(766535-P) (766535-P) Annual Report 2015 WINTONI GROUP BERHAD ... RM56,909,137 against a profit of RM4,406,230 in 2014. ... Khind Holdings Berhad,

WINTONI GROUP BERHAD(766535-P)

Annual Report 2015W

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ANNUAL REPORT 2015

WINTONI GROUP BERHAD (766535-P)

No. 13A, Jalan Perwira, Pusat Bandar, 34200 Parit Buntar, Perak Darul Ridzuan

Tel: +605 716 4017

Corporate Information

Corporate Structure

Chairman’s Statement

5 Years Group Financial Highlights

Directors’ Profile

Statement on Corporate Governance

Additional Compliance Information

Audit Committee Report

Statement of Corporate Social Responsibilities

Risk Management & Internal Control Statement

Financial Statements

Analysis of Shareholding

Analysis of Warrantholding

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CONTENTS

2 WINTONI GROUP BERHAD (766535 P)

Corporate Information

AUDIT COMMITTEE

Kamil Bin Abdul Rahman (Chairman)Dato’ Seri Mohd Shariff Bin Omar (Member)Dato’ Ng How Hon (Member)

NOMINATION COMMITTEE

Dato’ Seri Mohd Shariff Bin Omar (Chairman)Dato’ Ng How Hon (Member)Kamil Bin Abdul Rahman (Member)

REMUNERATION COMMITTEE

Dato’ Ng How Hon (Chairman)Dato’ Seri Mohd Shariff Bin Omar (Member)Kamil Bin Abdul Rahman (Member)

COMPANY SECRETARIES

Tan Tong Lang (MAICSA 7045482)Thien Lee Mee (LS 0009760)

AUDITORS

Messrs SJ Grant Thornton(Member of Grant Thornton International Ltd.)Chartered AccountantsLevel 11, Sheraton Imperial CourtJalan Sultan Ismail50250 Kuala LumpurMalaysiaTel : +603-26924022Fax : +603-26915229

REGISTERED OFFICE

Suite 10.03, Level 10The Gardens South Tower, Mid Valley CityLingkaran Syed Putra59200 Kuala LumpurMalaysiaTel : +603-2279 3080Fax : +603-2279 3090

PRINCIPAL PLACE OF BUSINESS

No. 20-1, Jalan Kuchai Maju 1Kuchai Entrepreneurs ParkOff Jalan Kuchai Lama58200 Kuala LumpurMalaysiaTel : +603-7493 5121Fax : +603-7983 1900

SHARE REGISTRAR

Mega Corporate Services Sdn. Bhd.Level 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail50250 Kuala LumpurMalaysiaTel : +603-2692 4271Fax : +603-2732 5388

PRINCIPAL BANKERS

Public Bank BerhadCIMB Bank BerhadCIMB Islamic Bank BerhadBank of China (Malaysia) Berhad

STOCK EXCHANGE LISTING

Bursa Malaysia Securities Berhad - ACE MarketListed since 22 January 2008Stock code: 0141

REGULARISATION SPONSOR

M&A Securities Sdn BhdNo. 45-11, The BoulevardMid Valley CityLingkaran Syed Putra59200 Kuala LumpurTel : +603-2284 2911Fax : +603-2284 2718

BOARD OF DIRECTORS Dato’ Seri Mohd Shariff Bin Omar (Independent Non-Executive Chairman)

Dato’ Ng How Hon (Independent Non-Executive Director)

Kamil Bin Abdul Rahman (Independent Non-Executive Director)

Ahmad Amryn Bin Abd Malek (Executive Director)

Raja Kamarudin Bin Raja Adnan (Executive Director)

Annual Report 2015 3

WINTONI ENGINEERING SDN. BHD.

Research and development, solution provider and system

designer of automation systems

SYSCOMP TECHNOLOGY SDN. BHD.

Trading and consulting services of computer software and hardware

PLANET WIRELESS HOLDINGS LIMITED

Mobile application gateway & mobile internet platform services

PLANET WIRELESS SDN BHD

Carry on business as network center

WINTONI GROUP BERHADInvestment holding 100%

60%

100%

100%

Corporate StructureAs at 24 November 2016

Chairman’s Statement

OVERVIEW

It has been a challenging year for the Company. In early September 2015, litigation was commenced by a shareholder against former directors of the Company and a shareholder/former director had also commenced litigation against a group of shareholders. The Company is caught in the middle of this cross-fire and is a casualty. To compound an already difficult situation, almost all of the Company’s staff have resigned. Ultimately, the other shareholders who are not parties to the litigation are collateral damage victims.

The business of the Company has dropped to an almost negligible level and the Company is unable to raise funding and is unable to attract new employees. The Company is left with very limited resources and is in an unenviable position. This predicament has caused the Company to fall within the Guidance Note 3 condition and the financial position of the Company must be regularized.

The Board recognizes that the financial position of the Company must be regularized and is taking all steps necessary to salvage any value that may remain, for shareholders. In this regard, the Board would like to take this opportunity to appeal to the better judgment of the shareholders to support the corporate proposals that will be proposed to the shareholders, in the best interests of the Company.

FINANCIAL HIGHLIGHTS

For the financial period ended 31 December 2015, the Group recorded a revenue of RM5,397,222 against RM25,356,009 for the preceding 12 months financial period. For the current period, the Group suffered a loss of RM56,909,137 against a profit of RM4,406,230 in 2014. This substantial loss suffered was mainly due to writing off of assets which no longer appear to be usable and unable to generate any economic benefit for the Group.

SIGNIFICANT DEVELOPMENTS

On 26 February 2016, the Company announced that it was an Affected Listed Issuer pursuant to Guidance Note (GN) 3 of the Listing Requirements of Bursa Malaysia Securities Bhd for the ACE market. On 28 September 2016, the Company has appointed M&A Securities Sdn Bhd as the Regularisation Sponsor pursuant to Rule 8.04(3)(a)(ii) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad. The Group is in the midst of formulating its regularisation plan and the last date to submit its regularisation plan to the relevant authorities is on 26 February 2017.

ENDNOTE

In these very difficult times, the Board has finally been able to fill the vacancies from earlier resignations and has managed to fully constitute all the relevant board committees including the Audit Committee. We hope and feel confident that we are resilient and will be able to weather this storm soon enough.

Dato’ Seri Mohd Shariff Bin Omar

Independent Non-Executive Chairman

On behalf of the Board of Directors, I present to you the Annual Report and Audited Financial Statements of Wintoni Group Bhd (“the Company”) and its subsidiaries (“the Group”) for the financial year ended 31 December 2015.

DEAR SHAREHOLDERS,



5 Years Group Financial Highlights

Financial Year Ended31.12.2015

RM31.12.2014

RM31.12.2013

RM31.12.2012

RM31.12.2011

RM

Key Results

Revenue 5,397,222 25,356,009 16,596,277 13,692,576 11,417,329

Profit/(Loss) After Tax (56,894,437) 4,406,230 (2,899,838) (1,321,923) (2,450,915)

Total Assets 549,084 57,308,962 25,523,648 22,144,685 25,868,980

Total Liabilities 9,151,721 7,843,076 5,071,104 2,894,981 4,998,803

Shareholders’ Equity (8,602,637) 49,465,886 20,452,544 19,249,704 20,870,177

Financial Indicators

Earnings/(Loss) per Share (sen) (11.08) (0.93) (0.44) (0.82) (1.47)

Net Assets per Share (sen) (1.68) 6.20 6.42 6.96 7.55


Directors’ Profile

DATO’ SERI MOHD SHARIFF BIN OMARAged 69, Male, Malaysian | Independent Non-Executive ChairmanChairman of Nomination Committee, Member of Audit Committee and Member of Remuneration Committee

Dato’ Seri Mohd Shariff Bin Omar was appointed to the Board of Wintoni Group Berhad (“Wintoni”) on 10 September 2015. He graduated from University of Malaya in 1972 with a Bachelor Degree in Economics majoring in rural development. He began his civil service in 1972 as the Assistant District Officer of Pekan, Pahang and continued to serve the state of Perak and Penang until 1982. His political career started when he won the state seat of Sungai Dua in the 1982 General Election. He served the Penang State Legislative Executive Council (EXCO) from 1982 until 1990. He then served as the Parliamentary Secretary for Ministry of Agriculture from 1990 until 1995. He held the position as Deputy Chief Minister of Penang from 1995 to 1999. He was a Member of Parliament from 1999 until 2008 and during that stint he was appointed a Deputy Minister of Agriculture and Agro-based Industry.

He is also appointed as Director in Cymao Holdings Berhad.

Dato’ Seri Mohd Shariff Bin Omar does not have any family relationship with any other directors of the Company. He has no conflict of interest with the Company and no conviction for offences within the past five (5) years other than traffic offences, if any.

DATO’ NG HOW HONAged 40, Male, Malaysian | Independent Non-Executive DirectorChairman of Remuneration Committee, Member of Audit Committee and Member of Nomination Committee

Dato’ Ng How Hon was appointed as an Independent Non-Executive Director on 19 September 2016. He graduated in BA Hons in Marketing Administration from University Of Northumbria at New Castle, U.K. Dato’ Ng has worked with a few banks at the consumer banking division for more than 10 years, i.e. Maybank, Citibank and Standard Chartered Bank Malaysia.

Dato’ Ng is also involved in the following non-governmental organisation:-

a) National Kidney Foundation-BOD

b) National Cancer Society-Committee Member

c) Malaysian Hokkien Chin Kang Youth Chamber of Commerce-Vice President

Dato’ Ng is currently the Chief Executive Officer and Director for Redberry Solutions Sdn. Bhd.

Dato’ Ng does not have any family relationship with any other directors of the Company. He has no conflict of interest with the Company and no conviction for offences within the past five (5) years other than traffic offences, if any.


ENCIK KAMIL BIN ABDUL RAHMAN Aged 67, Male, Malaysian | Independent Non-Executive DirectorChairman of Audit Committee, Member of Nomination Committee and Member of Remuneration Committee

Encik Kamil Bin Abdul Rahman is appointed as an Independent Non-Executive Director on 19 September 2016.

His qualifications are as follows:-

(i) Bachelor of Commerce degree from the University of Otago, New Zealand;(ii) Chartered Accountant of the Institute of Chartered Accountants of New Zealand;(iii) Fellow Chartered Secretary of the Institute of Chartered Secretaries and Administrators, United Kingdom; and(iv) Chartered Accountant of the Malaysian Institute of Accountants.

His previous senior positions were as Senior Vice President of the Bank of Commerce (M) Berhad and as Executive Director of Commerce International Merchant Bankers Berhad. He was the Chairman of the Audit Committee of Global Carriers Berhad, Magna Prima Berhad, PJ Bumi Berhad, Malaysian Merchant Marine Berhad, Bukit Katil Resources Berhad, Putera Capital Berhad, Pancaran Ikrab Berhad, Hotline Furniture Berhad.

He also sits as Director in other public listed companies, namely, Khind Holdings Berhad, Brahim’s Holdings and Jiankun International Berhad.

Encik Kamil Bin Abdul Rahman does not have any family relationship with any other directors of the Company. He has no conflict of interest with the Company and no conviction for offences within the past five (5) years other than traffic offences, if any.

ENCIK AHMAD AMRYN BIN ABD MALEKAged 42, Male, Malaysian | Executive Director

Encik Ahmad Amryn Bin And Malek was appointed as Executive Director of Wintoni on 20 November 2015. He graduated from Cardiff University of Wales on 1998 with a Bachelor of Law (Hons). After graduation, he joined Boustead Holdings Berhad as Legal Officer in Group Legal & Secretarial Department. From Jan 2001 - 2008, he was Executive Secretary Barisan Nasional Youth Malaysia. From April 2008 - 2012, he was Sales and Project General Manager - Persela Group/Empayar Setia Berhad. He has been Business Development Director for Avitsystem Sdn Bhd since January 2013. He has no other directorship in any other public and public listed companies.

Encik Ahmad Amryn Bin Abd Malek does not have any family relationship with any other directors of the Company. He has no conflict of interest with the Company and no conviction for offences within the past five (5) years other than traffic offences, if any.

ENCIK RAJA KAMARUDIN BIN RAJA ADNAN Aged 52, Male, Malaysian | Executive Director

Encik Raja Kamarudin Bin Raja was appointed as Executive Director of Wintoni on 20 November 2015. He served as Director of Practical Aim Sdn Bhd from 1991 to 1997. He worked as Shipping Coordinator at Texstrip Manufacturing Sdn Bhd from 1989 to 1991; Shipping Coordinator Peninsular Carpet (M) Sdn Bhd from 1987 to 1989 and Shipping Coordinator at Segani Shipping Sdn Bhd from 1983 to 1987. He completed high school in 1981. Currently, he is the owner of Auto Biz Enterprise since year 1997. He has no other directorship in any other public and public listed companies.

Encik Raja Kamarudin Bin Raja Adnan does not have any family relationship with any other directors of the Company. He has no conflict of interest with the Company and no conviction for offences within the past five (5) years other than traffic offences, if any.

Directors’ Profilecont’d


Statement on Corporate Governance

The Board of Directors of Wintoni Group Berhad (“Wintoni” or “the Company”) recognises the importance of adopting high standards of corporate governance in the Company in order to safeguard stakeholders’ interests as well as enhancing shareholders’ value.

Pursuant to Rule 15.25 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“AMLR”) (“Bursa Securities”), this corporate governance statement (the “Statement”) sets out how the Company has applied the 8 Principles of the Malaysian Code on Corporate Governance (“MCCG 2012” or “the Code”) and and the extent to which it has applied the principles and recommendations as set out the Code throughout the financial year 31 December 2015.

THE BOARD OF DIRECTORS

Role & Responsibilities of the Board

The Board is responsible, amongst others, supervising its affairs to ensure within acceptable risk and effective control and in compliance with the relevant laws, regulations, guidelines and directives in which it operates. The Board is ensures necessary resources of the Company are available to meet the Group’s objective. The Board has delegated day-to-day operational decisions or any business dealing to the Executive Directors and respective key personnel who are responsible for monitoring daily operational matters. In this event, Non-Executive Directors are responsible to bringing Independent judgement and scrutiny to decision taken by the Board.

To assist in the discharge of its stewardship role, the Board has established Board Committees, namely the Audit Committee, Nomination Committee and Remuneration Committee to examine specific issues within their respective terms of reference as approved by the Board and report to the Board with their recommendations. The ultimate responsibility for decision making, however, lies with the Board.

The Board recognises the key role of duties and responsibilities to strategic direction of the Company and has assumed the following principal roles in discharging its fiduciary and leadership functions:

• reviewingandadoptingastrategicplanfortheCompany;• evaluatingthesustainabilityoftheGroup’sbusiness;• overseeingtheconductoftheGroup’sbusinessandevaluatingwhetherornotitsbusinessesarebeingproperly

managed;• identifyingprincipalbusiness risks facedby theGroupandensuring the implementationofappropriate internal

controls and mitigating measures to address such risks;• ensuring that all candidates appointed to seniormanagement positions are of sufficient caliber, including the

orderly succession of senior management personnel;• overseeing thedevelopmentand implementationofashareholdercommunicationspolicy, includingan investor

relations programme for the Company; and• reviewingtheadequacyandintegrityoftheGroup’sinternalcontrolandmanagementinformationsystems.

Board Charter

The Board had approved and formalized on 21st April 2014 a Board Charter setting out the duties, responsibilities and functions of the Board in accordance with the principles of good corporate governance set out in MCCG 2012.

Board Balance and Independence

The Board consists of (5) members comprising two (2) Executive Directors, and three (3) Independent Non-Executive Directors. This composition fulfills the requirement prescribed under Rule 15.02 of the AMLR which stipulates that at least two (2) Directors or one-third (1/3) of the Board, whichever higher, must be independent. The profile of each Director is presented on pages 6 and 7 of this Annual Report.


Statement on Corporate Governancecont’d

THE BOARD OF DIRECTORS cont’d

Board Balance and Independence cont’d

Influence is balanced within the Board by virtue of the Independent Directors whose skills and business experience are invaluable in constructively challenging and directing the Group’s strategy and direction. All of the Independent Directors provide an independent and external insight to the Board and its committees, and have a deep appreciation of the Group’s business and activities, enabling them to make a thorough evaluation of information received. They are independent in their judgement as demonstrated by their objective challenge of management, and objective decision making after appropriate debate.

The independence of each independent Director was reviewed as part of the Board’s annual performance evaluation. The Board concluded that each of them remained independent in character, performance and judgement.

The Board acknowledges the importance of board diversity, including gender diversity to the effective functioning of the Board as per Recommendation 2.2 of MCCG 2012. The Group has no immediate plan to implement a diversity policy as it is of the view that employment is dependent on each candidate’s skills, experience, core competencies and other qualities, regardless of gender and age.

Sustainability of Business

The Board is mindful of the importance of business sustainability. The Board acknowledges the importance of investment in corporate sustainability to the mutual benefit of both shareholders and stakeholders. Currently, the Company has been exploring into diversifying and to turn around the business.

Supply of, and Access to, Information

The Board is supplied with relevant information and reports on financial, operational, corporate, regulatory, business development and audit matters, by way of Board reports or upon specific requests, for decisions to be made on an informed basis and effective discharge of Board’s responsibilities.

Good practices have been observed for timely dissemination of meeting agenda, including the relevant Board and Board Committee papers to all Directors prior to the Board and Board Committee meetings, to give effect to Board decisions and to deal with matters arising from such meetings. The Executive Directors and/or other relevant Board members furnish comprehensive explanation on pertinent issues and recommendations by Management. The issues are then deliberated and discussed thoroughly by the Board prior to decision making.

In addition, the Board members are updated on the Company’s activities and its operations on a regular basis. All Directors have access to all information of the Company on a timely basis in an appropriate manner and quality necessary to enable them to discharge their duties and responsibilities. Senior Management of the Group and external advisers are invited to attend Board meetings to provide additional insights and professional views, advice and explanations on specific items on the meeting agenda. Besides direct access to Management, Directors may obtain independent professional advice at the Company’s expense, if considered necessary, in furtherance of their duties.

