Post on 29-Apr-2018
JADI IMAGING HOLDINGS BERHAD(Company No. 526319-P)
No. 1, Jalan Peguam U1/25A, Seksyen U1,Hicom-Glenmarie Industrial Park,40150 Shah Alam, Selangor, Malaysia.
Tel : (603) 7804 0333 Fax : (603) 7804 3211
www.jadi.com.my
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Annual R
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rt 2013 JADI IMAGING HOLDINGS BERHAD
(Company No. 526319-P)
annual report
2013
2 FIVE-YEAR PERFORMANCE HIGHLIGHTS
3 NOTICE OF ANNUAL GENERAL MEETING
7 CORPORATE STRUCTURE
8 CORPORATE INFORMATION
9 CHAIRMAN’S STATEMENT
13 DIRECTORS’ PROFILES
16 AUDIT AND RISK MANAGEMENT COMMITTEE REPORT
20 STATEMENT TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARY SHARES
26 STATEMENT ON CORPORATE GOVERNANCE
33 STATEMENT ON INTERNAL AUDIT FUNCTION
34 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
36 MATERIAL CONTRACTS
37 ADDITIONAL COMPLIANCE INFORMATION
38 STATEMENT ON DIRECTORS’ RESPONSIBILITY IN RESPECT OF THE PREPARATION OF THE FINANCIAL STATEMENTS
39 STATUTORY FINANCIAL STATEMENTS
100 LIST OF PROPERTIES
101 ANALYSIS OF SHAREHOLDINGS
103 ANALYSIS OF WARRANT HOLDINGS
PROXY FORM
Contents
FIVE-YEAR PERFORMANCE HIGHLIGHTS
2013 2012 2011 2010 2009
Revenue RM’000 75,329 77,690 86,678 94,746 85,889 Profit/(Loss) before taxation RM’000 598 (1,064) 3,522 15,666 12,552 Net profit/(loss) attributable to shareholders RM’000 2,023 (111) 4,081 13,246 10,350 Shareholders’ funds RM’000 125,166 120,323 122,652 114,926 92,106 Return on shareholders’ funds % 1.62% -0.09% 3.33% 11.53% 11.24%Number of shares in issue* ‘000 706,189 706,189 706,189 696,534 603,643 Net tangible assets per share sen 17.72 17.04 17.37 16.50 15.26 Basic earnings/(loss) per share sen 0.29 (0.02) 0.58 2.05 1.71 Diluted earnings per share sen NA NA 0.54 1.82 - Gross dividend per share sen - - 0.20 0.30 0.30
* net of treasury shares
100,000
80,000
60,000
40,000
20,000
0
20,000
18,000
15,000
12,000
9,000
6,000
3,000
0
35
30
25
20
15
10
5
0
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
140,000
120,000
100,000
80,000
60,000
40,000
20,000
RM,000
2009 2010 2011 2012 2013
2009 2010 2011 2012 2013
2009 2010 2011 2012 2013
2009 2010 2011 2012 2013
2009 2010 2011 2012 2013
Revenue (RM’000)
Profit/(Loss) before taxation (RM’000)
Net tangible assets per share (sen)
Net profit/(loss) attributable to shareholders (RM’000)
Shareholders’ funds (RM’000)
10,350
13,246
4,081
(111)
2,023
85,889
94,746
86,678 77,690
75,329
15.26
16.50
17.37
17.04
17.72
92,106
114,926
122,652
120,323
125,166
12,552
15,666
3,522
(1,064)
598
2 Jadi Imaging Holdings Berhad Annual Report 2013
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Thirteenth Annual General Meeting of Jadi Imaging Holdings Berhad (“Company” or “Jadi”) will be held at Mauna Lani B Room, Holiday Inn Glenmarie Kuala Lumpur, 1 Jalan Usahawan U1/8, Seksyen U1, 40250 Shah Alam, Selangor Darul Ehsan on Tuesday, 20 May 2014 at 10.00 a.m. for the following purposes:-
AGENDA
A. Ordinary Business
1. To lay the Audited Financial Statements for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.
2. To re-elect the following Directors who are retiring in accordance with Article 123 of the Articles of Association of the Company:-
2.1 Mr. Liew Kim Siong
2.2 Ms. Eu Lan Eng
2.3 Mr. Liew Choon
3. To approve the Directors’ fees in respect of the financial year ended 31 December 2013.
4. To re-appoint Messrs Crowe Horwath as Auditors and to authorise the Directors to fix their remuneration.
B. Special Business
To consider and if thought fit, to pass, with or without modifications, the following Ordinary Resolutions:
5. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965
“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors of the Company be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions for such purposes as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the 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 and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company unless revoked or varied by the Company at a general meeting.”
6. PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES UP TO 10% OF THE ISSUED AND PAID-UP CAPITAL OF THE COMPANY PURSUANT TO SECTION 67A OF THE COMPANIES ACT, 1965 (“Proposed Renewal of Share Buy-Back Authority”)
(See Note 2)
(Ordinary Resolution 1)
(Ordinary Resolution 2)
(Ordinary Resolution 3)
(Ordinary Resolution 4)
(Ordinary Resolution 5)
(Ordinary Resolution 6)
3Jadi Imaging Holdings Berhad Annual Report 2013
“THAT, subject always to the Companies Act, 1965, the provisions of the Memorandum and Articles of Association 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 of RM0.10 each 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 issued and paid-up share capital of the Company as quoted on Bursa Securities at any point in time;
(b) the maximum funds to be allocated by the Company for the purpose of purchasing its shares shall not exceed the total retained earnings and share premium reserves of the Company at the time of the purchase(s); and
(c) the Directors of the Company may decide either to retain the shares purchased as treasury shares or cancel the shares or retain part of the shares so purchased as treasury shares and cancel the remainder and to deal with the shares so purchased in such other manner as may be permitted by the relevant legislations and regulations.
AND 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 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.
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 Companies Act, 1965, the provisions of the Memorandum and Articles of Association 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.”
NOTICE OF ANNUAL GENERAL MEETING
(Ordinary Resolution 7)
4 Jadi Imaging Holdings Berhad Annual Report 2013
NOTICE OF ANNUAL GENERAL MEETING
C. Other Business
7. To transact any other business of which due notice shall have been given in accordance with the Company’s Articles of Association and the Companies Act, 1965.
By Order of the Board
WONG WAI FOONG (MAICSA 7001358)LIM POH YEN (MAICSA 7009745)Company Secretaries
Kuala Lumpur 28 April 2014
NOTES:-
1. Notes on Appointment of Proxy
(i) A proxy need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A member shall be entitled to appoint a person, whether a member or not, as his proxy to attend and vote at a meeting of the Company. If the proxy is not a member, he need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.
(ii) A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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.
(vii) 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 Articles of Association 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 14 May 2014 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend this meeting.
5Jadi Imaging Holdings Berhad Annual Report 2013
2. AuditedFinancialStatementsforthefinancialyearended31December2013
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 169(1) of the Companies Act, 1965. Hence, this Agenda is not put forward for voting by shareholders of the Company.
3. ExplanatoryNotesonSpecialBusiness
(i) OrdinaryResolution6–AuthoritytoIssueSharespursuanttoSection132DoftheCompaniesAct, 1965
The proposed Ordinary Resolution 6 is a renewal of the general mandate pursuant to Section 132D of the Companies Act, 1965 (“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 issued share capital 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.
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 Twelfth Annual General Meeting held on 20 May 2013 and which will lapse at the conclusion of the Thirteenth 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 future investment project(s), working capital, acquisition and/or issuance of shares as settlement of purchase consideration.
(ii) OrdinaryResolution7–ProposedRenewalofShareBuy-BackAuthority
The proposed Ordinary Resolution 7, if passed, will provide a mandate for the Company to purchase its own shares up to 10% of the issued and paid-up ordinary share capital 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 2013 of the Company for further details.
NOTICE OF ANNUAL GENERAL MEETING
6 Jadi Imaging Holdings Berhad Annual Report 2013
CORPORATE STRUCTURE
VisionTo be an integrated company which provide solutions for the global imaging supplies industry.
MissionCustomer satisfaction in every decision.
