Directors Profile. DATO CHUA TIA GUAN Independent Non-Executive Director Aged 48, Malaysian Appointed on 22 April 2016

Transcription

1 Success Transformer Corporation Berhad Directors Profile 9 DATO CHUA TIA GUAN Independent Non-Executive Director Aged 48, Malaysian Appointed on 22 April 2016 Dato Chua Tia Guan aged 48, a Malaysian, male, is an Independent Non-Executive Director of STC. He was appointed as Chairman to the Board of the Company as well as Chairman of the Nomination Committee and Chairman of the Remuneration Committee on 22 April Dato Chua Tia Guan is the Head of Tax & Financial Consulting of Great Vision Advisory Group and the Chairman of Executive Committee of Burger King Malaysia & Singapore. Previously, he served in a senior position in two international accounting firms. He graduated with a Bachelor of Accounting (Hons) from University of Malaya. Besides being a Chartered Accountant of Malaysian Institute of Accountants ( MIA ), Certified Public Accountant of The Malaysian Institute of Certified Public Accountants ( MICPA ) and an Associate of Chartered Tax Institute of Malaysia ( CTIM ), he is also an Approved Income Tax and GST Agent licensed by the Ministry of Finance. He was appointed as the Founding Member of The Special Task Force to Facilitate Business ( PEMUDAH ) of Prime Minister s Department ( PM s Department ) which is entrusted to improve the business environment and enhance the national competitiveness of Malaysia since He is also the Co-Chair of PEMUDAH s Focus Group on Paying Taxes which focuses on tax reforms and a member of the GST Monitoring Working Committee of Ministry of Finance as well as GST Technical Committee of the Royal Malaysian Customs Department. He is a Board Member of Secretariat for the Advancement of Malaysian Entrepreneurs of PM s Department and a member of the Steering Committee for SME High Impact Program of The Malaysian Administrative Modernization and Management Planning Unit of PM s Department. He is also the Deputy Chairman of Economic Studies Committee of the Federation of Chinese Associations Malaysia and the Founding Council Member of INXO Arts & Culture (L) Foundation. Previously, he also served as the Head of Economic Survey Unit of the Associated Chinese Chambers of Commerce and Industry of Malaysia for a period of 12 years. MR TAN AH TAN AH PING Managing Director Aged 65, Malaysian Appointed on 25 October 2004 Mr Tan Ah Tan Ah Ping, aged 65, a Malaysian, male, the founder of STM Group, is the Managing Director of STC. He was appointed to the Board of the Company on 25 October 2004 and he is also a member of the Remuneration Committee. In 1978, Mr Tan Ah Tan Ah Ping formed Syarikat Success Electronics Trading. In 1990, SETM was incorporated to take over the business activities of Success Electronics Trading and in 1998, he established STMKT to focus on the local marketing activities. In 2007, STC has diversified its business through the acquisition of equity in SEB. Currently, he is responsible for the overall management, strategic business planning and development, decision making and technical advisory of the STC Group. He has been appointed as a member of audit committee and nomination committee of SEB. He also assumes the role of Managing Director or Director of most subsidiaries of STC. Madam Pan Kim Foon is the wife and Ms Tan Chung Ling and Ms Tan Chung Chiah are the daughter of Mr. Tan Ah Tan Ah Ping.

2 10 Success Transformer Corporation Berhad Directors Profile (Cont d) MADAM PAN KIM FOON Executive Director Aged 61, Malaysian Appointed on 25 October 2004 Madam Pan Kim Foon, aged 61, a Malaysian, female, is an Executive Director of STC. She was appointed to the Board of the Company on 25 October She advises the STC Group on business strategies and planning, purchasing and management matters. She has more than 36 years of working experience in the Electrical Industrial Equipment Industry. She started her career with Syarikat Success Electronics Trading and established Success Electronics Trading in 1980 to take over the manufacturing and trading of electrical apparatus of Syarikat Success Electronics Trading and was responsible for sales activities. Together with a few shareholders her husband and her incorporated SETM in 1990 to take over the business activities of Success Electronics Trading and she was appointed as Executive Director of SETM and STMKT. She oversees the management functions, strategic business planning and development of the STC Group. Mr. Tan Ah Tan Ah Ping is the husband and Ms Tan Chung Ling and Tan Chung Chiah are the daughter of Madam Pan Kim Foon. MS TAN CHUNG LING Executive Director Aged 39, Malaysian Appointed on 22 July 2015 Ms Tan Chung Ling, aged 39, a Malaysian, female. She was appointed to the Board of the Company as the Alternate Director of STC to Madam Pan Kim Foon on 17 February She has ceased as Alternate Director and appointed as Executive Director on 22 July In 1999, she obtained her Bachelor of Commerce from Murdoch University, Australia and subsequently in 2001 she obtained her Masters of Electronic Commerce from Curtin University, Australia. Within the same year, she started her career at SETM as International Sales Coordinator. Subsequently in 2003, she was transferred internally to STMKT and was promoted to Business Development Manager of STMKT in Currently, she is the Export Director and responsible for business strategic planning, market planning and developing new markets. Subsequently, she was also appointed as Director of BIHM group, NSZ group and NLT. Mr. Tan Ah Tan Ah Ping is the father, Madam Pan Kim Foon is the mother and Tan Chung Chiah is the sibling of Ms Tan Chung Ling.

3 Success Transformer Corporation Berhad Directors Profile (Cont d) 11 MR TAN WEI NENG Executive Director Aged 43, Malaysian Appointed on 30 November 2015 Mr Tan Wei Neng, aged 43, a Malaysian, male. He was appointed as an Executive Director of STC on 30 November Mr. Tan graduated with a Bachelor of Accounting (Honours) Degree from the Northern University of Malaysia in He is a Chartered Accountant by profession. He is a member of Malaysian Institute of Accountants (MIA) since Mr. Tan has more than 15 years of financial and general management experiences in a variety of industries. He was the Regional Finance Manager for Menard Geosystem Sdn. Bhd. before he joined STC on Currently, he is the Chief Operating Officer of the company and has spearheaded the entire operations, planning and business development for the Group. MS CHAN FOONG PING Independent Non-Executive Director Aged 45, Malaysian Appointed on 23 September 2016 Ms Chan Foong Ping, aged 45, a Malaysian, female, was appointed to the Board of the Company on 23 September 2016 as a Independent Non-Executive Director. She is also a member of the Audit Committee, Nomination Committee and Remuneration committee. Ms Chan Foong Ping graduated with a Bachelor of Accountancy from Faculty of Economic and Business Management, Universiti Putra Malaysia. She is a Chartered Accountant, fellow member of Malaysian Institute of Accountants since After graduation from Universiti Putra Malaysia, Ms Chan joined Deloitte Touche Tohmatsu Kuala Lumpur in 1995 as auditor and subsequently she joined the Lion Group (listed Bursa) as Accounting Manager. In 2000, she joined Phillips Foods Group (U.S.A), played key roles in senior management position including Director for Controllership of international operations, company director of the group, Asia Pacific and Africa subsidiaries. Prior to departure, led the shared services centres in Indonesia and India. Throughout the period with the group, she responsible for overseeing regional financial system of 14 manufacturing plants covering 10 different countries. In 2011, Ms Chan joined Resource Holding Management Ltd (LSE AIM) as Group Finance Director to complete the RTO on PUC Founder (M) Bhd (Bursa). In 2014, she was appointed as corporate advisor of Swiss Biological Medicine Group Ltd (SBMG) pursuing for a potential listing at LSE. Recently, SBMG becomes a subsidiary of Huapont Life Science which is listed at Shenzen Exchange Board. Presently, she is an Independent Non-Executive Director of SEB.

4 12 Success Transformer Corporation Berhad Directors Profile (Cont d) MR NG CHEE KEONG Independent Non-Executive Director Aged 61, Malaysian Appointed on 22 July 2015 Mr Ng Chee Keong, aged 61, a Malaysian, male. He was appointed as Independent Non-Executive Director of STC on 22 July He obtained his Bachelor of Commerce and Administration from Victoria University of Wellington, New Zealand. He spent his career with Panasonic Malaysia Sdn Bhd from 1981 to Mr Ng was the Finance Director from 2002 to His responsibilities encompassed not only the financial operations of the company but was also in charge of Information Communication and Systems Department, internal audit, the logistics and warehouse operations, as well as serving as the Head of Administration. YEOH KIM WAH Non-Independent Non-Executive Director Aged 63, Malaysian Appointed on 7 March 2008 Mr Yeoh Kim Wah, aged 63, a Malaysian, male, was appointed to the Board of the Company on 7 March 2008 as a Non-Independent Non-Executive Director. He is also a member of the Audit Committee and Nomination Committee. He is an entrepreneur with more than 40 years of extensive knowledge and experience in the electrical supplies industry. He is one of the founders of Syarikat See Wide Letrik Group of Companies, a well established electrical trading group throughout Malaysia. He is primarily responsible for business development and implementation of marketing strategies of these companies. Presently, he holds directorships and has business interests in several other private companies such as Oriental Group of companies, See Wide Industries Sdn Bhd and NSK. MS TAN CHUNG CHIAH Alternate Director to Pan Kim Foon Aged 32, Malaysian Appointed on 21 October 2015 Ms Tan Chung Chiah, aged 32, a Malaysian, female. She was appointed as an Alternate Director of STC to Madam Pan Kim Foon on 21 October She graduated with a Bachelor of Commerce Degree with Double Majors in Accounting and Finance from Deakin University, Australia in She is a Certified Practising Accountant by profession. She has 6 years of financial and taxation working experiences as a Tax Accountant in Australia before she joined Success Electronics & Transformer Manufacturer Sdn Bhd as the Cost Controller in As the Cost Controller, she is responsible for the cost management and also overseeing the Group s corporate affairs in STC. Mr. Tan Ah Tan Ah Ping is the father, Madam Pan Kim Foon is the mother and Ms. Tan Chung Ling is the sibling of Ms. Tan Chung Chiah.

5 Success Transformer Corporation Berhad Key Senior Management Profile 13 MR CHANG POAY HEE Technical Director Aged 58, Malaysian Mr Chang Poay Hee, aged 58, a Malaysian, male, finished his tertiary education and is an Electrical Engineer by profession. He began his working career in 1988 with Dynacraft Sdn Bhd, Penang and subsequently with Sumitomo Electric Sintered Components Sdn Bhd and USG Malaysia Sdn Bhd. He joined SETM in 1995 as the Technical Manager. He was responsible for the designs and the technical support for both the lighting and transformer products. He was appointed as the Technical Director for SETM in 2008 and holds the responsibility in overseeing the overall operations particularly in design and manufacturing of the Transformer Division. MR FONG YIT SIN Marketing Director Aged 46, Malaysian Mr Fong Yit Sin, aged 46, a Malaysian, male. He began his working career in 1987 in the steel industry. He worked his way up the corporate ladder from a humble beginning until he became the Production Manager with an advertisement organisation in He joined STMKT in 1997 as a Sales Representative and promoted as Sales Manager in 2004 and holds the responsibility in overseeing the local market. In 2009, he was appointed as Director in STMKT. Under his leadership in the Company, he had groomed many successors in the Sales and Marketing team.

6 14 Success Transformer Corporation Berhad Key Senior Management Profile (Cont d) MR LO CHIOW LIEH Finance Controller Aged 36, Malaysian Mr Lo Chiow Lieh, aged 36, a Malaysian, male. He has been with the Company as a Finance Manager since September On January 2016, he was promoted as Finance Controller and he is also appointed as Chief Risk Officer recently. He now holds the responsibility in overseeing financial operation, internal audit and involved in planning, operational and strategic decision making. Mr Lo started his public practice with one of the international accounting firm in year He then left and joined Nirvana Group as an Account Manager for a year. He has more than 10 years of financial and auditing experiences in a variety of industries. Mr Lo is a qualified Chartered Accountant from Malaysian Institute of Accountants. He graduated with a Bachelor of Accounting Degree from University of Malaya. MR CHANG KAM KUAN Technical Lighting and Project Sales Director Aged 40, Malaysian Mr Chang Kam Kuan, aged 40, a Malaysian, male. He began his working career in lighting industry since In 2000, he joined STMKT as a Sales Representative and was promoted as Sales Manager and Project Sales Manager in 2007 and 2009 respectively. In 2015, he was promoted as Technical Lighting and Project Sales Director. His main role as Technical Lighting Director is to oversee the overall functionality of new products designs, testings, development and productions support. Whilst, as a Project Sales Director, his responsibilities include planning, coordinating and monitoring various projects and programs to be within their relevant schedules. His leadership and experiences enables him to manage well both Project Sales Team and Technical Lighting Team. His expertise and skills sets enable him to lead his Technical Lighting Team into new improvement and development in the Lighting Division as well as resolving any technicality challenges for present projects and for future advance technological projects. Ms. Tan Chung Ling, who is the Executive Director of STC is his wife.

7 Success Transformer Corporation Berhad Directors and Key Senior Management Profile OTHER INFOATION Save as disclosed in the Circular to shareholders dated 27 October 2016, none of the Directors and key senior management have any conflict of interest with the Company. All the Directors and key senior management do not hold any other directorships of public companies and listed issuers. None of the Directors and key senior management has convicted of any offences within the past five (5) years. Attendance of Directors at Board Meetings There were eight (8) Board Meetings held during the financial period ended 30 June 2016 and all Directors have attended these meetings, except Ms Wong Poh Chee and Ms Tan Chung Ling (refer to page 23 or number of meetings attended by each director). 15

8 FOR BRIGHTER TOMORROW

9 Success Transformer Corporation Berhad Corporate Governance Statement 17 The Board of Directors recognises the importance of establishing and maintaining good corporate governance within the Company and its subsidiaries and associates ( Group or STC Group ). The Board is committed to ensure the adoption of the principles and best practices of the Malaysian Code on Corporate Governance 2012 ( MCCG 2012 ) as a fundamental part of discharging its responsibilities to protect and enhance shareholders value and the financial performance of the Group. This statement sets out the manner in which the Group has applied and observed the principles and recommendations of the MCCG 2012 during the financial period under review. PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES The Board is responsible for the overall governance and conduct of the Group s strategic plan, including its implementation, and is accountable for the performance of the Company and the Group. The Board assumes the following duties and responsibilities: a) Review and adopt a strategic plan for the Company, addressing the sustainability of the Company s business policies and performance and ensure they fit in with the Company s overall business strategy The Board plays an active role in the development of the Company s strategy. Management will present to the Board its recommended strategy and proposed business plans and the Board will review and deliberate upon both Management s and its own perspectives. b) Overseeing the conduct of the Company s business The Managing Director and Executive Director are responsible for the day-to-day management of the business and operations of the Group. The Board will assess the management s performance through the comprehensive summary of the financial performance during the reporting period. c) Identifying principal risks faced by the Group and ensuring the implementation of appropriate systems to manage and mitigate these risks The Board oversees the risk management framework of the Group. The management will advise the Audit Committee and the Board on areas of high risk and the corresponding internal controls that are implemented. d) Succession planning, including appointing and training, replacing Directors The Nomination and Remuneration Committee is responsible for reviewing Directors position and determining the remuneration for these appointments. All Directors are required to attend trainings to further enhance their skills and knowledge and fully equip themselves to effectively discharge their duties. During the financial period, all Directors have successfully completed the Mandatory Accreditation Programme prescribed by Bursa Securities. e) Overseeing the development and implementation of a shareholder communication policy The Group regularly updates the Company s website ( press/media releases as and when required, as well as timely announcements are being made to Bursa Securities as and when required. f) Reviewing the adequacy and integrity of the Group s internal control management information system The Board is responsible for the adequacy and integrity of the Company s internal control system. Details pertaining to the Company s internal control system are available in the Statement on Risk Management and Internal Control of this Annual Report.

10 18 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (Cont d) To assist in the discharge of its duties, the Board has established Board Committees, namely the Audit Committee ( AC ), Nomination Committee ( NC ) and Remuneration Committee ( RC ), to examine specific issues within their respective terms of reference as approved by the Board and to report their recommendations to the Board. The ultimate responsibility for decision making, however, lies with the Board. i. Charter of Board There is a formal schedule of matters reserved to the Board for its deliberation and decision to ensure the direction and control of the Company are in its hand. In discharging its duties, the Board is guided by its Charter which outlines the authority, delegations, responsibilities of the Board, and other matters that are specifically reserved for the Board. The management function is conducted by, or under the supervision of, the Managing Director as directed by the Board and by other officers to whom the management function is properly delegated by the Managing Director. The Board will be supplied by Management with information in a form, timeframe and quality that will enable the Board to discharge its duties effectively. Directors are entitled to request additional information at any time when they consider it appropriate. In line with Recommendation 1.7 of the MCCG 2012, the Board Charter is available on the corporate website at ii. Code of Conduct The Board has formalised a Code of Conducts, setting out the standards of conduct expected from Directors and all employees of the Group. The Code of Conduct provides guidance for Directors regarding ethical and behavioural considerations and/or actions as they address their duties and obligations during the appointment. The Board should periodically review the Code of Conduct and a summary of the Code of Conduct is available on the company website. iii. Sustainability of Business The Board is mindful of the importance of business sustainability and, in conducting the Group s business, the impact of the Group s business on the environmental, social and governance ( ESG ) is taken into consideration. The Board will incorporate ESG aspect while formalising the company s strategies on promoting its sustainability. The Group activities on corporate social responsibilities during the financial period under review are disclosed on page 8 on this Annual Report. iv. Access to Information and Advice The Board members have full and unrestricted access to all information pertaining to the Group s business and affairs. Directors are supplied with relevant information and reports on financial, operational, corporate, regulatory, business development and audit matters for decisions to be made on an informed basis and effective discharge of the Board s responsibilities. Besides, the Board may also obtain independent professional advice at the Company s expense through an agreed procedure set out in the Board Charter. In additional, the Board is regularly updated and advised by the Company Secretary who is qualified and competent on statutory and regulatory requirements in carrying out its roles and responsibilities. Management provides the Board with information in a form, timeframe and quality that will enable the Board to discharge its duties effectively. Directors are entitled to request additional information at any time when they consider it appropriate. Every possible effort will be made to ensure that Board papers tabled at a Board meeting will be made available in good time to all Directors attending, regardless of location.

11 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) 19 PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (Cont d) v. Assignment of Authority and Responsibility Directors may delegate their powers as they consider it appropriate through appropriate manual of delegations or manual of authorities. However, ultimate responsibility for strategy and control rests with the Directors as guided by the Managing Director. vi. Qualified and competent Company Secretaries The Company Secretary of the Group is a qualified company secretary under Section 139A of the Companies Act The Company Secretary plays an advisory role to the Board, particularly with regard to the Company s constitution, Board policies and procedures, and its compliance with regulatory requirements, codes, guidance and legislation. The Company Secretary ensures that deliberations at Board and Board Committee meetings are well documented, and subsequently communicated to the relevant Management for appropriate actions. PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD As at the date of the Annual Report, the Board has nine (9) members comprising one (1) Independent Non-Executive Chairman, two (2) Independent Non-Executive Director, four (4) Executive Directors (including the Managing Director), one (1) Non- Independent Non-Executive Directors and one (1) Alternate Director. This composition complies with Paragraph of the Main Market Listing Requirements ( Listing Requirements ) of Bursa Malaysia Securities Berhad ( Bursa Securities ) whereby the Company must have at least two (2) directors or one-third (1/3) of the Board, whichever is higher who are independent directors. The Board has a healthy mix of both genders. The Profile of each director is presented on page 9 to 12. Appointments to the Board The objective of the NC is to ensure that there is a formal and transparent procedure for appointment of new directors and appraisal of directors for recommendation to the Board. However, the Board has the final decision on appointments after considering the recommendations of the Committee. The members are as follows: Chairman: Dato Chua Tia Guan (Independent Non-Executive Director) (Appointed w.e.f ) Chairman: Chiam Tau Meng (Independent Non-Executive Director) (Resigned w.e.f ) Member: Yeoh Kim Wah (Non-Independent Non-Executive Director) Member: Chan Foong Ping (Independent Non-Executive Director) (Appointed w.e.f ) Member: Yoong Kah Yin (Independent Non-Executive Director) (Resigned w.e.f ) The NC operates under its terms of reference and had two (2) meetings during the financial period ended 30 June Review of Candidates Proposed for Appointment as Directors The NC s criteria to be used in the appointment process was largely focused on ensuring a good mix of skill, experience and strength in the qualities necessary for the Board to discharge its responsibilities in an effective and competent manner. Diversity of the Board s composition is important to facilitate optimal decision-making by harnessing different insights and perspectives. Diversity criteria reviewed by the NC include experience, skills, competence, race, gender, culture and nationality. Other factors considered by the NC include the candidates ability to commit sufficient time and energy to the Group s matters, and the ability to satisfy the test of independence taking into account the candidate s character, integrity and professionalism.

12 20 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (Cont d) Review of Candidates Proposed for Appointment as Directors (Cont d) Currently, there are four women Directors (including Alternate Director) in the Board taking into account the combination of skill, experience and strength in the qualities necessary to strengthen the composition of the Board. Board Appointment Process The Company maintains a formal and transparent procedure for the appointment of new Directors. All nominees to the Board are first considered by the NC, taking into account the mix of skills, competencies, experience and other qualities before they are recommended to the Board. While the Board is responsible for the appointment of new Directors, the NC is delegated the role of screening and conducting an initial selection, which includes an external search, before making a recommendation to the Board. NC evaluates the nominees ability to discharge their duties and responsibilities before recommending their appointment as Directors to the Board for approval. During the period, the NC considered the skills, experience and respective backgrounds of Directors. Subsequently, NC recommended their nomination to the Board. The Board accepted their recommendations and they are duly appointed as follow: Name of Directors Desingnation Appointed on Dato Chua Tia Guan Chairman, Independent Non-Executive Director 22 April 2016 Tan Chung Ling Executive Director 22 July 2015 Tan Wei Neng Executive Director 30 November 2015 Ng Chee Keong Independent Non-Executive Director 22 July 2015 Chan Foong Ping Independent Non-Executive Director 23 September 2016 Tan Chung Chiah Alternate Director to Pan Kim Foon 21 October 2015 Board and Board Committee Assessment The NC carries out Board effectiveness assessment, including Board Committees and individual Director. The effectiveness of the Board is assessed in the areas of Board mix/diversity, composition and governance, quality of information and decision-making and Boardroom activities. The effectiveness of the Board Committees is assessed in terms of composition and governance, meeting administration and conduct, skills and competencies, and roles and responsibilities. The Directors assessment are intended to assess their contribution, performance, calibre and personality in relation to the skills, experience and other qualities they bring to the Board. The assessment examines Directors ability to give input in meetings and demonstrate high level of integrity in decision making. The Board assessment has been carried out by NC on 23 September Re-election of Directors In accordance with the Articles of Association of the Company, all directors shall retire from office once in every three (3) years but shall be eligible for re-election and one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting ( AGM ). Newly appointed directors during the financial period shall hold office until the next following AGM and shall then be eligible for re-election. This requirement has been adhered to by the Board members in AGM.

