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L rEpOrT 2014

w w w. r a p i d c o n n . o r g

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

57000 Kuala Lumpur.Tel : 03-89341138Fax : 03-89341139

rapID CONN INTErCONNECT (M) SDN BHDNo. 12-1 (1st Floor),Jalan Radin Bagus 9, Sri Petaling,57000 Kuala Lumpur, Malaysia

rapID CONN INC19571 Pauling, Foothill RanchCA 92610-2619 USATel: 1-949-9511020 Fax: 1-949-9518265Email: [email protected]

rapID CONN (S) pTE LTDBlock 4012 #03-07 Tech Place 1Ang Mo Kio Ave 10, Singapore 569626Tel: 65-68414517 Fax: 65-68414519Email: [email protected]

rapID CONN (SHENZHEN) CO., LTDNo.12, Long Shan Road,6th Lane Luo Tian Social DistrictSong Gang Street, Bao An DistrictShen Zhen, China 518105Tel: 86-755-29726660 Fax: 06-755-2972673/44

(618933-D)

(618933-D)

02 Corporate Information

04 Chairman’s Statement

07 Board of Directors’ Profile

12 Statement on Corporate Governance

34 Corporate Responsibility Statement

38 Audit Committee Report

47 Nomination Committee Report

52 Statement on Risk Management and Internal Control

57 Additional Compliance Information

60 Statement on Directors’ Responsibility for Preparing the Financial Statements

61 Financial Statements

62 Directors’ Report

66 Statement by Directors

66 Statutory Declaration

67 Independent Auditors’ Report to the Members

69 Statements of Comprehensive Income

70 Consolidated Statement of Financial Position

71 Company Statement of Financial Position

72 Consolidated Statement of Changes in Equity

74 Company Statement of Changes in Equity

75 Statements of Cash Flows

77 Notes to the Financial Statements

129 Statistics of Shareholdings

131 Statistics of Warrantholdings

133 Notice of Annual General Meeting

Enclosed Proxy Form

TABLE OF CONTENTS

02

CONNECTCOUNTY HOLDINGS BERHAD(Company No. 618933-D)

ANNUAL REPORT 2014

CORPORATEINFORMATION

BOARD Of DIRECTORS

• Roy Thean Chong Yew Independent Non-Executive Chairman

• Ang Chuang Juay Executive Deputy Chairman

• Goh Kok Boon Executive Director

• Hong Cheong Liang Independent Non-Executive Director

• Lee Choon Kwong Non-Independent Non-Executive Director

COmpANY SECRETARY

• ChuaSiewChuan (MAICSA 0777689)

• ChengChiaPing (MAICSA 1032514)

AUDIT COmmITTEE

• HongCheongLiang(Chairman)• RoyTheanChongYew• LeeChoonKwong

NOmINATION COmmITTEE

• RoyTheanChongYew(Chairman)• HongCheongLiang• LeeChoonKwong

REmUNERATION COmmITTEE

• RoyTheanChongYew(Chairman)• AngChuangJuay• HongCheongLiang

RISK mANAGEmENT COmmITTEE

• AngChuangJuay(Chairman)• GohKokBoon• NicholasCheeTiongKing

AUDITORS

Moore Stephens Associates & CoSuite5.2A,Level5,Menara Pelangi,No.2,JalanKuning,TamanPelangi,80400JohorBahru,JohorDarulTakzimTel:(607)3338800Fax:(607)3346151

SHARE REGISTRAR

SecuritiesServices(Holdings)SdnBhdLevel7,MenaraMilenium,JalanDamanlela,Pusat Bandar Damansara,DamansaraHeights50490KualaLumpur,Wilayah PersekutuanTel:(603)20849000Fax:(603)20949940

pRINCIpAL BANKER

Malayan Banking BerhadAmBank Berhad

REGISTERED OffICE

Level7,MenaraMilenium,JalanDamanlela,Pusat Bandar Damansara,DamansaraHeights,50490KualaLumpur,Wilayah PersekutuanTel:(603)20849000Fax:(603)20949940

BUSINESS OffICE

No. 12-1 (1st Floor), JalanRadinBagus9,Sri Petaling,57000KualaLumpur,Wilayah PersekutuanTel:(603)89341138Fax:(603)89341139

STOCK ExCHANGE LISTING

ACE Market of Bursa Malaysia Securities BerhadBursaCode:0102ReutersCode:0102.KLBloombergCode:CCHBMKDateofListing:20October2005

OTHER INfORmATION CORpORATE WEBSITE:

http://www.rapidconn.org/

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ANNUAL REPORT 2014

Corporate Information(cont’d)

ConnectCountyHoldingsBerhad(“CCHB”)isaninvestmentholdingcompany.Theprincipalactivitiesofitssubsidiariesarethatofdesign,manufacture,services,sales,andmarketingofcables,connectorsandrelatedproducts.CCHBisheadquarterdinMalaysiawithsubsidiariesoperating inChina,theUnitedStatesofAmericaandSingapore.TheCompany’soverseassubsidiariesareRapidConn(Shenzhen)Co.Ltd.(“RCC”),RapidConnInc.(“RCI”),andRapidConn(S)Pte.Ltd.(“RCS”).

Ouradvancedinterconnectandcablesolutionscaterfordiverseindustriesrangingfrommedical,automotive,entertainmentandtelecommunication.Wealsoofferverticallyintegratedservicesforin-housepartsandsourcingactivities.Ourhighlyautomated manufacturing facilities and product development are undertaken by RCC, while RCI undertakes research and development and design. All subsidiaries have their own portfolio of customers and are solely responsible for their own marketing of cables, connectors and related products.

On26September2014,theCompanyhadannouncedthesigningofanagreementforSaleandPurchaseofRedeemableConvertiblePreferenceShareswithMr.TanSeeKuyandMyGenBizzBerhad(“mGB”) for the sale of 900,000 redeemable convertiblepreferencesharesofRM1.00eachinMGBcurrentlyheldbytheCompany(“Sale Shares”)toMr.TanSeeKuyforatotalconsiderationofRM900,000/-,subjecttothetermsandconditionsthathadbeenagreeduponbetweenallparties.

On14October2014,Mr.TanSeeKuyconvertedallhis900,000redeemableconvertiblepreferencesharesinMGBinto900,000ordinarysharesofRM1.00eachofMGB.TheCompanyalsoconvertedall itsremaining500,000redeemableconvertible preference shares in MGB to 500,000 ordinary shares of RM1.00 each of MGB.

Upon completion of the preference share conversion, the Company’s stake in MGB was 551,000 ordinary shares representing approximately 36.73% and MGB had ceased to be the subsidiary of the Company but remained as an associated company of the Company.

On11May2015,theCompanyhasannouncedthatithadon7May2015disposedallitsequityinterestof551,000ordinaryshares of RM1.00 each representing 36.73% held in MGB, an associate company, at a total consideration of RM1.00 (Ringgit Malaysia:One)onlytoMr.TanSeeKuy.Uponthat,MGBhasceasedtobeanassociatecompanyoftheCompanywitheffectfrom 7 May 2015.

CCHB

Interconnect Solutions Provider

Rapid ConnInterconnect (M)

Sdn Bhd(Dormant)

Rapid Conn (S)Pte. Ltd.

(Singapore)

Rapid Conn Inc.(USA)

Rapid Conn(Shenzhen) Co. Ltd.

(China)

Borderless Fame Sdn Bhd

(Dormant)

100%

100%

HS Co., Ltd.(China)

60%

04


ANNUAL REPORT 2014

CHAIRMAN’SSTATEMENT

On behalf of the Board of Directors, I am pleased to present to you the Annual Report and the Audited financial Statements of ConnectCounty Holdings Berhad (“CCHB” or the “Company”) for the financial year ended (“fYE”) 31 December 2014.

fINANCIAL REVIEW 2014 AND HIGHLIGHTS

Sales

FortheFYE31December2014,CCHBanditssubsidiaries(the Group) recorded a turnover of RM52.6 million as compared to RM52.8 million in the previous year. Global Set-Top-Box(STB)andBroadband(BB)marketsarestrugglingto maintain its shipments with European markets which are still lingering from its crisis since 2008 and USA markets on slightupwardtrends.STBandBBmarketsarefacinganewparadigm shift of moving most of their design and product developmenttoOriginalDesignManufacturer(ODM).China’sdomestic market growth has been slow due to factors such as expectation of prices below standard market pricing and the arduous long payment credit terms.

Aggressive sales campaigns into new industries like Automotive and White Goods have been launched early 2014. Since the sales cycle in this industry ranges from 9 months to 3 years, results of our campaign efforts materialising into sales can only be seen from 2015 onwards. Gross margin

ThegrossmarginfortheFYE31December2014standsat22.5%, a slight decrease if compared to the previous year’s 23.4% in 2013 due to the escalating direct manufacturing costs such as increases in the minimum wage rate, labour shortages and the cost of rental in Shenzhen, where ourGroup’smajormanufacturing facility is located. As partof our strategy to reduce costs, increase productivity and efficiency, and to remain price competitive, we are periodically reviewing our cost structure and manufacturing processes to identifyareasofimprovement.Towardsthisend,wecontinueimplementing cost reduction initiatives as outlined on page 5andexpandingourportfolioofexisting/newcustomersinthe high margin products markets.

Group’s overall performance

TheGroup’sturnoverin2014hasbeenconsistentwiththeprevious year’s result. In terms of financial performance, the Group had recorded only a slight dip in revenue, if compared to the previous year’s (0.4%), and incurring a loss before tax ofRM2.7millionafterincorporatingadjustmentforlossondeemed disposal of a subsidiary for RM1.2 million, and a deposit of RM500,000 placed by its now dormant subsidiary forafailedbusinessventure.ThedepositwaspaidbyCCHBand was deemed unrecoverable, and hence written off in 2014.Theoverallresultwasalsoadverselyaffectedbyabaddebt of RM323,078 that was written off during the year, which was incurred by one of our overseas subsidiaries.

However, after adjusting for deferred tax, our overallperformance was an after tax loss of RM3.0 million against an after tax loss of RM1.1 million in the previous year. Notwithstanding the slight dip in revenue in 2014, the Group would have recorded a higher gross margin (and profitability) if not for the escalating manufacturing costs experienced in that year.

THE GROUp’S 5-YEAR REVENUE TREND

fYERevenue

(Rm)Rm’000

Revenue(USD

Equivalent)USD’000

Weighted Average

Rm : USD1

Gross margin

%

2010 61,118 18,922 3.23:1 21.45

2011 51,420 16,587 3.10:1 17.86

2012 53,526 17,266 3.10:1 18.12

2013 52,792 16,498 3.20:1 23.39

2014 52,610 16,089 3.27:1 22.48

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ANNUAL REPORT 2014

Chairman’s Statement(cont’d)

The Group continues its costs reduction exercise including:

a. Improving the employee efficiency program to further enhance productivity;

b. Reviewing and updating the production remuneration scheme for production workers in its subsidiary in China,RapidConn(Shenzhen)Co.,Ltd.(“RCC”),wherethe employees would be remunerated according to productivity;

c. Vertical integration of manufacturing process to increase profit margin and quality control;

d. Progressive automation of its manufacturing process – potentially new areas of automation were under review during the year which will not only reduce manufacturing costs but also improve space utilisation;

e. Continuous investment in research and development for product innovation;

f. Re-engineering of products to increase the efficiency of material and labour consumption; and

g. Outsourcingofmanufacturingactivitiestocontractorslocated in the inland provinces of China.

The Group’s Core Business as the Interconnect Solutions provider

TheGroupiswellpositionedforgrowthglobally,andtotakeonits competitors in the highly competitive interconnect market.

TheGroup’sefforttoimproveitscompetitivenessgloballyisreflectedinthefollowing:

a. Cultivated a customer-focused culture by liaising very closely with our customers world-wide in order to meet their needs and expectations in both customised cable and connector designs;

b. Created a strategic advantage over most of our competitors where we are able to obtain our products directly from RCC which has resulted in faster leadtimes and relatively lower costs. In contrast, many of RCC’s competitors in the US have engaged suppliers in Asia for their manufacturing needs, which has resulted in relatively higher prices and slower turnaround time;

c. Established a chain of support within RCC, which spans its entire value chain, from engineering, design, and logistics to warehousing, as compared to many of our competitors who only have a local sales office.

d. Established expertise and versatility in areas of product design and customisation, which enabled us to develop customised cables for our overseas customers in various industries (SatelliteModems, Set Top Box,Fitness Sport Watches, Smart Watches, FireProof SecurityLockers,HouseBuglaryAlarms,Bloodpressurechecking instruments etc);

e. RCC, through its Research and Development team, is currentlydevelopingthelatestUSB3.1TypeCcablewhich is expected to replace all current USB cables by 2016; and

f. Successfully attaining sought after certifications by its manufacturing concerns;1. RCC is an adoptor of USB-HDMIOrganization

Standards which gives it access to all the latest specifications.

2. RCC is MFI certified for Apple products which gives us the oppor tunity to obtain Apple specifications for cables, etc. Additionally, RCI is working with RCC to secure approval from Apple which will enable RCC to manufacture Apple certified cables.

Strategic Business plans

TheGrouphasalsoembarkedonseveralinitiativesthatwillincrease overall sales while increasing profitability, by way of two strategic business plans – the sales growth plan and the margin management plan.

1. Sales Growth plans As our core industry has always been in theHome

Entertainment business, we are now venturing into other key industries while increasing our portfolio of customers across different markets geographically. We are currently working with a few contract manufacturers who are servicing OEMs in the smart connecteddevices industry (i.e. mobile phones, tablets, smart watches, etc.). We have also managed to penetrate the White Goods Market as we have secured key accounts with various divisions in Philips, Panasonic UKandDyson,amongothers.WithourfactorybeingsuccessfullyTS16949certified,wehavebeenworkingon new opportunities and have started supplying wire harnesses for in-car breath analyzers and carentertainment systems.

We have also undertaken the initiative to expand further into our existing markets such as the USA, Canada,TaiwanandChina.ThoughwehavesuccessfullyestablishedsalesrepresentativesinTaiwan,partsofChina and the US, we will continue to expand our reach into the local markets of these countries, and beyond.

We have also formed a local sales team in 2013 to expand our market in China and there has been a concerted effort to improve domestic sales by expanding our portfolio of customers in key industries and across different regions in China. It is estimated that 20% of our sales in the core business will come from the Chinese market by 2015. Apart from the intense competition, our challenges will be the funding of working capital needed for credit sales as well as managing the credit risk controls over trade receivables.

06


ANNUAL REPORT 2014

2. margin management plans

Efforts have been taken to increase the mix of higher margin products in our sales, hence our diversification into new and more lucrative industry markets like the White Goods and Automotive. Consequently, we have managed to maintain a reasonable gross margin at 22.5% in 2014 despite the surge in labour costs in China.

Soldering, one of the most labour intensive process, has been replaced by our new auto-soldering machine. A production worker doing manual soldering can only achieve 250 pieces per hour whereas 500 to 800 pieces can be easily achieved using an automated soldering machine. Another potential automated machine that we are looking to invest in is the Autocut, StripandTintDipmachine.Onesuchmachinedoesthe job of 3 production workers and would reduceworkstation space.

fUTURE OUTLOOK AND GROUp pROSpECTS

InitsJanuary2015report,Bishop & Associates forecasted that 2015 is poised to be another growth year of between 3 and 5%, from 2014 which saw the industry sales of cable assemblies soared to nearlyUS$136billion. Theworld’s interconnectmarket is expected to continue its positive growth from now till 2018 with the improving global economic conditions and thecontinuedproliferationofelectronicsworldwide.Enjoyingthe highest growth in revenues since 2010, the global market for broadband consumer premises equipment (CPE) achieved nearly US$11 billion in 2014, according to IHS Technology. Worldwide,theset-topbox(STB)marketisexpectedtopeakat US$265 million in 2015 before softening.

According to the semi-annual report released by the Consumer Electronics Association (CEA), the consumer electronics industryisexpectedtoenjoyexponentialboomoverthenext5years.Revenuesfortheindustryareprojectedtogrowby3% in 2015 to reach US$223.2 billion. New technologies in this industry include smartphones, tablets and wearables such as health and fitness devices, smartwatches and smart eyewear, are expected to contribute almost US$11 billion in revenue to the overall consumer electronics market in 2015. CCHBhasbeenworkingwithkeyplayersinthisindustry,tospecially design and customise cables and charging cables forthesesmartconnecteddevices.Toenhanceourcapabilityand expertise in this industry, our factory has been MFi (Made for iPhone, iPad or iPox) certified in 2014.

Chairman’s Statement(cont’d)

After attaining the coveted ISO/TS 16949:2009, anAutomotive Industrial Quality Management System in 2013, we have successfully started working on a few automotive projects andwill continue increasing our penetration intothis exclusive industry. IHS Automotive forecasted global automotive sales for 2015 to reach US$88.6 million, an increase of 2.4 percent over 2014, continuing an unbroken five-year run of sales recovery and growth since the Great Recession in 2009.

Garnering a few customers in the White Goods industry as far back as 2011, CCHBwill continue to enhance itsreputation and strengthen its market position in this industry. More than 600 million appliances have been shipped worldwide in 2014 alone for this multi-billion dollar industry. Appliances in this category include home laundry appliances, ovens,dishwashers,refrigerators,freezers,heatersandairconditioning units.

Inarecentannouncementmade,CCHBhasalsoembarkedon a corporate exercise for the proposed acquisition of the entire equity interest in Kejuruteraan Asastera Sdn. Bhd.Thecompletionofthisacquisition,ifsuccessful,willresultinthe Group expanding its core business to include electrical, mechanical and telecommunication engineering contracting.

In summary, the Board of Directors is optimistic that the financial performance for 2015 will continue to be positive given the favourable economic outlook, the expected and continuous growth of the world’s interconnect market, and our successful penetration into the lucrative white goods and automotive markets.

AppRECIATION

OnbehalfoftheBoardofDirectors,Iwishtoextendmysincerethanks to all our valued customers, financiers, business associates, Government authorities and shareholders for their continue support, co-operation and confidence in the Group. I would also like to convey my sincere appreciation and gratitude to my fellow Directors (past and present), the management and staff for their dedication and commitment to the Company.

Roy Thean Chong YewIndependent Non-Executive Chairman22 April 2015

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ANNUAL REPORT 2014

BOARD OFDIRECTORS’ PROFILE

ROY THEAN CHONG YEWIndependent Non-Executive ChairmanMalaysian, aged 44

Date of appointment as Director : 29September2014

Length of service since the date of : 7monthsappointment(as at 22 April 2015) Board Committee(s) served on : • MemberoftheAuditCommittee • ChairmanoftheNominationCommittee • ChairmanoftheRemunerationCommittee

Academic/ professional Qualification(s): • MemberoftheMalaysianInstituteofCertifiedPublicAccountants(“mICpA”) • MemberoftheMalaysianInstituteofAccountants(“mIA”) • CharteredMemberofInstituteofInternalAuditorsofMalaysia(“CmIIA”)

present Directorship(s) in other public : JAGBerhad,apubliclistedcompany.Listed Companies

Working experience: Mr.RoyTheanstartedembarkingonhiscareerpathinyear1994withPKFMalaysia.Afteraccumulatingextensiveworkingexperienceinhisfield,Mr.RoyTheanleftPKFMalaysiaasanAuditManagerinyear2003tojoinaprofessionalservicesfirm, Russell Bedford Malaysia Business Advisory Sdn. Bhd. for another six (6) years, rising to the position of an Executive Director.Heisatpresentinthecommercialline,playingtheroleofanExecutiveDirectorofJIWAGroupofCompaniesthatisinvolvedinmanufacturingandprojectmanagementactivities.

Time committed:

Mr.RoyTheanattendedone(1)BoardofDirectors’MeetingoftheCompanyheldinthefinancialyearended2014subsequentto his appointment to the Board.

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ANNUAL REPORT 2014

ANG CHUANG JUAYExecutive Deputy Chairman Singaporean, aged 57

Date of appointment as Director : 18August2003

Length of service since the date of : 11years8monthsappointment(as at 22 April 2015) Board Committee(s) served on : • MemberoftheRemunerationCommittee • ChairmanoftheRiskManagementCommittee

Academic/ professional Qualification(s) : BachelorDegreeinEngineeringfromtheNationalUniversityofSingapore

present Directorship(s) in other public : N/AListed Companies

Working experience: Mr.AngbeganhiscareerwithWearnesTechnologyastheHeadofitsPrintedCircuitBoardassemblyoperations.HeremainedwiththeCompanyfor6yearsthroughoutwhichheobtainedextensiveexposureinsurfacemounttechnology(“SmT”), floppy diskdrive(“fDD”)andharddiskdrive(“HDD”)operation.HewassecondedtoTaiwantoheadtheproductionunitandwassubsequentlysenttoChinatosetuptheFDDoperation.HealsoworkedastheManagingDirectorofaUIITcompanybasedin Singapore specialising in networking.

AfterthetakeoveroftheUKITCompanybyanotherfirm,hebecameaconsultanttoNS-TechCo.Ltd.HistalentsandnaturaldrivewasspottedbythefoundingmemberofNS-TechCo.Ltd.andwasropedintoassistintheexpansionintotheUSAandsetupapresenceinSingapore.NotsatisfiedwithmerelybeingasubcontractorforOEMsandwithhismindfirmlysetonworking in the forefront technology with MNCs, he decided to pursue his own goals and visions by divesting his interests in NS-TechCo.Ltd.andthereafterformedConnectCountyHoldingsBerhad(“CCHB”).

Time committed:

Mr. Ang attended all six (6) Board of Directors’ Meeting of the Company held in the financial year ended 2014.

Board of Directors’ Profile(cont’d)

09


ANNUAL REPORT 2014


GOH KOK BOONExecutive DirectorMalaysian, aged 41

Date of appointment as Director : 29September2014

Length of service since the date of : 7monthsappointment(as at 22 April 2015) Board Committee(s) served on : • MemberoftheRiskManagementCommittee Academic/ professional Qualification(s): • BachelorofAppliedScience(Honours)inElectricalEngineeringfromUniversity

ofWindsor,Ontario,Canada • HewasalsolistedintheDean’sHonourRollin1999


Working experience: Mr.Gohbeganhiscareerin2000asaprojectengineerwithamechanicalandelectricalcontractingfirmandhasaccumulatedmorethan15yearsexperienceinthefieldofmechanicalandengineeringrisingtotherankofanexecutivedirector.Healsoheld key positions in a retail, food and beverage business.

Time committed:

Mr. Goh attended one (1) Board of Directors’ Meeting of the Company held in the financial year ended 2014 subsequent to his appointment to the Board.

10


ANNUAL REPORT 2014

HONG CHEONG LIANGIndependent Non-Executive DirectorMalaysian, aged 36

DateofappointmentasDirector : 30October2014

Length of service since the date of : 6monthsappointment(as at 22 April 2015) Board Committee(s) served on : • ChairmanoftheAuditCommittee • MemberoftheNominationCommittee • MemberoftheRemunerationCommittee

Academic/ professional Qualification(s): • BachelorofManagement(Hons)UniversitiTunAbdulRazak,KelanaJaya,Selangor, Malaysia

• MastersofBusinessUniversityofSouthAustralia,Adelaide,SouthAustralia,Australia

• MemberoftheMalaysianInstituteofAccountants(“mIA”) • MemberoftheCertifiedPractisingAccountants,Australia(“CpA”) • AnassociatememberofInstituteofInternalAuditorsinMalaysia • AnapprovedGSTTaxAgentunderSection170ofGoodsandServicesTax

Act(“GST Act ”), 2014


Working experience: HecommencedhiscareerasanauditassistantwithRussellBedfordLC&Company(“RBLC”)in2004.HeiswellexposedintheareaofinternalauditsofPublicListedCompanies(“pLCs”), external financial audits, tax, liquidation, financial modeling andcorporateadvisory.SomeofhissignificantassignmentsincludeperforminginternalauditsforvariousPLCs,conductingvarious financial due diligences for merger and acquisition exercise and developing a financial model for a national level HighImpactProject.

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,andactedasFinanceManagerof a large manufacturing corporation based in P.R. China.

Time committed:

Mr.Hongattendedone(1)BoardofDirectors’MeetingoftheCompanyheldinthefinancialyearended2014subsequentto his appointment to the Board.


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ANNUAL REPORT 2014


LEE CHOON KWONGNon-Independent Non-Executive Director Malaysian, aged 47

Date of appointment as Director : 7November2014

Length of service since the date of : 5monthsappointment(as at 22 April 2015) Board Committee(s) served on : • MemberoftheAuditCommittee • MemberoftheNominationCommittee

Academic/ professional Qualification(s): DiplomainInstituteTechnologyIndustry present Directorship(s) in other public : N/AListed Companies

Working experience: HewaspreviouslytheManagingDirectorofCendanaJayaSdn.Bhd.from1993to1996andwasinvolvedinthewiringtapebusiness.From1994to1997,hewasaDirectoratUltimateLaserDiscSdnBhdandaManageratU-TaTrading.Thereafter,hejoinedJaringMetalIndustriesSdnBhdinOctober1997astheGeneralAffairsManager.HeiscurrentlyappointedastheGeneralAffairsDirectorsince2010.LeeisresponsibleforliaisingwithGovernmentauthoritiesandalsotaskedwithsalesandmarketingobjectives.Heisalsoresponsibleforsupplychainactivities.

Time committed:

Mr.Leeattendedone(1)BoardofDirectors’MeetingoftheCompanyheldinthefinancialyearended2014subsequenttohis appointment to the Board.

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ANNUAL REPORT 2014

TheBoardofDirectorsrecognisesthatcorporategovernanceisofparamountimportanceinensuringtheCompanyismanagedin the best interest of the shareholders.

TheBoardispleasedtoprovidethisstatementwhichoutlinewithanoverviewofthemannerinwhichtheGrouphasappliedthe principles and the extent of compliance with the best practices as advocated by the Malaysian Code on Corporate Governance2012(“mCCG 2012”) under the stewardship of the Board, throughout the financial year under review.

ThisstatementalsoservesasacompliancewithRule15.25oftheACEMarketListingRequirements(“ACE LR”) of Bursa MalaysiaSecuritiesBerhad(“Bursa Securities”).

(I) ESTABLISH CLEAR ROLES AND RESpONSIBILITIES

1. Clear functions of the Board and management

Board of Directors (“the Board”)

TheBoard is responsible for the leadership, oversight and the long-term success of theGroup. TheBoard 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.

TheBoardhasreservedcertainitemsforitsreviewincludingtheapprovalofGroupstrategicplans,financialstatements,dividendpolicy, riskmanagement,significantacquisitionsanddisposals, investments insignificant jointventures,significant property transactions, significant capital expenditure, dividends and board appointments.

