You are on page 1of 136

JADI IMAGING HOLDINGS BERHAD • ANNUAL REPORT 2018

JADI IMAGING HOLDINGS BERHAD


(Company No. 526319-P)
JADI IMAGING HOLDINGS BERHAD
No. 1, Jalan Peguam U1/25A, Seksyen U1, (Company No. 526319-P)
Hicom-Glenmarie Industrial Park,
40150 Shah Alam, Selangor, Malaysia. ANNUAL REPORT 2018
Tel : (603) 7804 0333 Fax : (603) 7804 3211

w w w. j a d i . c o m . m y

JADIarCov(18)_FINAL.indd 1 24/07/2018 2:50 PM


Contents
2 Notice of Annual General Meeting

7 Corporate structure

8 Corporate information

9 Chairman’s statement

11 Management discussion and analysis

14 Directors’ profile

18 Profile of Key senior management

19 Audit and Risk management committee report

21 Statement to shareholders
In Relation To The Proposed Renewal Of Share Buy-Back Authority
For The Company To Purchase Its Own Ordinary Shares

26 Sustainability statement

28 Corporate Governance overview statement

42 Statement on risk management and internal control

47 Additional Compliance information

48 Statement on directors’ responsibility


In Respect Of The Preparation Of The Financial Statements

49 Statutory financial statements

129 List of properties

130 ANALYSIS OF SHAREHOLDINGS

PROXY FORM
2 Jadi Imaging Holdings Berhad Annual Report 2018

notice of
annual general meeting

NOTICE IS HEREBY GIVEN that the Seventeenth Annual General Meeting of Jadi Imaging Holdings Berhad (“Company”
or “Jadi”) will be held at Function Room 1, Mezzanine Floor, Setia City Convention Centre, No. 1, Jalan Setia Dagang
AG U13/AG, Setia Alam Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan on Wednesday, 29 August 2018 at
10.00 a.m. for the following purposes:-

AGENDA

A. Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 31 (Please see Note 2)
March 2018 together with the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors who are retiring in accordance with Article
128 of the Constitution of the Company:-

2.1 Dato’ Sri Liew Lee Leong (Ordinary Resolution 1)


2.2 Mr Lim Chee Khang (Ordinary Resolution 2)

Mr Chan Chee Lian, Mr Yeoh Chui En and Madam Sim Swee Yoke, who are (Please see Note 3)
retiring pursuant to Article 123 of the Constitution of the Company, will be
retiring at the conclusion of this Seventeenth Annual General Meeting.

3. To approve the payment of the Directors’ fees of RM290,000 for the financial (Ordinary Resolution 3)
year ending 31 March 2019.

4. To approve the payment of the Directors’ benefits of RM20,000 for the (Ordinary Resolution 4)
period from 29 August 2018 until the next Annual General Meeting.

5. To re-appoint Messrs PKF as Auditors of the Company and to authorise the (Ordinary Resolution 5)
Directors to fix their remuneration.

B. Special Business

To consider and if thought fit, to pass, with or without modifications, the following
Ordinary Resolutions:

6. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTIONS 75 AND 76 (Ordinary Resolution 6)


OF THE COMPANIES ACT 2016 [Please see Note 4(i)]

“THAT, pursuant to Sections 75 and 76 of the Companies Act 2016 (“the


Act”) and the Constitution of the Company and subject to the approvals from
Bursa Malaysia Securities Berhad and other relevant government/regulatory
authorities, where such approval is necessary, the Directors of the Company
be and are hereby empowered pursuant to Sections 75 and 76 of the Act
to issue shares in the Company at any time until the conclusion of the next
Annual General Meeting and upon such terms and conditions and for such
purposes as the Board of Directors may, in their absolute discretion, deem
fit provided that the aggregate number of shares to be issued during the
preceding 12 months does not exceed 10% of the total number of the issued
shares (excluding treasury shares) of the Company for the time being AND
THAT the Board of Directors be and are also empowered to obtain approval
for the listing of and quotation for the additional shares so issued on Bursa
Malaysia Securities Berhad.”
Jadi Imaging Holdings Berhad Annual Report 2018 3

notice of annual general meeting

7. PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY FOR THE (Ordinary Resolution 7)


COMPANY TO PURCHASE ITS OWN SHARES UP TO 10% OF THE TOTAL [Please see Note 4(ii)]
NUMBER OF ISSUED SHARES OF THE COMPANY (“Proposed Renewal
of Share Buy-Back Authority”)

“THAT, subject always to the Companies Act 2016 (“the Act”), the provisions
of the Constitution of the Company, the Main Market Listing Requirements
of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the approvals
of all relevant governmental and/or regulatory authorities, the Company be
and is hereby authorised, to the fullest extent permitted by law, to purchase
such amount of ordinary shares in the Company as may be determined by the
Directors of the Company from time to time through Bursa Securities upon
such terms and conditions as the Directors may deem fit and expedient in
the interest of the Company provided that:-

(a) the aggregate number of shares purchased does not exceed ten percent
(10%) of the total number of issued shares of the Company as quoted
on Bursa Securities as at the point of purchase;

(b) the maximum funds to be allocated by the Company for the purpose
of purchasing its shares shall not exceed the total retained earnings
of the Company at the time of the purchase(s); and

(c) the Directors of the Company may decide to:-

i. retain the shares purchased as treasury shares for distribution


as dividend to the shareholders and/or resale on the market of
Bursa Securities and/or for cancellation subsequently; and/or

ii. cancel the shares so purchased; and/or

iii. retain part of the shares so purchased as treasury shares and


cancel the remainder in the manner as allowed by the Act.

THAT such authority shall commence upon passing of this resolution and
shall continue to be in force until:-

(a) the conclusion of the next Annual General Meeting of the Company
following the forthcoming Annual General Meeting at which such
resolution was passed at which time it will lapse, unless by ordinary
resolution passed at that meeting, the authority is renewed, either
unconditionally or subject to conditions; or

(b) the expiration of the period within which the next Annual General
Meeting of the Company after the date is required by law to be held;
or

(c) revoked or varied by ordinary resolution passed by the shareholders


in general meeting;

whichever occurs first.


4 Jadi Imaging Holdings Berhad Annual Report 2018

notice of annual general meeting

AND THAT authority be and is hereby given unconditionally and generally


to the Directors of the Company to take all such steps as are necessary
or expedient (including without limitation, the opening and maintaining
of central depository account(s) under the Securities Industry (Central
Depositories) Act, 1991, and the entering into of all other agreements,
arrangements and guarantee with any party or parties) to implement, finalise
and give full effect to the aforesaid purchase with full powers to assent to
any conditions, modifications, revaluations, variations and/or amendments
(if any) as may be imposed by the relevant authorities and with the fullest
power to do such acts and things thereafter (including without limitation, the
cancellation or retention as treasury shares of all or any part of the purchased
shares) in accordance with the Act, the provisions of the Constitution of the
Company and the Main Market Listing Requirements of Bursa Securities and/
or guidelines of Bursa Securities and all other relevant governmental and/or
regulatory authorities.”

C. Other Business

8. To transact any other business of which due notice shall have been given in
accordance with the Constitution of the Company and the Companies Act
2016.

By Order of the Board

WONG WAI FOONG (MAICSA 7001358)


LIM POH YEN (MAICSA 7009745)
THAM YIN TONG (MAICSA 7049718)
Company Secretaries

Kuala Lumpur
31 July 2018

NOTES:-

1. Notes on Appointment of Proxy

(i) A member entitled to attend and vote at the general meeting is entitled to appoint not more than two (2) proxies
to attend and vote in his place. There shall be no restriction as to the qualification of the proxy.

A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member
to speak at the meeting.

Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion
of his holdings to be represented by each proxy.

(ii) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act
1991 (“SICDA”), it may appoint not more than two (2) proxies in respect of each Securities Account it holds with
ordinary shares of the Company standing to the credit of the said Securities Account.
Jadi Imaging Holdings Berhad Annual Report 2018 5

notice of annual general meeting

(iii) Where a member of the Company is an Exempt Authorised Nominee (referring to an authorised nominee defined
under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA) which
holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”),
there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each
omnibus account it holds.

(iv) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly
authorised in writing or, if the appointor is a corporation, either under the corporation’s seal or under the hand
of an officer or attorney duly authorised.

(v) The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed
or a notarially certified copy of such power of attorney and any authority, shall be deposited at the Registered
Office of the Company at No. 1, Jalan Peguam U1/25A, Seksyen U1, Hicom-Glenmarie Industrial Park, 40150
Shah Alam, Selangor Darul Ehsan not less than forty eight (48) hours before the time appointed for holding the
meeting or any adjourned meeting as the case may be.

(vi) For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting
Bursa Malaysia Depository Sdn Bhd to make available to the Company pursuant to Article 74 of the Constitution
of the Company and Paragraph 7.16(2) of the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad, a Record of Depositors as at 23 August 2018 and only a Depositor whose name appears on such Record
of Depositors shall be entitled to attend this meeting.

2. Audited Financial Statements for the financial year ended 31 March 2018

The Audited Financial Statements in Agenda 1 is meant for discussion only as the approval of shareholders is not
required pursuant to the provision of Section 340(1)(a) of the Companies Act 2016. Hence, this Agenda is not put
forward for voting by shareholders of the Company.

3. Retirement of Directors

Mr Chan Chee Lian, Mr Yeoh Chui En and Madam Sim Swee Yoke, who are retiring in accordance with Article 123 of
the Constitution of the Company, have indicated that they do not wish to seek re-election at this Seventeenth Annual
General Meeting of the Company, respectively. Hence, they shall cease to be Directors of the Company at the conclusion
of the Seventeenth Annual General Meeting, respectively.

4. Explanatory Notes

(i) Ordinary Resolution 6 – Authority to Issue Shares pursuant to Sections 75 and 76 of the Companies Act 2016

The proposed Ordinary Resolution 6 is a renewal of the general mandate pursuant to Sections 75 and 76 of the
Companies Act 2016 (“General Mandate”) obtained from the shareholders of the Company at the previous Annual
General Meeting and, if passed, will empower the Directors of the Company to issue new shares in the Company
from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does
not exceed 10% of the total number of the issued shares (excluding treasury shares) of the Company for the
time being.

The General Mandate, unless revoked or varied by the Company in general meeting, will expire at the conclusion
of the next Annual General Meeting of the Company.
6 Jadi Imaging Holdings Berhad Annual Report 2018

notice of annual general meeting

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to
the Directors at the Sixteenth Annual General Meeting held on 25 August 2017 and which will lapse at the
conclusion of the Seventeenth Annual General Meeting.

The General Mandate will provide flexibility to the Company for any possible fund raising activities, including
but not limited to further placing of shares, for purpose of funding current and/or future investment project(s)
and working capital, acquisition and/or for issuance of shares as settlement of purchase consideration.

(ii) Ordinary Resolution 7 – Proposed Renewal of Share Buy-Back Authority

The proposed Ordinary Resolution 7, if passed, will provide a mandate for the Company to purchase its own
shares up to 10% of the total number of issued shares of the Company and shall lapse at the conclusion of the
next Annual General Meeting unless authority for the approval is obtained from the shareholders of the Company
at a general meeting. Please refer to the Statement to Shareholders in relation to the Proposed Renewal of Share
Buy-Back Authority attached in the Annual Report 2018 of the Company for further details.
Jadi Imaging Holdings Berhad Annual Report 2018 7

corporate
structure

100%
Jadi Imaging Solutions
Sdn. Bhd.

100% 100%
Jadi Imaging Technologies
Jadi Chemicals Sdn. Bhd.
Sdn. Bhd.

100%
International Cartridge
Supplies Sdn. Bhd.

100% 100%
Jadi Imaging Technologies Zhuhai Jadi Imaging
(Suzhou) Co., Ltd. Technologies Co., Ltd.
Jadi Imaging Holdings Berhad

100%
Jadi Imaging Supplies
(US), Inc.

100%
Jadi Imaging Solutions
(UK) Limited

Our Vision
To be an integrated company which provides solutions for the global imaging supplies industry.

Our Mission
Customer satisfaction in every decision.
8 Jadi Imaging Holdings Berhad Annual Report 2018

corporate
information

BOARD OF DIRECTORS
Liew Kim Siong Yeoh Chui En
Executive Chairman / Group CEO Independent Non-Executive Director 1
Eu Lan Eng Sim Swee Yoke
Executive Director / General Manager 3 Independent Non-Executive Director 1
Liew Kit Chia Yuet Yoong
Executive Director / Sales & Marketing Manager Independent Non-Executive Director 2
Liew Hock Yee Dato’ Sri Liew Lee Leong
Executive Director / Accountant Independent Non-Executive Director 4
Chan Chee Lian Lim Chee Khang
Senior Independent Non-Executive Director 1 Independent Non-Executive Director 4

AUDIT AND RISK MANAGEMENT COMMITTEE SHARE REGISTRAR


Dato’ Sri Liew Lee Leong (Chairman) 4
Tricor Investor & Issuing House Services Sdn. Bhd.
Lim Chee Khang (Member) 4 Unit 32-01, Level 32, Tower A
Yeoh Chui En (Member) 1 Vertical Business Suite, Avenue 3
Sim Swee Yoke (Member) 1 Bangsar South
Chan Chee Lian (Member) 1
No. 8, Jalan Kerinchi
Chia Yuet Yoong (Member) 2
59200 Kuala Lumpur
Wilayah Persekutuan
REMUNERATION COMMITTEE
Malaysia
Lim Chee Khang (Chairman) 4 Telephone No. : (603) 2783 9299
Dato’ Sri Liew Lee Leong (Member) 4 Facsimile No. : (603) 2783 9222
Chan Chee Lian (Member) 1
Sim Swee Yoke (Member) 1
Chia Yuet Yoong (Member) 2 PRINCIPAL BANKERS
HSBC Bank Malaysia Berhad
NOMINATION COMMITTEE Head Office
Dato’ Sri Liew Lee Leong (Chairman) 4 2, Leboh Ampang
Lim Chee Khang (Member) 4 50100 Kuala Lumpur
Sim Swee Yoke (Member) 1 Citibank Berhad
Chan Chee Lian (Member) 1
Level 42, Menara Citibank
Chia Yuet Yoong (Member) 2
165, Jalan Ampang
50450 Kuala Lumpur
COMPANY SECRETARIES
Wong Wai Foong (MAICSA 7001358) AUDITORS
Lim Poh Yen (MAICSA 7009745)
Tham Yin Tong (MAICSA 7049718) PKF
Level 33, Menara 1MK
REGISTERED OFFICE Kompleks 1 Mont’ Kiara
No.1, Jalan Kiara, Mont’ Kiara
No. 1, Jalan Peguam U1/25A
Seksyen U1 50480 Kuala Lumpur
Hicom-Glenmarie Industrial Park Telephone No. : (603) 6203 1888
40150 Shah Alam Facsimile No. : (603) 6201 8880
Selangor Darul Ehsan
Telephone No. : (603) 7804 0333 STOCK EXCHANGE
Facsimile No. : (603) 7804 3211
Main Market of Bursa Malaysia Securities Berhad
1 Expressed intention not to seek for re-election
at the forthcoming Annual General Meeting on
29 August 2018
STOCK CODE
2 Resigned on 18 May 2018 7223
3 Resigned on 18 July 2018
4 Appointed on 20 July 2018
Jadi Imaging Holdings Berhad Annual Report 2018 9

chairman’s
statement

On behalf of the Board of Directors, I am pleased to present


the Annual Report of Jadi and its subsidiaries (“Group”) for
the financial year ending 31 March 2018.

The aftermarket toner industry remained extremely challenging amidst the changing
market dynamics and evolving competitive landscape. For the financial year ending 31st
March 2018, the Group reported a total sales revenue of RM55.7 million - a decline
of 27.6% as compared to RM76.9 million recorded in the preceding 12-months ending
31st March 2017. Against the backdrop of an increasingly competitive environment,
net loss after tax for the Group has narrowed from RM17.2 million in the financial year
ending 31st March 2017 to RM10.7 million in the financial year ending 31st March 2018.

The Group’s sales volume for the year under review has declined as a result of the following factors:

1. A drop in demand for bulk toner among traditional cartridge remanufacturers outside China as their business
model have changed from cartridge remanufacturing to a focus on trading and distribution of Chinese-made
finished cartridges in their respective markets;
2. An oversupply of bulk toner in the aftermarket toner industry which was caused by excessive capacity-building
by new and existing toner makers in China over the past few years; and
3. Changing consumer behaviour in favour of greater digitization which led to a reduction in hardcopy printing
worldwide.

Of all the above-mentioned factors, the main reason for the Group’s overall drop in sales during the year under review
is primarily because of the growing concentration of cartridge manufacturing activities in China at the expense of other
export markets outside China. This is evidenced by data collected by the export statistics department in China which
saw the export volume of Chinese-made finished cartridges growing by 20% year-on-year for 2018 over the preceding
year. The changing market dynamics where traditional cartridge remanufacturers outside China are evolving into
cartridge trading and distribution businesses has therefore adversely affected the Group’s bulk toner sales to export
markets except China.

Despite the change in market dynamics, the Group has taken necessary actions to mitigate further decline in bulk toner
sales outside China. Among some of the on-going measures include:

1. Boosting sales, marketing and technical support efforts through its sales office located in Zhuhai to grow bulk
toner sales to Chinese cartridge manufacturers;
2. Formulating and introducing new core bulk toner products faster than its competitors in order to penetrate major
accounts, eg. large Chinese cartridge manufacturers;
3. Focusing on downstream activities such as promoting and distributing monochrome and colour bulk toners, as
well as finished cartridges which are marketed under its own private-label Jaditoner.com through its own online
store and third-party e-commerce platforms across three distribution hubs located in Malaysia, China, and the
UK; and
4. Seeking and developing alternative sources as well as lower cost raw materials to further cost down its bulk toner
products in order to compete effectively with other toner manufacturers.

With the growing concern over sustainability of its environment, the Chinese government is imposing stricter
environmental regulations which saw the authorities clamping down hard on errant China-based manufacturers in
favour of promoting cleaner and more high-technology industries in its country. In light of these developments in China,
the Group foresees that the increasingly tough operating environment is expected to apply an upward pressure on the
operating costs of Chinese toner manufacturers, thus putting it in a more favourable position to compete in the industry.
Also, further consolidation in the aftermarket toner industry as observed from the recent announcement by Mitsubishi
Kagaku Imaging (MKI) of Japan to cease its conventional toner production in March 2019 would ease competition and
assist to normalize supply-demand imbalances.
10 Jadi Imaging Holdings Berhad Annual Report 2018

CHAIRMAN’S STATEMENT

Moving forward, to reduce its dependence on the aftermarket toner industry, the Group has also initiated its
diversification strategy by working on the research and development of water-based coating polymer emulsions for
ink, paint, glove and other applications. This new chemical business is expected to start contributing to the Group’s
overall sales revenue in the financial year ending 31st March 2019.

In line with our commitment to social and environmental sustainability, the Group will strive to incorporate the use
of renewed waste materials in its products, reduce the generation of waste from its operations, and treat or recycle
water/solvent used in its production. Where environmental friendly solutions are not readily available because of
commercial inviability and/or technological limitation, the Group will seek for the best possible alternative with least
negative consequence on the community and its surrounding environment.

As a leading toner manufacturer in the cartridge remanufacturing industry, the Group also takes cognizance of its
role and responsibility in encouraging the use of remanufactured cartridges to reduce plastic wastes from heading to
landfills. Emphasis on sustainable product design and the use of environmentally sound ingredients will be included
as part of the criteria in any new product development.
Jadi Imaging Holdings Berhad Annual Report 2018 11

management discussion
and analysis

CORPORATE PROFILE

Jadi Imaging Holdings Berhad, through its overseas subsidiaries, is a world-class independent toner manufacturer.
The Group is principally involved in the development, formulation and manufacturing of toners for laser printers,
photocopiers, facsimile machines and multi-function office equipment.

The Company was founded in 1993 and is headquartered in Hicom-Glenmarie Industrial Park, Shah Alam, Selangor,
Malaysia, where its main manufacturing and R&D facilities are located. Its overseas offices and distribution centers
are located at Zhuhai, China and Alton, United Kingdom.

OVERVIEW

The FY2018 has been another challenging year for the Group. The business environment in USA and European markets
became more competitive as the manufacturers in China have changed their business strategy with lower pricing.
To maintain and increase the Group’s share in the global market, the Group has ventured downstream to expand its
business into the e-commerce sector that consists of mainly the distribution of bulk toners and toner cartridges to
the end-users. It is still in the stage of implementation but there was an increase in sales and good feedback from the
market in FY2018.

In addition to the online business, the Group has put in place plans to increase its local market share. Arising from the
implementation of this strategic plan, the local market sales has increased in FY2018.

Since 2013, the Group has ventured into backward integration of manufacturing toner resin to improve price
competitiveness in the industry. During current year, the Group has started selling toner resin besides consuming
internally. The sales contributed marginally to the Group’s revenue for FY2018 as it is at the initial stage of the Group’s
venture into the upstream market as well.

FINANCIAL REVIEW

Financial Indicators 31 March 2018 31 March 2017 Variance

Revenue RM’000 55,746 76,950 -27.56%

Loss before tax RM’000 (10,410) (16,896) 38.39%

Loss attributable to equity holders RM’000 (10,650) (17,193) 38.06%


 of the Company

Net assets per share RM 0.14 0.15 -6.67%

Total borrowings RM’000 1,895 17,221 -89.00%

Net debt to Capital and Reserves attributable Times – 0.05 -100.00%


 to equity holders of the Company
12 Jadi Imaging Holdings Berhad Annual Report 2018

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL REVIEW (cont’d)

Revenue

For the financial year under review, the Group revenue decreased by 27.6% to RM55.7 million from RM76.9 million as
compared to the preceding financial year. The lower turnover was due to the decline in demand for bulk toner in the
USA and European markets even though the sales in the local market and e-Commerce increased compared to last
financial year. The decline in the demand for bulk toner was partly caused by the higher cost pressure in remanufactured
cartridges compared to the Chinese-made finished cartridges.

Gross loss margin was 2.8% in current year as compared to the gross profit margin of 9.9% in the preceding financial
year mainly due to lower productivity resulted in higher production cost.

Costs and expenses

31 March 2018 31 March 2017 Variance


RM’000 RM’000

Administrative expenses 9,015 9,939 -9.30%


Selling and distribution costs 2,620 2,659 -1.47%
Other operating expenses 5,039 13,319 -62.17%

16,674 25,917 -35.66%

Total costs and expenses of the Group in the current year decreased by 35.7% as compared to the preceding year. The
difference arose from lower impairment of plant and machineries of RM1.4 million in current year as compared to RM11
million in the preceding year after assessing the value in use of the assets which reduced to their recoverable amount.

Loss Before Tax (“LBT”)

The Group’s LBT of RM10,410 million was lower by RM6.5 million when compared to the LBT for the preceding year
of RM16.9 million. The difference was mainly due to higher impairment of plant and machineries in previous year
as compared to the current year. Disposal of the Group’s property at No.1, Jalan Peguam U1/25A Hicom-Glenmarie
Industrial Park Seksyen U1, Shah Alam, Selangor, Malaysia contributed net gain of RM5.8 million and part of the
proceeds was utilised to fully retire the bank revolving credit loan, hence the reduction in the Group’s finance charges.

Gearing

The bank revolving credit loan of RM10 million was fully repaid, which reduced the total borrowings for the Group to
RM1.9 million as at 31 March 2018 as compared to RM17.2 million as at 31 March 2017.
Jadi Imaging Holdings Berhad Annual Report 2018 13

MANAGEMENT DISCUSSION AND ANALYSIS

FUTURE OUTLOOK

The Group expects growth in the China cartridge market due to the change of business model globally from cartridge
remanufacturing to the distribution of Chinese-made finished cartridges. Moving forward, the Group intends to increase
our market share in this segment through partnership with distributors and dealers. Our e-Commerce segment has
shown an encouraging improvement in sales during the year. The Group intends to expand this segment through the
increase of online distribution hubs.

The Group will continue to invest in research and development as we always believe that it is important to improve
our product quality and offerings so as to increase our market share in the bulk toner and cartridges businesses. As a
result, we are able to introduce the latest toner with higher than market standard quality which we expect will delay
the price war with our competitors by taking the opportunity as the first player to introduce it in the market.

In view of the rising manufacturing costs, tight labour market and challenging business environment, the Group will
continue to manage its costs and optimize productivity through increasing operational and manufacturing efficiencies.

Appreciation

On behalf of the Board of Directors, we would like to express our thanks and appreciation to our shareholders, business
partners, customers and all the employees for all your supports and hard work. We look forward to your continuous
support in the years ahead.
14 Jadi Imaging Holdings Berhad Annual Report 2018

directors’
profiles

The profiles of the Board of Directors of Jadi Imaging Holdings Berhad are as follows:

Liew Kim Siong, Executive Chairman / Group CEO

Liew Kim Siong, Malaysian, male, aged 60, was appointed to the Board as Executive Director of Jadi Imaging Holdings
Berhad on 9 April 2002. He is presently the Executive Chairman and Group CEO of Jadi Imaging Holdings Berhad. He
has resigned as a member of Remuneration Committee on 23 February 2018.

He obtained a Diploma in Accounting and Finance from the Association of Chartered Certified Accountants (“ACCA”),
UK before pursuing a Master in Business Administration from University of Strathclyde, Scotland in 1995.

In 1984, he established Office Business Systems Sdn. Bhd., a company involved in the remanufacturing, sales and
servicing of copiers and assumed the position of Managing Director. Subsequently in 1992, he established Technitone
(M) Sdn. Bhd., a toner manufacturing company and was appointed Managing Director of the company. As a result of
a change in partnership arrangements, he established Jadi Imaging Technologies Sdn. Bhd. in 1999 to acquire all the
assets of Technitone (M) Sdn. Bhd. and was appointed Chief Executive Officer of the company. With over 33 years
of experience in the copier and toner industries, he has been instrumental in the success, growth and development
of the Jadi Imaging Group. As the Group Chief Executive Officer, he is responsible for the strategic direction as well
as business development of the Group.

Eu Lan Eng, Executive Director / General Manager

Eu Lan Eng, Malaysian, female, aged 60, was appointed to the Board as Executive Director of Jadi Imaging Holdings
Berhad on 9 April 2002.

She completed her secondary school education at Sekolah Menengah Kebangsaan Sultan Abdul Aziz, Kuala Selangor,
Selangor where she obtained her Malaysian Certificate of Education in 1975.

She has approximately 22 years of experience in the toner industry. Her career started in 1988 when she joined Chang
Export Trading House as a Secretary/Coordinator before leaving in 1992 to join Segani Freight Services Sdn. Bhd.,
a freight forwarding company, as an Executive. Subsequently in 1995, she left to take up the position of Executive
in Office Business Systems Sdn. Bhd., a company involved in the remanufacturing, sales and servicing of copiers. In
1997 she left to join Technitone (M) Sdn. Bhd. as a Marketing Executive and was promoted to Marketing Manager in
1999. In 2000, she assumed the position as Marketing Manager with Jadi Imaging Technologies Sdn. Bhd. and was
later promoted to Deputy General Manager of the company in 2002. In the same year, she was appointed General
Manager of Jadi Imaging Technologies Sdn. Bhd. Her main responsibilities include overseeing the overall operations
of the Group including the UK’s entity. She has resigned as an Executive Director on 18 July 2018.

Liew Kit, Executive Director / Sales & Marketing Manager

Liew Kit, Malaysian, male, aged 26, was appointed to the Board as Executive Director of Jadi Imaging Holdings Berhad
on 1 June 2017.

He obtained a Joint Honors Degree in the field of Business and Marketing Management and Branding from the
University of Gloucestershire, before completing his Master in Business Administration in Coventry University with
a Distinction in 2015.

Since 2012, he had participated in various roles throughout Jadi Imaging Technologies Sdn. Bhd. including Business
Development, E-Commerce, Marketing and Sales respectively. Appointed as the Marketing Manager in January 2017,
his main responsibilities include overseeing the Group’s marketing division. In January 2018, he was appointed as the
Group’s Sales & Marketing Manager overseeing the sales and marketing division.
Jadi Imaging Holdings Berhad Annual Report 2018 15

DIRECTORS’ PROFILES

Liew Hock Yee, Executive Director / Accountant

Liew Hock Yee, Malaysian, female, aged 33, was appointed to the Board as an Executive Director of Jadi Imaging
Holdings Berhad on 1 June 2017.