13 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) 21 PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (Cont d) Tenure of Independent Directors ( ID ) During the financial period, there is no ID served more than nine years cumulatively in the Group. Directors Remuneration The objective of the RC is to recommend the remuneration framework of Executive Directors to the Board. The remunerations and entitlements of the non-executive directors including the Non-Executive Chairman shall be a matter to be decided by the Board as a whole with the director concerned abstaining from deliberation and voting on his individual remuneration. The RC had one (1) meeting during the financial period ended 30 June This meeting was attended by all members. The members of the RC are: Chairman: Dato Chua Tia Guan (Independent Non-Executive Director) (Appointed w.e.f ) Chairman: Chiam Tau Meng (Independent Non-Executive Director) (Resigned w.e.f ) Member: Tan Ah Tan Ah Ping (Managing Director) Member: Chan Foong Ping (Independent Non-Executive Director) (Appointed w.e.f ) Member: Yoong Kah Yin (Independent Non-Executive Director) (Resigned w.e.f ) The RC adopts the principles recommended by the MCCG 2012 in determining the directors remuneration, whereby, the executive remuneration is designed to link rewards to the Group s performance whilst the remuneration of the Non-Executive Directors is determined in accordance with their experience and the level of responsibilities assumed. The RC reviews the Board remuneration policy annually, considering various factors including the Non-Executive Directors fiduciary duties, time commitments expected of Non-Executive Directors and Board Committee members and the Company s performance as well as the market condition. The Directors fees are subject to the approval of the shareholders of the Company at AGMs. The number of Directors of the Company whose income falls within the following bands are set out as follows: Number of Directors Range of Remuneration Executive Non-Executive 1 to 50, ,001 to 100, ,001 to 150, ,001 to 250, ,001 to 300, ,001 to 350, ,001 to 700, ,001 to 750, ,001 to 950, ,001 to 1,150, ,150,001 to 1,200, ,200,001 to 2,150, ,150,001 to 2,200, ,200,001 to 2,400, ,400,001 to 2,450,

14 22 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (Cont d) Directors Remuneration (Cont d) The aggregate remuneration paid or payable to all Directors are further categorised into the following components: Salaries & Benefits other in Group Fees* emoluments kind Total Executive 272 6, ,858 Non-executive Salaries & Benefits other in Company Fees* emoluments kind Total Executive Non-executive * Subject to the approval of shareholders The above disclosure includes the remuneration paid to Directors and Alternate Director who had received her remuneration from her capacity as Executive Director or Director and/or manager of the subsidiaries of STC. In respect of the non-disclosure of detailed remuneration of each director, the Board views that the transparency in respect of the Directors remuneration has been appropriately dealt with by the band disclosure presented in this statement. PRINCIPLE 3 - REINFORCE INDEPENCE OF THE BOARD There is clear division of responsibilities between the Chairman and Managing Director to engender accountability and facilitate the division of responsibility, such that one individual has unfettered powers over decision making. The Chairman is responsible ensuring the adequacy and effectiveness of the Board s governance process and acts as a facilitator at board meeting to ensure that contribution by Directors are forthcoming on matters being deliberated and that no Board member dominates discussion. The Managing Director, supported by the senior management team, implements the Group s strategic plan, policies and decision adopted by the Board and oversees the Operations and business development of the STC Group. The Independent Non-Executive Directors bring to bear objective and independent views, advice and judgment on interest, not only of the Group, but also of shareholder, employee, customers, suppliers and many communities in which the Group conducts its business. Independent Non-Executive Directors are essential for protecting the interest of shareholders and can make significant contributions to the Company s decision making by bringing in the quality of detached impartiality. PRINCIPLE 4 FOSTER COMMITMENT OF DIRECTORS The Board ordinarily meets at least five (5) 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 and additional meetings are convened as and when necessary. The Board obtains the commitment from Directors to devote sufficient time and efforts to carry out their responsibilities at the time of their appointment. Each Director is expected to commit time as and when required to discharge the relevant duties and responsibilities, besides attending meetings of the Board and Board Committees. It is also the Board s policy for Directors to notify the Chairman before accepting any new directorships notwithstanding that the Listing Requirements allow a Director to sit on the board of 5 listed issuers. Such notification is expected to include an indication of time that will be spent on the new appointment. At the quarterly Board meetings, the Board reviews the business performance of the Group and discusses major operational and financial issues. All pertinent issues discussed at Board meetings in arriving at decisions and conclusions are properly recorded by the Company Secretary by way of minutes of meetings.

15 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) 23 PRINCIPLE 4 FOSTER COMMITMENT OF DIRECTORS (cont d) During the financial period under review, the number of Board of Directors meeting attended by each director is as follows: Name of Directors No. of Meetings Attended Dato Chua Tia Guan (appointed on 22 April 2016) 1/1 Chiam Tau Meng (resigned w.e.f. 22 April 2016) 7/7 Tan Ah Tan Ah Ping 8/8 Pan Kim Foon 8/8 Woh Way Cheang (resigned w.e.f. 27 April 2015) 3/3 Tan Chung Ling (appointed on 22 July 2015) 2/3 Tan Wei Neng (appointed on 30 November 2015) 2/2 Yoong Kah Yin (resigned w.e.f. 22 September 2016) 8/8 Ng Chee Keong (appointed on 22 July 2015) 3/3 Yeoh Kim Wah 8/8 Wong Poh Chee (resigned w.e.f. 28 November 2015) 4/5 Chan Foong Ping (appointed on 23 September 2016) - Directors Training All Directors have successfully completed the Mandatory Accreditation Programme prescribed by Bursa Securities. The Directors will continue to attend other relevant training programmes as appropriate, to further enhance their skills and knowledge and fully equip themselves to effectively discharge their duties. The training programmes attended by the Directors are as follows: Training Programme Training Date Name of Directors Pre-Cast Technology: Concepts and Applications 27 May 2015 Yoong Kah Yin (Resigned w.e.f. 22 September 2016) Conflict Management Workshop 8 August 2015 Tan Ah Tan Ah Ping, Pan Kim Foon, Tan Chung Ling and Yeoh Kim Wah Asean Economic Community Impact & 29 September 2015 Tan Chung Ling Opportunities for SMIs Mandatory Accreditation Programme for 07 & 08 October 2015 Ng Chee Keong Directors of Public Listed Companies Mandatory Accreditation Programme for 03 & 04 February 2016 Tan Wei Neng and Tan Chung Chiah Directors of Public Listed Companies Mandatory Accreditation Programme for 04 & 05 May 2016 Dato Chua Tia Guan Directors of Public Listed Companies National GST Conference May & 01 June 2016 Dato Chua Tia Guan (Customs & CTIM) Mandatory Accreditation Programme for 01 & 02 June 2016 Chan Foong Ping Directors of Public Listed Companies Audit Committee Workshop C : Related Party 15 June 2016 Dato Chua Tia Guan Transactions and Conflict of Interest Situations (MIA)

16 24 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) PRINCIPLE 4 FOSTER COMMITMENT OF DIRECTORS (Cont d) The Company Secretary normally circulates the relevant statutory and regulatory requirement from time to time for the Board s reference and briefs the Board on the updates, where applicable. External Auditors also brief the Board on Malaysian Financial Reporting standards that affect the Group s financial statement for the period under review. The Board will on continuing basis evaluate and determine the training needs of each Director, particularly on relevant new law and regulations and essential practices for effective corporate governance and risk management to enable the Directors to effectively discharge their duties. PRINCIPLE 5 UPHOLD INTEGRITY IN FINANCIAL REPORTING BY THE COMPANY The Board is committed to present a balanced and understandable assessment of the Group s financial position and prospects to the public. These results are contained in the quarterly financial results, audited financial statements and annual reports. The Board is assisted by the AC in overseeing the Group s financial reporting processes and the accuracy, adequacy and completeness of its financial reports. The audit committee is to ensure that the financial statements of the group and Company have been prepared in conformity with Malaysian Financial Reporting Standards issued by the Malaysian Accounting Standards Board and in accordance with the provisions of the Companies Act 1965 in Malaysia. The roles of the AC in relation to the External Auditors are described in the Audit Committee Report set out on page 27 to 28. Financial Reporting In overseeing the Group s financial reporting, the AC reviewed the quarterly financial statements and the annual audited financial statements. The AC s recommendations were presented for approval at the subsequent Board meetings. External Auditor The Board, via the AC, maintains a formal and transparent relationship with the Group s external auditors in seeking valuable professional advice and in ensuring compliance with Malaysian Financial Reporting Standards issued by the Malaysian Accounting Standards Board in Malaysia. The AC meets up with the External Auditors at least twice a year to review audit plans and exchange views on issues requiring attention. There is no any significant issue raised by External Auditor during the financial period. The AC reviewed the External Auditors Audit Plan outlining their scope of work and proposed fees for the statutory audit and review of the Statement of Risk Management and Internal Control. The AC further resolved to recommend the proposed fees to the Board for approval. The AC carries out an annual review of the performance of the External Auditors, including assessment of their independence in performing their obligations, adequacy of experience and resources of the firm and the professional staff assigned to the audit. Based on the annual evaluation of their performance and audit fees, the AC was satisfied with the External Auditors technical competency and independence for With that, the AC further recommended to the Board the reappointment of the External Auditors for In assessing the independence of External Auditors, the AC required written assurance from the External Auditors conforming that they are, and have been, independent throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants. The External Auditors provided written assurance to the AC that in accordance with the terms of all relevant professional and regulatory requirements, they had been independent throughout the audit engagement.

17 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) 25 PRINCIPLE 5 UPHOLD INTEGRITY IN FINANCIAL REPORTING BY THE COMPANY (Cont d) Internal Auditor The Company outsourced its internal audit function to an external consulting company, NGL Tricor Governance Sdn Bhd. The audit team members are independent of the activities audited by them. The Internal Auditors presented to the AC updates on its activities comprising progress of the Annual Audit Plan and ad-hoc assignments. The AC considered the adequacy of scope and coverage of the Group s activities and approved the Internal Auditor s Annual Audit Plan. The identified key audit areas for financial period ended 30 June 2016 covered were the revenue, receivables, inventory management system, payables, direct and indirect expenditure cycles of its subsidiaries. The AC reviewed the annual Statement on Internal Control and Risk Management for publication in the Annual Report. PRINCIPLE 6 RECOGNISE AND MANAGE RISK OF THE GROUP With the assistance of the internal audit function, the Board also affirms its responsibility for maintaining a sound system of internal control for the Group. The effectiveness of the systems of key internal control, which are in place, is reviewed by internal auditors, who operated independently from the activities of the Company. The independent internal audit function is currently outsourced to an external consulting company who reports directly to the AC on the adequacy and effectiveness of the Group s internal controls during the quarterly AC meetings. The scope of work covered by internal audit function during the financial period under review is provided in the Statement on Risk Management and Internal Control of this Annual Report. PRINCIPLE 7 ENSURE TIMELY AND HIGH QUALITY DISCLOSURE The Board will formalize internal corporate disclosure policies and procedures not only to comply with the disclosure requirements set out in the Bursa Malaysia Listing Requirements, but also setting out the persons authorized and responsible to approve and disclose material information to regulators, shareholders and stakeholders. Amongst the policies is to upload its announcements to the regulators, the Board Charter, rights of shareholders and Annual Report in the Company s website timely. Various contact details are provided on the Company s website to address queries from customers, shareholders and other Public. PRINCIPLE 8 STRENGTHEN RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS The Board values dialogue with investors as a means of effective communication that enables the Board and management to convey information about the STC Group s performance, corporate directions and other matters affecting shareholders interests. Such information is disseminated through various disclosures and announcements made to the Bursa Securities covering quarterly financial results, audited financial statements and annual reports. This information is also accessible by the public through the Bursa Securities website at In addition, the Company s website at provides information on the Group s business, corporate development and announcements to Bursa Securities. Other information relevant to shareholders and investors such as annual reports, circulars and quarterly reports are available for download at the Company s website. The Company s AGM continues to be used as a principal forum for dialogue and interaction with shareholders. The Notice of AGM is circulated at least twenty one (21) clear days before the date of the meeting to enable shareholders to go through the Annual Report. Shareholders are encouraged to participate in discussions and to give their views to the Board. Extraordinary General Meetings are held as and when required. At the General Meetings, the Directors will respond to the shareholders queries. Proposed resolutions for special business included in the notice of meeting will be accompanied by an explanatory statement to facilitate shareholders understanding and evaluation of issues involved.

18 26 Success Transformer Corporation Berhad Corporate Governance Statement (Cont d) PRINCIPLE 8 STRENGTHEN RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS (Cont d) Statement of Directors Responsibility for Preparing the Financial Statements The Board is responsible for ensuring that the financial statements are properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the STC Group as at 30 June 2016 and of the financial performance and the cash flow of the STC Group for the financial period ended on that date. In preparing the financial statements, the Directors have adopted suitable accounting policies and applied them consistently, and made estimates and judgements which are reasonable and prudent. The financial statements have been prepared on a going-concern basis. The statement by Directors pursuant to section 169 of the Companies Act 1965 is set out on page 39.

19 Success Transformer Corporation Berhad Audit Committee Report COMPOSITION OF AUDIT COMMITTEE Ng Chee Keong Chairman (Independent Non-Executive Director) Chan Foong Ping Member (Independent Non-Executive Director) Yeoh Kim Wah Member (Non-Independent Non-Executive Director) 2. FREQUENCY OF MEETINGS Meetings shall be conducted not less than four (4) times annually. In order to form quorum for the meeting, the majority of the members present must be Independent Directors. Other meetings may be held as and when required. However, the Committee should meet with the external auditors without the presence of the executive directors, at least twice a year. 3. AUDIT COMMITTEE MEETING ATTENDANCE The Audit Committee had conducted six (6) meetings for the financial period ended 30 June Details of attendance of the Directors at Audit Committee Meetings held during the financial period are as follows: Name of Directors No. of Meetings Attended Chiam Tau Meng (resigned w.e.f ) 7/7 Ng Chee Keong (appointed on ) 5/5 Yeoh Kim Wah 8/8 Yoong Kah Yin (resigned w.e.f ) 8/8 Chan Foong Ping (appointed on ) - 4. SUMMARY OF WORK During the financial period and up to the date of statement, the Audit Committee had carried out the following works:- (a) Reviewed the quarterly financial results and announcements prior to submission to the Board of Directors for consideration and approval; (b) Reviewed the audited financial statements; (c) Reviewed the external auditors comments in relation to audit and accounting issues arising from the audit; (d) Considered the nomination of external auditors for recommendation to the Board for re-appointment; (e) Reviewed the internal audit plan, findings and reports;

20 28 Success Transformer Corporation Berhad Audit Committee Report (Cont d) 4. SUMMARY OF WORK (Cont d) (f) Reviewed the disclosure statements on Corporate Governance, Audit Committee Report and the Statement of Internal Control and recommend their adoption to the Board; (g) Reviewed the recurrent related party transactions and control procedures for these transactions in the shareholder mandate; (h) Deliberated the disclosure requirements for corporate social responsibility and noted the management action plan; (i) (j) Reviewed the application of corporate governance principles and the extent of the Group s compliance with the best practices set out under the Code on Corporate Governance; and Convened meeting with external auditors and internal auditors, without the attendance of other directors or employees. (k) Reviewed and monitored the risk management committee report and progress. 5. INTERNAL AUDIT FUNCTION The internal audit function is essential to assist the Board in obtaining the assurance of the system of internal control maintained by the management. To achieve this objective, the Company outsourced its internal audit function to an external consulting company, NGL Tricor Governance Sdn Bhd. The audit team members are independent of the activities audited by them. The internal auditors review and assess the Group s system of internal control and report to the Audit Committee. The Internal Audit adopts a risk-based approach in developing its audit plan to address the essential auditable areas of the Group based on their risk profiles. The audit focuses on high risk areas to ensure that an adequate action plan is in place to enhance the internal controls. The results of the audit reviews, recommendations as well as management s responses and action plans were brought to the attention of Audit Committee at scheduled meetings. Follow-up reviews were also conducted in ensuring that the recommendations of the internal auditors have been adopted and implemented by the management. The management has to ensure that all recommended remedial actions were executed to rectify the highlighted shortcomings within a reasonable time frame. Any other significant issues would also be highlighted by Audit Committee to the Board on a quarterly basis. The main activities and assignments undertaken during the financial period under review include the following: i) Conducted operational reviews on selected key business areas and processes of the Group; ii) Evaluated key strategies and risk management framework and processes; and iii) Conducted follow-up reviews on audit recommendations raised in previous audit reports to ensure the recommendations are implemented accordingly with the necessary corrective and preventive actions. The findings of the Internal Auditor were communicated to the Management for the necessary corrective action and being followed up and reported to Audit Committee accordingly.

21 Success Transformer Corporation Berhad Statement on Risk Management And Internal Control 29 INTRODUCTION In pursuant to Paragraph (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board is pleased to present its Statement on Risk Management and Internal Control which illustrates the nature and scope of risk management and internal control of the Group during the financial period. BOARD RESPONSIBILITY The Board of Directors is committed to maintain a sound system of internal control. In addition, the Board is also responsible for the Group s risk management and to review the adequacy and effectiveness of these systems to safeguard shareholders investment and the Group s assets. The system of risk management and internal control is reviewed by the Board in accordance with the guideline for directors on internal control, the Statement on Risk Management and Internal Control: Guidance for Directors of Listed Issuers. However, it shall be noted that these systems are designed to manage, rather than eliminate risk of failure in achieving the Group s business objectives and to provide reasonable, but not absolute, assurance against material misstatement or loss. This Statement has not dealt with the associate and joint venture entities as the Company does not have full management over them. However, the Group s interest is served through representations on the Board of the associate and joint venture entities. THE SYSTEM OF INTERNAL CONTROL The principal elements of the Group s system of internal controls are summarised as follows: 1. A documented hierarchical organization structure defining the line of management responsibility, authority and appropriate reporting structure; 2. Internal policies, procedures and manuals are updated from time to time. These policies, procedures and manual are further strengthened with the implementation of ISO9001:2008 Quality Management System covering major operating subsidiary companies of the Group; 3. Financial statements and management information are provided to the Audit Committee and the Board on a quarterly basis for review. These reviews help the Audit Committee and the Board members to complement its understanding of the risk management in the Group; 4. An annual budgeting process where key performance indicators for each business units are set, and reviewed by the Board and Audit Committee. Performance is monitored regularly and a reporting system highlights significant variances against budgets for investigation and follow-up by management of respective business units; 5. Management and operational meetings are held to monitor and review the operational performance and changes in the business environments. These meetings are led by executive directors and attended by the management; 6. Significant corporate matters and its status discussed at the management meetings are brought to the Board meetings for further deliberation and review by the Board members; and 7. Appointment of staff is based on the required level of qualification, experience and competency to fulfill their responsibilities. Trainings and development programs are provided as part of the management succession plan for selected staff to further enhance their skill and capability

22 30 Success Transformer Corporation Berhad Statement on Risk Management And Internal Control (Cont d) RISK MANAGEMENT FRAMEWORK The Board regards risk management processes as an integral part of the business operations. The Board acknowledges its responsibility to put in place an on-going process for identifying, evaluating and managing the significant risks faced by the Group. The Group s risk management initiative includes delegating the responsibilities of identifying and managing risk to the respective Head of each business units. The Group also has set-up an operation level Risk Management Committee ( C ) to discuss and evaluate those significant risk identified and the corresponding internal controls implemented by the Head of each business units. There are also formalised processes for the identification, assessment, communication, monitoring as well as continual review of risks and effectiveness of risk mitigation strategies. The C will report to the Audit Committee periodically whether those significant risks identified are properly monitored, managed, and mitigated to an acceptable level. Within the framework, there is an established and structured process for the identification, assessment, communication, monitoring as well as continual review of risks and effectiveness of risk mitigation strategies and controls at the management and Board levels. The management of the significant risks identified for the financial period ended 2016 are outlined below: Competition Risk The market is currently flooded with competitors selling similar products, coupled with the sluggish economy and soft spending power of businesses, the competition risk has been rising in recent years. Therefore, the Group has identified various initiatives strategy: Stay relevant in a more competitive environment; tap regional growth through the subsidiaries in China; leverage our strength and infrastructure to capture new opportunities; and innovation of new product. Credit Risk Credit risk arises from the inability to recover debts in a timely manner which may adversely affect the Group s profitability, cash flows and funding. The Group minimises such exposures by assessing the creditworthiness of potential customers, close monitoring of collections and overdue debts, and effective credit utilisation to keep leverage at a comfortable level. Operational Risk Operational risk arises from the execution of a company s business including risks of systems and equipment failure, overcapacity situations and inadequate skilled workforce. The Group strictly adheres to policies, procedures, quality controls and best practices to ensure that all systems and equipments are functional. To manage overcapacity issues, the Group constantly reviews its business plans and seeks alternative uses for excess capacity. The Group implemented attractive remuneration schemes to attract and retain its skilled workforce to meet existing and future needs.

23 Success Transformer Corporation Berhad Statement on Risk Management And Internal Control 31 REVIEW OF ADEQUACY AND EFFECTIVENESS The review of adequacy and effectiveness of the Group s risk management and internal controls are undertaken by the outsourced internal audit function, who reports directly to the Audit Committee. The process is in place for the financial period under review and up to the date of issuance of the Statement on Risk Management and Internal Control. The resulting reports from the reviews undertaken are presented to the Audit Committee at its regular meetings for review, discussion, and direct actions on matters pertaining to reports, which among other matters include findings relating to the adequacy and effectiveness of the internal control system of the Group. After the Audit Committee had deliberated on the reports, these are then forwarded to the operational management for attention and necessary actions. The operational management is responsible for ensuring recommended corrective actions on reported weaknesses were taken within the required time frame. INTERNAL AUDIT FUNCTION The Group has outsourced its internal audit function to an independent internal audit service provider to review the adequacy and effectiveness of the internal control systems of the business units. The internal audit adopts a risk-based approach and prepares its audit strategy and plan based on the risk profiles of the business units of the Group. These plan are presented and approved by the Audit Committee annually. The cost of internal audit function for the financial period ended 30 June 2016 was 125,300. ASSURANCE PROVIDED BY THE MANAGING DIRECTOR In line with the Guidelines, the Board has received assurance from the Managing Director that the Group s risk management and internal control systems are adequate and operating effectively, in all material aspects, to meet the Group s business objectives during the financial period under review. The Managing Director also reports to the Board on significant changes in the business and the external environment which affects the operations. Financial information, key performance and risk indicators are also reported on a quarterly basis to the Board. REVIEW OF STATEMENT BY EXTERNAL AUDITOR In accordance with the Paragraph of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the external auditors have reviewed this Statement on Risk Management and Internal Control and reported that nothing has come to their attention that causes them to believe that this statement intended to be included in the annual report is not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers to be set out, nor is factually inaccurate. conclusion The Board considers that the risk management framework is adequate, but will still be subject to continuous improvement, taking into consideration better practices and the changing business environment, where appropriate. The Board is committed to maintain a sound system of internal control and will strive for continuous improvement where necessary, to further enhance the Group s system of internal control. The statement was approved by the Board on 10 October 2016.

24 32 Success Transformer Corporation Berhad OTHER COMPLIANCE INFOATION 1. Audit and Non-Audit Fees Audit fees payable to the external auditors by the Group and the Company for the financial period ended 30 June 2016 amount to 713,553 and 105,350 respectively. Non-audit fees payable to the external auditors by the Group and the Company for the financial period ended 30 June 2016 amount to 6,500 and 6,500 respectively. 2. Material Contracts Other than the related party transactions as disclosed in Note 40 to the financial statements, there were no material contracts entered into by the Company and its subsidiaries involving the Directors and major shareholders interests, either still subsisting at the end of the financial period ended 30 June 2016 or entered into since the end of the previous financial year. 3. Utilisation of Proceeds There were no proceeds raised from any proposal during the financial period. 4. Recurrent Related Party Transactions of Revenue Nature The details of the related parties transactions undertaken by the Group during the financial period ended 30 June 2016 are stated in Note 40 to the financial statements on page 108 to 110. COMPLIANCE STATEMENT The Company has complied with the best practices as set out in the Code save for the appointment of Senior Independent Non-Executive Director and the disclosure on the details of the remuneration of each Director as stated above.

25 Financial Statements Directors Report 34 Statement by Directors 39 Statutory Declaration 39 Independent Auditors Report 40 Statements of Financial Position 42 Statements of Profit or Loss and Other Comprehensive Income 44 Statements of Changes in Equity 45 Statements of Cash Flow 48 51

26 34 Success Transformer Corporation Berhad Directors Report The directors have pleasure in submitting their report together with the audited financial statements of the Group and of the Company for the financial period from 1 January 2015 to 30 June PRINCIPAL ACTIVITIES The Company is principally engaged in the business of investment holding and the provision of management services. The principal activities of the subsidiaries are disclosed in Note 7(a) to the financial statements. There have been no significant changes in the nature of these principal activities during the financial period. RESULTS Group Company Profit after tax for the financial period 26,616,916 9,414,835 Attributable to: Owners of the Company 35,612,936 9,414,835 Non-controlling interests (8,996,020) - DIVIDENDS Dividends paid or declared by the Company since the end of the previous financial year were as follows: 26,616,916 9,414,835 (i) (ii) A first interim tax-exempt single-tier dividend of 8% equivalent to 0.04 per ordinary share amounting to 4,651,674 for the financial period ended 30 June 2016 was declared on 24 April 2015 and subsequently paid on 15 June 2015 to the shareholders whose names appeared in the Company s Record of Depositors on 18 May A second interim tax-exempt single-tier dividend of 8% equivalent to 0.04 per ordinary share amounting to 4,614,425 for the financial period ended 30 June 2016 was declared on 26 April 2016 and subsequently paid on 15 June 2016 to the shareholders whose names appeared in the Company s Record of Depositors on 19 May The directors do not recommend any final dividend in respect of the financial period ended 30 June RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial period other than those disclosed in the financial statements. ISSUES OF SHARES AND DEBENTURES During the financial period: (i) (ii) there were no changes in the authorised, issued and paid-up share capital of the Company; and there were no issues of debentures by the Company.

