Annual Report Multi Sports Holdings Ltd And its subsidiaries...2016)(Resigned on 11 July 2017) Cheh...

Annual Report

Multi Sports Holdings Ltd

And its subsidiaries For the year ended 31 December 2016


and its subsidiaries

2

Contents

Page

Company Information 1

Group Structure 3

Products 3

Directors Profile 4

Management Discussion and Analysis 6

Corporate Governance Statement 8

Statement on Risk Management and Internal Control 14

Additional Compliance Issues 16

Audit Committee Report 17

Financial Statements 21

Analysis of Shareholdings 94

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Company information

Company Registration Number i) Bermuda Company No. : 42425

ii) Malaysian Foreign Company Registration No. : 995199-H

Registered Offices i) Clarendon House, 2 Church Street, Hamilton HM11,Bermuda.

ii)Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue

3,Bangsar South, No.8, Jalan Kerinchi 59200 Kuala Lumpur

Wilayah Persekutuan Malaysia.

Directors Lin Huozhi

Lin Liying

Gong Ane (Independent Director)(Retired 22 June 2015)

Wong Wang Lam (Independent Director)(Appointed on 20 May

2014) )(Resigned 21.06.2016)

Ang Wei Chuan(Independent Director)(Resigned on 20 April 2016)

Bernard Tan Chin Teik (Independent Director)(Appointed on 22 June

2015)(Resigned on 20 April 2016)

Kasinathan A/L Tulasi (Independent Director)(Appointed on 4 October

2016)(Resigned on 11 July 2017)

Cheh Chee Mun (Appointed on 4 October 2016)(Resigned on 10 August

2017)

Terence Selvarajah A/L Peter Selvarajah (Appointed on 4 October 2016)

Naren Anand Gill (Appointed on 4 October 2016)

Guan Swee Kwee (Appointed on 4 October 2016)

Clarence Yeow Kong Chew (Appointed on 4 October 2016)

Audit Committee Gong Ane (Chairperson) (Retired 22 June 2015)


2014) )(Resigned 21.06.2016)

Ang Wei Chuan(Independent Director) (Resigned on 20 April 2016)



Cheh Chee Mun(Independent Director) (Chairman)(Appointed on 4

October 2016)(Resigned on 10 August 2017)

Naren Anand Gill (Non-independent Director)(Appointed on 4 October

2016)

Clarence Yeow Kong Chew (Independent Director)(Appointed on 4

October 2016)

Nomination Committee Gong Ane (Chairperson) (Retired 22 June 2015)


2014) )(Resigned 21.06.2016)

Ang Wei Chuan(Independent Director)(Resigned on 20 April 2016)



Terence Selvarajah A/L Peter Selvarajah (Chairman) Appointed on 4

October 2016)(Redesigned to Chairman on 26 July 2017)

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Company information

(Continued)

Nomination Committee (Cont’d)

Guan Swee Kwee (Independent Director)(Appointed on 4 October 2016)

Remuneration Committee Gong Ane (Chairperson) (Retired 22 June 2015)

Lin Liying


2014) )(Resigned 21.06.2016)

Ang Wei Chuan(Independent Director) (Resigned on 20 April 2016)

Secretary Secretarius Services Sdn. Bhd. (Resigned on 8 June 2016)

Codan Services Limited (Asst. Company Secretary) (Resigned on 27 May

2016)

Boardroom.com Sdn. Bhd. (Agent) (Appointed on 3 November 2016)

Registrar i) Tricor Investor Services Sdn. Bhd.

Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3,

Bangsar South, No.8, Jalan Kerinchi 59200 Kuala Lumpur Wilayah

Persekutuan Malaysia.

Bankers

Industrial and Commercial Bank of China

Construction Bank of China

Auditors RT LLP

1 Raffles Place #17-02 One Raffles Place Singapore 048616

Partner-in-charge: Mr Su Chun Keat

(Since financial year 2013)

Solicitors

Conyers Dill & Pearman Pte. Ltd.

9 Battery Road, #20-01 Straits Trading Building, Singapore 049910.

Multi Sports Holdings Ltd and its subsidiaries

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GROUP STRUCTURE The structure of the Group of Companies is as follows:

Multi Sports is an investment holding company. The principal activities of its subsidiaries for the financial year are as follows: Pak Sing Shoe Material (H.K.) Limited- Investment Holding Jinjiang Baixing Shoe Material Co. Ltd– Design, development and manufacture of sports shoe soles Fujian Evidoma Ltd. – Apparel trading under the brand name “Evidoma” Fujian Qingte Investment Ltd.– Investment in agriculture, wholesale, manufacturing, retail trade, construction and transportation. Quanzhou Zente Trading Ltd.– Wholesale and retail of textile, garments, shoes, hats, toys, sporting goods, daily necessities, handicrafts, electrical products, metal products, machinery and equipment, building materials and chemical products (excluding dangerous chemicals).

PRODUCTS For management purposes, during the financial year the Group was organized into business units based on their business activities, and has five reportable operating segments producing the following products: 1) TPR shoe soles

TPR shoe soles are a physical mix of polymers, usually a rubber and a plastic. 2) RB shoe soles

Natural and synthetic rubbers are used in the production of RB shoe soles. 3) MD1 shoe soles

The main components of MD1 shoe soles are ethylene vinyl acetate (“EVA”) and rubber. 4) MD2 shoe soles

The main components of MD 2 shoe soles are similar to MD 1 shoe soles, but are produced using a distinct production process.

5) Apparels and accessories The main component is men’s fashion wear and accessories.


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DIRECTORS PROFILE LIN HOUZHI EXECUTIVE CHAIRMAN PEOPLES REPUBLIC OF CHINA AGE 52 Lin Huozhi was appointed to Multi Sports Board on 14 October 2008 as the Executive Chairman. He is the founder of the Group and claims more than 20 years of experience in the shoe-sole-production industry. According to previous reporting, he is responsible for the formulation and execution of the overall business strategies and policies of the Group; implementing management policies and overseeing the production and operation, marketing, quality control, public relations and Research and Development (“R&D”) of the Group. LIN LIYING EXECUTIVE DIRECTOR AND CHIEF EXECUTIVE OFFICER (CEO) PEOPLES REPUBLIC OF CHINA AGE 33 Lin Liying was appointed to Multi Sports Board on 14 October 2008. She was re-designated as Chief Executive Officer on 25 August 2014. According to previous reporting, she graduated from Huaqiao University with a Degree in Accounting and Information Technology in 2004 and joined Baixing in 2005, assuming position of Vice General Manager (Sales, Marketing and Purchasing) and is supposed to oversees Baixing’s procurement, marketing and distributionfunctions. TERENCE SELVARAJAH INDEPENDENT NON-EXECUTIVE DIRECTOR MALAYSIANAGE 50 Terence currently serves as an Independent Non-Executive Director of Systech Berhad and is also Chairman of the Audit Committee of Multi Sports Holdings Limited. He is currently employed as Vice President of Business Development at Dunlopillo (Malaysia) Sdn. Bhd. He started his career with Arthur Andersen from 1992 to 2003 in Corporate Finance. In 2003 he joined Pannell Kerr Forster Pte.Ltd. as Head of Corporate Finance before returning to start his own business in 2005. He has a degree in B.A. Law (Hons) from University of Nottingham, UK and an MBA (Finance) University of Hull, UK and qualified as an Advocate and Solicitor of the High Court of Malaya. NAREN ANAND GILL NON- INDEPENDENT NON-EXECUTIVE DIRECTOR MALAYSIANAGE 43 Naren is an Advocate and Solicitor of the High Court of Malaya practicing as a partner at Messrs Gill and Tang in Kuala Lumpur. He is on the Audit Committee of Multi Sports Holding Limited. He holds a BA in Philosophy and Politics from Leeds University, UK, an MBA from Southern Cross University (Australia), Barrister at Law (Lincolns Inn) Graduate Diploma in Law, University of Westminster (UK), BVC from the Inns of Court School of Law (UK). Related to Paramjit Singh Gill, a major shareholder of the Company. CLARENCE YEOW KONG CHEW INDEPENDENT NON-EXECUTIVE DIRECTOR MALAYSIANAGE 46 Clarence is a Consultant in Finance at JW Assets Sdn. Bhd. He has a degree in LLB(Law) University of London and University of Wales, Cardiff. GUAN SWEE KWEE INDEPENDENT NON-EXECUTIVE DIRECTOR MALAYSIANAGE 59 Guan is Managing Director of Japan Pulp and Paper (M) Sdn. Bhd. He holds a Bachelor of Science degree from Campbell University, North Carolina, USA.


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NOTES:

1. Directorship in Public Companies: apart from Terence Selvarajah, none of the other directors in office have directorships in other public companies / listed issuers

2. Attendance at Board Meetings (total number of board meetings for year is 5)

Attendance at Board Meetings during FYE 31.12.2016

Board Member Meetings Scheduled

during Tenure

Meetings Attended Change in Status

Lin Houzhi 5 1

Lin Liying 5 3

Wong Wang Lam 3 3 Resigned 21.06.2016

Ang Wei Chuan 2 2 Resigned 20.04.2016

Bernard Tan Chin Teik 2 2 Resigned 20.04.2016

Kasinathan A/L Tulasi 2 2 Appointed 04.10.2016

Resigned 11.07.2017

Cheh Chee Mun 2 2 Appointed 04.10.2016

Resigned 10.08.2017

Terence Selvarajah 2 2 Appointed 04.10.2016

Naren Anand Gill 2 2 Appointed 04.10.2016

Guan Swee Kwee 2 2 Appointed 04.10.2016

Clarence Yeow Kong Chew 2 2 Appointed 04.10.2016


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MANAGEMENT DISCUSSION & ANALYSIS (NON-EXECUTIVE DIRECTORS STATEMENT) We, the non-executive Directors of Multi Sports Holdings Limited (the Company) appointed by the shareholders of the Company on 4 October 2016 at a Special General Meeting (the new Directors) wish to make the following statement in relation to the Company / Group’s business and operations and the 2016 Audited Accounts:

1. This 2016 Annual Report is being released 16 months after the end of the financial year. As reflected in Note 30 to the financial statements, by the second quarter of 2016, the company had lost its company secretary and agent (both in Bermuda and Malaysia), the Company was left without a functioning board with all non-executive directors and the Chief Financial Officer resigning, leaving only Lin Liying and Lin Houzhion the board. Both Lin Liying and Lin Houzhihave failed or refused to communicate with either the regulators in Malaysia or the new board in Malaysia and following Bursa enforcement action, fines of RM1,656,000 each have been imposed on Lin Houzhi and Lin Liying.

2. As set out in Note 30 to the financial statements, we have confirmed (to the best of our ability given limited rights of

access to information), the existence of 24 litigation cases that were taken against the main subsidiary,

JinjiangBaixing,from2014 till April 2018. The financial amounts involved in the lawsuits were approximately RMB

518.13 million yuan and in some of the cases, either or both Lin Liying and Lin Houzhi are named as defendants to

the claims.

3. As set out in Note 20 to the financial statements, the new directors have concluded that they have no option but to deconsolidate the Company’s subsidiaries in the PRC as at 31 December 2016 based on a pre-existing loss of control and their inability to re-gain control of the subsidiaries since taking office. As such, the Company’s investment in the subsidiaries will be written down as a disposal and going forward, the subsidiaries financial statements shall not be consolidated into group accounts. In the event that the Company regains control over the subsidiaries or underlying assets, these will be captured and recognised in the Company’s accounts again.

4. The auditors in the conduct of their audit have also been unable to locate or contact Lin Liying and Lin Houzhi and were unable to access the books and records of the Group.The auditors were also unable to carry out confirmations on the subsidiaries’ cash bank balances in China and an audit visit to the factory and operations in China in March, 2018 revealed that the business and the factory is apparently under different ownership and is currently occupied by another company.

5. We believe the notes to the financial statements, as referred to above, will provide shareholders with a far clearer picture of what transpired and ledto the Company’s inability to release its 2015 Accounts, triggering suspension and the current predicament.

6. The release of the 2016 Annual Report on an unconsolidated basis should allow the Company to avoid delisting by Bursa due to the ongoing inability to release the Group’s accounts on a consolidated basis and will allow the process of restructuring/reorganisation under PN 17 status to continue.

7. Given the circumstances, the Auditors have had no choice but to give a disclaimer of opinion in their report on the 2016 Audit. The Auditors highlighted the uncertainties summarized below:

7.1. Disposal of subsidiaries:The auditors were unable to carry out audit procedures on the subsidiaries to ascertain whether the Group had lost control over the subsidiaries as therefore they were unable to determine the effect of any adjustments if necessary on the financial statements of the Group and Company.

7.2. Litigation:The auditors were unable to satisfy themselves on the completeness of the outstanding legal cases, extent of liabilities, including contingent liabilities that may arise from those legal claims as the PRC lawyer was only able to perform limited procedures on legal cases that were publicly available.

7.3. Going concern: The auditors were unable to satisfy themselves on the Group’s use of the going concern assumption which underlies the preparation of the Group and Company’s financial statements due to inability to ascertain ownership of assets, completeness of liabilities and assurance over the future funding to enable the Group and Company to operate as a going concern.

7.4. Events occurring after the reporting period: The auditors were unable to complete all their audit procedures with regards to the completeness of significant matters occurring after the reporting period.


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7.5. Risk due to fraud: The auditors were unable to perform the necessary procedures to satisfy themselves over the risk that the financial statements may be materially mis-stated due to fraud as they were unable to contact the management of those subsidiaries which the Group had disposed of in the current year.

7.6. Internal control: The auditors were unable to perform procedures to satisfy themselves whether the internal controls relevant to the audit were effectively designed and implemented as they were unable to contact the management of those subsidiaries which the Group had disposed of in the current year.

7.7. Opening balances: The auditors had issued a disclaimer of opinion on the financial statements of the Group and Company for the financial year ended 31 December 2015. Therefore, they were unable to determine whether any adjustments to the Group and Company financial statements for financial year ended 31 December 2016 were necessary as a result of misstatements to those balances.

8. In the circumstances, we wholly support the Auditor’s decision and are grateful for their assistance in carrying out checks on the subsidiaries in China and identifying key issues for further action and investigation.

9. When the new directors took office, they found that the Company did not have an operational office or staff in Malaysia and as such, the new directors have had to operate independently and without access to management / administrative support or to Company funding. Having only joined the board in the last quarter of 2016, we have been faced with the same obstacles as the Auditors in terms of accessing and verifying information and have also been unable to express an unqualified opinion on the financial statements due to lack of control and access to books, records and management of the subsidiaries.

10. Due to the circumstances referred to above and our inability to confirm the completeness of information and review and independently test the financial information prepared by the previous management under the control of Lin Liying and Lin Houzhi and submitted to the Company’s auditors for auditing, the new non-executive Directors are unable to express an unqualified opinion on this report and the Company’s / Groups affairs.

11. Looking forward, pursuant to Paragraph 4.1(b) of Practice Note 17, the company is actively pursuing a regularisation plan and the Board of MSPORTS anticipates that the said Regularisation Plan may result in a significant change in the business direction or policy presently adopted by the Company. The Company is now seeking a suitable business or asset that will meet the criteria to maintain the listing status of MSPORTS on the Main Board of the Malaysian Stock Exchange within the timeframe allocated to the Company under its PN17 status.

………………………………… Terence Selvarajah a/l Peter Selvarajah Independent Non-Executive Director ………………………………… Naren Anand Gill Non-Executive Director

………………………………… Guan Swee Kwee Independent Non-Executive Director ………………………………… Clarence Yeow Kong Chew Independent Non-Executive Director

For Multi Sports Holdings Limited Dated: 25 April, 2018


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CORPORATE GOVERNANCE STATEMENT The new Directors of Multi Sports recognise the importance of corporate governance in running the operations of the Company and Group and of the trust and expectations placed upon their shoulders by the shareholders and stakeholders. In fulfilling the respective fiduciary duties, the principles of transparency, integrity and professionalism should rightfully be incorporated into all levels of the Group’s corporate hierarchy. The new Directors were appointed on 4October, 2016 i.e. the 4th Quarter of the Financial Year. The appointment of the new Independent Directors was to safeguard the interest of shareholders and ensure proper governance. As detailed in this Annual Report, the new Directors (based in Malaysia) have not been able to establish control over the operations of the Group (which are in China) since their appointment and as such, were acting without a functioning organisation or offices. The newly appointed Board of Directors have taken steps to comply with the best practices of principles of good corporate governance as set out in the Malaysian Code on Corporate Governance 2012 (the “Code”) and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. It is with this in mind that the new Directors reports their findings to the shareholders on the manner of application of the principles contained in the Code to the best of their ability and with the limited information available on hand for the financial year ended in this report: 1. Establish Clear Roles and Responsibilities 1.1 Clear Functions of the Board and Management

The new Directors who are signing off on these accounts were appointed on 4 October, 2016 and did not have any control over the Group’s overall strategy, growth and direction including its financial performance or management supervision during the financial period reported in these accounts. Attempts by the Company’s auditors to contact the Executive Directors and the Management have been futile. For the financial year ended 31 December, 2016, the previous Board was nominally in control of the Company and Group during the 1st and 2nd Quarters. By mid-June 2016, the previous Board had either resigned apart from Lin Liying and Lin Houzhi who remained as directors but effectively cut off contact and we have been unable to trace their whereabouts to date. From mid-June to 4 October 2016, the Company was without a functioning board or staff in Malaysia. From 4 October to 31 December 2016, the new Directors were appointed to the board of the Company but had no control over the Group and minimal access to books and records of the Company itself. The new Directors are unable to comment on the application of Corporate Governance Principles prior to their appointment, however on 1 November 2017 Bursa Malaysia Securities Berhad had publicly reprimandedtd ("MSPORTS"), its Chairman and CEO and 3 other former directors in office during the financial year, for breaches of the Bursa Malaysia Securities Main Market Listing Requirements. In addition, the Chairman and CEO were also fined RM1,656,000 as at the date of the announcement. Post-appointment, the new Directors did not have access to operations or management therefore it was impossible to establish clear functions reserved for the board and those delegated to management. 1.2 Clear Roles and Responsibilities 15 Due to the circumstances set out in 1.1 above, the new Board had no interaction with management and was therefore unable to establish clear roles and responsibilities in discharging its fiduciary and leadership functions with respect to management supervision, oversight and succession planning. Similarly, the new Directors were unable to ensure internal controls and systems were in place; 1.3 Formalise ethical standards through a code of conduct

Due to the circumstances set out in 1.1 above, the new Directors were not in a position to formalise ethical standards through a code of conduct and ensure its compliance throughout the Group.


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1.4 Access to Information and Advice

Due to the circumstances set out in 1.1 above, the board had minimal access to information pertaining to the Group and were unable to rely or seek management’s assistance due to loss of control of the operating subsidiaries. 1.5 Qualified and Competent Company Secretaries The Company’s previous Secretaries in Malaysia and Bermuda resigned prior to 4 October 2016 the new Board was not in a position to re-engage its previous company secretaries during the financial year. The new Board was however able to appoint Boardroom.com on 02.11.2016 to act as Agent in Malaysia to provide certain secretarial services and limited advice/assistance with reporting and regulatory matters. 1.6 Corporate Social Responsibilities There were no CSR activities or practices undertaken by the Company during the Financial Year and no information is available in respect of the subsidiaries.

2. STRENGTHEN COMPOSITION

2.1 Nomination Committee (“NC”) Following the resignation of the previous NC, the new Board re-establish an NC during the Financial Year on 16.11.2016. Independent Non-Executive Directors. Composition of the NC

1) Wong Wang Lam (Independent Director) (Appointed on 20 May 2014) (Resigned 21 June, 2016)

2) Ang Wei Chuan(Independent Director) (Resigned on 20 April

2016)

3) Bernard Tan Chin Teik (Independent Director)(Appointed on 22 June 2015)(Resigned on 20 April 2016)

4) Terence Selvarajah A/L Peter Selvarajah (Independent Director)(Appointed to NC 16.11.2016)

5) Guan Swee Kwee (Independent Director) (Appointed to NC 16.11.2016)

The pre-existing Term of Reference (“TOR”) of the NC provided that the NC shall have specific responsibilities with respect to the nomination matters. The functions of the NC include, among others: (i) recommend to the Board of Directors, candidates for all directorships to be filled by the shareholders or the

Board of Directors. In making its recommendations, the nomination committee should consider the candidates’:- - skills, knowledge, expertise and experience; - professionalism; - integrity; and - in the case of candidates for the position of independent non-executive directors, the nomination committee should also evaluate the candidate’s ability to discharge such responsibilities/functions as expected from independent non-executive directors;

(ii) consider, in making its recommendations, candidates for directorships proposed by the Chief Executive Officer

and, within the bounds of practicability, by any other senior executive or any director or shareholder; (iii) recommend to the Board of Directors, directors to fill the seats on board committees;


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(iv) assess annually the effectiveness of the board as a whole, the committees of the board and thecontribution of each existing individual director and thereafter, recommend its findings to the Board of Directors;

(iv review annually the required mix of skills and experience and other qualities, including core competencies

which non-executive directors should bring to the board and thereafter, recommend its findings to the board; and

(v apply the process as determined by the Board of Directors, for assessing the effectiveness of the board as a

whole, the committees of the board, and for assessing the contribution of each individual director, including independent non-executive directors, as well as the chief executive officer where all assessments and evaluations carried out by the Committee in the discharge of all its functions should be properly documented.