TheBoardhasalsodelegatedcertainresponsibilitiestootherBoardCommittees,whichoperatewithinclearlydefinedTermsofReference(“TOR”). Standing committees of the Board include the Audit Committee, Nomination Committee, RemunerationCommitteeandRiskManagementCommittee.TheBoardreceivesreportsat itsmeetingsfromtheChairmanofeachcommitteeoncurrentactivitiesanditisthegeneralpolicyoftheCompanythatallmajordecisionsbe considered by the Board as a whole.

SeniorManagementTeam

TheBoardisdulyassistedbytheManagementoftheCompany,namelytheSeniorManagementTeam.TheSeniorManagementTeamconsistsofsenioremployeesholdingthefollowingpositions:-

(i) Executive Deputy Chairman; (ii) Executive Director; and(iii) ChiefFinancialOfficer.

TheprincipalresponsibilitiesoftheSeniorManagementTeamareasfollows:-

• Developing,co-ordinatingandimplementingbusinessandcorporatestrategiesfortheapprovaloftheBoard;• ImplementingthepoliciesanddecisionsoftheBoard;• Overseeingtheday-to-dayoperationsoftheGroup;• Toparticipateinvariousmanagementcommitteesorworkingcommitteesfortheeffectivedischargeofduties

and functions; • ToattendBoardand/orBoardCommitteesmeetingstoadviseandfurnishtheBoardand/orBoardCommittees

withinformation,report,clarificationsasandwhenrequiredontheagendaitemstobetabledtotheBoardand/orBoardCommittees,toenabletheBoardand/orBoardCommitteestoarriveatadecision.

STATEMENT ONCORPORATE GOVERNANCE

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ANNUAL REPORT 2014

Statement onCorporate Governance

(cont’d)

(I) ESTABLISH CLEAR ROLES AND RESpONSIBILITIES (CONT’D)

2. Clear Roles and Responsibilities of the Board

TheBoardhasreservedaformalscheduleofmattersforitsdecisionmakingtoensurethatthedirectionandcontrolof the Group is firmly in its hands. It provides effective leadership and manages overall control of the Company and its subsidiarycompaniestheGroup’saffairsthroughthedischargeofthefollowingprincipaldutiesandresponsibilities:-

(a) Reviewing and adopting a strategic plan for the Company

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.

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

(1) ProposedventureintodirectsellinganddistributionofhealthandenergydrinkproductsinVietnam,Laos,CambodiaandMyanmarwithVitaxelSdn.Bhd.,asubsidiaryofHoWahGentingBerhad;

(2) Proposed acquisition of up to sixty per centum (60%) equity interest in two China companies specialising in manufacturing of electronic parts and connectors; as well as manufacturing and trading of cables and connectors;

(3) Proposed formation of new wholly-owned subsidiary by the name of Borderless Fame Sdn. Bhd.;

(4) ProposedventureintomarketingofMyBrandApp,apersonalmobileapplicationsoftwarewithGenBizzInc.(USA)videtheformationofajointventurecompanyknownasMyGenBizzBerhad;

(5) ProposedFundRaisingexerciseviatheissuanceof IrredeemableConvertibleUnsecuredLoanStocks(“ICULS”)eitherbytheCompanyorMyGenBizzBerhad;and

(6) Proposed Private Placement of up to 34,358,500 new ordinary shares of RM0.10 each to independent third party investors to be identified.

(b) Overseeing the conduct of the Company’s business

TheBoardmonitorstheperformanceofManagementonaregularbasisvidetheinsertionofrelevantagendaitemintheBoardMeetings.TheExecutiveDeputyChairmanisrequiredtobrieftheBoardontheoperationalperformanceoftheGroupwhiletheChiefFinancialOfficer(“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.

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

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

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ANNUAL REPORT 2014


2. Clear Roles and Responsibilities of the Board (Cont’d)

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

Risk management Committee (“RmC”)

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.

TheRMC ischairedbyMr.AngChuangJuay, theExecutiveDeputyChairmanand ismadeupof theSeniorManagementTeam.ThecompositionoftheRMCisasfollows:-

Name position Designation

Mr.AngChuangJuay Chairman Executive Deputy Chairman

Mr.GohKokBoon Member Executive Director

Mr.NicholasCheeTiongKing Member ChiefFinancialOfficer

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) Succession planning

TheBoardrecognisesthatsuccessionplanningisanongoingprocessdesignedtoensurethattheGroupidentifiesanddevelopsatalentpoolofpersonnelthroughmentoring,trainingandjobrotationforhighlevelmanagementpositionsthatbecomevacantduetoretirement,resignation,deathordisabilityand/ornewbusinessopportunities.

Succession move 2014

During the financial year under review, there were substantial changes to the Board composition following the resignations of certain Directors, both executives and non-executives. In view thereof, the Board has undertaken astructuredprocessknownas“Succession move 2014” to ensure the orderly and balance succession of Board membersaswellastopexecutivemanagement,withthefollowingappointments:-

• AppointmentofMr.RoyTheanChongYewandhissubsequentelectionas IndependentNon-ExecutiveChairman;

• AppointmentofMr.GohKokBoonasExecutiveDirector;• AppointmentofMr.HongCheongLiangasIndependentNon-ExecutiveDirector;and• AppointmentofMr.LeeChoonKwongasNon-IndependentNon-ExecutiveDirector.

Statement onCorporate Governance(cont’d)

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ANNUAL REPORT 2014


(cont’d)



(d) Succession planning (Cont’d)

Succession move 2014 (Cont’d)

Name of Directors Designation Date of Appointment

Date of Resignation

RoyTheanChongYew Independent Non-Executive Chairman

29 September 2014 Not applicable

GohKokBoon Executive Director 29 September 2014 Not applicable

HongCheongLiang Independent Non-Executive Director

30October2014 Not applicable

LeeChoonKwong Non-Independent Non-Executive Director

7 November 2014 Not applicable

LimWeeKiat Non-Independent Non-Executive Director

Not applicable 31 December 2014

OngKooiTatt Independent Non-Executive Director

Not applicable 7 November 2014

TanNyapKeong@TonyTan

Independent Non-Executive Chairman

Not applicable 31October2014

WongKeetLoy Independent Non-Executive Director

11 August 2014 31October2014

DatukNorazmanBinHajiHamidun


Not applicable 30 September 2014

Megat D.Shahriman Bin Dato’ Zaharudin

Executive Director Not applicable 30 September 2014

LaiSoonYip ExecutiveDirector/Group Chief

ExecutiveOfficer

Not applicable 29 May 2014

(e) Overseeing the development and implementation of a shareholder communications policy for the Company TheBoard isawareoftheGroup’scommitmenttoenhancing longtermshareholders’valuethroughregular

communication with all its shareholders, regardless of individual shareholders and institutional investors (hereinafterreferredtoas“the Shareholders”.)

With the completion of Succession Move 2014, the Board would formalise the adoption of a Shareholders’ Communication Policy during the financial year ending 31 December 2015 in order to provide guidance as well as ensuring a consistent approach towards the Company’s communication with the Shareholders.

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ANNUAL REPORT 2014



(f) Reviewing the adequacy and the integrity of the Group’s internal control systems

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.

3. Code of Ethics and Conduct

TheBoardhasadoptedaCodeofEthics(“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.

TheCodehasbeenentrenchedintotheBoardCharterandwillbereviewedbienniallyorasandwhenitisrequiredtoensure the information remains relevant and appropriate.

ThedetailedBoardChartercanbedownloadedfromtheCompany’swebsiteatwww.rapidconn.org.

Handling of Reported Allegation(s)

TheAuditCommitteeisresponsiblefortheinterpretationandsupervisionoftheenforcementoftheCode.Theactionto be taken by the Group in response to a report of concern under the Code will depend on the nature of the concern. TheAuditCommitteeshallreceiveinformationoneachreportofconcernandensurethatfollow-upactionsbetakenaccordingly.

Communication and feedback Channels

Report(s)canbemadeverballyorinwritinginthefollowingmanner:-

• ByLetter – tobeforwardedinasealedenvelopetothebelowmentioneddesignatedpersonlabellingwitha legendof“To be opened by the Audit Committee Chairman/ Executive Deputy Chairman/ Executive Director/ Chief Financial Officer only” (where applicable); or

• ByEmail – tobeforwardedvidesecureemailtothebelowmentioneddesignatedpersonwiththeheadingof “For the eyes of the Audit Committee Chairman/ Executive Deputy Chairman/ Executive Director/ Chief Financial Officer only” (where applicable).


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ANNUAL REPORT 2014


(cont’d)


3. Code of Ethics and Conduct (Cont’d)

Communication and feedback Channels (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]

Postal Address

No. 12-1 (1stFloor),JalanRadinBagus9,SriPetaling,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]

Postal Address

No.12-1(1stFloor),JalanRadinBagus9,SriPetaling,57000KualaLumpur,WilayahPersekutuan

4. Strategies to promote Sustainability

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.

TheBoardisawareoftheimportanceofbusinesssustainabilityandhaveensuredManagementimplementsvariousstrategiestopromotesustainabilityoftheGroup.OneofthestrategyundertakenbyManagementwouldbetosolidifythe quality of the product offerings of the Group by obtaining external certifications.

ISO/TS 16949:2009 Certification

TheCompany’swholly-ownedsubsidiary,namelyRapidConn(Shenzhen)Co.Ltd.(“RCC”) has successfully obtained the following certification from NQA, a the leading independent provider of environmental simulation testing, inspection and certification services.

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ANNUAL REPORT 2014


4. Strategies to promote Sustainability (Cont’d)

ISO/TS 16949:2009 Certification (Cont’d)

Certification Scope of work Validity

ISO/TS16949:2009 Themanufacture of connecting wires for theautomotive industry

16June2013to15June2016

ISO/TS16949wasdevelopedbyThe InternationalAutomotiveTaskForce (IATF), inconjunctionwith International

OrganizationforStandardization(ISO)supportbyJapanAutomotiveManufacturersAssociationInc.(JAMA).

ThisCertificationpursuanttoISO/TS16949isintendedtobuilduporenforcetheconfidenceofa(potential)customertowardsthesystemandprocessqualityofa(potential)supplier.TheregistrationtoISO/TS16949isarequirementfor any company wanting to supply its products to the automotive industry.

ThepositionofRCCas theaccreditedsupplierofconnectingwires for theautomatic industry inChinahasbeensolidified with the receipt of this Certification.

5. Access to Information and Advice

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.ThisistoenabletheDirectors to obtain further explanations, where necessary, in order to be adequately informed before the meeting.

TheDirectorsmayalsointeractdirectlywith,orrequestfurtherexplanation,informationorupdates,onanyaspectofthe 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 Company Secretary,whoisresponsibleforensuringthattheBoardproceduresarefollowed.TheSecretaryisalsoresponsibleforproviding advice to the Board on the Group’s legal and statutory obligations, while highlighting, if any, non-compliance withregardstostatutoryregulationsandpoliciesaffectingtheGroup.TheDirectorsmay,attheGroup’sexpense,also seek external independent professional advice, to assist them in making informed decisions with regards to the Group’s affairs.

6. Company Secretaries

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.


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ANNUAL REPORT 2014


6. Company Secretaries (Cont’d)

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. Chua Siew Chuan, 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. Cheng Chia ping, 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.

TheBoardissatisfiedwiththesupportrenderedbytheCompanySecretariestotheBoardindischargeofitsrolesandresponsibility.TheCompanySecretariesplayanadvisoryroletotheBoardontheCompany’scontribution,Board’spolicies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations.

TheCompanySecretariesattendthemeetingsoftheBoardandtheBoardCommitteeandensurethatthemeetingsare properly convened and the deliberations at the meetings are well captured and minuted.

7. Board Charter and Overall Responsibility

TheCompanyhasadoptedaBoardCharterwhichgovernshowtheCompanyconductsitsaffairs.TheBoardCharterisapplicable 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.


(cont’d)

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ANNUAL REPORT 2014


7. Board Charter and Overall Responsibility (Cont’d)

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

• Objectives;• OverviewofDirectors’Functions;• CompositionoftheBoard;• RoleoftheBoard;• AppointmentandTenureofOffice;• RemunerationFramework;• InductionforNewDirectors;• BoardProcedures;• RightsofDirectors;• MattersReservedforBoard’sDecision;• InternalControlincludingRiskManagement;• TimeCommitmentofDirectors;• Directors’Training;• BoardCommittees;• SeniorIndependentDirector;• ShareholdersandInvestorRelations;• CompanySecretary;and• ChangestoBoardCharter.

TheBoardwillreviewtheBoardCharterbienniallyand/orfromtimetotimeandmakeanynecessaryamendmentstoensuretheyremainconsistentwiththeBoard’sobjectives,currentlawandpractices.

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

(II) STRENGTHEN COmpOSITION

(A) Board Committees

TheBoardhasputinplacethefollowingBoardCommitteestoassistincarryingoutitsfiduciaryduties:-

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

AlloftheseCommitteeshavewrittenTermsofReference(“TOR”)clearlyoutliningtheirobjectives,dutiesandpowers.Thefinal decisions on all matters are determined by the Board as a whole.

1. Audit Committee

ThemembershipandTORoftheAuditCommitteeisstatedintheAuditCommitteeReportofthisAnnualReport.Asummary 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.


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ANNUAL REPORT 2014

(II) STRENGTHEN COmpOSITION (CONT’D)

2. Nomination Committee

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

3. Remuneration Committee

ThemembersoftheRemunerationCommitteecompriseamajorityofINEDsandthecompositionoftheRemunerationCommitteeisasfollows:-

Remuneration Committee Designation Directorship

Number of Remuneration Committee meetingsattended / held in the

financial year under review

RoyTheanChongYew(Appointed w.e.f. 29 September 2014)

Chairman Independent Non-Executive Chairman

1/1

AngChuangJuay Member Executive Deputy Chairman

1/1

HongCheongLiang(Appointed w.e.f. 30 October 2014)

Member Independent Non-Executive Director

1/1

TheRemunerationCommitteemetonceduringthefinancialyearunderreview.

TheprincipaldutiesandresponsibilitiesoftheRemunerationCommitteeareasfollows:-

• ToreviewandassesstheremunerationpackagesoftheExecutiveDirectorsinallforms,withorwithoutotherindependent professional advice or other outside advice;

• ToensurethelevelsofremunerationbesufficientlyattractiveandbeabletoretainDirectorsneededtoruntheCompany successfully;

• Tostructurethecomponentpartsofremunerationsoastolinkrewardstocorporateandindividualperformanceand to assess the needs of the Company for talent at Board level at a particular time; and

• TorecommendtotheBoardtheremunerationpackagesoftheExecutiveDirectors.

3.1 Directors’ Remuneration policy

It is the Board’s duty to ensure that the level of remuneration is sufficient to attract and retain the Directors neededtoruntheCompanysuccessfully.TheExecutiveDirectorsplaynopartindecidingtheirownremunerationand the respective Board members shall abstain from all discussions pertaining to their remuneration.

TheremunerationofeachDirectorreflectsthelevelofresponsibilityandcommitment,whichgoeswithBoardmembership.ThefullBoarddeterminestheremunerationofeachDirector.


(cont’d)

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ANNUAL REPORT 2014


3. Remuneration Committee (Cont’d)

3.1 Directors’ Remuneration policy (Cont’d)

In tandem with the Succession Move 2014, the Directors’ remuneration have been revised accordingly by the Boardon20November2014:-

prior to the Succession move 2014:-

Directors Entitlement

Non-ExecutiveDirectors(“NEDs”) • Directors’FeesofRM1,000/-permonth;• MeetingallowanceofRM1,000/-permeeting;• ChairmanshipallowanceofRM3,000/-peryear;and• MembershipallowanceofRM2,000/-peryear.

ExecutiveDirectors(“EDs”) • Directors’FeesofRM1,000/-permonth

After the Succession move 2014 (with effect from 20 November 2014):-

Directors Entitlement

Non-Executive Directors Directors’feesofRM2,000/-permonth(inclusive of meeting allowance, chairmanship allowance and membership allowance).

Audit Committee Chairman the Directors’ fees of RM3,000 per month (inclusive of meeting allowance, chairmanship allowance and membership allowance)

Forthefinancialyearended31December2014,atotalDirectors’FeesofRM183,355/-havebeenrecommendedtotheshareholdersforapprovalattheforthcomingTwelfthAnnualGeneralMeeting(“12th AGm”) of the Company.

TheRemunerationCommitteeisresponsibleforreviewingandmakingrecommendationstotheBoardforapproval,the framework and remuneration packages of the NEDs as well as the EDs in all forms, drawing from outside advice whenever necessary prior to making the relevant recommendations to the Board such that the levels of remuneration are sufficient to attract and retain the Directors 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.

A summary of remuneration packages of the Directors of the Company who served during the financial year ended 31 December2014wasasfollows:-

Directors’ Remuneration Executive Directors(Rm)

Non-Executive Directors(Rm)

Total (Rm)

FeesSalariesBenefits-in-kind

120,0491,172,175

25,669

146,355––

266,4041,172,175

25,669

Total 1,317,893 146,355 1,464,248


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ANNUAL REPORT 2014


3. Remuneration Committee (Cont’d)

ThedetailsofremunerationforDirectorsoftheCompanyreceived/receivableforthefinancialyearended31December2014bycategoryandwithinthefollowingbandsareasshownbelow:-

Range of Remuneration per Annum No. of Directors(Executive)

No. of Directors(Non-Executive)

Below RM100,000RM100,001 to RM150,000RM950,001 to RM1,000,000

311

7––

4. Risk management Committee (“RmC”)

ThemembershipoftheRiskManagementCommitteeisstatedonItem(I)(2)(c)ofthisStatement.Asummaryoftheactivities of the Risk Management Committee during the year is set out in the Audit Committee Report of this Annual Report.

TheTORofRMChasbeenentrenchedintotheBoardCharter.AfullcopyoftheBoardCharterisavailableforviewingon the Company’s corporate website at www.rapidconn.org.

(III) REINfORCE INDEpENDENCE

1. Annual Assessment of Independence of Directors

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,confirmingtheirindependencepursuanttorelevantACELRofBursaSecuritiesaswellas the MCCG 2012 and that they Independent Non-Executive Directors have undertaken to inform the Company immediatelyshouldtherebeanychangewhichcouldinterferewiththeexerciseoftheirindependentjudgementorabilitytoactinthebestinterestoftheCompany:-

• Mr.RoyTheanChongYew• Mr.HongCheongLiang

(iii) Independenceofmindand/oraction

Thirdly,theBoardwillperformageneralobservationonthecontributionsmadebytheIndependenceDirectorsinrespecttotheirindividualandunfetteredviewsonvariousissuesatBoardand/orBoardCommitteeMeetings(where applicable).


(cont’d)

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ANNUAL REPORT 2014

(III) REINfORCE INDEpENDENCE (CONT’D)

1. Annual Assessment of Independence of Directors (Cont’d)

(iv) OutcomeofDirectors’self-assessmentandEvaluationofBoardandBoardCommittee’seffectiveness

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(hereinafterreferredtoas“theSurveys”).TheSurveysdoprovideanindicationoflevelofindependencedemonstrated 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, theBoardwill consideranyexisting relationship,be it familyand/orbusinessbetween IndependentDirectorsandManagementthatcouldmateriallyinterferewiththeexerciseoftheirobjectivityandindependentjudgement.

TheBoardnotedthatbothMr.RoyTheanChongYewandMr.HongCheongLiangareindependentofmanagementandfreefromanyrelationshipthatcouldmateriallyinterferewiththeexerciseoftheirobjectivityandindependentjudgement.

Mr.RoyTheanChongYewandMr.HongCheongLiang,weretheIndependentNon-ExecutiveDirectorswhowouldbe

eligibleforstandforre-electionattheforthcoming12thAGMoftheCompany.TheNominationCommitteewassatisfiedthatMr.RoyTheanChongYewandMr.HongCheongLiangmetthecriteriaforanindependentdirectorasprescribedundertheACELRofBursaSecurities.TheBoardconsidersthatitsIndependentNon-ExecutiveDirectorsprovideanobjectiveand independentviewsonvarious issuesdealtwithattheBoardandBoardCommittee level,basedontheirprofessionalbackgroundandworkingexperiences.TheBoard isof theview that thecurrentcompositionofIndependent Non-Executive Directors fairly reflects the interest of minority shareholders in the Company through the Board representation.

TheBoardthereforerecommendsandsupportsthere-electionofMr.RoyTheanChongYewandMr.HongCheongLiang,theIndependentNon-ExecutiveDirectorswhoretireinaccordancewithArticle90oftheAAoftheCompanyatforthcoming 12th AGM of the Company.

2. Tenure of Independent Directors

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

TheBoardnotedtherearenoIndependentDirectorswhosetenureexceedsacumulativetermofnine(9)yearsintheCompany thus far.

3. Separation of position of the Chairman and Chief Executive Officer

TheBoardrecognisestheimportanceofhavingaclearlyaccepteddivisionofpowerandresponsibilitiesattheheadof the Company to ensure a balance of power and authority. At present, the Company does not have a Chief Executive OfficerbutExecutiveDirectors.

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


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ANNUAL REPORT 2014

(III) REINfORCE INDEpENDENCE (CONT’D)

3. Separation of position of the Chairman and Chief Executive Officer (Cont’d)

Mr.AngChuangJuayistheExecutiveDeputyChairman,thedefactoheadofmanagementwhoisbasedmainlyinChina.Mr.GohKokBoon,anotherExecutiveDirector,overseestheMalaysiansubsidiaries.TherolesoftheIndependentNon-Executive Chairman and the Executive Deputy Chairman, duly outlined in the Board Charter are quite distinct and separate.

ThecurrentarrangementistoprovidestrongleadershipwiththeabilitytomarshaltheBoard’sprioritiesobjectivelyand to turnaround the Group while keeping a lean Board composition.

4. Board Composition and Balance

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.TheIndependentDirectorsrepresentcompliancewiththerequirementforone-third(1/3)IndependentDirectorsontheBoard,pursuanttoRule15.02(1)oftheACELRoftheBursaSecuritiesandtheadoptionofthebestpracticessetoutintheCode.

Through the Surveys the Independent Non-ExecutiveDirectors have indicated their satisfactionwith the level ofindependence of each of their peers and their ability to act in the best interests of the Company in decision-making. TheDirectorshavemadevaluablecontributionstotheCompanythroughtheirbusinessacumenandtheapplicationof a wide spectrum of knowledge and skills from their respective experiences.

ThemembersoftheBoardconsistofprofessionalswithcalibreandentrepreneursequippedwithamixofindustryspecificknowledgewithbroadbusinessandcommercialexperience.ThisbalanceprovidesthestrengththatisneededtoleadtheCompanytomeetitsobjectivesandtoprovideeffectiveleadershiptotheCompanyinaspectsofstrategyand 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)oftheBoardmembersnamelyMr.AngChuangJuayisone(1)ofthesubstantialshareholderintheCompany.In that respect, the interests of investors including the Company’s minority shareholders and the public are adequately servedandprotectedbytheappointmentofMr.LeeChoonKwong,aNon-IndependentNon-ExecutiveDirectoraswellasthetwoIndependentNon-ExecutiveDirectors.TheprofileofeachofthemembersoftheBoardisassetoutintheBoard of Directors’ Profile of this Annual Report.

TheBoardstructureensuresthatnoindividualorgroupofindividualsdominatestheBoard’sdecision-makingprocess.ThecompositionoftheBoardprovidesaneffectiveblendofentrepreneurship,businessandprofessionalexpertiseingeneral management, finance, corporate affairs, legal and technical areas of the industry in which the Group operates. The individualityandvastexperienceof theDirectors inarrivingatcollectivedecisionsatboard levelwillensureimpartiality.

(IV) fOSTER COmmITmENT

1. Time Commitment

TheBoardrequiresitsmemberstodevotesufficienttimetotheworkingsoftheBoard,toeffectivelydischargetheirdutiesasDirectorsoftheCompany,andtousetheirbestendeavourstoattendmeetings.Thistimecommittedfactoralso forms one of the criteria for determining the quantum of the meeting allowance payable to the Board members.


(cont’d)

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ANNUAL REPORT 2014

(IV) fOSTER COmmITmENT (CONT’D)

1. Time Commitment (Cont’d)

1.1 Board of Directors’ meetings Attendance

During the financial year ended 31 December 2014, the Board had convened a total of six (6) Board of Directors’ Meetings for the purposes of deliberating 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.

Review of attendance by the Nomination Committee

TheNominationCommitteehasbeentaskedtoreviewtheattendanceoftheDirectorsatBoardand/orBoardCommittee Meetings. Upon review, the Nomination Committee noted the Board members have devoted sufficient timeandefforttoattendBoardand/orBoardCommitteemeetingsforthefinancialyearended31December2014.

For the financial year ended 31 December 2014, the Board members achieved a 100% attendance at the Board Meetingsheld.TheattendancerecordofeachDirectoratBoardMeetingsduringthelastfinancialyearisasfollows:-

Name of Directors

Total no.of meetings held

during tenure of office

Total no.of meetings

attended

% of attendance

RoyTheanChongYew(Appointed on 29 September 2014)*

1 1 100

AngChuangJuay 6 6 100GohKokBoon(Appointed on 29 September 2014)

1 1 100

HongCheongLiang(Appointed on 30 October 2014)*

1 1 100

LeeChoonKwong(Appointed on 7 November 2014)**

1 1 100

LimWeeKiat(Resigned on 31 December 2014)**

6 6 100

TanNyapKeong@TonyTan(Resigned on 31 October 2014)*

5 5 100

DatukNorazmanBinHajiHamidun(Resigned on 30 September 2014)*

5 4 80

LaiSoonYip(Retired on 29 May 2014)

3 3 100

Megat D.Shahriman Bin Dato’ Zaharudin (Resigned on 30 September 2014)

5 4 80

OngKooiTatt(Resigned on 7 November 2014)

5 5 100

WongKeetLoy(Resigned on 31 October 2014 andAppointed on 11 August 2014)

1 1 100

* Denotes Independent Non-Executive Director** Denotes Non-Independent Non-Executive Director


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ANNUAL REPORT 2014


1. Time Commitment (Cont’d)

1.1 Board of Directors’ meetings Attendance (Cont’d)

TheBoardwillalsomeetonanad-hocbasistodeliberateurgentissuesandmattersthatrequireexpeditiousBoard direction or approval. In the intervals between Board meetings, any matters requiring urgent Board decisions and/orapprovalcanbesoughtviacircularresolutionswhicharesupportedwithalltherelevantinformationandexplanations required for an informed decision to be made.

Meeting papers were prepared to provide relevant facts, analysis and recommendations for supporting the proposalstoenableinformeddecision-makingbytheBoard.Theagendaandpapersformeetingswerefurnishedto 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.

TheCompanySecretarieswouldensureaquorumispresentforallmeetingsandthatsuchmeetingsareconvenedinaccordancewiththeArticlesofAssociationoftheCompanyorrelevantBoardCommittee’sTOR.TheCompanySecretaries record the proceedings of all meetings including pertinent issues, the substance of inquiries (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 theBoard’sdecisionsand/or requestsatsubsequentmeetings.TheBoard is thereforeable toperform itsfiduciary duties and fulfil its oversight role towards instituting a culture of transparency and accountability in the Company.