The Company Secretary is of a qualified prescribed body. Company Secretaryis responsible for the secretarial functions such as compliance with all statutory and regulatory requirements, recording the proceedings of all Board meetings and Committee meetings and proper maintenance of secretarial records.

PRINCIPLE 2 - STRENGTHEN COMPOSITION OF THE BOARD

The Board consist of five (5) members, comprising two (2) Executive Directors and three (3) Independent Non-Executive Directors. The composition of the board compliant with the requirements as set out under the AMLR of Bursa Securities which stipulate that at least two (2) Directors or one-third of the Board, whichever is higher, must be Independent. The profile of each Director is set out in this Annual Report. The Directors, with their differing backgrounds and specialisations, collectively bring with them a wide range of experience and expertise in areas such as finance; accounting and audit; corporate affairs; and marketing and operations.


PRINCIPLE 2 - STRENGTHEN COMPOSITION OF THE BOARD cont’d

Nomination Committee – Selection and Assessment of Directors

A Nomination Committee was established by the Board on 12 November 2007, with specific terms of reference, by the Board, comprising three (3) Independent Non-Executive Directors and as follows:

Chairman DesignationNo. of Meetings

Attended

Dato’ Seri Mohd Shariff Bin Omar (Appointed on 23.09.16) Independent Non-Executive Director N/A

Fu Lit Fung (Resigned on 10.09.15) Independent Non-Executive Director 1/1

Members

Kamil Bin Abdul Rahman (Appointed on 23.09.16) Independent Non-Executive Director N/A

Dato’ Ng How Hon (Appointed on 23.09.16) Independent Non-Executive Director N/A

Mohd Sopiyan Bin Mohd Rashdi (Resigned on 10.09.15) Independent Non-Executive Director 1/1

Mohamad Farid Bin Mohd Yusof (Resigned on 10.09.15) Independent Non-Executive Director 1/1

Umsery @ Ansara Bin Abdullah (Resigned on 10.09.15) Independent Non-Executive Director 1/1

The Nomination Committee is primarily responsible for recommending suitable appointments to the Board, taking into consideration the Board structure, size, composition and the required mix of expertise and experience which the Director should bring to the Board. It assesses the effectiveness of the Board as a whole, the Board Committees and the contribution of each Director, including Non-Executive Directors.

The final decision on the appointment of a candidate recommended by Nomination Committee rests with the whole Board. The Board is entitled to the services of the Company Secretary who would ensure that all appointments are properly made upon obtaining all necessary information from the Directors.

Pursuant to the Company’s Articles of Association, one-third (1/3) of the Directors including the Managing Director, shall retire from office, at least once in three (3) years. Retiring directors can offer themselves for re-election. Directors who are appointed by the Board during the financial year are subject to re-election by shareholders at the next Annual General Meeting held following their appointment. Directors over seventy (70) years of age are subject for re-appointment annually in accordance with Section 129 of the Companies Act, 1965.

During the financial year, the Nomination Committee met one (1) time, attended by all members. The Nomination Committee assesses the balance composition of Board members based on merits, Directors’ contribution and Board effectiveness. The Company has no policy on gender diversity or target set but believes in merits and commitment of its Board members.

During the financial year, the Nomination Committee had assessed the effectiveness of the Board as a whole, the various Board Committees as well as the contribution of each individual director.



PRINCIPLE 2 - STRENGTHEN COMPOSITION OF THE BOARD cont’d

Directors’ Remuneration

A Remuneration Committee was established by the Board on 23 September 2016, comprising three (3) Independent Non-Executive Directors as follows:

Chairman DesignationNo. of Meetings

Attended


Members

Dato’ Seri Mohd Shariff Bin Omar (Appointed on 23.09.16) Independent Non-Executive Director N/A


The Remuneration Committee has been entrusted by the Board to determine that the levels of remuneration are sufficient to attract and retain Directors of quality required to manage the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the Executive Directors. In the case of Non-Executive Directors, the level of remuneration shall reflect the experience and level of responsibilities undertaken by the Non-Executive Directors concerned. In all instances, the deliberations are conducted, with the Directors concerned abstaining from discussions on their individual remuneration.

Details of Directors’ remuneration for the financial year ended 31 December 2015 are as follows:

Fees (RM)

Salary (RM)

Defined contribution

plan (RM)

Total (RM)

Executive Directors 106,000 64,000 7,680 177,680

Non-Executive Directors 85,000 - - 85,000

Total 191,000 64,000 7,680 262,680

The number of Directors whose remuneration falls into the following bands is as follows:

Remuneration BandNo. of Directors

ExecutiveNo. of Directors

Non-Executive

Below RM50,000 3 5

RM50,001 – RM100,000 1 -

RM100,001 – RM150,000 - -

RM150,001 – RM200,000 - -

Total 4 5



PRINCIPLE 3 – REINFORCE INDEPENDENCE OF THE BOARD

In accordance with Recommendation 3.3 of MCCG 2012 which recommends that the Chairman of the Board is a Non-Executive Director or the Board must comprise a majority of independent directors if the Chairman is not an independent director. The Company Board meetings during the year were chaired by the Chairman who is an Independent Non-Executive Director, thus, the Board comprise a majority of independent directors.

The Independent Non-Executive Directors bring to bear objective and independent views, advice and judgment on interests, not only of the Group, but also of shareholders and stakeholders. Independent Non-Executive Directors are essential for protecting the interests of shareholders and can make significant contributions to the Company’s decision making by bringing in the quality of detached impartiality.

The Board recognises the importance of establishing criteria on independence to be used in the annual assessment of its Independent Non-Executive Directors. In accordance with Recommendation 3.3 of MCCG 2012, the Board must justify and seek shareholders’ approval in the event it retains an independent director, a person who has served in that capacity for more than nine (9) years. As at the date of this Statement, all the Company’s Independent Non-Executive Directors have not reached the nine (9)-year limit.

PRINCIPLE 4 – FOSTER COMMITMENT OF DIRECTORS

The Board ordinarily meets at least four (4) times a year, scheduled well in advance before the end of the preceding financial year to facilitate the Directors in planning their meeting schedule for the year. Additional meetings are convened when urgent and important decisions need to be made between scheduled meetings. Board and Board Committee papers which are prepared by Management, provides the relevant facts and analysis for the convenience of Directors. The meeting agenda, the relevant reports and Board papers are furnished to Directors and Board Committee members well before the meeting to allow the Directors sufficient time to peruse for effective discussion and decision making during meetings. At the quarterly Board meetings, the Board reviews the business performance of the Group and discusses major operational and financial issues. The Chairman of the Audit Committee informs the Directors at each Board meetings of any salient matters noted by the Audit Committee and which require the Board’s attention or direction. All pertinent issues discussed at Board meetings in arriving at the decisions and conclusions are properly recorded by the Company Secretary by way of minutes of meetings.

Board Meetings

There were thirteen (13) Board meetings held during the financial year ended 31 December 2015, with details of Directors’ attendance set out below:

Board of Directors DesignationNo. of Meetings

Attended

Dato’ Seri Mohd Shariff Bin Omar (Appointed on 10.09.15) Independent Non-Executive Director 3/3



Ahmad Amryn Bin Abd Malek (Appointed on 20.11.15) Executive Director 1/1

Raja Kamarudin Bin Raja Adnan (Appointed on 20.11.15) Executive Director 1/1

Suaran Singh A/L Himat Singh (Appointed on 10.09.15 and resigned on 01.04.16)

Independent Non-Executive Director 3/3

Haflil Feiruz Bin Muhammad Feisol (Appointed on 10.09.15 and resigned on 01.04.16)


Dato’ Muzaffirah Yurhaningseh Mazputri Binti Tun Dato Sri Ahmad Fairuz (Appointed on 10.09.15 and resigned on 01.04.16)


Mohamad Annuar Bin Ariffin (Appointed on 10.09.15 and resigned on 9.11.15)

Executive Director 2/2



PRINCIPLE 4 – FOSTER COMMITMENT OF DIRECTORS cont’d

Board Meetings cont’d

Board of Directors DesignationNo. of Meetings

Attended

Dato’ Haji Jalaldin Bin Hussain (Appointed on 10.09.15 and resigned on 08.12.15)


Anita Chew Cheng Im (Appointed on 10.09.15 and resigned on 19.10.15)


Chaang Kok Fai (Appointed on 10.09.15 and resigned on 08.12.15)


Kamal Bin Abdul Aziz (Appointed on 10.09.15 and resigned on 30.10.15)

Executive Director 2/2

Dato’ Tey Por Yee (Resigned on 10.09.15) Executive Director 10/10

Choong Siew Meng (Resigned on 10.09.15) Executive Director 5/8

Mohd Sopiyan Bin Mohd Rashdi (Resigned on 10.09.15) Independent Non-Executive Director 7/9

Soo Tee Wei (Resigned on 10.09.15) Executive Director 9/9

Mohamad Farid Bin Mohd Yusof (Resigned on 10.09.15) Independent Non-Executive Director 9/10

Fu Lit Fung (Resigned on 10.09.15) Independent Non-Executive Director 10/10

LT GEN (Rtd) Datuk Khairuddin Bin Mat Yusof (Resigned on 10.09.15)


Tuan Haji Umsery Umsery @ Ansari Bin Abdullah (Resigned on 10.09.15)


The Directors observes the recommendation of the MCCG 2012 that they are required to notify the Company before accepting any new directorship and to indicate the time expected to be spent on the new appointment. To ensure that the Directors have the time to focus and fulfil their roles and responsibilities effectively, they must not hold directorships at more than five (5) public listed companies and must be able to commit sufficient time to the Company.

The Board is satisfied with the level of time commitment given by each Directors towards fulfilling their roles and responsibilities as Directors of the Company. This is evidenced by the attendance record of the Directors at Board meetings.

Directors’ Training – Continuing Education Programmes

The Board is mindful of the importance for its members to undergo continuous training to be apprised on changes to regulatory requirements and the impact of such regulatory requirements have on the Group.

All the Directors of the Company have attended the Mandatory Accreditation Programme within the stipulated timeframe required in the AMLR.

The Board encourages its Directors to attend talk, seminars, workshops and conferences to update and enhance their skills and knowledge to enable them to carry out their role effectively as Directors in discharging their responsibilities towards corporate governance, operational and regulatory issues. The Directors are briefed by the Company Secretaries on the letters and circular issued by Bursa Securities, if any, at every Board meeting.

Throughout the year, Directors also received updates and briefings, particularly on regulatory, industry and legal developments, including information on significant changes in business and procedures instituted to mitigate such risks.



PRINCIPLE 4 – FOSTER COMMITMENT OF DIRECTORS cont’d

Directors’ Training – Continuing Education Programmes cont’d

Save for Dato’ Ng How Hon and En Kamil Bin Abd Rahman who were appointed on 19 September 2016, all the Directors were not able to attend any seminars and/or training programmes during the financial year due their busy work schedule. However, they have kept themselves abreast on financial and business matters through readings to enable them to contribute to the Board. They are also aware of their duties and responsibilities and will continue to undergo other relevant training programmes to keep abreast with new regulatory developments and requirements in compliance with the AMLR on continuing education.

The External Auditors have also briefed the Board members on any changes to the Malaysian Financial Reporting Standards that would affect the Group’s financial statements during the financial year under review. The Directors continue to undergo relevant training programmes to further enhance their skills and knowledge in the discharge of their stewardship role.

PRINCIPLE 5 – UPHOLD INTEGRITY IN FINANCIAL REPORTING BY COMPANY

It is the Board’s commitment to present a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of each reporting period and financial year, primarily through the quarterly announcement of Group’s results to Bursa Securities, the annual financial statements of the Group and Company as well as the Chairman’s Statement and review of the Group’s operations in the Annual Report, where relevant. A statement by the Directors of their responsibilities in the preparation of financial statements is set out in the ensuing paragraph.

Statement of Directors’ Responsibility for Preparing Financial Statements

The Board is responsible to ensure that the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the results and cash flows of the Group for the financial year then ended.

The Directors are satisfied that in preparing the financial statements of the Group for the financial year ended 31 December 2015, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The financial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

Audit Committee

In assisting the Board to discharge its duties on financial reporting, the Board has established an Audit Committee, comprising wholly Independent Non-Executive Directors, with Encik Kamil Bin Abdul Rahman as the Committee Chairman. The composition of the Audit Committee, including its roles and responsibilities, are set out in the Audit Committee Report of this Annual Report. One of the key responsibilities of the Audit Committee in its specific terms of reference is to ensure that the financial statements of the Group and Company comply with applicable financial reporting standards in Malaysia. Such financial statements comprise the quarterly financial report announced to Bursa Securities and the annual statutory financial statements.

Through the Audit Committee, the Company has established a transparent and appropriate relationship with its auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia.



PRINCIPLE 6 – RECOGNISE AND MANAGE RISKS OF THE GROUP

During the financial year under review, the Board has yet to establish a structured risk management framework to manage business risks, although Management has a process to identify and evaluate significant risks faced by the Group. This represents a departure from Recommendation 6.1 of the MCCG 2012 which stipulates the need for the Board to establish a sound framework to actively identify, assess and monitor key business risks faced by the Group to safeguard shareholder’s investment and the Group’s assets. In the absence of such a structured framework, issues on risks were discussed at Board meetings where the Executive Director would articulate risks associated with projects and investment, including any risk exposure that the Group faced in its operations. The Board is aware of the importance of such a framework and will take measures to formalise one, which is expected to consider the risk appetite of various companies in the Group as well as the Group itself.

The Group has undertakes regular reviews of the adequacy and effectiveness of the Group’s system of internal controls and risk management process, as well as appropriateness and effectiveness of the corporate governance practices. The Internal Auditors reports directly to the Audit Committee. Further details on the internal audit function can be seen in the Audit Committee Report and the Risk Management and Internal Control Statement in this Annual Report.

PRINCIPLE 7 – ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries to be made to the regulators, shareholders and stakeholders. On this basis, the Board has formalised a Corporate Disclosure Policy which is not only to comply with the disclosure requirements as stipulated in the AMLR, but also setting out the persons authorised to approve and disclose material information to regulators, shareholders and stakeholders. The Corporate Disclosure Policy applies to the conduct of directors, authorised spokesperson, management, officers, employees, consultants and contractors of the Company who have access to confidential corporate information.

PRINCIPLE 8 – STRENGTHEN RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS

Shareholder participation at general meeting

The Annual General Meeting (“AGM”), which is the principal forum for shareholders dialogue, allows shareholders to review the Group’s performance via the Company’s Annual Report and pose questions to the Board for clarification. At the AGM, shareholders participate in deliberating resolutions being proposed or on the Group’s operations in general. At the last AGM, a question & answer session was held where the Chairman invited shareholders to raise questions with responses from the Board.

The Notice of AGM is circulated at least twenty one (21) days before the date of the meeting to enable shareholders to go through the Annual Report and papers supporting the resolutions proposed. Shareholders are invited to ask questions both about the resolutions being proposed before putting a resolution to vote as well as matters relating to the Group’s operations in general. All the resolutions set out in the Notice of the last AGM were put to vote by show of hands and duly passed. The outcome of the AGM was announced to Bursa on the same meeting day. Pursuant to the recent amendment to the AMLR, every Malaysian public listed company are required to adopt poll voting in general meetings.

Communication and engagement with shareholders

The Board recognises the importance of being transparent and accountable to the Company’s investors and, as such, has various channels to maintain communication with them. The various channels of communications are through the quarterly announcements on financial results to Bursa Securities, relevant announcements and circulars, when necessary, the Annual and Extraordinary General Meetings and through the Group’s website at where shareholders can access pertinent information concerning the Group.



Additional Compliance Information

The information set out below was disclosed in compliance with the Listing Requirements:-

1. Share Buy-Back

The Company did not make any proposal for share buy-back during the financial year ended 31 December 2015.

2. Options, Warrants or Convertible Securities Exercised

The Company has issued a total of 216,000,000 warrants during the financial year ended 31 December 2015. The said warrants will be expired on 23 February 2019.

3. Depository Receipt (“DR”) Programme

The Company did not sponsor any DR programme during the financial year ended 31 December 2015.

4. Imposition of Sanctions and/or Penalties

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2015.

5. Non-Audit Fees

There was no any non-audit fees paid to the external auditors by the Company for the financial year ended 31 December 2015.

6. Variation in Results

In compliance with Paragraph 9.19(36) of the AMLR, the Board of Wintoni wishes to inform that there is a deviation of about 14% between the Group’s profit after tax and minority interest position as stated in the unaudited quarterly results for the period ended 31 December 2015 (“4Q2015”) announced on 29 February 2016 and the Audited Financial Statement for the financial year ended 31 December 2015 (“AFS 2015”), as follows:-

AuditedRM’000

UnauditedResult

RM’000Variance

RM’000

Profit /(Loss) After Tax and Minority Interest (49,864) (56,909) (7,045)

The major causes of the variances between the 4Q2015 Results and the AFS 2015 are mainly due to the loss on foreign exchange and waive able of debts for disposal of subsidiary but not recognized by the external auditor.

The reconciliation of the variances is set out below:-

RM (‘000)

Profit/(Loss) at 31 December 2015 (unaudited) (49,864)

- Waive able of debts for disposal of subsidiary but not recognized by external auditor (3,940)

- Losses in forex (different in USD rate) (2,290)

- impairment on doubtful debts (434)

- impairment on goodwill (117)

- impairment of assets (75)

- Accrual expenses (189)

As per auditor’s report 2015 (56,909)


Additional Compliance Informationcont’d

7. Profit Guarantee

During the financial year ended 31 December 2015, the Wintoni Group did not receive any profit guarantee.

8. Material Contracts Involving Directors and Major Shareholders

For the financial year ended 31 December 2015, no contract of a material nature was entered into between the Company or its subsidiaries and its Directors, major shareholders and/or persons connected to them.

9. Recurrent Related Party Transactions Statement There was no recurrent related party transaction during the financial year ended 31 December 2015.

