VITROX CORPORATION BERHAD

(Incorporated in Malaysia)
Company No: 649966-K

INTERIM FINANCIAL REPORT

FOR THE THIRD QUARTER

ENDED 30 SEPTEMBER 2016
 VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

CONTENTS

Page
Condensed Consolidated Statement of Comprehensive Income………………….. 1
Condensed Consolidated Statement of Financial Position……..………………….. 2
Condensed Consolidated Statement of Changes in Equity...……………………… 3
Condensed Consolidated Statement of Cash Flows…..……………………………. 4
Notes to the Interim Financial Report…………………………………………………. 5-10
VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(The figures have not been audited)

INDIVIDUAL QUARTER CUMULATIVE QUARTER

Preceding year Preceding year
Current period corresponding Current period corresponding
quarter quarter to date period
30-Sep-16 30-Sep-15 30-Sep-16 30-Sep-15
Note RM'000 RM'000 RM'000 RM'000

Revenue 57,647 40,058 170,318 112,231

Other operating income 1,865 9,289 2,850 15,364

Operating expenses (43,413) (29,713) (130,826) (84,824)

Finance costs (100) (24) (199) (74)

Profit before tax B14 15,999 19,610 42,143 42,697

Tax income/(expense) (126) (3,886) 3,748 (7,694)

Profit for the period 15,873 15,724 45,891 35,003

Other comprehensive income:

Currency translation of
differences for the foreign
operation (12) 90 (86) (38)

Other comprehensive income

for the period (12) 90 (86) (38)

Total comprehensive income

for the period 15,861 15,814 45,805 34,965

Earnings Per Ordinary Share

attributable to ordinary equity
holders of the Company (sen)
- Basic 6.78 6.75 19.61 15.03
- Diluted 6.76 6.72 19.55 14.97

The Condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the audited financial statements
for the year ended 31 December 2015 and the accompanying explanatory notes attached to the interim financial statements.

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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(The figures have not been audited)

As at As at
30-Sep-16 31-Dec-15
RM'000 RM'000
(unaudited) (audited)
ASSETS
Non-current assets
Property, plant and equipm ent 50,709 35,820
Investm ent properties 600 600
Investm ent in club mem bers hip - at cost 91 91
Development expenditure 2,376 3,085
53,776 39,596
Current assets
Inventories 70,465 56,555
Trade and other receivables 81,475 76,498
Prepayments 26,276 19,372
Current tax assets 3,231 48
Cash and cash equivalents 100,677 63,985
282,124 216,458
TOTAL ASSETS 335,900 256,054

EQUITY AND LIABILITIES

Capital and reserves attributable to equity
holders of the Company
Share capital 23,427 23,342
Reserves 225,113 185,578
Total equity 248,540 208,920

Non-current liabilities
Term loan - secured 26,416 2,179
Deferred tax liabilities 1,348 1,356
Deferred incom e on governm ent grant 3,635 3,353
Total non-current liabilities 31,399 6,888

Current liabilities
Trade and other payables 49,561 29,713
Dividend payable 0 3,501
Term loan - secured 4,335 1,724
Financial liabilities at fair value through profit or loss 370 157
Advance paym ent from customers 1,695 1,186
Current tax liabilities 0 3,965
Total current liabilities 55,961 40,246
Total liabilities 87,360 47,134

TOTAL EQUITY AND LIABILITIES 335,900 256,054

Net ass ets value per share attributable to

ordinary equity holders of the parent (sen) 106.09 89.50

The Condensed Consolidated Statement of Financial Position should be read in conjunction with the audited financial statements for the
year ended 31 December 2015 and the accompanying explanatory notes attached to the interim financial statements.
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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(The figures have not been audited)
Share Currenc y
Share Share Option Translation Retained Total
Capital Premium Reserve Reserve Profits Equity
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
P e riod e nde d 3 0 S e p te mbe r 2 0 16
Balanc e as at 1January 2016 23,342 8,332 1,887 62 175,297 208,920

