Annual Report Multi Sports Holdings Ltd And its ......Nov 10, 2017 · Bangsar South, No.8, Jalan Kerinchi 59200 Kuala Lumpur Wilayah Persekutuan, Malayisa Bankers Industrial and

Multi Sports Holdings Ltd and its subsidiaries

1

Annual Report

Multi Sports Holdings Ltd

And its subsidiaries

For the year ended 31 December 2015 Contents

Page

Corporate Information 2

Group Structure 4

Products 5

Directors Profile 6

Non Executive Directors Statement 8

Corporate Governance Statement 13

Statement on Risk Management and Internal Control 24

Additional Compliance Issues 27

Audit Committee Report 29


2

CORPORATE 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 on 21 June, 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 (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)

Terence Selvarajah A/L Peter Selvarajah (Independent

Director)( Appointed on 4 October 2016)

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

2016)

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

Wong Wang Lam (Independent Director) (Resigned on 21 June,

2016)

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

Bernard Tan Chin Teik (Independent Director) (Resigned on 20 April

2016)

Cheh Chee Mun (Chairman) (Appointed to AC on 16 November

2016)(Resigned on 10 August 2017)

Naren Anand Gill (Non-independent Director) (Appointed to AC on

16 November 2016)

Clarence Yeow Kong Chew (Independent Director) (Appointed to

AC on 16 November 2016)

Terence Selvarajah A/L Peter Selvarajah (Chairman) Appointed to

AC on 23 October 2017)

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



3

2016)



2016)

Kasinathan a/l Tulasi (Independent Director) (Appointed to NC on 16

November 2016) (Resigned on 11 July 2017)

Terence Selvarajah A/L Peter Selvarajah (Independent Director)

Appointed to NC on 16 November 2016)

Guan Swee Kwee (Independent Director)(Appointed to NC on 16

November 2016)

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

Lin Liying

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



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 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, Malayisa

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.

WEBSITE www.multi-sports.com.cn


4

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).


5

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. It combines

the functional properties of rubber and the easy processability, mouldability and recyclability

of thermoplastics. TPR-based sports shoe soles are lightweight, durable, and flexible and

provide good traction even under cold conditions.

2) RB shoe soles

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

resistant to wear and tear, possess the highest tensile strength, provide good traction and is

waterproof and weatherproof. However, they provide less dimensional stability, cushioning

and shock-absorption capabilities.

3) MD1 shoe soles

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

EVA-based sports-shoe soles are lightweight, soft, flexible, elastic, resistant to wear and

tear, and are dimensionally stable with adequate cushioning, thus serve as an excellent

shock-absorber in sports shoe soles.

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 with equipment that are technologically more advanced

than MD1 shoe soles and as such, has greater variability in designs and improved quality

control.

5) Apparels and accessories

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


6

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 has been instrumental in the Group’s development, growth and success. He has more than 20 years of experience in the shoe-sole-production industry and is responsible for the formulation and execution of the overall business strategies and policies of the Group. He is also responsible for implementing the management policies and overseeing the production and operation, marketing, quality control, public relations and Research and Development (“R&D”) of the Group. Mr Lin took up the trade of shoe manufacturing as a production worker in 1989. From 1991 to 1993, he partnered with a business partner to manufacture generic shoes soles. From 1993 to 1999, he began his own venture in the manufacturing of sports shoe soles. Mr Lin started JinjiangHuoxing Investment Co. Ltd (“JHX”) in 1999 and this business was transferred to Baixing in 2005. 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. She is also a member of the Remuneration Committee. She graduated from Huaqiao University with a Degree in Accounting and Information Technology in 2004. Upon her graduation, she joined JHX as deputy finance manager and was responsible for its accounting, finance and general administration. Ms Lin joined Baixing in 2005 and assumed the position of Vice General Manager (Sales, Marketing and Purchasing). She oversees Baixing’s procurement, marketing and distribution functions. TERENCE SELVARAJAH INDEPENDENT NON-EXECUTIVE DIRECTOR AGE 49 Terence currently serves as an Independent Non-Executive Director of SystechBerhad 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 AGE 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.


7

CLARENCE YEOW KONG CHEW INDEPENDENT NON-EXECUTIVE DIRECTOR AGE 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 AGE 46 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.


8

NON-EXECUTIVE DIRECTORS STATEMENT We, the non-executive Directors of Multi Sports Holdings Limited (the Company) recently 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 2015 Audited Accounts:

1. This 2015 Annual Report is being released 22 months after the end of the financial year. As the shareholders will be aware, the previous 22 months have been a tumultuous period for the Company, having seen the resignation of directors and advisors; the auditors being unable to carry out confirmations of the Company’s cash bank balances in China; the Company’s suspension by Bursa Malaysia for failure to release the 2015 accounts; potential de-listing of the Company; and Bursa enforcement action against the Company including a public reprimand, and the imposition of fines of RM1,656,000 each on Lin Houzhi and Lin Liying, the Executive Directors in China.

2. We appreciate that Shareholders are impatient for a full explanation and seek accountability. The release of this 2015 Annual Report is a significant step towards regularization of the Company however there is much work to be done and the process of investigating and unravelling what transpired in China has to be completed.

3. The Auditors have given a disclaimer of opinion in their report on the 2015 Audit highlighting the uncertainties summarized below:

I. Property, plant and equipment and land use rights - Inability to contact management of Jinjiang Baixing Shoe Material Co.,Ltd (“Baixing”), Fujian Evidoma Ltd (“Evidoma”), Fujian Qingte Investment Ltd (“Qingte”) and Quanzhou Sente Trading Ltd (“Sente”) (“subsidiaries”) (entities which held the Group’s property, plant and equipment and land use rights) to audit the existence and control of these rights; determine their continued recognition as assets; or the recoverable amount of or allowance for impairment.

II. Subsidiaries - Inability to contact the management of subsidiaries to determine whether the Company had control over those subsidiaries or ascertain the ownership and recoverable amount of those subsidiaries or to complete the audit on the subsidiaries.

III. Inventories - Inability to obtain appropriate supporting evidence from Baixing and Evidoma (entities which held the Group’s inventories) since end of April 2016 or ascertain whether the Group still had ownership of those inventories.

IV. Trade and other receivables - Inability to obtain sufficient audit evidence to test samples of trade and other receivable or to perform alternative procedures to test the existence and recoverability of those samples.

V. Cash and cash equivalents - Inability to perform audit procedures on cash and cash equivalents in China in order to obtain sufficient appropriate audit evidence as to the existence of the bank balances in the current account amounting to RMB 496,480,000 as at 31 December 2015.

VI. Trade and other payables - The Group reported trade and other payables of RMB 88,917,000 which represented 87% of total liabilities. The Auditors had selected samples of creditors and circularised confirmations but did not receive reasonable assurance over the completeness of those creditor balances.

VII. Borrowings - Inability to carry out audit procedures to obtain sufficient appropriate audit evidence to determine the existence, quantum and completeness of the bank borrowings, which amounted to RMB 11,500,000 as 31 December 2015.

VIII. Tax provision - In view of the above, the auditors were unable to determine the consequential tax impact arising from any necessary adjustments and the appropriateness / completeness of disclosures made in the financial statements.


9

IX. Advertising expenses - During the financial year ended 31 December 2015, Fujian Evidoma Ltd, a subsidiary of the Company, incurred Advertising and Promotion Expenses of RMB 34,980,000 for which the Auditors were unable to obtain sufficient appropriate audit evidence to allow the Auditors to determine the effect of adjustments, if any, on the financial statements of the Group.

X. Loss on disposal of property, plant and equipment - The amount of loss on disposal of property, plant and equipment was approximately RMB 3,062,000 during the financial year however the Auditors were unable to ascertain or obtain reasonable assurance over the completeness of those transactions.

XI. Litigation - The Auditors were informed by the new non-executive Directors that legal claims appear to have been brought by certain parties against Jinjiang Baixing Shoe Material Co.,Ltd Lin Huo Zhi and Lin Liying (the Executive Directors of the Company). Since the new board of Directors have not completed their investigations and are currently unable to provide the required information and comprehensive legal advice, the Auditors are unable to assess the completeness of all legal cases, extent of liabilities, including contingent liabilities that may arise.

XII. Going Concern - The issues raised above 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 and due to the Auditor’s inability to contact the management of the subsidiaries, they were unable to determine whether the use of the going concern assumption is appropriate.

XIII. Events occurring after the reporting period - Inability to complete all their audit procedures for events occurring after the reporting period necessary to determine whether all significant events occurring after the reporting period had been adequately dealt with in the financial statements with respect to disclosures, presentation and adjusting subsequent events.

XIV. Risk due to fraud - Inability to obtain disclosure from management of the subsidiaries regarding the results of their assessment of the risk that the financial statements may be materially misstated as a result of fraud.

XV. Internal Control - Inability to obtain sufficient assurance that there are no material weaknesses in the system of internal accounting controls or that there is no risk that the financial statements may be materially misstated as a result of fraud.

4. In the circumstances, we wholly support their decision and are grateful for their assistance in identifying key issues for further action and investigation.

5. We have been faced with the same obstacles as the Auditors in terms of accessing and verifying information and as explained below, have also been unable to express an unqualified opinion on the financial statements, which were prepared and submitted to the Auditors for audit by the Board in office during the financial year.

Background to appointment

6. On 4 October, 2016, six new non-executive directors were appointed by the shareholders of the Company at a specially convened general meeting and given a mandate to carry out an independent investigation of the Company’s and group’s affairs.

7. The move to appoint new Malaysian directors was due to the failure of the then board of directors to release the 2015 audited accounts, leading to the suspension of the shares from the main board of the Malaysian Stock Exchange.

8. Shareholders were concerned by the auditor’s inability to confirm the company’s substantial bank balances in China (amongst other items) and resignation of directors/advisors in 2015 and early 2016, including two Malaysian Independent Directors, the CFO, the Company Secretary in Malaysia and the agent in Bermuda.


10

Status of Company upon appointment

9. Multi Sports Holdings Limited (the Company) is a Bermuda registered holding Company with agents in Bermuda; subsidiaries in Hong Kong and China with a separate company secretary; auditors in China; auditors in Singapore for the holding company, Legal Representative in China, company secretary in Malaysia; and regulators in Malaysia where the company is listed. Our attempt to exercise control over the Company and secure the cooperation of relevant parties has been marked by delays and continues to be challenging till today.

10. 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. The new Directors and the Auditors of the Company have also not been able to establish proper communications with the Chairman, the CEO and other key management of the Company.

11. The Company also faced delisting by Bursa Malaysia for the failure to release the 2015 annual report, which had already led to the Company’s suspension.

12. We found that both the Company’s Auditor and Secretary in Bermuda had outstanding fees owing to them:

12.1. Although the Auditor met with and assisted the new directors with information and documents, the outstanding fees owed to the Auditor prevented the new directors from recommencing work to finalise the accounts. It was not until 8 September 2017 that the new directors were able to agree and secure funds for a settlement of fees due to the Auditor to allow works to continue.

12.2. The resignation of the previous secretary in Bermuda and the outstanding fees owed to them prevented the appointment of a new secretary in Bermuda and in order to start the regularization of the Company, the new directors dealt directly with the Company Registry in Bermuda as the Company also had outstanding registration fees due to the Registrar of Companies in Bermuda.

13. The Company’s finances in China were under the control of Lin Liying and Lin Houzhi, both of whom would or should have known that the failure to make the abovementioned payments and release the accounts would risk causing the Company to be delisted or de-registered.

14. The Chairman did not respond to the Auditors and our requests for a meeting and the CEO refused to discuss the audit issues or facilitate the confirmations required by the auditors on the basis that there was no point because the company was going to be delisted.

Ongoing Investigations

15. Investigations into the Company’s affairs are ongoing and it is not appropriate to report on them until confirmed and complete. Information regarding legal action taken against the operating subsidiaries in China has however been published in China and it is appropriate to relate this information to Malaysian shareholders - The following is a list of legal action in China stated to involve the main subsidiary Jinjian Baixing as a defendant, as published on a Government of the People’s Republic of China website: http://zhixing.court.gov.cn/search/; and or on Openlaw.cn a non-governmental , open source Chinese case law database.

No. Case Number Filing

Date

Court Value of Claim

RMB

1 (2017)闽 0503执2188

5/7/2017 泉州市丰泽区人民法院 Quanzhou

Fenze Basic People’s Court

18,336,450

2 (2017)闽 0582执3220

5/6/2017 晋江市人民法院, Jinjiang People’s

Court

357,880

3 (2017)闽 05执 15/5/2017 泉州市中级人民法院, Quanzhou 29,850,000


11

* Signifies a judgment published online at Openlaw.cn

Postponement of De-listing

16. On 4 July 2017 Bursa Malaysia served a notice to show cause against de-listing of the Company from the Main Board of the Malaysian Stock Exchange for failure to submit the 2015 Audited accounts and the subsequent quarterly financial reports. The 2015 financial statements had already been submitted to the auditors by the board in office during that financial year and the draft audit had been prepared.

17. The new Directors secured a postponement of delisting for six months subject to the release of this 2015 audited accounts by 9 October 2017 and all other outstanding financial statements (other than the AR 2015) on or before 28 February 2018.

18. The new Directors had prior to the postponement being granted, informed Bursa Malaysia that the 2015 accounts would need to be heavily qualified or disclaimed due to the circumstances as outlined in the Auditors’ Report and also that the investigations and action that needed to be completed in respect of the subsidiaries in China would only be able to be carried out after the period allowed for the submission of the 2015 Annual Report.

19. To comply with the conditions for postponement of de-listing, the new Directors re-engaged the Auditors, RT LLP in Singapore to complete the 2015 Audit that already been prepared in draft form under the previous board.

20. Due to the circumstances stated above and our inability to 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.

675 Intermediate People’s Court

4 (2017)闽 05执654

10/5/2017 泉州市中级人民法院, Quanzhou

Intermediate People’s Court

29,868,534

5 (2017) 皖 02执 56 20/3/2017 芜湖市中级人民法院, Anhui Wuhu


30,096,166

6 (2017)闽 0582执567


Court

202,800

7 (2017)闽 0582执553


Court

82,854

8 (2017)闽 0102执209

12/1/2017 福州市鼓楼区人民法院, Fuzhou Gulou

People’s Court

19,931,696

9 (2016)闽 05执1889



143,851,680

10 (2016)闽 0203执6869

29/11/2016 厦门市明区人民法院, Xiamen Siming

People’s Court

61,800

11* (2016) 0102 999闽

Early Republic

15/8/2016 鼓楼区人民法院,Gulou District People's Court

19,931,134

12* (2016) 227闽 05

Early Republic


Intermediate People’s Court 169,551,591

13* (2016) 01 61 18/07/201

6

Fuzhou Intermediate People's Court 52,890,026

14* (2014) Article 504-1

No. Springs

Minchuzi


Intermediate People’s Court 104,647

Total 487,795,667


12

Going Forward

21. Given the circumstances faced by the new Directors and the limited resources available, a key priority has been to focus on releasing the 2015 accounts to prevent the Company’s delisting from Bursa and to regularize and maintain the Company’s registration in Bermuda.

22. With the release of the 2015 Annual Report, the new Directors can now focus on completing the investigation and regularization in China and reporting to the authorities so that action can be taken as appropriate; and the regularization and restructuring of the Company necessary to maintain its Bursa Listing for the benefit of the Shareholders.

