procedures;Review the financial statements of the Group and the Company prior to their submission to the Boardof Directors of the Company for adoption; andReview the interested person transactions (as defined in Chapter 9 of the Listing Manual of theSGX-ST).Other functions performed by the Audit Committee are disclosed in the report on Corporate Governanceincluded in the Annual Report of the Company. It also includes a description of how auditors’ objectivityand independence is safeguarded, where there are non-audit services provided by the independent externalauditors.The Audit Committee has recommended to the Board of Directors that RSM Chio Lim LLP be nominatedfor re-appointment as independent external auditors at the next annual general meeting of the Company.

ecoWise Holdings Limitedannual report 201249DIRECTORS’ REPORT7. INDEPENDENT EXTERNAL AUDITORSThe independent external auditors, RSM Chio Lim LLP, have expressed their willingness to acceptre-appointment.8. SUBSEQUENT DEVELOPMENTSThere are no significant developments subsequent to the release of the Group’s and the Company’spreliminary financial statements as announced on 28 December 2012, which would materially affect theGroup’s and the Company’s operating and financial performance as of the date of this report.On Behalf of the Board of Directors........................................................Lee Thiam SengDirector........................................................Low Kian BengDirector11 January 2013

50ecoWise Holdings Limitedannual report 2012STATEMENT BY DIRECTORSIn the opinion of the directors,(a)the accompanying consolidated statement of comprehensive income, statements of financial position,statements of changes in equity, consolidated statement of cash flows, and notes thereto are drawn up soas to give a true and fair view of the state of affairs of the Company and of the Group as at 31 October 2012and of the results and cash flows of the Group and changes in equity of the Company and of the Group forthe reporting year then ended in accordance with the provisions of the Singapore Companies Act, Chapter50 and Singapore Financial Reporting Standards; and(b)at the date of this statement, there are reasonable grounds to believe that the Company will be able to payits debts as and when they fall due.On Behalf of the Board of Directors........................................................Lee Thiam SengDirector........................................................Low Kian BengDirector11 January 2013

ecoWise Holdings Limitedannual report 201251INDEPENDENT AUDITORS’ REPORTto the Members of ECOWISE HOLDINGS LIMITED (Registration No: 200209835C)REPORT ON THE FINANCIAL STATEMENTSWe have audited the accompanying financial statements of ecoWise Holdings Limited (the “Company”) and itssubsidiaries (collectively, the “Group”), which comprise the consolidated statement of financial position of the Groupand the statement of financial position of the Company as at 31 October 2012, and the consolidated statement ofcomprehensive income, statement of changes in equity and statement of cash flows of the Group, and statementof changes in equity of the Company for the reporting year then ended, and a summary of significant accountingpolicies and other explanatory information.MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTSManagement is responsible for the preparation of the financial statements that give a true and fair view inaccordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore FinancialReporting Standards, and for devising and maintaining a system of internal accounting controls sufficient toprovide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; andtransactions are properly authorised and that they are recorded as necessary to permit the preparation of true andfair statement of comprehensive income and statements of financial position and to maintain accountability of assets.AUDITORS’ RESPONSIBILITYOur responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditors consider internal control relevant to the entity’s preparation of financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances, but not for the purposeof expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by management,as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

52ecoWise Holdings Limitedannual report 2012INDEPENDENT AUDITORS’ REPORTto the Members of ECOWISE HOLDINGS LIMITED (Registration No: 200209835C)OPINIONIn our opinion, the consolidated financial statements of the Group and the statement of financial position andstatement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Actand Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Groupand of the Company as at 31 October 2012 and of the results, changes in equity and cash flows of the Group andthe changes in equity of the Company for the reporting year ended on that date.REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSIn our opinion, the accounting and other records required by the Act to be kept by the Company and by thosesubsidiaries incorporated in Singapore of which we are the independent auditors have been properly kept inaccordance with the provisions of the Act.RSM Chio Lim LLPPublic Accountants andCertified Public AccountantsSingapore11 January 2013Partner-in-charge: Chan Weng KeenEffective from reporting year ended 31 October 2012

ecoWise Holdings Limitedannual report 201253YEAR ENDED 31 OCTOBER 2012CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMENotes 2012 2011$’000 $’000Revenue 5 90,521 79,842Cost of Sales (72,811) (66,207)Gross Profit 17,710 13,635Other Items of IncomeFinance Income 6 39 4Dividend Income 7 411 1Other Credits 8 551 781Other Items of ExpensesMarketing and Distribution Expenses (3,831) (3,292)Administrative Expenses (9,218) (7,493)Finance Costs 9 (1,042) (875)Other Charges 8 (846) (201)Share of Results from Associates, Net of Tax (345) (287)Profit Before Income Tax 3,429 2,273Income Tax Expense 12 (1,711) (1,341)Profit for the Year 1,718 932Other Comprehensive Income/(Loss):Exchange Differences on Translating Foreign Operations, Net of Tax (588) (614)Effective Portion of Changes in Fair Value of Cash Flow Hedges 19 –Other Comprehensive Loss for the Year, Net of Tax (569) (614)Total Comprehensive Income for the Year 1,149 318Profit for the Year Attributable to:Owners of the Company 1,366 562Non-Controlling Interests 352 3701,718 932Total Comprehensive Income for the Year Attributable to:Owners of the Company 840 215Non-Controlling Interests 309 1031,149 318Earnings Per ShareBasic Earnings Per Share (Cents) 13 0.15 0.07Diluted Earnings Per Share (Cents) 13 0.15 0.07The accompanying notes form an integral part of these financial statements.

54ecoWise Holdings Limitedannual report 2012AS AT 31 OCTOBER 2012STATEMENTS OF FINANCIAL POSITIONGroupCompanyNotes 2012 2011 2012 2011$’000 $’000 $’000 $’000ASSETSNon-Current AssetsProperty, Plant and Equipment 14 29,162 37,743 507 501Intangible Assets 15 1,980 2,119 – –Land Use Rights 16 1,045 1,074 – –Investments in Subsidiaries 17 – – 25,945 18,380Investments in Associates 18 5,001 1,352 – –Other Financial Assets 19 1,180 422 – –Trade and Other Receivables 21 600 600 – –Finance Lease Receivables 22 13,731 – – –Total Non-Current Assets 52,699 43,310 26,452 18,881Current AssetsInventories 20 10,064 9,764 – –Trade and Other Receivables 21 20,167 20,292 22,742 21,256Finance Lease Receivables 22 840 – – –Derivative Financial Instruments 31 35 20 – –Other Assets 23 634 961 85 86Cash and Cash Equivalents 24 18,527 12,785 3,356 3,805Total Current Assets 50,267 43,822 26,183 25,147Total Assets 102,966 87,132 52,635 44,028The accompanying notes form an integral part of these financial statements.

ecoWise Holdings Limitedannual report 201255AS AT 31 OCTOBER 2012STATEMENTS OF FINANCIAL POSITIONGroupCompanyNotes 2012 2011 2012 2011$’000 $’000 $’000 $’000EQUITY AND LIABILITIESEquityShare Capital 25 45,927 37,050 45,927 37,050Retained Earnings 5,383 4,017 3,438 2,220Other Reserves 26 1,699 (1,047) 528 –Equity Attributable to Ownersof the Company 53,009 40,020 49,893 39,270Non-Controlling Interests 7,473 12,800 – –Total Equity 60,482 52,820 49,893 39,270LIABILITIESNon-Current LiabilitiesProvision for Retirement Benefit Obligations 28 584 542 – –Loans and Borrowings 27 10,808 6,853 127 1,518Deferred Tax Liabilities 12 2,622 2,700 – 20Deferred Income 29 65 65 – –Total Non-Current Liabilities 14,079 10,160 127 1,538Current LiabilitiesIncome Tax Payable 335 – 120 –Trade and Other Payables 30 13,021 11,668 1,104 1,894Derivative Financial Instruments 31 14 51 – –Loans and Borrowings 27 15,027 12,425 1,391 1,326Deferred Income 29 8 8 – –Total Current Liabilities 28,405 24,152 2,615 3,220Total Liabilities 42,484 34,312 2,742 4,758Total Equity and Liabilities 102,966 87,132 52,635 44,028The accompanying notes form an integral part of these financial statements.

56ecoWise Holdings Limitedannual report 2012YEAR ENDED 31 OCTOBER 2012STATEMENTS OF CHANGES IN EQUITYNon-Total Controlling Parent Share Retained OtherEquity Interests Sub-Total Capital Earnings Reserves$’000 $’000 $’000 $’000 $’000 $’000GroupCurrent Year:At 1 November 2011 52,820 12,800 40,020 37,050 4,017 (1,047)Movements in Equity:Total Comprehensive Income/(Loss) for the Year 1,149 309 840 – 1,366 (526)Issue of Ordinary Shares(Note 25) 5,250 – 5,250 5,250 – –Share Issue Expenses(Note 25) (48) – (48) (48) – –Capital Contribution fromNon-Controlling Interestsof a Subsidiary 1,275 1,275 – – – –Equity Settled Share-BasedExpenses (Note 26) 528 – 528 – – 528Issue of Ordinary Shares asConsideration for Acquisitionof Non-Controlling Interestswithout Change in Control(Note 17B and Note 25) – (6,419) 6,419 3,675 – 2,744Dividends Paid to Non-Controlling Interests ofSubsidiaries (492) (492) – – – –7,662 (5,327) 12,989 8,877 1,366 2,746At 31 October 2012 60,482 7,473 53,009 45,927 5,383 1,699The accompanying notes form an integral part of these financial statements.

ecoWise Holdings Limitedannual report 201257YEAR ENDED 31 OCTOBER 2012STATEMENTS OF CHANGES IN EQUITYNon-Total Controlling Parent Share Retained OtherEquity Interests Sub-Total Capital Earnings Reserves$’000 $’000 $’000 $’000 $’000 $’000GroupPrevious Year:At 1 November 2010 53,189 13,358 39,831 36,375 3,455 1Movements in Equity:Total Comprehensive Income/(Loss) for the Year 318 103 215 – 562 (347)Issue of Ordinary Shares(Note 25) 98 – 98 98 – –Issue of Performance Shares(Note 25 and 26A) – – – 577 – (577)Acquisition of Non-ControllingInterests without Changein Control (Note 17B) (160) (36) (124) – – (124)Disposal of Non-ControllingInterests without Changein Control (Note 17C) 20 20 – – – –Dividends Paid to Non-Controlling Interests ofSubsidiaries (645) (645) – – – –(369) (558) 189 675 562 (1,048)At 31 October 2011 52,820 12,800 40,020 37,050 4,017 (1,047)The accompanying notes form an integral part of these financial statements.

58ecoWise Holdings Limitedannual report 2012YEAR ENDED 31 OCTOBER 2012STATEMENTS OF CHANGES IN EQUITYTotal Share Retained OtherEquity Capital Earnings Reserves$’000 $’000 $’000 $’000CompanyCurrent Year:At 1 November 2011 39,270 37,050 2,220 –Movements in Equity:Total Comprehensive Income for the Year 1,218 – 1,218 –Issue of Ordinary Shares (Note 25) 5,250 5,250 – –Share Issue Expenses (Note 25) (48) (48) – –Issue of Ordinary Shares as Consideration forAcquisition of Non-Controlling Interests(Note 17B and 25) 3,675 3,675 – –Equity Settled Share-Based Expenses (Note 26) 528 – – 52810,623 8,877 1,218 528At 31 October 2012 49,893 45,927 3,438 528Total Share Retained OtherEquity Capital Earnings Reserves$’000 $’000 $’000 $’000CompanyPrevious Year:At 1 November 2010 39,256 36,375 2,304 577Movements in Equity:Total Comprehensive Loss for the Year (84) – (84) –Issue of Ordinary Shares (Note 25) 98 98 – –Issue of Performance Shares (Note 25 and 26A) – 577 – (577)14 675 (84) (577)At 31 October 2011 39,270 37,050 2,220 –The accompanying notes form an integral part of these financial statements.

ecoWise Holdings Limitedannual report 201259YEAR ENDED 31 OCTOBER 2012CONSOLIDATED STATEMENT OF CASH FLOWS2012 2011$’000 $’000Cash Flows From Operating ActivitiesProfit Before Income Tax 3,429 2,273Depreciation of Property, Plant and Equipment 3,153 2,810Impairment Loss on Property, Plant andEquipment – Made/(Reversed) 194 (502)Loss/(Gain) on Disposal of Property, Plant and Equipment 40 (23)Amortisation of Intangible Assets 104 105Amortisation of Land Use Rights 23 22Share of Results from Associates, Net of Tax 345 287Impairment Loss on Other Financial Assets 67 76Gain on Disposal of Other Financial Assets – (9)Net Fair Value (Gain)/Loss on Derivative Financial Instruments (33) 108Provision for Retirement Benefit Obligations Expenses, Net 34 19Amortisation of Deferred Income (8) (8)Finance Income (39) (4)Finance Lease Income (1,079) –Dividend Income (411) (1)Finance Costs 1,042 875Equity-Settled Share-Based Expenses 528 –Operating Cash Flows Before Changes in Working Capital 7,389 6,028Inventories (539) (367)Trade and Other Receivables (339) 557Finance Lease Receivables 27 –Other Assets 327 178Trade and Other Payables 961 (1,392)Finance Lease Income Received 1,079 –Retirement Benefit Obligations Paid (16) (54)Increase in Cash Restricted in Use Over 3 Months (902) –Net Cash Flows From Operations Before Income Tax 7,987 4,950Income Tax Paid (1,407) (1,426)Net Cash Flows From Operating Activities 6,580 3,524The accompanying notes form an integral part of these financial statements.

60ecoWise Holdings Limitedannual report 2012YEAR ENDED 31 OCTOBER 2012CONSOLIDATED STATEMENT OF CASH FLOWS2012 2011$’000 $’000Cash Flows From Investing ActivitiesAcquisition of a Subsidiary, Net of Cash (Note 17A) 2 –Acquisition of an Associate (3,994) –Acquisition of Property, Plant and Equipment (Note 24B) (8,125) (9,308)Increase in Investment in Other Financial Assets (835) –Dividend Income Received 411 1Interest Income Received 39 4Proceeds from Disposal of Other Financial Assets 7 135Proceeds from Disposal of Property, Plant and Equipment 161 2,073Proceeds from Government Grant to Acquire Property,Plant and Equipment 9 –Net Cash Flows Used In Investing Activities (12,325) (7,095)Cash Flows From Financing ActivitiesAcquisition of Non-Controlling Interests without Change in Control – (160)Capital Contribution from Non-Controlling Interests of a Subsidiary 1,275 –Disposal of Non-Controlling Interests without Change in Control – 20Dividends Paid to Non-Controlling Interests of Subsidiaries (492) (645)Increase in Cash Restricted in Use Over 3 Months (206) (588)Interest Expenses Paid (1,007) (875)Proceeds from Issue of Ordinary Shares 5,202 98Proceeds from Loans and Borrowings 9,324 5,877Repayments of Loans and Borrowings (2,177) (2,295)Net Cash Flows From Financing Activities 11,919 1,432Net Increase/(Decrease) in Cash and Cash Equivalents 6,174 (2,139)Effect of Exchange Rate Changes on Cash and Cash Equivalents (79) (1)Cash and Cash Equivalents, Consolidated Statement of Cash Flows,Beginning Balance 10,355 12,495Cash and Cash Equivalents, Consolidated Statement of Cash Flows,Ending Balance (Note 24A) 16,450 10,355The accompanying notes form an integral part of these financial statements.

ecoWise Holdings Limitedannual report 20126131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS1. GENERALecoWise Holdings Limited (the “Company”) is incorporated in Singapore with limited liability. It is listed onthe Singapore Exchange Securities Trading Limited. The registered office and principal place of business ofthe Company is located at 17 Kallang Junction, #04-03, Singapore 339274.The financial statements for the reporting year ended 31 October 2012 comprise those of the Company andits subsidiaries (collectively, the “Group”) and the Group’s interests in associates. All financial informationpresented in Singapore dollars have been rounded to the nearest thousand (“$’000”), unless otherwise stated.The financial statements were approved and authorised for issue by the board of directors on the date ofstatement by directors.The principal activities of the Company are those of an investment holding company and provision ofmanagement services to its subsidiaries. The principal activities of the subsidiaries are disclosed in Note 17to the financial statements.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESAccounting ConventionThe financial statements have been prepared in accordance with the Singapore Financial Reporting Standards(“FRS”) and the related Interpretations to FRS (“INT FRS”) as issued by the Singapore Accounting StandardsCouncil and provisions in the Singapore Companies Act, Chapter 50. The financial statements are preparedon a going concern basis under the historical cost convention except where a FRS requires an alternativetreatment (such as fair values) as disclosed where appropriate in these financial statements.Basis of PreparationThe preparation of financial statements in conformity with generally accepted accounting principles requiresthe management to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of the financial statements and thereported amounts of revenues and expenses during the reporting year. Actual results could differ from theseestimates. The estimates and assumptions are reviewed on an on-going basis. Apart from those involvingestimations, management has made judgements in the process of applying the Group’s accounting policies.The areas requiring management’s most subjective or complex judgements, or areas where assumptionsand estimates are significant to the financial statements, are disclosed at the end of this note to the financialstatements, where applicable.

62ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Basis of PresentationThe consolidated financial statements include the financial statements of the Company and all its directly andindirectly controlled subsidiaries made up to the end of the reporting year. Consolidated financial statementsare the financial statements of the Group presented as those of a single economic entity. The consolidatedfinancial statements are prepared using uniform accounting policies for like transactions and other eventsin similar circumstances. All significant intra-group balances and transactions, including income, expensesand dividends are eliminated in full upon consolidation. The results of any subsidiary acquired or disposedoff during the reporting year are accounted for from the respective dates of acquisition or up to the date ofdisposal, which is the date on which effective control is obtained of the acquired business until that controlceases. Upon disposal, the attributable amount of goodwill, if any, is included in the determination of thegain or loss on disposal.Changes in the Group’s equity interests in a subsidiary that do not result in the loss of control are accountedfor within equity as transactions with owners in their capacity as owners. The carrying amounts of the Group’sand non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.When the Group ceases to control a subsidiary, it derecognises the assets and liabilities and related equitycomponents of the former subsidiary. Any gain or loss is recognised in profit or loss. Any investment retainedin the former subsidiary is measured at its fair value at the date when control has ceased and is subsequentlyaccounted for as an associate, joint venture or financial asset.An investment in associate is accounted for in the consolidated financial statements using the equity method.The Company’s financial statements have been prepared on the same basis, and as permitted by theSingapore Companies Act, Chapter 50, no statement of comprehensive income is presented for theCompany.Foreign Currency TransactionsThe functional currency of the Company is the Singapore dollar as it reflects the primary economicenvironment in which the Company operates in.Transactions in foreign currencies are recorded in the functional currency at the exchange rates ruling atthe dates of the transactions. At the end of each reporting year, recorded monetary balances and balancesmeasured at fair value that are denominated in non-functional currencies are reported at the exchangerates ruling at the end of the reporting year and fair value dates, respectively. All realised and unrealisedexchange adjustment gains and losses are dealt with in the profit or loss, except when recognised in othercomprehensive income.The presentation currency is the functional currency.

ecoWise Holdings Limitedannual report 20126331 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Translation of Financial Statements of Other EntitiesEach entity in the Group determines its appropriate functional currency to reflect the primary economicenvironment in which the entity operates in. In translating the financial statements of an investee forincorporation in the consolidated financial statements to the presentation currency, the assets and liabilitiesdenominated in other currencies are translated at the exchange rates ruling at the end of the reporting yearand the profit or loss items are translated at average exchange rates for the reporting year. The resultingtranslation adjustments (if any) are recognised in other comprehensive income and accumulated in a separatecomponent of equity until the disposal of that investee.Segment ReportingReportable segments are operating segments or aggregations of operating segments that meet specifiedcriteria. Operating segments are components about which separate financial information is available thatis evaluated regularly by the chief operating decision maker in deciding how to allocate resources and inassessing performance. Generally, financial information is reported on the same basis as is used internally forevaluating operating segment performance and deciding how to allocate resources to operating segments.Revenue RecognitionThe revenue amount is the fair value of the consideration received or receivable from the gross inflow ofeconomic benefits during the reporting year arising from the course of the activities of the Group and it isshown net of related sales taxes, estimated returns and rebates.• Revenue from the sale of goods is recognised when significant risks and rewards of ownership aretransferred to the buyer, there is neither continuing managerial involvement to the degree usuallyassociated with ownership nor effective control over the goods sold, and the amount of revenue andcosts incurred or to be incurred in respect of the transaction can be measured reliably.• Revenue from service income that is of short duration is recognised when the services are completed.• The finance lease income from finance lease arrangement represents the interest income on thefinance lease receivables and is recognised using the effective interest method.• Interest income is recognised using the effective interest method.• Dividend income from equity instruments is recognised when the Group’s right to receive payment isestablished.

64ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Employee BenefitsShort-Term Employee BenefitsShort-term employee benefit obligations are measured on an undiscounted basis and are expensed as therelated services are provided.A liability is recognised for the amount expected to be paid if the Group has a present legal or constructiveobligation to pay this amount as a result of past service provided by the employee and the obligation canbe estimated reliably.For employee leave entitlement, the expected cost of short-term employee benefits in the form ofcompensated absences is recognised in the case of accumulating compensated absences when theemployees render service that increases their entitlement to future compensated absences; and in the caseof non-accumulating compensated absences, when the absences occur. A liability for bonuses is recognisedwhere the Group is contractually obliged or where there is constructive obligation based on past practice.Defined Contribution BenefitsContributions to defined contribution retirement benefit plans are recorded as an expense as they fall due.The Group’s legal or constructive obligation is limited to the amount that it agrees to contribute to anindependently administered fund, such as the Central Provident Fund in Singapore and Employees ProvidentFund in Malaysia.Defined Benefit PlanThe Group operates an unfunded defined benefit plan for qualifying employees of its subsidiaries in Malaysia.In accordance with the terms of their employment contracts, the benefits are calculated based on the lastdrawn salaries, length of services and the rates set out in the employment contracts. The Group’s obligationsunder the defined benefit plan, calculated using the projected unit credit method, are determined based onactuarial assumptions and computations. Actuarial assumptions are updated for any material transactionsand changes in circumstances at each end of the reporting year.

ecoWise Holdings Limitedannual report 20126531 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Employee Benefits (Continued)Share-Based CompensationBenefits to employees, including the directors, are provided in the form of share-based paymenttransactions, whereby employees render services in exchange for shares or rights over shares (“equity-settledtransactions”). The fair value of the employee services rendered is determined by reference to the fair valueof the shares awarded or granted, excluding the impact of any non-market vesting conditions. The fairvalue is determined by reference to the fair value of the shares awarded or granted on grant date. This fairvalue amount is charged to the profit or loss over the vesting period of the share-based payment scheme,with the corresponding increase in equity. The value of the charge is adjusted in the profit or loss over theremainder of the vesting period to reflect expected and actual levels of shares vesting, with the correspondingadjustment made in equity. Cancellations of grants of equity instruments during the vesting period (otherthan a grant cancelled by forfeiture when the vesting conditions are not satisfied) are accounted for as anacceleration of vesting, therefore any amount unrecognised that would otherwise have been charged isrecognised immediately in the profit or loss.Income TaxIncome tax expense comprises current tax and deferred tax. Current and deferred taxes are recognised asan income or an expense in the profit or loss. The income taxes payables are accounted using the assetand liability method that requires the recognition of taxes payable or refundable for the current year anddeferred tax liabilities and assets for the future tax consequence of events that have been recognised in thefinancial statements or tax returns.The measurements of current and deferred tax liabilities and assets are based on provisions of the enactedor substantially enacted tax laws at the end of each reporting year; the effects of future changes in tax lawsor rates are not anticipated.Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same incometax authority.

66ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Income Tax (Continued)A deferred tax asset or liability is recognised for all temporary differences, unless the temporary differencesarise from the initial recognition of an asset or liability in a transaction that (i) is not a business combinationand (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferredtax liability or asset is recognised for all temporary differences associated with investments in subsidiaries andassociates, except where the Group is able to control the timing of the reversal of the temporary differencesand it is probable that the temporary differences will not reverse in the foreseeable future.The carrying amount of deferred tax assets is reviewed at the end of each reporting year and is reduced, ifnecessary, by the amount of any tax benefits based on available evidence, are not expected to be realised.Borrowing CostsBorrowing costs comprise interest expenses on borrowings and unwinding of the discount on provisionsand contingent consideration that are recognised in the profit or loss.Borrowing costs that are interest expenses and other costs incurred in connection with the borrowing offunds that are directly attributable to the acquisition, construction or production of a qualifying asset thatnecessarily take a substantial period of time to get ready for their intended use or sale are capitalised aspart of the cost of that asset until substantially all the activities necessary to prepare the qualifying asset forits intended use or sale are completed.Other borrowing costs are recognised as an expense in the period in which they are incurred.Interest expenses are calculated using the effective interest method.

ecoWise Holdings Limitedannual report 20126731 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Property, Plant and EquipmentProperty, plant and equipment are carried at cost on initial recognition and after initial recognition at costless any accumulated depreciation and accumulated impairment losses.Cost includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing theasset to the location and condition necessary for it to be capable of operating in the manner intended bymanagement. Subsequent costs are recognised as an asset only when it is probable that future economicbenefits associated with the item will flow to the Group and the cost of the item can be measured reliably.All other repair and maintenance costs are charged to the profit or loss when they are incurred.Cost also includes the initial estimate of the costs of dismantling and removing the item and restoring thesite on which it is located, the obligation for which the Group incurs either when the item is acquired or asa consequence of having used the item during a particular period.Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets lesstheir residual values over their estimated useful lives of each part of an item of these assets as follows:Leasehold land – Over remaining lease period of 65 and 68 yearsLeasehold properties and improvements – Over remaining lease period of 11 and 25 yearsPlant and equipment – 2.38% to 33.33%Construction-in-progress – Not depreciatedConstruction-in-progress is not depreciated as these are not available for use.An asset is depreciated when it is available for use even if during that period the item is idle. Fully depreciatedassets still in use are retained in the financial statements.The gain or loss arising from the derecognition of an item of property, plant and equipment is determined asthe difference between the net disposal proceeds, if any, and the carrying amount of the item of property,plant and equipment and is recognised in the profit or loss.The residual value and the useful life of an asset is reviewed at least at the end of each reporting year and,if expectations differ significantly from previous estimates, the changes are accounted for as a change in anaccounting estimate and the depreciation charge for the current and future periods are adjusted.

68ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)LeasesWhether an arrangement is, or contains, a lease is based on the substance of the arrangement at theinception date, that is, whether (a) fulfilment of the arrangement is dependent on the use of a specific assetor assets (the asset); and (b) the arrangement conveys a right to use the asset.Leases are classified as finance leases if substantially all the risks and rewards of ownership are transferredto the lessee. All other leases are classified as operating leases.Finance LeasesUnder a finance lease, the lessor recognises a finance lease receivables and the lessee recognises the leasedasset and a liability for future lease payments.(a)When the Group is a lessor:When the Group is a lessor, it records a finance lease receivables at the amount of the Group’s netinvestment in the lease, which comprises the present value of the minimum lease payments and anyunguaranteed residual value accruing to the Group. The present value is calculated by discountingthe minimum lease payments due and any unguaranteed residual value, at the interest rate implicitin the lease.The Group derecognised the leased assets and recognised the difference between the carryingamount of the leased assets and the finance lease receivables in the profit or loss and recorded aspart of revenue under “finance lease income”.The Group recognises finance lease income on the net investment over the lease term. The receiptsunder the lease arrangement are allocated between reducing the net investment and recognisingfinance income, so as to product a constant rate of return on the net investment.

ecoWise Holdings Limitedannual report 20126931 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Leases (Continued)Finance Leases (Continued)(b)When the Group is a lessee:At the commencement of the lease term, a finance lease is recognised as an asset and as a liability inthe statement of financial position at amounts equal to the fair value of the leased asset or, if lower,the present value of the minimum lease payments, each determined at the inception of the lease.The discount rate used in calculating the present value of the minimum lease payments is the interestrate implicit in the lease, if this is impracticable to determine, the lessee’s incremental borrowing rateis used.Any initial direct costs of the lessee are added to the amount recognised as an asset. The excess ofthe lease payments over the recorded lease liability are treated as finance costs which are allocatedto each reporting year during the lease term so as to produce a constant periodic rate of interest onthe remaining balance of the liability.Contingent rents are charged as expenses in the reporting years in which they are incurred. Theassets are depreciated as owned depreciable assets.Operating LeasesLeases where the lessor effectively retains substantially all the risks and rewards of ownership of the leasedassets are classified as operating leases. For operating leases, lease payments are recognised as an expensein the profit or loss on a straight-line basis over the term of the relevant lease unless another systematicbasis is representative of the time pattern of the user’s benefit, even if the payments are not on that basis.Lease incentives received are recognised in the profit or loss as an integral part of the total lease expense.Land Use RightsLand use rights under operating leases are initially stated at cost. Following initial recognition, land use rightsare measured and carried at cost less accumulated amortisation. The land use rights are amortised on astraight-line basis over the lease term 50 years.

70ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Intangible AssetsAn identifiable non-monetary asset without physical substance is recognised as an intangible asset atacquisition cost if it is probable that the expected future economic benefits that are attributable to the assetwill flow to the Group and cost of the asset can be measured reliably.After initial recognition, an intangible asset with finite useful life is carried at cost less any accumulatedamortisation and accumulated impairment losses. An intangible asset with an indefinite useful life is notamortised. An intangible asset is regarded as having an indefinite useful life when, based on an analysisof all of the relevant factors, there is no foreseeable limit to the period over which the asset is expected togenerate net cash inflows for the Group.Identifiable intangible assets acquired as part of a business combination are initially recognised separatelyfrom goodwill if the asset’s fair value can be measured reliably, irrespective of whether the asset had beenrecognised by the acquiree before the business combination. An intangible asset is considered identifiableonly if it is separable or if it arises from contractual or other legal rights, regardless of whether those rightsare transferable or separable from the Group or from other rights and obligations.The amortisable amount of an intangible asset with finite useful life is allocated on a systematic basis overthe best estimate of its useful life from the point at which the asset is ready for use.TrademarksTrademarks acquired in a business combination are recognised at fair value at the acquisition date.Trademarks have a finite useful life and are carried at cost less any accumulated amortisation andaccumulated impairment losses. Amortisation is calculated on a straight-line basis over the estimated usefullives of 10 to 25 years.Customer RelationshipsCustomer relationships acquired in a business combination are recognised at fair value at the acquisitiondate. The customer relationships are carried at cost less any accumulated amortisation and accumulatedimpairment losses. Amortisation is calculated on a straight-line basis over the expected life of the customerrelationships of 10 years.

ecoWise Holdings Limitedannual report 20127131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Intangible Assets (Continued)GoodwillGoodwill is recognised as of the acquisition date measured as the excess of (a) over (b) whereby (a) beingthe aggregate of (i) the consideration transferred measured at acquisition date fair value; (ii) the amount ofany non-controlling interests in the acquiree measured either at fair value or at the non-controlling interests’proportionate share of the acquiree’s net identifiable assets; and (iii) in a business combination achieved instages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree; and(b) being the net of the identifiable assets acquired and the liabilities assumed measured at acquisition datefair values.After initial recognition, goodwill acquired in a business combination is measured at cost less anyaccumulated impairment losses. Goodwill is not amortised. Irrespective of whether there is any indicationof impairment, goodwill is tested for impairment at least annually. Impairment on goodwill is not reversedin any circumstances.For the purpose of impairment testing and since the acquisition date of the business combination, goodwill isallocated to each cash-generating unit, or groups of cash-generating units that are expected to benefit fromthe synergies of the business combination, irrespective of whether other assets or liabilities of the acquireewere assigned to those units or groups of units. Each unit or group of units to which the goodwill is allocatedrepresents the lowest level within the Group at which the goodwill is monitored for internal managementpurposes and is not larger than a segment.SubsidiariesA subsidiary is an entity including unincorporated and special purpose entity that is controlled by the Group.Control is the power to govern the financial and operating policies of an entity so as to obtain benefits fromits activities accompanying a shareholding of more than one half of the voting rights or the ability to appointor remove the majority of the members of the board of directors or to cast the majority of votes at meetingsof the board of directors. The existence and effect of potential voting rights that are currently exercisable orconvertible are considered when assessing whether the Group controls another entity.In the Company’s own separate financial statements, the investments in subsidiaries are stated at cost lessany allowance for impairment in value. Impairment loss recognised in the profit or loss for a subsidiary isreversed only if there has been a change in the estimates used to determine the asset’s recoverable amountsince the last impairment loss was recognised.

72ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)AssociatesAn associate is an entity including an unincorporated entity in which the Group has a substantial financialinterest (usually not less than 20% of the voting power), significant influence and that is neither a subsidiarynor a joint venture of the investor. Significant influence is the power to participate in the financial andoperating policy decisions of the investee but is not control or joint control over those policies.The investment in associate is accounted using the equity method of accounting. The investment in associateis carried in the consolidated statement of financial position at cost plus post-acquisition changes in theGroup’s share of net assets of the associate less any allowance for impairment in value. The profit or lossreflects the Group’s share of the results of operations of the associate. Losses of the associate in excessof the Group’s interests in the relevant associate are not recognised, except to the extent that the Grouphas an obligation. Profits and losses resulting from transactions between the Group and the associate arerecognised in the financial statements only to the extent of unrelated investors’ interests in the associate.Unrealised losses are eliminated in the consolidated financial statements unless the transaction providesevidence of an impairment of the asset transferred.Accounting policies of the associate are changed where necessary to ensure consistency with the policiesadopted by the Group.The Group discontinues the use of the equity method of accounting from the date that it ceases to havesignificant influence over the associate and accounts for the remaining investment as financial assets. Anygain or loss is recognised in the profit or loss. Any investment retained in the former associate is measuredat its fair value at the date that it ceases to be an associate.Business CombinationsA business combination is a transaction or other event which requires that the assets acquired and liabilitiesassumed to constitute a business. It is accounted for by using the acquisition method of accounting.The cost of a business combination includes the fair values of assets given, liabilities incurred or assumed,and equity instruments issued by the acquirer at the acquisition date. The acquisition related costs areexpensed in the periods in which the costs are incurred and the services are received, except for any costsincurred to issue debts or equity securities are recognised in accordance with FRS 32 – Financial Instruments:Presentation and FRS 39 – Financial Instruments: Recognition and Measurement.

ecoWise Holdings Limitedannual report 20127331 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Business Combinations (Continued)At acquisition date, the acquirer recognises, separately from goodwill, the identifiable assets acquired, theliabilities assumed and any non-controlling interests in the acquiree measured at acquisition date fair valuesas defined in and that meet the conditions for recognition under FRS 103 – Business Combinations.Goodwill is an asset representing the future economic benefits arising from other assets acquired in abusiness combination that are not individually identified and separately recognised. If the acquirer has madea gain from a bargain purchase, that gain is recognised in the profit or loss. For gain on bargain purchase, areassessment is made of the identification and measurement of the acquiree’s identifiable assets, liabilitiesand contingent liabilities and the measurement of the cost of the business combination and any excessremaining after this reassessment is recognised immediately in the profit or loss.For business combinations achieved in stages, any equity interest held in the acquiree is remeasuredimmediately before achieving control at its acquisition date fair value and any resulting gain or loss isrecognised in the profit or loss.Goodwill and fair value adjustments resulting from the application of acquisition method of accounting atthe date of acquisition are treated as assets and liabilities of the acquired entity and are recorded at theexchange rates prevailing at the acquisition date and are subsequently translated at the exchange ratesruling at the end of the reporting year.Where the fair values are estimated on a provisional basis, they are finalised within one year from theacquisition date with consequent retrospective changes to the amounts recognised at the acquisition dateto reflect new information obtained about facts and circumstances that existed as of the acquisition dateand, if known, would have affected the measurement of the amounts recognised as of that date.

74ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Non-Controlling InterestsOn an acquisition-by-acquisition basis, the Group recognises any non-controlling interests in the acquireeeither at fair value or at the non-controlling interests’ proportionate share of the acquiree’s net assets. Wherethe non-controlling interests are measured at fair value, the valuation techniques and key model inputs usedare disclosed in the relevant note. Profit or loss and each component of other comprehensive income areattributed to the owners of the Company and to the non-controlling interests. Total comprehensive incomeis attributed to the owners of the Company and to the non-controlling interests even if this results in thenon-controlling interests having a deficit balance.The non-controlling interests in the net assets and net results of a consolidated subsidiary are shownseparately in the appropriate components of the consolidated financial statements.The Group treats transactions with non-controlling interests as transactions with equity owners of the Group.For acquisitions of non-controlling interests, the difference between any consideration paid and the relevantshare of the carrying amount of net assets of the subsidiary acquired is recorded in equity. Gains or losseson disposals without loss of control are also recorded in equity.Impairment of Non-Financial AssetsThe carrying amounts of non-financial assets are reviewed at each end of the reporting year for indicationsof impairment.The impairment loss is the excess of the carrying amount over the recoverable amount and is recognisedin the profit or loss. The recoverable amount of an asset or a cash-generating unit is the higher of its fairvalue less costs to sell and its value in use. In assessing value in use, the estimated future cash flows arediscounted to their present value using a pre-tax discount rate that reflects current market assessments ofthe time value of money and the risks specific to the asset. For the purposes of assessing impairment, assetsare grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).At the end of each reporting year, non-financial assets, other than goodwill, with impairment loss recognisedin prior periods are assessed for possible reversal of the impairment. An impairment loss is reversed onlyto the extent that the asset’s carrying amount does not exceed the carrying amount that would have beendetermined, net of depreciation or amortisation, if no impairment loss had been recognised.

ecoWise Holdings Limitedannual report 20127531 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)InventoriesInventories are measured at the lower of cost and net realisable value. The costs of raw materials,work-in-progress and finished goods are measured using the first-in-first-out method and the costs ofconsumables are measured using the weighted average method.Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventoriesto their present location and condition.Net realisable value is the estimated selling price in the ordinary course of business less the estimated costsof completion and the estimated costs necessary to make the sale. A write down on inventories is madewhere the cost is not recoverable or if the selling prices have declined.Non-Derivative Financial AssetsThe Group initially recognises loans and receivables and deposits on the date that they are originated. Allother financial assets (including assets designated at fair value through profit or loss) are recognised initiallyon the trade date, which is the date that the Group becomes a party to the contractual provisions of theinstrument.The Group derecognises a financial asset when the contractual rights to the cash flows from the assetexpire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction inwhich substantially all the risks and rewards of ownership of the financial asset are transferred. Any interestin transferred financial assets that is created or retained by the Group is recognised as a separate asset orliability.Financial assets and liabilities are offset and the net amount presented in the statement of financial positionwhen, and only when, the Group has a legal right to offset the amounts and intends either to settle on a netbasis or to realise the asset and settle the liability simultaneously.The Group has three classes of non-derivative financial assets, as follows: financial assets at fair value throughprofit or loss, loans and receivables and available-for-sale financial assets.

76ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Non-Derivative Financial Assets (Continued)Financial Assets at Fair Value through Profit or LossA financial asset is classified at fair value through profit or loss if it is classified as held for trading or isdesignated as such upon initial recognition. Financial assets are designated at fair value through profit orloss if the Group manages such investments and makes purchase and sale decisions based on their fairvalue in accordance with the Group’s investment strategy.Attributable transaction costs are recognised in the profit or loss as incurred. Financial assets at fair valuethrough profit or loss are measured at fair value, and changes therein are recognised in the profit or loss.Financial assets designated at fair value through profit or loss comprise equity shares that otherwise wouldhave been classified as available-for-sale.Loans and ReceivablesLoans and receivables comprise trade and other receivables, cash and cash equivalents and finance leasereceivables.Loans and receivables are financial assets with fixed or determinable payments that are not quoted in anactive market. Such assets are recognised initially at fair value plus any directly attributable transaction costs.Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effectiveinterest method less any impairment losses.Cash and cash equivalents comprise cash balances and bank deposits. For the purpose of the consolidatedstatement of cash flows, cash and cash equivalents exclude short-term deposits which are pledged to thebank as security and cannot be withdrawn on demand. Bank overdrafts that are repayable on demand andform an integral part of the Group’s cash management are included as a component of cash and cashequivalents.Available-For-Sale Financial AssetsThe Group’s investments in certain equity shares are classified as available-for-sale financial assets.Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairmentlosses, and foreign exchange gains and losses on available-for-sale monetary items, are recognised directlyin other comprehensive income. When an investment is derecognised, the cumulative gain or loss in othercomprehensive income and presented within equity in other reserves is transferred to the profit or loss.

ecoWise Holdings Limitedannual report 20127731 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Non-Derivative Financial LiabilitiesThe Group’s non-derivative financial liabilities comprise trade and other payables and loans and borrowings.Financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initiallyon the trade date at which the Group becomes a party to the contractual provisions of the instrument.Financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effectiveinterest method.Financial assets and liabilities are offset and the net amount presented in the statement of financial positionwhen, and only when, the Group has a legal right to offset the amounts and intends either to settle on a netbasis or to realise the asset and settle the liability simultaneously.Derivative Financial Instruments and Hedge AccountingDerivatives are recognised initially at fair value and the attributable transaction costs are recognised in theprofit or loss as incurred. Subsequent to initial recognition, derivatives are measured and carried at fair value,and changes therein are accounted for as described below.Embedded derivatives are separated from the host contract and accounted for separately if the economiccharacteristics and risks of the host contract and the embedded derivative are not closely related, a separateinstrument with the same terms as the embedded derivative would meet the definition of a derivative, andthe combined instrument is not measured at fair value through the profit or loss.On initial designation of the derivative as the hedging instrument, the Group formally documents therelationship between the hedging instrument and hedged item, including the risk management objectivesand strategy in undertaking the hedge transaction and the hedged risk, together with the methods that willbe used to assess the effectiveness of the hedging relationship.The Group makes an assessment, both at the inception of the hedge relationship as well as on an on-goingbasis, of whether the hedging instruments are expected to be “highly effective” in offsetting the changes inthe fair value or cash flows of the respective hedged items attributable to the hedged risk, and whether theactual effectiveness of each hedge are within an acceptable range. Transaction that is highly probable tooccur and addresses an exposure to variations in cash flows that could ultimately affect reported profit orloss is accounted for as a cash flow hedge of a forecast transaction.

78ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Derivative Financial Instruments and Hedge Accounting (Continued)Cash Flow HedgesWhen a derivative is designated as the hedging instrument in a hedge of the variability in cash flowsattributable to a particular risk associated with a recognised asset or liability or a highly probable forecasttransaction that could affect the profit or loss, the effective portion of changes in the fair value of the derivativeis recognised (net of tax) in other comprehensive income and presented in the hedging reserve in equity. Anyineffective portion of changes in the fair value of the derivative is recognised immediately in the profit or loss.Other Non-Trading DerivativesWhen a derivative financial instrument is not designated in a hedge relationship that qualifies for hedgeaccounting, all changes in its fair value are recognised immediately in the profit or loss.Financial Guarantee ContractsFinancial guarantee contracts are initially recognised at fair value and are subsequently measured at thegreater of (a) the amount determined in accordance with FRS 37 and (b) the amount initially recognised less,where appropriate, cumulative amortisation recognised in accordance with FRS 18. All changes in fair valuerelating to liabilities at fair value through profit or loss are recognised to profit or loss as incurred.Fair Value of Financial InstrumentsThe carrying values of current financial instruments approximate their fair values due to the short-termmaturity of these instruments and the disclosures of fair value are not made when the carrying amount ofcurrent financial instruments is a reasonable approximation of its fair value. The fair values of non-currentfinancial instruments may not be disclosed separately unless there are significant differences at the end ofthe reporting year and in the event the fair values are disclosed in the relevant notes.The fair value of a financial instrument is derived from an active market or by using an acceptable valuationtechnique. The appropriate quoted market price for an asset held or liability to be issued is usually the currentbid price without any deduction for transaction costs that may be incurred on sale or other disposal and, foran asset to be acquired or for liability held, the asking price. If there is no market, or the markets availableare not active, the fair value is established by using an acceptable valuation technique.

ecoWise Holdings Limitedannual report 20127931 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Fair Value of Financial Instruments (Continued)The fair value measurements are classified using a fair value hierarchy of 3 levels that reflects the significanceof the inputs used in making the measurements that is, Level 1 for the use of quoted prices (unadjusted)in active markets for identical assets or liabilities; Level 2 for the use of inputs other than quoted pricesincluded within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly(i.e. derived from prices); and Level 3 for the use of inputs for the asset or liability that are not based onobservable market data (unobservable inputs). The level is determined on the basis of the lowest level inputthat is significant to the fair value measurement in its entirety. Where observable inputs require significantadjustment based on unobservable inputs, that measurement is a Level 3 measurement.EquityEquity instruments are contracts that give a residual interest in the net assets of the Company. Ordinaryshares are classified as equity. Equity instruments are recognised at the amount of proceeds received netof incremental costs directly attributable to the transaction. Dividends on equity are recognised as liabilitieswhen they are declared. Interim dividends are recognised when declared by the directors.ProvisionsA liability or provision is recognised when there is a present obligation (legal or constructive) as a result ofa past event, it is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation and a reliable estimate can be made of the amount of the obligation.Provisions are made using best estimates of the amount required in settlement and where the effect of thetime value of money is material, the amount recognised is the present value of the expenditures expectedto be required to settle the obligation using a pre-tax rate that reflects current market assessments of thetime value of money and the risks specific to the obligation.The increase in the provision due to passage of time is recognised as interest expense. Changes in estimatesare reflected in the profit or loss in the reporting year they occur.

80ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Government GrantsA government grant is recognised at fair value when there is reasonable assurance that the conditionsattaching to it will be complied with and that the grant will be received. A grant in recognition of specificexpenses is recognised as income in profit or loss over the periods necessary to match them with therelated costs that they are intended to compensate, on a systematic basis. A grant related to depreciableassets is allocated to income over the periods in which such assets are used in the project subsidised bythe grant. A government grant related to assets, including non-monetary grants at fair value, is presentedin the statement of financial position as deferred income.Critical Judgements, Assumptions and Estimation UncertaintiesThe critical judgements made in the process of applying the accounting policies that have the most significanteffect on the amounts recognised in the financial statements and the key assumptions concerning the future,and other key sources of estimation uncertainty at the end of the reporting year, that have a significant riskof causing a material adjustment to the carrying amounts of assets and liabilities currently or within the nextreporting year are discussed below.These estimates and assumptions are periodically monitored to ensure they incorporate all relevantinformation available at the date when financial statements are prepared. However, actual figures may differfrom these estimates.Impairment of Property, Plant and EquipmentAn assessment is made at the end of each reporting year whether there is any indication that the assets maybe impaired. If any such indication exists, an estimate is made of the recoverable amounts of the assets.The recoverable amounts of cash-generating units have been determined based on value in use calculations.These calculations require the use of estimates.Included in the property, plant and equipment of the Group is a coal-fired power plant with carrying amountof $6,514,000 as at 31 October 2012 (2011: $7,008,000) of a non-wholly owned subsidiary, WuhanecoWise Energy Co., Ltd.. This plant will be converted to a biomass co-generation plant. The coal-firedpower plant has ceased operations and the commencement of plant conversion is subject to the subsidiaryreceiving additional capital injection from its shareholders for purposes of securing the bank financing for theconversion. As at 31 October 2012, the Group has assessed the recoverable amount of the plant based onits estimated value in use assuming the operation of a biomass co-generation plant, using a pre-tax discountvalue of 12.8%. Based on management’s review, there is no impairment loss.

ecoWise Holdings Limitedannual report 20128131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Critical Judgements, Assumptions and Estimation Uncertainties (Continued)Impairment of Property, Plant and Equipment (Continued)It is impracticable to disclose the extent of the possible effects. It is reasonably possible, based on existingknowledge, that outcomes within the next reporting year that are different from assumptions could requirea material adjustment to the carrying amount of the balances affected.Useful Lives of Property, Plant and EquipmentThe estimates for the useful lives and related depreciation charges for property, plant and equipment is basedon commercial and production factors which could change significantly as a result of technical innovationsand competitors’ actions in response to severe market conditions. When useful lives are less than previouslyestimated useful lives, depreciation charges are increased or the carrying amounts written-off or written-downfor technically obsolete or non-strategic assets that have been abandoned. It is impracticable to disclosethe extent of the possible effects. It is reasonably possible, based on existing knowledge, that outcomeswithin the next reporting year that are different from assumptions could require adjustments to the carryingamounts of the property, plant and equipment (Note 14).Impairment of Subsidiaries and AssociatesWhen a subsidiary or associate is in net equity deficit and has suffered operating losses, the recoverableamount of the investee is estimated to assess whether the investment in the investee has suffered anyimpairment. This determination requires significant judgement. An estimate is made of the future profitabilityof the investee, and the financial health of and near-term business outlook for the investee, including factorssuch as industry and sector performance and operational and financing cash flows. It is impracticable todisclose the extent of the possible effects. It is reasonably possible, based on existing knowledge, thatoutcomes within the next reporting year that are different from assumptions could require adjustments tothe carrying amounts of the investments in subsidiaries and associates.The specific assets at the end of the reporting year affected by the assumptions, which have carrying amountsof $1,450,000 (2011: $1,450,000) have been fully impaired.

82ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Critical Judgements, Assumptions and Estimation Uncertainties (Continued)Net Realisable Value of InventoriesA review is made periodically on inventories for obsolescence and excess inventory and declines in netrealisable value below cost and an allowance is recorded against the carrying amounts of inventories forany such obsolescence, excess and declines. These reviews require management to consider the futuredemands for the inventories. The realisable value represents the best estimate of the recoverable amountand is based on the acceptable evidence available at the end of the reporting year and inherently involvesestimates regarding the future expected realisable value. The usual considerations for determining the amountof allowance or write-down include expected usage, ageing analysis, technical assessment and subsequentevents. In general, such an evaluation process requires significant judgment and may affect the carryingamount of inventories at the end of the reporting year. Possible changes in these estimates could result inrevisions to the carrying amounts of the inventories.The carrying amounts of inventories of the Group at the end of the reporting year were $10,064,000 (2011:$9,764,000).Allowance for Doubtful Trade ReceivablesAn allowance is made for doubtful trade receivables for estimated losses resulting from the subsequentinability of the customers to make required payments. If the financial conditions of the customers wereto deteriorate, resulting in an impairment of their ability to make payments, additional allowances may berequired in future periods. Management generally analyses trade receivables, historical bad debts, customerconcentrations, customer creditworthiness, and changes in customer payment terms when evaluating theadequacy of the allowance for doubtful trade receivables. To the extent that it is feasible, impairment anduncollectibility is determined individually for each specific customer. In cases where that process is notfeasible, a collective evaluation of impairment is performed. At the end of the reporting year, the tradereceivables carrying amount approximates its fair value and the carrying amount might change within the nextreporting year but the change would not arise from assumptions or other sources of estimation uncertaintyat the end of the reporting year (Note 21).

ecoWise Holdings Limitedannual report 20128331 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Critical Judgements, Assumptions and Estimation Uncertainties (Continued)Actuarial Assumptions on Retirement Benefit ObligationsAccounting for retirement benefit obligations involves actuarial assumptions required to measure the obligationand the expenses, with the possibility that actual results differ from the assumed results. These differencesare known as actuarial gains and losses. Retirement benefit obligations are measured using the projectedunit credit method. According to this method, the Group has to make a reliable estimate of the amount ofbenefits earned in return for services rendered in current and prior periods using actuarial techniques. Inaddition, in cases where defined benefit plans are funded, the Group has to estimate the fair value of planassets based on the expected return on plan assets which is computed using the estimated long-term rateof return. The use of the projected unit credit method involves a number of actuarial assumptions. Theseassumptions include demographic assumptions such as mortality, employee turnover and retirement age,and financial assumptions such as discount rates, salary and benefit levels. Such assumptions are subjectto judgements and actual results may develop differently than expected (Note 28).3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONSFRS 24 defines a related party as a person or entity that is related to the reporting entity and it includes(a) A person or a close member of that person’s family if that person (i) has control or joint control overthe reporting entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the keymanagement personnel of the reporting entity or of a parent of the reporting entity. (b) An entity is related tothe reporting entity if any of the following conditions apply: (i) The entity and the reporting entity are membersof the same group; (ii) One entity is an associate or joint venture of the other entity; (iii) Both entities are jointventures of the same third party; (iv) One entity is a joint venture of a third entity and the other entity is anassociate of the third entity; (v) The entity is a post-employment benefit plan for the benefit of employeesof either the reporting entity or an entity related to the reporting entity; (vi) The entity is controlled or jointlycontrolled by a person identified in (a); or (vii) A person identified in (a) (i) has significant influence over theentity or is a member of the key management personnel of the entity (or of a parent of the entity).

84ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)3A. Related PartiesThere are transactions and arrangements between the Group and related parties and the effects of these onthe basis determined between the parties are reflected in these financial statements. The sales with relatedparties are based on the price lists in force with non-related parties. The current related party balances areunsecured without fixed repayment terms and interest, unless stated otherwise. For non-current balances,if significant, an interest is imputed, unless stated otherwise, based on the prevailing market interest rate forsimilar debt less the interest rate, if any, provided in the agreement for the balance. For financial guarantees,an amount is imputed and is recognised accordingly if significant where no charge is payable.Intragroup transactions and balances that have been eliminated in these consolidated financial statementsare not disclosed as related party transactions and balances below.In addition to the transactions and balances disclosed elsewhere in the notes to the financial statements,significant related party transactions include the following:Group2012 2011$’000 $’000Non-Controlling Interests in SubsidiariesSale of goods (6,031) (6,472)Service income – (7)Rental income – (65)Sale of property, plant and equipment – (28)Purchase of goods 3,799 3,568Purchase of services 311 242Operating lease expenses 363 516Purchase of property, plant and equipment 3,674 16AssociatesService income – (73)Management fee income (1,570) (1,359)Purchase of services 1,223 1,429

ecoWise Holdings Limitedannual report 20128531 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS3. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS (CONTINUED)3B. Key Management CompensationKey management are the directors and those persons having authority and responsibility over the activitiesof the Group. Key management compensation comprised those of directors and other key managementpersonnel totalling 9 (2011: 6) persons. Key management compensation is included under employee benefitsexpense.Group2012 2011$’000 $’000Salaries and other short-term employee benefits 2,991 1,923Equity-settled share-based expense 421 –Included in the above amounts are the following items:Group2012 2011$’000 $’000Remuneration of directors of the Company 1,327 870Remuneration of directors of the subsidiaries 363 403Fees to directors of the Company 125 110Fees to directors of the subsidiaries 183 198Equity-settled share-based expenses to directors of the Company 304 –Equity-settled share-based expenses to directors of subsidiaries 83 –Further information about the remuneration of directors of the Company is provided in the report on CorporateGovernance.

86ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS4. FINANCIAL INFORMATION BY OPERATING SEGMENTS4A. Information about Operating Segment Profit or Loss, Assets and LiabilitiesDisclosure of information about operating segments, products and services, the geographical areas and themajor customers is made as required by FRS 108 – Operating Segments. This disclosure standard has noimpact on the reported results or financial position of the Group.For management reporting purposes, the Group has three operating segments, which form the Group’sstrategic business units. The strategic business units offer different products and services and are managedseparately because they require different technologies and marketing strategies. For each of the strategicbusiness units, management reviews internal management reports on at least a quarterly basis.The following summary describes the operations in each of the Group’s operating segments:(a)Renewable Energy – Design, build and operate biomass co-generation systems, generate power forsale and provision of services related to the applications of heat.(b)Resource Recovery – Process, recycle and repurpose waste and salvageable materials intoenvironmentally friendly products for industrial applications, such as washed copper slag, compostand retreaded tyres.(c)Integrated Environmental Management Solutions – Provision of resource management and integratedenvironmental engineering solutions for industrial waste and energy management, including designing,optimising, engineering, procurement, fabricating, commissioning, managing and maintenance ofwaste and energy management facilities.Performance is measured based on segment results before allocation of corporate management fees, shareof results from associates, finance income, dividend income, finance costs and income tax, as included inthe internal management reports. Segment results is used to measure performance as management believesthat such information is the most relevant in evaluating the results of the operating segments relative to otherentities that operate in similar industries.Inter-segment sales are based on agreed price lists. Internal transfer pricing policies of the Group are as faras practicable based on market prices. The accounting policies of the operating segments are the same asthose disclosed in Note 2 to the financial statements.The information about the operating segment profit or loss, assets and liabilities is set out below.

ecoWise Holdings Limitedannual report 20128731 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS4. FINANCIAL INFORMATION BY OPERATING SEGMENTS (CONTINUED)4B. Profit or Loss ReconciliationRenewableEnergyResourceRecoveryIntegratedEnvironmentalManagementSolutions Elimination Group2012 2011 2012 2011 2012 2011 2012 2011 2012 2011$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000GroupRevenueRevenue from external customers 9,907 5,136 80,330 74,449 284 257 – – 90,521 79,842Inter-segment revenue 459 275 1,357 493 270 197 (2,086) (965) – –Segment revenue 10,366 5,411 81,687 74,942 554 454 (2,086) (965) 90,521 79,842Segment results before allocationof corporate management fees 1,957 (469) 7,379 7,344 (597) (532) (4,258) (2,933) 4,481 3,410Allocated corporatemanagement fees (2,472) (1,107) (1,786) (1,826) – – 4,258 2,933 – –Segment results (515) (1,576) 5,593 5,518 (597) (532) – – 4,481 3,410Share of results from associates,allocated to operating segments (85) – (260) (287) – – – – (345) (287)Unallocated corporate results (115) 20Profit before dividend income,finance income/(costs) andincome tax 4,021 3,143Finance income 39 4Dividend income 411 1Finance costs (1,042) (875)Income tax expense (1,711) (1,341)Profit for the year 1,718 932

88ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS4. FINANCIAL INFORMATION BY OPERATING SEGMENTS (CONTINUED)4C. Assets, Liabilities ReconciliationRenewableEnergyResourceRecoveryIntegratedEnvironmentalManagementSolutions Elimination Group2012 2011 2012 2011 2012 2011 2012 2011 2012 2011$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000GroupSegment assets 33,932 32,424 66,152 65,506 7,523 7,995 (13,590) (24,552) 94,017 81,373Investments in associates,allocated to operating segments 3,909 – 1,092 1,352 – – – – 5,001 1,352Unallocated corporate assets 3,948 4,407Total assets 102,966 87,132Segment liabilities 29,248 28,357 17,251 20,625 9,447 8,979 (43,297) (46,325) 12,649 11,636Loans and borrowings– Allocated to operatingsegments 8,828 4,615 15,489 11,819 – – – – 24,317 16,434– Unallocated corporate loansand borrowings 1,518 2,844Income tax payable 335 –Deferred tax liabilities 2,622 2,700Unallocated corporate liabilities 1,043 698Total liabilities 42,484 34,312Capital expenditureAllocated to operating segments– Property, plant and equipment 4,455 8,411 5,333 907 13 52 – – 9,801 9,370– Other financial assets – – 835 – – – – – 835 –Unallocated corporate capitalexpenditure on property,plant and equipment 86 14Total capital expenditure 10,722 9,384

ecoWise Holdings Limitedannual report 20128931 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS4. FINANCIAL INFORMATION BY OPERATING SEGMENTS (CONTINUED)4D. Other Material ItemsRenewableEnergyResourceRecoveryIntegratedEnvironmentalManagementSolutions Elimination Group2012 2011 2012 2011 2012 2011 2012 2011 2012 2011$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000GroupDepreciation of property,plant and equipmentAllocated to operating segments 1,330 1,350 1,713 1,364 30 17 – – 3,073 2,731Unallocated corporate depreciation 80 79Total depreciation of property,plant and equipment 3,153 2,810Impairment loss on property,plant and equipment– (reversed)/made – (502) 194 – – – – – 194 (502)Loss/(gain) on disposal of property,plant and equipment 55 37 (15) (60) – – – – 40 (23)Amortisation of land use rights 23 22 – – – – – – 23 22Amortisation of intangible assets – – 104 105 – – – – 104 105Impairment loss on other financial assets – – 67 76 – – – – 67 76Gain on disposal of other financial assets – – – (9) – – – – – (9)Net fair value (gain)/loss onderivative financial instruments – – (33) 108 – – – – (33) 108Provision for retirement benefitobligations expenses (net) – – 34 19 – – – – 34 19Amortisation of deferred income – – (8) (8) – – – – (8) (8)Allowance for doubtful receivables– (reversed)/made (264) (45) (249) 28 – – 530 – 17 (17)Allowance for inventory obsolescence– made/(reversed) 92 12 (6) (110) – – – – 86 (98)

90ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS4. FINANCIAL INFORMATION BY OPERATING SEGMENTS (CONTINUED)4E. Geographical InformationIn presenting information based on geographical segments, segment revenue is based on geographicallocation of the customers and segment assets are based on geographical location of the assets.RevenueNon-Current Assets2012 2011 2012 2011$’000 $’000 $’000 $’000Singapore 16,071 11,638 21,569 18,410Malaysia 50,547 45,427 19,417 16,634Australia 19,457 18,670 – –People’s Republic of China 256 484 11,713 8,266Others 4,190 3,623 – –90,521 79,842 52,699 43,3104F. Information about Major CustomersRevenue from one customer of the Group’s resource recovery operating segment contributed approximately$19,457,000 (2011: $18,450,000) of the Group’s total revenue.5. REVENUEGroup2012 2011$’000 $’000Sale of goods 77,552 71,039Service income 10,131 6,751Management fee income 1,570 1,359Finance lease income 1,079 –Others 189 69390,521 79,842

ecoWise Holdings Limitedannual report 20129131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS6. FINANCE INCOMEGroup2012 2011$’000 $’000Interest income from financial institutions 39 47. DIVIDEND INCOMEGroup2012 2011$’000 $’000Dividend income from quoted corporation – 1Dividend income from unquoted corporation 411 –411 18. OTHER CREDITS AND (OTHER CHARGES)Group2012 2011$’000 $’000Impairment loss on property, plant and equipment – (made)/reversed (194) 502(Loss)/gain on disposal of property, plant and equipment (40) 23Impairment loss on other financial assets (67) (76)Gain on disposal of other financial assets – 9Net fair value gain/(loss) on derivative financial instruments 33 (108)Foreign exchange gain (net) 432 223Equity-settled share-based expenses (528) –Allowance for doubtful receivables – (made)/reversed (17) 17Government grant income 47 7Others 39 (17)Net (295) 580Presented in profit or loss as:Other credits 551 781Other charges (846) (201)Net (295) 580

92ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS9. FINANCE COSTSGroup2012 2011$’000 $’000Interest expenses on bank loans 916 741Interest expenses on finance lease liabilities 92 102Interest expenses on retirement benefit obligations 34 321,042 87510. EMPLOYEE BENEFITS EXPENSEGroup2012 2011$’000 $’000Salaries, bonus and other wages 13,342 11,063Contributions to defined contribution plans 1,052 789Provision for retirement benefit obligations expense (net) 34 19Equity-settled share-based expenses 528 –Other benefits 557 42715,513 12,29811. ITEMS IN THE STATEMENT OF COMPREHENSIVE INCOMEIn addition to items of profit or loss disclosed elsewhere in the notes to the financial statements, items inthe statement of comprehensive income include the following:Group2012 2011$’000 $’000Auditors’ remuneration:Auditor of the Company 213 214Member firms of the Auditor of the Company 97 97Other auditors 10 4Non-audit fees paid and payable to:Auditors of the Company 93 48Member firms of the Auditor of the Company 14 21Other auditors 2 –

ecoWise Holdings Limitedannual report 20129331 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS12. INCOME TAX EXPENSE12A. Components of Income Tax Expense Recognised in Profit or LossGroup2012 2011$’000 $’000Current tax expenseCurrent tax expense 1,875 951Withholding tax expense 66 77Adjustments to current tax in respect of prior years (186) 2531,755 1,281Deferred tax expenseDeferred tax expense (44) 60(44) 60Total income tax expense 1,711 1,341The income tax in profit or loss varied from the amount determined by applying the Singapore income taxrate of 17% (2011: 17%) to profit or loss before income tax as a result of the following differences:Group2012 2011$’000 $’000Profit before income tax 3,429 2,273Add: Share of losses from associates 345 2873,774 2,560Income tax using Singapore’s income tax rate above 642 435Effect of different tax rates in foreign jurisdictions 572 227Withholding tax expense 66 77Non-deductible items 556 469Tax exempt income (317) (220)Tax incentives (10) (41)Adjustments to current tax in respect of prior years (186) 253Deferred tax assets not recognised 419 126Others (31) 15Total income tax expense 1,711 1,341

94ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS12. INCOME TAX EXPENSE (CONTINUED)12B. Movements in Deferred Tax Liabilities in the Statements of Financial PositionAt1 November2010Recognisedin profitor lossExchangedifferencesAt31 October2011Recognisedin profitor lossExchangedifferencesAt31 October2012$’000 $’000 $’000 $’000 $’000 $’000 $’000GroupProperty, plant andequipment (2,380) (158) 49 (2,489) 65 (242) (2,666)Intangible assets (496) 26 13 (457) 26 7 (424)Unutilised tax losses 577 337 – 914 201 88 1,203Unutilised capitalallowances 371 (370) – 1 149 40 190Other items 101 231 – 332 22 68 422Deferred tax assetsvaluation allowance (839) (126) (36) (1,001) (419) 73 (1,347)(2,666) (60) 26 (2,700) 44 34 (2,622)At1 November2010Recognisedin profitor lossAt31 October2011Recognisedin profitor lossAt31 October2012$’000 $’000 $’000 $’000 $’000CompanyProperty, plant and equipment (20) – (20) 20 –

ecoWise Holdings Limitedannual report 20129531 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS12. INCOME TAX EXPENSE (CONTINUED)12C. Unrecognised Deferred Tax Assets2012 2011GrossamountTaxeffectGrossamountTaxeffect$’000 $’000 $’000 $’000GroupCapital allowances carryforwards 760 190 179 43Tax losses carryforwards 4,900 1,084 4,177 922Others 297 73 146 365,957 1,347 4,502 1,001No deferred tax asset has been recognised in respect of the above balance as the future profit streams arenot probable. Except for tax loss carryforwards in a subsidiary amounting to approximately $741,000 (2011:$566,000) as at the end of the reporting year which expires between 1 to 5 years (2011: 1 to 5 years), therealisation of the future income tax benefits from these tax loss carryforwards is available for an unlimitedfuture period subject to the conditions imposed by laws of the countries in which the companies in the Groupoperates, including the retention of majority shareholders as defined.

96ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS13. EARNINGS PER SHAREThe following table illustrates the numerators and denominators used to calculate basic and diluted earningsper share.2012 2011$’000 $’000Numerator: EarningsProfit for the year attributable to owners of the Companyused in the basic and diluted earnings per share calculation 1,366 562Weighted AverageNumber ofOrdinary Shares2012 2011’000 ’000Denominator: SharesWeighted average number of ordinary shares in issue duringthe reporting year used in the basic earnings per share calculation 890,020 836,555Effect of dilutive performance shares 2,538 –Weighted average number of ordinary shares in issue duringthe reporting year used in the diluted earnings per share calculation 892,558 836,555At 31 October 2011, the Group had no dilutive potential ordinary shares in issue.

ecoWise Holdings Limitedannual report 20129731 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS14. PROPERTY, PLANT AND EQUIPMENTConstructionin-progressLeaseholdlandLeaseholdproperties andimprovementsPlant andequipment Total$’000 $’000 $’000 $’000 $’000GroupCostAt 1 November 2010 2,673 1,513 7,169 33,214 44,569Effects of movements in exchange rates 14 (27) (35) (364) (412)Additions 8,344 – 50 990 9,384Transfers (19) – – 19 –Disposals – (950) (1,112) (621) (2,683)At 31 October 2011 11,012 536 6,072 33,238 50,858Effects of movements in exchange rates (13) (27) (67) (278) (385)Additions 4,554 1,124 1,900 2,309 9,887Transfers (14,770) – 36 14,734 –Disposals – – – (331) (331)Reclassified to finance lease receivables – – – (14,598) (14,598)At 31 October 2012 783 1,633 7,941 35,074 45,431Accumulated depreciation and impairment lossesAt 1 November 2010 – 17 2,684 8,757 11,458Effects of movements in exchange rates – (1) 2 (19) (18)Depreciation for the year – 18 179 2,613 2,810Disposals – (6) (31) (596) (633)Reversal of impairment loss – – – (502) (502)At 31 October 2011 – 28 2,834 10,253 13,115Effects of movements in exchange rates – (1) (4) (58) (63)Depreciation for the year – 6 192 2,955 3,153Disposals – – – (130) (130)Impairment loss – – – 194 194At 31 October 2012 – 33 3,022 13,214 16,269Carrying amountsAt 1 November 2010 2,673 1,496 4,485 24,457 33,111At 31 October 2011 11,012 508 3,238 22,985 37,743At 31 October 2012 783 1,600 4,919 21,860 29,162

98ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS14. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)Constructionin-progressPlant andequipmentTotal$’000 $’000 $’000CompanyCostAt 1 November 2010 – 765 765Additions – 14 14Disposals – (2) (2)At 31 October 2011 – 777 777Additions 67 19 86Disposals – (11) (11)At 31 October 2012 67 785 852Accumulated depreciationAt 1 November 2010 – 199 199Depreciation for the year – 79 79Disposals – (2) (2)At 31 October 2011 – 276 276Depreciation for the year – 80 80Disposals – (11) (11)At 31 October 2012 – 345 345Carrying amountsAt 1 November 2010 – 566 566At 31 October 2011 – 501 501At 31 October 2012 67 440 50714A. Impairment Loss on Plant and EquipmentIncluded in the property, plant and equipment of the Group is a coal-fired power plant with carrying amountof $6,514,000 as at 31 October 2012 (2011: $7,008,000) owned by a non-wholly owned subsidiary, WuhanecoWise Energy Co., Ltd.. This plant will be converted to a biomass co-generation plant. The coal-firedpower plant has ceased operations and the commencement of plant conversion is subject to the subsidiaryreceiving additional capital injection from its shareholders for purposes of securing the bank financing for theconversion. As at 31 October 2012, the Group has assessed the recoverable amount of the plant based onits estimated value in use assuming the operation of a biomass co-generation plant, using a pre-tax discountvalue of 12.8%. Based on management’s review, there is no impairment loss.

ecoWise Holdings Limitedannual report 20129931 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS14. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)14A. Impairment Loss on Plant and Equipment (Continued)During the current reporting year, the Group has also assessed the recoverable amount of certain of itsplant and equipment in the resource recovery segment and recorded an impairment loss of $194,000. TheGroup considered the amount and expected usage of the plant and equipment and assessed the recoverableamount based on its estimated value in use at a pre-tax discount value of 12%. The impairment loss onplant and equipment was recorded under other charges in the profit or loss.In the previous reporting year, the Group assessed the recoverable amount of certain of its plant andequipment in the renewal energy operating segment and reversed an impairment loss of $502,000 recognisedin previous reporting years. The reversal of impairment loss on plant and equipment was recognised underother credits in the profit or loss.14B. Plant and Equipment Acquired Under Finance Lease ArrangementsThe Group and the Company acquired certain plant and equipment under finance lease agreements and thecarrying amounts of the plant and equipment are as follows:GroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Plant and equipment (Note 27B) 2,116 2,746 273 31714C. Securities PledgedAs at the end of the reporting year, the carrying amounts of the Group’s property, plant and equipment thatare pledged as securities to secure loans and borrowings (Note 27A) are as follows:Group2012 2011$’000 $’000Leasehold land 1,600 511Leasehold properties and improvements 3,455 1,573Plant and equipment 11,317 13,04216,372 15,126

100ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS15. INTANGIBLE ASSETSTrademarksCustomerrelationships Goodwill Total$’000 $’000 $’000 $’000GroupCostAt 1 November 2010 1,939 55 487 2,481Effects of movements in exchange rates (51) (2) (7) (60)Written-off – – (198) (198)At 31 October 2011 1,888 53 282 2,223Effects of movements in exchange rates (32) (1) (5) (38)At 31 October 2012 1,856 52 277 2,185Accumulated amortisation andimpairment lossesAt 1 November 2010 – – 198 198Effects of movements in exchange rates (1) – – (1)Amortisation for the year 100 5 – 105Written-off – – (198) (198)At 31 October 2011 99 5 – 104Effects of movements in exchange rates (3) – – (3)Amortisation for the year 99 5 – 104At 31 October 2012 195 10 – 205Carrying amountsAt 1 November 2010 1,939 55 289 2,283At 31 October 2011 1,789 48 282 2,119At 31 October 2012 1,661 42 277 1,980The amortisation of trademarks and customer relationships were included in marketing and distributionexpenses.

ecoWise Holdings Limitedannual report 201210131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS15. INTANGIBLE ASSETS (CONTINUED)15A. Impairment Testing for Cash-Generating Units (“CGUs”) Containing GoodwillFor the purpose of impairment testing, goodwill is allocated to the Group’s CGUs identified through operatingsubsidiaries as follows:2012 2011$’000 $’000Name of subsidiarySunrich Resources Sdn. Bhd. (Resource Recovery segment) 277 282The recoverable amount of goodwill allocated to the CGU, Sunrich Resources Sdn. Bhd., was based on itsvalue in use and was determined by discounting the future cash flows to be generated from the continuinguse of the CGU. These calculations use cash flow projections based on financial budgets.Key assumptions used in value in use calculation2012 2011Growth rate 5% to 15% 5% to 16%Discount rate 12% 12%The growth rate used is based on management’s expectations on market performance. The discount rateused is pre-tax and reflects specific risks relating to the specific industry in which the entity operates inand cash flows beyond the periods covered by the financial budgets are projected on the assumptions ofconstant revenue growth and gross margins.

102ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS16. LAND USE RIGHTSGroup2012 2011$’000 $’000CostAt beginning of the reporting year 1,136 1,123Effects of movements in exchange rates (7) 13At end of the reporting year 1,129 1,136Accumulated amortisationAt beginning of the reporting year 62 39Effects of movements in exchange rates (1) 1Amortisation for the year 23 22At end of the reporting year 84 62Carrying amountsAt beginning of the reporting year 1,074 1,084At end of the reporting year 1,045 1,074Land use rights relate to a land in The People’s Republic of China (“PRC”). The land use rights expire on 14June 2059 and are non-transferable. Amortisation of land use rights was charged as administrative expenses.

ecoWise Holdings Limitedannual report 201210331 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS17. INVESTMENTS IN SUBSIDIARIESCompany2012 2011$’000 $’000Unquoted equity shares, at cost 19,524 19,524Less: Allowance for impairment loss (1,450) (1,450)18,074 18,074Loans to subsidiaries 7,871 30625,945 18,380Movements in allowance for impairment loss:At beginning of the reporting year 1,450 1,350Impairment loss recognised – 100At end of the reporting year 1,450 1,450Loans to subsidiaries are unsecured and interest-free. The settlement of these amounts is neither plannednor likely to occur in the future. As these amounts are in substance, a part of the Company’s net investmentsin subsidiaries, they are stated at cost less impairment losses.

104ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS17. INVESTMENTS IN SUBSIDIARIES (CONTINUED)The subsidiaries held by the Group are listed below:EffectivePercentage ofEquityCountry ofHeld by GroupIncorporation/2012 2011Name of SubsidiaryPlace of OperationsPrincipal Activities% %Held by the CompanyAsia Cleantech Hub Pte. Ltd. (a) Singapore Investment holding 100 –(Incorporated on 6 January 2012)Bee Joo Environmental Pte. Ltd. (a) Singapore General waste management services 100 100Bee Joo Industries Pte. Ltd. (a) Singapore Processing and recycling of usedcopper slag, horticultural and otherwaste and operating of biomass cogenerationplant100 100ecoWise Energy Pte. Ltd. (a) Singapore Renewable energy business 100 100ecoWise International Pte. Ltd. (a) Singapore International procurement and tradingof rubber related goods and researchand experimental development onenvironment and clean technologies100 100ecoWise Resources Pte. Ltd. (a) Singapore Processing and recycling of horticulturaland other waste100 100ecoWise Solutions Pte. Ltd. (a) Singapore Developing and commercialisingecology solutions, research anddevelopment of technologies relating toenvironmental solutions100 100ecoWise Ventures Pte. Ltd. (a) Singapore Investment holding 100 100Sunrich Resources Sdn. Bhd. (a) Malaysia Investment holding 100 100

ecoWise Holdings Limitedannual report 201210531 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS17. INVESTMENTS IN SUBSIDIARIES (CONTINUED)EffectivePercentage ofEquityCountry ofHeld by GroupIncorporation/2012 2011Name of SubsidiaryPlace of OperationsPrincipal Activities% %Held by subsidiariesEco Environmental (S) Pte. Ltd. (d) Singapore Dormant 100 100ecoWise Technologists andSingapore Provision of environmental solutionsEngineers Pte. Ltd. (a) consultancy services80 80ecoWise Marina Power Pte. Ltd. (a) Singapore Operation and maintenance of biomassco-generation plant100 100Envirox Pte. Ltd. (d) Singapore Dormant 100 100ecoWise RubberTech Pte. Ltd.Singapore Processing of rubberised related goodsCorporation Pte. Ltd) (a)(formerly known as Sunrichand investment holding100 100Chongqing ecoWise InvestmentPRC Service provider for project andManagement Co., Ltd. (b) investment consultancy andmanagement100 100Wuhan ecoWise EnergyPRC Generation and sale of electricity andCo., Ltd. (a)(c) steam49 49Sunrich Integrated Sdn. Bhd. (a) Malaysia Investment holding 100 70Autoways Industries Sdn. Bhd. (a) Malaysia Trading of retread tyres and relatedrubberised products76 53Ecogreen Products andMalaysia Production, trading and consultancyServices Sdn. Bhd. (a) services related to biomass products80 –

106ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS17. INVESTMENTS IN SUBSIDIARIES (CONTINUED)Name of SubsidiaryCountry ofIncorporation/Place of OperationsPrincipal ActivitiesHeld by subsidiaries (Continued)Gulf Rubber (M) Sdn. Bhd. (a) Malaysia Retreading of tyres, dealing inrubberised products and investmentholdingEffectivePercentage ofEquityHeld by Group2012 2011% %84 59Gulf Rubber Suntex Sdn. Bhd. (a) Malaysia Trading of retread tyres and relatedrubberised products71 49Saiko Rubber (Malaysia) Sdn. Bhd. (a) Malaysia Manufacturing and trading of rubberisedproducts and investment holding51 36Sun Rubber Industry Sdn. Bhd. (a) Malaysia Manufacturing and trading of rubberisedproducts and investment holding100 70Sun Rubber Marketing Sdn. Bhd. (a) Malaysia Dormant 100 70Sun Tyre & Auto ProductsMalaysia Trading of new and retread tyres andSdn. Bhd. (a) related rubber products100 70Sun Tyre Industries Sdn. Bhd. (a) Malaysia Retreading of tyres, dealing inrubberised products and investmentholding100 70Sunrich Marketing Sdn. Bhd. (a) Malaysia Trading of retread tyres and relatedrubberised products100 70Trakar Suntex Sdn. Bhd. (a) Malaysia Trading of retread tyres and relatedrubberised products43 30Winner Suntex Sdn. Bhd. (a) Malaysia Trading of retread tyres and relatedrubberised products75 53

ecoWise Holdings Limitedannual report 201210731 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS17. INVESTMENTS IN SUBSIDIARIES (CONTINUED)(a)Audited by member firms of RSM International. RSM Chio Lim LLP in Singapore is the auditor for all significantSingapore-incorporated subsidiaries. RSM Robert Teo, Kuan & Co. is the auditor for all Malaysia-incorporatedsubsidiaries. RSM China CPA Firm, Shanghai International Division, is the auditor for all significant subsidiariesestablished in the PRC.(b)For the purpose of consolidation, the unaudited management financial statements at 31 October 2012 have beenused. The impact arising from the use of the subsidiaries’ unaudited management financial statements is notexpected to be significant to the financial statements of the Group.(c)This entity is consolidated because the Group is able to govern the financial and operating policies of the entity byvirtue of an agreement with other shareholders of the entity although the Group does not own, directly or indirectlythrough subsidiaries, more than half of the voting power of the entity.(d)In the process of de-registration.17A. Acquisition of a SubsidiaryIn December 2011, the Group acquired 80% equity interests in Ecogreen Products and Services Sdn. Bhd.for cash consideration of $1,000.The fair values of identifiable assets and liabilities of Ecogreen Products and Services Sdn. Bhd. at the dateof acquisition are as follows:Fair values$’000Cash and cash equivalents 3Trade and other payables (2)Net identifiable assets 1The net cash inflows upon acquisition are as follows:2012$’000Cash consideration paid (1)Less: Cash and cash equivalents acquired 3Net cash inflows upon acquisition 2

108ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS17. INVESTMENTS IN SUBSIDIARIES (CONTINUED)17B. Acquisition of Non-Controlling Interests without Change in ControlIn March 2012, the Company acquired an additional 30% equity interests in Sunrich Integrated Sdn. Bhd.for consideration of $3,675,000 by way of issuance of 35,000,000 new ordinary shares in the capital ofthe Company at $0.105 per ordinary share. After the acquisition, Sunrich Integrated Sdn. Bhd. became awholly-owned subsidiary of the Group. The carrying amount of Sunrich Integrated Sdn. Bhd.’s net assetson the date of acquisition was $22,489,000. The Group recognised a decrease in non-controlling interestsof $6,419,000 and an increase in other reserves of $2,744,000.In April 2011, the Company acquired an additional 27% equity interests in ecoWise Resources Pte. Ltd. for$100,000 in cash. After the acquisition, ecoWise Resources Pte. Ltd. became a wholly-owned subsidiaryof the Group. The carrying amount of ecoWise Resources Pte. Ltd.’s net liabilities in the Group’s financialstatements on the date of acquisition was $1,689,000.The Group recognised an increase in non-controlling interests of $8,000 and a decrease in other reservesof $108,000.In July 2011, the Group acquired an additional 30% equity interests in Eco Environmental (S) Pte. Ltd. for$60,000 in cash. After the acquisition, Eco Environmental (S) Pte. Ltd. became a wholly-owned subsidiaryof the Group. The carrying amount of Eco Environmental (S) Pte. Ltd.’s net assets in the Group’s financialstatements on the date of acquisition was $168,000. The Group recognised a decrease in non-controllinginterests of $44,000 and a decrease in other reserves of $16,000.17C. Disposal of Non-Controlling Interests without Change in ControlIn February 2011, the Group disposed off 20% equity interests in ecoWise Technologists and Engineers Pte.Ltd. for a cash consideration of $20,000.

ecoWise Holdings Limitedannual report 201210931 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS18. INVESTMENTS IN ASSOCIATESGroup2012 2011$’000 $’000Unquoted equity shares, at cost 5,187 1,193Share of profits or loss:At beginning of the reporting year 159 446Share of loss for the reporting year (345) (287)At end of the reporting year (186) 159Share of carrying amount of associates 5,001 1,352The associates held by the Group are listed below:Name of AssociateCountry ofIncorporation/Place of OperationsPrincipal ActivitiesHeld by subsidiariesGeocycle Singapore Pte. Ltd. Singapore Management and recycling ofindustrial waste materialsEffectivePercentage ofEquityHeld by Group2012 2011% %50 50China-UK Low CarbonEnterprise Co., LtdPRC Investment holding 20 –For the purpose of equity accounting for the associates, the unaudited management financial statements at31 October 2012 have been used. The impact arising from the use of the associates’ unaudited managementfinancial statements is not expected to be significant to the financial statements of the Group.

110ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS18. INVESTMENTS IN ASSOCIATES (CONTINUED)The summarised unaudited financial information of the associates, not adjusted for the percentage ownershipheld by the Group, is as follows:Group2012 2011$’000 $’000Assets 23,000 4,254Liabilities (1,396) (1,516)Revenue 1,904 1,743Loss for the year (946) (574)19. OTHER FINANCIAL ASSETSGroup2012 2011$’000 $’000Unquoted equity shares in corporations asavailable-for-sale financial asset, at cost 1,180 415Quoted equity shares in corporations, at fair value – 71,180 422The fair value of the unquoted investments as available-for-sale financial asset is deemed to be not reliablymeasurable as the probabilities of the various estimates within the range cannot be reasonably assessedand used in estimating fair value. Consequently, the investment is carried at cost less impairment losses.

ecoWise Holdings Limitedannual report 201211131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS20. INVENTORIESGroup2012 2011$’000 $’000Raw materials 3,605 4,135Work-in-progress 802 618Finished goods 4,613 4,016Consumables 1,044 99510,064 9,764Inventories are stated after allowance for inventory obsolescence as follows:Group2012 2011$’000 $’000At beginning of the reporting year 102 203Effects of movements in exchange rates (2) (3)Allowance for inventory obsolescence – made/(reversed) 86 (98)At end of the reporting year 186 102At the end of the reporting year, the Group’s inventories with a carrying amount of $621,000 (2011:$1,174,000) are pledged as security to secure loans and borrowings (Note 27A). Raw materials, consumablesand changes in finished goods and work-in-progress recognised as cost of sales during the reporting yearamounted to $51,859,000 (2011: $48,983,000).The reversal of the allowance in the previous reporting year was for inventories sold.

112ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS21. TRADE AND OTHER RECEIVABLESGroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Trade receivablesOutside parties 19,094 19,715 – 14Allowance for doubtful receivables (671) (665) – –Factored trade receivables 373 255 – –Related parties 119 332 – –Subsidiaries – – 10,278 10,095Associate 65 83 – –Subtotal 18,980 19,720 10,278 10,109Other receivablesSubsidiaries – – 12,464 11,147Associate 600 600 – –Related parties 196 197 – –Other receivables 1,014 398 – –Allowance for doubtful receivables (23) (23) – –Subtotal 1,787 1,172 12,464 11,147Total trade and other receivables 20,767 20,892 22,742 21,256Presented in statements of financial position as:Non-current 600 600 – –Current 20,167 20,292 22,742 21,25620,767 20,892 22,742 21,256Movements in the allowance for doubtful receivables are as follows:Group2012 2011$’000 $’000At beginning of the reporting year 688 694Allowance for doubtful receivables – made/(reversed) 17 (17)Effects of movements in exchange rates (11) 11At end of the reporting year 694 688

ecoWise Holdings Limitedannual report 201211331 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS21. TRADE AND OTHER RECEIVABLES (CONTINUED)Other receivables from the subsidiaries are unsecured, bear interest at 2.75% (2011: 5%) per annum andhave no fixed terms of repayment.Other receivables from an associate are unsecured, non-interest bearing and not expected to be repaidwithin the next 12 months.Other receivables from related parties are unsecured, non-interest bearing and have no fixed terms ofrepayment.There is no allowance for doubtful receivables on receivables due from related parties.At the end of the reporting year, factored trade receivables of $373,000 (2011: $255,000) were transferredto bank. The factoring facility is secured by a corporate guarantee provided by the Company. Since thesereceivables did not meet the FRS 39 derecognition requirements, they were recognised as receivables eventhough they were legally sold without recourse.22. FINANCE LEASE RECEIVABLESDuring the current reporting year, the Group completed the construction of a biomass co-generation plantunder a Design, Build and Operate Agreement (“DBO Agreement”) entered with a customer in previousreporting years. Under the DBO Agreement, the Group will operate and maintain the biomass co-generationplant to supply electricity and heat to the customer for a term of 15 years.The Group assessed that the terms and conditions of the DBO Agreement contains a lease arrangementunder INT-FRS 104 – Determining whether an Arrangement contains a Lease. The lease is classified as afinance lease as the present value of the minimum lease receivables amount to at least substantially all ofthe fair value of the biomass co-generation plant at the inception of the lease. Consequently, the Groupreclassified its investment in the biomass co-generation plant from plant and equipment to finance leasereceivables. The Group continues to be the legal owner of the plant.

114ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS22. FINANCE LEASE RECEIVABLES (CONTINUED)Future minimum finance lease receivables under finance leases together with the present value of the netminimum finance lease receivables are as follows:Minimumfinance leasereceivablesUnearnedfinanceincomeNet financeleasereceivables2012 $’000 $’000 $’000Receivable within one year 2,287 (1,447) 840Receivable within 2 to 5 years 7,735 (5,240) 2,495Receivable after 5 years 17,880 (6,644) 11,236Total 27,902 (13,331) 14,571The imputed finance income on the finance lease receivables was determined based on the interest rateimplicit in the lease. The effective interest rate is 10.2% per annum.23. OTHER ASSETSGroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Prepayments 383 405 42 42Deposits to secure services 251 556 43 44634 961 85 86

ecoWise Holdings Limitedannual report 201211531 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS24. CASH AND CASH EQUIVALENTSGroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Not restricted in use 16,801 12,167 3,356 3,805Restricted in use 1,726 618 – –18,527 12,785 3,356 3,805Interest earning balances 1,855 634 1,000 –Details of restricted cash balances are as follows:Group2012 2011Under Financing Activities $’000 $’000Fixed deposits held by banks as securitydeposits for loans and borrowings 706 500Fixed deposits held by banks as securitydeposits for performance bond 30 30Bank balances held by banks as securitydeposits for foreign currency contract facilities 88 88Under Operating ActivitiesBank balances set aside for payments to specific creditors 902 –1,726 618Other than the amount that is restricted in use, cash and cash equivalents represent amounts with less than90 days maturity.The rate of interest for the cash on interest earning accounts is between 0.1% and 0.8% (2011: 0.1% and0.8%) per annum.

116ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS24. CASH AND CASH EQUIVALENTS (CONTINUED)24A. Cash and Cash Equivalents in the Consolidated Statement of Cash FlowsGroup2012 2011$’000 $’000Cash and cash equivalents in the statement of financial position 18,527 12,785Cash restricted in use (1,726) (618)Bank overdrafts (351) (1,812)Cash and cash equivalents for consolidated statement ofcash flows purposes at end of the reporting year 16,450 10,35524B. Non-Cash TransactionsDuring the reporting year, the Group had the following major non-cash transactions:Group2012 2011$’000 $’000Acquisition of plant and equipment underfinance lease agreements 1,072 76Issue of ordinary shares as consideration for acquisition ofnon-controlling interests (Note 17B) 3,675 –Issue of ordinary shares for the performanceshares awarded (Note 25) – 577

ecoWise Holdings Limitedannual report 201211731 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS25. SHARE CAPITALNumber of ordinaryshares with no par value Share capital2012 2011 2012 2011$’000 $’000 $’000 $’000Group and CompanyAt beginning of the reporting year 839,159 832,072 37,050 36,375Exercise of warrants – 2,802 – 98Award of performance shares – 4,285 – 577Issue of ordinary shares 85,000 – 8,925 –Share issue expenses – – (48) –At end of the reporting year 924,159 839,159 45,927 37,050Ordinary SharesThe ordinary shares with no par value are fully paid and carry no right to fixed income. The holders of ordinaryshares are entitled to receive dividends when declared by the Company. All ordinary shares carry one voteper share without restrictions at meetings of the Company.Issue of ordinary shares:During the reporting year, the Company issued new ordinary shares as follows:(a)50,000,000 new ordinary shares at S$0.105 per ordinary share for cash in pursuant to a SubscriptionAgreement; and(b)35,000,000 new ordinary shares as consideration for the acquisition of the remaining 30% equityinterests in Sunrich Integrated Sdn. Bhd. (Note 17B).In the previous reporting year, the Company issued new ordinary shares as follows:(c)85,500,000 warrants were exercised, resulting in the issuance of 2,802,000 new ordinary shares.(d)4,285,000 new ordinary shares were issued pursuant to the ecoWise Performance Share Plan.

118ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS25. SHARE CAPITAL (CONTINUED)Externally Imposed Capital RequirementThe Company is subject to externally imposed capital requirement which is to have share capital with afree float of at least 10% of the shares to maintain its listing on the Singapore Exchange Securities TradingLimited. The Company has met the externally imposed capital requirement.Capital ManagementThe Company is committed to maintain an optimal capital structure to safeguard the Company’s ability tocontinue as a going concern, to provide returns for owners and benefits for other stakeholders, and to providean adequate return to owners by pricing products and services commensurately with the level of risk. Themanagement sets the amount of capital in proportion to risk. There were no changes in the approach tocapital management during the reporting year.The management manages the capital structure and makes adjustments to it where necessary or possible inthe light of changes in conditions and the risk characteristics of the underlying assets. In order to maintainor adjust the capital structure, the management may adjust the amount of dividends paid to owners, returncapital to owners, issue new shares, or sell assets to reduce debts.The management monitors the capital on the basis of the debt-to-adjusted capital ratio. This ratio iscalculated as net debt/adjusted capital. Net debt is calculated as total borrowings less cash and cashequivalents. Adjusted capital comprises all components of equity (i.e. share capital and retained earnings).The debt-to-adjusted capital ratio is set out below:GroupCompany2012 2011 2012 2011Debt-to-adjusted capital ratio 14.2% 15.8% NM NM(NM: Not meaningful as cash and cash equivalents exceed borrowings)

ecoWise Holdings Limitedannual report 201211931 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS26. OTHER RESERVESGroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Equity-settled share-basedcompensation reserve (Note 26A) 528 – 528 –Foreign currency translationreserve (Note 26B) (1,401) (923) – –Hedging reserve (Note 26C) 19 – – –Other reserve (Note 26D) 2,553 (124) – –1,699 (1,047) 528 –All reserves classified on the face of the statements of financial position as retained earnings represent pastaccumulated earnings and are distributable. The other reserves are not available for cash dividends unlessrealised.26A. Equity-Settled Share-Based Compensation ReserveecoWise Performance Share PlanThe ecoWise Performance Share Plan (the “Share Plan”) was approved by the members of the Company atan extraordinary general meeting held on 23 March 2007. The Share Plan provides for the grant of ordinaryshares of the Company, their equivalent cash value or combinations thereof, to selected employees of theCompany and its subsidiaries, including the directors of the Company, and other selected participants. Underthe Share Plan, the maximum number of ordinary shares to be awarded to eligible participants shall notexceed 15% of the issued ordinary shares of the Company on the date preceding the grant of the award.The Share Plan is administered by the Remuneration Committee comprising three independent directors,Ang Mong Seng, Ng Cher Yan and Ong Teck Ghee. Ordinary shares are awarded when the RemunerationCommittee is satisfied that the prescribed performance target(s) have been achieved and the vesting period(if any) has expired. The vesting periods may be extended beyond the performance achievement periods asset out by the Remuneration Committee.

120ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS26. OTHER RESERVES (CONTINUED)26A. Equity-Settled Share-Based Compensation Reserve (Continued)The lapsing of the award is provided for upon the occurrence of certain events, which includes:(a)the misconduct of an eligible participant;(b)the termination of the employment of an eligible participant;(c)the bankruptcy of an eligible participant;(d)the retirement, ill health, injury, disability or death of an eligible participant; and/or(e)a take-over, amalgamation, winding-up or restructuring of the Company.The Share Plan shall continue in force at the discretion of the Remuneration Committee, subject to amaximum period of 10 years commencing on 23 March 2007. The Share Plan may continue beyond theabove stipulated period with the approval of members of the Company by ordinary resolution in a generalmeeting and of any relevant authorities which may then be required.The Company may deliver ordinary shares pursuant to awards granted under the Share Plan by way of:(a)Issuance of new ordinary shares;(b)Delivery of existing ordinary shares purchased from the market or ordinary shares held in treasury;and/or(c)Cash in lieu of ordinary shares, based on the aggregate market value of such ordinary shares.From the commencement date of the Share Plan to 31 October 2012, 43,232,225 performance shares havebeen granted (after adjustments for rights cum warrants issue on 1 November 2007 and rights issue on 26September 2008).

ecoWise Holdings Limitedannual report 201212131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS26. OTHER RESERVES (CONTINUED)26A. Equity-Settled Share-Based Compensation Reserve (Continued)At the end of the reporting year, the number of performance shares granted under the Share Plan are asfollows:Number of ecoWise performance sharesDate of GrantAt 1November2011 Granted AwardedCancelled/lapsedAt 31October201221 March 2012 – 5,426,875 – (350,000) 5,076,875The above number of performance shares represents the shares required if participants are awarded at 100%of the grant. However, the performance shares awarded at the vesting date are dependent on the level ofachievement against the pre-set performance conditions and targets.Group and Company2012 2011$’000 $’000Equity-settled share-based compensation reserveAt beginning of the reporting year – 577Equity-settled share-based expenses charged to profit or loss,included in other charges 528 –Transfer to share capital (Note 25) – (577)At end of the reporting year 528 –The equity-settled share-based compensation reserve is not available for distribution as cash dividends.26B. Foreign Currency Translation ReserveGroup2012 2011$’000 $’000At beginning of the reporting year (923) (576)Exchange differences on translating foreign operations (478) (347)At end of the reporting year (1,401) (923)

122ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS26. OTHER RESERVES (CONTINUED)26B. Foreign Currency Translation Reserve (Continued)The foreign currency translation reserve represents exchange differences arising from the translation of thefinancial statements of foreign operations whose functional currencies are different from the presentationcurrency of the Group.26C. Hedging ReserveThe hedging reserve relates to the effective portion of the cumulative net change in the fair value of cashflow hedging instruments related to hedged transactions that have not yet occurred.26D. Other ReserveOther reserve relates to the difference between the change in non-controlling interests when acquiringadditional equity interests in subsidiaries and the fair value of the consideration given for the acquisitions.27. LOANS AND BORROWINGSGroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Non-current liabilitiesSecured bank loans (Note 27A) 9,862 4,953 – –Unsecured bank loans – 1,345 – 1,345Finance lease liabilities (Note 27B) 946 555 127 17310,808 6,853 127 1,518Current liabilitiesSecured bank loans (Note 27A) 1,886 75 – –Secured bank overdrafts (Note 27A) 194 749 – –Unsecured bank overdrafts 157 1,063 – –Secured bankers’ acceptances (Note 27A) 8,560 8,484 – –Secured trust receipts (Note 27A) 2,360 224 – –Unsecured bank loans 1,345 1,280 1,345 1,280Finance lease liabilities (Note 27B) 525 550 46 4615,027 12,425 1,391 1,326Total loans and borrowings 25,835 19,278 1,518 2,844

ecoWise Holdings Limitedannual report 201212331 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS27. LOANS AND BORROWINGS (CONTINUED)The non-current portion is repayable as follows:GroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Due within 2 to 5 years 6,793 3,834 123 1,495Due after 5 years 4,015 3,019 4 23Total non-current portion 10,808 6,853 127 1,518The range of floating interest rates per annum paid was as follows:Group2012 2011Bank loans 2.2% to 7.4% 2.2%Trust receipts 2.8% to 6.0% 2.3% to 2.4%Bank overdrafts 6.1% to 8.1% 7.3% to 8.1%The range of fixed interest rates paid was as follows:Group2012 2011Bank loans 5.0% 5.0% to 10.4%Bankers’ acceptances 4.0% to 5.5% 3.9% to 5.8%Finance lease liabilities 2.5% to 10.9% 2.2% to 9.0%

124ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS27. LOANS AND BORROWINGS (CONTINUED)27A. Securities on Loans and BorrowingsThe details of the securities for loans and borrowings amounting to $24,333,000 (2011: $15,590,000) areas follows:(a)Loans and borrowings of the Group comprising bank loans of $2,462,000 (2011: $424,000), bankoverdrafts of $80,000 (2011: 616,000) and bankers’ acceptances of $6,922,000 (2011: $8,205,000)are secured by a charge over the leasehold land of $1,600,000 (2011: $511,000), leasehold propertiesand improvements of $3,330,000 (2011: $1,573,000) and plant and equipment of $7,685,000(2011: $8,449,000) of the Group as disclosed in Note 14C. As at 31 October 2011, these loansand borrowings were also secured by a charge over leasehold land and leasehold properties andimprovements of non-controlling interests of a subsidiary.(b)Loans and borrowings of the Group comprising bank loans of $634,000 (2011: Nil) and trust receiptsof $2,360,000 (2011: $224,000) are secured by pledges of fixed deposits amounting to $500,000(2011: $500,000) of the Group as disclosed in Note 24. These bank loans and trust receipts areguaranteed by the Company.(c)Loans and borrowings of the Group comprising bankers’ acceptances of $1,353,000 (2011: Nil) aresecured by pledges of fixed deposits amounting to $206,000 (2011: Nil) of the Group as disclosedin Note 24.(d)A bank loan of the Group amounting to $8,652,000 (2011: $4,604,000) is secured by a legalassignment of the DBO Agreement with a customer (Note 22) and a fixed and floating charge overpresent and future undertakings, property assets, revenue and rights in relation to the biomass cogenerationplant of a subsidiary (Note 22). This bank loan is guaranteed by the Company.(e)Loans and borrowings of the Group comprising bankers’ acceptances of $151,000 (2011: Nil) andbank overdrafts of $114,000 (2011: $133,000) are secured by a pledge of inventories of the Groupamounting to $621,000 (2011: $1,174,000) as disclosed in Note 20.(f) Loans and borrowings of the Group comprising bankers’ acceptances of $134,000 (2011: $279,000)are secured by a charge over leasehold properties and improvements of $125,000 (2011: Nil), plantand equipment of $1,516,000 (2011: $1,847,000) of the Group as disclosed in Note 14C.(g) Financial lease liabilities of the Group and the Company amounting to $1,471,000 (2011: $1,105,000)and $173,000 (2011: $219,000) respectively are secured by the lessors’ charge over the leased plantand equipment as disclosed in Note 14B and Note 14C.

ecoWise Holdings Limitedannual report 201212531 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS27. LOANS AND BORROWINGS (CONTINUED)27B. Finance Lease LiabilitiesThe finance lease liabilities are payable as follows:MinimumGroupleasepaymentsFinancecosts Principal2012 $’000 $’000 $’000Due within one year 596 (71) 525Due within 2 to 5 years 1,032 (90) 942Due after 5 years 5 (1) 4Total 1,633 (162) 1,4712011Due within one year 609 (59) 550Due within 2 to 5 years 592 (60) 532Due after 5 years 32 (9) 23Total 1,233 (128) 1,105Company2012Due within one year 56 (10) 46Due within 2 to 5 years 156 (33) 123Due after 5 years 5 (1) 4Total 217 (44) 1732011Due within one year 56 (10) 46Due within 2 to 5 years 185 (36) 149Due after 5 years 32 (8) 24Total 273 (54) 219The Group leases certain of its plant and equipment under finance leases. The lease term is between 3 to10 years. The fixed rate of interest for finance leases is approximately 2.5% to 10.9% (2011: 2.2% to 9.0%)per annum. All leases are on a fixed repayment basis and no arrangements have been entered into forcontingent rental payments. The obligations under finance leases are secured by the lessor’s charge overthe leased assets (Note 14B and Note 14C).

126ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS28. PROVISION FOR RETIREMENT BENEFIT OBLIGATIONSThe Group operates a defined benefit plan for qualifying employees of its subsidiaries in Malaysia. Under thescheme, the employees are entitled to two weeks of their last drawn salary for every year of employmentserved having fulfilled certain conditions. No other post-retirement benefits are provided. The scheme is notheld separately by an independent administrated fund as the scheme is not a funded arrangement. Newemployees of the subsidiaries in Malaysia are not entitled to such retirement benefits.Group2012 2011$’000 $’000Provision for retirement benefit obligations 584 542The movements in the provision for retirement benefit obligations and the amounts recognised in the profitor loss during the reporting year are as follows:Group2012 2011$’000 $’000At beginning of the reporting year 542 592Effects of movements in exchange rates (10) (47)Current service cost 45 30Interest expenses on retirement benefit obligations 34 32Actuarial gain (11) (11)Benefits paid (16) (54)At end of the reporting year 584 542The principal actuarial assumptions used in respect of the Group’s defined benefit plan were as follows:Group2012 2011% %Discount rate 6.24 6.24Expected rate of salaries increase 4.00 4.00The assumptions relating to longevity used to compute the retirement benefit obligations are based on thepublished mortality tables commonly used by the actuarial professionals in Malaysia.

ecoWise Holdings Limitedannual report 201212731 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS29. DEFERRED INCOMEGroup2012 2011$’000 $’000Deferred government grant income 73 73Presented in consolidated statements of financial position as:Non-current 65 65Current 8 873 7330. TRADE AND OTHER PAYABLESGroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Trade payablesOutside parties and accrued liabilities 12,726 11,507 1,040 1,755Related parties 19 15 – –Subsidiaries – – 61 136Subtotal 12,745 11,522 1,101 1,891Other payablesOutside parties 276 146 3 3Total trade and other payables 13,021 11,668 1,104 1,894

128ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS31. DERIVATIVE FINANCIAL INSTRUMENTSGroup2012 2011$’000 $’000Forward foreign currency contracts 21 (31)Presented in statement of financial position as:Current assets 35 20Current liabilities (14) (51)21 (31)At 31 October 2012, the notional principal amounts of the outstanding forward foreign currency contractswere $4,014,000 (2011: $4,097,000). The outstanding forward foreign currency contracts are expected tobe settled within the next 12 months.Forward foreign currency contracts are utilised to hedge against significant future transactions and cashflows. They are used where possible to reduce the exposure in the fluctuations of foreign currency rates.The forward foreign currency contracts are primarily denominated in the currencies of the Group’s principalmarkets. The Group does not enter into derivative contracts for speculative purposes.The forward foreign currency contracts are not traded in an active market. As a result, their fair valuesare based on valuation techniques currently consistent with generally accepted valuation methodologiesfor pricing financial instruments, and incorporate all factors and assumptions that knowledgeable, willingmarket participants would consider in setting the price. The fair value of forward foreign currency contractsis based on the current value of the difference between the contractual exchange rate and the market rateat the end of the reporting year. The fair value is regarded as a Level 2 fair value measurement for financialinstruments (Note 32B2).

ecoWise Holdings Limitedannual report 201212931 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS32A. Classification of Financial Assets and LiabilitiesThe carrying amounts of financial assets and financial liabilities are as follows:GroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Financial assetsLoans and receivables:Trade and other receivables (Note 21) 20,767 20,892 22,742 21,256Finance lease receivables (Note 22) 14,571 – – –Cash and cash equivalents (Note 24) 18,527 12,785 3,356 3,805Financial assets at fair value through profitor loss classified as held for trading:Quoted equity shares (Note 19) – 7 – –Available-for-sale financial assets:Unquoted equity shares (Note 19) 1,180 415 – –Derivative financial instruments at fairvalue (Note 31) 35 20 – –55,080 34,119 26,098 25,061Financial liabilitiesFinancial liabilities at amortised cost:Loans and borrowings (Note 27) 25,835 19,278 1,518 2,844Trade and other payables (Note 30) 13,021 11,668 1,104 1,894Derivative financial instruments at fair value (Note 31) 14 51 – –38,870 30,997 2,622 4,738Further quantitative disclosures are included throughout these financial statements.32B. Fair Values of Financial Instruments32B1. Fair value of financial instruments stated at amortised cost in the statements of financial positionThe carrying amounts of financial assets and liabilities at amortised cost are reasonable approximation oftheir fair values.

130ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)32B. Fair Values of Financial Instruments (Continued)32B2. Fair value measurements recognised in the consolidated statement of financial positionThe fair value measurements are classified using a fair value hierarchy that reflects the significance of theinputs used in making the measurements. The levels are (a) Level 1: quoted prices (unadjusted) in activemarkets for identical assets or liabilities; (b) Level 2: inputs other than quoted prices included within Level 1that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);and (c) Level 3: inputs for the asset or liability that are not based on observable market data (unobservableinputs).The Group recognised quoted equity shares of $Nil (2011: $7,000) (Note 19), derivative financial instruments(assets) of $35,000 (2011: $20,000) (Note 31) and derivative financial instruments (liabilities) of $14,000(2011: $51,000) (Note 31) at fair values in the consolidated statement of financial position. The quotedequity shares and derivative financial instruments were measured at Level 1 and Level 2 of the fair valuehierarchy, respectively.32C. Financial Risk ManagementThe board of directors has overall responsibility for the establishment and oversight of the Group’s riskmanagement framework. Risk management is carried out under policies approved by the board of directors.Risks management policies are established to identify and analyse the risks faced by the Group, to setappropriate risks’ limits and controls, and to monitor risks and adherence to limits. Risk management policiesand systems are reviewed regularly to reflect changes in the Group’s activities and market conditions.The Group has exposure to the following financial risks:• Credit risk;• Liquidity risk;• Foreign currency risk; and• Interest rate riskThe Group’s overall financial risk management strategy seeks to minimise the potential material adverseeffects from these exposures. The information about the Group’s exposure to each of the above risks andthe Group’s objectives, policies and processes for measuring and managing risks are presented below.

ecoWise Holdings Limitedannual report 201213131 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)32D. Credit Risk on Financial AssetsCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrumentfails to meet its contractual obligations and arises principally from the Group’s receivables, cash and cashequivalents and equity shares. The maximum exposure to credit risk is the total of the fair values of thefinancial instruments.Credit risk on cash balances with banks and financial institutions is limited because the counter-parties areentities with acceptable credit ratings.For credit risk on receivables, an on-going credit evaluation is performed on the financial conditions ofthe debtors and an impairment loss is recognised in profit or loss. The Group’s exposure to credit risk ontrade and finance lease receivables is influenced mainly by the individual characteristics of each customer.Management considers the demographics of the Group’s customer bases, including the default risk of theindustry and country which customers operate, as these factors may have an influence on credit risk.The Group has established a credit policy, whereby each new customer is analysed individually for creditworthiness. Each entity within the Group is responsible for managing and analysing the credit risk of eachof its new customers before standard payment and delivery terms and conditions are offered. For existingcustomers, an on-going credit evaluation is performed on customers’ financial conditions. The exposure tocredit risk is controlled by setting credit limits to individual customers.The credit terms granted to customers are generally between 14 to 90 days (2011: 14 to 90 days).(a)Ageing analysis of trade receivables that are past due at the end of the reporting year but not impairedis as follows:Group2012 2011$’000 $’000Past due less than 60 days 5,989 3,266Past due 61 to 90 days 375 436Past due 91 to 180 days 144 267Past due over 180 days 726 8197,234 4,788

132ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)32D. Credit Risk on Financial Assets (Continued)(b)Ageing analysis of trade receivables at the end of the reporting year that are impaired is as follows:Group2012 2011$’000 $’000Past due 61 to 90 days 12 –Past due to 91 to 180 days 197 –Over 180 days 462 665671 665The allowance for doubtful trade receivables as disclosed in Note 21 to the financial statements isbased on individual accounts totalling $671,000 (2011: $665,000) that are determined to be impairedat the end of the reporting year.(c)At end of the reporting year, approximately 23% (2011: 30%) of trade receivables are due from threecustomers as follows:Group2012 2011$’000 $’000Top 1 customer 1,667 3,409Top 2 customers 3,079 5,006Top 3 customers 4,392 5,887Other receivables are normally with no fixed terms and therefore there is no maturity.Cash and cash equivalents disclosed in Note 24 represent amounts with less than 90-days maturity.

ecoWise Holdings Limitedannual report 201213331 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)32E. Liquidity RiskLiquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated withits financial liabilities that are settled by delivering cash or another financial assets. The Group’s approachto managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet itsliabilities when due, under both normal and stressed conditions, without incurring unacceptable losses orrisking damage to the Group’s reputation.The following table analyses the financial liabilities by remaining contractual maturity (contractual andundiscounted cash flows at the end of the reporting year):Less than1 yearDue within2 to 5 yearsDue after5 years Total$’000 $’000 $’000 $’000Group2012Loans and borrowings 15,390 7,232 4,455 27,077Trade and other payables 13,021 – – 13,02128,411 7,232 4,455 40,0982011Loans and borrowings 12,728 4,379 3,225 20,332Trade and other payables 11,668 – – 11,66824,396 4,379 3,225 32,000Company2012Loans and borrowings 1,437 156 5 1,598Trade and other payables 1,104 – – 1,1042,541 156 5 2,7022011Loans and borrowings 1,438 1,567 32 3,037Trade and other payables 1,894 – – 1,8943,332 1,567 32 4,931

134ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)32E. Liquidity Risk (Continued)The undiscounted amounts on the loans and borrowings with fixed and floating interest rates are determinedby reference to the conditions existing at the end of the reporting year.The average credit period taken to settle trade payables is approximately 65 days (2011: 63 days). The otherpayables are with short-term durations. In order to meet such cash commitments, the operating activitiesare expected to generate sufficient cash inflows.Derivative financial instruments in respect of the Group’s forward foreign currency contracts are expectedto be settled within the next 12 months. (Note 31)The following table analyses the financial guarantee contracts based on the earliest dates in which themaximum guaranteed amount could be drawn down:Less than1 yearDue within2 to 5 yearsDue after5 years Total$’000 $’000 $’000 $’000Company2012Financial guarantee contracts 4,118 4,891 3,591 12,6002011Financial guarantee contracts 224 1,761 2,843 4,828At the end of the reporting year, no claims on the financial guarantee contracts are expected.The unutilised borrowing facilities available to the Group for its operating and investing activities are asfollows:Group2012 2011$’000 $’000Unutilised loans and borrowings 14,936 15,244Unutilised factoring facilities 3,500 3,500The unutilised borrowing facilities are available for the Group’s operating activities and to settle othercommitments. Borrowing facilities are maintained to ensure funds are available for the Group’s operations.

ecoWise Holdings Limitedannual report 201213531 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)32F. Interest Rate RiskThe Group’s exposure to interest rate risk relates primarily to interest-earning financial assets and interestbearingfinancial liabilities. Interest rate risk is managed by the Group on an on-going basis with the primaryobjective of limiting the extent to which net interest expense could be affected by an adverse movement ininterest rates.The interest rate risk exposure is mainly from changes in fixed and floating interest rates. The breakdown ofthe significant financial instruments by type of interest rate is as follows:GroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Financial assetsFixed rates 16,606 634 13,464 11,147Financial liabilitiesFloating rates 14,459 15,124 – –Fixed rates 11,376 4,154 1,518 2,84425,835 19,278 1,518 2,844Sensitivity AnalysisFor the variable rate financial assets and liabilities, a hypothetical increase of 100 basis points (2011: 100basis points) in interest rate at the end of the reporting year would increase/(decrease) pre-tax profit forthe reporting year by the amounts shown below. A decrease in 100 basis points (2011: 100 basis points)in interest rate would have an equal but opposite effect. This analysis assumes all other variables remainconstant.GroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Pre-tax profit for the year (145) (151) – –The hypothetical changes in basis points are not based on observable market data (unobservable inputs).

136ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)32G. Foreign Currency RiskThe Group has exposure to foreign currency movements on financial assets and financial liabilitiesdenominated in foreign currencies. It also has foreign currency risk on sales and purchases that aredenominated in foreign currencies. The currencies giving rise to this risk is primarily the Australian dollar,Chinese renminbi, United States dollar and Japanese yen. The Group hedges its foreign currency exposureshould the need arise through the use of forward foreign currency contracts.Other than as disclosed elsewhere in the financial statements, the Group’s exposures to foreign currenciesare as follows:AustralianDollarChinese Malaysian SingaporeRenminbi Ringgit DollarUnitedStatesDollarJapaneseYen Euro TotalGroup $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’0002012Financial AssetsCash and cash equivalents 252 1 – 67 699 – 1 1,020Trade and other receivables 5,283 196 4,401 6 4,437 – – 14,323Total financial assets 5,535 197 4,401 73 5,136 – 1 15,343Financial LiabilitiesTrade and other payables 2,569 – – – 3,975 443 668 7,655Loans and borrowings – – – – 2,993 – – 2,993Total financial liabilities 2,569 – – – 6,968 443 668 10,648Net financial assets/(liabilities) 2,966 197 4,401 73 (1,832) (443) (667) 4,6952011Financial AssetsCash and cash equivalents 68 – – – 69 – – 137Trade and other receivables – 197 306 242 3,780 – – 4,525Total financial assets 68 197 306 242 3,849 – – 4,662Financial LiabilitiesTrade and other payables – – – – 114 282 – 396Loans and borrowings – – – – 224 – – 224Total financial liabilities – – – – 338 282 – 620Net financial assets/(liabilities) 68 197 306 242 3,511 (282) – 4,042

ecoWise Holdings Limitedannual report 201213731 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS32. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONTINUED)32G. Foreign Currency Risk (Continued)AustralianDollarChinese Malaysian SingaporeRenminbi Ringgit DollarUnitedStatesDollarJapaneseYen Euro TotalCompany $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’0002012Financial AssetsCash and cash equivalents – – – – – – – –Trade and other receivables – – 4,401 – – – – 4,401Net financial assets – – 4,401 – – – – 4,4012011Financial AssetsCash and cash equivalents – – – – – – – –Trade and other receivables – – 306 – – – – 306Net financial assets – – 306 – – – – 306Sensitivity AnalysisA hypothetical 10% (2011: 10%) strengthening of the above currencies against the functional currency of therespective subsidiaries of the Group at the end of the reporting year would increase/(decrease) pre-tax profitfor the reporting year by the amounts shown below. A 10% (2011: 10%) weakening of the above currenciesagainst the functional currency of the respective subsidiaries would have an equal but opposite effect. Thisanalysis assumes all other variables remain constant.GroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Pre-tax profit for the year 470 404 440 31The hypothetical sensitivity rate used in the above table is the reasonably possible change in foreign exchangerates.

138ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS33. CAPITAL COMMITMENTSAt the end of the reporting year, the Group and the Company had the following capital commitments:GroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Contracted but not recognisedAcquisition of property,plant and equipment 237 3,713 – –Authorised but not contractedCommitments to acquire equity interests – 3,994 – 3,99434. OPERATING LEASE COMMITMENTSThe Group leases various offices, land and factory premises, plant and machinery, workers’ quarters undernon-cancellable operating lease arrangements. The lease terms are between 1 to 10 years. Majority of thelease arrangements are renewable at the end of the lease periods at market rates.The future aggregate minimum lease payments under non-cancellable operating leases are as follows:GroupCompany2012 2011 2012 2011$’000 $’000 $’000 $’000Not later than one year 540 545 174 174Later than one year and not laterthan five years 810 825 85 242Later than five years 351 421 – –Operating lease expensesfor the reporting year 1,345 1,292 174 176

ecoWise Holdings Limitedannual report 201213931 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS35. EVENTS AFTER THE END OF THE REPORTING YEARSubsequent to the end of the reporting year, the following events took place:(a)In November 2012, the entire share capital of Sunrich Corporation Pte. Ltd. held through anotherwholly-owned subsidiary was transferred to the Company at a cash consideration of $100. SunrichCorporation Pte. Ltd. has also increased its issued and paid-up share capital from $100 to $1,000,000and changed its name to ecoWise RubberTech Pte. Ltd.(b)In December 2012, the Company incorporated a new wholly-owned subsidiary, ecoWise New EnergyPte. Ltd. which in turn entered into a conditional Sale and Purchase Agreement with SDPC Pte Ltdto acquire 100% equity interests in Hivern Investments Pte. Ltd. for a cash consideration of $90,000.(c)In December 2012, the Group incorporated a 65% held subsidiary, Chongqing eco-CTIG RubberTechnology Co., Ltd. in China to carry out total tyre management business. The Group’s initialinvestment in the subsidiary amounted to approximately $2,560,000.36. CHANGES AND ADOPTION OF FINANCIAL REPORTING STANDARDSFor the reporting year ended 31 October 2012, the following new or revised FRSs and INT FRSs wereadopted. The new or revised standards did not require any material modification of the measurement methodsor the presentation in the financial statements.FRS No. TitleFRS 1Presentation of Financial Statements Disclosures (Amendments to)FRS 24 Related Party Disclosures (revised)FRS 27 Consolidated and Separate Financial Statements (Amendments to)FRS 32 Classification Of Rights Issues (Amendments to) (*)FRS 34 Interim Financial Reporting (Amendments to)FRS 103 Business Combinations (Amendments to)FRS 107 Financial Instruments: Disclosures (Amendments to)FRS 107 Financial Instruments: Disclosures (Amendments to) – Transfers of Financial Assets (*)INT FRS 113 Customer Loyalty Programmes (Amendments to) (*)INT FRS 114 Prepayments of a Minimum Funding Requirement (revised) (*)INT FRS 115 Agreements for the Construction of Real Estate (*)INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments(*)(*) Not relevant to the entity.

140ecoWise Holdings Limitedannual report 201231 OCTOBER 2012NOTES TO THE FINANCIAL STATEMENTS37. FUTURE CHANGES IN FINANCIAL REPORTING STANDARDSThe following new or revised Singapore Financial Reporting Standards that have been issued will be effectivein future. The transfer to the new or revised standards from the effective dates is not expected to resultin material adjustments to the financial position, results of operations, or cash flows for the following year.FRS No. TitleEffective datefor periodsbeginningon or afterFRS 1Amendments to FRS 1 – Presentation of Items of Other1 July 2012Comprehensive IncomeFRS 1Amendment to FRS 1 Presentation of Financial Statements (Annual 1 January 2013Improvements)FRS 16Amendment to IAS 16 Property, Plant and Equipment (AnnualImprovements)FRS 19 Employee Benefits (Revised) 1 January 2013FRS 27 Consolidated and Separate Financial Statements (Amendments to) 1 July 2012FRS 27 Separate Financial Statements (Revised) 1 January 2014FRS 28 Investments in Associates and Joint Ventures (Revised) (*) 1 January 2014FRS 32Amendment to FRS 32 Financial instruments: Presentation (Annual 1 January 2013Improvements)FRS 107 Amendments to FRS 32 and 107 titled Offsetting Financial Assets 1 January 2013and Financial Liabilities (*)FRS 110 Consolidated Financial Statements 1 January 2014FRS 111 Joint Arrangements (*) 1 January 2014FRS 112 Disclosure of Interests in Other Entities (*) 1 January 2014FRS 110 Amendments to FRS 110, FRS 111 and FRS 112 1 January 2014FRS 113 Fair Value Measurements 1 January 2013INT FRS 120 Stripping Costs in the Production Phase of a Surface Mine (*) 1 January 2013(*) Not relevant to the entity.

ecoWise Holdings Limitedannual report 2012141AS AT 16 JANUARY 2013SHAREHOLDINGS STATISTICSSHARE CAPITALNumber of shares : 924,158,877Class of shares : Ordinary sharesVoting rights : One vote per shareDISTRIBUTION OF SHAREHOLDINGSRange of ShareholdingsNo. ofShareholders % No. of Shares %1 – 999 20 0.78 9,170 0.001,000 – 10,000 408 15.95 2,765,481 0.3010,001 – 1,000,000 2,051 80.18 246,969,968 26.721,000,001 and above 79 3.09 674,414,258 72.982,558 100.00 924,158,877 100.00SHAREHOLDING HELD BY THE PUBLICBased on the information available to the Company as at 16 January 2013, approximately 59.69% of the issuedordinary shares of the Company is held by the public. Accordingly Rule 723 of the Listing Manual of SingaporeExchange Securities Trading Limited has been complied with.TOP TWENTY SHAREHOLDERSNo. Name No. of Shares %1 Ecohub Pte. Ltd. 125,729,375 13.602 Ma Ong Kee 88,000,000 9.523 Hong Leong Finance Nominees Pte Ltd 46,400,000 5.024 SBS Nominees Pte Ltd 38,420,000 4.165 CIMB Securities (Singapore) Pte Ltd 30,530,000 3.306 OCBC Securities Private Ltd 28,038,750 3.037 Bank of Singapore Nominees Pte Ltd 26,711,512 2.898 Ong Keng Hua Sunny 25,042,125 2.719 Tan Tiong Beng 22,986,534 2.4910 Phillip Securities Pte Ltd 18,359,190 1.9911 Ong King Sun 15,769,375 1.7112 UOB Kay Hian Pte Ltd 14,453,000 1.5613 United Overseas Bank Nominees Pte Ltd 8,477,423 0.9214 Chan Buang Heng 7,969,850 0.8615 Lee Thiam Seng 7,460,950 0.8116 Ching Wee Ling (Zhong Huiling) 7,318,000 0.7917 DBS Nominees Pte Ltd 6,938,100 0.7518 Citibank Nominees Singapore Pte Ltd 6,935,000 0.7519 Ng Cheow Boo 6,252,000 0.6820 Tang Fook Cheong 6,000,000 0.65537,791,184 58.19

142ecoWise Holdings Limitedannual report 2012AS AT 16 JANUARY 2013SHAREHOLDINGS STATISTICSSUBSTANTIAL SHAREHOLDERS AS AT 16 JANUARY 2013Direct Interest% ofDeemed Interest% ofNo.Name of ShareholdersNo. of SharesSharesNo. of ShareShares1 ecoHub Pte. Ltd. 218,229,375 23.61 – –2 Ma Ong Kee 88,000,000 9.52 – –3 Lee Thiam Seng 32,960,950 1 3.57 218,229,375 2 23.614 Sunny Ong Keng Hua 25,042,125 2.71 218,229,375 3 23.61Notes:(1) 25,500,000 Shares of which are held through Bank of Singapore Nominees Pte Ltd.(2) Lee Thiam Seng holds 49.3% in ecoHub Pte. Ltd. which in turn holds 218,229,375 shares (of which 45,000,000 are heldthrough Hong Leong Finance Nominees Pte Ltd, 22,500,000 shares are held through CIMB Nominees (S) Pte Ltd and25,000,000 are held through SBS Nominees Pte Ltd), representing 23.61% of the issued share capital of the Company.Accordingly, Lee Thiam Seng has a deemed interest in the 218,229,375 shares held by ecoHub Pte. Ltd.(3) Sunny Ong Keng Hua holds 26.7% in ecoHub Pte. Ltd. which in turn holds 218,229,375 shares (of which 45,000,000 areheld through Hong Leong Finance Nominees Pte Ltd, 22,500,000 shares are held through CIMB Nominees (S) Pte Ltd and25,000,000 are held through SBS Nominees Pte Ltd), representing 23.61% of the issued share capital of the Company.Accordingly, Sunny Ong Keng Hua has a deemed interest in the 218,229,375 shares held by ecoHub Pte. Ltd.

ecoWise Holdings Limitedannual report 2012143ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN that the 2013 Annual General Meeting of the shareholders of the Company will beheld at 17 Kallang Junction #04-03 Singapore 339274 on Thursday, 28 February 2013 at 2.30 p.m. to transactthe following businesses:ORDINARY BUSINESS1. To receive and consider the Audited Financial Statements of the Company and thereports of the Directors and Auditors for the year ended 31 October 2012.Resolution 12. To declare a final dividend of 0.1 cent per ordinary share (one-tier tax exempt) for theyear ended 31 October 2012.Resolution 23. To re-elect the following Directors retiring pursuant to the Company’s Articles ofAssociation:–(a) Mr Lee Thiam Seng (Article 107) Resolution 3(a) Mr Ng Cher Yan (Article 107) Resolution 4Mr Ng Cher Yan shall, upon re-election as Director of the Company, remain asChairman of the Audit Committee and as a member of the Remuneration Committeeand Nominating Committee and shall be considered independent for the purpose ofRule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.4. To approve the Directors’ fees of SGD 125,000/- for the year ended 31 October 2012. Resolution 55. To re-appoint Messrs RSM Chio Lim LLP as Auditors and to authorise the Directors tofix their remuneration.Resolution 6SPECIAL BUSINESSTo consider and, if thought fit, to pass the following Resolutions as Ordinary Resolutions, with or withoutamendments:

144ecoWise Holdings Limitedannual report 2012ANNUAL GENERAL MEETING6. Authority to Allot and Issue Shares Resolution 7That pursuant to Section 161 of the Companies Act, Cap. 50 and in accordance with Rule 806 of the ListingManual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), authority be and is hereby givento the Directors to issue:–(i)shares in the capital of the Company (whether by way of rights, bonus or otherwise) or;(ii)convertible securities; or(iii)additional convertible securities arising from adjustments made to the number of convertible securitiespreviously issued in the event of rights, bonus or capitalisation issues; or(iv)shares arising from the conversion of convertible securities,at any time and upon such terms and conditions and for such purposes as the Directors may in their absolutediscretion deem fit provided that:–(1) the aggregate number of shares and convertible securities that may be issued shall not exceed 50%of the total number of issued shares (excluding treasury shares) in the capital of the Company, ofwhich the aggregate number of shares and convertible securities to be issued other than on a prorata basis to all shareholders of the Company shall not exceed 20% of the total number of issuedshares (excluding treasury shares) in the capital of the Company.(2) for the purpose of determining the aggregate number of shares that may be issued undersub-paragraph (1) above, the total number of issued shares (excluding treasury shares) shall becalculated based on the total number of issued shares (excluding treasury shares) in the capital ofthe Company as at the time of the passing of this Resolution after adjusting for:–(a)new shares arising from the conversion or exercise of convertible securities;(b)new shares arising from exercising share options or vesting of share awards outstanding orsubsisting at the time of the passing of this Resolution; and(c)any subsequent bonus issue, consolidation or subdivision of shares.

ecoWise Holdings Limitedannual report 2012145ANNUAL GENERAL MEETING(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisionsof the Listing Manual of the SGX-ST for the time being in force (unless such compliance has beenwaived by the SGX-ST) and the Articles of Association of the Company; and(4) unless revoked or varied by the Company in general meeting, such authority shall continue in forceuntil the conclusion of the next Annual General Meeting of the Company or the date by which thenext Annual General Meeting of the Company is required by law to be held, whichever is earlier.[see Explanatory Note(i)]7. Authority to grant Awards in accordance with ecoWise Performance Share Plan Resolution 8That approval be and is hereby given to the Directors to grant awards in accordance with the provisions ofthe ecoWise Performance Share Plan (“Share Plan”) and to allot and issue or deliver from time to time suchnumber of fully paid-up Shares as may be required to be issued pursuant to the vesting of Awards underthe Share Plan, provided that the aggregate number of Shares to be allotted and issued pursuant to theShare Plan shall not exceed 15% of the total number of issued shares of the Company from time to time.[See Explanatory Note (ii)]8. Proposed grant of Award of 2,000,000 Shares to Mr Lee Thiam Seng Resolution 9To approve the grant of Award of 2,000,000 Shares to Mr Lee Thiam Seng, in accordance with the SharePlan.[See Explanatory Note (iii)]9. And to transact any other business which may be properly transacted at an Annual General Meeting.BY ORDER OF THE BOARDZhong XiaowenCompany SecretarySingapore8 February 2013

