Annual Report 2015 - Rapid Connrapidconn.org/rcweb16/wp-content/uploads/2016/05/Annual-Report-2015.pdf · Annual Report 2015 Annual Report 2015 RAPID CONN INTERCONNECT (M) SDN BHD

2015Annual Report

Annual Rep

ort 2015

RAPID CONN INTERCONNECT (M) SDN BHDNo. 12-1 (1st Floor)Jalan Radin Bagus 9, Sri Petaling57000 Kuala Lumpur, MalaysiaTel: +6 03 9054 3776 Fax: +6 03 9055 3767

RAPID CONN (SHENZHEN) CO LTDNo. 12, Long Shan Road6th Lane, Luo Tian Social DistrictSong Gang Street, Bao An DistrictShenzhen City 518105People’s Republic of ChinaTel: +86 755 2972 6660 Fax: +86 755 2972 6744

RAPID CONN INC19571 Pauling, Foothill RanchCA 92610-2619 USATel: +1 949 951 1020 Fax: +1 949 951 8265

RAPID CONN (S) PTE LTD4012 Ang Mo Kio Ave 10 #03-07Tech Place 1 Singapore 569628Tel: +65 6841 4517 Fax: +65 6841 4519

www.connectcounty.com

(618933-D)

No. 12-1 (1st Floor)Jalan Radin Bagus 9, Sri Petaling57000 Kuala LumpurTel: +6 03 9054 3776Fax: +6 03 9055 3767

MALAYSIA

UNITED STATES OF AMERICA

SINGAPORE

ConnectC

ounty Holdings Berhad

CHINA

(618933-D)

Contents

02 Corporate Information

04 Chairman’s Statement

06 Board of Directors

07 Board of Directors’ Profile

12 Statement on Corporate Governance

40 Corporate Responsibility Statement

45 Audit Committee Report

52 Nomination Committee Report

56 Statement on Risk Management and Internal Control

60 Additional Compliance Information

62 Statement on Directors’ Responsibility for Preparing the Financial Statements

FinanCial statements

64 Directors’ Report

68 Statement by Directors

68 Statutory Declaration

69 Independent Auditors’ Report to the Members

71 Income Statements

72 Statements of Comprehensive Income

73 Consolidated Statement of Financial Position

74 Company Statement of Financial Position

75 Consolidated Statement of Changes in Equity

76 Company Statement of Changes in Equity

77 Statements of Cash Flows

79 Notes to the Financial Statements

125 Statistics of Shareholdings

127 Statistics of Warrantholdings

129 Notice of Annual General Meeting

Enclosed Proxy Form

2

AnnuAl RepoRt 2015 ConneCtCountY HolDInGS BeRHAD (618933-D)

BOARD OF DIRECTORS

• RoyTheanChongYew Independent Non-Executive Chairman

• AngChuangJuay Executive Deputy Chairman

• GohKokBoon Executive Director

• HongCheongLiang Independent Non-Executive Director

• LeeChoonKwong Non-Independent Non-Executive Director

COMPANYSECRETARY

• ChuaSiewChuan (MAICSA 0777689)

• ChengChiaPing (MAICSA 1032514)

AUDIT COMMITTEE• HongCheongLiang(Chairman)• RoyTheanChongYew• LeeChoonKwong

NOMINATION COMMITTEE• RoyTheanChongYew(Chairman)• HongCheongLiang• LeeChoonKwong

REMUNERATION COMMITTEERoyTheanChongYew(Chairman)Ang Chuang Juay HongCheongLiang

RISKMANAGEMENTCOMMITTEEAng Chuang Juay (Chairman)GohKokBoonNicholasCheeTiongKing

AUDITORS

MooreStephensAssociatesPLTChartered AccountantsUnit3.3A,3rdFloor,SurianTowerNo. 1, Jalan PJU 7/3Mutiara Damansara47810 Petaling JayaSelangor Darul EhsanTel:+60377281800Fax:+60377289800

SHAREREGISTRAR

SecuritiesServices(Holdings)SdnBhdLevel7,MenaraMileniumJalan DamanlelaPusat Bandar DamansaraDamansaraHeights50490KualaLumpurWilayah PersekutuanTel:+60320849000Fax:+60320949940

FORMOFLEGALENTITYIncorporated in Malaysia on 18 June 2003 as a private limited company

Converted to a public limited company on 19 December 2003, and listed on the ACE Market of Bursa Malaysia Securities Berhad on 20 October 2005

COMPANYNUMBER618933-D

REGISTEREDOFFICELevel7,MenaraMileniumJalan DamanlelaPusat Bandar DamansaraDamansaraHeights50490KualaLumpurWilayah PersekutuanTel:+60320849000Fax:+60320949940

BUSINESS OFFICENo. 12-1 (1st Floor)Jalan Radin Bagus 9Sri Petaling57000KualaLumpurWilayah PersekutuanTel:+60390543776Fax:+60390553767

STOCKEXCHANGELISTINGACEMarketof BursaMalaysiaSecuritiesBerhadBursaCode:0102ReutersCode:0102.KLBloombergCode:CCHBMKDateofListing:20October2005

PRINCIPALBANKERSMalayan Banking BerhadAmBank BerhadUOB Bank Berhad

CORPORATE WEBSITEhttp://www.connectcounty.com

CoRPoRate inFoRmation

3

CONNECTCOUNTY HOLDINGS BERHAD (618933-D) ANNUAL REpORT 2015

CORPORATEPROFILE

ConnectCountyHoldingsBerhad(“CCHB”or“theCompany”) is an investment holding company headquartered in Malaysia withsubsidiariesoperatinginChina,theUnitedStatesofAmericaandSingapore.TheCompany’soverseassubsidiariesareRapidConn(Shenzhen)Co.Ltd.(“RCC,China”),RapidConnInc.(“RCI, USA”),andRapidConn(S)Pte.Ltd.(“RCS,Singapore”).Theprincipal activities of its subsidiaries are that of design, manufacture, services, sales, and marketing of cables, wires, connectors andrelatedproducts.CCHB’ssubsidiariesarecollectivelyknownastheRapidConnGroup.

We are an integrated provider of interconnect solutions, offering vertically integrated services for in-house parts and sourcing activities with highly automated manufacturing facilities in China. Our advanced interconnect and cable solutions cater for diverse industries and applications globally. Our key industries include: connected homes and offices (set-top boxes andbroadband), smart connected devices (i.e. mobile and wearables), white goods, and automotive. Our manufacturing operations are undertaken by our Shenzhen-based plant (RCC, China), while our research and development (R&D) activities are undertaken by our US (RCI, USA) and China (RCC, China) subsidiaries.

Oursolutionscover:

1. Value-added products and services where we enhance industry standard cables and connectors in terms of additional features, improved product performance and product quality; and

2. Customization of products where we provide product development inclusive of conceptualization, design, prototyping, tool building, testing, debugging and tooling, all of which are undertaken based on our customers’ requirements.

All subsidiaries within the Group maintain and manage their individual portfolio of customers and industrial markets (both domestically and globally), and assume direct ownership and responsibility over the sales and marketing of cables, connectors and related products.

CORPORATE STRUCTURE

Corporate information (Cont’d)

CCHB

100% 100%

BorderlessFameSdnBhd(Dormant)

RapidConnGroup(Interconnect Solutions Provider)

100%

RapidPower(Shenzhen)Co.Ltd.

(China)(Dormant)

RapidConn(Shenzhen)Co.Ltd.

(China)

RapidConnInterconnect(M)

SdnBhd(Dormant)

RapidConn(S)Pte.Ltd.

(Singapore)

RapidConnInc.(USA)

4


FINANCIALREVIEW2015ANDHIGHLIGHTS

SalesFor the FYE 2015, CCHB and its subsidiaries (“the Group”) recorded a turnover of RM64.9 million as compared to RM52.6 million in the previous financial year. This was due to theincrease in sales in China’s domestic market, coupled with sales from new customers and increased orders from current customers. This was largely due to the Group’s aggressivesales campaigns into relatively new (i.e. in terms of market penetration), but key industries like automotive and white goods, while increasing its market presence geographically.

GrossmarginThe gross margin for the FYE 2015 stood at 24.3%, animprovement if compared to the previous financial year’s 22.5% in 2014. This was due mainly to the Group’s effortsin diversifying into high margin products, and the Group’s implementation of certain cost reduction initiatives which involved automation of wire harnessing and wrapping, which resultedinincreasedefficiencyandreducedlabourandinputcosts.Theprice reduction incertaincommoditiescrucial toour production such as resin and copper, had also contributed to the drop in raw materials costs.

Group’soverallperformanceTheGroup’sturnoverfortheFYE2015hasshowedarelativelymarked improvement over its previous financial year result. In terms of financial performance, the Group had recorded an increase in revenue, if compared to the previous year (i.e. an increaseby23%),whileincurringaprofitbeforetaxofRM2.8million.However,afteradjustingfordeferredtax,ouroverallperformance was an after tax profit of RM2.7 million against an after tax loss of RM3.0 million in the previous financial year.

THEGROUP’S5-YEARREVENUETREND

FYE

Revenue(RM)

RM’000

Revenue(USD

Equivalent)USD’000

WeightedAverage

RM : USD1

GrossMargin

%2011 51,420 16,587 3.10:1 17.862012 53,526 17,266 3.10:1 18.122013 52,792 16,498 3.20:1 23.392014 52,610 16,089 3.27:1 22.482015 64,877 16,635 3.90:1 24.31

TheGroupcontinuestoreviewandimprovebothitsnewandexistingcostsreductioninitiatives:a. Improvingtheemployeeefficiencyprogrammetofurther

enhance productivity;

b. Reviewing and updating the production remuneration scheme for production workers in its subsidiary in China, Rapid Conn (Shenzhen) Co., Ltd., where the employeeswould be remunerated according to productivity;

c. Progressive automation of its manufacturing processes – potentially new areas of automation both in terms of revenue generating machines and production lines were under review during the year which will enable the Group to reduce overall manufacturing costs and improve space utilisation. For example, we have started moving from manual assembly to automated machine (e.g. incorporating auto wire cut, wire strip, wire crimp and wire tin activities into a single automated machine) for the wire harness process, and switching from manual wrapping wire activities to automated wrapping and incorporating both automatic wrapping and tie activities into a single process;

d. Outsourcing of manufacturing activities to contractors located in the inland provinces of China;

e. Continuous investment in research and development for product innovation, while keeping abreast of advances in technologies affecting the market and changing consumers’ tastes and requirements; and

f. Management is looking at a full vertical integration process which will increase the Group’s margin (due to overall costs savings), and enable better control over quality and enhance delivery lead time.The benefits toboth cost reduction and enhanced delivery lead time will become even more apparent with automation.

Significant Corporate Developments

(a) NewIndirectSubsidiary–RapidPower(Shenzhen)Co.Ltd.

On 12 February 2015, Rapid Conn (Shenzhen) Co., Ltd.(“RCC,China”), a wholly-owned subsidiary of the Company incorporated a new majority-owned subsidiary inShenzhen,China,namelyRapidPower(Shenzhen)Co.Ltd.(“RPS”) (formerly known as HS. Co. Ltd.). Subsequently, on 20 July 2015, RPS became a wholly-owned subsidiary of RCC, China,whichinturnisawholly-ownedsubsidiaryofCCHB.

On behalf of the Board of Directors, I am pleased to

present to you the Annual Report and the Audited

FinancialStatementsofConnectCountyHoldingsBerhad

(“CCHB”orthe“Company”) for the financial year ended

31December2015(“FYE2015”).

CHaiRman’s statement

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Chairman’s statement (Cont’d)

(b)ProposedRightsIssueApprovedbyShareholders On 19 October 2015, the Company announced its proposal

to undertake the following, which had been subsequently approved by the shareholders at the Extraordinary GeneralMeetingheldon8April2016:

1. Proposed renounceable rights issue of up to 800,994,000 new irredeemable convertible preference shares (“ICPS”) at an issue price of RM0.025 per ICPS on the basis of three (3) ICPS for every one (1) existing ordinary share of RM0.10 each held on an entitlement date to be determined later together with up to 53,399,600 free detachable warrants (“Warrant(s)-B”) on the basis of one (1) free Warrant-B for every fifteen (15)ICPSsubscribed(“ProposedRightsIssueofICPS”);

2. Proposed increase in the authorised share capital of the Company in order to facilitate the issuance of ICPS and new Shares arising from the conversion thereof (“Proposed IASC”); and

3. Proposed amendment to the Memorandum and Articles of Association of the Company in order to facilitate the issuance of ICPS and the Proposed IASC.

TheaboveproposalswillenabletheCompanytoraisethenecessary funds required for the capital expenditure and working capital of the Group without incurring additional interest cost as compared to bank borrowings.

FUTUREOUTLOOKANDGROUPPROSPECTS

The Interconnect market boasts of annual sales exceedingUSD120 billion. The connector industry contributed tomore than USD50 billion whilst the remainder of the pie are occupiedbythecableassemblymarket.AnalystsinTechnavioforecast the global cable assembly market to grow at a CompoundAnnualGrowthRate(“CAGR”)of9.15%overtheperiod 2014 to 2019.

OutlookfortheConnectedHomesandOfficeIndustry,whichis Rapid Conn’s core competency, looks bright. Broadband and Set-TopBox(“STB”) markets formed the crux of the Connected HomesandOfficeIndustry.TheBroadbandmarketisexpectedto close at USD7.8 billion for year 2015. Even though it is a drop from 2014’s USD11 billion record-breaking sales, IHS(Information Handling Services, USA) has raised its outlookfor the broadband customer premises equipment (“CPE”) market,whichincludesDSL,cable,fibre-to-the-home(“FTTH”), residential gateways and mobile broadband CPE, by 8% toUSD12.4 billion by year 2019. Their basis for the optimisticforecast stems from the ongoing massive investments in China with the help of Government’s subsidies.

Themarket for STBs is expected to surpassUSD18billionby2019 due to its easy deployment options and the introduction

of features like pause and play facility. APAC region will account formorethan56%ofthetotalmarketshareby2019.Marketgrowth in this region is primarily driven by countries like China and India, where the rapid digitisation of analogue TVs isresulting in its rapid adoption during the forecast period. China andIndiawilldominatetheSTBmarketstill2019astheyarealready in theprocessofupgradingtodigitalSTBs.However,the largest growth can be expected from South and Central AmericaastheyareonlyjuststartingtodigitisetheirSTBs.ForEurope markets, Western Europe may experience saturation but growth will be seen coming from Central and Eastern Europe, as they continue to move into digitisation.

One of the new industry that Rapid Conn has successfully made a foray into is the Smart Connected Devices aka Consumer Electronics Market. They include Smart TVs,Smartphones, tablets, smart wearables, etc). According to “Consumer Electronics Market: Global Industry Analysisand Opportunity Assessment 2015-2020”, a research report by Future Market Insights (“FMI”), the global consumer electronics market will be worth approximately USD3 trillion by 2020. Wearable technology is gaining popularity at such a rapidpace,andithasgonebeyondjustconnectedeyewearand smartwatches with new products such as wrist bands, smartshoes,smartapparels,andmore.Theoverallwearabletechnology market for wearable technology is expected to reachUSD31.27billionby2020,ataCAGRof17.8%between2015 and 2020.

WithourTSCertificationobtainedin2013,wearecontinuingour foray into the automotive market. The market outlookfor the automotive industry looks healthy with worldwide car sales targeted to reach 74.38 million units by 2016 and is expected to exceed 100 million units by 2020 (from Statista Inc. report, 2016). The automotivemarket in the EuropeanUnion are set to recover but the main boost in worldwide car sales will come from Asian markets. Car sales are on the rise in Malaysia, Indonesia and India, and particularly in China where sales of passenger cars quadrupled to a staggering 19.7 million units in 2014.

APPRECIATION

On behalf of the Board of Directors, I wish to extend my sincere thanks to all our valued customers, financiers, business associates, Government authorities and shareholders for their continued support, co-operation and confidence in the Group. I would also like to convey my sincere appreciation and gratitude to my fellow Directors, the management and staff for their dedication and commitment to the Company.

RoyTheanChongYewIndependent Non-Executive Chairman29 April 2016

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BoaRd oF diReCtoRs

1.RoyTheanChongYew Independent Non-Executive Chairman

2.AngChuangJuay Executive Deputy Chairman

3.GohKokBoon Executive Director

4.HongCheongLiang Independent Non-Executive Director

5.LeeChoonKwong Non-Independent Non-Executive Director

25 1 3 4

7


Board of directors’ Profile (Cont’d)

BoaRd oF diReCtoRs’ PRoFile

ROYTHEANCHONGYEWIndependent Non-Executive ChairmanMalaysian, aged 45

DateofappointmentasDirector 29 September 2014

Lengthofservicesincethedateofappointment(asat31March2016)

1 year 6 months

BoardCommittee(s)servedon • MemberoftheAuditCommittee• ChairmanoftheNominationCommittee• ChairmanoftheRemunerationCommittee

Academic/ProfessionalQualification(s) • MemberoftheMalaysianInstituteofCertifiedPublicAccountants(“MICPA”)

• MemberoftheMalaysianInstituteofAccountants(“MIA”) • CharteredMemberofInstituteofInternalAuditorsof

Malaysia(“CMIIA”)

PresentDirectorship(s)inotherPublicListedCompanies

• JAGBerhad• MalaysiaSteelWorks(KL)Berhad

WorkingexperienceMr.RoyTheanstartedembarkingonhiscareerpathin1994withPKFMalaysia.Afteraccumulatingextensiveworkingexperienceinhisfield,he leftPKFMalaysiaasanAuditManager in2003 to joinaprofessional servicesfirm,RussellBedfordMalaysiaBusiness Advisory Sdn. Bhd. for another six (6) years, rising to the position of an Executive Director.

Heisatpresentinthecommercialline,whereheisanExecutiveDirectorandalsoactsastheGroupFinancialControlleroftheJIWAGroupofCompaniesthatisinvolvedinmanufacturingandprojectmanagementactivities.Withover20yearsofworkingexperience in localand internationalprofessional servicesfirms,Mr.RoyTheanhasbeen involved in renderingawideanddiverserangeofprofessionalservicestopubliclistedcompaniesandmultinationalandlargenationalenterprises.Hisworkencompasses a wide range of professional services with his core practice being in corporate finance and advisory work for transaction support services including business valuations, financial due diligence, preparation of business plans and financial modelling, internal control and business risk review, corporate governance, risk management, merger / acquisition related services, internal and external auditing.

Presently,Mr.RoyTheanactsasanAuditCommitteeChairmanofJAGBerhadandhealsoholdsthepositionofanIndependentNon-ExecutiveDirectorofMasteelSteelWorks(KL)Berhad.

TimecommittedMr.RoyTheanattendedallfive(5)BoardofDirectors’MeetingoftheCompanyheldinthefinancialyearended2015.

8



ANGCHUANGJUAYExecutive Deputy Chairman Singaporean, aged 58

DateofappointmentasDirector 18 August 2003


12 years 7 months

BoardCommittee(s)servedon • MemberoftheRemunerationCommittee• ChairmanoftheRiskManagementCommittee

Academic/ProfessionalQualification(s) Bachelor Degree in Engineering from the National University of Singapore


N/A

WorkingexperienceMr.AngbeganhiscareerwithWearnesTechnologyastheHeadofitsPrintedCircuitBoardassemblyoperations.HeremainedwiththeCompanyfor6yearsthroughoutwhichheobtainedextensiveexposureinsurfacemounttechnology(“SMT”), floppy diskdrive(“FDD”)andharddiskdrive(“HDD”)operation.HewassecondedtoTaiwantoheadtheproductionunitandwassubsequentlysenttoChinatosetuptheFDDoperation.HealsoworkedastheManagingDirectorofaUIITcompanybasedinSingapore specialising in networking.

AfterthetakeoveroftheUKITCompanybyanotherfirm,hebecameaconsultanttoNS-TechCo.Ltd.HistalentsandnaturaldrivewasspottedbythefoundingmemberofNS-TechCo.Ltd.andwasropedintoassistintheexpansionintotheUSAandsetup a presence in Singapore. Not satisfied with merely being a subcontractor for Original Equipment Manufacturer and with his mind firmly set on working in the forefront technology with multinational companies, he decided to pursue his own goals and visionsbydivestinghisinterestsinNS-TechCo.Ltd.andthereafterformedConnectCountyHoldingsBerhad(“CCHB”).

TimecommittedMr. Ang attended all five (5) Board of Directors’ Meeting of the Company held in the financial year ended 2015.

9



GOHKOKBOONExecutive DirectorMalaysian, aged 42

DateofappointmentasDirector 29 September 2014


1 year 6 months

BoardCommittee(s)servedon • MemberoftheRiskManagementCommittee

Academic/ProfessionalQualification(s) • BachelorofAppliedScience(Honours)inElectricalEngineering from University of Windsor, Ontario, Canada

• HewasalsolistedintheDean’sHonourRollin1999


N/A

WorkingexperienceMr.Gohbeganhiscareerin2000asaprojectengineerwithamechanicalandelectricalcontractingfirmandhasaccumulatedmorethan15yearsexperienceinthefieldofmechanicalandengineeringrisingtotherankofanExecutiveDirector.Healsoheld key positions in a retail, food and beverage business.

TimecommittedMr. Goh attended all five (5) Board of Directors’ Meeting of the Company held in the financial year ended 2015.

10



HONGCHEONGLIANGIndependent Non-Executive DirectorMalaysian, aged 37

DateofappointmentasDirector 30 October 2014


1 year 5 months

BoardCommittee(s)servedon • ChairmanoftheAuditCommittee• MemberoftheNominationCommittee• MemberoftheRemunerationCommittee

Academic/ProfessionalQualification(s) • BachelorofManagement(Hons) UniversitiTunAbdulRazak,KelanaJaya,Selangor,Malaysia• MastersofBusiness University of South Australia, Adelaide, South Australia,

Australia• MemberoftheMalaysianInstituteofAccountants(“MIA”) • MemberoftheCertifiedPractisingAccountants,Australia

(“CPA”) • AnassociatememberofInstituteofInternalAuditorsin

Malaysia• AnapprovedGSTTaxAgentunderSection170ofGoods

andServicesTaxAct(“GSTAct”), 2014


N/A

WorkingexperienceMr.HongcommencedhiscareerasanauditassistantwithRussellBedfordLC&Company(“RBLC”)in2004.HeiswellexposedintheareaofinternalauditsofPublicListedCompanies(“PLCs”), external financial audits, tax, liquidation, financial modeling andcorporateadvisory.SomeofhissignificantassignmentsincludeperforminginternalauditsforvariousPLCs,conductingvariousfinancialduediligencesformergerandacquisitionexerciseanddevelopingafinancialmodelforanationallevelHighImpactProject.

HeleftRBLCtojoinaboutiqueinvestmentadvisoryfirmasAssistantVicePresidentin2008,whereheobtainedhiscorporatefinanceandmanagementexperiences.Hewasinvolvedinvariousassignmentsinadvisingclientswhoseekcorporatefinanceadvicelocallyandabroad.HewasalsoassignedtoassistthemanagementofaleadingshoppingmallinKualaLumpur.

After his stint in the investment advisory firm, he moved on to provide corporate and management advisory services as well asinternalauditandriskmanagementservicestosmallmediumenterprisesandPLCs.SincethenhehasalsoactedasGroupAccountantofaPLC,tookontheroleasFinancialControllerofanAIMlistedcompany,andactedasFinanceManagerofalargemanufacturing corporation based in China.

TimecommittedMr.Hongattendedallfive(5)BoardofDirectors’MeetingoftheCompanyheldinthefinancialyearended2015.

11


LEECHOONKWONGNon-Independent Non-Executive Director Malaysian, aged 48

DateofappointmentasDirector 7 November 2014


1 year 4 months

BoardCommittee(s)servedon • MemberoftheAuditCommittee• MemberoftheNominationCommittee

Academic/ProfessionalQualification(s) DiplomainInstituteTechnologyIndustry


N/A

WorkingexperienceMr.LeewaspreviouslytheManagingDirectorofCendanaJayaSdn.Bhd.from1993to1996andwasinvolvedinthewiringtapebusiness.From1994to1997,hewasaDirectoratUltimateLaserDiscSdn.Bhd.andaManageratU-TaTrading.Thereafter,hejoinedJaringMetalIndustriesSdn.Bhd.inOctober1997astheGeneralAffairsManager.HeiscurrentlyappointedastheGeneralAffairsDirectorsince2010.Mr.LeeisresponsibleforliaisingwithGovernmentauthoritiesandalsotaskedwithsalesandmarketingobjectives.Heisalsoresponsibleforsupplychainactivities.

TimecommittedMr.Leeattendedthree(3)BoardofDirectors’MeetingoftheCompanyheldinthefinancialyearended2015.

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statement on Corporate Governance (Cont’d)

TheBoardispleasedtoprovidethisstatementwhichoutlinewithanoverviewofthemannerinwhichtheGrouphasappliedtheprinciples and the extent of compliance with the best practices as advocated by the Malaysian Code on Corporate Governance 2012(“MCCG2012”) under the stewardship of the Board, throughout the financial year under review, i.e. financial year ended 31December2015(“FYE2015”).

ThisstatementalsoservesasacompliancewithRule15.25oftheACEMarketListingRequirements(“ACELR”) of Bursa Malaysia SecuritiesBerhad(“BursaSecurities”).

(I) ESTABLISHCLEARROLESANDRESPONSIBILITIES

1. ClearFunctionsoftheBoardandManagement

BoardofDirectors(“theBoard”)

The Board is responsible for the leadership, oversight and the long-term success of theGroup.The Board fullyunderstands their collective responsibilities in guiding the business activities of the Group in reaching an optimum balance of a sound and sustainable business operation with an optimal corporate governance framework in order to safeguard shareholders’ value.

The Board has reserved certain items for its review including the approval of Group strategic plans, financialstatements,dividendpolicy,riskmanagement,significantacquisitionsanddisposals,investmentsinsignificantjointventures, significant property transactions, significant capital expenditure, dividends and board appointments.

The Board has also delegated certain responsibilities to other Board Committees,which operatewithin clearlydefinedTermsofReference(“TOR”). Standing committees of the Board include the Audit Committee, Nomination Committee,RemunerationCommitteeandRiskManagementCommittee.TheBoardreceivesreportsatitsmeetingsfromtheChairmanofeachcommitteeoncurrentactivitiesanditisthegeneralpolicyoftheCompanythatallmajordecisions be considered by the Board as a whole.

SeniorManagementTeam

TheBoardisdulyassistedbytheManagementoftheCompany,namelytheSeniorManagementTeam.TheSeniorManagementTeamconsistsofsenioremployeesholdingthefollowingpositions:-

JobDesignation NameExecutive Deputy Chairman Mr. Ang Chuang JayExecutive Director Mr.GohKokBoonChiefFinancialOfficer Mr.NicholasCheeTiongKingGeneral Manager / Director, RCC, China Mr.LimSayChuanVice President, Operations Mr.BalajiRaghunathanGroup Business Development Director Ms.CorinaYong

TheBoardofDirectorsrecognisesthatcorporate

governance is of paramount importance in

ensuring the Company is managed in the best

interest of the shareholders.

statement on CoRPoRate GoVeRnanCe

13



(I) ESTABLISHCLEARROLESANDRESPONSIBILITIES(CONT’D)

1. ClearFunctionsoftheBoardandManagement(Cont’d)

BoardofDirectors(“theBoard”)(Cont’d)

TheprincipalresponsibilitiesoftheSeniorManagementTeamareasfollows:- • Developing,co-ordinatingandimplementingbusinessandcorporatestrategiesfortheapprovaloftheBoard; • ImplementingthepoliciesanddecisionsoftheBoard; • Overseeingtheday-to-dayoperationsoftheGroup; • Toparticipatesinvariousmanagementcommitteesorworkingcommitteesfortheeffectivedischargeofduties

and functions; • Relevantmember(s) of theSeniorManagementTeambe invited to attendBoardand/orBoardCommittees

meetings to advise and furnish the Board and/or Board Committees with information, report, clarifications as and when required on the agenda items to be tabled to the Board and/or Board Committees, to enable the Board and/or Board Committees to arrive at a decision.

2. ClearRolesandResponsibilitiesoftheBoard

TheBoardhasreservedaformalscheduleofmattersforitsdecisionmakingtoensurethatthedirectionandcontrolof the Group is firmly in its hands. It provides effective leadership and manages overall control of the Company and its subsidiary companies the Group’s affairs through the discharge of the following principal duties and responsibilities:-

(a) ReviewingandadoptingastrategicplanfortheCompany

TheBoardplaysanactiveroleintheestablishmentoftheCompany’sstrategicplan.Atthebeginningofthefinancial year, Management would present to the Board the proposed business plans as well as the annual budgetfortheyear.TheBoardreviewsanddeliberatesthosedocumentsatgreatlength,aswellaschallengingManagement’s underlying assumptions, prior to approving the same for adoption.

Duringthefinancialyearended31December2014(“FYE2014”),theBoardhasadoptedthefollowingtwo(2)strategicbusinessplanstodrivethesalesandsimultaneouslyincreasingtheprofitmarginoftheGroup:-

(1) Sales Growth Plan; and (2) Margin Management Plan.

ForFYE2015,beingsecondyearinrunningaftertheadoptionoftheabovementionedstrategicbusinessplans,the Board noted both the strategic business plans have yielded positive results and the same have been reflected inthefinancialperformanceoftheGroupi.e.anincreaseofRM12.3millioninturnovertoRM64.9millionforFYE2015ascomparedtoRM52.6millionforFYE2014.

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2. ClearRolesandResponsibilitiesoftheBoard(Cont’d)

(a) ReviewingandadoptingastrategicplanfortheCompany(Cont’d)

During the financial under review, the Board has reviewed and approved the following strategic business activitiesoftheGroup:-

(1)Disposalof551,000ordinarysharesofRM1.00eachfullypaid-upinthecapitalofMyGenBizzBerhad(“MGB”), anassociatecompanyrepresenting36.73%sharesheldinMGB;

(2) Proposed venture into the manufacturing of automotive components for a Japanese car maker in China;

(3)ProposedexpansionintoThermoplasticElastomers(“TPE”) business as part of Vertical Integration Plan;

(4)Proposedincorporationofanewmajority-ownedsubsidiaryinChina;and

(5) Proposed Renounceable Rights Issue of up to 800,994,000 New Irredeemable Convertible Preference Shares (“ICPS”) at an Issue Price of RM0.025 per ICPS on the Basis of three (3) ICPS for every one (1) Existing Ordinary ShareofRM0.10eachheldonanEntitlementDatetobeDeterminedLatertogetherwithupto53,399,600FreeDetachableWarrants(“Warrant(S)-B”) on the Basis of One (1) Free Warrant-B For Every Fifteen (15) ICPS Subscribed(“ProposedRightsIssueofICPS”).

(b)OverseeingtheconductoftheCompany’sbusiness

TheBoardmonitorstheperformanceofManagementonaregularbasisvidetheinsertionofrelevantagendaitem in the Board Meetings.

As the de facto executive head of the Group, the Executive Deputy Chairman is required to brief the Board on the operationalperformanceoftheGroupwhiletheChiefFinancialOfficer(“CFO”) is required to present a quarterly report on the financial performance of the Group.

As with any other business proposal, the Board conducted regular reviews vide the receipt of regular updates at everyBoardMeetinginrelationtothestrategicbusinessplansapprovedbytheBoardearlier.TheBoardwouldthen make the necessary business decisions to adapt to changing circumstances.

ForFYE2015, theBoardnotedthefollowingdevelopment inrelationtothetwo(2)strategicbusinessplansadoptedsinceFYE2014:-

(1)SalesGrowthPlan

For FYE 2015, the aggressive sales campaigns into key industries such as automotive and white goodsundertakenbythelocalsalesteaminRapidConn(Shenzhen)Co.Ltd.(“RCC,China”) have borne fruit with sales from new customers and increased orders from current customers.

(2)MarginGrowthPlan

With the Group’s intensive efforts in diversifying into high margin products and the Group’s implementation ofcertaincostreductioninitiatives,thegrossmarginforFYE2015stoodat24.3%ascomparedto22.5%forFYE2014.

