Corporate Structure 2

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2 CON TENTS Corporate Structure 2 Corporate Information 4 Chairman and Managing Director s Statement 5 Corporate Social Responsibility Statement 8 Directors Profile 9 Corporate Governance Statement 13 Audit Committee Report 19 Statement on Risk Management and Internal Control 22 Other Compliance Information 24 Financial Statements 25 List of Properties 106 Analysis of Shareholdings 109 Notice of Annual General Meeting 112 Statement Accompanying Notice of 116 Annual General Meeting Proxy Form

3 5 YEARS FINANCIAL HIGHLIGHT Revenue (RM Million) Shareholders Equity (RM Million) PBT (RM Million) PAT after NCI (RM Million) EPS (Sen) NTA per share (RM) REVENUE (RM Million) SHAREHOLDERS EQUITY (RM Million) PBT (RM Million) PAT AFTER NCI (RM Million) EPS (Sen) NTA PER SHARE (RM)

4 2 SUCCESS TRANSFORMER CORPORATION BERHAD CORPORATE STRUCTURE SUCCESS ELECTRONICS & TRANSFORMER MANUFACTURER SDN. BHD. (SETM) 65% SEREMBAN ENGINEERING BERHAD* (SEB) SUCCESS TRANSFORMER MARKETING SDN. BHD. (STMKT) SEB RESOURCES SDN. BHD. (SEBR) SUCCESS TRANSFORMER MANUFACTURER SDN. BHD. (STMFR) SEREMBAN MECHANICAL SERVICES SDN. BHD. (SMS) SES PROPERTY SDN. BHD. (SESP) ACE STANDARD INTERNATIONAL LIMITED (ACE) (Incorporated in British Virgin Island) NIKKON INDUSTRIAL LIGHTING SDN. BHD. (NKIL) 60% SEPEN ENGINEERING SDN. BHD. (SEPEN) ARUANMOTA SDN. BHD. (ASB) 50% GROUPAGE SEB SDN. BHD. (GSSB) NIKKON LIGHTING PTY. LTD. (NLPL) (Incorporated in Australia) 40% SELEKTA SPEKTRA SDN. BHD. (SSSB) 80% NIKKON LED SDN. BHD. (NLED) 40% NINE ENERGY SDN. BHD. (NESB) 75% DAIICHI STEEL SDN. BHD. (DS) 65% OMEGA METAL INDUSTRIES SDN. BHD. (OMI) 60% EOS LIGHTING SDN. BHD. (EOS) 51% NIKKON SUCCESS KENYA LIMITED (NSK) (Incorporated in Republic of Kenya) 49% NIKKON LIGHTING (THAILAND) CO. LTD. (NLT) (Incorporated in Thailand)

5 SUCCESS TRANSFORMER CORPORATION BERHAD 3 CORPORATE STRUCTURE (CONT D) 60% BOXON INDUSTRIES HARDWARE (M) SDN. BHD. (BIHM) BOXON INDUSTRIES HARDWARE (JB) SDN. BHD. (BIHJ) BOXON INDUSTRIES HARDWARE (S) PTE. LTD. (BIHS) (Incorporated in Singapore) 60% NINGBO SUCCESS ZHENYE LUMINAIRE LIMITED LIABILITIES COMPANY (NSZ) (Incorporated in People s Republic of China) 60% NINGBO SUCCESS ZHENYE CASTING LIMITED LIABILITIES COMPANY (NSC) (Incorporated in People s Republic of China) SUCCESS TRANSFORMER PTE. LTD. (STPL) (Incorporated in Singapore) 55% NIKKON LIGHTING & ELECTRICAL PTE. LTD. (NLE) (Incorporated in Singapore) 80% PT. BOXON NIKKON JAYAINDO (BNJ) (Incorporated in Indonesia) 60% SHENYANG SUCCESS ZHENYE LUMINAIRE LIABILITIES COMPANY (SSZ) (Incorporated in People s Republic of China) Incorporated In Malaysia Incorporated Outside Malaysia * Listed on the Main Market of Bursa Malaysia Securities Berhad