7Jadi Imaging Holdings Berhad Annual Report 2013
CORPORATE INFORMATION
BOARD OF DIRECTORS
Liew Kim SiongExecutive Chairman / Group CEO
Eu Lan EngExecutive Director / General Manager
Liew ChoonExecutive Director / Assistant General Manager
Pathmarajah A/L R NagalingamIndependent Non-Executive Director
Lim Yew Thoon Senior Independent Non-Executive Director
Dr. Gan Seng Neon Independent Non-Executive Director
Khoo Teng KeatNon-Independent & Non-Executive Director
AUDIT AND RISK MANAGEMENT COMMITTEE
Pathmarajah A/L R Nagalingam (Chairman)Lim Yew Thoon (Member)Dr. Gan Seng Neon (Member)
REMUNERATION COMMITTEE
Lim Yew Thoon (Chairman)Dr. Gan Seng Neon (Member)Liew Kim Siong (Member)
NOMINATION COMMITTEE
Lim Yew Thoon (Chairman)Dr. Gan Seng Neon (Member)Pathmarajah A/L R Nagalingam (Member)
COMPANY SECRETARIES
Wong Wai Foong (MAICSA 7001358)Lim Poh Yen (MAICSA 7009745)
REGISTERED OFFICE
No. 1, Jalan Peguam U1/25ASeksyen U1,Hicom-Glenmarie Industrial Park40150 Shah AlamSelangor Darul EhsanTelephone No. : (603) 7804 0333Facsimile No. : (603) 7804 3211
SHARE REGISTRAR
Tricor Investor Services Sdn BhdLevel 17, The Gardens North TowerMid Valley CityLingkaran Syed Putra59200 Kuala Lumpur
Telephone No. : (603) 2264 3883Facsimile No. : (603) 2282 1886
PRINCIPAL BANKERS
United Overseas Bank (Malaysia) Bhd2A, Ground FloorWisma MasalamJalan Tengku Ampuan Zabedah 3/9CSeksyen 940100 Shah AlamSelangor Darul Ehsan
Citibank BerhadLevel 42, Menara Citibank165, Jalan Ampang50450 Kuala Lumpur
OCBC Bank (Malaysia) Berhad89, 91 and 93, Jalan SS21/60Damansara Utama47400 Petaling JayaSelangor Darul Ehsan
AUDITORS
Crowe HorwathLevel 16, Tower C Megan Avenue II12, Jalan Yap Kwan Seng50450 Kuala Lumpur
Telephone No. : (603) 2788 9999Facsimile No. : (603) 2788 9898
STOCK EXCHANGE
Main Market of Bursa Malaysia Securities Berhad
STOCK CODE
72237223WA
8 Jadi Imaging Holdings Berhad Annual Report 2013
CHAIRMAN’S STATEMENT
PERFORMANCEREVIEW
In view of the continued softening of demand for consumer and home printing due to the proliferation of mobile devices such as smart-phones and tablets, the Group registered a slight decrease in revenue from RM77.7 million in 2012 to RM75.3 million for the year ended 31 December 2013. Notwithstanding the 3.08 percent lower revenue, the Group managed to turn in a profit before tax of RM0.598 million for the year ended 31 December
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 ended 31 December 2013.
2013 compared to a loss before tax of RM1.064 million for the corresponding period a year earlier. Profit after tax was RM2.023 million in 2013 compared to a loss after tax of RM0.111 million over the same period in 2012.
Together with the exchange translation differences of RM2.82 million, the Group’s earnings per share for the current year review was 0.29 sen per share.
The main reasons for the better results are as follows:
1. The weakening of the Ringgit Malaysia by an average of about 5 percent against the US dollar in 2013.
2. The strengthening of the Ringgit Malaysia against the Japanese Yen by an average of about 10 percent for the year under review, help to bring down the cost of raw materials.
3. The increase in sales of colour toners by about 17.4 percent also help to cushion the drop in sales of monochrome toners by about 6.5 percent.
4. The reduction of selling and distribution, and administrative expenses by 11.5 percent and 12.3 percent respectively help to turnaround the bottom-line for the Group.
For 2013 financial year, the Group invested another RM9.09 million on capital expenditure which is the last phase of investment on the resin manufacturing plant. The Group also made net repayment of bank loan amounted to about RM5.5 million in 2013. In view of the negative cash flow of RM5.5 million due to the above mentioned capital expenditure and loan repayment, the directors do not recommend the payment of dividend for the year under review.
I would like to take this opportunity to thank the Board of Directors for their guidance and invaluable advice during these highly challenging times. I would also like to express my heartfelt appreciation to our customers, business partners, shareholders and all our employees for their unwavering support and loyalty which contributed immensely to the rapid growth of the Group and its emergence as a key player in the global imaging supplies industry.
