ECO WORLD INTERNATIONAL BERHAD

(Company No: 1059850-A)

(Incorporated in Malaysia)

Interim Financial Report

30 April 2019
 ECO WORLD INTERNATIONAL BERHAD
(Company No: 1059850-A)
(Incorporated in Malaysia)

Interim Financial Report - 30 April 2019

Page No.

Condensed Consolidated Statement of Comprehensive Income 1

Condensed Consolidated Statement of Financial Position 2-3

Condensed Consolidated Statement of Changes In Equity 4

Condensed Consolidated Statement of Cash Flows 5-6

Notes to the Interim Financial Report 7-16

Additional Information Required by the Main Market Listing Requirements of

Bursa Malaysia Securities Berhad 17-25
 1
ECO WORLD INTERNATIONAL BERHAD
(Company No: 1059850-A)
(Incorporated in Malaysia)

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 APRIL 2019
(The figures have not been audited)

3 MONTHS ENDED 6 MONTHS ENDED

30 APRIL 2019 30 APRIL 2018 30 APRIL 2019 30 APRIL 2018
(RESTATED) (RESTATED)
RM'000 RM'000 RM'000 RM'000

Revenue - - - -
Direct expenses (705) (846) (1,583) (2,514)
Gross loss (705) (846) (1,583) (2,514)
Other income 2,790 2,932 5,819 9,871
Marketing expenses (919) (1,952) (1,697) (3,336)
Administrative and general expenses (12,948) (17,034) (25,657) (34,226)
Unrealised gain/(loss) on foreign exchange (1,585) (6,883) 71 (2,005)
Finance costs (12,452) (98) (25,307) (98)
Share of results in joint ventures 13,825 (3,307) 60,479 (7,392)
Profit/(Loss) before tax (11,994) (27,188) 12,125 (39,700)
Taxation 400 1,108 625 3,445
Profit/(Loss) for the period (11,594) (26,080) 12,750 (36,255)

Other comprehensive (loss)/income, net of tax

Items that may be reclassified to profit or loss
subsequently:
Fair value adjustment on cash flow hedge (365) - (1,786) -
Exchange differences on translation of foreign
operations (6,793) (39,814) 6,720 (77,967)
Total comprehensive income/(loss) for
the period (18,752) (65,894) 17,684 (114,222)

Profit/(Loss) for the period attributable to:

Owners of the Company (11,981) (26,459) 10,777 (36,632)
Non-controlling interests 387 379 1,973 377
(11,594) (26,080) 12,750 (36,255)

Total comprehensive income/(loss) for the

period attributable to:
Owners of the Company (18,809) (65,375) 15,717 (114,217)
Non-controlling interests 57 (519) 1,967 (5)
(18,752) (65,894) 17,684 (114,222)

Earnings/(Loss) per share attributable to

owners of the Company:
Basic earnings/(loss) per share (sen) (0.50) (1.10) 0.45 (1.53)

Diluted earnings/(loss) per share (sen) * (0.50) (1.10) 0.45 (1.53)

* Anti-dilutive

(The Condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the audited financial
statements for the year ended 31 October 2018 and the accompanying explanatory notes)
 2
ECO WORLD INTERNATIONAL BERHAD
(Company No: 1059850-A)
(Incorporated in Malaysia)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 APRIL 2019
(The figures have not been audited)

As At As At As At
30 APRIL 2019 31 OCTOBER 2018 1 NOVEMBER 2017
(RESTATED) (RESTATED)
RM'000 RM'000 RM'000

ASSETS
Non-current assets
Plant and equipment 5,298 6,366 7,169
Goodwill 105,198 105,198 105,198
Investment in joint ventures 235,085 192,850 140,665
Amounts owing by joint ventures 2,070,463 2,116,983 1,089,481
Deferred tax assets 26,806 25,787 19,316
2,442,850 2,447,184 1,361,829
Current assets
Inventories - property development costs 734,683 460,331 365,138
Trade and other receivables 32,477 43,549 25,031
Current tax assets 1,429 1,188 682
Derivative financial assets - 2,004 -
Cash, bank balances and deposits 413,054 436,960 992,388
1,181,643 944,032 1,383,239
TOTAL ASSETS 3,624,493 3,391,216 2,745,068

EQUITY AND LIABILITIES

Equity
Share capital 2,592,451 2,592,451 2,592,451
Warrant reserve 276,418 276,418 276,418
Cash flow hedge reserve (1,796) (10) -
Exchange translation reserve (67,280) (72,995) 16,681
Accumulated losses (310,795) (319,775) (308,596)
Equity attributable to owners of
the Company 2,488,998 2,476,089 2,576,954
Non-controlling interests 7,485 17,199 3,396
Total equity 2,496,483 2,493,288 2,580,350

Non-current liabilities
Borrowings 842,153 605,440 48,684
Hire purchase liability 131 134 -
Deferred tax liabilities 1,838 1,883 1,944
844,122 607,457 50,628
Current liabilities
Trade and other payables 51,287 43,473 16,067
Amount owing to a corporate shareholder
of a subsidiary - 15,465 16,340
Borrowings 230,850 230,638 79,913
Derivative financial liabilities 918 - -
Hire purchase liability 24 48 -
Current tax liabilities 809 847 1,770
283,888 290,471 114,090
Total liabilities 1,128,010 897,928 164,718
TOTAL EQUITY AND LIABILITIES 3,624,493 3,391,216 2,745,068
 3
ECO WORLD INTERNATIONAL BERHAD
(Company No: 1059850-A)
(Incorporated in Malaysia)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 APRIL 2019 (continued)
(The figures have not been audited)

