EW Annual Report

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TENTS 01 Introduction 02 Contents 04 Vision & misson 01THE ELEMENTS OF VALUE70 Directors’ report75 Statement by directors & Statutory declaration76 Independent auditors’ report78 Statements of 70 comprehensive income & statements of financial position

TRANSFORMATION THE EVOLUTION THE STATEMENTS 34 Financial highlights09 Corporate information & 40 Statement on Board of directors 35 Corporate structure Corporate governance14 Profile of directors 56 Audit committee report24 Chairman’s statement 09 34 40 63 Statement on risk management and internal controlTHE ELEMENTS OF VALUE THE OPPORTUNITIES81 Consolidated statement of 124 Particulars of properties changes in equity & company 125 Statistics on Shareholdings statement of changes in equity 130 Notice of annual83 Statements of cash flows & General meeting notes to the financial statements 81 Form of proxy 124 3

TUOR CVRISEIAOTNE World-Class Eco Living In All Our Developments

ANCIAL HIGHLIGHTS Actual Actual Actual Actual Actual 30/9/2010 30/9/2011 30/9/2012 30/9/2013 30/9/2014Paid-up capital (RM’000) 253,317 253,317 253,317 253,317 253,317Net Assets (RM’000) 300,694 291,233 289,152 296,354 318,722Net Assets per share (sen) 119 115 114 117 126Revenue (RM’000) 30,957 63,920 55,714 65,286 156,326Profit/(Loss) before taxation and after exceptional item -7,888 -6,108 -2,296 8,095 29,603(RM’000)Profit/(Loss) after taxation and after exceptional item -8,334 -5,569 -2,081 7,202 24,268(RM’000)Net earnings/(loss) per share (sen) -3.29 -2.20 -0.82 2.84 9.58Pretax profit/(loss) margin (%) -25.5 -9.56 -4.12 12.40 18.94Current ratio 3.03 2.62 2.95 2.22 2.05Return on capital employed -2.6% -2.1% -0.8% 2.7% 9.3%Total borrowings (RM’000) 94,584 83,240 64,468 64,041 52,148Gearing (times) 0.31 0.29 0.22 0.22 0.16 5

AANISR-STATEMENTDearShareholders, It is my pleasure to present Eco World Development Group Berhad’s (formerly known as Focal Aims Holdings Berhad)” (“Eco World Development or Company”) Annual Report and Financial Statements for the financial year ended 30 September 2013. Encouraging Developments in 2013 Iskandar Malaysia The bulk of the Group’s 2013 sales and profits came from our Kota Masai development. This year’s strong financial results resulted from greater interest and demand for our properties, in tandem with increased investor interest in Iskandar Malaysia. Kota Masai is the Company’s flagship development situated in Node D of the Iskandar Development Region (“IDR”) and consists of a 2,484-acre township containing residential, commercial, industrial and recreational properties. During the financial year under review, the Group sold 428 properties in Kota Masai as compared to 323 in the previous financial year. Sales during the year included single storey cluster and terrace houses, double storey terrace houses, semi-detached houses, double and three storey shoplots and several parcels of industrial land. The broad based demand for both affordable and upgraded homes, along with commercial and industrial lots, augurs well for the long-term prospects of our development here. Klang Valley The Group has one high end niche development in the Klang Valley, Saujana O-Lot, which is situated on 25.9-acres of

Despite the recent property Following completion of the cooling measures announced takeover offer, a new Board has by the Malaysian government in been appointed comprising of Budget 2014, we are confident highly qualified and experienced about the Group’s capability and individuals who have distinguished capacity to grow. themselves in the legal, financial, engineering, accounting, investment “As a first step towards actualizing our aims to banking, public and social service become the leader in creating World Class Eco arenas. Most importantly, the Living, the Group is in the midst of revamping majority of the Board comprises members with almost 70 years the development masterplan of our flagship of collective experience in the Kota Masai township.” property development industry.FMOORVIWANRGD On 1 October 2013 the The Executive team is led by Company received a notice of Dato’ Chang Khim Wah, the new unconditional takeover offer President and Chief Executive from CIMB Investment Bank Officer of the Group, who is Berhad on behalf of Eco World a 26-year industry veteran. Development Holdings Sdn. Bhd. Dato’ Chang was previously an (formerly known as Maple Quay Executive Director of S P Setia Sdn. Bhd.) (“EWDH”) and Liew Berhad in charge S P Setia’s Tian Xiong (“LTX”)(collectively Southern and Northern Property referred to as the “Offerors”) to Divisions as well as its Singapore acquire all the remaining ordinary and Indonesian Offices. He led shares in the Company held by Setia’pioneering team to e its other shareholders for a cash stablish its business in Johor offer price of RM1.40 per share. Bahru and grew the portfolio The takeover offer closed on 12 from a single township in 1997 to November 2013 with Offerors 8 projects capable of generating emerging as new shareholders more than RM1 billion sales owning approximately 65% of when he resigned from S P Setia the Company. earlier this year. 7