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(b)OverseeingtheconductoftheCompany’sbusiness(Cont’d)

(2)MarginGrowthPlan(Cont’d)

Under the Margin Growth Plan, the Board noted Management has undertaken the following cost reduction initiativesforFYE2015:-

(a) ImprovementmadetotheEmployees’EfficiencyProgramme(“EEP”) to further enhance productivity of employees of RCC, China;

(b) ReviewandadjustmenttotheProductionRemunerationScheme(“PRS”) for production workers in RCC, China where those employees were now being remunerated mainly based on productivity level instead of fixed remuneration to increase the motivation and productivity of Production Department of RCC;

(c) Progressive automation of RCC’s manufacturing processes – potentially new areas of automation both in terms of revenue generating machines and production lines were under review during the year which would enable the Group to reduce overall manufacturing costs and improve space utilisation. For example, we have moved from manual assembly to automated machine (e.g. incorporating auto wire cut, wire strip, wire crimp and wire tin activities into a single automated machine) for the wire harness process, and switching from manual wrapping wire activities to automated wrapping and incorporating both automatic wrapping and tie activities into a single process;

(d) For RCC, outsourcing of certain manufacturing activities to contractors located in the inland provinces of China;

(e) ForRapidConn,Inc.,UnitedStatesofAmerica(“RCI, USA”), the Group’s centre of excellence for research and development (“R&D”) activities, continuous investment in R&D for product innovation, while keeping abreast of advances in technologies affecting the market and changing consumers’ tastes and requirements; and

(f ) For the Group, Management is looking at a full vertical integration process which will increase the Group’s margin (due to overall costs savings), and enable better control over quality and enhance delivery lead time. The benefits to both cost reduction and enhanced delivery lead time will become evenmoreapparent with automation.

(c) Identification of principal risks and implementation of appropriate internal controls and mitigationmeasures

Mindful of its duties in terms of identification of principal risks as well as the need to institute risk management andinternalcontrolmeasures.TheBoardhasadoptedaGroupRiskManagementFramework(“GroupRMF”) to manageitsriskandopportunities.ABoardCommitteeknownastheRiskManagementCommittee(“RMC”) was established by the Board since 17 April 2012.

RiskManagementCommittee(“RMC”)

TheBoardoverseestheGroupRMFvidetheRMC.TheRMCisgovernedbyitsownTermsofReference(“TOR”). TheTORoftheRMCisavailableas“AppendixD” of the Board Charter and is accessible from the Company’s website at www.connectcounty.com.

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(c) Identification of principal risks and implementation of appropriate internal controls and mitigationmeasures(Cont’d)

RiskManagementCommittee(“RMC”)(Cont’d)

TheRMCischairedbyMr.AngChuangJuay,theExecutiveDeputyChairmanandismadeupofselectedmembersoftheSeniorManagementTeam.ThecompositionoftheRMCisasfollows:-

Name Position Designation AttendanceofMeetings

Mr. Ang Chuang Juay Chairman Executive Deputy Chairman 2/2Mr.GohKokBoon Member Executive Director 2/2Mr.NicholasCheeTiongKing Member ChiefFinancialOfficer 2/2

ForFYE2015,theRMCmettwiceanda100%attendancewasachievedbyallmembers.

PrincipalDutiesandResponsibilities:-

TheRMChasbeenentrustedbytheBoardtoidentify,evaluate,monitorandmanageanyrelevantmajorriskfacedbytheGroupsothattheGroupwillachieveitsbusinessobjectives.However,theBoardasawholeremainsresponsible for all the actions of the RMC with regard to the execution of the delegated role and this includes the outcome of the review and disclosure on key risks and internal control in the Company’s annual reports.

PrincipalRisksIdentified:-

TheRMChasidentifiedthefollowingsignificantrisksforFYE2015:-

(1) Sales and operations risk

Cost of doing business in China has been on an increasing trend in view of the rising minimum wage imposed by thegovernmentof Peoples’ Republic ofChina (“PRC”).The automationof relevantoperations in RCC,China as indicated in the Margin Growth Plan, form part of the mitigation measure to countermeasure the over reliance on manual workers.

(2) Credit risk

As part of the Sales Growth Plan, the local sales team of RCC, China, only pursued from a pool of carefully identified potential new customers with reputable and good track records in order to mitigate the credit risk.

(3) Market risk

AspartoftheSalesGrowthPlan,ManagementhasestablishedsalesrepresentativeofficesinTaiwan,partsofChina and the USA in order to diversify the sources of income and mitigate against the market risk.

(4) Foreign exchange risk

Tomitigate against the fluctuation of currencies, Management hasmainly dealt in United States Dollar(“USD”) in its transactions, be it procurement or sales.

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SummaryofRMCactivitiesheldforFYE2015:-

ForFYE2015,theRMChascarriedoutthefollowingthreemainactivities:-

(1) Review of Group RMF

TheexistingGroupRMFwasadoptedbytheBoardofDirectorson17April2012andwiththeeffluxoftimeaswellassubsequentmajorchangestotheBoardofDirectorsandtheRMC,theRMChasresolvedtoupdate/revise the Group RMF where necessary.

(2) Risk Accountabilities procedures

The RMC has reviewed and then recommended to the Board of Directors, the adoption of a “RiskAccountabilities” procedures encompassing the following basic criteria for plant/ subsidiaries of the Company:-

No. Description(1) Riskmanagementactivities:-

(a) Identify both inherent and residual risks – itemisation of risk category, specify both systemic and unsystematic risk(s);

(b) Design risk management activities/ procedures, tools and techniques;(c) Incorporate risk management activities and procedures into Standard Operating Procedures

(“SOP”) and business processes and operations;(2) Setting of standards/ policies and controls;(3) Establishing ownership, authorisation protocols and segregation of duties;(4) Periodic review of risks and risk management procedures and internal controls;(5) Reporting protocols – format/ layout, content and frequency of report(s)(6) Documentation

TheRiskAccountabilitiesprocedureswhichwill formpartof theGroupRMF, is intended to formalise thefollowing processes for the Management staff located at operating plant/ subsidiaries of the Group where theywouldberequiredtoreporttotheRMConaregularbasis:-

• Processforidentifyingrisk(s); • Processforevaluatingrisk(s); • Recommendation/Suggestionforimprovementormangingrisk(s);and • Confirmationthatnecessaryactionhavebeentakentoremedysignificantweaknesses identifiedfrom

review.

TheRMCwouldinturnreviewthesameattheRMCmeeting(s)beforeescalatingtotheattentionoftheBoardof Directors.

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SummaryofRMCactivitiesheldforFYE2015:-(Cont’d)

(3) Additional components added to the Group RMF

The Group has operating subsidiaries located in China, USA, Singapore andMalaysiawhere each of thesubsidiaries has been incorporated under the respective local laws and to adhere to the local legislations. Therefore,tomaintaintherobustnessoftheGroupRMF,thefollowingadditionalcomponentstotheGroupRMF, each cater to the local customs and regulations have been recommended by the RMC to the Board of Directorsforadoption:-

(i) Group RMF – Sales and Marketing function; (ii) Group RMF – Finance function; (iii)RapidConn(S)PteLtd(“RCS,Singapore”) – Risk Management Framework – Finance function; (iv) RCI, USA – Risk Management Framework – Finance function; (v) RCC, China – Risk Management Framework – Finance function; and (vi)Rapid Conn Interconnect (M) Sdn. Bhd. (“RCM,Malaysia”) - Risk Management Framework – Finance

function.

Further details of the principal residual risks identified and the relevant internal control and mitigation measures are set out in the Statement on Risk Management and Internal Control of this Annual Report.

(d)SuccessionPlanning

The Board recognises that succession planning is an ongoing process designed to ensure that the Groupidentifiesanddevelopsatalentpoolofpersonnelthroughmentoring,trainingandjobrotationforhighlevelmanagement positions that become vacant due to retirement, resignation, death or disability and/or new business opportunities.

During the financial year under review, there were no changes to the Board composition.

(e) ImplementationofashareholdercommunicationspolicyfortheCompany

TheBoard isawareof theGroup’scommitment toenhancing longtermshareholders’valuethroughregularcommunication with all its shareholders, regardless of individual shareholders and institutional investors (hereinafterreferredtoas“theShareholders”).

TheBoardhasadoptedaShareholders’CommunicationPolicyon19November2015inordertoprovideguidanceas well as ensuring a consistent approach towards the Company’s communication with the Shareholders.

(f) ReviewingtheadequacyandtheintegrityoftheGroup’sinternalcontrolsystems

Given the diverse locations of the operating subsidiaries, the Board has established key control processes to ensure there is a sound framework of Group reporting on internal controls and regulatory compliance.

Details pertaining to the Group’s internal control system and its effectiveness are set out in the Statement on Risk Management and Internal Control of this Annual Report.

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3. CodeofConductandEthicsforDirectors

The Board has adopted a Code of Conduct and Ethics for Directors (“the Code”) which sets forth the values, expectations and standards of business ethics and conduct to guide the Board, in attaining the best corporate governance practices as well as compliance with the relevant legislations.

TheCodeisestablishedbasedontheprinciplesinrelationtotheBoard’sdutyofcare,integrity,responsibilitiesaswell as corporate social responsibilities. It applies to both executive and non-executive directors of the Company.

TheCodehasbeenentrenchedintotheBoardCharterandwillbereviewedbienniallyorasandwhenitisrequiredto ensure the information remains relevant and appropriate.

ThedetailedBoardChartercanbedownloadedfromtheCompany’swebsiteatwww.connectcounty.com.

WhistleBlowingPolicy Whistle blowing is an act of voluntary disclosure/reporting to the Management of the Company for further action of

anyimproperconductcommittedorabouttobecommittedbyanemployee,officerorManagementoftheGroup.

TheBoardhasadoptedaWhistleBlowingPolicyon19November2015withthefollowingobjectives:-

• Provideanavenueforallemployeesandmemberofthepublictodiscloseanyimproperconductoranyactionthat is or could be harmful to the reputation of the Company and/or compromise the interest of stakeholders;

• Provideproperinternalreportingchanneltodiscloseanyimproperorunlawfulconductinaccordancewiththeprocedures as provided for under this policy;

• Addressadisclosureinanappropriateandtimelymanner; • Provideprotectionforthewhistle-blowerfromreprisalasadirectconsequenceofmakingadisclosureandto

safeguard such person’s confidentiality; and • Treatboththewhistle-blowerandtheallegedwrongdoerfairly.

Thispolicyshallalsosimilarlyapplytoanyvendors,partners,associatesoranyindividuals,includingthegeneralpublic, in the performance of their assignment or conducting the business for or on behalf of the Company.

HandlingofReportedAllegation(s)

TheAuditCommittee is responsible for the interpretationandsupervisionof theenforcementof theCode.Theaction to be taken by the Group in response to a report of concern under the Code will depend on the nature of theconcern.TheAuditCommitteeshallreceiveinformationoneachreportofconcernandensurethatfollow-upactions be taken accordingly.

CommunicationandFeedbackChannels

Report(s)canbemadeinverbalorinwritinginthefollowingmanners:-

• ByLetter– tobeforwardedinasealedenvelopetothebelowmentioneddesignatedpersonlabellingwitha legendof“Tobeopenedby theAuditCommitteeChairman/ExecutiveDeputyChairman/ExecutiveDirector/ChiefFinancialOfficeronly” (where applicable); or

• ByEmail–tobeforwardedvidesecureemailtothebelowmentioneddesignatedpersonwiththeheadingof“FortheeyesoftheAuditCommitteeChairman/ExecutiveDeputyChairman/ExecutiveDirector/ChiefFinancialOfficeronly” (where applicable).

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3. CodeofConductandEthicsforDirectors(Cont’d)

CommunicationandFeedbackChannels(Cont’d)

For matters relating to financial reporting, unethical or illegal conduct, one can report directly to the following designatedperson:-

(1) Audit Committee Chairman Mr.HongCheongLiangatemailaddress:[email protected]

PostalAddress:

No. 12-1 (1st Floor), Jalan Radin Bagus 9, Sri Petaling, 57000KualaLumpur,WilayahPersekutuan

Foremployment-relatedconcerns,onecanreportdirectlytothefollowingdesignatedpersons:-

(1) Executive Deputy Chairman Mr.AngChuangJuayatemailaddress:[email protected]

(2) Executive Director Mr.GohKokBoonatemailaddress:[email protected]

(3) ChiefFinancialOfficer Mr.NicholasCheeatemailaddress:[email protected]

PostalAddress:

No. 12-1 (1st Floor), Jalan Radin Bagus 9, Sri Petaling, 57000KualaLumpur,WilayahPersekutuan

For FYE2015,noneof thedesignatedpersonshave receivedany reportor concerns vide theabovementionedcommunication and feedback channels.

4. StrategiestoPromoteSustainability

TheBoardviewsthecommitmenttosustainabilityandEnvironmental,SocialandGovernance(“ESG”) performance as part of its broader responsibility to clients, shareholders and the communities in which it operates. Details of the ESG practices of the Group can be found in the Corporate Responsibility Statement of this Annual Report.

TheBoardisawareoftheimportanceofbusinesssustainabilityandhaveensureManagementimplementsvariousstrategies to promote sustainability of the Group. One of the strategy undertaken by Management would be to solidify the quality of the product offerings of the Group by obtaining external certifications.

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4. StrategiestoPromoteSustainability(Cont’d)

ISO/TS16949:2009Certification

TheCompany’swholly-ownedsubsidiary,namelyRCC,Chinahassuccessfullyobtainedthefollowingcertificationfrom NQA, the leading independent provider of environmental simulation testing, inspection and certification services.

Certification Scopeofwork ValidityISO/TS16949:2009 Themanufactureofconnectingwiresforthe

automotive industry16 June 2013 to 15 June 2016

ISO/TS16949wasdevelopedbyTheInternationalAutomotiveTaskForce(IATF),inconjunctionwithInternationalOrganisation for Standardisation (ISO) support by Japan Automotive Manufacturers Association Inc. (JAMA).

This Certification pursuant to ISO/TS 16949 is intended to build up or enforce the confidence of a (potential)customer towards thesystemandprocessqualityofa (potential) supplier.The registration to ISO/TS16949 isarequirement for any company wanting to supply its products to the automotive industry.

ThepositionofRCC,ChinaastheaccreditedsupplierofconnectingwiresfortheautomaticindustryinChinahasbeen solidified with the receipt of this Certification.

TheBoardstronglybelievesinmaintainingthequalityofitsproductsandservices,andthesafetyofitsprocesses.Assuch, the Group has documented most of its standard operating procedures, which encompass all work processes.

TheGrouphasreceivedandmaintainedthefollowingcertifications:-

Certification ItemofCertificationISO9001:2008 Quality Management SystemISO14001:2004 Environment Management SystemTS16949 Quality Management System for Automotive

TheGrouphas also adopted the following industry best practices to ensure it operates responsiblywithin thesphereofESG:-

BestPractice RemarkElectronic Industry Citizenship Coalition (“EICC”)CodeofConduct

Voluntary best practice for electronics industry supply chain that consistently operates with social, environmental and economic responsibility

EcoVadis-registered EcoVadis provides the Supplier Sustainability Ratings for global supply chain companies

•EURoHS2.0•ChinaRoHs•REACH•JIG•SS00259

HazardousSubstanceControl

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5. AccesstoInformationandAdvice

In ensuring the effective functioning of the Board, all Directors have individual and independent access to the advice and support services of the Company Secretaries and External Auditors and, may seek advice from the Management on issues under their respective purview.

Each Director is provided with complete, relevant and timely information that will enable them to discharge their duties and responsibilities effectively. Prior to each Board Meeting, the agenda together with the detailed reports,relevantdocumentationandsupplementarypapersarecirculatedtotheDirectorsinadvance.Thisistoenable the Directors to obtain further explanations, where necessary, in order to be adequately informed before the Meeting.

TheDirectorsmayalsointeractdirectlywith,orrequestfurtherexplanation,informationorupdates,onanyaspectof the Company’s operations or business concerns from the Management to enable the Board to discharge its duties in relation to the matters being deliberated.

TheDirectors,whetherasafullBoardorintheirindividualcapacity,havefullandunrestrictedaccesstoallinformationwithin the Group. Additionally, all Directors have access to the advice and services of the Group’s appointed CompanySecretary,whoisresponsibleforensuringthattheBoardproceduresarefollowed.TheSecretariesarealso responsible for providing advice to the Board on the Group’s legal and statutory obligations, while highlighting, ifany,non-compliancewithregardstostatutoryregulationsandpoliciesaffectingtheGroup.TheDirectorsmay,at the Group’s expense, also seek external independent professional advice, to assist them in making informed decisions with regards to the Group’s affairs.

Protocolforseekingofprofessionaladvisoryservices

Where applicable, the Directors whether as a full board or in their individual capacity, are encouraged to seek independentprofessionaladvicefromthefollowingparties:-

• Forcorporateand/orgovernancematters,theexternalcompanysecretaries;

• For audit and/or audit-relatedmatters, any representatives of the audit engagement team of the ExternalAuditors or the outsourced Internal Auditors;

• ForanyotherspecificissueswhereprofessionaladviceisrequiredtoenabletheBoardtodischargeitsdutiesin connection with specific matters, the Board may proceed to do so, with prior consultation of the Board Chairman, in relation to the quantum of fees to be incurred. Such right has been encapsulated as Item 9 – Rights of Directors section of the Board Charter of the Company.

6. CompanySecretaries

TheappointmentandremovaloftheCompanySecretariesisamatterfortheBoard.AllDirectorshaveunrestrictedaccess to the advice and services of the Company Secretaries, who are responsible for ensuring that board procedures are followed and that applicable rules and regulations are complied with.

Inperformingtheirduties,theCompanySecretariescarryout,amongstothers,thefollowingtasks:-

• StatutorydutiesasrequiredundertheCompaniesAct,1965,ACEMarketListingRequirementsofBursaSecurities,Capital Market and Services Act, 2007;

• FacilitatingandattendingBoardMeetingsandBoardCommitteeMeetings,respectively; • Ensuring that BoardMeetings andBoardCommitteeMeetings, respectively areproperly convened and the

proceedings are properly recorded; • EnsuringtimelycommunicationoftheBoardleveldecisionstotheManagementforfurtheraction; • EnsuringthatallappointmentstotheBoardand/orBoardCommitteesareproperlymadeinaccordancewith

the relevant regulations and/or legislations;

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6. CompanySecretaries(Cont’d)

• Maintainingrecordsforthepurposeofmeetingstatutoryobligations; • Facilitatingtheprovisionof informationasmayberequestedbytheDirectorsfromtimetotimeonatimely

manner and ensuring adherence to Board policies and procedures; • FacilitatingtheconductoftheassessmentstobeundertakenbytheBoardand/orBoardCommitteesaswellas

to compile the results of the assessments for the Board and/or Board Committee’s notation; • Assisting the Board with the preparation of announcements for release to Bursa Securities and Securities

Commission Malaysia; and • RenderingadviceandsupporttotheBoardandManagement.

Both the Company Secretaries are members of the Malaysian Institute of Chartered Secretaries and Administrators (“MAICSA”) and are qualified to act as company secretary under Section 139A of the Companies Act, 1965.

ThebriefprofileoftheCompanySecretariesisasfollows:-

(1)Ms.ChuaSiewChuan,FCIS

Ms. Chua has been elected as a Fellow Member of the MAICSA since 1997. She has more than 35 years of experience in handling corporate secretarial matters, with working knowledge of many industries and government services. She is currently the President of MAICSA.

Ms.ChuaisaCharteredSecretarybyprofession.SheistheManagingDirectorofSecuritiesServices(Holdings)Sdn. Bhd., a prominent corporate secretarial service provider in Malaysia. Ms. Chua is also the named company secretary for a number of public listed companies, public companies, private limited companies and societies.

Ms. Chua has been appointed as Company Secretary to the Company with effect from 12 December 2014.

(2)Mr.ChengChiaPing,ACIS

Mr.ChenghasbeenelectedasanAssociateMemberoftheMAICSAsince2012.Hehasmorethan10yearsofexperience in handling corporate secretarial matters, with working knowledge of many industries and non-profit organisations.

Mr.ChengisaCharteredSecretarybyprofession.HeisaManager(CorporateSecretarial)ofSecuritiesServices(Holdings)Sdn.Bhd.,aprominentcorporatesecretarialserviceproviderinMalaysia.Mr.Chengisalsothenamedcompany secretary for a number of public listed companies, public companies, private limited companies and societies.

Mr. Cheng has been appointed as Company Secretary to the Company with effect from 12 December 2014.

TheCompanySecretariesattendthemeetingsoftheBoardandtheBoardCommitteeandensurethatthemeetingsare properly convened and the deliberations at the meetings are well captured andminuted. The CompanySecretaries play an advisory role to the Board on the Company’s contribution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations.

For FYE 2015, the Company Secretaries have attended the relevant continuous professional developmentprogrammes as required by MAICSA for practising company secretaries.

TheBoard is satisfiedwith theperformanceandsupport renderedby theCompanySecretaries to theBoard indischarging its functions.

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7. BoardCharterandOverallResponsibility

TheCompanyhasadoptedaBoardCharterwhichgovernshowtheCompanyconductsitsaffairs.TheBoardCharteris applicable to all Directors of the Company and, amongst other things, provides that all Directors must avoid conflicts of interest between their private financial activities and their part in the conduct of company business.

TheBoardChartersetsouttheauthority,responsibilities,membershipandoperationoftheBoardoftheCompany,adoptingprinciplesofgoodcorporategovernanceandpractice,inaccordancewithapplicablelawsinMalaysia.TheBoardCharterentailsthefollowing:-

• Objectives; • OverviewofDirectors’Functions; • CompositionoftheBoard; • RoleoftheBoard; • AppointmentandTenureofOffice; • RemunerationFramework; • InductionforNewDirectors; • BoardProcedures; • RightsofDirectors; • MattersReservedforBoard’sDecision; • InternalControlincludingRiskManagement; • TimeCommitmentofDirectors; • Directors’Training; • BoardCommittees; • ShareholdersandInvestorRelations; • CompanySecretary; • MembersoftheBoardofDirectors; • CodeofConductandEthicsforDirectors; • ConflictofInterestPolicy; • CorporateDisclosurePolicy; • TermsofReferenceoftheAuditCommittee; • TermsofReferenceoftheNominationCommittee; • TermsofReferenceoftheRemunerationCommittee;and • TermsofReferenceoftheRiskManagementCommittee.

TheBoardwillreviewtheBoardCharterbienniallyand/orfromtimetotimeandmakeanynecessaryamendmentstoensuretheyremainconsistentwiththeBoard’sobjectives,currentlawandpractices.

TheBoardCharterhasbeenupdatedbytheBoardon19November2015.

A full copy of the Board Charter is available for viewing on the Company’s corporate website at www.connectcounty.com.

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(II) STRENGTHENCOMPOSITION

(A)BoardCommittees

TheBoardhasputinplacethefollowingBoardCommitteestoassistincarryingoutitsfiduciaryduties:-

• AuditCommittee; • NominationCommittee; • RemunerationCommittee;and • RiskManagementCommittee;

All of these Committees havewrittenTerms of Reference (“TOR”) clearly outlining their objectives, duties andpowers.ThefinaldecisionsonallmattersaredeterminedbytheBoardasawhole.

1. AuditCommittee

ThemembershipandTORoftheAuditCommitteeisstatedintheAuditCommitteeReportofthisAnnualReport.A summary of the activities of the Audit Committee during the year, including an evaluation of the independent audit process, is set out in the Audit Committee Report of this Annual Report.

2. NominationCommittee

Themembership andTORof theNominationCommittee is stated in theNominationCommittee Report ofthis Annual Report. A summary of the activities of the Nomination Committee during the year is set out in the Nomination Committee Report of this Annual Report.

3. RemunerationCommittee

Themembersof theRemunerationCommitteecompriseamajorityof IndependentNon-ExecutiveDirectorsandthecompositionoftheRemunerationCommitteeisasfollows:-

RemunerationCommittee Designation Directorship NumberofRemunerationCommitteeMeetingsattended/heldinthefinancialyearunderreview

RoyTheanChongYew Chairman Independent Non-Executive Chairman

1/1

Ang Chuang Juay Member Executive Deputy Chairman

1/1

HongCheongLiang Member Independent Non-Executive Director

1/1

TheRemunerationCommitteemetonceduringthefinancialyearunderreview.

TheprincipaldutiesandresponsibilitiesoftheRemunerationCommitteeareasfollows:-

• ToreviewandassesstheremunerationpackagesoftheExecutiveDirectors inall forms,withorwithoutother independent professional advice or other outside advice;

• ToensurethelevelsofremunerationbesufficientlyattractiveandbeabletoretainDirectorsneededtorunthe Company successfully;

• To structure the component parts of remuneration so as to link rewards to corporate and individualperformance and to assess the needs of the Company for talent at Board level at a particular time; and

• TorecommendtotheBoardtheremunerationpackagesoftheExecutiveDirectors.

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(II) STRENGTHENCOMPOSITION(CONT’D)

(A)BoardCommittees(Cont’d)

3. RemunerationCommittee(Cont’d)

3.1 Directors’RemunerationPolicy

TheDirectors’RemunerationpolicyoftheCompanyisencapsulatedasItem6–RemunerationFrameworkin the Board Charter of the Company.

Pursuant to the said Remuneration Framework, the remuneration packages of the Executive Directors havebeenstructuredtoattractandretainDirectorsofrightcalibretomanagetheGroupeffectively.TheExecutive Directors play no part in deciding their own remuneration and the respective Board members shall abstain from all discussions pertaining to their remuneration. It is the ultimate responsibility of the Board to approve the remuneration packages of Executive Directors.

Pursuant to the said Remuneration Framework, the remuneration of the Non-Executive Directors shall be based on experience, degree of responsibilities and contributions, which will be determined by the Board as awhole.TheNon-ExecutiveDirectorshavebeenaccordedaDirectors’Fees(inclusiveofmeetingallowance,chairmanshipallowanceandmembershipallowance)(subjecttoshareholders’approval)asfollows:-

Directors EntitlementFor Non-Executive Directors Directors’ fees of RM2,000/- per month

(inclusive of meeting allowance, chairmanship allowance and membership allowance)

For Audit Committee Chairman only Additional Directors’ fees of RM1,000/- per month

ForFYE2015,atotalDirectors’FeesofRM96,000/-havebeenrecommendedtotheshareholdersforapprovalattheforthcomingThirteenthAnnualGeneralMeeting(“13thAGM”) of the Company.

The Remuneration Committee is responsible for reviewing andmaking recommendations to the Board forapproval, the framework and remuneration packages of the Non-Executive Directors as well as the Executive Directors in all forms, drawing from outside advice whenever necessary prior to making the relevant recommendations to theBoard such that the levels of remuneration are sufficient to attract and retain theDirectors needed to run the Company successfully. In its review, the Remuneration Committee considers various factors including the Directors’ fiduciary duties, time commitments expected of them and the Company’s performance.

AsummaryofremunerationpackagesoftheDirectorsoftheCompanywhoservedduringtheFYE2015wasasfollows:-

Directors’Remuneration ExecutiveDirectors (RM)

Non-ExecutiveDirectors (RM)

Total (RM)

Fees 115,367 84,000 199,367 Salaries 1,132,659 - 1,132,659 Benefits-in-kind 14,852 - 14,852Total 1,262,878 84,000 1,346,878

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(II) STRENGTHENCOMPOSITION(CONT’D)

(A)BoardCommittees(Cont’d)

3. RemunerationCommittee(Cont’d)

Thedetailsof remuneration forDirectorsof theCompany received/receivable forFYE2015bycategoryandwithinthefollowingbandsareasshownbelow:-

RangeofRemunerationPerAnnum No.ofDirectors(Executive)

No.ofDirectors(Non-Executive)

Below RM100,000 - 3RM100,001 to RM150,000 - -RM150,001to RM200,000 1 -RM200,001 to RM1,000,000 - -RM1,000,001 to RM1,500,000 1 -

4. RiskManagementCommittee(“RMC”)

ThemembershipoftheRMCisstatedonitem(I)(2)(c)ofthisStatement.

TheTORofRMChasbeenentrenchedintotheBoardCharter.AfullcopyoftheBoardCharterisavailableforviewing on the Company’s corporate website at www.connectcounty.com.

(III) REINFORCEINDEPENDENCE

1. AnnualAssessmentofIndependenceofDirectors

TheBoardcarriesoutanannualassessmentoftheindependenceofitsIndependentDirectors.

ThesaidAssessmenthasbeenbasedonthefollowingcriteria:-

(i) Legalrequirements

As a basic evaluation criteria, the Board adopts the definition of Independent Director as stipulated in Rule 1.01 oftheACELRofBursaSecurities.

(ii) Declaration of independence by the Independent Directors

Secondly, the Board will take note of the Declaration of Independence by the Independent Directors.

TheBoardnotedthatLettersofDeclarationhavebeenexecutedbythefollowingIndependentNon-ExecutiveDirectorsoftheCompany,confirmingtheir independencepursuanttorelevantACELRofBursaSecuritiesaswell as the MCCG 2012 and that the Independent Non-Executive Directors have undertaken to inform the Company immediately should there be any change which could interfere with the exercise of their independent judgementorabilitytoactinthebestinterestoftheCompany:-

• Mr.RoyTheanChongYew • Mr.HongCheongLiang

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(III) REINFORCEINDEPENDENCE(CONT’D)

1. AnnualAssessmentofIndependenceofDirectors(Cont’d)

(iii) Independence of mind and/or action

Thirdly,theBoardwillperformageneralobservationonthecontributionsmadebytheIndependenceDirectorsin respect to their individual and unfettered views on various issues at Board and/or Board Committee Meetings (where applicable).

(iv) Outcome of Directors’ self-assessment and evaluation of Board and Board Committee’s effectiveness

Fourthly, the Board vide the Nomination Committee will conduct annually the Directors’ self-assessment and peer assessment survey, the Evaluation on the effectiveness of the Board of Directors and the Committees of the Board (hereinafter referredtoas“theSurveys”).TheSurveysdoprovidean indicationof levelof independencedemonstrated by the Independent Non-Executive Directors and their ability to act in the best interest of the Company.

(v) Any relationship between Independent Directors and Management Lastly, the Boardwill consider any existing relationship, be it family and/or business between Independent

DirectorsandManagementthatcouldmateriallyinterferewiththeexerciseoftheirobjectivityandindependentjudgement.

The Board noted that both Mr. Roy Thean Chong Yew and Mr. Hong Cheong Liang are independent ofmanagementandfreefromanyrelationshipthatcouldmateriallyinterferewiththeexerciseoftheirobjectivityandindependentjudgement.

Mr.AngChuangJuayandMr.HongCheongLiangaretheDirectorswhowillbeeligibleforstandforre-electionat

theforthcoming13thAGMoftheCompany.TheNominationCommitteewassatisfiedthatMr.HongCheongLiangmetthecriteriaforanIndependentDirectorasprescribedundertheACELRofBursaSecurities.TheBoardconsidersthatitsIndependentNon-ExecutiveDirectorprovideanobjectiveandindependentviewsonvariousissuesdealtwith at the Board and Board Committee level, based on his professional background and working experiences.

TheBoardthereforerecommendsandsupportsthere-electionofMr.AngChuangJuayandMr.HongCheongLiang,theDirectorswhoretireinaccordancewithArticle83oftheArticlesofAssociationoftheCompanyatforthcoming 13th AGM of the Company.

2. TenureofIndependentDirectors

TheMCCG2012recommendedthatthetenureofanIndependentDirectorshouldnotexceedacumulativetermsofnine (9) years. Upon completion of the nine (9) years’ terms, an Independent Director may continue to serve on the BoardsubjecttotheDirector’sre-designationsasaNon-IndependentDirector.

The Board subscribes to an open policy on the tenure of Independent Director whereby there should not bean arbitrary tenurebe imposedon the IndependentDirectors.TheBoardbelieves that the lengthof tenureofIndependentDirectorsontheBoarddoesnotinterferewiththeirobjectiveandindependentjudgementortheirability to act in the best interest of the Company.

Inviewthereof,theBoardshallprovidejustificationsandseekshareholders’approvalintheeventitproposestoretain an independent director who has served the Board in that capacity for more than nine (9) years, upon the prior review and relevant recommendation from the Nomination Committee.

TheBoardnotedtherearenoIndependentDirectorswhosetenureexceedsacumulativetermofnine(9)yearsinthe Company thus far.

TheBoardnotedtherearenoIndependentDirectorswhosetenureexceedsacumulativetermofnine(9)yearsintheCompanythusfar.Therefore,thereisnosuchneedfortheCompanytoseekforshareholders’approvalonthesaid purpose at the forthcoming 13th AGM of the Company.

29



(III) REINFORCEINDEPENDENCE(CONT’D)

3. SeparationofPositionoftheChairmanandChiefExecutiveOfficer

TheBoard recognises the importanceofhavinga clearlyaccepteddivisionofpowerand responsibilitiesat thehead of the Company to ensure a balance of power and authority. At present, the Company does not have a Chief ExecutiveOfficerbutExecutiveDirectors.