As At As At As At
30 APRIL 2019 31 OCTOBER 2018 1 NOVEMBER 2017
(RESTATED) (RESTATED)
RM'000 RM'000 RM'000

Net assets per share attributable to

owners of the Company (RM) 1.04 1.03 1.07

(The Condensed Consolidated Statement of Financial Position should be read in conjunction with the audited financial
statements for the year ended 31 October 2018 and the accompanying explanatory notes)
 4
ECO WORLD INTERNATIONAL BERHAD
(Company No: 1059850-A)
(Incorporated in Malaysia)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 APRIL 2019
(The figures have not been audited)

Attributable to owners of the Company

Non-distributable Distributable
Cash flow Exchange Non-
Share Warrant hedge translation Accumulated controlling Total
capital reserve reserve reserve losses Total interests equity
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 November 2018 (as previously reported) 2,592,451 276,418 (10) (68,851) (306,399) 2,493,609 15,873 2,509,482
Effects of MFRS 15 adoption - - - (4,144) (13,376) (17,520) 1,326 (16,194)
At 1 November 2018 (restated) 2,592,451 276,418 (10) (72,995) (319,775) 2,476,089 17,199 2,493,288
Other comprehensive (loss)/income for the period:
- Net change in fair value of cash flow hedge - - (1,786) - - (1,786) - (1,786)
- Exchange differences on translation of foreign operations - - - 6,726 - 6,726 (6) 6,720
Profit for the period - - - - 10,777 10,777 1,973 12,750
Total comprehensive (loss)/income for the period - - (1,786) 6,726 10,777 15,717 1,967 17,684
Transactions with owners of the Company:
Dividend declared to non-controlling interests of a subsidiary - - - - - - (1,333) (1,333)
Acquisition of non-controlling interests in a subsidiary - - - (1,011) (1,797) (2,808) (10,348) (13,156)
At 30 APRIL 2019 2,592,451 276,418 (1,796) (67,280) (310,795) 2,488,998 7,485 2,496,483

At 1 November 2017 (as previously reported) 2,592,451 276,418 - 17,644 (341,637) 2,544,876 2,768 2,547,644
Effects of MFRS 15 adoption - - - (963) 33,041 32,078 628 32,706
At 1 November 2017 (restated) 2,592,451 276,418 - 16,681 (308,596) 2,576,954 3,396 2,580,350
Other comprehensive (loss)/income for the period:
- Exchange differences on translation of foreign operations - - - (77,585) - (77,585) (382) (77,967)
Loss for the period - - - - (36,632) (36,632) 377 (36,255)
Total comprehensive (loss)/income for the period - - - (77,585) (36,632) (114,217) (5) (114,222)

Issuance of preference shares by a subsidiary to

non-controlling interests - - - - - - 13,885 13,885
At 30 APRIL 2018 (RESTATED) 2,592,451 276,418 - (60,904) (345,228) 2,462,737 17,276 2,480,013

(The Condensed Consolidated Statement of Changes In Equity should be read in conjunction with the audited financial statements for the year ended 31 October 2018 and the accompanying explanatory
notes)
 5
ECO WORLD INTERNATIONAL BERHAD
(Company No: 1059850-A)
(Incorporated in Malaysia)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 APRIL 2019
(The figures have not been audited)

6 MONTHS ENDED
30 APRIL 2019 30 APRIL 2018
(RESTATED)
RM'000 RM'000

Cash Flows From Operating Activities

Profit/(Loss) before tax 12,125 (39,700)
Adjustments for:
Non-cash items (59,464) 10,090
Non-operating items 19,600 (9,504)
Operating loss before working capital changes (27,739) (39,114)
Changes in inventories - property development costs (273,584) (27,050)
Changes in receivables 1,749 (5,205)
Changes in payables 9,643 (554)
Cash used in operations (289,931) (71,923)
Interest received 2,571 22
Tax paid (1,093) (1,749)
Net cash used in operating activities (288,453) (73,650)

Cash Flows From Investing Activities

Purchase of plant and equipment (31) (1,215)
Proceeds from disposal of plant and equipment - 4
Repayment by/(Advances to) joint ventures 91,225 (548,322)
Investment in joint ventures (11,726) (51,191)
Acquisition of a subsidiary (13,156) -
Placements of deposits, debt service reserve and
interest service reserve accounts (2,293) (2,419)
Landholder duty - (269)
Interest received 3,135 9,849
Net cash generated from/(used in) investing activities 67,154 (593,563)

Cash Flows From Financing Activities

Drawdown of borrowings 242,007 209,552
Repayment of borrowings - (73,818)
(Repayment to)/Advances from a corporate shareholder of a subsidiary (15,826) 13,235
Finance costs (29,503) (8,888)
Dividend paid to non-controlling interests of a subsidiary (1,333) -
Repayment of hire purchase (23) -
Net cash generated from financing activities 195,322 140,081
 6
ECO WORLD INTERNATIONAL BERHAD
(Company No: 1059850-A)
(Incorporated in Malaysia)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 APRIL 2019 (continued)
(The figures have not been audited)

6 MONTHS ENDED
30 APRIL 2019 30 APRIL 2018
(RESTATED)
RM'000 RM'000

Net changes in cash and cash equivalents (25,977) (527,132)

Cash and cash equivalents at 1 November 2018/ 2017 427,597 986,680
Effect of exchange rate changes (222) (6,835)

Cash and cash equivalents at 30 April 2019/ 2018 401,398 452,713

Cash and cash equivalents comprise the following:

Deposits 296,660 439,145
Cash and bank balances 116,394 21,695
413,054 460,840
Less: Deposit pledged, debt service reserve and interest
service reserve accounts (11,656) (8,127)
401,398 452,713

(The Condensed Consolidated Statement of Cash Flows should be read in conjunction with the audited financial statements
for the year ended 31 October 2018 and the accompanying explanatory notes)
 7
A. NOTES TO THE INTERIM FINANCIAL REPORT

A1. Basis of Preparation

The interim financial report of the Group is unaudited and has been prepared in accordance with
Malaysian Financial Reporting Standard (“MFRS”) 134, Interim Financial Reporting, International
Accounting Standard (“IAS”) 34, Interim Financial Reporting and paragraph 9.22 of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

This interim financial report should be read in conjunction with the audited financial statements of the
Group for the financial year ended 31 October 2018.