27 Success Transformer Corporation Berhad Directors Report (Cont d) 35 TREASURY SHARES During the financial period, the Company purchased 1,318,700 of its issued ordinary shares from the open market at an average price of approximately 1.65 per share. The total consideration paid for the purchase was 2,169,264 including transaction costs. The shares purchased are being held as treasury shares in accordance with Section 67A of the Companies Act 1965 and are presented as a deduction from equity. At 30 June 2016, the Company held as treasury shares a total of 4,955,477 of its 120,000,000 issued and fully paid-up ordinary shares. The treasury shares are held at a carrying amount of 6,462,197. Relevant details on the treasury shares are disclosed in Note 25 to the financial statements. OPTIONS GRANTED OVER UNISSUED SHARES During the financial period, no options were granted by the Company to any person to take up any unissued shares in the Company. BAD AND DOUBTFUL DEBTS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables. At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the Company. CURRENT ASSETS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their value 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 which would render the values attributed to the current assets in the financial statements misleading. VALUATION METHODS At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

28 36 Success Transformer Corporation Berhad Directors Report (Cont d) CONTINGENT AND OTHER LIABILITIES The contingent liabilities are disclosed in Note 43 to the financial statements. At the date of this report, there does not exist: (a) (b) any charge on the assets of the Group and of the Company that has arisen since the end of the financial period which secures the liabilities of any other person ; or any contingent liability of the Group and of the Company which has arisen since the end of the financial period. No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial period 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 when they fall due. CHANGE OF CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. ITEMS OF AN UNUSUAL NATURE The results of the operations of the Group and of the Company during the financial period were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature. There has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial period. HOLDING COMPANY The Company is a subsidiary of Omega Attraction Sdn. Bhd., a company incorporated in Malaysia, which is also regarded by the directors as the ultimate holding company. DIRECTORS The directors who served since the date of the last report are as follows: Tan Ah Tan Ah Ping Pan Kim Foon (f) Ng Chee Keong (Appointed on ) Dato Chua Tia Guan (Appointed on ) Tan Chung Ling (f) (Appointed on ) Wong Poh Chee (f) (Resigned on ) Chiam Tau Meng (Resigned on ) Yeoh Kim Wah Yoong Kah Yin (Resigned on ) Tan Chung Chiah (f) (Alternate to Pan Kim Foon (f)) (Appointed on ) Tan Wei Neng (Appointed on ) Chan Foong Ping (Appointed on )

29 Success Transformer Corporation Berhad Directors Report (Cont d) 37 DIRECTORS INTERESTS According to the register of directors shareholdings, the interests of directors holding office at the end of the financial period in shares of the Company and its related corporations during the financial period are as follows: The Company Number of Ordinary Shares of 0.50 Each Balance at / Date of Balance at appointment Bought Sold Tan Ah Tan Ah Ping - Direct 100, ,450 - Indirect (1) 49,605, ,605,114 Pan Kim Foon (f) - Direct 100, ,450 - Indirect (2) 49,605, ,605,114 Tan Chung Ling (f) - Direct 77, ,490 (3) - Indirect 49,628, ,628,074 Yeoh Kim Wah - Direct 530,750 46, ,850 Yoong Kah Yin - Direct 20, , ,000 (Resigned on ) Tan Chung Chiah (f) - Indirect (3) 49,628, ,628,074 (Appointed on ) Holding Company Omega Attraction Sdn. Bhd. ( OASB ) Number of Ordinary Shares of 1.00 Each Balance at Balance at /Date of Appointment Bought Sold Tan Ah Tan Ah Ping - Direct 51, ,000 (4) - Indirect 49, ,000 Pan Kim Foon (f) - Direct 49, ,000 (5) - Indirect 51, ,000 Tan Chung Ling (f) (6) - Indirect 100, ,000 Tan Chung Chiah (f) - Indirect (6) 100, ,000 Notes: (1) Deemed interest by virtue of his wife, Pan Kim Foon and his direct interests in OASB, and his wife and daughter, Tan Chung Ling s direct interests in the Company. (2) Deemed interest by virtue of her husband, Tan Ah Tan Ah Ping and her direct interests in OASB, and her husband and daughter, Tan Chung Ling s direct interests in the Company. (3) Deemed interest by virtue of her parents, Tan Ah Tan Ah Ping and Pan Kim Foon s direct interests in OASB, and her parents direct interest in the Company. (4) Deemed interest by virtue of his wife, Pan Kim Foon s direct interest in OASB. (5) Deemed interest by virtue of her husband, Tan Ah Tan Ah Ping s direct interest in OASB. (6) Deemed interest by virtue of her parents, Tan Ah Tan Ah Ping and Pan Kim Foon s direct interest in OASB. By virtue of their interests in the shares of OASB, Messrs. Tan Ah Tan Ah Ping, Pan Kim Foon (f), Tan Chung Ling (f) and Tan Chung Chiah (f) are deemed to have an interest in the shares of the Company and its related corporations to the extent that OASB has an interest.

30 38 Success Transformer Corporation Berhad Directors Report (Cont d) DIRECTORS BENEFITS Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in Note 34 in the financial statements or the fixed salary of a full time employee of the Company or of related companies) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with companies in which certain directors have substantial financial interests as disclosed in Note 40 to the financial statements. Neither during nor at the end of the financial period was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in, or debentures of the Company or any other body corporate. SIGNIFICANT EVENTS DURING THE FINANCIAL PERIOD The significant events during the financial period are disclosed in Note 45 to the financial statements. SIGNIFICANT EVENTS OCCURING AFTER THE REPORTING PERIOD The significant events occurring after the reporting period are disclosed in Note 46 to the financial statements. AUDITORS The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the directors: TAN AH TAN AH PING Director PAN KIM FOON (f) Director Muar, Johor Darul Takzim Date: 12 October 2016

31 Success Transformer Corporation Berhad Statement by Directors Pursuant to Section 169(15) of the Companies Act We, Tan Ah Tan Ah Ping and Pan Kim Foon (f), being two of the directors of Success Transformer Corporation Berhad, state that, in the opinion of the directors, the financial statements set out on pages 42 to 131 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 at 30 June 2016 and of their financial performance and cash flows for the financial period ended on that date. The supplementary information set out in Note 48 to the financial statements on page 132, which is not part of the financial statements, is prepared in all material respects, 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 Accountant and the directive of Bursa Malaysia Securities Berhad. Signed on behalf of the Board in accordance with a resolution of the directors: TAN AH TAN AH PING Director PAN KIM FOON (f) Director Muar, Johor Darul Takzim Date: 12 October 2016 Statutory Declaration Pursuant to Section 169(16) of the Companies Act 1965 I, LO CHIOW LIEH, being the officer primarily responsible for the financial management of Success Transformer Corporation Berhad, do solemnly and sincerely declare that the financial statements and supplementary information set out on pages 42 to 132 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act Subscribed and solemnly declared by } LO CHIOW LIEH at Muar in the state of } Johor Darul Takzim } on 12 October 2016 } LO CHIOW LIEH MIA Chartered Accountant Before me: LIM PEI LING (No. J238) Commissioner for Oaths

32 40 Success Transformer Corporation Berhad Independent Auditors Report To the Members of Success Transformer Corporation Berhad REPORT ON THE FINANCIAL STATEMENTS We have audited the financial statements of Success Transformer Corporation Berhad, which comprise the statements of financial position at 30 June 2016 of the Group and of the Company, and 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 period then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 42 to 131. 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 the approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company at 30 June 2016 and of their financial performance and cash flows for the financial period then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

33 Success Transformer Corporation Berhad Independent Auditors Report To the Members of Success Transformer Corporation Berhad (Cont d) 41 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) (b) (c) (d) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. We have considered the financial statements and the auditors reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 7 to the financial statements. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. The auditors reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. OTHER REPORTING RESPONSIBILITIES The supplementary information set out in Note 48 on page 132 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. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. 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. Crowe Horwath Firm No.: AF 1018 Chartered Accountants Ng Kim Kiat Approval No.: 02074/10/2018 J Chartered Accountant Muar, Johor Darul Takzim Date: 12 October 2016

34 42 Success Transformer Corporation Berhad Statements of Financial Position At 30 June 2016 Group company 30 June 31 December 30 June 31 December Note ASSETS Non-Current Assets Investment in subsidiaries ,798,671 97,902,624 Investment in joint venture Investment in associates 9 695,468 9,069, Property, plant and equipment ,084, ,852, Investment properties 11 28,514,120 12,763, Goodwill on consolidation 12 7,616,238 7,763, Amount due from subsidiaries ,006,628 6,423,388 Amount due from associates , Deferred tax assets , , Other receivables , ,946, ,647, ,805, ,326,012 Current Assets Inventories ,234, ,415, Trade receivables ,117,267 91,202, Other receivables, deposits and prepayments 16 10,032,999 9,978, ,923 1,000 Tax recoverable 2,894,790 2,888, Amount due from contract customers 17 1,271,727 29,491, Amount due from subsidiaries ,723, ,919 Amount due from joint venture 19 65,407 65, Amount due from associates ,164 1,699, Amount due from related parties 21 2,825,525 2,465, Short-term investments 22 1,817,018 1,151, Deposits placed with licensed banks 23 1,330,258 10,557, Cash and bank balances 38,521,341 32,214,726 1,109, , ,513, ,130,467 13,762,111 1,122,556 TOTAL ASSETS 475,460, ,777, ,567, ,448,568

35 Success Transformer Corporation Berhad Statements of Financial Position At 30 June 2016 (Cont d) 43 Group company 30 June 31 December 30 June 31 December Note EQUITY AND LIABILITIES Share capital 24 60,000,000 60,000,000 60,000,000 60,000,000 Treasury shares 25 (6,462,197) (4,292,933) (6,462,197) (4,292,933) Reserves ,765, ,100,043 46,123,256 45,974,520 Equity Attributable to Owners of the Company 265,302, ,807,110 99,661, ,681,587 Non-Controlling Interests 28,343,571 37,369, TOTAL EQUITY 293,646, ,176,647 99,661, ,681,587 Non-Current Liabilities Loans and borrowings 27 24,833,705 23,538, Hire purchase payables 28 2,189,115 2,408, Deferred tax liabilities 13 2,764,882 3,242, ,787,702 29,189, Current Liabilities Trade payables 29 40,751,918 41,600, Other payables and accruals 30 33,941,024 29,853, , ,714 Amount due to contract customers ,296 10,400, Amount due to subsidiaries ,209,231 3,335,685 Amount due to an associate , , Amount due to related parties 21 2,029,192 2,418, Loans and borrowings 27 65,439,427 77,429,408 9,000,000 - Hire purchase payables 28 1,219,997 1,139, Tax liabilities 7,672,997 1,928,206 85,595 42, ,026, ,411,183 15,906,351 3,766,981 TOTAL LIABILITIES 181,814, ,601,052 15,906,351 3,766,981 TOTAL EQUITY AND LIABILITIES 475,460, ,777, ,567, ,448,568 The annexed notes form an integral part of these financial statements.

36 44 Success Transformer Corporation Berhad Statements of Profit or Loss and Other Comprehensive Income For the Financial Period from 1 January 2015 to 30 June 2016 Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December Note REVENUE ,950, ,414,578 12,871,726 7,140,000 COST OF SALES (419,657,751) (276,580,192) - - GROSS PROFIT 153,292,935 94,834,386 12,871,726 7,140,000 OTHER INCOME 14,192,191 4,135, ,376 9,431,520 SELLING AND DISTRIBUTION EXPENSES (25,713,856) (15,377,922) - - ADMINISTRATIVE EXPENSES OTHER EXPENSES (69,833,576) (12,990,986) (35,123,320) (8,551,766) (939,343) (1,521,456) (660,991) (87,523) PROFIT FROM OPERATIONS 58,946,708 39,916,647 10,781,303 15,823,006 FINANCE COSTS 32 (8,127,715) (4,092,542) (196,262) (128,552) SHARE OF LOSS OF ASSOCIATES, NET OF TAX 9 (402,503) (12,493) - - PROFIT BEFORE TAX 33 50,416,490 35,811,612 10,585,041 15,694,454 TAX EXPENSE 36 (23,799,574) (10,034,708) (1,170,206) (436,552) PROFIT AFTER TAX 26,616,916 25,776,904 9,414,835 15,257,902 OTHER COMPREHENSIVE INCOME Items that may be reclassified subsequently to profit or loss Foreign currency translation differences for foreign operations 1,020,180 1,297, TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD/YEAR 27,637,096 27,073,918 9,414,835 15,257,902 PROFIT AFTER TAX ATTRIBUTABLE TO: Owners of the Company 35,612,936 24,667,638 9,414,835 15,257,902 Non-controlling interests (8,996,020) 1,109, ,616,916 25,776,904 9,414,835 15,257,902 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company 36,143,563 25,317,593 9,414,835 15,257,902 Non-controlling interests (8,506,467) 1,756, BASIC EARNINGS PER ORDINARY SHARE (SEN) ,637,096 27,073,918 9,414,835 15,257,902 The annexed notes form an integral part of these financial statements.

37 Success Transformer Corporation Berhad 45 Statements of Changes in Equity For the Financial Period from 1 January 2015 to 30 June 2016 Attributable to Owners of the Company Non-Distributable Distributable non- Share Treasury Share Translation Capital Retained controlling2 Total The Group note Capital Shares Premium Reserve Reserve Profits Total Interests2 Equity 2 At 1 January ,000,000 (4,292,933) 1,267,803 2,432,895 3,544, ,855, ,807,110 37,369, ,176,647 Profit after tax for the financial period ,612,936 35,612,936 (8,996,020) 2 26,616,916 Foreign currency translation differences for foreign operations , , , ,020,180 Total comprehensive income for the financial period ,627-35,612,936 36,143,563 (8,506,467) 2 27,637,096 Contributions by and distributions to owners of the Company: Arising from bonus shares issue of subsidiary ,245,539 (4,245,539) Purchase of treasury shares 25 - (2,169,264) (2,169,264) - 2 (2,169,264) Dividends to owners of the Company - by Company (9,266,099) (9,266,099) - 2 (9,266,099) - by subsidiary to noncontrolling interests (314,484)2 (314,484) Changes in ownership interest in subsidiary that do not result in a loss of control (212,488) (212,488) (205,015)2 (417,503) Total transactions with owners of the Company - (2,169,264) - - 4,245,539 (13,724,126) (11,647,851) (519,499)2 (12,167,350) At 30 June ,000,000 (6,462,197) 1,267,803 2,963,522 7,789, ,743, ,302,822 28,343, ,646,393

38 46 Success Transformer Corporation Berhad Statements of Changes in Equity Attributable to Owners of the Company Non-Distributable Distributable non- Share Treasury Share Translation Capital Retained controlling2 Total The Group note Capital Shares Premium Reserve Reserve Profits Total Interests2 Equity 2 At 1 January ,000,000 (3,800,082) 1,267,803 1,782,940 3,544, ,752, ,547,566 36,269, ,817,277 Profit after tax for the financial year ,667,638 24,667,638 1,109, ,776,904 Foreign currency translation differences for foreign operations , , , ,297,014 Total comprehensive income for the financial year ,955-24,667,638 25,317,593 1,756, ,073,918 Contributions by and distributions to owners of the Company: Purchase of treasury shares 25 - (492,851) (492,851) - 2 (492,851) Dividends to owners of the Company - by Company (4,666,569) (4,666,569) - 2 (4,666,569) - by subsidiary to noncontrolling interests (553,636)2 (553,636) Changes in ownership interest in subsidiary that do not result in a loss of control , ,371 (102,863)2 (1,492) Total transactions with owners of the Company - (492,851) (4,565,198) (5,058,049) (656,499)2 (5,714,548) At 31 December ,000,000 (4,292,933) 1,267,803 2,432,895 3,544, ,855, ,807,110 37,369, ,176,647 The annexed notes form an integral part of these financial statements.

39 Success Transformer Corporation Berhad Statements of Changes in Equity 47 Attributable to Owners of the Company Non-Distributable Distributable Share Treasury Share Retained Total The Company note Capital Shares Premium Profits Equity At 1 January ,000,000 (4,292,933) 1,267,803 44,706, ,681,587 Profit after tax for the financial period ,414,835 9,414,835 Total comprehensive income for the financial period ,414,835 9,414,835 Contributions by and distributions to owners of the Company Purchase of treasury shares 25 - (2,169,264) - - (2,169,264) Dividends to owners of the Company (9,266,099) (9,266,099) Total transactions with owners of the Company - (2,169,264) - (9,266,099) (11,435,363) At 30 June ,000,000 (6,462,197) 1,267,803 44,855,453 99,661,059 At 1 January ,000,000 (3,800,082) 1,267,803 34,115,384 91,583,105 Profit after tax for the financial year ,257,902 15,257,902 Total comprehensive income for the financial year ,257,902 15,257,902 Contributions by and distributions to owners of the Company Purchase of treasury shares 25 - (492,851) - - (492,851) Dividends to owners of the Company (4,666,569) (4,666,569) Total transactions with owners of the Company - (492,851) - (4,666,569) (5,159,420) At 31 December ,000,000 (4,292,933) 1,267,803 44,706, ,681,587 The annexed notes form an integral part of these financial statements.

40 48 Success Transformer Corporation Berhad Statements of Cash Flows For the Financial Period from 1 January 2015 to 30 June 2016 Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December note CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 50,416,490 35,811,612 10,585,041 15,694,454 Adjustments for: Allowance for impairment loss of receivables: - collective impairment 231, , individual impairment 7,453, ,968-9,000 Bad debts written off 281,580 99, Depreciation of investment properties 177,169 85, Depreciation of property, plant and equipment 13,957,916 8,295, Dividend income - - (9,271,726) (4,740,000) Foreseeable loss from contract customers - 4,662, Gain from waiver of debts (9,411,230) Gain on disposal of a subsidiary that retained as an associate (2,263) Gain on disposal of investment in associate (1,319,503) Impairment loss of investment in subsidiaries - - 1,521,457 78,523 Impairment loss of property, plant and equipment 382,298 48, Impairment loss on investment in associates 300, Impairment of goodwill 147, Inventories written off 44, Loss on inventories 117, Loss/(Gain) on disposal of property, plant and equipment 106,993 (368,318) - - Property, plant and equipment written off 289, , Reversal of allowance for impairment loss of trade receivables (2,109,289) (207,357) - - Reversal of inventories write down (1,214,418) (1,282,321) - - Share of loss of associates 402,503 12, Unrealised (gain)/loss on foreign exchange (2,700,838) 980,120 - (8,654) Write down of inventories 5,004,180 3,504, Interest expense 7,415,442 3,576,613 87,630 10,108 Interest income (464,048) (363,410) (172,880) - OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 78,917,773 55,932,955 2,749,522 1,632,201 Changes In Working Capital Inventories (12,272,860) (25,532,023) - - Amount due from contract customers 18,506,310 (13,473,396) - - Trade and other receivables, deposits and prepayments (26,959,650) 8,738,881 (10,342,533) 326,950 Trade and other payables and accruals 1,172, ,159 3,096,357 (345,155)

41 Success Transformer Corporation Berhad Statements of Cash Flows 49 Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December note CASH GENERATED FROM/(absorbed into) OPERATIONS 59,364,288 26,313,576 (4,496,654) 1,613,996 Interest paid Interest received (7,415,442) 464,048 (3,576,613) 363,410 (87,630) 172,880 (10,108) - Tax paid Tax refund (20,638,870) 1,978,691 (14,164,407) 68,432 (1,131,730) 4,537 (488,038) 10,495 NET CASH FROM/(USED IN) OPERATING ACTIVITIES 33,752,715 9,004,398 (5,538,597) 1,126,345 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment (b) (17,451,197) (14,178,645) - - Acquisition of investment properties (6,883,399) Additional investment in existing subsidiaries (417,504) - (417,504) - Proceeds from disposal of associates 10,000, Investment in associates (626,900) (600,000) - - Proceeds from disposal of property, plant and equipment 2,825,846 1,505, Dividend received - - 9,271,726 4,740,000 NET CASH (USED IN)/FROM INVESTING ACTIVITIES (12,553,154) (13,273,053) 8,854,222 4,740,000 CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid by the Company Dividends paid by subsidiaries to non-controlling interests (9,266,099) (314,484) (4,666,569) (553,636) (9,266,099) - (4,666,569) - Drawdown from term loans 12,813,787 4,000, Net (increase)/decrease in deposit pledged (153,567) 157, Net movement in trade bills (19,161,158) 13,457, Repayment of hire purchase payables (1,482,709) (1,269,679) - - Drawdown/(Repayment) of revolving credit facility 7,282,522 15,217,478 9,000,000 (500,000) Repayment of term loans (11,400,011) (17,527,221) - - Purchase of treasury shares (2,169,264) (494,343) (2,169,264) (492,851) NET CASH (USED IN)/FROM FINANCING ACTIVITIES (23,850,983) 8,321,030 (2,435,363) (5,659,420) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (2,651,422) 4,052, , ,925 EFFECT OF FOREIGN EXCHANGE TRANSLATION 1,043, , CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL PERIOD/Year 41,213,317 36,474, ,637 22,712 CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL PERIOD/Year (a) 39,605,327 41,213,317 1,109, ,637

42 50 Success Transformer Corporation Berhad Statements of Cash Flows NOTES TO STATEMENTS OF CASH FLOWS (a) CASH AND CASH EQUIVALENTS Cash and cash equivalents included in the statements of cash flows comprise the following: Group company 30 June 31 December 30 June 31 December note Cash and bank balances 38,521,341 32,214,726 1,109, ,637 Deposits placed with licensed bank 23 1,330,258 10,557, Bank overdrafts 27 (736,871) (1,537,376) ,114,728 41,234,895 1,109, ,637 Add: Cash and cash equivalents included in short-term investment 22 1,817,018 1,151, Less: Deposits pledged to licensed banks (1,326,419) (1,172,852) ,605,327 41,213,317 1,109, ,637 (b) ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT Group 18 Months Financial Financial Period Ended Year Ended 30 June 31 December Aggregate cost of property, plant and equipment acquired 19,471,006 16,833,567 Finance via hire purchase (2,019,809) (2,654,922) Cash paid during the financial period/year 17,451,197 14,178,645 The annexed notes form an integral part of these financial statements.

43 Success Transformer Corporation Berhad For the Financial Period from 1 January 2015 to 30 June GENERAL INFOATION The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office and principal place of business are as follows: Registered office : 3-2, 3rd Mile Square, No. 151, Jalan Kelang Lama, Batu 3 ½, Kuala Lumpur Principal place of business : No. 3, 5 & 7, Jalan TSB 8, Taman Industri Sungai Buloh, Sungai Buloh Selangor Darul Ehsan The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 12 October HOLDING COMPANY The Company is a subsidiary of Omega Attraction Sdn. Bhd., a company incorporated in Malaysia, which is also regarded by the directors as the ultimate holding company. 3. CHANGE IN FINANCIAL YEAR END The financial year end of the Company was changed from 31 December to 30 June. Accordingly, the current financial statements are prepared for eighteen months from 1 January 2015 to 30 June As a result, the comparative figures stated in the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows and the related notes are not comparable. 4. PRINCIPAL ACTIVITIES The Company is principally engaged in the business of investment holding and the provision of management services. The principal activities of the subsidiaries are disclosed in Note 7(a) to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year. 5. BASIS OF PREPARATION The financial statements of the Group are prepared under historical cost convention, and in compliance with Malaysian Financial Reporting Standards ( MFRSs ), International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. 5.1 During the current financial period, the Group has adopted the following new accounting standards and/or interpretations (including the consequential amendments, if any): MFRSs and/or IC Interpretations (including the Consequential Amendments) Amendments to MFRS 119 : Defined Benefit Plans Employee Contributions Annual Improvements to MFRSs Cycle Annual Improvements to MFRSs Cycle The adoption of the above accounting standards and interpretations (including the consequential amendments, if any) did not have any material impact on the Group s financial statements.