ThereisacleardivisionofresponsibilitiesbetweentheChairmanandtheExecutiveDirectors.ThepositionoftheChairmanisheldbyMr.RoyTheanChongYew,anIndependentNon-ExecutiveDirector.TheBoardhasoutlinedtheroles and responsibilities of the Chairman of the Board through the Board Charter.

Mr. Ang Chuang Juay is the Executive Deputy Chairman, the de facto head of management who is based mainly in China. Mr. Goh Kok Boon, another Executive Director, oversees the Malaysian subsidiaries. The roles of theIndependent Non-Executive Chairman and the Executive Deputy Chairman, duly outlined in the Board Charter are quite distinct and separate.

ThecurrentarrangementistoprovidestrongleadershipwiththeabilitytomarshaltheBoard’sprioritiesobjectivelyand to propel the Group to the next level while keeping a lean Board composition.

4. BoardCompositionandBalance

TheBoardnotedtheRecommendation3.5oftheMCCG2012statingthattheBoardmustcompriseamajorityofIndependent Directors where the Chairman of the Board is not an Independent Director.

TheBoardiscurrentlycomposedoffive(5)members,two(2)ofwhomareIndependentNon-ExecutiveDirectors,one(1)istheNon-IndependentNon-ExecutiveDirectorandtwo(2)aretheExecutiveDirectors.TheIndependentDirectors represent compliance with the requirement for one-third (1/3) Independent Directors on the Board, pursuanttoRule15.02(1)oftheACELRoftheBursaSecuritiesandtheadoptionofthebestpracticessetoutintheMCCG 2012.

Through the Surveys the Independent Non-Executive Directors have indicated their satisfactionwith the levelof independence of each of their peers and their ability to act in the best interests of the Company in decision-making.TheDirectorshavemadevaluablecontributionstotheCompanythroughtheirbusinessacumenandtheapplication of a wide spectrum of knowledge and skills from their respective experiences.

ThemembersoftheBoardconsistofprofessionalswithcalibreandentrepreneursequippedwithamixofindustryspecific knowledgewithbroadbusiness andcommercial experience.Thisbalanceprovides the strength that isneededtoleadtheCompanytomeetitsobjectivesandtoprovideeffectiveleadershiptotheCompanyinaspectsof strategy and performance as well as to maintain high standards of governance and integrity in deciding matters relating to strategy, performance, internal controls, investor relations and human resource.

TheBoardisoftheviewthatthecurrentcompositionoftheBoardisappropriate,wherenoindividualshalldominatethe Board’s decision making. It reflects fairly the investment in the Company by the shareholders at large even though one (1) of the Board members namely Mr. Ang Chuang Juay is one (1) of the substantial shareholder in the Company. In that respect, the interests of investors including the Company’s minority shareholders and the publicareadequatelyservedandprotectedbytheappointmentofMr.LeeChoonKwong,aNon-IndependentNon-ExecutiveDirectoraswellasthetwo(2)IndependentNon-ExecutiveDirectors.Theprofileofeachofthemembersof the Board is as set out in the Board of Directors’ Profile of this Annual Report.

The Board structure ensures that no individual or group of individuals dominates the Board’s decision-makingprocess.ThecompositionoftheBoardprovidesaneffectiveblendofentrepreneurship,businessandprofessionalexpertise in general management, finance, corporate affairs, legal and technical areas of the industry in which the Groupoperates.TheindividualityandvastexperienceoftheDirectorsinarrivingatcollectivedecisionsatboardlevel will ensure impartiality.

30



(IV)FOSTERCOMMITMENT

1. TimeCommitment

TheBoardrequiresitsmemberstodevotesufficienttimetotheworkingsoftheBoard,toeffectivelydischargetheirduties as Directors of the Company, and to use their best endeavours to attend meetings.

BoardProtocolonTimeCommitment

Asageneralrule,theDirectorsareexpectedtodevotesufficienttimeandattentiontotheaffairsoftheCompany/Group.

TheBoardhasputinplacethefollowingprotocols:-

1.1 BoardofDirectors’MeetingsAttendance

DuringFYE2015,theBoardhadconvenedatotaloffive(5)BoardofDirectors’Meetingsforthepurposesofdeliberating on the Company’s quarterly financial results at the end of every quarter and discussing important matters which demanded immediate attention and decision-making. During the Board of Directors’ Meetings, the Board reviewed the operation and performance of the Company and other strategic issues that may affect the Company’s business. Relevant staffs were invited to attend some of the Board of Directors’ Meetings to provide the Board with their views and clarifications on issues raised by the Directors.

ReviewofattendancebytheNominationCommittee

TheNominationCommitteehasbeentaskedtoreviewtheattendanceoftheDirectorsatBoardand/orBoardCommittee Meetings. Upon review, the Nomination Committee noted the Board members have devoted sufficienttimeandefforttoattendBoardand/orBoardCommitteemeetingsforFYE2015.

ForFYE2015,majorityoftheBoardmembersachieveda100%attendanceattheBoardMeetingsheld.TheattendancerecordofeachDirectoratBoardMeetingsduringthelastfinancialyearisasfollows:-

NameofDirectors Totalno.ofmeetingsheldduringtenureofoffice

Totalno.ofmeetingsattended

%ofattendance

RoyTheanChongYew 5 5 100Ang Chuang Juay 5 5 100GohKokBoon 5 5 100HongCheongLiang 5 5 100LeeChoonKwong 5 3 60

TheBoardwillalsomeetonanad-hocbasistodeliberateurgentissuesandmattersthatrequireexpeditiousBoard direction or approval. In the intervals between Board meetings, any matters requiring urgent Board decisions and/or approval can be sought via circular resolutions which are supported with all the relevant information and explanations required for an informed decision to be made.

Meeting papers were prepared to provide relevant facts, analysis and recommendations for supporting the proposals to enable informed decision-making by the Board. The agenda and papers for meetings werefurnished to the Directors and Board Committee members in advance to enable them to prepare for the meetings.

TheBoardencouragesconstructiveandhealthydebateatallmeetings.TheDirectorsaregiventhechancetofreely express their opinions or share information with their peers in the course of deliberation as a participative Board.AnyDirector/BoardCommitteememberwhohasadirectordeemedinterestinthesubjectmattertobedeliberated shall abstain from deliberation and voting on the same during the meeting.

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(IV)FOSTERCOMMITMENT(CONT’D)

1. TimeCommitment(Cont’d)

1.1 BoardofDirectors’MeetingsAttendance(Cont’d)

The Company Secretaries would ensure a quorum is present for allmeetings and that suchmeetings areconvenedinaccordancewiththeArticlesofAssociationoftheCompanyorrelevantBoardCommittee’sTOR.TheCompanySecretariesrecordtheproceedingsofallmeetingsincludingpertinentissues,thesubstanceofinquiries (if any) and responses thereto, members’ suggestions and the decisions made, as well as the rationale for those decisions. By doing so, the Company Secretaries keep the Board updated on the follow-up actions arising from the Board’s decisions and/or requests at subsequent meetings. The Board is therefore ableto perform its fiduciary duties and fulfil its oversight role towards instituting a culture of transparency and accountability in the Company.

1.2 AcceptanceofNewDirectorshipsinothercompanies

ThemembersoftheBoardarerequiredtonotifytheIndependentNon-ExecutiveChairmanand/ortheCompanySecretaries in writing prior to accepting any new directorship. Such notification also includes an indication of time that will be spent on the new appointment.

As at the date of this Statement, there was no written notification received from any of the Directors.

1.3AnnualMeetingSchedule

In facilitating the schedule of the Directors, the Company Secretaries will prepare and circulate in advance an annual meeting schedule, which includes all the proposed meeting dates for Board and Board Committee Meetings, as well as the AGM. Upon the concurrence by all the Board members, the annual meeting timetable will be adopted for the applicable financial year.

1.4 RestrictiononDirectorshipinotherlistedcompanies

None of the Directors have more than five directorships in public listed corporations listed on Bursa Securities.

2. ContinuingEducationandTrainingofDirectors

In order for the enlarged Connect Group to remain competitive, the Board ensures that the Directors continuously enhance their skills and expand their knowledge to meet the challenges of the Board.

TheBoardhascultivatedthefollowingbestpractices:-

• AllnewlyappointedDirectorsaretoattendtheMandatoryAccreditationProgrammeasprescribedbytheACELRofBursaSecuritieswithinthestipulatedtimeframe;

• AllDirectorsareencouragedtoattendtalks,trainingprogrammesandseminarstoupdatetheirknowledgeonthe latest regulatory and business environment;

• TheDirectorsmayberequestedtoattendadditionaltrainingcoursesaccordingtotheirindividualneedsasaDirector or member of Board Committees on which they serve;

• TheDirectorsarebriefedbytheCompanySecretariesonthelettersissuedbyBursaSecuritiesateveryBoardmeeting.

All members of the Board have attended the Mandatory Accreditation Programme prescribed by Bursa Securities.

Upon assessing the training needs of the Directors, the Board recognised that continuing education would be the way forward in ensuring its members are continually equipped with the necessary skills and knowledge to meet the challenges ahead.

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(IV)FOSTERCOMMITMENT(CONT’D)

2. ContinuingEducationandTrainingofDirectors(Cont’d)

AsatthedateofthisStatement,theBoardhasparticipatedinthefollowingcontinuingeducationprogrammes:-

(a) Mr.RoyTheanChongYew

No. Dates DescriptionofTrainingProgrammes1. 16 February 2015 BriefingbytheCompanySecretaryinrelationto:-

· Analysis of Corporate Governance Disclosures in Annual Reports and Report on Company Performance; and

· AmendmentstoBursaSecuritiesACEMarketListingRequirementsinVariousAreas

2. 7 May 2015 Audit Oversight Board Conversation with Audit Committee, organised by Securities Commission Malaysia

3. 8 May 2015 “LeadtheChange:WomenonBoard”,organisedbyPerformanceManagementandDeliveryUnit(PEMANDU)ofPrimeMinister’sDepartment,Putrajaya

4. 28 July 2015 BoardChairmanSeriesPart2:LeadershipExcellencefromtheChair,ajointprogrammebyBursaMalaysiaBerhadandtheICLIFLeadershipandGovernance Centre

5. 9 September 2015 BursaMalaysiaCGBreakfastSerieswithDirectors:“HowtoMaximiseInternalAudit”, organised by Bursa Malaysia Berhad

6. 2 November 2015 FutureofAuditorReporting-TheGameChangerforBoardroom,organisedbyBursa Malaysia Berhad

(b) Mr. Ang Chuang Juay




2. 19 May 2015 UnderstandingISO31000RiskManagementTraining

(c) Mr.GohKokBoon





33


(IV)FOSTERCOMMITMENT(CONT’D) 2. ContinuingEducationandTrainingofDirectors(Cont’d)

(d) Mr.HongCheongLiang




2. 7 May 2015 Audit Oversight Board Conversation with Audit Committees3. 15 June 2015 NewCompaniesBill-LatestUpdatesandDevelopments*4. 15 July 2015 HalfDayQ&AwithDato’Subromaniam–GST5. 4 August 2015 CorporateGovernanceBreakfastSerieswithDirectors-TheBoard’sResponsein

LightofRisingShareholderEngagements6. 19 August 2015 CorporateGovernanceDirector’sWorkshop:CG,NFIandInvestmentDecision

(e) Mr.LeeChoonKwong




In addition, the Company Secretaries and the External Auditors update the Board on a regular basis the respective changes and amendments to regulatory requirements and laws and accounting standards to help Directors keep abreast of such developments.

Uponreview,theBoardconcludedthatthecontinuingeducationprogrammesparticipatedbytheDirectorsforFYE2015 were adequate.

2016TrainingNeeds

Upon review of the training needs of the Directors for the financial year ending 31 December 2016 and recognising the need to keep abreast with the fast changing business and regulatory environment, the Board has encouraged its members to attend at least two (2) continuing education programmes, whereby one of those should be in relation totheACELRofBursaSecurities.

(V) UPHOLDINTEGRITYINFINANCIALREPORTING 1. CompliancewithApplicableFinancialReportingStandards

TheAuditCommitteeassist theBoard tooversee thefinancial reportingprocessand thequalityof itsfinancialreporting by reviewing the information to be disclosed, to ensure completeness, accuracy and adequacy prior to endorsing the same to the Board for release to Bursa Securities and Securities Commission Malaysia.

TheAuditCommitteehasreceivedassurancethatthefinancialstatementsoftheGroupandoftheCompanyforthe financial year ended 31 December 2015 had been prepared in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. Consequently, the Audit Committee has recommended the Audited Financial Statement for the financial year ended 31 December 2015 of the Company to the Board for approval and the Board upon its review, has approved the same at a Board of Directors’ Meeting held on 25 March 2016.

TheBoardensuresthatshareholdersarepresentedwithaclear,balanced,meaningfulassessmentoftheCompany’sfinancial performance and prospects through the issuance of the audited financial statements and quarterly announcements of financial results and vide corporate announcements on significant development in accordance with theACELRofBursaSecuritiesona timelybasisand incompliancewith theapplicablefinancial reportingstandards.


34


(V) UPHOLDINTEGRITYINFINANCIALREPORTING(CONT’D)

2. AssessmentofSuitabilityandIndependenceofExternalAuditors

ForFYE2015,theAuditCommitteehasformalisedtheprocedurestoassessthesuitabilityandindependenceofExternal Auditors vide an annual assessment of the suitability and independence of the External Auditors.

Initsassessmentof“Suitability”oftheExternalAuditors,theAuditCommitteeconsidered,interalia,thefollowingfactors:-

• TheExternalAuditorshavetheadequateresources,skills,knowledgeandexperiencetoperformtheirdutieswith professional competence and due care in accordance with approved professional auditing standards and applicable regulatory and legal requirements;

• TotheknowledgeoftheAuditCommittee,theExternalAuditorsdonothaveanyrecordofdisciplinaryactionstaken against them for unprofessional conduct by the MIA which has not been reversed by the Disciplinary Board of MIA;

• Theengagementpartnerhasnotservedforacontinuousperiodofmorethanfive(5)yearswiththeCompany; • TheexternalauditfirmhasthegeographicalcoveragerequiredtoaudittheCompany; • TheexternalauditfirmadvisestheAuditCommitteeonsignificantissuesandnewdevelopmentspertainingto

risk management, corporate governance, financial reporting standards and internal controls on a timely basis; • TheexternalauditfirmconsistentlymeetsthedeadlinessetbytheCompany; • Thelevelofqualitycontrolproceduresintheexternalauditfirm,includingtheauditreviewprocedures;and • TheexternalauditscopeisadequatetocoverthekeyfinancialandoperationalrisksoftheCompany.

In its assessment of “Independence” of the External Auditors, the Audit Committee considered, inter alia, thefollowingfactors:-

• The lead engagementpartnerhasnot served for a continuousperiodofmore thanfive (5) yearswith theCompany;

• The Audit Committee receiveswritten assurance from the External Auditors confirming that they are, andhave been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements; and

• TenureofthecurrentExternalAuditors.

TheAuditCommitteenoted for FYE2015,Messrs.Moore StephensAssociates PLT, the ExternalAuditorsof theCompany confirmed that the engagement quality control reviewer and members of the engagement team in the course of their audits were and had been independent for the purpose of the audit in accordance with the terms of relevant professional and regulatory requirements.

TheAuditCommitteenotedthatthecurrentExternalAuditorshasbeenappointedsincetheCompany’slistingon20October2005.TheAuditCommitteefurthernotedthattheleadengagementpartnerofMessrs.MooreStephensAssociatesPLTforFYE2015hasbeenrotated.

Upon completion of its assessment, the Audit Committee was satisfied with Messrs. Moore Stephens Associates PLT’stechnicalcompetencyandauditindependenceduringthefinancialyearunderreviewandrecommendedtotheBoardthere-appointmentofMessrs.MooreStephensAssociatesPLTasExternalAuditorsforthefinancialyearending31December2016.TheBoardhasinturn,hasrecommendedthesameforshareholders’approvalattheforthcoming 13th AGM of the Company.


35


(VI) RECOGNISEANDMANAGERISKS

1. SoundFrameworktoManageRisks

The Group’s risk management system was updated internally by the Management. The framework of the riskmanagementencompassesthefollowingkeyelements:-

• Risks identifiedwere individuallyassessedandrankedaseitherextreme,high,mediumor lowbasedon its

magnitude of impact and likelihood of occurrence within the Group; and

• Individual risk profiles created from the above assessmentwere endorsed by the Board and subsequentlycascaded to the Senior Management of the Group for implementation of action plans required to mitigate or maintain the risk impact of the Group at an acceptable level.

ForFYE2015,theRMChasreviewedtheGroupRMFtoensurethatthesaidFrameworkremainrelevantforuseandmade recommendations for additional insertions, where applicable.

The internal controls are tested for effectiveness and efficiency at least two (2) cycles per financial year via anindependentoutsourcedInternalAuditfunction.ThereportoftheInternalAuditistabledfortheAuditCommittee’sreview and comments, and the audit findings will then be communicated to the Board.

TheStatementonRiskManagementandInternalControloftheGroupassetoutinthisAnnualReportprovidesanoverview of the state of risk management and internal controls within the Group.

Aspartoftheriskmitigationmeasures,theBoardhasestablishedthefollowingpolicies:-

(i) InsiderDealingPolicy

Insider dealing or trading is defined as the purchase or sale of the Company’s securities affected by or on behalf of a personwith knowledge of relevant but non-publicmaterial information regarding that company.Theinsider is in a position to make massive gains by selling or buying securities before information that might affect the price of the Company’s securities (price-sensitive information) is made public.

Thispolicyaimsmainlytopreventinsiderdealingofsecuritiesandensuretransparencyandfairnessindealingwith all stakeholders of the Company.

(ii) RelatedPartyTransaction(“RPT”)Policy

TheBoardhasformalisedaRPTPolicywhichisdesignedtoensuretheRPTscarriedoutintheordinarycourseof business, are made at arm’s length and on normal commercial terms which are not more favourable to the related party or parties than those generally available to the public and are not on terms that are detrimental to the minority shareholders of the Company.

ThispolicyalsoaimstocomplywiththePartE,Paragraphs10.08and10.09oftheACELRofBursaSecurities.

2. InternalAuditFunction

TheoutsourcedInternalAuditorscommunicateregularlywithandreportdirectlytotheAuditCommittee.ForFYE2015, the outsourced Internal Auditors’ representative met up twice with the Audit Committee.

TheInternalAuditReviewoftheCompany’soperationsencompassesanindependentassessmentoftheCompany’scompliance with its internal controls and makes recommendations for improvement.


36


(VI) RECOGNISEANDMANAGERISKS(CONT’D)

2. InternalAuditFunction(Cont’d)

OutsourcedInternalAuditors

At the Audit Committee Meeting held on 16 February 2015, the outsourced Internal Auditors, Morison AAC CorporateSolutionsSdn.Bhd.(“Morison”) have presented to the Audit Committee the 2015 Risk-based Internal AuditPlan,encompassingthefollowingauditvisitsandtiming:-

ScheduledforInternalAuditReview FYE31December2014 2015

1. ReviewofCorporateGovernance Q4

2. RapidConn(Shenzhen)Co.Ltd.(“RCC,China”) (a)OperationsManagement • ProductionResourcePlanning • ProductionPlanning,WorkSchedulingandControl • QualityManagementandPerformanceMeasurement • WasteHandlingandEquipmentMaintenance • ResearchandDevelopmentmonitoring • Environment,SafetyandHealth

Q2

(b)InventoryControl&Management • InventoryLevelsManagement • Re-orderquantitiesandprocurement • Materialissuance • InventoryTrackingSystem • WarehouseControlandAccess • ControlOverDisposalofSpoilage/DamagedGoods

3. RapidConn(S)PteLtd(“RCS,Singapore”) RevenueandReceivablesManagement • RevenueForecastandPlanning • RevenueProcessingCycle • CreditManagementandEvaluation • CreditMonitoringandCollection

Q4

At the said Meeting, the Audit Committee has resolved that the 2015 Risk-based Internal Audit Plan be approved for adoption.

ForFYE2015,theACnotedthatMorisonhassuccessfullyconductedandcompletedtheirauditsinaccordancewiththe 2015 Risk-based Internal Audit Plan.

FormalAssessmentofInternalAuditors

ForFYE2015,theAuditCommitteehasformalisedtheprocedurestoassesstheperformanceofinternalauditorsvide an annual assessment of the suitability of the internal auditors.

Initsassessment,theAuditCommitteeconsidered,interalia,thefollowingassessmentcriteria:- • Understanding; • Charterandstructure; • Skillsandexperiences; • Communication;and • Performance.

Upon completion of its assessment, the Audit Committee was satisfied with the outsourced Internal Auditor, Morison’s technical competency and audit independence during the financial year under review.


37


(VII)ENSURETIMELYANDHIGHQUALITYDISCLOSURE

1. CorporateDisclosurePolicy

The Company recognises the value of transparent, consistent and coherent communications with investmentcommunity consistent with commercial confidentiality and regulatory considerations.

In line with that, the Board has adopted a Corporate Disclosure Policy on 19 November 2015 in order to develop and maintain an established framework for making corporate disclosures.

TheDirectorsoftheCompany,theCompanySecretary,allemployeesoftheCompanyanditssubsidiariesareobligedtoobservetheprovisionsofCorporateDisclosurePolicy.Nonetheless,thisPolicydoesnotcoverthefollowing:-

(i) material information that is already in the public domain; (ii) material information that is not generated or owned by the Company; and (iii) material information that summarises, realigns or is computed from material information that already in the

public domain.

PursuanttothisPolicy,thefollowingaretheauthorisedspokespersonoftheCompany:-

AuthorisedSpokesperson

NameofDirector DesignationMr.RoyTheanChongYew Independent Non-Executive ChairmanMr. Ang Chuang Juay Executive Deputy ChairmanMr.GohKokBoon Executive Director

ThisPolicyhasbeenentrenchedintotheBoardCharterandwillbereviewedbienniallyorasandwhenitisrequiredto ensure the information remains current and updated.

ThedetailedBoardChartercanbedownloadedfromtheCompany’swebsiteatwww.connectcounty.com.

DuringFYE2015, theCompanyhasengagedaprofessionalpublic relationsfirmtomanageandassistwith therelease of information to the public, in particular, press release and press interview.

2. LeverageonInformationTechnologyforEffectiveDisseminationofInformation

TheCompany’scorporatewebsiteprovidesallrelevantinformationontheCompanyandisaccessiblebythepublic.It includestheannouncementsmadebytheCompanyandannual reports.TheBoarddisclosestothepublicallmaterial information necessary for informed investment and takes reasonable steps to ensure that all shareholders enjoyequalaccesstosuchinformation.

TheCompany’scorporatewebsiteisaccessibleatwww.connectcounty.com.


38


(VIII)STRENGTHENRELATIONSHIPBETWEENCOMPANYANDSHAREHOLDERS

1. Shareholders’ParticipationatGeneralMeetings

The Company communicates regularly with the shareholders and investors through annual reports, quarterlyfinancial reports and various announcements made to the Bursa Securities as the Board acknowledges the importance of accurate and timely dissemination of information to its shareholders, potential investors and the public in general.

Severalchannelsareusedtodisseminateinformationonatimelybasis,suchas:-

• TheAGMwhichisusedasthemainforumofdialogueforshareholderstoraiseanyissuespertainingtotheCompany;

• Annualreport,quarterlyfinancialresultsandvariousannouncementsmadetoBursaSecurities;and • Thewebsiteswww.connectcounty.com.mywhichprovidecorporateinformationontheGroup.

2. PollVoting

TheBoardnotedtheRecommendation8.2oftheMCCG2012statesthattheBoardshouldencouragepollvoting.Inline with this recommendation, the Independent Non-Executive Director will inform the shareholders of their right to demand a poll vote at the commencement of the general meeting.

Where feasible and within the financial means of the Company, the Board will consider and explore the suitability and feasibility of adopting electronic voting in coming years to facilitate greater shareholders participation at general meeting(s).

3. Shareholders’CommunicationandInvestorRelations

3.1 Shareholders’CommunicationPolicy

TheCompanyrecognisesthevalueoftransparent,consistentandcoherentcommunicationswithinvestmentcommunity consistent with commercial confidentiality and regulatory considerations.

In line with that, the Board has adopted a Shareholders’ Communication Policy on 19 November 2015 to ensure that all shareholders have ready and timely access to all publicly available information of the Company, to fairly and accurately represent the Company so that investors and potential investors can make properly informed investmentdecisionsandotherscanhaveabalancedunderstandingoftheCompanyanditsobjectives.

The Board has adopted the following measures with regards to communication with the Company’sshareholders:-

(i) AnnouncementstoBursaMalaysiaSecuritiesBerhad Material information, updates and periodic financial reports are published on a timely basis through

announcements to Bursa Securities.

Shareholders and investors can obtain the Company’s latest announcements such as quarterly financial resultsinthededicatedwebsiteofBursaSecuritiesathttp://www.bursamalaysia.com.my.


39


(VIII)STRENGTHENRELATIONSHIPBETWEENCOMPANYANDSHAREHOLDERS

3. Shareholders’CommunicationandInvestorRelations(Cont’d)

3.1 Shareholders’CommunicationPolicy(Cont’d)

(ii)CorporateWebsite Acorporatewebsite(http://www.connectcounty.com)ismaintainedandthesaidwebsitecontainsrelevant

information for the shareholders, potential investors, suppliers and the general public.

(iii)AnnualReports TheCompany’sAnnualReports to the shareholders remain thecentralmeansof communicating to the

shareholders, amongst others, the Company’s operations, activities and performance for the past financial year end as well as the status of compliance with applicable rules and regulations.

(iv)AGMs/GeneralMeetings TheAGM/GeneralMeetingswhichareusedas themain forumofdialogue forshareholders to raiseany

issues pertaining to the Company.

For the convenience of the shareholders, the Board endeavour to ensure the venue of the general meetings beheldinKualaLumpurarea,beingthecapitalcityofMalaysia.

(v)DesignatedContactPersons Any enquiry regarding investor relations/ from the shareholders may be conveyed to the following

designated senior management personnel, the information of which has also been published on the Company’sCorporateWebsite:-

Mr.NicholasChee,ChiefFinancialOfficer Emailaddress :[email protected] TelephoneNo. :03-90543776 FacsimileNo :03–90553767

Thispolicywill be reviewedbiennially or as andwhen it is required to ensure the information remainscurrent and updated.

3.2 InvestorRelations(“IR”)

AsummaryofIRactivitiesconductedforFYE2015islistedbelowforinformation:-

Date TopicofIRactivities

TypeofIRactivities

Audience PressReleaseSubject

27 February 2015 Quarter4FYE2014 results

Press release Media ConnectCloses2014FinancialYearwithLossAfterTaxofRM3million

11 May 2015 Quarter1FYE2015 results

Press release Media Connect Records Significantly Improved ProfitAfterTaxforFirstQuarter

21 August 2015 Quarter2FYE2015 results

Press release Media ConnectAchievesHigherProfitAfterTaxin Second Quarter

September 2015 Interview Email Interview China Press

-

20 November 2015 Quarter3FYE2015 results

Press release Media ConnectCounty Records RM1.68 million in3rdQuarterProfitAfterTax

December 2015 Interview Email Interview TheEdge -

Conclusion

TheBoard issatisfiedthat for thefinancialyearended31December2015, itcompliessubstantiallywiththeprinciplesandrecommendations of the MCCG 2012.

ThisStatementonCorporateGovernanceismadeinaccordancewiththeresolutionoftheBoardofDirectorspassedon4April2016.


40


Aligned with the Group’s business strategy, we endeavour to manage our business in a socially responsible manner. We strive to look after the interests of our key stakeholders – from shareholders, investors, customers, suppliers to employees, as well as the community where we operate.

BursaMalaysiaBerhad(“BursaMalaysia”)hasdefined“CorporateSocialResponsibility(“CSR”)as“open and transparent business practices that are based on ethical values and respect for the community, employees, the environment, shareholders. It is designed to deliver sustainable value to society at large.”

TheGrouphasadoptedtheBursaMalaysia’sCSRFrameworkwhichwaslaunchedin2006asasetofguidelinesforMalaysianpubliclistedcompanieswhowishtopracticeCSR.TheGroup’sCSRframeworkcoversthefollowingfour(4)areas:-

Workplace

√Traininganddevelopment√ Workplace diversity√Healthyandsafeworkingenvironment√ Employees’ well being

Community

√ Cultural awareness programme to selected school

Environment

√ Re-engineering of products for less material and labour consumption

Marketplace

√ Corporate governance√ Dedicated sections at corporate website

(1) WORKPLACE

Withaconstantlygrowingworkforceandever-evolving InformationandTechnology, it is imperativethattheGroupcontinues to invest in its employees.

(a)TrainingandDevelopment Trainingprogrammes,bothinternalandexternal,areorganisedtodeliveranall-roundtrainingexperiencetoour

employeesbyupgradingtheirskillsets, jobknowledgeandcompetencylevel inachievinganoverall increaseinproductivity.

RapidConn(Shenzhen)Co.,Ltd.(“RCC,China”), the Group’s subsidiary in China has put in place a comprehensive training and development programme to improve the skill sets and knowledge of its staff.

ForFYE2015,a totalof27 trainingsessionshavebeenorganised for thebenefitofProductionworkers,QualityAssurance workers, all workers and Store Department workers, respectively, with an average of 7 training sessions per quarter. Upon completion, the relevant participants were required to undergo oral and/or written examinations, which will form part of their personnel records for bonus entitlement, salary increment and/or promotion prospects.

Respect and considerations of our colleagues are thework culture of theGroup.Trainingprogrammes and jobrotations are in place for employees in assisting them to work towards their goals and aspirations.

TheGroupbelievesthatafirmcommitmenttoCorporate

Responsibility(“CR”) activities forms the basis of good

corporate citizenship and upholds the highest level of

corporate governance.

CoRPoRate ResPonsiBilitY statement

41


Corporate Responsibility statement (Cont’d)

(1) WORKPLACE(CONT’D)

(b)WorkplaceDiversity The Group embraces diversity at workplace andwe do not

allow room for any form of discrimination practice against people of different gender, age, ethnicity, nationality or marital status.

By employing a diverse workforce, the Group is able to have a better understanding of today’s dynamic market demographics. It has also enable the Group to tap into a pool of people from diverse background who can provide unique market insights or generate creative solutions, thereby increasing the Group’s competitiveness in today’s globalised and challenging economy.

Gender diversity Asat31March2016,theGrouphadachievedaratioof62:38

in the workforce of the Group in terms of Male/Female, which had well exceeded the Malaysian government’s initiatives to achieve30%womenparticipationintheworkplace.

Age diversity Asat31March2016,41%ofouremployeesbelongtotheage

group of between 20 to 29 with the next largest age group beingthoseagedbelow20(16%)andagedbetween30and39 (27%). The Group’s age demographics broadly reflectedthose of Malaysia where the younger age employees form the majorityoftheworkforce.

Ethnicity diversity In view that, save for one subsidiary, the other subsidiaries

of the Company are located out of Malaysia, namely United States of America, Singapore and China, the demographics of the ethnicity of the Group’s employees are broadly reflected as such.

As at 31 March 2016, employees of Non-Malaysian Citizens ethnicity constituted the largest workforce of the Group at 98%.

Male62%

Female38%

<20 years16%

50 – 59 years4%

60 years and above1%

20 – 29 years41%

40 – 49 years11%

30 – 39 years27%

India0%

Other98%

Malay0%

Chinese2%

WorkforceintermsofGenderinConnectGroup

WorkforceintermsofAgeinConnectGroup

WorkforceintermsofEthnicityinConnectGroup

42



(1) WORKPLACE(CONT’D)

(c)HealthyandSafeWorkingEnvironment The Group continuously strive to provide a healthy and safe working environment for our employees. Regular

workplace inspection is one of the main duties of the Management to ensure work places are uncluttered, neat, tidy and safe. Fire and safety drills, as well as risk awareness campaigns are held regularly to ensure that employees are well prepared in the event of an emergency.

Topromotehealthyworkingenvironment,RCC,Chinahasabasketballcourtwithinitscompoundforthestafftoexercise after the working hours and organises several basketball competitions every year.

(d)Employees’WellBeing As a caring and law-abiding employer, the Group has ensure that all the benefits-in-kind and/or perks as required

by the local legislation (where the individual subsidiary operates) be accorded and complied with by the respective HumanResourceDepartments(“HRD”).