10. Profit Estimate, Forecast or Projection

The Company did not release any profit estimate, forecast or projection during the financial year ended 31 December 2015.

11. Corporate Social Responsibility (“CSR”) The Group is aware of its CSR and has always made CSR an integral part of the way it conducts its businesses.

12. Contracts relating loan

During the financial year ended 31 December 2015, there was no any contracts relating loan.

13. Utilisation of proceeds

There was no any utilisation of proceeds raised during the financial year.

14. Capital commitment

There is no any capital commitments which has been approved and contracted for within the financial year.


Audit Committee Report

The primary objectives of the Audit Committee is to provide assistance to the Board in fulfilling its statutory and fiduciary responsibilities and to ensure that the corporate governance, internal control, proper accounting and financial reporting systems of the Wintoni Group are adequately managed. The Audit Committee will endeavour to adopt various practices aimed at maintaining appropriate standards of responsibility, integrity and accountability to the shareholders of the Company.

The Audit Committee Members

The Audit Committee consists of three (3) members all of whom are Independent Directors.

No of meetings Attended

Chairman : Kamil Bin Abdul Rahman (Appointed on 23.09.2016) N/A Mohd Sopiyan Bin Mohd Rashdi (resigned on 10.09.2015) 4/4 Members : Dato’ Seri Mohd Shariff Bin Omar (Appointed on 23.09.2016) N/A Dato Ng How Hon (Appointed on 23.09.2016) N/A Suaran Singh A/L Himat Singh (Appointed on 07.10.2015 and resigned on 01.04.2016) 1/1 Haflil Feiruz Bin Muhammad Feisol (Appointed on 07.10.2015 and resigned on 01.04.2016) 0/1 Dato’ Muzaffirah Yurhaningseh Mazputri Binti Tun Dato’ Sri Ahmad Fairuz N/A (Appointed on 25.02.2016 and resigned on 01.04.2016) Chaang Kok Fai (Appointed on 07.10.2015 and resigned on 08.12.2015) 1/1 Fu Lit Fung (Resigned on 10.09.2015) 4/4 Mohamad Farid Bin Mohd Yusof (Resigned on 10.09.2015) 4/4 Tuan Haji Umsery @ Ansari Bin Abdullah (Resigned on 10.09.2015) 2/4

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

The Committee is governed by the following terms of reference:-

Membership

The Board from among its members shall appoint the Audit Committee that fulfils the following requirements:-

1. The Audit Committee must be composed of no fewer than three (3) members, exclusively Non-Executive Director.

2. A majority of the Audit Committee members must be Independent Director.

3. All members of the Audit Committee should be able to read, analyse and interpret financial statements. At least one of them:-

(i) must be a member of the Malaysian Institute of Accountants; or

(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:-

(a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or

(b) he must be a member of one of the Associations of Accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967; or

(iii) fulfils such other requirements as prescribed or approved by the Exchange.


Membership cont’d

4. The members of the Audit Committee shall elect a Chairman among their number who shall be an Independent Director.

5. No alternate director is appointed as a member of Audit Committee.

6. If a member of the Audit Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced below three (3), the Board of Directors shall, within three (3) months of that event, appoint such number of new member as may be required to make up the minimum number of three (3) members.

7. The terms of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years. However, the appointment terminates when a member ceases to be a Director.

Meetings

The Chairman may call upon a meeting of the Audit Committee if requested by any committee member, any Executive Director or the external auditors.

A minimum of two (2) members present shall form a quorum, and both of whom present must be Independent Directors. The Committee shall meet with the external auditors and internal auditors as and when necessary without the presence of other directors and employees of the Company. The Company Secretary shall act as Secretary of the Audit Committee or in her/his absence, another person authorised by the Chairman of the Audit Committee.

There were four (4) Audit Committee meetings held during the year 2015. The Record of attendance for meetings held during the financial year ended 31 December 2015 is indicated above.

Authority

The Committee is authorised by the Board to investigate any activity within its terms of reference and shall have adequate resources and unrestricted access to any information from both internal and external auditors and all employees of the Wintoni Group in performing its duties. The Committee is also authorised by the Board to obtain external legal or other independent professional advice and to invite outsiders with relevant experience to attend, if necessary.

The Committee is also authorised to convene meetings with external auditors without executive board members present, whenever deemed necessary.

Key Functions and Responsibilities

The key functions and responsibilities of the Audit Committee shall be:-

1. To review and recommend the appointment of external auditors, the audit fee and any questions of resignation or dismissal including the nomination of person or persons as external auditors;

2. To discuss with external auditors where necessary, on the nature and scope of audit, the audit plan and to ensure coordination of audit where more than one audit firm is involved;

3. To review the quarterly results and yearend financial statements prior to the approval by the Board, focusing on:-

• goingconcernassumption; • compliancewiththelatestaccountingstandards,statutoryandregulatorydisclosurerequirementsandany

changes in accounting policies and practices; • significantadjustmentsarisingfromtheauditandunusualevents;

Audit Committee Reportcont’d


Key Functions and Responsibilities cont’d

4. To discuss problems and reservations arising from the interim and final external audits, and any matters the external auditors may wish to discuss (in the absence of management where necessary);

5. To review the external auditors’ management letter and management response;

6. To review any related party transaction and conflict of interest situation that may arise within the Company or Wintoni Group including any transaction, procedure or course of conduct that raises questions of management integrity;

7. To consider the major findings of internal investigations and management’s response; and

8. To carry out such other responsibilities, functions or assignments, as may be defined jointly by the Audit Committee and the Board of Directors from time to time.

Summary of activities during the financial year

The activities of the Audit Committee during the financial year ended 31 December 2015 are as follows:-

1. review the quarterly results and year-end financial statements.

2. review reports of the internal and external auditors.

3. review the audited Financial Statements of the Group and the Company prior to submission to the Board for their consideration and approval. The review was to ensure that the audited Financial Statements were drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia.

Internal Audit Function

The Group has follow-up reviews on previous audit reports are carried out to ensure that appropriate actions are taken to address internal control weaknesses highlighted. Based on the audits, the internal auditors will recommend on areas of improvement and at subsequent audits, they will conduct follow-up review to determine whether improvements have been made.

Internal Audit’s goal is to focus mainly on risk-based audits related to operations and compliance that are aligned with the risks of the Company and the Group to ensure that the relevant controls addressing those risks are reviewed.

Audit Committee Reportcont’d


The Group understands the importance of its stakeholders, i.e. shareholders, employees, customers, suppliers, and local communities, in the successfulness of Company’s business. Pursuant to that, the Company will be constantly trying to balance the return of each of its stakeholders group. The Board of Directors acknowledges that Corporate Social Responsibility (“CSR”) is the basis for building positive relationship towards the community, environment, its employees, customers, suppliers, shareholders and other stakeholders. Therefore, the continuance practice of CSR activities is strongly encouraged to ensure that people within and outside the Group benefited from the existence of the organization. However, the Group has not undertaken any CSR activities during the financial year as the Company’s resources were very much limited. Nonetheless, the Group would consider practicing CSR activities in the future when the resources are available.

Statement of Corporate Social Responsibilities


Risk Management & Internal Control Statement

(A) INTRODUCTION

This risk management & internal control statement is made in accordance with the Malaysian Code on Corporate Governance and Rule 15.26(b) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, which requires Malaysian public listed companies to make a statement about their state of risk management and internal control system in the annual report.

(B) BOARD RESPONSIBILITY

The Board acknowledges its responsibility for maintaining a sound risk management and internal control system and the need to review its adequacy and integrity on a regular basis. The system of risk management and internal control is meant to effectively manage business risk towards the achievement of objectives, to enhance the value of shareholders’ investments and to safeguard the Group’s assets.

In view of the limitations that are inherent in any system of internal control, this system is designed to manage rather than eliminate the risk of failure to achieve business objectives. However, the Board recognizes that such system can only provide reasonable and not absolute assurance against material misstatement or loss.

(C) RISK MANAGEMENT FRAMEWORK

The Board affirms that a sound risk management is critical and is an integral part of the business operations.

The Board maintains continuous commitment in strengthening the Group’s risk management framework and processes. Day-to-day risk management of the individual operating units is delegated to the respective senior managements. In this regard, the Board is responsible for timely identification of the Group’s risks of each business units and implementation of systems to manage these risks. The respective senior management of each operating subsidiary is responsible for managing the risks of the operating subsidiary, and the Head of Departments with each operating subsidiary is responsible for managing the risk of his/ her respective department as part of their day-to-day duties. Any significant weaknesses identified during the review together with the improvement measures to strengthen the internal control system were reported to the Board.

(D) INTERNAL CONTROL SYSTEM

The internal control processes are embedded within the operations of the Group. The key elements of controls that are in place for the year under review are as follows:

(a) The Board continuously assesses key business risks with the help of key management

(b) Board meetings are carried out every quarter to assess the overall financial and non-financial performance and internal controls of the Group.

(c) Regular and comprehensive information is provided to management, covering financial and operational performance and key business indicators, for effective monitoring and decision making.

(d) Quarterly results are reviewed by the Board and the Audit Committee before announcement to the Bursa Securities.


Risk Management & Internal Control Statementcont’d

(E) INTERNAL AUDIT FUNCTION

The Group has follow-up reviews on previous audit reports are carried out to ensure that appropriate actions are taken to address internal control weaknesses highlighted. Based on the audits, the internal auditors will recommend on areas of improvement and at subsequent audits, they will conduct follow-up review to determine whether improvements have been made.

Audit Committee has ensure those internal control procedure has been implemented by the management and resolved the internal control issue from time to time.

(F) CONCLUSION

The Board is of the view that the present system of risk management and internal control system described in this statement to be satisfactory and the risks to be at an acceptable level within the context of the Group’s business environment. The Board and Management will continue to take measures to strengthen the risk management and internal control system as well as monitor the level of the risk and internal control framework.

The Board is of the view that the present system of risk management and internal control is adequate for the Group to manage its risks and to achieve its business objectives. The Board is committed in ensuring that the Group continuously reviews the risk management and internal control system so that it is effective in enhancing shareholders’ investments and safeguarding the Group’s assets.

This statement was made in accordance with the Board of Directors’ resolution dated 24 November 2016.


Directors’ Report

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

Statements of Financial Position

Statements of Profit or Loss And Other Comprehensive Income

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

25

29

29

30

33

34

35

37

39

FINANCIALSTATEMENTS


The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2015.

PRINCIPAL ACTIVITIES

The Company is principally an investment holding company.

The principal activities of the subsidiary companies are disclosed in Note 5 to the financial statements.

The Group and the Company have ceased their operations during the financial year except for its newly acquired subsidiary company, Syscomp Technology Sdn. Bhd..

RESULTS

Group Company

RM RM

Loss for the financial year 56,909,137 51,489,002

Attributable to:-

Owners of the Company 56,830,799 51,489,002

Non-controlling interest 78,338 -

56,909,137 51,489,002

DIVIDENDS

There were no dividend proposed, declared or paid by the Company since the end of previous financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

Directors’ Report


DIRECTORS

The Directors in office since the date of the last report are:-

Dato’ Seri Mohd Shariff Bin Omar (appointed on 10 September 2015)Ahmad Amryn Bin Abd Malek (appointed on 20 November 2015)Raja Kamarudin Bin Raja Adnan (appointed on 20 November 2015)Suaran Singh A/L Himat Singh (appointed on 10 September 2015 and resigned on 1 April 2016)Haflil Feiruz Bin Muhammad Feisol (appointed on 10 September 2015 and resigned on 1 April 2016)Dato’ Muzaffirah Yurhaningseh Mazputri Binti Tun Dato’ Sri Ahmad Fairuz (appointed on 10 September 2015 and

resigned on 1 April 2016)Dato’ Haji Jalaldin Bin Hussain (appointed on 10 September 2015 and resigned on 8 December 2015)Chaang Kok Fai (appointed on 10 September 2015 and resigned on 8 December 2015)Mohamad Annuar Bin Ariffin (appointed on 10 September 2015 and resigned on 9 November 2015)Kamal Bin Abdul Aziz (appointed on 10 September 2015 and resigned on 30 October 2015)Anita Chew Cheng Im (appointed on 10 September 2015 and resigned on 19 October 2015)Mohd Sopiyan Bin Mohd Rashdi (retired on 26 June 2015, re-appointed on 26 June 2015 and resigned on 10

September 2015)Soo Tee Wei (retired on 26 June 2015, re-appointed on 26 June 2015 and resigned on 10 September 2015)LT GEN (RTD) Datuk Khairuddin Bin Mat Yusof (retired on 26 June 2015, re-appointed on 26 June 2015 and resigned

on 10 September 2015)Tuan Haji Umsery @ Ansari Bin Abdullah (retired on 26 June 2015, re-appointed on 26 June 2015 and resigned on 10

September 2015)Fu Lit Fung (resigned on 10 September 2015) Mohamad Farid Bin Mohd Yusof (resigned on 10 September 2015)Dato’ Tey Por Yee (resigned on 10 September 2015)Chong Siew Meng (resigned on 10 September 2015)

DIRECTORS’ INTEREST

According to the Register of Directors’ shareholdings, there is no Director who is in office at the end of the financial year held any interest in the shares of the Company or of its related corporations.

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangement subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire any benefits by means of the 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 any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivables by Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

ISSUE OF SHARES AND DEBENTURES

There were no new shares or debentures issued during the financial year.

Directors’ Reportcont’d


WARRANTS

As at the end of the financial year, the Company has the following outstanding warrants:-

WarrantsExercise price per

ordinary share Expiry date

Number of warrants outstanding as at

31.12.2015

Warrants 2014/2019 RM0.10 23 February 2019 216,000,000

Each warrant entitles its registered holder to subscribe one (1) new ordinary share in the Company at an exercise price of RM0.10 per share, subject to adjustments in accordance with the provisions of the deed poll, at any time within 5 years from the date of issue of the warrants. The last date to exercise the warrant rights is 23 February 2019.

There were no new ordinary shares issued by virtue of the exercise of warrants. As at the end of the financial year, 216,000,000 warrants remained unexercised.

OTHER STATUTORY INFORMATION

Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps:-

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

(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:-

(a) which would render 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; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(d) not otherwise dealt with in the report or the financial statements which would render any amount stated in the financial statements misleading.

At the date of this report, there does not exist:-

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

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



OTHER STATUTORY INFORMATION cont’d

In the opinion of the Directors:-

(a) no contingent liability 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, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due;

(b) the results of operations of the Group and of the Company during the financial year were substantially affected by significant impairment on all the assets of the Group and of the Company and disposal of subsidiary companies; and

(c) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the current financial year in which this report is made.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year are disclosed in Note 33 to the financial statements.

SIGNIFICANT EVENTS AFTER THE FINANCIAL YEAR

The significant events after the financial year are disclosed in Note 33 to the financial statements.

AUDITORS

The Auditors, Messrs SJ Grant Thornton, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

)RAJA KAMARUDIN BIN RAJA ADNAN ) ) ) ) DIRECTORS ) ) ) ) )

)AHMAD AMRYN BIN ABD MALEK )

Kuala Lumpur19 August 2016


Annual Report 2015

In the opinion of the Directors, the financial statements set out on pages 33 to 92 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2015 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the supplementary information set out on page 92 had been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

RAJA KAMARUDIN BIN RAJA ADNAN AHMAD AMRYN BIN ABD MALEK Kuala Lumpur19 August 2016

I, Ahmad Amryn Bin Abd Malek, being the Director primarily responsible for the financial management of Wintoni Group Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 33 to 92 and the supplementary information set out on page 92 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the Statutory Declaration Act, 1960.

Subscribed and solemnly declared by )the above named at Kuala Lumpur in )the Federal Territory on 19 August 2016 ) ) AHMAD AMRYN BIN ABD MALEK

Before me:

S. ArulsamyW.490Commissioner for Oaths

Statement by Directors

Statutory Declaration

29


REPORT ON THE FINANCIAL STATEMENTS

We were engaged to audit the financial statements of Wintoni Group Berhad, which comprise the statements of financial position of the Group and of the Company as at 31 December 2015, the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 33 to 92.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Because of the matters described in the Basis for Disclaimer of Opinion paragraph, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

Basis for Disclaimer of Opinion

1. As disclosed in Note 33 to the financial statements, the Company had on 21 August 2015 and 27 August 2015 disposed of its subsidiary companies, namely Shanghai Winner Electrical Co., Ltd., Shanghai Winco Electrical Co., Ltd. (“Shanghai Group”) and Wintoni Power Sdn. Bhd. (“Wintoni Power”) respectively. Consequently, all the accounting records and information of Shanghai Group and Wintoni Power were transferred to the acquirer and the Company had no right to access to these accounting records and information subsequent to disposal dates. As such, the relevant accounting records and information of Shanghai Group and Power were not made available to us during our audit for the financial year ended 31 December 2015.

Consequently, the financial position and results of Shanghai Group and Wintoni Power at the date of disposals prepared by the management for the computation of the gain on disposal of subsidiary companies include significant amounts based on estimates. Based on the unaudited management financial information, the aggregated financial contributions of Shanghai Group and Wintoni Power to the Group’s assets and liabilities as at the date of disposals were RM12,812,398 and RM13,162,995, respectively and the loss after tax prior to disposals is RM4,790,483; which is significant to the Group’s financial position and results for the financial year ended.

We are unable to obtain sufficient appropriate audit evidence to ascertain the possible adjustments, if any, that may be required to be made to the current financial year Group’s results and cash flows had the relevant accounting records and information of Shanghai Group and Wintoni Power up to the date of disposals were made available for our audit purposes.

2. As disclosed in Note 33 to the financial statements, there was a break in to the Company’s office on 12 November 2015, resulting all of the accounting records and assets of the Company and of its subsidiary companies, namely Wintoni Engineering Sdn. Bhd., Planet Wireless Holdings Limited and Planet Wireless Sdn. Bhd. were stolen.

