Annual Report 2012 - ecoWise Holdings Limited

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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
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