6 4 SUCCESS TRANSFORMER CORPORATION BERHAD CORPORATE INFORMATION BOARD OF DIRECTORS Independent Non-Executive Director, Chairman Chiam Tau Meng Managing Director Tan Ah Tan Ah Ping Executive Director Pan Kim Foon Woh Way Cheang (Resigned w.e.f. 27 April 2015) Independent Non-Executive Director Yoong Kah Yin (Appointed on 18 July 2014) Non-Independent Non-Executive Director Yeoh Kim Wah Wong Poh Chee Alternate Director to Pan Kim Foon Tan Chung Ling AUDIT COMMITTEE Chairman Chiam Tau Meng Members Yeoh Kim Wah Yoong Kah Yin (Appointed as Committee Member on 18 July 2014) NOMINATION COMMITTEE Chairman Chiam Tau Meng Members Yeoh Kim Wah Yoong Kah Yin (Appointed as Committee Member on 18 July 2014) REMUNERATION COMMITTEE Chairman Chiam Tau Meng Members Tan Ah Tan Ah Ping Yoong Kah Yin (Appointed as Committee Member on 18 July 2014) COMPANY SECRETARY Pang Kah Man (MIA 18831) REGISTERED OFFICE 3-2, 3 rd Mile Square No.151, Jalan Kelang Lama Batu 3½ Kuala Lumpur Tel : (603) Fax : (603) CORPORATE OFFICE No. 3, 5 & 7, Jalan TSB 8 Taman Industri Sungai Buloh Sungai Buloh Selangor Darul ehsan Tel : (603) / (603) Fax : (603) / ses@success.com.my Website : AUDITORS Crowe Horwath (AF 1018) Chartered Accountants Muar Office, 8 (2 nd Floor) Jalan Pesta 1/1 Taman Tun Dr. Ismail Jalan Bakri, Muar Johor, Malaysia SHARE REGISTRAR Symphony Share Registrars Sdn Bhd Level 6, Symphony house Block D13, Pusat Dagangan Dana 1 Jalan PJU 1A/ Petaling Jaya Selangor Darul Ehsan Tel : (603) Fax : (603) PRINCIPAL BANKERS AMBANK (M) BeRhAD CIMB BANK BeRhAD CITIBANK BeRhAD hong LeONG BANK BeRhAD hsbc BANK MALAYSIA BeRhAD STANDARD ChARTeReD BANK MALAYSIA BeRhAD united OVeRSeAS BANK (MALAYSIA) BeRhAD STOCK EXCHANGE LISTING Main Market of BuRSA MALAYSIA SeCuRITIeS BeRhAD

7 SUCCESS TRANSFORMER CORPORATION BERHAD 5 CHAIRMAN & MANAGING DIRECTOR S STATEMENT Dear Shareholders, On behalf of the Board of Directors and the Management of Success Transformer Corporation Berhad (STC), we are pleased to present the Annual Report and Audited Financial Statements for the financial year ended 31 December FY2014 Financial Performance Success Transformer Corporation Berhad ( STC or the Group ) recorded a revenue of RM million for the financial year ended 2014 compared to RM million in the previous year. This figure represents an increase of RM million or 15.08% compared to previous financial year s performance. With this figure, we recorded a profit after tax (PAT) of RM million for the financial year ended 2014 compared to RM million in the previous year, represents a decrease of RM 6.6 million or 20.38%. This is due to the poor performance from process equipment segment. Earnings per share stands at sen as compared to sen per share for the financial year ended The net tangible assets per share of RM 2.32 per share, up from RM 2.13 in the previous year. Dividends For the financial year ended 31 December 2014, the Board of Directors has paid an interim tax-exempt cash dividend of 8% equivalent to 4 sen per ordinary share, amounting to a total of RM 4.67 million. This cash dividend was declared on 19 March 2014 and subsequently paid on 13 June In respect of the financial year ending 31 December 2015, the Board of Directors has declared an interim single-tier dividend of 8% equivalent to 4 sen per ordinary share on 24 April It is an intention of the Board to continue justify shareholder s investments with future dividends.