Pursuant to Recommendation 2.1 of the Code, the NC should be chaired by a senior independent non-executive director. Remuneration Committee (“RC”) The Company had previously established a Remuneration Committee, which at the start of 2016 comprised the following members:- the

1) Lin Liying (CEO/Executive Director)

2) Wong Wang Lam (Independent Director)(Appointed on 20 May 2014) (Retired 21 June, 2016)

3) Ang Wei Chuan (Independent Director) (Resigned on 20 April 2016)

The RC was responsible for drawing up policy framework and to make recommendations to the Board on the remuneration packages of the Executive Directors of the Company. The Executive Directors should take no part in decisions relating to their remuneration and the Board as a whole is to determine the remuneration of the Non-Executive Directors with the Directors concerned abstaining from participating in decisions in respect of their individual remuneration. A Remuneration Committee was not set up by the new Directors during the Financial Year as the new Board had no control over operations or access to Company/ Group funds. 2.2 Develop, maintain and review criteria for recruitment and annual assessment of Directors a. Recruitment or Appointment of Directors

Matters relating to the appointment of Directors are dealt with by the NC in considering appointments of new Directors. The NC is to take into consideration the mix of skills and expertise, experience and potential contributions of the potential incoming Director. In addition, other factors considered by the NC include the candidates’ ability to commit sufficient time to the Group and also the ability to satisfy the test of independence taking into account the candidate’s character, integrity and professionalism. b. Annual assessment

The Board’s performance and effectiveness should be assessed on annual basis. The Board’s performance evaluation should be supported with assessment carried out on each individual Director’s performance and contribution in respect of their individual contribution, interaction and quality of input to the Board’s effectiveness. The NC should assess and recommend to the Board those Directors who are eligible to stand for re-election/re-appointment. The recommendation is based on formal reviews of the performance of the Directors, taking into consideration of their latest Board Effectiveness Evaluation, contribution to the Board through their skills, experience, strengths and qualities, level of independence and ability to act in the best interest of the Company in decision making as well as time commitment, character and integrity. The Board Committees are also subject to annual assessment and the evaluation processes take due consideration of each committee’s contribution and effectiveness in discharging its delegated duties and responsibilities in supporting the Board.


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The NC is tasked to carry out the evaluation of the effectiveness of the Board and individual Directors annually, including independent non-executive directors. All assessments and evaluations carried out by the NC in the discharge of all its functions are properly documented. Following the evaluation process, the NC identifies areas for improving the effectiveness of the Board and actions to be taken based on such feedback. The Bye-Laws of the Company provides that all Directors including the Managing Director shall retire from office at least once every three (3) years and all retiring Directors shall be eligible for re-election at the Annual General Meeting (“AGM”) in which they retire. A retiring Director shall remain in office until the close of the meeting at which he/she retires. The Bye-Laws further provide that Directors who are appointed by the Board during the financial period before an AGM are subject to retirement and shall be eligible for re-election by the shareholders at the next AGM of the Company to be held following their appointments. The NC is required to review and asses the mix of skills, expertise, composition, size and experience of the Board, including core-competencies of the Directors, the contribution of each individual directors as well as their character, integrity and time commitment, independence of the Independent Directors, effectiveness of the Board as a whole, and the Board Committees; and also the retirement of Directors eligible for re-election. No review and assessment was carried out for the financial year ended 31 December, 2016 due to the short period of time in which the new Directors held office. Annual Report 2014 c. Gender diversity policy

In terms of gender make-up of the Board, the Board had 1 female director (non-participating as explained above) and given the current circumstances, the Board is of the view that there is no necessity to fix a specific gender diversity policy until the Company is regularised. In any event, any new appointments to the Board shall be based on merit. d. Remuneration policies

There were two (2) Directors holding executive positions and drawing salaries from the Group. We understand that the remuneration policy for Directors and management as at 31 December, 2015 were as follows: a) Basic Salary The Remuneration Committee recommends the basic salary of the CEO and executivedirector after having considered their performance. In the evaluation process, considerations given to the salary scales for similar jobs in the industry. b) Directors’ Fees Directors’ fees are only payable to Non-Executive Directors. The Remuneration Committee recommends the framework of Directors’ fees to the Board. The fee structure is determined based on their experience as well as the level of responsibilities involved and is subject to shareholders approval at the AGM. c) Bonus Scheme The Group operated a bonus scheme for the CEO and Executive Director. The eligibility for the scheme is linked to the performance of the Group’s business activities and an assessment of the employees’ performance and contribution. d) Social Security Contributions Contribution made in respect of the CEO and Executive Director is computed on the basis of the “average wage” of the preceding year. Each year the Department of Labour and Social Security of China will announce the amount of the said average wage in the first half of the year. In addition to the above, the Directors have the benefit of Directors and Officers (D&O) insurance in respect of any liabilities arising from acts committed in their capacity as D&O of Multi Sports. However, the said insurance policy does not indemnify a Director or principal officer if he or she is proven to have acted negligently, fraudulently or dishonestly, or in breach of his or her duty or trust.


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In February 2016, the previous Board had resolved that the remuneration packages amounting to RMB2,285,575.00 for the Executive Directors for 2016 be hereby approved and that Directors fees should be put to the shareholders for approval in the 2016 AGM but these decisions was overtaken by events and no AGM was held for shareholders to approve any such remuneration for the financial year ended 31 December, 2016.The new Directors do not have access to information to confirm the amount of remuneration received by the Executive Directors and former directors during the Financial Year from the Group. The new Directors have received no remuneration for the Financial Year ended2016. 3. REINFORCE INDEPENDENCE 3.1 Annual Assessment of Independence The Board, through the NC, assesses the independence of non-executive directors using the Exhibit 8 of the Corporate Governance Guide 2 issued by Bursa Malaysia Berhad, Independent Director Self-Assessment Checklist. This is in line with Recommendation 3.1 of the Code. 3.2 Tenure of Independent Director Recommendation 3.2 of the Code stipulates that the tenure of an independent director should not exceed a cumulative term of nine years. 3.3 Shareholders’ approval for re-appointment as Independent Director after a tenure of nine years As at 31 December, 2016, none of the Independent Directors have served the Board for nine years. 3.4 Separation of positions of the Chairman and CEO The positions of Chairman and CEO during the Financial Year were held by two different individuals however they are related (father and daughter) 3.5 Composition of the Board Post 4 October 2016 to 31 December, 2016, the new non-executive Directors were in constant contact and met at ad-hoc meetings as needed. 4.2 Directors’ Training The Board should emphasise the importance of continuing education programmes or training for Directors. Continual improvement allows the Directors of the Company to equip themselves with updated knowledge and skills to enable them to actively participate in board deliberation and meet future challenges. The Board evaluates and determines the training needs of its members to assist them in the discharge of their duties as Directors. The NC should evaluate the training needs of its directors and ensure that they keep abreast of regulatory changes, other developments, and Board business trends. The new Directors did not undertake any training between 4 October 2016 and the end of the Financial Year due to the short time frame. 4. FOSTER COMMITMENT As part of the continuing learning process, the Directors will attend seminars and courses to keep themselves updated on regulatory and corporate governance development besides enhancing their professionalism and knowledge to effectively discharge their duties and obligation. Each Director should determine the areas of training that he or she may require for personal development as a Director or as a member of a Board Committee. 5. UPHOLD INTEGRITY IN FINANCIAL REPORTING 5.1 Audit Committee The main purpose of the Audit Committee is to assist the Board in fulfilling its responsibilities relating to accounting and reporting practices of the Group. The Board should have a formal, professional and transparent relationship with both


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the internal and external auditors of the Group. The auditors should have direct access to the Board and to Audit Committee thus ensuring that issues highlighted are treated objectively and are free from any potential management influence. .The Audit Committee should also have the liberty to meet with the external auditors as and when deemed necessary. The new Directors and Audit Committee had no formal access to the Company’s Auditors until September 2017 and no access to the Groups internal audit function. The responsibility of the Audit Committee in relation to both the internal and external auditors is described on pages 20 to 21 of this Annual Report. oldinLt26 5.2 Financial Reporting The Directors are duty bound to present a fair and accurate assessment of the Group’s financial position and prospects to the shareholders and stakeholders. The Audit Committee plays a crucial role in assisting the Board to scrutinise information for disclosure to shareholders in order to ensure accuracy, adequacy, completeness and timeliness. The Board is responsible for the preparation of the financial statements of the Company and ensuring that they are drawn up in accordance with the provisions of the Bermuda Companies Act, 1981 and International Financial Reporting Standards. The Statement of Responsibility by Directors in respect of the preparations of the annual audited financial statements of Multi Sports and the Multi Sports Group is found on 14 of this Annual Report and is to be read in conjunction with the Non-Executive Directors Statement starting at page 6 on the issues faced by the new Directors in adhering to this function and ensuring compliance with the relevant regulations stated herein. 5.3 Assessment of suitability and independence of external auditors Through the Audit Committee, the Board has established transparent and appropriate relationship with the Company’s External Auditors. The Audit Committee oversees the quality of the audits conducted by the Company’s external auditors and assess’ the adequacy of the risk management systems as well as the financial reporting systems based on audit feedback from the external auditors. The Company’s independent External Auditors fill an essential role for the shareholders by enhancing the reliability of the Company’s financial statements and giving assurance of that reliability to users of these financial statements. 6. RECOGNISE AND MANAGE RISKS 6.1 Internal Control and Risk Management The Board has overall responsibility for maintaining a sound system of internal controls, internal procedures and guidelines that together serve to provide a reasonable assurance of an effective and efficient operation and always strive to comply with the relevant laws and regulations.An overview of the state of internal controls within the Group is set out in the Statement on Risk Management and Internal Control starting at 15 of this Annual Report. 27Annual Report 2014 6.2 Internal Audit Functions reports directly to Audit Committee The new Directors recognise that there will be a need for an internal audit function once control is regained over operations. 7. ENSURE TIMELY AND HIGHQUALITY DISCLOSURE 7.1 Appropriate corporate disclosure policies and procedures The new Board recognises the need and importance of communication with shareholders and investors through timely and accurate dissemination of information of the Group’s performance and major developments via appropriate channels of communication compliance with the disclosure requirements as set out in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.


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8. STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS 8.1 Encourage shareholder participation at general meetings The principal forum for shareholders to interact and have dialogue with the Board is at the AGM of the Company. The Company supports the Code’s recommendation of encouraging shareholder participation in general meetings. In this respect, notice of AGM and the annual report should be disseminated to the shareholders at least twenty-one (21) days before the date of the AGM. In addition, notice of AGM is further enhanced to include all relevant information in regard to the shareholders’ rights at the said general meeting. Any special business items within the agenda for the AGM would be accompanied by an explanatory statement in order for the shareholders to have a better understanding of the issues involved and thereby, better evaluation and decision-making. For certain business/corporate proposals where shareholders’ approval is required, circulars are sent to shareholders within the prescribed timeframe in compliance with the regulatory and statutory provisions. These circulars provide the necessary details and are sufficiently comprehensive to enable shareholders to arrive at an informed decision on the proposals to be tabled at the AGM/Special General Meeting (“SGM”). The Board of Directors did not convene an AGM for the financial year ended 31 December, 2016 to date. During the AGM/SGM, shareholders would have the opportunity to seek clarifications pertaining to the Group or to request for information regarding operations, business activities, developments and direction of the Group. Any queries raised would be attended to by the Board and members of senior management would be at hand to provide the necessary information. Furthermore, Recommendation 8.2 of the Code recommends that the Board should encourage poll voting for substantive resolutions. The Board will evaluate the feasibility of carrying out electronic polling at its general meetings in future as was done at the SGM held on 04 October 2016. 9. COMPLIANCE WITH THE CODE The new Directors are unable to verify or confirm if Multi Sports was substantially in compliance with the principles and recommendations of the Malaysian Code on Corporate Governance 2012 throughout the financial year ended 31 December 2016 due to the lack of control of the operational subsidiaries, and lack of information and co-operation of the Executive Directors. 10. DIRECTOR’S RESPONSIBILITY STATEMENT The Directors are required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and the Group as at the end of the financial year, using appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates, and that all applicable accounting standards have been followed. The Directors have responsibility for ensuring that the Company and the Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the financial statements comply with the Bermuda Companies Act, 1981 and International Financial Reporting Standards. The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities. In the process of reviewing these financial statements for the financial year ended 31 December, 2016, the newly appointed Board of Directors have relied on information furnished by the external auditors of the Company and from the information and records prepared by the Executive Directors and officers of the Company for part of the financial period. The Executive Chairman and the Chief Executive Officer are no longer contactable and have not replied to the queries and information sought by the auditors and new Directors. As such, the new Directors are not in a position to determine whether the accounting policies and practices were consistently applied throughout the year and in cases where judgement and estimates were made, whether they were based on reasonableness and prudence.


15

Additionally, in view of the material uncertainty as highlighted in the Auditor’s Report, the new Non-Executive Directors are unable to form an opinion on the accuracy and reliability of such information contained in this report.

Statement on Risk Management and Internal Control The Board wishes to make the following disclosures pursuant to Paragraph 15.26 (b) of the Main Market Listing requirements of Bursa Malaysia Securities Berhad on the state of risk management and internal control of Multi Sports Holdings Ltd (the “Company”), which has been prepared in accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad with reference to the Statement on Risk Management& Internal Control: Guidelines for Directors of Listed Issuers which replaced the original guidelines “Statement of Internal Control - Guidance for Directors of Public Listed Companies” issued in December 2000. References to the “Group” are a reference to the Company and its subsidiaries. BOARD RESPONSIBILITIES The Board recognises that it is responsible for the existence of an appropriate risk management framework and maintaining a sound system of internal control including the establishment of a robust control framework to assist management in mitigating business process and regulatory risks that cover the financial reporting, compliance and operations of the Group to safeguard shareholders’ investment and the Group’s assets. In pursuing these objectives, the Board is aware of the limitations that are inherent in any systems of internal control and risk management, such systems being designed to manage, and can only provide reasonable but not absolute assurance against the risk of material misstatement or loss internal control, which may hinder the achievement of the Group’s business objectives. The new directors, having not had control over the Group since their appointment, are unable to obtain confirmation or verification that the Group’s risk management and internal control system was operating adequately, effectively or at all during the financial year. RISK MANAGEMENT FRAMEWORK The Board recognises the need for an effective risk management practice and to maintain a sound system of internal control. The Board is unable to determine if the Group’s existing risk management framework in which the existence of significant risk of the Group was identified and rated using its adopted risk quadrant was functioning. A detail risk profiles should have been compiled to help the Board and senior management to prioritise their focus on high risks. Significant risk matters should be brought to the attention of the Directors to ensure systematic risk management process to identify, evaluate and manage the significant risks. Both the Audit Committee and Board of Directors were to have reviewed the effectiveness of the risk management function and deliberate on the risk management and internal control frameworks, functions, processes and reports on a regular basis. For the period under review, the Audit Committee was to have been assisted by the management staff as well as the internal auditor to evaluate the significant risks faced by the Group against a defined risk appetite and ensured that appropriate risk treatments were in place to mitigate those risks affecting the achievement of the Group’s business objectives. The new Directors, having not had control over the subsidiaries of the Company since their appointment, are unable to obtain confirmation or verification that the Group’s risk management and internal control system was operating adequately, effectively or at all during the financial year and given the circumstances, have concerns over whether a control system in fact existed. INTERNAL AUDIT The Group had previously outsourced its internal audit function to a professional services firm to provide the Audit Committee and the Board with the assurance they require pertaining to the adequacy and effectiveness of internal control. The newly appointed Board of Directors, having not had control over the Group since their appointment, are unable to obtain confirmation or verification that the Internal Audit function operated adequately, effectively or at all during the financial year.


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KEY ELEMENTS OF INTERNAL CONTROL During the financial year ended 31 December 2016 the Board in office during that period was to have continued its ongoing process of identifying, evaluating and managing of key financial, operational and compliance risks facing the business. The new directors, having not had control over the Group since their appointment, have been unable to continue the business-as-usual role of identifying, evaluating and managing of key financial, operational and compliance risks facing the business. The new directors are unable to confirm or verify the Group’s internal control procedures and systems and due to the structure of the group, the holding Company effectively operates in isolation in Malaysia whilst the Group business operations are in China. REVIEW OF THE STATEMENT BY EXTERNAL AUDITOR The external auditors have reviewed this Statement on Internal Control for the inclusion in the annual report of the Company for the year ended 31 December 2016 and the External Auditors are unable to confirm if the financial statements so furnished were consistent with the process supposed to have been adopted by the Board in reviewing the effectiveness and efficiency of the risk management process as well as the adequacy and integrity of the system of internal controls. Recommended Practice Guide 5, Guidance for Auditors on the Review of Directors’ Statement on Internal Controls (“RPG 5”) does not require the External Auditors to consider whether the Directors’ Statement on Risk Management and Internal Controls covers all risks and controls, or to form an opinion on the effectiveness of the Group’s risk and control procedures. WEAKNESSES IN INTERNAL CONTROL THAT RESULT IN MATERIAL LOSSES The newly appointed Board of Directors are unable to confirm if there were any material losses reported caused by any weaknesses in internal control for the financial year ended 31 December 2016 as theyhave had no control over the subsidiaries since their appointment.

ADDITIONAL COMPLIANCE ISSUES 1. Share Buy Back

The Company did not undertake any share buy-back exercise. 2. Depository Receipt (“DR”) Programme

The Company was involved in the TDR Programme of which has been listed and quoted on the Taiwan Stock Exchange on 30 December 2011. Far Eastern International Bank Co., Ltd. has been appointed as the depository institution for the TDR Programme with Citibank Hong Kong as the custodian of Multi Sports’ shares in Malaysia for the TDR. The total numberof shares that can be purchased under the TDR shall not exceed 15% of the total issued and paid-up capital of Multi Sports at any point in time. As at 30 April 2015,the total number of Multi Sports shares issued was 517,500,000 Ordinary Shares of USD0.05 each.

The total number and percentage of the securities for which the DRs are issued against its issued and paid-upcapital was 67,500,000 Ordinary Shares of USD0.05 each at an issue price of RM0.37 per share. The Company’s listing in Taiwan under the Taiwan Depository Receipts Programme was de-listed on 1November, 2016 as the Company had failed to issue the 2015 annual financial reports and the 2016 half yearly financial reports as required under the Taiwan Securities Exchange Act and Taiwan Stock Exchange regulations.

3. Audit and Non-Audit Fees

The audit fee paid to the Auditors for the financial year amounted to RM130,092. There were no non-audit fees paid or payable to the external auditors by the Group for the financial year.


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4. Variation in Results

There was no material variance between the results for the financial year and the audited results previously announced. No profit forecast was announced or published by the Group and hence, no comparison is made between actual and forecast results.

5. Profit forecast

There was no profit forecast issued by the Company and its subsidiary companies during the financial year.

Multi Sports Holdings Ltd34 6. Profit Guarantee

There were no profit guarantees given by the Company and its subsidiary companies during the financial year. 7. Material Contracts

During the year under review, the non-executive directors appointed on 4 October 2016 confirmed that they had not entered into any material contracts involving Directors’ and major shareholders’ interest with the Company and its subsidiaries. Due to lack of information, the non-executive directors appointed on 4 October 2016 were not able to confirm whether the Company and its subsidiaries had entered into any material contracts involving Directors’ and major shareholders’ interest with any other directors.

