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 ReportA

nnual Report 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.

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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.

31



(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.

32



(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) UPHOLDINTEGRITYINFINANCIALREPORT

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