Due to the break in, the management has not been able to provide us with the financial records of the Company and of its subsidiary companies, namely Wintoni Engineering Sdn. Bhd., Planet Wireless Holdings Limited and Planet Wireless Sdn. Bhd. for the financial year then ended. Consequently, we are unable to verify the appropriateness of the entire financial statements due to the absence of the documents. Furthermore, the management is unable to quantify the extent of the financial losses resulting from the suspension of its businesses. Additional and consequential damages resulting from the break in have also not been reflected in the financial statements. In the absence of financial information after the reporting date, we were not able to perform audit procedures to review the events after the reporting period and determine whether any potential audit adjustments are required to be made or subsequent events to be disclosed in the financial statements for the financial year ended 31 December 2015.

Independent Auditors’ ReportTo the Members of Wintoni Group Berhad


REPORT ON THE FINANCIAL STATEMENTS cont’d

Basis for Disclaimer of Opinion cont’d

3. As disclosed in Note 2.2 to the financial statements, the Group has net liabilities of RM8,602,637 and net current liabilities of RM8,614,239 respectively. The Company has net liabilities of RM906,466 and net current liabilities of RM916,498 respectively.

On 26 February 2016, the Company has announced that it became an Affected Listed Issuer pursuant to Guidance Note 3 (“GN 3”) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

The ability of the Group and of the Company to continue as a going concern is dependent on the formalisation and successful implementation of the regularisation plan of the Company to restore its financial position and achieving sustainable and viable operations.

The application of the going concern concept is based on the assumption that the Group and the Company will be able to realise their assets and liquidate their liabilities in the normal course of business. Should the formalisation and implementation of the regularisation plan not materialise or not approve, the application of the going concern concept may be inappropriate and adjustments may be required to, inter alia, write down assets to their immediate realisable value, reclassify all long term assets and liabilities as current and to provide for further costs which may arise.

Disclaimer of Opinion

Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis of an audit opinion. Accordingly, we do not express an opinion on the financial statements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:-

a) In view of the matters as described in the Basis for Disclaimer of Opinion paragraph, in our opinion, the accounting and other records and the registers required by the Companies Act, 1965 in Malaysia to be kept by the Company and its Malaysian subsidiary companies of which have act as the auditors have not been properly kept in accordance with the provisions of the Companies Act, 1965 in Malaysia.

b) Because the auditors’ reports on the financial statements of the subsidiary companies contain disclaimer of opinion, we are unable to report whether we are satisfied that the financial statements of the subsidiary companies 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 whether we have received satisfactory information and explanations required by us for those purposes.

c) The auditors’ reports on the accounts of the subsidiary companies contain disclaimer of opinion as disclosed in Note 5 to the financial statements.

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out on page 92 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we do not express an opinion on the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Independent Auditors’ ReportTo the Members of Wintoni Group Berhad

cont’d


OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

SJ GRANT THORNTON OOI POH LIM (No. AF: 0737) (NO: 3087/10/17(J)) CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT

Kuala Lumpur19 August 2016

Independent Auditors’ ReportTo the Members of Wintoni Group Berhadcont’d


Group CompanyNote 2015 2014 2015 2014

RM RM RM RM

ASSETSNon-current assetsProperty, plant and equipment 4 11,602 22,126,304 - 3,767

Investment in subsidiary companies 5 - - 10,032 31,198,762

Total non-current assets 11,602 22,126,304 10,032 31,202,529

Current assetsInventories 6 - 1,697,161 - -

Trade receivables 7 47,342 11,050,861 - -

Amount due from customers on contracts 8 - 2,321,402 - -

Other receivables 9 357,091 15,142,210 302,432 2,432

Amount due from subsidiary companies 10 - - - 20,012,553

Tax recoverable - 3,593 - -

Fixed deposit with a licensed bank 11 - 64,791 - -

Cash and bank balances 12 133,049 4,902,640 12,068 117,931

Total current assets 537,482 35,182,658 314,500 20,132,916

TOTAL ASSETS 549,084 57,308,962 324,532 51,335,445

EQUITY AND LIABILITIESEQUITYEquity attributable to owners of the

Company:-Share capital 13 25,650,000 25,650,000 25,650,000 25,650,000

Share premium 14 10,199,031 10,199,031 10,199,031 10,199,031

Reserves 15 15,237,270 16,481,682 17,456,580 17,456,580

Accumulated losses (59,695,626) (2,864,827) (54,212,077) (2,723,075)

(8,609,325) 49,465,886 (906,466) 50,582,536

Non-controlling interest 5.4 6,688 - - -

Total equity (8,602,637) 49,465,886 (906,466) 50,582,536

LIABILITIESNon-current liabilityDeferred tax liabilities 16 - - - -

Total non-current liability - - - -

Current liabilitiesTrade payables 17 7,600,160 1,382,957 - -

Other payables 18 1,493,818 6,427,310 1,230,998 752,909

Finance lease liability 19 13,743 29,899 - -

Tax payable 44,000 2,910 - -

Total current liabilities/Total liabilities 9,151,721 7,843,076 1,230,998 752,909

TOTAL EQUITY AND LIABILITIES 549,084 57,308,962 324,532 51,335,445

Statements of Financial PositionAs at 31 December 2015

The accompanying notes form an integral part of the financial statements.



RM RM RM RM

Revenue 20 5,397,222 25,356,009 - -

Cost of sales (11,427,821) (14,603,389) - -

Gross (loss)/profit (6,030,599) 10,752,620 - -

Other income 13,070,810 8,698,695 270,282 10,092

Selling and distribution expenses (15,099) (159,919) - -

Administrative expenses (21,535,318) (7,653,880) (1,142,934) (2,521,600)

Other expenses (42,383,714) (7,246,550) (50,616,350) (2,000,000)

Finance costs (517) (1,675) - -

(Loss)/Profit before tax 21 (56,894,437) 4,389,291 (51,489,002) (4,511,508)

Tax (expense)/income 22 (14,700) 16,939 - (360)

(Loss)/Profit for the financial year (56,909,137) 4,406,230 (51,489,002) (4,511,868)

Other comprehensive income:-

Item that will be reclassified subsequently to profit or loss

Exchange differences on translating foreign operation, net of tax 1,808,549 1,608,081 - -

Total comprehensive (loss)/income for the financial year (55,100,588) 6,014,311 (51,489,002) (4,511,868)

(Loss)/Profit for the financial year attributable to:-

Owners of the Company (56,830,799) 4,406,230 (51,489,002) (4,511,868)

Non-controlling interest (78,338) - - -

(56,909,137) 4,406,230 (51,489,002) (4,511,868)

Total comprehensive (loss)/income attributable to:-

Owners of the Company (55,022,250) 6,014,311 (51,489,002) (4,511,868)

Non-controlling interest (78,338) - - -

(55,100,588) 6,014,311 (51,489,002) (4,511,868)

(Losses)/Earnings per share (sen)

- Basic 23 (11.08) 0.91

- Diluted 23 N/A N/A

Statements of Profit or LossAnd Other Comprehensive IncomeFor the Financial Year Ended 31 December 2015



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Statements of Changes in EquityFor the Financial Year Ended 31 December 2015


Non-distributable Distributable

Sharecapital

Sharepremium

Warrantreserve

Discount on shares

Capitalreserve

Accumulatedlosses

Totalequity

RM RM RM RM RM RM RM

Company

Balance as at 1 January 2014 33,000,000 - - - - (6,404,627) 26,595,373

Total comprehensive loss for the financial year - - - - - (4,511,868) (4,511,868)

Transactions with owners:-

Issuance of ordinary shares 13,300,000 5,320,000 - - - - 18,620,000

Issuance of ordinary shares arising from acquisition of subsidiary companies 5,000,000 5,000,000 - - - - 10,000,000

Par value reduction (25,650,000) - - - 17,456,580 8,193,420 -

Share issuance expenses - (120,969) - - - - (120,969)

Issuance of warrants - - 1,080,000 (1,080,000) - - -

Total transactions with owners (7,350,000) 10,199,031 1,080,000 (1,080,000) 17,456,580 8,193,420 28,499,031

Balance as at 31 December 2014 25,650,000 10,199,031 1,080,000 (1,080,000) 17,456,580 (2,723,075) 50,582,536

Total comprehensive loss for the financial year - - - - - (51,489,002) (51,489,002)

Balance as at 31 December 2015 25,650,000 10,199,031 1,080,000 (1,080,000) 17,456,580 (54,212,077) (906,466)


Statements of Changes in EquityFor the Financial Year Ended 31 December 2015cont’d



RM RM RM RM

OPERATING ACTIVITIES(Loss)/Profit before tax (56,894,437) 4,389,291 (51,489,002) (4,511,508)

Adjustments for:-Bad debts written off 9,190 43,280 - - Depreciation 4,527,921 1,590,156 333 233 (Gain)/Loss on disposal of subsidiary

companies (2,432,364) - 16,428,762 - Impairment loss on goodwill 5,272,462 - - - Impairment loss on inventories - 235,850 - - Impairment loss on receivables 429,487 489,604 - - Impairment loss on investment in subsidiary

companies - - 19,889,968 2,000,000 Impairment loss on amount due from

customers on contacts - 5,891,209 - - Impaiment loss on amount due from

subsidiary companies - - 14,294,186 - Interest expenses 517 1,675 - - Inventories written off - 9,935 - - Bargain purchase on business combination - (8,391,357) - - Interest income (671) (37,064) - (9,898)Property, plant and equipment written off 35,925,026 13,624 3,434 - Reversal of impairment loss on inventories - (23,196) - - Reversal of impairment loss on receivables - (655) - - Unrealised loss/(gain) on foreign exchange 270,333 (70,966) - (173)

Operating (loss)/profit before working capital changes (12,892,536) 4,141,386 (872,319) (2,521,346)

Changes in working capital:-Inventories (1,093,381) (791,504) - - Receivables 18,739,489 (11,713,235) (30,000) 3,186,532 Amount due from customers on contracts 2,914,153 (1,184,815) - - Payables 9,820,902 1,092,852 478,089 (172,869)

Cash generated from/(used in) operations 17,488,627 (8,455,316) (424,230) 492,317 Income tax paid - (40,749) - (360)Interest received 671 37,064 - 9,898

Net cash from/(used in) operating activities 17,489,298 (8,459,001) (424,230) 501,855

INVESTING ACTIVITIESAcquisition of a subsidiary company, net of

cash (outflows)/acquired (5,183,628) 3,713,172 (5,400,000) - Purchase of property, plant and equipment A (16,556,743) (11,431,078) - (4,000)Placement of fixed deposit pledged to a

licensed bank - (64,791) - - Interest paid (517) (1,675) - - Net cash outflows from disposal of subsidiary

companies (501,845) - - -

Net cash used in investing activities (22,242,733) (7,784,372) (5,400,000) (4,000)

Statements of Cash FlowsFor the Financial Year Ended 31 December 2015



RM RM RM RM

FINANCING ACTIVITIES

Advances from/(to) subsidiary companies - - 5,718,367 (18,891,085)

Repayment of finance lease liability (16,156) (26,118) - -

Proceeds from issuance of shares - 18,620,000 - 18,620,000

Share issuance expenses - (120,969) - (120,969)

Net cash (used in)/from financing activities (16,156) 18,472,913 5,718,367 (392,054)

CASH AND CASH EQUIVALENTS

Net changes (4,769,591) 2,229,540 (105,863) 105,801

Effects of changes in foreign exchange rate - 341,601 - 173

Brought forward 4,902,640 2,331,499 117,931 11,957

Carried forward B 133,049 4,902,640 12,068 117,931

NOTES TO THE STATEMENTS OF CASH FLOWS

A. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

The Group acquired property, plant and equipment with an aggregate cost of RM16,556,743 (2014: RM17,011,492) of which RMNil (2014: RM5,580,414) of deposit was paid by a subsidiary company in prior year. Cash payments of RM16,556,743 (2014: RM11,431,078) was made to purchase the property, plant and equipment.

B. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the statements of cash flows comprise of the following amounts:-

Group Company2015 2014 2015 2014

RM RM RM RM

Fixed deposit with a licensed bank - 64,791 - -

Cash and bank balances 133,049 4,902,640 12,068 117,931

133,049 4,967,431 12,068 117,931

Less: Fixed deposit pledged to a licensed bank - (64,791) - -

133,049 4,902,640 12,068 117,931

Statements of Cash FlowsFor the Financial Year Ended 31 December 2015cont’d



1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the ACE Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Suite 10.03, Level 10, The Gardens South Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.

The principal place of business of the Company is located at No. 13A, Jalan Perwira, Pusat Bandar, 34200 Parit Buntar, Perak Darul Ridzuan.

The Company is principally an investment holding company.

The principal activities of the subsidiary companies are disclosed in Note 5 to the financial statements.

The Group and the Company have ceased their operations during the financial year except for the newly acquired subsidiary company, Syscomp Technology Sdn. Bhd. (“Syscomp”).

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 19 August 2016.

2. BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the requirements of the Companies Act, 1965 in Malaysia.

2.2 Going concern

As at the reporting date, the Group has net liabilities of RM8,602,637 and net current liabilities of RM8,614,239 respectively.

As at the reporting date, the Company has net liabilities of RM906,466 and net current liabilities of RM916,498 respectively.

On 26 February 2016, the Company has announced that it became an Affected Listed Issuer pursuant to Guidance Note 3 (“GN 3”) of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) for the ACE Market.

The ability of the Group and of the Company to continue as a going concern is dependent on the formalisation and successful implementation of the regularisation plan of the Company to restore its financial position and achieving sustainable and viable operations.

The application of the going concern concept is based on the assumption that the Group and the Company will be able to realise their assets and liquidate their liabilities in the normal course of business. Should the formalisation and implementation of the regularisation plan not materialise or not approved, the application of the going concern concept may be inappropriate and adjustments may be required to, inter alia, write down assets to their immediate realisable value, reclassify all long term assets and liabilities as current and to provide for further costs which may arise.

Notes to the Financial Statements31 December 2015


Notes to the Financial Statements31 December 2015cont’d

2. BASIS OF PREPARATION cont’d

2.3 Basis of measurement

The financial statements of the Group and of the Company have been prepared on the historical cost convention, unless otherwise indicated in the summary of significant accounting policies.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that 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. The principal or the most advantageous market must be accessible by the Group and the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial market takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient 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, described as follows, based on the lowest level input that is significant to their fair value measurement as a whole:-

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 -Valuation techniques for which the lowest level input that is significant to their fair value measurement is directly or indirectly observable.

Level 3 -Valuation techniques for which the lowest level input that is significant to their fair value measurement is unobservable.

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 their fair value measurement as a whole) at the end of each reporting period.

The Group and the Company have established control framework in respect of measurement of fair value of financial instruments. The Executive Committee has overall responsibility for overseeing all significant fair value measurements. The Executive Committee regularly reviews significant unobservable inputs and valuation adjustments.

For the purpose of fair value disclosures, the Group and the Company have determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of fair value hierarchy as explained above.

2.4 Functional and presentation currency

The financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency and all values are rounded to the nearest RM except when otherwise stated.



cont’d


2.5 MFRSs

2.5.1 Adoption of new and revised MFRSs and IC Interpretations

The Group and the Company have consistently applied the accounting policies set out in Note 3 to the financial statements to all periods presented in these financial statements.

At the beginning of the current financial year, the Group and the Company adopted amendments to MFRSs and IC Interpretations which are mandatory for the financial years beginning on or after 1 January 2015.

Initial application of all the amendments to MFRSs and IC Interpretations that are effective did not have material impact to the financial statements of the Group and of the Company.

2.5.2 Standards issued but not yet effective

At the date of authorisation of these financial statements, the Malaysian Accounting Standards Board (“MASB”) has approved certain new standards, amendments and interpretations to existing standards which are not yet effective, and have not been early adopted by the Group and the Company.

Management anticipates that all of the relevant pronouncements will be adopted in the Group’s and the Company’s accounting policies for the first period beginning after the effective date of the pronouncement.

MFRS 9 Financial instruments

MFRS 9 replaces MFRS 139 Financial Instruments: Recognition and Measurement and all previous version of MFRS 9. The new standard introduces extensive requirements and guidance for classification and measurement of financial assets and financial liabilities which fall under the scope of MFRS 9, new “expected credit loss model” under the impairment of financial assets and greater flexibility has been allowed in hedge accounting transactions. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost. It is also expected that the Group’s and Company’s investment in unquoted shares will be measured at fair value through other comprehensive income.

The adoption of MFRS 9 will result in a change in accounting policy. The Group and the Company are currently examining the financial impact of adopting MFRS 9.

MFRS 15 Revenue from Contracts with Customers

MFRS 15 presents new requirements for the recognition of revenue, replacing the guidance of MFRS 111 Construction Contracts, MFRS 118 Revenue, IC Interpretation 13 Customer Loyalty Programmes, IC Interpretation 15 Agreements for Construction of Real Estate, IC Interpretation 18 Transfers of Assets from Customers and IC Interpretation 131 Revenue – Barter Transaction Involving Advertising Services. The principles in MFRS 15 provide a more structured approach to measuring and recognising revenue. It establishes a new five-step model that will apply to revenue arising from contracts with customers. Under MFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The adoption of MFRS 15 will result in a change in accounting policy. The Group and the Company are currently assessing the impact of MFRS 15 and plan to adopt the new standards on the required effective date of 1 January 2018.




2.6 Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and of the Company’s accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual results may differ from the judgements, estimates and assumptions made by the management, and will seldom equal the estimated results.

2.6.1 Estimation uncertainty

Information about significant estimation and assumptions that the most significant effect on recognition and measurement assets, liabilities, income and expense are discussed below:-

Useful lives of depreciable assets

Property, plant and equipment are depreciated on a straight line basis over their estimated useful lives. Management estimates the useful lives of the property, plant and equipment to be 5 to 10 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and residual values of the property, plant and equipment. Therefore, future depreciation charges could be revised.

The carrying amount of the Group’s and of the Company’s property, plant and equipment at the end of the reporting period is disclosed in Note 4 to the financial statements.