Inability to provide Statement on Company’s affairs

For reasons stated above and due to the inability to gain access to the Executive Chairman, Directors and

former officers of the Company and the books and records of the Company, the newly appointed Non-

Executive Board of Directors are unable to express an opinion on this report which was prepared based on

financial statements and information prepared under the control of the previous board and submitted to the

Company’s auditors for auditing.

………………………..

Terence Selvarajah a/l Peter Selvarajah

Independent Non-Executive Director

………………………

Naren Anand Gill

Non-Executive Director

……………………………

Guan Swee Kwee


…………………………….

Clarence Yeow Kong Chew


For Multi Sports Holding Limited


13

CORPORATE GOVERNANCE STATEMENT The new Directors of Multi Sports recognise the importance of good corporate governance in running the operations of the Group and in all of its dealings and are mindful 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. In view of the failure by the Executive Directors and former Independent Directors of the Group to release the 2015 Audited Accounts, shareholders of the Company appointed 6 new Independent Directors at a specially convened shareholders meeting on 4 October, 2016. The appointment of the new Independent Directors was to safeguard the interest of shareholders and ensure proper governance. 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 but realistically, the objective will only be possible once the investigation and regularisation of the Company is completed so that there can be application of the code in substance throughout the Company/Group as opposed to being applied in form only. It is with this mandate in mind that the present Board of Directors hereby reports its findings to the shareholders on the manner of application of these principles contained in the Code to the best of its 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 Board of Directors who are signing off on these accounts were appointed on 4 October, 2016 and did not have any responsibility for the Group’s overall strategy, growth and direction including its financial performance as well as 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. Repeated requests by the newly appointed Board of Directors to meet with the Chairman and CEO have been unsuccessful. For the financial year ended 31 December, 2015 as reported in these accounts, the Board was led by an Executive Chairman while executive management of the Company was ledby the Chief Executive Officer (“CEO”). The Executive Chairman was responsible for running the Board and should have ensured that all Directors receive sufficient relevant information on financial and non-financial matters to enable them to participate actively in Board decisions and in fulfilling its responsibilities to the stakeholders. The CEO’s role was to oversee the day-to-day operations and implementation of the Board’s corporate and operational policies and strategies. In line with the pre-determined authority levels, certain issues such as approval of interim and annual results, significant acquisitions and disposals, long-term planning and major capital expenditure were subject to collective decision by the Board. The Directors should have met, reviewed and approved all corporate announcements before releasing them to Bursa Malaysia Securities Berhad and Taiwan Stock Exchange. The previous Board had established three (3) committees namely Audit Committee, Nomination Committee and Remuneration Committee. Certain responsibilities are delegated to the Audit Committee which operates within clearly defined parameters as set out in the Audit Committee’s Terms of Reference. This was for an added degree of independence and objectivity on matters within the ambit of the Audit Committee.


14

Nomination Committee and Remuneration Committee were set up to assist in discharging its duties and responsibilities as set out in the Board Charter and respective Terms of Reference. The three (3) Committees set up to assist the Board have specific powers and responsibilities. The Chairman of the respective committees’ reports the outcome of decisions and recommendations to the Board and minutes of committees’ meetings would be tabled for the Board’s notation. Notwithstanding recommendations from the Committees, the ultimate decision on all matters lies with the entire Board that was appointed as at 31 December, 2015. The present Board of Directors who are signing off on these accounts are unable to make any representation or assurance that the three (3) Committees had effectively fulfilled their role and obligations as set out in the Company’s terms of reference and Board Charter during the financial period of this report . Furthermore, on 1 November 2017 Bursa Malaysia Securities Berhad has publicly reprimanded Multi Sports Holdings Ltd ("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 on announcement. 1.2 Clear Roles and Responsibilities 15 For financial year ended 2015, the then Board of Directors had delegated the day-to-day operations of the Group to the CEO and Executive Directors, who are experienced in the business of the Group. The Executive Directors are responsible for implementing policies and decisions of the Board. Assisted and supported by a Management team, they are tasked with the respective day-to-day operations and to oversee the overall development and implementation of the Group’s business and corporate strategies. The non-executive Independent Directors do not participate in the daily management of the Group and are not engaged in any business and or other relationship which could interfere with the exercise of independent judgement or the ability to act in the best interest of the Company. The Independent Non-Executive Directors, besides functioning as a check and balance, bring an element of objectivity to the Board and provides the Board with a diverse set of experience, expertise and independent judgement to better manage and run the Group. Their presence is intended to provide an unbiased views and impartiality to the Board’s deliberation and decision making process. In addition, the Non-Executive Directors are to ensure that matters and issues brought to the Board are fully discussed and examined, taking into account the interest of all stakeholders in the Group. In order to ensure the effectiveness of the Independent Directors, the Board undertakes an assessment of its independent Directors on an annual basis. 1.3 Formalise ethical standards through a code of conduct

The Board during the financial period in this report should have adopted and implemented a Code of Ethics and Conduct (“COEC”) which reflected the Group’s vision and mission. The Board would expect the behaviour of all employees, officers and directors adhere to a high standard of ethics and to comply with all laws and regulations that govern the Group’s businesses. The Group should foster an environment where integrity and ethical behaviour are maintained and any illegal or improper action and/or wrongdoing in the Group may be exposed. The Board and Management should provide their assurance that employees will not be at risk of any form of victimisation, retribution or retaliation from any member of the Management provided they act in good faith in their reporting. Multi Sports Holdings Ltd The Board aims to promote an atmosphere in which ethical behaviour is well recognised as a priority andpracticed and to treat fairly and courteously without regard to race, creed, religion, gender, nationality,age or disability, and shall not cause any form of discrimination or prejudice in the workplace.


15

In addition, any personnel who knows of a suspected breach or violation of the COEC, wass encouraged to whistle-blow or report the guilty party or parties to his/her immediate superior or Head of Department or the Chief Operating Officer or the Board of Directors. The new Directors are unable to confirm if the above ethical standards and code of conduct was properly implemented and practiced by the Company, its management and/or its employees in view of the various issues raised in this report. The COEC was accessible on the Company’s website at www.multi-sports.com.cn. as at 31 December, 2015. 1.4 Access to Information and Advice

Prior to the convening of a Board meeting, the notice and agenda for that Board meeting should have been furnished to each Board member and the full set of the relevant Board Papers provided to them for their perusal. In a potential conflict of interest situation, the Director concerned would be required to declare his interest and abstain from decision making. The present Board of Directors are unaware of any change of circumstances during the financial period in this report that had altered the processes above. 1.5 Qualified and Competent Company Secretaries

The Company Secretary and/or the representative(s) should attend all Board meetings, Audit Committee meetings, Nomination Committee meetings as well as Remuneration Committee meetings of the Company. Their duties include minuting the proceedings and decisions of those meetings and ensuring that the proceedings are properly adhered to, providing advice and ensuring that related statutory obligations namely compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Listing Requirement of Taiwan Stock Exchange, the Malaysian Companies Act, 1965, the Bermuda Companies Act, 1981 and any other relevant requirements as may be applicable to the Company are complied with. They also advise the Board on matters relating to corporate governance, directors’ responsibilities in compliance with the relevant legislation and regulations and keep them updated of new statutory and regulatory requirements relating to the discharge of duties and responsibilities of Directors as well as appropriate procedures for management of meetings. Members of the Board should have a complete and unimpeded access to the services and advice of the Company Secretary. They also have direct and unrestricted access to senior management of the Company for information relating to the affairs of the Group and have authority to seek external professional advice at the expense of the Company, if necessary. The Company Secretary during this financial period resigned on 27 May, 2016.


16

2. STRENGTHEN COMPOSITION

2.1 Nomination Committee (“NC”) For the financial year ended 31 December 2015, the NC comprised the following Independent Non-Executive Directors. Composition of the NC

1) Gong Ane (Chairperson) (Retired 22 June 2015)

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

May 2014) (Resigned 21 June, 2016)

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

April 2016)

4) Bernard Tan Chin Teik (Independent Director) (Appointed

on 22 June 2015) (Resigned on 20 April 2016)

The Term of Reference (“TOR”) of the NC provides that the NC shall have specific responsibilities with respect to the nomination matters. The functions of the NC include, among others: (i) recommend 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; (iv) assess annually the effectiveness of the board as a whole, the committees of the board and the

contribution 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.


17

Remuneration Committee (“RC”) The Company had established a Remuneration Committee. For the financial year ended 31 December 2014, the RC comprised the following members:- Composition of the RCMeeting during the


2) Lin Liying (CEO/ Executive Director)

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

May 2014) (Retired 21 June, 2016)

4) 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 take no part in decisions relating to their remuneration. The Board as a whole determines the remuneration of the Non-Executive Directors with the Directors concerned abstaining from participating in decisions in respect of their individual remuneration. The remuneration of the Non-Executive Directors is determined in accordance with their experience and level of responsibilities assumed. Non-Executive Directors are remunerated in the form of Directors’ fees as approved by the shareholders. 20 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 takes 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. An assessment of independence under the nomination and election process of Independent Non-Executive Directors should have been conducted in line with Recommendation 3.1 of the Code. The NC had reviewed, assessed and concluded that all independent directors comply with the requirement of independence as prescribed in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. 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 assesses and recommends 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.


18

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. 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 information was forthcoming if such review and assessment was carried out for the financial year ended 31 December, 2015. Annual Report 2014 c. Gender diversity policy

In terms of gender make-up of the Board, the Board currently had 1 female director. The Board membership is dependent on each candidate’s skills, experience, core competencies and other qualities, regardless of gender. Therefore, the Board is presently of the view that there is no necessity to fix a specific gender diversity policy. Any new appointments to the Board shall be based on merits without fulfilling any gender quotas. d. Remuneration policies

There were two (2) Directors holding executive positions and drawing salaries from the Group. The remuneration packages for the Executive Directors of the Company are, to a certain extent, dictated by market competitiveness and are tailored to retain and motivate directors of the quality required to manage the business of Multi Sports Group and to align the interests of the Directors with those of the shareholders. The contribution, responsibilities and performance of each Executive Director are also taken into account when determining their respective remuneration packages whilst the remuneration of the Non-Executive Directors is determined in accordance with their experience and the level of responsibilities assumed. We understand that the remuneration policy for Directors and management as at 31 December, 2015 are as follows: a) Basic Salary The Remuneration Committee recommends the basic salary of the CEO and executive director after having considered their performance. In the evaluation process, consideration


19

is 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 operates 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. In 2015, no information was made available on the quantum of remuneration or any change in remuneration policy of the Executive Directors and Independent Non-Executive Directors of he Company. No AGM was held for shareholders to approve any such remuneration for the financial year ended 31 December, 2015. 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, 2015, 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 are held by two different individuals. The Executive Chairman is responsible for running the Board and ensures that all Directors receive sufficient relevant information on financial and non-financial matters to enable them to participate actively in Board decisions and in fulfilling its responsibilities to the stakeholders. The CEO oversees the day-to-day operations and implementation of the Board’s corporate and operational policies and strategies.


20

3.5 Composition of the Board As at 31 December, 2015, The Board chaired by the Executive Chairman, met on a quarterly basis to review and approve the results of each financial quarter. Additional ad-hoc meetings were to be called if needed. The Chairman of the Audit Committee would report to the Directors at Board meetings on decisions and key issues that have been raised at the Audit Committee meetings including any areas of emphasis that may have been expressed by the Audit Committee. 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 evaluates the training needs of its directors and ensure that they keep abreast of regulatory changes, other developments, and Board business trends. 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. In addition, the Directors are supposed to be briefed by the Company Secretary from time to time on updates and changes of statutory requirements such as amendments to Main Market Listing Requirements of Bursa Malaysia Securities Berhad. 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 has a formal, professional and transparent relationship with both the internal and external auditors of the Group. The auditors 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 has the liberty to meet with the external auditors as and when deemed necessary. The responsibility of the Audit Committee in relation to both the internal and external auditors is described on pages 35 to 37 of this Annual Report. . Multi Sports Holdings Lt26 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.


21

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 page 23 of this Annual Report and is to be read in conjunction with the Non-Executive Directors Statement starting at page 8 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. The external auditors are invited to attend the Audit Committee meetings and AGMs and are available to answer shareholders’ questions on the conduct of the statutory audit and the preparation and content of their audit report. AC assesses the suitability of Messrs RT LLP, the External Auditors by considering the adequacy of experience and resources of the firm, the qualified staff assigned to the audit and the independence of Messrs RT LLP. The Audit Committee if satisfied with the external auditors’ performance would recommend their re-appointment to the Board, upon which the shareholders’ approval will be sought at the forthcoming AGM. 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. The internal controls in place are meant to safeguard the Group’s assets and shareholders’ investments. A key component in carrying out this responsibility is to ensure that risks are appropriately and adequately managed within the Group. However, it must be noted that such controls by their nature can only provide reasonable assurance but are not absolute assurance against the risk of material errors, frauds or losses occurring. A risk profile has been compiled to help the Board and senior management to prioritise their focus on high risks. Significant risk matters are brought to the attention of the Directors. 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 page 24 of this Annual Report. 27Annual Report 2014 6.2 Internal Audit Functions reports directly to Audit Committee The Board recognises the need for an internal audit function and should have engaged the services of an independent professional firm to provide much of the assurance it requires on the effectiveness as well as the adequacy and integrity of the Group’s systems of internal control. The Board had established that the internal audit functions are independent of the activities or operations of the operating units and report directly to the Audit Committee.


22

7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE 7.1 Appropriate corporate disclosure policies and procedures The Company is supposed to recognise 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. The Board should have in place, internal corporate disclosure policies and procedures, which are in compliance with the disclosure requirements as set out in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. 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 are 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, 2015 as at 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 is of the view that with the current level of shareholders’ attendance at AGMs, voting by way of a show of hands continues to be efficient. The Board will evaluate the feasibility of carrying out electronic polling at its general meetings in future. 9. COMPLIANCE WITH THE CODE The newly appointed Board of 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 2015 due to the lack information and co-operation of the Executive Directors.


23

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, 2015, the newly appointed Board of Directors have relied on information furnished by the external auditors of the Company and from the information and records provided by the Executive Directors and officers of the Company for this 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. Additionally, in view of the material uncertainty as highlighted in the Auditor’s Report, tthe new Non-Executive Directors are unable to form an opinion on the accuracy and reliability of such information contained in this report.