PORATE SOCIAL RESPONSIBILITY We also recognize that the to upholding and implementing thecontinued success of this Company highest standards of corporate governancevery much depends on the support and risk management practices. This is reflected in the various measures listed in of our esteemed shareholders. the relevant sections of our Annual Report. In compliance with the Malaysian Code on As a responsible developer and Corporate Governance 2012 issued by the corporate citizen, we are always Securities Commission of Malaysia, we mindful of balancing our economic goals have also introduced a new Board Charter with good corporate practices which to ensure that the responsibilities of the positively impact all our stakeholders, board are clearly defined, that management which range from our customers, oversight is continuously promoted, and shareholders, business associates, ultimately, the Group’s strategic direction employees, the local communities where is always founded on sustainability and the our developments are located and society promotion of ethical conduct in all of our at large. Accordingly, I was delighted when business dealings. Tan Sri Lee Lam Thye accepted the Board’s invitation to join us as an Independent Non- The Executive team is led by Dato’ Chang Executive Director on 28 November 2013. Khim Wah, the new President and Chief Tan Sri Lee’s credentials and track-record Executive Officer of the Group, who is a as Malaysia’s foremost social activist is 26-year industry veteran. Dato’ Chang was unrivalled. Our Board is also committed previously an Executive Director of S P Setia Berhad in charge S P Setia’s Southern and Northern Property Divisions as well as its Singapore and Indonesian Offices.

ECOWORLD FOUNDATION economic vibrancy of the area and resulting in increased value creation.The Board of Directors of Eco World Development are pleasedto announce the recommendation for the declaration and 1% Our endeavours to transform Kota Masai into Johor Bahru’s township and industrial park of for the financial year ended 30 September 2013. choice is also supported by vast improvements in both infrastructure and economic vibrancy in Iskandar Malaysia as a whole.Following completion of the takeover Berhad” effective 18 December 2013. As aoffer, a new Board has been appointed first step towards actualizing our aims tocomprising of highly qualified and become the leader in creating World-Classexperienced individuals who have Eco Living, the Group is in the midst ofdistinguished themselves in the legal, revamping the development masterplanfinancial, engineering, accounting, of our flagship Kota Masai township. Theinvestment banking, public and social remaining 991.63 acres of undevelopedservice arenas. Most importantly, the land will be redesigned to incorporatemajority of the Board comprises members properties which are not just well-builtwith almost 70 years of collective and aesthetically pleasing, but will becomeexperience in the property development vibrant habitats for sustainable greenindustry.The Executive team is led by Dato’ Chang As a first step towards actualizing our aims toKhim Wah, the new President and Chief become the leader in creating World Class EcoExecutive Officer of the Group, who is a Living, the Group is in the midst of revamping26-year industry veteran. Dato’ Chang was the development masterplan of our flagshippreviously an Executive Director of S P Setia Kota Masai township.Berhad in charge S P Setia’s Southern andNorthern Property Divisions as well as its communities to flourish. From earth-Singapore and Indonesian Offices. He led friendly designs which incorporate moreS P Setia’s pioneering team to establish natural ventilation thereby reducing air-its business in Johor Bahru and grew the conditioning usage to selection of buildingportfolio from a single township in 1997 to materials requiring less maintenance8 projects capable of generating more than in order to age gracefully, carefulRM1 billion sales when he resigned from thought will be given to every aspectS P Setia earlier this year. of the development to ensure that the homes built will delight its residents forDato’ Chang’s vast experience in breaking generations. On the industrial front thethrough to new markets, leading start- Eco World Development team aims toups, developing and grooming talents into create a Technology Garden to showcaseaward-winning teams, places the Group in our vision of a sustainable industrial parkgood stead to execute its corporate ethos with social & environmental issues highof “Creating Tomorrow and Beyond”. This on its agenda. This is to attract world classis underpinned by a new Corporate Vision partners and SMEs to relocate here tostatement which is to “Create World-Class spur greater job creation, talent gain andEco Living In All Our Developments”. In line technology transfer thus enhancing thewith this aspiration, the Company’s namehas been changed from Focal Aims HoldingsBerhad to “Eco World Development Group 9



INREFTUHCOTEUTSRES 11

EPENDENT AUDITORS’ REPORTto the members of Focal Aims Holdings Berhad (Incorporated in Malaysia)REPORT ON THE FINANCIAL STATEMENTSWe have audited the financial statements of Focal Aims Holdings Berhad, which comprise the statements of financial position as at30 September 2013 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equityand statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accountingpolicies and other explanatory notes, as set out on pages 10 to 52.Directors’ responsibility for the financial statementsThe directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordancewith Financial Reporting Standards and the Companies Act 1965 in Malaysia, and for such internal control as the directorsdetermine are necessary to enable the preparation of financial statements that are free from material misstatement, whether dueto fraud or error.Auditors’ responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewith approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’spreparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit alsoincludes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by thedirectors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and theCompanies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30September 2013 and of their financial performance and cash flows for the year then ended.