9Jadi Imaging Holdings Berhad Annual Report 2013
CHAIRMAN’S STATEMENT
CORPORATEDEVELOPMENT
For the year under review, the Group started the commercial production of its own home-grown toner resin in May 2013. With the concentrated efforts put in by all the operational team members, the Group managed to convert more than 90 percent of all its toner resin consumption and requirements from Japanese suppliers to its own resins. It took the Group about 18 months for the conversion exercise which was achieved at the expense of reducing the amount of time for the R & D on new product development for the year. As such, for the whole year of 2013, the Group only managed to develop one new toner which is listed below.
: JLT-050 compatible toner for use in Brother HL2240/2250*
(*All brand names and trademarks are the property of their respective owners and are for descriptive purposes only.)
As the Group has completed its backward integration exercises of manufacturing toner resin and chemical toner ( CPT ), it is currently pursuing the corporate strategy of merger and acquisition to grow its top-line. The Group believes with the current uncertainties surrounding the global imaging supplies industry, there will be good opportunities to acquire decent companies with reasonable valuation to grow its top-line.
To better reflect the future direction of the Group, it has decided to change its Vision “ To be an integrated company which provide solutions for the global imaging supplies industry ”.
The Group has also decided to change its Mission to “ Customer satisfaction in every decision ”, which it hopes will change the company’s culture to be more focused on meeting customers’ requirements.
The Board recognizes and remains committed to exercising high standards of corporate governance and transparency as the basis for managing the Group’s business. Thus, the Group continues to review and enhance the Group’s system of internal control and governance to ensure that its business is conducted according to accepted standards of best practices. The Group’s internal audit function is outsourced to external consultants who assist the Board and Audit and Risk Management Committee by providing an independent assessment of the adequacy, efficiency and effectiveness of the Group’s internal control system.
CORPORATESOCIALRESPONSIILITIES
As a leading global independent toner manufacturer which caters to the cartridge remanufacturing industry, an environmentally-friendly industry that promotes the reuse and recycling of toner cartridges, the Group is particularly mindful of the role it can play in helping to protect the environment.
In 2013, the Group through its wholly owned subsidiary Jadi Imaging Technologies Sdn. Bhd. (“JITSB”), obtained its fourth patent on Environmentally-friendly Natural Oil-based Toner Resin from the Japanese Patent and Trademark office, in addition to the same patent obtained from the US Patent and Trademark office, World International Patent Office and the Chinese Patent and trademark office. The successful filing of this Environmentally-friendly Natural Oil-based Toner Resin patent is the result of R & D efforts which was started way back in 2005 in collaboration with the University of Malaya. And this demonstrates the Group’s commitment on green technologies and products for the environment.
The Group is optimistic that this differentiated environmentally-friendly natural oil-based toner will further enhance its competitive advantage over its competitors in the long term.
10 Jadi Imaging Holdings Berhad Annual Report 2013
CHAIRMAN’S STATEMENT
OPERATIONSREVIEW
The Group is an independent toner manufacturer which develops, formulates and manufactures toners for laser printers, photocopiers and multi-function printers ( MFP ). An independent toner manufacturer is a manufacturer that is not owned by a hardware manufacturer, often called an original brand maker, or OBM.
The Group manufactures both the monochrome and colour toners, using the conventional melt pulverize toner ( MPT ) process as well as the latest polymerization process, commonly known as the Chemically Produced Toner ( CPT ). Currently, monochrome toners make up the bulk of the Group’s production but the contribution from colour toners is expected to increase significantly in the future due to the higher value and margin that they command. The Group focuses on the supply of bulk toner and sell mainly to the aftermarket. However, the Group plans to start the sales of packed finished cartridges for use in the colour MFPs in the near future.
It is the sole toner manufacturer in Malaysia and the biggest in Southeast Asia. Currently, it comprises of four key wholly-owned subsidiaries, namely: Jadi Imaging Technologies Sdn. Bhd. (“JITSB”), Jadi Imaging Solutions Sdn. Bhd. (“JISSB”), and Jadi Chemicals Sdn. Bhd. (“JCSB”) in Malaysia and Jadi Imaging Technologies ( Suzhou ) Co. Ltd. (“JIT Suzhou”), in China. JITSB and JIT Suzhou manufacture monochrome toners, JISSB manufactures colour toners and JCSB manufactures chemical raw materials.