The interim financial report does not include all of the information required for a complete set of MFRS
financial statements. However, selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the changes in the Group’s financial position and
performance since the last annual financial statements.

The accounting policies and methods of computation adopted by the Group in this interim financial
report are consistent with those adopted in the audited financial statements of the Group for the
financial year ended 31 October 2018, except for the adoption of the following new MFRSs,
Amendments to MFRSs and Issues Committee Interpretations (“IC Interpretations”), which are relevant
to the Group and effective for annual periods beginning on or after 1 November 2018:

Amendments to MFRS 1 and Annual Improvements to MFRS Standards 2014–2016 Cycle

MFRS 128
MFRS 9 Financial Instruments
MFRS 15 Revenue from Contracts with Customers
Amendments to MFRS 15 Clarifications to MFRS 15
Amendments to MFRS 2 Classification and Measurement of Share-based Payment
Transactions
Amendments to MFRS 140 Transfers of Investment Property
IC Interpretation 22 Foreign Currency Transactions and Advance Consideration

The adoption of the above new MFRSs, Amendments to MFRSs and IC Interpretations is not expected
to have a material impact to the Interim Financial Statements of the Group except for MFRS 9 and
MFRS 15, discussed as follows:

MFRS 9 Financial Instruments

MFRS 9 addresses the classification, recognition, derecognition, measurement and impairment of

financial assets and financial liabilities as well as general hedge accounting. It replaces MFRS 139
Financial Instruments: Recognition and Measurement and IC Interpretation 9 Reassessment of
Embedded Derivatives.

MFRS 9 contains a new impairment model based on expected losses (as oppose to ‘incurred loss’ model
under MFRS 139), i.e. a loss event need not occur before an impairment loss is recognised, which will
result in earlier recognition of losses.

The Group has assessed the effects of adopting MFRS 9 on their financial assets and financial liabilities
and concluded that the adoption does not have significant impact to the financial performance or
position upon their initial application.
 8

A1. Basis of Preparation (continued)

MFRS 15 Revenue from Contract with Customers

MFRS 15 introduces a new model for revenue recognition arising from contracts with customers.
MFRS 15 replaces MFRS 111 Construction Contracts, MFRS 118 Revenue, IC Interpretation 13
Customer Loyalty Programmes, IC Interpretation 15 Agreements for the Construction of Real Estate, IC
Interpretation 18 Transfers of Assets from Customers and IC Interpretation 131 Revenue – Barter
Transactions Involving Advertising Services. The application of MFRS 15 will result in difference in
amount and timing of revenue recognition as compared with current accounting policies.

The Group has conducted an assessment on the existing contracts with customers and identified, among
others, the following changes to the existing accounting principles:

(i) Timing of recognition for the sales of properties

The Group’s existing accounting policy is to recognise revenue on the basis of fair value of
consideration received or receivable from the sale of properties when the significant risks and
rewards of development units are transferred to purchasers. Upon adoption of MFRS 15, revenue
from property development is recognised as and when the control of the asset is transferred to the
customer and it is probable that the Group will collect the consideration to which it will be
entitled in exchange for the asset that will be transferred to the customer. Control of the asset may
transfer over time or at a point in time.

(ii) Accounting for incremental costs of obtaining a contract

The Group’s existing accounting policy is to expense off incremental costs, such as referral fees
and sales commissions, in obtaining a customer contract. Upon adoption of MFRS 15, these costs
are qualified to be recognised as an asset and subsequently amortised to profit or loss
progressively over the period during which the property sold is transferred to the customer as the
Group expects to recover these costs.
 9
A1. Basis of Preparation (continued)

The financial impacts to the Interim Financial Statements of the Group arising from the adoption of
MFRS 15 are disclosed as follows:

Condensed Consolidated Statement of Financial Position

As at 1 November 2017

As previously Effect of As
reported MFRS 15 restated
RM’000 RM’000 RM’000
ASSETS
Non-current assets
Plant and equipment 7,169 - 7,169
Goodwill 126,302 (21,104) 105,198
Investment in a joint venture 104,907 35,758 140,665
Amount owing by a joint venture 1,089,481 - 1,089,481
Deferred tax assets 19,316 - 19,316
1,347,175 14,654 1,361,829
Current assets
Inventories - properties development costs 366,717 (1,579) 365,138
Trade and other receivables 5,400 19,631 25,031
Current tax assets 682 - 682
Cash, bank balances and deposits 992,388 - 992,388
1,365,187 18,052 1,383,239
TOTAL ASSETS 2,712,362 32,706 2,745,068

EQUITY AND LIABILITIES

Equity
Share capital 2,592,451 - 2,592,451
Warrant reserve 276,418 - 276,418
Exchange translation reserve 17,644 (963) 16,681
Accumulated losses (341,637) 33,041 (308,596)
Equity attributable to owners of the
Company 2,544,876 32,078 2,576,954
Non-controlling interests 2,768 628 3,396
Total equity 2,547,644 32,706 2,580,350