8 6 SUCCESS TRANSFORMER CORPORATION BERHAD CHAIRMAN & MANAGING DIRECTOR S STATEMENT (CONT D) Lighting and Transformers 2014 was filled with macro-economic uncertainties. The volatile market coupled with lower consumer confidence generated moderate profit and this trend may continue into We aim to stay resilient despite these uncertainties in the coming year. With our strong network of business partners around the world, we will make it a priority to maintain our performance in Our resilience lies in the strong foundation of quality, network and relationship our brands have with our business partners. All business units will continue to focus on strengthening their respective sales distribution network and trade presence worldwide. Our flagship lighting division, house brand NIKKON, is our pride. Designing, integrating, manufacturing and supplying industrial lighting products have always been our expertise and with this expertise we are also producing custom-made energy efficient lighting design for our customers. Currently we are actively exporting our lighting range to more than 40 countries, tapping the global market. QPS, the trusted brand in transformers provides the most comprehensive range of low voltage transformers in Malaysia and we also manufacture transformers and industrial power products such as automatic voltage stabilisers, power line conditioners and energy-saving lumens regulators. The demand for eco-friendly LED lighting products and transformers are also boosting sales for the Group. Our Research and Development (R&D) initiatives are working hard to ensure all our products are made with standards that meet international requirements. The existing range of environmentally-products is well-received by our clients as consumers are becoming increasingly concerned about preserving Mother Nature. Our dedicated sales and marketing team are well equipped with comprehensive knowledge and expertise to deliver quality products. Our expertise stems from technical acumen and offering the customers streamlined services, more product and choices while maintaining our high standards of quality. The success of the Group also lies within its most valuable asset its Human Resources. As an expanding business, the Group s strength lies in their talented employees. Each plays a crucial part in sustaining its operations and growth. Each and every achievement of the Group is attributed to the management and staff as a whole. Another part of the Group s success also stems from the long term beneficial relationships with our business partners. Without these important links, the Group may not be able to achieve its current status and standing in the business world. We are grateful and will continue to work hard in establishing even more business relationships for our future endeavours. It is with the on-going consolidation of each business unit s strengths and effort, the Group will continue to invest in the establishment and promotion of in-house brands which are already on par with global players. The Group s Own Design Manufacturing (ODM) and Own Brand Model (OBM) already include the established NIKKON, QPS, SES, LIKO and SUPER-LITE brands all of which have already made their mark among local and export clients. S W LED Street Lantern S2125 LED Floodlight up to 125W S W LED Highbay K W LED Floodlight General Application: * Municipal Lighting * Highway & Expressway Lighting General Application: * Government Facilities Lighting * Airport Lighting * Corporate Campus Lighting * Residential & Public Venue Lighting * Municipal Lighting General Application: * Industrial & Warehouse Lighting * Retail & Grocery Lighting * Showroom Lighting * Parking Building Lighting General Application: * Airport Lighting * Sport Field Lighting * Stadium Lighting * Government Facilities Lighting