44 52 Success Transformer Corporation Berhad 5. BASIS OF PREPARATION (cont d) 5.2 The Group has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial period. MFRSs and IC Interpretations (including the Consequential Amendments) effective Date MFRS 9 : Financial Instruments 1 January 2018 (IFRS 9 issued by IASB in July 2014) MFRS 14 : Regulatory Deferral Accounts 1 January 2016 MFRS 15 : Revenue from Contracts with Customers 1 January 2018 MFRS 16 : Leases 1 January 2019 Amendments to MFRS 2 : Classification and Measurement of Share- Based 1 January 2018 Payment Transactions Amendments to MFRS 10 : Sale or Contribution of Assets between an Deferred until and MFRS 128 Investor and its Associate or Joint Venture further notice Amendments to MFRS 10, : Investment Entities Applying the Consolidation 1 January 2016 MFRS 12 and MFRS 128 Exception Amendments to MFRS 11 : Accounting for Acquisitions of Interests in Joint 1 January 2016 Operations Amendments to MFRS 15 : Effective Date of MFRS 15 1 January 2018 Amendments to MFRS 15 : Classifications to MFRS 15 Revenue from Contracts 1 January 2018 With Customers Amendments to MFRS 101 : Disclosure Initiative 1 January 2016 Amendments to MFRS 107 : Disclosure Initiative 1 January 2017 Amendments to MFRS 112 : Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017 Amendments to MFRS 116 : Clarification of Acceptable Methods of Depreciation 1 January 2016 and MFRS 138 and Amortisation Amendments to MFRS 116 : Agriculture Bearer Plants 1 January 2016 and MFRS 141 Amendments to MFRS 127 : Equity Method in Separate Financial Statements 1 January 2016 Annual Improvements to MFRSs Cycle 1 January 2016 The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application.

45 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES 6.1 Critical Accounting Estimates and Judgements Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below: (a) Depreciation of Property, Plant and Equipment The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors actions in response to the market conditions. The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (b) Income Taxes There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax expense and deferred tax balances in the year in which such determinations is made. (c) Impairment of Non-financial Assets When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows. (d) Write-down of Inventories Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.

46 54 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.1 Critical Accounting Estimates and Judgements (Cont d) (e) Classification between Investment Properties and Owner-occupied Properties The Group determined whether a property qualifies as an investment property, and has developed a criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independent of the other assets held by the Group. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property. (f) Impairment of Trade and Other Receivables An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. 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. If the expectation is different from the estimation, such difference will impact the carrying amount of receivables. (g) Impairment of Goodwill Goodwill is tested for impairment annually and at other times when such indicators exist. This requires management to estimate the expected future cash flows of the cash-generating unit to which goodwill is allocated and to apply a suitable discount rate in order to determine the present value of those cash flows. The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discount rate used. If the expectation is different from the estimation, such difference will impact the carrying value of goodwill. (h) Construction Contracts Revenue and expenses that satisfy the characteristic of construction contracts are recognised in the profit or loss by using the stage of completion method. The stage of completion is determined by the proportion that contract costs incurred for work performed to date compared to the estimated total contract costs. Judgement is required in determining the stage of completion, the extent of the contract costs incurred, the estimated total contract revenue and costs, as well as the recoverability of the contracts. Using experience gained on each particular contract and taking into account the expectations of time and materials required to complete the contract, management estimates the profitability of the contract on an individual basis at any particular time.

47 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.2 Basis of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period. Subsidiaries are entities (including structured entities, if any) controlled by the Group. The Group controls an entity when the Group is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has a de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee s return. Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate. Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group. (a) Business Combinations Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred included the fair value of any asset or liability resulting from a contingent considerations arrangement. Acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss when incurred. In 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. Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests proportionate share of the fair value of the acquiree s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.

48 56 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.2 Basis of Consolidation (Cont d) (b) Non-controlling Interests Non-controlling interests are presented within equity in the consolidated statements of financial position, separately from equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance. (c) Changes in Ownership Interests in Subsidiaries without Change of Control All changes in the parent s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity of the Group. (d) Loss of Control Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit or loss which is calculated as the difference between: (i) (ii) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of (i.e. reclassified to profit or loss or transferred directly to retained profits). The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

49 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.3 Goodwill Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period. Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group s previously held equity interest in the acquire (if any), over the net fair value of the acquiree s identifiable assets and liabilities at the date of acquisition is recorded as goodwill. Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised as a gain in profit or loss. 6.4 Functional and Foreign Currencies (a) Functional and Presentation Currency The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency. The consolidated financial statements are presented in Ringgit Malaysia ( ), which is the Company s functional and presentation currency. All values are rounded to the nearest, unless otherwise stated. (b) Transactions and Balances Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss. (c) Foreign Operations Assets and liabilities of foreign operations are translated to at the rates of exchange ruling at the end of the reporting period. Income and expenses of foreign operations are translated at exchange rates ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity; attributable to the owners of the Company and noncontrolling interests, as appropriate. Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period except for those business combinations that occurred before the date of transition (1 January 2011) which are treated as assets and liabilities of the Company and are not retranslated.

50 58 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.4 Functional and Foreign Currencies (Cont d) (c) Foreign Operations (Cont d) On the disposal of a foreign operation (i.e. a disposal of the Group s entire interest in a foreign subsidiary, or a partial disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that foreign operation attributable to the owners of the Company are reclassified to profit or loss as part of the gain or loss on disposal. The portion that related to non-controlling interests is derecognised but is not reclassified to profit or loss. In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to noncontrolling interests and are not recognised in profit or loss. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the proportionate share of the accumulative exchange differences is reclassified to profit or loss. In the consolidated financial statements, when settlement of an intragroup loan is neither planned nor likely to occur in the foreseeable future, the exchange differences arising from translating such monetary item are considered to form part of a net investment in the foreign operations and are recognised in other comprehensive income. 6.5 Financial Instruments Financial assets and financial liabilities are recognised in the statements of financial position when the Group has become a party to the contractual provisions of the instruments. Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair values through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss. Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

51 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.5 Financial Instruments (Cont d) (a) Financial Assets On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. (i) Financial Assets at Fair Value through Profit or Loss Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. Fair value through profit or loss category also comprises contingent consideration in a business combination. Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Group s right to receive payment is established. Financial assets at fair value through profit or loss could be presented as current assets or non-current assets. Financial assets that are held primarily for trading purposes are presented as current assets whereas financial assets that are not held primarily for trading purposes are presented as current assets or non-current assets based on the settlement date. (ii) Held-to-maturity Investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that the management has the positive intention and ability to hold to maturity. Heldto-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with interest income recognised in profit or loss on an effective yield basis. Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current assets. (iii) Loans and Receivables Financial Assets Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets.

52 60 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.5 Financial Instruments (Cont d) (a) Financial Assets (Cont d) (iv) Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories. After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss. Interest income calculated for a debt instrument using the effective interest method is recognised in profit or loss. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group s right to receive payments is established. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date. (b) Financial Liabilities All financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. Fair value through profit or loss category also comprises contingent consideration in a business combination. Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. (c) Equity Instruments Equity instruments classified as equity are measured at cost and are not remeasured subsequently. (i) Ordinary Shares Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

53 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.5 Financial Instruments (Cont d) (c) Equity Instruments (Cont d) (ii) Treasury Shares When the Company s own shares recognised as equity are bought back, the amount of the consideration paid, including all costs directly attributable, are recognised as a deduction from equity. Own shares purchased that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. Where treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or distributable resources, or both. Where treasury shares are sold, the difference between the sales consideration and the carrying amount of the treasury shares are shown as a movement in equity. When the consideration received is more than the carrying amount, the credit difference arising is taken to the share premium account. Where the consideration received is less than the carrying amount, the debit difference is offset against reserves. (d) Derecognition 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. 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 equity is recognised in profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. 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. (e) Financial Guarantee Contracts A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specific debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. The Group designates corporate guarantees given to financial institutions for credit facilities granted to subsidiaries and third parties as insurance contracts as defined in MFRS 4 Insurance Contracts. The Group recognises these corporate guarantees as liabilities when there is a present obligation, legal or constructive, 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 obligations and a reliable estimate can be made of the amount of the obligation.

54 62 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.6 Investment in Subsidiaries Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investments includes transaction costs. On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss. 6.7 Joint Arrangements Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements returns. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures. A joint venture is a joint arrangement whereby the Group has rights only to the net assets of the arrangement. The investment in a joint venture is accounted for in the consolidated financial statements using the equity method, based on the financial statements of the joint venture made up to 30 June The Group s share of the post acquisition profits and other comprehensive income of the joint venture is included in the consolidated statement of profit or loss and other comprehensive income, after adjustments if any, to align the accounting policies with those of the Group, from the date that joint control commences up to the effective date when the investment ceases to be a joint venture or when the investment is classified as held for sale. The Group s interest in the joint venture is carried in the consolidated statement of financial position at cost plus the Group s share of the post acquisition retained profits and reserves. The cost of investment includes transaction costs. When the Group s share of losses exceeds its interest in a joint venture, the carrying amount of that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation. Unrealised gains on transactions between the Group and the joint venture are eliminated to the extent of the Group s interest in the joint venture. Unrealised losses are eliminated unless cost cannot be recovered. The Group discontinues the use of the equity method from the date when the investment ceases to be a joint venture or when the investment is classified as held for sale. When the Group retains an interest in the former joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as the initial carrying amount of the financial asset in accordance with MFRS 139. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that joint venture to profit or loss when the equity method is discontinued. However, the Group will continue to use the equity method when an investment in a joint venture becomes an investment in an associate. Under such change in ownership interest, the retained investment is not remeasured to fair value but a proportionate share of the amounts previously recognised in other comprehensive income of the joint venture will be reclassified to profit or loss where appropriate. All dilution gains or losses arising in investments in joint ventures are recognised in profit or loss.

55 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.8 Investments in Associates An associate is an entity in which the Group has a long-term equity interest and where it exercise significant influence over the financial and operating policies. The investment in an associate is accounted for in the consolidated statement of financial position using the equity method, based on the financial statements of the associate made up to 30 June The Group s share of the post acquisition profits and other comprehensive income of the associate is included in the consolidated statement of profit or loss and other comprehensive income, after adjustment if any, to align the accounting policies with those of the Group, from the date that significant influence commences up to the effective date on which significant influence ceases or when the investment is classified as held for sale. The Group s interest in the associate is carried in the consolidated statement of financial position at cost plus the Group s share of the post acquisition retained profits and reserves. The cost of investment includes transaction costs. When the Group s share of losses exceeds its interest in an associate, the carrying amount of that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation. Unrealised gains on transactions between the Group and the associate are eliminated to the extent of the Group s interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered. When the Group ceases to have significant influence over an associate and the retained interest in the former associate is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as the initial carrying amount of the financial assets in accordance with MFRS 139. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that associate into profit or loss when the equity method is discontinued. 6.9 Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

56 64 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.9 Property, Plant and Equipment and Depreciation (Cont d) Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straightline method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purposes are: Leasehold land Factory buildings Plant and machinery Motor vehicles Office equipment, furniture and fittings 66 to 96 years 10 to 66 years 2 to 20 years 4 to 12.5 years 2 to 10 years Freehold land is not depreciated. Capital work-in-progress is not depreciated until the asset is ready for its intended use. The depreciation method, useful lives and residual values are reviewed and adjusted if appropriate, at the end of each reporting date 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. The carrying amount of property, plant and equipment are revised for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of assets, being the different between the net disposal proceeds and the carrying amount, is recognised in profit or loss Investment Properties Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and impairment losses, if any. Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the year in which they arise. Depreciation is charged to profit or loss on the straight-line method over the estimated useful lives of the investment properties. Freehold land is not depreciated whilst leasehold land is amortised over its remaining lease period of 50 to 99 years. The principal annual rates used for buildings are 2% per annum. Investment properties are derecognised when they have either been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal. On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss. Transfers are made to or from investment property only when there is a change in use. All transfers do not change the carrying amount of the property reclassified.

57 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.11 Leased Assets (a) Finance Lease Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. On initial recognition of 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. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. 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. Leasehold land which in substance is a finance lease is classified as property, plant and equipment. (b) Operating Lease 6.12 Impairment Leases, in which the Group does not assume substantially all the risks and rewards of ownership are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line method over the lease period. (a) Impairment of Financial Assets All financial assets (other than those categorised at fair value through profit or loss), 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. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be an objective evidence of impairment. An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets 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 financial asset s original effective interest rate. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

58 66 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.12 Impairment (Cont d) (b) Impairment of Non-financial Assets 6.13 Inventories The carrying values of assets, other than those to which MFRS 136 : Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when an annual impairment assessment is compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of the assets is the higher of the assets fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow using a pre-tax discount rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised in profit or loss. In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately. Inventories are stated at the lower of cost and net realisable value. The cost of inventories is measured based on weighted average cost and first-in-first-out formula, where appropriate, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred and bringing them to their existing location and condition. In the case of work-in-progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale Amount due from/(to) Contract Customers Amount due from/(to) contract customers on fixed price contracts is stated at cost plus attributable profits less foreseeable losses and progress billings. Cost includes all direct costs and other related costs. Where progress billings exceed the aggregate amount due from contract customers plus attributable profit less foreseeable losses, the net credit balance on all such contracts is shown in payables as amount due to contract customers. Where aggregate amount due from contract customers plus attributable less foreseeable losses exceed progress billings, the net debit balance on all such contracts is shown in receivables as amount due from contract customers.

59 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.15 Income Taxes Income tax for the reporting period comprises current tax and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting period and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period. Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity and the same taxation authority. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill or excess of the acquirer s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the business combination costs Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand, bank balances, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.

60 68 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.17 Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. The unwinding of the discount is recognised as interest expense in profit or loss Employee Benefits (a) Short-term Employee Benefits Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Group. (b) Defined Contribution Plans 6.19 Related Parties The Group s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans. A party is related to an entity (referred to as the reporting entity ) if: (a) A person or a close member of that person s family is related to a reporting entity if that person: (i) (ii) (iii) has control or joint control over the reporting entity; has significant influence over the reporting entity; or is a member of the key management personnel of the reporting entity or of a parent of the reporting entity. Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the reporting entity. (b) An entity is related to a reporting entity if any of the following conditions applies: (i) (ii) (iii) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). Both entities are joint ventures of the same third party.

61 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.19 Related Parties (Cont d) (b) An entity is related to a reporting entity if any of the following conditions applies (Cont d): (iv) (v) (vi) (vii) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. The entity is controlled or jointly controlled by a person identified in (a) above. A person identified in (a)(i) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). (viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity. Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including any director (whether executive or otherwise) of that entity Contingent Liabilities A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably. A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision Fair Value Measurements 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, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement 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.

62 70 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.21 Fair Value Measurements (Cont d) For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows: Level 1 Level 2 Level 3 : Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date; : Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and : Inputs are unobservable inputs for the asset or liability. The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer Revenue and Other Income Recognition (a) Goods Sold and Service Rendered Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns and allowances, traded discount and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the end of the reporting period. The stage of completion is assessed by reference to services performed to date as a percentage of total services to be performed. (b) Construction Contracts Revenue from construction contracts is recognised on the percentage of completion method for projects supported by contracts, and/or where specific progress claims can be clearly identified against the stage of completion of contracts or when there is continuous transfer of control and risks and rewards of ownership. When these characteristics cannot be identified, the delivery and acceptance basis shall be adopted. The stage of completion is measured by reference to the proportion that contract costs incurred for contract work performed to date that reflect work performed bear to the total estimated contract costs. When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that is probable to be recoverable and the contract costs are recognised as an expense in the period in which they are incurred. An expected loss on a contract is recognised immediately in profit or loss.

63 Success Transformer Corporation Berhad SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.22 Revenue and Other Income Recognition (Cont d) (c) Dividend Income Dividend income is recognised in profit or loss on the date that the Company s right to receive payment is established. (d) Rental Income Rental income from properties is recognised on an accrual basis unless collectability is in doubt, in which case it is recognised on cash receipt basis. (e) Interest Income Interest income is recognised as it accrues using the effective interest method in profit or loss. (f) Management Fee Income Management fee income from subsidiaries is recognised on accrual basis. (g) Government Grants Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis over the period necessary to match them with the related costs which they are intended to compensate for. Grants that compensate the Group for the costs of an assets are recognised in profit or loss on a systematic basis over the expected life of the related asset Operating Segments An operating segment is a component of the Group that engages in business activities from which it may earn revenues 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 is this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available Earnings per Ordinary Share Basic earnings per ordinary share is calculated by dividing the consolidated profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period, adjusted for own shares held Borrowing Costs Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

64 72 Success Transformer Corporation Berhad 6. SIGNIFICANT ACCOUNTING POLICIES (cont d) 6.25 Borrowing Costs (Cont d) Borrowing costs that directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the assets is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed. 7. INVESTMENTS IN SUBSIDIARIES company 30 June 31 December At Cost Unquoted shares At 1 January 66,262, ,908,421 Addition 417,504 - Write-off - (36,646,254) At 30 June / 31 December 66,679,671 66,262,167 Quoted shares At 30 June / 31 December 31,718,980 31,718,980 98,398,651 97,981,147 Less: Accumulated Impairment Losses At 1 January 78,523 - Addition 1,521,457 78,523 At 30 June / 31 December 1,599,980 78,523 Carrying Amount At 30 June / 31 December 96,798,671 97,902,624 Represented by: Unquoted shares in Malaysia 59,834,041 60,223,961 Unquoted shares outside Malaysia 5,245,650 5,959,683 Quoted shares in Malaysia 31,718,980 31,718,980 96,798,671 97,902,624 Market value of quoted shares as at end of the period/year 16,640,000 26,000,000

65 Success Transformer Corporation Berhad INVESTMENTS IN SUBSIDIARIES (cont d) (a) Details of the subsidiaries are as follows: Equity Interest C country of 30 June 31 December Name of Subsidiaries Incorporation Principal Activities Success Electronics & Malaysia Manufacture of electrical 100% 100% Transformer Manufacturer apparatus and industrial Sdn. Bhd. ( SETM ) lighting. Success Transformer Malaysia Trading, sales and marketing of 100% 100% Marketing Sdn. Bhd. electrical apparatus and ( STMKT ) industrial lighting and ceased business operation during the financial period. Success Transformer Malaysia Investment holding. 100% 100% Manufacturer Sdn. Bhd. ( STM ) Nikkon Industrial Lighting Malaysia Dormant. 100% 100% Sdn. Bhd. ( NKIL ) SES Property Sdn. Bhd. Malaysia Property investment holding. 100% 100% ( SESP ) Aruanmota Sdn. Bhd. ( ASB ) Malaysia Dormant. 100% 100% Nikkon LED Sdn. Bhd. ( NLED ) Malaysia Manufacturing of LED lighting. 80% 80% Daiichi Steel Sdn. Bhd. ( DS ) Malaysia Manufacture of metal products 80% 75% focusing on metal stamping parts. Omega Metal Industries Malaysia Manufacture of metal products 70% 65% Sdn. Bhd. ( OMI ) focusing on metal casing. EOS Lighting Sdn. Bhd. ( EOS ) Malaysia Ceased business operations. 60% 60% Nikkon Lighting Pty. Ltd. Australia Marketing and distributing of 100% 100% ( NLPL ) electrical apparatus and industrial lighting. Success Transformer Pte. Ltd. Singapore Investment holding and to 100% 100% ( STPL ) # carry on business of electricians, mechanical engineers of any other of alike nature.

66 74 Success Transformer Corporation Berhad 7. INVESTMENTS IN SUBSIDIARIES (cont d) (a) Details of the subsidiaries are as follows (Cont d): Equity Interest C country of 30 June 31 December Name of Subsidiaries Incorporation Principal Activities Seremban Engineering Berhad Malaysia Fabrication of process 65% 65% ( SEB ) equipment and metal structures and the provision of maintenance, repair and shutdown works. Boxon Industries Hardware Malaysia Supplier and dealer in metal 60% 60% (M) Sdn. Bhd. ( BIH ) enclosure and accessories. Ningbo Success Zhenye People s Design, manufacture and trading 60% 60% Luminaire Limited Liabilities Republic of of industrial light fittings Company ( NSZ ) # China and fixtures. Nikkon Success Kenya Limited Republic of Marketing and distributing of 51% 51% ( NSK ) # Kenya electrical apparatus and industrial lighting. Nikkon Lighting (Thailand) Thailand Distribution of lighting and 49% ^ 49% ^ Co., Ltd. ( NLT ) * electrical products. Subsidiaries of SEB SEB Resources Sdn. Bhd. Malaysia Fabrication of process equipment 100% 100% ( SEBR ) and metal structures and the provision of maintenance, repair and shutdown services and also to supply both local and foreign labours. ACE Standard International British Dormant. 100% 100% Limited ( ACE ) * Virgin Island Sepen Engineering Sdn. Bhd. Malaysia Manufacturing and fabrication 60% 60% ( SEPEN ) of process equipment and metal structure. Seremban Mechanical Services Malaysia Fabrication of process equipment 100% 100% Sdn. Bhd. ( SMS ) and metal structures and the provision of maintenance, repair and shutdown services.

67 Success Transformer Corporation Berhad INVESTMENTS IN SUBSIDIARIES (cont d) (a) Details of the subsidiaries are as follows (Cont d): Equity Interest C country of 30 June 31 December Name of Subsidiaries Incorporation Principal Activities Subsidiaries of NSZ Ningbo Success Zhenye People s Aluminum die-casting, light 60% 60% Casting Limited Liabilities Republic of fittings assembly and Company ( NSC ) # China mould. Shenyang Success Zhenye People s Wholesale for lighting and - 60% Luminaire Limited Liabilities Republic of electrical products. Company ( SSZ ) China Subsidiary of STPL Nikkon Lighting & Electrical Singapore Marketing and distribution of 55% 55% Pte. Ltd. ( NLE ) # electrical appliances and industrial lighting. Subsidiaries of BIH Boxon Industries Hardware Malaysia Trader of accessories and panel 100% 100% (JB) Sdn. Bhd. ( BIHJ ) box and ceased business operations during the financial period. Boxon Industries Hardware Singapore Wholesale of metals and metal 100% 100% (S) Pte. Ltd. ( BIHS ) # ores except general hardware. PT. Boxon Nikkon Jayaindo Indonesia Wholesale for lighting, mechanical 80% 80% ( BNJ ) # and electrical products, metal enclosure and accessories. * Not a legal requirement to be audited and therefore consolidated based on unaudited management accounts. # Audited by firms other than Messrs. Crowe Horwath. ^ In accordance with the Memorandum of Articles of Association of NLT, one voting right is attached to every one ordinary share and one voting right is attached to every ten preferred shares. Based on existing total issued and paid-up share capital of NLT of 9,800 ordinary shares of THB 100 each and 10,200 preferred shares of THB 100 each, the total voting rights are 10,820 comprising 9,800 voting rights for ordinary shares and 1,020 voting rights for preferred shares. Success Transformer Corporation Berhad ( STC ) holds 9,800 ordinary shares which carry with them 9,800 voting rights or 90.6% of the total voting rights in NLT. As STC has control over NLT, the accounts of NLT is consolidated into the Group s financial statements.

68 76 Success Transformer Corporation Berhad 7. INVESTMENTS IN SUBSIDIARIES (cont d) (b) (c) (d) (e) (f) On 3 June 2015, a subsidiary of the Company, NSZ completed a bonus issue, which involved increase of paid-up capital by capitalizing an amount of million from the retained earnings account. The bonus issue was carried out proportionate to the existing contribution made by all shareholders. As a result, STC remained its equity interest of 60% in NSZ. On 1 October 2015, the Company acquired an additional 5% equity interests in DS and OMI respectively from its non-controlling interests for a cash consideration of 185,319 and 232,185 respectively. Following the completion of the acquisition, DS and OMI become a 80% and 70% owned subsidiary of the Company respectively. On 2 December 2015, Company s 60%-owned subsidiary, namely Ningbo Success Zhenye Luminaire Limited Liabilities Company ( NSZ ) disposed of 100,000 ordinary shares of B 1.00 each in its 60%-owned subsidiary, Shenyang Success Zhenye Luminaire Limited Liabilities Company ( SSZ ), representing an equity interest of 20% in the issued and paid up capital of SSZ ( Dilution ) to an existing shareholder of SSZ, namely Mr. Zeng Fanzhi for a cash consideration of B 100,000 (equivalent to 66,500). Following the Dilution, SSZ ceased to be a subsidiary of NSZ and became an associate of NSZ. The effect of the partial disposal was immaterial. During the financial period, the Company has carried out a review of the recoverable amounts of its investments in certain subsidiaries that having indication of impairment. A total impairment losses of 1,521,457 was recognised in the statement of profit or loss as the recoverable amount of investment in certain subsidiaries are below their carrying amount. During the previous financial year, the following transactions occurred: Substantial cost of investment in STM was written off due to lower recoverable amount arising from a waiver of debt given by STM to the Company. The net impact of investment cost written off and waiver of debt was presented in profit or loss of the Company as gain from waiver of debt. The directors reviewed the Company s investment in subsidiaries for indication of impairment. Impairment losses of 78,523 was recognised as the recoverable amount of investment in certain subsidiaries was below their carrying amount. On 9 July 2014, a subsidiary of the Company, NSZ subscribed to a total of 300,000 ordinary shares of B 1.00 each in SSZ upon its incorporation, representing a 60% of the total issued and paid-up capital of SSZ for a total cash consideration of B 300,000 (equivalent to 156,000). The investment in SSZ was deemed completed on 9 July The addition of the above newly incorporated subsidiary had resulted in a decrease in the Group s net profit for the financial year 2014 by 28,492 and an increase in net assets by 138,874.