Inventories

Inventories are measured at the lower of cost and net realisable value. In estimating net realisable values, the management takes into account the most reliable evidence available at the time the estimates are made. The Group’s core business is subject to economical and technological changes which may cause selling price to change rapidly. The rapid change in selling price will have an impact in determining the net realisable value of inventories and ultimately the earnings of the Group.

The carrying amount of the Group’s inventories at the end of the reporting period is disclosed in Note 6 to the financial statements.

Impairment of loans and receivables

The Group and the Company assess at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the receivables and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics.

The carrying amount of the Group’s and of the Company’s receivables at the end of the reporting period is disclosed in Note 7, 9 and 10 to the financial statements.



cont’d


2.6 Significant accounting estimates and judgements cont’d

2.6.1 Estimation uncertainty cont’d

Customers on contracts

The carrying amount of customer contracts and revenue recognised from customers on contracts reflect the management’s best estimate about the outcome and stage of completion of each contract. The management assesses the profitability of ongoing contracts and the order backlog at least monthly, using extensive project management procedures. For more complex contracts in particular, costs to completion and contract profitability are subject to significant estimation uncertainty.

The carrying amount of the Group’s customers on contract at the end of the reporting period is disclosed in Note 8 to the financial statements.

Deferred tax assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group’s and the Company’s latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. Significant management’s estimates and assumptions are required in arriving at the budget forecast and these estimates and assumptions are subject to risks and uncertainties.

Hence, there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised tax losses and unrecognised temporary differences.

Impairment of non-financial assets

The Group and the Company review the carrying amounts of assets to determine whether there is any indication of impairment at each reporting date. If such indication exists, or when an annual impairment testing for an asset is required, the recoverable amount is estimated and an impairment loss is recognised if the recoverable amount of the asset or a cash-generating unit is less than its carrying amount.

Recoverable amount is the higher of fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows 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 risk specific to the asset for which the estimates of future cash flows have not been adjusted.

An impairment loss is recognised as an expense in the profit or loss. If the asset is carried at revalued amount, impairment loss is treated as a revaluation decrease to the extent of previously revaluation surplus for the same asset. Impairment loss is reversed and credited to profit or loss if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised.

Income taxes Significant estimation is involved in determining the provision for income taxes. There are certain

transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.




2.6 Significant accounting estimates and judgements cont’d

2.6.2 Significant management judgements

The significant management judgements in applying the accounting policies of the Group that have the most significant effect on the statements are as follows:-

Leases

In applying the classification of leases in MFRS 117, the management considers its leases of motor vehicles as finance lease arrangement. In some cases, the transaction is not always conclusive, and the management uses judgement in determining whether the lease is a finance lease arrangement that transfers substantially all the risks and rewards incidental to ownership.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied to financial statements for the periods presented, unless otherwise stated.

3.1 Basis of consolidation

3.1.1 Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. The Group elects on a transaction-by-transaction basis whether to measure the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Transaction costs incurred are expensed and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date which, if known, would have affected the amounts recognised at that date.



cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d

3.1 Basis of consolidation cont’d

3.1.1 Business combinations and goodwill cont’d

Goodwill represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of subsidiary companies at the date of acquisition.

Goodwill arising on the acquisition of subsidiary companies is presented separately in the statements of financial position.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying values may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination.

A cash-generating unit (or group of cash-generating units) to which goodwill has been allocated is tested for impairment annually and, whenever there is an indication that the unit may be impaired, by comparing the carrying amount of the unit, including goodwill, with the recoverable amount of the unit. Where the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount, an impairment loss is recognised in the profit or loss.

An impairment loss recognised for goodwill should not be reversed in subsequent period. Gain and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operations within that unit is disposed off, the goodwill associated with the operations disposed of is included in the carrying amount of the operations when determining the gain or loss on disposal of the operations. Goodwill disposed of in these circumstances is measured based on the relative fair values of the operations disposed of and portion of the cash-generating unit retained.

3.1.2 Subsidiary companies

Subsidiary companies are entities controlled by the Group and the Company. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entities and has the ability to affect those returns through its power over the entities. In circumstances when the voting rights are not more than half or when voting rights are not the dominant determinant of control, the Group uses judgements to assess whether it has de facto control, control by other arrangements, or by holding substantive potential voting rights.

Consolidation of a subsidiary company begins when the Company obtains control over the subsidiary company and ceases when the Company losses control of the subsidiary company.

Investment in subsidiary companies is stated at cost in the Company’s statement of financial position. Where an indication of impairment exists, the carrying amount of the subsidiary company is assessed and written down immediately to its recoverable amount.




3.1 Basis of consolidation cont’d

3.1.3 Eliminations on consolidation

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated on consolidation.

Unrealised gains arising from transactions with equity-accounted associates are eliminated against the investment to the extent of the Group’s interest in the entities. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

3.1.4 Changes in ownership in subsidiary companies without loss of control

Changes in the Group’s ownership interests in subsidiary companies that do not result in the Group losing control over the subsidiary companies are accounted for as equity transactions. The carrying amounts of the Group’s interest and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary companies. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

3.1.5 Loss on control

When the Group ceases to have control of a subsidiary company, the Group derecognises the assets and liabilities, non-controlling interests and other components of equity related to the subsidiary company. Surplus or deficit arising from the loss of control is recognised in profit or loss.

Any interest retained by the Group in the entity is remeasured to its fair value at the date when the control is lost and surplus or deficit arising from the remeasurement is recognised in profit or loss. Subsequently, it is accounted for as equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

3.1.6 Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary company not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the financial year between non-controlling interests and the owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary company are allocated to the non-controlling interests even if that results in a deficit balance.

3.2 Property, plant and equipment

Property, plant and equipment are initially stated at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item can be measured reliably.

All property, plant and equipment are subsequently stated at cost less accumulated depreciation and less any impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group and the Company recognise such costs as individual assets with specific useful lives and depreciation respectively. All other repair and maintenance costs are recognised in profit or loss as incurred.



cont’d


3.2 Property, plant and equipment cont’d

Depreciation is recognised on the straight line method in order to write off the cost of each asset over its estimated useful life. Property, plant and equipment are depreciated based on the estimated useful lives of the assets as follows:-

Machinery and equipment 10% - 20%Motor vehicles 20%Office equipment, furniture and fittings 10% - 20%Computer equipment and software 10% - 20%Renovation 10% - 20%

The residual value, useful life and depreciation method are reviewed at least annually to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

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

3.3 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or asset or the arrangement conveys a right to use the asset, even if that right is not explicitly specific in an arrangement.

3.3.1 Finance lease

Lease in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance lease. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.

Minimum lease payments made under finance lease are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the profit or loss. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty 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 of the asset and the lease term.

3.3.2 Operating lease

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.




3.4 Impairment of non-financial assets

The Group and the Company assess at the end of each reporting period whether there is an indication that an asset may be impaired.

For the purpose of impairment testing, recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating units (“CGU”) to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the profit or loss except for assets that were previously revalued where the revaluation surplus was taken to other comprehensive income. In this case, the impairment loss is also recognised in other comprehensive income up to the amount of any previous revaluation surplus.

An impairment loss for an asset is reversed if, and 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. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

3.5 Financial instruments

3.5.1 Initial recognition and measurement

Financial assets and financial liabilities are recognised when the Group and the Company become a party to the contractual provisions of the financial instrument.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value. Financial assets and financial liabilities are measured subsequently as described below.

3.5.2 Financial assets - Categorisation and subsequent measurement

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:-

(a) loans and receivables; (b) financial assets at fair value through profit or loss; (c) held to maturity investments; and (d) available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income.

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least once at the end of each reporting period. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets.



cont’d


3.5 Financial instruments cont’d

3.5.2 Financial assets - Categorisation and subsequent measurement cont’d

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset are transferred. On derecognition of a financial asset, the difference between 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 the equity is recognised in the profit or loss.

Other than loans and receivables, the Group and the Company do not have any held-to-maturity investments or available-for-sale financial assets and financial assets at fair value through profit or loss.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. Gains or losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. The Group’s and the Company’s cash and cash equivalents, trade and most of the other receivables fall into this category of financial instruments.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the end of the reporting period which are classified as non-current.

3.5.3 Financial liabilities - Categorisation and subsequent measurement

After the initial recognition, financial liability is classified as financial liability at fair value through profit or loss or other liabilities measured at amortised cost using the effective interest method.

A financial liability or part of it is derecognised when, and only when the obligation specified in the contract is discharged, cancelled or expired. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

Other than other liabilities measured at amortised cost, the Group and the Company do not have any financial liabilities at fair value through profit or loss.

Other liabilities measured at amortised cost

The Group’s and the Company’s other liabilities include finance lease liability, trade and other payables.

Other liabilities are subsequently measured at amortised cost using the effective interest method. Other liabilities are classified as current liabilities unless the Group and the Company have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.




3.5 Financial instruments cont’d

3.5.4 Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

3.6 Impairment of financial assets

All financial assets (except for financial assets categorised as fair value through profit or loss and investment in subsidiary companies) are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

3.7 Research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

Research and development expenditure are expensed in the period in which they are incurred except when the cost incurred on development project are recognised as development assets to the extent that such expenditure is expected to generate future economic benefits.

Development expenditure initially recognised as an expense is not recognised as an asset in subsequent periods.



cont’d


3.7 Research and development expenditure cont’d

Capitalised development expenditure, considered to have finite useful life, is amortised on a systematic basis over their expected useful lives which is 3 years commencing from the time when the product is available for sale and assessed for impairment whenever there is an indication that the development cost may be impaired. Should the product or project be aborted, the relative expenditure will be charge to the profit or loss in the period in which such decision is made.

The amortisation period and the amortisation method for the development cost with a finite useful life are reviewed at least once at each financial year end.

The amortisation expenses on development cost with finite useful life are recognised in the profit or loss.

3.8 Inventories

Inventories are stated at the lower of cost and net realisable value after adequate write down has been made for all deteriorated, damage, obsolete and slow-moving inventories.

Cost is determined using first-in-first-out method. Cost includes the original purchase price plus direct cost of bringing these inventories to their present condition and location.

Net realisable value represents the estimated selling price in the ordinary course of business less selling and distribution costs and all other estimated costs necessary to make the sale.

3.9 Amount due from customers on contracts

Amount due from customers on contracts is the net amount of cost incurred for contract-in-progress plus attributable profit less progress billings and anticipated losses, if any. Contract costs incurred to date include:-

(i) Costs directly related to the contract;

(ii) Costs attributable to contract activity in general and can be allocated to the contract; and

Other costs specifically chargeable to the contract under the terms of the contract. Attributable profit represents the net amount of total contract sum less the total contract costs.

Progress billings represent the certified work done billed to the customers.

3.10 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and bank balances, which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

3.11 Equity and reserves

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

Share capital represents the nominal value of shares that have been issued.

Share premium includes any premiums received on issuance of share capital. Any transaction costs associated with the issuance of shares are deducted from share premium, net of any related income tax benefits.




3.11 Equity and reserves cont’d

Warrants are classified as equity instruments and its value is allocated based on Black-Scholes model upon issuance. The issuance of the ordinary shares upon exercise of warrants is treated as new subscription of ordinary shares for the consideration equivalent to the exercise price of the warrants.

Upon exercise of warrants, the proceeds are credited to share capital and share premium. The warrants reserve in relation to the unexercised warrants at the expiry of the warrants will be reversed.

Accumulated losses include all current and prior period’s accumulated losses.

All transactions with owners of the Company are recorded separately within equity.

3.12 Statutory reserves

3.12.1 Statutory common reserve

In accordance with the relevant laws and regulations of the People’s Republic of China (“PRC”), the subsidiary companies of the Company established in the PRC are required to transfer 10% of their profit after tax prepared in accordance with accounting regulations of the PRC to the statutory reserve until the reserve balance reaches 50% of the respective registered share capital. Such reserve may be used to offset accumulated losses or to increase the registered share capital of these subsidiary companies, subject to the approval from the PRC authorities, and are not available for dividend distribution to the owners of the PRC company.

3.12.2 Statutory development reserve

Statutory development reserve represents transfer of 10% of the profit after tax prepared in accordance with accounting regulations of the PRC during the current financial year less accumulated losses in prior year, if any, for subsidiary companies of the Company established in the PRC. This reserve can be used to make up any losses incurred or to increase the registered share capital.

3.13 Provisions

Provisions are recognised when there is a present legal or constructive obligation that can be estimated reliably, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Any reimbursement that the Group and the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

Provisions are reviewed at each end of the reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. Where the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks 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.



cont’d


3.14 Employee benefits

3.14.1 Short term employee benefits

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

3.14.2 Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into independent entities of funds and will have no legal or constructive obligation to pay further contribution if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current period.

Such contributions are recognised as expenses in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the national pension scheme, the Employees Provident Fund (“EPF”). The Group’s foreign subsidiary companies also make contributions to their country’s statutory pension schemes.

3.14.3 Retirement benefits scheme

Pursuant to the relevant regulations of the PRC government, the Group participates in a local municipal government retirement benefits scheme (the “Scheme”), whereby the subsidiary companies of the Company in the PRC are required to contribute a certain percentage of the basic salaries of its employees to the Scheme to fund their retirement benefits. The local municipal government undertakes to assume the retirement benefits obligations of all existing and future retired employees of the subsidiary companies of the Company. The only obligation of the Group with respect to the Scheme is to pay the ongoing required contributions under the Scheme mentioned above. Contributions under the Scheme are charged to the profit or loss as incurred. There is no provision under the Scheme whereby forfeited contributions may be used to reduce future contributions.

3.14.4 Employee public welfare expenses Employee public welfare expenses range from 1% to 10% of the PRC statutory profit after taxation

during the current financial year less accumulated loss in prior year, if any. The full amount of allocation for each financial year will be expensed to profit or loss.

3.15 Revenue recognition

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

3.15.1 Revenue on contracts

Revenue on contracts is recognised based on the percentage of completion method in cases when the outcome of the contracts can be reliably estimated.

When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that is probable will be recoverable and contract cost is recognised as an expense in the period in which they are incurred.




3.15 Revenue recognition cont’d

3.15.1 Revenue on contracts cont’d

‘Percentage of completion’ is determined by reference to the proportion of actual total costs incurred at the end of the reporting period to the total estimated contract costs. Provision is made for all foreseeable losses.

3.15.2 Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of the goods to the customer and is shown net of returns and trade discounts.

3.15.3 Rendering of service

Revenue is recognised upon the performance or service rendered.

3.15.4 Interest income

Interest income is recognised on an accrual basis using the effective interest method.

3.16 Borrowing costs

All borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds.

3.17 Income tax

3.17.1 Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the financial year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Current tax is recognised in the statements of financial position as a liability (or an asset) to the extent that it is unpaid (or refundable).

3.17.2 Deferred tax

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statements of financial position and their tax bases. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted as at the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.



cont’d


3.17 Income tax cont’d

3.17.2 Deferred tax cont’d

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3.17.3 Value-added tax (“VAT”)/Goods and services tax (“GST”)

VAT and GST are consumption tax based on value-added concept. VAT and GST are imposed on goods and services at every production and distribution stage in the supply chain including importation of goods and services.

The Group’s and Company’s domestic sale of goods in the PRC and Malaysia are subjected VAT and GST at the applicable tax rate of 17% and 6% respectively. Input tax on purchases can be deducted from output VAT/GST.

Revenues, expenses and assets are recognised net of amount of VAT/GST except:

l where the taxes incurred on the purchase of assets or services is not recoverable from the taxation authority, in which case the taxes is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

l receivables and payables that are stated with the amount of taxes included.

The net amount of VAT/GST recoverable from, or payable to, the authority is included as part of “other receivables” or “other payables” in the statements of financial position.

3.18 Foreign currency transaction and balances

3.18.1 Foreign currency transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded in the entity’s functional currency using the exchange rates prevailing at the date of transactions.

Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at exchange rate at the reporting date. However, non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date, except for those that are measured at fair value in a foreign currency are retranslated to the functional currency at exchange rate when the fair value was determined.

Foreign currency differences arising from retranslation are recognised in profit or loss except for differences arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.




3.18 Foreign currency transaction and balances cont’d

3.18.2 Operations denominated in functional currencies other than RM

Assets and liabilities of foreign subsidiary companies, including goodwill and fair value adjustments arising in an acquisition, are translated at year-end exchange rates. The income and expenses of foreign subsidiary companies are translated to Ringgit Malaysia at average rates during the financial year.

Foreign currency differences are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve, except to the extent that the translation difference is allocated to non-controlling interest.

When a foreign subsidiary company is disposed in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposed part of its interest but retains control, then the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes only part of an associate company or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

If the settlement of a monetary item receivable from or payable to a foreign subsidiary company is neither planned nor likely to occur in the foreseeable future, then foreign currency differences arising from such item will form part of the net investment in the foreign subsidiary company. Differences of such nature are recognised in other comprehensive income and accumulated in the exchange fluctuation reserve.

3.19 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case is the Board of Directors of the Company, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

3.20 Contingencies

Where it is not probable that an inflow or an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the asset or the obligation is not recognised in the statement of financial position and is disclosed as a contingent asset or contingent liability, unless the probability of inflow or outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent assets or contingent liabilities unless the probability of inflow or outflow of economic benefits is remote.



cont’d


3.21 Related parties

A related party is a person or entity that is related to the Group and they could be:-

(a) A person or a close member of that person’s family is related to the Group if that person:-

(i) Has control or joint control over the Group; (ii) Has significant influence over the Group; or (iii) Is a member of the key management personnel of the ultimate holding company, or the Group,

and

(b) An entity is related to the Group if any of the following conditions applies:-

(i) The entity and the Group are members of the same group. (ii) One entity is an associate company or joint venture of the other entity. (iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate company of the

third entity. (v) The entity is a post-employment benefit plan for the benefits of employees of either the Group

or an entity related to the Group. (vi) The entity is controlled or jointly-controlled by a person identified in (a) above. (vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the

key management personnel of the ultimate holding company or the entity. (viii) The entity or any member of a Group of which it is a part, provides key management personnel

services to the Group.