24

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 “Group”), 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. 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 newly appointed Board of Directors in the course of reviewing the financial statement and accounts for the financial year ended 31 December, 2015 were unable to obtain confirmation or verification from the Executive Chairman, the Chief Executive Officer and the Chief Financial Officer that the Group’s risk management and internal control system was operating adequately and effectively in all material aspects 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 risk management framework in which the existence of significant risk of the Group was identified and rated using its adopted risk quadrant. 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 are 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 are unable to confirm if this was undertaken during the financial period of this report. INTERNAL AUDIT The Group 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. In general, the internal auditors contributes towards improving the Group’s risk management process and internal control systems and thereby reports to the Audit Committee on their assessments. In assessing the adequacy and effectiveness of the system of internal control and financial control procedures of the Group, the Audit Committee reports to the Board on its activities, significant audit results or findings and the necessary recommendations or actions needed to be taken by management to rectify those issues. The


25

scope of internal audits function covered the audit and review of risk assessment, compliance control and enhancement opportunities. The internal audit adopts a risk-based approach in developing its audit plan based on the Group’s key risks profile. The scope of the internal audit should have been discussed and approved by the Audit Committee. In view of the material uncertainty highlighted by the Auditors and the resignation of the Audit Committee prior to the preparation and release of the 2015 Audited Accounts, the new Directors are unable to confirm if this was undertaken during the financial year.ti Sports Holdings Ltd 30 KEY ELEMENTS OF INTERNAL CONTROL During the financial year ended 31 December 2015 the Board appointed 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. Key features are as follows:- The Board had delegated the responsibilities to the relevant committees such as Audit Committee, Nomination Committee, and Remuneration Committee to implement and monitor the Board’s policies and controls within the Group. Quarterly financial results are presented to the Audit Committee to ensure all matters of concern are noted by the board;

• The Group has placed competent and responsible personnel to oversee the Group’s operating functions. There is a clearly defined delegation of responsibilities of the Board and the management of the Group who ensure that appropriate control procedures are in place;

• The Company has a policy on the financial limits and approving authority for its revenue and expenditure, and capital expenditure with appropriate approving authority thresholds to ensure all revenue and expenditure and capital expenditure are in line with the Group’s strategic objectives.

• Adequate financial and operational information systems are in place to capture and present information on a timely basis to the management. The management teams perform regular monitoring and review of the Group’s financial results.

• The Audit Committee is tasked by the Board with the duty of reviewing the effectiveness of the Group’s system of internal controls.

• The Audit Committee, on behalf of the board, reviews and hold discussion with management to deliberate on action plans addressing the internal control issues identified by the internal and external auditors.

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 2015 and the External Auditors are unable to confirm if the financial statements so furnished were consistent with the process 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.


26

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 2015 as the management of the Company did not respond to the request by the Directors for such confirmation.


27

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-up capital 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 1 November, 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. Non-Audit Fees

There was no non-audit fees paid or payable to the external auditors by the Group for the financial year. 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 Company and its subsidiaries did not enter into material contracts involving Directors’ and major shareholders’ interest. 11. Recurrent Related Part y Transactions (“RRPT”) There was no Shareholders’ Mandate obtained in respect of RRPTs during the financial year-end.


28

12. STATEMENT PERTAINING TO THE ALLOCATION OF SHARE ISSUANCE SCHEME TO EMPLOYEES

During the financial year, 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.


29

AUDIT COMMITTEE REPORT The Audit Committee serve 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. 1. COMPOSITION & MEETINGS OF AUDIT COMMITTEE The Audit Committee serve 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 2015, four (4) meetings were convened. For the financial year ended 31 December 2015, the Audit Committee comprised the following members:- Meeting during th31 December 2014 Chairperson : Gong Ane (resigned on 22 June 2015) Independent Non-Executive Director Members : Bernard Tan Chin Teik(Appointed on 22 June 2015/Resigned on 20 April 2016) Independent Non-Executive Director Wong Wang Lam (Appointed on 20 May 2014/ Resigned on 21 June, 2016) Independent Non-Executive Director Ang Wei Chuan (Resigned on 20 April 2016) Independent Non-Executive Director 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 of

the1st Schedule of the Accountants Act 1967; or (iii) fulfils such other requirements as prescribed or approved by the Exchange. Multi Sports Holdings Ltd 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


30

2.1 Composition of the Audit Committee (Cont’d) 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 andthe

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.

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 2015 in discharging their duties and responsibilities, based on information extracted from available documents in hand are as follows:- i) reviewed the quarterly financial results of the Group prior to their release to Bursa Malaysia

Securities Berhad; ii) reviewed the changes in accounting policies; iii) reviewed any significant or unusual events; and


31

iv) reviewed the fees of external auditors; The Audit Committee appointed during the financial period in this report 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 2015. The current members of the Audit Committee were not in office during the financial year ending 31 December 2015 and were not involved in the preparation or approval of the financial statements issued to the Company’s Auditors for auditing. 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. 5. INTERNAL AUDIT FUNCTION The new Directors are unable to report or give an opinion on the activities and involvement of the internal audit function (if any) during the financial year.


32

Financial Statements




Page

Directors’ Report 33

Statement by Directors / Statutory Declaration 38/39

Independent Auditor’s Report 40

Statements of Financial Position 46

Consolidated Statement of Comprehensive Income 47

Consolidated Statement of Changes in Equity 48

Consolidated Statement of Cash Flows 49

Notes to the Financial Statements 50


33

DIRECTORS’ REPORT

The directors submit this report to the members together with the audited consolidated financial statements of

the Group and of the statement of financial position of the Company for the financial year ended 31

December 2015.

Note: All information contained in this report was obtained from Management accounts furnished to the

Auditors by officers and the Board of Directors of the Company and its subsidiaries who were in office as at

31 December 2015.

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 (28,785) (2,489)

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:-

Lin Huozhi

Lin Liying

Wong Wang Lam

Ang Wei Chuan(Resiged on 20 April 2016)

Gong Ane (Retired on 22 June 2015)

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

Cheh Chee Mun (Appointed on 4 October 2016)(Resigned on 10 August 2017)*

Kasinathan A/L Tulasi (Apointed on 4 October 2016)(Resigned on 11 July 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)*

*This director wasappointed after the financial year of 31 December 2015.


34

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.

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 were as follows:-

The Company Ordinary shares of USD 0.025 each

Direct interest

At 1.1.2015 At 31.12.2015

Lin Houzhi

- 7,762,000

Lin Liying

- 3,881,250

Indirect interest

At 1.1.2015 At 31.12.2015

Lin Huozhi(1)

176,124,125 96,124,125

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 1.1.2015 At 31.12.2015

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.

Lin Huozhi by 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.


35

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



ordinary share.

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 10 months after the financial year end 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 confirm whether, before the financial statements of the Group and of the

Company were made out and submitted to the Auditors, that the former officers and board of directors of

the Company as at 31 December, 2015 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, 2015 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.


36

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 2015 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 28 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 29 to the financial

statements.


37

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: 10 November 2017

Kuala Lumpur, Malaysia


38

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 09.11.2017.

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 2015 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 being based on financial statements submitted by the

previous board, is subject to the material uncertainties identified by the Auditors.

.

On behalf of the Directors,


Naren Anand Gill




39

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 09.11.2017. 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 2015 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

Above named MrTerence Selvarajah

a/l Peter Selvarajah

in Malaysia



Before me:

Commissioner for Oaths/ Notary Public


40

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

Report on the financial statements

We were engaged to audit the financial statements of Multi Sports Holdings Ltd (“the Company”) and its subsidiaries (“the Group”), which comprise the statements of financial position of the Group and the Company as at 31 December 2015, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of consolidated financial statements and the statement of financial position of the Company that give a true and fair view in accordance with International Financial Reporting Standards (“IFRSs”). The directors are also responsible for such internal controls as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Because of the matters described in the Bases for Disclaimer of opinion paragraphs, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

Bases for Disclaimer of Opinion

1. Property, plant and equipment and land use rights

As at 31 December 2015, the Group’s carrying amounts of property, plant and equipment and land use rights amounted to RMB 290,197,000 and RMB 642,000 respectively, which collectively represented 29% of total assets. Since end of April 2016, we have not been able to contact management of JinjiangBaixing Shoe Material Co.,Ltd (“Baixing”), Fujian Evidoma Ltd (“Evidoma”), Fujian Qingte Investment Ltd (“Qingte”) and Quanzhou Sente Trading Ltd (“Sente”) (entities which held the Group’s property, plant and equipment and land use rights) to perform additional audit procedures on the existence of these property, plant and equipment and land use rights and whether the Group still had control over those assets. Existence and control over property, plant and equipment and land use rights are critical to the determination of whether the Group can derive economic benefits from those assets. Accordingly, we were unable to determine whether property, plant and equipment and land use rights should continue to be recognised as assets.

In addition, management has also not determined the recoverable amount of, nor assessed for any allowance for impairment of property, plant and equipment and land use rights. Consequently, we were unable to perform alternative audit procedures to assess the appropriateness of the carrying amounts of the property, plant and equipment and land use rights.

2. Subsidiaries

i) Investment in subsidiaries

Since end of April 2016, we have not been able to establish contact with the management of Baixing, Evidoma, Qingte and Sente and therefore were not able to determine whether the Company had control over those subsidiaries. Accordingly, we were not able to ascertain the ownership and recoverable amount of those subsidiaries.

As disclosed in Note 6 to the financial statements, the audit of the subsidiary companies, namely Pak Sing Shoe Material (H.K) Limited, Jinjiang Baixing Shoe Material Co.,Ltd, Fujian Evidoma Ltd, Fujian Qingte Investment Ltd and Quanzhou SenteTrading Ltd (collectively “subsidiaries”) was unable to be completed due to insufficient documents and information, and no audited financial statements being available for the financial year ended 31 December 2015. The financial position and results of these subsidiary companies had been consolidated based on the latest available management financial statements received by us from the Executive Directors.


41


(Continued)

Report on the financial statements (Cont’d)


2. Subsidiaries (Cont’d)

i) Investment in subsidiaries (Cont’d)

We were unable to carry out procedures or to obtain information we consider necessary on the management financial statements of these subsidiary companies during our audit of the financial statements of the Group. Therefore, we could not determine the effect of adjustments, if any, on the financial statements of the Group.

The Company’s carrying amount of amount due from a subsidiary as at 31 December 2015 amounted to RMB 36,845,000. As disclosed in Note 8 to the financial statements, the Company has not determined the recoverable amount of, nor assessed for any allowance for amount due from a subsidiary as at 31 December 2015. Consequently, we were unable to perform any alternative audit procedures to assess the appropriateness of the carrying amount of the amount due from a subsidiary.

As disclosed in Note 6to the financial statements, included in carrying amount of investment in subsidiary companies is an amount of RMB 103,465,000 representing the investment cost in Pak Sing Shoe Material (H.K) Limited, JinjiangBaixing Shoe Material Co.,Ltd, Fujian Evidoma Ltd, Fujian Qingte Investment Ltd and Quanzhou Sente Trading Ltd which represented 32.9% of the total assets of the Company.

3. Inventories

As at 31 December 2015, the Group’s inventories has a carrying amount of RMB 11,238,000 (Note 7) which represented 1% of total assets. In relation to the audit of inventories, we had selected samples for audit testing of whether inventories are stated appropriately at the lower of cost and net realisable value but were not provided appropriate supporting evidence. We had not been able to contact the management of Baixing and Evidoma (entities which held the Group’s inventories) since end ofApril 2016. Therefore, we were unable to ascertain whether the Group still had ownership of those inventories.

4. Trade and other receivables

As stated in Note 8 to the financial statements, the Group’s trade receivables of RMB 173,627,000 represented 18% of total assets as at 31 December 2015. We had selected samples for the purpose of our audit but were unable to obtain sufficient audit evidenceand we were not able to perform alternative procedures over the existence and recoverability of those samples.

5. Cash and cash equivalents

The management of Pak Sing Shoe Material (H.K) Limited, Jinjiang Baixing Shoe Material Co.,Ltd (“Baixing”), Fujian Evidoma Ltd (“Evidoma”), Fujian Qingte Investment Ltd (“Qingte”) and Quanzhou Sente Trading Ltd (“Sente”) (collectively “subsidiaries”) had not responded to certain of our audit procedures to be performed on cash and cash equivalents and there were no acceptable alternatives to these procedures. Consequently, we were unable to carry out our audit procedures to obtain sufficient appropriate audit evidence to satisfy ourselves as to the existence of the bank balances in the current account amounting to RMB 496,480,000 (see Note 9) as at 31 December 2015.

6. Trade and other payables

The Group reported trade and other payables of RMB 90,871,000 which represented 87% of total liabilities. We had selected samples of creditors and circularised confirmations but did not received replies for all the samples and were not able to perform alternative audit procedures. Therefore, we were not able to obtain reasonable assurance over the completeness of those creditor balances.


42


(Continued)



7. Borrowings

In addition, we were also unable to carry out our audit procedures to obtain sufficient appropriate audit evidence to determine the existence, quantum and completeness of the bank borrowings, which amounted to RMB 11,500,000 (see Note 13 and 27) as 31 December 2015.

8. Tax provision

In view of the above paragraphs of Bases for Disclaimer of Opinion, we were also unable to determine the consequential tax impact arising from any necessary adjustments and the appropriateness and completeness of disclosures made in the financial statements for the financial year ended 31 December 2015.

9. Advertising expenses

As disclosed in Note 16 to the financial statements, during the financial year ended 31 December 2015, Fujian Evidoma Ltd, a subsidiary of the Company, incurred Advertising and Promotion Expenses of RMB 34,980,000. The Company was unable to provide complete supporting documents for the Advertising and Promotion Expenses. We were unable to obtain sufficient appropriate audit evidence on the Advertising and Promotion Expenses. Therefore, we could not determine the effect of adjustments, if any, on the financial statements of the Group.

10. Loss on disposal of property, plant and equipment

As disclosed in Note 16 to the financial statements, the amount of loss on disposal of property, plant and equipment was approximately RMB 3,062,000 during the financial year. Management was unable to provide the required information to assess the completeness of the transactions. Therefore, we were unable to ascertain orobtain reasonable assurance over the completeness of those transactions which resulted in loss on disposal of property, plant and equipment.

11. Litigation

We were informed by the new non-executive Directors that, during and subsequent to the financial year ended 31 December 2015, legal claims appear to have beenbrought by certain parties against Jinjiang Baixing Shoe Material Co.,Ltd (“Baixing”), Fujian Evidoma Ltd (“Evidoma”), Quanzhou Sente Trading Ltd (“Sente”), Lin HuoZhi and LinLiying (theExecutive Directors of the Company), on certain loan contracts and sale and purchase contracts. The board of directors of the Company have not completed their investigations and are currently unable to provide the required information and comprehensive legal advice to allow us to assess the completeness of all legal cases, extent of liabilities, including contingent liabilities that may arise from these legal claims.

Without full information on those legal cases (see Note 27) and we had not been able to contact the management of Baixing and Evidoma since end of April 2016, management of subsidiaries was unable to determine whether any further provision would be required in respect of those legal casesor reasonable assurance over the completeness of provision for any outstanding legal cases.


43


(Continued)


Bases for Disclaimer of Opinion (Cont’d)

12. 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 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.

13. 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 2015. 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 29) with respect to disclosures, presentation and adjusting subsequent events.

14. 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 assure any allegations of fraud, or suspected fraud, affecting the Company’s financial statements communicated by employees, former employees, analysts, regulators or others.

15. Internal Control

Management 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 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 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 did not assess and conclude that there is no risk that the financial statements may be materially misstated as a result of fraud.


44


(Continued)



16. Employee Share Option Scheme (“ESOS”)

We were unable to determine whether the RMB5,212,000 (Note 16) recognised as an expense with a

corresponding increase in the ESOS reserve (Note 11) complies with the recognition and measurement

requirements of IFRS 2 Share-based Payment. In addition, management of subsidiaries has not

complied with the following presentation and disclosure requirements of IFRS 2:

• A description of the ESOS, including the general terms and conditions of the ESOS such as

vesting requirements, the maximum term of options granted, and the method of settlement;

• The number and weighted average exercise prices of share options outstanding at the beginning of the period, granted during the period, forfeited during the period, exercised during the period, expired during the period, and outstanding at the end of the period; and

• The option pricing model used and the inputs to that model, including the weighted average share price, exercise price, expected volatility, option life, expected dividends, the risk-free interest rate and any other inputs to the model, including the method used and the assumptions made to incorporate the effects of expected early exercise.

