Dear valued shareholders,
On behalf of the Board of Directors of Ekovest Berhad, I am pleased to present this Annual Report and Audited Financial Statements of the Group and of the Company for the financial year ended 30 June 2011.
For the financial year ended 30 June 2011, the Group recorded a profit after tax of RM24.350 million from a turnover of RM128.175 million as compared to a profit after tax of RM8.908 million from a turnover of RM217.733 million from the previous year.
At the Company level, the Company recorded a profit after tax of RM4.899 million from a turnover of RM49.697 million as compared to a profit after tax of RM1.889 million from a turnover of RM64.357 million from the previous year.
We are pleased to report that construction works for projects we secured at Danga Bay, Johor are progressing smoothly and in accordance with schedule. Projects that contributed to our bottomline in the June 2011 financial year include Universiti Malaysia Sabah Phase 2B, 2 contracts for Universiti Tun Hussein Onn Malaysia and projects at Danga Bay.
At the Group level, profit improvement this year was also contributed by the recognition of RM20.456 million after incorporating the effects of adopting FRS 139 compared to the preceding year.
In appreciation of the continuing support by all our shareholders, the Board of Directors had on 26 August 2011 recommended, subject to the approval of shareholders being obtained, a first and final dividend of 5 sen less 25% income tax per ordinary share of RM1.00 each.
In 2011, the global economy is expected to register modest expansion. Europe's ongoing debt crisis and sluggish growth in the world's advanced economies will continue to impact growth prospects in the foreseeable future. Despite these uncertainties on the external front, the Malaysian economy is expected to expand between 5% and 6% in 2011, to be driven by private investment and consumption, as well as exports. The manufacturing and services sectors are also expected to contribute significantly.
The Government is committed towards accelerating the nation's transformation process by ensuring projects and programmes under the Tenth Malaysian Plan are implemented successfully. A sum of RM28.3 billion has been allocated to the economic sector for infrastructure, industrial, agricultural and rural development.
High on the list of expenditure items are projects revolving around the Greater Kuala Lumpur National Key Economic Activity. These developments are anticipated to generate a significant multiplier effect on domestic production through better connectivity (urban infrastructure projects such as the Mass Rapid Transport system) and increased financial flows (incentives to accelerate the development of Kuala Lumpur International Financial District).
Under Budget 2012 announced by the Prime Minister, development in the few economic corridors will be accelerated with special emphasis placed on joint venture projects between local and foreign investors as well as high-impact industries with competitive edge. For this purpose, the Government has allocated RM850 million for infrastructure support.
For Iskandar Malaysia, a sum of RM339 million is allocated for, amongst others, the construction of highways, development of housing areas as well as providing and improving public transportation services. The amount of investment committed by the private sector as at June 2010 was RM62 billion, surpassing the targeted RM47 billion. Total actual investment up to June 2010 was RM25 billion. The Newcastle University Medicine Malaysia and Chelsea Factory Outlet are expected to be completed in 2011, while Legoland and Marlborough College in 2012.
Against this backdrop, we remain cautiously optimistic as the Group's prospects are linked directly to investments into upgrading as well as constructing new infrastructure. Given our strong track record as a civil and structural engineering specialist, with turnkey design and build capabilities, we are well-positioned to secure our fair share of contract works. In this respect, we are pleased to report that our joint venture vehicle Ekovest Bhd – MRCB JV has been awarded a Letter of Intent by the Government for the project management in respect of river cleaning works in the Klang Valley. Additional negotiation for works for river beautification is also ongoing, and results thus far are encouraging.
Meanwhile, we will continue pursuing opportunities in the fast-growing Iskandar Region. We already have a strong foothold in Johor's construction market, but are expanding our presence even further in anticipation of exciting growth opportunities from both the public and private sectors. Currently, we are tendering for various construction jobs from the private sector, and are optimistic of successful outcomes.
There were no significant corporate developments during the current financial year. However, the Group continues to concentrate its efforts in securing more works and upholding a higher standard of corporate governance to enhance shareholders' value.
The Board continues to recognize the importance and advantage of having good corporate governance. To the benefit of all directors and in compliance with the requirements for continuing education program, various courses have been organized at our corporate head quarters for all directors and members of the senior management team to participate. We also encourage management and staff to take part in relevant courses for their own development and to this effect, we have requested external consultants to organize courses for the working group so that they have a better understanding of the latest developments of corporate governance regime.
On behalf of the Board of Directors, I wish to express my appreciation and thanks to all our fellow directors and members of the senior management team who have been providing their invaluable services, assistance and advice to the Group.
Further, I would also like to thank all our clients, shareholders, bankers, business associates, various government and local authorities for their continuing support and confidence in our group.
Finally, I wish to express my personal gratitude to all staff and management of the Group for their dedication and commitment.
Dato' Lim Kang Hoo
Executive Chairman
25 November 2011