1.2 protocol for Acceptance of New Directorships

ThemembersoftheBoardarerequiredtonotifytheIndependentNon-ExecutiveChairmanpriortoacceptinganynew 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.

1.3 Annual meeting Schedule

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.

2. Continuing Education and Training of Directors

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;


(cont’d)

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ANNUAL REPORT 2014


2. Continuing Education and Training of Directors (Cont’d)

TheBoardhascultivatedthefollowingbestpractices:-(Cont’d)

• 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.

AsatthedateofthisStatement,theBoardhasparticipatedinthefollowingcontinuingeducationprogrammes:-

(a) mr. Roy Thean Chong Yew

No. Dates Description of Training programmes

1. 7 May 2015 AuditOversightBoardConversationwithAuditCommittee,organisedbySecuritiesCommission Malaysia

2. 8 May 2015 “LeadtheChange:WomenonBoard”,organisedbyPerformanceManagementandDeliveryUnit(PEMANDU)ofPrimeMinister’sDepartment,Putrajaya

(b) mr. Ang Chuang Juay


1. 19 May 2015 UnderstandingISO31000RiskManagementTraining

(c) mr. Goh Kok Boon


1. 08 & 09 October2014

MandatoryAccreditationProgrammeforDirectorsofPublicListedCompanies

(d) mr. Hong Cheong Liang


1. 18 November2014

NominatingCommitteeProgramme2:EffectiveBoardEvaluation,jointlyorganisedbytheICLIFLeadership&GovernanceCentreandBursaMalaysiaBerhad

2. 19 & 20 November 2014


3. 7 May 2015 AuditOversightBoardConversationwithAuditCommittee,organisedbySecuritiesCommission Malaysia


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ANNUAL REPORT 2014


2. Continuing Education and Training of Directors (Cont’d)

(e) mr. Lee Choon Kwong


1. 14 & 15 January2015


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.

Upon review, the Board concluded that the continuing education programmes participated by the Directors for the financial year ended 31 December 2014 were adequate.

2015 Training Needs

Upon review of the training needs of the Directors for the financial year ending 31 December 2015 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 continuing education programmes, whereby one of those should be in relation to the ACELRofBursaSecurities.

(V) UpHOLD INTEGRITY IN fINANCIAL REpORTING

1. Compliance with Applicable financial Reporting Standards

TheAuditCommitteeassisttheBoardtooverseethefinancialreportingprocessandthequalityofitsfinancialreportingby 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.

TheAuditCommitteehasreceivedassurancethatthefinancialstatementsoftheGroupandoftheCompanyforthefinancial year ended 31 December 2014 had been prepared in accordance with Malaysian Financial Reporting Standards (“mfRSs”), 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 2014 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 8 April 2015.

During the financial year ended 31 December 2014, the engagement partner of the External Auditors have briefed the Audit Committee on the revised timeframe for issuance of period financial information by listed issuers following the revisionintheACELRbyBursaSecuritiesandtheAuditCommitteehasinturnbriefedtheBoardonthesame.

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 theACELRofBursaSecuritiesonatimelybasisandincompliancewiththeapplicablefinancialreportingstandards.


(cont’d)

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ANNUAL REPORT 2014

(V) UpHOLD INTEGRITY IN fINANCIAL REpORTING (CONT’D)

2. Assessment of Suitability and Independence of External Auditors

For the financial year ended 31 December 2014, the Audit Committee has formalised the procedures to assess the suitability and independence of external auditors vide an annual assessment of the suitability and independence of the external auditors.

Initsassessment,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;• TheAuditCommitteereceiveswrittenassurancefromtheExternalAuditorsconfirmingthattheyare,andhave

been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements; and

• TheexternalauditscopeisadequatetocoverthekeyfinancialandoperationalrisksoftheCompany.

TheAuditCommitteenotedforthefinancialyearended31December2014,Messrs.MooreStephensAssociates&Company, the External Auditors of the Company 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.

Upon completion of its assessment, the Audit Committee was satisfied with Messrs. Moore Stephens Associates & Co’s technical competency and audit independence during the financial year under review and recommended to theBoardtheirre-appointmentunderMessrs.MooreStephensAssociatesPLTasExternalAuditorsforthefinancialyearending31December2015.TheBoardhasinturn,recommendedthesameforshareholders’approvalattheforthcoming 12th AGM of the Company.

(VI) RECOGNISE AND mANAGE RISKS

1. Sound framework to manage Risks

TheGroup’sriskmanagementsystemwasupdatedinternallybytheManagement.Theframeworkoftheriskmanagementencompassesthefollowingkeyelements:-

• Risksidentifiedwereindividuallyassessedandrankedaseitherextreme, high, moderate or low based on its

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

• Individual risk profiles created from the above assessmentwere endorsed by theBoard 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.


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ANNUAL REPORT 2014

(VI) RECOGNISE AND mANAGE RISKS (CONT’D)

1. Sound framework to manage Risks (Cont’d)

TheriskmanagementframeworkisregularlyreviewedbytheManagementandrelevantrecommendationsaremadeto the RMC, Audit Committee and Board for approval.

The internal controlsare tested foreffectivenessandefficiency twocyclesper financial year viaan independentoutsourcedInternalAuditfunction.ThereportoftheInternalAudit istabledfortheAuditCommittee’sreviewandcomments, and the audit findings will then be communicated to the Board.

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

2. Internal Audit function

TheDirectorsareresponsiblefortheGroup’ssystemofinternalcontrolsanditseffectiveness.Theprincipalaimofthe system of internal controls is the management of financial and business risks that are significant to the fulfilment oftheCompany’sbusinessobjectives,whichistoenhancethevalueofshareholders’investmentandsafeguardingthe Group’s assets.

TheGrouphasappointedanindependentprofessionalserviceprovidertocarryouttheinternalauditfunction,namelyMorisonAACCorporateServicesSdn.Bhd.(“morison”).TheoutsourcedInternalAuditorsreportdirectlytotheAuditCommittee, providing the Board with a reasonable assurance of adequacy of the scope, functions and resources of the InternalAuditfunction.ThepurposeoftheInternalAuditfunctionistoprovidetheBoard,throughtheAuditCommittee,assurance of the effectiveness of the system of internal control in the Group.

TheinternalcontrolsaretestedforeffectivenessandefficiencybyMorison.ThereportoftheInternalAuditistabledfortheAuditCommittee’sreviewandcomments,andtheauditfindingswillthenbecommunicatedtotheBoard.Theoutsourced Internal Auditors’ representative met up twice with the Audit Committee in year 2014.

For the financial year under review, Morison has conducted an independent assessment of the Company’s compliance with MCCG 2012. Morison noted that the Board and Management maintained an ongoing commitment to enhance the Group’s control environment and processes, and practice proactive identification of key risks. Morison then concluded that the Board’s principle structures were in place for the financial year ended 31 December 2014.

TheAuditCommitteehasreviewedandapprovedthesaidReportatitsAuditCommitteeMeetingheldon16February2015.

(VII) ENSURE TImELY AND HIGH QUALITY DISCLOSURE

1. Corporate Disclosure policy

TheCompanyrecognisesthevalueoftransparent,consistentandcoherentcommunicationswithinvestmentcommunityconsistent with commercial confidentiality and regulatory considerations.

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


(cont’d)

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ANNUAL REPORT 2014

(VII) ENSURE TImELY AND HIGH QUALITY DISCLOSURE (CONT’D)

1. Corporate Disclosure policy (Cont’d)

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;(iii) material information that summarises, realigns or is computed from material information that already in the

public domain.

PursuanttothisPolicy,thefollowingaretheauthorisedspokespersonoftheCompany:-

Name of Director Designation

Mr.RoyTheanChongYew Independent Non-Executive Chairman

Mr.AngChuangJuay Executive Deputy Chairman

Mr.GohKokBoon Executive Director

ThisPolicyhasbeenentrenchedintotheBoardCharterandwillbereviewedbienniallyorasandwhenitisrequiredto ensure the information remains current and updated.

ThedetailedBoardChartercanbedownloadedfromtheCompany’swebsiteatwww.rapidconn.org.

During the financial year ended 31 December 2014, the Company has engaged a professional public relations firm to manage and assist with the release of information to the public, in particular, press release and press interview.

2. Leverage on Information Technology for Effective Dissemination of Information

TheCompany’scorporatewebsiteprovidesallrelevantinformationontheCompanyandisaccessiblebythepublic.ItincludestheannouncementsmadebytheCompanyandannualreports.TheBoarddisclosestothepublicallmaterialinformationnecessaryforinformedinvestmentandtakesreasonablestepstoensurethatallshareholdersenjoyequalaccess to such information.

TheCompany’scorporatewebsiteisaccessibleatwww.rapidconn.org.

(VIII) STRENGTHEN RELATIONSHIp BETWEEN COmpANY AND SHAREHOLDERS

1. Shareholders’ participation at General meetings

TheCompanycommunicatesregularlywiththeshareholdersandinvestorsthroughannualreports,quarterlyfinancialreports 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.rapidconn.org which provide corporate information on the Group.


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ANNUAL REPORT 2014

(VIII) STRENGTHEN RELATIONSHIp BETWEEN COmpANY AND SHAREHOLDERS (CONT’D)

2. poll Voting

TheBoardnotedtheRecommendation8.2oftheCodestatesthattheBoardshouldencouragepollvoting.Inlinewiththis 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’ Communication and Investor Relations

TheCompany is committed to on-going communication across its entire shareholder base, whether institutionalinvestors,privateoremployeeshareholders.ThisisachievedprincipallythroughannualandquarterlyreportsandtheAGM and timely dissemination of information on significant company developments and price sensitive information in accordancewiththeACELRofBursaSecurities.AlltheDirectorswerepresentatthe11thAGMoftheCompanyheldon 29 May 2014 to engage with the shareholders personally and proactively.

TheproceedingsoftheAGMincludedthepresentationoftheCompany’soperatingandfinancialperformancesforthefinancial year under review, the presentation of financial statements to the shareholders, and a question and answer session in which the Chairperson of the Meeting would invite shareholders to raise questions on the Company’s financialstatementsandotheritemsforadoptionattheAGM,beforeputtingaresolutiontovote.TheEDsensurethat sufficient opportunities are given to shareholders to raise issues relating to the affairs of the Company and that adequate responses are given.

AllNEDsabstainedfromvotingontheresolutionconcerningtheirremuneration.TheExternalAuditorsand/orshareregistrar will be on standby to act as independent scrutineers and poll administrator respectively, should a demand forapollberequested.TheresultsofalltheresolutionssetoutintheNoticeofthe12thAGMwillbeannouncedonthe same day to the Bursa Securities, which is accessible on the Bursa Securities’ website.

TheBoardensuresthatfullinformationoftheDirectorswhoareretiringattheAGMandwillingtoserveifre-electedare disclosed in the Notice of the AGM.

Theexplanatorynotesfacilitatingfullunderstandingandevaluationofissuesinvolvedintheproposedresolutionsaccompanying each item of special business is included in the Notice of the AGM.

Investor Relations (“IR”) activities

AsatthedateofthisStatement,theIRactivityconductedislistedbelowforinformation:-

Date Topic of IR activities Type of IR activities

Audience Responsible Spokesperson

1 April 2015 ConnecttoacquireKejuruteraanAsastera Sdn. Bhd. for RM25 million

Press Release Public Mr.AngChuangJuay

Conclusion

TheBoardissatisfiedthatforthefinancialyearended31December2014,itcompliessubstantiallywiththeprinciplesand recommendations of the MCCG 2012.

ThisStatementonCorporateGovernanceismadeinaccordancewiththeresolutionoftheBoardofDirectorspassedon 8 May 2015.


(cont’d)

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ANNUAL REPORT 2014

CORPORATE RESPONSIBILITYSTATEMENT

TheGroupbelievesthatafirmcommitmenttoCorporateResponsibility(“CR”) activities forms the basis of good corporate citizenshipandupholdsthehighestlevelofcorporategovernance.

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(“Bursa malaysia”)hasdefined“CorporateSocialResponsibility(“CSR”)as“openandtransparentbusiness practices that are based on ethical values and respect for the community, employees, environment and 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

With a constantly growing workforce and ever-evolving information and technology, it is imperative that the Group continues to invest in its employees.

(a) Training and development

Trainingprogrammes,bothinternalandexternal,areorganisedtodeliveranall-roundtrainingexperiencetoouremployeesbyupgradingtheirskillsets,jobknowledgeandcompetencylevelinachievinganoverallincreaseinproductivity.

RespectandconsiderationsofourcolleaguesaretheworkcultureoftheGroup.Trainingprogrammesandjobrotations are in place for employees in assisting them to work towards their goals and aspirations.

(b) Workplace Diversity

TheGroupembracesdiversityatworkplaceandwedonotallowroomforanyformofdiscriminationpracticeagainst 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.

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ANNUAL REPORT 2014

(1) WORKpLACE (CONT’D)

(b) Workplace Diversity (Cont’d)

Gender diversity

Asat22April2015,theGrouphadachievedaratioof63:37intheworkforceoftheGroupintermsofMale/Female, well exceeded the Malaysian government’s initiatives to achieve 30% women participation in the workplace.

Age diversity

As at 22 April 2015, 30% of our employees belong to the age group of between 26 to 36 with the next largest agegroupbeingthoseagedbelow21(21%)andagedbetween21to25(21%).TheGroup’sagedemographicsbroadlyreflectedthoseofMalaysiawheretheyoungerageemployeesformthemajorityoftheworkforce.

Corporate ResponsibilityStatement

(cont’d)

Workforce in terms of Gender in Connect Group

Male Female

63%

37%

Workforce in Terms of Age in Connect Group

21%

19%

6%

21%

3%

Below 21 21-25 26-36 36-45 46-55 Above 55

30%

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ANNUAL REPORT 2014

(1) WORKpLACE (CONT’D)

(b) Workplace Diversity (Cont’d)

Ethnicity diversity

Apart from one subsidiary, the other subsidiaries of the Company are located out of Malaysia, namely United States of America, Singapore and China.

Asat22April2015,employeesofNon-MalaysianCitizensethnicityconstitutedthelargestworkforceoftheGroup at 97%.

(c) Healthy and Safe working environment TheGroupcontinuouslystrivetoprovideahealthyandsafeworkingenvironmentforouremployees.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.

(d) Employees’ well being

Asacaringandlaw-abidingemployer,theGrouphasensurethatallthebenefits-in-kindand/orperksasrequiredby the local legislation (where the individual subsidiary operates) be accorded and complied with by the respective HumanResourceDepartments.

RapidConn(Shenzhen)Co.,Ltd.(“RCC”), the Group’s subsidiary in China has reviewed 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.

Corporate ResponsibilityStatement(cont’d)

Workforce in terms of Ethnicity in Connect Group

3%

97%

Chinese other

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ANNUAL REPORT 2014

Corporate ResponsibilityStatement

(cont’d)

(2) ENVIRONmENT

TheGroupbelievesithasamoralandsocialresponsibilityinreducingthecarbonfootprint,contributingtowardsagreener environment. RCC, being the manufacturing outfit of the Group has re-engineered some of its products to increase the efficiency of material and labour consumption, thereby reducing the amount of material usage as well as utilisation of labour resources.

(3) COmmUNITY

TheGrouprecognisesthatthecommunityplaysanessentialroleindrivingthesuccessofitsbusiness.

Aspartofitsculturalawarenessprogramme,RapidConn(S)PteLtd,theCompany’swholly-ownedsubsidiaryinSingaporehasbeencontributingonanannualbasis,selectionsofmooncakesinconjunctionwiththemooncakefestivalaswellasnewyearcookiesinconjunctionwiththeChineseNewYearfestivaltotheschoolchildrenofWellingtonPrimarySchool.

(4) mARKETpLACE

As a listed entity as well as an employer, the Group has an obligation to its shareholders and statutory obligations to therelevantauthorities.TheGrouphasinstitutedseveralresponsiblemarketplacepracticestomaintainthehigheststandards of integrity, fairness and transparency in our conduct of business.

(a) Corporate Disclosure practices

TheGrouprecognisestheimportanceoftimelyandthoroughdisseminationofaccurateandusefulinformationrelating to our operations to stakeholders. In this regard, we strictly adhere to the disclosure requirements of BursaMalaysiaSecuritiesBerhad(“Bursa Securities”) 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) Investor Relations (“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 IR activities during the year.

TheGrouporganiseregularIRactivitiestopromoteanddevelopapositiverelationshipwithallourstakeholdersvia active 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 conducted for the financial year ended 31 December 2014.

(c) Dedicated sections at corporate website

Apart from the mandatory public announcements through Bursa Securities, the Group’s website at http://www.rapidconn.org/ provides the public with convenient and timely access to business updates, and financial and non-financial information. Furthermore, stakeholders are able to direct queries to the Group via this website.

CONCLUSION

TheGroupnotedthatBursaMalaysiahasalwaysadvocatedCRaskeytosustainability.TheGrouprecognisestheimportantofsustainabilityanditsincreasingimpacttothebusiness.TheGroupiscommittedtounderstandingandimplementingsustainable 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.

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ANNUAL REPORT 2014

TheBoardispleasedtopresenttheAuditCommitteeReportforthefinancialyearended31December2014.

1. COmpOSITION AND DESIGNATION Of THE AUDIT COmmITTEE

TheAuditCommitteecomprisesofthree(3)members,two(2)ofwhomareIndependentNon-ExecutiveDirectors(“INED”)and one (1) of whom is Non-Independent Non-Executive Director, who also satisfy the test of independence under the ACEListingRequirements(“ACELR”)ofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)andalsomeetstherequirementsoftheMalaysianCodeonCorporateGovernance2012.ThecompositionoftheAuditCommitteeandtheir attendance records are as set out in this report accordingly.

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

ThetermofofficeandperformanceoftheAuditCommitteeandeachofitsmemberswerereviewedbytheBoardandissatisfiedthattheyareabletodischargetheirfunctions,dutiesandresponsibilitiesinaccordancewiththeTermsof Reference of the Audit Committee, thereby supporting the Board in ensuring appropriate Corporate Governance standards within the Group.

Name Designation Directorship

HongCheongLiang Chairman IndependentNon-ExecutiveDirector (Appointed on 31 October 2014)

RoyTheanChongYew Member IndependentNon-ExecutiveDirector (Appointed on 30 September 2014)

LeeChoonKwong Member Non-IndependentNon-ExecutiveDirector Appointed on 7 November 2014)

2. TERmS Of REfERENCE

ThetermsofreferenceoftheAuditCommitteeoftheCompanysetoutbytheBoardofDirectorsareasfollows:-

(I) COmpOSITION

TheAuditCommitteeshallbeappointedbytheBoardfromamongsttheirmembersandshallfulfillthefollowingrequirements:

a. TheCommitteeshallconsistofnotlessthanthree(3)members,allmustbenon-executivedirectors,withmajorityofthembeingIndependentDirectors.

b. TheCommitteeshallelectaChairmanfromamongitsmemberswhoisanIndependentNon-Executive Director.

AUDIT COMMITTEE REPORT

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ANNUAL REPORT 2014

Audit Committee Report(cont’d)

2. TERmS Of REfERENCE (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) Ifhe/sheisnotamemberofMIA,he/shemusthaveatleastthree(3)years’workingexperienceand;

• MusthavepassedtheexaminationsspecifiedinPartIofthe1stScheduleoftheAccountantsAct, 1967; or

• MustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthe1stSchedule of the Accountants Act, 1967; or

• FulfilssuchotherrequirementsasprescribedorapprovedbyBursaMalaysiaSecuritiesBerhad.

(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) AUTHORITY Of THE AUDIT COmmITTEE

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. convenemeetingswiththeExternalAuditors,theInternalAuditorsorboth,ina“closeddoor”environmentduring Board sessions, i.e. in the absence of other directors and employees of the Group, whenever deemed necessary.

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ANNUAL REPORT 2014


(III) KEY RESpONSIBILITIES

a. Overseeing the financial reporting process

• Assesstheappropriatenessofmanagement’sselectionandapplicationofaccountingprinciplesand key accounting policies;

• Assessmanagement’sjudgmentsandaccountingestimatesappliedinfinancialreporting;• ConferwithbothmanagementandtheExternalAuditorsaboutthefinancialstatements;• EnsurethattheGroup’sfinancialstatementsarecomplete,uptodate,relevantandfairlypresented,

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

• Ensurecompliancewithrelevantlawsandregulations;and• Reviewearningsreleases,announcementsandotherkeyinformationpresentedthatwillaffectthe

financial reporting prior to release.

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

Riskmanagement involves identifying risks,analyzingandevaluating theserisksandtakingproactivemeasures to mitigate (or avoid) them as such risks will invariably have an impact on the Group’s operations andfinancialreporting.TheAuditCommitteeplaysanessentialroleintheGroup’sfinancialintegritybyassuming direct oversight 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) fREQUENCY AND ATTENDANCE Of AUDIT COmmITTEE mEETINGS

TheAuditCommitteeshallmeetatleast(5)fivetimesayearandsuchmeetingsastheChairmanshalldecideinordertofulfilitsduties.AquorumshallconsistofamajorityofAuditCommitteemembers,andthemajoritypresent must be 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

Theminutesof eachmeeting shall be kept by theSecretary anddistributed toeachmemberof theAuditCommittee and of the Board of directors. All minutes of the meetings shall be circulated to every member of theBoard.TheSecretaryoftheAuditCommitteeshallbetheCompanySecretary.


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(VI) fUNCTIONS

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

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. Determine the level of cooperation given by the Company’s officer to the auditors;

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. Make recommendations concerning the appointment, terms of engagement and remuneration of theExternal Auditors to the Board;

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

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ANNUAL REPORT 2014

SUmmARY Of ACTIVITIES

TheAuditCommitteeheldatotaloffive(5)meetingsduringthefinancialyearended31December2014.

ThedetailsofattendanceoftheAuditCommitteeMeetingsduringthefinancialyearwereasbelow:-

Audit Committee membersDate of

Appointment

Total no. of meetings

attended

Total no.of meetings held during tenure of

office

%

HongCheongLiang(Chairman) 30October2014 1 1 100

RoyTheanChongYew 29 September 2014 1 1 100

LeeChoonKwong 7 November 2014 1 1 100

TanNyapKeong@TonyTan(Resigned on 31 October 2014)

1 November 2011 4 4 100

OngKooiTatt(Resigned on 7 November 2014)

19 August 2013 3 3 100

DatukNorazmanBinHajiHamidun(Resigned on 30 September 2014)

19 August 2013 4 4 100

WongKeetLoy(Resigned on 31 October 2014)

11 August 2014 1 1 100

TheleadauditpartneroftheExternalAuditorsresponsiblefortheGroupattendedtwo(2)AuditCommitteemeetingsheldin year 2014.

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’srecommendationstogetherwiththerespectiverationaleto the 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:

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.

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.


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ANNUAL REPORT 2014

SUmmARY Of ACTIVITIES (CONT’D)

4. Followed up on previous internal audit reports issued.

5. Assessed the Internal Auditors’ performance.

6. Reviewed the Audit Progress Memorandum for the financial year ended 31 December 2014 prepared by the external auditors which comprised the significant audit findings.

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

8. Reviewed the Audit Planning Memorandum for the audit of financial year ended 31 December 2014 prepared by the external auditors which set out the auditors’ responsibilities in respect of financial reporting, audit approach, scope of work, current developments, areas of concern and audit procedures.

9. Considered and recommended to the Board for the approval the audit fees payable to the external auditors.

10. 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.

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

12. Discussed any other matters raised during the meeting.

INTERNAL AUDIT fUNCTION

(1) Introduction

During the financial year, the Internal Auditor 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 actions 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.

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

TheQualityAssurance(“QA”)DepartmentofRCC,awholly-ownedsubsidiaryoftheCompanyhasbeenperformingtheinternalauditfunctionfortheGroupbasedonascheduledIAprogrammeapprovedbytheAuditCommittee.TheIAprogramme is designed, supervised and conducted by the QA Manager, being the head of QA Department.


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ANNUAL REPORT 2014

INTERNAL AUDIT fUNCTION (CONT’D)

(1) Introduction (Cont’d) During the financial year under review, the Board, vide the Audit Committee has undergone the following revamp of its

Internal Audit function, by replacing the in-house Internal Auditor with the outsourced professional firm which would be abletoprovideobjectiveassuranceaswellastheintroductionofasystematic,disciplinedapproachtoevaluateandimprovetheeffectivenessorriskmanagement,controlandgovernanceprocessesoftheGroup:-

financial Year ended 31 December 2014 Internal Auditor

January2014toMay2014 In-house–Mr.LimHuangFee(“In-house IA”)

June2014toOctober2014 Outsourced–CeopeConsultingSdn.Bhd.(“Ceope”)

November 2014 to present Outsourced–MorisonAACCorporateSolutionsSdn.Bhd.(“morison”)

The Audit Committee ensures that Internal Audit function is independent and performs audit assignmentswithimpartiality, proficiency and due professional care.

(2) Internal Audit activities during the financial year under review

In view of the abovementioned revamp, the Internal Audit activities conducted during the financial year under review canbedividedintothefollowingthree(3)phases:-

(i) In-house IA

At the beginning of year 2014, the In-house IA has tabled a departmental-based audit plan, encompassing the following key business areas of the Group, together with the schedule of the audits to the Audit Committee for approval:-

• Engineeringchangeprocedureandcontrol;• Productsqualitycontrolpolicyandcontrol;• Humanresourcepolicyandprocedure;• Salesandmarketingpoliciesandprocedures;• Purchasingpolicyandprocedure;and• Safetyandsecuritypolicies.

Thedepartmental-basedauditplanhasbeenpreparedbytheInternalAuditorbasedontheimpactofdifferentareas of the Group based on materiality of the numbers reported.

Duringthefinancialyearunderreview,theIn-houseIAhascoveredthefollowingareas:-

(a) RapidConn(ShenZhen)Co.Ltd> ProductionDepartment–StandardOperatingPoliciesandProcedures(“SOpp”);> HumanResourcePolicyandProcedure;> SalesandMarketingSOPP;> PurchasingSOPP;and> Compliance of Documentation and Authorisation Procedures


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(2) Internal Audit activities during the financial year under review (Cont’d)

(i) In-house IA (Cont’d)

Duringthefinancialyearunderreview,theIn-houseIAhascoveredthefollowingareas:-(Cont’d)

(b) RapidConnTechnology(YongXin)PteLtd> ProductionDepartment–StandardOperatingPoliciesandProcedures;> HumanResourcePolicyandProcedure;> SalesandMarketingSOPP;> PurchasingSOPP;and> Compliance of Documentation and Authorisation Procedures

(ii) Ceope

TheAuditCommitteehasapprovedtheappointmentofCeopeasthenewoutsourcedInternalAuditoron29May2014.