She obtained her Bachelor of Commerce, majoring in Accounting and Finance in 2006 from University of Melbourne,
Australia. She became a member of the Certified Practising Accountants of Australia (CPA) and a member of the
Malaysian Institute of Accountants (MIA) in 2010.

She started her career as an auditor with Ernst & Young in 2007. Subsequently, she joined Jadi Imaging Technologies
Sdn. Bhd. in 2010 as an Accountant with primary responsibilities in ensuring financial reports are prepared in accordance
with the statutory and regulatory requirements.

Chan Chee Lian, Senior Independent & Non-Executive Director

Chan Chee Lian, Malaysian, male, aged 67, was appointed to the Board as a Senior Independent Non- Executive
Director of Jadi Imaging Holding Berhad on 8 January 2015. He is the Chairman of the Remuneration Committee,
as well as a member of the Audit and Risk Management Committee and the Nomination Committee. He has been
redesignated as a member of Remuneration Committee on 20 July 2018.

He had completed School Certificate in Clifford School (Form 1-5) in 1968 and Institute of Marketing, London in 1970.

He started his career path from Equatron Malaysia which was under Inchape Group – a conglomerate under the “British
Empire”. His first role was a salesman for Ricoh range of copier in 1971. In 1975, he was promoted to head of Ricoh
Word Processing (IT), Ricoh Table Offset Systems and Government Accounts. He was instrumental in the formation of
Wywy Malaysia in 1980, in his capacity as General Manager & Director. In 1990, he was seconded to Wywy Singapore
Headquarter as Marketing Director to start the Lifestyle Businesses in Singapore and Malaysia, i.e. Wywy Lifestyle
retail outlets “The Wywy Shop” and family entertainment centres “Wywy WonderSpace”, Chilie Restaurant were
created. In 1999, he joined Ericsson Malaysia as Vice President to expand the mobile phone business of Ericsson for
acquiring a local production facility to build phones for the world. In 2001, he rejoined Wywy Malaysia to streamline
operations ready to exit the business to a Singapore-based funds manager – Prime Partner. He was then appointed
as President and CEO of Wywy Malaysia. In November 2013, Wywy Group was acquired by another party and he has
resigned on 26 April 2017. Currently, he is appointed as a Vistage Chair.

Yeoh Chui En, Independent & Non-Executive Director

Yeoh Chui En, Malaysian, male, aged 63, was appointed to the Board as an Independent Non-Executive Director of
Jadi Imaging Holdings Berhad on 12 June 2015. He is a Chairman of the Audit and Risk Management Committee. He
has been redesignated as a member of Audit and Risk Management Committee on 20 July 2018.

He received his initial training with KPMG Kuala Lumpur and qualified as a CPA in 1981 and moved on to specialise in
tax. In 1988, he was recruited by Schlumberger, an oil field services contractor, to work on international tax assignments
in Singapore, Dubai, Paris and Houston over a period of 16 years. He returned to Kuala Lumpur in 2004 as Head of
Schlumberger Asia Tax Department.

In 2009, he took early retirement and worked for Technip, a French engineering company in Kuala Lumpur until his
retirement in June 2014.

Currently he is involved on a pro bono basis in business for transformation projects among poor communities.

He is also a member of the Malaysian Institute of Certified Public Accountants (“CPA”) and CPA Australia.
16 Jadi Imaging Holdings Berhad Annual Report 2018

DIRECTORS’ PROFILES

Sim Swee Yoke, Independent & Non-Executive Director

Sim Swee Yoke, Malaysian, female, aged 58, was appointed to the Board as an Independent Non-Executive Director
of Jadi Imaging Holdings Berhad on 3rd August 2015. She is the Chairman of the Nomination Committee, as well as a
member of the Audit and Risk Management Committee, and the Remuneration Committee. She has been redesignated
as a member of Nomination Committee on 20 July 2018.

She holds a Bachelor Degree of Arts & Social Science from University Malaya, a Masters of Arts (Management &
Organisational Analysis) from Warwick Business School of the United Kingdom, and is also a certified coach with the
International Coaching Federation (ICF).

She belongs to the new league of human resource practitioner and has close to 33 years of commercial experience in
the real estate/hospitality, management consulting and financial services (insurance and asset management) industry.
She started her career in marketing communications. Her working experience were gained in both developed and
emerging markets include start-ups in China, India and Vietnam. She has also worked regionally in Hong Kong, Tokyo,
Indonesia, Maldives, Singapore and the Philippines.

Her core expertise covers partnering with business leaders in setting-up new offices, information technology shops, as
well as sale and acquisition of businesses. She has extensive experience in human resource transformation, managing
and delivering shared services practice, and human resource & information technology outsourcing and change
management.

She is skillful in organisational development, talent acquisition as well as building bench strength and human capital
for organisations. She has been a key leader in the insurance sector and has introduced the best in class practices
when the insurance sector was undergoing critical skills shortage in the last decade. She has also led cross-cultural
teams, and is adept in providing human resource solutions for organisations experiencing change especially in the
context of mergers and acquisitions.

Prior to her current appointment, her last employment was with Great Eastern Life Assurance (M) Berhad as its Senior
Vice-President of Human Capital. She has also served as the President of the Association of Insurance Employers (AIE),
and as Vice President on the Malaysian Employers Federation (MEF), and as a Director of the Malaysian of Employers
Federation Academy (MEFA).

In her spare time, she contributes her time as a Mentor Coach for the ICAEW Malaysia Women In Leadership (WIL)
programme and writes for Leadernomics, a human resource pullout section of the Star Publications (M) Berhad. She
is also an Independent Director for Focus Point Holdings Berhad.

Dato’ Sri Liew Lee Leong, Independent & Non-Executive Director

Dato’ Sri Liew Lee Leong, Malaysian, male, aged 61, was appointed to the Board as an Independent Non-Executive
Director of Jadi Imaging Holdings Berhad on 20 July 2018. He has been appointed as the Chairman of the Audit and
Risk Management Committee and Nomination Committee on 20 July 2018.

Dato’ Sri Liew Lee Leong is an Entrepreneur Chartered Accountant and holds a Master degree from Henley Management
College, United Kingdom, a corporate advisor with many years of extensive work experience with professional firms
and multi-national companies in brand repositioning, corporate advisory, insolvency, Mergers & Acquisitions to include
corporate tax planning, investigative reviews and VAT/GST related exercises; and has since assisted in numerous
corporate turnarounds and related due diligence corporate exercises.

Dato’ Sri Liew Lee Leong is the President of McMillan Woods Global, an independent member firm of McMillan Woods
Global network of which the global Head Office is based in London, United Kingdom.
Jadi Imaging Holdings Berhad Annual Report 2018 17

DIRECTORS’ PROFILES

With his extensive work knowledge, Dato’ Sri Liew Lee Leong is a regular writer of technical articles and a frequent
speaker at various professional seminars, conferences and training programmes. He is a Trustee of the Malaysian
Accountancy Research & Education Foundation and was a Council member of the Malaysian Institute of Accountants
and the Chartered Taxation Institute of Malaysia. He is also an adjudicator for the National Annual Corporate Report
Awards for the past many years.

Dato’ Sri Liew Lee Leong is a member of The Malaysian Institute of Accountants (MIA), Chartered Tax Institute of
Malaysia (CTIM), Institute of Internal Auditors of Malaysia (IIAM) and a fellow member of The Association of Certified
Chartered Accountants (UK) (ACCA).

He holds licences for audit, tax and insolvency certificates with the Ministry of Finance (MOF) and is a member of
various Committees of MIA & CTIM.

Currently, Dato’ Sri Liew Lee Leong is a Senior Independent Director of Seni Jaya Corporation Berhad and assumes
the chairmanship of both the Audit and Nomination Committees.

Lim Chee Khang, Independent & Non-Executive Director

Lim Chee Khang, Malaysian, male, aged 52, was appointed to the Board as an Independent Non-Executive Director
of Jadi Imaging Holdings Berhad on 20 July 2018. He has been appointed as the Chairman of the Remuneration
Committee on 20 July 2018.

He serves as Independent Non-Executive Director of Seni Jaya Corp Bhd. He was appointed on 28 September, 2011.
He is a member of the Audit and Nomination Committees and Chairman of the Remuneration Committee.

He is a member of the Honourable Society of Lincoln’s Inn and has graduated with Bachelor of Laws (Honours) degree
from London School of Economics and Political Science, London. He was called to the Bar of England and Wales in
1992. He has been practising as an advocate & solicitor in Malaysia since 1993. Mr Lim Chee Khang co-founded
Messrs. Jal & Lim, Advocates & Solicators in 1996. He is currently the Partner of Jal & Lim.

Notes:-

1. Liew Kim Siong is the father of Liew Kit and Liew Hock Yee. Save as disclosed herein, none of the Directors have any
family relationship with any director and/or major shareholder of the Company.
2. None of the Directors have any business arrangement with the Company in which he has personal interest.
3. None of the Directors have any conflict of interest with the Company.
4. None of the Directors have any conviction for offences within the past 5 years.
5. None of the Directors have any sanction and/or penalty imposed on them by any regulatory body during the financial
year ended 31 March 2018.
6. Please refer to the Analysis of Shareholdings of this Annual Report for details of the Directors’ shareholdings in the
Company.
7. The details of attendance of the Directors at the Board Meetings are set out on page 34 of the Corporate Governance
Overview Statement in this Annual Report.
8. Chan Chee Lian, Yeoh Chui En and Sim Swee Yoke have expressed intention not to seek for re-election at the forthcoming
Annual General Meeting on 29 August 2018.
9. Dato’ Sri Liew Lee Leong and Lim Chee Khang were appointed on 20 July 2018.
18 Jadi Imaging Holdings Berhad Annual Report 2018

profile of
key senior management

The Management of the Group is headed by the Group Chief Executive Officer, Mr Liew Kim Siong, and he is assisted
by the Executive Directors, i.e. Mr Liew Kit, Ms Liew Hock Yee, and the following key senior management:

Koh Chin Chin, Finance Manager

Koh Chin Chin, Malaysian, female, aged 48, was appointed as Finance Manager on 18 August 2016. She is a Chartered
Accountant by profession, a member of the Malaysian Institute of Accountants and an Associate of The Chartered
Institute of Management Accountants, United Kingdom. She has gained extensive working experience in the areas of
auditing, accounting, taxation, GST, corporate affairs and finance, having worked with public listed companies with
various industries prior to joining the Group.

Notes:-

1. None of the Key Senior Management hold directorships in any other public companies and listed issuer.
2. None of the Key Senior Management have any family relationship with any director and/or major shareholder of the
Company.
3. None of the Key Senior Management have any business arrangement with the Company in which he has personal
interest.
4. None of the Key Senior Management have any conflict of interest with the Company.
5. None of the Key Senior Management have any conviction for offences within the past 5 years.
6. None of the Key Senior Management have any sanction and/or penalty imposed on them by any regulatory body during
the financial year ended 31 March 2018.
Jadi Imaging Holdings Berhad Annual Report 2018 19

audit and risk management


committee report

The Board of Directors is pleased to present the Report of the Audit and Risk Management Committee (“ARMC”) for
the financial year under review.

1. COMPOSITION AND MEETINGS

ARMC currently has four (4) members, who are all Independent Non-Executive Directors as follows:-

Name Number of Attendance Remark

Yeoh Chui En – Chairman 5/5


(Independent Non-Executive Director)

Chan Chee Lian – Member 5/5


(Senior Independent Non-Executive Director)

Sim Swee Yoke – Member 5/5


(Independent Non-Executive Director)

Chia Yuet Yoong – Member 5/5 Resigned on 18 May 2018


(Independent Non-Executive Director)

(Total: 5 meetings during the year)

The Group’s external auditors, certain designated members of the management and internal auditors also
attended some of the meetings, at the invitation of the committee.

The details of the training attended by the committee are set out in the Corporate Governance Overview
Statement appearing on pages 35 and 36 of this Annual Report.

The Terms of Reference of ARMC is available for reference in the Group’s website at www.jadi.com.my.

2. SUMMARY OF WORK performed by THE AUDIT AND RISK MANAGEMENT COMMITTEE

During the financial year, the Committee carried out its duties and responsibilities in accordance with its terms
of reference. The Committee has discharged its duties as set out below:

Financial Results

• Reviewed and recommended to the Board for approval, the quarterly and statutory financial results
of the Company and its subsidiaries, including related announcements to ensure adherence to listing
requirements, the relevant laws, regulations and applicable accounting standards as well as highlighted
significant issues and any accounting adjustments to the Board.

External Audit

• Reviewed the external auditors’ audit plan and reports on the audit of the statutory financial statements
of the Group.
• Reviewed the independence, objectivity and effectiveness of the external auditors in meeting their
responsibilities, including non-audit services and corresponding fees.
• Reviewed and recommended the reappointment of external auditors and audit fees to the Board for its
approval.
• Met the external auditors twice during the financial year ended 31 March 2018 in the absence of Executive
Management.
20 Jadi Imaging Holdings Berhad Annual Report 2018

AUDIT AND RISK MANAGEMENT COMMITTEE REPORT

2. SUMMARY OF WORK performed by THE AUDIT AND RISK MANAGEMENT COMMITTEE


(Cont’d)

Internal Audit

• Reviewed and approved the internal audit plan for the Group.
• Reviewed the results of the internal audit reviews with the internal auditors.
• Reviewed the adequacy of the scope, function, competency and resources of the internal audit functions.

Risk Management

• Overseeing the Group’s internal control system and risk management. ARMC continuously monitor and
review effectiveness of the internal control with the support of internal auditor and Risk Management
Committee (“RMC”).

Compliance

• Reported to the Board on significant issues and findings discussed during the ARMC meetings with
applicable recommendations. Minutes of ARMC meetings were tabled and noted by the Board.
• Reviewed Management Discussion and Analysis, Corporate Governance Overview Statement, ARMC
report and Statement on Risk Management and Internal Control prior to submission to the Board for
consideration and approval for inclusion in the Annual Report 2018.

3. SUMMARY OF THE ACTIVITIES OF THE INTERNAL AUDIT FUNCTION

The Internal Audit function of the Group has been outsourced to Axcelasia Columbus Sdn Bhd. The Engagement
Director is Mr Mah Siew Hoong who has diverse professional experience in internal audit, risk management
and corporate governance advisory. He is a Chartered Member of the Institute of Internal Auditors Malaysia,
a member of the Malaysian Institute of Accountants and a Fellow Member of the Association of Chartered
Certified Accountants, United Kingdom. Mr Mah is a Certified Internal Auditor (USA) and has a Certification in
Risk Management Assurance (USA). The internal auditor reports directly to the ARMC.

The activities of the Internal Audit Function during the financial year ended 31 March 2018 were as follows:

(a) Carried out reviews of the business processes in accordance with the approved internal audit plan and
areas of improvement in internal controls have been identified and formally tabled at the ARMC meetings.
The business processes reviewed are as follows:

• Management of Information System


• Human Resource Management
• E-Commerce

(b) Follow up reviews were also carried out to ascertain the status of implementation of the agreed action
plans, the results of which were reported to the ARMC.

The results of the above-mentioned work carried out by the Internal Audit function were tabled to the ARMC
at their scheduled meetings. The internal audits conducted did not reveal internal control weaknesses which
have resulted in material losses, contingencies or uncertainties that would require separate disclosure in the
annual report.

The cost incurred for the Internal Audit function of the Group in respect of the financial year ended 31 March
2018 amounted to RM45,000. An overview of the Group’s internal control is set out in the Statement on Risk
Management and Internal Control on pages 42 to 46.
Jadi Imaging Holdings Berhad Annual Report 2018 21

statement to
shareholders
In Relation To The Proposed Renewal Of Share Buy-Back Authority
For The Company To Purchase Its Own Ordinary Shares

1. Disclaimer Statement

Bursa Malaysia Securities Berhad (“Bursa Securities”) takes no responsibility for the contents of this Share
Buy-Back Statement (“Statement”), makes no representation as to its accuracy or completeness and expressly
disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part
of the contents of this Statement.

2. Rationale for the Proposed Renewal of Share Buy-Back Authority for the Purchase by Jadi Imaging Holdings
Berhad (“JADI” or the “Company”) of its own Ordinary Shares (“Shares”) on the Main Market of Bursa Securities
of up to ten per centum (10%) of its Existing Issued and Paid-up Share Capital (“Proposed Renewal”)

Any Share Buy-Back, if implemented pursuant to the Proposed Renewal, is expected to potentially benefit the
Company and its shareholders as follows:-

(a) It will enable the Company to utilise its surplus financial resources which is not immediately required for
other uses to purchase JADI Shares from the market. This may help to stabilise the supply and demand of
JADI Shares traded on the Main Market of Bursa Securities and thereby support its fundamental value;

(b) The purchase of its own shares by JADI, whether to be held as treasury shares or subsequently cancelled,
will effectively reduce the number of JADI Shares carrying voting and participation rights. Therefore, the
shareholders of the Company may enjoy an increase in the value of their investment in JADI due to the
increase in the Company’s earnings per share; and

(c) The purchased JADI Shares can be held as treasury shares and resold on Bursa Securities at a higher price
with the intention of realising potential gain without affecting the total issued and paid-up share capital
of the Company. Should any treasury shares be distributed as share dividends, this would serve to reward
the shareholders of the Company.

3. Retained Profits/(Accumulated Losses) and Share Premium

Based on the audited financial statements for the financial year ended 31 March 2018, the accumulated losses
account of the Company stood at RM389,169.

In accordance with Section 74 of the Companies Act, 2016 in Malaysia which became effective 31 January 2017,
all shares issued by a company shall have no par or nominal value. Therefore, the share premium account now
effectively forms part of the Company’s share capital effective 31 January 2017 and at the end of the financial
year end.

The Company has adopted the transitional provision under the Company Act, 2016 in Malaysia where the sum
standing to the credit of the share premium and capital reserve account may be utilised within 24 months from
the commencement date of 31 January 2017 in the manner as allowed for under the Act. Any remaining amount
standing to the credit of the Company’s shall be reclassified and become part of the share capital.

4. Source of Funds

The funding for the Proposed Renewal will be from internally generated funds and/or borrowings. The actual
amount of borrowings will depend on the financial resources available at the time of the Proposed Renewal.
The Proposed Renewal will reduce the cash of the Company by an amount equivalent to the purchase price of
JADI Shares and the actual number of JADI Shares bought back. There is no restriction on the type of funds
which may be utilized for the Proposed Renewal so long as it is backed by an equivalent amount of retained
profits and/or share premium of the Company.

In the event that the Company decides to utilize external borrowings to finance the Proposed Renewal, the Board
would ensure that the Company has sufficient funds to repay the external borrowings and that the repayment
would have no material effect on the cash flow of the Company.
22 Jadi Imaging Holdings Berhad Annual Report 2018

STATEMENT TO SHAREHOLDERS
In Relation To The Proposed Renewal Of Share Buy-Back Authority
For The Company To Purchase Its Own Ordinary Shares

5. Direct and Indirect Interests of the Directors and Substantial Shareholders

Save for the proportionate increase in the percentage of shareholding and/or voting rights in their capacity
as the shareholders of the Company, pursuant to the Proposed Renewal, none of the Directors, Substantial
Shareholders and/or persons connected to them have any interest, direct or indirect, in the Proposed Renewal
and/or resale of treasury shares.

The direct and indirect interest of the Directors and Substantial Shareholders of JADI as at 11 July 2018 are
set out in the tables below together with the effect of the Proposed Renewal assuming that JADI implements
the Proposed Renewal in full and all the shares so purchased are fully cancelled:

(a) Effects of the Proposed Renewal on Directors’ Shareholdings

Name Before Proposed Renewal After Proposed Renewal (i)


Direct Shareholding Indirect Shareholding Direct Shareholding Indirect Shareholding
No. of No. of No. of No. of
Shares % Shares % Shares % Shares %

Liew Kim Siong 22,017,045 2.338% 284,743,985 1 30.237% 22,017,045 2.598% 284,743,985 1 33.597%
Eu Lan Eng 33,929,954 3.603% – – 33,929,954 4.003% – –
Yeoh Chui En 1,000,000 0.106% – – 1,000,000 0.118% – –
Sim Swee Yoke – – – – – – – –
Chan Chee Lian – – 100,000 2 0.011% – – 100,000 2 0.012%
Liew Kit – – – – – – – –
Liew Hock Yee – – – – – – – –

Notes:-

(i) Assuming that the purchase of JADI Shares pursuant to the Proposed Renewal is based on the maximum
number of JADI Shares that may be purchased.
1
Deemed interested by virtue of his shareholdings in LSI Holdings Sdn Bhd pursuant to Section 8 of the
Companies Act, 2016 (“the Act”).
2
Deemed interested by virtue of the shares held by his spouse.

(b) Effects of the Proposed Renewal on Substantial Shareholders’ Shareholdings

Name Before Proposed Renewal After Proposed Renewal (i)


Direct Shareholding Indirect Shareholding Direct Shareholding Indirect Shareholding
No. of No. of No. of No. of
Shares % Shares % Shares % Shares %

LSI Holdings Sdn Bhd 284,743,985 1 30.237% – – 284,743,985 1 33.597% – –


Liew Kim Siong 22,017,045 2.338% 284,743,985 1 30.237% 22,017,045 2.598% 284,743,985 1 33.597%
Ng Poh Imm – – 284,743,985 1 30.237% – – 284,743,985 1 33.597%

Notes:-

(i) Assuming that the purchase of JADI Shares pursuant to the Proposed Renewal is based on the maximum
number of JADI Shares that may be purchased.
1
Deemed interested by virtue of his/her shareholdings in LSI Holdings Sdn Bhd pursuant to Section 8 of
the Act.
Jadi Imaging Holdings Berhad Annual Report 2018 23

STATEMENT TO SHAREHOLDERS
In Relation To The Proposed Renewal Of Share Buy-Back Authority
For The Company To Purchase Its Own Ordinary Shares

6. Potential Advantages and Disadvantages of the Proposed Renewal

For the potential advantages of the Proposed Renewal to the Company and its shareholders, kindly refer to
Section 2 of this Statement. The potential disadvantages of the Proposed Renewal to the Company and its
shareholders are as follows:-

(a) the Proposed Renewal will reduce the financial resources of the Group and may result in the Group
foregoing better investment opportunities that may emerge in the future;

(b) the cashflow of the Company may be affected if the Company decides to utilise bank borrowings to
finance a Share Buy-Back;

(c) as the Proposed Renewal can only be made out of the retained profits of the Company, it will result in
a reduction in the financial resources available for distribution to shareholders of the Company in the
immediate future; and

(d) the Proposed Renewal may reduce the consolidated net assets of the Company if the purchase price of
JADI Shares is higher than the consolidated net assets of the Company at the time of purchase.

Nevertheless, any Share Buy-Back to be undertaken pursuant to the Proposed Renewal is not expected to have
any potential material disadvantages to the Company and its shareholders as the Company would purchase JADI
Shares only after the Board has given due consideration to its potential impact on the Company’s earnings and
financial position and the Board is of the opinion that it would be in the best interest of the Company and its
shareholders to do so.

7. Financial Effects

The financial effects of the Share Buy-Back under the Proposed Renewal are set out below:

(a) Share Capital

No. of Shares as at Total (RM) as at


11/07/2018 11/07/2018

Issued and paid-up share capital 941,820,083 94,182,008.30

Less:-
Shares purchased amounting to ten per cent
 (10%) of issued and paid-up capital pursuant
 to Proposed Renewal (94,182,008) (9,418,200.83)

Reduced issued and paid-up capital in the event


 that the purchased JADI Shares are cancelled 847,638,075 84,763,807.47

The Proposed Renewal will have no effect on the issued and paid-up share capital of JADI if all the
Purchased JADI Shares are to be retained as treasury shares.
24 Jadi Imaging Holdings Berhad Annual Report 2018

STATEMENT TO SHAREHOLDERS
In Relation To The Proposed Renewal Of Share Buy-Back Authority
For The Company To Purchase Its Own Ordinary Shares

7. Financial Effects (Cont’d)

(b) Earnings

The effects of the Share Buy-Back under the Proposed Renewal on the earnings of the Group would
depend on the purchase price and the number of JADI Shares purchased. The effective reduction in the
issued and paid-up share capital of the Company pursuant to a Share Buy-Back will, generally, with all
else being equal, have a positive impact on the consolidated earnings per share of the Company.

Buy-Back Authority is not expected to have any impact on the policy of the Board in recommending
dividends, if any, to shareholders of JADI. However, the Board may distribute future dividends in the form
of the treasury shares purchased pursuant to the Proposed Renewal of Share Buy-Back Authority.

8. Implication of the Malaysian Code on Take-Overs and Mergers 1998 (the “Code”)

As at 11 July 2018, LSI Holdings Sdn Bhd (“LSI”) and Liew Kim Siong collectively hold 32.57% of the voting
issued and paid-up share capital of JADI.

Assuming that the Proposed Renewal is carried out in full in any period of six (6) months, the collective
shareholdings of the LSI and Liew Kim Siong will increase to 36.20% of the total voting issued and paid-up share
capital of JADI.

Pursuant to the Code, if a person or a group of persons acting in concert holding more than 33% but less than
50% of the voting shares of the Company and such person or group of persons acting in concert acquires in any
period of six (6) months more than 2% of the voting shares of the Company, there is an obligation to undertake
a mandatory general offer for the remaining JADI Shares not already owned by the said person or group of
persons acting in concert.

Practice Note 2.9.10 of the Code allows an exemption from the obligation to undertake a mandatory general
offer to a holder of voting shares who, as a result of a reduction of the voting shares of the company through a
buy-back scheme under the Act, has increased his holding of voting shares to more than 33% or, if his existing
holding of voting shares is more than 33% but less than 50%, by more than 2% in any six (6) month period, if
the increase in his holding is inadvertent and as a result of any action that is outside his direct participation.

In the event that JADI decides to purchase its own Shares which will result in LSI’s and Liew Kim Siong’s
shareholdings in JADI increasing by more than 2% in any period of six (6) months, LSI and Liew Kim Siong will
seek a waiver from the SC under Practice Note 2.9.10 of the Code before the Company purchases its own
Shares.

9. Purchases Made in Last Financial Year

The Company did not undertake any Share Buy-Back during the financial year ended 31 March 2018.
Jadi Imaging Holdings Berhad Annual Report 2018 25

STATEMENT TO SHAREHOLDERS
In Relation To The Proposed Renewal Of Share Buy-Back Authority
For The Company To Purchase Its Own Ordinary Shares

10. Public Shareholding Spread

According to JADI’s Record of Depositors as at 11 July 2018, there were 5,038 public shareholders holding
not less than 100 JADI Shares, with a total shareholding of 99.99% of the Company’s issued and paid-up share
capital.

The public shareholding spread of the Company is expected to be reduced to 59.68% assuming the Company
implements the Share Buy-Back in full i.e. up to 10% of the issued and paid-up share capital of the Company.
Further, the purchased JADI Shares are assumed to be purchased from the market from shareholders of JADI
who are deemed public, and the number of JADI Shares held by the Directors and substantial shareholders of
JADI and/or persons connected to them remains unchanged.

Notwithstanding the above, the Company, in implementing any Share Buy-Back, will be mindful in ensuring that
the aforesaid public shareholding spread requirement is met and maintained at all times.

11. Directors’ Statement

Your Directors, having considered all aspects of the Proposed Renewal, are of the opinion that the Proposed
Renewal is in the best interest of the Company.

12. Directors’ Recommendation

Your Directors are of the opinion that the Proposed Renewal is in the best interests of the Company and its
shareholders. Accordingly, your Directors recommend that you vote in favor of the resolution in relation to the
Proposed Renewal to be tabled at the forthcoming Annual General Meeting.

13. Other Information

There is no other information concerning the Proposed Renewal that shareholders and other professional advisers
would reasonably require and expect to find in the Statement for the purpose of making informed assessment
as to the merits of approving the Proposed Renewal and the extent of the risks involved in doing so.
26 Jadi Imaging Holdings Berhad Annual Report 2018

Sustainability
Statement

The Group recognises the importance of being committed to create long-term sustainable value for all stakeholders.
Sustainability has become a significant factor contributing to business growth and competitiveness internationally.
We therefore strive to look after the interests of our key stakeholders – including investors, shareholders, customers,
suppliers, employees and the community. In this regard, the Group is committed to integrating corporate social
responsibility practices into our daily operational activities while pursuing its corporate goals.

Governance

As a public listed entity on Bursa Malaysia Securities Berhad (“Bursa Securities”), the Group ensures that compliance
of listing requirements is adhered to and provide greater transparency to our valued investors and shareholders.