RCC, China has provide hostel accommodation to its out-of-town employees at a designated hostel accommodation next to the manufacturing plant.

ForFYE2015,RCC,Chinahasembarkedonthefollowingactivities:-

(i) Review of the Production Remuneration Scheme for its production workers in accordance with the productivity target achieved which served to boost productivity while increasing the take home pay of the production workers;

(ii) Foodsubsidyallowance,thequantumrangedfromaminimum30%to100%,beprovidedtotheemployees,in

accordance with their length of service with RCC, China, with a minimum of 1 year’ service; (iii) Staff Welfare Store – a purpose-built subsidised convenience store within the compound of RCC, China for the

benefit of the employees who are staying in the hostel accommodation; and

(iv) One-day trip to Zhuhai, China – A partially-subsidised trip in July, 2015, organised by professional tour agency which was well received by the staff. A total of 53 units of tour bus were required to ferry the staff.

(2) ENVIRONMENT

TheGroupbelieves ithasamoralandsocial responsibility in reducingthecarbon footprint,contributing towardsagreener environment.

RCC, China, being the manufacturing outfit of the Group has re-engineered some of its products to increase the efficiencyofmaterialandlabourconsumption,therebyreducingtheamountofmaterialusageaswellasutilisationoflabour resources.

Pursuant to the Margin Growth Plan, RCC, China also embarked on automation with the purchase of new machineries to reduce over reliance on manual labour.

43



(3) COMMUNITY

The Group recognises that the community plays anessential role in driving the success of its business.

In view thereof, the Group has made its contribution back to society a cornerstone of its CR activities. For FYE 2015, the following community activities werecarriedoutbytheGroup:-

(a)RCC,China’sAnnualDinner A group of needy family and old folks were invited

to the annual dinner of RCC, China and Chinese NewYear’sgoodiesandredpackagesweregivento them.The event provided awin-win situationfor both the care givers and the recipients. Care givers were given the opportunity to serve the misfortune group and at the same time, appreciate foreverythingtheyarehaving.Theparticipants,inparticular the children, had learned and received an invaluable lesson in humanity.

(b)Donation to Singapore AmalgamatedServices Co-Operative OrganisationLimited(SASCOLtd)

Rapid Conn (S) Pte. Ltd. (“RCS, Singapore”) had made some donations to the SASCO Community Project Fund with the aim to provide a betterquality of life for the elders and their families with dependable and affordable care.

(c)DonationtotheMalaysiaAssociationHelpforthePoorTerminallyIll

TheCompanydonated some funds to theaboveassociation to support the purchase of two (2) units of semi auto light weight wheelchairs.

As a responsible corporate citizen, the Group recognises the importance of meeting the environmental and social needs of the community and will endeavour to take proactive action in relation to our CR activities.

AwardandAccolades

RCC, China – The “2015 Caring Enterprise Award”,awarded by Luo Tian Community Service Centre,Shenzhen, China in recognition of RCC’s participation inthefollowingactivitiesduringtheyear2015:-

(i) Active participations in numerous charitable

eventsintheLuoTianCommunityArea; (ii) Active contribution in terms of financial assistance

and volunteer manpower; and (iii) Provision of meals and monetary gifts to the poor

and old folks during various festival celebrations suchasChineseNewYear,MooncakeFestival,etc.

A group of needy family and old folks were invited to the annual dinner of RCC, China andChineseNewYear’sgoodiesandredpackages were given to them.

A certificate was issued to Mr. Ang Chuang Juay for his contribution at the Annual Dinner of RCC.

TheCompanydonatedsomefundstotheabove association to support the purchase of two (2) units of semi auto light weight wheelchairs. A certificate was issued to the Company in recognition of the Company’s contribution.

44


(4) MARKETPLACE

As a listed entity as well as an employer, the Group has an obligation to its shareholders and statutory obligations to the relevantauthorities.TheGrouphas institutedseveral responsiblemarketplacepractices tomaintain thehigheststandards of integrity, fairness and transparency in our conduct of business.

(a)CorporateDisclosurePractices TheGrouprecognisestheimportanceoftimelyandthoroughdisseminationofaccurateandusefulinformationrelating

to our operations to stakeholders. In this regard, we strictly adhere to the disclosure requirements of Bursa Malaysia Securities Berhad and the Malaysian Accounting Standards Board. In fact, this Annual Report contains comprehensive information pertaining to the Group, while various disclosures on financial results provide stakeholders with the latest financial information on the Group.

(b)InvestorRelations(“IR”)Activities Recognising the need to communicate the corporate vision, strategies, developments, financial plans and prospects of

the Group to investors, financial community and other stakeholders fairly and accurately and to obtain feedback from the stakeholders, the Group has embarked on investor relation activities during the year.

TheGrouporganisesregularIRactivitiestopromoteanddevelopapositiverelationshipwithallourstakeholdersviaactive two-way communication and to relay pertinent information to stakeholders in a transparent and consistent manner. Please refer to the Statement on Corporate Governance in this Annual Report for a summary of IR activities conductedforFYE2015.

(c)DedicatedSectionsatCorporateWebsite Apart from the mandatory public announcements through Bursa Securities, the Group’s website at

http://www.connectcounty.comprovidesthepublicwithconvenientandtimelyaccesstobusinessupdates,andfinancialand non-financial information. Furthermore, stakeholders are able to direct queries to the Group via this website.

CONCLUSION

TheGroupnotedthatBursaMalaysiahasalwaysadvocatedCRaskeytosustainability.TheGrouprecognisestheimportanceof sustainability and its increasing impact to the business. The Group is committed to understanding and implementingsustainable practices and to exploring the benefits to the business whilst attempting to achieve the right balance between the needs of the wider community, the requirements of shareholders and stakeholders and economic success.

45


1. COMPOSITIONANDDESIGNATIONOFTHEAUDITCOMMITTEE

The Audit Committee comprises of three (3)members, two (2) ofwhom are IndependentNon-ExecutiveDirectors(“INED”) and one (1) of whom is Non-Independent Non-Executive Director, who also satisfy the test of independence undertheACEMarketListingRequirements(“ACELR”)ofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”) and alsomeets the requirements of theMalaysianCodeonCorporateGovernance 2012.The composition of theAuditCommittee and their attendance records are set out in this report accordingly.

TheAuditCommitteeChairman,Mr.HongCheongLiang,isamemberoftheMalaysianInstituteofAccountants(“MIA”). Inthisrespect,theCompanycomplieswithRule15.09(1)(c)(i)oftheACELR.

ForFYE2015,thetermofofficeandperformanceoftheAuditCommitteeandeachofitsmemberswerereviewedbytheBoard and the letter is satisfied that they were able to discharge their functions, duties and responsibilities in accordance withtheTermsofReferenceoftheAuditCommittee,therebysupportingtheBoardinensuringappropriateCorporateGovernance standard within the Group.

Name Designation DirectorshipHongCheongLiang Chairman Independent Non-Executive Director

RoyTheanChongYew Member Independent Non-Executive Director

LeeChoonKwong Member Non-Independent Non-Executive Director

2. TERMSOFREFERENCE

ThetermsofreferenceoftheAuditCommitteeoftheCompanysetoutbytheBoardofDirectorsareasfollows:-

(I) COMPOSITION

TheAuditCommitteeshallbeappointedbytheBoardfromamongsttheirmembersandshallfulfillthefollowingrequirements:-

a. TheCommitteeshallconsistofnotlessthanthree(3)members,allmustbeNon-ExecutiveDirectors,withmajorityofthembeingIndependentDirectors.

b. TheCommitteeshallelectaChairmanfromamongitsmemberswhoisanIndependentNon-ExecutiveDirector.

TheBoardispleasedtopresenttheAuditCommittee

Report for the financial year ended 31 December 2015.

aUdit Committee RePoRt

46


2. TERMSOFREFERENCE(CONT’D)

(I) COMPOSITION(CONT’D)

c. At least one (1) member of the Audit Committee;

(i) Must be a member of the MIA;

(ii) If he/she is not a member of MIA, he/she must have at least three (3) years’ working experience and;

• MusthavepassedtheexaminationsspecifiedinPartIofthe1stScheduleoftheAccountantsAct,1967;or

• MustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthe1stScheduleoftheAccountants Act, 1967; or

• FulfilssuchotherrequirementsasprescribedorapprovedbyBursaSecurities.

(iii) No alternate Director shall be appointed as a member of the Audit Committee,

(iv) Persons related or deemed related to Executive Directors shall not be eligible for appointment as a member of the Audit Committee.

If a member of the Audit Committee resigns, dies or for any other reasons ceased to be a member resulting in the number of members to be reduced to two (2), the Board of Directors shall within three (3) months of that event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

TheBoardshallreviewthetermsoftheAuditCommitteenolessthaneverythree(3)years.

(II) AUTHORITYOFTHEAUDITCOMMITTEE

TheAuditCommitteeisauthorisedto:

a. investigate any activity within its terms of reference.

b. have unrestricted access to any information pertaining to the Company and its subsidiary companies for the purpose of discharging its functions and responsibilities.

c. consult independent experts if and when necessary to carry out their duties.

d. convenemeetingswith the External Auditors, the Internal Auditors or both, in a“closed door” environmentduring Board sessions, i.e. in the absence of other Directors and employees of the Group, whenever deemed necessary.

47


audit Committee Report (Cont’d)


(III)KEYRESPONSIBILITIES

a. Overseeing the financial reporting process

• Assess the appropriateness ofManagement’s selection and application of accounting principles and keyaccounting policies;

• AssessManagement’sjudgmentsandaccountingestimatesappliedinfinancialreporting; • ConferwithbothManagementandtheExternalAuditorsaboutthefinancialstatements; • EnsurethattheGroup’sfinancialstatementsarecomplete,uptodate, relevantandfairlypresented, inall

material aspects, with regards to the financial position of the Group, and that all disclosures are clear, concise and transparent;

• Ensurecompliancewithrelevantlawsandregulations;and • Reviewearningsreleases,announcementsandotherkeyinformationpresentedthatwillaffectthefinancial

reporting prior to release.

b. Overseeing the process relating to the Group’s financial integrity

Risk management involves identifying risks, analysing and evaluating these risks and taking proactive measures to mitigate (or avoid) them as such risks will invariably have an impact on the Group’s operations and financial reporting.The Audit Committee plays an essential role in the Group’s financial integrity by assuming directoversight responsibilities with regards to the Group’s risk management processes.

c. Overseeing internal control

Although Management is responsible for the design and implementation of an effective internal control system, the Audit Committee must ensure that the controls are adequate, in place, relevant and properly enforced. As part of its assessment, the Audit Committee do, from time to time, obtain from Management an overview of the entire system, and associated risks, with regards to the integrity of the Group’s financial operations and reporting. For good measure, the Audit Committee may consider holding consultations with the Internal and the External Auditors before or when acting on representations received from Management.

(IV)FREQUENCYANDATTENDANCEOFAUDITCOMMITTEEMEETINGS

TheAuditCommitteeshallmeetatleast(5)fivetimesayearandsuchmeetingsastheChairmanshalldecideinordertofulfilitsduties.AquorumshallconsistofamajorityofAuditCommitteemembers,andthemajoritypresentmustbe Independent Directors.

Member of Audit Committee may participate in a meeting by means of conference telephone, conference videotape or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting.

(V)MINUTES

TheminutesofeachmeetingshallbekeptbytheSecretaryanddistributedtoeachmemberoftheAuditCommitteeandoftheBoardofDirectors.AllminutesofthemeetingsshallbecirculatedtoeverymemberoftheBoard.TheSecretary of the Audit Committee shall be the Company Secretary.

48




(VI)FUNCTIONS

In order for the Audit Committee to discharge its oversight responsibilities in an effective and timely manner, the AuditCommitteewillcarryoutthefollowingactivities:

a. Review the audit plan with the External Auditors;

b. Review with the Internal Auditors their evaluation of the system of internal controls;

c. Review the audit report of the External Auditors;

d. DeterminethelevelofcooperationgivenbytheCompany’sofficertotheAuditors;

e. Review the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work;

f. Review the scope and result of the internal procedures;

g. Review the balance sheet and profit and loss account;

h. Review any related party transactions that may arise within the Company or the Group;

i. Review and report the same to the Board of Directors any letter of resignation from the External Auditors of the Group as well as whether there is any reason (supported by grounds for release) to believe that the Group’s External Auditors are not suitable for re-appointment;

j. Makerecommendationsconcerningtheappointment,termsofengagementandremunerationoftheExternalAuditors to the Board;

k. Prompt reporting to Bursa Securities on any matters reported by the Audit Committee to the Board which has notbeensatisfactoryresolvedresultinginabreachoftheACELRofBursaSecurities;and

l. Perform any other work that is required or empowered to do so by statutory legislation or guidelines as instructed by the relevant Government authorities.

49



SUMMARYOFACTIVITIES

TheAuditCommitteeheldatotaloffive(5)meetingsduringthefinancialyearended31December2015.

ThedetailsofattendanceoftheAuditCommitteeMeetingsduringthefinancialyearwereasbelow:-

AuditCommitteeMembers DateofAppointmentTotalno.ofmeetings

attended

Totalno.ofmeetingsheldduringtenureof

office %

HongCheongLiang(Chairman) 30 October 2014 5 5 100RoyTheanChongYew 29 September 2014 5 5 100LeeChoonKwong 7 November 2014 3 5 60

TheleadauditengagementpartnerandtheengagementmanageroftheExternalAuditorsattendedtwo(2)AuditCommitteemeetings held in year 2015 and two (2) private sessions with the Audit Committee without the presence of the executive management were also held on the same day.

The Audit Committee Chairman sought information on the communication flow between the External Auditors and theManagement which was necessary to allow unrestricted access to information for the External Auditors to effectively perform their duties.

All deliberations during the Audit Committee meetings were duly minuted. Minutes of the Audit Committee meetings were tabled for confirmation at every succeeding Audit Committee meeting.

TheAuditCommitteeChairmanpresentedtheAuditCommittee’srecommendationstogetherwiththerespectiverationaletothe Board for approval of the annual audited financial statements and the unaudited quarterly financial results. As and when necessary, the Audit Committee Chairman would convey to the Board matters of significant concern raised by the Internal or External Auditors.

ThesummaryoftheactivitiesoftheAuditCommitteeforthefinancialyearunderreviewincludedthefollowing:-

(a)FinancialReportingreview

1. Reviewed the Group’s audited financial statements and made recommendation to the Board for approval.

2. Reviewed the unaudited quarterly reports and announcements for the Board’s consideration and approval.

(b)ReviewofInternalControlmatters

3. Reviewed and discussed the internal audit reports on audit issues highlighted, recommendations and Management Responses and the effectiveness of the Group’s system of internal controls.

4. Followed up on previous internal audit reports issued.

5. Reviewed the Audit Committee Report and Statement on Risk Management and Internal Controls.

50



SUMMARYOFACTIVITIES(CONT’D)

(c)OversightofInternalAuditfunction 6. ReviewedtheInternalAuditReportsfortheFYE2015andassessedtheInternalAuditors’findingsandthemanagement’s

responses and made the necessary recommendations to the Board of Directors for approval.

7. Reviewed the adequacy and performance of the Internal Audit function and its comprehensive coverage of the Group’s activities.

8. Reviewed and assessed the adequacy of the scope, functions, competency and resources of the outsourced internal auditors and that they have the necessary authority to carry out their work.

(d)OversightofExternalAuditors

9. Reviewed the Audit Planning Memorandum for the audit of financial year ended 31 December 2015 prepared by the External Auditors which set out the External Auditors’ responsibilities in respect of financial reporting, audit approach, scope of work, current developments, areas of concern and audit procedures.

10. Considered and recommended to the Board for the approval of the audit fees payable to the External Auditors.

11. Reviewed the Audit Progress Memorandum for the financial year ended 31 December 2015 prepared by the External Auditors which comprised the significant audit findings.

12. Reviewed existing accounting standards for the additional disclosures requirement approved by the Malaysian Accounting Standards Board and Malaysian Financial Reporting Standards applicable in the preparation of the Group’s financial statements.

(e)ReviewofRelatedPartyTransactions

13. Reviewed the related party transactions and conflict of interest situation that may arises within the Company and the Group.

INTERNALAUDITFUNCTION

(I) Appointment

TheGrouphasappointedanexternalinternalauditserviceprovidertocarryouttheinternalauditfunction,namelyMorisonAACCorporateSolutionsSdn.Bhd.(“Morison”).TheoutsourcedInternalAuditorsreportdirectlytotheAuditCommittee,providing the Board with a reasonable assurance of adequacy of the scope, functions and resources of the Internal Audit function.ThepurposeoftheInternalAuditfunctionistoprovidetheBoard,throughtheAuditCommittee,assuranceoftheeffectiveness of the system of internal control in the Group.

The Internal Audit function is independent and performs audit assignments with impartiality, proficiency and dueprofessional care.

51



INTERNALAUDITFUNCTION(CONT’D)

(II)Internalauditactivities

For the financial year ended 31 December 2015, Morison has successfully conducted the following audits in accordance with their Internal Audit Plan 2015 which was approved by the Audit Committee and agreed on the timing, frequency and scopeofinternalauditservicestoberendered:-

Auditactivities Auditentity/area

Review of the corporate governance ConnectCountyHoldingsBerhadReview of sales and account receivable RapidConn(S)PteLtdReview of production department, inventory control management department and information technology department

RapidConn(Shenzhen)Co.Ltd.

TheAuditCommitteewasinformedthatMorisonhasconductedtheirauditinadherencetotheInternationalStandardsforthe Professional Practice of Internal Auditing (Standards) as advocated by the Institute of Internal Auditors.

During their course of audit, Morison has reviewed compliance with policies, procedures and standards, relevant external rules and regulations, as well as assessed the adequacy and effectiveness of the Group’s system of internal control and recommended appropriate actions to be taken where necessary.

TheinternalauditsperformedmettheobjectiveofhighlightingtotheAuditCommitteetheauditfindingswhichrequiredfollow-up action by the Management, any outstanding audit issues which required corrective actions to be taken to ensure an adequate and effective internal control system within the Group, as well as any weaknesses in the Group’s internal control system. It ensured that those weaknesses were appropriately addressed and that recommendations from the internal audit reports and corrective actions on reported weaknesses were taken appropriately within the required timeframe by the Management.

(III)Totalcostsincurredforthefinancialyearended31December2015

ThetotalcostincurredfortheInternalAuditfunctionoftheGroupforthefinancialyearended31December2015amountedtoRM30,800/-(2014:RM19,630/-).

52



TheNominationCommitteemetonceduringthefinancialyearunderreview.ThepresentchairoftheNominationCommitteeisMr.RoyTheanChongYew,theIndependentNon-ExecutiveChairmanoftheCompany.

TheprincipaldutiesandresponsibilitiesoftheNominationCommitteeareasfollows:-

• Tonominateand recommend to theBoard, suitablecandidates fordirectorships. Inmakingsuch recommendations, toconsider candidates proposed by the Executive Directors and within the bounds of practicability, by any other senior executives or any director or shareholder;

• TonominateandrecommendtotheBoard,thenomineestofillseatsonBoardcommittees;• To assist the Board in its annual reviewof its requiredmix of skills and experience and other qualities, including core

competencies which non-executive directors should bring to the Board; and• ToassisttheBoardinimplementinganassessmentprogrammestoassesstheeffectivenessoftheBoardasawhole,the

committees of the Board and the individual Director on an annual basis.

ThefollowingactivitieswereundertakenbytheNominationCommitteeduringthefinancialyearunderreview:-

(i) Conducted the Board evaluation to assess the effectiveness of the Board as a whole and Board Committees in accordance with the eight (8) principles of the Malaysian Code on Corporate Governance 2012;

(ii) Evaluated the contribution and performance of each individual Director;

(iii)Review and recommended to the Board, the adoption of “Declaration by Independent Directors” to confirm the“independence”oftheIndependentDirectorsonanannualbasis;

(iv) Review and recommended to the Board, the re-election of the Directors who will be retiring at the forthcoming Annual GeneralMeeting(“AGM”) of the Company; and

(v) NominationandrecommendationtotheBoard,theappointmentofMs.LimBeeSanasan IndependentNon-ExecutiveDirector, of which her appointment will be effected after the AGM of the Company.

For the financial year ended 31 December 2015,

the Nomination Committee comprises exclusively

of non-executive Directors and the composition of

theNominationCommitteeisasfollows:-

nomination Committee RePoRt

NominationCommittee Designation Directorship

NumberofNominationCommitteeMeetingsattended/heldinthe

financialyearunderreviewRoyTheanChongYew Chairman Independent Non-Executive

Chairman1/1

HongCheongLiang Member Independent Non-Executive Director

1/1

LeeChoonKwong(Appointed w.e.f 16/02/2015)

Member Non-Independent Non-Executive Director

0/1

53


1.APPOINTMENTOFTHEBOARD

The Nomination Committee has the responsibility to identify and select potential new Directors and to makerecommendations to the Board for the appointment of Directors.

TheNominationCommitteereviewscandidatesforappointmentasDirectorsbasedonthefollowingestablishedcriteria:- • qualifications; • skillsandcompetence; • functionalknowledge; • experience; • backgroundandcharacter; • integrityandprofessionalism; • timecommitment; • genderdiversity;and • inthecaseofcandidatesforthepositionofIndependentNon-ExecutiveDirectors,whetherthetestofindependence

undertheACEMarketListingRequirementsofBursaMalaysiaSecuritiesBerhadissatisfied.

In its review of the candidates, the Nomination Committee also considered the overall composition of the Board and the combination of skills of existing Directors to ensure the selected candidate would help close any possible gaps in the Board. TherecommendationoftheNominationCommitteewassubmittedtotheBoardforitsconsiderationandapproval.

Upon review against the established criteria as abovementioned, the Nomination Committee recommended to the Board thatMs.LimBeeSan,apracticinglawyerbyprofessionforappointmentasIndependentNon-ExecutiveDirector.TheBoardin turn has in principle agreed to the same, to be appointed after the 13th AGM of the Company.

2.APPOINTMENTTOBOARDCOMMITTEES

Thereviewisconductedonanannualbasis,andasandwhentheneedarises,suchaswhenanewdirectorisappointed.Indetermining the candidates for appointment to the Board Committees, various factors are considered by the Nomination Committee, including,

• theneedsoftheparticularBoardCommittee; • theresultsoftheBoardevaluationsfortheBoardCommittees; • timecommitmentandavailability; • regulatoryrequirements;and • bestpracticesorgovernancepractices.

54


nomination Committee Report (Cont’d)

3.RE-ELECTIONOFDIRECTORS

PursuanttoArticle83oftheArticlesofAssociation(“AA”) of the Company, an election of Directors shall take place each year atitsAGMwhereone-third(1/3)oftheDirectorswhoarelongestinofficeshallretire,and,ifeligible,mayofferthemselvesforre-election.TheNominationCommitteeisresponsibleformakingrecommendationtotheBoardontheeligibilityoftheDirectors to stand for re-election at the AGM.

IndeterminingtherelevantDirectors’eligibility,theNominationCommitteecarriedoutthefollowingassessments:- • formalreviewoftheperformanceoftheDirector,takingintoaccounttheresultsofthelatestBoardevaluations; • attendanceofBoardmeetingsaswellasBoardCommitteeMeetings(whereapplicable); • thelevelofcontributiontotheBoardthroughhisskills; • experienceandstrengthinqualities; • hislevelofindependence;and • abilitytoactinthebestinterestoftheCompanyindecision-making.

TheNominationCommitteehas recommended the followingDirectors for retirementpursuant toArticle 83of theAAand the Board in turn has recommended the same to the shareholders for approval at the forthcoming 13th AGM of the Company:-

• Mr.AngChuangJuay;and • Mr.HongCheongLiang.

4.ANNUALASSESSMENTOFTHEBOARD

TheNominationCommitteeconductedthefollowingassessmentsannually:-

(i) Directors’ self-assessment

Inconductingthesurvey,thefollowingmaincriteriawereadoptedbytheNominationCommittee:- (i) Contribution to interaction; (ii) Quality of input; and (iii) Understanding of role.

Based on the survey conducted for the financial year ended 31 December 2015, the Nomination Committee was satisfied with the performance of the individual Board of Directors.

(ii) Evaluation on the effectiveness of the Board of Directors and the Committees of the Board

Inconductingtheevaluation,thefollowingmaincriteriawereadoptedbytheNominationCommittee:- • BoardStructure; • BoardOperations; • BoardRolesandResponsibilities; • BoardChairman’sRolesandResponsibilities;and • ExecutiveDirector’sRoleandResponsibilities.

Based on the evaluation conducted for the financial year ended 31 December 2015, the Nomination Committee was satisfied with the performance of the Board and Committees of the Board.

55


nomination Committee Report (Cont’d)

5.BOARDDIVERSITYPOLICY

TheBoardaffirmsitscommitmenttoboardroomdiversityasatrulydiversifiedBoardcanenhancetheBoard’seffectiveness,creativity and capacity to thrive in good times and weather tough times.

Bearing in mind that an appointment to the Board is a long term commitment to the Company and in view of the need to keepaleanBoardcompositiontoassistwiththeturnaroundoftheCompany,theBoardhasnotatthisjuncturesetanyshort term target or measure for boardroom diversity but nevertheless works to ensure that there is no discrimination onthebasisof,butnot limitedto,ethnicity, race,age,gender,nationality,politicalaffiliation, religiousaffiliation,sexualorientation, marital status, education, physical ability or geographic region, during the recruitment of new Board members.

TheBoardhasindicateditscommitmenttoboardroomdiversitybythefollowingappointments:-

Gender Diversity TheNominationCommitteehadrecommendedtotheBoard,theappointmentofMs.LimBeeSanasanIndependentNon-

Executive Director of the Company, of which her appointment will be effected after the 13th AGM of the Company.

Age Diversity TheBoardbelieves that theDirectorswithdiverseageprofilewillbeable toprovideadifferentperspectiveandbring

vibrancy to the Group’s strategy making process.

TheageprofilesoftheDirectorswererangingfromthirtiestofiftiesofage,whichunderliestheBoard’scommitmenttoagediversity at the Board level appointment.

Mr.HongCheongLiang,the Independent Non-Executive Director, is 37 years old, the youngest member on Board and yet elected as the Chairman of the Audit Committee in view of his professional accountancy background and experiences.

Diversity in Nationality and Geographic Region Mindfulofglobalmobilityof talents, theBoarddoesnot restrict its composition to justMalaysianswhowerebased in

Malaysia.TheBoardendeavourtosourceandappointDirectorsofdiversenationalityandoftrans-nationalbackgroundandexperiences.

Mr. Ang Chuang Juay, the Executive Deputy Chairman, is a Singaporean who has more than 20 years of industry experiences inSingapore,TaiwanandChina.

56


BOARDRESPONSIBILITY

TheBoardhasoverallresponsibilityfortheGroup’sERMframeworkandinternalcontrolsystem.TheBoard’sresponsibilitiesinclude identifying material risks, implementing the appropriate and relevant control measures to evaluate and manage these risks, and reviewing the adequacy, relevance and integrity of both the ERM framework and internal control system.

During the year under review, Management still maintained its existing internal control protocols and risk management framework, as there were no changes that have materially affected, or are reasonably likely to materially affect the Group’s system of internal control and risk management with respect to its financial reporting.

ObjectivesofRiskManagementThemainobjectiveofriskmanagementistoidentifypotentialriskeventsbeforetheyoccursothattheappropriatemeasures,controlsandcontingencyplanscanbeputinplace,andinvokedifneeded,tomitigateadverseimpactsonachievingobjectives.Tothisend,thefollowingriskmanagementactivitiesarecarriedout:-a. Identify and prioritise potential risk events;b. Develop risk management strategies and risk management plans;c. Utilise established risk management methods, tools and techniques to assist in the analysis and reporting of identified risk

events;d. Seek ways to identify, evaluate and where possible, preempt risks; ande. Develop strategies and plans for lasting risk management strategies.

TheBoardofDirectors(“theBoard”) acknowledges the importance

of good corporate governance policies and practices, and is

therefore committed to maintaining a sound and robust enterprise

riskmanagement(“ERM”) framework and internal control system.

TheBoardalsoacknowledgesthattheERMframeworkandthe

system of internal controls can only provide reasonable, but not

absolute, assurance against any material misstatement, fraud or loss

as they are designated to manage rather than eliminate the risk of

failuretoachievetheGroup’sbusinessobjectives,andtosafeguard

shareholders’ investments and the Group’s assets.

TheBoardispleasedtopresenttheStatementonRiskManagement

andInternalControl(“SORMIC”), which is made pursuant to

Paragraph15.26(b)oftheACEMarketListingRequirements(“ACE

LR”)ofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)andin

accordance with the Principles and Recommendations relating to risk

management and internal controls provided in the Malaysian Code on

CorporateGovernance2012(“MCCG2012”) as well as the Statement

on Risk Management and Internal Control: Guidelines for Directors of

Listed Issuers (“SRMICG”).

statement on RisK manaGement and inteRnal ContRol

57


statement on Risk management and internal Control (Cont’d)

BOARDRESPONSIBILITY(CONT’D)

PurposeandApplicationRisk assessment is intended to furnish Management with information regarding events that could impact the achievement of objectives.Itisbestcoordinatedandintegratedintoexistingmanagementandoperationalprocessesthatshouldbecarriedoutusingatop-downapproachthatiscomplementedbyabottomupappraisalmethodology.TheERMframeworkconsidersall inherent and residual risks, including how risks interrelate, and develops a portfolio view of risks from both subsidiary and entity level perspectives.

The risk assessment procedures conducted by the Group’s subsidiaries should, therefore, be aligned (e.g., using commonterminology,riskcategories,principlesonriskvaluation,etc),coverkeyobjectives,whilethe individualunitrisksshouldbereviewed and consolidated first to identify any key risks that may impact the Group as a whole (i.e. at the entity-level).

TheBoardacknowledgesthatarobustriskassessmentprocessformsthefoundationforaneffectiveERMprogram.TheERMframeworktakesintoaccounttheobjectives,events,theGroup’sinternalprocessesandresources,andtheGroup’sbusinessenvironment when ascertaining the type and scope of the risk assessment to be undertaken.

RiskManagementduringtheYearunderReviewDuringtheyearunderreview,Managementcontinuedto:-1. review all risk events and factors, while continuing to monitor the Group’s business environment to ensure that the Risk

Register(“RR”) continues to be relevant and up to date; and2. determine if there were any additional risks to consider in light of changing events and to ensure that the current risk

management strategies are adequate and relevant, and to make the appropriate amendments where necessary.

Management still maintains the ERM framework and the RR as there were no significant changes in the risk exposure pertaining to the Group’s current operations and business environment.

Management will continue to assess and evaluate the ERM framework, and seek ways to make improvements in the implementation and application of the framework, or the general framework itself, if and when necessary. Management will also continue to review the value proposition of the entire ERM framework in light of the changes in the business environment in which the Group operates.

Thekeyrisksareasidentifiedin2015aretabulatedbelow:-

KeyAreasofRiskAssessment

RiskDescription

1 Strategic ThisrelatestotheGroup’smissionandstrategicobjectives.

2 Operational ThisrelatestotheGroup’sriskofloss(i.e.financialperformance)asaresultofshortcomingsor failings from within the Group (i.e. systems, processes, people), or from external events.

3 Compliance ThisrelatestotheGroup’scomplianceobligationsvis-a-visgovernmentregulations,policies and procedures, business ethics, etc.

4 Internal Audit ThisrelatestorisksassociatedwiththevaluedriversoftheGroupthatimpactshareholder’svalueasitaffectsstrategic,financial,operational,andcomplianceobjectives.

5 Financial Statement ThisrelatestorisksassociatedwiththelikelihoodofmaterialmisstatementsoftheGroup’sfinancial statements through input from various departments within the Group.

6 Fraud Thisrelatestopotentialoccurrencesoffraudormisrepresentationsthatmaycompromisethe Group’s ethics and compliance standards, business practice requirements, financial reportingintegrity,andotherobjectives.

7 Market ThisrelatestorisksassociatedwithmovementsinthemarketthatcouldaffecttheGroup’sperformance or risk exposure (typically forex, interest rates and commodity prices).

8 Credit Thisrelatestorisksassociatedwiththelikelihoodthattheborrowerorcounterparty (re:contracts)maydefaultontheirfinancialobligations.

9 Customer Thisrelatestotheriskprofileofthecustomer(i.e.creditworthiness)orcounterparty (i.e. intent), that could affect the Group’s credibility, reputation and financial standing.