Duringtheirtenure,Ceopehasconductedthefollowingauditactivities:-

• MyGenBizzBerhad> Formalisation of service agreements;> Marketing Strategy, Sales Reporting and Commitment; and > Risk and Process Management

CeoplehasproposedtoperformaCorporateGovernance(“CG”) review of the Group as their next audit activity for the Board’s consequent preparation of Statement on CG and Statement on Risk Management andInternalControl(“SORmIC”).

(iii) Morison

TofurtherenhancetheInternalAuditfunctionoftheGroupgiventhediverselocationsoftheGroup’ssubsidiaries,the Audit Committee has approved the appointment of Morison as the new outsourced Internal Auditor on 20 November 2014, in replacement of Ceope.

Upon their appointment, Morison has performed a CG review of the Group and concluded that in the area of CG, the Board and Management maintained an ongoing commitment to enhance the Group’s control environment and processes, and practiced pro-active identification of key risks. Morison further noted that the Board’s principle structures were in place.

Audit Plan 2015

MorisonhastabledanAuditPlanforyear2015coveringthefollowingkeyareas:-> OperationsManagement;> Inventory Control and Management; and> Revenue and Accounts Receivables Management.

TheAuditCommitteehasdulyapprovedtheAuditPlan2015on16February2015.


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ANNUAL REPORT 2014


(2) Internal Audit activities during the financial year under review (Cont’d)

Risk management framework

TheCompanyhasputinplaceasimplifiedRiskManagementFrameworkandthefollowingkeyriskshavebeendulyidentified:-

• Salesandoperationsrisks;• Creditrisk;• Marketrisk;and• Foreignexchangerisk.

TheRiskManagementCommitteeistaskedtoreviewandreportontheabovementionedkeyrisksonaregularbasis.

Details of the key risks identified are set out in the Statement on Risk Management and Internal Control of this Annual Report.

(3) Total costs incurred for the financial year ended 31 December 2014

ThetotalcostincurredfortheInternalAuditfunctionoftheGroupforthefinancialyearended31December2014amountedtoRM19,630/-.


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ANNUAL REPORT 2014

NOMINATION COMMITTEEREPORT

For the financial year ended 31 December 2014, the Nomination Committee comprises exclusively of non-executive Directors andthecompositionoftheNominationCommitteeisasfollows:-

Nomination Committee Designation Directorship

Number of Nomination Committee meetings attended / held in the

financial year under review

RoyTheanChongYew Chairman(Appointed on

29 September 2014)


1/1

HongCheongLiang Member(Appointed on

30 October 2014)

Independent Non-Executive Director

1/1

LeeChoonKwong Member(Appointed on

16 February 2015

Non-Independent Non-Executive Director

N/A

TanNyapKeong@TonyTan Chairman(Resigned on 31 October 2014)


1/1

DatukNorazmanBinHajiHamidun

Member(Resigned on 30 September 2014)


1/1

OngKooiTatt Member(Resigned on 7

November 2014)


1/1

TheNominationCommitteemettwiceduringthefinancialyearunderreview.ThepresentchairoftheNominationCommitteeisMr.RoyTheanChongYew,theIndependentNon-ExecutiveChairmanoftheCompany.

TheprincipaldutiesandresponsibilitiesoftheNominationCommitteeareasfollows:-

• TonominateandrecommendtotheBoard,suitablecandidatesfordirectorships.Inmakingsuchrecommendations,to consider candidates proposed by the Executive Directors and within the bounds of practicability, by any other senior executives or any director or shareholder;

• TonominateandrecommendtotheBoard,thenomineestofillseatsonBoardcommittees;• ToassisttheBoardinitsannualreviewofitsrequiredmixofskillsandexperienceandotherqualities,includingcore

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.

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ANNUAL REPORT 2014

Nomination Committee Report(cont’d)

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) Reviewandrecommendationto theBoard, theadoptionof“Declarationby IndependentDirectors” toconfirmthe“independence”oftheindependentdirectorsonanannualbasis;

(iv) Review and recommendation 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,theappointmentofMr.RoyTheanChongYew,Mr.GohKokBoon,Mr.HongCheongLiangandMr.LeeChoonKwong,asthenewdirectors.

1. Appointment of the Board

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

TheNominationCommitteereviewscandidatesforappointmentasDirectorsbasedonthefollowingcriteria:-

• 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 to close any possible gaps intheBoard.TherecommendationoftheNominationCommitteewassubmittedtotheBoardforitsconsiderationandapproval.

During the financial year under review, the Nomination Committee has performed the abovementioned reviews and recommendationstotheBoard,theappointmentsofMr.RoyTheanChongYew,Mr.GohKokBoon,Mr.HongCheongLiangandMr.LeeChoonKwongasthecandidatestotheBoard.

Mr.RoyTheanChongYew,Mr.GohKokBoon,Mr.HongCheongLiangandMr.LeeChoonKwonghaveacceptedtheBoard’sappointmentson29September2014,30October2014and7November2014,respectively.

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ANNUAL REPORT 2014


2. Appointment to Board Committees

The review isconductedonanannualbasis,andasandwhen theneedarises,suchaswhenanewdirector isappointed. In determining the candidates for appointment to the Board Committees, various factors are considered by the Nomination Committee, including,

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

During the financial year under review, in view of the vacancy in the Board Committees which arose due to the retirement ofMr.LaiSoonYipandresignationofEncikMegatD.ShahrimanBinDato’Zaharudin,DatukNorazmanBinHajiHamidun,Mr.WongKeetLoy,Mr.OngKooiTatt,Mr.LimWeeKiatandMr.TanNyapKeong@TonyTan,andupontheacceptanceoftheBoard’sappointmentofMr.RoyTheanChongYewandMr.HongCheongLiang,theIndependentNon-ExecutiveDirectors,oftheCompany,Mr.GokKokBoon,theExecutiveDirectorandMr.LeeChoonKwong,theNon-IndependentNon-ExecutiveDirectoroftheCompany,thefollowingappointmentstotheBoardCommitteestookplace:-

(i) Mr. Roy TheanChong Yewwas appointed as aChairman to theNominationCommittee andRemunerationCommittee and a member to Audit Committee;

(ii) Mr.HongCheongLiangwasappointedasaChairmantotheAuditCommittee,membersofNominationCommitteeand Remuneration Committee;

(iii) Mr.GohKokBoonwasappointedasamembertotheRiskManagementCommittee;and

(iv) Mr.LeeChoonKwongwasalsoappointedamemberoftheAuditCommitteeandNominationCommittee.

3. Re-election of Directors

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

IndeterminingtherelevantDirectors’eligibility,theNominationCommitteecarriedoutthefollowingassessments:-

• formalreviewoftheperformanceoftheDirector,takingintoaccounttheresultsofthelatestBoardevaluations;• attendanceofBoardmeetingsaswellasBoardCommitteeMeetings(whereapplicable);• thelevelofcontributiontotheBoardthroughhisskills;• experienceandstrengthinqualities;• hislevelofindependence;and• abilitytoactinthebestinterestoftheCompanyindecision-making.

Pursuant to Article 90 of the AA, any Director appointed by the Board shall hold office until the next following AGM and shall then be eligible for re-election.

Mr.RoyTheanChongYew,Mr.GohKokBoon,Mr.HongCheongLiangandMr.LeeChoonKwongaresubjecttoretirementpursuant to Article 90 of the AA at the forthcoming 12th AGM of the Company.

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ANNUAL REPORT 2014

4. Annual Assessment of the Board

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 2014, 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 2014, the Nomination Committee was satisfied with the performance of the Board and Committees of the Board.

(iii) Evaluation on the contribution of the Executive Directors

TheNominationCommitteealsoconductedanevaluationonthecontributionoftheExecutiveDirectorsforthefinancial year ended 31 December 2014 and was satisfied with the performance of the Executive Directors.

5. Board Diversity policy

The Board affirms its commitment to boardroom diversity as a truly diversified Board can enhance the Board’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 tokeepaleanBoardcompositiontoassistwiththeturnaroundoftheCompany,theBoardhasnotatthisjunctureset any short term target or measure for boardroom diversity but nevertheless works to ensure that there is no discrimination on the basis of, but not limited to, ethnicity, race, age, gender, nationality, political affiliation, religious affiliation, sexual orientation, marital status, education, physical ability or geographic region, during the recruitment of new Board members.

TheBoardhasindicateditscommitmenttoboardroomdiversitybythefollowingappointments:-


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ANNUAL REPORT 2014


5. Board Diversity policy (Cont’d)

Age Diversity

TheBoardbelievesthattheDirectorswithdiverseageprofilewillbeabletoprovideadifferentperspectiveandbringvibrancy to the Group’s strategy making process.

TheageprofilesoftheDirectorswererangingfromthirtiestofiftiesofage,whichunderliestheBoard’scommitmentto age diversity at the Board level appointment.

Mr.HongCheongLiang,theIndependent Non-Executive Director, is 36 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

Mindfulofglobalmobilityoftalents,theBoarddoesnotrestrictitscompositiontojustMalaysianswhowerebasedinMalaysia.TheBoardendeavourtosourceandappointDirectorsofdiversenationalityandoftrans-nationalbackgroundand experiences.

Mr.AngChuang Juay, theExecutive Deputy Chairman, is a Singaporean who has more than 20 years of industry experiencesinSingapore,TaiwanandChina.

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ANNUAL REPORT 2014

INTRODUCTION

TheBoardofDirectors(“the Board”) acknowledges the importance of good corporate governance policies and practices, andisthereforecommittedtomaintainingasoundandrobustenterpriseriskmanagement(“ERm”) framework and internal controlsystem.TheBoardalsoacknowledgesthattheERMframeworkandthesystemofinternalcontrolscanonlyprovidereasonable, but not absolute, assurance against any material misstatement, fraud or loss as they are designated to manage ratherthaneliminatetheriskoffailuretoachievetheGroup’sbusinessobjectives,andtosafeguardshareholders’investmentsand the Group’s assets. TheBoardispleasedtopresenttheStatementofRiskManagementandInternalControl,whichismadepursuanttoParagraph15.26(b)oftheACEMarketListingRequirements(“ACE LR”)ofBursaMalaysiaSecuritiesBerhad(“Bursa Securities”) and in accordance with the Principles and Recommendations relating to risk management and internal controls provided in the MalaysianCodeonCorporateGovernance2012(“mCCG 2012”) as well as the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“SRMICG”).

BOARD RESpONSIBILITY

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.

The ERm framework

TheBoardisnowintheprocessofdevelopingamorestructured,formalisedERMframeworkwhichisdesignedto:

a. Identify potential events that may affect the Group, at both entity and subsidiary-level;b. Manage risks to be within the Group’s risk appetite and risk tolerance levels;c. Providereasonableassuranceregardingtheachievementofbothentityandsubsidiaryobjectives;d. Provide clear direction as to how to evaluate, manage and monitor risks; ande. Establish clear protocols for accountabilities and reporting.

Objectives of Risk management

Themainobjectiveofriskmanagementistoidentifypotentialriskeventsbeforetheyoccursothattheappropriatemeasures,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.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

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ANNUAL REPORT 2014

Statement on Risk Management and Internal Control

(cont’d)

purpose and Application

Risk assessment is intended to furnish Management with information regarding events that could impact the achievement ofobjectives.It isbestcoordinatedandintegratedintoexistingmanagementandoperationalprocessesthatshouldbecarriedoutusingatop-downapproachthatiscomplementedbyabottomupappraisalmethodology.TheERMframeworkconsiders all inherent and residual risks, including how risks interrelate, and develops a portfolio view of risks from both subsidiary and entity level perspectives.

TheriskassessmentproceduresconductedbytheGroup’ssubsidiariesshould,therefore,bealigned(e.g.,usingcommonterminology,riskcategories,principlesonriskvaluation,etc),coverkeyobjectives,whiletheindividualunitrisksshouldbereviewed 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’sbusiness environment when ascertaining the type and scope of the risk assessment to be undertaken.

Theareasofriskassessmentwouldtypicallycover:

a. Strategicriskassessment–thisrelatestotheGroup’smissionandstrategicobjectives.

b. Operational risk assessment – this relates to theGroup’s risk of loss (i.e. financial performance) as a result ofshortcomings or failings from within the Group (i.e. systems, processes, people), or from external events.

c. Compliance risk assessment – this relates to the Group’s compliance obligations vis-a-vis government regulations, policies and procedures, business ethics, etc.

d. Internal audit risk assessment – this relates to risks associated with the value drivers of the Group that impact shareholder’svalueasitaffectsstrategic,financial,operational,andcomplianceobjectives.

e. Financial statement risk assessment – this relates to risks associated with the likelihood of material misstatements of the Group’s financial statements through input from various departments within the Group.

f. Fraud risk assessment – this relates to potential occurrences of fraud or misrepresentations that may compromise the Group’s ethics and compliance standards, business practice requirements, financial reporting integrity, and other objectives.

g. Market risk assessment – this relates to risks associated with movements in the market that could affect the Group’s performance or risk exposure (typically forex, interest rates and commodity prices).

h. Creditriskassessment–thisrelatestorisksassociatedwiththelikelihoodthattheborrowerorcounterparty(re:contracts) may default on their financial obligations.

i. Customer risk assessment – this relates to the risk profile of the customer (i.e. creditworthiness) or counterparty (i.e. intent), that could affect the Group’s credibility, reputation and financial standing.

j. Supplychainriskassessment–thisrelatestotherisksassociatedwiththefunctionsofpurchasing,planning,logisticsandwarehousing.Thefailuretoeffectivelymanagesupplychainrisksmayresultineconomicandfinanciallosses,reductions in product quality, delivery delays and loss of reputation.

k. Product risk assessment – this relates to risks associated with an organisation’s product, from design and development 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.

l. Projectriskassessment–thisrelatestorisksassociatedwiththeimplementationanddeliveryofaproject,takingintoaccounttherisksaffectingthekeyparametersofprojectmanagement,i.e.time,costandquality.

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ANNUAL REPORT 2014

On-going Assessment by the Board

TheRiskManagementCommittee shall report to theBoard periodically on key developments of theGroup’s businessstrategies, risks, opportunities and rewards that may have impacted or likely to impact the Group and its achievement of itsstrategicobjectives.

Key features of the Group’s Internal Control System

(i) Internal Control

AspertheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(“COSO”)’sdefinition:

Internal control is a process, effected by an entity’s Board of Directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting and compliance.

TheGroup’sinternalcontrolsarealignedtoitsfinancialoperations,reportingandcomplianceobjectives.

TheGroup’sinternalcontrolprocessconsistsofongoingtasksandactivities,andiscontinuouslybeingreviewedandupdated.TheinternalcontrolprocessisdesignedtocomplementtheGroup’sERMprogrammes.

TheGroup’ssystemofinternalcontrolsaredesignedtoprovidemanagementandtheBoardwithreasonableassurance,butnotabsoluteassurance,whichwillenabletheBoardtomakesoundjudgementandinformeddecisions.

TheGroup’ssystemofinternalcontrolsaresodesignedsuchthattheprocessesandprocedurescanbeappliedonanentity-widebasisorasubsidiarybasis.Theprocess,proceduresandpolicieswillbedesignedtakingintoaccountlocal conditions pertaining to the individual subsidiaries.

TheExecutiveDeputyChairman,whoisprimaryresponsiblefortheGroup’soperations,providesassurancethattheoperationalcontrolsareeffectivethroughouttheyear,whiletheChiefFinancialOfficerprovidesassurancethatthefinancialreportingcontrolsareeffectivethroughouttheyear.TheExecutiveDeputyChairmanandtheChiefFinancialOfficerwillundertakeamorecomprehensivereviewoftheGroup’sinternalcontrolsystemasrecommendedbyMCCG2012.

(ii) Authority and responsibility

CertainresponsibilitiesaredelegatedtothefollowingBoardCommitteesthroughclearlydefinedTermsofReference(“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.rapidconn.org.

Statement on Risk Management and Internal Control(cont’d)

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ANNUAL REPORT 2014

Key features of the Group’s Internal Control System (Cont’d)

(iii) Internal Audit function

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

Fortheinitialfivemonthsofthefinancialyearunderreview,theQualityAssurance(“QA”) Department, which comes

under RCC, the wholly-owned subsidiary of the Company located in China, is tasked with conducting a review on the plant’sinternalcontrolsandtoensurethatitiscompliantwiththevariousstandards(i.e.ISOs),policiesandprocedures(i.e.SOPs)relatedtoitsoperations.AsrequestedbytheAuditCommittee,theQAManagerhasalsobeendeemedthe“In-house IA’byperforminginternalauditonothersubsidiaries/businessunitsoftheGroupbasedonascheduledIAprogrammeapprovedbytheAuditCommittee.TheIAprogrammeisdesigned,supervisedandconductedbytheQAManager.

For the later part of the financial year under review, the Company has outsourced its internal audit functions to an independentprofessionalconsultingfirm.TheoutsourcedinternalauditorsareindependentofManagementandreportdirectlytotheAuditCommitteewithrespecttotheInternalAuditfunction.ForthemonthofJune2014untilOctober2014,anoutsourcedprofessionalfirm,namelyCeopeConsultingSdn.Bhd.(“Ceope”) has been engaged to perform the role of an Internal Auditor.

For the month of November 2014 until the date of this Statement, Morison AAC Corporate Solutions Sdn. Bhd. has been engaged to perform the role of an Internal Auditor, in replacement of Ceope.

For the financial year ended 31 December 2014, assurance from the Executive Deputy Chairman, who is primary responsiblefortheGroup’soperations,andtheChiefFinancialOfficerareobtainedthroughouttheyear(viaformaland informal inquiries, discussions and meetings) that the Group’s risk management and internal control systems are operating effectively.

Internal Audit activities conducted for the financial year under review

ThedetailsoftheInternalAuditactivitiesconductedforthefinancialyearended31December2014weresetoutinthe Audit Committee Report of this Annual Report.

Review of Statement by the External Auditors

PursuanttoParagraph15.23oftheMainLR,theExternalAuditorshavereviewedthisstatementforinclusioninthe2014Annual Report, in accordance with the Malaysian Approved Standard on Assurance Engagements, International Standard on AuditEngagement(“ISAE”)3000–AssuranceEngagementsotherthanAuditsorReviewsofHistoricalFinancialInformationandRecommendedPracticeGuide(“RpG”)5(Revised)–GuidanceforAuditorsonEngagementstoReportontheSORMICincluded in the Annual Report issued by the Malaysian Institute of Accountants. Based on the 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.

Statement on Risk Management and Internal Control

(cont’d)

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ANNUAL REPORT 2014

Statement on Risk Management and Internal Control(cont’d)

CONCLUSION

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

TheBoardisalsooftheopinionthatasthedevelopmentofasoundriskmanagementandinternalcontrolsystemsisacontinuous 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.

ThisstatementismadeinaccordancewiththeresolutionoftheBoardofDirectorsdated8May2015.

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ANNUAL REPORT 2014

ADDITIONAL COMPLIANCE INFORMATION

ThefollowinginformationisprovidedinaccordancewithRule9.25oftheACEMarketListingRequirementassetoutinAppendix 9C thereto.

1. private placement and Utilisation of proceeds

TheCompanyhadon20June2014and4November2014completedthePrivatePlacementfollowingthelistingandquotation of 16,902,900 and 17,455,600 new ordinary shares of RM0.10 each on the ACE Market of Bursa Malaysia SecuritiesBerhad(“Bursa Securities”).

TheRM5,161,282proceedsraisedfromthePrivatePlacementof16,902,900and17,455,600newordinarysharesof RM0.10 each in the Company at an issue price of RM 0.168 and RM 0.133 each, has been proposed to be utilised asfollows:-

Description proposed Revised Actual Balance Status of Utilisation Utilisation Utilisation as Utilisation of at 30 April proceeds 2015 Rm Rm Rm Rm Rm

Increased in the paid-up capital for Rapid Conn (Shenzhen)Co.Ltd. 3,960,000 2,960,000 2,350,000 610,000 Partial Acquisition of 51% equity interestsinMyGenBizzBerhad * 1,026,000 900,000 900,000 – Completed Administrative expenses of other companies under the Connect Group of Companies 698,530 1,081,208 971,580 109,628 Partial Private placement expenses 500,000 220,074 220,074 – Completed Total 6,184,530 5,161,282 4,441,654 719,628

* CCHB has disposed of its entire equity interest held in MyGenBizz Berhad in May 2015. The details are mentioned in the Corporate Information section of this Annual Report.

2. Share Buy-Back

TheCompanydidnotundertakeanysharebuy-backexerciseduringthefinancialyearunderreview.

3. Options, Warrants or Convertible Securities

(a) Self regularisation plan

TheCompanyhadon28September2011issued60,847,500ordinaryshareswithfreedetachablewarrantsatanissuepriceofRM0.10pershareinconjuctionwiththerenounceablerightsissueof60,847,500rightsharesonthebasisofthree(3)rightssharetogetherwiththree(3)warrantsforeveryfour(4)ConnectCountyHoldingsBerhad(“CCHB”)’ssharesheld.Theexerciseperiodforthewarrantisten(10)yearsfrom19September2011up to and including 18 September 2021.

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ANNUAL REPORT 2014

Additional Compliance Information(cont’d)

3. Options, Warrants or Convertible Securities (Cont’d)

(a) Self regularisation plan (Cont’d)

Each warrant entitles its registered holder the right to subscribe for one (1) new ordinary share of RM0.10 each in the Company at an exercise price of RM0.10 per share until the expiry of the exercise period.

WithregardstotheProposalsasmentionedabove,on18July2011,theSecuritiesCommissionhadvideitsletterdated18July2011approvedtheProposedExemption.TheapprovalissubjectedtoCCHBdisclosinginits annual and interim accounts and any public document, including annual reports, prospectuses and circulars, throughout the validity period and the conversion or subscription rights or options remain outstanding.

ThefollowingarethereleventdisclosuresmadeincompliancewiththedisclosureconditionsimposedbytheSecuritiesCommission:-

(i) ThevalidityperiodfortheExemptionisfrom18July2011upto18September2021.

(ii) ThedetailsoftheshareholdingsofthePersonActinginConcert(“pAC”) and their entitlement to the Rights Issueareasfollows:

Directshareholdingsasat8May2015:

No. of No. of CCHB shares % Warrants %

ChngSengChye@ ChngHungSeng 18,287,382 8.87 4,466,070 7.34 AngChuangJuay 11,665,752 5.66 – –

Total 29,953,134 14.53 4,466,070 7.34

(iii) ThemaximumpotentialvotingsharesorvotingrightsoftheofferorandPACintheofferee,ifonlytheofferor and PAC (but not other holders) exercise the conversion or subscription rights or options in full is 34,419,204CCHBSharesrepresenting17.82%oftheissuedandpaid-upsharecapitalofCCHB.

(iv) ThePACshallnotundertaketheacquisitionofvotingsharesorvotingrightsoracquisitionoftheconversionorsubscriptionrightsoroptionsofCCHB(excludingissuanceofnewCCHBsharesfollowingtheexerciseoftheconversionorsubscriptionrightsoroptions,orwhereallCCHBsubscriptionrightsoroptionsonapro-rata basis) by the PAC throughout the validity period of the Exemption.

(v) ThemandatoryofferobligationbythePACtoacquirealltheremainingCCHBSharesnotalreadyheldbythem upon completion of the Rights Issue or after the exercise of the Warrants will not arise as a result of granting of the Exemption.

Thecorporateproposalwascompletedon3October2011withthelistingandquotationfor60,847,500newCCHBsharestogetherwith60,847,500freedetachablewarrants.

4. Depository Receipt programme

TheCompanydidnotsponsoranyDepositoryReceiptProgrammeduringthefinancialyear.

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ANNUAL REPORT 2014

Additional Compliance Information

(cont’d)

5. Related party Transactions of a Revenue or Trading Nature

Significant related party transactions of the Group for the financial year ended 31 December 2014 are disclosed on page 116 of this Annual Report.

6. Sanctions and/or penalties

Therewerenosanctionsand/orpenaltyimposedontheCompany,itssubsidiaries,Directorsormanagementbytherelevant regulatory bodies during the financial year under review.

7. Non-Audit fees

For the financial year ended 31 December 2014, Messrs. Moore Stephens Associates & Co, the External Auditors has renderedcertainnon-auditservicestotheCompany,abreakdownofwhichislistedasbelowforinformation:-

CompanyNon-audit services rendered (Rm)

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

8. Variation in Results

TheannualauditedfinancialstatementsoftheCompany/Groupforthefinancialyearended31December2014didnot vary by 0.4% or more from the unaudited financial results announced to Bursa Securities on 27 February 2015.

9. profit Guarantee

Therewasnoprofitguaranteeforthefinancialyear.

10. material Contracts Involving Directors’ and major Shareholders’ Interests

TherewasnomaterialcontractenteredintobytheGroupinvolvingtheinterestofDirectorsandmajorshareholders,either still subsisting as at the end of the financial year or entered into since the end of the previous financial year.

11. Share Issuance Scheme for Employees

TheGroupdidnotofferanyshareschemeforemployeesduringthefinancialyear.

12. Directors’ Training and Education

TheDirectorsattendednumeroustrainingsduringthefinancialyearended31December2014andthedetailsoftrainings are disclosed in the Statement on Corporate Governance on pages 28 and 29 of this Annual Report.

13. Sanction and/or penalties

TheCompanyanditssubsidiaries,Directorsandmanagementhavenotbeenimposedwithanysanctionsand/orpenaltiesbyandregulatoryauthorities.

14. Revaluation of Landed properties

TheCompanyanditssubsidiarieshavenolandedproperties.

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ANNUAL REPORT 2014

STATEMENT ON DIRECTORS’ RESPONSIbILITy FOR PREPARING ThE FINANCIAL STATEMENTS

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.

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

TheDirectorshavereliedonthesystemofinternalcontrolstoensurethattheinformationgeneratedforthepreparationofthe financial statements from the underlying accounting records are accurate and reliable.

TheDirectorsareresponsibleforensuringthattheCompanymaintainsaccountingrecordswhichdisclosewithreasonableaccuracy 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.

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

ThisStatementonDirectors’Responsibilityforpreparingthefinancialstatementsismadeinaccordancewiththeresolutionof the Board of Directors dated 8 May 2015.

62 Directors’ Report

66 Statement by Directors

66 Statutory Declaration

67 Independent Auditors’ Report

69 Statements of Comprehensive Income

70 Consolidated Statements of Financial Position

71 Company Statements of Financial Position

72 Consolidated Statements of Changes in Equity

74 Company Statements of Changes in Equity

75 Statements of Cash Flows

77 Notes to the Financial Statements

FINANCIALSTATEMENTS

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ANNUAL REPORT 2014

DIRECTORS’ REPORT

ThedirectorshavepleasureinpresentingtheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompany for the financial year ended 31 December 2014.

pRINCIpAL ACTIVITIES

TheprincipalactivityoftheCompanyisinvestmentholding.