The Group recognises the importance of timely, accurate and useful information is disseminated to stakeholders. Latest
information is constantly being disclosed in the forms of Annual reports, Quarterly reports and Announcements on the
Bursa Securities’ website. Apart from that, stakeholders may easily access the Group’s website at www.jadi.com.my for
business, financial and non-financial information. Stakeholders are also able to direct queries to the Group via this website.

Direct & Indirect Economic impact

In recent years, the Group has been employing workers from local community surrounding our Kapar factory, as well
as suitable candidates from East Coast of Peninsular Malaysia and East Malaysia. This has indirectly contributed to
the development of community within the abovementioned areas. The Group also continues to explore new business
opportunities with local suppliers and contractors, eventually supporting the development of our local economy.

Environment

Being a global toner manufacturer, the Group is cautious in handling its product in a proper manner and in accordance
with the relevant laws and regulations. The Group is continuously looking out for ways to incorporate sustainability
practises into the entire manufacturing and supply chain process. The Group is consciously making concerted effort
to promote awareness and commitment to contributing towards a greener environment, with the following initiatives:

• Proper waste management with storage, collection and reuse of recyclables


• Waste water treatment plant are in placed at all factories with production lines, to recycle waste water
• Proper air filters are installed at the chimney of all factories, to ensure that air emissions do not cause any adverse
impact to the environmental and community
• Energy management initiatives are in place, as our energy consumption is an area of concern as our production
lines consume high energy and there have been possible increases in tariff from time to time by our main electricity
provider, Tenaga Nasional Berhad (“TNB”). Thermal insulation and clear roofs have been installed in parts of our
largest factory located in Kapar, that allow natural sunlight into the factory to reduce electricity. We have also
switched to LED lightings in all of our factories to reduce energy consumption. Lights and air-conditioning are
switched off when they are not required. Awareness is being created amongst our employees.
Jadi Imaging Holdings Berhad Annual Report 2018 27

SUSTAINABILITY STATEMENT

Social

As the Group is growing in a fast-evolving market, the Group acknowledges the importance of investing in its employees.
Both internal and external training programmes are organized to upgrade employees’ skills and job knowledge, assisting
them to work towards achieving their goals and aspirations. In FY2018, the Group has sponsored one of its employees
to undertake PhD studies on the characterization of Chemically Produced Toner in a local university.

The Group embraces diversity at workplace, in terms of age, gender, race, ethnicity and social background. By having
a diverse workforce, the Group is able to have a tap into pool of people from diverse backgrounds with different
experiences and perspectives. This also enables the Group to increase competitiveness by having various creative
solutions. The Group continuously strives to provide a conducive working environment for all our employees. As part
of our commitment to workplace safety and the environment, a Health, Safety and Environment (“HSE”) Committee is
tasked to oversee all occupational health and safety, as well as environmental protection initiatives. Monthly General
Toolbox Talks are conducted by our in-house HSE Officer to create awareness on health and safety amongst our
employees. Fire drills are also held to ensure our employees are well prepared in the event of an emergency.

Annual dinner is organized each year to gather all of our employees from all regions, to foster closer relationships
amongst the employees of the Group. Company lunch is also organized 2 – 3 times a week for all of operation team,
to create better employee engagement. During these lunches, we celebrate all of the festivals from Hari Raya, Chinese
New Year, Deepavali to International Women’s Day.

The Group recognises that it is our responsibility to be a good corporate citizen.

Customer engagement

We carry out Customer Feedback Survey, mainly covering product quality satisfaction, after sales service, and delivery
services. This is carried out on a quarterly basis.

Prompt action will be taken on customer complaints. Our Quality Assurance & Control team will perform tests and
investigations to identify the root-causes. Corrective action plans will then be taken to reduce the complaints and
improve customer satisfaction.

Conclusion

With various initiatives conducted, we strive to achieve a sustainable balance between our commitments to our
customers, the needs of our community and requirements of other stakeholders in the economic success.
28 Jadi Imaging Holdings Berhad Annual Report 2018

CORPORATE GOVERNANCE
OVERVIEW Statement

The Board of Jadi Imaging Holdings Berhad recognises the importance of adopting corporate governance and is
committed to ensuring that good corporate governance practices are applied throughout the Group to protect and
enhance shareholders’ value and safeguard the Group’s assets.

In accordance with Practice Note 9 of Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia
Securities Berhad (“Bursa Securities”) and Corporate Governance Guide (3rd edition) issued by Bursa Securities, the
Board is pleased to provide Corporate Governance Overview Statement in which the Company has applied the new
Malaysian Code on Corporate Governance 2017 (“MCCG”). The Corporate Governance Overview Statement is to be
read together with Corporate Governance Report, based on a prescribed format as outlined in paragraph 15.25 of
the Listing Requirements.

The Corporate Governance Overview Statement and Corporate Governance Report are available for reference in the
Group’s website at www.jadi.com.my.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

1. Board Roles and Responsibilities

The Board has established clearly defined roles and responsibilities to discharge its responsibilities in the best
interests of the Group’s shareholders and stakeholders. The Board sets the Company’s strategic aims and ensure
sufficient resources are in place to achieve these objectives. The Board assumes, amongst others, the following
responsibilities:

• Reviews and adopts the Group’s overall strategic plans, major investments and funding requirements for
the Company by conducting discussion with Executive Directors
• Promotes good corporate governance culture within the Company
• Oversee and assess the conduct of the Company’s business. The Group CEO will explain to the Board on
the current Company’s business as and when questions are raised during the Board meetings.
• Assess management performance to determine the Company’s business is properly managed
• Identifies principal risks and ensure proper internal controls are implemented to manage these risks
• Ensure succession planning of senior management with right skillsets
• Oversee and ensure effective communication with shareholders are implemented
• Review and ensure the integrity of financial and non-financial management information
• Promotes sustainability to ensure long-term value creation

The Board is responsible for the oversight and overall management of the Group. The responsibilities of the Board
are stipulated in the Board Charter. The management of the Group is delegated to execute the strategies and
business plans of the Group. Matters such as major capital expenditure, business acquisition and restructuring,
corporate proposal and annual budget are reserved for the Board to make its decision.

2. Key Responsibilities of Chairman

Chairman of the Group plays an important role in leading the Board to function and instilling good corporate
governance practices. The responsibilities of the Chairman, amongst others, are as follows:

• Leads an effective corporate governance system


• Lead the Board and ensure the Board perform its responsibilities effectively. Ensure Board decisions are
made in the best interest of the Company
• Ensure the efficient organization and conduct of the Board’s function and meetings
• Encourage active participation amongst the Board members to ensure effective contribution of all Directors
at the Board’s meeting
• Takes appropriate steps to provide effective communication with stakeholders
Jadi Imaging Holdings Berhad Annual Report 2018 29

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

3. Chairman and Chief Executive Officer (“CEO”)

Although the Executive Chairman is also the Group Chief Executive Officer, all decisions of the Board are based
on the decision of the majority of the Board’s members and matters are deliberated with the active participation
of all four independent non-executive directors. The Group Chief Executive Officer who is also the Executive
Chairman overseas the day-to-day operations, understands the industry well and able to facilitate effective
contribution about the industry market at the Board meetings. Notwithstanding that, no single Board member
can make decision on behalf of the Board unless duly authorised by the entire Board.

4. Qualified and competent Company Secretaries

Company Secretaries play an advisory role to the Board, particularly with regard to the Company’s constitution,
and its compliance with regulatory requirements and updates on new Listing Requirements to the Board. It is
important that a suitably qualified and competent company secretary is appointed according to the requirements
outlined in the Companies Act 2016.

Company Secretaries ensure that deliberations at Board and Board Committee meetings are well documented
and follow-up on matters arising are subsequently communicated to the relevant Management for appropriate
actions. A secured retrieval system which stores meeting papers, minutes of board and committees are properly
maintained by them. They also constantly keep themselves abreast of the evolving capital market environment,
regulatory changes and developments in CG through continuous training. Hence, supporting the Board by
ensuring adherence to board policies and procedures, rules, relevant laws and best practices in CG. The Company
Secretaries also manage processes pertaining to general meetings and act as a focal point for stakeholders’
communication and corporate governance.

5. Access to Information and Advice

Scheduled Board meetings are structured with a pre-set agenda, taking into account the formal schedule of
matters reserved for the Board’s decision. Board meetings are carried out on a quarterly basis, with additional
meetings when urgent matters are required to be discussed. Notice of meetings is given in writing at least 7 days
prior to the meeting. Board papers providing mainly information on the financial performance of the Group as
well as minutes of meetings are circulated approximately 7 days prior to the Board meetings or such other period
as deemed appropriate by the Board, to provide sufficient time for the Directors to consider and deliberate on
issues to be raised at the Board meetings. Notwithstanding, urgent matters will be presented and discussed at
the Board meetings. The Directors have full access to the senior management as well as the advice and services
of the Company Secretaries, and they ensure that the Board proceedings are properly documented.

In addition, the Directors may also seek independent professional advice, at the Company’s expense, if required.
The Directors may also consult with the Executive Chairman and other Board members prior to seeking any
independent professional advice.
30 Jadi Imaging Holdings Berhad Annual Report 2018

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

6. Board Charter

The Board Charter is a source of reference and primary induction literature, providing insights to prospective
Board members and senior management. The Board is structured to protect the best interests of shareholders and
stakeholders by practising a high level of good governance. The Board delegates to the Group CEO to oversee
the business operation of the Group. The management of the Group is delegated to the senior management
execute the strategies and business plans of the Group.

During the Management’s monthly meeting among the Head of Departments, risks are identified and appropriate
internal controls are put in place to manage these risks. Succession planning of senior management is discussed
by Nomination Committee by appointment of Executive Directors based on its relevant criteria. Internal auditors
are appointed by the Board to review and highlight the adequacy and integrity of the internal control system.
The details on the internal control system including its effectiveness are stipulated in the Statement on Internal
Control and Risk Management.

Notwithstanding that, the Board also delegates to several Board Committees to carry out their fiduciary duties
and responsibilities effectively. The following principal Board Committees have been established to assist the
Board in discharging its duties effectively:

• Audit and Risk Management Committee (“ARMC”)


• Nomination Committee
• Remuneration Committee

The terms of reference of each Board Committee have been approved by the Board and, where applicable,
comply with the recommendations of the Code. These Committees have the authority to examine particular
issues and report to the Board with their recommendations. Nonetheless, the ultimate responsibility for the
final decision on such matters lies with the Board.

Board Charter was approved on 16 April 2013. Roles and responsibilities of directors are also included in the
Board Charter. The Board Charter will be reviewed and updated in accordance with the needs of the Company
and any new regulations that may have an impact on the discharge of the Board’s responsibilities. Board Charter
has been revised and updated on 9 July 2018. The details of the Board Charter are available for reference in the
Group’s website at www.jadi.com.my.

7. Formalised Ethical Standards through Code of Ethics and Whistle Blowing Policy

The Board has formalised a Code of Ethics and Conduct to define the ethical standards and conduct at work,
which the Directors and all employees are required to conform to when discharging their respective duties and
responsibilities. The Code includes the guiding principles of conduct on confidential information, misconducts,
conflict of interest and several other principles of conduct to uphold the best governance practices.

The Code of Ethics and Conduct also facilitates a whistle blowing function. Any employee is encouraged to
whistle blow on any form of violation of the Code. The internal audit function which is appointed by ARMC will
report independently to the ARMC on its quarterly review results. The Group’s Whistle Blowing guidance are
available for reference in the Group’s website at www.jadi.com.my.

The Code is reviewed regularly as and when it is deemed necessary by the Board. Summary of the Code of Ethics
and Conduct forms part of the Board Charter. The details of the Code of Ethics and Conduct are available for
reference in the Group’s website at www.jadi.com.my.
Jadi Imaging Holdings Berhad Annual Report 2018 31

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

8. Strategies promoting Sustainability

In relation to sustainability, the Board understands the importance of striking the balance between shareholder
expectations and the needs and concerns of all other stakeholders. The Board is committed to ensuring that
the Group’s sustainability strategies and framework are continuously reviewed for effectiveness and adequacy.
The Board also focuses on environmental sustainability of the Group’s operations with emphasis on sustainable
product design and the use of environmentally sound ingredients will be included as part of the criteria in any
new product development. The Group is particularly mindful of the role that it can play in helping to protect
the environment by encouraging the use of remanufactured cartridges to reduce plastic wastes from heading
to landfills. The Board will take into consideration these three aspects of doing business; they are environment,
social and governance (“ESG”). Managing and balancing ESG are essential to ensure long-term viability of the
Company’s business, in the interests of various stakeholders.

9. Board Composition and Diversity

Executive Chairman
Liew Kim Siong

Executive Directors
Eu Lan Eng 3
Liew Kit
Liew Hock Yee

Senior Independent Non-Executive Directors


Chan Chee Lian 1

Independent Non-Executive Directors


Yeoh Chui En 1
Sim Swee Yoke 1
Chia Yuet Yoong 2
Dato’ Sri Liew Lee Leong 4
Lim Chee Khang 4

1
Expressed intention not to seek for re-election at the forthcoming Annual General Meeting on 29 August 2018
2
Resigned on 18 May 2018
3
Resigned on 18 July 2018
4
Appointed on 20 July 2018

During the financial year, the Board has eight (8) members, comprising the Executive Chairman, one (1) Senior
Independent Non-Executive Director, three (3) Independent Non-Executive Directors and three (3) Executive
Directors. After 31 March 2018, one (1) Independent Non-Executive Director has resigned, three (3) Independent
Non-Executive Directors have expressed intention not to seek for re-election on the Seventeenth Annual General
Meeting (“17th AGM”) and replaced with two (2) Independent Non-Executive Directors. This is in line with the
Listing Requirements of Bursa Malaysia Securities Berhad which require at least three (3) directors or one-third
(1/3) of the Board members, whichever is the higher, to be Independent Directors.
32 Jadi Imaging Holdings Berhad Annual Report 2018

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

9. Board Composition and Diversity (Cont’d)

The MCCG recommends at least half of the Board comprises Independent Directors. After the financial year
ended 31 March 2018, the total seven (7) Board members, of whom three (3) are Independent Non-Executive
Directors. Notwithstanding that, no single Board member can make decision on behalf of the Board unless duly
authorised by the entire Board.

All Board members participate fully in decisions on key issues involving the Group. The Executive Directors
are responsible for implementing the policies and decisions of the Board and managing the Group’s day-to-
day operations. Together with the Independent Non-Executive Directors, they ensure that strategies are fully
discussed and examined taking into account the long term interests of the various stakeholders including
shareholders, employees, customers, suppliers and the various communities in which the Group conducts
its business. In addition to the role and guidance of the Independent Non-Executive Directors, each Director
nevertheless brings an independent judgment to bear on issues of strategy, performance, resources and standards
of conduct.

During the financial year ended 31 March 2018, the Board has met 30% female representation. The Board
is satisfied with the current composition which represents a balanced mix of essential skills, experience and
knowledge to ensure the capable management and leadership of the Group.

9.1 Tenure of Independent Directors

As recommended in the MCCG and provided in the Board Charter, the tenure of an independent director
should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, the
independent director may continue to serve on the Board subject to the director’s re-designation as a
non-independent director. Strong justification and recommendation has to be provided to the shareholders
in the annual general meeting for the re-appointment. If the Board continues to retain the independent
director after the twelfth year, the board should seek annual shareholders’ approval through a two-tier
voting process. During the current year, all of the Independent Non-Executive Directors’ service tenure
is within the nine (9) years term.

Dato’ Sri Liew Lee Leong and Mr Lim Chee Khang, Independent Non-Executive Directors were
appointed to the Board on 20 July 2018. With their diverse backgrounds and many years of experience
gained from their field of expertise, this will contribute to making Board decision more effectively,
objectively and independently.

10. Appointment of Directors to the Board

Nomination Committee (“NC”) and Board members will review the Board composition and ensure its board
diversity in terms of skills, knowledge, experience and gender; and mindful that it will contribute to better
management and leadership to the Group. When potential candidates have been shortlisted, NC will deliberate on
their skills, knowledge, expertise and experience, independence and capability to discharge their responsibilities.
NC will assess the candidates and make recommendations to the Board for approval. In accordance with the
Company’s Constitution, all Board members who are appointed by the Board shall be subject to election by
shareholders at the first opportunity of their appointment.

During the recent recruitment, the appointment of Director is undertaken by the Board as a whole guided
by formal recommendations from the Nomination Committee which received nomination of candidates from
shareholders and existing directors of the Company for directorship in the Company. The Board may consider
utilising independent sources such as directors’ registry, recruitment agency or industry and professional
associations to identify suitably qualified candidates when necessary.
Jadi Imaging Holdings Berhad Annual Report 2018 33

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

11. Nomination Committee

The Nomination Committee (“NC”) has three members, all of whom are Independent Non-Executive Directors
and meets as and when required. Although the Nomination Committee Chairman is not a Senior Independent
Non-Executive Director, the current Chairman’s core expertise is in managing human resource. There is also a
Senior Independent Non-Executive Director in the Nomination Committee.

The members of the Nomination Committee are:

Name Number of Attendance Remark

Sim Swee Yoke – Chairwoman 2/2


(Independent Non-Executive Director)

Chia Yuet Yoong 2/2 Resigned on 18 May 2018


(Independent Non-Executive Director)

Chan Chee Lian 2/2


(Senior Independent Non-Executive Director)

(Total: 2 meetings during the year)

The Nomination Committee has clearly defined written terms of reference approved by the Board and is
responsible for nominating new nominees to the Board and assessing the performance of the directors of the
Company. The Terms of Reference of Nomination Committee is available for reference in the Group’s website
at www.jadi.com.my.

During the financial year under review, NC has undertaken the following activities:

(a) Reviewed, considered and recommended to the Board for approval, the re-election of Directors who
retired in accordance with Articles of the Company’s Constitution.
(b) Assessed the competence, experience, integrity and character of the newly appointed directors
(c) Reviewed and discussed succession planning of the Group
(d) Reviewed and recommended the revised NC’s Terms of Reference in compliance with the latest
amendments to the Listing Requirements and MCCG, to the Board for approval
(e) Assessed and evaluated the performance and effectiveness of the Board as a whole and individual
Board member, taking into consideration directors’ time commitment and directors’ continuous training
development.

12. Annual Assessment of Directors

A good size and balance of the Board composition ensures that no individual or group of individuals can dominate
its decision-making process. The MCCG recommends that the majority of the Board members must comprise
of independent directors in the event, the Board Chairman is not an independent director. The Board and its
committees have undertaken an annual assessment of the independence of its independent directors. The
evaluation forms adopted are based on the prescribed forms recommended by Bursa Securities and MCCG,
covering Board’s structure, operations, role and responsibilities as a whole, assessment of individual director’s
input quality, time commitment, character, integrity, competency and experience.

During the financial year under review, the Board has performed peer-to-peer assessments on the effectiveness
of the board as a whole, the committees of the board and the contribution of each individual director, including
the Independent Non-Executive Directors. The assessment also included the assessment of independence of
independent non-executive directors. After the assessment, the Board satisfies the level of independence by
all independent directors. All decisions are made by the Board as a whole, with an objective judgement.
34 Jadi Imaging Holdings Berhad Annual Report 2018

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

13. Time commitment

The Board meets at quarterly intervals, with additional meetings held when urgent issues and important decisions
are required to be taken between the scheduled meetings.

The Board held five (5) meetings during the financial year ended 31 March 2018 and they were attended by the
following Directors:

Name Number of Attendance Remark

Liew Kim Siong – Chairman 5/5


(Executive Chairman/Group CEO)

Eu Lan Eng 3/5 Resigned on 18 July 2018


(Executive Director/General Manager)

Liew Kit 4/4 Appointed on 1 June 2017


(Executive Director/Sales & Marketing Manager)

Liew Hock Yee 4/4 Appointed on 1 June 2017


(Executive Director/Accountant)

Chan Chee Lian 5/5


(Senior Independent Non-Executive Director)

Yeoh Chui En 5/5


(Independent Non-Executive Director)

Sim Swee Yoke 5/5


(Independent Non-Executive Director)

Chia Yuet Yoong 5/5 Resigned on 18 May 2018


(Independent Non-Executive Director)

(Total: 5 meetings during the year)

All the Directors have complied with the minimum 50% attendance at Board meetings during the financial year
as stipulated by the Listing Requirements. All directors are expected to devote sufficient time to carry out its
responsibility and are required to notify the Chairman of their intention of accepting new directorship.

The notification shall include an indication of time that will be spent on the new appointment. The Chairman
has to also notify the Board if he has any new directorship or significant commitments outside the Company.
Jadi Imaging Holdings Berhad Annual Report 2018 35

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

14. Training

All the Directors have attended the Mandatory Accreditation Programme as prescribed by Bursa Malaysia
Securities Berhad. The individual director as determined by the Board will continue to participate in other relevant
training programmes to further enhance their knowledge to enable them to discharge their responsibilities more
effectively.

During the financial year ended 31 March 2018, the following Directors have attended the following seminars
and training courses:

No. Name of Director Seminar / Training Courses Attended

1 Liew Kit (a) Mandatory Accreditation Programme for Directors of Public Listed
Companies
(b) Leading for Excellence, Action & Performance
(c) ISO 9001:2015 Internal Audit Training

2 Liew Hock Yee (a) Mandatory Accreditation Programme for Directors of Public Listed
Companies
(b) Leading for Excellence, Action & Performance
(c) Transfer Pricing Workshop Value Chain Analysis
(d) ISO 9001:2015 Internal Audit Training

3 Chan Chee Lian (a) IMINDA Corporate Directors Onboard Programme - Companies Act
2016 and its Implications To Directors by Malaysian Directors Academy
(MINDA)
(b) Boards in the Digital Economy by Securities Industry Development
Corporation

4 Yeoh Chui En (a) The Blockchain Potential


(b) Colored Brain Communication for Accountants & Connecting Generations
at Workplace
(c) Advocacy for Corporate Disclosure
(d) Leading in a Volatile, Uncertain, Complex & Ambiguous (VUCA) World
(e) Integrating an Innovative Mindset with Effective Governance
(f) Leading Change : The Brain
(g) Top 9 Valuation Mistakes & How to Avoid Them

5 Sim Swee Yoke (a) Bursa Malaysia’s Sustainability Forum 2017:


“The Velocity of Global Change & Sustainability – The New Business
Model” by BURSA & ACCA
(b) Securities Industry Development Corporation (SIDC) & International
Institute for Management Development (IMD), the “Global Business
Insights Series: Embracing Paradoxes” by SIDC
(c) Securities Industry Development Corporation (SIDC) and International
Institute for Management Development (IMD), the “Global Business
Insights Series: Innovation in the Financial Sector – Where the World
Will Be, How To Get There” talk by Professor Howard Yu
(d) SIDC, “ Malaysian Code of Corporate Governance: A New Dimension” by
SIDC
(e) Asian Institute of Finance’s Distinguished Speaker Series 2017 “Bank 4.0:
Banking everywhere, but not at a bank” by Brett King
(f) Talent View conference on “ Employer Branding”
36 Jadi Imaging Holdings Berhad Annual Report 2018

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

14. Training (Cont’d)

No. Name of Director Seminar / Training Courses Attended

5 Sim Swee Yoke (g) Advocacy Session on Corporate Disclosure for Directors and Principal
(Cont’d) Officers of Listed Issuers by Bursa
(h) Effective Internal Audit Function for Audit Committee (AC) Workshop by
Mr Ranjit Singh
(i) CG Breakfast Series: Integrating An Innovation Mindset with Effective
Governance
(j) Leading Change @The Brain, Corporate Governance Series by Bursa
Malaysia
(k) Life At Work 2017: Future of Work, Workplace, Workforce, Organised
by Talent Corporation

6 Chia Yuet Yoong (a) The Greatest Risk is No Risk by Global Strategist, Eastspring Investment
(S) Ltd
(b) Investment is Managing Probability by CIO - Philip Capital Management
(c) Warrant and Call Warrant - How to Select by MRR Consulting
(d) Potential Impact of OBOR & other World Events on Bursa Malaysia
Valuation by Harwindar Singh
(e) Advocacy Session on Corporate Disclosure for Directors and Principal
Officers of Listed Issuers Corporate Disclosure Framework by Bursa
Malaysia
(f) Pitfall to avoid in Company’s Meeting under the Company Act 2016 by
Norvic Corp Services Sdn Bhd
(g) Open Source Leadership Reinventing Management When There’s No
More Business as Usual by Iclif

Saved as disclosed above, Mr Liew Kim Siong and Madam Eu Lan Eng were not able to select any suitable
training programmes to attend during the financial year due to overseas travelling and their busy work schedule.
However, they have constantly been updated with relevant reading materials and technical updates, which will
enhance their knowledge and equip them with the necessary skills to effectively discharge his duties as Director
of the Group. Directors would also be updated on recent developments in the areas of statutory and regulatory
requirements from the briefing by the External Auditors, the Internal Auditors and Company Secretaries during
the Committee and/or Board meetings. The Board will continuously evaluate and determine the training needs
of each Director, particularly on relevant new law and regulations and essential practices for effective corporate
governance and risk management to enable the Directors to effectively discharge their duties.

In addition, any newly appointed directors will be given briefings by the executive directors and senior
management of the Company on the business activities of the Group and its strategic directions, as well as their
duties and responsibilities as directors. They have also attended the MAP programme conducted by Bursatra
Sdn Bhd.
Jadi Imaging Holdings Berhad Annual Report 2018 37

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

15. Remuneration policies

The members of the Remuneration Committee (“RC”) are as follows:

Name Number of Attendance Remark

Chan Chee Lian – Chairman 2/2


(Senior Independent Non-Executive Director)

Liew Kim Siong 2/2 Resigned on 23 February


(Executive Chairman/Group CEO) 2018

Sim Swee Yoke 2/2


(Independent Non-Executive Director)

Chia Yuet Yoong 2/2 Resigned on 18 May 2018


(Independent Non-Executive Director)

(Total: 2 meetings during the year)

The responsibility of the Remuneration Committee is to recommend to the Board the remuneration framework
for the remuneration packages of each Director. The remuneration of Directors is determined at levels which
enable the Group to attract and retain the Directors with the relevant experience and expertise needed to
assist in managing the Group effectively. In the case of Executive Directors of the Group, their remuneration
is structured to link rewards to corporate and individual performance. The Board as a whole determines the
remuneration of the Non-Executive Directors with the Directors concerned abstaining from deliberation and
voting in respect of his/her own individual remuneration. The remuneration and entitlements of the Non-
Executive Directors reflects the experience, expertise and level of responsibilities undertaken by the particular
Non-Executive Director concerned. The determination of the remuneration will be decided by the Board as a
whole.

The Remuneration Committee met two (2) times during the year under review and the meeting was attended by
Mr Chan Chee Lian, Mr Liew Kim Siong, Madam Sim Swee Yoke and Madam Chia Yuet Yoong. During the financial
year under review, RC had reviewed the remuneration for the Executive Directors and Senior Management, which
reflects the level of risk, responsibility as well as the performance of the Company and considered the packages
are well within the industry norm. RC and Board members had also reviewed the fees and BIK for Executive
Directors and Non-Executive Directors to be approved by shareholders at the forthcoming AGM. Besides that,
Mr Liew Kim Siong has indicated his intention to resign as a member of RC to comply in accordance with the
latest amendments on MCCG.

Directors’ Remuneration

The Group does not have a formalised remuneration policies and procedures for Directors and Senior
Management. The Board is guided by the present remuneration practices and procedures to determine their
remuneration. Nevertheless, it is the ultimate responsibility of the Board to approve the remuneration of the
Directors.

The remuneration of Directors is determined at levels which enable the Group to attract and retain the Directors
with the relevant experience and expertise needed to assist in managing the Group effectively. In the case of
Executive Directors of the Group, their remuneration is structured to link rewards to corporate and individual
performance.
38 Jadi Imaging Holdings Berhad Annual Report 2018

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

15. Remuneration policies (Cont’d)

Directors’ Remuneration (Cont’d)

Details of the remuneration of the Directors of the Company and categorised into appropriate components
during the financial year ended 31 March 2018 are as follows:

Company Group
Salaries Salaries
and other and other
Fees emoluments Fees emoluments
(RM’000) (RM’000) (RM’000) (RM’000)

Executive Directors
Liew Kim Siong 38 – 38 856 *
Eu Lan Eng 30 – 30 370 *
Liew Kit 24 – 24 91
Liew Hock Yee 24 – 24 75

Total 116 – 116 1,392

Non-Executive Directors
Chan Chee Lian 57 – 57 –
Yeoh Chui En 52 – 52 –
Sim Swee Yoke 57 – 57 –
Chia Yuet Yoong 54 – 54 –

Total 220 – 220 –

* Other emoluments include other allowances and BIK for the Directors on Board

Disclosure on remuneration of Key Senior Management

In determining the remuneration packages of the Group’s key Senior Management personnel, factors that were
taken into consideration included their individual responsibilities, skills, expertise and contributions to the Group’s
performance and whether the remuneration packages are competitive and sufficient to ensure that the Group
is able to attract and retain executive talents. The Group believes it may not be in its best interest to disclose on
named basis the key Senior Management personnel, having considered the highly competitive human resource
environment for personnel with the requisite knowledge, expertise and experience in the Group’s business
activities.