146ecoWise Holdings Limitedannual report 2012ANNUAL GENERAL MEETINGExplanatory Notes:(i)The Ordinary Resolution proposed in Resolution 7 above, if passed, will empower the Directors of the Company, effectiveuntil the conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual GeneralMeeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a generalmeeting, whichever is earlier, to issue shares and convertible securities in the Company up to a number not exceeding,in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which notexceeding 20% may be issued other than on a pro rata basis to existing shareholders.For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasuryshares) will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of theCompany at the time this Resolution is passed after adjusting for new shares arising from the conversion or exercise ofconvertible securities or share options or vesting of share awards which are outstanding or subsisting at the time whenthis Resolution is passed and any subsequent bonus issue, consolidation or subdivision of shares.(ii)The proposed Resolution 8 above, if passed, will empower the Directors of the Company to offer and grant awards, andto allot and issue new ordinary shares in the capital of the Company, pursuant to the Share Plan (which was approvedby shareholders at the Extraordinary General Meeting held on 23 March 2007) as may be modified by the RemunerationCommittee from time to time, provided that the aggregate number of Shares to be allotted and issued pursuant to theShare Plan shall not exceed 15% of the total number of issued ordinary shares of the Company from time to time.(iii)The proposed Resolution 9 above, if passed, will empower the Remuneration Committee of the Company to grant atotal of 2,000,000 ordinary shares of the Company to Mr Lee Thiam Seng, a controlling shareholder of the Company, inaccordance with and for the duration of the Share Plan.Proxies:1. A member of the Company is entitled to attend and vote at the above Meeting and may appoint not more than two proxiesto attend and vote instead of him.2. Where a member appoints two proxies, he shall specify the proportion of his shareholding to be represented by eachproxy in the instrument appointing the proxies. A proxy need not be a member of the Company.3. If the member is a corporation, the instrument appointing the proxy must be under seal of the hand of an officer or attorneyduly authorised.4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 17 Kallang Junction#04-03 Singapore 339274 not less than 48 hours before the time appointed for holding the above Meeting.

ecoWise Holdings Limitedannual report 2012ADDITIONAL EXPLANATORY STATEMENT TO ORDINARY RESOLUTION 9AS SET OUT IN THE NOTICE OF ANNUAL GENERAL MEETING(“ADDITIONAL EXPLANATORY STATEMENT”)147If you are in any doubt as to the contents herein or as to the course of action that you should take, you shouldconsult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.The Singapore Exchange Securities Trading Limited assumes no responsibility for the accuracy of any statementsor opinions made or reports contained in this Additional Explanatory Statement.1. The Ordinary Resolution 9 proposed in item 8 of the Company’s Notice of Annual General Meeting dated8 February 2013 (“Notice of AGM”), if passed, will empower the Remuneration Committee (the “Committee”)of the Company to grant a total of 2,000,000 ordinary shares of the Company (“Shares” or “ecoWise shares”)to Mr Lee Thiam Seng, a Controlling Shareholder, in accordance with and for the duration of the ecoWisePerformance Share Plan (“Share Plan”).2. The participation of Mr Lee Thiam Seng in the Share Plan was approved and adopted by the shareholdersat the Extraordinary General Meeting convened on 23 March 2007.3. Pursuant to Rule 853 of the Listing Manual, the specific grant of Award to Mr Lee Thiam Seng and any otherControlling Shareholders or their Associates will have to be approved by independent Shareholders of theCompany in general meetings.4. Rationale for grant of Award of 2,000,000 Shares to Mr Lee Thiam Seng under the Share Plan(include also details of past awards and vested awards)Mr Lee Thiam Seng is the Chief Executive Officer of the Company. He is responsible for the strategicdirection, business strategies and management of the Group.The Directors are of the view that Mr Lee Thiam Seng’s contributions to the Group as its Chief ExecutiveOfficer have been instrumental to the growth of the Group’s business over the years. The Directors believethat there is substantial potential future development and contribution that may be made by Mr Lee ThiamSeng towards steering the Company to be one of the leading renewable energy, waste managementservices and environmental solutions provider in the region and towards enhancing the competitiveness ofthe Company.

148ecoWise Holdings Limitedannual report 2012ADDITIONAL EXPLANATORY STATEMENT TO ORDINARY RESOLUTION 9AS SET OUT IN THE NOTICE OF ANNUAL GENERAL MEETING(“ADDITIONAL EXPLANATORY STATEMENT”)Under the leadership of Mr Lee Thiam Seng, over the last three years the Group has diversified its businessportfolio in the Resource Recovery segment with the acquisition of Sunrich Integrated Sdn. Bhd. and itssubsidiaries in July 2010, a leading rubber compound manufacturing and tyre retreading group based inMalaysia. The Group has in March 2010 acquired a 15% interest in Chongqing Zhongtian Electronic WasteManagement Co., Ltd which holds an exclusive e-waste license for collection, recovering and disposal ofelectrical and electronic waste in Chongqing, China. The Group’s businesses under its Renewable Energysegment has also expanded with a new biomass co-generation plant at the Gardens by the Bay startedoperation since November 2011.As a result of the diversification and expansion plan, over the last three financial years from 1 November 2009to 31 October 2012 (i.e. FY2010 to FY2012), the Group’s revenue grew from S$37.59 million in FY2010 toS$90.52 million in FY2012 and the Group recorded a net profit of S$1.37 million in FY2012 as comparedto a loss of S$1.35 million in FY2010.The Directors are of the view that the remuneration package of Mr Lee Thiam Seng is fair given hiscontributions to the Company. The extension of the Share Plan to Mr Lee Thiam Seng is consistent withthe Company’s objectives to motivate its employees to achieve and maintain a high level of performanceand contribution which is vital to the success of the Company. Although Mr Lee Thiam Seng already has ashareholding interest in the Company, the extension of the Share Plan to him will ensure that he is equallyentitled, with the other employees who are not Controlling Shareholders, to take part in and benefit from thissystem of remuneration, thereby enhancing his long-term commitment to the Company. For the aforesaidreasons, the Directors believe that Mr Lee Thiam Seng deserves, and should be allowed to participate inthe Share Plan.Subject to Shareholders’ approval for Ordinary Resolution 9 as set out in the Notice of AGM at the AGM,the Company proposes to grant an Award of 2,000,000 Shares (“Proposed 2013 Award”) to Mr Lee ThiamSeng in accordance with the Share Plan and the proposed date of grant of Shares to be any time within1 year from the date of the AGM to be held on 28 February 2013.On 23 March 2007, Mr Lee Thiam Seng was awarded 1,500,000 fully paid-up ecoWise shares (“2007Award”) subject to achieving performance targets at the end of the financial year ending 31 October 2007and 31 October 2008 respectively under the Share Plan. 50% of the said grant or 3,442,500 fully paid-upecoWise shares (after adjusting for Rights cum Warrants Issues dated 7 November 2007) were vested andissued to Mr Lee Thiam Seng for the financial year ended 31 October 2007. The balance 50% of the saidgrant or 5,034,700 fully paid-up ecoWise shares (after adjusting for Rights cum Warrants Issues dated 7November 2007 and further Rights Issues dated 26 September 2008) were vested and issued to Mr LeeThiam Seng for the financial year ended 31 October 2008.

ecoWise Holdings Limitedannual report 2012ADDITIONAL EXPLANATORY STATEMENT TO ORDINARY RESOLUTION 9AS SET OUT IN THE NOTICE OF ANNUAL GENERAL MEETING(“ADDITIONAL EXPLANATORY STATEMENT”)149At the AGM held on 28 February 2008, shareholders had approved the Company’s grant of an Award of2,250,000 Shares to Mr Lee Thiam Seng and the date of grant of Shares to be any time within 5 years fromthe date of the EGM held on 23 March 2007. Subsequent to the AGM held on 28 February 2008, Mr LeeThiam Seng has been awarded a total of 2,250,000 fully paid-up ecoWise shares (“2008 Award”) (equivalentto 3,290,625 fully paid-up ecoWise shares after adjusting for Rights Issues dated 26 September 2008) subjectto achieving the performance targets over performance periods up to 31 January 2013 under the Share Plan.As at 29 January 2013 (“Latest Practicable Date”), a total of 2,193,750 fully paid-up ecoWise shares (afteradjusting for Rights Issues dated 26 September 2008) have been vested and issued to Mr Lee Thiam Sengfor performance periods ended 31 January 2011. The amount of ecoWise shares (after adjusting for RightsIssues dated 26 September 2008) that has been awarded but has not been vested pending satisfaction of theperformance targets for performance period ending 31 January 2013 is 1,096,875 (“Unvested 2008 Award”).Under the Listing Rules, the aggregate number of Shares which may be issued pursuant to Awards grantedunder the Share Plan on any date, when added to the number of new Shares issued and/or issuable inrespect of all Awards granted under the Share Plan and any other share scheme which the Company mayimplement from time to time, will not exceed 15% of the total issued Shares in the capital of the Company.As at the Latest Practicable Date, the total number of issued Shares is 924,158,877 Shares. The total numberof Shares available under the Share Plan as at the Latest Practicable Date would be 138,623,832 Shares,representing 15% of the total number of issued Shares. Accordingly, the total number of Shares available tothe controlling shareholders of the Company or their associates under the Share Plan is up to 34,655,958Shares, being 25% of the total number of Shares available under the Share Plan and the total number ofShares available to each controlling shareholder of the Company or his associate is up to 13,862,383 Shares,being 10% of the total number of Shares available under the Share Plan.For illustrative purposes, on the assumption that (i) there is no increase in the number of issued Shares; and(ii) the Company does not buy back or otherwise acquire any of its Shares, and (iii) the proposed grant ofUnvested 2008 Award to Mr Lee Thiam Seng is fully granted, the aggregate number of Shares to be awardedto Mr Lee Thiam Seng when aggregated with the 8,477,200 ecoWise shares vested and issued to him arisingfrom the 2007 Award, the 2,193,750 ecoWise shares vested and issued to him arising from the 2008 Award,the Unvested 2008 Award and Proposed 2013 Award would be 13,767,825 Shares, representing 9.93%of the number of Shares available under the Share Plan as at the Latest Practicable Date. Accordingly, theproposed grant of Award to Mr Lee Thiam Seng as set out in the proposed Ordinary Resolution 9 of theNotice of AGM would be within the limits prescribed under the Listing Manual.As at the Latest Practicable Date, the Company has not implemented any share-based incentive schemeother than the ecoWise Performance Share Plan.

150ecoWise Holdings Limitedannual report 2012ADDITIONAL EXPLANATORY STATEMENT TO ORDINARY RESOLUTION 9AS SET OUT IN THE NOTICE OF ANNUAL GENERAL MEETING(“ADDITIONAL EXPLANATORY STATEMENT”)5. Criteria for the vesting of Awards to Mr Lee Thiam SengAwards are released once the Committee is satisfied that the prescribed performance target(s) have beenachieved and the vesting period (if any) has expired. There may be vesting periods beyond the performanceachievement periods, imposed by the Committee. The performance targets and criteria for the Awards aredetermined by the Committee and these include targets such as total shareholders’ return and financialperformance of the Group.6. Directors’ and Substantial Shareholders’ interestsAs at the Latest Practicable Date (being 29 January 2013), the interests of Directors and SubstantialShareholders of the Company in the Shares, based on the Company’s Register of Directors’ Shareholdingsand Register of Substantial Shareholders respectively are as follows:–NumberDirect InterestNo. of SharesDeemedInterestNo. of SharesTotal InterestNo. of Shares %of SharesComprised inOutstandingPerformanceShares (3)Date ofgrant ofoutstandingPerformanceSharesDirectorsLee Thiam Seng (1) 32,960,950 218,229,375 251,190,325 27.18 1,096,875 21-03-2012Low Kian Beng 5,500,000 – 5,500,000 0.60 1,500,000 21-03-2012Ng Cher Yan 1,166,500 – 1,166,500 0.13 130,000 21-03-2012Ang Mong Seng 796,950 – 796,950 0.09 100,000 21-03-2012Ong Teck Ghee 871,950 – 871,950 0.09 100,000 21-03-2012Substantial ShareholdersecoHub Pte. Ltd. 218,229,375 – 218,229,375 23.61 – –Lee Thiam Seng (1) 32,960,950 218,229,375 251,190,325 27.18 1,096,875 21-03-2012Ma Ong Kee 88,000,000 – 88,000,000 9.52 – –Sunny Ong Keng Hua (2) 25,042,125 218,229,375 243,271,500 26.32 – –

ecoWise Holdings Limitedannual report 2012ADDITIONAL EXPLANATORY STATEMENT TO ORDINARY RESOLUTION 9AS SET OUT IN THE NOTICE OF ANNUAL GENERAL MEETING(“ADDITIONAL EXPLANATORY STATEMENT”)151Notes:(1) Mr Lee Thiam Seng holds 49.3% in ecoHub Pte Ltd which in turn holds 218,229,375 Shares in the Company.Accordingly, by virtue of Section 4 of the Securities and Futures Act, Mr Lee Thiam Seng is deemed interested in218,229,375 Shares held by ecoHub Pte. Ltd.(2) Mr Sunny Ong Keng Hua holds 26.7% in ecoHub Pte Ltd which in turn holds 218,229,375 Shares in the Company.Accordingly, by virtue of Section 4 of the Securities and Futures Act, Mr Sunny Ong Keng Hua is deemed interestedin 218,229,375 shares held by ecoHub Pte. Ltd.(3) Including award of performance shares not vested and not issued.7. Directors’ recommendationAs all the Directors of the Company are eligible to participate in the Share Plan, they have refrained frommaking any recommendation relating to the Share Plan, and where they are also Shareholders, shall abstainfrom voting in respect of the Ordinary Resolution 9 which relates to the proposed grant of Award of 2,000,000Shares to Mr Lee Thiam Seng and will not accept any appointment as proxies or otherwise for voting onOrdinary Resolution 9 unless specific instructions have been given in the proxy form(s) on how the votesare to be cast.Mr Lee Thiam Seng, as Director and Controlling Shareholder, who is an interested party to the aboveproposal, has refrained from making any recommendation as to how Shareholders should vote and he willabstain from voting in respect of Resolution 9. Mr Lee Thiam Seng will also decline to accept appointments asproxies for voting at the AGM in respect of the said Resolutions unless specific instructions have been givenin the proxy instrument on how Shareholders wish their votes to be cast for each of the said Resolutions.8. Action to be taken by shareholdersShareholders who are unable to attend the AGM and wish to appoint a proxy to attend and vote on theirbehalf should sign and return the Proxy Form attached to the Notice of AGM in accordance with theinstructions printed thereon as soon as possible and in any event so as to arrive at the registered office ofthe Company at 17 Kallang Junction, #04-03, Singapore 339274, not later than 48 hours before the timefixed for the AGM. The appointment of a proxy by a shareholder does not preclude him from attending andvoting in person at the meeting if he wishes to do so.A Depositor shall not be regarded as a member of the Company entitled to attend the AGM and to speakand vote thereat unless his name appears on the Depository Register at least 48 hours before the AGM.

152ecoWise Holdings Limitedannual report 2012ADDITIONAL EXPLANATORY STATEMENT TO ORDINARY RESOLUTION 9AS SET OUT IN THE NOTICE OF ANNUAL GENERAL MEETING(“ADDITIONAL EXPLANATORY STATEMENT”)9. Directors’ responsibility statementThe Directors collectively and individually accept full responsibility for the accuracy of the information givenin this Additional Explanatory Statement and confirm after making all reasonable enquiries that, to the bestof their knowledge and belief, this Additional Explanatory Statement constitutes full and true disclosure ofall material facts about the proposed Ordinary Resolution 9 in the Notice of AGM, the Company and itssubsidiaries, and the Directors are not aware of any facts the omission of which would make any statement inthis Additional Explanatory Statement misleading. Where information in the Additional Explanatory Statementhas been extracted from published or otherwise publicly available sources or obtained from a named source,the sole responsibility of the Directors has been to ensure that such information has been accurately andcorrectly extracted from those sources and/or reproduced in the Additional Explanatory Statement in itsproper form and context.

PROXY FORMIMPORTANT1. For investors who have used their CPF monies to buythe Company’s shares, this Annual Report is forwardedto them at the request of their CPF Approved Nomineesand is sent solely FOR INFORMATION ONLY.2. This Proxy Form is not valid for use by CPF investors andshall be ineffective for all intents and purposes if used orpurported to be used by them.I/Weofbeing a member(s) of ecoWise Holdings Limited (the “Company”), hereby appoint:NameAddressNRIC/PassportNumberProportion ofShareholdingsand/or (delete as appropriate)NameAddressNRIC/PassportNumberProportion ofShareholdingsas *my/our *proxy/proxies to vote for *me/us on *my/our behalf at the 2013 Annual General Meeting of the Companyto be held 17 Kallang Junction #04-03, Singapore 339274 on Thursday, 28 February 2013 at at 2.30 p.m. and at anyadjournment thereof.(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutionsas set out in the notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote orabstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)No. Resolutions For Against1 Audited Financial Statements for the year ended 31 October 2012together with the reports of Directors and Auditors2 Declaration of proposed Final Dividend3 Re-election of Mr Lee Thiam Seng as Director4 Re-election of Mr Ng Cher Yan as Director5 Approval of Directors’ fees for the year ended 31 October 20126 Re-appointment of Messrs RSM Chio Lim LLP as Auditors7 Authority to allot and issue shares pursuant to Section 161 of the CompaniesAct, Chapter 50 and Rule 806 of the Listing Manual of the SingaporeExchange Securities Trading Limited8 Approval of Awards in accordance with ecoWise Performance Share Plan9 Approval of Award of 2,000,000 Shares to Lee Thiam SengSigned this day of 2013Total number of shares heldSignature or Common Seal of shareholder

NOTES:1. Please insert the total number of shares held by you. If you have shares entered against your name in the DepositoryRegister (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number of shares. Ifyou have shares registered in your name in the Register of Members, you should insert that number of shares. Ifyou have shares entered against your name in the Depository Register and shares registered in your name in theRegister of Members, you should insert the aggregate number of shares. If no number is inserted, this form ofproxy will be deemed to relate to all the shares held by you.2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not morethan two proxies to attend and vote on his behalf. A proxy need not be a member of the Company.3. Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to berepresented by each proxy.4. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorisedin writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executedeither under its common seal or under the hand of its attorney or duly authorised officer.5. A corporation which is a member of the Company may authorise by resolution of its directors or other governingbody such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with itsArticles of Association and Section 179 of the Companies Act, Cap. 50.6. The instrument appointing a proxy or proxies, together with the power of attorney or other authority (if any) underwhich it is signed, or notarially certified copy thereof, must be deposited at the registered office of the Company at17 Kallang Junction #04-03 Singapore 339274 not later than 48 hours before the time set for the Annual GeneralMeeting.7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperlycompleted or illegible or where the true intentions of the appointor are not ascertainable from the instructions ofthe appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of theCompany whose shares are entered against their names in the Depository Register, the Company may reject anyinstrument appointing a proxy or proxies lodged if such members are not shown to have shares entered againsttheir names in the Depository Register at 48 hours before the time appointed for holding the Annual General Meetingas certified by The Central Depository (Pte) Limited to the Company.

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