11. Recurrent Related Party Transactions (“RRPT”)

There was no Shareholders’ Mandate obtained in respect of RRPTs during the financial year-end. 12. STATEMENT PERTAINING TO THE ALLOCATION OF SHARE ISSUANCE SCHEME TOEMPLOYEES

During the financial year 2015, the Company issued 77,622,000 new ordinary share of USD0.025 (RM0.11) each for cash arising from the exercise of employees’ share options at exercise price of USD0.025 (RM0.11) per ordinary shareand during 2016, the Company issued 11,642,000 further ESOS shares of USD0.025 (RM0.11) on the same basis as announced via Bursa Malaysia on 24 March 2016. The holders of ordinary shares are entitled to receive dividends as declared from time to time and entitled to one vote per share at general meetings of the Company. All shares rank equally with regard to the Company’s residual assets.

AUDIT COMMITTEE REPORT 1. COMPOSITION & MEETINGS OF AUDIT COMMITTEE The Audit Committee serves to assist the Board in ensuring the effectiveness of the Group’s system of internal control, risk management and financial reporting practices of the Group. In compliance with the Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, all three (3) members of the Audit Committee (“the Committee”) are independent non-executive directors. During the financial year ended 31 December 2016, one (1) Audit Committee meeting was convened. For the financial year ended 31 December 2016, the Audit Committee comprised the following members:- Chairperson : Members : Bernard Tan Chin Teik (Appointed on 22 June 2015/Resigned on 20 April 2016) Independent Non-Executive Director (attended 1/1 meetings convened) Wong Wang Lam (Appointed on 20 May 2014/ Resigned on 21 June, 2016)


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Independent Non-Executive Director (attended 1/1 meetings convened) Ang Wei Chuan (Resigned on 20 April 2016) Independent Non-Executive Director](attended 1/1 meetings convened) Cheh Chee Mun (Appointed 16 November 2016) (no meeting convened) Naren Anand Gill (Appointed 16 November 2016) (no meeting convened) Clarence Yeow (Appointed 16 November 2016) (no meeting convened) 2. TERMS OF REFERENCE 2.1 Composition of the Audit Committee The Audit Committee must be composed of no fewer than 3 Non-Executive Directors of which the majority shall be Independent Directors. All Audit Committee members should be financially literate, with at least one member:- i) must be a member of the Malaysian Institute of Accountants; or ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’working experience

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

or (b) he must be a member of one of the associations of accountants specified in Part II ofthe1st Schedule of

the Accountants Act 1967; or (iii) fulfils such other requirements as prescribed or approved by the Exchange. No Alternate Director shall be appointed as a member of the Committee. The Chairman of the Audit Committee should engage on a continuous basis with the senior management, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Company. All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. The Board must review the term of office and performance of the Audit Committee and each of its members at least once every 3 years to determine whether the Audit Committee has carried out its duties in accordance with its terms of reference. 2.2 Secretary of the Audit Committee The Company Secretary of the Company shall act as Secretary of the Audit Committee. 2.3 Duties and Responsibilities of the Audit Committee

The Audit Committee shall review and report to the Board on the following key matters:

i. To review the appointment, resignation, conduct and audit plans of the Internal and External Auditors;

ii. To review the assistance given by the employees of the Company to the external auditors and the internal auditors;

iii. To review the quarterly results and year end financial statements, prior to the approval by the Board;

iv. To review any related party transactions and conflict of interest situations that may arise within the Company or group including any transaction, procedure or course of conduct that raises questions of management integrity; and

v. To oversee the Company’s internal control structure to ensure operational effectiveness and efficiency, reduce risk of inaccurate financial reporting, protect the Company’s assets from misappropriation and encourage legal and regulatory compliance.


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vi. To review the allocation of options pursuant to a share scheme for employees.

vii. To report promptly to the Bursa Malaysia Securities Berhad where the Audit Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements.

2.4 Authority of the Audit Committee The Committee shall at the expense of the Company have the following authority:-

1) to investigate any matter within its terms of reference;

2) to have the resources which are required to perform its duties;

3) to have full and unrestricted access to any information pertaining to the Company;

4) to have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;

5) to obtain independent professional or other advice; and

6) to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

Attendance of any particular Audit Committee meeting by other directors and employees of the Company shall be at the Audit Committee’s invitation and discretion and must be specific to the relevant meeting. 4. SUMMARY OF ACTIVITIES

A brief summary and an overall view of the activities of the Audit Committee during the Financial Year ending 31 December 2016 in discharging their duties and responsibilities, based on information extracted from available documents in hand are as follows:-

i) The Audit Committee in place at the beginning of the financial year reviewed the 4th Quarter unaudited financial results of the Group prior to their release to Bursa Malaysia Securities Berhad;

ii) reviewed the draft 2015 financial statements

iii) it is not known if the Audit Committee appointed during the period reviewed the 1st Quarter 2016 unaudited financial results although the same were, according to available records, approved by the Board.

The current Audit Committee, operating after the Financial Year, did discuss the audit with the external auditors prior to and during the commencement of the audit of the Group’s financial statements for the financial year ended 31 December 2016. The current members of the Audit Committee were only in office from 4 October 2016 and were not able to begin formal discussions with the Auditors until September 2017 due to ongoing discussions and negotiations regarding outstanding fees, which had led the Auditors to cease work during the 2nd quarter of 2016, prior to the appointment of the new directors. The current members of the Audit Committee were involved in the preparation and approval of the Company’s financial statements based on financial transactions and events occurring during their tenure; available documents/records and via their attempts to re-construct the financial position from the limited available information but all statements relating to the subsidiaries are carried forward from previous reports due to loss of control and inability to access information. For the reasons set out in the Non-Executive Directors’ Statement and report and the issues highlighted by the Auditors for their disclaimer of opinion, the current members of the Audit Committee have not had the necessary access to information and resources to be able to retrospectively test the financial statements or ensure the effectiveness of the Group’s system of internal control, risk management and financial reporting practices of the Group during the financial year.


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5. INTERNAL AUDIT FUNCTION The new Directors are unable to report on the activities and involvement of the internal audit function (if any) during the financial year as not information.


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Financial Statements


And its subsidiaries For the year ended 31 December 2016

Contents

Page

Directors’ Report 22

Statement by Directors / Statutory Declaration 26

Independent Auditor’s Report 28

Statements of Financial Position 33

Consolidated Statement of Comprehensive Income 34

Consolidated Statement of Changes in Equity 35

Consolidated Statement of Cash Flows 36

Notes to the Financial Statements 37


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DIRECTORS’ REPORT

The new directors submit this report to the members together with the-consolidated financial statements of the Company

for the financial year ended 31 December 2016.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of its subsidiaries are disclosed in

Note 6to the financial statements.

There were no significant changes in the nature of these activities of the Company and its subsidiaries during the

financial year.

FINANCIAL RESULTS

Group Company

RMB’000 RMB’000

Loss for the year attributable to equity holders 906,733 (28,785)

DIVIDENDS

No dividend was paid and declared by the Company since the end of the previous financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year except as disclosed in the

financial statements.

DIRECTORS

The directors in office at the date of this report are:-

Terence Selvarajah A/L Peter Selvarajah (Appointed on 4 October 2016)

Naren Anand Gill (Appointed on 4 October 2016)

Guan Swee Kwee (Appointed on 4 October 2016)

Clarence Yeow Kong Chew (Appointed on 4 October 2016)


23

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during the year, did there subsist any arrangement to which the

Company was a party, with the object or objects of enabling directors of the Company to acquire benefits by means of

the acquisition of shares in or debentures of the Company or any other body corporate apart from the issue of the

Employees share Option Scheme (“ESOS”).

Since the end of the previous financial year, no director has received or become entitled to receive any benefit other

than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the

fixed salary of a full time employee of the Company as shown in Note 16 to the financial statements by reason of a

contract made by the Company or a related corporation with the director or with a firm of which the director is a member,

or with a company in which the director has a substantial financial interest.

The new directors have not received any payment or benefits for their service from the date of their appointment up to

the date of this report.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the beneficial interests of those who were directors at the end of

the financial year in the shares of the Company and its related corporations during the financial year wereasfollows:-

The Company Ordinary shares of USD 0.025 each

Direct interest

At 1.1.2016 At 31.12.2016

Lin Houzhi

7,762,000 -

Lin Liying

3,881,250 -

Naren Anand Gill

- 23,599,600

Indirect interest

At 1.1.2016 At 31.12.2016

Lin Huozhi(1)

96,124,125 68,124,125

A summary of the warrants granted to the Directors of the Group or to the Company where the directors have interest

are set out below:

The Company Warrants

Indirect interest

At 1.1.2016 At 31.12.2016

Lin Huozhi(1) - -

Further details of the warrants are disclosed in Note 26 to the financial statements.

(1)Indirect interest by virtue of his substantial interest in Power Wide Holdings Limited.


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Lin Huozhiby virtue of his interest in shares in the Company is also deemed interested in shares of all the Company’s

subsidiaries to the extent the Company has an interest.

DIRECTORS’ INTERESTS (CONT’D)

Other than those disclosed above, the directors at the end of the financial year did not hold any interest in shares and/or

option over shares and loan stocks of the Company and its related corporations during the financial year.

ISSUE OF SHARES

During the financial year 2015, the Company issued 77,622,000 new ordinary share of USD0.025 (RM0.11) each for

cash arising from the exercise of employees’ share options at exercise price of USD0.025 (RM0.11) per ordinary

shareand during 2016, the Company issued 11,642,000 further ESOS shares of USD0.025 (RM0.11) on the same basis

as announced via Bursa Malaysia on 24 March 2016.

There were no other changes in the authorised, issued and paid-up capital of the Company during the financial year.

OTHER STATUTORY INFORMATION

The directors signing this report were appointed to the Board on 4 October 2016 by which point the other non-executive

directors and the Company’s CFO had resigned. The remaining Executive Directors, Lin Liying and Lin Houzhi, are

believed to be in China but have failed to cooperate or render an explanation for the audit issues raised by the

Company’s Auditors and the new independent non-executive directors.

As such, the new non-executive Directors appointed on 4.10.2016 signing this report hereby declare as follows:

(a) the directors are unable to confirmthat, before the financial statements of the Group and of the Company were

made out and submitted to the Auditors, that the former officers and boardof directors of the Company as at 31

December,2016 took reasonable steps:-

(i) to ascertain that action had been taken in relation to the writing-off of bad debts and the making of

allowance for doubtful debts and satisfied themselves that there were no bad debts to be written off and no

allowance for doubtful debts was required; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting

records in the ordinary course of business had been written down to an amount which they might be

expected to realise.

(b) At the date of this report, the directors are unable to ascertain if the Officers, former Board of Directors and

Executive Directors of the company as at 31 December 2016 were aware of any circumstances other than those

already disclosed in the financial statements which would render:-

(i)it necessary to write off any bad debts or to make any amount of the allowance for doubtful debts in respect of

the financial statements of the Group and of the Company; or

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

misleading.


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OTHER STATUTORY INFORMATION (CONT’D)

(c) At the date of this report, other than those disclosed in the report or the financial statements, the directors are

unable to confirm of any circumstances which have arisen that would render adherence to the existing method of

valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) Other than those disclosed in the financial statements and this report, the directors are not able to determine if the

officers and directors of the company in 2016 were aware of any circumstances not otherwise dealt with in this

report or the financial statements which would render any amount stated in the financial statements misleading.

(e) Other than those disclosed in the financial statements and this report, the directors are not able to confirm if at the

date of this report, there does not exist:-

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial

year which secures the liability of any other person; or

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

financial year.

(f) Other than those disclosed in the financial statements and this report, the directors are not in a position of offer an

opinion that:-

(i) no other contingent or other liability has become enforceable or is likely to become enforceable withinthe

period of twelve months after the end of the financial year whichwill or may affect the ability of the Group or

of the Company to meet its obligations as and when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of

the financial year and date of this report which is likely to affect substantially the results of the operations of

the Group or of the Company for the financial year in which this report is made.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year are disclosed in Note 29 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

The significant events subsequent to the balance sheet date are disclosed in Note 30 to the financial statements.

INDEPENDENT AUDITORS

The auditors, RT LLP have expressed their willingness to accept re-appointment.

On behalf of the Board,

…………………………………………………

Terence Selvarajah A/L Peter Selvarajah

…………………………………………………

Naren Anand Gill

Date: 25 April 2018 Kuala Lumpur, Malaysia

DRAFT


26

STATEMENT BY DIRECTORS

The non-executive Directors believe that the accompanying financial statements and the consolidated balance sheet

and consolidated profit and loss account are subject to material uncertainties as reflected in the issues raised by the

Auditors in their Report dated 25.04.2018.

We are unable at present to form an opinion or draw conclusions in respect of the circumstances leading to the

disclaimers by the Auditors. There may be additional circumstances as yet unknown or unconfirmed that could have a

material impact on the truth and fairness of the financial statements.

Accordingly, we are unable to form an opinion as to whether the financial statements have been 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

state of affairs of the Group and of the Company at 31 December 2016 and of their results and cash flows for the

financial year ended on that date

The information set out in Note 25 to the financial statements have been prepared in accordance with the Guidance of

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 accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad but due to loss of

control of the subsidiaries and the inability to access records and key personnel, this is based on incomplete information

and financial statements submitted by the previous board and as such, is subject to the material uncertainties identified

by the Auditors.

On behalf of the Directors,

Terence Selvarajah a/l Peter Selvarajah

Date: 25 April 2018

Kuala Lumpur, Malaysia

DRAFT


27

STATUTORY DECLARATION

Pursuant to Paragraph 9.27 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad:

I, Mr. Terence Selvarajah A/L Peter Selvarajah, being the Director primarily responsible for the financial management of

Multi Sports Holdings Ltd effective 4 October, 2016, do solemnly and sincerely declare to the best of my knowledge and

belief:

that it is my opinion that the accompanying financial statements and the consolidated balance sheet and consolidated

profit and loss account are subject to material uncertainties as reflected in the issues raised by the Auditors in their

Report dated 25.04.2018. There may also be additional circumstances of which I am not aware of that may have a

material impact on the truth and fairness of the financial statements.

Accordingly, I am unable to form an opinion as to whether the financial statements have been drawn up in accordance

with Financial Reporting Standards and give a true and fair view of the state of affairs of the Group and of the Company

at 31 December 2016 and of their results and cash flows for the financial year ended on that date and I make this

solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory

Declarations Act 1960.

Subscribed and solemnly declared by the

abovenamed Mr.Terence Selvarajah a/l

Peter Selvarajain Malaysia

Date: 25 April 2018

_______________________________

Before me:

Commissioner for Oaths/ Notary Public


28

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MULTI SPORTS HOLDINGS LTD

Report on the financial statements Disclaimer of Opinion We were engaged to audit the financial statements of Multi Sports Holdings Ltd (the “Company”) and its subsidiaries (the “Group”), which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 December 2016, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group and the statement of changes in equity of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. We do not express an opinion on the accompanying financial statements of the Group and the statement of financial position and statement of changes in equity of the Company. Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

Basis for Disclaimer of Opinion

1. Disposal of subsidiaries As disclosed in Note 20 to the financial statements, the board of directors are of the view that the Company has lost its ability to control its subsidiaries and has not had control of its subsidiaries since before their appointment on 4 October 2016, the subsidiaries are namely Pak Sing Shoe Material (H.K) Limited, Jinjiang Baixing Shoe Material Co.,Ltd, Fujian Evidoma Ltd, Fujian Qingte Investment Ltd and Quanzhou Sente Trading Ltd (collectively “subsidiaries”).The formulation and implementation of a Regularisation Plan is pending at this stage. We were unable to carry out certain audit procedures or to obtain information we considered necessary during our audit of the financial statements of the Group and the Company which including the trade and other payables of approximately RMB 3,098,000 stated on the face of the statement of financial position of the Company as we were unable to carry out alternative procedures to enable us to conclude on the completeness and existence of trade and other payables. Therefore, we could not determine the effect of adjustments, if any, on the financial position of the Group and the Company as at 31 December 2016 or on its financial performance and cash flows forthe year then ended.

2. Litigation We were informed by the new non-executive Directors that, prior to, during and subsequent to the preceding financial year ended 31 December 2015, legal claims appear to have been brought by certain parties against Jinjiang Baixing Shoe Material Co.,Ltd (“Baixing”), Fujian Evidoma Ltd (“Evidoma”), Fujian Qingte Investment Ltd (“Qingte”), Quanzhou Sente Trading Ltd (“Sente”), Lin HuoZhi and Lin Liying (the Executive Directors of the Company), on certain loan contracts and sale and purchase contracts. The board of directors of the Company have sought the assistance of PRC lawyers to obtain relevant information related to legal claims brought against the PRC subsidiaries. However, the PRC lawyers are unable to provide an assurance on completeness of all legal cases identified and the extent of liabilities, including contingent liabilities that may arise from these legal claims due to their inability to access sufficient information from the Courts and authorities and their reliance on publicly available information.


29

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MULTI SPORTS HOLDINGS LTD (CONT’D) Report on the financial statements (Cont’d)

Without full information on those legal cases (see Note 28)(we had not been able to contact the management of the subsidiaries since end of April 2016),we were unable to determine whether any further provision would be required in respect of those legal cases or reasonable assurance over the completeness of provision for any outstanding legal cases.

3. Going Concern

As disclosed in Note 1 to the financial statements, the financial statements of the Group and the statement of financial position of the Company have been prepared on the assumption that the Group and Company will continue as going concerns. The application of the going concern basis is based on the assumption that the Group will be able to realise their assets and liquidate their liabilities in the normal course of business. As disclosed in Note 1 to the financial statements, there are conditions which indicate the existence of a material uncertainty that may cast significant doubt about the Group’s and Company’s ability to continue as going concerns. Since end of April 2016, we were not able to contact the management of Baixing, Evidoma, Qingte and Sente (active subsidiaries of the Group) and were thus unable to obtain reasonable assurance of whether the Group still had ownership of the assets held by those entities. The ability of the Group and Company to continue as going concerns depends on whether the Group and Company are able to exert legal ownership rights over those assets and continue to have sustainable operations. Accordingly, we were unable to determine whether the use of the going concern assumption is appropriate.

4. Events occurring after the reporting period We were unable to complete all our audit procedures for events occurring after the reporting period, which we considered necessary to satisfy ourselves on the significant matters occurring after the reporting period with respect to items recorded or unrecorded as at 31 December 2016. Accordingly, in view of the limitation of scope, we were unable to determine whether all significant events occurring after the reporting period had been adequately dealt with in these financial statements (see Note 30) with respect to disclosures, presentation and adjusting subsequent events.

5. Risk due to fraud We were unable to receive the disclosure from management of subsidiaries regarding the results of their assessment of the risk that the financial statements may be materially misstated as a result of fraud. We were not informed by management that they have no knowledge of any significant facts relating to any frauds or suspected frauds known that may involve: i) management; ii) employees who have significant roles in internal controls or; iii) others where the fraud could have a material effect on the financial statements. Accordingly, we could not obtain assurance over the completeness of any allegations of fraud, or suspected fraud, affecting the Company’s financial statements as communicated by employees, former employees, analysts, regulators or others.

6. Internal Control Management of subsidiaries is unable to acknowledge their responsibilities for the design, implementation and maintenance of accounting and internal control systems that are designed to prevent and detect fraud and error. Management of subsidiaries is unable to acknowledge their responsibilities for devising and maintaining a system of internal accounting controls, the objectives of which are to provide us with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorised use or disposition and that transactions are executed as authorised and


30


Report on the financial statements (continued)

recorded properly to permit preparations of such financial statements. Management is not able to assure us that there are no material weaknesses in the system of internal accounting controls, including any of which they believe the cost of corrective actions exceeds the benefits. Management of subsidiaries did not assess and conclude that there is no risk that the financial statements may be materially misstated as a result of fraud.

7. Opening balances As disclosed inthefinancial statements for the financial year ended 31 December 2015, the matters stated were unresolved since the preceding financial year and formed the basis for disclaimer of opinion on the financial statements of the Group and the Company for the financial year ended 31 December 2015. We were unable to determine whether adjustments to results of operationsand opening retained earnings/accumulated losses might be necessary. Our opinion on the current year’s financial statements is also modified because of the possible effects of these matters on the comparability of the current financial year’s figures and corresponding figures.

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements Our responsibility is to conduct an audit of the Group’s consolidated financial statements and Company's statement of financial position and statements of changes in equity in accordance with Singapore Standards on Auditing and to issue an auditor’s report. However, because of the matters described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority (ACRA) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code.


31


Report on the financial statements (continued)

Disclaimer of Opinion

Because of the significance of the matters described in the Basisfor Disclaimer of Opinion paragraphs, we

have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

Accordingly, we do not express an opinion on the accompanying financial statements of the Group and the

Company.