The aggregate remuneration paid to the key Senior Management was RM154,973, representing 1.6% of the
total employees remuneration of the Group, commensurate with their performance. The Company believes
that such disclosure still allows stakeholders a fair view of the remuneration paid as it is linked to the Group’s
performance.

The Terms of Reference of Remuneration Committee which clearly sets out its duties and functions has been
approved by the Board. The Terms of Reference is made available on the Company’s website at www.jadi.com.my.
Jadi Imaging Holdings Berhad Annual Report 2018 39

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

1. Audit and Risk Management Committee (“ARMC”)

During the financial year under review, the ARMC comprises four (4) Independent Non-Executive Directors.
Subsequent to financial year end, the ARMC is comprised of three (3) Independent Non-Executive Directors.

The composition of the ARMC, including its roles and responsibilities are set out in pages 19 and 20 under the
ARMC Report in this Annual Report. The Terms of Reference of ARMC has been updated on 9 July 2018 to be
in line with the recent amendments in the MCCG.

The ARMC members have broad experience, knowledge and expertise from various industries allow them to
discharge their duties effectively. They have committed their time and during meetings, they continuously probe
with hard questions on the financials until they are completely satisfied with the feedback provided. Details of
the ARMC members’ experience and qualifications are set out in profile on the Directors’ Profiles on pages 14
to 17.

All the ARMC members receive training and continuous professional developments set out in this statement
on pages 35 and 36.

2. Assessment of suitability and independence of external auditors

The Board maintains a formal and transparent professional relationship with the auditors through the Audit
and Risk Management Committee. The role of the Audit and Risk Management Committee in relation to this
is described in the Audit and Risk Management Committee Report in this Annual Report. The Audit and Risk
Management Committee has been explicitly accorded the power to communicate with the auditors of the Group.
During the financial year, the Committee had two (2) private sessions with the external auditors without the
presence of the management.

During the financial year under review, the ARMC has assessed the external auditors based on question and
answer with the external auditors to assess the suitability and independence of the external auditors. ARMC is
satisfied with PKF technical competency and audit independence during the financial year. A written assurance
by PKF is disclosed in the Independent Auditors’ Report to confirm their independence throughout the audit
engagement. None of the Board members were former key audit partners. As per stipulated in the Terms of
Reference of ARMC, in the event if a former key audit partner to be appointed as a member of ARMC, at least
two (2) years of cooling-off period have to be observed prior to the appointment.

3. Sound framework to manage risks

Risk Management Committee (“RMC”) comprising directors and senior management staff was established by
the Board with specific terms of reference. RMC reports directly to the Audit and Risk Management Committee
(“ARMC”). RMC activities are reported to the ARMC at their scheduled meeting.

RMC has established a risk management framework to manage the Group’s risk. The key risk profile has
been identified and evaluated. RMC reviews the Group’s risk management process periodically and makes
recommendations to the Board for approval. The Board continues to identify, evaluate and manage significant
risks. The Board has ultimate responsibility for reviewing the Group’s risks, approving the risk management
framework and the effectiveness of risk management of the Group.

The key risks relating to the Group’s strategic and business plans are addressed at the Board and Senior
Management Meetings on a periodical basis. In addition, the responsibility of managing the risks of each
department within the Group lies with the respective Heads of Department and it is during the periodic
management meetings where significant risks identified and the corresponding internal controls implemented
are communicated to the Group Chief Executive Officer (“CEO”) and Senior Management.
40 Jadi Imaging Holdings Berhad Annual Report 2018

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (cont’d)

3. Sound framework to manage risks (Cont’d)

At the Board level, the top three primary risks are;

(i) ensuring that the key leadership positions are filled and that succession planning/talent management
process is in place annually;
(ii) that processes are in place so that products are manufactured with ample attention paid to its quality and
standards;
(iii) that all overseas operation is being governed from Head Office and that the leadership team is fully aware
of the risk and exposure of the Company.

The Statement on Risk Management and Internal Control of the Group as set out in this Annual Report provides
an overview of the state of risk management and internal controls within the Group.

4. Internal audit function

The Group’s internal audit function is outsourced to a professional service firm and they report directly to the
Audit and Risk Management Committee. The internal auditors have carried out their functions according to the
standards set by recognised professional bodies. They have conducted periodic reviews on the effectiveness of
the internal control processes within the Group.

During the financial year under review, ARMC has assessed the performance of internal auditors based on
question and answer with them on their competency and reports presented by the internal auditors. ARMC
was satisfied with the outsourced Internal Auditor, Axcelasia Columbus Sdn. Bhd.’s technical competency and
audit independence during the financial year under review.

The ARMC Report and Statement on Risk Management and Internal Control set out in this Annual Report
provides an overview of the state of internal control within the Group.

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH


STAKEHOLDERS

1. Compliance with applicable financial reporting standards

In presenting the annual audited financial statements and quarterly announcements of unaudited consolidated
financial results to shareholders, the Board is responsible for presenting a balanced and understandable
assessment of the Group’s financial position and prospects. Audit and Risk Management Committee has been
delegated in overseeing the Group’s financial reporting processes, accuracy and quality of its financial reporting.
The Audit and Risk Management Committee Report set out in this Annual Report provides an overview of the
duties and functions of the Committee. A statement by the Directors of their responsibilities in preparing the
financial statements is set out in the Directors’ Responsibility Statement In Respect Of The Preparation Of The
Annual Audited Financial Statements contained in this Annual Report.
Jadi Imaging Holdings Berhad Annual Report 2018 41

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH


STAKEHOLDERS (cont’d)

2. Communications with Stakeholders

The Board acknowledges the importance of timely, regular and effective communication with stakeholders.

The Group has established a dedicated section on the Group’s website at www.jadi.com.my whereby shareholders
as well as members of the public may access the latest information on the aforesaid website which provides
information relating to annual reports, press releases, quarterly results and announcements.

The Group also participates in the overseas exhibition events and through social media and other electronic
channels to give the stakeholders and public at large a better understanding of the businesses of the Company.

3. Conduct of General Meetings

Notice of Annual General Meeting (“AGM”) sets out the resolutions together with the Company’s Annual Report
was sent to shareholders at least twenty-eight (28) days prior to the meeting to provide shareholders with
sufficient time for considerations and to make informed decisions. Shareholders who are unable to attend may
appoint their respective proxies to ask questions and vote on their behalf at the general meetings.

AGM is an important platform to have direct interaction with shareholders. Shareholders are encouraged to
raise questions pertaining to the Annual report, financial statements, corporate developments, resolutions and
businesses of the Company. Board members, senior management and the external auditors attended the last
AGM and the Board had provided explanations to all shareholders’ queries during the meeting.

All resolutions at the last AGM were voted by way of poll at which an independent scrutineer was appointed
to validate the votes cast at the last AGM.
42 Jadi Imaging Holdings Berhad Annual Report 2018

Statement on risk management


and internal control

INTRODUCTION

The Board of Directors (“the Board”) of Jadi Imaging Holdings Berhad is pleased to present its Statement on Risk
Management and Internal Control for financial year ended 31 March 2018, which has been prepared pursuant to
paragraph 15.26(b) of Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements and
as guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“the
Guidance”). This statement outlines the nature and state of the internal controls of the Group during the financial year.

BOARD RESPONSIBILITY

The Board acknowledges that it is ultimately responsible for the Group’s systems of risk management and internal
control and for reviewing the adequacy and effectiveness of the risk management and internal control systems to ensure
that shareholders’ interests and the Group’s assets are safeguarded. In this respect, the responsibility of reviewing the
adequacy and effectiveness of the internal control systems has been delegated to the Audit and Risk Management
Committee (“ARMC”), which is empowered by its terms of reference to seek the assurance on the adequacy and
effectiveness of the internal control systems through reports it receives from independent reviews conducted by the
internal audit function and Management.

Due to inherent limitations in any system on risk management and internal controls, such systems put into effect by
Management can only manage rather than eliminate all the risks that may impede the achievement of the Group’s
business objectives or goals. Therefore, the risk management and internal control systems can only provide reasonable
and not absolute assurance against material misstatement or loss.

RISK MANAGEMENT FRAMEWORK

The Group’s established a structured Risk Management Framework with a systematic process to proactively identify,
evaluate, mitigate, continuous monitoring and reviewing possible risks. The key risks relating to the Group’s strategic
and business plans are addressed at the Board and Senior Management Meetings on a periodical basis. In addition, the
responsibility of managing the risks of each department within the Group lies with the respective Heads of Department
and it is during the periodic management meetings where significant risks identified and the corresponding internal
controls implemented are communicated to the Chief Executive Officer (“CEO”) and Senior Management.

The Group’s Risk Management Oversight Structure is comprised of the following:

Audit & risk risk


Board of risk heads of all
Management Management
Directors coordination department employees
Committee Committee
Jadi Imaging Holdings Berhad Annual Report 2018 43

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

RISK MANAGEMENT FRAMEWORK (cont’d)

1) Board of Directors

The Board has delegated the oversight role and function to Risk Management Committee (“RMC”), a sub-
committee under ARMC, who shall oversee and ensure effective implementation of all risk management policies.

2) Audit and Risk Management Committee

RMC which is a sub-committee under ARMC, will report to ARMC periodically, should there be any changes
to the key risk profile as well as the necessary action plans to be taken by the management to systematically
address these potential risks.

3) Risk Management Committee (“RMC”)

RMC reviews the status and monitors the overall implementation of the Group’s risk management policies.
Periodic review of the Group’s key risk profile will be conducted by RMC. The RMC is comprised of at least
three (3) members from amongst the Directors and Senior management.

4) Risk Coordinator (“RC”)

RC coordinates and documents all risk management activities from each Head of Department throughout the
Group.

5) Heads of Department

Heads of Department will carry out risk identification and evaluate the effectiveness of existing controls with
its department team members.

6) All Employees

All employees shall have the responsibility to manage risks associated with all activities and functions within
their control.

The Group’s risk management process is comprised of the following essential activities:

2. Risk 3. Risk
Identification Evaluation

1. Establishing Goals
& Objectives
6. Risk 4. Risk
Review Mitigation

5. Risk
Monitoring

The above-mentioned risk management process of the Group serves as the on-going process used to identify, evaluate
and manage significant risks for the year under review and up to the date of approval of this statement. During financial
year ended 31 March 2018, RMC has met three times to deliberate on risk assessments and related action plans.
44 Jadi Imaging Holdings Berhad Annual Report 2018

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTERNAL AUDIT FUNCTION

The Group’s Internal Audit Function assists the Board and Audit and Risk Management Committee by providing an
independent assessment of the adequacy and effectiveness of the Group’s internal control system. Further details of
the Internal Audit Function are set out in the Audit and Risk Management Committee Report on pages 19 and 20 of
this Annual Report.

The Group’s internal audit function, which reports directly to the Audit Committee, is outsourced to Axcelasia Columbus
Sdn Bhd. The Engagement Director is Mr Mah Siew Hoong who has diverse professional experience in internal audit,
risk management and corporate governance advisory. He is a Chartered Member of the Institute of Internal Auditors
Malaysia, a member of the Malaysian Institute of Accountants and a Fellow Member of the Association of Chartered
Certified Accountants, United Kingdom. Mr Mah is a Certified Internal Auditor (USA) and has a Certification in Risk
Management Assurance (USA).

The number of staff deployed for the internal audit reviews ranges from 4 to 5 staff per visit including the Engagement
Director. The staff involved in the internal audit reviews possesses professional qualifications and/or a university degree.
Certain staff are members of the Institute of Internal Auditors Malaysia. The internal audit staff on the engagement
are free from any relationships or conflict of interest, which could impair their objectivity and independence, and the
internal audit reviews were conducted using a risk based approach and were guided by the International Professional
Practice Framework.

During the financial year under review, a summary of the activities carried out by the internal audit function are as
follows:

(a) Prepared the risk based internal audit plan for the review and approval of the Audit Committee.

(b) Carried out reviews in accordance with the risk based internal audit plan reviewed and approved by the Audit
Committee. Details of the reviews carried out are as follows:

Entity Business Processes

Jadi Imaging Technologies Sdn Bhd • Management of Information System


• Human Resource Management
• E-Commerce

Findings from the internal audit reviews conducted were discussed with Senior Management and subsequently
presented, together with Management’s response and proposed action plans, to the Audit and Risk Management
Committee for their review and approval. The outsourced internal audit function also carries out follow up reviews
and reports to the Audit and Risk Management Committee on the status of implementation of action plans committee
by Management pursuant to the recommendations highlighted in the internal audit reports.

Notwithstanding the above, although a number of internal control deficiencies were identified during the internal
audit reviews, none of the weaknesses have resulted in any material losses, contingencies or uncertainties that would
require a separate disclosure in this annual report.

The total professional fees paid for the outsourcing of the internal audit function for the financial year ended
31 March 2018 was RM45,000.

In addition, the external auditors met with the ARMC on 6 July 2017 and 23 February 2018 without the executive
members of the board and management team being present to discuss audit related matters.
Jadi Imaging Holdings Berhad Annual Report 2018 45

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

OTHER KEY ELEMENTS OF INTERNAL CONTROL

The other key elements of the Group’s internal control systems are:-

1) The Group has a well-defined organisation structure with clear lines of accountability, approval and control
procedures to provide a sound framework within the organization in facilitating proper decision making at the
appropriate authority levels of Management including matters that require Board’s approval.

2) The Audit and Risk Management Committee reviews the quarterly financial reports, annual financial statements
and the internal audit report on a periodic basis. Discussions with Management were held to deliberate on the
actions that are required to be taken to address internal control matters identified by the outsourced internal
audit function.

3) The Executive Directors are closely involved in the running of business and operations of the Group and they
report to the Board on significant changes in the business and external environment which affect the operations
of the Group at large.

4) Management meetings are conducted regularly with the Executive Directors, Senior Management and/or Head
of Departments in attendance. The meetings discuss and decide on all operational issues as well as inform and
update all Senior Management and Head of Departments on all major policies and business strategies directed
by the Board.

5) Policies and procedures on hiring and training scheme of staff have been established at Group level with individual
business group having the flexibility to adapt these policies for their specific needs. Staffs are guided on where
and how they can contribute their knowledge and skills through continuous upgrading to meet the demand of
their working requirements. Heads of Department assume the responsibility of developing staff with relevant
and appropriate skills by reviewing and recommending trainings to the Human Resource department on a yearly
basis.

6) Established internal policies and procedures for key business units within the Group.

7) In April 2018, the Group has upgraded from its existing ISO 9001:2008 certification to ISO 9001:2015. Certain
operations of the Group are ISO 9001:2015 certified. With such a certification, audits are conducted by external
parties periodically to ensure compliance with the terms and conditions of the certification.

8) All purchases and maintenance expenditures for the Group are centralised and coordinated by a Procurement
Department that ensures adherence to approved procedures as well as to leverage on economies of scale. Major
expenditures are subjected to tender procedure whenever possible and are appraised by the Management before
they are approved by the Board.

REVIEW OF THIS STATEMENT BY EXTERNAL AUDITOR

The external auditors have reviewed this statement of risk management and internal control for inclusion in the Annual
Report of the Company for the financial year ended 31 March 2018 and reported to the Board that nothing has come
to their attention that causes them to believe that the Statement on Risk Management and Internal Control intended
to be included in the annual report is not prepared, in all material respects, in accordance with the disclosures required
by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of
Listed Issuers, nor is factually inaccurate.
46 Jadi Imaging Holdings Berhad Annual Report 2018

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

CONCLUSION

At a meeting held on 9 July 2018, the Board obtained assurance from the Chief Executive Officer (“CEO”) and Finance
Manager that the Group’s risk management and internal control system are operating adequately and effectively, in
all material aspects.

The Board is of the view that the risk management and internal control systems are satisfactory and shall continue to
take the appropriate and necessary measures to improve the Group’s risk management and internal controls systems
in meeting the Group’s corporate objectives.

This statement was approved by the Board of Directors on 9 July 2018.


Jadi Imaging Holdings Berhad Annual Report 2018 47

ADDITIONAL COMPLIANCE
INFORMATION

The information set out below is disclosed in compliance with the Listing Requirements of Bursa Malaysia Securities
Berhad:-

1. UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS

There were no proceeds raised by the Company from any corporate proposals during the financial year ended
31 March 2018.

2. AUDIT AND NON-AUDIT FEES

(a) Amount of audit fees incurred by the Company and on a Group basis are amounted to RM24,000 and
RM103,268 respectively.

(b) Amount of non-audit fees incurred by the Company and on a Group basis are amounted to RM5,000 and
RM5,000 respectively.

3. MATERIAL CONTRACTS

There were no material contracts entered into by the Company and its subsidiaries involving Directors and
substantial shareholders, either still subsisting at the end of the financial year under review or entered into since
the end of the previous financial year except as disclosed in Note 34 to the Financial Statements which are in
the Financial Statements section of the Annual Report.

4. Recurrent Related Party Transactions of Revenue or Trading Nature

The details of related party transactions for the financial year are disclosed in Note 27 to the financial
statements.

5. Revaluation Policy on Landed Properties

The Group has not adopted a policy of regular revaluation of its landed properties as at the end of the financial
year.
48 Jadi Imaging Holdings Berhad Annual Report 2018

statement on
directors’ responsibility
In Respect Of The Preparation Of The Financial Statements

The Directors are responsible for ensuring that the financial statements of the Group and the Company are drawn up
in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies
Act, 2016 in Malaysia so as to give a true and fair view of the state of affairs of the Group and the Company as at 31
March 2018 and of the results and cashflows of the Group and the Company for the financial year ended on that date.

In preparing the financial statements, the Directors have:

(a) adopted suitable accounting policies and applied them consistently;


(b) made judgements and estimates that are prudent and reasonable;
(c) ensured the adoption of applicable approved accounting standards; and
(d) used the going concern basis for the preparation of the financial statements.

The Directors are responsible for ensuring that proper accounting records which disclose the financial position of
the Group and the Company with reasonable accuracy at any time are kept in accordance with the Companies Act,
2016 in Malaysia. The Directors are also responsible for ensuring that a proper system of internal control is in place
to safeguard the Group’s assets and to prevent and detect fraud and other irregularities.
Statutory
 Financial Statements
50 Directors’ report

54 Statement by directors

54 Statutory declaration

55 Independent auditors’ report

59 Statements of profit or loss


and other comprehensive income

60 Statements of financial position

62 Statements of changes in equity

64 Statements of cash flows



67 Notes to the financial statements
50 Jadi Imaging Holdings Berhad Annual Report 2018

directors’
report

The Directors hereby submit their report and the audited financial statements of the Group and of the Company for
the year ended 31 March 2018.

Principal activities

The Company is principally an investment holding company. The principal activities of the subsidiaries are disclosed
in Note 9 to the financial statements.

There has been no significant change in the nature of these activities during the financial year.

Results

Group Company
RM RM

Loss for the financial year 10,650,114 5,400,509

Attributable to:
Owners of the Company 10,650,114 5,400,509

Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial year other than those disclosed
in the financial statements.

Dividends

No dividend has been paid or declared by the Company since the end of the previous financial year. The Directors do
not recommend any dividend for the financial year ended 31 March 2018.

Directors

The directors of the Company in office during the financial year and during the period from the end of the financial
year to the date of this report are:

Liew Kim Siong


Eu Lan Eng (Resigned on 18 July 2018)
Yeoh Chui En
Chan Chee Lian
Sim Swee Yoke
Liew Hock Yee (Appointed on 1 June 2017)
Liew Kit (Appointed on 1 June 2017)
Chia Yuet Yoong (Resigned on 18 May 2018)

Apart from the directors mentioned above, there are no other directors holding office in the Company’s subsidiaries
since the date of the last report.
Jadi Imaging Holdings Berhad Annual Report 2018 51

DIRECTORS’ REPORT

Directors’ interests in shares

According to the Register of Directors’ Shareholdings, the interest of directors in office at the end of the financial year
in shares in the Company and its related incorporations during the financial year were as follows:

Number of ordinary shares


Balance Balance
as at as at
1.4.2017 Bought Sold 31.3.2018

In the Company

Direct interests:

Liew Kim Siong 22,017,045 – 2,000,000 20,017,045


Eu Lan Eng 42,887,454 – – 42,887,454
Yeoh Chui En 1,000,000 – – 1,000,000
Chia Yuet Yoong 1,000,000 – – 1,000,000

Indirect interests:

Liew Kim Siong (1) 284,743,985 – – 284,743,985


Chan Chee Lian (2) 100,000 – – 100,000


(1)
Deemed interest through LSI Holdings Sdn. Bhd.
(2)
Deemed interest through spouse

By virtue of their interest in shares of the Company, these directors are deemed to have interest in the shares of the
subsidiaries to the extent of the Company’s interest, in accordance with Section 8 of the Companies Act, 2016 in
Malaysia.

The other directors in office at the end of the financial year, did not hold any interest in the ordinary shares of the
Company and related corporations during the financial year, according to the register required to be kept under Section
59 of the Companies Act, 2016 in Malaysia.

Directors’ benefits

Since the end of the previous financial year, no director of the Company has received nor become entitled to receive
any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by
directors or the fixed salaries of full time employees of the Company as disclosed in Note 5 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 except those disclosed
in Note 27 to the financial statements.

There were no arrangements during or at the end of the financial year, which had the object of enabling the 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.
52 Jadi Imaging Holdings Berhad Annual Report 2018

DIRECTORS’ REPORT

Directors’ remuneration and fee

Directors’ remuneration and fee of the Group are disclosed in Note 4 and Note 5 respectively to the financial statements.

Indemnity and insurance for directors, officers and auditors

The Company has paid insurance premiums amounting to RM9,995 for Directors and Officers Liability insurance up
to a limit of RM3 million for the period from 9 December 2017 to 8 December 2018 for the Directors.

Except for the above, there is no other premium paid nor indemnities given, during or since the end of financial year,
for any person who is or has been a director, officer or auditor of the Group and of the Company.

Issue of shares and debentures

There were no changes in the share capital of the Company during the financial year.

There were no debentures issued during the financial year.

Options granted over unissued shares

No options were granted by the Company to any parties during the financial year to take up unissued shares of the
Company.

Other statutory information

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable
steps to ascertain that:

(i) proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful
debts and have satisfied themselves that all known bad debts had been written off and that adequate provision
had been made for doubtful debts; and

(ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down
to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

(i) which would render the amount written off for bad debts or the making of provision for doubtful debts inadequate
to any material extent; or

(ii) which would render the value attributed to current assets in the financial statements of the Group and of the
Company misleading; or

(iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the
Group and of the Company misleading or inappropriate; or

(iv) not otherwise dealt with in this report or the financial statements, which would render any amount stated in
the financial statements of the Group and of the Company misleading.
Jadi Imaging Holdings Berhad Annual Report 2018 53

DIRECTORS’ REPORT

Other statutory information (cont’d)

At the date of this report, there does not exist:

(i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year
and which secures the liabilities of any other person; or

(ii) any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial
year.

No contingent liability or other liability of the Group and of the Company has become enforceable or is likely to
become enforceable within the period of twelve months after the end of the financial year which, in the opinion of
the Directors, will or may affect the ability of the Group and of the Company to meet their obligations as and when
they fall due. Contingent liabilities are disclosed in Note 29 to the financial statements.

In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year
ended 31 March 2018 have not been substantially affected by any item, transaction or event of a material and unusual
nature nor has any such item, transaction or event occurred in the interval between the end of the financial year and
the date of this report.

Significant event

Details of significant event are disclosed in Note 34 to the financial statements.

Auditors remuneration

The remuneration of the auditors amounted to RM103,268 and is disclosed in Note 4 to the financial statements.

Auditors

The auditors, Messrs PKF, have indicated their willingness to continue in office.

Signed on behalf of the Directors


in accordance with a resolution of the Board,

LIEW KIM SIONG LIEW HOCK YEE

Kuala Lumpur

19 July 2018
54 Jadi Imaging Holdings Berhad Annual Report 2018

statement by
directors
Pursuant To Section 251(2) Of The Companies Act, 2016 In Malaysia

In the opinion of the Directors, the accompanying financial statements as set out on pages 59 to 128 are drawn up
in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act, 2016 in Malaysia, so as to give a true and fair view of the financial positions of
the Group and of the Company as at 31 March 2018 and of their financial performances and their cash flows for the
financial year ended on that date.

Signed on behalf of the Directors


in accordance with a resolution of the Board,

LIEW KIM SIONG LIEW HOCK YEE

Kuala Lumpur

19 July 2018

statUTORY
decLARATION
Pursuant To Section 251(1)(b) Of The Companies Act, 2016 In Malaysia

I, LIEW HOCK YEE, being the director primarily responsible for the financial management of JADI IMAGING HOLDINGS
BERHAD, do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial
statements as set out on pages 59 to 128 are in my opinion correct, and I make this solemn declaration conscientiously
believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the )


above named at Kuala Lumpur in Wilayah )
Persekutuan on 19 July 2018 )

LIEW HOCK YEE


(MIA No. 32558)

Before me,

KAPT. (B) JASNI BIN YUSOFF (W465)


COMMISSIONER FOR OATHS
Jadi Imaging Holdings Berhad Annual Report 2018 55

independent
auditors’ report
To The Members Of Jadi Imaging Holdings Berhad
(Co. No. 526319-P) (Incorporated In Malaysia)

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of JADI IMAGING HOLDINGS BERHAD, which comprise the statements
of financial position as at 31 March 2018 of the Group and of the Company, and the statements of profit or loss and
other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the
Company for the financial year then ended, and notes to the financial statements, including a summary of significant
accounting policies, as set out on pages 59 to 128.

In our opinion, the accompanying financial statements give a true and fair view of the financial positions of the Group
and of the Company as at 31 March 2018, and of their financial performances and their cash flows for the financial year
then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards
and the requirements of the Companies Act, 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards
on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the
Audit of the Financial Statements section of our report.

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct
and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board
for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical
responsibilities in accordance with the By-Laws and the IESBA Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the Group and of the Company for the current financial year. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.

Net realisable value of inventories


(Refer to Notes 2(l) and 14 to the financial statements)

We identified inventories as an area of focus in the audit as there is significant judgement involved in the assessment
of the write down of inventories based on the estimated net realisable value in accordance with their ageing. The
estimation of net realisable value of inventories is based on the most reliable evidence available at the time the estimates
are made. A net reversal of impairment of RM22,609 was made against total Group’s inventories of RM40,522,749
as at the financial year ended.

As part of our audit, we evaluated management’s assessment of the net realisable value of inventories and the amount
written down, focusing especially on slow moving inventories and inventories that do not appear to be useable. Our
procedures included:

(a) Assessment and enquiry with management on the rationale and basis of specific inventories written down that
do not appear to be useable;
(b) Reviewing the sufficiency of amounts of inventories written down based on the Group’s policy on inventories,
whether stated at the lower of cost and net realisable value; and
(c) Verifying appropriateness of inventory costing and assessing its accuracy.
56 Jadi Imaging Holdings Berhad Annual Report 2018

INDEPENDENT AUDITORS’ REPORT


To The Members Of Jadi Imaging Holdings Berhad
(Co. No. 526319-P) (Incorporated In Malaysia)

Report on the Audit of the Financial Statements (cont’d)

Key Audit Matters (Cont’d)

Impairment of plant and equipment


(Refer to Notes 2(i) and 10 to the financial statements)

The Group has plant and machinery with an aggregate cost of RM116,228,892 as at 31 March 2018. Following a
review of the business, including the Group’s operating plans and the outlook for the industry, the management has
assessed further impairment provision of RM1,385,320 to reduce the carrying amounts of certain plant and machinery
to their estimated recoverable values. For the remaining plant and machinery, the management has concluded that
the recoverable amount is higher than their carrying amounts such that no impairment provision was required.

We identified impairment of plant and machinery as an area of focus in the audit as these conclusions are dependent
upon significant management judgement, including in respect of estimated utilisation, estimated recoverable values
and discount rates applied to future cash flows.