9 SUCCESS TRANSFORMER CORPORATION BERHAD 7 CHAIRMAN & MANAGING DIRECTOR S STATEMENT (CONT D) S439 30W Solar Street Lantern Power Transformer Up to 2000KVA SES Current Transformer GC Series Golf Car Battery Charger Outlook and Prospects Process Equipment The process equipment turned in to poor performance due to cost over-run of the Sabah Ammonia Urea ( SAMUR ) project. This project, although contributing to a significant portion of the revenue for 2014 but has dampened our results. The lessons learned at SAMUR has enabled us to be more cautious and prudent in bidding for a number of packages in the Refinery and Petrochemical Integrated Development project (RAPID) and other associated facilities in Pengerang, South of Johor. We have also made inroads by securing bids with regard to the airport terminal facilities and waste treatment industry, the former involving the fabrication of passenger boarding bridges for a neighbouring country. In the oil and gas sector we also see opportunities for the maintenance and upkeep of plants with major oil companies cutting down their capital expenditure and temporarily reducing production activities. We believe that the above shall compensate for our traditional market that comprises the oil palm, chemical and food industry, which are perceived to be challenging in the coming year. Moving forward, we are confident that SEB will continue to deliver satisfactory performances in The market outlook for the year 2015 is expected to remains challenging. The Group will continue through the challenges foreseen in 2015 but with meticulous efforts to expand and to seek new business opportunities and operations. The Group will remain vigilant and respond accordingly to the changing times and market environment. We are confidence that the Group shall deliver satisfactory performance in year Acknowledgements On behalf of the Board of Directors and Management, we would like to take this opportunity to thank Mr Woh Way Cheang for his contribution and long service to the Group. We also would like to wish him well in his future endeavour. We wish to express our heartfelt thanks to the Group s employees who have worked hard to achieve this year s results. We would also like to express our appreciation to our valued customers, suppliers, business associates and stakeholders who have given their unwavering support and loyalty. Finally, we wish to record our gratitude to the Board of Directors for their contribution towards success of the company. CHIAM TAU MENG Chairman TAN AH TAN AH PING Managing Director

10 8 SUCCESS TRANSFORMER CORPORATION BERHAD CORPORATE SOCIAL RESPONSIBILITY STATEMENT NIKKON LED Expo Thailand 2014 It is the culture of the Group to be committed and focused in implementing initiatives to uplift staff morale and the community it serves. The Group truly believes that corporate social responsibility is the key to its business sustainability and success. With an aim to build a stable working culture and a pleasant atmosphere for employees of STC, the Group focuses on staff education and by providing a safe and pleasant working environment. This helps foster better interaction and teamwork among staff. Training, social and sports activities are also an integral part of our employee s working experience. NIKKON Light + Building Frankfurt 2014 We are also strong advocates in honesty and integrity as we believe that this is a prerequisite for strong and lasting relationships. Our base aim is to continuously maintain the strong bonds with our customers, suppliers and business associates. This will translate to satisfaction for our customers with quality products at attractive prices with timely deliveries. We also place great importance in social and community services with contributions in cash and in kind to charitable and welfare organisations. In the coming year, we will continue to place great importance to give back to the society and environment while striving for profitability. Annual Badminton Tournament 2014 SUCCESS Annual Dinner 2014