Disclaimer of Opinion

Because of the significance of the matters described in the Bases for 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 25 is disclosed to meet the requirement of Bursa Malaysia

Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation

of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of

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

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

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

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

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

directive of Bursa Malaysia Securities Berhad.


45


(Continued)

Other matters

1.The Group and Company were in the de-listing process from the Main Board of Bursa Malaysia Securities

Berhad (“Bursa”) due to failure to issue the outstanding financial statements within 6 months from the expiry

of the relevant timeframes. In addition to any enforcement action that Bursa Securities may take, Bursa

Securities may commence de-listing procedures against the Group and Company.

2.This report is made solely to the members of the Company, as a body and for no other purpose. We do not

assume responsibility to any other person for the content of this report.

RT LLP

Public Accountants and Chartered Accountants

Su Chun Keat

Partner in Charge of the audit

Singapore, 9 November 2017


46

STATEMENTS OF FINANCIAL POSITION As at 31 December 2015 The Company The Group

31 December 31 December 31 December 31 December

2015 2014 2015 2014

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

ASSETS

Non-current assets

Property, plant and equipment 3 - - 290,197 260,078

Intangible assets 4 - - 642 875

Land use rights 5 - - 16,578 16,980

Subsidiaries 6 277,374 277,374 - -

277,374 277,374 307,417 277,933

Current assets

Inventories, at cost 7 - - 11,238 18,369

Trade and other receivables 8 36,869 25,975 174,173 135,575

Cash and bank balances 9 74 58 496,480 575,988

36,943 26,033 681,891 729,932

Total asset 314,317 303,407 989,308 1,007,865

EQUITY AND LIABILITIES

Capital and Reserves

Share capital 10 100,362 175,361 100,362 175,361

Reserves 11 211,297 126,105 785,048 720,940

Total equity 311,659 301,466 885,410 896,301

Currentliabilities

Trade and other payables 12 2,658 1,941 90,871 95,593

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

Income tax payable 17 - - 1,527 4,471

2,658 1,941 103,898 111,564

Total equity and liabilities 314,317 303,407 989,308 1,007,865

The annexed notes form an integral part of and

should be read in conjunction with these financial statements.


47

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the financial year ended 31 December 2015 The Group Year ended Year ended 31 December 31 December 2015 2014 Notes RMB'000 RMB'000

Revenue 14 579,352 706,456

Cost of sales (492,832) (555,078) Gross profit 86,520 151,378 Other income 14 2,479 1,961 Selling and distribution expenses (55,550) (28,841) Administrative expenses (49,501) (44,053) Other operating expenses (3,062) - Finance costs 15 (734) (1,184) (Loss)/ profit before taxation 16 (19,848) 79,261

Income tax expense 17 (8,937) (20,934)

(Loss)/ profit after taxation representing total comprehensive income attributable to equity holders of the Company (28,785) 58,327

Basic (loss)/earnings per share(RMB cents) 18 (4.83) 11.27

Diluted (loss)/ earnings per share(RMB cents) 18 (4.83) 11.27




48

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 2014 175,361 137,426 27,203 (54,916) - - 553,323 838,397

Net profit for the year representing total comprehensive

Income for the financial year

- - - -

- - 58,327 58,327

Warrants issue expenses - (423) - - - - - (423)

Transfer of reserves representing transaction with equity

holders as owners of the Group

-

-

8,643 -

- - (8,643)

-

Balance at 31 December 2014 175,361 137,003 35,846 (54,916) - - 603,007 896,301


Loss for the year representing total comprehensive

Income for 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 the Group

-

- 2,830 -

-

-

(2,830) -

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

49

CONSOLIDATED STATEMENT OF CASH FLOWS For the financial year ended 31 December 2015

The Group

Year ended Year ended

31 December 31 December

2015 2014

Notes RMB'000 RMB'000

Cash flows from operating activities

(Loss)/ profit before taxation (19,848) 79,261

Adjustments for:

Depreciation of property, plant and equipment 3 22,295 21,795

Amortisation of intangible assets 4 233 233

Amortisation of land use rights 5 402 402

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

Interest income 14 (1,941) (1,894)

Interest expense 15 734 1,184

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

Operating profit before working capital changes 10,148 100,981

Decrease in inventories 7,131 5,779

(Increase)/decrease in trade and other receivables (38,599) 8,129

(Decrease)/ Increase in trade and other payables (8,264) 4,696

Cash (used in)/ generated from operations (29,584) 119,585

Income tax paid (8,338) (22,707)

Interest received 14 1,941 1,894

Net cash (used in)/ generated from operating activities (35,981) 98,772

Cash flows from investing activities

Acquisition of property, plant and equipment 3 (55,675) (6,617)

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

Net cash used in investing activities (55,475) (6,617)

Cash flows from financing activities

Bank loan obtained 13 - 11,500

Proceeds from issuance of shares 12,682 -

Repayment of bank loan - (27,500)

Transaction costs for issuance of warrants - (423)

Interest paid 15 (734) (1,184)

Net cash generated from/ (used) in financing activities 11,948 (17,607)

Net(decrease)/ increase in cash and cash equivalents (79,508) 74,548

Cash and cash equivalents at beginning of the year 575,988 501,440

Cash and cash equivalents at end of the year 9 496,480 575,988




50

Notes to the financial statements For the financial year ended 31 December 2015

1. GENERAL INFORMATION

Corporate Information

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

were authorised 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 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 Note6 to the financial statements.

Going Concern

The financial statements of the Group and 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 and Company will

be able to realise their assets and liquidate their liabilities in the normal course of business.

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

approximately RMB 28,785,000 and RMB 2,489,000 respectively. During the current financial year,

the Group incurred negative operating cash flows of approximately RMB 35,981,000.

The external auditors, Messrs. RT LLP, issued an disclaimer opinion on property, plant and

equipment, land use rights, investment in subsidiaries, inventories, trade and other receivables, cash

and cash equivalents, trade and other payables, borrowings, tax provision, advertising expenses,

loss on disposal of property, plant and equipment,litigation cases, events occurring after reporting

period, risk due to fraud, internal control and employees share option scheme as the external

auditors have raised significant issues from their audit on these areas. Those issues may have a

significant impact on the recorded assets, liabilities, income and expenses of the Group and

Company.

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.

DRAFT


51


2. SIGNIFICANT ACCOUNTING POLICIES

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 2015, 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 judgments 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. Estimates, assumptions and judgments 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

Depreciation of property, plant and equipment

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful

lives. Management estimates the useful lives of property, plant and equipment to be within 3 to 20

years. The carrying amounts of the Group’s property, plant and equipment as at 31 December 2015

and 31 December 2014 were approximately RMB 290,197,000 and RMB 260,078,000 respectively.

Changes in the expected level of usage and technological developments could impact the economic

useful lives and the residual values of these assets, therefore future depreciation charges could be

revised.

DRAFT


52


2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Critical judgements made and key sources of estimation uncertainty inapplyingaccounting

policies (Cont’d)

Allowance for bad and doubtful debts

Allowances for bad and doubtful debts are based on an assessment of the recoverability of trade

and other receivables. The carrying amount of the Group’s trade and other receivables as at 31

December 2015 and 31 December 2014 were approximately RMB 174,173,000 and RMB

135,575,000respectively. Allowances are applied to trade and other receivables where events or

changes in circumstances indicate that the balances may not be collectible. The identification of bad

and doubtful debts requires the use of judgment and estimates. Where the expected outcome is

different from the original estimate, such differences will impact the carrying value of trade and other

receivables and doubtful debt expenses in the period in which such estimate has been changed.

Allowance for inventory obsolescence

The Group reviews the ageing analysis of inventories at each reporting date, and makes provision

for obsolete and slow-moving inventory items identified that are no longer suitable for sale. The net

realisable value for such inventories are estimated based primarily on the latest invoice prices and

current market conditions. Possible changes in these estimates could result in revisions to the

valuation of inventories.

Impairment of investment in subsidiary

Determining whether investment in subsidiary is impaired requires an estimation of the value-in-use

of that investment. The value-in-use calculation requires the Group to estimate the future cash flows

expected from the cash-generating units and an appropriate discount rate in order to calculate the

present value of the future cash flows. The carrying amount of Company’s investment in subsidiaries

as at 31 December 2015 and 31 December 2014 is RMB 103,465,000.Management of subsidiaries

has evaluated the recoverability of the investment based on such estimates and concluded that no

impairment is required.

Income tax

The Group has exposure to income taxes in the PRC. Significant judgement is required in

determining the provision for income taxes. There are also claims for which the ultimate tax

determination is uncertain during the ordinary course of business. The Group recognizes liabilities

for expected tax issues based on estimates of whether additional taxes will be due. Where the final

tax outcome of these matters is different from the amounts that were initially recognized, such

differences will impact the income tax and deferred tax provisions in the period in which such

determination is made.

DRAFT


53



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

2015 and which the Company and the Group have not early adopted:

Effective for the Company’s and the Group’s annual accounting period beginning on 1 January 2016

• Amendments to IAS 1: Disclosure Initiative

• Amendments to IAS 27: Equity Method in Separate Financial Statements

• Various improvements to IFRSs (Annual Improvements 2012-2014) o Amendments to IFRS 7 Financial Instruments: Disclosures o Amendments to IAS 19 Employee Benefits

• Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation

Effective for the Company’s and Group’s annual accounting period beginning on 1 January 2017


• IFRS 9Financial Instruments

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


• IFRS 16Leases

DRAFT


54




adopted 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 financial statements of the Group include the financial statements of the Company and its subsidiaries made up to the end of the financial year. Information on its subsidiaries is given in Note 6. The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets.

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of assets transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. The use of merger accounting principles has resulted in a balance on Group capital and reserves that have been classified as a merger deficit and included in the Group’s shareholders’ funds. The consolidated financial statements include the results of the Company and all its subsidiary undertakings made up to the same accounting date.

In the Company’s separate financial statements, investments in subsidiaries are stated at cost less

allowance for any impairment losses on an individual subsidiary basis.

DRAFT


55


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.

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.

DRAFT


56



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.


57

Notes to the financial statements For the financial year ended 31 December 2015 2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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


58



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


59



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.

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.


60



Cost of sales

Cost of sales comprises mainly of direct 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:

(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


61



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 subsidiary is

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.

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.


62



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 Group are 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, in which 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

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

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

DRAFT


63



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

employers are 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.

DRAFT


64



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


65


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

At 1 January 2014 263,831 53,891 2,645 24,531 2,889 347,787

Additions - 588 12 5,843 174 6,617

263,831 53,891 2,645 24,531 2,889 347,787 At 31 December 2014 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

Accumulated Depreciation

At 1 January 2014 31,709 28,202 1,262 10,670 688 72,531

Depreciation 12,258 3,973 536 4,753 275 21,795

At 31 December 2014 43,967 32,175 1,798 15,423 963 94,326

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


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

Net Book Value

At 31 December 2014 219,864 22,304 859 14,951 2,100 260,078

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

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

The Group's leasehold buildings were pledged as securities to secure the Group’s bank borrowings at 31

December 2015 and 31 December 2014respectively (Note 13).


66


4. INTANGIBLE ASSETS

The Group Software Trademark Total

Cost

RMB’000 RMB’000 RMB'000

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

Addition - - -

At 31 December 2014 1,580 18,521 20,101

Addition - - -

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

Accumulated Amortisation

and Impairment

At 1 January 2014 472 18,521 18,993

Amortisation 233 - 233

Impairment - - -

At 31 December 2014 705 18,521 19,226


At 31 December 2015 938 18,521 19,459

Net Book Value

At 31 December 2014 875 - 875

At 31 December 2015 642 - 642

The Group’s Directors, who were in office as at 31 December 2015, are of the view that no further future economic benefits are expected to arise from the trademark at the end of the reporting period

The amortisation expenses and impairment loss of approximately RMB 233,000 and RMB nil (2014: RMB 233,000 and RMB nil) respectively have been charged in administrative expenses on the face of the statement of comprehensive income.


67


5. LAND USE RIGHTS

The Group Land use

rights

Cost

RMB’000

At 1 January 2014, at 31 December 2014

and at 31 December 2015 18,990


At 1 January 2014 1,608

Amortisation 402

At 31 December 2014 2,010

Amortisation 402


Net Book Value

At 31 December 2014 16,980

At 31 December 2015 16,578

The Group’s land use rights are located at Xinbin Farm, Xibin Town, Jinjiang City, Fujian Province,

PRC. The land 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, are of the opinion that the

recoverable amount of the land use rights exceeds its carrying amount as at 31 December 2015 and

2014 respectively.

The amortisation expense of approximately RMB 402,000 (2014: RMB 402,000) has been charged in administrative expenses on the face of the statement of comprehensive income.

6. SUBSIDIARIES

The Company

2015 2014

RMB’000 RMB’000

Unquoted equity investment, at cost 103,465 103,465

Amount owing by a subsidiary 173,909 173,909

277,374 277,374

DRAFT


68


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

2015 2014 2015 2014

RMB’000 RMB’000 % %

Directly held:

Pak Sing Shoe Material

(H.K.) Limited(1)(“Pak

Sing”)

Hong Kong 103,465 103,465 100% 100% Investment holding

Indirectly held:

Jinjiang Baixing Shoe

Material Co., Ltd.(2)

PRC - - 100% 100% Design, development and

manufacturing of sportshoe

soles

Fujian Evidoma Ltd.(2)

PRC - - 100% 100% Carry on the business of

apparel trading under the

brand name “EVIDOMA”.

Fujian Qingte Investment

Ltd (“Qingte”) (2) (3)

PRC - - 100%* 100%* Investment in agriculture,

manufacturing, wholesale

and retail trade,

construction and

transportation industry

Quanzhou Sente Trading

Ltd (“Sente”) (2) (3)

PRC - - 100% 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 Qingte equity 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 the audit have commenced but have not been completed.

(2)Audited by XiamenLiangcheng, Certified Public Accountants for statutory purposes and intended to audit by RT 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 2015.


69


7. INVENTORIES, AT COST TheGroup

2015 2014

RMB'000 RMB'000

Raw materials 4,723 4,462

Finished goods 4,494 11,981

Work in progress 2,021 1,926

11,238 18,369

During the financial year ended 31 December 2015 and 31 December 2014, there have been no

inventory written off or allowance for inventory obsolescence made.

8. TRADE AND OTHERRECEIVABLES

The Company The Group

2015 2014 2015 2014

RMB'000 RMB’000 RMB'000 RMB'000

Trade receivables - - 173,627 132,376

Amount due from a subsidiary 36,845 25,947 - -

Prepayments - 20 - 293

Deposit - 8 - 208

Interest receivable - - - -

Other receivables 24 - 546 2,698

36,869 25,975 174,173 135,575

Trade receivables generally have credit term of 60 days (2014: 60 days).

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

amount is unsecured, interest free and repayable on demand.