Our procedures in relation to management’s impairment assessment of plant and machinery included:

(a) Assessment and enquiry with management on the rationale and basis of impairment of plant and machinery;
(b) Assessing management’s methodology used to estimate values in use;
(c) Checking, on a sample basis, the accuracy and relevance of the input data used by management to estimate
values in use;
(d) Assessing reasonableness of forecasted production output based on historical data for each production line;
(e) Assessing key assumptions used to estimate recoverable values and values in use via enquiry and discussions
with management; and
(f) Considering the potential impact of reasonably possible downside changes in these key assumptions.

Information Other than the Financial Statements and Auditors’ Report Thereon

The Directors are responsible for the other information. The other information comprises the Chairman’s Statement,
Management Discussion and Analysis, Audit and Risk Management Committee Report, Corporate Governance Overview
Statement, Statement on Risk Management and Internal Control, Additional Compliance Information, Director’s
Report and List of Properties, but does not include the financial statements of the Group and of the Company and
our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company do not cover the other information and we
do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to
read the other information identified and, in doing so, consider whether the information is materially inconsistent
with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise
appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of the other information,
we are required to report that fact. We have nothing to report in this regard.
Jadi Imaging Holdings Berhad Annual Report 2018 57

INDEPENDENT AUDITORS’ REPORT


To The Members Of Jadi Imaging Holdings Berhad
(Co. No. 526319-P) (Incorporated In Malaysia)

Report on the Audit of the Financial Statements (cont’d)

Responsibilities of the Directors for the Financial Statements

The Directors are responsible for the preparation of financial statements of the Group and of the Company that give
a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also responsible for such
internal controls as the Directors determine are necessary to enable the preparation of financial statements of the
Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing
the Group’s and Company’s ability to continue as going concerns, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or
the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the
Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s and of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Directors.

• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures
in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report.
However, future events or conditions may cause the Group or the Company to cease to continue as a going
concern.
58 Jadi Imaging Holdings Berhad Annual Report 2018

INDEPENDENT AUDITORS’ REPORT


To The Members Of Jadi Imaging Holdings Berhad
(Co. No. 526319-P) (Incorporated In Malaysia)

Report on the Audit of the Financial Statements (cont’d)

Auditors’ Responsibilities for the Audit of the Financial Statements (Cont’d)

• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the
Company, including the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial statements of the Group. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have compiled with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial statements of the Group and of the Company for the current year and are therefore the key
audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 2016 in Malaysia, we report that the subsidiaries of which
we have not acted as auditors, are disclosed in Note 9 to the financial statements.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies
Act, 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents
of this report.

PKF BRIAN WONG WYE PONG


AF 0911 02610/04/2019 J
CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT

Kuala Lumpur

19 July 2018
Jadi Imaging Holdings Berhad Annual Report 2018 59

statements of profit or loss


and other comprehensive income For The Financial Year Ended 31 March 2018

Group Company
2018 2017 2018 2017
Note RM RM RM RM

Revenue 3 55,745,965 76,950,167 – –


Cost of sales (57,286,292) (69,317,752) – –

Gross (loss)/profit (1,540,327) 7,632,415 – –


Other income 8,562,595 2,501,569 515,136 –
Administrative expenses (9,014,793) (9,939,035) (498,142) (426,486)
Selling and distribution expenses (2,620,158) (2,659,374) – –
Other expenses (5,039,198) (13,318,837) (5,417,503) (951,082)

Loss from operations 4 (9,651,881) (15,783,262) (5,400,509) (1,377,568)


Finance costs 6 (758,419) (1,112,940) – –

Loss before tax (10,410,300) (16,896,202) (5,400,509) (1,377,568)


Tax expense 7 (239,814) (297,199) – –

Loss for the financial year (10,650,114) (17,193,401) (5,400,509) (1,377,568)




Other comprehensive
 income, net of tax:
Items that are or may be
 reclassified subsequently
 to profit or loss:
Foreign currency translation
 differences 65,546 1,875,398 – –

Total comprehensive loss


 for the financial year (10,584,568) (15,318,003) (5,400,509) (1,377,568)

Loss attributable to
 owners of the Company (10,650,114) (17,193,401)


Total comprehensive loss
 attributable to owners
 of the Company (10,584,568) (15,318,003)

Basic loss per share (sen):


Basic 8 (1.13) (1.83)

The accompanying notes form an integral part of the financial statements.


60 Jadi Imaging Holdings Berhad Annual Report 2018

statements of
financial position
As At 31 March 2018

Group Company
2018 2017 2018 2017
Note RM RM RM RM

ASSETS
Non-current assets
Investment in subsidiaries 9 – – 83,180,468 103,004,797
Property, plant and equipment 10 69,716,867 94,775,548 – –
Investment properties 11 4,867,841 5,455,170 – –
Other investment 12 50,000 50,000 – –
Amount due from a subsidiary 13 – – 2,753,579 –

74,634,708 100,280,718 85,934,047 103,004,797

Current assets
Inventories 14 40,522,749 42,404,219 – –
Trade receivables 15 6,629,344 10,604,503 – –
Non-trade receivables,
 deposits and prepayments 16 3,406,938 2,252,409 1,500 8,024
Amount due from subsidiaries 13 – – 7,484,668 4,091,298
Tax recoverable 345,479 452,279 – –
Fixed deposit with a licensed bank 17 55,746 1,940,994 – –
Cash and bank balances 10,587,263 8,604,284 2,310,433 22,163

61,547,519 66,258,688 9,796,601 4,121,485

TOTAL ASSETS 136,182,227 166,539,406 95,730,648 107,126,282




EQUITY AND LIABILITIES
Equity attributable to owners
 of the Company
Share capital 18 94,185,469 94,185,469 94,185,469 94,185,469
Share premium 18 – – – –
Treasury shares 19 (22,042) (22,042) (22,042) (22,042)
Foreign exchange
 translation reserve 20 9,226,047 9,160,501 – –
Revaluation reserve 21 14,259,085 23,673,482 – –
Retained profits/
 (Accumulated losses) 22 9,320,461 10,556,178 (389,169) 5,011,340

Total equity 126,969,020 137,553,588 93,774,258 99,174,767

The accompanying notes form an integral part of the financial statements.


Jadi Imaging Holdings Berhad Annual Report 2018 61

STATEMENTS OF FINANCIAL POSITION


As At 31 March 2018

Group Company
2018 2017 2018 2017
Note RM RM RM RM

LIABILITIES
Non-current liabilities
Borrowings 23 46,120 76,895 – –
Deferred tax liabilities 24 774,637 1,408,921 – –

820,757 1,485,816 – –

Current liabilities
Trade payables 25 2,030,021 7,444,706 – –
Non-trade payables and accruals 26 4,513,881 2,911,493 1,956,390 164,791
Amount due to subsidiaries 13 – – – 7,786,724
Borrowings 23 1,848,548 17,143,803 – –

8,392,450 27,500,002 1,956,390 7,951,515

Total liabilities 9,213,207 28,985,818 1,956,390 7,951,515

TOTAL EQUITY AND LIABILITIES 136,182,227 166,539,406 95,730,648 107,126,282

The accompanying notes form an integral part of the financial statements.


62 Jadi Imaging Holdings Berhad Annual Report 2018

statements of
CHANGES IN EQUITY
For The Financial Year Ended 31 March 2018

<--------------------------- Non-distributable ---------------------------> Distributable


Foreign
exchange
Share Treasury Share translation Revaluation Retained
capital shares premium reserve reserve profits Total
RM RM RM RM RM RM RM

Group
At 1 April 2016 94,182,008 (22,042) 3,461 7,285,103 23,567,691 27,855,370 152,871,591
Transfer in accordance
 to Section 74 of the
 Company Act 2016
 (Note 18) 3,461 – (3,461) – – – –

Loss for the financial year – – – – – (17,193,401) (17,193,401)


Other comprehensive
 income for the
 financial year:
- foreign currency
  translation differences – – – 1,875,398 – – 1,875,398

Total comprehensive loss


 for the financial year – – – 1,875,398 – (17,193,401) (15,318,003)
Over realisation of
 revaluation reserve – – – – 105,791 (105,791) –

At 31 March 2017 94,185,469 (22,042) – 9,160,501 23,673,482 10,556,178 137,553,588

<------------------- Non-distributable -------------------> Distributable


Foreign
exchange
Share Treasury translation Revaluation Retained
capital shares reserve reserve profits Total
RM RM RM RM RM RM

Group
At 1 April 2017 94,185,469 (22,042) 9,160,501 23,673,482 10,556,178 137,553,588

Loss for the financial year – – – – (10,650,114) (10,650,114)


Other comprehensive income
 for the financial year:
- foreign currency
  translation differences – – 65,546 – – 65,546

Total comprehensive loss


 for the financial year – – 65,546 – (10,650,114) (10,584,568)
Realisation of revaluation reserve – – – (9,414,397) 9,414,397 –

At 31 March 2018 94,185,469 (22,042) 9,226,047 14,259,085 9,320,461 126,969,020

The accompanying notes form an integral part of the financial statements.


Jadi Imaging Holdings Berhad Annual Report 2018 63

STATEMENTS OF CHANGES IN EQUITY


For The Financial Year Ended 31 March 2018

<-------- Non-distributable --------> Distributable


Retained
profits/
Share Treasury Share (Accumulated
capital shares premium losses) Total
RM RM RM RM RM

Company
At 1 April 2016 94,182,008 (22,042) 3,461 6,388,908 100,552,335
Transfer in accordance
 to Section 74 of the
 Companies Act, 2016
 (Note 18) 3,461 – (3,461) – –
Total comprehensive loss
 for the financial year – – – (1,377,568) (1,377,568)

At 31 March 2017 94,185,469 (22,042) – 5,011,340 99,174,767


Total comprehensive loss
 for the financial year – – – (5,400,509) (5,400,509)

At 31 March 2018 94,185,469 (22,042) – (389,169) 93,774,258

The accompanying notes form an integral part of the financial statements.


64 Jadi Imaging Holdings Berhad Annual Report 2018

statements of
CASh flows
For The Financial Year Ended 31 March 2018

Group Company
2018 2017 2018 2017
Note RM RM RM RM

Cash flows from


 operating activities
Loss before tax (10,410,300) (16,896,202) (5,400,509) (1,377,568)

Adjustments for:
Bad debts written off 42,551 41,621 – –
Depreciation of:
- investment properties 372,029 2,400 – –
- property, plant and equipment 8,095,980 10,848,310 – –
Property, plant and equipment
 written off 56,705 2 – –
Impairment loss on
 trade receivables 4,257 458,106 – –
Impairment loss on property,
 plant and equipment 1,385,320 10,997,789 – –
Impairment loss on investment
 in a subsidiary – – 1,743,254 –
Interest income (111,308) (120,173) – –
Interest expense 758,419 1,112,940 – –
Inventories written down 2,245,130 1,600,523 – –
(Gain)/Loss on disposal
 of a subsidiary – (16,802) – 6
(Gain)/Loss on disposal of
 property, plant and equipment (6,439,775) 83,170 – –
Reversal of inventories
 written down (2,267,739) (1,187,102) – –
Loss/(Gain) on unrealised
 foreign exchange 636,165 (1,398,748) – 883,949
Loss on remeasurement of
 amount due from subsidiaries – – 3,646,517 –

Operating (loss)/profit before


 working capital changes (5,632,566) 5,525,834 (10,738) (493,613)
Decrease in inventories 1,904,079 3,568,657 – –
Decrease in receivables 2,451,929 3,866,184 6,524 10,936
(Decrease)/Increase in payables (3,625,084) (3,574,617) 1,791,599 (675,620)

Cash (used in)/generated


 from operations (4,901,642) 9,386,058 1,787,385 (1,158,297)
Interest paid (754,034) (1,092,180) – –
Income tax refunded 135,164 – – –
Income tax paid (28,364) (88,563) – –
Real property gains tax paid (690,000) – – –

Net cash (used in)/from


 operating activities (6,238,876) 8,205,315 1,787,385 (1,158,297)

The accompanying notes form an integral part of the financial statements.


Jadi Imaging Holdings Berhad Annual Report 2018 65

STATEMENTS OF CASH FLOWS


For The Financial Year Ended 31 March 2018

Group Company
2018 2017 2018 2017
Note RM RM RM RM

Cash flows from


 investing activities
Interest received 111,308 120,173 – –
Proceeds from disposal
 of property, plant and
 equipment 23,197,056 601,605 – –
Purchase of property,
 plant and equipment (1,413,986) (2,424,769) – –
Capital reduction in
 a subsidiary – – 18,081,075 –
(Advances to)/Repayment
 from subsidiaries – – (17,580,190) 1,158,213

Net cash from/(used in)


 investing activities 21,894,378 (1,702,991) 500,885 1,158,213

Cash flows from


 financing activities
Interest paid (4,385) (20,760) – –
Repayment of bills payable (5,307,038) (6,827,701) – –
Repayment of hire
 purchase liability (29,359) (28,007) – –
Repayment of revolving credits (10,000,000) – – –

Net cash used in


 financing activities (15,340,782) (6,876,468) – –

Net increase/(decrease)
 in cash and cash equivalents 314,720 (374,144) 2,288,270 (84)
Effects on foreign
 currency translation (216,989) 638,938 – –
Cash and cash equivalents
 at 1 April 2017/2016 10,545,278 10,280,484 22,163 22,247

Cash and cash equivalents


 at 31 March (i) 10,643,009 10,545,278 2,310,433 22,163

The accompanying notes form an integral part of the financial statements.


66 Jadi Imaging Holdings Berhad Annual Report 2018

STATEMENTS OF CASH FLOWS


For The Financial Year Ended 31 March 2018

Notes:

(i) Cash and cash equivalents

Cash and cash equivalents comprise the following:

Group Company
2018 2017 2018 2017
RM RM RM RM

Cash and bank balances


- cash in bank and cash on hand 9,784,669 8,604,284 2,310,433 22,163
- money market placement 802,594 – – –
Fixed deposit with a licensed bank 55,746 1,940,994 – –

10,643,009 10,545,278 2,310,433 22,163

(ii) Reconciliation of liability arising from financing activity:

Foreign
1 April exchange 31 March
2017 Cash flows movements 2018
RM RM RM RM

Group
Bills payable 7,114,444 (5,307,038) 10,367 1,817,773
Hire purchase liability 106,254 (29,359) – 76,895
Revolving credits 10,000,000 (10,000,000) – –

The accompanying notes form an integral part of the financial statements.


Jadi Imaging Holdings Berhad Annual Report 2018 67

notes to the
financial statements As At 31 March 2018

1. Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian
Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of
the Companies Act, 2016 in Malaysia.

The accompanying financial statements have been prepared assuming that the Group and the Company will
continue as going concerns which contemplates the realisation of assets and settlement of liabilities in the
normal course of business.

These financial statements are presented in the Ringgit Malaysia (“RM”), which is the Group’s and the Company’s
functional and presentation currency.

(a) Standards issued and effective

On 1 April 2017, the Group and the Company have also adopted the following amended MFRS which are
mandatory for annual financial periods beginning on or after 1 January 2017.

Effective for
annual periods
beginning on
Description or after

• Annual improvements to MFRSs 2014 - 2016 cycle


- Amendments to MFRS 12, Disclosure of Interests in
 Other Entities 1 January 2017
- Amendments to MFRS 107, Statement of Cash Flow:
 Disclosure Initiative 1 January 2017
- Amendments to MFRS 112, Income Taxes: Recognition
 of Deferred Tax Assets for Unrealised Losses 1 January 2017

Adoption of the above amended MFRS did not have any material effect on the financial performances or
positions of the Group and the Company.

(b) Standards issued but not yet effective

The Group and the Company have not adopted the following standards and interpretations that have
been issued not yet effective:

Effective for
annual periods
beginning on
Description or after

• Annual improvements to MFRSs 2014 - 2016 cycle


- Amendments to MFRS 1, First-time Adoptions of
 Malaysian Financial Reporting 1 January 2018
- Amendments to MFRS 128, Investment in
 Associates and Joint Ventures 1 January 2018
• Annual improvements to MFRSs 2015 - 2017 cycle
- Amendments to MFRS 3, Business Combinations 1 January 2019
- Amendments to MFRS 11, Joint Arrangements 1 January 2019
- Amendments to MFRS 112, Income Taxes 1 January 2019
- Amendments to MFRS 123, Borrowing Costs 1 January 2019
68 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

1. Basis of preparation (Cont’d)

(b) Standards issued but not yet effective (Cont’d)

Effective for
annual periods
beginning on
Description or after

• Amendments to MFRS 2, Share-based Payment: Classification


 and Measurement of Share-based Payment Transactions 1 January 2018
• Amendments to MFRS 4, Insurance Contracts: Applying
 MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018
• Amendments to MFRS 119, Employee Benefits: Plan Amendment,
 Curtailment and Settlement 1 January 2019
• Amendments to MFRS 2, Share-based Payment 1 January 2020
• Amendments to MFRS 3, Business Combinations 1 January 2020
• Amendments to MFRS 6, Exploration for and Evaluation of
 Mineral Resources 1 January 2020
• Amendments to MFRS 14, Regulatory Deferral Accounts 1 January 2020
• Amendments to MFRS 101, Presentation of Financial Statements 1 January 2020
• Amendments to MFRS 108, Accounting Policies, Change in
 Accounting Estimates and Errors 1 January 2020
• Amendments to MFRS 134, Interim Financial Reporting 1 January 2020
• Amendments to MFRS 137, Provisions, Contingent Liabilities
 and Contingent Assets 1 January 2020
• Amendments to MFRS 138, Intangible Assets 1 January 2020
• MFRS 9, Financial Instruments 1 January 2018
• MFRS 15, Revenue from Contract with Customers 1 January 2018
• Clarifications to MFRS 15, Revenue from Contract with Customers 1 January 2018
• MFRS 16, Leases 1 January 2019
• MFRS 17, Insurance Contracts 1 January 2021
• Amendments to MFRS 10, Consolidated Financial Statements and
 MFRS 128 Investment in Associate and Joint Venture: Sales or
 Contribution of Assets Between an Investor and its Associate
 or Joint Venture Deferred
• Amendments to MFRS 140, Investment Property: Transfer of
 Investment Property 1 January 2018
• Amendments to MFRS 9, Financial Instruments: Prepayment
 Features with Negative Compensation 1 January 2019
• Amendments to MFRS 128, Investment in Associates and
 Joint Ventures: Long-term Interests in Associates and Joint Ventures 1 January 2019
• IC Interpretation 22, Foreign Currency Transactions and
 Advance Consideration 1 January 2018
• IC Interpretation 23, Uncertainty over Income Tax Treatments 1 January 2019
• Amendments to IC Interpretation 12, Service Concession
 Arrangements 1 January 2020
• Amendments to IC Interpretation 19, Extinguishing
 Financial Liabilities with Equity Instruments 1 January 2020
• Amendments to IC Interpretation 20, Stripping Costs
 in the Production Phase of a Surface Mine 1 January 2020
• Amendments to IC Interpretation 22, Foreign Currency Transactions
 and Advance Consideration 1 January 2020
• Amendments to IC Interpretation 132, Intangible assets - Web Site Costs 1 January 2020
Jadi Imaging Holdings Berhad Annual Report 2018 69

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

1. Basis of preparation (Cont’d)

(b) Standards issued but not yet effective (Cont’d)

The initial application of the abovementioned accounting standards, amendments or interpretations are
not expected to have any material impact to the financial statements of the Group and of the Company
except as mentioned below:

MFRS 9 Financial Instruments

MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces earlier versions of MFRS 9 and introduces a package
of improvements which includes a classification and measurement model, a single forward looking
‘expected loss’ impairment model and a substantially reformed approach to hedge accounting. MFRS 9
when effective will replace MFRS 139 Financial Instruments: Recognition and Measurement.

MFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement
categories for financial assets: amortised cost, fair value through other comprehensive income and fair
value through profit or loss. The basis of classification depends on the entity’s business model and the
contractual cash flow characteristics of the financial asset. Investments in equity instruments are required
to be measured at fair value through profit or loss with the irrevocable option at inception to present
changes in fair value in other comprehensive income not recycling. There is now a new expected credit
losses model that replaces the incurred loss impairment model used in MFRS 139. For financial liabilities
there were no changes to classification and measurement except for the recognition of changes in own
credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss.
MFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness
tests. It requires an economic relationship between the hedged item and hedging instrument and for
the ‘hedged ratio’ to be the same as the one management actually uses for risk management purposes.
Contemporaneous documentation is still required but is different to that currently prepared under MFRS
139.

Based on the analysis of the Group’s and of the Company’s financial assets and liabilities as at 31 March
2018 on the basis of facts and circumstances that existed at that date, the Directors of the Group and
of the Company have assessed the impact of MFRS 9 to the Group’s and the Company’s consolidated
financial statements as follows:

(i) Classification and measurement

Based on its assessment, the Group and the Company believe that the new classification requirements
will have no material impact on the Group’s and the Company’s financial assets and financial liabilities.

(ii) Impairment

The Group and the Company have chosen to apply the simplified approach prescribed by MFRS
9, which requires a lifetime expected credit loss to be recognised from initial recognition of the
trade and non-trade receivables, including financial assets. Due to the strong creditworthiness of
the Group’s and of the Company’s receivables, the Group and the Company believe that the new
impairment model will not have any significant impact on the Group’s and the Company’s financial
statements.
70 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

1. Basis of preparation (Cont’d)

(b) Standards issued but not yet effective (Cont’d)

MFRS 9 Financial Instruments (Cont’d)

(iii) Hedge accounting

As the Group and the Company do not apply hedge accounting, applying the hedging requirements
of MFRS 9 will not have a significant impact on the Group’s and the Company’s consolidated financial
statements.

The assessment is based on currently available information and may be subject to changes arising from
further reasonable and supportable information being made available to the Group and the Company in
the financial year ending 31 March 2019 when the Group and the Company adopt MFRS 9.

MFRS 15 Revenue from Contracts with Customers

MFRS 15 replaces MFRS 118 Revenue, MFRS 111 Construction Contracts and related IC Interpretations.
The Standard deals with revenue recognition and establishes principles for reporting useful information
to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash
flows arising from an entity’s contracts with customers.

Revenue is recognised when a customer obtains control of a good or service and thus has the ability to
direct the use and obtain the benefits from the good or service. The core principle in MFRS 15 is that an
entity recognises revenue to depict the transfer of promised goods or services to the customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services.

An entity recognises revenue in accordance with the core principle by applying the following steps:

(1) Identify the contracts with a customer;


(2) Identify the performance obligation in the contract;
(3) Determine the transaction price;
(4) Allocate the transaction price to the performance obligations in the contract; and
(5) Recognise revenue when the entity satisfies a performance obligation.

The Group and the Company intend to adopt the standard using modified retrospective approach which
means that the cumulative impact of the adoption will be recognised in retained earnings as of 1 April
2018 and that comparatives will not be restated.

MFRS 15 also includes new disclosures that would result in an entity providing users of financial statements
about the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers.

Based on the assessment, the Group and the Company recognised revenue based on the transfer of the
goods to customer which is similar to the principal of MFRS 15 whereby revenue is recognise based on
satisfaction of performance obligation, therefore, the Group and the Company do not expect the application
of MFRS 15 to have a significant impact on its consolidated financial statements.

The assessment is based on currently available information and may be subject to changes arising from
further reasonable and supportable information being made available to the Group and the Company in
financial year ending 31 March 2019 when the Group and the Company adopt MFRS 15.
Jadi Imaging Holdings Berhad Annual Report 2018 71

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

1. Basis of preparation (Cont’d)

(b) Standards issued but not yet effective (Cont’d)

MFRS 16 Leases

MFRS 16, which upon the effective date will supersede MFRS 117 Leases, introduces a single lessee
accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value. Specifically, under MFRS 16, a lessee
is required to recognise a right-of-use asset representing its right to use the underlying leased asset and
a lease liability representing its obligation to make lease payments. Accordingly, a lessee should recognise
depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments
of the lease liability into a principal portion and an interest portion and presents them in the statement
of cash flows. Also, the right-of-use asset and the lease liability are initially measured on a present value
basis. The measurement includes non-cancellable lease payments and also includes payments to be made
in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not to
exercise an option to terminate the lease. This accounting treatment is significantly different from the
lessee accounting for leases that are classified as operating leases under the predecessor standard, MFRS
117.

In respect of the lessor accounting, MFRS 16 substantially carries forward the lessor accounting
requirements in MFRS 117. Accordingly, a lessor continues to classify its leases as operating leases or
finance leases, and to account for those two types of leases differently.

The adoption of MFRS 16 will result in a change in accounting policy. The Group and the Company are
currently assessing the financial impact of adopting MFRS 16.

(c) Basis of measurement

The financial statements have been prepared on the historical cost basis other than as disclosed in Note
2 to the financial statements.

(d) Critical accounting estimates and judgements

Estimates and judgements are continually evaluated by the Directors and management and are based
on historical experience and other factors, including expectations of future events that are believed to
be reasonable under the circumstances. The estimates and judgements that affect the application of the
Group’s and of the Company’s accounting policies and disclosures, and have a significant risk of causing
a material adjustment to the carrying amount of assets, liabilities, income and expenses are discussed
below:

(i) Depreciation of property, plant and equipment

The estimates for the residual values, useful lives and related depreciation charges for property,
plant and equipment are based on commercial factors which could change significantly as a result
of technical innovations and competitors’ actions in response to the market conditions.

The Group anticipates that the residual values of its property, plant and equipment will be
insignificant. As a result, residual values are not being taken into consideration for the computation
of the depreciable amount.

Changes in the expected level of usage and technological development could impact the economic
useful lives and the residual values of these assets, therefore future depreciation charges could be
revised.
72 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

1. Basis of preparation (Cont’d)

(d) Critical accounting estimates and judgements (Cont’d)

(ii) Income taxes

There are certain transactions and computations for which the ultimate tax determination may
be different from the initial estimate. The Group and the Company recognise tax liabilities based
on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in
the ordinary course of business. Where the final outcome of these matters is different from the
amounts that were initially recognised, such difference will impact the income tax and deferred tax
provisions in the year in which such determination is made.

(iii) Withholding tax on dividends

The Group is subject to withholding tax on dividends in the tax jurisdiction of the People’s Republic
of China (“PRC”). According to the New Corporate Income Tax Law (“CIT”) and the Detailed
Implementation Regulations (“DIR”), dividends distributed to a foreign investor by a Foreign Invested
Enterprise (“FIE”) in the PRC would be subject to withholding tax of 10%. The PRC tax authorities
have granted a special concession which states that from 1 January 2008 onwards, a FIE’S profit
arising in year 2008 and beyond, distributed to the foreign investors as dividends shall be subject to
withholding tax of 10%, which is subject to reduction as provided by an applicable double taxation
treaty.

As at 31 March 2018, deferred tax has not been recognised for the withholding tax that would
be payable on the entire unremitted earnings of its PRC subsidiary as the Group is able to control
the timing of the reversal of the timing differences and it is not probable that material temporary
differences would be reversed in the foreseeable future.

(iv) Impairment of non-financial assets

When the recoverable amount of an asset is determined based on the estimate of the value in use
of the cash-generating unit to which the asset is allocated, the management is required to make
an estimate of the expected future cash flows from the cash-generating unit and also to apply a
suitable discount rate in order to determine the present value of those cash flows.

(v) Written down for inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories.
These reviews require judgement and estimates. Possible changes in these estimates could result
in revisions to the valuation of inventories.

(vi) Impairment of trade and non-trade receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired.
Management specifically reviews its loan and receivables financial assets and analyses historical bad
debts, customer concentrations, customer creditworthiness, current economic trends and changes
in the customer payment terms when making a judgment to evaluate the adequacy of the allowance
for impairment losses. Where there is objective evidence of impairment, the amount and timing of
future cash flows are estimated based on historical loss experience for assets with similar credit
risk characteristics. If the expectation is different from the estimation, such difference will impact
the carrying amount of receivables.
Jadi Imaging Holdings Berhad Annual Report 2018 73

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

1. Basis of preparation (Cont’d)

(d) Critical accounting estimates and judgements (Cont’d)

(vii) Revaluation of properties

Freehold land and buildings of the Group are reported at valuation which is based on valuation
performed by independent professional valuers.

The independent professional valuers have exercised judgment in determining discount rates,
estimates of future cash flows, capitalisation rate, terminal year value, market freehold rental and
other factors used in the valuation process. Also, judgement has been applied in estimating prices
for less readily observable external parameters. Other factors such as model assumptions, market
dislocations and expected correlations can also materially affect these estimates and the resulting
valuation estimates.

