Chairman's Statement

(extracted from Annual Report 2011)

Reaching another lap in our growth path

On behalf of the Board of Directors, I am pleased to present our Annual Report for the financial year ended 31 March 2011.

Alongside the strong economic recovery, our Group's revenue grew from $24.8 million to $27.4 million, an increase of $2.6 million, or 10.5% compared to the previous financial year. A significant growth that is indicative of an optimistic course and outlook for our current and upcoming development ventures.

Corresponding to the higher revenue, Earnings Before Interest, Taxes, Depreciation and Amortization rose to S$5.3 million from S$4.4 million in the last financial year.

The main contributors of this growth are the ECON Medicare Centres and Nursing Homes in both Singapore and Malaysia. Revenue from other ancillary services such as ECON home care and ECON Traditional Medicine also contribute to the increase.

In line with the increasing volume of work in our facilities our staff costs increased by S$1 million (9%) from S$11.4 million to S$12.4 million. This also included the cost of upgrading overall management capabilities that help equip and propel our Group's local and international expansions.

Building a Stronger Core for Expansion

We are keeping our focus on West Point Hospital ("WPH") and will continue to enlarge our long-term vision for its development. Our expansion plan for WPH is progressing well on track. Upon completion, WPH will be transformed into a 100-bedded facility with a modern and comprehensive medical centre.

Reports show that due to the ageing population, there is an expected continuous increase in the demand for nursing home services. Consequently, our network of Medicare Centres and Nursing Homes continued to perform well, with almost full occupancy consistently reflecting our customers' continued confidence in our quality of care and services.

Partnering with the government through trusted service

Our favourable reputation as a reliable and quality healthcare provider strengthened by our premium brand positioning is reaping results. The Group has entered a first-of-its-kind partnership with the Ministry of Health (MOH) to operate and manage a new medicare centre at Yio Chu Kang Road. Operational since June 2011, ECON Medicare Centre @ Yio Chu Kang is expected to have positive impact on our group revenue and bottom line for FY2012. Likewise impressed by our strength and expertise in the elder care sector, Ministry of Community Youth & Sports commissioned the Group to operate a senior service centre to serve the residents at Golden Jasmine studio apartments (Bishan) as well as residents in the vicinity.

This new avenue of opportunity to serve the community by working hand in hand with the government is something we dedicate our expertise to with passion and commitment. We also see this as a good way to enhance our social responsibility endeavours as a corporate citizen. Being the first private operator to be awarded projects of such nature, we are positive and confident that we will be able to further our businesses in this area of collaborations with relevant government agencies and reach out to more people in need of quality healthcare.

The Group will continue to optimise occupancy, provide quality and costeffective healthcare services to its residents and bring greater value to the community and its shareholders.

Onward to Overseas Success

Our overseas branches projects are treading the same path to success as well. Expansion plans and new projects are in progress in Malaysia and China. We will continue to consolidate our local core business and enhance our strong branding in Singapore to help foster overseas growth.

Malaysia

As in Singapore, our Medicare Centre in Kuala Lumpur, Malaysia also delivered a commendable performance. Revenue increased 4.6% from S$980,000 to S$1,025,000. The new purpose-build ECON Medicare Centre which is located in Taman Perling, Johor, Malaysia, is scheduled for completion before end 2012. The planned capacity of 200 beds will comprise private rooms, open wards, physiotherapy area and traditional Chinese medicine facilities. Upon completion, it is expected to contribute positively to the Group's profitability as the medicare centre is positioned to attract residents from both Malaysia and Singapore.

China

The Group consultancy services in the planning and construction of the proposed development of Elderly Apartment projects in Suzhou Industrial Park and Tianjin Eco- City are progressing well. With the expected increase in ageing population in the People's Republic of China ("PRC"), the Group sees many opportunities in PRC market and we look forward to securing more of such exciting contracts in the future as it enhances the reputation and track record of the Group.

The performance in this FY has given us great confidence and optimism as we keep a solid standing. The road ahead looks promising as we gear up to take further strides for greater growth and development in the future. ECON's strong local branding will take us further beyond our local shores, as seen by our successes in the Malaysia and China markets.

We have reached a position where the international community perceives us as an outstanding healthcare brand in the Asia Pacific region, having been invited to share and present our experiences in regional conferences and seminars, for the benefit of the ageing population.

I am also particularly pleased with the growth and development of the management team, which has been moving in tandem with our business direction. The organisation places great emphasis on our people and this has brought us invaluable rewards. We will also continue to invest in the upgrading of our human resources so as to further strengthen our management and operating capabilities to achieve our vision and bring more value to our customers and shareholders.

I would also like to thank our board members for their expert counsel and support, our management and staff for their dedication, hard work and commitment, and our customers and suppliers for their continued confidence and trust in us.

Ong Chu Poh
Group Executive Chairman
4 July 2011