Trade and other receivables are denominated in the following currencies:


2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi 36,845 25,947 174,149 135,548

Malaysia Ringgit 24 28 24 27

United States Dollar - - - -

36,869 25,975 174,173 135,575


70


8. TRADE AND OTHERRECEIVABLES (Continued)

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

follows:

The Group

2015 2014

RMB'000 RMB'000

Not past due 54,675 132,376

Pastdue0 to1 months 101,726 -

Pastdue1to2 months 13,742 -

Pastduemore than2 months 3,484 -

173,627 132,376

Based on historical default rates, the Group’s Directors in office during the financial year, believe

that no impairment allowance is necessary in respect of trade receivables that are past due. These

receivables mainly relate to customers that have a good track record with the Group.

9. CASH AND BANK BALANCES


2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Cash on hand 18 1 937 98

Cash at bank 56 57 495,543 575,890

74 58 496,480 575,988

Cash and bank balances are denominated in the following currencies:


2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi - - 495,801 575,862

Hong Kong Dollar - - 2 3

United States Dollar 32 30 635 95


74 58 496,480 575,988

The Renminbi is not freely convertible into foreign currencies. Under the PRC Foreign Exchange

Control Regulations and Administration of Settlement, Sales and Payment of Foreign Exchange

Regulations, the Group is permitted to exchange Renminbi for foreign currencies through banks that

are authorised to conduct foreign exchange business.


71


9. CASH AND BANK BALANCES (Continued)

The cash at bank bears effective interest rates 0.36% per annum and 0.36% per annum during the

years ended 31 December 2015and 31 December 2014 respectively.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

2015 2014 2015 2014

USD’000 RMB’000 USD’000 RMB’000

Authorised share capital:

At beginning of the year

(par value of USD0.05)

1,000,000,000 1,000,000,000 50,000 342,000 50,000 342,000

Diminution of authorized

share capital (par value of

USD0.05)

(482,500,000)* - (24,125)* (166,639) - -

517,500,000 1,000,000,000 25,875 175,361 50,000 342,000

Effect of par value

reduction

- - (12,938)# (87,680) - -

Increased during the year


1,482,500,000 - 37,063 254,319 - -

At end of the year (2015:

par value of USD0.025;

2014: par value of

USD0.05)

2,000,000,000

1,000,000,000

50,000

342,000

50,000

342,000

Issued and fully paid:



517,500,000 517,500,000 25,875 175,361 25,875 175,361

Effect of par value reduction - - (12,938)# (87,680) - -

Issued during the year (par

value of USD0.025)

77,622,000 - 1,941 12,681 - -



2014: par value of

USD0.05)

595,122,000

517,500,000

14,878

100,362

25,875

175,361


72


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.

During the financial year, 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

2015 2014

RMB'000 RMB'000

Share Premium 137,003 137,003

Contribution Surplus 87,680 -

Accumulated losses (13,386) (10,898)

211,297 126,105

(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 -

End of the year 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.


73


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, Company was approved 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.


74


12. TRADE AND OTHER PAYABLES


2015 2014 2015 2014

RMB'000 RMB’000 RMB'000 RMB'000

Trade payables - - 55,363 63,879

VAT payable - - 3,543 3,756

Accrued liabilities - 1,689 31,159 27,192

Other creditors 2,658 252 806 766

2,658 1,941 90,871 95,593

Trade payables generally have credit terms of 30 to60 days.

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

overhead.

Trade and other payables are denominated in the following currencies:


2015 2014 2015 2014

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

Renminbi - 203 88,050 93,838

Malaysia Ringgit 1,909 968 1,978 970

Singapore Dollar 448 739 448 754

Hong Kong Dollar - - -

United States Dollar 85 - 85 -

Taiwan Dollar 216 31 310 31

2,658 1,941 90,871 95,593

DRAFT


75


13. INTEREST-BEARING BANK BORROWINGS

The Group

2015 2014

RMB'000 RMB'000

Short term bank borrowings- secured 11,500 11,500

The Group’s interest-bearing bank borrowings in the financial year 2015 and 2014 are 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.

The carrying amount of interest-bearing bank borrowings is denominated in Renminbi.

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

2015 2014

RMB'000 RMB'000

Revenue

Sale of goods 579,352 706,456

Other income

Interest income 1,941 1,894

Sale of scrap material 538 67

2,479 1,961

15. FINANCE COSTS

The Group

2015 2014 RMB'000 RMB'000

Interest expense - bank borrowings (Note 13) 734 1,184

DRAFT


76


16. (LOSS)/ PROFIT BEFORE TAXATION

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

*During the financial year, Fujian Evidoma Ltd, a subsidiary company of the Company, incurred Advertising and Promotion

Expenses of RMB 34,980,000.

The Group

2015 2014

Notes RMB’000 RMB'000

Cost of inventories recognised as expenses 488,334 382,948




Advertising expenses* 34,980 -

Directors’ remuneration excluding directors’ fee

- salaries and related cost 2,091 2,382

- retirement scheme contribution 29 26

Directors’ fee 338 252

Key management personnel(other than

directors)


- retirement scheme contributions 23 20

Other than directors and key management

personnel


- retirement scheme contribution 17,147 13,890

Research and development expenses 714 758

Loss on disposal of property, plant and

equipment

3,062 -

Rental expenses of office premises 1,790 1,790

Employment share option scheme (ESOS) 5,212 -

1. Depreciation expenses of approximately RMB 12,803,000 (2014: RMB 12,300,000) and RMB

9,491,000 (2014: RMB 9,495,000) have been charged in cost of sales and administrative

expenses on the face of the statement of comprehensive income respectively.

2. Salaries and related cost of persons other than directors and key management personnel, of

approximately RMB 101,305,000 (2014: RMB 102,424,000), RMB 7,882,000 (2014: RMB

8,443,000) and RMB 6,245,000 (2014: RMB 6,297,000) have been charged in cost of sales,

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

comprehensive income respectively.


77

17. INCOME TAX EXPENSE

The Group

2015 2014

RMB'000 RMB'000

Current taxation 9,273 20,649

Underprovision/(overprovision) of taxation in respect of prior year (336) 285

PRC income tax 8,937 20,934

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

2015 2014

The Group RMB'000 RMB'000

(Loss)/ Profit before taxation (19,848) 79,261

Tax at the applicable tax rate of 25% (4,962) 19,815

Utilisation of prior year tax losses - (1,227)

Tax effect on non-deductible expenses 14,235 2,093

Under/ (over) provision of taxation in respect of prior

year

(336) 285

Tax effect on non-taxable income - (3)

Effect of tax rate in foreign jurisdictions - (29)

8,937 20,934

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. Retirement scheme contribution of persons other than directors and key management

personnel, of approximately RMB 16,098,000 (2014: RMB 12,990,00) , RMB 526,000 (2014:

RMB 442,000) and RMB 523,000 (2014: RMB 458,000) have been charged in cost of sales,



4. 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.

DRAFT


78


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 directors have 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 Group has no intention to declare dividends from the current year’s profit

and the past retained profits.

18. (LOSS)/EARNINGS PER SHARE

Basic (loss)/earnings per share are calculated based on(loss)/profit attributable to equity holders of

the Group and weighted average number of 595,622,000 and 517,500,000 ordinary shares in issue

for the financial years ended 31 December 2015 and 2014 respectively:

The Group

2015 2014

RMB RMB

cents cents

Basic earnings per share is based on:

(Loss)/Profit after taxation attributable to ordinary shareholders of the

Company

(4.83) 11.27

Weighted average

no. of shares

2015 2014

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

Share issued during the year under ESOS 77,622,000 -

Total 595,122,000 517,500,000

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 2015 and 2014 respectively.

DRAFT


79


19. DIVIDENDS

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

20. COMMITMENTS

20.1 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.

2015 2014

The Group RMB’000 RMB’000

Not later than one year 204 1,485

Later than one year and not later than five years - 4

204 1,489

The leases are 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.

20.2 Other commitment

As at 31 December 2015, the Group has an unpaid commitment amounting RMB 4.5 million (2014:

RMB 1 million) 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.

21. 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:

6) TPR shoe soles

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

functional properties of rubber and the easy processability, mouldability and recyclability of

thermoplastics. TPR-based sportsshoe soles are lightweight, durable, and flexible and provide

good traction even under cold conditions.

DRAFT


80


21. SEGMENT INFORMATION (CONT’D)

Business segment (Cont’d)

7) RB shoe soles



waterproof and weatherproof. However, they provide less dimensional stability, cushioning and

shock-absorption capabilities.

8) MD1 shoe soles

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

based sports-shoe soles are lightweight, soft, flexible, elastic, resistant to wear and tear, and are

dimensionally stable with adequate cushioning, thus serve as an excellent shock-absorber in

sportsshoe soles.

9) MD2 shoe soles


using a distinct production process with equipment that are technologically more advanced than

MD1 shoe soles and as such, has greater variability in designs and improved quality control.



Management monitors the operating results of its business units separately for the purpose of

making decisions about resource allocation and performance assessment. Segment performance is

evaluated based on operating profit or loss which in certain 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.

DRAFT


81


21. 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 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

DRAFT


82






TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles

Apparels &Accessories TOTAL


Segment revenue


Segment results

3,649 2,014 14,464 56,037 4,910 81,074

Unallocated interest income 17


(1,830)

Profit from operations 79,261 -

Segment assets 46,719 25,786 185,188 717,473 32,545 1,007,711

Segment liabilities

5,103 2,817 20,230 78,377 3,078 109,605

Other information:


- - - - - -

Interest income 78 44 310 1197 248 1,877

Interest expenses (49) (27) (196) (757) (155) (1,184)


317 175 1,257 4,868 - 6,617

Depreciation and amortisation (1,065) (588) (4,223) (16,359) (195) (22,430)

31 December 2014

RMB’000


Segment assets 1,007,711

Unallocated prepayment and other receivable(4)

28

Unallocated cash at bank & on hand(5)

126

Total assets 1,007,865



Unallocated income tax payable -

Unallocated accruals and other payables(6)

1,959









83


22. FINANCIAL RISK MANAGEMENT OBJECTIVES – POLICIES

The Group does not have written risk management policies and guidelines. However, the board of

directors meets periodically to analyse and formulate measures to manage the Group's exposure to

market risk, including principally changes in interest rates and currency exchange rates. Generally,

the Group employs a conservative strategy regarding its risk management. As the Group's exposure

to market risk is kept at a minimum level, the Group has not used any derivatives or other

instruments for hedging purposes. The Group does not hold or issue derivative financial instruments

for trading purposes.

As at 31 December 2015, 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 carries out its business in the PRC and most of

the transactions are denominated in Renminbi. Accordingly, the Group’s exposure to risk

resulting from changes in foreign currency exchange rates is minimal.

DRAFT


84


22. FINANCIAL RISK MANAGEMENT OBJECTIVES – POLICIES (Continued)

(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 is 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 2015

RMB’000 RMB’000 RMB'000

Trade and other payables 90,871 - 90,871

Bank borrowings (Note 13) 11,500 - 11,500

102,371 - 102,371

At 31 December 2014

Trade and other payables (Note12) 95,593 - 95,593


107,093 107,093

The Company

At 31 December 2015

Trade and other payables (Note 12) 2,658 - 2,658

At 31 December 2014

Trade and other payables (Note 12)

1,941 -

1,941

DRAFT


85



(iv) Credit risk

Credit risk is the risk of financial loss to the Group if the counterparty fails to meet its contractual

obligations. The carrying amounts of trade receivables and other receivables represent the

Group’s maximum exposure to credit risk in relation to its financial assets. The Group does not

have significant concentrations of credit risk as no individual customer form more than 5% of the

trade receivables balance as at 31 December 2015 and 31 December 2014, respectively.

The Group performs ongoing credit evaluation of its customers’ financial condition and requires

no collateral from its customers. The allowance for doubtful debts is based upon a review of the

expected collectability of all trade and other receivables. There is no impairment loss

recognized in the statement of comprehensive income as majority of the receivables are

collected within the credit period granted and directors expect all balances to be recoverable.

Further quantitative disclosure in respect of the Group’s exposure to credit risk arising from

trade and other receivables are set out in Note 8.

Cash and cash balances of the Group are to be 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.

DRAFT


86



(vii) Categories of financial instruments



2015 2014 2015 2014

RMB’000 RMB’000 RMB’000 RMB’000

Financial assets

Loans and receivables

Cash and bank balances 74 58 496,480 575,988

Trade and other receivables 24 28 174,173 135,575

Amounts owing by affiliated companies 36,845 25,947 - -


Amortised cost

Trade and other payables 2,658 1,941 90,871 95,593

Bank borrowings - - 11,500 11,500


87


23. CAPITAL MANAGEMENT

The objectives of Group’s Directors, who were in office as at 31 December 2015, when managing

capital are:

(a) To safeguard the Group’s ability to continue as a going concern, so that it continues to provide

returns to shareholders and benefits for other stakeholders;

(b) To support the Group’s stability and growth; and

(c) To provide capital for the purpose of strengthening the Group’s risk management capability.

The Group actively and regularly reviews and manages its capital structure to ensure optimal capital

structure and shareholders’ returns, taking into consideration the future capital requirements of the

Group and capital efficiency, prevailing and projected profitability, projected operating cash flows,

projected capital expenditures and projected investment opportunities. The Group currently does not

adopt any formal dividend policy.

The Group and Company are not subjected to externally imposed capital requirements.

24. 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.

25. SUPPLEMENTARY INFORMATION DISCLOSED PURSUANT TO BURSA MALAYSIA

SECURITIES LISTING REQUIREMENT

The breakdown of the retained profits of the Group as at 31 December 2015 and 2014 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 2015 2014 RMB’000 RMB’000 Total retained profits of the Group - realized 574,954 601,600 - unrealized 230 (107)

575,184 601,493

Add: Consolidation adjustments 1,514 1,514

Retained profits as per financial statements 576,698 603,007


88


26. 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.The

conversion ratio is 1 warrant for 1 new ordinary share of the Company.

The number of warrants outstanding as at 31 December 2015 is 258,750,000.

27. LITIGATION

During and subsequent to the financial year, there were legal litigation brought by certain parties against Jinjiang Baixing Shoe Material Co., Ltd (“Baixing”), Fujian Evidoma Ltd (“Evidoma”), a subsidiary of the Company, Lin HuoZhi and LinLiying, the director of the Company, on certain loan contracts and sale and purchase contracts. Without full information on those legal cases, management was unable to determine whether any further provision would be required in respect of those legal cases. In addition, management was unable to ascertain the completeness of all identified legal cases announced by the Company on 1 August 2016on the below litigation cases. Pending such legal advice on all the identified and potential litigation cases, the Company is unable to assess the extent of liabilities, including contingent liabilities that may arise from these legal claims.