(viii) Classification between investment properties and owner occupied properties

The Group determines whether a property qualifies as an investment property, and have developed
criteria in making that judgement. Investment property is a property held to earn rentals or for
capital appreciation or both. Therefore, the Group considers whether a property generates cash
flows largely independent of the other assets held by the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another
portion that is held for use in the production or supply of goods or services or for administrative
purposes. If these portions could be sold separately (or leased out separately under a finance lease),
the Group accounts for the portions separately. If the portions could not be sold separately, the
property is an investment property only if an insignificant portion is held for use in the production
or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so
significant that a property does not qualify as investment property.

(ix) Impairment of available-for-sale financial assets



The Group reviews its available-for-sale financial assets at the end of each reporting period to
assess whether they are impaired. The Group also records impairment loss on available-for sale
equity investments when there has been a significant or prolonged decline in the fair value below
their cost. The determination of what is “significant” or “prolonged” requires judgement. In making
this judgement, the Group evaluates, among other factors, historical share price movements and
the duration and extent to which the fair value of an investment is less than its cost.

(x) Classification of leasehold land

The classification of leasehold land as a finance lease or an operating lease requires the use of
judgement in determining the extent to which risks and rewards incidental to its ownership lie.
Despite the fact that there will be no transfer of ownership by the end of the lease term and
that the lease term does not constitute the major part of the indefinite economic life of the land,
management considered that the present value of the minimum lease payments approximated to
the fair value of the land at the inception of the lease.

Accordingly, management judged that the Group has acquired substantially all the risks and rewards
incidental to the ownership of the land through a finance lease.
74 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

1. Basis of preparation (Cont’d)

(d) Critical accounting estimates and judgements (Cont’d)

(xi) Fair value estimates for certain financial assets and liabilities

The Group carries certain financial assets and liabilities at fair value, which requires extensive use
of accounting estimates and judgement. While significant components of fair value measurement
were determined using verifiable objective evidence, the amount of changes in fair value would
differ if the Group uses different valuation methodologies. Any changes in fair value of these assets
and liabilities would affect profit and/or equity.

(xii) Deferred tax assets and liabilities

Deferred tax implications arising from the changes in corporate income tax rates are measured with
reference to the estimated realisation and settlement of temporary differences in the future periods
in which the tax rates are expected to apply, based on the tax rates enacted or substantively enacted
at the end of the reporting year. While management’s estimates on the realisation and settlement
of temporary differences are based on the available information at the statements of financial
position date, changes in business strategy, future operating performance and other factors could
potentially impact on the actual timing and amount of temporary differences realised and settled.
Any difference between the actual amount and the estimated amount would be recognised in the
profit or loss in the period in which actual realisation and settlement occurs.

(xiii) Provision for liabilities

Provision for liabilities are based on management’s judgement on the likelihood of liabilities
crystallising and best estimates on the amounts required to settle the liabilities arising from legal
and constructive obligations. A change in circumstances which could cause estimates to change
include changes in market trends and conditions, regulatory environment, employees’ behaviours
and other factors that may change the amount of provisions in the statement of financial position.
The difference between the actual amount and the estimated amount would be recognised in the
profit or loss in the period in which the change occurs.

(xiv) Classification of finance and operating lease

The Group classifies a lease as a finance lease or an operating lease based on the criterion of the
extent to which significant risk and rewards incident to ownership of the underlying asset lie. As a
lessee, the Group recognises a lease as a finance lease if it is exposed to significant risks and rewards
incident to ownership of the underlying asset. In applying judgements, the Group considers whether
there is significant economic incentive to exercise a purchase option and any optional renewal
periods. A lease is classified as a finance lease if the lease term is for at least 75% the remaining
economic life of the underlying asset, or the identified asset in the lease is a specialised asset which
can only be used by the lessee without major modifications. All other leases that do not result in a
significant transfer of risks and rewards are classified as operating leases.
Jadi Imaging Holdings Berhad Annual Report 2018 75

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies

(a) Basis of consolidation

Subsidiaries are entities, including structured entities, controlled by the Company. The Group controls
an entity when the Group is exposed to, or has rights 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 consolidated from the date on which control is transferred to the Group up to the effective
date on which control ceases, as appropriate.

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Where necessary,
adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting
policies with those of the Group.

(i) Business combinations

Acquisitions of business are accounted for using the acquisition method. Under the acquisition
method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets
transferred, liabilities incurred and the equity interests issued by the Group at the acquisition
date. The consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Acquisition-related costs, other than the costs to issue debt
or equity securities, are recognised in profit or loss when incurred.

In a business combination achieved in stages, previously held equity interests in the acquiree are
remeasured at fair value at the acquisition date and any corresponding gain or loss is recognised in
profit or loss.

Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-
controlling interests’ proportionate shares of the fair value of the acquiree’s identifiable net assets
at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction
basis.

(ii) Non-controlling interests

Non-controlling interests are presented within equity in the consolidated statement of financial
position, separately from equity attributable to the owners of the Company. Transactions with
non-controlling interests are accounted for as transactions with owners and are recognised directly
in equity. Profit or loss and each component of other comprehensive income are attributed to
the owners of the Company and to the non-controlling interests. Total comprehensive income is
attributed to non-controlling interests even if this results in the non-controlling interests having a
deficit balance.

At the end of each reporting period, the carrying amount of non-controlling interests is the amount
of those interests at initial recognition plus the non-controlling interests’ shares of subsequent
changes in equity.
76 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(a) Basis of consolidation (Cont’d)

(iii) Loss of control

Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit
or loss which is calculated as the difference between:

(i) The aggregate of the fair value of the consideration received and the fair value of any retained
interest in the former subsidiary; and

(ii) The previous carrying amount of the assets (including goodwill), and liabilities of the former
subsidiary and any non-controlling interests.

Amounts previously recognised in other comprehensive income in relation to the former subsidiary
are accounted in the same manner as would be required if the relevant assets or liabilities were
disposed of (i.e. reclassified to profit or loss or transferred directly to retained profits). The fair value
of any investments retained in the former subsidiary at the date when control is lost is regarded as
the fair value on initial recognition for subsequent accounting under MFR 139 or, when applicable,
the cost on initial recognition of an investment in an associate or joint venture.

(iv) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-
group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with equity accounted associates are eliminated against
the investment to the extent of the Group’s interest in the associates and jointly controlled entities.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that
there is no evidence of impairment.

(v) Changes in ownership interests in subsidiaries without change of control

All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control
are accounted for as equity transactions. Any difference between the amount by which the non-
controlling interest is adjusted and the fair value of consideration paid or received is recognised
directly in equity of the Group.
Jadi Imaging Holdings Berhad Annual Report 2018 77

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(b) Foreign currencies

(i) Functional and presentation currency

The individual financial statements of the Group and of the Company are measured using the currency
of the primary economic environment in which the entity operates (“the functional currency”).
The financial statements are presented in Ringgit Malaysia (“RM”), which is the Group’s and the
Company’s functional currency.

(ii) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Group
and of the Company are recorded on initial recognition in the functional currencies at exchange
rates approximating those ruling at the transaction dates.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of
exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that
are measured at historical cost are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items denominated in foreign currencies measured at fair value are
translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary


items at the reporting date are recognised in profit or loss except for exchange differences arising
on monetary items that form part of the Group’s and of the Company’s net investment in foreign
operations, which are recognised initially in other comprehensive income and accumulated under
foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified
from equity to profit or loss of the Group and of the Company on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are
included in profit or loss for the period except for the differences arising on the translation of non-
monetary items in respect of which gains and losses are recognised directly in equity. Exchange
differences arising from such non-monetary items are also recognised directly in equity.

The principal exchange rates for every unit of foreign currency ruling used at reporting date are as
follows:

2018 2017
RM RM

1 Chinese Renminbi 0.62 0.65


1 Euro 4.76 4.73
100 Japanese Yen 3.63 3.95
1 Pound Sterling 5.46 5.53
1 United States Dollar 3.86 4.45
78 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(c) Revenue and other income

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group
and to the Company and the revenue can be reliably measured.

(i) Sale of goods

Revenue from sale of goods is measured at the fair value of the consideration received or receivable,
net of returns and provisions, trade discounts and volume rebates.

Revenue is recognised when the significant risks and rewards of ownership have been transferred
to the buyer, recovery of the consideration is probable, the associated costs and possible return
of goods can be reliably estimated, and there is no continuing management involvement with the
goods.

Revenue is not recognised to the extent where there are significant uncertainties regarding recovery
of the consideration due, associated costs or the possible return of goods.

(ii) Rental income

Rental income from investment property is recognised on a straight line basis over the term of lease.

(iii) Dividend income

Dividend income is recognised when the shareholder’s right to receive payment is established.

(iv) Interest income

Interest income is recognised on an accrual basis, based on effective yield on the investment.

(d) Employee benefits expense

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the
financial year in which the associated services are rendered by employees of the Group and of the
Company. Short term accumulating compensated absences such as paid annual leave are recognised
when services are rendered by employees that increase their entitlement to future compensated
absences, and short term non-accumulating compensated absences such as sick leave are recognised
when the absences occur.

(ii) Defined contribution plans

The Group’s and the Company’s contribution to defined contribution plans are charged to the profit
or loss in the period to which they relate. Once the contributions have been paid, the Group and
the Company have no further liability in respect of the defined contribution plans.
Jadi Imaging Holdings Berhad Annual Report 2018 79

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(e) Borrowing costs

Borrowings are stated at cost with any difference between cost and redemption value being recognised
in the profit or loss over the period of the loans and borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group and the Company have an unconditional
right to defer settlement of the liability for at least 12 months after the reporting date.

(f) Tax expense

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive income or directly in equity.

(ii) Deferred tax

Deferred tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise
from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable
assets, liabilities and contingent liabilities over the business combination costs or from the initial
recognition of an asset or liability in a transaction which is not a business combination and at the
time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses
and unused tax credits to the extent that it is probable that future taxable profits will be available
against which the deductible temporary differences, unused tax losses and unused tax credits can
be utilised.

The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient future taxable profits will be
available to allow all or part of the deferred tax assets to be utilised.
80 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(f) Tax expense (Cont’d)

(ii) Deferred tax (Cont’d)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period when the asset is realised or the liability is settled, based on the tax rates that have been
enacted or substantively enacted at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when the deferred income taxes relate to the
same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss.
Deferred tax items are recognised in correlation to the underlying transactions either in other
comprehensive income or directly in equity and deferred tax arising from a business combination
is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the
acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination.

(iii) Withholding tax

Withholding tax, which is payable by the subsidiary in the PRC on distribution of earnings to the
holding company incorporated or domiciled outside the PRC, are deducted from the dividends
paid and payable to the foreign holding company and are included as part of current tax liabilities
in the statements of financial position. Correspondingly, the distribution represents realisation of
the temporary differences. The tax rates and tax laws used to compute the amount are those that
have been enacted or substantively enacted by the end of each reporting period.

(iv) Other taxes

The Group’s sales of goods in the PRC are subject 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 together with other taxes, such as land use rights tax, recoverable from,
or payable to, the tax authority is included as part of “other receivables” or “other payables” in the
statements of financial position respectively.

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

(a) VAT incurred on the purchases of assets or services is not recoverable from the tax authority,
in which case VAT is recognised as part of the cost of acquisition of the asset or as part of
the expense items as applicable; and

(b) Receivables and payables are stated with the amount of VAT included.

Land use rights tax and other taxes are not based on taxable profits and are recognised as part of
administrative expenses in the profit or loss.
Jadi Imaging Holdings Berhad Annual Report 2018 81

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(g) Impairment

(i) Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence
that a financial asset is impaired.

Financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has
been incurred, the Group and the Company consider factors such as the probability of insolvency
or significant financial difficulties of the debtor and default or significant delay in payments.

For certain categories of financial assets, such as trade receivables, assets that are assessed not to
be impaired individually are subsequently assessed for impairment on a collective basis based on
similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could
include the Group’s and the Company’s past experience of collecting payments, an increase in the
number of delayed payments in the portfolio past the average credit period and observable changes
in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows discounted at the
financial asset’s effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables, where the carrying amount is reduced through the
use of an allowance account. When a trade receivable becomes uncollectible, it is written off against
the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed to the extent that the carrying amount of the asset does
not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or
loss.

(ii) Impairment of non-financial assets

The Group and the Company assess at each reporting date whether there is an indication that an
asset may be impaired. If any such indication exists, or when an annual impairment assessment
for an asset is required, the Group and the Company make an estimate of the asset’s recoverable
amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value
in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset
are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable
amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to
reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.
82 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(g) Impairment (Cont’d)

(ii) Impairment of non-financial assets (Cont’d)

Impairment losses are recognised in profit or loss except for assets that are previously revalued
where the revaluation was taken to other comprehensive income. In this case the impairment is
also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. A previously recognised
impairment loss is reversed only if there has been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed
the carrying amount that would have been determined, net of depreciation, had no impairment loss
been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured
at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss
on goodwill is not reversed in a subsequent period.

(h) Investment in subsidiaries

Investment in subsidiaries are stated at cost in the statement of financial position of the Company, and are
reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate
that the carrying values may not be recoverable. The cost of the investments includes transaction costs.

On the disposal of investments in subsidiaries, the difference between the net disposal proceeds and the
carrying value of the investments is recognised in profit or loss.

(i) Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property,
plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment losses. When significant parts of property, plant and equipment
are required to be replaced in intervals, the Group recognises such parts as individual assets with specific
useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Freehold land is stated at revalued amount less impairment losses recognised after the date of the
revaluation. Freehold land has an indefinite useful life and therefore is not depreciated. Freehold buildings
are stated at revalued amount less accumulated depreciation and accumulated impairment losses
recognised after the date of the revaluation.
Jadi Imaging Holdings Berhad Annual Report 2018 83

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(i) Property, plant and equipment (Cont’d)

Freehold land and buildings are revalued periodically, at least once in every 5 years. Surpluses arising
from the revaluation are recognised in other comprehensive income and accumulated in equity under
the revaluation reserve. Deficits arising from the revaluation, to the extent that they are not supported
by any previous revaluation surpluses, are recognised in profit or loss.

Depreciation of other property, plant and equipment is provided for on a straight line basis, at the following
annual rates:

Leasehold land over the lease period of 50 years


Buildings 2.5% to 5%
Furniture, fittings and office equipment 20% - 33.3%
Motor vehicles 20%
Plant and machinery 10% to 20%
Renovation 10%
Tools and equipment 20%

The carrying amount of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying amount may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year end, and
adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included
in the profit or loss in the year the asset is derecognised.

(j) Investment properties

Investment properties, which are properties held to earn rentals and/or for capital appreciation (including
property under construction for such purposes), are measured initially at its cost, including transaction
costs.

Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation
and accumulated impairment losses.

Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of 50 years.

Investment properties are derecognised when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal.

Any gain or loss on the retirement or disposal of an investment property is recognised in profit of loss in
the year of retirement or disposal.

The estimated useful lives, residual values and depreciation method of investment properties are reviewed
at each year end, with the effect of any changes in estimates accounted for prospectively.
84 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(k) Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group
and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial
assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition,
and the categories include loans and receivables and available-for-sale financial assets.

(i) Loans and receivables

Financial assets that are non-derivative with fixed or determinable payments that are not quoted
in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later
than 12 months after the reporting date which are classified as non-current.

(ii) Available-for-sale (“AFS”) financial assets

AFS financial assets are non-derivative financial assets that are designated in this category or are
not classified in any of other categories.

After initial recognition, AFS financial assets are measured at fair value. Any gains or losses from
changes in fair value of the financial assets are recognised in other comprehensive income, except
that impairment losses, foreign exchange gains and losses on monetary instruments and interest
calculated using the effective interest method are recognised in profit or loss. The cumulative gain or
loss previously recognised in other comprehensive income is reclassified from equity to profit or loss
as a reclassification adjustment when the financial asset is derecognised. Interest income calculated
using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale
equity instrument are recognised in profit or loss when the Group’s and the Company’s right to
receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at
cost less impairment loss.

AFS financial assets are classified as non-current assets unless they are expected to be realised
within 12 months after the reporting date.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has
expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount
and the sum of the consideration received and any cumulative gain or loss that had been recognised in
other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets
within the period generally established by regulation or convention in the marketplace concerned. All
regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e.,
the date that the Group and the Company commit to purchase or sell the asset.
Jadi Imaging Holdings Berhad Annual Report 2018 85

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(l) Inventories

Inventories, comprising of raw materials, spare parts, work-in-progress, goods in transit and finished goods,
are stated at the lower of cost and net realisable value.

Cost is determined using the weighted average basis, and comprises the purchase price, production or
conversion costs and incidentals incurred in bringing the inventories to their present location and condition.

Net reliasable value represents the estimated selling price in the ordinary course of business, less the
estimated costs of completion and the estimated costs necessary to make the sale.

(m) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand and fixed deposits with licensed banks at
maturities not exceeding three months, and other short term and highly liquid investments that are readily
convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

(n) Financial liabilities

Financial liabilities are classified according to the substance of the contractual agreements entered into
and the definitions of a financial liability.

Financial liabilities are recognised on the statements of financial position when, and only, when the Group
and the Company become a party to the contractual provisions of the financial instrument. Financial
liabilities of the Group and the Company are classified as financial liabilities measured at amortised cost.

Financial liabilities measured at amortised cost

The Group’s and the Company’s financial liabilities measured at amortised cost include trade and non-
trade payables, accruals, borrowings and amount due to subsidiaries.

Trade and non-trade payables, accruals, borrowings and amount due to subsidiaries are recognised initially
at fair value plus directly attributable transaction costs and are subsequently measured at amortised cost
using the effective interest method.

For financial liabilities measured at amortised cost, gains and losses are recognised in the profit or loss
when the liabilities are derecognised and impaired, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated
as a derecognition of the original liability and the recognition of a new liability, and the difference in the
respective carrying amounts is recognised in the profit or loss.
86 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(o) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance
with the original or modified terms of a debt instrument.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs that
are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the liability
is measured at higher of the best estimate of the expenditure required to settle the present obligation at
the reporting date and the amount initially recognised less cumulative amortisation.

(p) Hire purchase arrangements

Plant and equipment acquired under hire purchase arrangements are capitalised in the financial statements
and the corresponding obligations are taken up as hire purchase liability.

The interest element is charged to profit or loss over the years of respective hire purchase arrangements.

(q) Provisions

Provisions are recognised when the Group and the Company have a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of economic resources will be required to settle
the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is
no longer probable that an outflow of economic resources will be required to settle the obligation, the
provision is reversed. Where the effect of the time value of money is material, provisions are discounted
using a current pre-tax rate that reflects, where appropriate, the risk specific to the liability and the present
value of the expenditure expected to be required to settle the obligation.

(r) Contingencies

(i) Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot
be estimated reliably, the obligation is not recognised in the statements of financial position and is
disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote.
Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence
of one or more future events, are also disclosed as contingent liabilities unless the probability of
outflow of economic benefits is remote. However, contingent liabilities do not include financial
guarantee contracts.

(ii) Contingent assets

Where an inflow of economic benefits of an asset is probable where it arises from past events
and where existence will be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the entity, the asset is not recognised in the
statements of financial position but is disclosed as a contingent asset. When the inflow of benefit
is virtually certain, then the related asset is recognised.
Jadi Imaging Holdings Berhad Annual Report 2018 87

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(s) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. An operating segment’s operating results are reviewed regularly by
the chief operating decision maker to make decisions about resources to be allocated to the segment and
assess its performance, and for which discrete financial information is available.

(t) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of
the Company after deducting all of its liabilities. Ordinary shares are recorded at the proceeds received,
net of directly attributable incremental transaction costs. Dividends on ordinary shares are recognised
from equity in the period in which they are declared.

(u) Purchase of own shares

When the share capital recognised as equity is bought by the Company under the share buy-back
programme, the amount of the consideration paid, including directly attributable costs, are recognised
as a deduction from equity. Shares bought that are not subsequently cancelled are classified as treasury
shares in the statement of changes in equity and presented as a deduction from the total equity.

When such shares are subsequently sold or reissued, any consideration received, net of any direct costs,
and are included in shareholders’ equity.

(v) Fair value measurements

Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined
as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The measurement assumes that the transaction
to sell the asset or transfer the liability takes place either in the principal market or in the absence of a
principal market, in the most advantageous market.

For non-financial asset, the fair value measurement takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
88 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

2. Summary of significant accounting policies (cont’d)

(v) Fair value measurements (Cont’d)

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as
possible. Fair value is categorised into different levels in a fair value hierarchy based on the input used in
the valuation technique as follows:

Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group
can access at the measurement date.

Level 2 : Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.

Level 3 : Unobservable inputs for the asset or liability.

The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or
change in circumstances that caused the transfer.

(w) (Loss)/Earnings per ordinary share

The Group presents basic and diluted loss/earnings per share date for its ordinary shares (“LPS/EPS”).

Basic LPS/EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the period, adjusted
for own shares held.

Diluted LPS/EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and
the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects
of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to
employees.

3. Revenue

The revenue of the Group consists of the following:

Group
2018 2017
RM RM

Sale of goods 55,745,965 76,950,167


Jadi Imaging Holdings Berhad Annual Report 2018 89

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

4. Loss from operations

Group Company
2018 2017 2018 2017
RM RM RM RM

Loss from operations arrived


 at after charging/(crediting):
Auditors’ remuneration:
- current year 103,268 129,292 24,000 29,000
- overprovision in prior year (10,000) – – –
- non-statutory audit 5,000 26,300 5,000 7,000
Bad debts written off 42,551 41,621 – –
Depreciation of:
- investment properties 372,029 2,400 – –
- property, plant and equipment 8,095,980 10,848,310 – –
Directors’ fees
- current year 335,387 307,224 335,387 307,224
- underprovision/(overprovision)
  in prior year 1,809 (68,273) 1,809 (68,273)
Employee benefits expense (Note 5) 9,714,555 11,244,844 – –
Property, plant and equipment
 written off 56,075 2 – –
Rental income (900,458) (546,340) – –
Inventories written down 2,245,130 1,600,523 – –
Impairment loss on trade receivables 4,257 458,106 – –
Impairment loss on property,
 plant and equipment 1,385,320 10,997,789 – –
(Gain)/Loss on disposal of property,
 plant and equipment (6,439,775) 83,170 – –
(Gain)/Loss on disposal
 of a subsidiary – (16,802) – 6
Impairment loss on investment
 in a subsidiary – – 1,743,254 –
Loss on remeasurement of amount
 due from subsidiaries – – 3,646,517 –
(Gain)/Loss on foreign exchange:
- realised (114,365) (494,138) (515,136) 39,163
- unrealised 1,462,054 (1,398,748) – 883,949
Rental of premises 1,187,037 464,314 – –
Interest income (111,308) (120,173) – –
Reversal of inventories written down (2,267,739) (1,187,102) – –
90 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

5. Employee benefits expense

Group
2018 2017
RM RM

(a) Staff costs


Salaries, wages, allowances, bonus and overtime 7,595,728 9,077,620
Contributions to defined contribution plan 638,742 622,541
Other benefits 132,812 135,360

8,367,282 9,835,521

(b) Directors’ remuneration


Executive:
Salaries and other emoluments 1,200,014 1,256,940
Contribution to defined contribution plan 144,704 150,898
Other benefits 2,555 1,485
Estimated money value of benefits-in-kind 44,240 59,945

Total directors’ remuneration 1,391,513 1,469,268

Total directors’ remuneration excluding benefits-in-kind 1,347,273 1,409,323

Total 9,714,555 11,244,844

The total number of employees, inclusive of Executive Directors of the Group at the end of the financial year
was 140 (2016: 209).

6. Finance costs

Group
2018 2017
RM RM

Bills payable 337,428 290,474


Hire purchase interest 4,385 5,737
Revolving credits 400,117 787,878
Others 16,489 28,851

758,419 1,112,940
Jadi Imaging Holdings Berhad Annual Report 2018 91

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

7. Tax expense

No provision for income tax has been made in financial year 2018 and 2017 for the Company as the Company
has no taxable income.

Group Company
2018 2017 2018 2017
RM RM RM RM

Tax expenses
- real property gain tax 690,000 – – –
- underprovision/(overprovision)
  in prior year 184,098 (163,224) – –

874,098 (163,224) – –

Deferred tax (Note 24)


- current year – 3,094,216 – –
- over provision in prior year (39,456) (2,497,788) – –
- crystallisation of deferred
  tax liability arising from
  revaluation reserve (594,828) (136,005) – –

(634,284) 460,423 – –

239,814 297,199 – –

Reconciliation of effective tax expense

Loss before tax (10,410,300) (16,896,202) (5,400,509) (1,377,568)

Tax calculated using


 statutory tax rate at 24% (2,498,472) (4,055,088) (1,296,122) (330,616)
Non-deductible expenses 5,940,465 836,525 1,419,755 330,616
Non-taxable income (5,819,581) (17,671) (123,633) –
Tax savings arising from
 Pioneer Status (422,794) (1,426,452) – –
Deferred tax assets not recognised
 during the financial year 2,800,380 7,756,902 – –

– 3,094,216 – –
Real property gain tax 690,000 – – –
Underprovision/(Overprovision)
 of tax expense in prior year 184,098 (163,224) – –
Overprovision of deferred
 tax in prior year (39,456) (2,497,788) – –
Crystallisation of deferred
 tax liability arising from
 revaluation reserve (594,828) (136,005) – –

239,814 297,199 – –
92 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

7. Tax expense (cont’d)

The Group has the following items available for offset against future taxable business income, for which no
deferred tax assets are recognised due to uncertainty of its recoverability:

Group
2018 2017
RM RM

Provisions 4,463,185 4,775,494


Unutilised tax losses 6,575,137 1,394,735
Unabsorbed capital allowances 26,715,095 23,493,056
Unrealised loss on foreign exchange 2,772,553 2,136,388
Unutilised reinvestment allowances 20,494,650 20,494,650

61,020,620 52,294,323

On 1 October 2014, a subsidiary of the Company, Jadi Chemicals Sdn. Bhd., had been granted Pioneer Status
Incentive under Income Tax (Exemption) (No. 11) Order 2006 which qualifies the subsidiary for 100% exemption
from income tax on its statutory income from pioneer activities for a period of five years from 1 October 2014
to 30 September 2018.

Taxes in foreign jurisdictions are calculated at the rates prevailing in the respective jurisdictions.

8. BASIC Loss per share

The basic loss per share is based on the Group’s loss after taxation attributable to owners of the Company for
the financial year divide by the weighted average number of ordinary shares in issue (net of treasury shares),
computed as follows:

Group
2018 2017

Loss for the financial year attributable to owners of the Company (RM) (10,650,114) (17,193,401)

Weighted average number of ordinary shares in issue 941,700,411 941,700,411

Basic loss per share (sen) (1.13) (1.83)

There are no diluted potential ordinary shares during the current and previous financial year.
Jadi Imaging Holdings Berhad Annual Report 2018 93

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

9. Investment in subsidiaries

Company
2018 2017
RM RM

Unquoted shares, at cost:


At 1 April 2017/2016 35,567,254 35,567,260
Capital reduction (18,081,075) –
Disposal – (6)

17,486,179 35,567,254
Less: Impairment
At 1 April 2017/2016 – –
Addition (1,743,254) –

(1,743,254) –

Contribution to a subsidiary 67,437,543 67,437,543

At 31 March 83,180,468 103,004,797

The details of the subsidiaries are as follows:

Country of Percentage of
Name of subsidiaries incorporation equity held Principal activities
2018 2017
% %

Jadi Imaging Technologies Malaysia 100 100 Manufacturing and


 Sdn. Bhd.  sale of toner.

Jadi Imaging Technologies The People’s 100 100 Trading of toner.


 (Suzhou) Co., Ltd. *[1] Republic of
China

Jadi Imaging Supplies United States 100 100 Dormant.


 (US), Inc. * of America

Jadi Europe Limited # [2] United Kingdom – – Voluntarily wound up.

Jadi Imaging Solutions United Kingdom 100 100 Distributing of toner.


 (UK) Limited *
94 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

9. Investment in subsidiaries (cont’d)

Country of Percentage of
Name of subsidiaries incorporation equity held Principal activities
2018 2017
% %

Subsidiary of Jadi Imaging Technologies Sdn. Bhd.

Jadi Imaging Solutions Malaysia 100 100 Dormant.


 Sdn. Bhd.

Jadi Chemicals Sdn. Bhd. Malaysia 100 100 Manufacturing and


 sale of toner resin.

International Cartridge Malaysia 100 100 Dormant.