Other reporting responsibilities

The supplementary information set out in Note 26 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 informationin accordance with Guidance on Special Matter No. 1, Determination of

Realised and Unrealised Profits and Losses in theContext of Disclosure Pursuant to Bursa Malaysia

Securities Berhad Listing Requirements, as issued by the Malaysian Instituteof Accountants (“MIA Guidance”)

and the directive of Bursa Malaysia Securities Berhad. Because of the significance of the matters as

described in the Basis for Disclaimer of Opinion paragraphs, we were unable to report whether, the

supplementaryinformation is prepared, in all material aspects, in accordance with the MIA Guidance and the

directive of Bursa Malaysia Securities Berhad

Public Accountants and Chartered Accountants

Su Chun Keat

Partner in Charge of the audit

Singapore, 25 April 2018


32

STATEMENTS OF FINANCIAL POSITION As at 31 December 2016

The Company The Group

31 December 31 December 31 December 31 December

2016 2015 2016 2015

Notes RMB'000 RMB'000 RMB'000 RMB'000

ASSETS

Non-current assets

Property, plant and equipment 3 - - - 290,197

Intangible assets 4 - - - 642

Land use rights 5 - - - 16,578

Subsidiaries 6 - 277,374 - -

- 277,374 307,417

Current assets

Inventories, at cost 7 - - - 11,238

Trade and other receivables 8 - 36,869 - 174,173

Cash and bank balances 9 26 74 26 496,480

26 36,943 26 681,891

Total asset 26 314,317 26 989,308

EQUITY AND LIABILITIES

Capital and Reserves

Share capital 10 102,374 100,362 102,374 100,362

Reserves 11 (105,446) 211,297 (105,446) 785,048

(Capital deficiency) / Total equity (3,072) 311,659 (3,072) 885,410

Currentliabilities

Trade and other payables 12 3,098 2,658 3,098 90,871

Interest-bearing bank borrowings 13 - - - 11,500

Income tax payable 17 - - - 1,527

3,098 2,658 3,098 103,898

Total equity and liabilities 26 314,317 26 989,308

The annexed notes form an integral part of and should be read in conjunction with these financial statements.


33

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the financial year ended 31 December 2016

The Group

Year ended Year ended

31 December 31 December

2016 2015

Notes RMB'000 RMB'000

Revenue 14 80,215 579,352

Cost of sales (79,310) (492,832)

Gross profit 905 86,520

Other income 14 424 2,479

Selling and distribution expenses (2,452) (55,550)

Administrative expenses (12,323) (49,501)

Other operating expenses (893,104) (3,062)

Finance costs 15 (183) (734)

Loss before taxation 16 (906,733) (19,848)

Income tax expense 17 - (8,937)

Loss after taxation representing total comprehensive

income attributable to equity holders of the Company (906,733) (28,785)

Basic loss per share(RMB cents) 18 (150.09) (4.83)

Diluted loss per share(RMB cents) 18 (150.09) (4.83)

The annexed notes form an integral part of and

should be read in conjunction with these financial statements.


34

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 December 2015

The Group

Share

Capital

RMB’000

(Note 10)

Share

Premium

RMB'000

(Note 11)

Statutory

Reserve

RMB'000

(Note 11)

Merger

Deficit

RMB’000

(Note 11)

Contributed

Surplus

RM’000

(Note 11)

ESOS

Reserve

RM’000

(Note 11)

Retained

Profits

RMB'000

Total

Equity

RMB'000

Balance at 1 January 2015 175,361 137,003 35,846 (54,916) - - 603,007 896,301

Loss for the year representing total comprehensive

incomefor the financial year - - - -

- - (28,785) (28,785)

Effect of Par Value Reduction (87,680) - - - 87,680 - - -

Granting of Employees’ Share Option Scheme (ESOS) - - - - - 5,212 - 5,212

Exercise of ESOS 12,682 - - - - (5,212) 5,212 12,682

Transfer of reserves representing transaction with

equity holders as owners of theGroup

-

- 2,830 -

-

-

(2,830) -

Balance at 31 December 2015 100,363 137,003 38,676 (54,916) 87,680 - 576,604 885,410

Balance at 1 January 2016 100,363 137,003 38,676 (54,916) 87,680 - 576,604 885,410

Loss for the year, representing total comprehensive

Income for the year

- - - -

-

- (906,733) (906,733)

Transactions with equity holders as owners of the Group

Disposal of subsidiaries 20 - - (38,676) 54,916 - - - 16,240

Issuance of shares 2,011 - - - - - - 2,011

Total 2,011 - (38,676) 54,916 - - 18,251

Balance at 31 December 2016 102,374 137,003 - - 87,680 - (330,129) (3,072)

35

CONSOLIDATED STATEMENT OF CASH FLOWS For the financial year ended 31 December 2016

The Group

Year ended Year ended

31 December 31 December

2016 2015

Notes RMB'000 RMB'000

Cash flows from operating activities

Loss before taxation (906,733) (19,848)

Adjustments for:

Depreciation of property, plant and equipment 3 - 22,295

Amortisation of intangible assets 4 - 233

Amortisation of land use rights 5 - 402

Loss on disposal of property, plant & equipment - 3,061

Interest income 14 (375) (1,941)

Loss on disposal of subsidiaries 20 892,981 -

Interest expense 15 181 734

Employees Share Option Scheme (“ESOS”) - 5,212

Operating loss profit before working capital changes (13,946) 10,148

Decrease in inventories - 7,131

(Increase)/decrease in tradeand other receivables - (38,599)

(Decrease)/ Increase in trade and other payables 11,767 (8,264)

Cashused in operations (2,179) (29,584)

Income tax paid - (8,338)

Interest received 14 375 1,941

Netcashusedinoperating activities (1,804) (35,981)

Cash flows from investing activities

Acquisition of property, plant and equipment 3 - (55,675)

Disposal of subsidiaries 20 (496,625) -

Proceeds from disposal of property, plant and equipment 3 - 200

Netcashused ininvesting activities (496,625) (55,475)

Cash flows from financing activities

Bank loan obtained 13 - -

Proceeds from issuance of shares 2,011 12,682

Advances from shareholders 145 -

Interest paid 15 (181) (734)

Net cash generated from financing activities 1,975 11,948

Net(decrease)/ increase in cash and cash equivalents (496,454) (79,508)

Cash and cash equivalents at beginning of the year 496,480 575,988

Cash and cash equivalents at end of the year 9 26 496,480

The annexed notes form an integral part of and

should be read in conjunction with these financial statements.


36

Notes to the financial statements For the financial year ended 31 December 2016

1. GENERAL INFORMATION

Corporate Information

The financial statements of the Company and of the Group for the year ended 31 December

2016wereauthorised for issue in accordance with a resolution of the directors on the date of the Statement by

Directors.

The Company (Bermuda Company Registration No. 42425 and Malaysia Foreign Company Registration No.

995199-H) was incorporated in Bermuda on 18 September 2008 under the Bermuda Companies Act as an

exempted company with limited liability under the name of Multi Sports Holdings Ltd and is listed on the Main

Market of Bursa Malaysia Securities Berhad.

The registered offices of the Company in Bermuda and Malaysia are Clarendon House, 2 Church Street,

Hamilton HM 11,Bermuda and Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra,

59200 Kuala Lumpur, Malaysia, respectively. The principal place of business of the Company is/was located

at No. 18, Yongjun Road, Xibin Farm, Xibin Town, Jinjiang City, Fujian Province, the People's Republic of

China (“PRC”).

The principal activity of the Company is investment holding. The principal activities of its subsidiaries are

disclosed in Note 6 to the financial statements.

Going Concern

During the current financial year, the Group and Company incurred net losses amounting to approximately

RMB 14,100,000 and RMB 616,000(2015: RMB 28,785,000 and RMB 2,489,000) respectively.

The above conditions indicate the existence of a material uncertainty which may cast significant doubt about

the Group’s and the Company’s abilities to continue as going concerns.

The external auditors, Messrs. RT LLP, issued an disclaimer opinion on the Group’s disposal of subsidiaries,

litigation issues, going concern, events occurring after the reporting period, fraud risk, internal controls and the

opening balances for 1 January 2016. Those issues may have a significant impact on the recorded assets,

liabilities, income and expenses of the Group and Company.

On 13 November, 2017 The Company announces that it has entered Practice Note 17 status (“PN17”) of the

Main Market Listing Requirements (“LR”) following its issuance of Audited Financial Statements for the

financial year ended 31 December 2015 with a disclaimer of opinion by auditors, thus giving the Company 12

months in which to submit a regularisation plan.


37


2. SIGNIFICANT ACCOUNTING POLICIES

The board in Malaysia has concluded that the Company has no option but to de-consolidate the PRC

subsidiaries from its financial reporting as at 31.12.2016. Kindly refer to Note 20. De-consolidation will allow

the Company to prepare and issue financial reports that, to the extent possible given the circumstances, most

closely and accurately reflect the true financial position of the Company. The ability of the Company to

continue as a going concern depends on the implementation of a successful regularization plan within the

timeframe allocated and the Company through the assistance of two major shareholders of the Company is

pursuing all avenues possible to arrive at this outcome.

2 (a) Basis of preparation

The financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”)

including related Interpretations promulgated by the IFRS Interpretation Committee (“IFRIC”) applicable to

companies reporting under IFRS. The financial statements have been prepared under the historical cost

convention, except as disclosed in the accounting policies below.

On 1 January 2016, the Company and the Group adopted the new or amended IFRS and IFRIC

interpretations that are mandatory for application from that date. Changes to the Company’s and the Group’s

accounting policies have been made as required, in accordance with the transitional provisions in the

respective IFRSs and IFRIC interpretations.

The adoption of these new or amended IFRS and IFRIC Interpretations did not result in substantial changes to

the Company’s and the Group’s accounting policies and had no material effect on the amounts reported for

the current or prior financial years.

The Group’s principal operations are conducted in the PRC and thus the financial statements are presented in

Renminbi (RMB), being the functional and presentation currency of all the operating subsidiaries of the Group.

All values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.

Significant accounting estimates, assumptions and judgements

The preparation of the financial statements in conformity with IFRS requires the use of, estimates,

assumptions and judgements that affect the reported amounts of assets and liabilities and disclosure of

contingent assets and liabilities at the end of the reporting period and the reported amounts of revenues and

expenses during the financial year. Although these estimates are based on management’s best knowledge of

current events and actions, actual results may differ from those estimates, assumptions and judgements are

continually evaluated and are based on historical experiences and other factors, including expectations of

future events that are believed to be reasonable under the circumstances.

Critical judgements made and key sources of estimation uncertainty in applying accounting policies

Disposal of subsidiaries

The new Directors have not had control over the subsidiaries since their appointment and have limited access

to books and records for the Company itself. Prior to this report being issued, the Company had engaged

certain professionals to perform procedures to ascertain the ownership of the subsidiaries, ownership of the

underlying assets, contact the previous executive directors and also to ascertain the status of certain legal

liabilities. Despite


38

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Critical judgements made and key sources of estimation uncertainty inapplyingaccounting policies

(Cont’d)

all the above, the Company has not been able to re-establish control over the Group or obtain conclusive

evidence as to whether the Company still has ability to re-gain control over the subsidiaries and or underlying

assets and also the total exposure of the Group to the potential legal liabilities. In view of the above, the Group

made a critical judgement that it had lost control of the subsidiaries as at 31 December 2016. Further details

on the disposal of subsidiaries are disclosed in Note 20.

Litigation issues

The Company had sought the assistance of lawyers in China to perform certain procedures on the outstanding

legal cases on its subsidiaries. The Company has been informed by the legal professionals that the latter was

only able to access the status of legal cases relevant to the Group that were published on government

websites or other publicly available court information and had no means to ascertain whether the cases

published on those websites were complete. In addition, the legal professionals were not able to access the

details of the legal cases relevant to the Group published on those websites and therefore was not able to

determine whether those cases would culminate into additional liabilities for the Group. In view of the above,

the Company made the judgement that it would not recognise any liabilities for those cases since the

subsidiaries’ ownership could not be ascertained and the amount of actual liabilities could not be determined.

Completeness of liabilities

The total liabilities on the statement of financial positions for the Group and Company was prepared based on

the information available to the Company. Due to insufficient information, the Company was not able to

ascertain the existence of certain liabilities recorded and also the completeness of liabilities. Should any

liabilities arise after the date of publication of the financial statements for 31 December 2016, material

adjustments may be required for these financial statements.

Going Concern

As disclosed in Note 1 to the financial statements, the financial statements of the Group and the statement of financial position of the Company have been prepared on the assumption that the Group and Companywill continue as going concerns. The application of the going concern basis is based on the assumption that the Group will be able to realise their assets and liquidate their liabilities in the normal course of business. As disclosed in Note 1 to the financial statements, there are conditions which indicate the existence of a material uncertainty that may cast significant doubt about the Group’s and Company’s ability to continue as going concerns. Since end of April 2016, we were not able to contact the management of Baixing, Evidoma and Sente (active subsidiaries of the Group) and were thus unable to obtain reasonable assurance of whether the f the assets held by those entities. The ability of the Group and Company to continue as going concerns depends on whether the Group and Company are able to exert legal ownership rights over those assets and continue to have sustainable operations. Accordingly, we were unable to determine whether the use of the going concern assumption is appropriate.


39



Critical judgements made and key sources of estimation uncertainty in applying accounting policies

(Cont’d)

Events occurring after the reporting period

The Group was obligated under IFRS to assess all events occurring after the reporting period and determine

whether those events will result in adjustments to assets and liabilities as at the end of the reporting period

and to make full disclosure on all such material events. Due to the inability of the Company to re-establish

control its subsidiaries, assess full details of litigation cases and its completeness, the Company was not able

to determine whether there were any additional events which may necessitate adjustments or require

disclosure in these financial statements.

Fraud risk

The Companyhad engaged professionals to contact the previous executive directors but did not receive any

response as at the date of the publication of these financial statements. Therefore, the Company could not

categorically confirm whether any fraudulent activities had been committed in relation to its previous

subsidiaries or whether any fraud had been committed against it.

Opening balances

The auditors of the Group and Company financial statements for the financial year ended 31 December 2015

had given a disclaimer of opinion for those financial statements. Since the opening balances form the basis for

the preparation of the current year financial statements, the Group had made the judgment that no further

adjustment(s) was necessary in respect of the effect of those opening balances for the current year financial

statements.

2(b) IFRS and IFRIC Interpretations that are issued, not yet effective and have not been adopted early

Below are the mandatory new or amended IFRS and IFRIC interpretations that have been published, and are

relevant for the Company’s and the Group’s accounting periods beginning after 1 January 2016 and which the

Company and the Group have not early adopted:

Effective for the Company’s and Group’s annual accounting period beginning on 1 January 2018

• IFRS 9Financial Instruments • IFRS 15 Revenue from Contracts with Customers • Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions

Effective for the Company’s and Group’s annual accounting period beginning on 1 January 2019

• IFRS 16Leases


40



2(b) IFRS and IFRIC Interpretations that are issued, not yet effective and have not beenadopted early

(Cont’d)

The directors do not anticipate that the adoption of the above new or amended IFRS in future periods will have

a material impact on the financial statements of the Group and Company in the period of their initial adoption

except for IFRS 15 and IFRS 9. Management is currently evaluating the potential impact of the application of

IFRS 15 and IFRS 9) on the financial statements of the Group and of the Company in the period of their initial

application.

2(c) Summary of significant accounting policies

Consolidation

The consolidated financial statements incorporate the financial statements of the companyand entities

(including structured entities) controlled by the company and its subsidiaries. Control is achieved when

thecompany:

• Has power over the investee;

• Is exposed, or has rights, to variable returns from its involvement with the investee; and

• Has the ability to use its power to affect its returns.

The company reassesses whether or not it controls an investee if facts and circumstances indicate that there

are changes to one or more of the three elements of control listed above.

When the company has less than a majority of the voting rights of an investee, it has power over the investee

when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee

unilaterally. The company considers all relevant facts and circumstances in assessing whether or not the

company's voting rights in an investee are sufficient to give it power, including:

• The size of the company's holding of voting rights relative to the size and dispersion of holdings of the

other vote holders;

• Potential voting rights held by the company, other vote holders or other parties;

• Rights arising from other contractual arrangements; and

• Any additional facts and circumstances that indicate that the company has, or does not have, the current

ability to direct the relevant activities at the time that decisions need to be made, including voting patterns

at previous shareholders' meetings.

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

the company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or

disposed of during the year are included in the consolidated statement of profit or loss and other

comprehensive income from the date the company gains control until the date when the company ceases to

control the subsidiary.

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 of subsidiaries is attributed to the owners of

the company and to the non-controlling interests even if this results in the non-controlling interests having a

deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting

policies inline with the group's accounting policies.


41



Consolidation (continued)

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

When the group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as

the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any

retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the

subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income

in relation to that subsidiary are accounted for as if the group had directly disposed of the related assets or

liabilities of the subsidiary(i.e. reclassified to profit or loss or transferred to another category of equity as

specified/permitted by applicable

FRSs). The fair value of any investment 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 FRS 39, or when applicable,

the cost on initial recognition of an investment in an associate or a joint venture.

In the company’s separate financial statements, investments in subsidiaries, associates and joint ventures are

carried at cost less any impairment in net recoverable value that has been recognised in profit or loss.

Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is computed using the straight-line method to write off the cost of these assets over their

estimated useful lives as follows:

Leasehold Buildings 20 years

Plant and machinery 5 - 10 years

Office equipment, furniture & fixtures 5 years

Moulding equipment 3 - 5 years

Motor vehicles 3-10 years

The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of

the items. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and

equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring

or using the asset.

Subsequent expenditure relating to property, plant and equipment that have been recognised is added to the

carrying amount of the asset when it is probable that future economic benefits, in excess of the standard of

performance of the asset before the expenditure was made, will flow to the Group and the cost can be reliably

measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is

incurred.


42



For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition

and to the month before disposal respectively. Fully depreciated property, plant and equipment are retained in

the books of accounts until they are no longer in use. Depreciation methods, useful lives and residual values

are reviewed, and adjusted as appropriate, at each reporting date as a change in estimates.

Impairment of non-financial assets

The carrying amounts of the Company’s and Group’s non-financial assets subject to impairment are reviewed

at the end of each reporting period to determine whether there is any indication of impairment. If any such

indication exists, the asset’s recoverable amount is estimated. If it is not possible to estimate the recoverable

amount of the individual asset, then the recoverable amount of the cash-generating unit to which the asset

belongs will be identified.

For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.Any impairment loss is charged to profit or loss unless it reverses a previous revaluation in which case it is charged to equity.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying

amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-

use. To determine the value-in-use, management estimates expected future cash flows from each cash-

generating unit and determines a suitable interest rate in order to calculate the present value of those cash

flows. The data used for impairment testing procedures are directly linked to the Group’s latest approved

budget, adjusted as necessary to exclude the effects of future reorganisation and asset enhancements.

Discount factors are determined individually for each cash-generating unit and reflect management’s

assessment of respective risk profiles, such as market and asset-specific risks factors. Impairment losses for

cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit.

Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the

exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss

previously recognised may no longer exist. An impairment charge is reversed if the cash-generating unit’s

recoverable amount exceeds its carrying amount.

Financial assets

Financial assets, other than hedging instruments, can be divided into the following categories: financial assets

at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale

financial assets. Financial assets are assigned to the different categories by management on initial recognition,

depending on the purpose for which the investments were acquired. The designation of financial assets is re-

evaluated and classification may be changed at the end of each reporting period with the exception that the

designation of financial assets at fair value through profit or loss is not revocable.


43



All financial assets are recognised on their trade date - the date on which the Company and the Group commit

to purchase or sell the asset. Financial assets are initially recognised at fair value, plus directly attributable

transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair

value. Derecognition of financial instruments occurs when the rights to receive cash flows from the

investments expire or are transferred and substantially all of the risks and rewards of ownership have been

transferred. An assessment for impairment is undertaken at least at the end of each reporting period whether

or not there is objective evidence that a financial asset or a group of financial assets is impaired. Non-

compounding interest and other cash flows resulting from holding financial assets are recognised in profit or

loss when received, regardless of how the related carrying amount of financial assets is measured Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor

with no intention of trading the receivables. They are included in current assets, except for maturities greater

than 12 months after the end of the reporting period. These are classified as non-current assets.