No. Case Number Filing Date Court Value of

Claim

RMB

1 (2017)闽 0503执2188

5/7/2017 泉州市丰泽区人民法院 Quanzhou Fenze

Basic People’s Court

18,336,450

2 (2017)闽 0582执3220

5/6/2017 晋江市人民法院, Jinjiang People’s Court 357,880

3 (2017)闽 05执 675 15/5/2017 泉州市中级人民法院, Quanzhou


29,850,000



29,868,534



30,096,166

6 (2017)闽 0582执567


7 (2017)闽 0582执553


8 (2017)闽 0102执209


People’s Court

19,931,696



143,851,680

10 (2016)闽 0203执6869


People’s Court

61,800


89

Notes to the financial statements For the financial year ended 31 December 2015 27. LITIGATION (Continued)

No. Case Number Filing Date Court RMB

11 (2016)999闽 0102

Early Republic

15/8/2016 鼓楼区人民法院,Gulou District People's

Court 19,931,134

12 (2016)227闽 05

Early Republic



13 (2016) 01 61 18/07/2016 Fuzhou Intermediate People's Court 52,890,026

14 (2014) Article 504-1

No. Springs Minchuzi



Total 487,795,667

28. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The Group incurred significant selling and distribution related spending during the financial year,

whereby approximately RMB34.98millions was spend on advertisement by EVIDOMA which ceased

operations during the year.

During the current financial year,Jinjiang Baixing Shoe Material Co., Ltd purchased approximately

RMB21.06million of plant and machinery. The acquisition of the plant and machinery was to replace

those that were retired during the year. Also, according to the board of directors in office during the

financial year, the replacement was necessary to reduce costs of maintenance in view of Jinjiang

Baixing Shoe Material Co., Ltd’s long term operations.

29. EVENTS AFTER THE REPORTING PERIOD

On 4 October 2017, a special general meeting (SGM) of the Company was held, having been called for

and convened by a major shareholder, namely Mr Paramjit Singh Gill (“Requisitionist”) a beneficial

owner of not less than 10% of the paid-up share capital of the Company held through JF Apex

Nominees (Tempatan) Sdn. Bhd. At the SGM, Mr Kasinathan a/l Tulasi, Mr Naren Anand Gill, Mr

Clarence Yeow Kong Chew, Mr Cheh Chee Mun and Mr Guan Swee Kee were appointed as directors

of the Company with immediate effect.

On 29 November 2016, The Board of Directors (“Board”) of the Company announced that the

Company’s listing in Taiwan (MSH-DR code: 911626) under a Taiwan Depository Receipts programme

has been de-listed as at 1 November 2016 due to the Company failing to issue the 2015 annual

financial reports and the 2016 half-year financial reports as required under the Taiwan Securities

Exchange Act and TWSE's regulations.

On 4 July 2017, The Board of Directors of MSPORTS announced that the Listing Committee (“LC”)of

Bursa Malaysia had heard the Board’s request to defer de-listing at a meetingheld on 17 August 2017,

and subsequently decided to defer the de-listing of MSPORTS subject to the following:-(a) the

Company provides to Bursa Securities the duly executed RT LLP’s letter dated 21 June 2017 as

evidence of the Company agreeing to the terms of the addendum within 2 weeks from the date hereof

i.e. on or before 11 September 2017;(b) the Company issues the annual report for the financial year

ended 31 December 2015 (“the AR 2015”) within 6 weeks from the date hereof i.e. on or before 9

October 2017; and(c) the Company announces / issues all the outstanding financial statements as at


90


29. EVENTS AFTER THE REPORTING PERIOD (Continued)

to-date (other than the AR 2015) within 6 months from the date hereof i.e. on or before 28 February

2018.

On 31 July 2017, the Company announced that it has been made aware of information on a

Government of People Republic of China’s website that indicates there are ongoing litigation cases

involving the Company’s operating subsidiary in China, namely Jinjiang Baixing Shoe Materials Co. Ltd.

On 9 October 2017, the Board of Directors of the Company announced that the Company had applied

for an extension of time from Bursa Securities till 9 November 2017 for the issuance of the Annual

Report 2015 for the financial year ended 31 December 2015 of which is pending for Bursa Securities’

approval.

Please also refer to the Non-Executive Directors Statement starting page 8 of the Annual Report.

On 1 November, 2017 Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded Multi Sports Holdings Ltd (MSPORTS) and 5 directors for breaches of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR). In addition, 3 directors of MSPORTS were also fined.

MSPORTS was publicly reprimanded for committing the following breaches of the Main LR (“MSPORTS’ Breaches”):-

No. Breach

1. Financial Reporting Breaches

MSPORTS had failed to announce/issue its annual report for the financial year ended (FYE) 31 December 2015 and 31 December 2016 and quarterly reports from the period ended 30 June 2016 until 30 June 2017 within the stipulated timeframes, in contravention of paragraphs 9.23(1) and 9.22(1) of the Main LR respectively.

MSPORTS has yet to announce/issue the above financial statements as at to-date.

2. Corporate Governance Breaches

MSPORTS had failed to comply with the following requirements on the composition of its board of directors and audit committee:-

(a) paragraph 15.02(1) read together with paragraph 15.02(3) of the Main LR for failing to ensure that there were at least 2 independent directors in its board of directors after 3 months from the resignations of the independent directors, Ang Wei Chuan and Bernard Tan Chin Teik on 20 April 2016 (“resignations of Ang and Bernard”). MSPORTS had only filled the vacancies and appointed 5 independent directors on 4 October 2016;

(b) paragraph 15.09(1) read together with paragraph 15.19 of the Main LR for failing to have an audit committee after 3 months from the resignations of Ang and Bernard (who were the audit committee


91

chairman/member respectively) on 20 April 2016. MSPORTS had only reconstituted and appointed 3 members to its audit committee on 16 November 2016; and

(c) paragraph 15.10 of the Main LR for failing to elect a chairman amongst the members of the audit committee until 26 July 2017.

3. Foreign Listing Requirements Breaches

MSPORTS had failed to comply with the following foreign listing requirements:-

(a) paragraph 4A.04(2) of the Main LR for failing to have at least 2 independent directors whose principal or only place of residence is within Malaysia after the resignations of Ang and Bernard, who were the Malaysian independent directors. MSPORTS had only appointed 5 independent directors who are Malaysians on 4 October 2016;

(b) paragraph 4A.04A of the Main LR for failing to ensure that its audit committee has at least 1 independent director who has a principal or only place of residence in Malaysia after the resignations of Ang and Bernard. MSPORTS had only appointed 2 independent directors who are Malaysians to its audit committee on 16 November 2016; and

(c) paragraph 4A.05 of the Main LR for failing to appoint an agent or representative in Malaysia to be responsible for communication with Bursa Malaysia Securities on behalf of the Company from 1 July 2016 to 2 November 2016.

4. Disclosure Breaches

MSPORTS had failed comply with the following provisions of the Main LR on disclosure requirements:-

(a) paragraphs 9.19(12) and 9.19(13) of the Main LR for failing to:-

1. make an immediate announcement of the change in the composition of the board of directors and audit committee upon the resignation of Wong Wang Lam, an independent non-executive director and audit committee member of MSPORTS. His resignation was informed to the public by Bursa Malaysia Securities via a listing circular on 2 September 2016; and

2. make an immediate announcement of the appointment of Naren Anand Gill, Clarence Yeow Kong Chew and Cheh Chee Mun as members of the audit committee on 16 November 2016. The announcement was only made on 25 July 2017;

(b) paragraph 9.19(14A) of the Main LR for failing to make an immediate announcement of the resignation of its chief financial officer with effect from 8 July 2016. The resignation was informed to the public by Bursa Malaysia Securities via a listing circular on 2 September 2016;

(c) paragraphs 9.19(6) and 9.19(7) of the Main LR for failing to make an immediate announcement of:-

1. the notice of requisition dated 16 August 2016 to convene a special general meeting to put forward resolutions for amongst others, the appointment of 6 directors (“the 1st requisition”). The 1st requisition was informed to the public by Bursa Malaysia Securities via a listing circular on 2 September 2016;

2. the notice to call for a special general meeting sent on 9 September 2016 (“the 2nd requisition”) as the board of directors did not call for the meeting on the 1strequisition. The 2nd requisition was again informed to the public by Bursa Malaysia Securities via a listing circular on 21 September 2016; and


92

3. the outcome of the special general meeting held on 4 October 2016 where all the resolutions were passed by the shareholders present at the meeting. This was informed to the public by Bursa Malaysia Securities via a listing circular on 5 October 2016;

(d) paragraph 9.28(3A) of the Main LR for failing to make the monthly announcements on the status of the issuance of the outstanding annual report for the FYE 31 December 2015 (AR 2015) and quarterly report for the financial period ended 30 June 2016. MSPORTS had made an announcement on the status of the outstanding AR 2015 on 31 May 2016 and did not provide the monthly update / status since then until 29 November 2016.

5. Non-Compliance with Bursa Malaysia Securities’ Directives

MSPORTS had contravened paragraph 2.23(1) of the Main LR for it had failed to comply with the instructions or directives of Bursa Malaysia Securities:-

(a) vide emails dated 14, 16 & 29 June 2016 to provide Bursa Malaysia Securities with, amongst others, –

• the status of the audit for the financial year ended 31 December 2015; and • the actions taken / being taken on the new appointment of the independent directors, audit

committee, company secretary and agent;

(b) vide letters dated 4 & 16 August 2016 for MSPORTS to –

• announce the resignations of the chief financial officer and independent director, Wong Wang Lam; and

• announce the monthly update on the status of the outstanding AR 2015; and

(c) vide letter dated 19 August 2016 for MSPORTS to announce the 1st requisition,

(hereinafter collectively referred to as “the Instructions / Directives of Bursa Malaysia Securities”).

MSPORTS was also required to ensure:-

(1) all its directors and the relevant personnel of the company attend a training programme in relation to compliance with the Main LR particularly pertaining to financial statements; and

(2) its board of directors review and assess the adequacy and competency of its finance and accounting resources and adequacy, comprehensiveness and effectiveness of the company’s policies and procedures in respect of financial reporting and implementation of the same.

The following penalties were imposed on 5 directors of MSPORTS for breach of paragraph 16.13 of the Main LR where they had caused and/or permitted MSPORTS to commit all or some of MSPORTS’ Breaches:-

No. Director Breach Penalties Imposed

1. Lin Huozhi paragraph 16.13(a) of the Main LR for causing MSPORTS to commit the Financial Reporting Breaches

Public Reprimand and total fines


93

Executive Chairman

of RM656,000*

paragraph 16.13(b) of the Main LR for permitting MSPORTS to commit the Corporate Governance Breaches, Foreign Listing Requirements Breaches, Disclosure Breaches and the Non-Compliance with Bursa Malaysia Securities’ Directives

Public Reprimand and fine of RM1,000,000

2.

Lin Liying

Executive Director cum Chief Executive Officer

paragraph 16.13(a) of the Main LR for causing MSPORTS to commit the Financial Reporting Breaches

Public Reprimand and total fines of RM656,000*



3. Ang Wei Chuan

Independent Non-Executive Director and Audit committee Chairman

(appointed on 25 August 2014 and resigned on 20 April 2016)

paragraph 16.13 of the Main LR for causing and permitting MSPORTS to commit the breach of paragraph 9.23(1) of the Main LR on the failure to issue the AR 2015 on or before 30 April 2016

Public Reprimand

4. Bernard Tan Chin Teik

Independent Non-Executive Director and Audit committee member

(appointed on 22 June 2015 and resigned on 20 April 2016)


Public Reprimand

5. Wong Wang Lam


(appointed on 20


Public Reprimand and fine of RM7,200


94

May 2014 and resigned on 21 June 2016)

[*The fines imposed on Lin Huozhi and Lin Liying are computed as at 1 November 2017. A fine of RM500 per market day for each delay of the financial statements (subject to a maximum fine of RM1,000,000 for each financial statement) until the financial statements are submitted was imposed on Lin Huozhi and Lin Liying.]

The finding of breach and imposition of the above penalties on MSPORTS and its directors were made pursuant to paragraph 16.19 of the Main LR upon completion of due process and after taking into consideration all facts and circumstances of the matter including the materiality / impact of the breaches to MSPORTS and shareholders / investors and the roles, responsibilities, knowledge and conduct of the directors.

Bursa Malaysia Securities views the contraventions seriously as the timely and accurate disclosure of material information and submission of financial statements are fundamental obligations of listed companies. These obligations are of paramount importance in ensuring a fair and orderly market for securities traded on Bursa Malaysia Securities and necessary to aid informed investment decisions.

Bursa Malaysia Securities has also reminded MSPORTS and its board of directors of their responsibility to maintain the appropriate standards of corporate responsibility and accountability to its shareholders and the investing public.


95


1

Annual Report




Page


Group Structure 4

Products 5

Directors Profile 6







2



995199-H






Lin Liying












October 2016)


October 2016)




2016)



2016)



2016)




16 November 2016)








3

2016)



2016)






November 2016)


Lin Liying






27 May 2016)







Solicitors




4




5

PRODUCTS



1) TPR shoe soles





2) RB shoe soles





3) MD1 shoe soles





4) MD2 shoe soles




control.




6



7



8














9















10













Date


RMB

1 (2017)闽 0503执2188



18,336,450

2 (2017)闽 0582执3220


Court

357,880



11









4 (2017)闽 05执654



29,868,534



30,096,166

6 (2017)闽 0582执567


Court

202,800

7 (2017)闽 0582执553


Court

82,854

8 (2017)闽 0102执209


People’s Court

19,931,696

9 (2016)闽 05执1889



143,851,680

10 (2016)闽 0203执6869


People’s Court

61,800

11* (2016) 0102 999闽

Early Republic


19,931,134

12* (2016) 227闽 05

Early Republic



13* (2016) 01 61 18/07/201

6


14* (2014) Article 504-1

No. Springs

Minchuzi



Total 487,795,667


12

Going Forward









………………………..



………………………

Naren Anand Gill


……………………………

Guan Swee Kwee


…………………………….





13




14




15





16







April 2016)















17







April 2016)





18





19



20



21



22



23



24



25









26



27




28








29







30
















31



32





Page










33

DIRECTORS’ REPORT



December 2015.



31 December 2015.





the financial year.

FINANCIAL RESULTS

Group Company

RMB’000 RMB’000


DIVIDENDS





DIRECTORS


Lin Huozhi

Lin Liying

Wong Wang Lam












34











financial interest.






Direct interest

At 1.1.2015 At 31.12.2015

Lin Houzhi

- 7,762,000

Lin Liying

- 3,881,250

Indirect interest

At 1.1.2015 At 31.12.2015

Lin Huozhi(1)

176,124,125 96,124,125




Indirect interest

At 1.1.2015 At 31.12.2015

Lin Huozhi(1)

- -






35




financial year.

ISSUE OF SHARES



ordinary share.


financial year.






directors.


follows:
















misleading.


36





inappropriate.










financial year.









is made.





statements.


37




…………………………………………………


…………………………………………………

Naren Anand Gill




38



















.



Naren Anand Gill




39


















in Malaysia



Before me:



40












2. Subsidiaries





41


(Continued)








3. Inventories









42


(Continued)



7. Borrowings


8. Tax provision






11. Litigation




43


(Continued)



12. Going Concern











44


(Continued)
















Company.












45


(Continued)

Other matters







RT LLP


Su Chun Keat




46



2015 2014 2015 2014


ASSETS

Non-current assets



Land use rights 5 - - 16,578 16,980

Subsidiaries 6 277,374 277,374 - -

277,374 277,374 307,417 277,933

Current assets




36,943 26,033 681,891 729,932

Total asset 314,317 303,407 989,308 1,007,865



Share capital 10 100,362 175,361 100,362 175,361

Reserves 11 211,297 126,105 785,048 720,940

Total equity 311,659 301,466 885,410 896,301

Currentliabilities




2,658 1,941 103,898 111,564





47


Revenue 14 579,352 706,456









48


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




- - - -

- - 58,327 58,327




-

-

8,643 -

- - (8,643)

-





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



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



-

- 2,830 -

-

-

(2,830) -


49


The Group



2015 2014




Adjustments for:

































50


















Going Concern















Company.