Non-current liabilities
Borrowings 48,684 - 48,684
Deferred tax liabilities 1,944 - 1,944
50,628 - 50,628
Current liabilities
Trade and other payables 16,067 - 16,067
Amount owing to a corporate shareholder of a
subsidiary 16,340 - 16,340
Borrowings 79,913 - 79,913
Current tax liabilities 1,770 - 1,770
114,090 - 114,090
Total liabilities 164,718 - 164,718
TOTAL EQUITY AND LIABILITIES 2,712,362 32,706 2,745,068
 10
A1. Basis of Preparation (continued)

Condensed Consolidated Statement of Financial Position

As at 31 October 2018

As previously Effect of As
reported MFRS 15 restated
RM’000 RM’000 RM’000
ASSETS
Non-current assets
Plant and equipment 6,366 - 6,366
Goodwill 126,302 (21,104) 105,198
Investment in joint ventures 209,012 (16,162) 192,850
Amounts owing by joint ventures 2,116,983 - 2,116,983
Deferred tax assets 25,787 - 25,787
2,484,450 (37,266) 2,447,184
Current assets
Inventories - properties development costs 461,836 (1,505) 460,331
Trade and other receivables 20,972 22,577 43,549
Current tax assets 1,188 - 1,188
Derivative financial assets 2,004 - 2,004
Cash, bank balances and deposits 436,960 - 436,960
922,960 21,072 944,032
TOTAL ASSETS 3,407,410 (16,194) 3,391,216

EQUITY AND LIABILITIES

Equity
Share capital 2,592,451 - 2,592,451
Warrant reserve 276,418 - 276,418
Cash flow hedge reserve (10) - (10)
Exchange translation reserve (68,851) (4,144) (72,995)
Accumulated losses (306,399) (13,376) (319,775)
Equity attributable to owners of the
Company 2,493,609 (17,520) 2,476,089
Non-controlling interests 15,873 1,326 17,199
Total equity 2,509,482 (16,194) 2,493,288

Non-current liabilities
Borrowings 605,440 - 605,440
Hire purchase liability 134 - 134
Deferred tax liabilities 1,883 - 1,883
607,457 - 607,457
Current liabilities
Trade and other payables 43,473 - 43,473
Amount owing to a corporate shareholder of a
subsidiary 15,465 - 15,465
Borrowings 230,638 - 230,638
Hire purchase liability 48 - 48
Current tax liabilities 847 - 847
290,471 - 290,471
Total liabilities 897,928 - 897,928
TOTAL EQUITY AND LIABILITIES 3,407,410 (16,194) 3,391,216
 11
A1. Basis of Preparation (continued)

Condensed Consolidated Statement of Comprehensive Income

For the 6 months ended 30 April 2018

As previously Effect of As
reported MFRS 15 restated
RM’000 RM’000 RM’000
Revenue 18 (18) -
Direct expenses (2,514) - (2,514)
Gross loss (2,496) (18) (2,514)
Other income 9,871 - 9,871
Marketing expenses (6,218) 2,882 (3,336)
Administrative and general expenses (34,226) - (34,226)
Unrealised gain on foreign exchange (2,005) - (2,005)
Finance costs (98) - (98)
Share of results in joint ventures (13,566) 6,174 (7,392)
Loss before tax (48,738) 9,038 (39,700)
Taxation 3,445 - 3,445
Loss for the period (45,293) 9,038 (36,255)

Other comprehensive loss, net of tax

Item that may be reclassified to profit or loss
subsequently:
Exchange differences on translation of foreign
operations (74,840) (3,127) (77,967)
Total comprehensive loss for the period (120,133) 5,911 (114,222)

Loss for the period attributable to:

Owners of the Company (45,281) 8,649 (36,632)
Non-controlling interests (12) 389 377
(45,293) 9,038 (36,255)

Total comprehensive (loss)/income for the

period attributable to:
Owners of the Company (119,732) 5,515 (114,217)
Non-controlling interests (401) 396 (5)
(120,133) 5,911 (114,222)

Loss per share attributable to owners of the

Company:
Basic loss per share (sen) (1.89) 0.36 (1.53)
Diluted loss per share (sen) (1.89) 0.36 (1.53)
 12

A1. Basis of Preparation (continued)

Condensed Consolidated Statement of Cash Flows

For the 6 months ended 30 April 2018

As previously Effect of As
reported MFRS 15 restated
RM’000 RM’000 RM’000
Net cash used in operating activities (73,650) - (73,650)
Net cash used in investing activities (593,563) - (593,563)
Net cash used in financing activities (140,081) - (140,081)

A2. Seasonal or Cyclical Factors

The business operations of the Group during the 6 months ended 30 April 2019 have not been
materially affected by any seasonal or cyclical factors.

A3. Unusual items affecting Assets, Liabilities, Equity, Net Income or Cash Flows

There were no unusual items affecting assets, liabilities, equity, net income or cash flows during the 6
months ended 30 April 2019.

A4. Changes in Estimates

There were no material changes in estimates during the 6 months ended 30 April 2019.

A5. Debt and Equity Securities

There were no issuance or repayment of debt and equity securities, share buy-backs, share cancellations,
shares held as treasury shares or resale of treasury shares during the 6 months ended 30 April 2019.

A6. Dividends Paid

There was no payment of dividend during the 6 months ended 30 April 2019.
 13
A7. Segmental Reporting

The Group’s operating and reportable segments are business units operating in different geographical
locations:
(i) United Kingdom - the areas of operation are principally property development activities and
provision of advisory and project monitoring services;
(ii) Australia - the area of operation is principally property development activities; and
(iii) Malaysia - the areas of operation are investment holding and promotional and marketing services.