Loans and receivables include trade and other receivables. They are subsequently measured at amortised

cost using the effective interest method, less provision for impairment. If there is objective evidence that the

asset has been impaired, the financial asset is measured at the present value of the estimated future cash

flows discounted at the original effective interest rate. Impairment losses are reversed in subsequent periods

when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the

impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the

impairment is reversed does not exceed what the amortised cost would have been had the impairment not

been recognised. The impairment loss or write back is recognised in profit or loss.

DRAFT


44



Financial liabilities

The Group’s financial liabilities include trade payables and other payables.

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the

instrument. All interest related charges are recognised as an expense in “finance cost” in profit or loss.

Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are

discharged or cancelled.

Trade payables and other payables are initially measured at fair value, and subsequently measured at

amortised cost, using the effective interest method.

Borrowings are recognised initially at the fair value of proceeds received less attributable transaction costs, if

any. Borrowings are subsequently stated at amortised cost which is the initial fair value less any principal

repayments. Any difference between the proceeds (net of transaction costs) and the redemption value is

taken to profit or loss over the period of the borrowings using the effective interest method. The interest

expense is charged on the amortised cost over the period of the borrowings using the effective interest method.

Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the

amortisation process.

Borrowings which are due to be settled within twelve months after the end of the reporting period are included

in current borrowings in the statement of financial position even though the original term was for a period

longer than twelve months and an agreement to refinance, or to reschedule payments, on a long-term basis is

completed after the end of the reporting period. Borrowings to be settled within the Group’s normal operating

cycle are classified as current. Other borrowings due to be settled more than twelve months after the end of

the reporting period are included in non-current liabilities in the statement of financial position.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost incurred in bringing each product to

its present location and conditions are accounted for as follows:

(a) Raw materials at purchase cost on a weighted average basis; and

(b) Finished goods and work in progress at cost of direct materials and labour and a proportion of

manufacturing overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs

necessary to make the sale.

Provisions

Provisions are recognised whenthe Group has a present obligation (legal or constructive) as a result of a past

event, it is probable that an outflow of resources embodying economic benefits will be required to settle the

obligation and a reliable estimate can be made of the amount of the obligation.

DRAFT


45



The directors review the provisions annually and where in their opinion, the provision is inadequate or

excessive, due adjustment is made.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that

reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the

provision due to the passage of the time is recognised as finance costs.

Recognition of revenue

Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer,

generally when the delivery of the goods is completed. Revenue excludes value added tax and is arrived at

after deduction of trade discounts. No revenue is recognised if there are significant uncertainties regarding

recovery of the consideration due, associated costs or the possible return of goods.

Interest income is recognised on a time-apportioned basis using the effective interest rate method.

Cost of sales

Cost of sales comprises mainly ofdirect material, direct labour and manufacturing overheads. Direct material

costs are included in cost of sales based on actual consumption of raw materials for each product sold. Direct

labour and manufacturing overheads costs are included in cost of sales based on a systematic allocation of

such costs that are incurred in converting raw materials to finished goods sold.

Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or

recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively

enacted by the end of the reporting period

PRC corporate income tax is provided at rates applicable to an enterprise in the PRC on income for financial

reporting purpose, adjusted for income and expenses items which are not assessable or deductible for income

tax purposes.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and

liabilities and their carrying amounts in the financial statements except when the deferred income tax arises

from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination

and affects neither accounting nor taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries,

except where the Group is able to control the timing of the reversal of the temporary difference and it is

probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be

available against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

DRAFT


46



(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the

deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or

substantively enacted by the end of the reporting period; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the end of

the reporting period, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in profit or loss, except to the extent

that the tax arises from a business combination or a transaction which is recognised directly in equity

Value-added tax

The Group’s sale of goods in the PRC are subjected to Value-added tax (“VAT”) at the applicable tax rate of

17% for PRC domestic sales. Input VAT on purchases can be deducted from output VAT. The net amount of

VAT recoverable from, or payable to, the taxation authority is included as part of “trade and other receivables”

or “trade and other payables” in the statement of financial position respectively.

Revenues, expenses and assets are recognised net of the amount of VAT except where:

• VAT incurred on the purchase of assets or services is not recoverable from the taxation authority, in

which case VAT is recognised as part of the cost of acquisition of the asset or as part of the expense

item as applicable; and

• receivables and payables are stated with the amount of VAT included.

Employee benefits

Pursuant to the relevant regulations of the PRC government, the Group participates in a local municipal

government retirement benefits scheme (the “Scheme”), whereby the PRC subsidiaries are required to

contribute a certain percentage of the basic salaries of its employees to the Scheme to fund their retirement

benefits. The local municipal government undertakes to assume the retirement benefits obligations of all

existing and future retired employees of the PRC subsidiary. The only obligation of the Group with respect to

the Scheme is to pay the ongoing required contributions under the Scheme mentioned above. Contributions

under the Scheme are expensed as incurred.

Employee Share Option Scheme (ESOS)

The Group operates an equity-settled, share based compensation plan. The value of the employee services

received in exchange for the grant of options is recognised as an expense with a corresponding increase in

the ESOS reserve over the vesting period. The total amount to be recognised over the vesting period is

determined by reference to the fair value of the options granted on the date of the grant. Non-market vesting

conditions are included in

the estimation of the number of shares under options that are expected to become exercisable on the vesting

date. At each reporting date, the Group revises its estimates of the number of shares under options that are

expected to become exercisable on the vesting date and recognises the impact of the revision of the

estimates in profit or loss, with a corresponding adjustment to the ESOS reserve over the remaining vesting

period. When the options are exercised, the proceeds received (net of transaction costs) and the related

balance previously recognised in the ESOS reserve are credited to share capital account, when new ordinary

shares are issued to the employees.

DRAFT


47

Key management personnel

Key management personnel are those persons having the authority and responsibility for planning, directing

and controlling the activities of the Group and Company Directors, legal representative and certain general

managers are considered key management personnel.

Foreign currencies

(i) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of

the primary economic environment in which the entity operates (“functional currency”). The financial

statements of the Group and the Company are presented in Renminbi (RMB), which is also the functional

currency of the Company.

(ii) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the

functional currency using the exchange rates at the dates of the transactions. Currency translation

differences arising from the settlement of such transactions and from the translation of monetary assets

and liabilities denominated in foreign currencies at the closing rates are recognised in profit or loss. Non-

monetary items are not retranslated at year-end and are measured at historical cost (translated using the

exchange rates at transaction date), except for non-monetary items measured at fair value which are

translated using the exchange rates at the date when fair value was determined.

(iii) Group companies

The results and financial position of all the entities (none of which has the currency of a hyperinflationary

economy) within the Group that have a functional currency different from the presentation currency of the

Groupare translated into the presentation currency as follows:

(a) Assets and liabilities are translated at the closing exchange rates at the date of the end of the reporting

periods;

(b)Income and expenses are translated at average exchange rates (unless the average is not a

reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,

inwhich case income and expenses are translated using the exchange rates at the dates of the

transactions); and

(c)All resulting currency translation differences are recognised in the currency translation reserve in equity.

Related parties

A related party is defined as follows:

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

(i) has control or joint control over the Company;

(ii) has significant influence over the Company; or

(iii) is a member of the key management personnel of the Company or of a parent of the Company.

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

(i) the entity and the Company are members of the same group (which means that each parent,

subsidiary and fellow subsidiary is related to the others).

(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of amember

of a group of which the other entity is a member).

(iii) both entities are joint ventures of the same third party.

DRAFT


48

Related parties (Cont’d)

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) the entity is a post-employment benefit plan for the benefit of employees of either the Company

or an entity related to the Company. If the Company is itself such a plan, the sponsoring employersare

also related to the Company;

(vi) the entity is controlled or jointly controlled by a person identified in (a);

(vii) a person identified in (a) (i) 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

Operating leases

Rentals on operating leases are charged to profit or loss on a straight-line basis over the lease term. Lease

incentives, if any, are recognised as an integral part of the net consideration agreed for the use of the

leased asset. Penalty payments on early termination, if any, are recognised in profit or loss when incurred.

Financial instruments

The recognition methods adopted for financial assets and liabilities are disclosed in the individual policy

statements associated with each item. These instruments are recognised when contracted for. Disclosures

on financial risk management are provided in Note 22.

Operating segment

For management purposes, operating segments are organised based on their products and services which

are independently managed by the respective segment managers responsible for the performance of the

respective segments under their charge. The segment managers are directly accountable to the chief

executive officer who reviews the segment results in order to allocate resources to the segments and to

assess segment performance.

Share capital, reserves and dividend payments

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

premiums received on issue of share capital. Any transaction costs associated with the issuing of shares

and warrants are deducted from share premium, net of any related income tax benefits. Other components

of equity are described in Note 11.

All transactions with owners of the parent are recorded separately within equity. Dividend distributions

payable to equity shareholders are included in other liabilities when the dividends have been approved in a

general meeting prior to the reporting date.

Cash and cash equivalents

For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise cash on hand

and in bank.


49



Intangible assets

Intangible assets are accounted for using the cost model. Capitalised costs are amortised on a straight-line

basis over the estimated useful lives for those considered as having finite useful lives. After initial

recognition, they are carried at cost less accumulated amortisation and accumulated impairment losses, if

any. In addition, they are subject to annual impairment testing. Indefinite life intangibles are not amortised

but are subject to annual impairment testing.

Intangible assets are written off where, in the opinion of the directors, no further future economic benefits

are expected to arise.

Software

Costs relating to software acquired, which are not an integral part of related hardware, are capitalised and

amortised on a straight-line basis over their remaining useful life of 5 or 10 years.

Trademark

Trademark acquired is initially recognised at cost and is subsequently carried at cost less accumulated

amortisation and accumulated impairment losses. Trademark cost is amortised to profit or loss using the

straight-line method over 79 months which is the contractual periods of contractual rights.

Land use rights

Land use rights represent up-front payment for long-term interests in the usage of land and are stated at

cost less accumulated amortisation and impairment losses, if any. Amortisation is charged so as to write off

the cost of the land use rights, using the straight-line method, over the period of the grant of 50 years, which

is the lease term.

Research and developments costs

Research costs are expensed as incurred, Development costs which relate to the design and testing of new

or improved materials, products or processes are recognised as an asset to the extent that it is expected

that such assets will generate future economic benefits.

Borrowing cost

Borrowing costs are recognised in profit or loss using the effective interest rate method.


50


3. PROPERTY, PLANT AND EQUIPMENT

The Group

Leasehold

buildings

Plant &

machinery

Office

equipment,

furniture &

fixtures

Moulding

equipment

Motor

vehicles

Total

Cost

RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000

263,831 53,891 2,645 24,531 2,889 347,787 At 1 January 2015 263,831 54,479 2,657 30,374 3,063 354,404

Additions 30,000 21,078 - 4,597 - 55,675

Disposal / write off - (22,128) (242) (10,039) (156) (32,565)

At 31 December 2015 293,831 53,429 2,415 24,932 2,907 377,514

Disposal of subsidiaries (293,831) (53,429) (2,415) (24,932) (2,907) (377,514)

At 31 December 2016 - - - - - -

Accumulated Depreciation

At 1January 2015 43,967 32,175 1,798 15,423 963 94,326

Depreciation 12,258 4,610 461 4,702 264 22,295

Disposal / write off - (19,910) (217) (9,036) (141) (29,304)

At 31 December 2015 56,225 16,875 2,042 11,089 1,086 87,317

Disposal of subsidiaries (56,225) (16,875) (2,042) (11,089) (1,086) (87,317)

At 31 December 2016 - - - - - -

Net Book Value

At 31 December 2015 207,606 36,554 373 13,843 1,821 290,197

At 31 December 2016 - - - - - -

All property, plant and equipment held by the Group are located in the PRC.

In 2015, the Group's leasehold buildings were pledged as securities to secure the Group’s bank borrowings.(Note 13)

and according to litigation searches, it appears the Group’s leasehold buildings were also charged as security to China

Construction Bank above and beyond what was previously disclosed.


51


4. INTANGIBLE ASSETS

The Group Software Trademark Total

Cost

RMB’000 RMB’000 RMB'000

At 1 January 2015 1,580 18,521 20,101

Addition - - -

At 31 December 2015 1,580 18,521 20,101

Disposal of subsidiaries (1,580) (18,521) (20,101)

At 31 December 2016 - - -

Accumulated Amortisation

and Impairment

At 31 January 2015 705 18,521 19,226

Amortisation 233 - 233

At 31 December 2015 938 18,521 19,459

Disposal of subsidiaries (938) (18,521) (19,459)


Net Book Value

At 31 December 2015 642 - 642


In 2015, the amortisation expenses and impairment loss of approximately RMB 233,000 respectively have been charged in administrative expenses on the face of the statement of comprehensive income.


52


5. LAND USE RIGHTS

The Group Land use

rights

Cost

RMB’000

At 1 January 2015 18,990

Disposal of subsidiaries (18,990)

At 31 December 2016 -

Accumulated Amortisation

At 1 January 2015 2,010

Amortisation 402

At 31 December 2015 2,412

Disposal of subsidiaries (2,412)


Net Book Value

At 31 December 2015 16,578


In 2015, the Group’s land use rightsare located atXinbin Farm, Xibin Town, Jinjiang City, Fujian Province,

PRC.Theland use rights are pledged to a bank as securities for a banking facility (Note 13).

The Group’s Directors, who were in office as at 31 December 2015,were of the opinion that the recoverable

amount of the land use rights exceeds its carrying amount as at 31 December respectively.

In 2015, the amortisation expense of approximately RMB 402,000has been charged in administrative expenses on the face of the statement of comprehensive income.

6. SUBSIDIARIES

The Company

2016 2015

RMB’000 RMB’000

Unquoted equity investment, at cost - 103,465

Amount owing by a subsidiary - 173,909

- 277,374

As of 31 December 2016, the Company has fully written off the investment in subsidiaries and receivables from

subsidiaries as it is of the view that there is no recoverable amount from those investments as it no longer controls

the subsidiaries. The basis of the write-off was based on value-in-use. No discount rate was used as the Company

did not forecast any further possible cash flows from those subsidiaries.

DRAFT


53


6. SUBSIDIARIES (Continued)

As the amount owing by a subsidiary is an extension of the Company’s net investment in its subsidiary with

undeterminable repayment, fair value disclosure is not required. These are unsecured, interest free and not

expected to be repaid within one year. Amount due from subsidiary is denominated in RMB.

The subsidiaries are:

Name

Country of

incorporation/

Principal place

of business Cost of investments

Equity interest

held

Principal activities

2016 2015 2016 2015

RMB’000 RMB’000 % %

Directly held:

Pak Sing Shoe Material

(H.K.) Limited(1)(“Pak

Sing”)

Hong Kong - 103,465 - 100% Investment holding

Indirectly held:

JinjiangBaixing Shoe

Material Co., Ltd.(2)

PRC - - - 100% Design, development and

manufacturing of sport

shoe soles

Fujian EvidomaLtd.(2)

PRC - - - 100% Carry on the business of

apparel trading under the

brand name “EVIDOMA”.

Fujian Qingte Investment

Ltd (“Qingte”) (2) (3)

PRC - - - 100%* Investment in agriculture,

manufacturing, wholesale

and retail trade,

construction and

transportation industry

Quanzhou Sente Trading

Ltd (“Sente”) (2) (3)

PRC - - - 100% Wholesale and retail of

knitwear, textiles, garments,

shoes, hats, toys, sporting

goods, daily necessities,

handicrafts, electronic

products, metal products,

machinery and equipment,

building materials and

chemical products,

*10% of Qingteequity is held on behalf by a director of Jinjiang Baixing Shoe Co., Ltd. – Mr. Ding Qing He. (1) Scope in reviewed by RT LLP for the purposes of expressing an opinion on the consolidated financial statements, however, audited financial statements is not available

as there is loss of control over subsidiaries and no access to books and records.

(2)In 2015, audited by XiamenLiangcheng, Certified Public Accountants for statutory purposes and intended to audit byRT LLP for the purpose of expressing an opinion on

the consolidated financial statements.

(3) QIngteand Sente were dormant in the financial year ended 31 December 2016.


54


7. INVENTORIES, AT COST The Group

2016 2015

RMB'000 RMB'000

Raw materials - 4,723

Finished goods - 4,494

Work in progress - 2,021

- 11,238

In 2015, there have been no inventory written off or allowance for inventory obsolescence made.

8. TRADE AND OTHER RECEIVABLES


2016 2015 2016 2015

RMB'000 RMB’000 RMB'000 RMB'000

Trade receivables - - - 173,627

Amount due from a subsidiary - 36,845 - -

Prepayments - - - -

Deposit - - - -

Interest receivable - - - -

Other receivables - 24 - 546

- 36,869 - 174,173

In 2015, trade receivables generally have credit term of 60 days.

Amount due from a subsidiary relates to intercompany advances for working capital purposes. The amount is

unsecured, interestfree and repayable on demand.

Trade and other receivables are denominated in the following currencies:


2016 2015 2016 2015

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi - 36,845 - 174,149

Malaysia Ringgit - 24 - 24

United States Dollar - - - -

- 36,869 - 174,173


55


8. TRADE AND OTHER RECEIVABLES (Continued)

The ageing analysis of trade receivables that are not past due and past due but not impaired is as follows:

The Group

2016 2015

RMB'000 RMB'000

Not past due - 54,675

Pastdue0 to1 months - 101,726

Pastdue1to2 months - 13,742

Past duemore than2 months - 3,484

- 173,627

9. CASH AND BANK BALANCES


2016 2015 2016 2015

RMB’000 RMB’000 RMB'000 RMB'000

Cash on hand - 18 - 937

Cash at bank 26 56 26 495,543

26 74 26 496,480

Cash and bank balances are denominated in the following currencies:


2016 2015 2016 2015

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi - - - 495,801

Hong Kong Dollar - - - 2

United States Dollar - 32 - 635

Malaysia Ringgit 26 42 26 42

26 74 26 496,480

The Group and Company is still in the process of verifying certain listings of cash balances provided by the

previous finance department personnel and/or subsidiaries. Unless the cash balances can be verified, they

will not be recognised as assets.


56


9. CASH AND BANK BALANCES (Continued)

In 2015, the cash at bank bears effective interest rates at0.36% per annum.Cash and bank balances of the

Group are in the current account and have no maturity dates or fixed interest rates, accordingly, there is no

repricing of the cash and bank balances.

10. SHARE CAPITAL

The Company and the

Group

No. of ordinary shares Amount

2016 2015 2016 2015

USD’000 RMB’000 USD’000 RMB’000

Authorised share capital:

At beginning of the year

(par value of USD0.05)

2,000,000,000 1,000,000,000 50,000 50,000 50,000 50,000

Diminution of authorized

share capital (par value of

USD0.05)

- (482,500,000)

*

- (24,125)* - -

2,000,000,000 517,500,000 50,000 25,875 50,000 50,000

Effect of par value

reduction

- - - (12,938)# - -

Increased during the year


- 1,482,500,000 - 37,063 - -

At end of the year par

value of USD0.025

2,000,000,000

2,000,000,000

50,000

50,000

50,000

50,000

Issued and fully paid:

At beginning of the year


595,122,000 517,500,000 14,878 100,362 25,875 175,361

Effect of par value

reduction

- - - - (12,938)

#

(87,680)

Issued during the year 11,642,000 77,622,000 499 2,011 1,941 12,681

At end of the year par

value of USD0.025

606,764,000

595,122,000

15,377

102,373

14,878

100,362


57

Notes to the financial statements


10. SHARE CAPITAL (CONT’D)

*The par value of each issued and unissued share was reduced from USD 0.05 to USD 0.025 during the current financial year. All the authorized but unissued shares of USD 0.05 par value each was cancelled and the authorized share capital of the Company of USD 50,000,000 was diminished by USD 37,062,500, representing the amount of authorized but unissued shares so cancelled and, forthwith upon such cancellation, the authorized share capital of the Company be increased to USD 50,000,000 by the creation of 1,482,500,000 shares of USD 0.025 par value each.

#The issued and paid-up share capital of the Company be reduced (the “Par Value Reduction of issued capital”) from USD 25,875,000 to USD 12,937,500 by cancelling the paid-up capital of the Company to the extent of USD 0.025 on each of the existing issued and paid-up ordinary shares of the Company (“Shares”) of USD 0.05 par value in issue as at the Par Value Reduction Effective Date so that each issued Share of USD 0.05 par value shall be treated as a fully paid-up Share of USD 0.025 par value (“New Share”) and liability of the holder of such New Share to make any further contribution to the capital of the Company on each such New Share shall be treated as satisfied.