Theprincipalactivitiesofthesubsidiariesarethatofdesign,manufacture,sales,marketing,servicesandtradingofcables,connectors and related products.

Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.

RESULTS

Group Company Rm Rm Lossnetoftax 2,992,653 2,938,040

Lossattributableto: OwnersoftheCompany 2,659,732 2,938,040Non-controlling interest 332,921 –

2,992,653 2,938,040

Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanasdisclosedinthefinancial 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.

ISSUE Of SHARES Duringthefinancialyear,theCompanyincreasedits:

(a) authorised ordinary share capital from RM25,000,000 to RM50,000,000 through the creation of 250,000,000 ordinary shares of RM0.10 each; and

(b) issued and paid-up share capital from RM17,179,290 to RM20,615,140 by the issuance of 16,902,900 and 17,455,600 ordinary shares of RM0.10 each at an issue price of RM0.168 and RM0.133 per ordinary share respectively pursuant to the private placement exercise.

Thenewordinarysharesissuedduringthefinancialyearrankparipassuinallrespectswiththeexistingordinarysharesof the Company.

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ANNUAL REPORT 2014

DETACHABLE WARRANTS

Thewarrants2011/2021representdetachablewarrantswhichareconstitutedunderDeedPolldated24June2011.Asat31 December 2014, the total numbers of warrants that remain unexercised were 60,846,600.

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

DIRECTORS

ThenamesofthedirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:

AngChuangJuayRoyTheanChongYew (Appointedon29September2014)GohKokBoon (Appointedon29September2014)HongCheongLiang (Appointedon30October2014)LeeChoonKwong (Appointedon7November2014)LimWeeKiat (Resignedon31December2014)TanNyapKeong@TonyTan (Resignedon31October2014)LaiSoonYip (Retiredon29May2014)Megat D. Shahriman Bin Dato’ Zaharudin (Resigned on 30 September 2014)DatukNorazmanBinHajiHamidun (Resignedon30September2014)OngKooiTatt (Resignedon7November2014)WongKeetLoy (Appointedon11August2014;Resignedon31October2014)

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

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in sharesandoptionsoverthesharesintheCompanyanditsrelatedcorporationsduringthefinancialyearwereasfollows:

Number of Ordinary Shares of Rm0.10 EachDirect interest 1.1.2014 Bought Sold 31.12.2014 AngChuangJuay 11,665,752 – – 11,665,752LeeChoonKwong – 237,400 – 237,400

AngChuangJuaybyvirtueofhistotaldirectinterestsinsharesintheCompanyandpursuanttoSection6A(4)(c)oftheCompanies Act,1965, is deemed interested in the shares in all of the Company’s subsidiaries to the extent that the Company has interests.

Otherthanasdisclosedabove,theotherdirectorsdonothaveanyinterestinthesharesoroptionsoversharesoftheCompany or of its related companies during and at the end of the financial year.

Directors’ Report(cont’d)

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ANNUAL REPORT 2014


OTHER STATUTORY INfORmATION

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company weremadeout,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 the 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.

SIGNIfICANT EVENTS

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

SUBSEQUENT EVENTS

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

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ANNUAL REPORT 2014

AUDITORS

Theauditors,MooreStephensAssociates&Co.,retireandhaveindicatedtheirwillingnesstoacceptre-appointmentunderthenameofMooreStephensAssociatesPLT.

Signed on behalf of the Board in accordance with a resolution of the directors

ANG CHUANG JUAY GOH KOK BOON

KualaLumpur,WilayahPersekutuan8 April 2015


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ANNUAL REPORT 2014

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

We,ANGCHUANGJUAYandGOHKOKBOON,beingtwoofthedirectorsofCONNECTCOUNTYHOLDINGSBERHAD,doherebystate that, in the opinion of the directors, the accompanying financial statements set out on pages 69 to 127 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 2014 and of their financial performance and the cash flows of the Group and of the Company for the year then ended.

TheinformationsetoutinNote37tothefinancialstatementshavebeenpreparedinaccordancewiththeGuidanceonSpecialMatterNo.1.DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants. Signed on behalf of the Board in accordance with a resolution of the directors

ANG CHUANG JUAY GOH KOK BOON

KualaLumpur,WilayahPersekutuan8 April 2015

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

I,NICHOLASCHEETIONGKING(I/CNo.:651021-08-5293),beingtheofficerprimarilyresponsibleforthefinancialmanagementofCONNECTCOUNTYHOLDINGSBERHAD,dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementssetout on pages 69 to 128 are 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 )atKualaLumpurintheStateofWilayah )Persekutuan on 8 April 2015 ) NICHOLAS CHEE TIONG KING

Beforeme:

KALASAGAR NAIRCommissionerforOaths

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ANNUAL REPORT 2014

INDEPENDENT AUDITORS’ REPORT

to the Members of Connectcounty Holdings Berhad

REpORT ON THE fINANCIAL STATEmENTS

WehaveauditedthefinancialstatementsofConnectCountyHoldingsBerhad,whichcomprisethestatementsoffinancialposition as at 31 December 2014 of the Group and of the Company, 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 69 to 127.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.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,includingtheassessmentofrisksofmaterialmisstatementof the financial statements, 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In 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 2014 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.

REpORT ON OTHER LEGAL AND REGULATORY REQUIREmENTS

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 are indicated in Note 15 to the financial statements.

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ANNUAL REPORT 2014

Independent Auditors’ Reportto the Members of Connectcounty Holdings Berhad(cont’d)

REpORT ON OTHER LEGAL AND REGULATORY REQUIREmENTS (CONT’D)

(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’reportsontheaccountsofthesubsidiariesdidnotcontainanyqualificationoranyadversecommentmade under Section 174(3) of the Act other than that related to emphasis of matter as disclosed in Note 15(b) to the financial statements.

OTHER REpORTING RESpONSIBILITIES

ThesupplementaryinformationsetoutinNote37isdisclosedtomeettherequirementofBursaMalaysiaSecuritiesBerhadandisnotpartofthefinancialstatements.ThedirectorsareresponsibleforthepreparationofthesupplementaryinformationinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbyMalaysianInstituteofAccountants(“MIAGuidance”)andthedirectiveofBursaMalaysiaSecuritiesBerhad.Inouropinion,thesupplementaryinformation is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other matters

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

moore Stephens Associates & Co. Bala Krishnan A/L ponniahAF1494 1394/07/15(J/PH)Chartered Accountants Chartered Accountant

JohorBahru,Malaysia8 April 2015

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ANNUAL REPORT 2014

Group Company NOTE 2014 2013 2014 2013 Rm Rm Rm Rm

Revenue 3 52,609,613 52,792,159 – – Cost of sales 4 (40,782,764) (40,442,929) – – Gross profit 11,826,849 12,349,230 – – Other items of income 5 1,968,752 1,225,194 671,835 798,115 Other items of expenses Administration expenses (10,796,408) (9,318,812) (1,595,532) (1,350,374) Distribution and selling expenses (3,056,678) (3,307,062) – – Otherexpenses 6 (2,574,767) (1,277,871) (2,013,745) (55,651) Share of loss of associate 14 – (50,000) – – Finance cost, net 7 (87,328) (77,682) (598) (258)

Loss before tax 8 (2,719,580) (457,003) (2,938,040) (608,168) Incometax(expense)/credit 11 (273,073) (643,819) – 783 Loss net of tax (2,992,653) (1,100,822) (2,938,040) (607,385)

Loss attributable to:OwnersoftheCompany (2,659,732) (1,100,822) (2,938,040) (607,385)Non-controlling interest (332,921) – – –

(2,992,653) (1,100,822) (2,938,040) (607,385) Losspershareattributableto owners of the Company (sen) Basic 12(a) (1.44) (0.69)Diluted 12(b) (1.37) (0.67)

Other comprehensive income/ (expenses) Foreign currency translation 214,194 (96,533) – – Total comprehensive expenses for the year (2,778,459) (1,197,355) (2,938,040) (607,385) Total comprehensive expenses attributable to: OwnersoftheCompany (2,445,538) (1,197,355) (2,938,040) (607,385)Non-controlling interest (332,921) – – –

(2,778,459) (1,197,355) (2,938,040) (607,385)

STATEMENTS OF COMPREhENSIVE INCOME

for the year ended 31 December 2014

Theaccompanyingnotesformanintegralpartofthefinancialstatements.

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ANNUAL REPORT 2014

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONas at 31 December 2014


NOTE 2014 2013 Rm Rm

ASSETS Non-current assets Plant and equipment 13 4,046,899 2,593,936 Investment in associates 14 – –Deferred tax assets 16 194,234 444,402

4,241,133 3,038,338

Current assets Inventories 17 5,612,461 5,370,012Tradereceivables 18 9,666,351 10,329,566Otherreceivables 19 2,821,223 2,583,500Cash and bank balances 20 4,847,058 3,095,258

22,947,093 21,378,336

TOTAL ASSETS 27,188,226 24,416,674

EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital 21 20,615,140 17,179,290Share premium 22 2,170,979 665,621Foreign exchange reserve 23 194,327 (19,867)Accumulated losses (7,043,314) (4,383,582)

TOTAL EQUITY 15,937,132 13,441,462

Non-current liabilities Borrowings 24 266,715 122,598Otherpayables 27 38,466 47,307Deferred tax liabilities 16 39,799 39,799

344,980 209,704

Current liabilities Borrowings 24 60,760 51,728Tradepayables 26 7,884,125 8,329,829Otherpayables 27 2,961,229 2,383,951

10,906,114 10,765,508

TOTAL LIABILITIES 11,251,094 10,975,212

TOTAL EQUITY AND LIABILITIES 27,188,226 24,416,674

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ANNUAL REPORT 2014

COMPANY STATEMENT OF FINANCIAL POSITION

as at 31 December 2014

NOTE 2014 2013 Rm Rm

ASSETS Non-current assets Plant and equipment 13 11,537 2,954Investments in subsidiaries 15 3,636,358 1,186,358

3,647,895 1,189,312

Current assets Otherreceivables 19 6,080,302 6,952,603Cash and bank balances 20 909,661 532,574

6,989,963 7,485,177

TOTAL ASSETS 10,637,858 8,674,489

EQUITY AND LIABILITIES Share capital 21 20,615,140 17,179,290Share premium 22 2,170,979 665,621Accumulated losses (12,333,872) (9,395,832)

TOTAL EQUITY 10,452,247 8,449,079

Current liability Otherpayables 27 185,611 225,410

TOTAL LIABILITY 185,611 225,410

TOTAL EQUITY AND LIABILITIES 10,637,858 8,674,489


72


ANNUAL REPORT 2014

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CONSOLIDATED STATEMENT OF ChANGES IN EQUITyfor the year ended 31 December 2014

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73


ANNUAL REPORT 2014

Consolidated Statement of Changes in Equityfor the year ended

31 December 2014(cont’d)

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74


ANNUAL REPORT 2014

COMPANY STATEMENT OF ChANGES IN EQUITyfor the year ended 31 December 2014

Non-distributable NOTE Share Accumulated Total Capital Share premium Losses Equity Rm Rm Rm Rm

At 1 January 2013 15,617,540 491,340 (8,788,447) 7,320,433Totalcomprehensiveexpense for the year – – (607,385) (607,385)

15,617,540 491,340 (9,395,832) 6,713,048

Issuance of ordinary shares pursuant to Private placement 21&22 1,561,750 174,281 – 1,736,031

At 31 December 2013 17,179,290 665,621 (9,395,832) 8,449,079

At 1 January 2014 17,179,290 665,621 (9,395,832) 8,449,079Totalcomprehensiveexpense for the year – – (2,938,040) (2,938,040)

17,179,290 665,621 (12,333,872) 5,511,039Issuance of ordinary shares pursuant to Private placement 21&22 3,435,850 1,505,358 – 4,941,208

At 31 December 2014 20,615,140 2,170,979 (12,333,872) 10,452,247


75


ANNUAL REPORT 2014

STATEMENTS OFCASh FLOWS

for the year ended 31 December 2014

Group Company 2014 2013 2014 2013 Rm Rm Rm Rm CASH fLOWS fROm OpERATING ACTIVITIES Lossbeforetax (2,719,580) (457,003) (2,938,040) (608,168)Adjustmentsfor: Bad debts written off 892,244 – – 12,765Deposit written off 500,000 – 500,000 –Depreciation of plant and equipment 1,213,950 1,090,701 19,516 6,466Gain on disposal of plant and equipment (87,767) – – –Gain on disposal of associate (531) – – –Gain on foreign exchange – unrealised (354,794) (356,819) (269,174) (334,640)Impairment loss on other receivables – 507,734 – –Inventories written off – 74,500 – –Investment in subsidiary written off – – – 2Interest expenses 25,799 26,906 – –Interest income (1,796) (4,271) (1,367) (3,763)Lossondeemeddisposalofasubsidiary 1,153,490 – 1,500,000 –Reversal of impairment loss on – other receivables (1,088,451) (160,322) – (4,187)Share of loss of associate – 50,000 – –Share of post-acquisition loss of a subsidiary 346,510 – – –Plant and equipment written off 16,152 43,288 10,040 41,666

Operating(loss)/profitbeforeworking capital changes (104,774) 814,714 (1,179,025) (889,859)Inventories (242,449) (836,756) – –Receivables 343,239 (169,538) 564,557 (559,811)Payables 199,338 616,545 (39,799) (153,902)

Cashgeneratedfrom/(usedin) operations 195,354 424,965 (654,267) (1,603,572)Interest paid (25,799) (26,906) – –Tax(paid)/refund (16,256) (4,177) – 783

Netcashgeneratedfrom/(usedin) operating activities 153,299 393,882 (654,267) (1,602,789)


76


ANNUAL REPORT 2014

Statements of Cash Flowsfor the year ended 31 December 2014(cont’d)

Group Company 2014 2013 2014 2013 Rm Rm Rm Rm CASH fLOWS fROm INVESTING ACTIVITIES Acquisition of interest in subsidiaries (1,000,000) – (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 1,796 4,271 1,367 3,763Net cash outflow on dilution of equity interest in a subsidiary (12,748) – – –Proceeds from disposal of plant and equipment 183,936 – – –Proceeds from disposal of redeemable convertible preference shares in a subsidiary 900,000 – 900,000 –Proceeds from disposal of an associate 531 – – –Purchase of plant and equipment (2,250,151) (672,532) (38,139) –

Netcash(usedin)/generatedfrom investing activities (3,576,636) (668,261) (3,986,772) 3,763

CASH fLOWS fROm fINANCING ACTIVITIES Non-controlling interest arising from dilution of interest in subsidiary 332,921 – – –Proceeds from issuance of shares pursuant to private placement 5,161,282 1,874,100 5,161,282 1,874,100Private placement expenses (220,074) (138,069) (220,074) (138,069)Repayment of hire purchase (179,256) (34,896) – –Repayment of other short term borrowings – (444,673) – –

Net cash generated from financing activities 5,094,873 1,256,462 4,941,208 1,736,031

NET INCREASE IN CASH AND CASH EQUIVALENTS 1,671,536 982,083 300,169 137,005EffECTS Of ExCHANGE RATE CHANGES 80,264 (147,630) 76,918 170CASH AND CASH EQUIVALENTS AT BEGINNING Of THE fINANCIAL YEAR 3,095,258 2,260,805 532,574 395,399

CASH AND CASH EQUIVALENTS AT END Of THE fINANCIAL YEAR (NOTE 20) 4,847,058 3,095,258 909,661 532,574


77


ANNUAL REPORT 2014

NOTES TO THEFINANCIAL STATEMENTS

31 December 2014

1. CORpORATE INfORmATION

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

TheprincipalactivityoftheCompanyis investmentholding.Theprincipalactivitiesofthesubsidiariesarethatofdesign,manufacture,sales,marketing,servicesandtradingofcables,connectorsandrelatedproducts.Therehavebeen no significant changes in the nature of these principal activities during the financial year.

2. SUmmARY Of SIGNIfICANT ACCOUNTING pOLICIES

(a) Basis of preparation

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewithMalaysianFinancial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and therequirements of the Companies Act, 1965 in Malaysia.

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedunderthehistoricalcostconventionunless otherwise stated below.

ThefinancialstatementsarepresentedinRinggitMalaysia(RM).

(b) Adoption of Amendments to mfRSs and IC Interpretation

TheaccountingpoliciesadoptedbytheGroupandtheCompanyareconsistentwiththoseadoptedinthepreviousyear,exceptasfollows:

Effective for financial periods beginning on or after 1 January 2014 AmendmentstoMFRS10 : ConsolidatedFinancialStatements:InvestmentEntities AmendmentstoMFRS12 :DisclosureofInterestsinOtherEntities:InvestmentEntities AmendmentstoMFRS127: SeparateFinancialStatements:InvestmentEntities AmendmentstoMFRS132: Financial Instruments: Presentation –Offsetting Financial Assets and Financial

Liabilities AmendmentstoMFRS136: ImpairmentofAssets-RecoverableAmountDisclosuresforNon-FinancialAssets AmendmentstoMFRS139:NovationofDerivativesandContinuationofHedgeAccounting* ICInterpretation21 :Levies*

TheadoptionoftheabovepronouncementsdidnothaveanyimpactonthefinancialstatementsoftheGroupand of the Company.

(c) Standards and Interpretations Issued but Not Yet Effective

TheGroupandtheCompanyhavenotadoptedthefollowingaccountingstandards,amendmentsandinterpretationsoftheMFRSframeworkthathavebeenissuedbytheMalaysianAccountingStandardsBoard(“MASB”)butnotyeteffective:

Effective for financial periods beginning on or after 1 July 2014 AmendmentstoMFRS1 : First-timeAdoptionofMalaysianFinancialReportingStandards(AnnualImprovement

2011-2013 Cycle) AmendmentstoMFRS2 : Share-basedPayment(AnnualImprovements2010-2012)* AmendmentstoMFRS3 : BusinessCombinations(AnnualImprovements2010-2012Cycleand2011-2013

Cycle)

78


ANNUAL REPORT 2014

Notes to the Financial Statements31 December 2014(cont’d)

2. SUmmARY Of SIGNIfICANT ACCOUNTING pOLICIES (CONT’D)

(c) Standards and Interpretations Issued but Not Yet Effective (Cont’d)

Effective for financial periods beginning on or after 1 July 2014 (Cont’d) AmendmentstoMFRS8 :OperatingSegments(AnnualImprovements2010-2012Cycle) AmendmentstoMFRS13 : FairValueMeasurement(AnnualImprovement2010-2012Cycleand2011-2013

Cycle) AmendmentstoMFRS116: Property,PlantandEquipment(AnnualImprovements2010-2012Cycle) AmendmentstoMFRS119: EmployeeBenefits-DefinedBenefitPlans:EmployeeContributions AmendmentstoMFRS124: RelatedPartyDisclosures(AnnualImprovements2010-2012Cycle) AmendmentstoMFRS138: IntangibleAssets(AnnualImprovements2010-2012Cycle)* AmendmentstoMFRS140: InvestmentProperty(AnnualImprovements2011-2013Cycle)*

Effective for financial periods beginning on or after 1 January 2016 MFRS14:RegulatoryDeferralAccounts* AmendmentstoMFRS5 :Non-currentAssetsHeldforSaleandDiscontinuedOperations(AnnualImprovements

2012-2014 Cycle)* AmendmentstoMFRS7 : FinancialInstruments–Disclosures(AnnualImprovementsto2012-2014Cycle) AmendmentstoMFRS10 : ConsolidatedFinancialStatements–SaleorContributionofAssetsbetweenan

InvestoranditsAssociateorJointVenture* AmendmentstoMFRS11 : JointArrangements–AccountingforAcquisitionsofInterestinJointOperations* AmendmentstoMFRS116: Property,PlantandEquipmentandMFRS138,IntangibleAssets–Clarificationof

Acceptable Methods of Depreciation and Amortisation AmendmentstoMFRS116: Property,PlantandEquipmentandMFRS141,Agriculture–Agriculture:Bearer

Plants* AmendmentstoMFRS119: EmployeeBenefits(AnnualImprovementsto2012-2014Cycle) AmendmentstoMFRS127: Consolidated and Separate Financial Statements: EquityMethod in Separate

Financial Statements AmendmentstoMFRS128: InvestmentsinAssociates–SaleorContributionofAssetsbetweenanInvestor

anditsAssociateorJointVenture AmendmentstoMFRS134: InterimFinancialReporting(AnnualImprovementsto2012-2014Cycle) AmendmentstoMFRS138: Intangible Assets Clarification of AcceptableMethods of Depreciation and

Amortisation* AmendmentstoMFRS141: Agriculture*

Effective for financial periods beginning on or after 1 January 2017 MFRS15 : RevenuefromContractswithCustomers*

Effective for financial periods beginning on or after 1 January 2018 MFRS9 : FinancialInstruments

* Not applicable to the Group and the Company

79


ANNUAL REPORT 2014

Notes to the Financial Statements31 December 2014

(cont’d)


(c) Standards and Interpretations Issued but Not Yet Effective (Cont’d)

Thedirectorsexpectthattheadoptionoftheabovestandardsandinterpretationswillhavenosignificanteffectonthefinancialstatementsintheperiodofinitialapplicationexceptasthosedescribedbelow:

(i) MFRS9:FinancialInstruments MFRS9replacestheguidanceinMFRS139,FinancialInstruments:RecognitionandMeasurementon

the classification and measurement of financial assets. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost.

TheGroupandtheCompanywillquantifytheeffectofadoptingthisMFRSwhenthefullstandardisissued.

(ii) MFRS124:RelatedPartyDisclosures

TheamendmentstoMFRS124hasexpendedthedefinitionofkeymanagementpersonneltoincludeanentity, or any member of a group of which it is part, that provides key management personnel services to the reporting entity or to the parent of the reporting entity. Consequently, the amounts incurred by the reporting entity for the provisions of key management personnel services that are provided by a separate management entity shall be disclosed.

TheadoptionofMFRS124willresultinadditionaldisclosureinthenotestothefinancialstatements.

(d) Subsidiaries and basis of consolidation

(i) Subsidiaries

Subsidiariesareallentitiesoverwhichthegrouphascontrol.ThegroupcontrolanentitywhentheGroupis exposed 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 lessaccumulatedimpairmentlosses.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceeds and their carrying amounts is recognised in profit or loss.

(ii) Basis of consolidation

TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyanditssubsidiariesasatthefinancialyearend.Thefinancialstatementsofthesubsidiariesusedinthepreparationoftheconsolidated financial 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.

Subsidiaries are consolidated from the date onwhich control is transferred to theGroup. They aredeconsolidated from 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.

Acquisitions of subsidiaries are accounted for using the purchase method.

80


ANNUAL REPORT 2014



(d) Subsidiaries and basis of consolidation (Cont’d)

(ii) Basis of consolidation (Cont’d)

Under the purchase method of accounting identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the date of acquisition.Adjustmenttothosefairvaluesrelatingtopreviouslyheldinterestsaretreatedasarevaluationandrecognisedinothercomprehensiveincome.Thecostofabusinesscombinationismeasuredastheaggregate of the fair values, at the date 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 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 of financial position, separately from the parent shareholder's equity. Transactionswithnon-controlling interest are accounted for using the entity concept method, whereby, transactions with non-controllinginterestsareaccountedforastransactionswithowners.Onacquisitionofnon-controllinginterest, 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.

(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 participateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontrolover those policies.

Onacquisitionofaninvestmentinassociate,anyexcessofthecostofinvestmentovertheGroup’sshareof 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.

81


ANNUAL REPORT 2014


(cont’d)


(d) Subsidiaries and basis of consolidation (Cont’d)

(v) Associate (Cont’d)

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.

ThefinancialstatementsoftheassociatearepreparedasofthesamereportingdateastheCompany.Wherenecessary,adjustmentsaremadetobringtheaccountingpoliciesinlinewiththoseoftheCompany.

Afterapplicationoftheequitymethod,theCompanyappliesMFRS139FinancialInstruments:Recognitionand Measurement 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 withMFRS136:ImpairmentofAssetsasasingleasset,bycomparingitsrecoverableamount(higherofvalue in use and fair 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 impairmentlosses.Ondisposalofsuchinvestment,thedifferencebetweennetdisposalproceedsandtheir carrying amounts is included in profit or loss.

82


ANNUAL REPORT 2014



(e) foreign Currencies

(i) Functional and presentation currency

TheindividualfinancialstatementsofeachentityintheGroupandtheCompanyaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(the“functionalcurrency”).TheconsolidatedfinancialstatementsarepresentedinRinggitMalaysia(RM)whichisalsotheGroup’sand the Company’s functional currency.

(ii) Foreign currency transactions

TransactionsinforeigncurrenciesaremeasuredintherespectivefunctionalcurrenciesoftheCompanyand its subsidiaries 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 comprehensiveincomeandaccumulatedunderforeigncurrencytranslationreserveinequity.Theforeigncurrency translation reserve is reclassified 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

TheassetsandliabilitiesofforeignoperationsaretranslatedintoRMattherateofexchangerulingatthereporting date and income and expenses are translated at exchange rates at the dates of the transactions. Theexchangedifferencesarisingonthetranslationaretakendirectlytoothercomprehensiveincome.

Ondisposalofaforeignoperation,thecumulativeamountrecognisedinothercomprehensiveincomeand accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

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

83


ANNUAL REPORT 2014


(cont’d)


(f) plant and Equipment

Allitemsofplantandequipmentareinitiallyrecordedatcost.Thecostofanitemofplantandequipmentisrecognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and 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 Company recognise such parts as individual assets with specific useful lives and depreciation,respectively.Likewise,whenamajorinspectionisperformed,itscostisrecognisedinthecarryingamount of the plant and equipment 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 assetsasfollows:

Plant and machinery 10% to 33.3% Officeequipment,furnitureandfittings 10%to33.3% Motor vehicles 10% to 20% Mouldings 20% Renovation 10% to 33%

Thecarryingvaluesofplantandequipmentarereviewedforimpairmentwheneventsorchangesincircumstancesindicate that the carrying value may not be recoverable.

Theresidualvalues,usefullifeanddepreciationmethodarereviewedateachfinancialyear-end,andadjustedprospectively, 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) Impairment of Non-financial Assets

TheGroupandCompanyassessateachreportingdatewhetherthereisanindicationthatanassetotherthaninventories 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 identifiablecashflows(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.

84


ANNUAL REPORT 2014



(g) Impairment of Non-financial Assets (Cont’d)

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 toitsrecoverableamount.Thatincreaseshallnotexceedthecarryingamountthatwouldhavebeendetermined,net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.

(h) financial Assets

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.

TheGroupandtheCompanydeterminetheclassificationoftheirfinancialassetsatinitialrecognitionandthecategoriesareasfollows:

• 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,exceptforthosehavingmaturitydateslaterthan

12 months after reporting date which are classified as non-current.