The segmental analysis for the 6 months ended 30 April 2019 is as follows:

United
Kingdom Australia Malaysia Eliminations Total
RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
Inter-segment revenue 10,572 - 138 (10,710) -
Total revenue 10,572 - 138 (10,710) -

Segment results (8,715) (6,520) (12,616) - (27,851)

Share of results in joint ventures 60,479 - - - 60,479
Depreciation (142) (337) (607) - (1,086)
Unrealised gain/(loss) on foreign
exchange 1 (2,875) 2,945 - 71
Other income 31 231 5,557 - 5,819
Finance costs - (7) (25,300) - (25,307)
Profit/(Loss) before tax 51,654 (9,508) (30,021) - 12,125
Taxation (791) 1,171 245 - 625
Profit/(Loss) for the period 50,863 (8,337) (29,776) - 12,750

Main foreign currency GBP AUD RM

Exchange ratio of 1 unit of
foreign currency to RM (1) 5.3495 2.9460 1.0000

United
Kingdom Australia Malaysia Eliminations Total
RM’000 RM’000 RM’000 RM’000 RM’000
Segment assets 2,507,074 806,507 310,912 - 3,624,493

Segment liabilities 3,191 272,067 852,752 - 1,128,010

Main foreign currency GBP AUD RM

Exchange ratio of 1 unit of
foreign currency to RM (2) 5.3665 2.9177 1.0000

Note:
(1)
Average rates for the 6 months ended 30 April 2019.
(2)
Closing rates as at 30 April 2019.
 14
A8. Significant Events after the End of the Interim Financial Period

There were no significant events after 30 April 2019 until 20 June 2019, the latest practicable date from
the date of issue of this interim financial report other than as disclosed in Note B6(a).

A9. Changes in the Composition of the Group

(a) There were no changes in the composition of the Group during the 6 months ended 30 April
2019, except as follows:

(i) Acquisition by Fortune Quest Group Ltd, a wholly-owned subsidiary of the Company, of
the remaining 20% equity interest in Eco World Yarra One Pty Ltd (formerly known as
Eco World-Salcon Y1 Pty Ltd) (“EcoWorld Yarra One”) from Salcon Development Sdn
Bhd, a wholly-owned subsidiary of Salcon Berhad for a total purchase consideration of
AUD4,519,569 (equivalent to approximately of RM13.15 million) on 24 April 2019. As a
result, EcoWorld Yarra One became an indirect wholly-owned subsidiary of the Company.

(b) There were no changes in the composition of the Group during the period between 1 May 2019
until 20 June 2019, being the latest practicable date from the date of issue of this interim financial
report.

A10. Fair Value of Financial Instruments

(a) Details of derivative financial instruments outstanding as at 30 April 2019 are as follows:

Fair Value
Notional Assets/
Amount (Liabilities)
RM’000 RM’000
Cross currency swaps
- Less than 1 year 124,095 190
- Between 1 to 5 years 251,637 (1,108)
375,732 (918)

(b) Fair value of financial liabilities

The carrying amounts of the Group's financial liabilities at amortised cost are reasonable
approximations of fair values.
 15
A11. Commitments and Contingencies

As at
30/04/2019
RM’000

Approved and contracted for:

- Commitment to purchase development land/ properties 14,172
- Commitment to fund joint ventures
(i) Eco World-Ballymore Holding Company Limited (“EW-Ballymore Holding”)
by way of share subscription and shareholder’s loans (Note a) 158,567
(ii) EcoWorld London by way of shareholder’s loan (Note b) 235,290
(iii) EcoWorld London DMCo by way of shareholder’s loan (Note b) 1,766

Note a

The Group and the other joint venture partner are jointly committed to provide additional funding into
EW-Ballymore Holding in the event that EW-Ballymore Holding is unable, on its own, to repay its
banking facilities when due (“Increased Commitments”). The Increased Commitments shall be in the
ratio of 75:25 based on the current proportion of the joint venture partners’ existing equity interests in
EW-Ballymore Holding.

The Group’s share of the Increased Commitments is GBP90 million (equivalent to approximately
RM482.98 million based on the exchange rate of GBP1.00 : RM5.3665 as at 30 April 2019). If funding
in excess of the Increased Commitments is required to satisfy any claims from the banking facilities, the
Company shall have the obligation to fund the excess amount should the other joint venture partner not
fund its proportionate share. Any funding provided in excess of the Increased Commitments by one
partner will result in a corresponding adjustment to the equity interest in the joint venture.

Note b

The Group and the other joint venture partner are jointly committed to provide additional funding into
EcoWorld London or EcoWorld London DMCo to prevent a breach of a covenant or undertaking by the
EcoWorld London group of companies or EcoWorld London DMCo under any 3rd party finance
agreement (“Additional Funding”). Any Additional Funding shall be in the ratio of 70:30 based on the
current proportion of the joint venture partners’ existing equity interests in EcoWorld London and
EcoWorld London DMCo.

If a joint venture partner (“Funding Shareholder”) funds the other partner’s (“Non-Funding
Shareholder”) share of the Additional Funding (“Shortfall”) and the Non-Funding Shareholder does not
fund the Shortfall within the stipulated timeframe, the Funding Shareholder has an option to acquire all
of the shares held by the Non-Defaulting Shareholder in EcoWorld London group of companies or
EcoWorld London DMCo, as the case may be, at a discount or a portion of such shares at a nominal
price.
 16
A12. Significant Related Party Transactions

6 MONTHS
ENDED
30/04/2019
RM’000
(i) Transactions with joint ventures
- Advances to joint ventures 126,472
- Repayment of advances by joint ventures (217,876)
- Interest receivable 30,822
- Sales commission 1,647

(ii) Transactions with wholly-owned subsidiaries of Eco World Development Group

Berhad (“EW Berhad”) where certain directors of the Company are also the
directors of EW Berhad
- Agent fees paid or payable 517
- Support service fees paid or payable 48

(iii) Transaction with a joint venture of EW Berhad where certain directors of the
Company are also the directors of EW Berhad
- Rental paid or payable 535