69 Success Transformer Corporation Berhad INVESTMENTS IN SUBSIDIARIES (cont d) (g) The non-controlling interests at the end of the reporting period comprise the following: The Group equity Interest 30 June 31 December 30 June 31 December % % SEB ,973,986 21,705,323 NSZ ,447,784 7,855,902 NSK ,984,115 2,350,058 Other individually immaterial subsidiaries - - 4,937,686 5,458,254 28,343,571 37,369,537 (h) The summarised financial information (before intra-group elimination) for each subsidiary, which has non-controlling interests that are material to the Group is as follows: SEB 30 June 31 December At 30 June / 31 December Non-current assets 49,030,500 57,524,922 Current assets 58,405,168 99,310,413 Non-current liabilities (9,739,867) (5,989,138) Current liabilities (72,055,841) (88,830,988) Net assets 25,639,960 62,015,209 Financial period/year ended 30 June / 31 December Revenue 129,167, ,970,418 (Loss) and total comprehensive (expenses) for the financial period/year (36,375,249) (5,631,368) Total comprehensive (expenses) attributable to non-controlling interests (12,731,337) (1,970,979) Dividends paid to non-controlling interests - 553,636 Net cash flows (used in) operating activities (10,689,218) (6,372,524) Net cash flows from/(used in) investing activities 4,732,892 (6,357,611) Net cash flows (used in)/from financing activities (3,643,861) 17,147,763

70 78 Success Transformer Corporation Berhad 7. INVESTMENTS IN SUBSIDIARIES (cont d) (h) The summarised financial information (before intra-group elimination) for each subsidiary, which has non-controlling interests that are material to the Group is as follows: (Cont d) nsz 30 June 31 December Non-current assets 8,084,819 5,800,331 Current assets 44,398,203 32,617,042 Current liabilities (21,363,562) (18,777,617) Net assets 31,119,460 19,639,756 Financial period/year ended 30 June / 31 December Revenue 142,430,939 79,375,746 Profit and total comprehensive income for the financial period/year 11,068,921 4,030,192 Total comprehensive income attributable to non-controlling interests 4,427,568 1,612,077 Dividends paid to non-controlling interests 314,484 - Net cash flows from operating activities 8,963,297 5,747,168 Net cash flows (used in) investing activities (5,563,705) (3,198,400) Net cash flows (used in) financing activities (125,380) (7,968) nsk 30 June 31 December Non-current assets 43, ,769 Current assets 4,063,875 4,951,520 Current liabilities (58,430) (351,253) Net assets 4,049,215 4,796,036 Financial period/year ended 30 June / 31 December Revenue 802,762 1,749,927 (Loss) and total comprehensive (expenses) for the financial period/year (919,425) (310,621) Total comprehensive (expenses) attributable to non-controlling interests (450,518) (152,204) Net cash flows from/(used in) operating activities 86,272 (444,527) Net cash flows (used in) investing activities - (298)

71 Success Transformer Corporation Berhad INVESTMENT IN JOINT VENTURE Group 30 June 31 December At Carrying Amount At 30 June 2016 / 31 December Details of joint venture are as follows: Equity Interest C country of 30 June 31 December Name of Joint Venture incorporation Principal Activities Groupage SEB Sdn. Bhd. Malaysia Dormant 50% 50% 9. INVESTMENT IN ASSOCIATES Group 30 June 31 December At Carrying Amount At 1 January 9,069,419 8,481,912 Addition 626, ,000 Reclassification (Note 7(d)) * 120,853 - Disposal (8,680,497) - Impairment losses on investment (300,000) - Share of post-acquisition (loss) Transfer to amount due to associate (Note 20) (402,503) 284,570 (12,493) - Exchange differences (23,274) - At 30 June / 31 December 695,468 9,069,419 Represented by: Unquoted shares in Malaysia - 9,069,419 Unquoted shares outside Malaysia 695, ,468 9,069,419 * Reclassified from a subsidiary to an associate as disclosed in Note 7(d).

72 80 Success Transformer Corporation Berhad 9. INVESTMENT IN ASSOCIATES (cont d) (a) Details of the investment in associates are as follows: Equity Interest C country of 30 June 31 December Name of Associates incorporation Principal Activities Selekta Spektra Sdn. Bhd. Malaysia A turnkey contractor providing - 40% ( SSSB ) landfill services, waste pre-treatment and waste excavation services. Nine Energy Sdn. Bhd. Malaysia Fabrication of process equipment 40% 40% ( NESB ) and metal structures, piping, auto or manual blasting and painting and the provision of maintenance, repair and shutdown services. Shenyang Success Zhenye People s Sales of lighting, plastics, glassess, 40% - Luminaire Limited Republic molds, electric and electronic Liabilities Company ( SSZ ) * of China equipments and parts. Zhongsan Success Zhenye People s Research and development and 40% - Luminaire Limited Republic sales of lighting fixtures, lamps Liabilities Company of China and offer electrical accessories ( ZSZ ) * and lighting equipment. Success Zhenye Luminaire People s Sales of lighting and decorative 40% - (Beijing) Limited Republic materials. Liabilities Company of China ( BSZ ) * * Share of results recognised by the Group based on unaudited financial statements as at 30 June 2016.

73 Success Transformer Corporation Berhad INVESTMENT IN ASSOCIATES (cont d) (b) The summarised financial information for each associate that is material to the Group is as follows: SSSB 30 September 31 December At 30 September / 31 December Non-current assets 6,841,522 10,283,937 Current assets 4,538,044 1,532,011 Non-current liabilities (1,463,894) (1,177,495) Current liabilities (5,499,678) (6,126,696) Net assets 4,415,994 4,511,757 SSSB Financial period/year ended 1 January 1 January to to 30 September 31 December Revenue 3,848,506 4,184,950 (Loss) for the financial period/year (95,762) (60,465) Total comprehensive (expenses) (95,762) (60,465) Group s share of (loss) for the financial period/year (38,305) (24,186) Group s share of other comprehensive (expenses) (38,305) (24,186) Reconciliation of net assets to carrying amount Group s share of net assets above 1,766,397 1,804,703 Goodwill 6,914,100 6,914,100 Disposal of investment in associate (8,680,497) - Carrying amount of the Group s interest in this associate - 8,718,803

74 82 Success Transformer Corporation Berhad 10. Property, plant and equipment Office Factory equipment, Capital Freehold Leasehold and shoplot Plant and Motor furniture work-in- Group 2016 land land buildings machinery vehicles and fittings progress Total At Cost At 1 January ,802,052 24,592,832 62,019,061 47,451,108 11,309,736 7,016,846 4,580, ,772,373 Additions ,005 7,627,142 3,847,734 2,181,174 5,113,951 19,471,006 Reclassifications - - 9,341, , ,229 (9,694,689) - Disposals (1,843,352) (4,589,868) (195,146) - (6,628,366) Write off (294,288) (186,342) (311,910) - (792,540) Transfer to investment properties - (9,286,725) (9,286,725) Exchange differences , , , ,014-1,808,804 At 30 June ,802,052 15,306,107 72,877,843 53,721,903 10,609,440 9,027, ,344,552 Less: Accumulated Depreciation At 1 January ,110,811 4,970,890 23,663,766 5,338,170 3,788,099-38,871,736 Charge for the financial period - 168,923 2,024,943 7,721,812 2,144,262 1,897,976-13,957,916 Disposals (862,252) (2,766,096) (67,039) - (3,695,387) Write off (158,242) (73,498) (270,918) - (502,658) Transfer to investment properties - (242,330) (242,330) Exchange differences , ,422 82,762 56, ,371 At 30 June ,037,404 7,044,836 30,617,506 4,725,600 5,404,302-48,829,648 Less: Impairment Loss At 1 January ,371-4,689-48,060 Impairment loss ,856 37,239 1, ,298 At 30 June ,856 80,610 1,203 4, ,358 Carrying Amount At 30 June ,802,052 14,268,703 65,489,151 23,023,787 5,882,637 3,618, ,084,546

75 Success Transformer Corporation Berhad Property, plant and equipment (cont d) Office Factory equipment, Capital Freehold Leasehold and shoplot Plant and Motor furniture work-in- Group 2014 land land buildings machinery vehicles and fittings progress Total At Cost At 1 January ,056,452 24,592,832 61,450,593 47,263,425 8,998,199 8,269, , ,465,756 Additions - - 1,056,351 7,586,226 3,207,853 1,237,159 3,745,978 16,833,567 Reclassifications - - (13,500) (32,389) 136,500 (90,611) - - Disposals (254,400) - (606,341) (142,541) (1,034,286) (29,711) - (2,067,279) Write off (7,680,634) (54,064) (2,421,666) - (10,156,364) Exchange differences , ,021 55,534 52, ,693 At 31 December ,802,052 24,592,832 62,019,061 47,451,108 11,309,736 7,016,846 4,580, ,772,373 Less: Accumulated Depreciation At 1 January ,813 3,708,227 26,725,562 4,735,973 5,312,315-41,321,890 Charge for the financial year - 270,998 1,271,968 4,483,154 1,328, ,634-8,295,520 Reclassifications - - (13,500) (62,906) 114,012 (37,606) - - Disposals - - (3) (92,306) (808,394) (27,390) - (928,093) Write off (7,535,512) (54,063) (2,421,131) - (10,010,706) Exchange differences - - 4, ,774 21,876 21, ,125 At 31 December ,110,811 4,970,890 23,663,766 5,338,170 3,788,099-38,871,736 Less: Impairment Loss At 1 January Addition ,371-4,689-48,060 At 31 December ,371-4,689-48,060 Carrying Amount At 31 December ,802,052 23,482,021 57,048,171 23,743,971 5,971,566 3,224,058 4,580, ,852,577

76 84 Success Transformer Corporation Berhad 10. Property, plant and equipment (cont d) (a) The following property, plant and equipment of the Group are charged against loans and borrowings (Note 27): Group 30 June 31 December At Carrying Amount Freehold land 20,801,651 20,802,051 Leasehold land 13,922,788 13,989,928 Factory and shoplot buildings 64,315,394 56,061,118 Plant and machinery 471, ,591 99,511,374 91,610,688 (b) The following property, plant and equipment of the Group are subject to hire purchase agreements (Note 28): Group 30 June 31 December At Carrying Amount Motor vehicles 3,366,351 4,017,974 Plant and machinery 1,543,450 1,173,256 4,909,801 5,191,230 (c) There is no property, plant and equipment in the Company throughout the current financial period and previous financial year.

77 Success Transformer Corporation Berhad INVESTMENT PROPERTIES Group 30 June 31 December At Cost At 1 January 13,035,502 13,035,502 Addition 6,883,400 - Transfer from property, plant and equipment 9,286,725 - At 30 June / 31 December 29,205,627 13,035,502 Less: Accumulated Depreciation At 1 January 272, ,472 Charge for the financial period/year 177,169 85,536 Transfer from property, plant and equipment 242,330 - At 30 June / 31 December 691, ,008 Carrying Amount At 30 June / 31 December 28,514,120 12,763,494 (a) (b) Investment properties of the Group with carrying amount of 1,070,577 (31 December 2014 : 1,186,179) are charged against loans and borrowings (Note 27). The rental income earned by the Group from its investment properties, all of which are leased out under operating lease, amounted to 189,260 (31 December 2014 : 137,000). Direct operating expenses arising from the rentalearning investment properties amounted to 29,162 (31 December 2014 : 5,396).

78 86 Success Transformer Corporation Berhad 11. INVESTMENT PROPERTIES (cont d) (c) The carrying amount of investment properties held by the Group as at the end of the reporting period are as follows: Group 30 June 31 December Name of Property Description Tenure of Land Bandar Sunway, 1 unit of 99 years lease from 714, ,552 Petaling Jaya, 1 1/2 storey light 29 December 1998 Selangor industrial (82 years remaining) terrace factory Senawang Light 1 unit of single 90 years lease 87,893 90,352 Industrial Estate, storey terrace from 1 June 1985 Negeri Sembilan factory (60 years remaining) Mukim Ulu Yam Industrial land Freehold 5,340,513 5,340,513 Bandar Kundang Selangor Agriculture land 99 years lease from 6,136,208 6,236,802 4 November 2009 (93 years remaining) Taman Industri, 1 unit of 1 1/2 storey 99 years lease from 356, ,275 Sg. Buloh, Selangor terrace factory 24 March 1993 (77 years remaining) Mukim Pasir Panjang Agricultural land Freehold 6,294,399 - Pekan Subang, Selangor 3 pieces of leasehold 99 years lease from 8,997,493 - land 19 July 2012 (95 years remaining) Bandar Bukit Puchong, 1 unit of 99 years lease from 587,037 - Selangor condominium 10 October 2007 (90 years remaining) 28,514,120 12,763,494

79 Success Transformer Corporation Berhad GOODWILL ON CONSOLIDATION Group 30 June 31 December Cost At 1 January 7,763,479 7,763,479 Acquisition of a subsidiary - - At 30 June / 31 December 7,763,479 7,763,479 Less: Accumulated Impairment Losses At 1 January - - Impairment during the financial period/year 147,241 - At 30 June / 31 December 147,241-7,616,238 7,763,479 Impairment Testing of Goodwill Goodwill arising from business combinations has been allocated to each cash-generating unit ( CGU ) for impairment testing on an annual basis by comparing the carrying amount with the recoverable amount of the CGU based on value-inuse. Value-in-use is determined by discounting the future cash flows to be generated from the continuing use of the CGU based on the following assumptions: Cash flows are projected based on the management s five-year business plan. Discount rates used for cash flows discounting purpose are the pre-tax discount rate which reflects specific risks relating to the relevant operating segments. The discount rate applied for cash flow projection is 5.09% (31 December 2014 : 7.23%). Growth rate for the CGU is determined based on the management s estimate of the industry trends and past performances of the CGU. The management is not aware of any reasonably possible change in the above key assumptions that would cause the carrying amounts of the CGU to materially exceed their recoverable amounts.

80 88 Success Transformer Corporation Berhad 13. DEFERRED TAX ASSETS/(LIABILITIES) Deferred tax assets and liabilities are offset where there is a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred taxes relate to the same tax authority. The following amounts determined after appropriate offsetting, are shown in the statements of financial position. Group 30 June 31 December At 1 January (2,809,423) (4,707,710) Recognised in profit or loss - Accelerated capital allowance 433,120 1,520,316 - Allowance for impairment loss on receivables (463,564) - - Overprovision in prior years 253, ,970 - Exchange differences 22,547 13,066 - Others 144, ,935 At 30 June / 31 December (2,418,466) (2,809,423) Presented after appropriate offsetting as follow: Deferred tax assets 346, ,263 Deferred tax liabilities (2,764,882) (3,242,686) At 30 June / 31 December (2,418,466) (2,809,423) Detailed components of deferred tax assets/(liabilities) as follow: Deferred tax assets (before offsetting) Property, plant and equipment - accelerated capital allowances ,463 Allowance for impairment loss on receivables 163, ,521 Others 2,574,541 2,314,404 2,738,555 3,086,388 Offsetting (2,392,139) (2,653,125) Deferred tax assets (after offsetting) 346, ,263 Deferred tax liabilities (before offsetting) Property, plant and equipment - accelerated capital allowances (4,670,722) (5,642,096) Others (486,299) (253,715) (5,157,021) (5,895,811) Offsetting 2,392,139 2,653,125 Deferred tax liabilities (after offsetting) (2,764,882) (3,242,686)

81 Success Transformer Corporation Berhad INVENTORIES Group 30 June 31 December At Cost Raw materials 72,084,029 57,556,312 Work-in-progress 21,070,780 24,547,119 Finished goods - Trading 13,921,201 13,815,854 - Manufactured 21,613,833 23,627, ,689, ,546,596 At Net Realisable Value Raw materials ,031 Work-in-progress 1,328,012 1,310,778 Finished goods 215,503-1,544,389 1,868, ,234, ,415,405 Recognised in Profit or Loss Inventories recognised as cost of sales 285,261, ,528,789 Amount written down to net realisable value 5,004,180 3,504,509 Reversal of inventories written down (1,214,418) (1,282,321) 15. TRADE RECEIVABLES Group 30 June 31 December Trade receivables 125,322,750 93,866,164 Less: Allowance for impairment losses - collective impairment (310,602) (1,883,077) - individual impairment (9,894,881) (780,245) 115,117,267 91,202,842

82 90 Success Transformer Corporation Berhad 15. TRADE RECEIVABLES (cont d) Group 30 June 31 December Allowance for Impairment Losses: At 1 January 2,663,322 2,577,263 Addition 7,394, ,416 Reclassification from amount due from related parties 2,122,250-12,180,067 2,870,679 Less: Reversal (1,973,118) (207,357) Exchange differences (1,466) - At 30 June / 31 December 10,205,483 2,663,322 (a) (b) The Group s trade receivables are non-interest bearing and are generally on credit terms ranging from 7 to 150 days (31 December 2014 : 7 to 150 days) from invoice date or the first day of the immediate following month after sales invoice date, whichever applicable. Other credit terms are assessed and approved on a case-by-case basis. Included in trade receivables are retention sums of 1,405,208 (31 December 2014 : 4,345,447). The retention sums are unsecured, interest-free and are generally on credit terms up to 365 days (31 December 2014 : 365 days). 16. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS Group company 30 June 31 December 30 June 31 December Other receivables Non-current Non-trade balances 690, Current Sundry receivables 4,099,891 2,172,867 4,315 - Less : Allowance for impairment losses - collective (179,775) individual (606,071) (485,106) - - 3,314,045 1,687,761 4,315 - Deposits to suppliers 3,446,161 4,261, ,760,206 5,949,493 4,315 - Deposits 2,159,906 2,912, ,608 1,000 Prepayments 1,112,887 1,115, ,032,999 9,978, ,923 1,000

83 Success Transformer Corporation Berhad OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (cont d) Group company 30 June 31 December 30 June 31 December Allowance for Impairment Losses: At 1 January 485,106 6, Addition 300, , At 30 June / 31 December 785, , The deposits to suppliers are unsecured and interest-free. The amount owing will be offset against future purchases from the suppliers. 17. AMOUNT DUE FROM CONTRACT CUSTOMERS Group 30 June 31 December Aggregate costs incurred to date 170,050,288 92,692,583 Add: Attributable (losses)/profits (12,708,223) 4,145, ,342,065 96,837,595 Less: Progress billings (156,757,634) (77,746,854) 584,431 19,090,741 Breakdown into: Amount due from contract customers 1,271,727 29,491,377 Amount due (to) contract customers (687,296) (10,400,636) 584,431 19,090,741

84 92 Success Transformer Corporation Berhad 18. AMOUNT DUE FROM/(TO) SUBSIDIARIES company 30 June 31 December Amount due from subsidiaries Non-Current Non-trade balances 5,006,628 6,423,388 Current Trade balance 1,624, ,000 Non-trade balances 10,108,289 50,919 Less: Allowance for impairment losses - individual (9,000) (9,000) 11,723, ,919 16,729,917 7,315,307 Allowance for impairment losses: At 1 January 9,000 - Addition - 9,000 At 30 June / 31 December 9,000 9,000 Amount due to subsidiaries Current Non-trade balances 6,209,231 3,335,685 (a) (b) The amount due from/to subsidiaries of the Company are unsecured, interest free and repayable on demand. Amount due from subsidiaries that are individually determined to be impaired relate to subsidiaries that have been suffered significant financial losses. 19. AMOUNT DUE FROM JOINT VENTURE Group 30 June 31 December Amount due from joint venture Current Non-trade balances 65,407 65,407 The amount due from joint venture is unsecured, interest free and repayable on demand.

85 Success Transformer Corporation Berhad AMOUNT DUE FROM/(TO) ASSOCIATES Group 30 June 31 December Amount due from associates Non-Current Non-trade balances - 765,000 Current Trade balances 405,190 1,644,772 Less: Allowance for impairment losses - collective (2,026) (136,171) 403,164 1,508,601 Non-trade balances - 190, ,164 1,699, ,164 2,464,523 Allowance for impairment losses: At 1 January 136,171 - Addition 2, ,171 Reversal (136,171) - Exchange differences (68) 1 At 30 June / 31 December 2, ,172 Amount due to an associate Current Trade balances - 641,075 Current Non-trade balances 284,570 - (a) The trade amount due from associates are non-interest bearing and generally on credit terms ranging from 45 to 90 days (31 December 2014 : 7 to 150 days) from invoice date or the first day of the immediate following month after sales invoice date, whichever applicable. (b) (c) (d) The non-trade amount due from an associate is subject to an interest of 5% per annum and is expected to be collected within periods ranging from 25 to 64 months. This debt has been impaired and reclassified as sundry receivables subsequent to the disposal of the associate during the period. The trade amount due to an associates is unsecured, interest free and repayable on demand. The non-trade amount due to an associate arises from the Group s obligation in respect of its share of losses in the associate (Note 9).

86 94 Success Transformer Corporation Berhad 21. AMOUNT DUE FROM/(TO) RELATED PARTIES Group 30 June 31 December Amount due from related parties Current Trade balances 2,368,882 4,612,504 Less : Allowance for impairment losses - collective (1,440) - - individual (24,543) (2,146,793) 2,342,899 2,465,711 Non-trade balances 482,626-2,825,525 2,465,711 Allowance for impairment losses: At 1 January 2,146,793 2,122,250 Reclassification to trade receivables (2,122,250) - Addition 1,488 24,543 Exchange differences (48) - At 30 June / 31 December 25,983 2,146,793 Amount due to related parties Current Trade balances 2,029,192 2,266,915 Non-trade balances - 151,240 2,029,192 2,418,155 (a) The trade amount due from related parties are non-interest bearing and are generally on credit terms ranging from 7 to 150 days (31 December 2014 : 7 to 150 days) from invoice date or the first day of the immediate following month after sales invoices date, whichever applicable. (b) The trade amount due to related parties are ranging from 30 to 120 days (31 December 2014 : 30 to 120 days) from invoice date or the first day of the immediate following month after purchases invoice date, whichever applicable. (c) The non-trade amount due from/to related parties are unsecured, interest free and repayable on demand.

87 Success Transformer Corporation Berhad SHORT-TE INVESTMENTS Group 30 June 31 December At Fair Value Equity fund unit trust in Malaysia 1,817,018 1,151,274 Market value of short-term investments 1,817,018 1,151, DEPOSITS PLACED WITH LICENSED BANK Group 30 June 31 December Fixed deposits placed with licensed banks 1,226,149 1,172,852 Short term deposits placed with licensed banks 104,109 9,384,693 1,330,258 10,557,545 (a) (b) Fixed deposits and short term deposits placed with licensed banks of the Group amounting to 1,226,149 and 100,270 (31 December 2014 : 1,172,852 and NIL) respectively are pledged against loans and borrowings (Note 27). The effective interest rates (per annum) of deposits placed with licensed banks at the end of the reporting period are as follows : Group 30 June 31 December % % Fixed deposits Short term deposits (c) The maturity period at the end of the reporting period are as follows: Group 30 June 31 December Days Days Fixed deposits Short term deposits

88 96 Success Transformer Corporation Berhad 24. SHARE CAPITAL Group and Company 30 June December 2014 Number of number of shares shares Authorised: Ordinary shares of 0.50 each 200,000, ,000, ,000, ,000,000 Issued and fully paid-up: Ordinary shares of 0.50 each 120,000,000 60,000, ,000,000 60,000,000 The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company, and are entitled to one vote per share at meetings of the Company. 25. TREASURY SHARES Group and Company 30 June 31 December At Cost At 1 January 4,292,933 3,800,082 Buy back 2,169, ,851 At 30 June/ 31 December 6,462,197 4,292,933 The shareholders of the Company, by an ordinary resolution passed in the Annual General Meeting held on 24 June 2015, renewed their approval for the Company s plan to repurchase its own shares up to 10% of the issued and paid-up share capital of the Company ( Share Buy Back ). The directors of the Company are committed in enhancing the value of the Company to its shareholders and believe that the Share Buy Back can be applied in the best interests of the Company and its shareholders.