A financial asset or part of it is derecognised when, and only when, the contractual rights to receive cash flows from the asset has expired or the financial asset is transferred to another party without retaining control or substantiallyallrisksandrewardsoftheasset.Onderecognitionofafinancialassetinitsentirety,thedifferencebetween the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

(i) Impairment of financial Assets

TheGroupandCompanyassessateachreportingdatewhetherthereisanyobjectiveevidencethatafinancialasset is impaired.

Tradeandotherreceivablesandotherfinancialassetscarriedatamortisedcost

Todeterminewhetherthereisobjectiveevidencethatanimpairmentlossonfinancialassetshasbeenincurred,the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

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(cont’d)


(i) Impairment of financial Assets (Cont’d) Tradeandotherreceivablesandotherfinancialassetscarriedatamortisedcost(Cont’d)

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. ObjectiveevidenceofimpairmentforaportfolioofreceivablescouldincludetheGroup’sandtheCompany’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.

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 effectiveinterestrate.Theimpairmentlossisrecognisedinprofitorloss.

Thecarryingamountofthefinancialassetisreducedbytheimpairmentlossdirectlyforallfinancialassetswith the exception 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 in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectivelytoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentloss is reversed to the extent that the carrying amount of the assets does not exceed its amortised cost at the reversaldate.Theamountofreversalisrecognisedinprofitorloss.

(j) Cash and Cash Equivalents 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.Thecostofrawmaterialscomprisescostofpurchase.The

cost of 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) financial Liabilities

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 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.

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(l) financial Liabilities (Cont’d)

• Otherfinancialliabilities

TheGroup’s and the Company’s other financial liabilities include trade payables, other payables andborrowings.

Tradeandotherpayablesarerecognisedinitiallyatfairvalueplusdirectlyattributabletransactioncostsand subsequently 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.

A financial liability or a part of it is derecognised when, and only when, the obligation under the liability is extinguished. When an existing financial liability is replaced by another 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 amounts is recognised in profit or loss.

(m) fair Value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarketparticipantsatthemeasurementdate.Thefairvaluemeasurementisbasedonthepresumptionthat the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability.TheprincipalorthemostadvantageousmarketmustbeaccessiblebytheGroupandtheCompany.

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

TheGroupandtheCompanyusevaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the 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.

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(cont’d)


(n) Borrowing Cost

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) Employee Benefits

(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.

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

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

(iii) Terminationbenefits

TerminationbenefitsarerecognisedasanexpensewhentheGroupiscommitteddemonstrably,withoutrealistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntaryredundancy.TerminationbenefitsforvoluntaryredundanciesarerecognisedasexpensesiftheGroup 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 of the minimum lease payments. Any initial direct costs are also added to the amount capitalised.Leasepaymentsareapportionedbetweenthefinancechargesandreductionoftheleaseliabilitysoas 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.

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(p) Leases (Cont’d)

Leasedassetsaredepreciatedovertheestimatedusefullifeoftheasset.However,ifthereisnoreasonablecertainty that 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.

Operatingleasepaymentsarerecognisedasanexpenseinprofitorlossonastraight-linebasisovertheleaseterm.Theaggregatebenefitofincentivesprovidedbythelessorisrecognisedasareductionofrentalexpenseover the lease term on a straight-line basis.

(q) Income Taxes

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedor substantively enacted 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.

(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 temporary differences, and the carry forward of unused tax credits and unused tax lossescanbeutilisedexcept:

- 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.

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(cont’d)


(q) Income Taxes (Cont’d)

(ii) Deferred tax (Cont’d)

Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextentthat it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. 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 ordirectlyinequityanddeferredtaxarisingfromabusinesscombinationisadjustedagainstgoodwillonacquisition.

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) Segment Reporting

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 segments under their charge. The segmentmanagers report directly to Deputy Executive Chairman, whoregularly review the segment results in order to allocate resources to the segments and to assess the segments performance.

(s) Share Capital and Share Issuance Expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deductingallofitsliabilities.Ordinarysharesareequityinstruments.

Ordinarysharesarerecordedattheproceedsreceived,netofdirectlyattributableincrementaltransactioncosts.Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhich 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 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.

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(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 reviewedateachreportingdateandadjustedto reflect thecurrentbestestimate. If it isnolonger probable 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) Significant Accounting Judgments and Estimates

ThepreparationoftheGroup’sandtheCompany’sfinancialstatementsrequiresmanagementtomakejudgements,estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and thedisclosureofcontingentliabilitiesatthereportingdate.However,uncertaintyabouttheseassumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmenttothecarryingamountoftheassetor liability in the future.

(i) JudgementMadeinApplyingAccountingPolicies

TherewerenomajorjudgementsmadebythemanagementintheprocessofapplyingtheGroup’sandthe Company’s accounting policies that have the most significant effect on the amounts recognised in the financial statements.

(ii) KeySourcesofEstimationUncertainty

Thekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthereportingdate,thathavesignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow:

• Usefullivesofplantandequipment

Thecostofplantandequipmentforthemanufacturingofelectroniccomponentsisdepreciatedon a straight-line basis over the assets’ estimated economic useful lives. Management estimates theusefullifeoftheseplantandequipmenttobewithin3to10years.Thesearecommonlifeexpectancies applied in the electronics industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets,thereforefuturedepreciationchargescouldberevised.ThecarryingamountoftheGroup’sand 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 capitalallowancescanbeutilised.Significantmanagementjudgmentisrequiredtodeterminetheamount of deferred tax assets that can be recognised, based on the likely timing and level of future taxableprofitstogetherwithfuturetaxplanningstrategies.Thetotalcarryingvalueofthedeferredtax assets of the Group are as disclosed in Note 16.

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(cont’d)


(v) Significant Accounting Judgments and Estimates (Cont’d)

(ii) KeySourcesofEstimationUncertainty(Cont’d)

• Impairmentofloansandreceivables

TheGroupandtheCompanyassessateachreportingdatewhetherthereisanyobjectiveevidencethatafinancialassetisimpaired.Todeterminewhetherthereisobjectiveevidenceofimpairment,the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Wherethereisobjectiveevidenceofimpairment,theamountandtimingoffuturecashflowsareestimatedbasedonhistoricallossexperienceforassetswithsimilarcreditriskcharacteristics.Thecarrying amounts of the Group 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 insubsidiaries.TheCompanycarriedouttheimpairmenttestbasedontheestimationofthehigherofthevalue-in-useorthefairvaluelesscostofdisposalofthecash-generatingunits(“CGU”)towhich the investments in subsidiaries 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 anddeclineinthenetrealisablevaluebelowcost.Thesereviewsrequiretheuseofjudgementsand estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.InventorieswrittenofftoprofitorlossinrespectoftheGroupisRMNil(2013:RM74,500).

3. REVENUE

Thisrepresentsinvoicedsalesafterallowanceforgoodsreturnedandtradediscount.

4. COST Of SALES

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

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5. OTHER ITEmS Of INCOmE

Group Company 2014 2013 2014 2013 Rm Rm Rm Rm

GovernmentincentiveforSME/Job credit rebates 210,443 253,513 – –Gain on foreign exchange – unrealised 354,794 356,819 269,174 334,640Gain on disposal of plant and equipment 87,767 – – –Interest income 1,796 4,271 1,367 3,763Rebate from suppliers 74,040 95,107 – –Reversal of impairment on other receivables 1,088,451 160,322 – 4,187Recovery expenses from subsidiaries – – 401,122 455,525Rework charges – 231,418 – -Sales of scrap 54,414 46,666 – –Sub-let rental income 96,875 71,040 – –Other 172 6,038 172 – 1,968,752 1,225,194 671,835 798,115

6. OTHER ExpENSES


Bad debts written off 892,244 – – 12,765Deposit written off 500,000 – 500,000 –Investment in subsidiary written off – – – 2Impairment loss on other receivables – 507,734 – –Plant and equipment written off 16,152 43,288 10,040 41,666Lossondeemeddisposalinsubsidiary 1,153,490 – 1,500,000 –Lossonforeignexchange-realised 12,881 726,849 3,705 1,218 2,574,767 1,277,871 2,013,745 55,651

7. fINANCE COST, NET


Finance and bank interest 25,799 26,906 – –Bank charges 61,529 50,776 598 258

87,328 77,682 598 258

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ANNUAL REPORT 2014


(cont’d)

8. LOSS BEfORE TAx

Lossbeforetaxisstatedaftercharging/(crediting):


Auditors’ remuneration - Statutory audit - current year 88,374 75,680 22,000 20,000 -Otherservices - under provision in prior year 6,000 5,000 6,000 5,000Auditors’ remuneration borne by holding company - Subsidiary 37,000 35,000 37,000 35,000Bad debts written off 892,244 – – 12,765Deposit written off 500,000 – 500,000 –Depreciation (Note 13) 1,213,950 1,090,701 19,516 6,466Employee benefits expense (Note 9) 14,231,633 11,967,180 961,838 754,836Impairment loss on other receivables (Note 19) – 507,734 – –Interest income (1,796) (4,271) (1,367) (3,763)Interest expenses 25,799 26,906 – –Inventories written off – 74,500 – –Investment in subsidiary written off – – – 2(Gain)/Lossonforeignexchange - unrealised (354,794) (356,819) (269,174) (334,640) - realised 12,881 726,849 3,705 1,218Gain on disposal of plant and equipment (87,767) – – –Gain on disposal of associate (531) – – –Lossondeemeddisposalofsubsidiary (Note 14) 1,153,490 – 1,500,000 –Plant and equipment written off 16,152 43,288 10,040 41,666Professional fees and cost on corporate expenses 63,850 – 63,850 –Reversal of impairment loss on other receivables (Note 19) (1,088,451) (160,322) – (4,187)Rental of equipment 85,574 83,310 4,716 5,486Rental of factory 997,632 945,060 – –Rental of office 1,069,923 1,004,111 47,000 35,800Rental income (96,875) (71,040) – –

9. EmpLOYEE BENEfITS ExpENSE


Wages, salaries and bonuses 13,549,346 11,339,107 847,452 687,162Social security contributions 208,515 190,238 4,080 3,192Defined contribution plans 254,448 255,650 86,881 59,432Otherstaffrelatedexpenses 219,324 182,185 23,425 5,050 14,231,633 11,967,180 961,838 754,836

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9. EmpLOYEE BENEfITS ExpENSE (CONT’D)

Included in employee benefits expense of the Group and of the Company are directors’ remuneration amounting to RM2,875,734(2013:RM1,535,648)andRM504,130(2013:RM285,170)respectivelyasdisclosedinNote10.

10. DIRECTORS’ REmUNERATION


Directors of the CompanyExecutive:Salaries and other emoluments 1,172,175 922,420 320,775 73,837Fees 120,049 134,120 37,000 65,000Benefits-in-kind 25,669 37,458 – –

1,317,893 1,093,998 357,775 138,837

Non-executive:Salaries and other emoluments – 67,333 – 67,333-Overprovisioninprioryear – (2,000) – (2,000)Fees 146,355 81,000 146,355 81,000

146,355 146,333 146,355 146,333 1,464,248 1,240,331 504,130 285,170

Other directors of subsidiariesExecutive:Salaries and other emoluments 1,299,397 267,418 – –Defined contribution plans 28,185 20,557 – –Fee 109,573 44,800 – – 1,437,155 332,775 – –

Total 2,901,403 1,573,106 504,130 285,170

Analysisexcludingbenefits-in-kind:

Totalexecutivedirectors’ remuneration (Note 29(b)) 2,729,379 1,389,315 357,775 138,837

Totalnon-executivedirectors’ remuneration 146,355 146,333 146,355 146,333

Totaldirectors’remuneration(Note9) 2,875,734 1,535,648 504,130 285,170

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ANNUAL REPORT 2014


(cont’d)

10. DIRECTORS’ REmUNERATION (CONT’D)

ThenumberofdirectorsoftheCompanywhosetotalremunerationduringthefinancialyearfellwithinthefollowingbandsisanalysedbelow:

Number of directors 2014 2013

Executive directors: Below RM100,000 3 4RM100,001 to RM150,000 1 -RM950,001 to RM1,000,000 1 1 Non-executive directors: Below RM50,000 5 6RM50,0001 to RM100,000 2 –

11. INCOmE TAx ExpENSE/(CREDIT)

Themajorcomponentsofincometaxexpense/(credit)are:


Statement of comprehensive income: Currentincometax:Overprovisioninprioryear – (783) – (783)Foreign tax 16,256 4,960 – – 16,256 4,177 – (783)

Deferredtax(Note16):Relating to origination of temporary differences 290,831 753,418 – –Overprovisioninprioryears (34,014) (113,776) – – 256,817 639,642 – –

Income tax recognised in profit or loss 273,073 643,819 – (783)

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ANNUAL REPORT 2014


11. INCOmE TAx ExpENSE/(CREDIT) (CONT’D)

Reconciliationbetweentaxexpense/(credit)andaccountingloss

A reconciliationbetween taxexpense/(credit)and theproductofaccounting lossaremultipliedby theapplicablecorporatetaxrateareasfollows:

2014 2013 Rm RmGroup Lossbeforetax (2,719,580) (457,003)

TaxationatMalaysianstatutorytaxrateof25%(2013:25%) (679,895) (114,251)Adjustments: Different tax rates in other countries (108,513) (53,603)Foreign tax 16,256 4,960Non-deductible expenses 1,177,759 408,594Deferred tax assets not recognised 20,592 261,680Deferred tax asset reversed on unutilised business losses – 332,960Differential tax rate for deferred tax 82,596 105,181Incomenotsubjecttotax (201,708) (187,143)Overprovisionofdeferredtaxinprioryear (34,014) (113,776)Overprovisionofincometaxinprioryears – (783)

Income tax recognised in profit or loss 273,073 643,819

2014 2013 Rm Rm

Company Lossbeforetax (2,938,040) (608,168)

TaxationatMalaysianstatutorytaxrateof25%(2013:25%) (734,510) (152,042)Adjustments: Non-deductible expenses 899,959 267,911Incomenotsubjecttotax (165,449) (115,869)Overprovisionofincometaxinprioryear – (783)

Income tax recognised in profit or loss – (783)

DomesticincometaxiscalculatedattheMalaysianstatutorytaxrateof25%(2013:25%)oftheestimatedassessable

profitfortheyear.TheMalaysianstatutorytaxratewillbereducedto24%fromthecurrentyear’srateof25%effectiveyear of assessment 2016.

Taxationforotherjurisdictioniscalculatedattheratesprevailingintherespectivejurisdictions.

Theabovereconciliationispreparedbyaggregatingseparatereconciliationforeachnationaljurisdiction.

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(cont’d)

12. LOSS pER SHARE

(a) Basic loss per share

Basic loss per share amounts are calculated by dividing 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.

Thefollowingreflectthelossandsharedatausedinthecomputationofbasiclosspersharefortheyearsended31December:

2014 2013 Lossfortheyear,netoftax,attributabletoownersofthe Company (RM) (2,659,732) (1,100,822)

Weighted average number of ordinary shares in issue 184,620,332 160,101,110

Basic loss per share (sen) (1.44) (0.69)

(b) Diluted loss per share

For the purpose of calculating diluted loss per share, the weighted average number of ordinary shares in issue duringthefinancialyearhavebeenadjustedfordilutiveeffectsofunexercisedwarrant.

2014 2013 Lossfortheyear,netoftax,attributabletoownersofthe Company (RM) (2,659,732) (1,100,822)

Weighted average number of ordinary shares in issue 184,620,332 160,101,110Effect of dilution of unexercised warrants 10,088,413 5,328,630

Adjustedweightedaveragenumberofordinaryshares for diluted loss 194,708,745 165,429,740

Diluted loss per share (sen) (1.37) (0.67)

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ANNUAL REPORT 2014


13. pLANT AND EQUIpmENT

Office Equipment, plant and furniture and motor machinery fittings Vehicles mouldings Renovation Total

Rm Rm Rm Rm Rm Rm

Group At 31 December 2014 Cost At1January2014 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 23,611 146,118 944,067

At 31 December 2014 7,716,687 1,804,165 924,526 208,941 1,774,031 12,428,350

Accumulated Depreciation and Impairment Losses At1January2014 Accumulated depreciation 4,491,763 1,852,203 381,272 87,474 1,043,754 7,856,466Accumulated impairment losses 63,406 – – – – 63,406 4,555,169 1,852,203 381,272 87,474 1,043,754 7,919,872Charge 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 At 31 December 2014 Accumulated depreciation 5,188,317 1,602,711 162,453 140,213 1,224,351 8,318,045Accumulated impairment losses 63,406 – – – – 63,406 5,251,723 1,602,711 162,453 140,213 1,224,351 8,381,451

Net Carrying Amount At 31 December 2014 2,464,964 201,454 762,073 68,728 549,680 4,046,899

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ANNUAL REPORT 2014


(cont’d)

13. pLANT AND EQUIpmENT (CONT’D)

Office Equipment, plant and furniture and motor machinery fittings Vehicles mouldings Renovation Total

Rm Rm Rm Rm Rm Rm

Group At 31 December 2013 Cost At1January2013 6,271,816 1,894,840 565,059 185,330 1,252,301 10,169,346Additions 500,637 116,367 55,528 – – 672,532Written offs (491,080) (18,796) – – (50,000) (559,876)Exchange differences 157,074 42,054 25,478 – 7,200 231,806

At 31 December 2013 6,438,447 2,034,465 646,065 185,330 1,209,501 10,513,808 Accumulated Depreciation and Impairment Losses At1January2013 Accumulated depreciation 4,058,368 1,686,620 281,848 50,479 982,118 7,059,433Accumulated impairment losses 63,406 – – – – 63,406

4,121,774 1,686,620 281,848 50,479 982,118 7,122,839Charge for the year 769,782 143,580 77,572 36,995 62,772 1,090,701Written offs (489,682) (18,572) – – (8,334) (516,588)Exchange differences 153,295 40,575 21,852 – 7,198 222,920 At 31 December 2013 Accumulated depreciation 4,491,763 1,852,203 381,272 87,474 1,043,754 7,856,466Accumulated impairment losses 63,406 – – – – 63,406

4,555,169 1,852,203 381,272 87,474 1,043,754 7,919,872

Net Carrying Amount At 31 December 2013 1,883,278 182,262 264,793 97,856 165,747 2,593,936

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ANNUAL REPORT 2014



Office Equipment, furniture and fittings Renovation Total Rm Rm Rm

Company At 31 December 2014 Cost At1January2014 10,646 – 10,646Addition 9,390 28,749 38,139Written off – (25,100) (25,100)

At 31 December 2014 20,036 3,649 23,685 Accumulated Depreciation At1January2014 7,692 – 7,692Charge for the year 4,456 15,060 19,516Written off – (15,060) (15,060)

At 31 December 2014 12,148 – 12,148 Net Carrying Amount At 31 December 2014 7,888 3,649 11,537

At 31 December 2013 Cost At1January2013 10,646 50,000 60,646Addition – – –Written off – (50,000) (50,000)

At 31 December 2013 10,646 – 10,646 Accumulated Depreciation At1January2013 4,143 5,417 9,560Charge for the year 3,549 2,917 6,466Written off – (8,334) (8,334)

At 31 December 2013 7,692 – 7,692 Net Carrying Amount At 31 December 2013 2,954 – 2,954

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(cont’d)


(a) Duringthefinancialyear,theGroupandtheCompanyacquiredalltheirplantandequipmentbymeansof:


Cash 2,250,151 672,532 38,139 –Hirepurchase 332,405 – – – 2,582,556 672,532 38,139 –

(b) ThenetcarryingamountofmotorvehicleoftheGroupheldunderfinanceleaseandheldintrustbyadirectorattheendofthefinancialyearisRM664,513(2013:RM133,122).

(c) ThecarryingamountofotherplantandequipmentoftheGroupheldintrustbyathirdpartyattheendofthefinancialyearisRM25,130(2013:RM36,660).

(d) Included in plant and equipment of the Group are the cost of fully depreciated assets which are still in use as follow:

Group 2014 2013 Rm Rm Plant and machinery 4,637,107 2,477,098Officeequipment,furnitureandfittings 231,959 1,675,876Renovation 125,967 752,031 4,995,033 4,905,005

14. INVESTmENT IN ASSOCIATES


Unquoted shares, at cost 1,750,395 50,000 1,500,000 –Less: Lossondeemeddisposal – – (1,500,000) –Lossonre-measurement (1,750,395) – -- –Share of loss – (50,000) – –

Carrying amount – – – –

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ANNUAL REPORT 2014


14. INVESTmENT IN ASSOCIATES (CONT’D)

Detailsoftheassociatecompaniesareasfollows:

Name of associates Country of Effective interest incorporation held (%) principal activities 2014 2013 MyGenBizzBerhad Malaysia 36.73 – Directsellingmarketing, multi-level marketing, distributor of and dealer of goods and merchandise. Ceased operation during the period YongxinLibikang People’s – 20.00 Manufacturingandtrading TechnologyCo.,Ltd* Republicof ofcables,connectorsand China products.

*HeldthroughRapidConn(ShenZhen)Co.,Ltd.

(a) On20January2014,theCompanyacquired51%equityinterestheldinMyGenBizzBerhad(“MGB”)anon-listedcompany, representing 51,000 ordinary shares of RM1 each for a cash consideration of RM1,000,000.

On17February2014,MGBissued1,400,000redeemableconvertiblepreferenceshares(“RCPS”)ofRM1each

inMGBforatotalconsiderationofRM1,400,000,whichwerefullysubscribedbytheCompany.On26September2014, 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.

On14October2014,theCompanyandtheshareholderredeemed500,000and900,000RCPSofRM1eachrespectively into 1,400,000 ordinary shares. As a result, MGB ceased to be a 51% subsidiary of the Company and became a 36.73% associate company of the Company.

Reconciliation net liabilities to carrying amount

Group 2014 Rm Carrying cost amount 1,500,000Gain on re-measurement 250,395

Carrying amount to date control is lost 1,750,395Lossonre-measurement (1,750,395)

Carrying amount –

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ANNUAL REPORT 2014


(cont’d)


(a) Reconciliation net liabilities to carrying amount (Cont’d)

ThedetailsofnetliabilitiesandcashflowsasatthedateofdisposalofMGBwereasfollow:

Group 2014 Rm Net liabilities (679,431)Non-controlling interest 332,921

Group’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)

ThesummarisedfinancialinformationofMGB,notadjustedfortheproportionofownershipinterestheldbytheGroup,isasfollows:

Group 2014 Rm

Assets and liabilities: Totalassets 1,025,617

Totalliabilities (217,686)

Results: Revenue 743,619

Lossfortheperiod (691,870)

TheGrouphasnotrecogniseditsshareoflossasitsfairvalueisRMNilatthereportingdate.

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(b) On17December2014,theCompanydisposedallits20%equityinterestheldinYongxinLibikangTechnologyCo.,Ltd.foraconsiderationofRMB1,000(equivalenttoRM531)toathirdparty.

Thesummarisedfinancialinformationfortheyearended31December2014and31December2013ofthe

associate,notadjustedfortheproportionofownershipinterestheldbytheGroup,wasasfollows:

Group 2014 2013 Rm Rm

Assets and liabilities: Totalassets – 1,106,515

Totalliabilities – (1,304,408)

Results: Revenue – 2,718,006

Lossfortheyear – (352,452)

Unrecognised share of loss in an associate


Theunrecognisedshareoflossinanassociatefortheyear – 20,491

TheGrouphasnotrecognisedthisshareoflossasatyearend31December2013astheshareoflossofthe

associate has exceeded the Group’s interest.

15. INVESTmENTS IN SUBSIDIARIES Company

2014 2013 Rm Rm Unquoted shares, at cost 23,382,397 20,932,397Less:Accumulatedimpairmentlosses (19,746,039) (19,746,039) 3,636,358 1,186,358

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(cont’d)

15. INVESTmENTS IN SUBSIDIARIES (CONT’D)

(a) Detailsofthesubsidiariesareasfollows:

Name of Country of Effective interest Subsidiaries incorporation held (%) principal activities 2014 2013 Rapid Conn Malaysia 100 100 Dormant. Interconnect (M) Sdn. Bhd. Borderless Fame Malaysia 100 – Dormant. Sdn. Bhd. Rapid Conn Inc. United States 100 100 Design, manufacture, of America sales, marketing and (USA) services of cables, connectors and related

products. RapidConn(S) Singapore 100 100 Tradingandmarketingofcables, Pte.Ltd.* connectorsandrelated products. Rapid Conn People’s 100 100 Manufacture and trading (ShenZhen) Republic of of cables, connectors and Co.,Ltd. China relatedproducts.

*AuditedbyMooreStephensLLP,Singapore.

(b) Auditors’ Report and subsidiaries

Rapid Conn Interconnect (M) Sdn. Bhd.’s. auditors’ report contain 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 contain audit emphasis of matter relating to the appropriateness of going concern basis of accounting is dependent on the financial support from its holding company.

(c) Acquisition of new subsidiary

On9January2014,theCompanyacquired2ordinarysharesofRM1eachinBorderlessFameSdn.Bhd.foracashconsiderationofRM2.On21January2014,theCompanysubscribed99,998newordinarysharesofRM1each in Borderless Fame Sdn. Bhd. at par.

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15. INVESTmENTS IN SUBSIDIARIES (CONT’D)

(d) Impairment tests for investments in subsidiaries

Themanagementhascarriedoutanimpairmentreviewontheinvestmentsinthesubsidiariesduetothevalueofnet tangible assets being lower than the investment cost incurred by the Company. In view of this, the Company hasusedvalue-in-usecalculationsusingcashflowprojectionstoestimatetherecoverableamount.

Value-in-use was determined by discounting the future cash flows generated from the continuing use of the cash generatingunitsbasedonthefollowingassumptions:

(i) pre-taxcashflowprojectionsbasedonthemostrecentfinancialbudgetsapprovedbythedirectorscoveringa 1 year’s period and extrapolated for another 2 years.

(ii) apre-taxdiscountrateof7%to9%wasappliedindeterminingtherecoverableamount.Thediscountratewas based on the current borrowing interest rate applicable at each subsidiaries locality.

Thevaluesassignedtothekeyassumptionsrepresentmanagement’sassessmentoffuturetrendsintheindustry.