 Supplies Sdn. Bhd.

Subsidiary of Jadi Imaging Technologies (Suzhou) Co., Ltd.

Zhuhai Jadi Imaging The People’s 100 100 Trading in toner.


 Technologies Co., Ltd. * Republic of
China

* Not audited by PKF


# As at 31 March 2017, the subsidiary was voluntarily wound up and not audited.

[1]
Capital reduction of a subsidiary

The Company reduced the investment made in the subsidiary, namely Jadi Imaging Technologies (Suzhou)
Co., Ltd. from RM26,819,083 to RM8,738,008, equivalent to RMB56,163,003 and RMB26,713,159
respectively, during the financial year by way of capital reduction. As at the financial year end, the subsidiary
had temporarily ceased operations.

[2]
Deemed disposal of a subsidiary

The deemed disposal of a subsidiary is in relation to the voluntarily winding up of Jadi Europe Limited. The
disposal of this subsidiary has resulted in a net gain on disposal of RM16,802 as the subsidiary reported
a net current liability of RM16,808 as at the disposal date. There is no cash flow effect on the deemed
disposal.
Jadi Imaging Holdings Berhad Annual Report 2018 95

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

10. Property, plant and equipment

Carrying Reclassified Carrying


value to Currency value
as at Written investment translation Depreciation as at
1.4.2017 Additions Disposals off Impairment properties reserve charge 31.3.2018
RM RM RM RM RM RM RM RM RM

Group
2018
Freehold land 38,100,000 – (13,500,000) – – – – – 24,600,000
Leasehold land 2,219,284 – – – – – (90,678) (53,841) 2,074,765
Buildings 18,887,780 – (2,874,787) – – – (62,484) (479,380) 15,471,129
Furniture, fittings
 and office
 equipment 412,199 199,875 (9,746) (43,622) – – (2,601) (150,643) 405,462
Motor vehicles 124,116 86,132 (28,839) – – – (764) (61,008) 119,637
Plant and machinery 33,804,380 792,151 (176,964) (2,357) (1,385,320) (13,607) (6,915,151) 26,103,132
Renovation 663,509 155,805 (166,945) – – – (6,111) (189,701) 456,557
Tools and equipment 564,280 180,023 – (10,726) – – (1,136) (246,256) 486,185

Total 94,775,548 1,413,986 (16,757,281) (56,705) (1,385,320) – (177,381) (8,095,980) 69,716,867

Carrying Reclassified Carrying


amount to Currency amount
as at Written investment translation Depreciation as at
1.4.2016 Additions Disposals off Impairment properties reserve charge 31.3.2017
RM RM RM RM RM RM RM RM RM

Group
2017
Freehold land 38,100,000 – – – – – – – 38,100,000
Leasehold land 2,131,783 – – – – – 140,714 (53,213) 2,219,284
Buildings 25,485,323 – – – – (5,362,170) 447,013 (1,682,386) 18,887,780
Furniture, fittings
 and office
 equipment 540,920 69,423 (30,536) – – – 32,430 (200,038) 412,199
Motor vehicles 174,973 – (17,625) (2) – – 473 (33,703) 124,116
Plant and machinery 51,769,448 2,093,956 (633,668) – (10,997,789) – 829 (8,428,396) 33,804,380
Renovation 624,074 207,788 – – – – 10 (168,363) 663,509
Tools and equipment 794,860 53,602 (2,946) – – – 975 (282,211) 564,280

Total 119,621,381 2,424,769 (684,775) (2) (10,997,789) (5,362,170) 622,444 (10,848,310) 94,775,548
96 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

10. Property, plant and equipment (cont’d)

At At Accumulated Accumulated Carrying


cost valuation depreciation impairment value
RM RM RM RM RM

Group
2018
Freehold land – 24,600,000 – – 24,600,000
Leasehold land 2,648,635 – (573,870) – 2,074,765
Buildings 2,346,296 16,730,001 (3,605,168) – 15,471,129
Furniture, fittings and
 office equipment 3,413,886 – (3,008,424) – 405,462
Motor vehicles 1,443,148 – (1,323,511) – 119,637
Plant and machinery 116,288,892 – (77,802,651) (12,383,109) 26,103,132
Renovation 2,148,702 – (1,692,145) – 456,557
Tools and equipment 4,155,826 – (3,669,641) – 486,185

Total 132,445,385 41,330,001 (91,675,410) (12,383,109) 69,716,867

2017
Freehold land – 38,100,000 – – 38,100,000
Leasehold land 2,762,593 – (543,309) – 2,219,284
Buildings 2,447,126 20,930,001 (4,489,347) – 18,887,780
Furniture, fittings and
 office equipment 3,596,486 – (3,184,287) – 412,199
Motor vehicles 1,392,758 – (1,268,642) – 124,116
Plant and machinery 115,878,704 – (71,076,535) (10,997,789) 33,804,380
Renovation 2,248,749 – (1,585,240) – 663,509
Tools and equipment 4,047,924 – (3,483,644) – 564,280

Total 132,374,340 59,030,001 (85,631,004) (10,997,789) 94,775,548


Jadi Imaging Holdings Berhad Annual Report 2018 97

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

10. Property, plant and equipment (cont’d)

(a) Included in property, plant and equipment of the Group are the following fully depreciated property, plant
and equipment which are still in use:

2018 2017
RM RM

At cost:
Furniture and fittings 1,119,882 979,956
Motor vehicles 1,224,244 1,224,244
Office equipment 1,367,441 1,300,449
Plant and machinery 37,019,015 30,440,283
Tools and equipment 2,962,116 2,777,483

43,692,698 36,722,415

(b) Included in the property, plant and equipment at the end of the reporting period were motor vehicles
with a total carrying amount of RM84,953 (2017: RM116,811), which were acquired under hire purchase
terms.

(c) The freehold land and buildings were revalued on 9 September 2014 and 25 June 2014 by an independent
firm of professional valuers using the Comparison Market Method, and the arising revaluation surplus
was credited to the Revaluation Reserve.

(d) Fair value hierarchy of land and buildings

Level 2 fair value

Level 2 fair values of land and buildings have been generally derived using Market Comparison Method,
where the price of comparable properties in close proximity are adjusted for differences in key attributes
such as property size. The most significant input into this valuation approach is price per square foot of
comparable properties.

(e) If the freehold land and buildings were measured using the cost model, the carrying amount would be as
follows:

Group
2018 2017
RM RM

Freehold land, at cost 10,784,571 15,337,114

Buildings:
Cost 16,329,701 20,527,113
Accumulated depreciation (3,186,918) (3,600,638)

At 31 March 13,142,783 16,926,475


98 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

10. Property, plant and equipment (cont’d)

(f) In prior year, the freehold land and buildings with a total carrying value amounting to RM16,420,146 have
been charged to a licensed bank for banking facilities granted to the subsidiary as disclosed in the Note
23 to the financial statements.

(g) The Group has plant and machinery with an aggregate cost of RM116,288,892 (2017: RM115,878,704).
Following a review of the business, including the Group’s operating plans and the outlook for the industry,
management has reassessed the carrying amounts of the plant and machinery and further impairment of
RM1,385,320 (2017: RM10,997,789) was recorded to reduce the carrying amount of certain plant and
machinery to their estimated recoverable values. The estimated recoverable value is based on value in
use at the discount rate of 6.10%.

11. Investment properties

Freehold
apartment Building Total
RM RM RM

Group
2018
Cost
At 1 April 2017 120,000 8,420,010 8,540,010
Exchange difference – (347,446) (347,446)

At 31 March 2018 120,000 8,072,564 8,192,564

Accumulated depreciation
At 1 April 2017 (27,000) (3,057,840) (3,084,840)
Charge for the financial year (2,400) (369,629) (372,029)
Exchange difference – 132,146 132,146

At 31 March 2018 (29,400) (3,295,323) (3,324,723)

Carrying value
At 31 March 2018 90,600 4,777,241 4,867,841

Fair value 246,000 7,458,801 7,704,801


Jadi Imaging Holdings Berhad Annual Report 2018 99

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

11. Investment properties (cont’d)

Freehold
apartment Building Total
RM RM RM

Group
2017
Cost
At 1 April 2016 120,000 – 120,000
Reclassification from property, plant and equipment – 8,420,010 8,420,010

At 31 March 2017 120,000 8,420,010 8,540,010

Accumulated depreciation
At 1 April 2016 (24,600) – (24,600)
Charge for the financial year (2,400) – (2,400)
Reclassification from property, plant and equipment – (3,057,840) (3,057,840)

At 31 March 2017 (27,000) (3,057,840) (3,084,840)


Carrying amount
At 31 March 2017 93,000 5,362,170 5,455,170

Fair value 340,000 7,458,801 7,798,801

The fair value disclosure of the freehold apartment has been determined by the Directors based on their
assessment of fair market value of similar properties in the same vicinity at reporting date.

The fair value disclosure of the warehouse building is based on a valuation performed on the property in August
2014 by an independent valuer using the comparison method that makes reference to market values of similar
properties in the vicinity that have been transacted in the open market, and which the Directors believe continues
to be appropriate.

During the financial year, rental income generated from the warehouse building amounted to RM900,458.

Level 2 fair value

The fair value references of freehold apartment and building are categorised as Level 2, and have been generally
derived using Market Comparison Method, where the price of comparable properties in close proximity are
adjusted for differences in key attributes such as property size. The most significant input into this valuation
approach is price per square foot of comparable properties.
100 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

12. Other investment

The investment represents golf club membership which is designated as an available-for-sale financial asset and
measured at fair value.

13. Amount due from/(to) subsidiaries

Company
2018 2017
RM RM

Amount due from subsidiaries 13,884,764 4,091,298



Less: Loss on remeasurement
At 1 April – –
Addition (3,646,517) –

At 31 March (3,646,517) –

10,238,247 4,091,298

Representing:
Current 7,484,668 4,091,298
Non-current 2,753,579 –

10,238,247 4,091,298

Amount due to subsidiaries – (7,786,724)

The amount for the non-current portion of amount due from subsidiaries represents unsecured and interest-
free advances with amortised cost adjustment at 8.80% per annum, which is repayable at the end of financial
year 2028.

The current portion of amount due from/(to) subsidiaries represents unsecured, interest-free advances and
payments made on behalf and was repayable on demand.

Significant related party’s transactions are disclosed in Note 27(b) to the financial statements.
Jadi Imaging Holdings Berhad Annual Report 2018 101

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

14. Inventories

Group
2018 2017
RM RM

At cost:
Raw materials 16,404,232 16,621,164
Finished goods 16,865,784 17,499,619
Spare parts 750,549 666,957
Work-in-progress 5,048,155 5,831,555
Goods in transit 246,453 329,606

39,315,173 40,948,901
At net realisable value:
Finished goods 1,207,576 1,455,318

1,207,576 1,455,318

40,522,749 42,404,219

Recognised in profit or loss:


Inventories recognised as cost of sales 37,067,130 43,400,088
Amount written down to net realisable value 2,245,130 1,600,523
Reversal of inventories written down in prior year (2,267,739) (1,187,102)

During the year, the Group has reversed inventories written down recognised in prior year as RM1,531,477 of
inventories written down recognised in Jadi Imaging Technologies (SuZhou) Co., Ltd. has been sold to Zhuhai
Jadi Imaging Technologies Co., Ltd. in current year and subsequently sold to their customers and RM736,262 of
inventories written down recognised in Jadi Technologies Sdn. Bhd. has been used in production in the current
year.

15. Trade receivables

Group
2018 2017
RM RM

Trade receivables 6,994,643 11,426,795


Less: Impairment loss
At 1 April (822,292) (364,186)
Addition (4,257) (458,106)
Written off 461,250 –

At 31 March (365,299) (822,292)

6,629,344 10,604,503

The Group’s normal trade credit terms range from 30 to 60 days (2017: 30 to 60 days). Other credit terms are
assessed and approved on a case-by-case basis.

The allowance for impairment losses is made mainly on those trade receivables in significant financial difficulties
and have defaulted on payments.
102 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

16. Non-trade receivables, deposits and prepayments

Group Company
2018 2017 2018 2017
RM RM RM RM

Non-trade receivables 1,854,238 1,534,642 – –


Deposits 675,856 115,860 1,500 1,500
Prepayments 876,844 601,907 – 6,524

3,406,938 2,252,409 1,500 8,024

17. Fixed deposit with a licensed bank

The Group’s fixed deposit with a licensed bank bears interest of 2.40% (2017: 3.25%) per annum and has a
maturity of 31 days (2017: 34 days).

18. Share capital

Group and Company


2018 2017
Note RM RM

Ordinary shares (a) 94,185,469 94,182,008


Reclassified from reserve (b) – 3,461

94,185,469 94,185,469

(a) Ordinary shares

Issued and fully paid:


941,820,083 ordinary shares 94,182,008 94,182,008

(b) Share premium

At 1 April – 3,461
Reclassified to share capital – (3,461)

At 31 March – –

In accordance with Section 74 of the Companies Act, 2016 in Malaysia which became effective 31 January
2017, all shares issued by a company shall have no par or nominal value. Therefore, the share premium
account now effectively forms part of the Company’s share capital effective 31 January 2017 and at the
end of the financial year end.
Jadi Imaging Holdings Berhad Annual Report 2018 103

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

19. Treasury shares

The re-purchased shares are held as treasury shares in accordance with Section 127 of the Companies Act,
2016 in Malaysia.

The re-purchased shares under the share buy-back programme were financed by internally generated funds
and retained as treasury shares and are presented as a deduction from shareholders’ equity.

Out of the total 941,820,083 (2017: 941,820,083) issued and fully paid-up ordinary shares as at the end of the
reporting period, 119,672 (2017: 119,672) ordinary shares are held as treasury shares by the Company. The
treasury shares are held at a carrying amount of RM22,042 (2017: RM22,042). None of the treasury shares
were resold or cancelled during the financial year.

20. Foreign exchange translation reserve

The foreign exchange translation reserve arose from the translation of the financial statements of foreign
subsidiaries and is not distributable by way of dividends.

21. Revaluation reserve

The revaluation represents the increase in the fair value of freehold land and buildings of the Group (net of
deferred tax, where applicable).

22. Retained profits

Under the single tier system introduced by the Finance Act, 2007 in Malaysia which came into effect from the
year of assessment 2008, dividends paid under this system are tax exempt in the hands of shareholders. As
such, the whole retained profits can be distributed to shareholders as tax exempt dividends.

23. Borrowings

Group
2018 2017
Note RM RM

Secured
Current
Bills payable (a) 1,817,773 7,114,444
Hire purchase liability (b) 30,775 29,359
Revolving credits (c) – 10,000,000

1,848,548 17,143,803
Non-current
Hire purchase liability (b) 46,120 76,895

1,894,668 17,220,698
104 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

23. Borrowings (cont’d)

(a) Bills payable (secured)

The bills payable bears interest at 2.20% (2017: 2.20%) per annum and is secured by way by corporate
guarantees from the Company.

(b) Hire purchase liability

Group
2018 2017
RM RM

Minimum hire purchase payments:

Repayable within one year 33,744 33,744


Repayable between one to two years 33,744 33,744
Repayable between two to five years 14,015 47,759

81,503 115,247
Less: Future finance charges (4,608) (8,993)

Present value of hire purchase liability 76,895 106,254

Present value of hire purchase liability:

Repayable within one year 30,775 29,359


Repayable between one to two years 32,259 30,775
Repayable between two to five years 13,861 46,120

76,895 106,254

Representing hire purchase liability:

Current 30,775 29,359


Non-current 46,120 76,895

76,895 106,254

The hire purchase liability bears weighted average effective interest rate at 4.72% (2017: 4.72%) per annum.

(c) Revolving credits (secured)

In prior year, the revolving credits bear interest at 5.90% per annum and were secured by:

(i) a corporate guarantee by the Company; and


(ii) a legal charge over a freehold land and building of a subsidiary.
Jadi Imaging Holdings Berhad Annual Report 2018 105

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

24. Deferred tax liabilities

2018 2017
RM RM

At 1 April 1,408,921 948,498


Recognised in profit or loss (Note 7) (634,284) 460,423

At 31 March 774,637 1,408,921

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting
are as follows:

Property,
Revaluation plant and
reserve equipment Total
RM RM RM

Deferred tax liabilities of the Group:

At 1 April 2017 1,425,701 4,527,988 5,953,689


Recognised in profit or loss (594,828) (759,104) (1,353,932)

At 31 March 2018 830,873 3,768,884 4,599,757

At 1 April 2016 1,561,706 5,820,792 7,382,498


Recognised in profit or loss (136,005) (1,292,804) (1,428,809)

At 31 March 2017 1,425,701 4,527,988 5,953,689

Unrealised
Unabsorbed Unutilised loss on
capital reinvestment Unutilised foreign
allowances allowances tax losses exchange Total
RM RM RM RM RM

Deferred tax assets


 of the Group:

At 1 April 2017 (4,544,768) – – – (4,544,768)


Recognised in
 profit or loss 719,648 – – – 719,648

At 31 March 2018 (3,825,120) – – – (3,825,120)

At 1 April 2016 (2,498,000) (3,609,000) (50,000) (277,000) (6,434,000)


Recognised in
 profit or loss (2,046,768) 3,609,000 50,000 277,000 1,889,232

At 31 March 2017 (4,544,768) – – – (4,544,768)




106 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

24. Deferred tax liabilities (cont’d)

The amounts of temporary differences for which no deferred tax assets have been recognised as they may not
be used to offset taxable profits of the other subsidiaries in the Group and they arose in subsidiaries that have
a recent history of losses, are as follows (stated at gross):

2018 2017
RM RM

Provisions 4,463,185 4,775,494


Unrealised loss on foreign exchange 2,772,553 2,136,388
Unutilised reinvestment allowances 20,494,650 20,494,650
Unabsorbed capital allowances 10,777,095 4,627,032
Unutilised tax losses 6,575,137 1,380,803

45,082,620 33,414,367

25. Trade payables

The normal trade credit terms granted to the Group range from 30 to 90 days (2017: 30 to 90 days).

26. Non-trade payables and accruals

Group Company
2018 2017 2018 2017
RM RM RM RM

Non-trade payables 1,955,400 1,591,170 40,197 58,791


Deposit received 1,792,693 – 1,792,693 –
Accruals 765,788 1,320,323 123,500 106,000

4,513,881 2,911,493 1,956,390 164,791

27. Related party disclosures

(a) Identities of related parties:

Parties are considered to be related to the Group if the Group has the ability to directly control the party
or exercise significant influence over the party in making financial and operating decisions, or vice versa,
or where the Group and the party are subject to common control or common significant influence. Related
parties may be individuals or other entities. Related parties of the Group include:

i. Subsidiaries;
ii. Entities in which directors have substantial financial interests; and
iii. Key management personnel of the Group and of the Company, comprising persons having the
authority and responsibility for planning, directing and controlling the activities directly or indirectly.
Jadi Imaging Holdings Berhad Annual Report 2018 107

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

27. Related party disclosures (cont’d)

(b) Significant related party’s transactions

Significant transactions between the Company and its related parties during the financial year were as
follows:

2018 2017
Transaction RM RM

With subsidiaries:

Jadi Imaging Technologies Sdn. Bhd. Advances to 2,920,172 –


Loss on remeasurement (3,646,517) –

Jadi Imaging Technologies


 (Suzhou) Co., Ltd. Capital reduction 18,081,075 –

Zhuhai Jadi Imaging Technologies


 Co., Ltd. Advances to 1,792,693 –

Significant balances with related parties are disclosed in Note 13 to the financial statements.

(c) Compensation of Key Management Personnel

Group Company
2018 2017 2018 2017
RM RM RM RM

Short-term employee benefits 1,883,682 1,802,689 337,196 238,951

Key management personnel comprise executive and non-executive directors and managers of the Group
and of the Company who have authority and responsibility for planning, directing, and controlling the
activities of the Group and of the Company, directly or indirectly.

28. Material litigation

Legal suit by Guangzhou Maipu Digital Technology Co., Ltd. (“GZMDT”) against a subsidiary

On 9 July 2015, Jadi Imaging Technology (Suzhou) Co., Ltd. (“JITSZ”), a wholly owned subsidiary of the Company
received a Writ of Summons in relation to a claim by GZMDT amounting to approximately RM189,649
(RMB293,120) for return of toner purchased from JITSZ in prior years due to a dispute of the goods supplied.
The matter is still awaiting trial at the date of this report. Management has not made any provision on the claimed
amount by GZMDT and does not consider the event as a contingent liability as the Directors believe the claim
is unsubstantiated and it is not probable that GZMDT’s claim will materialise.

Subsequently, JITSZ initiated a claim against GZMDT for the balance payable by GZMDT on its account
outstanding of approximately RM361,042 (RMB579,400). The Group has nevertheless impaired the amount in
full in the financial statements as at 31 March 2017. The matter is still awaiting trial at the date of this report.
108 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

29. Contingent liabilities

Group
2018 2017
RM RM

Bank guarantees given by financial institutions to third parties 1,408,833 1,520,333

30. Financial guarantees

Company
2018 2017
RM RM

Corporate guarantees given to licensed banks for


 credit facilities granted to a subsidiary 1,817,773 17,114,444

31. Operating segments

Operating segments are presented in respect of the Group’s business and geographical segments. The primary
format, business segment, is based on the Group’s management and internal reporting structure. Inter-segment
transactions were carried out on terms and conditions not materially different from those obtainable in
transactions with independent third parties.

(a) Business segments

The Group comprises the following main business segments:

(i) Manufacturing - Manufacturing and sale of toner

(ii) Investment holding - Investment of companies

(b) Geographical segments

The Group comprises the following principal geographical areas:

(i) Malaysia - Manufacturing and sale of toner


- Investment of companies

(ii) Overseas - Trading and distributing of toner

In presenting information on the basis of geographical segments, segment revenue is based on the geographical
location of the customers. Segment assets are based on the geographical location of assets.

The management assesses the performance of the operating segments based on operating profit or loss which
is measured differently from those disclosed in the consolidated financial statements as enumerated in the
subsequent paragraphs below.

Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated
to operating segments.
Jadi Imaging Holdings Berhad Annual Report 2018 109

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

31. Operating segments (cont’d)

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating
segments are presented under unallocated items. Unallocated items comprise mainly investments and related
income, loans and borrowings and related expenses, corporate assets (primarily the Company’s headquarters)
and head office expenses.

Transfer prices between operating segments are at arm’s length basis in manner similar to transactions with
third parties.

Business segments

Investment
Manufacturing holding Group
Group RM RM RM
2018
Revenue
External revenue 55,745,965 – 55,745,965
Inter-segment revenue 46,133,114 – 46,133,114

Total revenue 101,879,079 – 101,879,079

Consolidation adjustments (46,133,114)

Consolidated revenue (55,745,965)

Results
Segment loss before interest and taxation (4,740,978) (5,400,509) (10,141,487)
Interest expense (772,947)
Income tax expense (67,481)
Consolidated adjustments 331,801

Consolidated loss after taxation (10,650,114)

Segment loss before interest and taxation


 includes the followings expenses/(income):

 Bad debts written off 42,551 – 42,551


 Depreciation of:
 - investment properties 372,029 – 372,029
 - property, plant and equipment 8,095,980 – 8,095,980
 Interest income (111,308) – (111,308)
 Inventories written down 2,245,130 – 2,245,130
 Impairment loss on trade receivables 4,257 – 4,257
 Impairment loss on property, plant and equipment 1,385,320 – 1,385,320
 Property, plant and equipment written off 56,075 – 56,075
 Reversal of inventories written down (2,267,739) – (2,267,739)
110 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

31. Operating segments (cont’d)

Business segments (Cont’d)

Investment
Manufacturing holding Group
Group RM RM RM
2018
ASSETS
Segment assets 205,484,001 95,730,649 301,214,650
Unallocated assets
- tax refundable 345,479
Consolidated adjustments (165,377,902)

Consolidated total assets 136,182,227

Additions to non-current assets other than


 financial instruments are:
 Property, plant and equipment 1,413,986 – 1,413,986

LIABILITIES
Segment liabilities 137,511,733 1,956,391 139,468,124
Unallocated liabilities
- deferred tax liabilities 830,873
- bank borrowings 1,894,668
Consolidated adjustments (132,980,458)

Consolidated total liabilities 9,213,207

2017
Revenue
External revenue 76,950,167 – 76,950,167
Inter-segment revenue 43,115,415 – 43,115,415

Total revenue 120,065,582 – 120,065,582

Consolidation adjustments (43,115,415)

Consolidated revenue 76,950,167

Results
Segment loss before interest and taxation (15,872,625) (1,377,567) (17,250,192)
Interest expense (1,112,940)
Income tax expense (341,584)
Consolidated adjustments 1,511,315

Consolidated loss after taxation (17,193,401)


Jadi Imaging Holdings Berhad Annual Report 2018 111

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

31. Operating segments (cont’d)

Business segments (Cont’d)

Segment loss before interest and taxation includes the followings expenses/(income):

Investment
Manufacturing holding Group
Group RM RM RM
2017
Interest income (120,173) – (120,173)
Bad debts written off 41,621 – 41,621
Depreciation of:
- investment properties 2,400 – 2,400
- property, plant and equipment 10,848,310 – 10,848,310
Inventories written down 1,600,523 – 1,600,523
Impairment loss on trade receivables 458,106 – 458,106
Impairment loss on property, plant and equipment 10,997,789 – 10,997,789
Property, plant and equipment written off 2 – 2
Reversal of inventories written down (1,187,102) – (1,187,102)

ASSETS
Segment assets 215,691,683 107,126,282 322,817,965
Unallocated assets
- tax refundable 452,279
Consolidated adjustments (156,730,838)

Consolidated total assets 166,539,406

Additions to non-current assets other than


 financial instruments are:
 Property, plant and equipment 2,424,769 – 2,424,769

LIABILITIES
Segment liabilities 112,447,024 7,951,515 120,398,539
Unallocated liabilities
- deferred tax liabilities 1,453,306
- bank borrowings 17,220,698
Consolidated adjustments (110,086,725)

Consolidated total liabilities 28,985,818


112 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

31. Operating segments (cont’d)

Geographical information

Group
Revenue Non-current assets
2018 2017 2018 2017
RM RM RM RM

South East Asia 15,614,648 16,074,145 68,015,287 92,369,340


South America 3,539,173 12,247,123 – –
East Asia 14,515,396 13,026,257 6,528,929 7,746,053
South Asia 5,733,576 11,845,576 – –
North Asia 4,746,179 7,476,775 – –
Middle East 2,535,413 3,773,445 – –
Europe 7,809,209 8,438,171 90,492 165,325
Others 1,252,371 4,068,675 – –

55,745,965 76,950,167 74,634,708 100,280,718

Information on specific countries within each region disclosed above is not presented as the cost of doing so
would be excessive relative to the benefit of their disclosures.

Major customer

Revenue from 1 (2017: 1) major customer, with revenue equal to or more than 10% of the Group’s revenue,
amounted to RM6,762,519 (2017: RM7,803,417) arising from sales in the manufacturing segment.
Jadi Imaging Holdings Berhad Annual Report 2018 113

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments

Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Loans and receivables;


(b) Available-for-sale (“AFS”) financial assets; and
(c) Financial liabilities measured at amortised cost.