Profit for the financ ial period 0 0 0 0 45,891 45,891

Currenc y translation differenc es for foreign operation
(representing other c omprehensive inc ome for the financ ial period) 0 0 0 (86) 0 (86)
Total c omprehensive income for the financ ial period 0 0 0 (86) 45,891 45,805

Share- based payments 0 0 423 0 0 423

Issuance of shares pursuant to ESOS 85 2,541 (1,048) 0 0 1,578
Dividends 0 0 0 0 (8,186) (8,186)
Total transac tion with owners 85 2,541 (625) 0 (8,186) (6,185)

Balanc e as at 30 September 2016 23,427 10,873 1,262 (24) 213,002 248,540

P e riod e nde d 3 0 S e p te mbe r 2 0 15

Balanc e as at 1January 2015 23,274 6,303 1,378 62 143,803 174,820

Profit for the financ ial period 0 0 0 0 35,003 35,003

Currenc y translation differenc es for foreign operation
(representing other c omprehensive inc ome for the financ ial period) 0 0 0 (38) 0 (38)
Total c omprehensive income for the financ ial period 0 0 0 (38) 35,003 34,965

Share- based payments 0 0 1,146 0 0 1,146

Issuance of shares pursuant to ESOS 66 1,974 (811) 0 0 1,229
Dividends 0 0 0 0 (9,326) (9,326)
Total transac tion with owners 66 1,974 335 0 (9,326) (6,951)

Balanc e as at 30 September 2015 23,340 8,277 1,713 24 169,480 202,834

The Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the audited financial statements for the year ended 31 December 2015 and the accompanying explanatory notes
attached to the interim financial statement.

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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(The figures have not been audited)
Period ended Period ended
30-Sep-16 30-Sep-15
CASH FLOW FROM OPERATING ACTIVITIES RM'000 RM'000
Prof it before tax 42,143 42,697
Adjustment f or:
Allow ance f or slow moving inventories 124 0
Amortisation and depreciation 3,746 3,011
Amortisation of deferred income (804) (470)
Impairment loss on loans and receivables 568 0
Interest expense 199 74
Interest income (593) (776)
(Gain)/Loss on disposal of property, plant and equipment (1) 1
Reversal of impairment loss on loans and receivables (32) (326)
Share-based payments 423 1,146
Unrealised loss on f inancial instruments at f air value
through prof it or loss 370 1,586
Unrealised gain on f oreign exchange (5,950) (15,460)
Operating profit before w orking capital changes 40,193 31,483
Change in:
Inventories and receivables (25,412) (15,845)
Payables and advance payments 20,071 (6,755)
Financial instruments at fair value through profit or loss (158) (1,016)
Cash generated from operations 34,694 7,867
Tax paid (3,577) (2,500)
Tax refunded 169 116
Net cash f rom operating activities 31,286 5,483

CASH FLOW FROM INVESTING ACTIVITIES

Grant received 314 1,071
Interest received 590 778
Proceed from disposal of property, plant and equipment 5 1
Purchase of property, plant and equipment (17,892) (2,291)
Net cash used in investing activities (16,983) (441)

CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid (11,688) (13,980)
Interest paid (201) (74)
Issue of shares 1,578 1,229
Repayment of term loans (2,208) (921)
Term loan raised 29,000 0
Net cash f rom/(used in) financing activities 16,481 (13,746)

Currency translation differences 5,908 7,543

Net increase in cash and cash equivalents 36,692 (1,161)
Cash and cash equivalents at beginning of period 63,985 60,629
Cash and cash equivalents at end of period 100,677 59,468

Cash and cash equivalents consist of:-

Highly liquid investments 11,685 20,415
Term deposits w ith licensed banks 3,074 17,567
Cash and bank balances 85,918 21,486
100,677 59,468

The Condensed Consolidated Statement of Cash flows should be read in conjunction with the audited financial statements for the year
ended 31 December 2015 and the accompanying explanatory notes attached to the interim financial statements.