16. DEfERRED TAx (ASSETS)/LIABILITIES


At1January (404,603) (1,010,140)Recognised in profit or loss (Note 11) 256,817 639,642Exchange differences (6,649) (34,105)

At 31 December (154,435) (404,603)

Deferred tax assets and liabilities are offsets when there is a legally enforceable right to set off current tax assets againstcurrenttaxliabilitiesandwhenthedeferredincometaxesrelatetothesametaxauthority.Thenetdeferredtaxassetsandliabilitiesshownonthestatementoffinancialpositionafterappropriateoffsettingareasfollows:


Deferred tax assets (194,234) (444,402)Deferred tax liabilities 39,799 39,799

(154,435) (404,603)

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ANNUAL REPORT 2014


(cont’d)

16. DEfERRED TAx (ASSETS)/LIABILITIES (CONT’D)

Deferred Tax Assets of the Group:

Unutilised business losses Others Total Rm Rm Rm At1January2014 (432,966) (11,436) (444,402)Recognised in profit or loss 256,817 – 256,817Exchange differences (6,649) – (6,649)

At 31 December 2014 (182,798) (11,436) (194,234)

At1January2013 (1,038,503) (11,436) (1,049,939)Recognised in profit or loss 639,642 – 639,642Exchange differences (34,105) – (34,105)

At 31 December 2013 (432,966) (11,436) (444,402)

Deferred Tax Liabilities of the Group:

plant and equipment Total Rm Rm

2014 and 2013 At1January/31December 39,799 39,799

Thedeferredtaxassetsarerecognisedforunutilisedbusinesslossesofasubsidiaryasthemanagementconsidereditprobablethatthefuturetaxableprofitsofthesubsidiarybasedontheprojectedfutureprofitswillbeavailableagainstwhich they can be utilised.

Deferred tax assets have not been recognised in respect of the following items as it is not probable that certain of thesubsidiarieswillgeneratesufficientfuturetaxableprofitsagainstwhichitcanbeutilised:


Unutilised business losses 7,746,920 7,541,800Unutilised capital allowances 4,511,600 4,511,600

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17. INVENTORIES


Atcost: Raw materials 909,387 764,509Finished goods 2,126,040 2,598,410Cables 552,153 9,445Components 78,135 385,340Goods in transit 1,040,407 952,730Work in progress 906,339 659,578

5,612,461 5,370,012

18. TRADE RECEIVABLES


Amount due from third parties 9,234,747 10,163,508Amount due from a former associate company 684,672 404,733 9,919,419 10,568,241Less:Allowanceforimpairment (253,068) (238,675) 9,666,351 10,329,566

Movementinallowanceforimpairmentduringthefinancialyearareasfollows:


At1January 238,675 224,210Exchange differences 14,393 14,465

At 31 December 253,068 238,675

TheGroup’snormaltradecredittermsareupto30daysto90days(2013:30daysto90days).Othercreditterms

are assessed and approved on a case-by-case basis.

TheGrouphasnosignificantconcentrationofcreditriskthatmayarisefromexposurestoasingledebtorortogroupofdebtors.Tradereceivablesarenon-interestbearing.

Theyarerecognisedattheiroriginalinvoiceamountswhichrepresenttheirfairvalueoninitialrecognition.

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ANNUAL REPORT 2014


(cont’d)

18. TRADE RECEIVABLES (CONT’D)

Ageing analysis of trade receivables

TheageinganalysisoftheGroup’stradereceivablesareasfollows:


Neither past due nor impaired 7,157,603 8,674,827

1 to 30 days past due not impaired 1,096,204 1,133,66531 to 60 days past due not impaired 436,544 259,79861 to 90 days past due not impaired 269,890 26,92691 to 120 days past due not impaired 312,292 234,350More than 120 days past due not impaired 393,818 –

2,508,748 1,654,739Impaired 253,068 238,675

9,919,419 10,568,241

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

TheGrouphastradereceivablesamountingtoRM2,508,748(2013:RM1,654,739)thatarepastdueatreportingdate but not impaired.

Thebalancesofreceivablesthatarepastduebutnotimpairedareunsecuredinnature.Themanagementisconfidentthat these receivables are recoverable as these accounts are still active.

Thecurrencyexposureprofilesoftradereceivablesareasfollows:


HongKongDollars 1,218,326 1,299,477US Dollars 1,092,088 1,422,948

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ANNUAL REPORT 2014


19. OTHER RECEIVABLES


Amount due from a former associate company 551,539 75,000 – –Amount due from subsidiaries – – 10,316,262 10,279,289Sales tax and purchase tax recoverable 2,125,963 1,397,213 – –Deposits 350,258 1,277,138 56,145 1,010,810Prepayments 158,227 179,933 49,160 1,624Sundry receivables 207,027 1,258,891 1,000 3,145

3,393,014 4,188,175 10,422,567 11,294,868Less:Allowanceforimpairment (571,791) (1,604,675) (4,342,265) (4,342,265)

2,821,223 2,583,500 6,080,302 6,952,603

Movementsinallowanceforimpairmentduringthefinancialyearareasfollows:


At1January 1,604,675 1,201,605 4,342,265 4,346,452Impairment loss (Note 8) – 507,734 – –Reversal of impairment on other receivables (Note 8) (1,088,451) (160,322) – (4,187)Exchange difference 55,567 55,658 – –

At 31 December 571,791 1,604,675 4,342,265 4,342,265

Otherreceivablesthatareindividuallydeterminedtobeimpairedatthereportingdaterelatetodebtorsthatareinsignificantfinancialdifficultiesandhavedefaultedonpayments.Thesereceivablesarenotsecuredbyanycollateralor credit enhancements.

Theamountsduefromrelatedpartiesareunsecured,non-interestbearingandarerepayableondemand.

Included in prior year’s deposits of the Group and the Company was an amount of RM1,000,000 placed as deposit for inventory in relation to the Distribution Agreement.

Included in reversal of impairment on other receivables of the Group are allowance for impairment written off amounting toRM569,166(2013:RMNil).

TheGrouphasnosignificantconcentrationofcreditriskthatmayarisefromexposurestoasingledebtorortogroupsofdebtorsexceptthat98%(2013:85%)ofreceivablesareduefromsubsidiariesatCompanylevel.

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(cont’d)

19. OTHER RECEIVABLES (CONT’D)

Thecurrencyexposureprofilesofotherreceivablesareasfollows:


US Dollars – 1,514 3,165,434 3,409,837Singapore Dollars 22,355 17,901 3,764,519 3,517,711

20. CASH AND BANK BALANCES


Cashonhandandatbanks/ Cash and cash equivalents 4,847,058 3,095,258 909,661 532,574

Thecurrencyexposureprofilesofcashandbankbalancesareasfollows:


HongKongDollars 8,338 4,692 – –Renminbi 23,356 2,406 – –Singapore Dollars 241,802 264,953 – –US Dollars 24,796 352,897 24,080 3,072

21. SHARE CApITAL

Group and Company Number of Ordinary Shares Amount of Rm0.10 each

2014 2013 2014 2013 Rm Rm

Authorised:At1January 250,000,000 250,000,000 25,000,000 25,000,000Created during the year 250,000,000 – 25,000,000 –

At 31 December 500,000,000 250,000,000 50,000,000 25,000,000

Issuedandfullypaid:At1January 171,792,900 156,175,400 17,179,290 15,617,540Issuance of shares pursuant to private placement 34,358,500 15,617,500 3,435,850 1,561,750

At 31 December 206,151,400 171,792,900 20,615,140 17,179,290

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ANNUAL REPORT 2014


21. SHARE CApITAL (CONT’D)

TheholdersofordinarysharesareentitledtoreceivedividendsasandwhendeclaredbytheCompany.Allordinaryshares carry one vote per share without restrictions and rank equally with regard to the Company’s residual assets.

Private Placement

During the financial year, the Company increased its

(a) authorised ordinary share capital from RM25,000,000 to RM50,000,000 through the creation of 250,000,000 ordinary shares of RM0.10 each; and

(b) issued and paid-up share capital from RM17,179,290 to RM20,615,140 by the issuance of 16,902,900 and 17,455,600 ordinary shares of RM0.10 each at an issue price of RM0.168 and RM0.133 per ordinary share respectively pursuant to the private placement exercise.

Thenewordinarysharesissuedduringthefinancialyearrankparipassuinallrespectswiththeexistingordinaryshares of the Company.

Detachable Warrants

In year 2011, the Company issued renounceable rights issue of 60,847,500 new ordinary share together with 60,847,500 free detachable warrants on the basis of three (3) rights shares together with three (3) detachable warrants foreveryfour(4)ordinarysharesoftheCompany.Thisexercisepriceissubjecttoadjustmentinaccordancewiththebasis set out in the deed poll.

Thewarrantsmaybeexercisedatanytimecommencingonthedateofissueofwarrantson19September2011butnot later 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.Thewarrantholderswillnothaveanyvotingrightsinanygeneralmeeting of the Company unless the warrants are exercised into new ordinary shares and registered prior to the date of the general meeting of the Company.

As at 31 December 2014, the total numbers of warrants that remained unexercised were 60,846,600.

22. SHARE pREmIUm

Group and Company 2014 2013 Rm Rm At1January 665,621 491,340Premiumarisingfrom: Private Placement 1,725,432 312,350Share issuance expenses (220,074) (138,069)

At 31 December 2,170,979 665,621

Thesharepremiumwhichisnon-distributablerepresentsthepremiumarisingfromtheissueofshares.

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ANNUAL REPORT 2014


(cont’d)

23. fOREIGN ExCHANGE RESERVE


At1January (19,867) 76,666Arising/(Reversal)duringtheyear 214,194 (96,533)

At 31 December 194,327 (19,867)

Theforeignexchangereservecomprisesallforeignexchangedifferencesarisingfromthetranslationofthefinancialstatements 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.

24. BORROWINGS


CurrentSecured: Obligationunderfinancelease(Note25) 60,760 51,728 Non-Current Secured: Obligationunderfinancelease(Note25) 266,715 122,598

Totalborrowings 327,475 174,326

Totalborrowings Obligationunderfinancelease(Note25) 327,475 174,326

TherewasashorttermloanfromathirdpartyobtainedbyasubsidiarycompanywhichwasdenominatedinSingaporeDollars, borne interest at rate of 10.5% per annum, unsecured and repayable in 12 monthly installments commencing from31July2014.Theshorttermloanwasfullyrepaidduringthefinancialyear.

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25. OBLIGATION UNDER fINANCE LEASE


Futureminimumhirepurchasepayments: Not later than 1 year 74,067 60,096Laterthan1yearandnotlaterthan2years 74,068 130,133Laterthan2yearsandnotlaterthan5years 215,992 –

364,127 190,229Less:Futurefinancecharges (36,652) (15,903)

Present value of obligation under finance lease (Note 24) 327,475 174,326

Analysisofpresentvalueofhirepurchaseliabilities: Not later than 1 year 60,760 51,728Laterthan1yearandnotlaterthan2years 63,752 122,598Laterthan2yearsandnotlaterthan5years 202,963 – 327,475 174,326

TheobligationunderfinanceleaseisdenominatedinSingaporeDollarsandbearsinterestatthereportingdateatrateof3.25%(2013:6.44%)perannum.

26. TRADE pAYABLES

Tradepayablesarenon-interestbearingandthenormaltradecredittermsgrantedtotheGrouprangesfrom30to120days(2013:30to120days).

Thecurrencyexposureprofilesoftradepayablesareasfollows:


US Dollars 664,854 1,352,038HongKongDollars – 1,424

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ANNUAL REPORT 2014


(cont’d)

27. OTHER pAYABLES Group Company 2014 2013 2014 2013 Rm Rm Rm Rm

CurrentAccruals 1,986,719 1,480,903 155,905 222,751Provision for unutilised leave 120,852 125,954 – –Sundry payables 853,658 777,094 29,706 2,659 2,961,229 2,383,951 185,611 225,410

Non-current Sundry payables 38,466 47,307 – –

Total 2,999,695 2,431,258 185,611 225,410

Thecurrencyexposureprofilesofotherpayablesareasfollows:


HongKongDollars 49,560 30,963 – –Singapore Dollars 195,895 198,148 – –

28. COmmITmENTS


(a) Lease commitments: Payable within one year 80,271 79,184 Payable more than one year but not more than five years 68,535 102,022

148,806 181,206

(b) Rental commitments:

TheGroupandtheCompanyhaveenteredintonon-cancellableoperatingleaseagreementsforuseoffactory,officeandequipment.Theseleaseshaveanaveragelifeofbetween1to5yearswithrenewaloptionincludedinthecontracts.TherearenorestrictionsplacedupontheGroupandtheCompanybyenteringintotheleases.

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28. COmmITmENTS (CONT’D)

(b) Rental commitments: (Cont’d)

The future aggregateminimum lease payments under the non-cancellable operating lease contacted as atreportingdatebutnotrecognisedasliabilitiesareasfollow:


Payable within one year 2,061,700 1,860,452 36,000 48,000Payable more than one year but not more than five years 1,179,628 2,852,443 69,000 28,000

3,241,328 4,712,895 105,000 76,000

29. SIGNIfICANT RELATED pARTY TRANSACTIONS

(a) Significant related party transactions

ThefollowingsignificantrelatedpartytransactionsbetweentheGroupandtheCompanyandtheirrelatedpartiestook place at terms agreed between the parties during the financial year.


Sales to former associate company 676,162 431,988

Company 2014 2013 Rm Rm

Recovery expenses charged to subsidiaries 401,122 455,525

(b) Compensation of key management personnel

Theremunerationofdirectorsandothermembersofkeymanagementduringtheyearwereasfollows:


Short term employee benefits 2,666,384 1,380,971 320,124 140,517Post-employmentbenefits:Defined contribution plan 88,664 57,802 37,651 10,320

2,755,048 1,438,773 357,775 150,837

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ANNUAL REPORT 2014


(cont’d)

29. SIGNIfICANT RELATED pARTY TRANSACTIONS (CONT’D)

(b) Compensation of key management personnel (Cont’d)


Included in the total key managementpersonnelare:

Directors’ remuneration excluding benefits in kind (Note 10) 2,729,379 1,389,315 357,775 138,837

30. fAIR VALUES Of fINANCIAL INSTRUmENTS

(a) Fair value of the financial instruments

TheGroupandtheCompanycategorisefairvaluemeasurementusingafairvaluehierarchythatisdependentonthevaluationinputsusedasfollows:

(i) Level1:Quotedprices(unadjusted)inactivemarketsforidenticalassetsandliabilitiesthattheGroupand the Company can access at measurement date;

(ii) Level2:InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,either directly or indirectly (i.e. derived from prices); and

(iii) Level3:Unobservableinputsfortheassetorliability.

TheGroupandtheCompanydonothaveanyfinancialassetsandfinancialliabilitiescarriedatfairvaluenorclassifiedanyfinancialassetsandfinancialliabilitiesinLevel1toLevel3asat31December2014and31December 2013.

(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:

Note Tradereceivables 18Otherreceivables 19Cash and bank balances 20Borrowings 24Tradepayables 26Otherpayables 27

Thecarryingvalueofcurrentfinancialassetsandcurrentfinancial liabilitiesoftheGroupandtheCompanyapproximate their 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.

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ANNUAL REPORT 2014


30. fAIR VALUES Of fINANCIAL INSTRUmENTS (CONT’D)

(b) Financial instruments that are not carried at fair value (Cont’d)

Nodisclosureoffairvalueismadefortheamountsduefrom/(to)relatedcompanies,asitisnotpracticabletodetermine their fair values with sufficient reliability due to lack of fixed payment terms entered by the parties involved.However,theGroupandtheCompanydonotanticipatethecarryingamountsrecordedatthereportingdate to be significantly different from the values that would eventually be received or settled.

(c) Categories of financial instruments

(i) Financial assets

Note 2014 2013 Rm Rm Group Loans and Receivables

Tradereceivables 18 9,666,351 10,329,566 Otherreceivables 19 2,821,223 2,583,500 Cash and bank balances 20 4,847,058 3,095,258

17,334,632 16,008,324

Company Loans and Receivables Otherreceivables 19 6,080,302 6,952,603 Cash and bank balances 20 909,661 532,574

6,989,963 7,485,177

(ii) Financial liabilities

Note 2014 2013 Rm Rm

Group financial liabilities measured at amortised cost Tradepayables 26 7,884,125 8,329,829 Otherpayables 27 2,999,695 2,431,258 Borrowings 24 327,475 174,326

11,211,295 10,935,413

Company financial liabilities measured at amortised cost Otherpayables 27 185,611 225,410

185,611 225,410

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ANNUAL REPORT 2014


(cont’d)

31. fINANCIAL RISK mANAGEmENT OBJECTIVES AND pOLICIES

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.Such financial instruments are not held for trade or speculative purposes.

(a) Liquidity Risk LiquidityriskistheriskthattheGrouportheCompanywillencounterdifficultyinmeetingobligationsassociated

with financial liabilities that are settled by delivering cash or another financial assets.

Tomanageliquidityrisk,theGroupandtheCompanymaintainalevelofcashequivalentandfundingfacilitiesdeemed adequate by management to finance their operations. In assessing the adequacy of the facilities, management reviews its working capital requirements.

Analysis of financial instruments by remaining contractual maturities

ThetablebelowsummarisesthematurityprofileoftheGroup’sandtheCompany’sfinancialliabilitiesatthereporting date base on contractual undiscounted repayment obligations.

On demand or within 1 year 1 to 5 years TotalGroup Rm Rm Rm31 December 2014 Tradepayables 7,884,125 – 7,884,125Otherpayables 2,961,229 38,466 2,999,695Borrowings 74,067 290,060 364,127 10,919,421 328,526 11,247,947

31 December 2013 Tradepayables 8,329,829 – 8,329,829Otherpayables 2,383,951 47,307 2,431,258Borrowings 60,096 130,133 190,229

10,773,876 177,440 10,951,316

On demand or within 1 year Rm

Company 31 December 2014 Otherpayables 185,611

31 December 2013 Otherpayables 225,410

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31. fINANCIAL RISK mANAGEmENT OBJECTIVES AND pOLICIES (CONT’D)

(b) Interest Rate Risk

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-bearingassetsasat31December2014.Theinvestmentsinfinancialassetsaremainlyshortterm in nature and 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 ratesexposetheGrouptofairvalueinterestraterisk.TheinterestratethattheGroupwillbeabletoobtainon debt financing will depend on market conditions at that time, and may differ from the rates the Group has secured currently.

Theinterestratesandrepaymenttermsofinterest-bearingfinancialinstrumentsaredisclosedintherespectivenotes to the financial statements.

TheGroup isnotexposedtoanysignificantmarket risk forchanges in interest rates.Hence,nosensitivityanalysis is presented.

(c) foreign Currency Risk

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.

TheGrouphas transactional currencyexposures that aredenominated in a currencyother than respectivefunctionalcurrenciesofGroupentities,primarilyRinggitMalaysia(“RM”),Renminbi(“RMB”)andUSDollars(“USD”).TheforeigncurrenciesinwhichthesetransactionsaredenominatedaremainlyUSDollars(“USD”),SingaporeDollars(“SGD”)andHongKongDollars(“HKD”).

TheGroupfacesforeignexchangeriskasitsborrowingisdenominatedinforeigncurrencyorwhosepriceisinfluenced by its benchmark price movements in foreign currency (especially USD) as quoted on international markets.

TheGroupdoesnothaveanyformalhedgingpolicyforitsforeignexchangeexposureanddidnotactivelyengageinactivitiestohedgeitsforeigncurrencyexposuresduringthefinancialyear.TheGroupseekstomanagetheforeign currency risk by constructing natural hedges where it matches revenue and expenses in any single currency.

TheGroupisalsoexposedtocurrencytranslationriskarisingfromitsnetinvestmentsinforeignoperations.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.

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(cont’d)


(c) foreign Currency Risk (Cont’d)

Sensitivity analysis for foreign currency risk

ThefollowingtabledemonstratesthesensitivityoftheGroup’sandtheCompany’slossnetoftaxtochangeintheUSD,SGDandHKDexchangeratesagainsttherespectivefunctionalcurrenciesoftheGroup’sentities,withall other variables held constant.


USD against RM(2014:6%,2013:5%)- strengthened 18,082 21,516 191,371 170,645- weakened (18,082) (21,516) (191,371) (170,645)

SGD against RM(2014:2%,2013:5%)- strengthened (3,501) (13,715) 75,290 175,886- weakened 3,501 13,715 (75,290) (175,886)

HKDagainstRM(2014:1%,2013:5%)- strengthened 11,770 63,173 – –- weakened (11,770) (63,173) – –

(d) Credit Risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default onitsobligations.TheGroupandtheCompany’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,receivablebalances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Themaximumexposuretocreditriskintheeventthatthecounterpartiesfailtoperformtheirobligationsasatthe end 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 counterpartieswhoseaggregatecreditexposureissignificantinrelationtotheGroup’stotalcreditexposure.TheGroup has no significant concentration of credit risks with exposure spread over a large number of counterparties and customers.

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(d) Credit Risk (Cont’d)

Receivables and other financial assets

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

Themaximumexposuretocreditriskarisingfromreceivablesisrepresentedbythecarryingamountsinthestatement of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are statedattheirnetrealisablevalues.TheGroupusesaginganalysistomonitorthecreditqualityofthereceivables.

Impairment losses

TheGroupmaintainsanaginganalysisinrespectoftradereceivablesonly.Theagingoftradereceivablesasatthe reporting date is disclosed in Note 18.

Themovement in the impairment lossof tradeandother receivables isdisclosed inNote18and19.Theallowance account 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.

Amounts due from subsidiaries

Riskmanagementobjective,policiesandprocessesformanagingtherisk

TheCompanyprovidesadvances to itssubsidiaries.TheCompanymonitors the resultsof thesubsidiariesregularly.

Exposure to credit risk

Themaximumexposuretocreditriskisrepresentedbytheircarryingamountsinthestatementoffinancialposition.

Impairment losses

As at the reporting date, there was no indication that the amounts due from subsidiaries are not recoverable.

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(cont’d)

32. CApITAL mANAGEmENT

TheprimaryobjectiveoftheGroup’scapitalmanagementistoensurethat itmaintainsastrongcreditratingandhealthy capital ratios in order to support its business and maximise shareholder value.

TheGroupmanagesitscapitalstructureandmakesadjustmentstoit,inlightofchangesineconomicconditions.Tomaintainoradjustthecapitalstructure,theGroupmayadjustthedividendpaymenttoshareholder,returncapitaltoshareholderorissuenewshares.Nochangesweremadeintheobjectives,policiesorprocessesduringtheyearsended 31 December 2014 and 31 December 2013.

TheGroupmonitorscapitalusingagearingratio,whichisnetdebtdividedbytotalcapitalplusnetdebt.TheGroupincludes within net debt, trade and other payables and borrowings, less cash and bank balances. Capital includes equity attributable to the owners.

TheGroup’sstrategyistomaintainthegearingratioataverylowlevel.

33. SIGNIfICANT EVENTS

(i) On29September2014,theCompany,YongxinLibikangTechnologyCo.Ltd.theCompany’sformerassociatecompany,andG-ConnPrecisionElectronicCo.,Ltd,athirdpartyhaveallagreedtoterminatetheMemorandumofUnderstandings(MOUs)whichthepartiesenteredinthepreviousfinancialyearfortheproposedacquisitionby the Company up to 60% equity interest in these companies.

(ii) On24December2013,theCompanyenteredintoaDistributionAgreementwithVitaxelSdn.Bhd.(“Vitaxel”),acompanyincorporatedinMalaysiaandisasubsidiaryofHoWahGentingBerhad,forexclusivedistributorshipofahealthandenergydrinkproductsinVietnam,Laos,CambodiaandMyanmar.On10January2014,theCompanyenteredintoaNovationAgreementwithitswhollyownedsubsidiary,BorderlessFameSdn.Bhd.(“BFSB”)andVitaxel for the purpose of novating the Company’s rights and obligations under the Distribution Agreement to BFSB.On13November2014,theNovationagreementwasterminated.

(iii) On7July2014and5December2014,theCompanysubscribedforadditionalsharesamountingtoRMB2,563,227and RMB1,781,301 respectively, totalling RMB4,344,528 (equivalent to RM2,350,000), in its wholly owned subsidiary,namelyRapidConn(ShenZhen)Co.Ltd.,acompanyincorporatedinthePeople’sRepublicofChina.

34. SUBSEQUENT EVENTS

(i) On12February2015,thewhollyowned-subsidiaryoftheCompany,RapidConn(Shenzhen)Co.,Ltd.(“RCC”),incorporatedanewmajority-ownedsubsidiaryinChina,namelyHSCo.,Ltd.,aprivatelimitedcompany,whichhassubscription share capital of RMB5,000,000 (equivalent to RM2,905,000) comprising 5,000,000 subscription shares of RMB1 each. RCC subscribed for 3,000,000 shares of RMB1 each, representing 60% of the equity interestofHSCo.,Ltd..TheproposedprincipalactivityofHSCo.,Ltd.istoengageinhighendcableextrusion.

(ii) On1April2015,theCompanyenteredintoasharesaleagreementwithathirdpartyfortheproposedacquisitionof Kejuruteraan Asastera Sdn. Bhd. (“KASB”), a private limited company, for a purchase consideration ofRM25,000,000 to be satisfied by cash amounting to RM12,500,000 and issuance of 250,000,000 new irredeemable convertible preference shares (“ICPS”) at an issue price of RM0.05 per ICPS amounting toRM12,500,000.KASBspecialisesintheprovisionofelectricalandmechanicalengineeringserviceswithintheconstruction industry.

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35. SEGmENT INfORmATION

For management purposes, the Group is organised into business units based on their geographical location, and has fourreportablesegmentsasfollows:

(i) Rapid Conn Interconnect (M) Sdn. Bhd. (“RCM”), Borderless FameSdn. Bhd. (“BFSB”),MyGenBizz Berhad(“MGB”)andConnectCountyHoldingsBerhad(“CCHB”)coveringMalaysia;

(ii) RapidConn(ShenZhen)Co.,Ltd.(“RCC”)coveringPeople’sRepublicofChina(“China”);

(iii) RapidConn(S)Pte.Ltd.(“RCS”)coveringSingapore;and

(iv) RapidConn,Inc.(“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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ANNUAL REPORT 2014


(cont’d)

35

.