Financial
liabilities
AFS measured at
Carrying Loans and financial amortised
amount receivables assets cost
RM RM RM RM

Group
2018
Financial assets
Other investment 50,000 – 50,000 –
Trade receivables 6,629,344 6,629,344 – –
Non-trade receivables and
 deposits (excluding prepayments) 2,530,094 2,530,094 – –
Fixed deposit with a licensed bank 55,746 55,746 – –
Cash and bank balances 10,587,263 10,587,263 – –

19,852,447 19,802,447 50,000 –

Financial liabilities
Trade payables 2,030,021 – – 2,030,021
Non-trade payables and accruals 4,513,881 – – 4,513,881
Bill payable 1,817,773 – – 1,817,773
Hire purchase liability 76,895 – – 76,895

8,438,570 – – 8,438,570
114 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Categories of financial instruments (Cont’d)

Financial
liabilities
AFS measured at
Carrying Loans and financial amortised
amount receivables assets cost
RM RM RM RM

Group
2017
Financial assets
Other investment 50,000 – 50,000 –
Trade receivables 10,604,503 10,604,503 – –
Non-trade receivables and
 deposits (excluding prepayments) 1,650,502 1,650,502 – –
Fixed deposit with a licensed bank 1,940,994 1,940,994 –
Cash and bank balances 8,604,284 8,604,284 – –

22,850,283 22,800,283 50,000 –

Financial liabilities
Trade payables 7,444,706 – – 7,444,706
Non-trade payables and accruals 2,911,493 – – 2,911,493
Bill payable 7,114,444 – – 7,114,444
Hire purchase liability 106,254 – – 106,254
Revolving credits 10,000,000 – – 10,000,000

27,576,897 – – 27,576,897
Jadi Imaging Holdings Berhad Annual Report 2018 115

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Categories of financial instruments (Cont’d)

Financial
liabilities
measured at
Carrying Loans and amortised
amount receivables cost
RM RM RM

Company
2018
Financial assets
Deposits (excluding prepayments) 1,500 1,500 –
Amount due from a subsidiary 10,238,247 10,238,247 –
Cash and bank balances 2,310,433 2,310,433 –

12,550,180 12,550,180 –

Financial liability
Non-trade payables and accruals 1,956,390 – 1,956,390

2017
Financial assets
Deposits (excluding prepayments) 1,500 1,500 –
Amount due from a subsidiary 4,091,298 4,091,298 –
Cash and bank balances 22,163 22,163 –

4,114,961 4,114,961 –

Financial liabilities
Non-trade payables and accruals 164,791 – 164,791
Amount due to subsidiaries 7,786,724 – 7,786,724

7,951,515 – 7,951,515
116 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Net gains and losses arising from financial instruments

Group Company
2018 2017 2018 2017
RM RM RM RM

Net gains/(losses) arising on:


Loans and receivables
Bad debts written off (42,551) (41,621) – –
Impairment loss on trade receivables (4,257) (458,106) – –
Impairment loss on investment
 in a subsidiary – – (1,743,254) –
Loss on remeasurement of amount
 due from subsidiaries – – (3,646,517) –
(Loss)/Gain on foreign exchange:
- realised (1,187,336) 93,161 (118,511) –
- unrealised (1,101,343) 649,058 – –
Interest income 111,308 120,173 – –

(2,224,179) 362,665 (5,508,282) –

Financial liabilities measures


 at amortised cost
Finance costs (758,419) (1,112,940) – –
Gain/(Loss) on foreign exchange:
- realised 1,301,701 400,977 633,647 (39,163)
- unrealised (360,711) 749,690 – (883,949)

182,571 37,727 633,647 (923,112)

Total (2,041,608) 400,392 (4,874,635) (923,112)

Financial risk management objectives and policies



The Group and the Company are exposed to financial risks arising from their operations and the use of financial
instruments. The key financial risks include credit risk, interest rate risk, market risk, foreign currency risk and
liquidity risk.

The Group’s and the Company’s financial risk management policy seeks to ensure that adequate financial
resources are available for the development of the Group’s and the Company’s businesses whilst managing its
credit risk, interest rate risk, market risk, foreign currency risk and liquidity risk.

The following sections provide details regarding the Group’s and the Company’s exposures to the above
mentioned financial risks and the objectives, policies and processes for the management of these risks.

Jadi Imaging Holdings Berhad Annual Report 2018 117

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. The Group’s exposure to credit risk, or the risk of counterparties defaulting,
arises mainly from trade and non-trade receivables. The Group manages its exposure to credit risk by the
application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial
assets (including quoted investments, cash and bank balances and derivatives), the Company minimises credit
risk by dealing exclusively with high credit rating counterparties.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of
the trade and non-trade receivables as appropriate. The main components of this allowance are a specific loss
component that relates to individually significant exposures, and a collective loss component established for
groups of similar assets in respect of losses that might have been incurred but not yet identified. Impairment is
estimated by management based on prior experience and the current economic environment.

Credit risk concentration profile

The Group does not have any major concentration of credit risk related to any individual customer or counterparty
as at the end of the reporting period.

Exposure to credit risk

As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the carrying
amount of the financial assets as at the end of the reporting period.

The exposure of credit risk for trade receivables by geographical region is as follows:

2018 2017
RM % RM %

Group
South East Asia 1,731,036 26 2,509,189 24
South America 418,671 7 2,329,870 22
East Asia 2,133,465 32 2,499,608 23
South Asia 422,414 7 1,563,892 15
North Asia 873,706 13 1,156,871 11
Middle East 105,192 1 41,485 –
Europe 942,533 14 442,799 4
Others 2,300 – 60,789 1

6,629,344 100 10,604,503 100


118 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Credit risk (Cont’d)

Ageing analysis

The ageing analysis of the Group’s trade receivables is as follows:

Gross Individual Carrying


amount impairment amount
RM RM RM

2018
Not past due: 3,240,906 – 3,240,906
Past due:
- less than 3 months 2,763,836 – 2,763,836
- 3 to 6 months 641,217 – 641,217
- more than 6 months 348,684 (365,299) (16,615)

6,994,643 (365,299) 6,629,344

2017
Not past due: 8,020,334 – 8,020,334
Past due:
- less than 3 months 2,108,271 – 2,108,271
- 3 to 6 months 922,175 (461,250) 460,925
- more than 6 months 376,015 (361,042) 14,973

11,426,795 (822,292) 10,604,503

At the end of reporting period, trade receivables that are individually impaired were those in significant financial
difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit
enhancement.

The Group deems collective impairment not necessary.

Trade receivables that are neither past due nor impaired

A significant portion of trade receivables that are neither past due nor impaired are regular customers that have
been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade
receivables.

Trade receivables that are past due but not impaired

Any receivables having significant balances past due or more than 60 days, which are deemed to have higher
credit risk, are monitored individually. The Group believes that no impairment allowance is necessary in respect
of these trade receivables. They are companies which have substantially good collection track record and no
recent history of default.

Jadi Imaging Holdings Berhad Annual Report 2018 119

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Credit risk (Cont’d)

Financial guarantees

The fair value of financial guarantees provided by the Company to banks in respect of bank facilities granted to a
subsidiary with nominal amount of RM1,817,773 (2017:RM17,114,444), as disclosed in Note 30 to the financial
statements, are negligible because the actual interest charged by the banks are not materially different from the
borrowing costs of the subsidiary and the outstanding borrowings are adequately secured by the Company. In
prior year, outstanding borrowings were secured by the freehold factory of the subsidiary in which their market
values upon realisation are expected to be higher than the outstanding borrowing amounts.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from interest-bearing
financial assets and liabilities. The Group’s policy is to obtain the most favourable interest rates available.

Information relating to the Group’s exposure to the interest rate risk of the financial liabilities is disclosed in the
notes to the financial statements.

Effective
interest Less Between
rate per than one and
annum one year five years Total
% RM RM RM

Group
2018
Financial liabilities
Bills payable 2.20 1,817,773 – 1,817,773
Hire purchase liability 4.72 30,775 46,120 76,895

1,848,548 46,120 1,894,668

2017
Financial liabilities
Bills payable 2.20 7,114,444 – 7,114,444
Hire purchase liability 4.72 29,359 76,895 106,254
Revolving credits 5.90 10,000,000 – 10,000,000

17,143,803 76,895 17,220,698


120 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Interest rate risk (Cont’d)

Interest rate risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the interest rates as at the
end of the reporting period, with all other variables held constant:

2018 2017
(Decrease) / (Decrease) /
Increase Increase
RM RM

Group
Effects on profit after taxation

Increase of 100 basis points (14,399) (130,877)
Decrease of 100 basis points 14,399 130,877

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other
prices that will affect the Company’s financial position or cash flows.

Foreign currency risk

The Group and the Company are exposed to foreign currency risk on sales and purchases that are denominated
in a currency other than Ringgit Malaysia. The currency giving rise to this risk is Chinese Renminbi (“RMB”),
Japanese Yen (“JPY”), Pound Sterling (“GBP”), United States Dollar (“USD”), and Euro. The exposure of foreign
currency risk is monitored on an on-going basis to ensure that the net exposure is at an acceptable level.


Jadi Imaging Holdings Berhad Annual Report 2018 121

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Foreign currency risk (Cont’d)

The Group’s exposure to foreign currency is as follows:



United
Chinese Japanese Pound States
Renminbi Yen Sterling Dollar Euro Total
RM RM RM RM RM RM

Group
2018
Financial assets
Trade receivables 2,129,108 2,502 206,096 3,730,528 555,037 6,623,271
Non-trade receivables
 and deposits
 (excluding
 prepayments) 1,032,895 – 348,055 – – 1,380,950
Cash and bank
 balances 4,611,028 4,524 236,696 3,983,940 330,021 9,166,209

7,773,031 7,026 790,847 7,714,468 885,058 17,170,430

Financial liabilities
Trade payables 212,191 306,232 209,091 611,840 118,232 1,457,586
Non-trade payables
 and accruals 324,091 – – 1,648 – 325,739
Bill payable – 141,422 – 365,700 – 507,122

536,282 447,654 209,091 979,188 118,232 2,290,447

Net financial assets/


 (liabilities) 7,236,749 (440,628) 581,756 6,735,280 766,826 14,879,983
Less: Net financial
 (assets)/ liabilities
 denominated
 in the respective
 entities’ functional
 currencies (7,236,749) – (581,756) – – (7,818,505)

Currency exposure – (440,628) – 6,735,280 766,826 7,061,478


122 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Foreign currency risk (Cont’d)

United
Chinese Japanese Pound States
Renminbi Yen Sterling Dollar Euro Total
RM RM RM RM RM RM

Group
2017
Financial assets
Trade receivables 2,408,305 – 32,671 8,154,679 – 10,595,655
Non-trade receivables
 and deposits (excluding
 prepayments) 288,273 – 311,157 – – 599,430
Fixed deposit with a
 licensed bank 1,940,994 – – – – 1,940,994
Cash and bank
 balances 2,724,071 18,444 284,442 2,425,240 516,700 5,968,897

7,361,643 18,444 628,270 10,579,919 516,700 19,104,976

Financial liabilities
Trade payables 147,776 2,081,661 141,881 2,841,660 – 5,212,978
Non-trade payables
 and accruals 346,285 – 48,806 1,858 – 396,949
Bill payable – 808,200 – 3,198,624 – 4,006,824

494,061 2,889,861 190,687 6,042,142 – 9,616,751

Net financial assets/


 (liabilities) 6,867,582 (2,871,417) 437,583 4,537,777 516,700 9,488,225
Less: Net financial
 (assets)/liabilities
 denominated
 in the respective
 entities’ functional
 currencies (6,867,582) – (437,583) 18,795 – (7,286,370)

Currency exposure – (2,871,417) – 4,556,572 516,700 2,201,855


Jadi Imaging Holdings Berhad Annual Report 2018 123

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Foreign currency risk (Cont’d)

The Company’s exposure to foreign currency is as follows:

2018 2017
RM RM

Chinese Renminbi
Financial asset
Amount due from subsidiaries 10,238,247 –

Financial liability
Amount due to a subsidiary – 7,695,028

Net currency exposure 10,238,247 (7,695,028)

Foreign currency risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies as
at the end of the reporting period, with all other variables held constant:

Group Company
2018 2017 2018 2017 2018 2017
% % RM RM RM RM
Increase/ Increase/ Increase/ Increase/
(Decrease) (Decrease) (Decrease) (Decrease)

Effect on profit after tax

JPY/RM
Strengthened by 5.00 5.00 (16,744) (109,114) – –
Weakened by 5.00 5.00 16,744 109,114 – –

USD/RM
Strengthened by 5.00 5.00 255,941 173,150 – –
Weakened by 5.00 5.00 (255,941) (173,150) – –

EURO/RM
Strengthened by 5.00 5.00 29,139 19,635 – –
Weakened by 5.00 5.00 (29,139) (19,635) – –

RMB/RM
Strengthened by 5.00 5.00 – – 389,053 (292,411)
Weakened by 5.00 5.00 – – (389,053) 292,411
124 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Liquidity risk

Liquidity risk is the risk that the Group and the Company will not be able to meet its financial obligations as
they fall due. The Group and the Company monitor and maintains a level of cash and cash equivalents deemed
adequate by management to finance the Group’s and the Company’s operations and to mitigate the effects of
fluctuations in cash flows.

Maturity analysis

The table below summarises the maturity profile of the Group’s financial liabilities as at the reporting period
based on undiscounted contractual payments:

Contractual Contractual
Carrying interest cash Within More than
amount rate flows 1 year 1 year
RM % RM RM RM

Group
2018
Trade payables 2,030,021 – 2,030,021 2,030,021 –
Non-trade payables
 and accruals, excluding
 financial guarantees 4,513,881 – 4,513,881 4,513,881 –
Bills payable 1,817,773 2.20 1,817,773 1,817,773 –
Hire purchase liability 76,895 4.72 81,503 33,744 47,759

8,438,570 8,443,178 8,395,419 47,759

2017
Trade payables 7,444,706 – 7,444,706 7,444,706 –
Non-trade payables
 and accruals, excluding
 financial guarantees 2,911,493 – 2,911,493 2,911,493 –
Bills payable 7,114,444 2.20 7,114,444 7,114,444 –
Hire purchase liability 106,254 4.72 115,247 33,744 81,503
Revolving credits 10,000,000 5.90 10,000,000 10,000,000 –

27,576,897 27,585,890 27,504,387 81,503

At the reporting date, the counterparty to the financial guarantees does not have a right to demand cash as the
default has not occurred. Accordingly, financial guarantees under the scope of MFRS 139 Financial Instruments:
Recognition and Measurement are not included in the above maturity profile analysis.


Jadi Imaging Holdings Berhad Annual Report 2018 125

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Maturity analysis (Cont’d)

Contractual Contractual
Carrying interest cash Within More than
amount rate flows 1 year 1 year
RM % RM RM RM

Company
2018
Non-trade payables and
 accruals 1,956,390 – 1,956,390 1,956,390 –

2017
Non-trade payables and
 accruals 164,791 – 164,791 164,791 –
Amount due to subsidiaries 7,786,724 – 7,786,724 7,786,724 –

7,951,515 7,951,515 7,951,515 –

Fair values

The following summarises the methods used to determine the fair values of the financial instruments:

(i) The financial assets and financial liabilities maturing within the next twelve (12) months approximated
their fair values due to the relatively short term maturity of the financial instruments.

(ii) The fair value of other investments is equivalent to the carrying value as at the end of the reporting period.

(iii) The fair value of financial guarantees is determined based on probability weighted discounted cash flow
method. The probability has been estimated and assigned using the following key assumptions:

- The likelihood of the guaranteed party defaulting within the guaranteed period;
- The exposure on the portion that is not expected to be recovered due to the guaranteed party’s
default; and
- The estimated loss exposure if the party guaranteed were to default.
126 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

32. Financial instruments (cont’d)

Financial risk management objectives and policies (Cont’d)

Fair values (Cont’d)

The aggregate fair values and the carrying amounts of the financial asset carried on the statement of financial
position as at 31 March are as below:

2018 2017
Carrying Fair Carrying Fair
amount value amount value
RM RM RM RM

Group
Financial asset:
Other investment 50,000 50,000 50,000 50,000

Financial liability:
Hire purchase liability 76,895 79,422 106,254 108,353

Fair value hierarchy

The table below analyses financial instrument carried at fair value, by valuation method. The different levels
have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for assets or liabilities,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Input for the assets or liabilities that are not based on observable market data (unobservable inputs).

Level 1 Level 2 Level 3 Total


RM RM RM RM

2018
Group
Financial asset
Other investment – 50,000 – 50,000

Financial liability
Hire purchase liability – 79,422 – 79,422

2017
Financial asset
Other investment – 50,000 – 50,000

Financial liability
Hire purchase liability – 108,353 – 108,353
Jadi Imaging Holdings Berhad Annual Report 2018 127

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

33. Capital management

The Group manages its capital by maintaining an optimal capital structure so as to support its business and
maximise shareholders’ value. To achieve this objective, the Group may make adjustments to the capital structure
in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of
capital to shareholders or issuing new shares.

The Group’s strategies were unchanged from the previous financial year. The Group monitors its capital based
on the debt-to-equity ratio. The debt-to-equity ratio is calculated as net debt divided by total equity, and where
net debt is calculated as borrowings less cash and cash equivalents. The debt-to-equity ratio of the Group as
at the reporting date was as follows:

2018 2017
RM RM

Bills payable 1,817,773 7,114,444


Hire purchase liability 76,895 106,254
Revolving credits – 10,000,000

1,894,668 17,220,698
Less: Cash and cash equivalent (10,643,009) (10,545,278)

Net debt (8,748,341) 6,675,420

Total equity 126,969,020 137,553,588

Gearing ratio (times) N/A 0.05

Under the requirement of Bursa Malaysia Practice Note 17, the Group is required to maintain a consolidated
shareholder’s equity equal to or not less than the 25% of the issued and paid up capital (including treasury shares)
and such shareholders’ equity is not less than RM40 million. The Group has complied with this requirement.

34. Significant event

On 10 July 2017, the Company signed a letter of intent with a third party to sell its entire equity interest in Jadi
Imaging Technologies (Suzhou) Co., Ltd., a subsidiary incorporated in the People’s Republic of China which has
temporarily ceased operations. However, the transaction has yet to complete as at 31 March 2018 and the
parties are still currently in negotiations.
128 Jadi Imaging Holdings Berhad Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS


As At 31 March 2018

35. General information

The Company is a public company limited by shares that is incorporated and domiciled in Malaysia and is listed
in the Main Market of Bursa Malaysia Securities Berhad.

The Company is principally an investment holding company. The principal activities of the subsidiaries are
disclosed in Note 9 to the financial statements.

There has been no significant change in the nature of these activities during the financial year.

The registered office and principal place of business of the Company are located at No.1, Jalan Peguam U1/25A,
Seksyen U1, Hicom-Glenmarie Industrial Park, 40150 Shah Alam, Selangor Darul Ehsan.

The financial statements were approved and authorised for issue by the Board of Directors on 19 July 2018.
Jadi Imaging Holdings Berhad Annual Report 2018 129

list of
properties

Approximate Audited
age of Land area/ net book
Date of building Built-up value as at
Registered Description/ certificate years/ area 31.03.2018
owner Location Existing use of fitness Tenure (sq. ft.) (RM’000)

Jadi Imaging No. 211 Tingkat 2 Apartment for 1 August 17 years/ 855 91
Technologies Block 1 foreign workers 2001 Freehold
Sdn. Bhd. Jalan Pegawai U1/33
Pangsapuri Sri Kerjaya
Seksyen U1,
40150 Shah Alam
Selangor

Jadi Imaging No. 3 Jalan Peguam U1/25 Toner factory, 28 February 23 years/ 45,833/ 10,858
Technologies Hicom-Glenmarie R & D Centre 2002 Freehold 24,921
Sdn. Bhd. Industrial Park
Seksyen U1, 40150 Shah Alam
Selangor

Jadi Imaging GM3626 Lot 719, Toner factory, 17 June 8 years/ 257,278/ 27,825
Technologies Mukim Kapar Resin factory 2011 Freehold 123,128
Sdn. Bhd. Tempat Sungai Dua R & D lab
Daerah Klang
Selangor

Jadi Imaging Block No. 41059 Sales office, 20 January 10 years/ 191,502/ 8,241
Technologies South of Xiasheng Road Distribution 2009 Tenure of 64,300
(Suzhou) Suzhou Industrial Park warehouse 50 years
Co., Ltd.* Suzhou, Jiangsu 215000
People’s Republic of China

Note:

* Pursuant to a contract with China-Singapore Suzhou Industrial Park Development Co., Ltd. for the transfer of the right
to the use of land.
130 Jadi Imaging Holdings Berhad Annual Report 2018

analysis OF
shareholdings
As At 11 July 2018

Issued and Paid-Up Share Capital : RM 94,182,008.30 comprising 941,820,083 ordinary shares of RM0.10 each
Class of Shares : Ordinary shares of RM0.10 each
Number of Shareholders : 6,972

ANALYSIS OF SHAREHOLDINGS

Holdings No. of holders Total holdings %

1 - 99 1,934 102,062 0.010


100 - 1,000 663 182,512 0.019
1,001 - 10,000 958 5,187,213 0.554
10,001 - 100,000 2,553 101,788,275 10.808
100,001 – 47,085,019 * 863 549,696,364 58.372
47,085,020 and above ** 1 284,743,985 30.237

Total 6,972 941,700,411 100.000

Notes:
* less than 5% of issued shares.
** 5% and above of issued shares.

SUBSTANTIAL SHAREHOLDERS

Direct Indirect
Shareholders No. of shares % No. of shares %
1
LSI Holdings Sdn Bhd 284,743,985 30.237 – –

Liew Kim Siong 22,017,045 2.338 284,743,985 1 30.237
Ng Poh Imm – – 284,743,985 1 30.237

Notes:
1
Deemed interested by virtue of his/her shareholdings in LSI Holdings Sdn Bhd pursuant to Section 8 of the Companies
Act, 2016.

DIRECTORS ’ SHAREHOLDINGS

Direct Indirect
Directors No. of shares % No. of shares %

Liew Kim Siong 22,017,045 2.338 284,743,985 1 30.237
Eu Lan Eng 33,929,954 3.603 – –
Yeoh Chui En 1,000,000 0.106 – –
Sim Swee Yoke – – – –
Chan Chee Lian – – 100,000 2 0.011
Liew Kit – – – –
Liew Hock Yee – – – –

Notes:
1
Deemed interested by virtue of his/her shareholdings in LSI Holdings Sdn Bhd pursuant to Section 8 of the Companies
Act, 2016.
2
Deemed interested by virtue of the shares held by his spouse.
Jadi Imaging Holdings Berhad Annual Report 2018 131

ANALYSIS OF SHAREHOLDINGS
As At 11 July 2018

LIST OF THIRTY (30) LARGEST REGISTERED SHAREHOLDERS

No. of Percentage
Name shares held (%)

1. LSI Holdings Sdn Bhd 246,050,335 26.128


2. Mega First Corporation Berhad 41,000,000 4.353
3. LSI Holdings Sdn Bhd 38,693,650 4.108
4. Eu Lan Eng 32,267,154 3.426
5. Teo Kwee Hock 28,873,780 3.066
6. UOB Kay Hian Nominees (Tempatan) Sdn Bhd 25,700,078 2.729
Pledged Securities Account For Teo Siew Lai
7. Liew Kim Siong 22,017,045 2.338
8. Won Tian Loong 13,429,036 1.426
9. Foo Fook Min 10,000,066 1.061
10. Ooi Chin Kiang 8,000,000 0.849
11. Leong Oow Lai 6,303,461 0.669
12. Won Bau Khim 6,000,010 0.637
13. How Bee Lay 4,797,266 0.509
14. Chew Chin Hun 4,426,000 0.470
15. Teoh Chew Seng 4,000,100 0.424
16. Huan Boon Haw 4,000,000 0.424
17. Kenanga Nominees (Tempatan) Sdn Bhd 4,000,000 0.424
Pledged Securities Account for Heng Yong Kang @
Wang Yong Kang (08HE101Q1-008)
18. Seah Tin Kim 3,563,544 0.378
19. Onn Tze How 3,500,100 0.371
20. Chong Hon Hwee 3,000,000 0.318
21. Foo Jy Ming 2,940,000 0.312
22. Hiew Hock Ngan 2,700,000 0.286
23. Maybank Nominees (Tempatan) Sdn Bhd 2,700,000 0.286
Pledged Securities Account For Chang Sang Kok
24. TA Nominees (Tempatan) Sdn Bhd 2,666,666 0.283
Pledged Securities Account for Rohayu Binti Ali
25. RHB Nominees (Tempatan) Sdn Bhd 2,513,797 0.266
Pledged Securities Account For Cheang Fook Sam
26. Maybank Nominees (Tempatan) Sdn Bhd 2,499,966 0.265
Pledged Securities Account For Jindar Singh A/L Sham Singh
27. Yung Boon Hong @ Yang Kok Ching 2,400,000 0.254
28. Yee Boon Hong 2,351,366 0.249
29. Poh Chun Ching 2,270,933 0.241
30. Tok Yu Li 2,235,000 0.237

Total 534,899,353 56.787


This page is intentionally left blank
JADI IMAGING HOLDINGS BERHAD
(526319-P)
(Incorporated in Malaysia)

PROXY FORM No. of ordinary shares held CDS Account No.

Telephone no. (During office hours) ......................................................

I/We ...................................................................................................................... NRIC No. ..............................................................................


(PLEASE USE BLOCK CAPITAL)
of ............................................................................................................................................................................................................................
(FULL ADDRESS)
being a Member(s) of JADI IMAGING HOLDINGS BERHAD (526319-P) hereby appoint* ..............................................................
NRIC No............................................................................of.................................................................................................................................
..............................................................or failing him........................................................NRIC No. . ...............................................................
of ............................................................................................................................................................................................................................
or THE CHAIRMAN OF THE MEETING as *my/our proxy/proxies to attend and vote for *me/us on *my/our behalf, at the Seventeenth
Annual General Meeting of the Company to be held at Function Room 1, Mezzanine Floor, Setia City Convention Centre, No. 1,
Jalan Setia Dagang AG U13/AG, Setia Alam Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan on Wednesday, 29 August 2018
at 10.00 a.m. and at any adjournment thereof, to vote as indicated below:-
Ordinary Business For Against
Ordinary Re-election of Dato’ Sri Liew Lee Leong as Director pursuant to Article 128 of the Company’s
Resolution 1 Constitution
Ordinary Re-election of Mr Lim Chee Khang as Director pursuant to Article 128 of the Company’s
Resolution 2 Constitution
Ordinary Payment of Directors’ fees of RM290,000 for the financial year ending 31 March 2019
Resolution 3
Ordinary Payment of Directors’ benefits of RM20,000 for the period from 29 August 2018 until the
Resolution 4 next Annual General Meeting
Ordinary Re-appointment of Messrs PKF as Auditors of the Company and to authorise the Directors
Resolution 5 to fix their remuneration
Special Business
Ordinary Authority to Issue Shares pursuant to Sections 75 and 76 of the Companies Act 2016
Resolution 6
Ordinary Proposed Renewal of Share Buy-Back Authority
Resolution 7

(Please indicate with an “X” in the space provided above on how you wish your vote to be cast. If you do not do so, the proxy will
vote or abstain from voting at his/her discretion)
The proportions of my/our shareholding to be represented by my/our proxy(ies) are as follows:

First named Proxy.................................................... %


Second named Proxy............................................... %
100%

Dated this ......................................................... day of . ................................................. 2018


...............................................................................
Signature of member(s) or/ Common Seal
Notes:
(i) A member entitled to attend and vote at the general meeting is entitled to appoint not more than two (2) proxies to attend and vote in his place. There
shall be no restriction as to the qualification of the proxy.
A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.
Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each
proxy.
(ii) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”), it may appoint not more
than two (2) proxies in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities
Account.
(iii) Where a member of the Company is an Exempt Authorised Nominee (referring to an authorised nominee defined under the SICDA which is exempted
from compliance with the provisions of subsection 25A(1) of SICDA) which holds ordinary shares in the Company for multiple beneficial owners in one
securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each
omnibus account it holds.
(iv) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor
is a corporation, either under the corporation’s seal or under the hand of an officer or attorney duly authorised.
(v) The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such
power of attorney and any authority, shall be deposited at the Registered Office of the Company at No. 1, Jalan Peguam U1/25A, Seksyen U1, Hicom-
Glenmarie Industrial Park, 40150 Shah Alam, Selangor Darul Ehsan not less than forty eight (48) hours before the time appointed for holding the meeting
or any adjourned meeting as the case may be.
(vi) For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make
available to the Company pursuant to Article 74 of the Constitution of the Company and Paragraph 7.16(2) of the Main Market Listing Requirements of
Bursa Malaysia Securities Berhad, a Record of Depositors as at 23 August 2018 and only a Depositor whose name appears on such Record of Depositors
shall be entitled to attend this meeting.

Please fold here

Stamp

The Company Secretary


JADI IMAGING HOLDINGS BERHAD (526319-P)
No. 1, Jalan Peguam U1/25A, Seksyen U1
Hicom-Glenmarie Industrial Park
40150 Shah Alam
Selangor Darul Ehsan
MALAYSIA

Please fold here


JADI IMAGING HOLDINGS BERHAD • ANNUAL REPORT 2018

JADI IMAGING HOLDINGS BERHAD


(Company No. 526319-P)
JADI IMAGING HOLDINGS BERHAD
No. 1, Jalan Peguam U1/25A, Seksyen U1, (Company No. 526319-P)
Hicom-Glenmarie Industrial Park,
40150 Shah Alam, Selangor, Malaysia. ANNUAL REPORT 2018
Tel : (603) 7804 0333 Fax : (603) 7804 3211

w w w. j a d i . c o m . m y

JADIarCov(18)_FINAL.indd 1 24/07/2018 2:50 PM