DRAFT


51








below.






















policies








revised.

DRAFT


52




policies (Cont’d)
























Income tax








DRAFT


53




adopted early














• IFRS 16Leases

DRAFT


54










DRAFT


55

























DRAFT


56


























57


Financial assets
































DRAFT


58



























59



Inventories








Provisions

















60



Cost of sales





goods sold.

Income taxes











transaction.













directly in equity


61



Value-added tax





respectively.






Employee benefits


























62



Foreign currencies




















reporting periods;






in equity.

Related parties












DRAFT


63





entity.









Operating leases









Operating segment
















DRAFT


64



Intangible assets








Software



Trademark




contractual rights.

Land use rights









Borrowing cost



65



The Group

Leasehold

buildings

Plant &

machinery

Office

equipment,

furniture &

fixtures

Moulding

equipment

Motor

vehicles

Total

Cost


At 1 January 2014 263,831 53,891 2,645 24,531 2,889 347,787

Additions - 588 12 5,843 174 6,617

263,831 53,891 2,645 24,531 2,889 347,787 At 31 December 2014 263,831 54,479 2,657 30,374 3,063 354,404

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


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


At 1 January 2014 31,709 28,202 1,262 10,670 688 72,531

Depreciation 12,258 3,973 536 4,753 275 21,795

At 31 December 2014 43,967 32,175 1,798 15,423 963 94,326

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


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

Net Book Value

At 31 December 2014 219,864 22,304 859 14,951 2,100 260,078

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





66




Cost

RMB’000 RMB’000 RMB'000

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

Addition - - -

At 31 December 2014 1,580 18,521 20,101

Addition - - -

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


and Impairment

At 1 January 2014 472 18,521 18,993


Impairment - - -

At 31 December 2014 705 18,521 19,226


At 31 December 2015 938 18,521 19,459

Net Book Value

At 31 December 2014 875 - 875

At 31 December 2015 642 - 642




67


5. LAND USE RIGHTS

The Group Land use

rights

Cost

RMB’000




At 1 January 2014 1,608

Amortisation 402


Amortisation 402


Net Book Value

At 31 December 2014 16,980

At 31 December 2015 16,578





2014 respectively.


6. SUBSIDIARIES

The Company

2015 2014

RMB’000 RMB’000



277,374 277,374

DRAFT


68







Name

Country of

incorporation/

Principal place


Equity interest

held


2015 2014 2015 2014

RMB’000 RMB’000 % %

Directly held:



Sing”)


Indirectly held:





soles









and retail trade,

construction and



Ltd (“Sente”) (2) (3)









chemical products,







69



2015 2014

RMB'000 RMB'000




11,238 18,369





2015 2014 2015 2014

RMB'000 RMB’000 RMB'000 RMB'000




Deposit - 8 - 208



36,869 25,975 174,173 135,575






2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi 36,845 25,947 174,149 135,548



36,869 25,975 174,173 135,575


70




follows:

The Group

2015 2014

RMB'000 RMB'000

Not past due 54,675 132,376




173,627 132,376






2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000


Cash at bank 56 57 495,543 575,890

74 58 496,480 575,988



2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi - - 495,801 575,862




74 58 496,480 575,988






71







10. SHARE CAPITAL

The Company and the

Group


2015 2014 2015 2014

USD’000 RMB’000 USD’000 RMB’000




1,000,000,000 1,000,000,000 50,000 342,000 50,000 342,000



USD0.05)

(482,500,000)* - (24,125)* (166,639) - -

517,500,000 1,000,000,000 25,875 175,361 50,000 342,000

Effect of par value

reduction

- - (12,938)# (87,680) - -



1,482,500,000 - 37,063 254,319 - -



2014: par value of

USD0.05)

2,000,000,000

1,000,000,000

50,000

342,000

50,000

342,000




517,500,000 517,500,000 25,875 175,361 25,875 175,361



value of USD0.025)

77,622,000 - 1,941 12,681 - -



2014: par value of

USD0.05)

595,122,000

517,500,000

14,878

100,362

25,875

175,361


72













satisfied.






11. RESERVES

The Company

2015 2014

RMB'000 RMB'000




211,297 126,105







Share premium




73



Statutory reserve







Merger Deficit





ESOS Reserve






74




2015 2014 2015 2014

RMB'000 RMB’000 RMB'000 RMB'000


VAT payable - - 3,543 3,756



2,658 1,941 90,871 95,593



overhead.



2015 2014 2015 2014

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

Renminbi - 203 88,050 93,838






2,658 1,941 90,871 95,593

DRAFT


75



The Group

2015 2014

RMB'000 RMB'000







The Group

2015 2014

RMB'000 RMB'000

Revenue

Sale of goods 579,352 706,456

Other income



2,479 1,961

15. FINANCE COSTS

The Group

2015 2014 RMB'000 RMB'000


DRAFT


76






The Group

2015 2014












directors)




personnel





equipment

3,062 -












77


The Group

2015 2014

RMB'000 RMB'000





2015 2014







year

(336) 285



8,937 20,934

Bermuda income tax















DRAFT


78



















The Group

2015 2014

RMB RMB

cents cents



Company

(4.83) 11.27

Weighted average

no. of shares

2015 2014



Total 595,122,000 517,500,000





DRAFT


79


19. DIVIDENDS


20. COMMITMENTS




one year.

2015 2014




204 1,489








technical support.


Business segment



6) TPR shoe soles





DRAFT


80




7) RB shoe soles





8) MD1 shoe soles




sportsshoe soles.

9) MD2 shoe soles

















DRAFT


81






TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles

Apparels &

Accessories TOTAL


Segment revenue


Segment results

1,000 761 4,669 16,658 (40,170) (17,082)




(3,000)


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:


- - - - - -

Interest income 78 59 363 1,296 144 1,940



2,412 1,836 11,259 40,167 - 55,674


31 December 2015

RMB’000




24


712






2,846








DRAFT


82






TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles



Segment revenue


Segment results

3,649 2,014 14,464 56,037 4,910 81,074



(1,830)


Segment assets 46,719 25,786 185,188 717,473 32,545 1,007,711

Segment liabilities

5,103 2,817 20,230 78,377 3,078 109,605

Other information:


- - - - - -

Interest income 78 44 310 1197 248 1,877



317 175 1,257 4,868 - 6,617


31 December 2014

RMB’000




28


126






1,959









83



























DRAFT


84








months.




1 year years

At 31 December 2015

RMB’000 RMB’000 RMB'000



102,371 - 102,371

At 31 December 2014



107,093 107,093

The Company

At 31 December 2015


At 31 December 2014


1,941 -

1,941

DRAFT


85



(iv) Credit risk














(v) Fair value



instruments.

(vi) Price risk






DRAFT


86






2015 2014 2015 2014

RMB’000 RMB’000 RMB’000 RMB’000

Financial assets






Amortised cost




87




capital are:












Fair values





settled.








575,184 601,493




88


26. WARRANTS ISSUED





November 2017.




27. LITIGATION



Claim

RMB

1 (2017)闽 0503执2188



18,336,450

2 (2017)闽 0582执3220




29,850,000



29,868,534



30,096,166

6 (2017)闽 0582执567


7 (2017)闽 0582执553


8 (2017)闽 0102执209


People’s Court

19,931,696



143,851,680

10 (2016)闽 0203执6869


People’s Court

61,800


89



11 (2016)999闽 0102

Early Republic


Court 19,931,134

12 (2016)227闽 05

Early Republic




14 (2014) Article 504-1




Total 487,795,667































90




2018.







approval.




No. Breach









91


















92





















93

Executive Chairman

of RM656,000*



2.

Lin Liying






3. Ang Wei Chuan




Public Reprimand





Public Reprimand

5. Wong Wang Lam


(appointed on 20




94







95


1

Annual Report




Page


Group Structure 4

Products 5

Directors Profile 6







2



995199-H






Lin Liying












October 2016)


October 2016)




2016)



2016)



2016)




16 November 2016)








3

2016)



2016)






November 2016)


Lin Liying






27 May 2016)







Solicitors




4




5

PRODUCTS



1) TPR shoe soles





2) RB shoe soles





3) MD1 shoe soles





4) MD2 shoe soles




control.




6



7



8














9















10













Date


RMB

1 (2017)闽 0503执2188



18,336,450

2 (2017)闽 0582执3220


Court

357,880



11









4 (2017)闽 05执654



29,868,534



30,096,166

6 (2017)闽 0582执567


Court

202,800

7 (2017)闽 0582执553


Court

82,854

8 (2017)闽 0102执209


People’s Court

19,931,696

9 (2016)闽 05执1889



143,851,680

10 (2016)闽 0203执6869


People’s Court

61,800

11* (2016) 0102 999闽

Early Republic


19,931,134

12* (2016) 227闽 05

Early Republic



13* (2016) 01 61 18/07/201

6


14* (2014) Article 504-1

No. Springs

Minchuzi



Total 487,795,667


12

Going Forward









………………………..



………………………

Naren Anand Gill


……………………………

Guan Swee Kwee


…………………………….





13




14




15





16







April 2016)















17







April 2016)





18





19



20



21



22



23



24



25









26



27




28








29







30
















31



32





Page










33

DIRECTORS’ REPORT



December 2015.



31 December 2015.





the financial year.

FINANCIAL RESULTS

Group Company

RMB’000 RMB’000


DIVIDENDS





DIRECTORS


Lin Huozhi

Lin Liying

Wong Wang Lam












34











financial interest.






Direct interest

At 1.1.2015 At 31.12.2015

Lin Houzhi

- 7,762,000

Lin Liying

- 3,881,250

Indirect interest

At 1.1.2015 At 31.12.2015

Lin Huozhi(1)

176,124,125 96,124,125




Indirect interest

At 1.1.2015 At 31.12.2015

Lin Huozhi(1)

- -






35




financial year.

ISSUE OF SHARES



ordinary share.


financial year.






directors.


follows:
















misleading.


36





inappropriate.










financial year.









is made.





statements.


37




…………………………………………………


…………………………………………………

Naren Anand Gill




38



















.



Naren Anand Gill




39


















in Malaysia



Before me:



40












2. Subsidiaries





41


(Continued)








3. Inventories









42


(Continued)



7. Borrowings


8. Tax provision






11. Litigation




43


(Continued)



12. Going Concern











44


(Continued)
















Company.












45


(Continued)

Other matters







RT LLP


Su Chun Keat




46



2015 2014 2015 2014


ASSETS

Non-current assets



Land use rights 5 - - 16,578 16,980

Subsidiaries 6 277,374 277,374 - -

277,374 277,374 307,417 277,933

Current assets




36,943 26,033 681,891 729,932

Total asset 314,317 303,407 989,308 1,007,865



Share capital 10 100,362 175,361 100,362 175,361

Reserves 11 211,297 126,105 785,048 720,940

Total equity 311,659 301,466 885,410 896,301

Currentliabilities




2,658 1,941 103,898 111,564





47


Revenue 14 579,352 706,456









48


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




- - - -

- - 58,327 58,327




-

-

8,643 -

- - (8,643)

-





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



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



-

- 2,830 -

-

-

(2,830) -


49


The Group



2015 2014




Adjustments for:

































50


















Going Concern















Company.



DRAFT


51








below.






















policies








revised.

DRAFT


52




policies (Cont’d)
























Income tax








DRAFT


53




adopted early














• IFRS 16Leases

DRAFT


54










DRAFT


55

























DRAFT


56


























57


Financial assets
































DRAFT


58



























59



Inventories








Provisions

















60



Cost of sales





goods sold.

Income taxes











transaction.













directly in equity


61



Value-added tax





respectively.






Employee benefits


























62



Foreign currencies




















reporting periods;






in equity.

Related parties












DRAFT


63





entity.









Operating leases









Operating segment
















DRAFT


64



Intangible assets








Software



Trademark




contractual rights.

Land use rights









Borrowing cost



65



The Group

Leasehold

buildings

Plant &

machinery

Office

equipment,

furniture &

fixtures

Moulding

equipment

Motor

vehicles

Total

Cost


At 1 January 2014 263,831 53,891 2,645 24,531 2,889 347,787

Additions - 588 12 5,843 174 6,617

263,831 53,891 2,645 24,531 2,889 347,787 At 31 December 2014 263,831 54,479 2,657 30,374 3,063 354,404

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


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


At 1 January 2014 31,709 28,202 1,262 10,670 688 72,531

Depreciation 12,258 3,973 536 4,753 275 21,795

At 31 December 2014 43,967 32,175 1,798 15,423 963 94,326

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


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

Net Book Value

At 31 December 2014 219,864 22,304 859 14,951 2,100 260,078

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





66




Cost

RMB’000 RMB’000 RMB'000

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

Addition - - -

At 31 December 2014 1,580 18,521 20,101

Addition - - -

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


and Impairment

At 1 January 2014 472 18,521 18,993


Impairment - - -

At 31 December 2014 705 18,521 19,226


At 31 December 2015 938 18,521 19,459

Net Book Value

At 31 December 2014 875 - 875

At 31 December 2015 642 - 642




67


5. LAND USE RIGHTS

The Group Land use

rights

Cost

RMB’000




At 1 January 2014 1,608

Amortisation 402


Amortisation 402


Net Book Value

At 31 December 2014 16,980

At 31 December 2015 16,578





2014 respectively.


6. SUBSIDIARIES

The Company

2015 2014

RMB’000 RMB’000



277,374 277,374

DRAFT


68







Name

Country of

incorporation/

Principal place


Equity interest

held


2015 2014 2015 2014

RMB’000 RMB’000 % %

Directly held:



Sing”)


Indirectly held:





soles









and retail trade,

construction and



Ltd (“Sente”) (2) (3)









chemical products,







69



2015 2014

RMB'000 RMB'000




11,238 18,369





2015 2014 2015 2014

RMB'000 RMB’000 RMB'000 RMB'000




Deposit - 8 - 208



36,869 25,975 174,173 135,575






2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi 36,845 25,947 174,149 135,548



36,869 25,975 174,173 135,575


70




follows:

The Group

2015 2014

RMB'000 RMB'000

Not past due 54,675 132,376




173,627 132,376






2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000


Cash at bank 56 57 495,543 575,890

74 58 496,480 575,988



2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi - - 495,801 575,862




74 58 496,480 575,988






71







10. SHARE CAPITAL

The Company and the

Group


2015 2014 2015 2014

USD’000 RMB’000 USD’000 RMB’000




1,000,000,000 1,000,000,000 50,000 342,000 50,000 342,000



USD0.05)

(482,500,000)* - (24,125)* (166,639) - -

517,500,000 1,000,000,000 25,875 175,361 50,000 342,000

Effect of par value

reduction

- - (12,938)# (87,680) - -



1,482,500,000 - 37,063 254,319 - -



2014: par value of

USD0.05)

2,000,000,000

1,000,000,000

50,000

342,000

50,000

342,000




517,500,000 517,500,000 25,875 175,361 25,875 175,361



value of USD0.025)

77,622,000 - 1,941 12,681 - -



2014: par value of

USD0.05)

595,122,000

517,500,000

14,878

100,362

25,875

175,361


72













satisfied.