58



10 Supply Chain Thisrelatestotherisksassociatedwiththefunctionsofpurchasing,planning,logisticsandwarehousing.Thefailuretoeffectivelymanagesupplychainrisksmayresultineconomicand financial losses, reductions in product quality, delivery delays and loss of reputation.

11 Product Thisrelatestorisksassociatedwithanorganisation’sproduct,fromdesignanddevelopment through manufacturing, distribution, use, and disposal. Failure to manage the risks will have far-reaching effects, as they not only negatively impact cost and revenue, but also the Group’s reputation and product credibility.

12 ProjectManagement Thisrelatestorisksassociatedwiththeimplementationanddeliveryofaproject,takingintoaccounttherisksaffectingthekeyparametersofprojectmanagement,i.e.time,costand quality.

On-goingAssessmentbytheBoardTheRiskManagementCommittee shall report to theBoardperiodicallyon theGroup’s risksexposure thatmaydirectlyorindirectly impact (or likely to impact) the Group business strategies, business opportunities and its achievement of its goals and objectives,andtorecommendtheappropriatemitigatingorpre-emptivemeasurestodealwithanyimpendingrisks.

TheRiskManagementCommitteewillalsoensurethattheERMframeworkandtheRRarebothrelevantanduptodate,andtoadvise the Board if any amendments are required.

KeyFeaturesoftheGroup’sInternalControlSystem

(i) InternalControl TheBoardmaintainsasoundsystemofinternalcontrolstomanagetheday-to-dayrunningofthebusinessactivitiesof

the Company and its subsidiaries (the“Group”).Theinternalcontrolsystemisamechanismofchecksandbalancesintheoperatingandfinancialprocesseswhereinthetransactionsandprocessescarriedoutaresubjectedtothisself-checkingmechanism. The management of the Group has embedded such control mechanism within the Standard OperatingProcedures(“SOPs”)oftheindividualsubsidiariestoensureeffectiveness.Theprocess,proceduresandpoliciesthatmakeup the entire Internal Control system are customized where necessary to take into account local conditions pertaining to the individual subsidiaries.

TheBoardhasoutsourcedtheinternalauditfunctionstoaqualifiedthirdparty,whichwillprovidesupporttotheAuditCommittee in discharging its duties with regard to the adequacy and integrity of the system of internal controls within the Group.

TheBoardhasmandatedtheAuditCommitteewiththeoverall responsibilityofensuringadequacy,completenessandeffectivenessoftheGroup’s internalcontrolsystems.TheAuditCommitteethus liaisewiththequalifiedthirdparty(i.e.an outsourced professional firm), who carries out audit checks on such control processes and provide feedback on its effectiveness the operating level. Any weaknesses or non-compliance reported will be addressed accordingly and rectified (within a set timeframe) by management on the instructions of the Audit Committee.

TheGroup’sinternalcontrolsarealignedtoitsfinancialoperations,reportingandcomplianceobjectives,anditisdesignedto:-

1. provide Management and the Board with reasonable assurance, but not absolute assurance, which will enable the Board tomakesoundjudgementandinformeddecisions;

2. complement the Group’s ERM programmes, where necessary; and 3. ensure that processes and procedures can be applied from an entity-wide perspective as well as from a subsidiary

perspective.

The Executive Deputy Chairman, who is primary responsible for the Group’s operations, provides assurance that theoperationalcontrolsareeffectivethroughouttheyear,whiletheChiefFinancialOfficerprovidesassurancethatthefinancialreportingcontrolsareeffectivethroughouttheyear.TheExecutiveDeputyChairmanandtheChiefFinancialOfficerwillundertake a more comprehensive review of the Group’s internal control system as recommended by MCCG 2012.


RiskManagementduringtheYearunderReview(Cont’d)

59



KeyFeaturesoftheGroup’sInternalControlSystem(Cont’d)

(ii) AuthorityandResponsibility Certain responsibilities are delegated to the following Board Committees through clearly definedTerms of Reference

(“TOR”)whicharereviewedperiodicallyand/orwhentheneedarises:- •AuditCommittee; •NominationCommittee; •RemunerationCommittee;and •RiskManagementCommittee.

TheTORoftheabovementionedBoardCommitteeshavebeenentrenchedintotheBoardCharter.

A full copy of the Board Charter is available for viewing on the Company’s corporate website at www.connectcounty.com.

(iii)InternalAuditFunction The purpose of an Internal Audit function is to provide the Board, through the Audit Committee, assurance of the

effectivenessofthesystemofinternalcontrolwithintheGroup.TheCompanyhasanInternalAuditfunctionwhichreportsto the Audit Committee, providing the Board with a reasonable assurance of adequacy of the scope, functions and resources of the Internal Audit function.

InternalAuditActivitiesfortheFinancialYearunderReviewAn internal audit was conducted on RCS and RCC in May 2015 and October 2015 respectively, covering key areas of the subsidiaries’operations.Thedetailsofthe internalauditactivitiesaresetout intheAuditCommitteeReportofthisAnnualReport.

AssurancefromManagementFor the financial year ended 31 December 2015, assurance from the Executive Deputy Chairman, who is primary responsible fortheGroup’soperations,andtheChiefFinancialOfficer,areobtainedthroughouttheyearthattheGroup’sriskmanagementandinternalcontrolsystemsareoperatingeffectively.Thisassuranceisobtainedviaformalandinformalinquiries,discussionsand meetings.

ReviewofStatementbytheExternalAuditorsPursuanttoParagraph15.23oftheMainLR,theExternalAuditorshavereviewedthisstatementforinclusioninthe2015AnnualReport, in accordance with the Malaysian Approved Standard on Assurance Engagements, International Standard on Audit Engagement (“ISAE”)3000–AssuranceEngagementsother thanAuditsorReviewsofHistorical Financial InformationandRecommendedPracticeGuide(“RPG”) 5 (Revised) – Guidance for Auditors on Engagements to Report on the SORMIC included in the Annual Report issued by the Malaysian Institute of Accountants.

Based on their review, the External Auditors reported to the Board that nothing has come to their attention that causes them to believe that this statement is inconsistent with their understanding of the processes adopted by the Board in reviewing the adequacy and integrity of the system of internal controls of the Group.

RPG 5 does not require the External Auditors to, and they did not, consider whether this statement covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control systems.

CONCLUSIONTheBoardhasreviewedtheriskmanagementandinternalcontrolsystemsandisoftheopinionthatthesystemsinplaceduringthe financial year under review are adequate and effective to safeguard the shareholders’ as well as other key stakeholders’ interests and the Group’s assets.

TheBoardisalsooftheopinionthatasthedevelopmentofasound,effectiveandrobustriskmanagementandinternalcontrolsystems is a continuous process, the Board together with management will maintain an on-going commitment by continuing to play a proactive role to ensure that the risk management and internal control systems will remain robust and up to date.

ThisstatementismadeinaccordancewiththeresolutionoftheBoardofDirectorsdated25March2016.


60


1. ShareBuy-Back

TheCompanydidnotundertakeanysharebuy-backexerciseduringthefinancialyearunderreview.

2. Options,WarrantsorConvertibleSecurities

On 3 October 2011, a total of 60,847,500 warrants 2011/2021 were issued and quoted on the ACE Market of Bursa Securities.

As at 31 December 2015, the total number of warrants 2011/2021 exercised were 10,456,700 and the remaining balance of unexercised warrants were 50,390,800.

3. DepositoryReceiptProgramme

TheCompanydidnotsponsoranyDepositoryReceiptProgrammeduringthefinancialyear.

4. RelatedPartyTransactionsofaRevenueorTradingNature

Significant related party transactions of the Group for the financial year ended 31 December 2015 are disclosed on page 114 of this Annual Report.

5. Sanctionsand/orPenalties

Therewereno sanctionsand/orpenalty imposedon theCompany, its subsidiaries,Directorsormanagementby therelevant regulatory bodies during the financial year under review.

Thefollowinginformationisprovidedinaccordancewith

Rule9.25oftheACEMarketListingRequirementofBursa

MalaysiaSecuritiesBerhad(“BursaSecurities”) as set out

in Appendix 9C thereto.

additional ComPlianCe inFoRmation

61


6. Non-AuditFees

For the financial year ended 31 December 2015, Messrs. Moore Stephens Associates PLT, the External Auditors hasrenderedcertainnon-auditservicestotheCompany,abreakdownofwhichislistedasbelowforinformation:-

Non-auditservicesrendered Company(RM)

Review of Directors’ Statement on Risk Management and Internal Control 8,000

7. VariationinResults

TheannualauditedfinancialstatementsoftheCompany/Groupforthefinancialyearended31December2015didnotvaryby2%ormorefromtheunauditedfinancialresultsannouncedtoBursaSecuritieson19February2016.

8. ProfitGuarantee

Therewasnoprofitguaranteeforthefinancialyear.

9. MaterialContractsInvolvingDirectors’andMajorShareholders’Interests

Therewasnomaterialcontractentered intobytheGroup involvingthe interestofDirectorsandmajorshareholders,either still subsisting as at the end of the financial year or entered into since the end of the previous financial year.

10.ShareIssuanceSchemeforEmployees

TheGroupdidnotofferanyshareschemeforemployeesduringthefinancialyear.

additional Compliance information

62


TheDirectorshavereviewedtheaccountingpoliciestoensurethattheyareconsistentlyappliedthroughoutthefinancialyearand are of the view that relevant approved accounting standards have been followed in the preparation of these financial statements.Incaseswherejudgementsandestimationsweremade,theywerebasedonreasonablenessandprudence.

TheDirectorshavereliedonthesystemofinternalcontrolstoensurethattheinformationgeneratedforthepreparationofthefinancial statements from the underlying accounting records are accurate and reliable.

TheDirectorsare responsible forensuringthat theCompanymaintainsaccountingrecordswhichdisclosewithreasonableaccuracy of the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with the provisions of the Companies Act, 1965.

TheDirectorshavegeneralresponsibilitiesfortakingsuchstepsthatarereasonablyavailabletothemtosafeguardtheassetsof the Group and the Company, and to prevent and detect frauds and other irregularities.

ThisStatementonDirectors’Responsibilityforpreparingthefinancialstatementsismadeinaccordancewiththeresolutionofthe Board of Directors dated 25 March 2016.

In accordance with the Companies Act, 1965 and the

applicable approved accounting standards, the Directors

are required to prepare annual financial statements that

give a true and fair view of the financial position and the

results and cash flows of the Group and of the Company

for that financial year then ended.

statement on diReCtoRs’ ResPonsiBilitY FoR PRePaRinG tHe FinanCial statements

FinanCial statements As at 31 December 2015

64 Directors’ Report

68 Statement by Directors

68 Statutory Declaration

69 Independent Auditors’ Report to the Members

71 Income Statements

72 Statements of Comprehensive Income

73 Consolidated Statement of Financial Position

74 Company Statement of Financial Position

75 Consolidated Statement of Changes in Equity

76 Company Statement of Changes in Equity

77 Statements of Cash Flows

79 Notes to the Financial Statements

64

AnnuAl RepoRt 2015 CONNECTCOUNTY HOLDINGS BERHAD (618933-D)

PRINCIPALACTIVITIES

TheprincipalactivityoftheCompanyisinvestmentholding.

Theprincipalactivitiesof thesubsidiariesare thatofdesign,manufacture, sales,marketing, servicesand tradingofcables,connectors and related products.

Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.

RESULTS

Group RM

Company RM

Profit/(Loss)netoftax 2,691,965 (491,116)Profit/(Loss)attributableto:Owners of the Company 2,691,965 (491,116)Non-controlling interest - -

2,691,965 (491,116)

Therewerenomaterial transfers toor from reservesorprovisionsduring thefinancial yearother thanasdisclosed in thefinancial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

No dividend has been paid or declared by the Company since the end of the previous financial year.

ISSUEOFSHARES During the financial year, 10,455,800 new ordinary shares of RM0.10 each were issued by virtue of the exercise of 10,455,800 warrants to subscribe for 10,455,800 ordinary shares of RM0.10 each in the capital of the Company at an exercise price of RM0.10 per ordinary share.

ThenewordinarysharesissuedduringthefinancialyearrankparipassuinallrespectswiththeexistingordinarysharesoftheCompany.

Thedirectorshavepleasureinpresentingtheirreport

together with the audited financial statements of the

Group and of the Company for the financial year ended 31

December 2015.

diReCtoRs’ RePoRt

65

AnnuAl RepoRt 2015ConneCtCountY HolDInGS BeRHAD (618933-D)

DETACHABLEWARRANTS

Thewarrants2011/2021representdetachablewarrantswhichareconstitutedunderDeedPolldated24June2011.Asat31December 2015, the total numbers of warrants that remained unexercised were 50,390,800.

Details of the warrants are set out in Note 21 to the financial statements.

DIRECTORS

ThenamesofthedirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:

Ang Chuang Juay RoyTheanChongYewGohKokBoonHongCheongLiangLeeChoonKwong

DIRECTORS’BENEFITS Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 10 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

DIRECTORS’INTERESTS

Accordingtotheregisterofdirectors’shareholdings,theinterestsofdirectorsinofficeattheendofthefinancialyearinsharesandoptionsoverthesharesintheCompanyanditsrelatedcorporationsduringthefinancialyearwereasfollows:

NumberofOrdinarySharesofRM0.10EachDirectinterest 1.1.2015 Bought Sold 31.12.2015Ang Chuang Juay 11,665,752 4,000,000 - 15,665,752LeeChoonKwong 237,400 - - 237,400

Other than as disclosed above, the other directors do not have any interest in the shares or options over shares of the Company or of its related companies during and at the end of the financial year.

directors’ Report (Cont’d)

66



OTHERSTATUTORYINFORMATION

(a) Before the income statements, statements of comprehensive income and statements of financial position of the Group and oftheCompanyweremadeout,thedirectorstookreasonablesteps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts, and have satisfied themselves that all known bad debts had been written off and adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichwouldrender:

(i) the amount written off for bad debts or the amount of provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) Asatthedateofthisreport,theredoesnotexist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f ) Intheopinionofthedirectors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

67



SIGNIFICANTEVENTS

Details of significant events are disclosed in Note 33 to the financial statements.

SUBSEQUENTEVENTS

Details of subsequent events are disclosed in Note 34 to the financial statements.

AUDITORS

Theauditors,MooreStephensAssociatesPLT,haveexpressedtheirwillingnesstocontinueinoffice.

Signed on behalf of the Board in accordance with a resolution of the directors dated 8 April 2016.

ANGCHUANGJUAY GOHKOKBOON

KualaLumpur8 April 2016

68


Pursuant to Section 169(15) of the Companies Act, 1965

Pursuant to Section 169(16) of the Companies Act, 1965

statement BY diReCtoRs

statUtoRY deClaRation

We,ANGCHUANGJUAYandGOHKOKBOON,beingtwoofthedirectorsofCONNECTCOUNTYHOLDINGSBERHAD,doherebystate that, in the opinion of the directors, the accompanying financial statements set out on pages 71 to 123 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies 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 31 December 2015 and of their financial performance and the cash flows of the Group and of the Company for the year then ended.

Theinformationsetoutonpage124havebeenpreparedinaccordancewiththeGuidanceonSpecialMatterNo.1.DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements, as issued by the Malaysian Institute of Accountants. Signed on behalf of the Board in accordance with a resolution of the directors dated 8 April 2016.

ANGCHUANGJUAY GOHKOKBOON


I,NICHOLASCHEETIONGKING,being theofficerprimarily responsible for thefinancialmanagementofCONNECTCOUNTYHOLDINGSBERHAD,dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementssetoutonpages71to124are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the )abovenamedNICHOLASCHEETIONGKING )atKualaLumpurintheFederalTerritoryon )8 April 2016 ) NICHOLASCHEETIONGKING

Beforeme:

S.ARULSAMYCommissioner for Oaths

69


totheMembersofConnectCountyHoldingsBerhad

indePendent aUditoRs’ RePoRt

ReportontheFinancialStatements

Wehaveaudited thefinancial statementsofConnectCountyHoldingsBerhad,which comprise the statementsof financialposition as at 31 December 2015 of the Group and of the Company, income statements, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 71 to 123.

Directors’ResponsibilityfortheFinancialStatementsThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementssoastogiveatrueandfairviewinaccordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements oftheCompaniesAct,1965inMalaysia.Thedirectorsarealsoresponsibleforsuchinternalcontrolasthedirectorsdetermineis necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsand plan and perform 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. Theproceduresselecteddependonourjudgment,includingtheassessmentofrisksofmaterialmisstatementofthefinancialstatements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

OpinionIn our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 December 2015 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

ReportonOtherLegalandRegulatoryRequirements

InaccordancewiththerequirementsoftheCompaniesAct,1965inMalaysia,wealsoreportthefollowing:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the accounts and the auditors’ report of a subsidiary of which we have not acted as auditors, which is indicated in Note 15 to the financial statements.

(c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(d) Theauditors’reportsontheaccountsofthesubsidiariesdidnotcontainanyqualificationoranyadversecommentmadeunder Section 174(3) of the Act.

70


independent auditors’ Report (Cont’d)

OtherReportingResponsibilities

Thesupplementaryinformationsetoutonpage124isdisclosedtomeettherequirementofBursaMalaysiaSecuritiesBerhadandisnotpartofthefinancialstatements.ThedirectorsareresponsibleforthepreparationofthesupplementaryinformationinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbyMalaysianInstituteofAccountants(“MIA Guidance”) and the directive of BursaMalaysia Securities Berhad. In our opinion, the supplementary information isprepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OtherMatter

ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection174oftheCompaniesAct,1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents of this report.

MOORESTEPHENSASSOCIATESPLT LOKUANCHELLP0000963–LCA&AF002096 3016/11/16(J)Chartered Accountants Chartered Accountant

Petaling Jaya, Selangor8 April 2016

71


Group Company

NOTE 2015 RM

2014 RM

2015 RM

2014 RM

Revenue 3 64,877,247 52,609,613 - -

Cost of sales 4 (49,105,919) (40,782,764) - -

Grossprofit 15,771,328 11,826,849 - -

Otheritemsofincome 5 2,110,100 1,969,283 1,372,448 671,835

Otheritemsofexpenses Administration expenses (11,016,943) (10,796,939) (1,419,559) (1,595,532) Distribution and selling expenses (3,199,268) (3,056,678) - - Other expenses 6 (767,951) (2,574,767) (443,653) (2,013,745) Finance cost, net 7 (80,776) (87,328) (352) (598)

Profit/(Loss)beforetax 8 2,816,490 (2,719,580) (491,116) (2,938,040)

Income tax expense 11 (124,525) (273,073) - -

Profit/(Loss)netoftax 2,691,965 (2,992,653) (491,116) (2,938,040)

Profit/(Loss)attributableto: Owners of the Company 2,691,965 (2,659,732) (491,116) (2,938,040) Non-controlling interest - (332,921) - -

2,691,965 (2,992,653) (491,116) (2,938,040)

Earnings/(Loss)pershareattributabletoowners of the Company (sen)

Basic 12(a) 1.27 (1.44) Diluted 12(b) 1.15 (1.37)

inCome statementsFor the year ended 31 December 2015

Theaccompanyingnotesformanintegralpartofthefinancialstatements.

72


statements oF ComPReHensiVe inComeFor the year ended 31 December 2015

Group Company

2015 RM

2014 RM

2015 RM

2014 RM

Profit/(Loss)netoftax 2,691,965 (2,992,653) (491,116) (2,938,040)

OthercomprehensiveincomeForeign currency translation 1,285,352 214,194 - -

Totalcomprehensiveincome/(expenses)fortheyear 3,977,317 (2,778,459) (491,116) (2,938,040)

Totalcomprehensiveincome/(expenses)attributableto:

Owners of the Company 3,977,317 (2,445,538) (491,116) (2,938,040) Non-controlling interest - (332,921) - -

3,977,317 (2,778,459) (491,116) (2,938,040)


73


Consolidated statement oF FinanCial PositionAs at 31 December 2015

NOTE 2015 RM

2014 RM

ASSETSNon-currentassetsPlant and equipment 13 4,839,634 4,046,899Investment in associate 14 - -Deferred tax assets 16 49,315 194,234

4,888,949 4,241,133CurrentassetsInventories 17 7,548,965 5,612,461Tradereceivables 18 17,184,359 9,666,351Other receivables 19 2,525,174 2,821,223Cash and bank balances 20 4,859,231 4,847,058

32,117,729 22,947,093

TOTALASSETS 37,006,678 27,188,226

EQUITYANDLIABILITIESEquityattributabletoownersoftheCompanyShare capital 21 21,660,720 20,615,140Share premium 22 2,070,279 2,170,979Foreign exchange reserve 23 1,479,679 194,327Accumulated losses (4,351,349) (7,043,314)TOTALEQUITY 20,859,329 15,937,132

Non-currentliabilitiesBorrowings 24 251,928 266,715Other payable 27 27,742 38,466Deferred tax liabilities 16 - 39,799

279,670 344,980CurrentliabilitiesBorrowings 24 79,231 60,760Tradepayables 26 12,415,521 7,884,125Other payables 27 3,372,927 2,961,229

15,867,679 10,906,114

TOTALLIABILITIES 16,147,349 11,251,094

TOTALEQUITYANDLIABILITIES 37,006,678 27,188,226


74


ComPanY statement oF FinanCial PositionAs at 31 December 2015

NOTE 2015 RM

2014 RM

ASSETSNon-currentassetsPlant and equipment 13 80,396 11,537Investments in subsidiaries 15 4,236,034 3,636,358

4,316,430 3,647,895

CurrentassetsOther receivables 19 6,469,066 6,080,302Cash and bank balances 20 340,801 909,661

6,809,867 6,989,963TOTALASSETS 11,126,297 10,637,858

EQUITYANDLIABILITIESShare capital 21 21,660,720 20,615,140Share premium 22 2,070,279 2,170,979Accumulated losses (12,824,988) (12,333,872)TOTALEQUITY 10,906,011 10,452,247

CurrentliabilityOther payables 27 220,286 185,611TOTALLIABILITY 220,286 185,611TOTALEQUITYANDLIABILITIES 11,126,297 10,637,858


75


Consolidated statement oF CHanGes in eQUitYFor the year ended 31 December 2015

AttributabletoownersoftheCompany

NOTE

Non-distributable

Share Capital RM

Share Premium RM

Foreign Exchange Reserve RM

Accumulated Losses RM

Total RM

Non-controlling interest RM

Total Equity RM

At1January2014 17,179,290 665,621 (19,867) (4,383,582) 13,441,462 - 13,441,462

Lossfortheyear - - - (2,659,732) (2,659,732) (332,921) (2,992,653)Other comprehensive income for the

year - - 214,194 - 214,194 - 214,194Totalcomprehensiveincome/

(expenses) - - 214,194 (2,659,732) (2,445,538) (332,921) (2,778,459)

TransactionswithownersoftheCompany

Issuance of ordinary shares pursuant to private placement

21 & 22 3,435,850 1,505,358 - - 4,941,208 - 4,941,208

Dilution of equity interest in subsidiary - - - - - 332,921 332,921Totaltransactionswithownersof

theCompany 3,435,850 1,505,358 - - 4,941,208 332,921 5,274,129At31December2014 20,615,140 2,170,979 194,327 (7,043,314) 15,937,132 - 15,937,132

At1January2015 20,615,140 2,170,979 194,327 (7,043,314) 15,937,132 - 15,937,132

Profit for the year - - - 2,691,965 2,691,965 - 2,691,965Other comprehensive income for the

year - - 1,285,352 - 1,285,352 - 1,285,352Totalcomprehensiveincome - - 1,285,352 2,691,965 3,977,317 - 3,977,317

TransactionswithownersoftheCompany

Issuance of ordinary shares pursuant to exercise of warrants

21 & 22 1,045,580 (100,700) - - 944,880 - 944,880

TotaltransactionswithownersoftheCompany 1,045,580 (100,700) - - 944,880 - 944,880

At31December2015 21,660,720 2,070,279 1,479,679 (4,351,349) 20,859,329 - 20,859,329


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ComPanY statement oF CHanGes in eQUitYFor the year ended 31 December 2015

Non-distributable

NOTE

Share Capital RM

Share Premium RM

Accumulated Losses RM

Total Equity RM

At1January2014 17,179,290 665,621 (9,395,832) 8,449,079Totalcomprehensiveexpensefortheyear - - (2,938,040) (2,938,040)

17,179,290 665,621 (12,333,872) 5,511,039

Issuance of ordinary shares pursuant to private placement 21 & 22 3,435,850 1,505,358 - 4,941,208

At31December2014 20,615,140 2,170,979 (12,333,872) 10,452,247

At1January2015 20,615,140 2,170,979 (12,333,872) 10,452,247Totalcomprehensiveexpensefortheyear - - (491,116) (491,116)

20,615,140 2,170,979 (12,824,988) 9,961,131

Issuance of ordinary shares pursuant to exercise of warrants 21 & 22 1,045,580 (100,700) - 944,880

At31December2015 21,660,720 2,070,279 (12,824,988) 10,906,011


77


statements oF CasH FloWsFor the year ended 31 December 2015


Group Company

2015 RM

2014 RM

2015 RM

2014 RM

CASHFLOWSFROMOPERATINGACTIVITIES

Profit/(Loss)beforetax 2,816,490 (2,719,580) (491,116) (2,938,040)Adjustmentsfor:Allowance for impairment loss on

investment in subsidiary - - 99,999 -Bad debts written off 629,812 892,244 - -Deposit written off - 500,000 - 500,000Depreciation of plant and equipment 1,634,530 1,213,950 10,842 19,516Gain on disposal of plant and equipment (5,983) (87,767) - -Gain on disposal of associates (1) (531) (1) -Gain on foreign exchange – unrealised (1,066,513) (354,794) (1,159,462) (269,174)Interest expenses 14,259 25,799 - -Interest income (4,786) (1,796) (69) (1,367)Lossondeemeddisposalofasubsidiary - 1,153,490 - 1,500,000Reversal of impairment loss on – other receivables (629,812) (1,088,451) - -Share of post-acquisition loss of a subsidiary - 346,510 - -Plant and equipment written off 73,745 16,152 - 10,040Operating profit/(loss) before working

capital changes 3,461,741 (104,774) (1,539,807) (1,179,025)Inventories (1,936,504) (242,449) - -Receivables (5,934,279) 343,239 790,950 564,557Payables 4,698,286 199,338 34,675 (39,799)Cash generated from/(used in) operations 289,244 195,354 (714,182) (654,267)Interest paid (14,259) (25,799) - -Taxpaid (371) (16,256) - -Net cash generated from/(used in) operating

activities 274,614 153,299 (714,182) (654,267)

78


statements of Cash Flows (Cont’d)

Group Company

2015 RM

2014 RM

2015 RM

2014 RM

CASHFLOWSFROMINVESTINGACTIVITIES

Acquisition of interest in subsidiaries - (1,000,000) (699,675) (2,450,000)Acquisition of interest in an associate - - - (1,000,000)Acquisition of redeemable convertible

preference shares in a subsidiary - (1,400,000) - (1,400,000)Interest received 4,786 1,796 69 1,367Net cash outflow on dilution of equity

interest in a subsidiary - (12,748) - -Proceeds from disposal of plant and

equipment 6,405 183,936 - -Proceeds from disposal of redeemable

convertible preference shares in a subsidiary - 900,000 - 900,000

Proceeds from disposal of associates 1 531 1 -Purchase of plant and equipment (1,826,770) (2,250,151) (79,701) (38,139)Net cash used in investing activities (1,815,578) (3,576,636) (779,306) (3,986,772)

CASHFLOWSFROMFINANCINGACTIVITIES

Non-controlling interest arising from dilution of interest in subsidiary - 332,921 - -

Proceeds from issuance of shares pursuant to private placement - 5,161,282 - 5,161,282

Proceeds from issue of shares upon exercise of warrants 1,045,580 - 1,045,580 -

Exercise of warrants expenses (100,700) - (100,700) -Private placement expenses - (220,074) - (220,074)Repayment of hire purchase (71,694) (179,256) - -Net cash generated from financing activities 873,186 5,094,873 944,880 4,941,208

NET(DECREASE)/INCREASEINCASHANDCASHEQUIVALENTS (667,778) 1,671,536 (548,608) 300,169

EFFECTSOFEXCHANGERATECHANGES 679,951 80,264 (20,252) 76,918CASHANDCASHEQUIVALENTSATBEGINNINGOFTHEFINANCIALYEAR 4,847,058 3,095,258 909,661 532,574

CASHANDCASHEQUIVALENTSATENDOFTHEFINANCIALYEAR(NOTE20) 4,859,231 4,847,058 340,801 909,661


79


1. CORPORATEINFORMATION

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andlistedontheACEMarketofBursaMalaysiaSecuritiesBerhad.TheregisteredofficeoftheCompanyislocatedatLevel7,MenaraMilenium,JalanDamanlela,PusatBandarDamansara,50490KualaLumpur.

TheprincipalactivityoftheCompanyisinvestmentholding.Theprincipalactivitiesofthesubsidiariesarethatofdesign,manufacture, sales,marketing, services and trading of cables, connectors and relatedproducts.There havebeennosignificant changes in the nature of these principal activities during the financial year.

2. SIGNIFICANTACCOUNTINGPOLICIES

(a)BasisofPreparation

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewithMalaysianFinancialReportingStandards (“MFRSs”), International Financial ReportingStandards (“IFRSs”) and the requirementsof theCompanies Act, 1965 in Malaysia.

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedunderthehistoricalcostconventionunless otherwise stated below.

ThefinancialstatementsarepresentedinRinggitMalaysia(“RM”).

(b)NewandamendedStandardsandInterpretations

At the beginning of the financial year, the Group and the Company adopted the following Amendments to MFRSs and AnnualImprovementswhicharemandatoryforthefinancialperiodsbeginningonorafter1January2015:

AmendmentstoMFRS119EmployeeBenefits-DefinedBenefitPlans:EmployeeContributions Annual improvements to MFRSs 2010 - 2012 Cycle Annual improvements to MFRSs 2011 - 2013 Cycle

TheadoptionoftheabovepronouncementsdidnothaveanyimpactonthefinancialstatementsoftheGroupandofthe Company.

(c)StandardsandInterpretationsIssuedbutNotYetEffective

TheGroupandtheCompanyhavenotadoptedthefollowingaccountingstandards,amendmentsandinterpretationsoftheMFRSframeworkthathavebeenissuedbytheMalaysianAccountingStandardsBoard(“MASB”)butnotyeteffective:

Effectiveforfinancialperiodsbeginningonorafter1January2016 MFRS14:RegulatoryDeferralAccounts* AmendmentstoMFRS5:Non-currentAssetsHeldforSaleandDiscontinuedOperations(Annual Improvementsto

MFRSs2012-2014Cycle)* AmendmentstoMFRS7:FinancialInstruments–Disclosures(AnnualImprovementstoMFRSs2012-2014Cycle) AmendmentstoMFRS10,MFRS12andMFRS128:InvestmentEntities–ApplyingtheConsolidationException AmendmentstoMFRS11:JointArrangements–AccountingforAcquisitionsofInterestinJointOperations* AmendmentstoMFRS101:DisclosureInitiative Amendments to MFRS 116: Property, Plant and Equipment and MFRS 138: Intangible Assets – Clarification of

Acceptable Methods of Depreciation and Amortisation

notes to tHe FinanCial statements31 December 2015

80


notes to the Financial statements (Cont’d)

2. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)

(c)StandardsandInterpretationsIssuedbutNotYetEffective(Cont’d)

AmendmentstoMFRS116:Property,PlantandEquipmentandMFRS141:Agriculture–Agriculture:BearerPlants* AmendmentstoMFRS119:EmployeeBenefits(AnnualImprovementstoMFRSs2012-2014Cycle) AmendmentstoMFRS127:SeparateFinancialStatements:EquityMethodinSeparateFinancialStatements AmendmentstoMFRS134:InterimFinancialReporting(AnnualImprovementstoMFRSs2012-2014Cycle)

Effectiveforfinancialperiodsbeginningonorafter1January2018 MFRS9:FinancialInstruments(2014) MFRS15:RevenuefromContractswithCustomers *NotapplicabletotheGroupandtheCompany

Effectivedateyettobeconfirmed AmendmentstoMFRS10andMFRS128:ConsolidatedFinancialStatements–SaleorContributionofAssetsbetween

an Investor and its Associate or Joint Venture

The Group and the Company are expected to apply the abovementioned pronouncement beginning from therespective date the pronouncement become effective

Thedirectorsexpectthattheadoptionoftheabovestandardsandinterpretationswillhavenomaterialeffectonthefinancialstatementsintheperiodofinitialapplicationexceptasthosedescribedbelow:

(i) AmendmentstoMFRS101:DisclosureInitiative

TheamendmentstoMFRS101includenarrow-focusimprovementsinthefollowingfiveareas:

(a) Materiality (b) Disaggregation and subtotals (c) Notes structure (d) Disclosure of accounting policies (e) Presentation of items of other comprehensive income arising from equity accounted investments

TheGroupandtheCompanydonotanticipatethattheapplicationoftheseamendmentswillhaveamaterialimpact on the Group’s and the Company’s financial statements.