SEG

mEN

T IN

fOR

mAT

ION

(C

ON

T’D

)

Gr

oup

Ad

justm

ents

and

pe

r con

solid

ated fi

nanc

ial

malay

sia

China

Sin

gapo

re US

A eli

mina

tions

No

te

state

ment

s

2014

20

13

2014

20

13

2014

20

13

2014

20

13

2014

20

13

20

14

2013

Rm

Rm

Rm

Rm

Rm

Rm

Rm

Rm

Rm

Rm

Rm

Rm

Reve

nue:

Exter

nal c

ustom

ers

743,

619

– 9,

379,

581

10,0

82,9

07

12,1

61,5

15

12,4

28,1

38

30,3

24,8

98

30,2

81,1

14

– –

52

,609

,613

52

,792

,159

Inter-

comp

anies

–

– 22

,902

,221

16

,634

,025

-

– –

– (2

2,90

2,22

1)

(16,

634,

025)

A

– –

Total

revenu

e74

3,61

9–

32,281

,802

26

,716

,932

12

,161

,515

12

,428

,138

30

,324

,898

30

,281

,114

(22,90

2,22

1)

(16,63

4,02

5)

52

,609

,613

52

,792

,159

Resu

lts:

Depre

ciatio

n and

amor

tisati

on

19,5

16

6,46

6 76

4,28

0 79

3,90

8 27

8,46

0 26

5,03

4 15

1,69

4 25

,293

–

–

1,21

3,95

0 1,

090,

701

Segm

ent(los

s)/pro

fit(3,838

,226

)(695

,613

)(437

,516

)(141

,847

)(209

,521

)(1,488

,110

)1,39

2,61

31,89

7,75

337

3,07

0(29,18

6)

C(2,719

,580

)(457

,003

)

Asse

ts:Ad

dition

s to

no

n-curr

ent a

ssets

38

,139

–

968,

408

377,

083

906,

941

250,

067

669,

068

45,3

82

– –

D 2,

582,

556

672,

532

Segm

ent a

ssets

10

,660

,484

8,

711,

216

14,8

47,5

50

10,7

72,8

38

8,28

0,64

3 6,

836,

231

9,86

3,14

1 9,

352,

691

(16,

463,

592)

(1

1,25

6,30

2)

E 27

,188

,226

24

,416

,674

Segm

ent li

abilit

ies

5,71

1,21

9 5,

644,

364

12,9

85,8

22

10,5

71,0

10

5,88

2,49

4 4,

327,

307

5,55

6,71

7 6,

729,

535

(18,

885,

158)

(1

6,29

7,00

4)

F 11

,251

,094

10

,975

,212

126


ANNUAL REPORT 2014


35. SEGmENT INfORmATION (CONT’D)

Note:Natureofadjustmentsandeliminationstoarriveatamountsreportedintheconsolidatedfinancialstatements

A Inter-companies revenues are eliminated on consolidation B Therearenoothermaterialnon-cashexpenses

C Thefollowingitemsareaddedto/(deductedfrom)segmentprofittoarriveat“Lossbeforetax”presentedintheconsolidatedstatementofcomprehensiveincome:

2014 2013 Rm Rm Profit from inter-companies sales (62,676) (647,927)Inter-companies sales commission 106 (2,746)Impairment on investments in subsidiaries – 50,000Reversal of impairment on amounts due from subsidiary – (37,468)Foreign currency difference 435,640 608,955

373,070 (29,186)

D Additionstonon-currentassetsconsistof:

2014 2013 Rm Rm Motor vehicles 670,097 55,528Officeequipment,furnitureandfittings 114,022 116,367Plant and machinery 1,354,925 500,637Renovation 443,512 -–

2,582,556 672,532

E Thefollowingitemsaredeductedfromsegmentassetstoarriveat totalassetsreportedintheconsolidatedstatementoffinancialposition:

2014 2013 Rm Rm Investments in subsidiaries (3,636,358) (1,186,358)Plant and equipment (10,706) (10,706)Inter-companies assets (12,816,528) (10,059,238) (16,463,592) (11,256,302)

F Thefollowingitemsaredeductedfromsegmentliabilitiestoarriveat totalliabilitiesreportedintheconsolidatedstatementoffinancialposition:

2014 2013 Rm Rm

Inter-companies liabilities (18,885,158) (16,297,004)

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ANNUAL REPORT 2014


(cont’d)

35. SEGmENT INfORmATION (CONT’D)

GEOGRAPHICALINFORMATION

Revenue and non-current assets information based on the geographical location of customers and assets respectively areasfollows:

Revenue Non-current assets 2014 2013 2014 2013 Rm Rm Rm Rm

Malaysia 743,619 – 11,537 2,954People’s Republic of China 9,379,581 10,082,907 2,209,487 1,826,686Singapore 12,161,515 12,428,138 1,277,187 724,551USA 30,324,898 30,281,114 548,688 39,745

52,609,613 52,792,159 4,046,899 2,593,936

Non-current assets information presented above consist of the following items as presented in the consolidated statement of financial position.

2014 2013 Rm Rm

Motor vehicles 762,073 264,793Mouldings 68,727 97,856Officeequipment,furnitureandfittings 201,456 182,262Plant and machinery 2,464,963 1,883,278Renovation 549,680 165,747 4,046,899 2,593,936

36. AUTHORISATION Of fINANCIAL STATEmENTS fOR ISSUE

Thefinancial statements for the yearended31December2014wereauthorised for issue inaccordancewitharesolution of the directors on 8 April 2015.

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ANNUAL REPORT 2014


37. SUppLEmENTARY INfORmATION pURSUANT TO BURSA mALAYSIA SECURITIES LISTING REQUIREmENTS

ThefollowingbreakdownandcomponentsofretainedearningsareidentifiedanddisclosedinaccordancewiththeGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurepursuanttoBursaMalaysiaSecuritiesListingRequirements,asissuedbytheMalaysianInstituteofAccountants.


Totalaccumulatedlosses:- Realised 19,188,580 21,908,637 (12,333,872) (9,395,832)- Unrealised (39,892) 424,470 – – 19,148,688 22,333,107 (12,333,872) (9,395,832)

Totalshareofaccumulatedloss ofanassociate: - Realised – (50,000) – –

19,148,688 22,283,107 (12,333,872) (9,395,832)

Less:Consolidationadjustments (26,192,002) (26,666,689) – –

Accumulated losses as per financial statements (7,043,314) (4,383,582) (12,333,872) (9,395,832)

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ANNUAL REPORT 2014

STATISTICS OF ShAREhOLDINGS

as at 22 April 2015

AuthorisedShareCapital : RM50,000,000/- IssuedandPaid-UpCapital : RM20,615,140/-comprisingof206,151,400ordinarysharesofRM0.10each ClassofShares : OrdinarysharesofRM0.10eachfully-paid VotingRights : Onevoteperordinaryshare

ANALYSIS BY SIZE Of SHAREHOLDINGS

No. of No. ofSize of Holdings Holders % Shares % 1 - 99 41 2.98 1,590 0.00100 - 1,000 252 18.30 122,472 0.061,001 - 10,000 407 29.56 2,157,520 1.5210,001 - 100,000 500 36.31 22,065,180 10.70100,001 – 10,307,569* 173 12.56 124,987,604 60.6310,307,570 and above ** 4 0.29 56,817,034 27.56 Total: 1,377 100.00 206,151,400 100.00

Notes:-*Lessthan5%ofissuedholdings** 5% and above of issued holdings

SUBSTANTIAL SHAREHOLDERS based on the Register of Substantial Shareholders as at 22 April 2015

No. of Ordinary Shares of Rm0.10 each Direct IndirectNo. Name Interest % Interest %

1. Chng Seng Chye (ChngHungSeng) 18,287,382 8.87 – –2. Dato’NgAikKee 23,000,000 11.16 – –3. YapShuhJian 11,863,900 5.75 – –4. AngChuangJuay 11,665,752 5.66 – –

DIRECTORS’ SHAREHOLDINGS in the Company based on the Register of Directors’ Shareholdings as at 22 April 2015

No. of Ordinary Shares of Rm0.10 each Direct IndirectName of Directors Interest % Interest %

RoyTheanChongYew – – – –AngChuangJuay 11,665,752 5.66 – –GohKokBoon – – – –HongCheongLiang – – – –LeeChoonKwong 237,400 0.12 – –

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ANNUAL REPORT 2014

Statistics of Shareholdingsas at 22 April 2015(cont’d)

TOp 30 SECURITIES ACCOUNT HOLDERS (ORDINARY SHARES) as per Record of Depositors as at 22 April 2015

No. ofNo. Name Issued Shares % 1. ChngSengChye(ChngHungSeng) 18,287,382 8.87

2. KenangaNominees(Tempatan)SdnBhd 15,000,000 7.28 -PledgedSecuritiesAccountforDato'NgAikKee

3. JFApexNominees(Tempatan)SdnBhd 11,863,900 5.75 -PledgedSecuritiesAccountForYapShuhJian

4. AngChuangJuay 11,665,752 5.66

5. LeeFu-Chien 10,169,600 4.93

6. HSBCNominees(Asing)SdnBhd 9,000,000 4.37 - Exempt an for Credit Suisse

7. NgYawLong 8,161,100 3.96

8. Dato’NgAikKee 5,000,000 2.43

9. Flonic Sdn. Bhd. 3,550,000 1.72

10. KenangaNominees(Tempatan)SdnBhd 2,815,000 1.37 forHonPansy

11. LaiYinSin@LaiYinSen 2,600,000 1.26

12. ChenKenMun 2,030,000 0.98

13. HSBCNominees(Tempatan)SdnBhd 2,000,000 0.97 - Exempt an for Credit Suisse

14. LimPohMei 2,000,000 0.97

15. TanBoonWay 2,000,000 0.97

16. WongChanKong 2,000,000 0.97

17. AFFINHwangNominees(Tempatan)Sdn.Bhd. 1,970,000 0.96 -PledgedSecuritiesAccountforLeeBoonKiat

18. AllianceGroupNominees(Tempatan)SdnBhd 1,900,050 0.92 - Pledged Securities Account for Batu Bara Resources Corporation Sdn Bhd

19. AFFINHwangNominees(Tempatan)Sdn.Bhd. 1,610,000 0.78 -PledgedSecuritiesAccountforTanSiewPing

20. LimXioHuey 1,533,100 0.74

21. FooLeeChinGladys 1,500,000 0.73

22. GohSiewTee 1,500,000 0.73

23. KuLiPing 1,500,000 0.73

24. KuangJingJing 1,500,000 0.73

25. LiewYoonPeck 1,500,000 0.73

26. MaybankNominees(Tempatan)SdnBhd 1,500,000 0.73 -PledgedSecuritiesAccountforCheongJunLim

27. WongHewYam 1,500,000 0.73

28. TANominees(Tempatan)SdnBhd 1,480,000 0.72 - Pledged Securities Account for Wong Wai Sun

29. MaybankSecuritiesNominees(Tempatan)SdnBhd 1,416,300 0.69 -PledgedSecuritiesAccountforLeongYeeKeong

30. AFFINHwangNominees(Tempatan)Sdn.Bhd. 1,300,000 0.63 -PledgedSecuritiesAccountforNgianYokeTee

Total: 129,852,184 62.99

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ANNUAL REPORT 2014

STATISTICS OF WARRANThOLDINGS

as at 22 April 2015

Description : Warrants2011/2021

TotalWarrantsIssued : 60,846,600

MaturityDate : 18September2021

NumberofWarrantholders : 358

ANALYSIS BY SIZE Of WARRANTHOLDINGS as per the Record of Depositors

Size of No. of No. ofWarrantholdings Warrant Holders % Warrants %

1 – 99 12 3.35 550 0.00100 – 1,000 28 7.82 10,640 0.021,001 - 10,000 62 17.32 394,600 0.6510,001 – 100,000 160 44.69 8,840,250 14.53100,001 – 3,042,329 * 94 26.26 41,825,490 68.743,042,330 and above ** 2 0.56 9,775,070 16.07

Total: 358 100.00 60,846,600 100.00

Notes:-*Lessthan5%ofissuedholdings** 5% and above of issued holdings

TOp 30 SECURITIES ACCOUNT HOLDERS (WARRANTS) as per the Record of Depositors

No. of No. Name of Warrantholders Warrants %

1. JFApexNominees(Tempatan)SdnBhd 5,309,000 8.73 -PledgedSecuritiesAccountforYapShuhJian

2. ChngSengChye(ChngHungSeng) 4,466,070 7.34

3. TeohTeikSoon 2,996,400 4.92

4. Ng Poh Seng 1,846,000 3.03

5. KenangaNominees(Tempatan)SdnBhd 1,701,100 2.80 -PledgedSecuritiesAccountforTeohTeikSoon

6. LimLayPeng 1,605,100 2.64

7. HLIBNominees(Tempatan)SdnBhd 1,590,000 2.61 -PledgedSecuritiesAccountforChiaKentWee

8. TehChinChing 1,500,000 2.47

9. LaiYinSin@LaiYinSen 1,110,000 1.82

10. Dato'NgAikKee 1,101,300 1.81

11. FoongKokHow 1,000,000 1.64

12. JFApexNominees(Tempatan)SdnBhd 1,000,000 1.64 -PledgedSecuritesAccountforLumYetChong

13. YongMunTong 1,000,000 1.64

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ANNUAL REPORT 2014

TOp 30 SECURITIES ACCOUNT HOLDERS (WARRANTS) as per the Record of Depositors (Cont’d)

No. of No. Name of Warrantholders Warrants %

14. TeeChenLee 980,000 1.61

15. LeongPohLiang 820,000 1.35

16. AllianceGroupNominees(Tempatan)SdnBhd 750,050 1.23 - Pledged Securities Account for Batu Bara Resources Corporation Sdn Bhd

17. HoKaHam 734,000 1.21

18. MaybankNominees(Tempatan)SdnBhd 710,000 1.17 -ThioSiewGeok

19. KenangaNominees(Tempatan)SdnBhd 650,000 1.07 -PledgedSecuritiesAccountforOngKimSer

20. LowPakSeng 650,000 1.07

21. LeeThongHeng 610,000 1.00

22. ChoongShowKee 590,000 0.97

23. ChuaLeeGuan 548,000 0.90

24. PublicNominees(Tempatan)SdnBhd 541,700 0.89 -PledgedSecuritiesAccountforLimYewLeong

25. LohKahLing 525,000 0.86

26. Chin Wen Chuan 500,000 0.82

27. RHBCapitalNominees(Tempatan)SdnBhd -ChaHoeYong@ChiaHwiChiang 490,000 0.81

28. RHBCapitalNominees(Tempatan)SdnBhd -ChaHoeYong@ChiaHwiChiang 490,000 0.81

29. RHBCapitalNominees(Tempatan)SdnBhd -PledgedSecuritiesAccountforTanCheeChuan 454,000 0.75

30. ChinLaiMooi 451,000 0.74

31. BuaLeeEing 435,000 0.71 Total: 37,153,720 61.06

Statistics of Warrantholdingsas at 22 April 2015(cont’d)

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ANNUAL REPORT 2014

NOTICE OF ANNUAL GENERAL

MEETING

NOTICE IS HEREBY GIVEN THATtheTwelfthAnnualGeneralMeetingoftheCompanywillbeheldatFunctionRoom1,Level2,HotelSriPetaling,30,JalanRadinAnum,BandarBaruSriPetaling,57000KualaLumpur,WilayahPersekutuanonFriday,19June2015at10:00a.m.forthefollowingpurposes:-

AGENDA

Ordinary Business

1. ToreceivetheAuditedFinancialStatementsoftheCompanyforthefinancialyearended31 December 2014 together with the Reports of the Directors and Auditors thereon.

2. ToapprovethepaymentofDirectors’feesamountingtoRM183,355/-forthefinancialyear

ended 31 December 2014. 3. Torecommendthere-electionofthefollowingDirectorswhoareretiringpursuanttoArticle

90of theCompany’sArticlesofAssociationat theforthcomingTwelfthAnnualGeneralMeetingoftheCompanyandbeingeligible,haveofferedthemselvesforre-election:-

(a) Mr.RoyTheanChongYew

(b) Mr.GohKokBoon

(c) Mr.HongCheongLiang

(d) Mr.LeeChoonKwong

4. Tore-appointMessrs.MooreStephensAssociates&Co.underMessrs.MooreStephensAssociatesPLTasAuditorsoftheCompanyuntiltheconclusionofthenextAnnualGeneralMeeting and to authorise the Board of Directors of the Company to determine their remuneration.

Special Business

Toconsiderand,ifthoughtfit,topassthefollowingasOrdinaryandSpecialResolutions:-

5. Ordinary Resolution - Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965

“THATsubjectalwaystotheCompaniesAct,1965,theArticlesofAssociationoftheCompanyandtheapprovalsfromtherelevantgovernmentaland/orregulatoryauthorities,wheresuchapproval 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 exceed ten per centum (10%) of the total issued share capital of the Company for the time being AND THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.

AND THAT theDirectors of theCompany,whether solely or jointly, be and are hereby

empowered 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 todoallsuchactsandthingsincludingexecutingallrelevantdocumentsashe/theymayconsider expedient or necessary to complete and give full effect to the abovesaid mandate.”

(Refer to Note 1)

Ordinary Resolution 1







134


ANNUAL REPORT 2014

Notice of Annual General Meeting(cont’d)

6. SpECIAL RESOLUTION - pROpOSED AmENDmENTS TO THE ARTICLES Of ASSOCIATION Of THE COmpANY

“THATtheProposedAmendmentstotheArticlesofAssociationoftheCompanyassetout in the Circular to Shareholders dated 27 May 2015 be and are hereby approved AND THATtheDirectorsandSecretariesoftheCompanybeandareherebyauthorisedtotakeall steps as are necessary and expedient in order to implement, finalise and give full effect to the Proposed Amendments to the Articles of Association of the Company.”

BY ORDER Of THE BOARD

CHUA SIEW CHUAN (mAICSA 0777689)CHENG CHIA pING (mAICSA 1032514)Company Secretaries

KualaLumpur27 May 2015

Explanatory Note to Special Business 1. OrdinaryResolution7-AuthoritytoIssueSharesPursuanttoSection132DoftheCompaniesAct,1965

TheOrdinaryResolution7proposedunderagendaitem5aboveisarenewalofthegeneralmandateforissuanceofnew ordinary shares pursuant to Section 132D of the Companies Act, 1965, which was granted by the shareholders at the last Annual General Meeting.

TheCompanyhadbeengrantedageneralmandatebyitsshareholdersatthelastAnnualGeneralMeetingoftheCompany held on 29 May 2014 to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting provided that the aggregate number of shares issued does not exceed ten per centum(10%)oftheissuedsharecapitaloftheCompany(hereinafterreferredtoasthe“previous mandate”).

Pursuant to the Previous Mandate, the Company has undertaken a private placement exercise where a total of

34,358,500 new ordinary shares of RM0.10 each have been issued at the issued price of RM0.168 and RM0.133 perplacementshare.Thesaidexercisehasbeendeemedcompletedwiththelistingofandquotationforthesameon the ACE Market of Bursa Malaysia Securities Berhad on 4 November 2014.

ThetotalproceedsraisedfromthesaidprivateplacementexercisewasRM5,161,282.

Special Resolution

135


ANNUAL REPORT 2014

Explanatory Note to Special Business (Cont’d)

1. OrdinaryResolution7-AuthoritytoIssueSharesPursuanttoSection132DoftheCompaniesAct,1965(Cont’d)

Thedetailsofutilisationoftheproceedsfromtheabovementionedprivateplacementexercisewereasfollows:-

particulars Status of Utilisation

Amount UtilisedRm’000

Amount Unutilised

Rm’000

Increased in the paid-up capital for Rapid Conn(Shenzhen)Co.Ltd.

Partial 2,350 610

Acquisitionof51%equityinterestsinMyGenBizzBerhad *

Completed 900 –

Administrative expenses of other companies under the Connect Group of Companies

Partial 972 110

Private placement expenses Completed 220 –

Total: 4,442 720

* CCHB has disposed of its entire equity interest held in MyGenBizz Berhad in May 2015. The details are mentioned

in the Corporate Information section of this Annual Report. TheproposedOrdinaryResolution7,ifpassed,willgivetheDirectorsoftheCompany,fromthedateoftheabove

Meeting, the authority to issue and allot ordinary shares from the unissued share capital of the Company up to an amount not exceeding in total ten per centum (10%) of the total issued share capital of the Company for the time being forsuchpurposesastheDirectorsoftheCompanyconsiderwouldbeinthebestinterestoftheCompany.Therewillbe no adverse effect on the share price in such cases, as the new issuance would not be priced at a discount of more than ten per centum (10%) of the weighted average market price for five (5) market days before the price-fixing date. Thisauthoritywill,unlessrevokedorvariedatageneralmeeting,expireattheconclusionofthenextAnnualGeneralMeeting of the Company.

TheauthoritywillprovidetheDirectorscertainflexibilitieswhentheneedarisestoissueadditionalsharesforanypossiblefundraisingactivities,includingbutnotlimitedtofundingfutureinvestmentprojects,workingcapitaland/oracquisitions and, in addition to enhancing efficiency in implementing the same, it will reduce the time and cost that would be involved in seeking shareholders’ approval at a general meeting convened solely for such issuance of shares.

2. SpecialResolution-ProposedAmendmentstotheArticlesofAssociationoftheCompany(“proposed Amendments”)

TheProposedAmendmentsaretostreamlinetheArticlesofAssociationoftheCompany,tobealignedwiththevariousamendmentstotheACEMarketListingRequirementsofBursaMalaysiaSecuritiesBerhadwhichtookeffecton3January2012.

Notice of Annual General Meeting

(cont’d)

136


ANNUAL REPORT 2014

Notice of Annual General Meeting(cont’d)

Notes:

1. Thisagendaitemismeantfordiscussiononly,astheprovisionofSection169(1)oftheCompaniesAct,1965doesnotrequireaformalapprovaloftheshareholdersfortheAuditedFinancialStatements.Therefore,thisagendaitemis not put forward for voting.

2. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson12June2015(“General meeting Record of Depositors”) shall be eligible to attend the Meeting.

3. A member entitled to attend and vote at the Meeting is entitled to appoint at least one (1) and up to three (3) proxies to attend and vote in his stead. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he or she specifies the proportion of his or her holdings to be represented by each proxy.

4. 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.Thereshall be no 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.

5. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororofhisattorneydulyauthorisedin writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

6. 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.

7. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiplebeneficialownersinonesecuritiesaccount(“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

8. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissignedoranotariallycertifiedcopyofthatpowerorauthority,shallbedepositedattheCompany'sRegisteredOfficelocatedatLevel7,MenaraMilenium,JalanDamanlela,PusatBandarDamansara,DamansaraHeights,50490KualaLumpur,WilayahPersekutuan,notlessthan48hoursbeforethetimeforholdingtheMeetingoratanyadjournmentthereof.

Abstention from Voting

9. All the Directors who are shareholders of the Company and entitled to Directors’ fees will abstain from voting on Ordinary Resolution 1 concerning Directors’ fees at the Annual General Meeting.

✄

(Incorporated in Malaysia)(Company No. 618933-D)

fORm Of pROxY

*I/We,..................…………………..………..........……………………..CompanyNo./NRICNo………………….….........................(full name as per NRIC/Certificate of Incorporation in capital letters)

of…..............................………………………………...……………………………………………………………................................(full address)

being a member of CONNECTCOUNTY HOLDINGS BERHAD hereby appoint

..................…………………..………………………………………........NRICNo……………………………………............................(full name as per NRIC in capital letters)

and/orfailinghim/her,

..................…………………..…………………………………….......….NRICNo……………………………………............................(full name as per NRIC in capital letters)

and/orfailinghim/her,

..................…………………..………………………………………........NRICNo………………………………..............................….(full name as per NRIC in capital letters)

and/failing*him/her,theChairmanoftheMeetingas*my/ourproxy,tovotefor*me/uson*my/ourbehalfattheTwelfthAnnualGeneralMeetingoftheCompanytobeheldatFunctionRoom1,Level2,HotelSriPetaling,30,JalanRadinAnum,BandarBaruSriPetaling,57000KualaLumpur,WilayahPersekutuanonFriday,19June2015at10:00a.m.andatanyadjournmentthereof,onthefollowingresolutionsreferredtointheNoticeofTwelfthAnnualGeneralMeeting.

*My/Ourproxy(ies)*is/aretovoteasindicatedbelow:-

Ordinary Business for AgainstOrdinary Resolution 1 ToapprovepaymentofDirectors’feesforthefinancialyearended

31 December 2014Ordinary Resolution 2 Tore-electMr.RoyTheanChongYewasDirector(Article90)Ordinary Resolution 3 Tore-electMr.GohKokBoonasDirector(Article90)Ordinary Resolution 4 Tore-electMr.HongCheongLiangasDirector(Article90)Ordinary Resolution 5 Tore-electMr.LeeChoonKwongasDirector(Article90)Ordinary Resolution 6 Tore-appointMessrs.MooreStephensAssociates&Co.asAuditors

of the Company and to authorise the Board of Directors to determine their remuneration

Special BusinessOrdinary Resolution 7 Authority to issue shares pursuant to Section 132D of the Companies

Act, 1965Special Resolution Proposed Amendments to the Articles of Association of the Company

(Please indicate with an “X” in the appropriate box against each Resolution how you wish your vote to be cast. If no specific direction as to how the proxy shall vote, the proxy shall vote as he/she thinks fit or, at his/her discretion, abstain from voting.)

Signed this_______ day of _____________, 2015

__________________________________________Signature(s)/CommonSealofMember(s)

Notes:

1. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson12June2015(“General meeting Record of Depositors”) shall be eligible to attend the Meeting.

2. A member entitled to attend and vote at the Meeting is entitled to appoint at least one (1) and up to three (3) proxies to attend and vote in his stead. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he or she specifies the proportion of his or her holdings 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 provisionsofSection149(1)(b)oftheCompaniesAct,1965shallnotapplytotheCompany.Thereshallbenorestrictionastothequalificationof 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,iftheappointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

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 inonesecuritiesaccount(“omnibus account”), 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,underwhichitissignedoranotariallycertifiedcopyofthatpowerorauthority,shallbedepositedattheCompany’sRegisteredOfficelocatedatLevel7,MenaraMilenium,JalanDamanlela,PusatBandarDamansara,DamansaraHeights,50490KualaLumpur,WilayahPersekutuan,notlessthan48hoursbeforethetimeforholdingtheMeetingoratanyadjournmentthereof.

* Delete if not applicable

Number of shares held

CDS account no.

For appointment of two proxies, percentage of shareholdings to be represented by the proxies

No. of shares percentage

Proxy 1

Proxy 2

Proxy 3

Total 100%

AFFIXSTAMP

Please fold here

Please fold here

TheCompanySecretariesof

CONNECTCOUNTY HOLDINGS BERHAD (618933-D)Level7,MenaraMilenium,JalanDamanlela,PusatBandarDamansara,DamansaraHeights50490KualaLumpur,Wilayah Persekutuan

CO

NN

ECTC

OUN

TY HOLDIN

GS BErHa

D • aN

NUa

L rEpOrT 2014

w w w. r a p i d c o n n . o r g

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

57000 Kuala Lumpur.Tel : 03-89341138Fax : 03-89341139

rapID CONN INTErCONNECT (M) SDN BHDNo. 12-1 (1st Floor),Jalan Radin Bagus 9, Sri Petaling,57000 Kuala Lumpur, Malaysia

rapID CONN INC19571 Pauling, Foothill RanchCA 92610-2619 USATel: 1-949-9511020 Fax: 1-949-9518265Email: [email protected]

rapID CONN (S) pTE LTDBlock 4012 #03-07 Tech Place 1Ang Mo Kio Ave 10, Singapore 569626Tel: 65-68414517 Fax: 65-68414519Email: [email protected]

rapID CONN (SHENZHEN) CO., LTDNo.12, Long Shan Road,6th Lane Luo Tian Social DistrictSong Gang Street, Bao An DistrictShen Zhen, China 518105Tel: 86-755-29726660 Fax: 06-755-2972673/44

(618933-D)

(618933-D)

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