11. RESERVES

The Company

2015 2014

RMB'000 RMB'000




211,297 126,105







Share premium




73



Statutory reserve







Merger Deficit





ESOS Reserve






74




2015 2014 2015 2014

RMB'000 RMB’000 RMB'000 RMB'000


VAT payable - - 3,543 3,756



2,658 1,941 90,871 95,593



overhead.



2015 2014 2015 2014

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

Renminbi - 203 88,050 93,838






2,658 1,941 90,871 95,593

DRAFT


75



The Group

2015 2014

RMB'000 RMB'000







The Group

2015 2014

RMB'000 RMB'000

Revenue

Sale of goods 579,352 706,456

Other income



2,479 1,961

15. FINANCE COSTS

The Group

2015 2014 RMB'000 RMB'000


DRAFT


76






The Group

2015 2014












directors)




personnel





equipment

3,062 -












77


The Group

2015 2014

RMB'000 RMB'000





2015 2014







year

(336) 285



8,937 20,934

Bermuda income tax















DRAFT


78



















The Group

2015 2014

RMB RMB

cents cents



Company

(4.83) 11.27

Weighted average

no. of shares

2015 2014



Total 595,122,000 517,500,000





DRAFT


79


19. DIVIDENDS


20. COMMITMENTS




one year.

2015 2014




204 1,489








technical support.


Business segment



6) TPR shoe soles





DRAFT


80




7) RB shoe soles





8) MD1 shoe soles




sportsshoe soles.

9) MD2 shoe soles

















DRAFT


81






TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles

Apparels &

Accessories TOTAL


Segment revenue


Segment results

1,000 761 4,669 16,658 (40,170) (17,082)




(3,000)


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:


- - - - - -

Interest income 78 59 363 1,296 144 1,940



2,412 1,836 11,259 40,167 - 55,674


31 December 2015

RMB’000




24


712






2,846








DRAFT


82






TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles



Segment revenue


Segment results

3,649 2,014 14,464 56,037 4,910 81,074



(1,830)


Segment assets 46,719 25,786 185,188 717,473 32,545 1,007,711

Segment liabilities

5,103 2,817 20,230 78,377 3,078 109,605

Other information:


- - - - - -

Interest income 78 44 310 1197 248 1,877



317 175 1,257 4,868 - 6,617


31 December 2014

RMB’000




28


126






1,959









83



























DRAFT


84








months.




1 year years

At 31 December 2015

RMB’000 RMB’000 RMB'000



102,371 - 102,371

At 31 December 2014



107,093 107,093

The Company

At 31 December 2015


At 31 December 2014


1,941 -

1,941

DRAFT


85



(iv) Credit risk














(v) Fair value



instruments.

(vi) Price risk






DRAFT


86






2015 2014 2015 2014

RMB’000 RMB’000 RMB’000 RMB’000

Financial assets






Amortised cost




87




capital are:












Fair values





settled.








575,184 601,493




88


26. WARRANTS ISSUED





November 2017.




27. LITIGATION



Claim

RMB

1 (2017)闽 0503执2188



18,336,450

2 (2017)闽 0582执3220




29,850,000



29,868,534



30,096,166

6 (2017)闽 0582执567


7 (2017)闽 0582执553


8 (2017)闽 0102执209


People’s Court

19,931,696



143,851,680

10 (2016)闽 0203执6869


People’s Court

61,800


89



11 (2016)999闽 0102

Early Republic


Court 19,931,134

12 (2016)227闽 05

Early Republic




14 (2014) Article 504-1




Total 487,795,667































90




2018.







approval.




No. Breach









91


















92





















93

Executive Chairman

of RM656,000*



2.

Lin Liying






3. Ang Wei Chuan




Public Reprimand





Public Reprimand

5. Wong Wang Lam


(appointed on 20




94







95


1

Annual Report




Page


Group Structure 4

Products 5

Directors Profile 6







2



995199-H






Lin Liying












October 2016)


October 2016)




2016)



2016)



2016)




16 November 2016)








3

2016)



2016)






November 2016)


Lin Liying






27 May 2016)







Solicitors




4




5

PRODUCTS



1) TPR shoe soles





2) RB shoe soles





3) MD1 shoe soles





4) MD2 shoe soles




control.




6



7



8














9















10













Date


RMB

1 (2017)闽 0503执2188



18,336,450

2 (2017)闽 0582执3220


Court

357,880



11









4 (2017)闽 05执654



29,868,534



30,096,166

6 (2017)闽 0582执567


Court

202,800

7 (2017)闽 0582执553


Court

82,854

8 (2017)闽 0102执209


People’s Court

19,931,696

9 (2016)闽 05执1889



143,851,680

10 (2016)闽 0203执6869


People’s Court

61,800

11* (2016) 0102 999闽

Early Republic


19,931,134

12* (2016) 227闽 05

Early Republic



13* (2016) 01 61 18/07/201

6


14* (2014) Article 504-1

No. Springs

Minchuzi



Total 487,795,667


12

Going Forward









………………………..



………………………

Naren Anand Gill


……………………………

Guan Swee Kwee


…………………………….





13




14




15





16







April 2016)















17







April 2016)





18





19



20



21



22



23



24



25









26



27




28








29







30
















31



32





Page










33

DIRECTORS’ REPORT



December 2015.



31 December 2015.





the financial year.

FINANCIAL RESULTS

Group Company

RMB’000 RMB’000


DIVIDENDS





DIRECTORS


Lin Huozhi

Lin Liying

Wong Wang Lam












34











financial interest.






Direct interest

At 1.1.2015 At 31.12.2015

Lin Houzhi

- 7,762,000

Lin Liying

- 3,881,250

Indirect interest

At 1.1.2015 At 31.12.2015

Lin Huozhi(1)

176,124,125 96,124,125




Indirect interest

At 1.1.2015 At 31.12.2015

Lin Huozhi(1)

- -






35




financial year.

ISSUE OF SHARES



ordinary share.


financial year.






directors.


follows:
















misleading.


36





inappropriate.










financial year.









is made.





statements.


37




…………………………………………………


…………………………………………………

Naren Anand Gill




38



















.



Naren Anand Gill




39


















in Malaysia



Before me:



40












2. Subsidiaries





41


(Continued)








3. Inventories









42


(Continued)



7. Borrowings


8. Tax provision






11. Litigation




43


(Continued)



12. Going Concern











44


(Continued)
















Company.












45


(Continued)

Other matters







RT LLP


Su Chun Keat




46



2015 2014 2015 2014


ASSETS

Non-current assets



Land use rights 5 - - 16,578 16,980

Subsidiaries 6 277,374 277,374 - -

277,374 277,374 307,417 277,933

Current assets




36,943 26,033 681,891 729,932

Total asset 314,317 303,407 989,308 1,007,865



Share capital 10 100,362 175,361 100,362 175,361

Reserves 11 211,297 126,105 785,048 720,940

Total equity 311,659 301,466 885,410 896,301

Currentliabilities




2,658 1,941 103,898 111,564





47


Revenue 14 579,352 706,456









48


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




- - - -

- - 58,327 58,327




-

-

8,643 -

- - (8,643)

-





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



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



-

- 2,830 -

-

-

(2,830) -


49


The Group



2015 2014




Adjustments for:

































50


















Going Concern















Company.



DRAFT


51








below.






















policies








revised.

DRAFT


52




policies (Cont’d)
























Income tax








DRAFT


53




adopted early














• IFRS 16Leases

DRAFT


54










DRAFT


55

























DRAFT


56


























57


Financial assets
































DRAFT


58



























59



Inventories








Provisions

















60



Cost of sales





goods sold.

Income taxes











transaction.













directly in equity


61



Value-added tax





respectively.






Employee benefits


























62



Foreign currencies




















reporting periods;






in equity.

Related parties












DRAFT


63





entity.









Operating leases









Operating segment
















DRAFT


64



Intangible assets








Software



Trademark




contractual rights.

Land use rights









Borrowing cost



65



The Group

Leasehold

buildings

Plant &

machinery

Office

equipment,

furniture &

fixtures

Moulding

equipment

Motor

vehicles

Total

Cost


At 1 January 2014 263,831 53,891 2,645 24,531 2,889 347,787

Additions - 588 12 5,843 174 6,617

263,831 53,891 2,645 24,531 2,889 347,787 At 31 December 2014 263,831 54,479 2,657 30,374 3,063 354,404

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


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


At 1 January 2014 31,709 28,202 1,262 10,670 688 72,531

Depreciation 12,258 3,973 536 4,753 275 21,795

At 31 December 2014 43,967 32,175 1,798 15,423 963 94,326

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


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

Net Book Value

At 31 December 2014 219,864 22,304 859 14,951 2,100 260,078

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





66




Cost

RMB’000 RMB’000 RMB'000

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

Addition - - -

At 31 December 2014 1,580 18,521 20,101

Addition - - -

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


and Impairment

At 1 January 2014 472 18,521 18,993


Impairment - - -

At 31 December 2014 705 18,521 19,226


At 31 December 2015 938 18,521 19,459

Net Book Value

At 31 December 2014 875 - 875

At 31 December 2015 642 - 642




67


5. LAND USE RIGHTS

The Group Land use

rights

Cost

RMB’000




At 1 January 2014 1,608

Amortisation 402


Amortisation 402


Net Book Value

At 31 December 2014 16,980

At 31 December 2015 16,578





2014 respectively.


6. SUBSIDIARIES

The Company

2015 2014

RMB’000 RMB’000



277,374 277,374

DRAFT


68







Name

Country of

incorporation/

Principal place


Equity interest

held


2015 2014 2015 2014

RMB’000 RMB’000 % %

Directly held:



Sing”)


Indirectly held:





soles









and retail trade,

construction and



Ltd (“Sente”) (2) (3)









chemical products,







69



2015 2014

RMB'000 RMB'000




11,238 18,369





2015 2014 2015 2014

RMB'000 RMB’000 RMB'000 RMB'000




Deposit - 8 - 208



36,869 25,975 174,173 135,575






2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi 36,845 25,947 174,149 135,548



36,869 25,975 174,173 135,575


70




follows:

The Group

2015 2014

RMB'000 RMB'000

Not past due 54,675 132,376




173,627 132,376






2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000


Cash at bank 56 57 495,543 575,890

74 58 496,480 575,988



2015 2014 2015 2014

RMB’000 RMB’000 RMB'000 RMB'000

Renminbi - - 495,801 575,862




74 58 496,480 575,988






71







10. SHARE CAPITAL

The Company and the

Group


2015 2014 2015 2014

USD’000 RMB’000 USD’000 RMB’000




1,000,000,000 1,000,000,000 50,000 342,000 50,000 342,000



USD0.05)

(482,500,000)* - (24,125)* (166,639) - -

517,500,000 1,000,000,000 25,875 175,361 50,000 342,000

Effect of par value

reduction

- - (12,938)# (87,680) - -



1,482,500,000 - 37,063 254,319 - -



2014: par value of

USD0.05)

2,000,000,000

1,000,000,000

50,000

342,000

50,000

342,000




517,500,000 517,500,000 25,875 175,361 25,875 175,361



value of USD0.025)

77,622,000 - 1,941 12,681 - -



2014: par value of

USD0.05)

595,122,000

517,500,000

14,878

100,362

25,875

175,361


72













satisfied.






11. RESERVES

The Company

2015 2014

RMB'000 RMB'000




211,297 126,105







Share premium




73



Statutory reserve







Merger Deficit





ESOS Reserve






74




2015 2014 2015 2014

RMB'000 RMB’000 RMB'000 RMB'000


VAT payable - - 3,543 3,756



2,658 1,941 90,871 95,593



overhead.



2015 2014 2015 2014

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

Renminbi - 203 88,050 93,838






2,658 1,941 90,871 95,593

DRAFT


75



The Group

2015 2014

RMB'000 RMB'000







The Group

2015 2014

RMB'000 RMB'000

Revenue

Sale of goods 579,352 706,456

Other income



2,479 1,961

15. FINANCE COSTS

The Group

2015 2014 RMB'000 RMB'000


DRAFT


76






The Group

2015 2014












directors)




personnel





equipment

3,062 -












77


The Group

2015 2014

RMB'000 RMB'000





2015 2014







year

(336) 285



8,937 20,934

Bermuda income tax















DRAFT


78



















The Group

2015 2014

RMB RMB

cents cents



Company

(4.83) 11.27

Weighted average

no. of shares

2015 2014



Total 595,122,000 517,500,000





DRAFT


79


19. DIVIDENDS


20. COMMITMENTS




one year.

2015 2014




204 1,489








technical support.


Business segment



6) TPR shoe soles





DRAFT


80




7) RB shoe soles





8) MD1 shoe soles




sportsshoe soles.

9) MD2 shoe soles

















DRAFT


81






TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles

Apparels &

Accessories TOTAL


Segment revenue


Segment results

1,000 761 4,669 16,658 (40,170) (17,082)




(3,000)


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:


- - - - - -

Interest income 78 59 363 1,296 144 1,940



2,412 1,836 11,259 40,167 - 55,674


31 December 2015

RMB’000




24


712






2,846








DRAFT


82






TPR RB MD1 MD2

Shoe soles

Shoe soles

Shoe soles

Shoe soles



Segment revenue


Segment results

3,649 2,014 14,464 56,037 4,910 81,074



(1,830)


Segment assets 46,719 25,786 185,188 717,473 32,545 1,007,711

Segment liabilities

5,103 2,817 20,230 78,377 3,078 109,605

Other information:


- - - - - -

Interest income 78 44 310 1197 248 1,877



317 175 1,257 4,868 - 6,617


31 December 2014

RMB’000




28


126






1,959









83



























DRAFT


84








months.




1 year years

At 31 December 2015

RMB’000 RMB’000 RMB'000



102,371 - 102,371

At 31 December 2014



107,093 107,093

The Company

At 31 December 2015


At 31 December 2014


1,941 -

1,941

DRAFT


85



(iv) Credit risk














(v) Fair value



instruments.

(vi) Price risk






DRAFT


86






2015 2014 2015 2014

RMB’000 RMB’000 RMB’000 RMB’000

Financial assets






Amortised cost




87




capital are:












Fair values





settled.








575,184 601,493




88


26. WARRANTS ISSUED





November 2017.




27. LITIGATION



Claim

RMB

1 (2017)闽 0503执2188



18,336,450

2 (2017)闽 0582执3220




29,850,000



29,868,534



30,096,166

6 (2017)闽 0582执567


7 (2017)闽 0582执553


8 (2017)闽 0102执209


People’s Court

19,931,696



143,851,680

10 (2016)闽 0203执6869


People’s Court

61,800


89



11 (2016)999闽 0102

Early Republic


Court 19,931,134

12 (2016)227闽 05

Early Republic




14 (2014) Article 504-1




Total 487,795,667































90




2018.







approval.




No. Breach









91


















92





















93

Executive Chairman

of RM656,000*



2.

Lin Liying






3. Ang Wei Chuan




Public Reprimand





Public Reprimand

5. Wong Wang Lam


(appointed on 20




94







95

Documents

Annual Report Multi Sports Holdings Ltd And its ......Nov 10, 2017 · Bangsar South, No.8, Jalan Kerinchi 59200 Kuala Lumpur Wilayah Persekutuan, Malayisa Bankers Industrial and