The Group focuses on export market. In financial year ended 31 December 2013, the Group exported its toners to more than 50 countries throughout the world, with revenue from export sales in foreign markets contributing above 98 percent of its total revenue.
In 2013, the Group participated in the following industry trade shows.
1. Africa Print 2013. : 21st - 23rd August 2013. Johannesburg, South Africa.
2. RechargExpo Thailand 2013. : 28th - 30th August 2013. Bangkok, Thailand.
3. Remax Asia Pacific Expo 2013. : 17th - 19th October 2013. Zhuhai, China.
4. R3 Conference & Mini-Expo 2013. : 23rd - 24th October 2013. Prague, Czech Republic.
5. RechargExpo Southeast Asia 2013. : 6th - 9th November 2013. Jakarta, Indonesia.
OUTLOOKANDFUTUREPROSPECTS
The latest IMF’s World Economic Outlook report released in January 2014 reveal that the global economic activity strengthened during the second half of 2013. And it is expected to improve further in 2014, largely on account of recovery in advanced economies. Global growth is now projected to be slightly higher in 2014 at around 3.7 percent, rising to 3.9 percent in 2015. But downward revisions to growth forecasts in some economies highlight continued fragilities, and downward risks remain.
In many emerging markets and developing economies, stronger external demand from advanced economies will lift growth, although domestic weaknesses remain a concern.
In some economies, there is a need to manage vulnerabilities associated with weakening credit quality and large capital outflows.
11Jadi Imaging Holdings Berhad Annual Report 2013
CHAIRMAN’S STATEMENT
In emerging market economies, an export rebound was the main driver behind better activity, while domestic demand generally remained subdued, except in China.
Growth in the United States is projected to be 2.8 percent in 2014 and 3 percent in 2015. The Euro area is turning the corner from recession to recovery. Growth is projected to strengthen to 1 percent in 2014 and 1.4 percent in 2015.
In emerging market economies, increased financial market and capital flow volatility remain a concern given that the US Federal Reserve Bank ( Fed ) will start tapering the quantity easing ( QE ) in early 2014.
Ringgit Malaysia is expected to depreciate further against the US dollar in 2014, which is favorable to the company since more than 98 percent of its sales revenue is derived from export and pegged in the greenback.
Against this backdrop, the Group is optimistic that it will start to grow its top-line after it experienced a drop in the last two consecutive years. Beside organic growth, the Group will actively pursue growth via merger and acquisition of complementary businesses which will bring about market, product, technical and operational synergies to the Group.
LIEW KIM SIONGExecutive Chairman / Group CEO
12 Jadi Imaging Holdings Berhad Annual Report 2013
DIRECTORS’ PROFILES
The profiles of the Board of Directors of Jadi Imaging are as follows:
Liew Kim Siong, Executive Chairman / Group CEO
Mr. Liew Kim Siong, Malaysian, aged 56, 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 is a member of the Remuneration Committee.
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 30 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
Ms. Eu Lan Eng, Malaysian, aged 56, 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 13 years 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, a position she still holds to date. Her main responsibilities include overseeing the overall operations of the Group including the marketing division.
Liew Choon, Executive Director / Assistant General Manager
Mr. Liew Choon, Malaysian, aged 27, was appointed to the Board as Executive Director of Jadi Imaging Holdings Berhad on 11 April 2011.
He obtained a Bachelor of Science degree majoring in Chemistry in 2008 from the University of Melbourne, Australia. He is a member of the American Chemical Society (ACS), the Royal Australian Chemical Institute (RACI), and the Society for Imaging Science & Technology (IS&T).
His career started in 2009 when he joined Jadi Imaging Technologies Sdn Bhd as a Business Development Executive and was mainly involved in sales and marketing activities. In the same year, he was promoted to Assistant Business Development Manager and was responsible for knowledge management, focusing on strategic business direction, development of new business opportunities and organization-wide integration efforts. In 2010, he assumed the position as Business Development Manager of Jadi Imaging Technologies Sdn Bhd, with expanded responsibilities in continuous improvement of overall operations, supplier relationship management, corporate affairs and investor relations. In 2012, he was promoted to Assistant General Manager, with main responsibilities in overseeing research & development, production, maintenance, as well as quality assurance & control.