In 2015, the Company issued 77,622,000 new ordinary share of USD0.025 (RM0.11) each for cash arising

from the exercise of employees’ share options at exercise price of USD0.025 (RM0.11) per ordinary share.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and entitled to

one vote per share at general meetings of the Company. All shares rank equally with regard to the Company’s

residual assets.

11. RESERVES

The Company

2016 2015

RMB'000 RMB'000

Share Premium 137,003 137,003

Contribution Surplus 87,680 87,680

Accumulated losses (330,129) (13,386)

(105,446) 211,297

(i) Movement of Share Premium:

Beginning and end of the year 137,003 137,003

(ii) Movement of Contribution Surplus:

-Beginning of the year - -

-Effect of par value reduction 87,680 87,680

End of the year 87,680 87,680

Share premium

The share premium arises from the difference between the par value and issue price of the share issued after

deducting transaction costs.

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58

Notes to the financial statements


11. RESERVES(CONT’D)

Statutory reserve

In accordance with the relevant laws and regulations of the PRC, the subsidiaries of the Company established

in the PRC are required to transfer 10% of their profit after taxation prepared in accordance with the

accounting regulations of the PRC to the statutory reserve until the reserve balance reaches 50% of the

respective subsidiary’s registered capital. Such reserve may be used to offset accumulated losses or increase

the registered capital of the subsidiaries, subject to the approval from the PRC authorities, and are not

available for dividend distribution to the shareholders.

Merger Deficit

The merger deficit arises from the difference between the nominal value of shares issued by the Company and

the nominal value of shares and share premium of subsidiary acquired under the pooling of interest method of

accounting.

Contribution Surplus

During the financial year 2015, Company given the approval for the Par Value Reduction by shareholders on 20 August 2015. Subject to and forthwith upon the Proposed Par Value Reduction of issued Capital taking effect, the transfer of the credit arising from the Proposed Par Value Reduction of issued Capital to the Contributed Surplus account of the Company to be utilized in such manner as may be determined by the Board and permitted by applicable law, including but not limited to capitalization of such reserve for future corporate exercises of the Company. The contributed surplus account of the Company may also be utilized for distribution and dividends.

ESOS Reserve

Employee share option scheme (ESOS) reserve represents the equity-settled share options granted to

employees. The reserve is made up of the cumulative value of services received from employees recorded

over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the

expiry or exercise of the share options.

12. TRADE AND OTHER PAYABLES


2016 2015 2016 2015

RMB'000 RMB’000 RMB'000 RMB'000

Trade payables - - - 55,363

VAT payable - - - 3,543

Accrued liabilities - - - 31,159

Other creditors 3,098 2,658 3,098 806

3,098 2,658 3,098 90,871

Trade payables generally have credit terms of 30 to60 days.

Accrued liabilities consist mainly of accrued wages, social security insurance and production overhead and

certain payables to shareholders.

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59

Trade and other payables are denominated in the following currencies:


2016 2015 2016 2015

RMB'000 RMB'000 RMB'000 RMB'000

Renminbi - - - 88,050

Malaysia Ringgit 2,349 1,909 2,349 1,978

Singapore Dollar 448 448 448 448

Hong Kong Dollar - -

United States Dollar 85 85 85 85

Taiwan Dollar 216 216 216 310

3,098 2,658 3,098 90,871

13. INTEREST-BEARING BANK BORROWINGS

The Group

2016 2015

RMB'000 RMB'000

Short term bank borrowings- secured - 11,500

According to information provided by the previous board, the Group’s interest-bearing bank borrowings in the financial year 2015were pledged by the Group’s leasehold buildings (Note 3) and land use rights (Note 5). Bank borrowings bear effective interest rate of 6.30% per annum (2014: 6.30% per annum). Interest-bearing bank borrowings have a fixed interest rate over the contract period. As set out in the litigation section, PRC publicly available information states that the Group had charged its leasehold buildings to China Construction Bank up to a maximum limit of of RMB 142.23 million yuan.

14. REVENUE AND OTHER INCOME

Revenue represents the net invoiced value of goods sold, after allowances for returns and trade discounts, if

any. An analysis of the Group's revenue and other income is as follows:

The Group

2016 2015

RMB'000 RMB'000

Revenue

Sale of goods 80,215 579,352

Other income

Interest income 248 1,941

Sale of scrap material - 538

Others 176 -

424 2,479

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60

15. FINANCE COSTS

The Group

2016 2015

RMB'000 RMB'000

Interest expense - bank borrowings (Note 13) 183 734

16. (LOSS)/ PROFIT BEFORE TAXATION

The Group's (loss)/ profit before taxation is arrived at after charging the following:

*In 2015, Fujian Evidoma Ltd, a subsidiary company of the Company, incurred Advertising and Promotion

Expenses of RMB 34,980,000. For 2016, please refer to Note 20 and 31.

The Group

2016 2015

RMB’000 RMB'000

Cost of inventories recognised as expenses - 488,334

Depreciation of property, plant and equipment - 22,295

Amortisation of intangible assets - 233

Amortisation of land use rights - 402

Advertising expenses* - 34,980

Directors’ remuneration excluding directors’ fee

- salaries and related cost - 2,091

- retirement scheme contribution - 29

Directors’ fee - 338

Key management personnel(other than directors)


- retirement scheme contributions - 23

Other than directors and key management personnel


- retirement scheme contribution - 17,147

Research and development expenses - 714

Loss on disposal of property, plant and equipment - 3,062

Rental expenses of office premises 1,790

Employment share option scheme (ESOS) - 5,212

1. In 2015, depreciation expenses of approximately RMB 12,803,000 and RMB 9,491,000 have been

charged in cost of sales and administrative expenses on the face of the statement of comprehensive

income respectively.

2. In 2015, salaries and related cost of persons other than directors and key management personnel, of

approximately RMB 101,305,000, RMB 7,882,000and RMB 6,245,000 have been charged in cost of

sales, selling and distribution expenses and administrative expenses on the face of the statement of

comprehensive income respectively.


61

17. INCOME TAX EXPENSE

The Group

2016 2015

RMB'000 RMB'000

Current taxation - 9,273

Underprovision/(overprovision) of taxation in respect of prior year - (336)

PRC income tax - 8,937

Reconciliation between tax expense and profit before taxation at applicable tax rates is as follows:

2016 2015

The Group RMB'000 RMB'000

Loss before taxation (906,733) (19,848)

Tax at the applicable tax rate of 25% (226,683) (4,962)

Utilisation of prior year tax losses - -

Tax effect on non-deductible expenses 226,683 14,235

Under/ (over) provision of taxation in respect of prior year - (336)

- 8,937

Bermuda income tax

Pursuant to the tax rules of Bermuda, the Company is not subject to income tax.

Hong Kong profit tax

No provision was made for Hong Kong income tax as the Group did not earn any income subject to Hong

Kong income tax during the financial year.


16. (LOSS)/ PROFIT BEFORE TAXATION(Continued)

3. In 2015, retirement scheme contribution of persons other than directors and key management

personnel, of approximately RMB 16,098,000, RMB 526,000 and RMB 523,000 have been charged in

cost of sales, selling and distribution expenses and administrative expenses on the face of the

statement of comprehensive income respectively.

4. In 2015, salaries and related cost, and retirement scheme contribution of directors and key

management personnel, have been charged in administrative expenses on the face of the statement of

comprehensive income.

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62


17. INCOME TAX EXPENSE (Continued)

PRC enterprise income tax (“EIT”)

The new PRC enterprise income tax law passed by the Tenth National People’s Congress on 16 March 2007 introduced various changes which include the unification of the enterprise income tax rate for domestic and foreign enterprises at 25%. The new tax law was effective from 1 January 2008.

Withholding tax on dividends

According to the Corporate Income Tax Law and its implementation rules, withholding tax is imposed on

dividends declared in respect of profit earned by PRC subsidiaries from 1 January 2008 onward. For the

Group, the applicable rate for the withholding tax is 10%. In estimating the withholding taxes on dividends

expected to be distributed by the subsidiaries established in PRC in respect of earnings generated from 1

January 2008 onwards, the then directors had made an assessment based on the factors which included the

dividend policy and the level of capital and working capital required for the Group’s operations in the

foreseeable future. No provision has been made on the books as the Company / Group has no intention to

declare dividends for the current year or the past retained profits.

18. LOSS PER SHARE

Basic lossper share are calculated based on(loss)/profit attributable to equity holders of the Group and

weighted average number of 604,116,641 and 595,122,000 ordinary shares in issue for the financial years

ended 31 December 2016and 2015respectively:

The Group

2016 2015

RMB RMB

cents cents

Basic earnings per share is based on:

Loss after taxation attributable to ordinary shareholders of the Company (150.09) (4.83)

Weighted average

no. of shares

2016 2015

At beginning of year and end of the year 595,122,000 517,500,000

Share issued during the year under ESOS (weighted) 8,994,641 77,622,000

Total 606,764,000 595,122,000

The warrants issued as disclosed in Note 26 are non-dilutive on the number of shares of the Company as the

exercise price of the warrant is higher than the market price and is not expected to be exercised. There is no

potential dilutive effect on earnings per share for the years ended 31 December 2016 and 2015 respectively.

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63


19. DIVIDENDS

The directors did not declare any dividend for the year ended 31 December 2016 and 2015.

20. Disposal of subsidiaries

As at 31 December 2016, the Company determined that it had lost control of the following subsidiaries (the

PRC subsidiaries):

(i) Pak Sing Shoe Material (H.K.) Limited

(ii) Jinjiang Baixing Shoe Material Co., Ltd.

(iii) Fujian Evidoma Ltd.

(iv) Fujian Qingte Investment Ltd

(v) Quanzhou Sente Trading Ltd

Rationale

The board in Malaysia has concluded that the Company has no option but to de-consolidate the PRC

subsidiaries from its financial reporting as at 31.12.2016.

The effect of de-consolidation is that in future, the financial results of the subsidiaries are no longer reported in

the Company’s Annual Report (i.e. the report will be at a company, not group level) and the investment in the

subsidiaries is written down in the Company’s accounts as a disposal without consideration. In the event that

the Company is able to re-establish control over the PRC subsidiaries and/or their assets, the Company will

then re-consolidate and/or recognize this value.

De-consolidation will allow the Company to prepare and issue financial reports that, to the extent possible

given the circumstances, most closely and accurately reflect the true financial position of the Company.

As shareholders will be aware, the Company has been unable to complete its financial reporting on a Group

basis (including the PRC subsidiaries information). The board did not, until now, believe that de-consolidation

was warranted as they were waiting for further information and confirmations on the PRC subsidiaries. This

has led the Company to seek several extensions for submission of the reports and left the Company facing

potential de-listing by Bursas Malaysia. The board now believes that the decision to de-consolidate as at

31.12.2016 is justified.

The de-consolidation is based on a combination of factors:

1. The Company was effectively abandoned and left a non-functioning shell following the mass resignation of the

previous board and the failure of Lin Liying to respond to Bursa Malaysia or attend a face-to-face meeting

requested with Bursa Malaysia and the Securities Commission;

2. The board in Malaysia has incomplete records for the Company itself and no access to the books and records

of the PRC subsidiaries or reliable information on which to reconstruct the financial performance of the PRC

subsidiaries.

3. All the Group’s operations and assets are in the PRC under the control of Lin Liying and Lin Houzhi as

directors and Legal Representative. The control and command structure of the Group is and has also been

based in China for all intents and purposes, including financial control. The Company, although owning 100%

of the subsidiaries, is only able to effect control over the PRC subsidiaries via the cooperation of the Legal

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64

Representative of such subsidiary and there are significant legal and financial obstacles to regaining control

and replacing the Legal Representative, which the Company does not currently have the ability to overcome.

4. The new directors appointed on 04.10.2016 have been unable to re-establish control over the PRC

subsidiaries since taking office. The directors in China, Lin Liying and Lin Houzhi, who had full control over the

PRC subsidiaries, have failed and refused to engage with the board and the regulators.

5. The discovery and confirmation of the existence of significant litigation involving the PRC subsidiaries in China

as well as Lin Liying and Lin Houzhi personally, which was not disclosed by PRC Management, points to the

subsidiaries having gone out of control even before 31.12.2015;

6. The discovery and confirmation (based on best available court information) that the land and factory facility of

Jinjiang Baixing at Xinbin Farm appears to have been foreclosed and auctioned (after several attempts)

pursuant to a judgment taken against Jinjian Baixing by its main banker in China, China Construction Bank.

Although we are not able to access details of the purchaser at the final auction or to conduct the necessary

land title searches, the best available information indicates the sale proceeded; and

7. The confirmation by way of site visit that the PRC subsidiaries have ceased operations at the land and factory

facility and that a third party company is operating out of those premises.

Given the circumstances and based on the available information, the Board believes that the Company and its

shareholders have been the victim of financial misreporting and non-disclosure by the PRC subsidiaries under

the control and management of Lin Liying and Lin Houzhi, in relation to financing debt, material litigation and

cash balances.

The board believes that de-consolidating the accounts as at 31.12.2016will be the fairest and most accurate

way of reporting the Company’s financial position going forward and will allow the Company to pursue a

restructuring and reorganization of its listing to safeguard its remaining value.

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65

20. Disposal of subsidiaries (cont’d)

Details of the disposal are as follows:

Carrying amounts of net assets of which control was lost:

2016 2015

RMB'000 RMB'000

Non-current assets

Property, plant and equipment 290,197 -

Intangible assets 642 -

Land-use rights 16,578 -

Current assets

Inventories 11,238 -

Trade and other receivables 176,184 -

Cash and bank balances 496,625 -

Current liabilities

Trade and other payables (101,696) -

Interest-bearing borrowings (11,500) -

Income tax payables (1,527) -

Net assets de-recognised 876,741

No consideration was received on disposal of the above subsidiaries

Loss on disposal:

Consideration received - -

Net assets de-recognised (876,741) -

Attributable reserves:

Statutory reserve 38,676 -

Merger deficit (54,916) -

Loss on disposal (892,981)

No cash was received for the disposal of the above subsidiaries.

Net cash out on disposal of subsidiaries

Cash and cash equivalents disposed (496,625) -

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66


21. COMMITMENTS

21.1 Operating lease commitment

At the end of the reporting period, the Group was committed to making the following rental payments in respect

of non-cancellable operating leases of office premises with an original term of more than one year.

2016 2015

The Group RMB’000 RMB’000

Not later than one year - 204

Later than one year and not later than five years - -

- 204

The leases were on the Group’s administrative offices in several provinces on which rental are payable will

expire according to the term of contracts. The current rental ranges from RMB 40,000 to RMB 48,000 per

month.

21.2 Other commitment

As at 31 December 2015, the Group had an unpaid commitment amounting RMB 4.5million related to an R&D

agreement entered with a local company –Fuzhou Plastics Technology Innovation Center to enhance the

quality of current products and obtain relevant technical support.

22. SEGMENT INFORMATION

Business segment

For management purposes, the Group is organized into business units based on their business activities, and

has five reportable operating segments as follows:

1) TPR shoe soles

TPR shoe soles are a physical mix of polymers, usually a rubber and a plastic.

2) RB shoe soles

Natural and synthetic rubbers are used in the production of RB shoe soles.

3) MD1 shoe soles

The main components of MD1 shoe soles are ethylene vinyl acetate (“EVA”) and rubber.

4) MD2 shoe soles

The main components of MD 2 shoe soles are similar to MD 1 shoe soles, but are produced using a

distinct production process.

5) Apparels and accessories

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67

The main component is men’s fashion wear and accessories.

Historically, management of the subsidiaries monitored the operating results of its business units separately for

the purpose of making decisions about resource allocation and performance assessment. Segment

performance was evaluated based on operating profit or loss which in certain respects, as explained in the

table below, is measured differently from operating profit or loss in the Consolidated Financial Statements.

Group income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transaction

with third parties, if any.

Geographical segment

As the business of the Group is engaged entirely in the PRC, no reporting by geographical location of

operation is presented.

There is no single segment which account for more than 10% of revenue.

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68

22. SEGMENT INFORMATION (Continued)

The segment information provided to the management for the reportable segments for the financial year ended

is as follows:

Financial Year ended 31 December 2016

TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles

Apparels &

Accessories TOTAL


Segment revenue

- External sales (Note 14) 2,839 2,814 16,701 57,275 586 80,215

Segment results

(385) (365) (2,256) (7,757) (1,882) (12,645)

Unallocated interest income

-

Unallocated other income

(1)

Unallocated other expenses(1)

(894,087)

Lossfrom operations (906,733) -

Segment assets - - - - - -

Segment liabilities

- - - - - -

Other information:

Interest income 13 13 78 269 2 375

Interest expenses 6 6 38 130 3 183

Additions to non-current assets (3) - - - - - -

Depreciation and amortisation - - - - - -

31 December 2016

RMB’000

Segment assets are reconciled to total assets as follows: Segment assets

-

Unallocated prepayment and other receivable (4)

-

Unallocated cash at bank & on hand (5)

26

Total assets 26

Segment liabilities are reconciled to total liabilities as follows: Segment liabilities

-

Unallocated income tax payable

Unallocated accruals and other payables (6)

3,098

Total liabilities 3,098

(1) Relate mainly to the loss on disposal of subsidiaries

(2) Impairment loss on intangible asset related to the trademark being fully written off during the financial year.

(3) Additions to non-current assets consist of additions to property, plant and equipment and intangible assets.

(4) Relate mainly relate to the Company’s prepaid administrative expenses.

(5) Relate to Qingte, Sente, Pak Sing and the Company’s cash and cash balances.

(6) Relate mainly to Pak Sing and the Company’s accruals and payables

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22. SEGMENT INFORMATION (Continued)

Financial Year ended 31 December 2015

TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles

Apparels &

Accessories TOTAL


Segment revenue

- External sales (Note 14) 23,176 17,899 107,492 384,587 46,198 579,352

Segment results

1,000 761 4,669 16,658 (40,170) (17,082)

Unallocated interest income

-

Unallocated other income

233

Unallocated other expenses(1)

(3,000)

Profit from operations (19,849) -

Segment assets 41,687 31,725 194,554 694,115 24,492 986,573

Segment liabilities

4,077 3,103 19,028 67,887 1,889 95,984

Other information:

Impairment loss on intangible asset (2) - - - - - -

Interest income 78 59 363 1,296 144 1,940

Interest expenses (29) (22) (137) (487) (54) (729)

Additions to non-current assets (3) 2,412 1,836 11,259 40,167 - 55,674

Depreciation and amortisation (985) (750) (4598) (16,402) (196) (22,931)

31 December 2015

RMB’000

Segment assets are reconciled to total assets as follows: Segment assets

988,573

Unallocated prepayment and other receivable (4)

24

Unallocated cash at bank & on hand (5)

712

Total assets 989,309

Segment liabilities are reconciled to total liabilities as follows: Segment liabilities

95,984

Unallocated income tax payable

5,070

Unallocated accruals and other payables (6)

2,846

Total liabilities 103,900

(1) Relate mainly to the Company’s administrative expenses.

(2) Impairment loss on intangible asset related to the trademark being fully written off during the financial year.

(3) Additions to non-current assets consist of additions to property, plant and equipment and intangible assets.

(4) Relate mainly relate to the Company’s prepaid administrative expenses.

(5) Relate to Qingte, Sente, Pak Sing and the Company’s cash and cash balances.

(6) Relate mainly to Pak Sing and the Company’s accruals and payables

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70


23. FINANCIAL RISK MANAGEMENT OBJECTIVES – POLICIES

The Group does not have written risk management policies and guidelines.

As at 31 December 2016, the Company’s financial instruments comprise only cash and bank balances.In2015,

the Group's financial instruments mainly comprise cash and bank balances, trade receivables, other

receivables, trade payables, accrued liabilities, other payables, and interest-bearing bank borrowings.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will

fluctuate because of changes in market interest rates.

The Group’s interest rate risk arises primarily from bank deposits placed with the financial institutions and

interest-bearing bank borrowings.

The Group’s exposures to interest rate risk from the interest-bearing bank borrowings are minimal as the

Group’s policy is to maintain the borrowings on a fixed rate basis. The Group does not have investment in

other financial assets.

(ii) Foreign currency risk

Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in

foreign exchange rates. Foreign currency risk arises when transactions are denominated in foreign

currencies. The Group carried out its business in the PRC and most of the transactions were

denominated in Renminbi. Accordingly, the Group’s exposure to risk resulting from changes in foreign

currency exchange rates was minimal.