(ii) AmendmentstoMFRS116andMFRS138:ClarificationofAcceptableMethodsofDepreciationandAmortisation

Theamendmentsclarifythatrevenuereflectsapatternofeconomicbenefitsthataregeneratedfromoperatingabusiness (of which the asset is part) rather than the economic benefits that are consumed through the use of an asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets.

Theamendmentsareeffectiveprospectivelyforannualperiodsbeginningonorafter1January2016,withearlyadoptionpermitted.TheseamendmentsarenotexpectedtohaveanyimpacttotheGroupandtheCompanyasthe Group and the Company have not used a revenue-based method to depreciate its non-current assets.

81




(c)StandardsandInterpretationsIssuedbutNotYetEffective(Cont’d)

(iii) AmendmentstoMFRS127:SeparateFinancialStatements–EquityMethodinSeparateFinancialStatements

Theamendmentswillallowentitiestousetheequitymethodtoaccountforinvestmentsinsubsidiarycompanies,jointventuresandassociatedcompanies intheirseparatefinancialstatements.EntitiesalreadyapplyingMFRSand electing to change to the equity method in its separate financial statements will have to apply to this change retrospectively. For first-time adopters of MFRS electing to use the equity method in its separate financial statements, they will be required to apply this method from the date of transition to MFRS.

The amendments are effective for annual periods beginning on or after 1 January 2016,with early adoptionpermitted.TheCompanyelectsnottoapplyequitymethodtoaccountforinvestmentsinsubsidiarycompanies,jointventuresandassociatedcompaniesinitsseparatefinancialstatements.Theseamendmentswillnothaveanyimpact on the Company’s financial statements.

(iv) Annual Improvements to MFRSs 2012-2014 Cycle

TheAnnualImprovementstoMFRSs2012-2014CycleincludeanumberofamendmentstovariousMFRSs,whicharesummarisedbelow.TheGroupandtheCompanydonotanticipatethattheapplicationoftheseamendmentswill have a significant impact on the Group’s and the Company’ financial statements.

(a) AmendmentstoMFRS7:FinancialInstruments–Disclosures

Theamendmentsclarifythataservicingcontractthatincludesafeecanconstitutecontinuinginvolvementin a financial asset. An entity must assess the nature of the fee and arrangement against the guidance for continuing involvement in MFRS 7 in order to assess whether the disclosures are required.

(v) MFRS9:FinancialInstruments

In November 2014, MASB issued the final version of MFRS 9 Financial Instruments which reflects all phases of the financial instrumentsprojectandreplacesMFRS139Financial Instruments:RecognitionandMeasurementandallpreviousversionsofMFRS9.Thestandardintroducesnewrequirementsforclassificationandmeasurement,impairment and hedge accounting. MFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted.

Retrospective application is required, but comparative information is not compulsory.

TheGroupandtheCompanydonotanticipateamaterialeffectontheclassificationandmeasurementof theGroup’s and the Company’s financial assets and financial liabilities.

(vi) MFRS15:RevenuefromContractwithCustomers

MFRS 15 Revenue from Contracts with Customers was issued in September 2014 and established a five-step model that will apply to recognition of revenue arising from contracts with customers. Under this Standard, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferringgoodsorservicestoacustomer.Theprincipleof thisStandard is toprovideamorestructuredapproach to measuring and recognising revenue.

ThisStandardisapplicabletoallentitiesandwillsupersedeallcurrentrevenuerecognitionrequirementsunderMFRS. Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018 with early adoption permitted.

82



(d)SubsidiariesandBasisofConsolidation

(i) Subsidiaries

Subsidiaries are all entities overwhich thegrouphas control.Thegroup control an entitywhen theGroup isexposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at costs less accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised in profit or loss.

(ii) Basis of consolidation

TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyanditssubsidiariesasatthefinancialyearend.Thefinancialstatementsofthesubsidiariesusedinthepreparationoftheconsolidatedfinancial statements are prepared for the same financial year end as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

SubsidiariesareconsolidatedfromthedateonwhichcontrolistransferredtotheGroup.Theyaredeconsolidatedfrom the date that control ceases.

All intra-group balances, income and expenses and unrealised gains and losses resulting from the intra-group transactions are eliminated in full.

Thestatementofcomprehensiveincomereflectstheresultsofthecombiningentitiesforthefullyear,irrespectiveof when the combination takes place. Comparatives are presented as if the entities have always been combined since the date the entities had come under common control. Acquisitions of subsidiaries are accounted for using the purchase method.

Under the purchase method of accounting, identifiable assets acquired and liabilities and contingent liabilities assumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesatthedateofacquisition.Adjustmentto those fair values relating to previously held interests are treated as a revaluation and recognised in other comprehensiveincome.Thecostofabusinesscombinationismeasuredastheaggregateofthefairvalues,atthedate of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination.

Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives are separated from the host contract that significantly modifies the cash flows that would otherwise be required under the contract.

(iii)Transactionswithnon-controllinginterest

Non-controlling interest represents the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in profit or loss of the Group and within equity in the consolidated statements offinancialposition,separatelyfromtheparentshareholder’sequity.Transactionswithnon-controllinginterestare accounted for using the entity concept method, whereby, transactions with non-controlling interests are accounted for as transactions with owners. On acquisition of non-controlling interest, the difference between the consideration and book value of the share of the net assets acquired is recognised directly in equity. Gain or loss on disposal to non-controlling interest is recognised directly in equity.


83



(d)SubsidiariesandBasisofConsolidation(Cont’d)

(iv)Lossofcontrol

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) Associate

An associate is an entity in which the Group has significant influence. Significant influence is the power to participateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontroloverthose policies.

On acquisition of an investment in associate, any excess of the cost of investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities of the investee over the cost of investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.

An associate is equity accounted for from the date on which the investee becomes an associate.

Under the equity method, on initial recognition the investment in an associate is recognised at cost, and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate after the date of acquisition. When the Group’s share of losses in an associate equal or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

Profits and losses resulting from upstream and downstream transactions between the Company and its associate are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the associate. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Thefinancial statementsof theassociate arepreparedasof the same reportingdate as theCompany.Wherenecessary,adjustmentsaremadetobringtheaccountingpoliciesinlinewiththoseoftheCompany.

Afterapplicationoftheequitymethod,theCompanyappliesMFRS139FinancialInstruments:RecognitionandMeasurement to determine whether it is necessary to recognise any additional impairment loss with respect to its net investment in the associate.

When necessary, the entire carrying amount of the investment is tested for impairment in accordance with MFRS 136: ImpairmentofAssetsasa singleasset,bycomparing its recoverableamount (higherofvalue inuseandfair value less costs to sell) with its carrying amount. Any impairment loss is recognised in profit or loss. Reversal of an impairment loss is recognised to the extent that the recoverable amount of the investment subsequently increases.

In the Company’s separate financial statements, investment in associate is accounted for at cost less impairment losses. On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.


84



(d)SubsidiariesandBasisofConsolidation(Cont’d)

(vi)Transactionseliminatedonconsolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

(e)ForeignCurrencies

(i) Functional and presentation currency

TheindividualfinancialstatementsofeachentityintheGroupandtheCompanyaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(the“functionalcurrency”).Theconsolidatedfinancial statements are presented in Ringgit Malaysia (RM) which is also the Group’s and the Company’s functional currency.

(ii) Foreign currency transactions

TransactionsinforeigncurrenciesaremeasuredintherespectivefunctionalcurrenciesoftheCompanyanditssubsidiaries are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income andaccumulatedunderforeigncurrencytranslationreserveinequity.Theforeigncurrencytranslationreserveisreclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(iii) Foreign operations

TheassetsandliabilitiesofforeignoperationsaretranslatedintoRMattherateofexchangerulingatthereportingdateandincomeandexpensesaretranslatedatexchangeratesatthedatesofthetransactions.Theexchangedifferences arising on the translation are taken directly to other comprehensive income.

On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

Fairvalueadjustmentsarisingontheacquisitionofforeignoperationsaretreatedasassetsandliabilitiesoftheforeign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.


85



(f)PlantandEquipment

Allitemsofplantandequipmentareinitiallyrecordedatcost.Thecostofanitemofplantandequipmentisrecognisedas an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item can be measured reliably.

Subsequent to recognition, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of plant and equipment are required to be replaced in intervals, the Group and the Company recognise such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when amajor inspection is performed, its cost is recognised in the carrying amount of the plant andequipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Depreciation of plant and equipment is computed on a straight line basis over the estimated useful lives of the assets asfollows:

Plantandmachinery 10%to33.3% Officeequipment,furnitureandfittings 10%to33.3% Motorvehicles 10%to20% Mouldings 20% Renovation 10%to33%

Thecarryingvaluesofplantandequipmentarereviewedforimpairmentwheneventsorchangesincircumstancesindicate that the carrying value may not be recoverable.

The residual values, useful life and depreciation method are reviewed at each financial year-end, and adjustedprospectively, if appropriate.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

(g)ImpairmentofNon-FinancialAssets

TheGroupandtheCompanyassessateachreportingdatewhetherthereisanindicationthatanasset(otherthaninventories and deferred tax assets) may be impaired. If any such indications exist, or when an annual impairment assessment for an asset is required, the Group and the Company make an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cashgeneratingunits(“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated to reduce the carrying amount of assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount.Thatincreaseshallnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation,had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.


86



(h)FinancialAssets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus in the case of financial assets not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

TheGroupandtheCompanydeterminetheclassificationoftheirfinancialassetsatinitialrecognitionandthecategoryisasfollows:

• Loansandreceivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through amortisation process.

Loansandreceivablesareclassifiedascurrentassets,exceptforthosehavingmaturitydateslaterthan12months

after reporting date which are classified as non-current.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the settlement date, i.e. the date that the asset is delivered to or by the Group and the Company.

(i) ImpairmentofFinancialAssets

TheGroupandtheCompanyassessateachreportingdatewhetherthereisanyobjectiveevidencethatafinancialasset is impaired.

Tradeandotherreceivablesandotherfinancialassetscarriedatamortisedcost

Todeterminewhetherthereisobjectiveevidencethatanimpairmentlossonfinancialassetshasbeenincurred,theGroupandtheCompanyconsiderfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthe debtor and default or significant delay in payments and delinquency in interest or principal payments and other financial reorganisation where observable data indicate that there is a measurable decrease in the estimated future cash flows.

For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’spast experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.


87



(i) ImpairmentofFinancialAssets(Cont’d)

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interestrate.Theimpairmentlossisrecognisedinprofitorloss.

Thecarryingamountofthefinancialassetisreducedbytheimpairmentlossdirectlyforallfinancialassetswiththeexception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelyto an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to theextentthatthecarryingamountoftheassetsdoesnotexceeditsamortisedcostatthereversaldate.Theamountof reversal is recognised in profit or loss.

(j) CashandCashEquivalents

Cash and cash equivalents comprise cash at banks and on hand.

(k)Inventories

Inventories are stated at lower of cost and net realisable value. Cost isdeterminedusingfirst-in,first-outbasis.Thecostof rawmaterials comprises costofpurchase.Thecostof

finished goods and work-in-progress include cost of raw materials, direct labour, other direct cost and appropriate production overheads.

Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

(l) FinancialLiabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

• Other financial liabilities

TheGroup’sandtheCompany’sotherfinancialliabilitiesincludetradepayables,otherpayablesandborrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs andsubsequently measured at amortised cost using the effective interest method.

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowing is classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised and through the amortisation process.


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(l) FinancialLiabilities(Cont’d)

A financial liability is derecognised when the obligation under the liability is extinguished

When an existing financial liability is replaced by another instrument from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amount is recognised in profit or loss.

(m) FairValueMeasurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarketparticipantsatthemeasurementdate.Thefairvaluemeasurementisbasedonthepresumptionthatthe transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability orintheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability.Theprincipalorthemost advantageous market must be accessible by the Group and the Company.

Thefairvalueofanassetoraliabilityismeasuredusingtheassumptionsthatmarketparticipantswouldusewhenpricing the asset or liability, assuming that market participants act in their economic best interest.

The Group and the Company use valuation techniques that are appropriate in the circumstances and forwhichsufficientdataareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingthe use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company determine whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the financial year end.

(n)BorrowingCost

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sales are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

(o)EmployeeBenefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group and the Company.

Short term accumulating compensated absences such as paid annual leave are recognised when services are

rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.


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(o)EmployeeBenefits(Cont’d)

(ii) Defined contribution plans As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees

ProvidentFund(“EPF”).SomeoftheGroup’sforeignsubsidiariesmakecontributionstotheirrespectivecountriesstatutory pension schemes. Such contributions are recognised as an expense in the period in which the related service is performed.

(iii)Terminationbenefits

TerminationbenefitsarerecognisedasanexpensewhentheGroupiscommitteddemonstrably,withoutrealisticpossibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date,ortoprovideterminationbenefitsasaresultofanoffermadetoencouragevoluntaryredundancy.Terminationbenefits for voluntary redundancies are recognised as expenses if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value.

(p)Leases

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value oftheminimumleasepayments.Anyinitialdirectcostsarealsoaddedtotheamountcapitalised.Leasepaymentsare apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leasedassetsaredepreciatedovertheestimatedusefullifeoftheasset.However,ifthereisnoreasonablecertaintythat the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. Theaggregatebenefitof incentivesprovidedbythelessorisrecognisedasareductionofrentalexpenseoverthelease term on a straight-line basis.

(q)IncomeTaxes

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantivelyenacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the current taxes is also recognised in other comprehensive income or directly in equity respectively.


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(q)IncomeTaxes(Cont’d)

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferredtaxliabilitiesarerecognisedforalltemporarydifferences,except:

- where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporarydifferences,andthecarryforwardofunusedtaxcreditsandunusedtaxlossescanbeutilisedexcept:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxassettobeutilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly inequityanddeferredtaxarisingfromabusinesscombinationisadjustedagainstgoodwillonacquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(r) SegmentReporting

For management purposes, the Group is organised into geographical operating segments which are independently managed by the respective geographical segment managers responsible for the performance of the respective segmentsundertheircharge.ThesegmentmanagersreportdirectlytoDeputyExecutiveChairman,whoregularlyreview the segment results in order to allocate resources to the segments and to assess the segments performance.


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(s)ShareCapitalandShareIssuanceExpenses

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

(t) Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(i) Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Interest income is recognised using the effective interest method.

(iii) Rental income is accounted for on a straight-line basis over the lease terms.

(u)Provisions

Provisions are recognised when the Group and the Company have a legal or constructive present obligation as a result of a past event, and it is probable that an outflow of resources embodying economics benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisionsare reviewedateach reportingdateandadjusted to reflect thecurrentbestestimate. If it isno longerprobable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(v)SignificantAccountingJudgmentsandEstimates

ThepreparationoftheGroup’sandtheCompany’sfinancialstatementsrequiresmanagementtomakejudgements,estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosureofcontingentliabilitiesatthereportingdate.However,uncertaintyabouttheseassumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmenttothecarryingamountoftheassetorliabilityinthefuture.

(i) Judgement Made in Applying Accounting Policies

Therewere nomajor judgementsmade by themanagement in the process of applying theGroup’s and theCompany’s accounting policies that have the most significant effect on the amounts recognised in the financial statements.


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(v)SignificantAccountingJudgmentsandEstimates(Cont’d)

(ii) KeySourcesofEstimationUncertainty

Thekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthereportingdate,thathavesignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow:

• Usefullivesofplantandequipment

Thecostofplantandequipmentforthemanufacturingofelectroniccomponentsisdepreciatedonastraight-line basis over the assets’ estimated economic useful lives. Management estimates the useful life of these plant andequipment tobewithin3 to10 years.These are common life expectancies applied in theelectronicsindustry. Changes in the expected level of usage and technological developments could impact the economic usefullivesandtheresidualvaluesoftheseassets,thereforefuturedepreciationchargescouldberevised.Thecarrying amount of the Group’s and the Company’s plant and equipment at the reporting date are disclosed in Note 13.

• Deferredtaxassets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can beutilised. Significantmanagement judgment is requiredtodeterminetheamountofdeferredtaxassetsthat can be recognised, based on the likely timing and level of future taxable profits together with future tax planningstrategies.ThetotalcarryingvalueofthedeferredtaxassetsoftheGroupisasdisclosedinNote16.

• Impairmentofloansandreceivables

TheGroupandtheCompanyassessateachreportingdatewhether there isanyobjectiveevidencethatafinancialassetisimpaired.Todeterminewhetherthereisobjectiveevidenceofimpairment,theGroupandtheCompanyconsiderfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtorand default or significant delay in payments.

Wherethereisobjectiveevidenceofimpairment,theamountandtimingoffuturecashflowsareestimatedbasedonhistoricallossexperienceforassetswithsimilarcreditriskcharacteristics.Thecarryingamountsofthe Group’s and the Company’s loans and receivables at the reporting date are disclosed in Notes 18 and 19.

• Impairmentofinvestmentinsubsidiaries

In previous financial years, the Company has recognised impairment losses in respect of investments in subsidiaries.TheCompanycarriedouttheimpairmenttestbasedontheestimationofthehigherofthevalue-in-useorthefairvaluelesscostofdisposalofthecash-generatingunits(“CGU”)towhichtheinvestmentsinsubsidiaries belong to. Estimating the recoverable amount requires the Company to make an estimate of the expected future cash flows from the CGU and also to determine a suitable discount rate in order to calculate the present value of those cash flows. Further details of the impairment losses recognised are disclosed in Note 15.

• Inventoriesobsolescence

Reviews are made periodically by the management on inventories for excess inventories, obsolescence and decline in thenet realisablevaluebelowcost.Thesereviewsrequire theuseof judgementsandestimates.Possible changes in these estimates could result in revisions to the valuation of inventories. Inventories written offtoprofitorlossinrespectoftheGroupisRMNil(2014:RM74,500).


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3. REVENUE

Thisrepresentsinvoicedsalesafterallowanceforgoodsreturnedandtradediscount.

4. COSTOFSALES

Cost of sales represents cost of inventories sold and recognised as expense.

5. OTHERITEMSOFINCOME

Group Company 2015 RM

2014 RM

2015 RM

2014 RM

Government incentive for SME/Job credit rebates

197,952 210,443 - -

Gain on foreign exchange - unrealised 1,066,513 354,794 1,159,462 269,174Gain on disposal of associates 1 531 1 -Gain on disposal of plant and equipment 5,983 87,767 - -Interest income 4,786 1,796 69 1,367Rebate from suppliers 56,824 74,040 - -Reversal of impairment on other receivables 629,812 1,088,451 - -Recovery expenses from subsidiaries - - 207,845 401,122Sales of scrap 60,641 54,414 - -Sub-let rental income 82,517 96,875 - -Other 5,071 172 5,071 172

2,110,100 1,969,283 1,372,448 671,835

6. OTHEREXPENSES


2014 RM

2015 RM

2014 RM

Bad debts written off 629,812 892,244 - -Deposit written off - 500,000 - 500,000Allowance for impairment loss on investment

in subsidiary - - 99,999 -Plant and equipment written off 73,745 16,152 - 10,040Lossondeemeddisposalinsubsidiary - 1,153,490 - 1,500,000Lossonforeignexchange-realised 64,394 12,881 14,716 3,705Recoverable expenses - - 328,938 -

767,951 2,574,767 443,653 2,013,745


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7. FINANCECOST,NET


2014 RM

2015 RM

2014 RM

Finance and bank interest 14,259 25,799 - -Bank charges 66,517 61,529 352 598

80,776 87,328 352 598

Included in finance and bank interest in prior year was interest on loans from a third party and were fully settled during thepreviousfinancialyear.Theloansincurredinterestrateof10.5%perannum.

8. PROFIT/(LOSS)BEFORETAX

Profit/(Loss)beforetaxisstatedaftercharging/(crediting):


2014 RM

2015 RM

2014 RM

Auditors’ remuneration - Statutory audit - current year 107,587 88,374 25,000 22,000 - Other services - under provision in prior year 8,000 6,000 - 6,000Auditors’ remuneration for subsidiaries - Current year 42,000 37,000 42,000 37,000 - Under provision in prior year 9,815 - 9,815 -Allowance for impairment loss on investment

in subsidiary - - 99,999 -Bad debts written off 629,812 892,244 - -Deposit written off - 500,000 - 500,000Depreciation (Note 13) 1,634,530 1,213,950 10,842 19,516Employee benefits expense (Note 9) 15,803,909 14,231,633 728,530 961,838Interest income (4,786) (1,796) (69) (1,367)Interest expenses 14,259 25,799 - -(Gain)/Lossonforeignexchange - unrealised (1,066,513) (354,794) (1,159,462) (269,174) - realised 64,394 12,881 14,716 3,705Gain on disposal of plant and equipment (5,983) (87,767) - -Gain on disposal of associates (1) (531) (1) -Lossondeemeddisposalofsubsidiary

(Note 14) - 1,153,490 - 1,500,000Plant and equipment written off 73,745 16,152 - 10,040Professional fees and cost on corporate

expenses 138,069 63,850 138,069 63,850Reversal of impairment loss on other

receivables (Note 19) (629,812) (1,088,451) - -Rental of equipment 81,910 85,574 5,842 4,716Rental of factory 1,082,513 997,632 - -Rentalofoffice 1,225,467 1,069,923 40,000 47,000Sub-let rental income (82,517) (96,875) - -


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9. EMPLOYEEBENEFITSEXPENSE


2014 RM

2015 RM

2014 RM

Wages, salaries and bonuses 15,040,821 13,549,346 658,507 847,452Social security contributions 259,825 208,515 2,945 4,080Defined contribution plans 241,763 254,448 61,267 86,881Other staff related expenses 261,500 219,324 5,811 23,425

15,803,909 14,231,633 728,530 961,838

Included in employee benefits expense of the Group and of the Company are directors’ remuneration amounting to RM2,982,459(2014:RM2,875,734)andRM288,757(2014:RM504,130)respectivelyasdisclosedinNote10.

10.DIRECTORS’REMUNERATION


2014 RM

2015 RM

2014 RM

DirectorsoftheCompanyExecutive:Salaries and other emoluments 1,132,659 1,172,175 192,757 320,775Fees 115,367 120,049 12,000 37,000Benefits-in-kind 14,852 25,669 - -

1,262,878 1,317,893 204,757 357,775Non-executive:Fees 84,000 146,355 84,000 146,355

84,000 146,355 84,000 146,355

1,346,878 1,464,248 288,757 504,130

OtherdirectorsofsubsidiariesExecutive:Salaries and other emoluments 1,491,122 1,299,397 - -Defined contribution plans 31,445 28,185 - -Fees 127,866 109,573 - -

1,650,433 1,437,155 - -

Total 2,997,311 2,901,403 288,757 504,130

Analysisexcludingbenefits-in-kind:

Totalexecutivedirectors’remuneration (Note 29(b)) 2,898,459 2,729,379 204,757 357,775

Totalnon-executivedirectors’remuneration 84,000 146,355 84,000 146,355Totaldirectors’remuneration(Note9) 2,982,459 2,875,734 288,757 504,130


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10.DIRECTORS’REMUNERATION(CONT’D)

ThenumberofdirectorsoftheCompanywhosetotalremunerationduringthefinancialyearfellwithinthefollowingbandsisanalysedbelow:

Numberofdirectors 2015 2014

Executivedirectors:Below RM100,000 - 3RM100,001 to RM150,000 - 1RM150,001 to RM200,000 1 -RM200,001 to RM1,000,000 - 1RM1,000,001 to RM1,500,000 1 -

Non-executivedirectors:Below RM50,000 3 5RM50,001 to RM100,000 - 2

11.INCOMETAXEXPENSE

Themajorcomponentsofincometaxexpenseare:


2014 RM

2015 RM

2014 RM

Incomestatements:Currentincometax:Underprovision in prior year 371 - - -Foreign tax - 16,256 - -

371 16,256 - -

Incomestatements:Deferredtax(Note16):Relating to origination of temporary

differences 168,428 290,831 - -Overprovision in prior year (44,274) (34,014) - -

124,154 256,817 - -

Income tax recognised in profit or loss 124,525 273,073 - -


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11.INCOMETAXEXPENSE(CONT’D)

Reconciliation between tax expense and accounting profit/(loss)

A reconciliation between tax expense and the product of accounting profit/(loss) are multiplied by the applicable corporatetaxrateareasfollows:

2015 RM

2014 RM

GroupProfit/(Loss)beforetax 2,816,490 (2,719,580)

TaxationatMalaysianstatutorytaxrateof25%(2014:25%) 704,123 (679,895)Adjustments:Different tax rates in other countries (184,783) (108,513)Foreign tax - 16,256Franchise tax 6,052 -Non-deductible expenses 300,620 1,177,759Deferred tax assets not recognised - 20,592Deferred tax assets movement not recognised (255,423) -Differential tax rate for deferred tax 40,757 82,596Incomenotsubjecttotax (359,717) (201,708)Underprovision of income tax in prior year 371 -Overprovision of deferred tax in prior year (44,274) (34,014)Utilisation of tax losses previously not recognised (83,201) -Income tax recognised in profit or loss 124,525 273,073

CompanyLossbeforetax (491,116) (2,938,040)

TaxationatMalaysianstatutorytaxrateof25%(2014:25%) (122,779) (734,510)

Adjustments:Non-deductible expenses 465,891 899,959Incomenotsubjecttotax (343,112) (165,449)Income tax recognised in profit or loss - -

Domestic incometax iscalculatedat theMalaysianstatutorytaxrateof25%(2014:25%)of theestimatedassessableprofitfortheyear.TheMalaysianstatutorytaxratewillbereducedto24%fromthecurrentyear’srateof25%,effectiveyear of assessment 2016.

Taxationforotherjurisdictioniscalculatedattheratesprevailingintherespectivejurisdictions.

Theabovereconciliationispreparedbyaggregatingseparatereconciliationforeachnationaljurisdiction.


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12.EARNINGS/(LOSS)PERSHARE

(a)Basicearnings/(loss)pershare

Basic earnings/(loss) per share amounts are calculated by dividing profit/(loss) for the year net of tax, attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

Thefollowingreflecttheprofit/(loss)andsharedatausedinthecomputationofbasicearnings/(loss)persharefortheyearsended31December:

2015 2014

Profit/(Loss)fortheyear,netoftax,attributabletoownersoftheCompany(RM) 2,691,965 (2,659,732)

Weighted average number of ordinary shares in issue 211,857,843 184,620,332

Basic earnings/(loss) per share (sen) 1.27 (1.44)

(b)Dilutedearnings/(loss)pershare

For the purpose of calculating diluted earnings/(loss) per share, the weighted average number of ordinary shares in issueduringthefinancialyearhavebeenadjustedfordilutiveeffectsofunexercisedwarrant.

2015 2014

Profit/(Loss)fortheyear,netoftax,attributabletoownersoftheCompany(RM) 2,691,965 (2,659,732)

Weighted average number of ordinary shares in issue 211,857,843 184,620,332Effect of dilution of unexercised warrants 22,685,860 10,088,413Adjustedweightedaveragenumberofordinaryshares 234,543,703 194,708,745

Diluted earnings/(loss) per share (sen) 1.15 (1.37)


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13.PLANTANDEQUIPMENT

Plantand Machinery RM

OfficeEquipment, FurnitureandFittings RM

Motor Vehicles RM

Mouldings RM

Renovation RM

Total RM

GroupAt31December2015CostAt 1 January 2015 7,716,687 1,804,165 924,526 208,941 1,774,031 12,428,350Additions 984,578 32,694 100,835 - 708,663 1,826,770Disposal (124,586) (504) (64,263) - - (189,353)Written offs (643,987) (47,997) - (5,425) - (697,409)Exchange differences 1,458,904 331,374 194,601 36,330 317,798 2,339,007At31December2015 9,391,596 2,119,732 1,155,699 239,846 2,800,492 15,707,365

AccumulatedDepreciationandImpairmentLosses

At 1 January 2015Accumulated

depreciation 5,188,317 1,602,711 162,453 140,213 1,224,351 8,318,045Accumulated impairment

losses 63,406 - - - - 63,4065,251,723 1,602,711 162,453 140,213 1,224,351 8,381,451

Charge for the year 1,206,313 107,228 131,768 43,505 145,716 1,634,530Disposal (124,586) (82) (64,263) - - (188,931)Written offs (571,982) (46,257) - (5,425) - (623,664)Exchange differences 1,068,399 301,469 36,007 27,187 231,283 1,664,345

At31December2015Accumulated


losses 63,406 - - - - 63,4066,829,867 1,965,069 265,965 205,480 1,601,350 10,867,731

NetCarryingAmountAt31December2015 2,561,729 154,663 889,734 34,366 1,199,142 4,839,634


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13.PLANTANDEQUIPMENT(CONT’D)

Plantand Machinery RM

OfficeEquipment, FurnitureandFittings RM

Motor Vehicles RM

Mouldings RM

Renovation RM

Total RM

GroupAt31December2014CostAt 1 January 2014 6,438,447 2,034,465 646,065 185,330 1,209,501 10,513,808Additions 1,354,925 114,022 670,097 - 443,512 2,582,556Disposal (2,724) - (416,922) - - (419,646)Written offs (649,576) (517,759) - - (25,100) (1,192,435)Exchange differences 575,615 173,437 25,286 23,611 146,118 944,067At31December2014 7,716,687 1,804,165 924,526 208,941 1,774,031 12,428,350

AccumulatedDepreciationandImpairmentLosses

At 1 January 2014Accumulated


losses 63,406 - - - - 63,4064,555,169 1,852,203 381,272 87,474 1,043,754 7,919,872

Charge for the year 908,932 106,978 91,392 39,196 67,452 1,213,950Disposal (363) - (323,114) - - (323,477)Written offs (643,785) (517,438) - - (15,060) (1,176,283)Exchange differences 431,770 160,968 12,903 13,543 128,205 747,389

At31December2014Accumulated


losses 63,406 - - - - 63,4065,251,723 1,602,711 162,453 140,213 1,224,351 8,381,451

NetCarryingAmountAt31December2014 2,464,964 201,454 762,073 68,728 549,680 4,046,899


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Office Equipment,Furnitureand Fittings RM

Renovation RM

Total RM

CompanyAt31December2015CostAt 1 January 2015 20,036 3,649 23,685Additions 14,259 65,442 79,701Written off - - -At31December2015 34,295 69,091 103,386

AccumulatedDepreciationAt 1 January 2015 12,148 - 12,148Charge for the year 4,508 6,334 10,842Written off - - -At31December2015 16,656 6,334 22,990

NetCarryingAmountAt31December2015 17,639 62,757 80,396

At31December2014CostAt 1 January 2014 10,646 - 10,646Additions 9,390 28,749 38,139Written off - (25,100) (25,100)At31December2014 20,036 3,649 23,685

AccumulatedDepreciationAt 1 January 2014 7,692 - 7,692Charge for the year 4,456 15,060 19,516Written off - (15,060) (15,060)At31December2014 12,148 - 12,148

NetCarryingAmountAt31December2014 7,888 3,649 11,537


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(a) Duringthefinancialyear,theGroupandtheCompanyacquiredalltheirplantandequipmentbymeansof:


2014 RM

2015 RM

2014 RM

Cash 1,826,770 2,250,151 79,701 38,139Hirepurchase - 332,405 - -

1,826,770 2,582,556 79,701 38,139

(b) ThenetcarryingamountofmotorvehicleoftheGroupheldunderfinanceleaseandheldintrustbyadirectorattheendofthefinancialyearisRM735,037(2014:RM664,513).

(c) The carryingamountofotherplant andequipmentof theGroupheld in trustbya thirdparty at theendof thefinancialyearisRM14,011(2014:RM25,130).