11 SUCCESS TRANSFORMER CORPORATION BERHAD DIRECTORS PROFILE 9 Mr Chiam Tau Meng, aged 62, a Malaysian, is an Independent Non- Executive Director of STC. He was appointed to the Board of the Company on 15 August 2008 and became the Chairman on 18 July Mr Chiam Tau Meng graduated with a Bachelor of Commerce Degree majoring in Accountancy from University of Otago, Dunedin, New Zealand in He is a Chartered Accountant of the Chartered Accountants Australia and New Zealand and the Malaysian Institute of Accountants. He started his career in 1976 as Finance Manager of Tolley Industries Ltd (New Zealand) and in 1979, he joined Malaysian Containers (1974) Berhad as Finance Manager cum Company Secretary. In 1984, he joined Menang Corporation (M) Berhad as General Manager of Corporate Services and in 1989 he joined Bee Hin Holdings Sdn. Bhd. as General Manager of Corporate Finance in charge of the reconstruction scheme under Section 176 of the Companies Act 1965 on Kuala Lumpur Industries Berhad. In 1992, he was in the management consultancy practice of an international accounting organisation and in 1994, he set up his own consulting practice namely CTM Consulting. Presently, he is also an Independent Non-Executive Director of Menang Corporation (M) Berhad, Seremban Engineering Berhad and Hovid Berhad. CHIAM TAU MENG Independent Non-Executive Director and Chairman TAN AH TAN AH PING Managing Director Mr Tan Ah Tan Ah Ping, aged 64, a Malaysian, the founder of STM Group, is the Managing Director of STC. He was appointed to the Board of the Company on 25 October 2004 and he is also a member of the Remuneration Committee. In 1978, Mr. Tan Ah Tan Ah Ping formed Syarikat Success Electronics Trading. In 1990, SETM was incorporated to take over the business activities of Success Electronics Trading. In 1995, STM became the holding company of SETM. In 1998, he established STMKT to focus on the local marketing activities of the STM Group and in 1999, DS was established and OMI was incorporated in In 2007, STC has diversified its business through the acquisition of equity in SEB. Currently, he is responsible for the overall management, strategic business planning and development, decision making and technical advisory of the STC Group. He has been appointed as a member of nomination committee of SEB. He also assumes the role of Managing Director or Director of most subsidiaries of STC. Madam Pan Kim Foon is the wife and Ms Tan Chung Ling is the daughter of Mr. Tan Ah Tan Ah Ping. Madam Pan Kim Foon, aged 60, a Malaysian, is an Executive Director of STC. She was appointed to the Board of the Company on 25 October She advises the STC Group on business strategies and planning, purchasing and management matters. She has more than 36 years of working experience in the Electrical Industrial Equipment Industry. She started her career with Syarikat Success Electronics Trading and established Success Electronics Trading in 1980 to take over the manufacturing and trading of electrical apparatus of Syarikat Success Electronics Trading and was responsible for sales activities. Together with a few shareholders, her husband and her incorporated SETM 1990 to take over the business activities of Success Electronics Trading and she was appointed as Executive Director of SETM. She oversees the management functions, strategic business plannning and development of the STC Group. She is also the Executive Director in subsidiaries of STC, namely STM, STMKT, SESP and NKIL. PAN KIM FOON Executive Director Mr. Tan Ah Tan Ah Ping is the husband and Ms Tan Chung Ling is the daughter of Madam Pan Kim Foon.

12 10 SUCCESS TRANSFORMER CORPORATION BERHAD DIRECTORS PROFILE (CONT D) YEOH KIM WAH Non-Independent Non-Executive Director Mr Yeoh Kim Wah, aged 62, a Malaysian, was appointed to the Board of the Company on 7 March 2008 as a Non-Independent Non-Executive Director. He is also a member of the Audit Committee and Nomination Committee. He is an entrepreneur with more than 40 years of extensive knowledge and experience in the electrical supplies industry. He is one of the founders of Syarikat See Wide Letrik Group of Companies, a well established electrical trading group throughout Malaysia. He is primarily responsible for business development and implementation of marketing strategies of these companies. Presently, he holds numerous directorships and business interests in several other private companies, such as Syarikat See Wide Letrik Sdn Bhd, See Wide Industries Sdn Bhd and NSK. Mr Yoong Kah Yin, aged 56, a Malaysian, is an Independent Non-Executive Director of STC. He was appointed to the Board of the Company on 18 July Currently, he is also the member of the Audit Committee, Nomination Committee and Remuneration Committee. Mr Yoong Kah Yin graduated with a BA (Hons) in Accounting and Finance and a MBA from City University, London. He has 28 years experience in corporate banking, stockbroking and investment banking. He was a Co-Head of Institutional Sales with SBB Securities from 1997 to He was also a Co-Head of a team in CIMB Investment Bank from 2000 to His team won the Top Performing Team Award in CIMB Investment Bank for seven consecutive years from 2006 to He came in Seventh Position in Euromoney/Asiamoney Poll 2001 for Best Salesperson in Malaysia. YOONG KAH YIN Independent Non-Executive Director