(iv) Transaction with a company where a director has interest

- Rental paid or payable 90

(v) Transaction with a company where a subsidiary director has interest

- Consultancy fee paid or payable 588

(vi) Transaction with a corporate shareholder of a subsidiary

- Repayment of advances to corporate shareholders (15,826)
- Interest receivable 691
 17
B. ADDITIONAL INFORMATION REQUIRED BY THE MAIN MARKET LISTING
REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

B1. Review of Group Performance

3 MONTHS ENDED 6 MONTHS ENDED

30/04/2019 30/04/2018 CHANGES 30/04/2019 30/04/2018 CHANGES
(RESTATED) (RESTATED)
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Gross loss (705) (846) 141 (1,583) (2,514) 931

Share of results in 13,825 (3,307) 17,132 60,479 (7,392) 67,871

joint ventures
Profit/(Loss) before 458 (27,090) 27,548 37,432 (39,602) 77,034
interest and tax
Profit/(Loss) before (11,994) (27,188) 15,194 12,125 (39,700) 51,825
tax
Profit/(Loss) for the (11,594) (26,080) 14,486 12,750 (36,255) 49,005
period
Profit/(Loss) for the
period attributable (11,981) (26,459) 14,478 10,777 (36,632) 47,409
to owners of the
Company

(a) Performance of the current quarter against the same quarter in the preceding year (2Q 2019
vs. 2Q 2018)

Gross loss for 2Q 2019 was RM0.71 million which was lower than RM0.85 million reported in 2Q
2018. The Group recorded a loss before tax (“LBT”) of RM11.99 million for 2Q 2019, as
compared to loss before tax (“LBT”) of RM27.18 million reported for 2Q 2018.

The lower LBT reported in 2Q 2019 as compared to 2Q 2018 was mainly due to recognition of
revenue and profit by its joint venture projects in the United Kingdom following completion and
commencement of handover of units sold to customers and lower unrealised foreign exchange loss,
partly offset by higher finance cost.

(b) Performance of the current year to-date against the same year to-date in the preceding year
(2Q YTD 2019 vs. 2Q YTD 2018)

The Group recorded a profit before tax (“PBT”) of RM12.12 million in the current financial period
compared to the loss before tax (“LBT”) of RM39.70 million reported for 2Q YTD 2018.

The PBT reported in the current financial period was mainly due to recognition of revenue and
profit by its joint venture projects in the United Kingdom following completion and
commencement of handover of units sold to customers. This enabled the Group to recognise
RM60.48 million as its attributable share of profit from its joint ventures as opposed to the share of
loss of RM7.39 million taken up in the previous corresponding period.

In addition, PBT in current financial period was due to an unrealised gain on foreign exchange of
RM0.07 million recorded for the 6 months ended 30 April 2019, as opposed to an unrealised loss
on foreign exchange of RM2.0 million recorded in 2Q YTD 2018.
 18
B2. Material Changes in the Quarterly Results compared to the Results of the Preceding Quarter

3 MONTHS ENDED
30/04/2019 31/01/2019 CHANGES
RM’000 RM’000 RM’000
Gross loss (705) (878) 173
Share of results in joint ventures 13,825 46,654 (32,829)
Profit before interest and tax 458 36,974 (36,516)
(Loss)/Profit before tax (11,994) 24,119 (36,113)
(Loss)/Profit for the period (11,594) 24,344 (35,938)
(Loss)/Profit for the period attributable to owners of
the Company (11,981) 22,758 (34,739)

The Group’s current quarter LBT was RM11.99 million, as opposed to PBT recorded of RM24.12
million in preceding quarter ended 31 January 2019.

The LBT recorded in the current quarter was mainly due to lower share of results in joint venture
projects in the United Kingdom due to the smaller number of handovers of units sold to customers
during the current quarter.

B3. Sales Achieved and Prospects for the Current Financial Year

LANDBANK
PROJECTS AS AT 7 MONTHS ENDED CUMULATIVE FUTURE
31/5/2019 31/5/2019 SALES REVENUE(1)
Total Units Units Sales value Total achieved Effective stake
(Acres) launched sold RM’mil(2) RM’mil(3) RM’mil(4)
London 49.2 192 148 548 10,137 5,375
Sydney 1.9 - - - 839 837
Melbourne 0.5 - 12 38 420 400
Total 51.6 192 160 586 11,396 6,612

EcoWorld International recorded RM586 million sales in the first seven months of FY2019. The sales
performance reflects the fruition of the Group’s strategy to expand into the mid-mainstream market in
London with products averaging from GBP500 psf to GBP800 psf as projects developed for this
market segment accounted for more than 50% of the sales achieved this period.

The sales performance as at 31 May 2019 is also a marked improvement from the first four months’
RM146 million as reported in the results announced for the previous quarter. The better performance
clearly indicates that certain pockets of demand for properties in London and Australia remain resilient,
even if overall homebuyers’ sentiment in these markets is weak amidst Brexit and economic
uncertainties.

Following the commencement of handover in London City Island, Embassy Gardens and Kensal Rise
in FY2018, Aberfeldy Village and Millbrook Park have also commenced handover in the second
quarter of FY2019. As at 30 April 2019, the Group has delivered 608 private units to the purchasers of
these five projects. More handovers are expected in the next few months, especially from London City
Island and Embassy Gardens, where four additional residential blocks are targeted for completion in
FY2019. This will enable the profits from these sales to be recognised in the upcoming quarters of
FY2019.