(iii) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they

fall due. The Group’s policy was to regularly monitor current and expected liquidity requirements to

ensure that it maintains sufficient reserves of cash to meet its liquidity requirement in the short and long

term. The Group’s financial liabilities are repayable within 12 months.

The table below analyses the maturity profile of the Company’s and the Group’s financial liabilities based

on contractual undiscounted cash flows:

The Group Less than 1 - 5 Total

1 year years

At 31 December 2016

RMB’000 RMB’000 RMB'000

Trade and other payables 3,098 - 3,098

Bank borrowings (Note 13) - - -

3,098 - 3,098

At 31 December 2015

Trade and other payables (Note12) 90,871 - 90,871

Bank borrowings (Note 13) 11,500 - 11,500

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71

102,371 - 102,371

The Company

At 31 December 2016

Trade and other payables (Note 12) 3,098 - 3,098

At 31 December 2015

Trade and other payables (Note 12)

2,658 -

2,658

(iv) Credit risk

Credit risk is the risk of financial loss to the Group if the counterparty fails to meet its contractual

obligations. Due to loss of control and lack of access to reliable information, the new directors are unable

to comment on the carrying amounts of trade receivables and other receivables representing the Group’s

maximum exposure to credit risk in relation to its financial assets.

Due to loss of control and lack of access to reliable information, the new directors are unable to comment on whether the cash and cash balances of the subsidiaries are held by reputable financial institutions.

(v) Fair value

The fair values of the Group’s financial assets and liabilities are not materially different from their carrying

amounts because of the immediate or short-term maturity of these financial instruments.

(vi) Price risk

Price risk is the risk that the value of a financial instrument will fluctuate due to changes in market prices

whether those changes are caused by factors specific to the individual security or its issuer or factors

affecting all securities traded in the market.

The Group does not hold any quoted or marketable financial instrument, hence is not exposed to any

movement in market prices.


72


23. FINANCIAL RISK MANAGEMENT OBJECTIVES – POLICIES (Continued)

(vii) Categories of financial instruments


31 December 31 December 31 December 31 December

2016 2015 2016 2015

RMB’000 RMB’000 RMB’000 RMB’000

Financial assets

Loans and receivables

Cash and bank balances 26 74 26 496,480

Trade and other receivables - 24 - 174,173

Amounts owing by affiliated companies - 36,845 - -

Financial liabilities

Amortised cost

Trade and other payables 3,098 2,658 3,098 90,871

Bank borrowings - - - 11,500

24. CAPITAL MANAGEMENT

Due to loss of control of the PRC subsidiaries and lack of access to reliable information, the new directors are

unable to comment on capital management as regards to the subsidiaries and operations of the Group as a

whole. Due to the overseas/offshore structure of the Group whereby capital is held in China, there is no

meaningful capital controlled directly by the holding Company.

25. FINANCIAL INSTRUMENTS

Fair values

The carrying amounts of financial assets and liabilities with a maturity of less than one year approximate their

fair values.

The Group does not anticipate that the carrying amounts recorded at the statement of financial position date

would be significantly different from the values that would eventually be received or settled.


73

26. SUPPLEMENTARY INFORMATION DISCLOSED PURSUANT TO BURSA MALAYSIA SECURITIES

LISTING REQUIREMENT

The breakdown of the retained profits of the Group as at 31 December 2016 and 2015 into realised and

unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad

dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No.1, Determination of

Realised and Unrealised Profits or Losses as issued by the Malaysian Institute of Accountants. The Group 2016 2015 RMB’000 RMB’000 Total (accumulated losses) retained profits of the Group - Realized (330,129) 574,954 - Unrealized - 230

(330,129) 575,184

Add: Consolidation adjustments - 1,514

(Accumulated losses)Retained profits as per financial statements (330,129) 576,698

27. WARRANTS ISSUED

On 15 August 2014, the Company proposed to undertake a bonus issue of 258,750,000 Warrants on the basis of

one(1) Warrant for every two(2) existing ordinary shares of USD 0.05 each in the Company held at 5 P.M on 5

November 2014. The par value was reduced to USD 0.025 during 2015. The warrants were issued on 10

November 2014 and are exercisable anytime from 10 November 2014 to 9 November 2017.

There was no consideration received for the warrants. The exercise price per share is RM 0.18.Theconversion

ratio is 1 warrant for 1 new ordinary share of the Company.

The number of warrants outstanding as at 31 December 2016 was 258,750,000.

28. LITIGATION

Please refer to the list of litigation cases as disclosed in Note 30. 29. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Other than the events described in Note 30 “Events After the Reporting Period”, the Group is not aware of any

other significant events during the financial year ended 31 December 2016.


74

30. EVENTS AFTER THE REPORTING PERIOD

Note: This chronology of events also provides background information pre-dating the reporting period, which the

directors have collated and reconstructed from available sources. This extended chronology of events is provided

because the New Board of Directors believe that the information is material and relevant to understanding the

Company’s current inability to gain access to books and information from the PRC subsidiaries or to rely without

qualification / disclaimer on earlier financial reports and information prepared under the previous board /

management in PRC.

Date Events

03/02/2016 The Company’s auditors made enquires with the PRC management regarding advertising

expenditure (relating to Evidoma) of RMB35million incurred mid-year 2015, when the Company

had decided to cease the business of Evidoma at the end of the year. Bursa Malaysia’s

Corporate Surveillance Department had also made enquiries with the Company on the

substantial increase / amount of administrative expenses incurred in or around the same

period.

29/02/2016 PRC management’s response to the auditors’ enquiry on why there was significant advertising

expenditure for Evidoma when the business was expected to cease in 2016 and for specific

details of the location and content of the billboard advertising was that “The location of the

billboard is at the six selling point. The cessation of business was decided when there was no

effect after the advertisement”.

19/04/2016 Lin Liying informed the board of the Company that the Company may not be able to release its

AR2015 by the deadline of 29.04.2016

20/04/2016 The Company announced the resignation of Ang Wei Chuan and Bernard Tan Chin Teik

25/04/2016 The Company announced that it was unable to release its AR2015 giving the reason that

additional works had to be performed by the auditors to verify the expenditure incurred and

bank balances within the PRC.

10/05/2016 The Company’s shares were suspended from trading by Bursa Malaysia

31/05/2016 The Company announced that the auditors required time to verify expenditure incurred and

bank balances and that this additional work would be completed by June 2016

31/05/2016 Company issues Q1 Quarterly Report

06/06/2017 The Company’s auditors halted work on the additional audit work (regarding expenses and

cash in bank confirmations) pending receipt of advance and outstanding payments

09/06/2016 The Company announced resignations of Secretarius Services SdnBhd, its company secretary

in Malaysia w.e.f. 08.06.2016 and PFA Corporate Consultants SdnBhd, its agent in Malaysia

w.e.f. 30.06.2016.

13/06/2016 Bursa Malaysia and the Securities Commission requested Lin Liying via tele-conference to

provide them contact details of the advertisers with whom the billboard advertising fees had

been incurred, and for a face-to-face meeting with the board. Following this, there was no

further response from Lin Liying to the regulators’ attempts to communicate.


75

Date Events

21/06/2016 Wong Wang Lam tenders his resignation from the board (announced via Bursa Listing Circular

dated 02.09.2016)

08/07/2016 The Company’s CFO, Wong Kok Fong, tenders his resignation (announced via Bursa Listing

Circular dated 02.09.2016).

02/09/2016 Bursa Malaysia Listing Circular announces notice to shareholders by P.S. Gill calling for a

special general meeting following the Company’s failure to call the meeting.

04/10/2016 Appointment of 6 new directors at the shareholder convened Special General Meeting

25/10/2016 The Company was informed (via the former CFO through whom Lin Liying had been

communicating) that she did not see the point meeting or discussing the audit issues because

the Company will be de-listed. There was no further response from Lin Liying.

01/11/2016 Company’s Taiwan Depository Receipts are delisted from the Taiwan Stock Exchange for

failure to issue the AR2015 and other financial reports.

03/11/2016 The Company appoints Boardroom.com as agents in Malaysia

29/11/2016 The Company announces that it has failed to issue quarterly reports for Q2 and Q3 2016.

Reasons given are that the newly appointed directors are in the midst of addressing

outstanding regulatory requirements and issues and because additional time is required to

gather and check the necessary financial information. An expected issued date of 14.02.2017

is given for the issuing of the outstanding reports.

13/02/2017 The Company announces that it is unable to issue the outstanding Annual Report 2015 and

Quarterly Reports. It is also announced that discussions with the company’s auditors, RT LLP,

regarding the Outstanding Annual Report and audit fees are ongoing and that the new Board

has received details of alleged unreported finance transactions and litigation involving the

Company’s operating subsidiary in China, JinjiangBaixing Shoe Materials Ltd, and the Senior

Management of the Company.

04/07/2017 The Company announces that it received a notice to show cause against de-listing from Bursa

Malaysia (dated 03.07.2017). The Company subsequently responds to the notice showing

cause as to why de-listing should not proceed.

31/07/2017 The Company announces that information from a Government of Peoples Republic of China’s

website indicates there are litigation cases involving the Company’s operating subsidiary in

China, namely Jinjiang Baixing Shoe Materials Co. Ltd but that the Company is unable to

confirm the information.

01/08/2017 The Company announced details of 10 law suits / cases as per the Government of Peoples

Republic of China website however the names of the parties to the suits are not available save

that Jinjiang Baixing is involved.

30/08/2017 The Company announced that Bursa Malaysia had decided to defer listing subject to

conditions including that the Company must sign an addendum to the existing audit

engagement letter with the Company’s auditors (to settle and allow the resumption of audit

work) before 11.09.2017; the issuing of AR2015 by 09.10.2017 and all other outstanding


76

Date Events

financial statements by 28.02.2018

08/09/2017 The Company resolves the ongoing discussions with the auditors regarding the outstanding

audit report and audit fees and an addendum to the existing audit engagement letter is signed.

09/10/2017 The Company announced that on 08.09.2017 it had applied for an extension of time from

Bursa Securities till 09.11. 2017

01/11/2017 Bursa Malaysia, which had previously commenced enforcement proceedings against the

Company, delivered its decision on the proceedings and publicly reprimanded the Company,

Lin Liying, Lin Houzhi and 3 former directors for multiple breaches of the Bursa Malaysia

Securities Main Market Listing Requirements. In addition, fines were imposed on the following

directors including:

Lin Liying – RM1,656,000 for causing MSPORTS to commit the Financial Reporting Breaches

and permitting MSPORTS to commit the Corporate Governance Breaches, Foreign Listing

Requirements Breaches, Disclosure Breaches and the Non-Compliance with Bursa Malaysia

Securities’ Directives;

Lin Houzhi RM1,656,000 for causing MSPORTS to commit the Financial Reporting Breaches

and permitting MSPORTS to commit the Corporate Governance Breaches, Foreign Listing

Requirements Breaches, Disclosure Breaches and the Non-Compliance with Bursa Malaysia

Securities’ Directives; and

Wong Wang Lam RM7,200 for causing and permitting MSPORTS to breach listing

requirements on the failure to issue the AR 2015 on or before 30 April 2016.

10/11/2017 The Company releases the Annual Report 2015. The auditors issued a disclaimer of opinion in

respect of the report. The new directors similarly qualify the Annual Report due to their inability

to check and verify the information prepared by management under the previous board.

13/11/2017 The Company announces that it has entered Practice Note 17 status (“PN17”) of the Main

Market Listing Requirements (“LR”) following its issuance of Audited Financial Statements for

the financial year ended 31 December 2015 with a disclaimer of opinion by auditors, thus

giving the Company 12 months in which to submit a regularisation plan

21/02/2018 The Company is still unable to finalise its Annual Report 2016 and its auditors have yet to

complete audit work in China due to the extended Chinese New Year holidays therefore a

further extension is sought from Bursa Securities. The Company seeks a further extension of

time from Bursa Malaysia for the release of the outstanding financial reports.Bursa Malaysia

subsequently allows an extension until 11.04.2018 for the Company to submit its outstanding

financial reports, failing which de-listing will proceed.

10.04.2018 The Company informs Bursa that it is still unable to finalise its Annual Report 2016 and is

awaiting reports on the litigation involving subsidiaries in China and checks on the status of

JinjiangBaixing’s factory facility at Xinbin Farm.

11.04.2018 The Company submits an application for an extension of time to Bursa Malaysia until

25.04.2018 to allow it to submit the outstanding financial reports.


77

Litigation

The Company has sought the assistance of lawyers in China to identify and confirm the existence of litigation involving the subsidiaries and primarily, Jinjiang Baixing with a view to providing us with the official cause papers, pleadings and evidence filed in the suits. Due to difficulties in accessing information, the lawyers have only been able to access publicly available information. In April, 2018, we received a report on the status of the various cases affecting the subsidiaries based on which an announcement dated25 April 2018, the relevant portions of which are as follows:

1. Due to restrictions by the Chinese courts on the disclosure of and the means of gathering litigation information, and legal and bureaucratic barriers to the access of private information and company documents in China involving the PRC subsidiaries, the board in Malaysia has been forced to rely on available public information and whatever court information is available to non-parties to the litigation, which is by nature incomplete.

2. The following information is based on the best available information from searches carried out by lawyers in China that we have currently however it is presented with the caveat that we have been unable to access the actual pleadings and court documents to verify the secondary sources and there may be factual inaccuracies; further litigation; or subsequent developments in the litigation discussed below that we have yet to discover.

3. The board does warrant or undertake any liability for the accuracy and completeness of information and materials of the cases involved that have been gathered and organized based on publicly available information.

4. We refer to the table below setting out the key details of the litigation identified.

5. According to the available but incomplete data, Jinjiang Baixing Shoe Materials Co., Ltd. was involved in 24 lawsuits from 2014 till April 2018. The financial amounts involved in the lawsuits were approximately RMB 518.13 million yuan (excluding the objects/value of subject matter of litigation where not stated.

6. Litigation in 2014: There were 2 cases in 2014. The total amount that was the subject of the litigation was RMB 18.8 million yuan.

a. The value of litigation brought by plaintiff Quanzhou branch of China Minsheng Bank Holdings Limited, Quanzhou Branch, was 13.8 million yuan.

b. In the second case, the value of the Plaintiff’s claim, Jinjiang Yuancheng Microfinance Co., Ltd. was 5 million yuan. Lin Houzhi is listed as a defendant. The 2 cases were settled through reconciliation and withdrawal of the lawsuits.

7. Litigation in 2015: There were 5 cases found to have been taken in 2015. The total amount in the objects of litigation was above RMB 30.002 million yuan (excluding the objects of litigation of unknown cases).

a. The value of the claim filed by Wang Qingyun as plaintiff was 5.8 million yuan, and the case was settled through reconciliation and withdrawal of the lawsuit. Lin Houzhi is listed as a defendant;

b. the value of the claim filed by Xiamen Port Trading Co., Ltd. Was 2.44 million yuan;

c. the value of the claim filed by Fujian Straits Finance and Leasing LLC was 21.843 million yuan. Both Lin Houzhi and Lin Liying are listed as defendants;

d. the value of the claim filed by Wanjiang Financial Leasing Co., Ltd. was unknown. Lin Houzhi is listed as a defendant;

e. the value of the claim filed by JingjiangYigao Exhibition Equipment Co., Ltd. was 0.919 million yuan.

8. Litigation in 2016: There were 14 cases from 2016 and the total amount in the objects of litigation was above RMB 450.972 million yuan (excluding the objects of litigation of unknown cases).

a. There were 2 claims by Shishi branch of the China Construction Bank Holdings Limited, the value of the claim was 296.54 million yuan. Both Lin Houzhi and Lin Liying are listed as defendants;

b. the value of the claim by the Fengze sub-branch of Rural Commercial Bank of Quanzhou Limited was 29.86 million yuan. Both Lin Houzhi and Lin Liying are listed as defendants;


78

c. the value of the claim by Bank of Quanzhou Holdings Limited was 18.335 million yuan. Both Lin Houzhi and Lin Liying are listed as defendants;

d. the value of the claim by the Fuzhou branch of Ping An Bank Holdings Limited was 52.89 million yuan. Lin Houzhi is listed as a defendant;

e. the value of the claim by the Quanzhou branch of China Everbright Bank Holdings Limited was unknown. Lin Houzhi is listed as a defendant;

f. the value of 2 claims by the Jinjiang branch of Industrial and Commercial Bank of China Holdings Limited was 29.499 million yuan;

g. the value of the claim by Fujian Straits Finance and Leasing LLC was 19.79 million yuan. Both Lin Houzhi and Lin Liying are listed as defendants;

h. the value of the claim by Deng Yunhua was 0.265 million yuan;

i. the value of the claim by Cai Mingyue was 1.169 million yuan. Both Lin Houzhi and Lin Liying are listed as defendants;

j. the value of the claim by Xiamen Xi’ao Elevator Installation Service Co., Ltd. was 0.618 million yuan;

k. the value of the claim by Deng A’yu was 2.361 million yuan. Lin Houzhi is listed as a defendant;

l. the main subject of litigationPeople’s Court of Jinjiang (2016) Fujian 0582 Minchu Case No. 11147 was unknown. The amount in object of litigation was 0.202 million yuan.

9. Litigation in 2017: There were 3 cases in 2017, and the total amount posted in the litigation was above RMB 17.357 million yuan.

a. The value of the claim by Peng Zhenfa was unknown;

b. the value of the claim for workers’ wage and labour disputes was 0.357 million yuan;

c. the claim of Ding Heping was a request for confirmation that the “Agreement of Credit Assignment” for the 17 million yuan in creditor’s right he asserts entitlement to against the People’s Government of Pinghe that was transferred to him by the Quanzhou Baixing Group/JinjiangBaixing Shoe Materials Co., Ltd./Fujian Qingte Investment Development Co., Ltd./Quanzhou Sente Trading Co., Ltd./Fujian Evidoma Clothing Development Co., Ltd. was legal and effective. The case was overruled by the court and was sent for arbitration before the Quanzhou Arbitration Committee. It could not be determined if the case has indeed been arbitrated by the Quanzhou Arbitration Committee subsequently.

10. We are informed that the debts in the cases above that have not been settled have been handed over to the court of China for enforcement procedures but have been unable to get further information or confirmation of specific details except in relation to the China Construction Bank matter:

a. JinjiangBaixing Shoe Materials Co., Ltd. Property at Block 1-9, No. 8, Xibin Farm, Xibin, Jingjiang (land use right certificate serial number is Jinjiang State Use (2009) No. 01012)(property ownership certificate serial number is Jinjiang property certificate Xibin No. 003397) was mortgaged to the Shishi branch of the China Construction Bank Holdings Limited to secure a maximum limit of RMB 142.23 million yuan.

b. It has been ruled by the Quanzhou Intermediate People’s Court (2016) Fujian 05 Minchu No. 227 “Written Civil Judgment Verdict” that the Shishi branch of the China Construction Bank shall enjoy priority in compensation from the auctioning of the said land and property within the maximum limit of of RMB 142.23 million yuan.

c. Auction 1: The first public auction of the property and its land use right was held at the Quanzhou Intermediate People’s Court Auction Hall at 10:00 on 13 March 2017. The starting price was 123.895 million yuan. The property was left unsold in this auction.


79

d. Auction 2: The second public auction of the property was held at the Quanzhou Intermediate People’s Court Auction Hall at 15:30 on 15 May 2017. The starting price was 99.116 million yuan. The property was left unsold in this auction.

e. Auction 3: The third public auction of the property was held at the Quanzhou Intermediate People’s Court Auction Hall at 10:00 on 12 June 2017. The starting price was 79.239 million yuan. It appears this was the final auction however Lawyers were unable to confirm details of the sale or whether this auction sale was successfully completed.

f. Checks on the properties carried out by our auditors for the 2016 Annual Report confirmed that the factory and land is currently being used by a third party, Quan Zhou City Huayang Shoes Material Technology Co. Ltd.

11. Based on the available information, the board understands that Lin Liying and Lin Houzhi are defendants in cases brought by banks / financing houses as they were party to loan agreements or guarantors for financing.


80

Summary of Legal cases involving JinjiangBaixing Shoes Material Co., Ltd.

No. Court Case No. Instance Level of Court

Plaintiffs Defendant Cause of case

Subject matter Conclusion Case Ref.