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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
A. NOTES TO THE INTERIM FINANCIAL REPORT

A1 Basis of preparation of Interim Financial Report

The interim financial report is unaudited and has been prepared in compliance with MFRS 134, “Interim
Financial Reporting”, issued by the Malaysian Accounting Standards Board (“MASB”) and the disclosure
requirements as set out in Appendix 9B of the Listing Requirements of Bursa Malaysia Securities Berhad
for the Main Market (“Main Market Listing Requirement”). This Condensed Report also complies with IAS
34: Interim Financial Reporting issued by the International Accounting Standards Board (“IASB”).

The Interim financial report should be read in conjunction with the audited financial statements for the
year ended 31 December 2015. These explanatory notes attached to the interim financial report provide
an explanation of events and transactions that are significant to an understanding of the changes in the
financial position and performance of the Group since the year ended 31 December 2015.

The accounting policies and methods of computation adopted for the interim financial report are
consistent with those adopted by the Group in the audited financial statements for the year ended 31
December 2015, except for the adoption of new Malaysian Financial Reporting Standards (“MFRS”) that
are effective for financial period beginning on or after 1 January 2016. The adoption of new MFRSs does
not have any significant impacts on the financial statements.

A2 Seasonal or cyclical factors

The Group’s operation is dependent on the cyclical trend of the semiconductors and electronics
industries.

A3 Unusual items affecting assets, liabilities, equity, net income or cash flows
There were no unusual items affecting assets, liabilities, equity, net income or cash flows of the Group for
the period under review.

A4 Material changes in estimates

There were no changes in nature and amount of estimates reported in prior financial years which may
have a material effect in the period under review.

A5 Debts and equity securities

There were no other issuance and repayment of debts and equity securities, share buy-backs, share
cancellations, shares held as treasury shares and resale of treasury shares for the quarter under review
except for:-

During the current quarter, the Company issued 267,800 and 101,100 new ordinary shares of RM0.10
each at average exercise price of RM1.63 and RM2.02 respectively pursuant to the Employee Shares
Option Scheme (“ESOS”).

A6 Dividend paid

In respect of the financial year ended 31 December 2015, the Company paid the following dividends:-

i) the special dividend of 3.0 sen per share tax exempt amounting to RM7,017,065 and final
dividend of 0.5 sen per share tax exempt amounting to RM1,169,511 for the financial year ended
31 December 2015 were paid 25 July 2016.

ii) an interim dividend of 1.5 sen per share tax exempt amounting to RM3,501,343 for the financial
year ended 31 December 2015 were paid on 22 January 2016.

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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
A. NOTES TO THE INTERIM FINANCIAL REPORT (cont’d)

A7 Segment reporting
No segment reporting has been prepared as the Group is principally engaged in development and
production of machine vision inspection products.

A8 Material events subsequent to the end of the quarter

There were no materials events subsequent to the end of the current reporting period that have not been
reflected in the financial statements for the said period.

A9 Changes in the composition of the Group

There were no material changes in the composition of the Group during the period under review.

A10 Contingent assets or contingent liabilities

There were no contingent assets or liabilities for the Group since the previous financial year ended 31
December 2015 to the date of this report.

A11 Capital commitments

Authorised contracted capital commitments not provided for in the interim financial statements as at 30
September 2016 is RM62,364,000.

A12 Significant related party transactions

There were no significant related party transactions during the period under review.

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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
B. DISCLOSURE REQUIREMENTS AS SET OUT IN APPENDIX 9B OF BURSA SECURITIES
MAIN MARKET LISTING REQUIREMENTS

B1 Review of performance
The Group achieved revenue of RM57.65 million for the period under review against RM40.06 million in
the corresponding period of preceding year, representing an increase of 44%. The increase in revenue
was contributed from the increase in revenue recorded for Machine Vision System (MVS), Automated
Board Inspection (ABI) and Electronics Communication System (ECS). Revenue from MVS, ABI and
ECS have recorded an increase of 32%, 53% and 22% respectively against the corresponding period of
preceding year. The increase was mainly due to higher demand from widen customer base and product
range.