Beyond the current financial year, the Group expects to deliver Wardian, West Village and Yarra One
in the next financial year. A significant portion of the Group’s effective stake in the future revenue of
properties sold amounting to RM6.6 billion as at 31 May 2019 is therefore anticipated to be translated
into its share of profits from joint ventures in FY2019 and FY2020.
 19
B3. Sales Achieved and Prospects for the Current Financial Year (continued)

The Board is pleased to share that the launch of its new Verdo residential blocks in Kew Bridge in
February 2019 has achieved a healthy take-up rate of 43% to date, supported by good responses from
both local and foreign homebuyers. Riding on the success of Verdo, EcoWorld London launched a new
phase of Millbrook Park (Phase 2) in May 2019. Located in a mature suburb of London, this
development targets mainly downsizers, especially those already familiar to the area. Both Verdo and
Millbrook Park will extend the Group’s earnings visibility beyond FY2020 as they are targeted for
completion by FY2021-FY2022.

EcoWorld London is also pursuing new Build-to-rent (BtR) deals to tap into the growing institutional
demand for purpose-built BtR developments in the UK. Efforts ranging from land sourcing and
securing of financing to planning application and negotiations with potential BtR investors on its
existing sites are being undertaken. In this regard, the Board maintains the sales target of RM6 billion
to be achieved over FY2019 and FY2020. The 2-year sales target is to allow management the requisite
time to negotiate the best possible terms on potential en-bloc BtR sales to institutional investors.

On the corporate front, the Group successfully acquired another 4 apartment units in Macquarie Park,
Sydney, in May 2019. At this juncture, EcoWorld International has acquired 29 out of a total 30 units
and has commenced the relevant legal process to acquire the remaining unit. Accordingly, the Group’s
plans to launch Macquarie Park in FY2020 remains on track.

Notes:
(1)
Based on sales achieved.
(2)
Based on the exchange rate of GBP1.00 : RM5.3665 and AUD1.00 : RM2.9177 as at 30 April 2019.
(3)
Cumulative sales as at 31 May 2019 represent contracts exchanged of RM11.106 billion and
reserved units of RM290 million.
(4)
Share of future revenue based on effective stake in joint ventures and subsidiaries as at 31 May
2019 and excludes other reserved units.

B4. Variance of Actual Profit from Forecast Profit

There was no profit forecast published as at 30 April 2019.

 20
B5. Taxation

Taxation comprises:

3 MONTHS ENDED 6 MONTHS ENDED

30/04/2019 30/04/2018 30/04/2019 30/04/2018
(RESTATED) (RESTATED)
RM’000 RM’000 RM’000 RM’000
Current tax
Malaysian tax
- current quarter/year - (6) - -
Foreign tax
- current quarter/year 545 480 809 1,020
- in respect of prior years - - - (1)

Deferred tax
Malaysian tax
- current quarter/year - (207) - (629)

Foreign tax
- current quarter/year (945) (1,375) (1,415) (3,835)
- in respect of prior years - - (19) -

(400) (1,108) (625) (3,445)

The Group’s effective tax rate for the current quarter is lower than the statutory tax rate of 24% mainly
due to the inclusion of certain non-taxable items in the income statement. Correspondingly, expenditure
which relates to the derivation of non-taxable income by the Group has been treated as permanent losses
for tax purposes.
 21
B6. Status of Corporate Proposals

(a) Save and except for the following corporate proposal, there are no other corporate proposals that
have been announced by the Company which are not yet completed as at 20 June 2019:

Acquisition of 70% equity interest in 12 development projects and a development management

entity in UK

On 8 November 2017, the Company has announced a joint venture in UK with Be Living
Holdings Limited. The joint venture contemplates the proposed acquisition of a 70% equity
interest in 12 development projects in Greater London and the South East of England which is
slated to be carried out in two stages as well as a development management entity.

The Stage 1 acquisition involved 6 out of the 12 development projects has been completed on 19
March 2018. Acquisitions of Aberfeldy Village and Kew Bridge were the first Stage 2 projects
which have been completed on 30 May 2018 and 20 August 2018, respectively whilst the
remaining Stage 2 sites are proposed to be completed subject to satisfactory planning consents
meeting pre-agreed minimum criteria being obtained from the respective local councils.

Acquisition of apartment units to be developed as “Macquarie Park Project” in Sydney, Australia

On 24 November 2017, EcoWorld Macquarie, an indirect wholly-owned subsidiary of the

Company, entered into a conditional put and call option agreement (“Option Agreement”) with
the owners of 25 apartment units (“Vendors”) in respect of the acquisition of such units in the
strata scheme comprised by Strata Plan 6481 (“Strata Scheme”), located at 1-3 Lachlan Avenue,
Macquarie Park, Sydney, NSW 2113, Australia (“Properties”).

On 5 February 2018, the Option Agreement has become unconditional. EcoWorld Macquarie had
subsequently entered into a definitive sale and purchase agreement with each of the Vendors to
acquire the Properties. The acquisition of the Properties was completed on 9 November 2018
following the full settlement of the total purchase consideration of AUD33.8 million (equivalent
to RM102.45 million(a)).

On 1 March 2019, EcoWorld Macquarie had entered into a conditional sale and purchase
agreement with the owner to acquire the remaining 4 (out of 5) apartment units for a purchase
consideration of AUD5.65 million (equivalent to RM16.43 million(b)). The said acquisition was
completed on 30 May 2019.

EcoWorld Macquarie has commenced the strata renewal process to acquire the remaining 1
apartment unit and is running this process in tandem with negotiation with its owner. The
estimated total purchase consideration for all apartment units in the Strata Scheme is AUD41.0
million (equivalent to RM119.20 million(b)).

Following acquisition of all apartment units in the Strata Scheme, EcoWorld Macquarie proposes
to redevelop the land into a residential-led with a small commercial component development to
be known as the “Macquarie Park Project”.