13 SUCCESS TRANSFORMER CORPORATION BERHAD 11 DIRECTORS PROFILE (CONT D) Ms Wong Poh Chee, aged 47, a Malaysian, was appointed as NonIndependent Non-Executive Director of STC on 4 March Prior to her appointment, she was the Alternate Director to Mr Wong Choon Cheon since 21 August She ceased to be the Alternate Director following the resignation of Mr Wong Choon Cheon as a Director of STC on 4 March She obtained her Bachelor of Science majoring in Marketing from California State University, Fresno, United States of America in She began her career in 1990 as an Administrative Supervisor with the Investor s Business Daily in Los Angeles, United States where she was responsible for managing and supervising the entire Telemarketing/Marketing Department for the financial newspaper company. In 1991, she returned to Malaysia and joined Seremban Engineering Sdn Bhd ( SESB ) as an Administrative Assistant. She was appointed as a Director of SESB and promoted to the position of Operations and Administrative Manager in She was responsible for overseeing the entire Information Technology, operations, administrative, human resources, finance and marketing functions of SESB. SESB was later converted to Seremban Engineering Berhad (SEB) prior to its listing on the Main Market of Bursa Malaysia Securities Berhad in May 2010, a 65%-owned subsidiary of our Company. She is currently an Executive Director of SEB. She holds various positions within Federation of Malaysian Manufacturers ( FMM ) including Seremban Regional Chairman of FMM from 2001 to 2004, Small and Medium Industries Committee Chairman of FMM from 2001 to She was the 1st woman Chairman of FMM Negeri Sembilan Branch and also the 1st woman council of FMM HQ from November 2006 until October She is the committee member of FMM Strategic Policies Committee and Finance Committee. She also started another Division under FMM - Woman In Business ( WIB ) to promote more entrepreneur women participation in manufacturing industries. She was the 1st Chairman of the WIB Committee of FMM since April 2009 until October Thereafter, she continuous to be the committee member of FMM WIB. She was also a member of the Steering Committee of the World Congress Chambers, which was held from 3 to 5 June She was awarded the DNS (Darjah Setia) by the Negeri Sembilan Yang Dipertuan Besar in She is the Director of SEPEN, SEBR, ACE and NESB. She is also the substantial shareholder of WTECH, which in turn is a substantial shareholder of our Company. WONG POH CHEE Non-Independent Non-Executive Director Ms Tan Chung Ling, aged 38, a Malaysian. She was appointed as the Alternate Director of STC to Madam Pan Kim Foon on 17 February TAN CHUNG LING Alternate Director to Pan Kim Foon In 1999, she obtained her Bachelor of Commerce from Murdoch University, Australia and subsequently in 2001 she obtained her Masters of Electronic Commerce from Curtin University, Australia. Within the same year, she started her career at SETM as International Sales Coordinator. Subsequently in 2003, she was transferred internally to STMKT and was promoted to Business Development Manager of STMKT in Currently, she is responsible for business strategic planning, market planning and developing new markets. Subsequently, she was also appointed as Director of SEBR, BIHM, BIHS, and BNJ. Mr. Tan Ah Tan Ah Ping is the father and Madam Pan Kim Foon is the mother of Ms Tan Chung Ling.

14 12 SUCCESS TRANSFORMER CORPORATION BERHAD DIRECTORS PROFILE (CONT D) OTHER INFORMATION Conflict of Interest Save as disclosed in the Circular to shareholders dated 26 May 2015, none of the Directors has any conflict of interest with the business of the company. Convictions None of the Directors has convicted of any offences within the past 10 years other than traffic offences. Attendance of Directors at Board Meetings There were five (5) Board Meetings held during the financial year ended 31 December 2014 and all Directors have attended these meetings, except Mr Yeoh Kim Wah and Mr Yoong Kah Yin (refer to page 16 for number of meetings attended by each director).