The Group achieved a profit before tax of RM16.00 million against profit before tax of RM19.61 million in
the corresponding quarter, representing a decrease of 18%. Lower profit before tax recorded was mainly
due to impact of strengthening of USD in the corresponding quarter last year. Correspondingly, the
Group’s profit after tax is at RM15.87 million against profit after tax of RM15.72 million in the
corresponding quarter. The profit after tax remained flat was mainly due to lower provision for taxation
with the pioneer status granted by MITI.

B2 Variation of results against immediate preceding quarter

The Group recorded revenue and profit before tax of RM57.65 million and RM16.00 million respectively
for the current quarter under review against revenue and profit before tax of RM56.64 million and
RM15.13 million respectively for the immediate preceding quarter. Both revenue and profit before tax
have recorded a slight increase of 2% and 6% respectively. The slight increase in revenue was
contributed from the increase in revenue recorded for MVS and ABI.

B3 Prospects for the final quarter of current financial year ending 31 December 2016
The Board is optimistic on the business prospect for the financial year 2016. We will continue to focus on
market expansion activities, customer relationship building and product innovation to grow our business
further in the remaining financial year.

B4 Profit forecast, profit guarantee and internal targets

The Group did not provide any profit forecast, profit guarantee and internal targets in any public
document or any announcements made.

B5 Tax (income)/expense
INDIVIDUAL QUARTER CUMULATIVE QUARTER
Preceding year Preceding year
Current year corresponding Current year corresponding
quarter quarter period period
30-Sep-16 30-Sep-15 30-Sep-16 30-Sep-15
RM'000 RM'000 RM'000 RM'000
Tax based on the results
for the period under review 126 3,886 (3,748) 7,694

A wholly-owned subsidiary of VCB, ViE Technologies Sdn.Bhd. (“ViE”) has been granted pioneer status
by MITI for a period of 5 years to undertake activities relating to design, development and manufacture of
embedded high density electronic modules. The incentive commenced from 1 January 2013 to 31
December 2017.The current provision of income tax is in respect of certain non-business income and
non-tax exempted income generated from non-pioneer products of ViE.

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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
B. DISCLOSURE REQUIREMENTS AS SET OUT IN APPENDIX 9B OF BURSA SECURITIES
MAIN MARKET LISTING REQUIREMENTS (cont’d)

B5 Tax (income)/expense (cont’d)

A wholly-owned subsidiary of VCB, ViTrox Technologies Sdn.Bhd. (“VTSB”) has been granted pioneer
status by MITI for a period of 5 years to undertake activities relating to development and production of
embedded intelligent robotic inspection system and machine with M2M connectivity and predictive
analytic capability for semiconductor and electronics industries. The incentive commenced from 17 June
2015 to 16 June 2020 (extendable for further 5 years). The current provision of income tax is in respect
of certain non-business income and non-tax exempted income generated from non-pioneer products of
VTSB.

B6 Status of corporate proposals announced

There was no corporate proposal announced and not completed as at the date of this report.

B7 Group borrowings
As at As at
30-Sep-16 31-Dec-15
RM'000 RM'000
Short term borrowings - secured
Foreign currency term loan in USD 4,335 1,724

Long term borrowings - secured

Foreign currency term loan in USD 26,416 2,179
30,751 3,903

B8 Financial instruments
The carrying amounts of receivables, cash and cash equivalents and payables which are short-term in
nature or repayable on demand are reasonable approximations of fair values.

The fair value of term loan is measured using present value technique by discounting the expected future
cash flows using observable current market interest rates for similar liabilities (i.e. Level 2). The fair value
measured is considered to be reasonably close to the carrying amount reported as the observable
current market interest rates also approximate to the effective interest rate of term loan.