13Jadi Imaging Holdings Berhad Annual Report 2013
Pathmarajah A/L R Nagalingam, Independent Non-Executive Director
Mr. Pathmarajah A/L R Nagalingam, Malaysian, aged 57, was appointed to the Board as Independent Non-Executive Director of Jadi Imaging Holdings Berhad on 6 January 2006. He is the Chairman of the Audit and Risk Management Committee and a member of the Nomination Committee.
He is a practising accountant and a member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants.
He was a Senior Manager with Goonting & Chew, an accounting firm, from 1978 until 1990 when he left to start his own practice. He is currently the sole proprietor of Pathmarajah & Co., an accounting firm, and a partner of TextStation Design, a graphic and Internet webpage design firm. He has vast experience in receiverships and liquidation assignments, having handled over 100 of such cases, including those on behalf of Bank Negara Malaysia. He has also handled several cases of investigations and special reporting over the last 30 years.
Lim Yew Thoon, Senior Independent Non-Executive Director
Mr. Lim Yew Thoon, Malaysian, aged 61, was appointed to the Board as Independent Non-Executive Director of Jadi Imaging Holdings Berhad on 6 January 2006. He has been re-designated as Senior Independent Non-Executive Director of Jadi Imaging Holdings Berhad on 16 April 2013. He is the Chairman of the Remuneration Committee and the Nomination Committee and a member of the Audit and Risk Management Committee.
He is a member of the Malaysian Institute of Accountants and a fellow member of the Association of Chartered Certified Accountants (ACCA) of England. He is currently employed as a Chief Financial Officer of a company listed in the Singapore Stock Exchange, which is principally engaged in the manufacture of dairy products in Malaysia, Indonesia and Vietnam. Prior to this engagement, Mr. Lim was the sole proprietor of a practicing firm of accountants and a director of a consulting firm. As from 1st March, 2013, Mr. Lim has ceased his accounting and consulting businesses.
He had more than 15 years of experience in the audit profession and more than 8 years of commercial experience, of which 3 years were spent in a large public corporation listed on Bursa Malaysia Securities Berhad where he was appointed General Manager of Internal Audit. His commercial experience includes the monitoring of manufacturing and gaming operations located in Malaysia and overseas, as well as participation in the negotiation and takeover of companies. He was also involved in negotiations for a build, operate and transfer contract for a water treatment plant in Vietnam.
Dr. Gan Seng Neon, Independent Non-Executive Director
Dr. Gan Seng Neon, Malaysian, aged 66, was appointed to the Board as Independent Non-Executive Director of Jadi Imaging Holdings Berhad on 23 June 2006. He is a member of the Audit and Risk Management Committee, Remuneration Committee and Nomination Committee. Currently, he is a Professor of Polymer Chemistry at the University of Malaya, Kuala Lumpur.
He obtained his B. Sc. Hons. (Chemistry) Degree in 1973, and his Ph.D Degree in 1976 from the University of Malaya and did his post-doctorate training for one year under a French Government Fellowship at the Centre Des Recherches sur les Macromolecules in Strasbourg for 1 year in 1976-77. He was appointed as a Lecturer at the University of Malaya in 1978 and promoted to Associate Professor in 1986 and Professor in 2000.
Dr. Gan served as a Lecturer at the Centre for Foundation Studies in Science, University of Malaya for 12 years from 1978–1990 after which he was transferred back to the Chemistry Department. He was also attached to various foreign universities during sabbatical leaves, including the Tokyo Institute of Technology, Japan as a Foreign Research Scholar for nine months in 1983; PennState University, USA as an exchange scholar for 1 year in 1989; Tokyo University of Agriculture and Technology as a visiting professor in May 1990; and King Mongkut Institute of Technology, Thonburi, Bangkok, Thailand as a visiting professor in April 1997.
DIRECTORS’ PROFILES
14 Jadi Imaging Holdings Berhad Annual Report 2013
He has published more than 150 scientific papers in international journals, and presented over 172 papers in both local and international seminars and conferences. He has also authored and co-authored a few textbooks and dictionaries. In application research, he has filed 20 patents on his inventions and received awards for excellent services and won gold medals in a number of exhibitions on his inventions and innovations, both at national and international events. He has supervised many postgraduates and has produced 14 PhD and 31 M.Sc. He holds memberships in a number of professional organizations and has been a Chartered Chemist and Member of the Royal Society of Chemistry, London since 1977. He was elected a Fellow of the Malaysian Scientific Association in December 2006 and became a Fellow of the Malaysian Institute of Chemistry in August 2008.