1

Intermediate People’s Court of Quanzhou City, Fujian Province

No.504(2006), Civil, First Instance, Quanzhou

First instance

中国民生银行股份有限公司泉州分行

China Minsheng Bank Co., Ltd. Quanzhou Branch

福建泉迎经贸有限公司/丁明强/福建省金盛钢业有限公司/福建省晋江市火星鞋材有限公司/晋江百兴鞋材有限公司

Fujian Quanying Economic & Trade Co., Ltd. / Ding Mingqiang / Fujian Jinsheng Steel Industry Co., Ltd. / Fujian Jinjiang Mars Shoes Material Co., Ltd. / JinjiangBaixing Shoes Material Co., Ltd.

Dispute of financial loan

13.8 million

Out-of-court settlement, withdrawing the lawsuit

2 People’s Court of Jinjiang City, Fujian Province

No.4821(2014) Civil, First Instance, JinJiang City

First instance

晋江市恒诚小额贷款有限公司

JinjiangHengcheng Small Loan Co., Ltd.

福建上正实业发展有限公司/晋江百兴鞋材有限公司/福建省晋江市火星鞋材有限公司/林火枝/留拥进/留永煌 Fujian Shangzheng Industrial

Development Co., Ltd. / JinjiangBaixing Shoes Material Co., Ltd. / Fujian Jinjiang Mars Shoes Material Co., Ltd. / Lin Huozhi / Liu Yongjin / Liu Yongyong

Dispute of petty financial loan

5 million Repaid，withdrawing the lawsuit


81

No. Court Case No. Instance Level of Court

Plaintiffs Defendant Cause of case

Subject matter Conclusion Case Ref.

3 People’s Court of Jinjiang City, Fujian Province

No.4150(2015) Civil, First Instance, JinJiang City

First instance

王庆芸

Wang Qingyu

晋江百兴鞋材有限公司/林火枝

JinjiangBaixing Shoes Co., Ltd. / Lin Huozhi

Dispute of financial loan

5.8 million Settled, withdrawing the lawsuit

4

Intermediate People’s Court of Wuhu City, An Hui Province

No.00302(2015) Civil, First Instance, Wuhu

First instance

皖江金融租赁有限公司

Qijiang Financial Leasing Co., Ltd.

晋江百兴鞋材有限公司/福建三大鞋服有限公司/林火枝/高琼莲

JinjiangBaixing Shoes Material Co., Ltd./Fujian Sanda Shoes Co., Ltd./Lin Huozhi/Gao Qionglian

Dispute over a financial leasing contract

Above 20 million JinJiangBaixin lose the lawsuit

5

People’s Court of Huli District, Fujian Province /Intermediate People’s Court of Xiamen City, Fujian Province

No. 5064（2015）Civil,

First instance, Huli /No.5227（2016）Final,

Civil Division, Fujian Province

First& Second instance

厦门港务贸易有限公司

Xiamen Port Trade Co., Ltd.

晋江百兴鞋材有限公司

JinjiangBaixing Shoes Material Co., Ltd.

Dispute of sales & purchase agreement

2.44 million

JinJiangBaixin lose the

lawsuit，withdraw lawsuit as no payment made for 2nd instance

（2017）闽 0206执 343号


82

No. Court Case No.

Instance

Level of

Court

Plaintiffs Defendant Cause of

case Subject matter Conclusion Case Ref.

6

People’s Court

of Gulou

District, Fujian

Province

/Intermediate

People’s Court

of Fuzhou City,

Fujian Province

No.4136（2015）Civil,

First instance,

Gulou

/No.946（2016）Final,

01 Civil Division,

Fujian Province

First&

Second

instance

福建海峡融资租赁有限责任公司

Fujian Strait Financial Leasing Co., Ltd.

晋江百兴鞋材有限公司/国辉（中国）有限公司/林火枝/高琼莲/林丽影

JinjiangBaixing Shoes Co., Ltd./Guohui (China) Co.,

Ltd./Lin Huozhi/Gao Qionglian/Lin Liying

Dispute over

a financial

leasing

contract

21.843

million

JinJiangBaixi

n lose the

lawsuit，withdraw

lawsuit as no

payment

made for 2nd

instance

(2017)闽0102 执4112 号

7

People’s Court

of Jinjiang City,

Fujian Province

/ Intermediate

People’s Court

of Quanzhou

City, Fujian

Province

No.11824（2015）Civil,

First instance,

Jinjiang /No.2959（2016）Final,

05 Civil Division,

Fujian Province

First&

Second

instance

晋江市怡高展览器材有限公司

JinjiangYigao Exhibition Equipment Co., Ltd.

福建艾多玛服饰发展有限公司/晋江百兴鞋材有限公司

Fujian Ai Duoma Fashion Development Co(Fujian Evidoma) Ltd./ JinjiangBaixing Shoes Material Co., Ltd.

Dispute of

sales &

purchase

agreement

0.919 million

JinJiangBaixi

n lose the

lawsuit，withdraw

lawsuit as no

payment

made for 2nd

instance

(2018)闽0582 执348 号

No. Court Case No.

Instance

Level of

Court



8

Intermediate

People’s Court

of Quanzhou

No. 227（2016）05

Civil, First

First

instance

中国建设银行股份有限公司石狮分行

China

晋江百兴鞋材有限公司/福建国晖鞋业有限公司/晋江国鹏鞋材有限公司/国辉（中国）有限公司/林火枝/高琼莲

JinjiangBaixing Shoes Material Co., Ltd. / Fujian

Dispute of

financial loan

169.55

million

JinJiangBaixi

n lose the

lawsuit

(2016)闽05执1308 号


83

City, Fujian

Province

Instance, Fujian

Province

Construction Bank Co., Ltd. Shishi Branch

Guohui Shoes Co., Ltd. / JinjiangGuopeng Shoes Material Co., Ltd. / Guohui (China) Co., Ltd. / Lin Huozhi/ Gao Qionglian

9

Intermediate

People’s Court

of Quanzhou

City, Fujian

Province

No. 228（2016）05

Civil, First

Instance, Fujian

Province

First

instance

中国建设银行股份有限公司石狮分行

China Construction Bank Co., Ltd. Shishi Branch

晋江百兴鞋材有限公司/福建省晋江市火星鞋材有限公司/福建喜得龙体育用品有限公司/喜得龙（中国）有限公司/金发达（福建）鞋塑有限公司/林丽玲/丁明强/林丽影/林火枝/高琼莲

JinjiangBaixing Shoes Material Co., Ltd./Jinjiang

Mars Shoes Co., Ltd. Fujian/ Xidelong Sporting

Goods Co., Ltd./ Hide Dragon (China) Co.,

Ltd./Jinda (Fujian) Shoes & Plastics Co., Ltd./Lin

Liling/Ding Mingqiang/ Lin Liying/Lin Huozhi/Gao

Qionglian

Dispute of

financial loan 126.99 million

JinJiangBaixi

n lose the

lawsuit

(2016)闽05执1889 号


84

No. Court Case No.

Instance

Level of

Court



10

Intermediate

People’s Court

of Quanzhou

City, Fujian

Province

No. 1021（2016）05

Civil, First

Instance, Fujian

Province

First

instance

泉州农村商业银行股份有限公司丰泽支行

Quanzhou Rural Commercial Bank Co., Ltd. Fortress Branch

晋江百兴鞋材有限公司/福建喜得龙体育用品有限公司/林火枝/林丽影/丁明强/林水盘

JinjiangBaixing Shoes Material Co., Ltd. / Fujian Xi Delong Sports Goods Co., Ltd. / Lin Huozhi / Lin Liying / Ding Mingqiang / Linshui Pan

Dispute of


JinJiangBaixi

n lose the

lawsuit

(2017)闽05 执 654号

11

People’s Court

of Jinjiang City,

Fujian Province

No.11147

(2016）0582

Civil, First

Instance, Fujian

Province

First

instance



Dispute of

Contract 0.202 million

JinJiangBaixi

n lose the

lawsuit

(2017)闽0582 执567 号


85

No. Court Case No.

Instance

Level of

Court



12

People’s Court

of Fengze

District, Fujian

Province /

Intermediate

People’s Court

of Quanzhou

City, Fujian

Province

No.988（2016）Civil, 0503 First

Instance, Fujian

/No.871（2017）Final,

05 Civil Division,

Fujian Province

泉州银行股份有限公司

Quanzhou Bank Co., Ltd.

晋江百兴鞋材有限公司/福建喜得龙体育用品有限公司/福建省晋江市火星鞋材有限公司/福建艾多玛服饰发展有限公司/林火枝/林丽影/林水盘

Jinjiang Baixing Shoes Material Co., Ltd. / Fujian Xi

Delong Sports Goods Co., Ltd. / Fujian Jinjiang Mars

Shoes Material Co., Ltd. / Fujian Ai Duoma Fashion

Development Co., Ltd. (Fujian Evidoma) / Lin Huozhi

/ Lin Liying / Linshu Pan

Dispute of


JinJiangBaixi

n lose the

lawsuit，withdraw

lawsuit as no

payment

made for 2nd

instance

(2017)闽0503 执2188 号

13

Intermediate

People’s Court

of Fuzhou City,

Fujian Province

/Higher

People’s Court

of Fujian

Province


Instance, Fujian /

No.199（2017）Final, 05 Civil

Division, Fujian

Province

First&

Second

instance

平安银行股份有限公司福州分行

Ping An Bank Co., Ltd. Fuzhou Branch

晋江百兴鞋材有限公司/福建国晖鞋业有限公司/福建省晋江市火星鞋材有限公司/林火枝/高琼莲

JinjiangBaixing Shoes Co., Ltd./Fujian Guohui Shoes

Co., Ltd./Jinjiang Mars Shoes Co., Ltd./Lin

Huozhi/Gao Qionglian

Dispute of


JinJiangBaixi

n lose the

lawsuit，withdraw

lawsuit as no

payment

made for 2nd

instance

(2017)闽01 执1287 号


86

No. Court Case No.

Instance

Level of

Court



14

Intermediate

People’s Court

of Quanzhou

City, Fujian

Province

/Higher

People’s Court

of Fujian

Province

No.1027（2016）Civil,

05 First Instance,

Fujian / No.1066（2017）Final,

05 Civil Division,

Fujian Province

First&

Second

instance

中国光大银行股份有限公司泉州分行

China Everbright Bank Co., Ltd. Quanzhou Branch

晋江百兴鞋材有限公司/国辉（中国）有限公司/晋江毅恒鞋材有限公司/福建省晋江市火星鞋材有限公司/福建艾多玛服饰发展有限公司/林火枝/高琼莲/林佳森

JinjiangBaixing Shoes Material Co., Ltd. / Guohui

(China) Co., Ltd. / JinjiangYiheng Shoes Material Co.,

Ltd. / Fujian Jinjiang Mars Shoes Material Co., Ltd. /

Fujian Aodoma Clothing Development Co., Ltd. / Lin

Huozhi / Gao Qionglian / Lin Jiasen

Dispute of

financial loan Above 20 million

JinJiangBaixi

n lose the

lawsuit，withdraw

lawsuit as no

payment

made for 2nd

instance

15

Xiamen

arbitration

committees

No. 20160724,

Xiamen

arbitration

Arbitration

中国工商银行股份有限公司晋江分行

Industrial and

Commercial

Bank of China

Co., Ltd.

Jinjiang Branch

福建国晖鞋业有限公司/晋江百兴鞋材有限公司/丁国需

Fujian Guohui Shoes Co., Ltd. / JinjiangBaixing Shoes Co., Ltd. / Ding Guoxu

Dispute of


JinJiangBaixi

n lose the

lawsuit

(2017)闽0582 执10283 号


87

No. Court Case No.

Instance

Level of

Court



16

Xiamen

arbitration

committees

No. 20160724

(2016), Xiamen

arbitration

Arbitration

中国工商银行股份有限公司晋江分行

Industrial and

Commercial

Bank of China

Co., Ltd.

Jinjiang Branch

福建国晖鞋业有限公司/晋江百兴鞋材有限公司/丁国需

Fujian Guohui Shoes Co., Ltd. / JinjiangBaixing

Shoes Co., Ltd. / Ding Guoxu

Dispute of


JinJiangBaixi

n lose the

lawsuit

(2017)闽0582 执10278号

17

People’s Court

of Gulou

District, Fujian

Province

No. 999（2016）Civil,

0102 First

instance

Fujian Province

First

instance

福建海峡融资租赁有限责任公司

Fujian Strait Financial Leasing Co., Ltd.

晋江百兴鞋材有限公司/国辉（中国）有限公司/林火枝/高琼莲/林丽影

JinjiangBaixing Shoes Co., Ltd./Guohui (China) Co., Ltd./Lin Huozhi/Gao Qionglian/Lin Liying

Dispute over

a financial

leasing

contract

19.79 million

JinJiangBaixi

n lose the

lawsuit

(2017)闽0102 执209 号


88

No. Court Case No.

Instance

Level of

Court



18

People’s Court

of Jinjiang City,

Fujian Province

No. 11844

(2016）Civil,

0582 First

instance

Fujian Province

First

instance

邓运花

Deng Yunhua



Dispute over

a processing

contract

0.265 million

JinJiangBaixi

n lose the

lawsuit

(2017)闽0582 执5452 号

19

People’s Court

of Shishi City,

Fujian Province

No. 84 (2016）Civil, 0581 First

instance

Fujian Province

First

instance

蔡明月

Cai Mingyue

晋江百兴鞋材有限公司、/林火枝/林丽婷/林佳森

JinjiangBaixing Shoes Material Co., Ltd., Lin Huozhi/Lin Liting/Lin Jiasen

Dispute of

Civil financial

loan

1.169 million

JinJiangBaixi

n lose the

lawsuit

20

People’s Court

of Siming

District, Fujian

Province


Instance, Fujian

Province

First

instance

厦门西奥电梯安装服务有限公司

Xiamen Xi'ao Elevator Installation Service Co., Ltd.



Dispute of

contract 0.0618 million

JinJiangBaixi

n lose the

lawsuit

（2016）闽 0203执 6869号


89

No. Court Case No.

Instance

Level of

Court



21

People’s Court

of Jinjiang City,

Fujian Province

/ Intermediate

People’s Court

of Quanzhou

City, Fujian

Province

No.1364（2016）Civil,

0582 First

Instance, Fujian

Province/

No.1432（2017）Final,

05 Civil Division,

Fujian Province

First&

Second

instance

邓阿玉

Deng Ayu

林火枝/丁明强/晋江百兴鞋材有限公司

Lin Huozhi/Ding Mingqiang/JinjiangBaixing Shoes

Material Co., Ltd.

Dispute of

Civil financial

loan

2.361 million

JinJiangBaixi

n lose the

lawsuit，withdraw

lawsuit as no

payment

made for 2nd

instance

(2017)闽0582 执4025 号

22

People’s Court

of Jinjiang City,

Fujian Province


Instance, Fujian

Province

First

instance

彭振发

Peng Zhenfa



Dispute of

Civil financial

loan

To be confirmed

JinJiangBaixi

n lose the

lawsuit

23

Jinjiang City,

labor arbitration

committees

No. 218 (2017)

Jinjianglabor

dispute case

First

instance

工人

worker



Labor

dispute case 0.357 million

JinJiangBaixi

n lose the

lawsuit

(2017)闽0582 执3220 号


90

No. Court Case No.

Instance

Level of

Court



24

People’s Court

of Jinjiang City,

Fujian Province

No.5227（2017）Civil,

0582 First

Instance, Fujian

Province

First

instance

丁和平

Ding Heping

泉州百兴集团/晋江百兴鞋材有限公司/福建省清特投资发展有限公司/泉州森特贸易有限公司/福建艾多玛服饰发展有限公司/第三人平和县人民政府

Quanzhou Baixing Group / JinjiangBaixing Shoes Material Co., Ltd. / Fujian Qingte Investment Development Co., Ltd. / Quanzhou Sente Trading Co., Ltd. / Fujian Ai Duoma Dress Development Co., Ltd. / Third Party Pinghe County People's Government

Dispute over

conditions of

agreements

17 million

Action

brought by

the plaintiff

has been

dismissed, it

will be

arbitrated by

Quanzhou

arbitration

committees


91

31. COMPARATIVE NUMBERS

The statement of comprehensive income for the financial year ended 31 December 2016 includes the results of

the Group from 1 January 2016 to 31 March 2016. The Company was unable to obtain any further information to

perform any consolidation.

The statement of comprehensive income for the financial year ended 31 December 2015 include the results from

1 January 2015 to 31 December 2015.


92

ANALYSIS OF SIZE OF HOLDINGS

No. of Holders

No. of Shares %

Size of Holdings Malaysian Foreign Malaysian Foreign

Malaysian

Foreign

1 to 99 48.00

1

2,137

50

-

-

100 to 1,000 367.00

-

223,643

-

0.036

-

1,001 to 10,000 1,223.00

4

7,644,339

15,200

1.259

0.002

10,001 to 100,000 1,585.00

19

65,808,175

1,001,350

10.845

0.165

100,001 and above 513.00

18

392,142,531

116,326,975

64.628

19.171

Directors' Holdings 1.00

-

23,599,600

-

3.889

-

Total 3,737.00

42

489,420,425

117,343,575

80.657

19.338

INFORMATION ON SUBSTANTIAL SHAREHOLDERS LIST

Name Nationality Holdings %

JF Apex Nominee (Tempatan) Sdn. Bhd. Malaysian 72,198,300.00

11.898

Pledged Securities Account for Paramjit Singh Gill

M&A Nominee (Asing) Sdn. Bhd. Malaysian 60,062,062.00

9.898

Sanston Financial Group Limited for Power Wide Holdings

Limited

Maybank Nominees (Tempatan) Sdn. Bhd. Pledged Securities for Erwin Selvarajah a/l Peter Selvarajah Malaysian

45,000,000.00

7.416

Citigroup Nominees (Asing) Sdn. Bhd. Malaysian 44,117,700.00

7.270

Far Eastern International Bank Dr.Program for Multi Sports

Holdings Limited


93

List of Top 30 Shareholders

No Name of Shareholder

Shareholdings %

1 JF Apex Nominees (Tempatan) Sdn. Bhd. Pledged Securities for Paramjit Singh Gill 72,198,300 11.898

2 M&A Securities Asing Sdn. Bhd. Sanston Financial Group Limited for Power Wide Holdings Ltd 60,062,062 9.898

3 Maybank Nominees Tempatan Sdn. Bhd.Pledged Securities for Erwin Selvarajah a/l Peter Selvarajah 45,000,000 7.416

4 Citigroup Nominees (Asing) Sdn. Bhd. Far Eastern International Bank Dr Prog. For Multi Sports Holdings Ltd. 44,117,700 7.270

5 JF Apex Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Naren Anand Gill 23,599,600 3.889

6 Mercsec Nominees Tempatan Sdn. Bhd.Pledged Securities Account for Siow Wong Yen@Siow Kwan Hwa 10,014,800 1.650

7 Ngo Seh Tee 8,300,000 1.367

8 Power Wide Holdings Limited 8,062,063 1.328

9 Ooi Cheng Huat@Ooi Peng Huat 7,965,400 1.312

10 Alliancegroup Nominees (Tempatan) Sdn. Bhd.Pledged Securities for Luk Teck Hoe 7,747,700 1.276

11 Cimsec Nominees (Tempatan) Sdn. Bhd. Pledged Securities for Erwin Selvarajah a/l Peter Selvarajah 6,700,000 1.104

12 Public Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Eng Su Lim 5,000,000 0.824

13 Low Ah Kou 4,600,000 0.758

14 Maybank Nominees Tempatan Sdn. Bhd. Lim Kah Eng 4,497,600 0.741

15 Lee See Jin 4,148,800 0.683

16 Koek Tiang Kung 4,000,000 0.659

17 Ong Chin Kang 3,500,000 0.576

18 Public Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Yeoh Joey Keng 3,130,300 0.515

19 Koon Siew Lin 3,000,000 0.494

20 Lee Wan Yean 2,990,000 0.492

21 Quek Lay Tin 2,980,000 0.491

22 Siew Kek Kee 2,700,000 0.444

23 Tey Hock Seng 2,480,100 0.408

24 Lau Li Lian 2,249,400 0.370

25 Lee Shan Kong 2,104,600 0.346

26 Loh Leong Huat 2,060,000 0.339

27 RHB Capital Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Lee Wai Kok 2,000,000 0.329

28 Lai Teng Siew 1,898,600 0.312

29 Lim Kee Siku 1,832,000 0.301

30 Chuah Chong Chuan 1,823,000 0.300

Annual Report Multi Sports Holdings Ltd And its subsidiaries...2016)(Resigned on 11 July 2017) Cheh...

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Transcript of Annual Report Multi Sports Holdings Ltd And its subsidiaries...2016)(Resigned on 11 July 2017) Cheh...