89 Success Transformer Corporation Berhad TREASURY SHARES (Cont d) During the financial period, the Company repurchased its treasury shares in its issued ordinary shares from the open market as follows: Buy Back average purchase price per C cost Highest Lowest share N no. of Shares February ,000 14, March ,000 78, April ,000 31, May , , June , , July , , August , , June , , ,318,700 2,169,264 The transactions of Share Buy Back were financed by internally generated funds. The shares bought back are held as treasury shares in accordance with Section 67A Subsection 3(A)(b) of the Companies Act None of the treasury shares held was cancelled during the financial period ended 30 June Out of total 120,000,000 issued and fully paid ordinary shares of 0.50 each at 30 June 2016, 4,955,477 (31 December 2014 : 3,636,777) ordinary shares are held as treasury shares by the Company. Therefore, the number of outstanding ordinary shares in issue and fully paid is 115,044,523 (31 December 2014 : 116,363,223) ordinary shares of 0.50 each. 26. RESERVES Group company 30 June 31 December 30 June 31 December Non-Distributable Share premium 1,267,803 1,267,803 1,267,803 1,267,803 Translation reserve 2,963,522 2,432, Capital reserve 7,789,739 3,544, Distributable Retained profits 199,743, ,855,145 44,855,453 44,706, ,765, ,100,043 46,123,256 45,974,520

90 98 Success Transformer Corporation Berhad 26. RESERVES (cont d) (a) Share Premium Share premium represents the resultant premium arising from the issue of new shares pursuant to the public issue and surplus arising from resale of treasury shares. (b) Translation Reserve The foreign currency translation reserve arose from the translation of the financial statements of foreign subsidiaries and is not distributable by way of dividends. It is also used to record the exchange differences arising from monetary items which form part of the Group s net investment in foreign subsidiaries, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign subsidiaries. (c) Capital Reserve The capital reserve comprises the equity portion of bonus shares issued by a subsidiary (Note 7(b)). 27. LOANS AND BORROWINGS Group company 30 June 31 December 30 June 31 December Current Secured - Bank overdrafts 736,871 1,537, Revolving credit 35,000,000 27,717,478 9,000, Trade bills 25,275,882 44,437, Term loans 4,426,674 3,737, ,439,427 77,429,408 9,000,000 - Non-Current Secured - Term loans 24,833,705 23,538, ,273, ,967,872 9,000,000 - (a) Loans and borrowings of the Group are secured by way of: (i) (ii) (iii) (iv) Charge over certain property, plant and equipment (Note 10(a)) and certain investment properties (Note 11(a)); Corporate guarantee provided by the Company; Deposits of the Group with licensed banks (Note 23(a)); and Joint and several guarantees by certain directors of a subsidiary.

91 Success Transformer Corporation Berhad LOANS AND BORROWINGS (b) The effective interest rates (per annum) for loans and borrowings at the end of the reporting period were as follows: Group company 30 June 31 December 30 June 31 December % % % % Bank overdraft Revolving credit Trade bills Term loans (c) The term loans are repayable by 60 to 300 (31 December 2014 : 60 to 300) equal monthly instalments. At the end of the reporting period, they are repayable as follows: Group 30 June 31 December Current Not later than one year 4,426,674 3,737,514 Non-Current Later than one year and not later than two years 3,406,482 3,904,153 Later than two years and not later than five years 8,550,933 9,325,356 Later than five years 12,876,290 10,308,955 24,833,705 23,538,464 29,260,379 27,275,978

92 100 Success Transformer Corporation Berhad 28. HIRE PURCHASE PAYABLES At the end of the reporting period, the outstanding hire purchase obligations are repayable as follow: Group 30 June 31 December Minimum hire purchase payments: Not later than one year 1,389,718 1,307,052 Later than one year and not later than five years 2,293,057 2,638,511 Later than five years 53,849 19,423 3,736,624 3,964,986 Less: Unexpired term charges (327,512) (416,407) Present value of hire purchase payables 3,409,112 3,548,579 Principal amount outstanding: Current 1,219,997 1,139,860 Non-Current 2,189,115 2,408,719 3,409,112 3,548,579 The effective interest rates of the hire purchase obligations at the end of the reporting period are 2.3% % (31 December 2014 : 2.3% %) per annum. 29. TRADE PAYABLES The normal trade terms granted to the Group are ranging from 30 to 120 days (31 December 2014 : 30 to 120 days) from invoice date or the first day of the immediate following month after purchases invoice date, whichever applicable. 30. OTHER PAYABLES AND ACCRUALS Group company 30 June 31 December 30 June 31 December Advance payment from customers 12,008,947 5,266, Accruals 14,929,597 18,798, , ,024 Sundry payables 7,002,480 5,787,702 36,269 54,690 33,941,024 29,853, , ,714

93 Success Transformer Corporation Berhad REVENUE Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December Dividend income - - 9,271,726 4,740,000 Management fee income - - 3,600,000 2,400,000 Invoiced value of goods sold net of discounts and return 426,267, ,904, Invoiced value of process equipment sold 70,961,709 36,587, Invoiced value of maintenance and shutdown services 3,043,967 2,403, Contract revenue 72,677,678 83,519, ,950, ,414,578 12,871,726 7,140, FINANCE COSTS Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December Interest on: Bank overdraft 142,149 67, Hire purchase 304, , Term loans 2,121,081 1,408, Trade bills 2,531,401 1,191, Revolving credit 2,316, ,942 87,630 10,091 7,415,442 3,576,613 87,630 10,108 Bank charges 513, ,121 3, Commitment fee 198, , , ,272 8,127,715 4,092, , ,552

94 102 Success Transformer Corporation Berhad 33. PROFIT BEFORE TAX Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December This is arrived at after charging: Allowance for impairment loss of receivables: - collective impairment 231, , individual impairment 7,453, ,968-9,000 Auditors remuneration: - statutory audit 713, , ,350 40,000 - under/(over) provision in prior year 32,640 (10,789) 5,000 3,700 - other services 6,500 4,516 6,500 4,000 Bad debts written off 281,580 99, Deposit written off 5, Depreciation of investment properties 177,169 85, Depreciation of property, plant and equipment 13,957,916 8,295, Foreseeable loss from contract customers - 4,662, Impairment of goodwill 147, Impairment loss of investment in associates 300, Impairment loss of investment in subsidiaries - - 1,521,457 78,523 Impairment loss of property, plant and equipment 382,298 48, Loss on disposal of property, plant and equipment 106, Loss on inventory 117, Property, plant and equipment written off 289, ,

95 Success Transformer Corporation Berhad PROFIT BEFORE TAX (cont d) Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December This is arrived at after charging (Cont d): Rental expenses : - office 1,240, , hostel 175, , factory 2,476,097 1,409, crane 110,352 4,348, gas cylinder - 8, forklift 18, , machine 21,372 1,185, motor vehicle - 87, equipment 3,016,123 6,193, skylift Reversal of accrued interest 104, Research and development expenses 8,800,527 4,330, Unrealised loss on foreign exchange - 980, Write down of inventories 5,004,180 3,504, Inventories written off 44, And crediting: Bad debts recovered (2,350) Export allowance/incentives - (246,372) - - Interest income (464,048) (363,410) (172,880) - Gain on disposal of investment in associate (1,319,503) Gain from waiver of debts (9,411,230) Gain on disposal of property, plant and equipment - (368,318) - - Gain on foreign exchange - realised (1,129,877) (772,313) (197,496) (11,480) - unrealised (2,700,838) - - (8,654) Gain on disposal of a subsidiary that retained as an associate (2,263) Government grants (525,385) Insurance compensation - (43,455) - - Rental income (502,886) (378,290) - - Reversal of allowance for impairment loss of trade receivables (2,109,289) (207,357) - - Reversal of inventories write down (1,214,418) (1,282,321) - -

96 104 Success Transformer Corporation Berhad 34. DIRECTORS REMUNERATION Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December Directors of the Company Executive Directors: Fees 271, , ,667 90,000 Salaries and other emoluments 2,542,555 1,530, Defined contribution plan ( EPF ) 385, , Bonus and incentive 3,589,940 1,429, ,789,165 3,319, ,667 90,000 Benefits-in-kind 68,825 36, ,857,990 3,355, ,667 90,000 * Non-executive Directors: Fees 283, , , ,000 Salaries and other emoluments - 271, EPF - 32, Bonus and incentive 225, , , , , ,000 Benefits-in-kind - 19, , , , ,000 7,366,657 4,120, , ,000 Directors of the subsidiaries Fees 338, , Salaries and other emoluments 4,569,465 2,537, EPF 496, , Bonus and incentive 1,173, , ,577,751 3,499, Benefits-in-kind 98,654 68, ,676,405 3,567, Total Directors Remunerations 14,043,062 7,687, , ,000 * Included in the non-executive directors remunerations are remuneration paid to certain directors who are executive directors of subsidiaries amounting to NIL (31 December 2014 : 365,164).

97 Success Transformer Corporation Berhad EMPLOYEE BENEFITS Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December Executive Directors Remuneration (excluding benefits-in-kind) (Note 34) 13,366,917 6,818, ,667 90,000 Other Staff Costs Wages, salaries and bonuses 74,523,480 44,223, ,000 EPF 7,696,760 3,711, Other benefits 11,534,112 6,399,362 5,200 4,530 93,754,352 54,334,275 5, ,530 Total Staff Costs 107,121,169 61,152, , , TAX EXPENSE Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December (a) Components of tax expense Current tax expense: - Malaysian income tax 20,946,452 10,336, , ,909 - Foreign income tax 3,573,383 1,615, Deferred tax expense relating to origination of temporary differences 28,895 (1,748,251) - - Effect of change in corporate income tax rate from 25% to 24% (143,343) Witholding tax 471, ,726 - Real property gain tax - 22, (Over)provision in prior years: - current tax - deferred tax (823,577) (253,962) (53,682) (136,970) (10,445) - (9,357) - 23,799,574 10,034,708 1,170, ,552

98 106 Success Transformer Corporation Berhad 36. TAX EXPENSE (cont d) Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December (b) Reconciliation of income tax expense Profit before tax 50,416,490 35,811,612 10,585,041 15,694,454 Tax at statutory income tax rate of 24% (2014 : 25%) 12,139,543 8,952,953 2,540,410 3,923,614 Tax effect of: - different tax rates in other countries 9,913 (113,356) non-deductible expenses 3,593,226 1,327, ,729 65,136 - expenses available for double deduction (399,966) (196,654) non-taxable expenses Effect of change in corporate income tax rate from 25% to 24% (715,781) (143,343) (31,130) - (2,225,214) - (3,542,841) - Tax saving from utilisation of tax incentives (82,549) (110,840) - - Deferred tax assets not recognised during the period/year 10,004, , Effect of different tax rate on capital gain - (38,000) - - Witholding tax 471, ,726 - Under/(Over)provision in prior years: - current tax - deferred tax (823,577) (253,962) (53,682) (136,970) (10,445) - (9,357) - 23,799,574 10,034,708 1,170, ,552 (c) Subject to the agreement of the Inland Revenue Board, at 30 June / 31 December, the Group has deferred tax assets not recognised in the financial statements for the following items under the liability method: Group 18 Months Financial Financial Period Ended Year Ended 30 June 31 December Unutilised reinvestment allowances 974,000 1,257,000 Unutilised tax losses 11,840,489 7,271,940 Unabsorbed capital allowances 2,408,830 2,138,937 15,223,319 10,667,877

99 Success Transformer Corporation Berhad EARNINGS PER ORDINARY SHARE (a) Basic Earnings Per Ordinary Share Basic earnings per ordinary share is calculated by dividing the profit after tax attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial period/year, excluding treasury shares held by the Company. Group 18 Months Financial Financial Period Ended Year Ended 30 June 31 December Profit after tax attributable to owners of the Company 35,612,936 24,667,638 Units Units Weighted average number of ordinary shares in issue 115,703, ,624,481 Basic earnings per ordinary share (sen) (b) Diluted Earnings Per Ordinary Share The diluted earnings per share of the Group were not presented as there was no dilute potential ordinary shares during the financial period. 38. ACQUISITION OF NON-CONTROLLING INTERESTS On 1 October 2015, the Company acquired an additional 5% equity interest in Daiichi Steel Sdn. Bhd. ( DS ) for 185,319 in cash, increasing its ownership from 75% to 80%. The carrying amount of DS s net assets in the Group s financial statements on the date of the acquisition was 2,263,566. The Group recognised a decrease in non-controlling interests of 113,178 and a decrease in retained profits of 72,141. On 1 October 2015, the Company acquired an additional 5% equity interest in Omega Metal Industries Sdn. Bhd. ( OMI ) for 232,185 in cash, increasing its ownership from 65% to 70%. The carrying amount of OMI s net assets in the Group s financial statements on the date of the acquisition was 1,836,744. The Group recognised a decrease in noncontrolling interests of 91,837 and a decrease in retained profits of 140,348.

100 108 Success Transformer Corporation Berhad 38. ACQUISITION OF NON-CONTROLLING INTERESTS (Cont d) The following summarises the effect of changes in the equity interests in DS and OMI that is attributable to the owners of the Company. DS OMI Total Equity interest at 1 October ,697,674 1,193,884 2,891,558 Effect of increase in the Company s ownership interest 113,178 91, ,015 Share of post acquisition profit/(loss) 25,237 (648,161) (622,924) Equity interest at 30 June ,836, ,560 2,473, DIVIDENDS Group 18 Months Financial Financial Period Ended Year Ended 30 June 31 December In respect of the financial year ended 31 December 2014 Interim single-tier dividend of 8% equivalent to 4 sen per ordinary share on 116,664,223 ordinary shares of 0.50 each - 4,666,569 In respect of the financial period ended 30 June 2016 First interim single-tier dividend of 8% equivalent to 4 sen per ordinary share on 116,285,223 ordinary shares of 0.50 each 4,651,674 - Second interim single-tier dividend of 8% equivalent to 4 sen per ordinary share on 115,360,623 ordinary shares of 0.50 each 4,614,425-9,266,099 4,666, RELATED PARTY DISCLOSURES (a) Identities of Related Parties Parties are considered to be related to the Group or the Company if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. In addition to the information detailed elsewhere in the financial statements, the Group has related party relationships with its directors, key management personnel and entities within the same group of companies.

101 Success Transformer Corporation Berhad RELATED PARTY DISCLOSURES (cont d) (b) Significant Related Party Transactions and Balances Other than those disclosed elsewhere in the financial statements, the Group and the Company also carried out the following significant transactions with the related parties during the financial period/year: Group company 18 Months 18 Months Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December Subsidiaries - Rendering of services - - (3,600,000) (2,400,000) - Dividend income - - (9,271,726) (4,740,000) Associates - Sale of goods (91,533) Supply of labour service 1,269,625 1,662, Other directors interest - Sale of goods (4,625,825) (2,980,815) Purchase of goods 9,946,118 1,058, Supply of labour services 157,222 99, Rental of factory 609, , Rental of machinery 184, , The significant outstanding balances of the related parties (including the allowance for impairment loss made) together with their terms and conditions are disclosed in the respective notes to the financial statements.

102 110 Success Transformer Corporation Berhad 40. RELATED PARTY DISCLOSURES (cont d) (c) Compensation of Key Management Personnel Key management personnel (include the Group and the Company s executive and non-executive directors) are defined as those persons having authority and responsibility for planning directly and controlling the activities of the Company whether directly or indirectly. The remuneration of directors and other members of key management personnel during the financial period/year was as follows: Group 18 Months Financial Financial Period Ended Year Ended 30 June 31 December Short-term employee benefits 15,739,386 8,861,775 EPF 1,320, ,149 17,059,625 9,558,924 Included in the total key management personnel compensation are: - Directors of the Group and of the Company (Note 34) 13,875,583 7,563,621 - Other key management personnel: Short-term employee benefits 2,745,002 1,805,307 EPF 439, ,996 3,184,042 1,995,303 17,059,625 9,558,924 The remuneration of key management personnel are determined by the remuneration committee having regard to the performance of individuals and market trends.

103 Success Transformer Corporation Berhad OPERATING SEGMENTS Operating segments are prepared in a manner consistent with the internal reporting provided to the Group Executive Committee as its chief operating decision maker in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on their products and services provided: The Group comprises the following business segments as follows: Business Segments Transformer, lighting and related products Process equipment Business Activities Manufacturing and marketing of electrical apparatus industrial lighting and metal products focusing on metal casing and stamping parts. Fabrication of process equipment and metal structures and the provision of maintenance, repair and shutdown works. The Group Executive Committee assesses the performance of the operating segments based on operating profit or loss which is measured differently from those disclosed in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments. Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments are presented under unallocated items. Unallocated items comprise mainly deferred tax assets and liabilities, tax recoverable, tax liabilities and corporate assets (primarily the Company s headquarters) and head office expenses.

104 112 Success Transformer Corporation Berhad 41. OPERATING SEGMENTS (Cont d) (a) Business Segments Transformer, lighting and related Process products equiptment Eliminations Consolidated At 30 June 2016 Revenue - external sales 426,267, ,683, ,950,686 - inter-segment sales 63,430 - (63,430) - Total revenue 426,330, ,683,354 (63,430) 572,950,686 Segment results 91,354,606 (31,932,603) - 59,422,003 Share of loss of associates (29,011) (373,492) - (402,503) 91,325,595 (32,306,095) - 59,019,500 Unallocated corporate expenses Finance cost Interest income (939,343) (8,127,715) 464,048 Profit before tax 50,416,490 Tax expense (23,799,574) Profit for the financial period 26,616,916 Attributable to : Owners of the Company 35,612,936 Non-controlling interests (8,996,020) 26,616,916 Other information : Segment assets 346,538, ,680, ,219,310 Unallocated assets 3,241,206 Consolidated total assets 475,460,516 Segment liabilities 87,402,690 83,973, ,376,244 Unallocated liabilities 10,437,879 Consolidated total liabilities 181,814,123 Other information : Capital expenditure 12,286,296 7,184,710-19,471,006 Depreciation of property, plant and equipment ,505 3,747,411-13,957,916 Depreciation of investment properties 174,710 2, ,169 Non-cash expenses 1,345,872 6,068,932-7,414,804 (other than amortisation and depreciation)

105 Success Transformer Corporation Berhad OPERATING SEGMENTS (Cont d) (a) Business Segments (Cont d) Transformer, lighting and related Process products equiptment Eliminations Consolidated At 31 December 2014 Revenue - external sales 248,904, ,510, ,414,578 - inter-segment sales 30,931 - (30,931) - Total revenue 248,935, ,510,336 (30,931) 371,414,578 Segment results 46,296,846 (6,082,618) - 40,214,228 Share of loss of associates - (12,493) - (12,493) 46,296,846 (6,095,111) - 40,201,735 Unallocated corporate expenses Finance cost Interest income (660,991) (4,092,542) 363,410 Profit before tax 35,811,612 Tax expense (10,034,708) Profit for the financial year 25,776,904 Attributable to : Owners of the Company 24,667,638 Non-controlling interests 1,109,266 25,776,904 Other information: Segment assets 297,896, ,560, ,456,243 Unallocated assets 3,321,456 Consolidated total assets 472,777,699 Segment liabilities 86,448, ,982, ,430,160 Unallocated liabilities 5,170,892 Consolidated total liabilities 194,601,052 Other information : Capital expenditure 9,208,734 7,624,833-16,833,567 Depreciation of property, plant and equipment 5,789,084 2,506,436-8,295,520 Depreciation of investment properties 83,896 1,640-85,536 Non-cash expenses 3,109,807 5,417,277-8,527,084 (other than amortisation and depreciation)

106 114 Success Transformer Corporation Berhad 41. OPERATING SEGMENTS (Cont d) (b) Geographical Information Revenue total Assets Total Capital Expenditure 18 Months 18 Months 18 Months Financial Financial Financial Financial Financial Financial Period Ended Year Ended Period Ended Year Ended Period Ended Year Ended 30 June 31 December 30 June 31 December 30 June 31 December Malaysia 451,820, ,600, ,522, ,327,244 13,621,875 12,059,673 People s Republic of China 143,959,445 80,156,390 54,891,953 41,527,719 4,813,885 3,775,057 Other countries 60,165,155 30,574,021 35,622,377 36,790,246 1,035, ,837 Eliminations (82,994,740) (46,915,894) (87,576,775) (67,867,510) - - Consolidated 572,950, ,414, ,460, ,777,699 19,471,006 16,833,567 (c) Major Customers The following are major customers with revenue equal to or more than 10% of the Group s total revenue : Revenue 18 Months Financial Financial Period Ended Year Ended 30 June 31 December Segment Customer A - 50,760,063 Process equipment

107 Success Transformer Corporation Berhad capital COMMITMENT At the end of the reporting period, the capital expenditure contracted but not provided for in the financial statements are as follows: Group 30 June 31 December Approved and contracted for: Purchase of property, plant and equipment - 3,232, CONTINGENT LIABILITIES No provisions are recognised on the following matters as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement: Group company 30 June 31 December 30 June 31 December Secured Bank guarantees issued to third parties 3,281,797 6,281, Unsecured Corporate guarantee to financial institution for banking facilities granted to subsidiaries ,468,000 44,826,000 At the end of the reporting period, certain subsidiaries have banking facilities from licensed banks which are guaranteed by the Company. Accordingly, the Company is contingently liable to the extent of the outstanding banking facilities of the said subsidiaries.