(d) IncludedinplantandequipmentoftheGrouparethecostoffullydepreciatedassetswhicharestillinuseasfollow:

Group 2015 RM

2014 RM

Plant and machinery 3,410,801 4,637,107Officeequipment,furnitureandfittings 1,688,658 231,959Mouldings 13,979 -Renovation 1,018,631 125,967

6,132,069 4,995,033

14.INVESTMENTINASSOCIATE


2014 RM

2015 RM

2014 RM

Unquoted shares, at cost - 1,750,395 - 1,500,000Less:Lossondeemeddisposal - - - (1,500,000)Lossonre-measurement - (1,750,395) - -Carrying amount - - - -

Detailsoftheassociatecompaniesareasfollows:

Nameofassociates Countryofincorporation Effectiveinterestheld(%) Principalactivities 2015 2014 MyGenBizz Berhad Malaysia - 36.73 Di rect selling marketing, multi-

level marketing, distributor of and dealer of goods and merchandise. Ceased operation in prior year.


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14.INVESTMENTINASSOCIATE(CONT’D)

(a) On 7 May 2015, the Company disposed all its equity interest of 551,000 ordinary shares of RM1 each representing 36.73%heldinMyGenBizzBerhad(“MGB”)attotalconsiderationofRM1toathirdparty.

(b) On 20 January 2014, the Company acquired 51% equity interest held inMyGenBizz Berhad (“MGB”) a non-listedcompany, representing 51,000 ordinary shares of RM1 each for a cash consideration of RM1,000,000.

On17February2014,MGBissued1,400,000redeemableconvertiblepreferenceshares(“RCPS”)ofRM1eachinMGBfor a total consideration of RM1,400,000, which were fully subscribed by the Company. On 26 September 2014, the Company entered into a Sales and Purchase Agreement to dispose 900,000 RCPS of RM1 each in MGB to an existing shareholder of MGB for a total consideration of RM900,000.

On 14 October 2014, the Company and the shareholder redeemed 500,000 and 900,000 RCPS of RM1 each respectively into1,400,000ordinaryshares.Asaresult,MGBceasedtobea51%subsidiaryoftheCompanyandbecamea36.73%associate company of the Company.

Reconciliation of net liabilities to carrying amount

Group 2014 RM

Carrying cost amount 1,500,000Gain on re-measurement 250,395Carrying amount to date control is lost 1,750,395Lossonre-measurement (1,750,395)Carrying amount -

ThedetailsofnetliabilitiesandcashflowsasatthedateofdisposalofMGBwereasfollow:

Group 2014 RM

Net liabilities (679,431)Non-controlling interest 332,921Group’s share of net liabilities disposed (346,510)Share of post-acquisition loss 346,510Less:cashandcashequivalentsdisposed (12,748)Net cash on deemed disposal of equity interest in MGB (12,748)

The summarisedfinancial informationofMGB,not adjusted for theproportionofownership interestheldby theGroup,wereasfollows:

Group 2014 RM

Assetsandliabilities:Totalassets 1,025,617Totalliabilities (217,686)

Results:Revenue 743,619Lossfortheperiod (691,870)

TheGrouphadnotrecogniseditsshareoflossasitsfairvalueisRMNilatthereportingdateinprioryear.


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15.INVESTMENTSINSUBSIDIARIES

Company 2015 RM

2014 RM

Unquoted shares, at cost 24,082,072 23,382,397Less:Accumulatedimpairmentlosses (19,846,038) (19,746,039)

4,236,034 3,636,358

(a) Detailsofthesubsidiariesareasfollows:

NameofSubsidiariesCountryof

incorporation

EffectiveinterestHeld(%)

PrincipalActivities2015 2014

Rapid Conn Interconnect (M) Sdn. Bhd.

Malaysia 100 100 Dormant.

Borderless Fame Sdn. Bhd.

Malaysia 100 100 Dormant.

Rapid Conn Inc. United States of America (USA)

100 100 Design, manufacture, sales, marketing and services of cables, connectors and related products.

Rapid Conn (S) Pte. Ltd.*

Singapore 100 100 Tradingandmarketingofcables, connectors and related products.

Rapid Conn (ShenZhen)Co.,Ltd.

People’s Republic of

China

100 100 Manufacture and trading of cables, connectors and related products.

HeldthroughRapidConn(ShenZhen)Co.,Ltd.Rapid Power (ShenZhen)Co.,Ltd.

People’s Republic of

China

100 - Dormant.

*AuditedbyMooreStephensLLP,Singapore.


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15.INVESTMENTSINSUBSIDIARIES(CONT’D)

(b) Auditors’ Reports and subsidiaries

Rapid Conn Interconnect (M) Sdn. Bhd.’s auditors’ report contains audit emphasis of matter relating to the appropriateness of going concern basis of accounting is dependent on the financial support from its holding company and its fellow subsidiaries.

Borderless Fame Sdn. Bhd.’s auditors’ report contains audit emphasis of matter relating to the appropriateness of going concern basis of accounting is dependent on the financial support from its holding company.

RapidPower(ShenZhen)Co.,Ltd.’sauditors’reportcontainsauditemphasisofmatterrelatingtotheappropriatenessof going concern basis of accounting is dependent on the financial support from its holding company.

(c) Acquisition of new subsidiary and subscription of shares

(i) RapidConn(ShenZhen)Co.,Ltd.(“RCC”)

On 4 August 2015, the Company subscribed for additional shares amounting to RMB1,117,233 (equivalent to RM699,675), in RCC.

(ii) RapidPower(ShenZhen)Co.,Ltd.(“RPS”)

On12February2015, theCompany’s subsidiary,RapidConn (ShenZhen)Co., Ltd. (“RCC”), incorporatedanewmajority-ownedsubsidiaryinChina,namelyHSCo.,Ltd(“HS”),aprivatelimitedcompanywhichhassubscriptionshares of RMB5,000,000 (equivalent to RM2,905,000) comprising 5,000,000 subscription shares of RMB1 each. RCC subscribed3,000,000sharesofRMB1each,representing60%ofequityinterestofHS.

On 2 July 2015, HS increased its subscription shares from RMB5,000,000 to RMB7,500,000,where 60% of thesubscriptionshares,representing4,500,000sharesofRMB1eachistobeheldbyRCC.Theregisteredsharecapitalis to be fully paid on or before 31 December 2054.

On 20 July 2015,

• HSchangeditsnametoRapidPower(ShenZhen)Co.,Ltd.(“RPS”);

• TheStateAdministrationofIndustryandCommerceofPeople’sRepublicofChinahadapprovedtheapplicationofRPSthattheremaining40%equityinterestheldbyathirdpartytobetransferredtoRCC.Asaresult,RPSbecomes a wholly-owned subsidiary of RCC.

(iii) Borderless Fame Sdn. Bhd.

On 9 January 2014, the Company acquired 2 ordinary shares of RM1 each in Borderless Fame Sdn. Bhd., for a cash consideration of RM2. On 21 January 2014, the Company subscribed 99,998 new ordinary shares of RM1 each in Borderless Fame Sdn. Bhd. at par.

(d) Impairment tests for investments in subsidiaries

Themanagementhascarriedoutanimpairmentreviewontheinvestmentsinthesubsidiaries.TheCompanyhasusedvalue-in-use calculations to estimate the recoverable amount. Value-in-use was determined by discounting the future cashflowsgeneratedfromthecontinuinguseofthecashgeneratingunitsbasedonthefollowingassumptions:

(i) pre-taxcashflowprojectionsbasedonthemostrecentfinancialbudgetsapprovedbythedirectorscoveringa1year’s period and extrapolated for another 4 years.

(ii) pre-taxdiscountratesof4%to5%wereappliedindeterminingtherecoverableamount.Thediscountratewasbased on the current borrowing interest rate applicable at each subsidiaries locality.

Thevaluesassignedtothekeyassumptionsrepresentmanagement’sassessmentoffuturetrendsintheindustry.


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16.DEFERREDTAX(ASSETS)/LIABILITIES

Group 2015 RM

2014 RM

At 1 January (154,435) (404,603)Recognised in profit or loss (Note 11) 124,154 256,817Exchange differences (19,034) (6,649)At 31 December (49,315) (154,435)

Deferred tax assets and liabilities are offsets when there is a legally enforceable right to set off current tax assets against currenttaxliabilitiesandwhenthedeferredincometaxesrelatetothesametaxauthority.Thenetdeferredtaxassetsandliabilitiesshownonthestatementoffinancialpositionafterappropriateoffsettingareasfollows:

Group 2015 RM

2014 RM

Deferred tax assets (49,315) (194,234)Deferred tax liabilities - 39,799

(49,315) (154,435) DeferredTaxAssetsoftheGroup:

Unutilised businesslosses RM

Others RM

Total RM

At 1 January 2015 (182,798) (11,436) (194,234)Recognised in profit or loss 124,154 - 124,154Overprovision in prior years 39,799 39,799Exchange differences (19,034) - (19,034)At31December2015 (37,879) (11,436) (49,315)

At 1 January 2014 (432,966) (11,436) (444,402)Recognised in profit or loss 256,817 - 256,817Exchange differences (6,649) - (6,649)At31December2014 (182,798) (11,436) (194,234)

DeferredTaxLiabilitiesoftheGroup:

2015 RM

2014 RM

PlantandequipmentAt 1 January 39,799 39,799Overprovision in prior years (39,799) -At 31 December - 39,799

Thedeferredtaxassetsarerecognisedforunutilisedbusinesslossesofasubsidiaryasthemanagementconsidereditprobablethatthefuturetaxableprofitsofthesubsidiarybasedontheprojectedfutureprofitswillbeavailableagainstwhich they can be utilised.


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16.DEFERREDTAX(ASSETS)/LIABILITIES(CONT’D)

Deferred tax assets have not been recognised in respect of the following items as it is not probable that certain of the subsidiarieswillgeneratesufficientfuturetaxableprofitsagainstwhichitcanbeutilised:

Group 2015 RM

2014 RM

Unutilised business losses 8,207,000 8,666,000Unutilised capital allowances 4,511,600 4,511,600

17.INVENTORIES

Group 2015 RM

2014 RM

Atcost:Raw materials 618,553 909,387Finished goods 3,532,121 2,126,040Cables 203,602 552,153 Components 56,698 78,135Goods in transit 1,209,511 1,040,407Work in progress 1,928,480 906,339

7,548,965 5,612,461

18.TRADERECEIVABLES

Group 2015 RM

2014 RM

Thirdparties 17,495,679 9,919,419Less:Allowanceforimpairment (311,320) (253,068)

17,184,359 9,666,351

Movementinallowanceforimpairment(individuallyimpaired)duringthefinancialyearareasfollows:

Group 2015 RM

2014 RM

At 1 January 253,068 238,675Exchange differences 58,252 14,393At 31 December 311,320 253,068

TheGroup’snormaltradecredittermsare30daysto90days(2014:30daysto90days).Othercredittermsareassessedand approved on a case-by-case basis.

TheGrouphasnosignificantconcentrationofcreditriskthatmayarisefromexposurestoasingledebtorortogroupofdebtors.Tradereceivablesarenon-interestbearing.

Theyarerecognisedattheiroriginalinvoiceamountswhichrepresenttheirfairvaluesoninitialrecognition.


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18.TRADERECEIVABLES(CONT’D)

Ageing analysis of trade receivables

TheageinganalysisoftheGroup’stradereceivablesareasfollows:

Group 2015 RM

2014 RM

Neither past due nor impaired 14,059,677 7,157,6031 to 30 days past due not impaired 3,079,176 1,096,20431 to 60 days past due not impaired 45,506 436,54461 to 90 days past due not impaired - 269,89091 to 120 days past due not impaired - 312,292More than 120 days past due not impaired - 393,818

3,124,682 2,508,748Impaired 311,320 253,068

17,495,679 9,919,419

Receivables that are neither past due nor impaired

TradereceivablesthatareneitherpastduenorimpairedarecreditworthydebtorswithgoodpaymentrecordswiththeGroup.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

TheGrouphastradereceivablesamountingtoRM3,124,682(2014:RM2,508,748)thatarepastdueatreportingdatebutnot impaired.

Thebalancesofreceivablesthatarepastduebutnotimpairedareunsecuredinnature.Themanagementisconfidentthatthese receivables are recoverable as these accounts are still active.

Thecurrencyexposureprofilesoftradereceivablesareasfollows:

Group 2015 RM

2014 RM

HongKongDollars 848,556 1,218,326US Dollars 925,988 1,092,088


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19.OTHERRECEIVABLES


2014 RM

2015 RM

2014 RM

Amount due from subsidiaries - - 10,590,529 10,316,262Sales tax and purchase tax recoverable 1,638,101 2,125,963 - -Deposits 383,775 350,258 11,190 56,145Prepayments 310,286 158,227 208,612 49,160Sundry receivables 193,012 758,566 1,000 1,000

2,525,174 3,393,014 10,811,331 10,422,567Less:Allowanceforimpairment - (571,791) (4,342,265) (4,342,265)

2,525,174 2,821,223 6,469,066 6,080,302

Movementsinallowanceforimpairment(individuallyimpaired)duringthefinancialyearareasfollows:


2014 RM

2015 RM

2014 RM

At 1 January 571,791 1,604,675 4,342,265 4,342,265Reversal of impairment on other receivables

(Note 8) (629,812) (1,088,451) - -Exchange difference 58,021 55,567 - -At 31 December - 571,791 4,342,265 4,342,265

Other receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significantfinancialdifficultiesandhavedefaultedonpayments.Thesereceivablesarenotsecuredbyanycollateralorcredit enhancements.

Theamountsduefromrelatedpartiesareunsecured,non-interestbearingandarerepayableondemand.

TheGrouphasnosignificantconcentrationofcreditriskthatmayarisefromexposurestoasingledebtorortogroupsofdebtors.98%(2014:98%)oftheCompany’sreceivablesareduefromsubsidiaries.

Thecurrencyexposureprofilesofotherreceivablesareasfollows:


2014 RM

2015 RM

2014 RM

US Dollars - - 3,095,364 3,165,434Singapore Dollars 36,901 22,355 4,083,509 3,764,519


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20.CASHANDBANKBALANCES


2014 RM

2015 RM

2014 RM

Cash on hand and at banks/ Cash and cash equivalents 4,859,231 4,847,058 340,801 909,661

Thecurrencyexposureprofilesofcashandbankbalancesareasfollows:


2014 RM

2015 RM

2014 RM

HongKongDollars 11,028 8,338 - -Renminbi 7,335 23,356 - -Singapore Dollars 4,789 241,802 - -US Dollars 187,599 24,796 3,765 24,080

21.SHARECAPITAL

GroupandCompanyNumberofOrdinaryShares

ofRM0.10each Amount 2015

2014

2015 RM

2014 RM

Authorised:At 1 January 500,000,000 250,000,000 50,000,000 25,000,000Created during the year - 250,000,000 - 25,000,000At 31 December 500,000,000 500,000,000 50,000,000 50,000,000

Issuedandfullypaid:At 1 January 206,151,400 171,792,900 20,615,140 17,179,290Issuance of shares pursuant to private

placement - 34,358,500 - 3,435,850Issuance of shares pursuant to exercise of

warrant 10,455,800 - 1,045,580 -At 31 December 216,607,200 206,151,400 21,660,720 20,615,140

TheholdersofordinarysharesareentitledtoreceivedividendsasandwhendeclaredbytheCompany.Allordinarysharescarry one vote per share without restrictions and rank equally with regard to the Company’s residual assets.


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21.SHARECAPITAL(CONT’D)Detachable Warrants

In year 2011, the Company issued renounceable rights issue of 60,847,500 new ordinary shares together with 60,847,500 free detachable warrants on the basis of three (3) rights shares together with three (3) detachable warrants for every four (4)ordinarysharesoftheCompany.Thisexercisepriceissubjecttoadjustmentinaccordancewiththebasissetoutinthedeed poll.

Thewarrantsmaybeexercisedatanytimecommencingonthedateofissueofwarrantson19September2011butnotlater than 18 September 2021. Any warrants which have not been exercised at date of maturity will lapse and cease to be valid for any purpose.

ThenewordinarysharesallottedandissueduponexerciseofthewarrantsshallbefullypaidandrankparipassuwiththethenexistingordinarysharesoftheCompany.Thewarrantholderswillnothaveanyvotingrightsinanygeneralmeetingof the Company unless the warrants are exercised into new ordinary shares and registered prior to the date of the general meeting of the Company.

Duringthefinancialyear,10,455,800(2014:Nil)warrantswereexercisedbythewarrantholdersand50,390,800(2014:60,846,600) warrants are still outstanding as at 31 December 2015.

22.SHAREPREMIUM

GroupandCompany 2015 RM

2014 RM

At 1 January 2,170,979 665,621Premiumarisingfrom:Private Placement - 1,725,432Share issuance expenses (100,700) (220,074)At 31 December 2,070,279 2,170,979

Thesharepremiumwhichisnon-distributablerepresentsthepremiumarisingfromtheissueofshares.

23.FOREIGNEXCHANGERESERVE

Group 2015 RM

2014 RM

At 1 January 194,327 (19,867)Arising during the year 1,285,352 214,194At 31 December 1,479,679 194,327

The foreignexchange reserve comprises all foreignexchangedifferencesarising from the translationof thefinancialstatements of foreign subsidiaries whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operations.


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24.BORROWINGS

Group 2015 RM

2014 RM

CurrentSecured:Obligation under finance lease (Note 25) 79,231 60,760

Non-CurrentSecured:Obligation under finance lease (Note 25) 251,928 266,715Totalborrowings 331,159 327,475

TotalborrowingsObligation under finance lease (Note 25) 331,159 327,475

25.OBLIGATIONUNDERFINANCELEASE

Group 2015 RM

2014 RM

Futureminimumfinanceleasepayments:Not later than 1 year 90,913 74,067Laterthan1yearandnotlaterthan2years 83,924 74,068Laterthan2yearsandnotlaterthan5years 185,721 215,992

360,558 364,127Less:Futurefinancecharges (29,399) (36,652)Present value of obligation under finance lease (Note 24) 331,159 327,475

Analysisofpresentvalueoffinanceleaseliabilities:Not later than 1 year 79,231 60,760Laterthan1yearandnotlaterthan2years 75,615 63,752Laterthan2yearsandnotlaterthan5years 176,313 202,963

331,159 327,475

TheobligationunderfinanceleaseisdenominatedinSingaporeDollarsandbearsinterestatthereportingdateatrateof3.25%(2014:3.25%)perannum.

26.TRADEPAYABLES

Tradepayablesarenon-interestbearingandthenormaltradecredittermsgrantedtotheGrouprangefrom30to120days(2014:30to120days).

Thecurrencyexposureprofilesoftradepayablesareasfollows:

Group 2015 RM

2014 RM

US Dollars 72,077 664,854


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27.OTHERPAYABLES


2014 RM

2015 RM

2014 RM

CurrentAccruals 2,179,498 1,986,719 170,737 155,905Provision for unutilised leave 151,889 120,852 - -Sundry payables 1,041,540 853,658 49,549 29,706

3,372,927 2,961,229 220,286 185,611Non-currentSundry payable 27,742 38,466 - -

Total 3,400,669 2,999,695 220,286 185,611

Thecurrencyexposureprofilesofotherpayablesareasfollows:


2014 RM

2015 RM

2014 RM

HongKongDollars 86,110 49,560 - -Singapore Dollars 371,711 195,895 - -

28.COMMITMENTS

Rentalcommitments

TheGroupandtheCompanyhaveenteredintonon-cancellableoperatingleaseagreementsforuseoffactory,officeandequipment.Theseleaseshaveanaveragelifeofbetween1to5yearswithrenewaloptionincludedinthecontracts.Thereare no restrictions placed upon the Group and the Company by entering into the leases.

Thefutureaggregateminimumleasepaymentsunderthenon-cancellableoperatingleasecontactedasatreportingdatebutnotrecognisedasliabilitiesareasfollow:


2014 RM

2015 RM

2014 RM

Payable within one year 1,433,616 2,141,971 36,000 36,000Payable more than one year but not more than

five years 6,615,500 1,248,163 33,000 69,0008,049,116 3,390,134 69,000 105,000


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29.SIGNIFICANTRELATEDPARTYTRANSACTIONS

(a) Significant related party transactions

The following significant relatedparty transactionsbetween theCompanyand their relatedparties tookplaceatterms agreed between the parties during the financial year.

Company 2015 RM

2014 RM

Recovery expenses paid to a subsidiary (328,938) -Recovery expenses charged to subsidiaries 207,845 401,122

(b) Compensation of key management personnel

Theremunerationofdirectorsandothermembersofkeymanagementduringtheyearwereasfollows:


2014 RM

2015 RM

2014 RM

Short term employee benefits 2,833,753 2,666,384 186,157 320,124Post-employmentbenefits:Defined contribution plan 79,558 88,664 18,600 37,651

2,913,311 2,755,048 204,757 357,775

Includedinthetotalkeymanagementpersonnelare:

Directors’ remuneration excluding benefits in kind (Note 10) 2,898,459 2,729,379 204,757 357,775

30.FAIRVALUESOFFINANCIALINSTRUMENTS

(a) Fair value of the financial instruments

TheGroupandtheCompanycategorisefairvaluemeasurementusingafairvaluehierarchythatisdependentonthevaluationinputsusedasfollows:

(i) Level1:Quotedprices (unadjusted) inactivemarkets for identicalassetsand liabilitiesthattheGroupandtheCompany can access at measurement date;

(ii) Level2:InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectly or indirectly (i.e. derived from prices); and

(iii)Level3:Unobservableinputsfortheassetorliability.

TheGroupandtheCompanydonothaveanyfinancialassetsandfinancialliabilitiescarriedatfairvaluenorclassifiedanyfinancialassetsandfinancialliabilitiesinLevel1toLevel3asat31December2015and31December2014.


115


30.FAIRVALUESOFFINANCIALINSTRUMENTS(CONT’D)

(b) Financial instruments that are not carried at fair value

Financial instruments classified as loans and receivables and financial liabilities are carried at amortised cost.

Thecarryingamountofthesefinancialinstrumentsarereasonableapproximationoftheirfairvalueduetoshort-termnature:

Thecarryingamountofthenon-currentotherpayableisreasonableapproximationoffairvalueduetotheinsignificantimpact of discounting.

Note Tradereceivables 18 Other receivables 19 Cash and bank balances 20 Borrowings 24 Tradepayables 26 Other payables (current) 27 Other payable (non-current) 27

ThecarryingvalueofcurrentfinancialassetsandcurrentfinancialliabilitiesoftheGroupandtheCompanyapproximatetheir values due to their short term nature whilst the carrying value of hire purchase payables is estimated to be approximate the fair value estimated based on the current rates available for borrowing with the same maturity profile.

Thecarryingamountofthenon-currentotherpayableisreasonableapproximationoffairvalueduetotheinsignificantimpact of discounting.

(c) Categories of financial instruments

(i) Financial assets

Note 2015 RM

2014 RM

GroupLoansandReceivables Tradereceivables 18 17,184,359 9,666,351 Other receivables 19 2,525,174 2,821,223 Cash and bank balances 20 4,859,231 4,847,058 24,568,764 17,334,632

CompanyLoansandReceivables Other receivables 19 6,469,066 6,080,302 Cash and bank balances 20 340,801 909,661

6,809,867 6,989,963


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30.FAIRVALUESOFFINANCIALINSTRUMENTS(CONT’D) (c) Categories of financial instruments (Cont’d)

(ii) Financial liabilities

Note 2015 RM

2014 RM

GroupFinancialliabilitiesmeasuredatamortisedcost Tradepayables 26 12,415,521 7,884,125 Other payables 27 3,400,669 2,999,695 Borrowings 24 331,159 327,475 16,147,349 11,211,295CompanyFinancialliabilitiesmeasuredatamortisedcost Other payables 27 220,286 185,611

31.FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES

TheGroup’sandtheCompany’sactivitiesexposethemtoavarietyoffinancialrisk:liquidityrisk,marketrisk(includinginterestraterisk,foreigncurrencyrisk)andcreditrisk.TheGroup’sandtheCompany’soverallriskmanagementstrategyseeks to minimise adverse effects from the unpredictability of financial markets on the Group’s and the Company’s financialperformance.TheGroupandtheCompanymayuserelevantfinancialinstrumentstomanagecertainrisks.Suchfinancial instruments are not held for trade or speculative purposes.

(a)LiquidityRisk

LiquidityriskistheriskthattheGrouportheCompanywillencounterdifficultyinmeetingobligationsassociatedwithfinancial liabilities that are settled by delivering cash or another financial assets.

Tomanageliquidityrisk,theGroupandtheCompanymaintainalevelofcashequivalentandfundingfacilitiesdeemedadequate by management to finance their operations. In assessing the adequacy of the facilities, management reviews its working capital requirements.

Analysisoffinancialinstrumentsbyremainingcontractualmaturities

ThetablebelowsummarisesthematurityprofileoftheGroup’sandtheCompany’sfinancialliabilitiesatthereportingdate based on contractual undiscounted repayment obligations.

Ondemandor within1year RM

1to5years RM

Total RM

Group31December2015Tradepayables 12,415,521 - 12,415,521Other payables 3,372,927 27,742 3,400,669Borrowings 79,231 251,928 331,159

15,867,679 279,670 16,147,349

31December2014Tradepayables 7,884,125 - 7,884,125Other payables 2,961,229 38,466 2,999,695Borrowings 74,067 290,060 364,127

10,919,421 328,526 11,247,947


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31.FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES(CONT’D) (a)LiquidityRisk(Cont’d)

Ondemandor within1year RM

Company31December2015Other payables 220,286

31December2014Other payables 185,611

(b)InterestRateRisk

Interest rate risk is the risk that the fair value of the future cash flows of the Group’s or the Company’s future instruments will fluctuate because of change in market interest rates.

TheGroup’sexposuretointerestrateriskarisesprimarilyfromitsborrowings;theGrouphasnosubstantiallongterminterest-bearingassetsasat31December2015.Theinvestmentsinfinancialassetsaremainlyshortterminnatureand they are not held for speculative purposes.

Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates exposetheGrouptofairvalueinterestraterisk.TheinterestratethattheGroupwillbeabletoobtainondebtfinancingwill depend on market conditions at that time, and may differ from the rates the Group has secured currently.

Theinterestratesandrepaymenttermsofinterest-bearingfinancialinstrumentsaredisclosedintherespectivenotesto the financial statements.

TheGroupisnotexposedtoanysignificantmarketriskforchangesininterestrates.Hence,nosensitivityanalysisispresented.

(c)ForeignCurrencyRisk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

TheGrouphastransactionalcurrencyexposuresthataredenominatedinacurrencyotherthanrespectivefunctionalcurrenciesofGroupentities,primarilyRinggitMalaysia(“RM”),Renminbi(“RMB”)andUSDollars(“USD”).TheforeigncurrenciesinwhichthesetransactionsaredenominatedaremainlyUSDollars(“USD”),SingaporeDollars(“SGD”)andHongKongDollars(“HKD”).

TheGroupfacesforeignexchangeriskasitsborrowingisdenominatedinforeigncurrencyorwhosepriceisinfluencedby its benchmark price movements in foreign currency (especially USD) as quoted on international markets.

TheGroupdoesnothaveanyformalhedgingpolicyforitsforeignexchangeexposureanddidnotactivelyengageinactivitiestohedgeitsforeigncurrencyexposuresduringthefinancialyear.TheGroupseekstomanagetheforeigncurrency risk by constructing natural hedges where it matches revenue and expenses in any single currency.

TheGroup is also exposed to currency translation risk arising from itsnet investments in foreignoperations.TheGroup’s net investment in Singapore, People’s Republic of China and United States of America are not hedged as currency position in RMB and USD are considered to be long-term in nature.

Sensitivity analysis for foreign currency risk

ThefollowingtabledemonstratesthesensitivityoftheGroup’sandtheCompany’slossnetoftaxtochangeintheUSD,SGDandHKDexchangeratesagainsttherespectivefunctionalcurrenciesoftheGroup’sentities,withall other variables held constant.


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31.FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES(CONT’D) (c)ForeignCurrencyRisk(Cont’d)


2014 RM

2015 RM

2014 RM

USD against RM (2015:15%,2014:6%) - strengthened 128,804 18,082 743,791 191,371 - weakened (128,804) (18,082) (743,791) (191,371) SGD against RM (2015:13%,2014:2%) - strengthened (62,188) (3,501) 653,361 75,290 - weakened 62,188 3,501 (653,361) (75,290) HKDagainstRM (2015:2%,2014:1%) - strengthened 15,470 11,770 - - - weakened (15,470) (11,770) - -

(d)CreditRisk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations.TheGroup’sandtheCompany’sexposuretocreditriskarisesprimarilyfromtradeandotherreceivables.For other financial assets (including cash and bank balances), the Group and the Company minimise credit risk by dealing with reputable banks with high credit ratings.

TheGroup’sobjectiveistoseekcontinualrevenuegrowthwhileminimisinglossesincurredduetoincreasedcreditriskexposure.TheGrouptradesonlywithrecognisedandcreditworthythirdparties.Inaddition,receivablebalancesare monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Themaximumexposuretocreditriskintheeventthatthecounterpartiesfailtoperformtheirobligationsasattheend of the financial year in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the statements of financial position.

Significant concentrations of credit risk

Concentrations of credit risk exist when changes in economics, industry or geographical factors similarly affect counterpartieswhoseaggregatecreditexposure is significant in relation to theGroup’s totalcreditexposure.TheGroup has no significant concentration of credit risks with exposure spread over a large number of counterparties and customers.


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31.FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES(CONT’D)

(d)CreditRisk(Cont’d)

Receivablesandotherfinancialassets

Riskmanagementobjective,policiesandprocessesformanagingtherisk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Deposits with banks are placed with or entered into with reputable banks with high credit ratings and no history of default.

Exposure to credit risk

The maximum exposure to credit risks arising from receivables is represented by the carrying amounts in thestatements of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated attheirnetrealisablevalues.TheGroupusesaginganalysistomonitorthecreditqualityofthereceivables.

Impairment losses

TheGroupmaintainsanaginganalysisinrespectoftradereceivablesonly.Theagingoftradereceivablesasatthereporting date is disclosed in Note 18.

ThemovementintheimpairmentlossoftradeandotherreceivablesisdisclosedinNote18and19.Theallowanceaccount is used to record impairment losses. Unless the Group is satisfied that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.

Amountsduefromsubsidiaries

Riskmanagementobjective,policiesandprocessesformanagingtherisk

TheCompanyprovidesadvancestoitssubsidiaries.TheCompanymonitorstheresultsofthesubsidiariesregularly.

Exposure to credit risk

Themaximumexposuretocreditriskisrepresentedbytheircarryingamountsinthestatementsoffinancialposition.

Impairment losses

As at the reporting date, there was no indication that the amounts due from related parties are not recoverable, except for those amounts for which an impairment loss had been made.

32.CAPITALMANAGEMENT

TheprimaryobjectiveoftheGroup’scapitalmanagementistoensurethatitmaintainsastrongcreditratingandhealthycapital ratios in order to support its business and maximise shareholder value.

TheGroupmanages itscapital structureandmakesadjustments to it, in lightofchanges ineconomicconditions.Tomaintainoradjustthecapitalstructure,theGroupmayadjustthedividendpaymenttoshareholder, returncapitaltoshareholderorissuenewshares.Nochangesweremadeintheobjectives,policiesorprocessesduringtheyearsended31 December 2015 and 31 December 2014.

TheGroupmonitorscapitalusingagearingratio,which isnetdebtdividedbytotalcapitalplusnetdebt.TheGroupincludes within net debt, trade and other payables and borrowings, less cash and bank balances. Capital includes equity attributable to the owners.

TheGroup’sstrategyistomaintainthegearingratioataverylowlevel.


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33.SIGNIFICANTEVENTS

(a) On 1 April 2015, the Company entered into a shares sale agreement with a third party for the proposed acquisition of KejuruteraanAsasteraSdn.Bhd.(“KASB”),aprivatelimitedcompany,forapurchaseconsiderationofRM25,000,000to be satisfied by cash amounting to RM12,500,000 and issuance of 250,000,000 new irredeemable convertible preferenceshares(“ICPS”)atanissuepriceofRM0.05perICPSamountingtoRM12,500,000.KASBspecialisesintheprovision of electrical and mechanical engineering services within the construction industry.

On4September2015,theCompanyandKASBmutuallyagreedtoterminatetheproposedacquisition.TheBoardhasresolved to abort the above proposal on 4 September 2015.

(b) On 4 August 2015, the Company subscribed for additional shares amounting to RMB1,117,233 (equivalent to RM699,675),initswholly-ownedsubsidiary,namelyRapidConn(ShenZhen)Co.Ltd.,acompanyincorporatedinthePeople’s Republic of China.