A related party transaction is a transfer of resources, services or obligations between the Group and its related party, regardless of whether a price is charged.



4. PROPERTY, PLANT AND EQUIPMENT

Machinery and

equipmentMotor

vehicles

Office equipment,

furnitureand

fittings

Computer equipment

andsoftware Renovation Total

RM RM RM RM RM RM

Group

Cost

At 1 January 2014 735,098 1,354,589 480,373 121,883 824,448 3,516,391Additions - - 36,496 16,974,996 - 17,011,492Addition through acquisition of

a subsidiary company - 148,888 45,206 5,467,574 46,260 5,707,928Written off (2,125) - (134,115) - - (136,240)Translation differences 28,615 48,015 12,438 1,524,099 32,237 1,645,404

At 31 December 2014 761,588 1,551,492 440,398 24,088,552 902,945 27,744,975Additions - - 71,862 16,481,685 3,196 16,556,743Additions through acquisition of

a subsidiary company - - 7,770 - 2,764 10,534Disposal of subsidiary

companies (819,237) (1,402,604) (460,037) (126,649) (856,685) (3,665,212)Written off - (148,888) (52,223) (43,251,018) (46,260) (43,498,389)Translation differences 57,649 - - 2,807,430 - 2,865,079

At 31 December 2015 - - 7,770 - 5,960 13,730

Accumulated depreciation

At 1 January 2014 594,761 768,788 313,859 96,888 660,487 2,434,783Charge for the financial year 16,477 249,978 48,744 1,225,206 49,751 1,590,156Additions through acquisition of

subsidiary companies - 81,888 22,878 1,313,349 28,527 1,446,642Written off (1,913) - (120,703) - - (122,616)Translation differences 24,139 36,715 7,486 172,758 28,608 269,706

At 31 December 2014 633,464 1,137,369 272,264 2,808,201 767,373 5,618,671Charge for the financial year 7,621 107,529 22,148 4,368,085 22,538 4,527,921Additions through acquisition of

a subsidiary company - - 46 - 777 823Disposal of subsidiary

companies (641,085) (1,115,359) (263,340) (111,699) (753,226) (2,884,709)Written off - (129,539) (30,795) (7,377,372) (35,657) (7,573,363)Translation differences - - - 312,785 - 312,785

At 31 December 2015 - - 323 - 1,805 2,128

Net carrying amount

At 31 December 2014 128,124 414,123 168,134 21,280,351 135,572 22,126,304

At 31 December 2015 - - 7,447 - 4,155 11,602



cont’d

4. PROPERTY, PLANT AND EQUIPMENT cont’d

Office equipment

RM

Company

Cost

At 1 January 2014 -

Additions 4,000

At 31 December 2014 4,000

Written off (4,000)

At 31 December 2015 -

Accumulated depreciation

At 1 January 2014 -

Charge for the financial year 233

At 31 December 2014 233

Charge for the financial year 333

Written off (566)


Net carrying amount

At 31 December 2014 3,767


(a) The net carrying amount of property, plant and equipment of the Group acquired under finance lease arrangement are as follows:-

Group

2015 2014

RM RM

Motor vehicle - 42,185

(b) The net carrying amount of property, plant and equipment of the Group held in trust under the name of a third party are as follows:-

Group

2015 2014

RM RM

Motor vehicle - 42,185

(c) The written off of property, plant and equipment are due to those assets have been stolen as disclosed in Note 33 to the financial statements.



5. INVESTMENT IN SUBSIDIARY COMPANIES

Company

2015 2014

RM RM

Unquoted shares, at cost 21,900,000 33,198,762

Less: Impairment loss (21,889,968) (2,000,000)

10,032 31,198,762

In the opinion of the Directors, the impairment loss on investment in subsidiary companies have been recognised due to net assets of the subsidiary companies are lower than the cost of investment.

The particulars of the subsidiary companies are as follows:-

Name of companyCountry of

incorporationEffective equity

interest Principal activities

2015 2014

% %

1. Shanghai Winner Electrical Co., Ltd.#

PRC - 100 Engaged in the business of solution provider and system designer of automation systems.

2. Shanghai Winco Electrical Co., Ltd.#

PRC - 100 Engaged in the business of solution provider and system designer of sophisticated and high-end automation systems.

3. Wintoni Engineering Sdn. Bhd.@

Malaysia 100 100 Ceased operations.

4. Wintoni Power Sdn. Bhd.# Malaysia - 100 Engaged in general trading, research and development in relation to energy saving product and services.

5. Planet Wireless Holdings Limited*

Anguilla 100 100 Ceased operations.

6. Syscomp Technology Sdn. Bhd.

Malaysia 60 - Engaged in trading and consulting services of computer software and hardware.

Subsidiary company of Planet Wireless Holdings Limited

7. Planet Wireless Sdn. Bhd.@

Malaysia 100 100 Ceased operations.

* An audit has been carried out by SJ Grant Thornton for the purposes of forming a group opinion.

# These subsidiary companies were disposed of during the financial year. The financial statements were not made available for consolidation purpose due to relevant accounting records and information were transferred to acquirer.

Consequently, no auditors’ reports were available.

@ Financial statements with disclaimer of opinion.



cont’d

5. INVESTMENT IN SUBSIDIARY COMPANIES cont’d

Significant restriction

Cash and bank balances of Nil (2014: RM604,136) are held by subsidiary companies in the PRC and are subject to local exchange control regulations. These local exchange control regulations provide for restriction on exporting capital from the country, other than through normal dividends.

5.1 Acquisition of a subsidiary company in 2015

On 22 June 2015, the Company had completed the acquisition of 60% equity interest in Syscomp for a purchase cash consideration of RM5,400,000.

The fair value of identifiable assets and liabilities of Syscomp as at the date of acquisition were:-

2015

RM

Non-current asset

Property, plant and equipment 9,711

Current assets

Trade receivables 233,001

Other receivables 3,327

Cash and bank balances 216,372

Total assets 462,411

Current liabilities

Trade payables (176,839)

Other payables (43,708)

Tax payable (29,300)

Total liabilities (249,847)

Fair value of identifiable net assets 212,564

Fair value of consideration transferred 5,400,000

Fair value of identifiable assets acquired (212,564)

Non-controlling interest, based on their proportionate interest in the recognised amounts of the assets and liabilities of the acquiree 85,026

Goodwill on acquisition 5,272,462

Cash outflow on acquisition


Less: Cash and cash equivalent balances acquired (216,372)

Cash outflow on the acquisition of a subsidiary company 5,183,628

Impact on acquisition on the consolidated statement of profit or loss and other comprehensive income

From the date of acquisition, Syscomp has contributed RM212,614 and RM195,844 to the Group’s revenue and loss after tax respectively. If the acquisition had taken place at the beginning of the financial year, the Group’s revenue and loss after tax would have been increased by RM1,522,374 and RM81,254 respectively.




5.2 Acquisition of subsidiary companies in 2014

On 3 March 2014, the Company had completed the acquisition of the entire equity interest in Planet Wireless Holdings Limited (“PW”) and its wholly owned subsidiary company for a purchase consideration of RM14.5 million to be satisfied via a combination of RM4.5 million in cash (“Cash Consideration”) and the remaining RM10.0 million via issuance of 50.0 million new ordinary shares of RM0.10 each in the Company (“Consideration Shares”) at an issue price of RM0.20, together with 50.0 million free detachable warrants in the Company (“Consideration Warrants”) on the basis of one (1) Consideration Warrant for every one (1) Consideration Share issued to the vendor.

The fair value of purchase consideration is derived based on the following:-

At cost

After fair value

adjustment

RM RM

Cash consideration (1) 4,500,000 4,500,000

50.0 million Consideration Shares issued (2) 10,000,000 4,250,000

50.0 million Consideration Warrants issued (3) - 250,000

14,500,000 9,000,000

(1) Cash consideration paid in previous year and recorded in other receivables.

(2) As part of the purchase consideration, the Company issued 50.0 million Consideration Shares at an issue price of RM0.20. For the purpose of computing the fair value of the purchase consideration, a fair value of RM0.085 per share (being the published price of share on 3 March 2014) is allocated to the 50.0 million Consideration Shares issued.

(3) The theoretical fair value of the warrants was computed using the Black-Scholes Option Pricing Model at approximately RM0.005 per warrant.

The fair value of identifiable assets and liabilities of PW and its wholly owned subsidiary company as at the date of acquisition were:-

2014

RM

Non-current asset

Property, plant and equipment 4,261,286

Current assets

Trade receivables 5,648,411

Other receivables 5,234,893

Cash and bank balances 3,713,172

Total assets 18,857,762



cont’d


5.2 Acquisition of subsidiary companies in 2014 cont’d

The fair value of identifiable assets and liabilities of PW and its wholly owned subsidiary company as at the date of acquisition:- cont’d

2014

RM

Non-current liabilities

Finance lease liability (24,555)

Deferred tax liabilities (9,300)

Current liabilities

Trade payables (917,662)

Other payables (435,038)

Finance lease liability (31,462)

Tax payable (48,388)

Total liabilities (1,466,405)

Fair value of identifiable net assets 17,391,357

Premium of shares issued on acquisition 5,500,000

Bargain purchase on business combination (8,391,357)


Less: Cash and cash equivalent balances acquired 3,713,172

Other receivables (4,500,000)

Settlement through issuance of shares (10,000,000)

Cash inflow on the acquisition of subsidiary companies 3,713,172

Impact on acquisition on the consolidated statement of profit or loss and other comprehensive income

From the date of acquisition, PW and its wholly owned subsidiary company have contributed RM9,094,046 and RM5,625,462 to the Group’s revenue and profit after tax respectively. If the acquisition had taken place at the beginning of the financial year, the Group’s revenue and profit after tax would have been increased by RM2,308,214 and RM2,005,534 respectively.

Bargain purchase on business combination

The bargain purchase on business combination is due to the fair value of consideration transferred (shares and warrants) are lower than its par value.




5.3 Disposal of subsidiary companies

On 21 August 2015 and 27 August 2015, the Company disposed of its 100% equity interest in Shanghai Winner Electrical Co., Ltd., Shanghai Winco Electrical Co., Ltd. (“Shanghai Group”) and Wintoni Power Sdn. Bhd. (“Wintoni Power”), for cash consideration of RM250,000 and RM20,000 respectively. The effect of the disposal of Shanghai Group and Wintoni Power on the financial position of the Group as at the date of disposal was as follows:-

Shanghai Group

Wintoni Power Total

RM RM RM

Net assets

Property, plant and equipment 779,410 1,093 780,503

Inventories 2,879,699 - 2,879,699

Trade and other receivables 3,765,873 4,849,738 8,615,611

Cash and bank balances 501,401 444 501,845

Tax recoverable 34,447 293 34,740

Other payables (8,042,215) (5,120,780) (13,162,995)

Net liabilities (81,385) (269,212) (350,597)

Gain on disposal of subsidiary companies

- Attributed to gain of disposed Interest 331,385 289,212 620,597

- Realisation of translation reserve (2,528,743) - (2,528,743)

- Realisation of statutory common reserve (524,218) - (524,218)

(2,721,576) 289,212 (2,432,364)

Cash consideration on disposal 250,000 20,000 270,000

Less: Cash and bank balances disposed (501,401) (444) (501,845)

(251,401) 19,556 (231,845)

Less: Cash consideration included in other receivables (250,000) (20,000) (270,000)

Net cash outflow from disposal (501,401) (444) (501,845)

There were no disposals in prior financial year.



cont’d


5.4 Non-controlling interest in a subsidiary company

The Group’s subsidiary company that have material non-controlling interest are as follows:-

2015

Syscomp

Percentage of ownership interest and voting interest (%) 40%

Carrying amount of non-controlling interest (RM) 6,688

Loss allocated to non-controlling interest (RM) 78,338

The summary of financial information before intra-group elimination for the Group’s subsidiary company that have material non-controlling interest is as below:-

Syscomp

2015 RM

Summary of financial position

Non-current assets 11,602

Current assets 192,946

Current liabilities (187,828)

Net assets 16,720

Summary of financial performance

Loss/Total comprehensive loss for the financial year 172,376

Included in the total comprehensive income is:-

Revenue 1,942,208

Summary of cash flows

Net cash outflow from operating activities (107,524)

Net cash outflow from investing activities (12,397)

Net cash inflow from financing activities 220,000

Net cash inflow 100,079

Other information

Dividends paid to non-controlling interest -



6. INVENTORIES

Group

2015 2014

RM RM

Raw materials - 1,697,161

Impairment loss on inventories - 235,850

Inventories written off - 9,935

Reversal of impairment loss on inventories - (23,196)

The impairment loss on inventories are recognised when the net selling price of inventories are lower than its purchase cost.

The inventories written off are recognised when there are damages on the inventories.

The reversal of impairment loss on inventories was made when the related inventories were used during the financial year.

7. TRADE RECEIVABLES

Group

2015 2014

RM RM

Trade receivables 586,955 11,194,706

Less: Impairment loss

Brought forward 535,913 263,470

Addition through acquisition of a subsidiary company 480 19,503

Additions 429,487 228,649

Disposal of subsidiary companies (446,504) -

Reversal - (655)

Translation differences 30,637 24,946

Written off (10,400) -

Carried forward 539,613 535,913

Net trade receivables 47,342 10,658,793

Retention sum - 392,068

Total trade receivables 47,342 11,050,861

Trade receivables are unsecured, interest free and are normally granted credit terms ranging from 30 to 90 days (2014: 30 to 90 days). Other credit terms are assessed and approved on case-by-case basis.



cont’d

7. TRADE RECEIVABLES cont’d

The currency exposure profile of trade receivables other than balances denominated in the Group entities’ functional currency is as follows:-

Group

2015 2014

RM RM

Australian Dollar (“AUD”) - 1,035

Euro (“EUR”) - 1,425,422

Indonesia Rupiah (“IDR”) - 4,408,943

Kenya Shiling (“KES”) - 13,462

Pound Sterling (“GBP”) - 37,171

New Zealand Dollar (“NZD”) - 871

South Africa Rand (“ZAR”) - 31,496

Thai Baht (“THB”) - 2,867

8. AMOUNT DUE FROM CUSTOMERS ON CONTRACTS

Group

2015 2014

RM RM

Cost incurred to date - 66,464,520

Add: Attributable profits - 12,482,098

- 78,946,618

Less: Progress billings - (70,376,897)

- 8,569,721


Brought forward 6,248,319 -

Addition - 5,891,209

Disposal of subsidiary companies (6,248,319) -

Translation differences - 357,110

Carried forward - 6,248,319

Net amount due from customers on contacts - 2,321,402

Amount due from customers on contracts that are individually determined to be impaired at the reporting date relate to contracts that are loss making and the Group foresee that the amount will not be certified by the customers.



9. OTHER RECEIVABLES

Group Company

2015 2014 2015 2014

RM RM RM RM

Non-trade receivables 273,420 12,879,445 270,000 -

Deposits 47,192 2,558,971 2,432 2,432

Advance to suppliers - 453,968 - -

VAT/GST receivable 234 60,805 - -

Prepayments 36,245 26,156 30,000 -

357,091 15,979,345 302,432 2,432


Brought forward 837,135 539,277 - -

Additions - 260,955 - -

Disposal of subsidiary companies (837,135) - - -

Translation differences - 36,903 - -

Carried forward - 837,135 - -

Net other receivables 357,091 15,142,210 302,432 2,432

Other receivables that are impaired at the reporting date relate to non-trade receivables that are in significant financial difficulties and have defaulted on payments.

10. AMOUNT DUE FROM SUBSIDIARY COMPANIES The amount due from subsidiary companies is non-trade related, unsecured, non-interest bearing and is

repayable on demand.

Company

2015 2014

RM RM

Amount due from subsidiary companies 14,294,186 20,012,553


Brought forward - -

Addition 14,294,186 -

Carried forward 14,294,186 -

Net amount due from subsidiary companies - 20,012,553

Amount due from subsidiary companies that are impaired at the reporting date relate to subsidiary companies that are in significant financial difficulties.



cont’d

11. FIXED DEPOSIT WITH A LICENSED BANK

Fixed deposit of the Group is pledged as security for trade finance facilities of a subsidiary company. The fixed deposit placed with a licensed bank earned interest at 3.75% (2014: 3.75%) per annum.

12. CASH AND BANK BALANCES

The currency exposure profile of cash and bank balances other than balances denominated in the Group entities’ functional currency is as follows:-

Group

2015 2014

RM RM

US Dollar (“USD”) - 1,319

AUD - 35

EUR - 4,738

Hong Kong Dollar (“HKD”) - 3,514

IDR - 4,080,674

GBP - 6,587

NZD - 203

Group

Included in the cash and bank balances of its subsidiary companies in PRC is an amount denominated in RMB of Nil (2014: RM604,136). The RMB is not freely convertible into foreign currencies. Under the PRC Foreign Exchange Control Regulation and Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for foreign currencies through banks that are authorised to conduct foreign exchange business.

13. SHARE CAPITAL

Group and Company

Number of shares Amount

Unit RM

Authorised:-

Ordinary shares

At 1 January 2014 of RM0.10 each 1,000,000,000 100,000,000

Par value reduction from RM0.10 each to RM0.05 each 1,000,000,000 -

Created during the financial year of RM0.05 each 8,000,000,000 400,000,000

At 31 December 2014/31 December 2015 of RM0.05 each 10,000,000,000 500,000,000



13. SHARE CAPITAL cont’d

Group and Company

Number of shares Amount

Unit RM

Issued and fully paid-up:-

Ordinary shares

At 1 January 2014 of RM0.10 each 330,000,000 33,000,000

Issuance of shares

- Acquisition of subsidiary companies of RM0.10 each 50,000,000 5,000,000

- Private placement of RM0.10 each 133,000,000 13,300,000

Par value reduction from RM0.10 each to RM0.05 each - (25,650,000)

At 31 December 2014/31 December 2015 of RM0.05 each 513,000,000 25,650,000

The new ordinary shares issued in prior financial year rank pari passu in all respects with the existing ordinary shares of the Company.