Notes:
(a) Based on the exchange rate of AUD1.00 : RM3.0315 as at 8 November 2018, being the last
full market day prior to the announcement dated 9 November 2018.
(b) Based on the exchange rate of AUD1.00 : RM2.9073 as at 29 May 2019, being the last full
market day prior to the completion date on 30 May 2019.
 22
B6. Status of Corporate Proposals (continued)

(b) Utilisation of IPO Proceeds as at 30 April 2019 are as follows:

Gross proceeds totalling RM2,584 million were raised from the IPO which was completed on 3
April 2017. The status of the utilisation of these proceeds is as set out below:

Intended
Proposed Actual Re- Balance timeframe for
utilisation utilisation allocation unutilised utilisation from
Purpose RM’mil RM’mil RM’mil RM’mil completed date
Debt repayment
- Repayment of
bank borrowings 1,211 (1,159) (52) - Within 6 months
- Repayment of
advances 156 (143) (13) - Within 6 months
Subtotal 1,367 (1,302) (65) -

Settlement of the
acquisition of EW
Investment 38 (38) - - Within 1 month
Working capital
and/or future land
acquisition(s) 1,126 (1,187) 76 15 Within 36 months
Estimated listing
expenses 53 (42) (11) - Within 3 months
Total 2,584 (2,569) - 15
 23
B7. Group Borrowings and Debt Securities

The total group borrowings and debt securities as at 30 April 2019 were as follows:

As at As at
30/04/2019 31/10/2018
(RESTATED)
Secured/ Foreign RM RM
Unsecured Currency Equivalent Equivalent
’000 ’000 ’000

Short term borrowings

- Term loan Unsecured GBP 19,937 106,991 105,668
- Revolving credit Unsecured USD 29,943 123,859 124,970
230,850 230,638

Long term borrowings

- Term loans Secured AUD 78,142 227,995 78,216
- Term loan Unsecured AUD 29,673 86,577 -
- Medium term notes Unsecured RM - 527,581 527,224
842,153 605,440

Total borrowings
- Term loans Secured AUD 78,142 227,995 78,216
- Term loan Unsecured AUD 29,673 86,577 -
- Term loan Unsecured GBP 19,937 106,991 105,668
- Revolving credit Unsecured USD 29,943 123,859 124,970
- Medium term notes Unsecured RM - 527,581 527,224
1,073,003 836,078

As at 30 April 2019, the Group’s medium term notes, term loans and revolving credit comprise
facilities based on fixed and floating rates to finance the projects in United Kingdom and Australia and
are denominated in RM, GBP, AUD and USD.

B8. Material Litigation

The Group was not engaged in any material litigation as at 20 June 2019, being the latest practicable
date from the date of issue of this interim financial report.

B9. Dividends Declared

No dividend has been declared or recommended for payment by the Company during the 6 months
ended 30 April 2019.
 24
B10. Earnings/(Loss) Per Share Attributable to Owners of the Company

(a) Basic earnings/(loss) per share attributable to owners of the Company

Basic earnings/(loss) per share has been calculated by dividing the Group’s profit/(loss) for the
period attributable to owners of the Company by the weighted average number of ordinary shares
in issue. The weighted average number of ordinary shares in issue is calculated as follows:

3 MONTHS ENDED 6 MONTHS ENDED

31/04/2019 31/04/2018 30/04/2019 30/04/2018
(RESTATED) (RESTATED)
Profit/(Loss) for the period
attributable to owners of
the Company (RM’000) (11,981) (26,459) 10,777 (36,632)
Weighted average number of
ordinary shares (’000) 2,400,000 2,400,000 2,400,000 2,400,000
Basic Earnings/(Loss) Per
Ordinary Share (sen) (0.50) (1.10) 0.45 (1.53)

(b) Diluted earnings/(loss) per share attributable to owners of the Company

Diluted earnings/(loss) per share has been calculated by dividing the Group’s profit/(loss) for the
period attributable to owners of the Company by the weighted average number of ordinary shares
that would have been in issue upon full exercise of the Warrants, adjusted for the number of such
shares that would have been issued at fair value.

However, in the event that the potential exercise of the Warrants gives rise to an anti-dilutive effect
on earnings/(loss) per share, the potential exercise of the Warrants is not taken into account in
calculating diluted earnings/(loss) per share.

3 MONTHS ENDED 6 MONTHS ENDED

30/04/2019 30/04/2018 30/04/2019 30/04/2018
(RESTATED) (RESTATED)
Profit/(Loss) for the period
attributable to owners of
the Company (RM’000) (11,981) (26,459) 10,777 (36,632)
Weighted average number of
ordinary shares for Basic
Earnings/(Loss) Per
Ordinary Share (’000) 2,400,000 2,400,000 2,400,000 2,400,000
Effect of potential exercise of
Warrants (’000) # # # #
Weighted average number of
ordinary shares (’000) 2,400,000 2,400,000 2,400,000 2,400,000
Diluted Earnings/(Loss) Per
Ordinary Share (sen) * (0.50) (1.10) 0.45 (1.53)

Notes:
# The calculation of diluted earnings/(loss) per ordinary share does not assume the potential
exercise of Warrants as the effect on profit/(loss) per ordinary share is anti-dilutive
* Anti-dilutive
 25
B11. Auditors’ Report on Preceding Annual Financial Statements

The preceding audited financial statements for the year ended 31 October 2018 were unqualified.

B12. Notes to the Statement of Comprehensive Income

Comprehensive income/(loss) has been arrived at after crediting/(charging):

3 MONTHS 6 MONTHS
ENDED ENDED
30/04/2019 30/04/2019
RM’000 RM’000
Interest income 2,678 5,707
Interest expense (12,452) (25,307)
Depreciation and amortisation (541) (1,086)
Foreign exchange loss (1,584) (94)

By order of the Board

Tan Ai Ning
Company Secretary
27 June 2019