34.SUBSEQUENTEVENTS

On3March2016,theCompanyproposedtoundertakethefollowings:

(a) Proposedrightsissueofupto800,994,000newirredeemableconvertiblepreferenceshares(“ICPS”)atanissuepriceof RM0.025 per ICPS on the basis of 3 ICPS for every existing ordinary shares of RM0.10 each held in the Company at anentitlementdatetobedeterminedlatertogetherwithupto53,399,600freedetachablewarrants(“warrants-B”)onthe basis of 1 free warrant-B for every 15 ICPS subscribed;

(b) Proposed increase in authorised share capital of the Company in order to facilitate the issuance of ICPS and new shares arising from the conversion thereof; and

(c) Proposed amendment to Memorandum and Articles of Association of the Company to facilitate the issuance of ICPS and the proposed increase in authorised share capital.

As at the date of the report, the abovementioned exercise is pending for completion.

35.SEGMENTINFORMATION

For management purposes, the Group is organised into business units based on their geographical location, and has four reportablesegmentsasfollows:

(i) RapidConnInterconnect(M)Sdn.Bhd.(“RCM”),BorderlessFameSdn.Bhd.(“BFSB”),MyGenBizzBerhad(“MGB”)andConnectCountyHoldingsBerhad(“CCHB”)coveringMalaysia;

(ii) RapidConn(ShenZhen)Co.,Ltd.(“RCC”)andRapidPower(ShenZhen)Co.,Ltd.(“RPS”)coveringPeople’sRepublicofChina(“China”);

(iii)RapidConn(S)Pte.Ltd.(“RCS”)coveringSingapore;and

(iv)RapidConnInc.(“RCI”)coveringUnitedStatesofAmerica(“USA”).

Except as indicated above, no operating segment has been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respect as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements.


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35.SEGMENTINFORMATION(CONT’D)

Group

Malaysia China Singapore USAAdjustmentsand

eliminations NotePerconsolidated

financialstatements 2015 RM

2014 RM

2015 RM

2014 RM

2015 RM

2014 RM

2015 RM

2014 RM

2015 RM

2014 RM

2015 RM

2014 RM

Revenue:External

customers - 743,619 12,314,082 9,379,581 21,106,583 12,161,515 31,456,582 30,324,898 - - 64,877,247 52,609,613Inter-companies - - 29,489,753 22,902,221 - - - - (29,489,753) (22,902,221) A - -Totalrevenue - 743,619 41,803,835 32,281,802 21,106,583 12,161,515 31,456,582 30,324,898 (29,489,753) (22,902,221) 64,877,247 52,609,613

Results:Depreciation and

amortisation 10,842 19,516 1,020,328 764,280 339,776 278,460 263,584 151,694 - - 1,634,530 1,213,950Finance cost 352 145 24,207 10,299 33,389 54,518 22,828 22,366 - - 80,776 87,328Income tax - - - - - - 161,525 273,073 (37,000) - 124,525 273,073Segment (loss)/

profit (871,933) (3,838,226) 913,288 (437,516) 1,555,076 (209,521) 1,120,060 1,392,613 99,999 373,070 C 2,816,490 (2,719,580)

Assets:Additions to

non-current assets 79,701 38,139 1,420,809 968,408 310,928 906,941 15,332 669,068 - - D 1,826,770 2,582,556

Segment assets 11,156,142 10,660,484 20,828,984 14,847,550 10,445,315 8,280,643 10,347,563 9,863,141 (15,771,326) (16,463,592) E 37,006,678 27,188,226

Segment liabilities 6,133,930 5,711,219 17,606,477 12,985,822 5,872,102 5,882,494 5,039,402 5,556,717 (18,504,562) (18,885,158) F 16,147,349 11,251,094

Note: Natureofadjustmentsandeliminationstoarriveatamountsreportedintheconsolidatedfinancialstatements

A Inter-companies revenues are eliminated on consolidation B Therearenoothermaterialnon-cashexpenses

C Thefollowingitemsareaddedto/(deductedfrom)segmentprofittoarriveat“Profit/(Loss)beforetax”presentedintheconsolidatedstatementofcomprehensiveincome:-

2015 RM

2014 RM

Profit from inter-companies sales (412,406) (62,676)Inter-companies sales commission - 106Impairment on investments in subsidiaries 99,999 -Foreign currency difference 412,406 435,640

99,999 373,070


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35.SEGMENTINFORMATION(CONT’D) D Additionstonon-currentassetsconsistof:

2015 RM

2014 RM

Motor vehicles 100,835 670,097Officeequipment,furnitureandfittings 32,694 114,022Plant and machinery 984,578 1,354,925Renovation 708,663 443,512

1,826,770 2,582,556

E Thefollowingitemsaredeductedfromsegmentassetstoarriveattotalassetsreportedintheconsolidatedstatementoffinancialposition:

2015 RM

2014 RM

Investments in subsidiaries (4,236,034) (3,636,358)Plant and equipment 311,805 (10,706)Inter-companies assets (11,884,097) (12,816,528)Deferred tax liability 37,000 -

(15,771,326) (16,463,592)

F The following itemsarededucted fromsegment liabilities toarriveat total liabilities reported in theconsolidatedstatementoffinancialposition:

2015 RM

2014 RM

Inter-companies liabilities (18,504,562) (18,885,158)

GEOGRAPHICALINFORMATION

Revenue and non-current assets information based on the geographical location of customers and assets respectively are asfollows:

Revenue Non-currentassets 2015 RM

2014 RM

2015 RM

2014 RM

Malaysia - 743,619 80,396 11,537People’s Republic of China 12,314,082 9,379,581 3,175,447 2,209,487Singapore 21,106,583 12,161,515 1,507,504 1,277,187USA 31,456,582 30,324,898 76,287 548,688

64,877,247 52,609,613 4,839,634 4,046,899


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35.SEGMENTINFORMATION(CONT’D)

Non-current assets information presented above consist of the following items as presented in the consolidated statement of financial position.

2015 RM

2014 RM

Motor vehicles 889,734 762,073Mouldings 34,366 68,727Officeequipment,furnitureandfittings 154,663 201,456Plant and machinery 2,561,729 2,464,963Renovation 1,199,142 549,680

4,839,634 4,046,899

36.COMPARATIVEFIGURES

Thepresentationandclassificationofitemsinthecurrentfinancialstatementshavebeenconsistentwiththepreviousfinancialyearexceptthatcertaincomparativeamountshavebeenadjustedasdisclosedbelow:-

The following comparative amounts as at 31 December 2014 have been reclassified to conformwith current year’spresentation:

Previouslystated RM

Reclassifications RM

Restated RM

IncomestatementsOther items of income 1,968,752 531 1,969,283

Other items of expenses Administration expense 10,796,408 531 10,796,939

37.AUTHORISATIONOFFINANCIALSTATEMENTSFORISSUE Thefinancialstatementsfortheyearended31December2015wereauthorisedforissueinaccordancewitharesolution

of the directors on 8 April 2016.


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SUPPLEMENTARYINFORMATIONPURSUANTTOBURSAMALAYSIASECURITIESLISTINGREQUIREMENTS

ThefollowingbreakdownandcomponentsofretainedearningsareidentifiedanddisclosedinaccordancewiththeGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurepursuanttoBursaMalaysiaSecuritiesListingRequirements,asissuedbytheMalaysianInstituteofAccountants.


2014 RM

2015 RM

2014 RM

Totalaccumulatedlosses:- Realised 23,859,663 19,188,580 (12,824,988) (12,333,872)- Unrealised (1,430,364) (39,892) - -

22,429,299 19,148,688 (12,824,988) (12,333,872)Less:Consolidationadjustments (26,780,648) (26,192,002) - -Accumulated losses as per financial statements (4,351,349) (7,043,314) (12,824,988) (12,333,872)

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statistiCs oF sHaReHoldinGsas at 31 March 2016

AuthorisedShareCapital : RM50,000,000/-

IssuedandPaid-UpCapital : RM21,660,720/-comprisingof216,607,200ordinarysharesofRM0.10each

ClassofShares : OrdinarysharesofRM0.10eachfully-paid

VotingRights : Onevoteperordinaryshare

ANALYSISBYSIZEOFSHAREHOLDINGS

SizeofHoldings No.ofHolders % No.ofShares % 1 - 99 43 2.25 1,740 0.00100 - 1,000 247 12.93 116,136 0.051,001 - 10,000 523 27.37 2,931,040 1.3510,001 - 100,000 872 45.63 38,794,970 17.91100,001–10,307,569* 221 11.56 101,946,280 47.0710,307,570andabove** 5 0.26 72,817,034 33.62Total: 1,911 100.00 216,607,200 100.00

Notes:-*Lessthan5%ofissuedholdings**5%andaboveofissuedholdings

SUBSTANTIALSHAREHOLDERSBASEDONTHEREGISTEROFSUBSTANTIALSHAREHOLDERSASAT31MARCH2016

No. NameNo.ofOrdinarySharesofRM0.10each

DirectInterest % IndirectInterest %1. Dato’NgAikKee 27,000,000 12.46 - -2. Chng Seng Chye

(ChngHungSeng)18,287,382 8.44 - -

3. Ang Chuang Juay 15,665,752 7.23 - -4. YapShuhJian 11,863,900 5.48 - -

DIRECTORS’SHAREHOLDINGSINTHECOMPANYBASEDONTHEREGISTEROFDIRECTORS’SHAREHOLDINGSASAT31MARCH2016

NameofDirectorsNo.ofOrdinarySharesofRM0.10each

DirectInterest % IndirectInterest %RoyTheanChongYew - - - -Ang Chuang Juay 15,665,752 7.23 - -GohKokBoon - - - -HongCheongLiang - - - -LeeChoonKwong 237,400 0.11 - -

126


TOP30SECURITIESACCOUNTHOLDERS(ORDINARYSHARES)ASPERRECORDOFDEPOSITORSASAT31MARCH2016

No. Name No.ofIssuedShares %1. ChngSengChye(ChngHungSeng) 18,287,382 8.442. Ang Chuang Juay 15,665,752 7.233. KenangaNominees(Tempatan)Sdn.Bhd.

-PledgedSecuritiesAccountforDato’NgAikKee15,000,000 6.92

4. Dato’NgAikKee 12,000,000 5.545. JFApexNominees(Tempatan)Sdn.Bhd.

-PledgedSecuritiesAccountforYapShuhJian(Margin)11,863,900 5.48

6. HoChuChai 9,900,400 4.577. HSBCNominees(Asing)Sdn.Bhd.

- Exempt an for Credit Suisse9,000,000 4.15

8. Flonic Sdn. Bhd. 6,200,000 2.869. LohTongYew 4,598,372 2.1210. Su Pek Fuang 4,000,000 1.8511. LeongWaiKwin 3,850,000 1.7812. Ng Poh Seng 2,300,000 1.0613. HSBCNominees(Tempatan)Sdn.Bhd.

- Exempt an for Credit Suisse2,000,000 0.92

14. Ooi Chia Zheng 1,500,000 0.6915. PamelaOngMeiYu 1,460,000 0.6716. LeeFu-Chien 1,457,000 0.6717. LeePhaikKooi 1,350,100 0.6218. MaybankNominees(Tempatan)Sdn.Bhd.

- Saw Wei Ming1,350,000 0.62

19. AllianceGroupNominees(Tempatan)Sdn.Bhd.- Pledged Securities Account for Batu Bara Resources Corporation Sdn. Bhd.

1,200,050 0.55

20. Public Invest Nominees (Asing) Sdn. Bhd. -ExemptanforPhillipSecuritiesPte.Ltd.

1,017,900 0.47

21. SuHowGiong 1,000,000 0.4622. UOBKayHianNominees(Asing)Sdn.Bhd.

-ExemptanforUOBKayHianPte.Ltd.1,000,000 0.46

23. HoChuChai 906,500 0.4224. Goh Mee Fong 900,770 0.4225. HLIBNominees(Tempatan)Sdn.Bhd.- PledgedSecuritiesAccountforChiaSooYee 810,800 0.3726. ChawHuanLoong 600,000 0.2827. HLBNominees(Tempatan)Sdn.Bhd.

-PledgedSecuritiesAccountforLowKaAik600,000 0.28

28. KenangaNominees(Tempatan)Sdn.Bhd.-PledgedSecuritiesAccountforGohTeckHoe

600,000 0.28

29. SimBingHan 600,000 0.2830. LianChinLan 550,000 0.25

Total: 131,568,926 60.74

statistics of shareholdings (Cont’d)

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statistiCs oF WaRRantHoldinGs as at 31 March 2016

Description : Warrants2011/2021

TotalWarrantsIssued : 50,390,800

MaturityDate : 18September2021

NumberofWarrantholders : 355

ANALYSISBYSIZEOFWARRANTHOLDINGSASPERTHERECORDOFDEPOSITORS

SizeofWarrantholdings No.ofWarrantHolders

% No.ofWarrants %

1 - 99 14 3.94 640 0.00100 - 1,000 27 7.61 11,740 0.021,001 - 10,000 60 16.90 356,300 0.7110,001 - 100,000 167 47.04 8,791,700 17.45100,001–2,519,539* 84 23.66 29,052,650 57.652,519,540andabove** 3 0.85 12,177,770 24.17Total: 355 100.00 50,390,800 100.00

Notes:-*Lessthan5%ofissuedholdings**5%andaboveofissuedholdings

128


TOP30SECURITIESACCOUNTHOLDERS(WARRANTS)ASPERTHERECORDOFDEPOSITORS

No. NameofWarrantholders No.ofWarrants %1. TeeKengJin 4,792,900 9.512. ChngSengChye(ChngHungSeng) 3,896,870 7.733. LuSimHoay 3,488,000 6.924. TamKockKay@TanKockKay 1,116,000 2.215. LimLayPeng 1,105,100 2.196. LowPakSeng 1,000,000 1.987. Ng Poh Seng 1,000,000 1.988. TehChinChing 1,000,000 1.989. LimSooIn 980,000 1.9410. KhongHengJian 950,000 1.8911. HLIBNominees(Tempatan)Sdn.Bhd.

-HongLeongBankBhdforLeeKimLang900,000 1.79

12. LaiYinSin@LaiYinSen 900,000 1.7913. SeeTengHock 900,000 1.7914. KwongYokChin 822,100 1.6315. AllianceGroupNominees(Tempatan)SdnBhd

- Pledged Securities Account for Batu Bara Resources Corporation Sdn Bhd

750,050 1.49

16. TamTzeSheong 718,000 1.4217. Mesti Juara Sdn. Bhd. 700,000 1.3918. ChuaLeeGuan 661,000 1.3119. LiewYokeMay 550,000 1.0920. LeeKaoChoon 500,000 0.9921. LeeSengHoe 430,000 0.8522. HLIBNominees(Tempatan)Sdn.Bhd.

-PledgedSecuritiesAccountforAngBakKhoi400,000 0.79

23. LeeChooiFang 400,000 0.7924. LimSongWar 400,000 0.7925. Syed Naguib Wafa Bin Syed Adwam Wafa 400,000 0.7926. Abu Bakar Bin Maidin 350,000 0.6927. LeeChuiYeok 350,000 0.6928. OngKimEe 350,000 0.6929. KohWheeLing 346,440 0.6930. GohThiamSeng 320,000 0.64

Total: 30,476,460 60.48

statistics of Warrantholdings (Cont’d)

129


AGENDA

OrdinaryBusiness1. ToreceivetheAuditedFinancialStatementsoftheCompanyforthefinancialyearended31

December 2015 together with the Reports of the Directors and Auditors thereon.(Refer to Note 8)

2. To approve the payment of Directors’ fees amounting to RM96,000/- for the financial yearended 31 December 2015.

Ordinary Resolution 1

3. Torecommendthere-electionofthefollowingDirectorswhoareretiringpursuanttoArticle83 of the Company’s Articles of Association and being eligible, have offered themselves for re-election:-

(a) Mr. Ang Chuang Juay Ordinary Resolution 2

(b)Mr.HongCheongLiang Ordinary Resolution 3

4. Tore-appointMessrs.MooreStephensAssociatesPLTasAuditorsof theCompanyuntil theconclusion of the next Annual General Meeting and to authorise the Board of Directors of the Company to determine their remuneration.


SpecialBusinessToconsiderand,ifthoughtfit,topassthefollowingasOrdinaryandSpecialResolutions:-

5. OrdinaryResolution-AuthoritytoIssueSharesPursuanttoSection132DoftheCompaniesAct,1965

“THATsubjectalwaystotheCompaniesAct,1965,theArticlesofAssociationoftheCompanyand the approvals from the relevant governmental and/or regulatory authorities, where such approval is necessary, the Directors of the Company be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company from time to time and upon such terms and conditions and for such purposes and to such person or persons whomsoever as the Directors of the Company may in their absolute discretion deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceedtenpercentum(10%)ofthetotal issuedsharecapitalof theCompanyforthetimebeing ANDTHAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.

AND THAT the Directors of the Company, whether solely or jointly, be and are herebyempowered to obtain the approval for the listing of and quotation for the additional shares so issued on the ACE Market of Bursa Malaysia Securities Berhad AND be hereby authorised to do all such acts and things including executing all relevant documents as he/they may consider expedient or necessary to complete and give full effect to the abovesaid mandate.”


NOTICEISHEREBYGIVENTHATtheThirteenth(“13th”)

AnnualGeneralMeeting(“AGM”) of ConnectCounty

HoldingsBerhad (“theCompany”) will be held at

FunctionRoom1,Level2,HotelSriPetaling,30,

Jalan Radin Anum, Bandar Baru Sri Petaling,

57000KualaLumpur,WilayahPersekutuanonThursday,

26May2016at10:00a.m.forthefollowingpurposes:-

notiCe oF annUal GeneRal meetinG

130


6. SPECIALRESOLUTION-PROPOSEDAMENDMENTTOTHEARTICLESOFASSOCIATIONOFTHECOMPANY

“THAT the following proposed amendment to the Articles of Association of the Company be andisherebyapprovedandadopted:-

Special Resolution

ArticleNo. ExistingArticle ProposedArticle

138 The Directors shall from time to time inaccordance with Section 169 of the Act cause to be prepared and laid before the Company in general meeting, such profit and loss accounts, balance sheets and reports as are referred to in the Section. The intervalbetween thecloseofa financial year of the Company and the issue of annual audited accounts, the directors’ and auditors’ report shall not exceed four (4) months. A copy of each such document in printed form or in CD-ROM form or in such other form of electronic media, shall not less than twenty-one (21) days before the date of the meeting (or such shorter period as may be agreed in any year of the receipt of notice of the meeting pursuant to Article 141, be sent to every Member of, and to every holder of debentures of the Company under the provisions of the Act or of these Articles. The requisite number of copies ofeach such document as may be required by the Exchange upon which the Company’s shares may be listed, shall at the same time be likewise sent to the Exchange provided that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any Member to whom a copy of these documents has not been sent shall be entitled to receive a copy, free of changeonapplicationattheCompany’sOffice.In the event that the annual report is sent in CD-ROM form or such other form of electronic media and a Member requires a printed form of such documents, the Company shall send such documents to the Member within fourteen (14) market days from the date of receipt of the Members’ request.

TheDirectorsshallfromtimetotimein accordance with Section 169 of the Act cause to be prepared and laid before the Company in general meeting, such profit and loss accounts, balance sheets and reports as are referred to in the Section. A copy of each such document in printed form or in electronicformat, shall not less than twenty-one (21) days before the date of the meeting (or such shorter period as may be agreed in any year of the receipt of notice of the meeting pursuant to Article 141, be sent to every Member of, and to every holder of debentures of the Company under the provisions of the Act or of these Articles. Provided that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any Member to whom a copy of these documents has not been sent shall be entitled to receive a copy, free of change on application attheCompany’sOffice.Intheeventthat the annual report is sent in electronic format and a Member requires a printed form of such documents, the Company shall send such documents to the Member within four (4) market days from the date of receipt of the Members’ request.

ANDTHAT the Directors and Secretaries of the Company be and are hereby authorised to take all steps as are necessary and expedient in order to implement, finalise and give full effect to the Proposed Amendment to the Articles of Association of the Company.”

BYORDEROFTHEBOARD

CHUASIEWCHUAN(MAICSA0777689)CHENGCHIAPING(MAICSA1032514)Company Secretaries


notice of annual General meeting (Cont’d)

131



Notes:

InformationforShareholders/Proxies

1. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson19May2016(“GeneralMeetingRecordofDepositors”) shall be eligible to attend the Meeting.

2. A member entitled to attend and vote at the Meeting is entitled to appoint more than one (1) proxy to attend and vote in hisstead(subjectalwaystoamaximumoftwo(2)proxiesateachmeeting).Whereamemberappointsmorethanone(1)proxy, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

3. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitationandtheprovisionsofSection149(1)(b)oftheCompaniesAct,1965shallnotapplytotheCompany.Thereshallbeno restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

4. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororofhisattorneydulyauthorisedinwritingor,iftheappointorisacorporation,eitherunderitssealorunderthehandofanofficerorattorneydulyauthorised.

5. Where a member is an authorised nominee as defined under the Securities Industry (Central Depository) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichthe exempt authorised nominee may appoint in respect of each omnibus account it holds.

7. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissignedoranotariallycertifiedcopyofthatpowerorauthority,shallbedepositedattheCompany’sRegisteredOfficelocatedatLevel7,MenaraMilenium,JalanDamanlela,PusatBandarDamansara,DamansaraHeights,50490KualaLumpur,WilayahPersekutuan,notlessthan48hoursbeforethetimeforholdingtheMeetingoratanyadjournmentthereof.

AuditedFinancialStatementsforthefinancialyearended31December2015

8. Thisagenda item ismeant fordiscussiononly, as theprovisionofSection169(1)of theCompaniesAct,1965doesnotrequireaformalapprovaloftheshareholdersfortheAuditedFinancialStatements.Therefore,thisagendaitemisnotputforward for voting.

PaymentofDirectors’Fees

9. TheProposedDirectors’ Fees for thefinancial year ended31December2015wasRM96,000/- (2014:RM183,355/-).TheOrdinaryResolution1, if approved, will authorise the payment of Directors’ Fees pursuant to Article 92(1) of the Articles of Association(“AA”) of the Company.

Re-electionofDirectors

10.Article83oftheAAoftheCompanystatesthatone-third(1/3)oftheDirectorsshallretirefromofficeandshallbeeligibleforre-electionateachAGM.AllDirectorsshallretirefromofficeatleastonceineachthree(3)yearsbutshallbeeligibleforre-election.

In determining the eligibility of the relevant Directors to stand for re-election at the forthcoming 13th AGM of the Company, theNominationCommittee(“NC”)hascarriedoutthefollowingassessments:-

(i) formal review of the performance of the Director, taking into account the results of the latest Board evaluations; (ii) attendance of Board meetings as well as Board Committee Meetings (where applicable); (iii) the level of contribution to the Board through his skills and experience; (iv) experience and strength in qualities; (v) his level of independence (for Independent Non-Executive Director only); and (vi) ability to act in the best interest of the Company in decision-making.

132


In linewith Recommendation 3.1 of theMalaysian Code on Corporate Governance 2012 (“MCCG2012”), the Board has conducted a separate assessment on the independence of the Independent Non-Executive Directors, the evaluation criteria adopted as well as the process of assessment by the Board have been duly elaborated in the Statement on Corporate Governance of the Annual Report 2015 of the Company.

TheBoardapprovedtheNC’srecommendationfortheretiringDirectorsi.e.Mr.AngChuangJuayunderOrdinaryResolution2andMr.HongCheongLiangunderOrdinaryResolution3 pursuant to Article 83 of the AA of the Company, respectively. All the retiring Directors have consented to their re-election, and abstained from deliberation as well as decision on their own eligibility to stand for re-election at the relevant NC and Board meetings, where applicable.

Re-appointmentofAuditors

11.TheAuditCommittee(“AC”) have assessed the suitability and independence of the External Auditors and recommended there-appointmentofMessrs.MooreStephenAssociatesPLTasExternalAuditorsoftheCompanyforthefinancialyearending31December2016.TheBoardhasinturnreviewedtherecommendationoftheACandrecommendedthesamebe tabled to the shareholders for approval at the forthcoming 13th AGM of the Company under OrdinaryResolution4. TheevaluationcriteriaadoptedaswellastheprocessofassessmentbytheACandBoard, respectively,havebeendulyelaborated in the Statement on Corporate Governance of the Annual Report 2015 of the Company.

ExplanatoryNotetoSpecialBusiness

12. AuthoritytoIssueSharesPursuanttoSection132DoftheCompaniesAct,1965

TheOrdinaryResolution5 proposed under agenda item 5 above is a renewal of the general mandate for issuance of new ordinary shares pursuant to Section 132D of the Companies Act, 1965, which was granted by the shareholders at the last Annual General Meeting.

TheCompanyhadbeengrantedageneralmandatebyitsshareholdersatthelastAnnualGeneralMeetingoftheCompanyheld on 19 June 2015 to issue and allot shares at any time to such persons in their absolute discretion without convening a generalmeetingprovidedthattheaggregatenumberofsharesissueddoesnotexceedtenpercentum(10%)oftheissuedshare capital of the Company.

TheproposedOrdinaryResolution5,ifpassed,willgivetheDirectorsoftheCompany,fromthedateoftheaboveMeeting,the authority to issue and allot ordinary shares from the unissued share capital of the Company up to an amount not exceedingintotaltenpercentum(10%)ofthetotalissuedsharecapitaloftheCompanyforthetimebeingforsuchpurposesastheDirectorsoftheCompanyconsiderwouldbeinthebestinterestoftheCompany.Therewillbenoadverseeffectonthesharepriceinsuchcases,asthenewissuancewouldnotbepricedatadiscountofmorethantenpercentum(10%)oftheweightedaveragemarketpriceforfive(5)marketdaysbeforetheprice-fixingdate.Thisauthoritywill,unlessrevokedorvaried at a general meeting, expire at the conclusion of the next Annual General Meeting of the Company.

TheauthoritywillprovidetheDirectorscertainflexibilitieswhentheneedarisestoissueadditionalsharesforanypossiblefundraisingactivities,includingbutnotlimitedtofundingfutureinvestmentprojects,workingcapitaland/oracquisitionsand,inadditiontoenhancingefficiencyinimplementingthesame,itwillreducethetimeandcostthatwouldbeinvolvedin seeking shareholders’ approval at a general meeting convened solely for such issuance of shares.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors attheTwelfthAnnualGeneralMeetingheldon19June2015andwhichwilllapseattheconclusionofthe13thAGM.

13. Special Resolution - Proposed Amendment to the Articles of Association of the Company (“ProposedAmendment”)

TheproposedadoptionoftheSpecialResolutionistostreamlinetheAAoftheCompanywiththerecentamendmentstotheACEMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad.

AbstentionfromVoting

14. All the Directors who are shareholders of the Company and entitled to Directors’ fees will abstain from voting on OrdinaryResolution1 concerning Directors’ fees at the 13th AGM.


(Incorporated in Malaysia)(Company No. 618933-D)

*I/We, ..................................................................................................................................................................... Company No./NRIC No ...........................................................................(full name as per NRIC/Certificate of Incorporation in capital letters)

of .........................................................................................................................................................................................................................................................................................................(full address)

being a member of CONNECTCOUNTYHOLDINGSBERHAD hereby appoint

.................................................................................................................................................................................. NRIC No .......................................................................................................(full name as per NRIC in capital letters)

and/ or failing him/ her,

.................................................................................................................................................................................. NRIC No ....................................................................................................... (full name as per NRIC in capital letters)

and/ or failing him/ her,

.................................................................................................................................................................................. NRIC No ....................................................................................................... (full name as per NRIC in capital letters)

and/failing*him/her,theChairmanoftheMeetingas*my/ourproxy,tovotefor*me/uson*my/ourbehalfattheThirteenthAnnualGeneralMeetingoftheCompanytobeheldatFunctionRoom1,Level2,HotelSriPetaling,30,JalanRadinAnum,BandarBaruSriPetaling,57000KualaLumpur,WilayahPersekutuanonThursday,26May2016at10:00a.m.andatanyadjournmentthereof,onthefollowingresolutionsreferredtointheNoticeofThirteenthAnnual General Meeting.

*My/Ourproxy(ies)*is/aretovoteasindicatedbelow:-

OrdinaryBusiness For Against

OrdinaryResolution1 ToapprovepaymentofDirectors’feesforthefinancialyearended31December2015

OrdinaryResolution2 Tore-electMr.AngChuangJuayasDirector(Article83)

OrdinaryResolution3 Tore-electMr.HongCheongLiangasDirector(Article83)

OrdinaryResolution4 Tore-appointMessrs.MooreStephensAssociatesPLTasAuditorsoftheCompanyandtoauthorise the Board of Directors to determine their remuneration

SpecialBusiness

OrdinaryResolution5 Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

SpecialResolution Proposed Amendment to the Articles of Association of the Company

(Pleaseindicatewithan“X”intheappropriateboxagainsteachResolutionhowyouwishyourvotetobecast.Ifnospecificdirectionastohowtheproxyshall vote, the proxy shall vote as he/she thinks fit or, at his/her discretion, abstain from voting.)

Signed this_______ day of _____________, 2016

___________________________________Signature(s)/Common Seal of Member(s)

Notes:-1. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson19May2016(“GeneralMeetingRecordof

Depositors”) shall be eligible to attend the Meeting.2. AmemberentitledtoattendandvoteattheMeetingisentitledtoappointmorethanone(1)proxytoattendandvoteinhisstead(subjectalways

to a maximum of two (2) proxies at each meeting). Where a member appoints more than one (1) proxy, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

3. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions ofSection149(1)(b)oftheCompaniesAct,1965shallnotapplytotheCompany.Thereshallbenorestrictionastothequalificationoftheproxy.Aproxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

4. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororofhisattorneydulyauthorisedinwritingor,iftheappointorisacorporation,eitherunderitssealorunderthehandofanofficerorattorneydulyauthorised.

5. Where a member is an authorised nominee as defined under the Securities Industry (Central Depository) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in onesecuritiesaccount(“omnibusaccount”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

7. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority, ifany,underwhichit issignedoranotariallycertifiedcopyofthatpowerorauthority,shallbedepositedattheCompany’sRegisteredOfficelocatedatLevel7,MenaraMilenium,JalanDamanlela,PusatBandarDamansara,DamansaraHeights,50490KualaLumpur,WilayahPersekutuan,notlessthan48hoursbeforethetimeforholdingtheMeetingoratanyadjournmentthereof.

*Deleteifnotapplicable

Numberofsharesheld

CDSaccountno.

For appointment of two proxies, percentage of shareholdings to be represented by the proxies

No.ofshares Percentage

Proxy 1

Proxy 2

Total 100%

FORMOFPROXY

Fold here

Fold here

AFFIXSTAMP

TheCompanySecretariesof

CONNECTCOUNTYHOLDINGSBERHAD(618933-D)Level7,MenaraMileniumJalan Damanlela, Pusat Bandar DamansaraDamansaraHeights50490KualaLumpurWilayah Persekutuan

2015Annual Report

Annual Rep

ort 2015

RAPID CONN INTERCONNECT (M) SDN BHDNo. 12-1 (1st Floor)Jalan Radin Bagus 9, Sri Petaling57000 Kuala Lumpur, MalaysiaTel: +6 03 9054 3776 Fax: +6 03 9055 3767

RAPID CONN (SHENZHEN) CO LTDNo. 12, Long Shan Road6th Lane, Luo Tian Social DistrictSong Gang Street, Bao An DistrictShenzhen City 518105People’s Republic of ChinaTel: +86 755 2972 6660 Fax: +86 755 2972 6744

RAPID CONN INC19571 Pauling, Foothill RanchCA 92610-2619 USATel: +1 949 951 1020 Fax: +1 949 951 8265

RAPID CONN (S) PTE LTD4012 Ang Mo Kio Ave 10 #03-07Tech Place 1 Singapore 569628Tel: +65 6841 4517 Fax: +65 6841 4519

www.connectcounty.com

(618933-D)

No. 12-1 (1st Floor)Jalan Radin Bagus 9, Sri Petaling57000 Kuala LumpurTel: +6 03 9054 3776Fax: +6 03 9055 3767

MALAYSIA

UNITED STATES OF AMERICA

SINGAPORE

ConnectC

ounty Holdings Berhad

CHINA

(618933-D)

Documents

Annual Report 2015 - Rapid Connrapidconn.org/rcweb16/wp-content/uploads/2016/05/Annual-Report-2015.pdf · Annual Report 2015 Annual Report 2015 RAPID CONN INTERCONNECT (M) SDN BHD