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction and rank equally with regards to the Company’s residual assets.

14. SHARE PREMIUM

Share premium represents the excess of the consideration received over the nominal value of shares issued by the Company. It is not to be distributed by way of cash dividends and its utilisation shall be in the manner as set out in Section 60 (3) of the Companies Act, 1965.

15. RESERVES

Group

2015 2014

RM RM

Non distributable:-

Statutory common reserve - 524,218

Exchange fluctuation reserve 3,280,690 4,000,884

Warrants reserve 1,080,000 1,080,000

Discount on shares (1,080,000) (1,080,000)

Capital reserve 17,456,580 17,456,580

Other reserve (5,500,000) (5,500,000)

Total reserves 15,237,270 16,481,682



cont’d

15. RESERVES cont’d

Company

2015 2014

RM RM

Non distributable:-

Warrants reserve 1,080,000 1,080,000

Discount on shares (1,080,000) (1,080,000)

Capital reserve 17,456,580 17,456,580

Total reserves 17,456,580 17,456,580

Statutory common reserve

Statutory common reserve represents appropriation of net profit of subsidiary companies in the PRC in accordance with local regulations.

Exchange fluctuation reserve

The exchange fluctuation reserve is in respect of foreign exchange differences arising from the translation of financial statements of the foreign subsidiary companies.

Warrant reserve and discount on shares

The theoretical fair value of the warrants was computed using the Black-Scholes Option Pricing Model at approximately RM0.005 per warrant. The fair value allocated to the warrant reserve is derived by a proportionate basis. The discount on shares is a reserve account that is created to preserve the par value of the ordinary shares.

Each warrant entitles its registered holder to subscribe for one (1) new ordinary share in the Company at an exercised price of RM0.10 per share subject to adjustments in accordance with the provisions of the deed poll, at any time within 5 years from the date of issue of the warrant. The last date to exercise the warrant rights is 23 February 2019.

As at 31 December 2014 and 31 December 2015, 216,000,000 warrants remained exercised.

Capital reserve

Capital reserve arising from the par value reduction.

Other reserve

Other reserve relates to fair value adjustment to the shares issued for the acquisition of subsidiary companies.



16. DEFERRED TAX LIABILITY

Group

2015 2014

RM RM

Brought forward - -

Addition through acquisition of subsidiary companies - 9,300

Recognised in profit or loss - (9,300)

Carried forward - -

17. TRADE PAYABLES

Group

Trade payables are unsecured, non-interest bearing and the credit terms normally granted to the Group range from 30 to 90 days (2014: 30 to 90 days).

The currency exposure profile of trade payables other than balances denominated in the Group entities’ functional currency is as follows:-

Group

2015 2014

RM RM

EUR - 625,251

KES - 18,584

ZAR - 63,773

18. OTHER PAYABLES

Group Company

2015 2014 2015 2014

RM RM RM RM

Non-trade payables 893,856 2,003,103 789,473 340,084

Advance from customers - 959,104 - -

Accruals 155,244 1,807,036 67,500 88,000

Amount due to related parties 444,718 1,658,067 374,025 324,825

1,493,818 6,427,310 1,230,998 752,909

The amount due to related parties are due to Directors of subsidiary companies which are unsecured, non-interest bearing and is repayable on demand.



cont’d

19. FINANCE LEASE LIABILITY

Group

2015 2014

RM RM

Payable within 1 year 13,896 30,569

Less: Interest in suspense (153) (670)

13,743 29,899

Present value of finance lease liability

- Within 1 year 13,743 29,899

The effective interest rate during the financial year is 2.48% (2014: 2.48%) per annum.

20. REVENUE

Group

2015 2014

RM RM

Contract revenue 1,837,195 13,670,330

Services revenue 3,347,413 8,974,046

Trading 212,614 2,711,633

5,397,222 25,356,009

21. (LOSS)/PROFIT BEFORE TAX

(Loss)/Profit before tax has been determined after charging/(crediting), amongst others, the following:-

Group Company

2015 2014 2015 2014

RM RM RM RM

Auditors’ remuneration:-

Company’s auditors

- statutory audit 32,667 31,000 17,000 17,000

- special audit 5,000 65,000 5,000 65,000

- others 4,000 123,500 4,000 123,500

Other auditors

- statutory audit - 7,437 - -

Bad debts written off 9,190 43,280 - -

Depreciation 4,527,921 1,590,156 333 233

Impairment loss on inventories - 235,850 - -

Inventories written off - 9,935 - -

Impairment loss on receivables 429,487 489,604 - -



21. (LOSS)/PROFIT BEFORE TAX cont’d

(Loss)/Profit before tax has been determined after charging/(crediting), amongst others, the following:- cont’d

Group Company

2015 2014 2015 2014

RM RM RM RM

Impairment loss on amount due from customers on contracts - 5,891,209 - -

Impairment loss on investment in subsidiary companies - - 19,889,968 2,000,000

Impairment loss on amount due from subsidiary companies - - 14,294,186 -

Impairment loss on goodwill 5,272,462 - - -

Interest expense 517 1,675 - -

(Gain)/ Loss on disposal of subsidiary companies (2,432,364) - 16,428,762 -

Property, plant and equipment written off 35,925,026 13,624 3,434 -

Realised loss on foreign exchange 477,216 134,893 - -

Rental expenses 57,900 361,870 - -

Unrealised loss/(gain) on foreign exchange 270,333 (70,966) - (173)

Bad debts recovered - (78,377) - -

Interest income (671) (37,064) - (9,898)

Reversal of impairment loss on receivables - (655) - -

Reversal of impairment loss on inventories - (23,196) - -

Bargain purchase on business combination - (8,391,357) - -

The remunerations paid to the Directors are categorised as follows:-

Fees Salaries Allowance


plan Total

RM RM RM RM RM

Group

2015

Previous executive Directors 106,000 247,100 - 13,109 366,209

Previous non-executive Directors 85,000 - - - 85,000

191,000 247,100 - 13,109 451,209

2014

Executive Directors 27,500 255,360 - 42,924 325,784

Non-executive Directors 138,000 - 6,800 - 144,800

- Overprovision in prior year - - (9,100) - (9,100)

165,500 255,360 (2,300) 42,924 461,484



cont’d

21. (LOSS)/PROFIT BEFORE TAX cont’d

The remunerations paid to the Directors are categorised as follows:-

Fees Salaries Allowance


plan Total

RM RM RM RM RM

Company

2015


Non-executive Directors 85,000 - - - 85,000

191,000 64,000 - 7,680 262,680

2014


Non-executive Directors 138,000 - 6,800 - 144,800

- Overprovision in prior year - - (9,100) - (9,100)

165,500 96,000 (2,300) 11,520 270,720

22. TAX EXPENSE/(INCOME)

Group Company

2015 2014 2015 2014

RM RM RM RM

Current year provision 14,700 - - -

(Over)/Under provision of tax in prior year - (7,639) - 360

Transfer to deferred tax liabilities - (9,300) - -

14,700 (16,939) - 360



22. TAX EXPENSE/(INCOME) cont’d

The numerical reconciliations between the average effective tax rate and the statutory tax rate of the Group and of the Company are as follows:-

Group Company

2015 2014 2015 2014

RM RM RM RM

(Loss)/Profit before tax (56,894,437) 4,389,291 (51,489,002) (4,511,508)

Income tax on statutory tax rate of 25% (14,223,609) 1,097,323 (12,872,250) (1,127,877)

Tax effects in respect of:-

Expenses not deductible for tax purposes 14,305,879 2,837,249 12,939,820 1,130,357

Income not subject to tax (67,570) (4,073,122) (67,570) (2,480)

Deferred tax movements not recognised - 129,250 - -

(Over)/Under provision in prior year - (7,639) - 360

14,700 (16,939) - 360

The above amounts are subject to acceptance of the Inland Revenue Board of Malaysia and relevant tax authorities of the foreign subsidiary companies.

The deferred tax movements not recognised are in respect of the following items:-

Group Company

2015 2014 2015 2014

RM RM RM RM

Temporary differences arising from property, plant and equipment (30,000) (34,000) (2,000) (2,000)

Unabsorbed business losses 2,669,000 8,691,000 651,000 651,000

Unutilised capital allowances 222,000 222,000 99,000 99,000

2,861,000 8,879,000 748,000 748,000

Deferred tax assets have not been recognised in respect of the above items (stated at gross) for certain subsidiary companies due to uncertainty of future taxable income of the subsidiary companies and absence of Group relief. However, unabsorbed business losses and unutilised capital allowances are available for offset against future taxable profits of the respective subsidiary companies.



cont’d

23. (LOSSES)/EARNINGS PER SHARE Basic (losses)/earnings per ordinary share

The basic (losses)/earnings per share of the Group is calculated by dividing the (loss)/profit for the financial year attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year as follows:-

Group

2015 2014

RM RM

(Loss)/Profit attributable to ordinary equity owners of the Company (56,830,799) 4,406,230

Weighted average number of ordinary shares in issue (unit) 513,000,000 481,602,740

Basic (losses)/earnings per share (sen) (11.08) 0.91

Diluted (losses)/earnings per ordinary share

For the warrant-in-issue, a calculation is done to determine the number of shares that could have been acquired at market price (determined based on the average annual share price of the Company’s shares) based on the monetary value of the subscriptions rights attached to outstanding warrant-in-issue. The calculation serves to determine the “unpurchased” shares to be added to the weighted average number of ordinary shares outstanding for the purposes of computing the diluted earnings per share.

No diluted earnings per share is presented as the effect is anti-dilutive.

24. EMPLOYEE BENEFITS EXPENSES

Group Company

2015 2014 2015 2014

RM RM RM RM

Staff costs 487,588 2,228,645 177,778 235,913

The following are included in the employee benefits expenses:-

Group Company

2015 2014 2015 2014

RM RM RM RM

Defined contribution plan 46,421 403,268 20,251 25,004

Key management personnel remuneration 59,500 - - -

Directors’ emoluments 260,209 295,984 71,680 105,220



25. SEGMENTAL INFORMATION

(i) Business segment

For management purposes, the Group is organised into three major business units based on their products and services which comprise the following:-

(a) SP - Solutions provider, system designer of automotive systems and high-end automotive system.

(b) MAG - Provision for mobile application gateway and mobile internet platform services.

(c) GT - General trading.

(d) Others - Other business segment. Management monitors the operating results to its business units separately for the purpose of making

decisions about resources allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements.

Transfer prices between operating segments are on a negotiated basis in a manner similar to transactions with third parties.

2015

Note SP MAG GT Others Eliminations Group

RM RM RM RM RM RM

Revenue

External/Total revenue 1,837,195 3,347,413 212,614 - - 5,397,222

Results

Interest income - 632 39 - - 671

Interest expenses - (517) - - - (517)

Depreciation of property, plant and equipment (131,687) (4,394,596) (1,305) (333) - (4,527,921)

Other non-cash (expenses)/income i - (39,412,625) (9,349) (50,616,350) 50,086,974 (39,951,350)

Tax income/ (expense) - - (14,700) - - (14,700)

Segment (loss)/ profit (4,787,191) (50,519,386) (200,532) (51,489,002) 50,086,974 (56,909,137)

Assets

Additions to non-current assets ii 71,862 16,481,685 3,196 - - 16,556,743

Segment assets iii - 26,545 208,039 324,532 (10,032) 549,084

Liabilities

Segment liabilities iii - 24,143,152 385,913 1,230,998 (16,608,342) 9,151,721



cont’d

25. SEGMENTAL INFORMATION cont’d

(i) Business segment cont’d

2014

Note SP MAG GT Others Eliminations Group

RM RM RM RM RM RM

Revenue

External 13,670,330 8,974,046 2,711,633 - - 25,356,009

Internal 626,426 120,000 - - (746,426) -

Total revenue 14,296,756 9,094,046 2,711,633 - (746,426) 25,356,009

Results

Interest income 23,508 3,133 525 9,898 - 37,064

Interest expenses - (1,675) - - - (1,675)

Depreciation of property, plant and equipment (339,657) (1,250,266) - (233) - (1,590,156)

Other non-cash (expenses)/income i (6,519,828) (88,035) (37,338) (2,000,000) 10,391,357 1,746,156

Tax income/ (expense) - 17,299 - (360) - 16,939

Segment (loss)/ profit (6,953,677) 5,625,463 (330,992) (4,511,868) 10,577,304 4,406,230

Assets

Additions to non-current assets ii 29,479 16,978,013 - 4,000 - 17,011,492

Segment assets iii 21,347,407 43,924,782 4,848,734 51,335,445 (64,147,406) 57,308,962

Liabilities

Segment liabilities iii 16,791,420 19,180,734 5,322,215 752,909 (34,204,202) 7,843,076




(i) Business segment cont’d

Notes to the nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements:-

i. Other non-cash (expenses)/income consist of the following items:-

2015 2014

RM RM

Bad debts written off (9,190) (43,280)

Bad debts recovered - 78,377

Bargain purchase on business combination - 8,391,357

Gain on disposal of subsidiary companies 2,432,364 -

Inventories written off - (9,935)

Impairment loss on amount due from customers on contracts - (5,891,209)

Impairment loss on goodwill (5,272,462) -

Realised loss on foreign exchange (477,216) (134,893)

Impairment loss on inventories - (235,850)

Impairment loss on receivables (429,487) (489,604)

Property, plant and equipment written off (35,925,026) (13,624)

Reversal of impairment loss on receivables - 655

Reversal of impairment loss on inventories - 23,196

Unrealised (loss)/gain on foreign exchange (270,333) 70,966

(39,951,350) 1,746,156

ii. Additions to non-current assets consist of:-

2015 2014

RM RM

Property, plant and equipment 16,556,743 17,011,492

iii. Inter-segment assets and liabilities are eliminated on consolidation.



cont’d


(ii) Geographical segment

The Group’s revenue and non-current assets information based on geographical location are as follows:-

RevenueNon-current

assets

RM RM

2015

Malaysia* 175,848 11,602

PRC 1,295,341 -

Indonesia 3,860,998 -

Others ∆ 65,035 -

5,397,222 11,602

2014

Malaysia* 35,940 109,531

PRC 14,146,023 782,679

Indonesia 7,657,690 -

United States of America - 21,234,094

Others ∆ 3,516,356 -

25,356,009 22,126,304

* Company’s home country ∆ Others contain countries with no individually revenue that more than 10% of the total consolidated revenue.

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

2015 2014

RM RM

Property, plant and equipment 11,602 22,126,304

(iii) Information about major customers

The following are major customers with revenue equal or more than 10% of the Group’s total revenue.

Segment Customer

2015 2014

RM RM

- Customer A SP - 11,495,661



26. COMMITMENTS

(i) Rental commitments

Minimum rental payable in the future and not provided for in the financial statements is as follow:-

Group

2015 2014

RM RM

Not later than one year 138,840 317,232

Later than one year but not later than five years 201,400 449,412

340,240 766,644

(ii) Capital commitments

Group

2015 2014

RM RM

Approved and contracted for:-

Purchase of property, plant and equipment - 20,973,755

Other commitment - 5,000,000

- 25,973,755

27. RELATED PARTY DISCLOSURES

(i) Related party transaction:-

Group

2015 2014

RM RM

Rental paid to a Director of a subsidiary company 3,500 -

(ii) Compensation of key management personnel

Key management personnel is defined as those person having authority and responsibility for planning, directing and controlling the activities of the Company either directly or indirectly.

The Group and the Company have no other members of key management personnel apart from the Board of Directors which compensation has been shown in Note 21 and 24 of the financial statements.

(iii) The outstanding balances arising from related party transactions as at the reporting date are disclosed in Note 10 and 18 to the financial statements.



cont’d

28. INTANGIBLE ASSETS

Developmentexpenditure Goodwill Total

RM RM RM

Group

Cost

At 1 January 2014 409,171 - 409,171

Additions through acquisition of subsidiary companies 520,477 - 520,477

Translation differences 15,999 - 15,999

At 31 December 2014 945,647 - 945,647

Additions through acquisition of a subsidiary company - 5,272,462 5,272,462

Disposal of subsidiary companies (425,170) - (425,170)

At 31 December 2015 520,477 5,272,462 5,792,939

Accumulated amortisation

At 1 January 2014 409,171 - 409,171


Translation differences 15,999 - 15,999

At 31 December 2014 673,977 - 673,977

Disposal of subsidiary companies (425,170) - (425,170)

At 31 December 2015 248,807 - 248,807

Accumulated impairment

At 1 January 2014 - - -


At 31 December 2014 271,670 - 271,670

Charge during the financial year - 5,272,462 5,272,462

At 31 December 2015 271,670 5,272,462 5,544,132

Net carrying amount

At 31 December 2014 - - -

At 31 December 2015 - - -



28. INTANGIBLE ASSETS cont’d

The recoverable amount for the above was based on its value in use and was determined by discounting the future cash flows generated from the continuing use of those units and was based on the following key assumptions:-

l Cash flows were projected based on actual operating results and a projected business plan.

l Revenue was projected based on increase of 10% annually for the next three years.

l Expenses were projected annual increase of approximately 5% per annum.

l A pre-tax discount rate of 10% was applied in determining the recoverable amount of the unit. The discount rate was estimated based on the Group’s existing weighted average cost of capital.

The values assigned to the key assumptions represent management’s assessment of future trends in the industry. A reasonably possible change in a key assumption does not have any significant difference to the recoverable amount.

Development cost and goodwill are impaired due to the projection cash flows on the recoverable amounts of intangible assets are lower than its carrying amount.

29. CATEGORIES OF FINANCIAL INSTRUMENTS

The table below provides an analysis of financial instruments categorised as loans and receivables (“L&R”) and financial liabilities measured at amortised cost (“FL”).