108 116 Success Transformer Corporation Berhad 44. FINANCIAL INSTRUMENTS The Group s activities are exposed to variety of market risks (including foreign currency risk, interest rate risk), credit risk and liquidity risk. The Group s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group s financial performance. (a) Financial Risk Management Policies The following sections provide details on the Group s and the Company s exposure to the abovementioned financial risks and the objectives, policies and processes for the management of these risks. (i) Foreign Currency Risk The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than the respective functional currencies of entities within the Group. The currencies giving rise to this risk are primarily United States Dollar ( USD ), Singapore Dollar ( SGD ) and Chinese Renminbi ( B ). Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. On occasion, the Group enters into forward foreign currency contracts to hedge against its foreign currency risk. The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes. The Group s and the Company s exposure to foreign currency is as follows: USD SGD B Others Total Group at 30 June 2016 Financial Assets Trade receivables 18,350,098 11,535,452 7,008,728 5,338,882 72,884, ,117,267 Other receivables 1,619, ,172 1,563, ,095 2,478,512 6,760,206 Amount due from joint venture ,407 65,407 Amount due from associates , ,164 Amount due from related parties ,156 1,064, ,055 2,825,525 Short-term investments ,817,018 1,817,018 Deposit placed with licensed banks ,330,258 1,330,258 Cash and bank balances 10,955,239 5,251,721 8,099,622 2,141,688 12,073,071 38,521,341 30,924,435 16,980,345 17,843,999 9,450,979 91,640, ,840,186

109 Success Transformer Corporation Berhad FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (i) Foreign Currency Risk (Cont d) USD SGD B Others Total Group at 30 June 2016 Financial Liabilities Loans and borrowings - (3,679,593) - - (86,593,539) (90,273,132) Hire purchase payables - (545,390) - (71,263) (2,792,459) (3,409,112) Trade payables Other payables and accruals Amount due to an associate (2,920,372) (183,198) - (918,697) (608,138) - (12,728,062) (4,302,865) - (483,831) (747,387) - (23,700,956) (28,099,436) (284,570) (40,751,918) (33,941,024) (284,570) Amount due to related parties - - (1,681,066) - (348,126) (2,029,192) (3,103,570) (5,751,818) (18,711,993) (1,302,481) (141,819,086) (170,688,948) Net financial assets/ (liabilities) 27,820,865 11,228,527 (867,994) 8,148,498 (50,178,658) (3,848,762) Less: Net financial (assets)/liabilities denominated in the respective entities functional currency - (1,823,560) 867,994 (7,012,614) 50,178,658 42,210,478 Currency exposure 27,820,865 9,404,967-1,135,884-38,361,716

110 118 Success Transformer Corporation Berhad 44. FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (i) Foreign Currency Risk (Cont d) USD SGD B Others Total Group at 31 December 2014 Financial Assets Trade receivables 8,358,368 6,101,773 6,232,019 4,756,633 65,754,049 91,202,842 Other receivables 597,493 37,460 1,358, ,023 3,689,761 5,949,493 Amount due from joint venture ,407 65,407 Amount due from associates ,699,523 1,699,523 Amount due from related parties ,251 1,482, ,385 2,465,711 Short-term investments ,151,274 1,151,274 Deposits placed with licensed banks ,686,000 8,871,545 10,557,545 Cash and bank balances 1,980,820 4,325,987 7,618,953 2,485,448 15,803,518 32,214,726 10,936,681 10,465,220 15,441,979 10,676,179 97,786, ,306,521 Financial Liabilities Loans and borrowings (13,036,265) (3,849,530) - - (84,082,077) (100,967,872) Hire purchase payables - (472,633) - (146,617) (2,929,329) (3,548,579) Trade payables Other payables and accruals Amount due to an associate (757,922) (662,776) - (1,129,431) (424,323) - (12,548,238) (3,125,819) - (113,583) (268,546) - (27,051,564) (25,371,641) (641,075) (41,600,738) (29,853,105) (641,075) Amount due to related parties - - (2,069,773) - (348,382) (2,418,155) (14,456,963) (5,875,917) (17,743,830) (528,746) (140,424,068) (179,029,524) Net financial assets/ (liabilities) (3,520,282) 4,589,303 (2,301,851) 10,147,433 (42,637,606) (33,723,003) Less: Net financial (assets)/liabilities denominated in the respective entities functional currency - (346,787) 2,324,059 (9,360,311) 42,637,606 35,254,567 Currency exposure (3,520,282) 4,242,516 22, ,122-1,531,564

111 Success Transformer Corporation Berhad FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (i) Foreign Currency Risk (Cont d) Others Total Company at 30 June 2016 Financial Assets Amount due from subsidiaries - 11,723,289 11,723,289 Other receivables - 4,315 4,315 Cash and bank balances - 1,109,899 1,109,899-12,837,503 12,837,503 Financial Liabilities Other payables and accruals - Amount due to subsidiaries - Loans and borrowings - - (611,525) (611,525) (6,209,231) (6,209,231) (9,000,000) (9,000,000) (15,820,756) (15,820,756) Net financial (liabilities) - (2,983,253) (2,983,253) Less : Net financial liabilities denominated in the entity s functional currency - 2,983,253 2,983,253 Currency exposure Company at 31 December 2014 Financial Assets Amount due from subsidiaries 25, , ,919 Cash and bank balances - 229, ,637 25,371 1,096,185 1,121,556 Financial Liabilities Other payables and accruals - Amount due to subsidiaries - (388,714) (388,714) (3,335,685) (3,335,685) (3,724,399) (3,724,399) - Net financial (liabilities) 25,371 (2,628,214) (2,602,843) Less : Net financial liabilities denominated in the entity s functional currency - 2,628,214 2,628,214 currency exposure 25,371-25,371

112 120 Success Transformer Corporation Berhad 44. FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (i) Foreign Currency Risk (Cont d) Foreign Currency Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies at the end of the reporting period, with all other variables held constant: Group increase/(decrease) 30 June 31 December effects on profit after tax USD / - strengthened by 1% 211,438 (26,402) SGD / - strengthened by 1% 71,478 31,819 A weakening of the above currencies against Ringgit Malaysia at the reporting date would have had the equal but opposite effect on the above currencies to the amounts shown above, with all other variables held constant. (ii) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group s exposure to interest rate risk arises mainly from interest-bearing financial assets and liabilities. The Group s policy is to obtain the most favourable interest rates available and by maintaining a balanced portfolio mix of fixed and floating rate borrowings. The Group s fixed rate borrowings and fixed deposit with licensed banks are carried at amortised cost. Therefore, they are not subject to interest rate risk as defined MFRS 7 since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. The Group s exposure to interest rate risk based on the carrying amounts of the financial instruments at the end of the reporting period is disclosed below: Group 30 June 31 December Floating rate instruments Financial liabilities 29,997,250 28,813,354

113 Success Transformer Corporation Berhad FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (ii) Interest Rate Risk (Cont d) Interest Rate Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the interest rates at the end of the reporting period, with all other variables held constant: Group 30 June 31 December effects on profit after tax Increase of 50 basic points (bp) (135,799) (113,794) Decrease of 50 basic points (bp) 135, ,794 (iii) Credit Risk The Group s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties. The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience and the current economic environment. The Company provides financial guarantee to financial institutions for credit facilities granted to certain subsidiaries. The Company monitors the results of these subsidiaries regularly and repayments made by the subsidiaries. Credit Risk Concentration Profile The Group does not have any major concentration of credit risk related to any individual customer or counter party.

114 122 Success Transformer Corporation Berhad 44. FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (iii) Credit Risk (Cont d) Credit Risk Concentration Profile (Cont d) In addition, the Group also determining concentration of credit risk by monitoring the geographical region of its trade receivables on an ongoing basis. The credit risk concentration profile of trade receivables (including related parties) at the end of the reporting period is as follows: Group 30 June 31 December By country: Malaysia 71,472,479 62,485,863 Singapore 15,102,811 11,587,264 Other countries 31,288,040 21,104, ,863,330 95,177,154 Exposure to Credit Risk At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position of the Company after deducting any allowance for impairment losses (where applicable).

115 Success Transformer Corporation Berhad FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (iii) Credit Risk (Cont d) Ageing Analysis The ageing analysis of the Group s trade receivables (including amount due from related parties) at the end of the reporting period is as follows: Gross Individual Collective Carrying amount impairment impairment value Group at 30 June 2016 Neither past due nor impaired 86,797,626 - (37,949) 86,759,677 Past due but not impaired: days 9,008,723 - (13,188) 8,995, days 10,209,870 (13,277) (12,342) 10,184,251 - more than 120 days 22,080,603 (9,906,147) (250,589) 11,923, ,096,822 (9,919,424) (314,068) 117,863,330 At 31 December 2014 Neither past due nor impaired 76,305,297 (3,643) - 76,301,654 Past due but not impaired: days 4,706,274 - (1,337) 4,704, days 6,242,200 - (4,375) 6,237,825 - more than 120 days 12,869,669 (2,923,395) (2,013,536) 7,932, ,123,440 (2,927,038) (2,019,248) 95,177,154 At the end of the reporting period, trade receivables that are individually impaired were those have defaulted on payments. These receivables are not secured by any collateral or credit enhancement. The Group believes that no additional impairment allowance is necessary in respect of trade receivables that are past due but not impaired because they are companies with good collection track record and no recent history of default.

116 124 Success Transformer Corporation Berhad 44. FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (iv) Liquidity Risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group and the Company maintain a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that they will have sufficient liquidity to meet their liabilities when they fall due. Maturity Analysis The following table sets out the maturity profile of the financial liabilities at the reporting date based on contractual undiscounted cash flows: contractual Contractual Carrying undiscounted Within Over interest rate amount cash flows 1 year 1-5 years 5 years % Group at 30 June 2016 non-derivative Financial Liabilities Trade payables - 40,751,918 40,751,918 40,751, Other payables and accruals - 33,941,024 33,941,024 33,941, Amount due to an associate - 284, , , Amount due to related parties - 2,029,192 2,029,192 2,029, Loans and borrowings ,273,132 96,963,451 66,676,711 14,455,204 15,831,536 Hire purchase payables ,409,112 3,736,624 1,389,718 2,293,057 53, ,688, ,706, ,073,133 16,748,261 15,885,385

117 Success Transformer Corporation Berhad FINANCIAL INSTRUMENTS (cont d) (a) Financial Risk Management Policies (Cont d) (iv) Liquidity Risk (Cont d) Maturity Analysis (Cont d) contractual Contractual Carrying undiscounted Within Over interest rate amount cash flows 1 year 1-5 years 5 years % Group at 31 December 2014 non-derivative Financial Liabilities Trade payables - 41,600,738 41,600,738 41,600, Other payables and accruals - 29,853,105 29,853,105 29,853, Amount due to an associate - 641, , , Amount due to related parties - 2,418,155 2,418,155 2,418, Loans and borrowings ,967, ,839,543 77,841,681 16,719,430 11,278,432 Hire purchase payables ,548,579 3,964,986 1,307,052 2,638,511 19, ,029, ,317, ,661,806 19,357,941 11,297,855 Company 30 June 2016 Non-derivative Financial Liabilities Other payables and accruals - 611, , , Amount due to subsidiaries - 6,209,231 6,209,231 6,209, Loans and borrowings ,000,000 9,000,000 9,000, ,820,756 15,820,756 15,820, At 31 December 2014 Non-derivative Financial Liabilities Other payables and accruals - 388, , , Amount due to subsidiaries - 3,335,685 3,335,685 3,335, ,724,399 3,724,399 3,724,

118 126 Success Transformer Corporation Berhad 44. FINANCIAL INSTRUMENTS (cont d) (b) Capital Risk Management The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares. The Group manages its capital based on debt-to-equity ratio. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as total borrowings from financial institutions less deposit, bank and cash balances. The debt-to-equity ratio of the Group as at the end of the reporting period was as follows: 30 June 31 December Loans and borrowings 90,273, ,967,872 Hire purchase payables 3,409,112 3,548,579 93,682, ,516,451 Less: Deposits, bank and cash balances (39,851,599) (42,772,271) Net debt 53,830,645 61,744,180 Total equity 265,302, ,807,110 Debt-to-equity There was no change in the Group s approach to capital management during the financial period. Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders equity (total equity attributable to owners of the Company) more than 25% of the issued and paid-up share capital (excluding treasury shares) and such shareholders equity is not less than 40 million. The Company has complied with this requirement.

119 Success Transformer Corporation Berhad FINANCIAL INSTRUMENTS (cont d) (c) Classification of Financial Instruments Group company 30 June 31 December 30 June 31 December Financial Assets Loans and receivables Trade receivables 115,117,267 91,202, Other receivables 6,760,206 5,949,493 4,315 - Amount due from subsidiaries ,723, ,919 Amount due from joint venture 65,407 65, Amount due from associates 403,164 1,699, Amount due from related parties 2,825,525 2,465, Deposits placed with licensed banks 1,330,258 10,557, Cash and bank balances 38,521,341 32,214,726 1,109, , ,023, ,155,247 12,837,503 1,121,556 Fair value through profit or loss Short-term investments 1,817,018 1,151, Financial Liabilities Other financial liabilities Loans and borrowings 90,273, ,967,872 9,000,000 - Hire purchase payables 3,409,112 3,548, Trade payables 40,751,918 41,600, Other payables and accruals 33,941,024 29,853, , ,714 Amount due to subsidiaries - - 6,209,231 3,335,685 Amount due to an associate 284, , Amount due to related parties 2,029,192 2,418, ,688, ,029,524 15,820,756 3,724,399

120 128 Success Transformer Corporation Berhad 44. FINANCIAL INSTRUMENTS (cont d) (d) Fair Value Information The fair values of the financial assets and financial liabilities of the Group and of the Company that maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments. The following table sets out the fair value profile of financial instruments that are carried at fair value and those not carried at fair value at the end of the reporting period : Fair Value of Financial Instruments Carried at Fair Value Fair Value of Financial Instruments Not Carried at Fair Value T total Carrying L level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Fair Value Amount Group 30 June 2016 Financial Asset Short-term investments - 1,817, ,817,018 1,817,018 Financial Liability Hire purchase payables ,156,584-3,156,584 3,409,112 Group 31 December 2014 Financial Asset Short-term investments - 1,151, ,151,274 1,151,274 Financial Liability Hire purchase payables ,513,757-3,513,757 3,548,579 the Company At the end of the reporting period, there were no financial instruments carried at fair values in the statement of financial position.

121 Success Transformer Corporation Berhad FINANCIAL INSTRUMENTS (cont d) (d) Fair Value Information (Cont d) Fair Value of Financial Instruments Carried at Fair Value The fair values above have been determined using the following basis: (i) The fair values of short-term investments is determined directly by reference to their published market bid prices at the end of the reporting period. There were no transfer between level 1 and level 2 during the financial period. Fair Value of Financial Instruments Not Carried at Fair Value The fair values above, which are for disclosure purposes, have been determined using the following basis : (i) The fair values of hire purchase payables are determined by discounting the relevant cash flows using interest rates for similar instruments at the end of the reporting period. The interest rates used to discount the estimated cash flows are as follows: Group 30 June 31 December % % Hire purchase payables

122 130 Success Transformer Corporation Berhad 45. SIGNIFICANT EVENTS DURING THE FINANCIAL PERIOD (a) (b) (c) (d) (e) (f) (g) (h) On 16 February 2015, the Group via its wholly-owned subsidiary, SES Property Sdn. Bhd., entered into sale and purchase agreement to acquire all that piece of freehold vacant agricultural land held under Geran 19765, Lot 821, Mukim Pasir Panjang, District of Port Dickson, State of Negeri Sembilan for a total cash consideration of 6,055,929. The acquisition was completed on 21 May On 3 June 2015, the Group via its subsidiary, Ningbo Success Zhenye Luminaire Limited Liabilities Company ( NSZ ) completed a bonus issue, which involved increase of paid-up capital by capitalizing an amount of million from the retained earnings account. The bonus issue was carried out proportionate to the existing contribution made by all shareholders. As a result, Company remained the equity interest of 60% in NSZ. On 22 July 2015, the Company s 65%-owned subsidiary, namely Seremban Engineering Berhad ( SEB ) entered into a conditional share sale agreement with Grand River Marketing Sdn. Bhd. ( G ) for disposal of the entire 40% equity interest in Selekta Spektra Sdn. Bhd. ( SELEKTA ) comprising 2,370,000 ordinary shares of 1.00 each ( Sales Shares ) to G for a total consideration of 10,000,000 ( Disposal ). The Disposal was completed on 19 April Subsequent to the Disposal, SELEKTA ceased to be an associate of SEB. On 1 October 2015, the Company acquired an additional 5% equity interest in Daiichi Steel Sdn. Bhd. ( DS ) and Omegal Metal Industries Sdn. Bhd. ( OMI ) respectively from its non-controlling interests for a cash consideration of 185,319 and 232,185 respectively. Following the completion of the acquisition, DS and OMI became a 80% and 70% owned subsidiaries of the Company respectively. On 2 December 2015, the Company s 60%-owned subsidiary, namely NSZ disposed of 100,000 ordinary shares of B 1.00 each in its 60%-owned subsidiary, Shenyang Success Zhenye Luminaire Limited Liabilities Company ( SSZ ), representing an equity interest of 20% in the issued and paid up capital of SSZ ( Dilution ) to an existing shareholder of SSZ, namely Mr. Zeng Fanzhi for a cash consideration of B 100,000 (equivalent to 66,500). Following the Dilution, SSZ ceased to be a subsidiary of NSZ and became an associate of NSZ on 2 December On 26 February 2016, the Company s 60%-owned subsidiary, namely NSZ subscribed to a total of 400,000 ordinary shares of B 1.00 each in Zhongshan Success Zhenye Luminaire Limited Liabilities Company ( ZSZ ) upon its incorporation, which represents 40% of the total issued and paid-up capital of ZSZ for a total cash consideration of B 400,000. On 30 March 2016, the Company s 60%-owned subsidiary, namely NSZ subscribed to a total of 600,000 ordinary shares of B 1.00 each in Success Zhenye Luminaire (Beijing) Limited Liabilities Company ( BSZ ) upon its incorporation, representing 40% of the total issued and paid-up capital of BSZ for a total cash consideration of B 600,000. On 30 March 2016, the Group via its wholly owned subsidiary, Success Transformer Marketing Sdn. Bhd. ( STMKT ), entered into sale and purchase agreement to acquire a unit of leasehold condominium held under PM 10174, Lot (formerly known as H.S. (M) P.T. No ) Batu 14 Puchong, Mukim of Petaling, District of Petaling and State of Selangor for a total purchase consideration of 589,000 by way of setting off against the debt owing by YFG Engineering Sdn. Bhd..

123 Success Transformer Corporation Berhad SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD (a) (b) (c) On 1 July 2016, the Company acquired an additional 25% equity interest in Omega Metal Industries Sdn. Bhd. ( OMI ) and 15% equity interest in Daiichi Steel Sdn. Bhd. ( DS ) respectively from its non-controlling interest for a total cash consideration of 1,282,789 and 565,347 respectively. Following the completion of the acquisition, OMI and DS both became 95% owned subsidiaries of the Company. On 1 July 2016, the Company acquired 90,000 ordinary shares of USD 1.00 each in PT. Boxon Nikkon Jayaindo ( BNJ ) which representing 30% equity interest in BNJ from its 60%-owned subsidiary, Boxon Industries Hardware (M) Sdn. Bhd. ( BIHM ) for a cash consideration of 280,998. Following the completion of the acquisition, BNJ became a 60% owned subsidiary of the Company. On 11 August 2016, the Company s 65%-owned subsidiary, namely SEB, disposed its investment of 600,000 ordinary shares of 1.00 each representing 60% equity interest in SEPEN for a total cash consideration of 2,537, COMPARATIVE FIGURES The following figures have been reclassified to conform with the presentation of the current financial period: Group as previously as restated reported Statement of financial position Current assets Cash and bank balances 32,214,726 33,366,000 Short-term investments 1,151,274 -

124 132 Success Transformer Corporation Berhad 48. SUPPLEMENTARY INFOATION DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES The breakdown of the retained profits/(accumulated losses) of the Group and the Company at the end of the reporting period into realised and unrealised profits/(losses) are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared 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, as follows: Group company 30 June 31 December 30 June 31 December Total retained profits/(accumulated losses) of the Company and its subsidiaries: - realised 226,808, ,378,235 44,855,453 44,698,063 - unrealised 4,478,187 (2,028,070) - 8, ,286, ,350,165 44,855,453 44,706,717 Total share of (accumulated losses) from associates and jointly controlled entity - realised (402,503) (12,493) ,884, ,337,672 44,855,453 44,706,717 Less: Consolidation adjustments (31,140,264) (52,482,527) - - At 30 June / 31 December 199,743, ,855,145 44,855,453 44,706,717

125 Success Transformer Corporation Berhad List of Properties 133 The summary of the information on the landed properties of the STC Group is as follows: Location/ Postal Address Description/ Existing use Land Area/ Built Up Area Tenure (years) Age of Buildings (years) Carrying Amount as at Date of Revaluation/ Acquisition 1. Title no. Geran Lot 19042, Seksyen 20, Bandar Rawang Address Lot. 102, Jalan Industri ¾, Taman Industri Integrasi Rawang, Rawang, Selangor Darul Ehsan. Industrial premises comprising a 1-storey factory/ warehouse/ office building annexed with a guardhouse 24,490 square meters / 16,444 square meters Freehold 17 9,421,027 (Land) 9,624,657 (Building) 7 September PN Lot Mukim Lumut Daerah Manjung Negeri Perak Address Lot 15516, (PT10441/ Plot F1), L/K Kawasan Perusahaan Kampung Acheh, Sitiawan, Perak Darul Ridzuan Industrial premises with an attached single storey open-sided factory together with a Fabrication Yard, Auto Blast Yard, Manual Blast Yard, Painting Chamber, Compressor Room and Store 28,430 square meters / 7, square meters Leasehold interest for 99 years expiring on 9 July 2105, leaving an unexpired term of about 89 years 4 5,066,670 (Land) 7,183,329 (Building) 17 December Title No. PM 1272 (Formerly HSM 7615), Lot No (Formerly Lot P.T. No ), Locality of Bt 16 Jalan Subang, Mukim of Sungai Buloh, District of Petaling, State of Selangor Address No. 7, Jalan TSB 8, Taman Industri Sungai Buloh, Sungai Buloh, Selangor Darul Ehsan. Industrial premises comprising a 4-storey detached factory/ warehouse/ office building with one basement level and a guardhouse 4,213 square metres / 11, square metres Leasehold interest for 99 years expiring on 24 March 2091, leaving an unexpired term of about 75 years 13 1,156,034 (Land) 8,368,341 (Building) 31 December 2009

126 134 Success Transformer Corporation Berhad List of Properties (Cont d) The summary of the information on the landed properties of the STC Group is as follows: Location/ Postal Address Description/ Existing use Land Area/ Built Up Area Tenure (years) Age of Buildings (years) Carrying Amount as at Date of Revaluation/ Acquisition 4. Title no. HSD PT 689, HSD PT 690 and HSD PT691, Pekan Subang, Daerah Petaling Negeri Selangor. Leasehold Industrial land 4,045 square meters / 4,046 square meters / 2,697 square meters Leasehold interest for 99 years expiring on 18 July 2111, leaving an unexpired term of about 95 years N/A 8,997,493 (Land) 25 March Title No. H.S.(D) , (Lot No , GRN114865), Pekan Senawang District of Seremban, State of Negeri Sembilan Address 75 & 76 Persiaran Bunga Tanjung 2, Senawang Industrial Park, Seremban, Negeri Sembilan Industrial premises with an attached single storey open-sided factory (Fasa 1) annexed together with a guardhouse 16,664 square metres / 6271 square metres Freehold 5 3,621,257 (Land) 4,670,973 (Building) 28 February Title No. H.S.(D) & , P.T. No & 1286 (Lot No ), Pekan Senawang District of Seremban, State of Negeri Sembilan Address Lot 1A & 1B, Lorong Bunga Tanjung 1/3, Senawang Industrial Park, Seremban, Negeri Sembilan. Industrial premises comprising a 3-storey office with an attached single storey open-sided factory annexed together with a guardhouse 14,144 square metres / 7,273 square metres Freehold 20 2,260,000 (Land) 7,333,333 (Building) 22 July 2009

127 Success Transformer Corporation Berhad List of Properties (Cont d) 135 Location/ Postal Address Description/ Existing use Land Area/ Built Up Area Tenure (years) Age of Buildings (years) Carrying Amount as at Date of Revaluation/ Acquisition 7. No. PT 2086, Jalan Batu Arang, Bandar Kundang, Daerah Gombak, State of Selangor. Agriculture Land 44,300 square metres Leasehold interest for 99 years expiring on 3 November 2108, leaving an unexpired term of about 92 years N/A 6,136,208 (Land) 21 February Title No. PM 1304 (Formerly HSM 7554) Lot (Formerly Lot P.T. No ), Locality of Bt 16 Jalan Subang, Mukim of Sungai Buloh, District of Petaling, State of Selangor Address No. 9, Jalan TSB 9, Taman Industri Sungai Buloh, Sungai Buloh, Selangor Darul Ehsan. Industrial premises comprising two 1 ½ storey factory/ warehouse/ office annexed with a guardhouse 4,435 square metres / 2,376 square metres Leasehold interest for 99 years expiring on 24 March 2091, leaving an unexpired term of about 75 years 16 4,010,524 (Land) 2,730,690 (Building) 20 September Title No. H.S.(D) , P.T (Lot No ), Pekan Senawang District of Seremban, State of Negeri Sembilan Address Lot 1C, Lorong Bunga Tanjung 1/3, Senawang Industrial Park, Seremban, Negeri Sembilan. Industrial premises comprising 2 single storey store and office with an attached single storey open-sided factory 8,786 square metres / 5,031 square metres Freehold 9 1,490,000 (Land) 4,128,944 (Building) 22 July 2009

128 136 Success Transformer Corporation Berhad List of Properties (Cont d) Location/ Postal Address Description/ Existing use Land Area/ Built Up Area Tenure (years) Age of Buildings (years) Carrying Amount as at Date of Revaluation/ Acquisition 10. Title No. GRN 19765, Lot 821, Mukim of Pasir Panjang, District of Port Dickson, Negeri Sembilan. Agriculture Land hectares Freehold N/A 6,294, February 2015 The above list of properties are only disclosed the top 10 properties in terms of highest net book value as at the end of financial period.