The fair value of forward exchange contracts were quoted by the financial institutions, which normally
measured the fair values using present value technique by discounting the differences between
contractual forward prices and observable current market forward prices using risk-free interest rate (i.e.
Level 2).

As at 30 September 2016, the Group’s outstanding derivatives are as follows:-

Contract value Fair value

RM'000 RM'000

Forward foreign exchange contracts

- Less than 1 year 29,806 370

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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
B. DISCLOSURE REQUIREMENTS AS SET OUT IN APPENDIX 9B OF BURSA SECURITIES
MAIN MARKET LISTING REQUIREMENTS (cont’d)

B9 Breakdown of realised and unrealised profits or losses of the Group

As at As at
30-Sep-16 30-Jun-16
RM'000 RM'000

Total retained profits of the Company and its subsidiaries:-

- Realised 213,344 198,667
- Unrealised 4,795 3,133
218,139 201,800
Less : Consolidation adjustments (5,137) (4,671)
Total group retained profits as per consolidated accounts 213,002 197,129

B10 Material litigation

As the date of this announcement, the Group is not engaged in any material litigation and the Board of
Directors do not have any knowledge of any proceedings pending or threatened against the Group.

B11 Dividends
No dividend was proposed and declared by the Company in current quarter under review.

B12 Earnings per share

INDIVIDUAL QUARTER CUMULATIVE QUARTER

Preceding year Preceding year
Current year corresponding Current year corresponding
quarter quarter period period
30-Sep-16 30-Sep-15 30-Sep-16 30-Sep-15

Net profit attributable to

shareholders (RM'000) 15,873 15,724 45,891 35,003

Weighted average number of

shares for computing basis
earnings per share ('000) 234,036 232,889 234,036 232,889

Basic earnings per share (sen) 6.78 6.75 19.61 15.03

Weighted average number of

shares for computing diluted
earnings per share ('000) 234,758 233,826 234,758 233,826

Diluted earnings per share (sen) 6.76 6.72 19.55 14.97

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VITROX CORPORATION BERHAD
(Incorporated in Malaysia)
Company No: 649966-K

QUARTERLY REPORT ON RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2016
B. DISCLOSURE REQUIREMENTS AS SET OUT IN APPENDIX 9B OF BURSA SECURITIES
MAIN MARKET LISTING REQUIREMENTS (cont’d)

B13 Auditors’ report on preceding annual financial statements

The auditors’ report on the financial statements for the year ended 31 December 2015 was not subject to
any qualification.

B14 Notes to the statement of comprehensive income

Profit Before Tax

INDIVIDUAL QUARTER CUMULATIVE QUARTER

Preceding year Preceding year
Current year corresponding Current year corresponding
quarter quarter period period
Profit before tax is arrived 30-Sep-16 30-Sep-15 30-Sep-16 30-Sep-15
at after charging:- RM'000 RM'000 RM'000 RM'000

Allowance for
s low moving inventories 124 0 124 0
Amortisation and depreciation 1,305 1,007 3,746 3,011
Interes t expense 100 24 199 74
(Gain)/Loss on financial ins trum ents
at fair value through profit or loss
- realis ed (18) 457 (530) 970
- unrealis ed 420 1,319 370 1,586
(Gain)/Loss on foreign exchange
- realis ed (711) (1,431) 9,303 134
- unrealis ed (1,670) (9,090) (5,950) (15,460)
Loss on disposal of
property, plant and equipment 0 0 0 1

and crediting:-
Amortisation of deferred income 292 151 804 470
Gain on dis posal of
property, plant and equipment 1 0 1 0
Grant related to income 1,373 (143) 1,373 836
Interes t income 178 248 593 776
Rental incom e 5 8 20 23
Reversal of im pairment loss on
loans and receivables 0 128 32 326

Save as disclosed above, the other items as required under Appendix 9B, Part A (16) of the Bursa
Securities Main Market Listing Requirements are not applicable.

B15 Authorisation for issue

The interim financial statements are authorised for issue by the Board of Directors on 17 November 2016.

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