Carryingamount L&R FL

RM RM RM

Group

2015

Financial assets

Trade receivables 47,342 47,342 -

Other receivables 320,612 320,612 -

Cash and bank balances 133,049 133,049 -

501,003 501,003 -

Financial liabilities

Trade payables 7,600,160 - 7,600,160

Other payables 1,493,818 - 1,493,818

Finance lease liability 13,743 - 13,743

9,107,721 - 9,107,721



cont’d

29. CATEGORIES OF FINANCIAL INSTRUMENTS cont’d

The table below provides an analysis of financial instruments categorised as loans and receivables (“L&R”) and financial liabilities measured at amortised cost (“FL”). cont’d

Carryingamount L&R FL

RM RM RM

Group cont’d

2014

Financial assets

Trade receivables 11,050,861 11,050,861 -

Other receivables 14,601,281 14,601,281 -

Fixed deposit with a licensed bank 64,791 64,791 -

Cash and bank balances 4,902,640 4,902,640 -

30,619,573 30,619,573 -

Financial liabilities

Trade payables 1,382,957 - 1,382,957

Other payables 5,468,206 - 5,468,206

Finance lease liability 29,899 - 29,899

6,881,062 - 6,881,062

Company

2015

Financial assets



284,500 284,500 -

Financial liability

Other payables 1,230,998 - 1,230,998

2014

Financial assets


Amount due from subsidiary companies 20,012,553 20,012,553 -


20,132,916 20,132,916 -

Financial liability

Other payables 752,909 - 752,909



30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Financial risks

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Head of Finance. It is, and has been, throughout the current financial year and previous financial year, the Group’s and the Company’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient.

The following sections provide details regarding the Group’s and the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks:-

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arise primarily from trade and most of the other receivables and intercompany balances.

The Group’s and the Company’s objective is to seek sustainable revenue growth while minimising losses incurred due to increased credit risk exposure. It is the Group’s and the Company’s policy that all customers who wish to trade on credit terms is subject to credit assessment. Additionally, receivable balances are reviewed on an ongoing basis.

(i) Receivables

With a credit policy in place to ensure the credit risk is monitored on an ongoing basis, management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than credit terms granted are deemed to have higher credit risk, and are monitored individually.

Information regarding credit terms for trade receivables is disclosed in Note 7 to the financial statements.

The Group determines concentration of credit risk by comparing the amount due from each individual customer against the total receivables. The credit risk concentration profile of the Group’s trade receivables as at the end of the reporting period is as follows:-

Group

RM %

2015

Top 3 customers 29,668 63

2014

Top 3 customers 7,269,065 66



cont’d

30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d

Financial risks cont’d

(a) Credit risk cont’d

(i) Receivables cont’d

The ageing analysis of trade receivables as at the end of the reporting period is as follows:-

Group

Gross Impairment Net

RM RM RM

2015

Not past due 37,675 - 37,675

Past due 1 - 30 days 891 - 891

Past due 31 - 60 days 1,251 - 1,251

Past due more than 60 days 547,138 (539,613) 7,525

586,955 (539,613) 47,342

2014

Not past due 4,429,719 - 4,429,719

Past due 1 - 30 days 1,717,800 - 1,717,800

Past due 31 - 60 days 717,394 - 717,394

Past due more than 60 days 4,721,861 (535,913) 4,185,948

11,586,774 (535,913) 11,050,861

Trade receivables of RM9,667 (2014: RM6,621,142) were past due but not impaired. These relate to a number of independent customers from whom there is no recent history of default.

Trade receivables that are individually impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by collateral.

(ii) Intercompany balances

The Company provides unsecured loans and advances to subsidiary companies and monitors the results of the subsidiary companies regularly.

As at the end of the reporting period, the Company has impaired the loans and advances to subsidiary companies as disclosed in Note 10 to the financial statements.

(b) Liquidity risk

Liquidity risk is the risk that the Group and the Company will not be able to meets their financial obligations as and when they fall due as a result of shortage of funds. The Group’s and the Company’s exposure to liquidity risk arise primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain sufficient levels of cash and cash equivalents to meet their working capital requirements.

The Group’s and the Company’s liquidity risk management policy is that long term assets are financed via long term financing so that the cash to be generated by the assets are sufficient to repay the financing over the economic lives of the assets. While short term financing facility is only used to finance the short term working capital gap.





(b) Liquidity risk cont’d

The table below summarises the maturity profile of the Group’s and of the Company’s liabilities at the end of the reporting period based on the contractual undiscounted repayment obligations.

Carryingamount

Contractual cash flows

Within1 year

RM RM RM

Group

2015

Trade payables 7,600,160 7,600,160 7,600,160

Other payables 1,493,818 1,493,818 1,493,818

Finance lease liability 13,743 13,896 13,896

Total undiscounted financial liabilities 9,107,721 9,107,874 9,107,874

2014

Trade payables 1,382,957 1,382,957 1,382,957

Other payables 5,468,206 5,468,206 5,468,206

Finance lease liability 29,899 30,569 30,569

Total undiscounted financial liabilities 6,881,062 6,881,732 6,881,732

Company

The financial liabilities of the Company as at the end of the reporting period will mature in less than one year based on the carrying amount reflected in the financial statements.

(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of the changes in market interest rates.

The Group is not exposed to interest rate risk as it maintains only fixed rate borrowing during the financial year.

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of the changes in foreign currency rates.

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the functional currency of the Company and its subsidiary companies. The functional currency of the Company and its local subsidiary company is RM whereas the functional currency of its foreign subsidiary companies which are all located in PRC is RMB and located in Anguilla is USD. The currencies giving rise to this risk are primarily EUR and IDR.



cont’d



(d) Foreign currency risk cont’d

2015

The management deemed the risk to be negligible as the said balances are immaterial.

The Company is also exposed to currency risk arising from its net investment in foreign subsidiary companies. The investments are not hedged because the investments are considered to be long term in nature.

2014

The carrying amount of the Group’s foreign currency denominated financial assets and financial liabilities at the end of the reporting period are as follows:-

GroupFinancial

assetsFinancial liabilities

Net exposure

RM RM RM

EUR 1,430,160 (625,251) 804,909

IDR 8,489,617 - 8,489,617

9,919,777 (625,251) 9,294,526

Sensitivity analysis

Strengthening of RM against the following foreign currencies at the end of the reporting period would increase/(decrease) the profit before tax by the amounts shown below. This analysis assumes that all other variables remain unchanged.

Group

Profit before tax

2014

RM

EUR (1%) 8,049

IDR (2%) 169,792

177,841

Weakening of RM against the above foreign currencies at the end of the reporting period would have had

the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain unchanged.

Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group’s exposure to currency risk



31. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of financial assets and financial liabilities of the Group and of the Company as at the end

of the reporting period approximate their fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

No fair value hierarchy had been disclosed for financial assets and financial liabilities as the Group and the Company do not have financial instruments measured at fair value.

32. CAPITAL MANAGEMENT

The primary objective of the Group’s and of the Company’s capital management is to maintain a strong capital base and safeguard the Group’s and Company’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of business.

The Group and the Company manage their capital structure and make adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group and the Company may return capital to shareholders or issue new share capital.

Group Company

2015 2014 2015 2014

RM RM RM RM

Total equity (8,609,325) 49,465,886 (906,466) 50,582,536

Share capital 25,650,000 25,650,000 25,650,000 25,650,000

% of Equity/Share capital (33.56) 192.85 (3.53) 197.20

The Group has not complied with Rule 8.04 and Paragraph 2.1(a) of the GN3 of the ACE Market Listing Requirements of Bursa Securities which requires the Group to maintain a consolidated shareholders’ equity equal to or not less than 25% of the issued and paid-up capital of the Company.

There was no change in the Group’s and the Company’s approach to capital management during the financial year.

The subsidiary companies of the Group in PRC are required by Foreign Enterprise Law of PRC to contribute and maintain a non-distributable statutory reserve fund whose utilisation is subject to the approval by the relevant PRC authorities. This externally imposed capital requirement has been complied by the subsidiary companies in PRC for the financial year ended 31 December 2014 and the subsidiary companies have been disposed of for the financial year ended 31 December 2015.



cont’d

33. SIGNIFICANT EVENTS

(a) On 22 June 2015, the Company acquired 60% shareholdings in Syscomp Technology Sdn. Bhd. for a purchase consideration of RM5,400,000 from Ng Chin Ye.

(b) On 21 August 2015, the Company disposed of its entire shareholdings held in Shanghai Winner Electrical Co., Ltd. and Shanghai Winco Electrical Co., Ltd. for a disposal consideration of RM250,000 to Casuarina Administration Inc..

(c) On 27 August 2015, the Company disposed of its entire shareholdings held in Wintoni Power Sdn. Bhd. for a disposal consideration of RM20,000 to Tristar Treasure Sdn. Bhd..

(d) On 12 November 2015, there was a break in to the Company’s office where all the accounting records and assets of the Company and of its subsidiary companies namely Wintoni Engineering Sdn. Bhd., Planet Wireless Holdings Limited and Planet Wireless Sdn. Bhd. had been stolen.

(e) On 8 December 2015, the Company’s securities had been suspended for trading due to the Company had failed to submit its quarterly report for the financial period ended 30 September 2015 within the stipulated time frame.

(f) On 26 February 2016, the Company announced that it become an Affected Listed Issuer pursuant to GN3 of the Listing Requirements of Bursa Securities for the ACE Market where the Company become an Affected Listed Issuer as it has triggers paragraph 2.1(a), (c) of the GN3.

As at the date of the approval of these financial statements, the Company has yet to formalise a complete regularisation plan.

(g) On 29 February 2016, the Company’s securities had resumed for trading as the Company had on 26 February 2016 submitted its outstanding quarterly report for the financial period ended 30 September 2015.

(h) On 10 May 2016, the Company’s securities had been suspended for trading due to the Company had failed to submit its annual report for the financial year ended 31 December 2015 within stipulated time frame.



34. SUPPLEMENTARY INFORMATION DISCLOSED PURSUANT TO BURSA MALAYSIA SECURITIES BERHAD LISTING REQUIREMENTS

With the purpose of improving transparency, Bursa Malaysia Securities Berhad has on 25 March 2010, and subsequently on 20 December 2010, issued directives which require all listed corporations to disclose the breakdown of unappropriated profits or accumulated losses into realised and unrealised on Group and Company basis in the annual audited financial statements.

The breakdown of accumulated losses as at the end of the reporting period has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and the Guidance on Special Matter No. 1 - Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants are as follows:-

Group Company

2015 2014 2015 2014

RM RM RM RM

Total accumulated losses:-

- Realised (85,355,937) (15,516,763) (54,212,077) (2,723,248)

- Unrealised (270,333) 70,966 - 173

(85,626,270) (15,445,797) (54,212,077) (2,723,075)

Less: Consolidation adjustments 25,930,644 12,580,970 - -

(59,695,626) (2,864,827) (54,212,077) (2,723,075)


SHAREHOLDING STATISTICS

Authorized Capital : RM500,000,000 divided into 10,000,000,000 ordinary shares of RM0.05 eachIssued and Paid-Up Capital : RM25,650,000 divided into 513,000,000 ordinary shares of RM0.05 eachClass of Shares : There is only one class of shares in the Company * Ordinary shares of RM0.05 eachVoting Rights : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS

Size of Shareholdings No. of

Shareholders Total

Shareholdings % Less than 100 Shares 6 250 0.00

100 - 1,000 Shares 299 111,050 0.02

1,001 - 10,000 Shares 682 4,848,000 0.95

10,001 - 100,000 Shares 1,532 71,917,900 14.02

100,001 - below 5% of issued Shares 659 436,123,800 85.01

5% and above of issued Shares - - -

Total 3,178 513,000,000 100.00

Based on the Register of Depositors as at 16 November 2016, none of the Directors have any interest in Ordinary Shares of the Company. The Group did not issue any ESOS in the financial year.

Analysis of ShareholdingsAs at 16 November 2016


THIRTY (30) LARGEST SHAREHOLDERS

NO NAME OF SHAREHOLDERNO OF

SHARES %

1. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TEY POR YEE

23,090,000 4.50

2. KOH BOON POH 23,033,100 4.49

3. AMSEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR KOH PEE SENG

23,000,000 4.48

4. TOH PIK CHAI 11,818,400 2.30

5. QUAH JOO LENG 7,083,000 1.38

6. LEE CHIN CHOW 7,075,000 1.38

7. KHOW ENG GUAN 6,130,000 1.19

8. GAN KIM KEE @ GAN LEONG LIAN 5,800,000 1.13

9. LIOW ENG CHUAN 5,200,000 1.01

10. LOW THIAM CHIN 5,023,400 0.98

11. TAY KOO HUI 4,621,000 0.90

12. TAN YEW GHEE 4,588,100 0.89

13. MAYBANK NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR WONG SIONG BIAU

4,300,000 0.84

14. CHANG KHIM WAH 4,160,000 0.81

15. CIMSEC NOMINEES (TEMPATAN) SDN BHDCIMB FOR CHAN KIM SENG (PB)

4,070,000 0.79

16. YEO POH GAIK 4,000,000 0.78

17. CHIN CHIN SEONG 4,000,000 0.78

18. MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR WONG YEE KIAT (MARGIN)

4,000,000 0.78

19. MUHAMMAD RAMALL ITO BIN JASPAL SINGH 3,600,000 0.70

20. HSBC NOMINEES (ASING) SDN BHDEXEMPT AN FOR BANK JULIUS BAER & CO. LTD. (SINGAPORE BCH)

3,500,000 0.68

21. CHEH SIEW LENG 3,338,900 0.65

22. DB (MALAYSIA) NOMINEE (ASING) SDN BHDEXEMPT AN FOR BANK OF SINGAPORE LIMITED

3,233,500 0.63

23. RHB CAPITAL NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR PHOA BOON TING (CEB)

3,200,000 0.62

24. LEONG CHEE HOONG 3,130,000 0.61

25. TANG PEI EE 3,125,000 0.61

26. TAN CHON HOO @ TAN CHOON HOO 3,000,000 0.58

27. LIEW YOKE JING 3,000,000 0.58

28. GRANDEUR HOLDINGS SDN BHD 3,000,000 0.58

29. YEE AH CHOU 3,000,000 0.58

30. LOH CHIEK FEEI 2,760,000 0.54

TOTAL 188,879,400 36.82

Analysis of ShareholdingsAs at 16 November 2016cont’d


Analysis of WarrantholdingAs at 16 November 2016

WARRANTHOLDING STATISTICS

Total warrants issued : 216,000,000 Warrants (2014/2019)Warrant holders : 1456Exercise Price of Warrants : RM0.10Expiry date of Warrants : 23 February 2019

DISTRIBUTION OF WARRANTHOLDINGS

Size of Warrant No. of

Warrant Holders Total

Warrant % Less than 100 Warrants 242 4,670 0.00

100 - 1,000 Warrants 167 90,850 0.04

1,001 - 10,000 Warrants 214 1,285,270 0.60

10,001 - 100,000 Warrants 514 27,614,690 12.78

100,001 - below 5% of issued Warrants 318 168,055,120 77.80

5% and above of issued Warrants 1 18,949,400 8.77

Total 1,456 216,000,000 100.00

SUBSTANTIAL WARRANTHOLDERS

Direct Interest Deemed Interest

No. Name Shares % Shares %

1. Seik Thye Kong 18,949,400 8.77 – –

Based on Register of Depositors as at 16 November 2016, none of the Directors have any interest holdings in warrants (2014/2019).


THIRTY (30) LARGEST WARRANTHOLDERS

NO NAME OF WARRANTHOLDER NO OF

WARRANTS %

1. SEIK THYE KONG 18,949,400 8.77

2. LEE CHIN CHOW 8,036,600 3.72

3. TIAN CHING SIEW 4,595,800 2.13

4. LEE TONG SENG 4,125,900 1.91

5. WONG KIM WAH 4,011,000 1.86

6. KOH BOON POH 4,000,000 1.85

7. LOW THIAM CHIN 3,930,000 1.82

8. SOH ENG SOENG 3,705,000 1.72

9. CHEW CHEE PENG 3,000,000 1.39

10. TAN BEE KHENG 3,000,000 1.39

11. PANG WAN LIH 3,000,000 1.39

12. HLIB NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR GAN BER KOON

2,700,000 1.25

13. YEOH CHIN HOI 2,166,100 1.00

14. LIM PAIK AI 2,000,000 0.93

15. KUANG LEE FUN 2,000,000 0.93

16. NG CHING TEIK 1,700,000 0.79

17. SP JUTAJAYA SDN BHD 1,700,000 0.79

18. MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TAN SET PIN

1,591,000 0.74

19. LIM SOON YAU 1,590,000 0.74

20. ERIN OOI EE LING 1,557,000 0.72

21. LOH PEK HAR 1,550,000 0.72

22. KOH WEI SHENG 1,470,000 0.68

23. LAI YOKE HOONG 1,353,000 0.63

24. NG VERN HAU 1,308,500 0.61

25. LIM PHAIK IM 1,300,000 0.60

26. MAYBANK NOMINEES (TEMPATAN) SDN BHDLAU FOOK SIONG

1,293,300 0.60

27. SYED NAZIR BIN M S KADIR 1,203,200 0.56

28. LAW SIEW PENG 1,200,000 0.56

29. MAYBANK NOMINEES (TEMPATAN) SDN BHDTEH KHENG BOON

1,189,000 0.55

30. LAW TEN LOOI 1,180,100 0.55

TOTAL 90,404,900 41.85

Analysis of WarrantholdingAs at 16 November 2016cont’d

WINTONI GROUP BERHAD(766535-P)

Annual Report 2015W

INTO

NI GR

OU

P BERH

AD (766535-P)

ANNUAL REPORT 2015

WINTONI GROUP BERHAD (766535-P)

No. 13A, Jalan Perwira, Pusat Bandar, 34200 Parit Buntar, Perak Darul Ridzuan

Tel: +605 716 4017

Documents

(766535-P) (766535-P) Annual Report 2015 WINTONI GROUP BERHAD ... RM56,909,137 against a profit of RM4,406,230 in 2014. ... Khind Holdings Berhad,