129 Success Transformer Corporation Berhad Analysis of Shareholdings As At 5 October Authorised share capital Issued and fully paid-up capital Class of shares No. of shareholders : 2,030 Voting Rights : One vote per ordinary share : 100,000,000 ordinary shares of 0.50 each : 60,000,000 divided into 120,000,000 shares of 0.50 each (including 5,875,577 treasury shares) : Ordinary shares of 0.50 each A) DISTRIBUTION OF SHAREHOLDINGS No. of % of Total No. of Shares % of Issued Size of Shareholdings Shareholders Shareholders Held Capital Less than , to , ,001 to 10, ,283, ,001 to 100, ,815, ,001 to less than 5% of issued shares ,955, % and above of issued shares ,957, TOTAL : 2, ,124, B) LIST OF SUBSTANTIAL SHAREHOLDERS Direct Deemed Interest in Share No. Name of Shareholders No. of Shares % No. of Shares % 1. Omega Attraction Sdn. Bhd. ( OASB ) 49,427, Tan Ah Tan Ah Ping 100, (1) 49,605, Pan Kim Foon 100, (2) 49,605, Tan Chung Ling 77, (3) 49,628, Tan Chung Chiah - - (3) 49,628, Notes : (1) Deemed interest by virtue of his substantial interest in OASB, and his wife, Pan Kim Foon and daughter, Tan Chung Ling s direct interests in the Company. (2) Deemed interest by virtue of her substantial interest in OASB, and her husband, Tan Ah Tan Ah Ping and daughter, Tan Chung Ling s direct interests in the Company. (3) Deemed interest by virtue of her father, Tan Ah Tan Ah Ping s and her mother, Pan Kim Foon s direct interests in STC, and her father and mother s direct interests in OASB.

130 138 Success Transformer Corporation Berhad Analysis of Shareholdings As At 5 October 2016 (Cont d) C) LIST OF DIRECTORS SHAREHOLDINGS The Company Direct Deemed Interest in Shares No. Name of Shareholders No. of Shares % No. of Shares % 1. Tan Ah Tan Ah Ping 100, (1) 49,605, Pan Kim Foon 100, (2) 49,605, Tan Chung Ling 77, (3) 49,628, Tan Wei Neng 10, (4) 20, Yeoh Kim Wah 619, Dato Chua Tia Guan Ng Chee Keong Tan Chung Chiah (Alternate Director to Pan Kim Foon) - - (3) 49,628, Chan Foong Ping Notes : (1) Deemed interest by virtue of his substantial interests in OASB, and his wife Pan Kim Foon s and daughter, Tan Chung Ling s direct interests in the Company. (2) Deemed interest by virtue of her substantial interests in OASB, and her husband Tan Ah Tan Ah Ping s and daughter, Tan Chung Ling s direct interests in the Company. (3) Deemed interest by virtue of her father, Tan Ah Tan Ah Ping s and her mother, Pan Kim Foon s direct interests in the company, and her father and mother s direct interests in OASB. (4) Deemed interest by virtue of his wife, Chew Yoke Ying s direct interests in the Company. Holding Company OASB Direct Deemed Interest in Shares No. Name of Shareholders No. of Shares % No. of Shares % 1. Tan Ah Tan Ah Ping 51, (1) 49, Pan Kim Foon 49, (2) 51, Tan Chung Ling - - (3) 100, Tan Chung Chiah - - (3) 100, Notes : (1) By virtue of his wife, Pan Kim Foon s direct interest in OASB. (2) By virtue of her husband, Tan Ah Tan Ah Ping s direct interest in OASB. (3) By virtue of her father, Tan Ah Tan Ah Ping and her mother, Pan Kim Foon s direct interests in OASB. By virtue of their interests in the shares of OASB, Messrs. Tan Ah Tan Ah Ping, Pan Kim Foon, Tan Chung Ling and Tan Chung Chiah are deemed to have an interest in the shares of the Company and its related corporations to the extent that OASB has an interest.

131 Success Transformer Corporation Berhad Analysis of Shareholdings As At 5 October 2016 (Cont d) 139 D) TOP THIRTY (30) LARGEST SHAREHOLDERS Percentage % No. of of Issued No. Name of Shareholders Shares Held Share Capital 1. Omega Attraction Sdn. Bhd. 49,427, Citigroup Nominees (Tempatan) Sdn Bhd 6,530, Universal Trustee (Malaysia) Berhad for Cimb Islamic Small Cap Fund 3. Cartaban Nominees (Asing) Sdn Bhd 5,500, Ssbt Fund F9EX for Fidelity Northstar Fund 4. Citigroup Nominees (Asing) Sdn Bhd 3,178, Exempt AN for Citibank New York (Norges Bank 14) 5. Maybank Nominees (Tempatan) Sdn Bhd 2,937, Maybank Trustees Berhad for Cimb-Principal Small Cap Fund (240218) 6. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad 2,371, Deutsche Trustees Malaysia Berhad for Eastspring Investmentsmy Focus Fund 7. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad 2,102, Deutsche Trustees Malaysia Berhad for Eastspring Investmentssmall-Cap Fund 8. Citigroup Nominees (Tempatan) Sdn Bhd 1,623, Universal Trustee (Malaysia) Berhad for Cimb Islamic Dali Equity Fund 9. Ng Chee Kit 1,515, Cimsec Nominees (Tempatan) Sdn Bhd 1,417, Pledged Securities Account for Cheng Hee Long (Kuchai L-CL) 11. Citigroup Nominees (Tempatan) Sdn Bhd 1,250, Kumpulan Wang Persaraan (Diperbadankan) (Espg IV SC E) 12. Susy Ding 1,250, Hlb Nominees (Tempatan) Sdn Bhd 1,200, Pledged Securities Account for Wong Yee Hui 14. Goh Thong Beng 1,180, Public Invest Nominees (Tempatan) Sdn Bhd 1,161, Pledged Securities Account for Yoong Fui Kien (C) 16. Lim Swee Fun 1,148, Yip Siew Leng 747, Citigroup Nominees (Tempatan) Sdn Bhd 685, Pledged Securities Account for Susy Ding (471873) 19. Hsbc Nominees (Asing) Sdn Bhd 671, Exempt AN for the Hongkong and Shanghai Banking Corporation Limited (Hbap-Sgdiv-Accl) 20. Hsbc Nominees (Tempatan) Sdn Bhd 600, Hsbc (M) Trustee Bhd for Rhb Small Cap Opportunity Unit Trust

132 140 Success Transformer Corporation Berhad Analysis of Shareholdings As At 5 October 2016 (Cont d) D) TOP THIRTY (30) LARGEST SHAREHOLDERS (Cont d) Percentage % No. of of Issued No. Name of Shareholders Shares Held Share Capital 21. Malacca Equity Nominees (Tempatan) Sdn Bhd 553, Exempt AN for Phillip Capital Management Sdn Bhd 22. Citigroup Nominees (Tempatan) Sdn Bhd 550, Kumpulan Wang Persaraan (Diperbadankan) (Mybk Am Sc E) 23. Tan Lee Hwa 535, Mak Tian Meng 506, Affin Hwang Nominees (Asing) Sdn. Bhd. 500, DBS Vickers Secs (S) Pte Ltd for Punit Khanna 26. Lin Hai Lin See Yan 500, Yeoh Kim Wah 500, Cimsec Nominees (Tempatan) Sdn Bhd 484, Cimb Bank For Mak Tian Meng (My0343) 29. Teuh Chin Yap 465, Tham Kin Foong (John) 444,

133 Success Transformer Corporation Berhad Notice of Annual General Meeting 141 NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting of the Company will be held at Perdana Ballroom, Bukit Jalil Golf and Country Resort, Jalan 3/155B, Bukit Jalil, Kuala Lumpur on Monday, 21 November 2016 at 2.00 p.m. for the following purposes: As Ordinary Business: 1. To receive the Audited Financial Statements for the financial period ended 30 June 2016 together with the Reports of Directors and Auditors thereon (Please refer to Note A). 2. To approve the payment of Directors fees for the financial period ended 30 June (Ordinary Resolution No. 1) 3. To re-elect the following Directors retiring in accordance with the Article 96 of the Company s Articles of Association: (1) Madam Pan Kim Foon (2) Mr Yeoh Kim Wah (Ordinary Resolution No. 2) (Ordinary Resolution No. 3) 4. To re-elect the following Directors retiring in accordance with the Article 103 of the Company s Articles of Association: (1) Ms Tan Chung Ling (2) Mr Ng Chee Keong (3) Mr Tan Wei Neng (4) Dato Chua Tia Guan (5) Ms Chan Foong Ping 5. To approve the re-appointment of retiring Auditors, Messrs Crowe Horwath as Auditors of the Company and to authorise the Directors to fix their remuneration. (Ordinary Resolution No. 4) (Ordinary Resolution No. 5) (Ordinary Resolution No. 6) (Ordinary Resolution No. 7) (Ordinary Resolution No. 8) (Ordinary Resolution No. 9) AS SPECIAL BUSINESS To consider and if thought fit, to pass the following resolutions with or without any modifications as resolutions: 6. Authority for Directors to allot and issue shares pursuant to Section 132D of the Companies Act 1965 THAT subject always to the Companies Act 1965 ( Act ), the Articles of Association of the Company and the approvals of Bursa Malaysia Securities Berhad and other relevant governmental or regulatory bodies, where such approvals are necessary, the Directors be and are hereby empowered, pursuant to Section 132D of the Act, to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issued share capital of the Company for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. (Ordinary Resolution No. 10)

134 142 Success Transformer Corporation Berhad Notice of Annual General Meeting (Cont d) 7. Proposed renewal of existing shareholders mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature ( RRPT ) THAT pursuant to paragraph of the Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ), approval be and is hereby given for the renewal of the shareholders mandate for the Company and its subsidiaries ( STC Group ) to enter into and to give effect to specified RRPT and with specified class of the related parties as stated in Section 2.4 of the Circular to Shareholders dated 27 October 2016, which are necessary for its day-to-day operations, to be entered into by the STC Group on the basis that these transactions are entered into on terms which are not more favourable to the Related Parties involved than generally available to the public and are not detrimental to the minority shareholders of the Company (hereinafter referred to as the Proposed Renewal of Shareholders Mandate ); THAT the Proposed Renewal of Shareholders Mandate is subject to annual renewal. In this respect, any authority conferred by the Proposed Renewal of Shareholders Mandate shall only continue to be in force until: (a) (b) (c) the conclusion of the next Annual General Meeting of the Company following the general meeting at which time the Proposed Renewal of Shareholders Mandate has been passed, at which time they will lapse, unless by a resolution passed at the meeting, the authority is renewed; the expiration of the period within which the next Annual General Meeting after the date it is required to be held pursuant to Section 143(1) of the Companies Act 1965 ( Act ) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or revoked or varied by resolution passed by the shareholders in general meeting, whichever is the earlier; AND THAT the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the Proposed Renewal of Shareholders Mandate. (Ordinary Resolution No. 11)

135 Success Transformer Corporation Berhad Notice of Annual General Meeting (Cont d) Proposed renewal of authority for the Company to purchase its own shares up to ten percent (10%) of its issued and paid-up capital THAT, subject always to the Companies Act 1965, the Memorandum and Articles of Association of the Company, the Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) and all other applicable laws, regulations and guidelines, the Directors of the Company be and are hereby given full authority, to seek shareholders approval for the renewal of authority for the Company to allocate an amount not exceeding the total available retained profits and share premium of the Company for the purpose of and to purchase such amount of ordinary shares of 0.50 each on the Company ( Proposed Renewal of Share Buy-back Authority ) as may be determined by the Directors of the Company from time to time through Bursa Securities as the Directors may deem fit and in the best interest of the Company provided that the aggregate number of shares to be purchased and/or held pursuant to this resolution does not exceed ten percent (10%) of the issued and paid-up share capital of the Company at any point in time; AND THAT, upon the purchase by the Company of its own shares, the Directors are authorised to retain such shares so purchased as treasury shares or cancel the shares so purchased or retain part of the shares so purchased as treasury shares and cancel the remainder. The Directors are further authorised to distribute the treasury shares as dividends to the shareholders of the Company and/or resell the shares on Bursa Securities in accordance with the relevant rules of Bursa Securities or subsequently cancel the treasury shares or any combination thereof; AND THAT such approval and authorisation shall only continue to be in force until: (i) (ii) (iii) the conclusion of the next Annual General Meeting of the Company, at which time it will lapse, unless renewed by ordinary resolution passed at that meeting, either unconditionally or subject to conditions; the expiration of the period within which the next Annual General Meeting after that date is required by law to be held; or revoked or varied by ordinary resolution passed by the shareholders in general meeting; whichever occurs first; AND FURTHER THAT the Directors of the Company be authorised to do all such acts and things (including, without limitation executing all such documents as may be required) as they may consider expedient or necessary to give full effect to the Proposed Renewal of Share Buy-back Authority. (Ordinary Resolution No. 12)

136 144 Success Transformer Corporation Berhad Notice of Annual General Meeting (Cont d) 9. Special Resolution Proposed Amendment to the Articles of Association of the Company THAT the proposed amendment to the Company s Articles of Association ( Proposed Amendment ) as set out in the Appendix 1 attached to the 2016 Annual Report be and is hereby approved AND THAT the Directors and/or the Secretary of the Company be and are hereby authorised to take all steps as are necessary and expedite in order to implement, finalise and give full effect to the Proposed Amendment. ( Special Resolution 1) 10. To transact any other ordinary business of which due notice shall have been given. By Order of the Board PANG KAH MAN (MIA 18831) Company Secretary Kuala Lumpur 27 October 2016 Notes: (A) This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act 1965 does not require a formal approval of the shareholders and hence, is not put forward for voting. 1. Only depositors whose names appear in the Record of Depositors as at 11 November 2016 shall be regarded as members and be entitled to attend, speak and vote at the Meeting. 2. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy or proxies to attend and vote on a poll in his/ her stead. There shall be no restriction as to the qualification of the proxy and the provision of Section 149(1)(b) of the Companies Act 1965 shall not apply to the Company. 3. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( Omnibus Account ), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds. 4. To be valid, the proxy form duly completed must be deposited at the Registered Office of the Company at 3-2, 3rd Mile Square, No. 151 Jalan Kelang Lama, Batu 3½, Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting provided that in the event the member(s) duly executes the proxy form but does not name any proxy, such member(s) shall be deemed to have appointed the Chairman of the meeting as his/her proxy, provided always that the rest of the proxy, other than the particulars of the proxy have been duly completed by the member(s). 5. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Companies Act 1965 are not complied with. 6. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy. 7. If the appointor is a corporation, the proxy form must be executed under its common seal or under the hand of an officer or attorney duly authorised.

137 Success Transformer Corporation Berhad Notice of Annual General Meeting (Cont d) 145 Explanatory Notes on Special Business: 8. Ordinary Resolution 10 Authority for Directors to allot and issue shares pursuant to Section 132D of the Companies Act 1965 (a) (b) (c) (d) The proposed Ordinary Resolution 10, if passed, will empower the Directors of the Company, from the date of the forthcoming Annual General Meeting to allot and issue shares in the Company up to an amount not exceeding ten percent (10%) of the issued capital of the Company for the time being for such purposes as they may deem fit and in the interest of the Company. This authority, unless revoked or varied at a general meeting will expire at the conclusion of the next Annual General Meeting of the Company. The mandate now sought is a renewal from the previous mandate obtained at the last Annual General Meeting held on 24 June 2015 which will expire at the conclusion of the forthcoming Annual General Meeting. The Company did not issue any new shares based on the previous mandate obtained at the last Annual General Meeting. The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions. 9. Ordinary Resolution 11 Proposed renewal of existing shareholders mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature ( RRPT ) The proposed Ordinary Resolution 11, if passed, will authorise the Company and/or its subsidiary companies ( STC Group ) to enter into RRPT which are necessary for the STC Group s day-to-day operations with the respective specified class of the related parties, subject to the transactions are entered into on terms which are not more favorable to the related parties involved than generally available to the public and are not detrimental to the minority shareholders of the Company. Further details on the proposed renewal of existing shareholders mandate for RRPT are provided in the Circular to Shareholders dated 27 October 2016 on the same. 10. Ordinary Resolution 12 Proposed renewal of authority for the Company to purchase its own shares up to ten percent (10%) of its issued and paid-up capital The proposed Ordinary Resolution 12, if passed, will authorise the Company to allocate an amount not exceeding the total available retained profits and share premium of the Company for the purpose of and to purchase such amount of ordinary shares of 0.50 each on the Company ( Proposed Renewal of Share Buy-back Authority ) as may be determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad as the Directors may deem fit and in the best interest of the Company provided that the aggregate number of shares to be purchased and/or held pursuant to this resolution does not exceed ten percent (10%) of the issued and paid-up share capital of the Company at any point in time. Further details on the Proposed Renewal of Share Buy-back Authority are provided in the Statement to Shareholders dated 27 October 2016 on the same. 11. Special Resolution 1 Proposed Amendments to the Articles of Association of the Company The proposed Special Resolution 1 is intended to streamline the Company s Articles of Association to be aligned with the recent amendment to Chapter 9 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad which took effect on 31 December 2015 as well as to enhance administrative efficiency. Further details on the Proposed Amendment are provided in the Appendix 1 attached to the 2016 Annual Report.

138 146 Success Transformer Corporation Berhad Statement Accompanying Notice Of Annual General Meeting (Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad) DETAILS OF INDIVIDUAL WHO IS STANDING FOR ELECTION AS DIRECTOR No individual is seeking election as a Director at the Twelfth Annual General Meeting of the Company.

139 Success Transformer Corporation Berhad APPENDIX Details of the proposed amendment to the Articles of Association of Success Transformer Corporation Berhad The proposed deletions, alterations, modifications, variations and additions to the Articles of Association of the Company ( Proposed Amendment ) are as follows: Existing Article Article 150 The Directors shall from time to time in accordance with Section 169 of the Act cause to be prepared and laid before the Company in a general meeting, such profit and loss accounts, balance sheets and reports as are referred to in the Section 169 of the Act and the Listing Requirements. An annual report which is to be laid before the Company in a general meeting (including every document required by law to be annexed thereto) together with a copy of the Auditors and the Directors Report relating thereto, shall not exceed six (6) months from the close of the financial year and not less than twenty-one (21) days before that date of meeting be sent to every Member of, and to every holder of the debenture of the Company under the provision of the Act or of these Articles. Notwithstanding the above, the annual audited accounts together with the Directors and auditors report shall be filed with the Exchange for public release with four (4) months after the expiry of its financial year. A copy of each such documents in printed form or in CD-ROM form or in such other form of electronic media, (including other documents required by law to be annexed thereto) shall together with the notice of the annual general meeting be sent to every member under the provisions of the Act or of these Articles. The requisite number of copies of each such document as may be require by the Exchange upon which the Company s shares may be listed, shall at the same time be likewise sent to each Stock Exchange upon which the Company s shares may be listed shall at the same time be likewise sent to each Stock Exchange upon which the Company s shares are listed PROVIDED ALWAYS that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any Member to whom a copy of these documents has not been sent shall be entitled to receive a copy free of charge on application at the office. Amendment to the Existing Article Article 150 The Directors shall from time to time in accordance with Section 169 of the Act cause to be prepared and laid before the Company in a general meeting, such profit and loss accounts, balance sheets and reports as are referred to in the Section 169 of the Act and the Listing Requirements. An annual report which is to be laid before the Company in a general meeting (including every document required by law to be annexed thereto) together with a copy of the Auditors and the Directors Report relating thereto, shall not exceed six (6) four (4) months from the close of the financial year or such other period as may be prescribed by the Listing Requirements be sent to the Exchange and the Securities Commission Malaysia and not less than twenty-one (21) days before that date of meeting be sent to every Member of, and to every holder of the debenture of the Company and to every other person who is entitled to receive notices from the Company under the provision of the Act or of these Articles. Notwithstanding the above, the annual audited accounts together with the Directors and auditors report shall be filed with the Exchange for public release with four (4) months after the expiry of its financial year. A copy of each such documents in printed form or in CD-ROM form electronic format or in such other form of electronic media, (including other documents required by law to be annexed thereto) shall together with the notice of the annual general meeting be sent to every member under the provisions of the Act or of these Articles. The requisite number of copies of each such document as may be require by the Exchange upon which the Company s shares may be listed, shall at the same time be likewise sent to each Stock Exchange upon which the Company s shares may be listed shall at the same time be likewise sent to each Stock Exchange upon which the Company s shares are listed PROVIDED ALWAYS that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any Member to whom a copy of these documents has not been sent shall be entitled to receive a copy free of charge on application at the office.

140 148 Success Transformer Corporation Berhad APPENDIX 1 (Cont d) Existing Article Article 150 (Cont d) In the event that the annual report is sent in CD-ROM form or such of electronic media and a member requires a printed form of such documents, the Company shall send such documents to the Member within four (4) market days from the date of receipt of the Members request. Amendment to the Existing Article Article 150 (Cont d) In the event that the annual report is sent in CD-ROM electronic format form or such of electronic media and a member requires a printed form of such documents, the Company shall send such documents to the Member within four (4) market days from the date of receipt of the Members request.

141 (Company No W) (Incorporated in Malaysia under the Companies Act, 1965) I/We proxy FO of (Full Address) being (a) member(s) of Success Transformer Corporation Berhad hereby appoint(s) of or failing him/her of as my / our proxy to vote for me / us and on my / our behalf at the Extraordinary General Meeting of the Company to be held at Perdana Ballroom, Bukit Jalil Golf and Country Resort, Jalan 3/155B, Bukit Jalil, Kuala Lumpur on Monday, 21 November 2016 immediately following the conclusion or adjournment (as the case may be) of the Twelfth Annual General Meeting of the Company, whichever is later, or at any adjournment thereof, for the purpose of considering and, if thought fit, to pass with or without modifications, the following resolution: No. Ordinary Resolutions For Against 1 Approval of Directors Fees for the financial period ended 30 June Re-election of Madam Pan Kim Foon as Director 3 Re-election of Mr Yeoh Kim Wah as Director 4 Re-election of Ms Tan Chung Ling as Director 5 Re-election of Mr Ng Chee Keong as Director 6 Re-election of Mr Tan Wei Neng as Director 7 Re-election of Dato Chua Tia Guan as Director 8 Re-election of Ms Chan Foong Ping as Director 9 Re-appointment of Messrs Crowe Horwath as Auditors and to authorise the Directors to fix their remuneration 10 Renewal of Authority for Directors to issue shares pursuant to Section 132D of the Companies Act, Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature 12 Proposed Renewal of Authority for the Company to purchase its own shares No. Special Resolution 1 Proposed Amendment to the Articles of Association of the Company Please indicate with an X in the appropriate box against each Resolution how you wish your proxy to vote if no instruction is given, this form will be taken to authorise the proxy to vote at his/ her discretion. For appointment of two proxies, percentage of shareholdings to be represented by the proxies: No. of Shares Percentage Proxy 1 Proxy 2 Total 100% Number of Shares Held Signature of Shareholder(s) or Common Seal Signed this day of 2016

142 Notes: 1. Only depositors whose names appear in the Record of Depositors as at 11 November 2016 shall be regarded as members and be entitled to attend, speak and vote at the Meeting. 2. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy or proxies to attend and vote on a poll in his/her stead. There shall be no restriction as to the qualification of the proxy and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 3. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( Omnibus Account ), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each OmnibusAccount it holds. 4. To be valid, the proxy form duly completed must be deposited at the Registered Office of the Company situated at 3-2, 3rd Mile Square, No. 151 Jalan Kelang Lama, Batu 3½, Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting provided that in the event the member(s) duly executes the proxy form but does not name any proxy, such member(s) shall be deemed to have appointed the Chairman of the meeting as his/their proxy, provided always that the rest of the proxy form, other than the particulars of the proxy have been duly completed by the member(s). 5. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Companies Act, 1965 are complied with. 6. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy. 7. If the appointor is a corporation, the proxy form must be executed under its common seal or under the hand of an officer or attorney duly authorised. Fold Here Stamp The Company Secretary Success Transformer Corporation BERHAD ( W) 3-2, 3rd Mile Square No. 151, Jalan Kelang Lama Batu 3 1 / Kuala Lumpur Fold Here

143 accreditations & certifications UKAS accredited ISO 9001 Quality Management System Certificate of Electromagnetic Compatibility (EME) compliance Certificate of Low Voltage Directive (LVD) compliance TUV SUD Certification Mark P : Safety tested & production monitored Attestation of conformity on product type testing SIRIM Product Type Test Certification for ballast, ignitor, street lighting and floodlights JKR approval of products for ballast and ignitor, street lighting TNB approval on products for ballast and ignitor ISO9001 : UKAS CE marking for street lantern TÜV SÜD marking for street lantern CE marking for transformer ISO9001 : Standard Malaysia TNB Approval SIRIM Certificate JKR Approval