Khoo Teng Keat, Non-Independent & Non-Executive Director
Mr. Khoo Teng Keat, Malaysian, aged 43, was appointed to the Board as Non-Independent & Non-Executive Director of Jadi Imaging Holdings Berhad on 3 January 2011.
He holds a Bachelor of Commerce (Actuarial Science) honours degree from the University of Melbourne, Australia. He currently serves as an Executive Director of Mega First Corporation Berhad, a company listed on Bursa Malaysia and is principally engaged in the power generation, resources and property businesses in Malaysia and overseas. Prior to that he has more than 14 years of experience as an equity analyst and has held senior positions with several reputable international investment banks.
Notes:-
1. Khoo Teng Keat serves as an Executive Director of Mega First Corporation Berhad. Save as disclosed herein, none of the Directors hold directorships in any other public company.
2. Liew Kim Siong is the father of Liew Choon. Save as disclosed herein, none of the Directors have any family relationship with any director and/or major shareholder of the Company.
3. None of the Directors have any business arrangement with the Company in which he has personal interest.4. None of the Directors have any conflict of interest with the Company.5. None of the Directors have any conviction for offences within the past 10 years.6. None of the Directors have any sanction and/or penalty imposed on them by any regulatory body during the
financial year ended 31 December 2013.7. Please refer to the Analysis of Shareholdings of this Annual Report for details of the directors’ shareholdings
in the Company.8. The details of attendance of the Directors at the Board Meetings are set out on page 27 of this Annual Report.
DIRECTORS’ PROFILES
15Jadi Imaging Holdings Berhad Annual Report 2013
AUDIT AND RISK MANAGEMENT COMMITTEE REPORT
The Board of Directors is pleased to present the Report of the Audit and Risk Management Committee (“Committee”) for the financial year under review.
1. COMPOSITION AND MEETINGS
The Committee currently has three (3) members, comprising of all Independent Non-Executive Directors as follows:-
(a) Pathmarajah A/L R Nagalingam – Chairman(b) Lim Yew Thoon – Member(c) Dr. Gan Seng Neon – Member
The attendance records at the five (5) Committee Meetings held during the financial year ended 31 December 2013 are appended below:
Members Attendance
Pathmarajah A/L R Nagalingam 5/5Lim Yew Thoon 4/5Dr. Gan Seng Neon 5/5
The Group’s external auditors, certain designated members of 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 Statement on Corporate Governance appearing on pages 26 to 32 of this Annual Report.
2. SUMMARY OF ACTIVITIES OF THE AUDIT AND RISK MANAGEMENT COMMITTEE
During the financial year, the Committee carried out its duties and responsibilities in accordance with the terms of reference. The Committee 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 judgment 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 before recommending their reappointment and remuneration.
• Met the external auditors twice during the financial year 2013 in the absence of Executive Management.
Internal Audit
• Reviewed and approved the internal audit plan for the Group.• Reviewed the results of the internal audit reviews with the internal auditors.
16 Jadi Imaging Holdings Berhad Annual Report 2013
AUDIT AND RISK MANAGEMENT COMMITTEE REPORT
3. SUMMARY OF THE ACTIVITIES OF THE INTERNAL AUDIT FUNCTION
The activities of the Internal Audit Function during the financial year ended 31 December 2013 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 Audit and Risk Management Committee meetings
(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 Audit and Risk Management Committee.
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.
4. TERMS OF REFERENCE
The terms of reference of the Audit and Risk Management Committee are as follows:
Composition and Membership
(1) The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than three (3) members. In addition, at least one (1) member of the Committee:
(a) must be a member of the Malaysian Institute of Accountants; or(b) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3)
years of working experience and(i) he must have passed the examinations specified in Part I of the 1st Schedule of the
Accountants Act, 1967; or(ii) he must be a member of one of the associations of accountants specified in Part II of the
1st Schedule of the Accountants Act, 1967; or(iii) fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad; or
(c) must have an undergraduate/masters/doctorate degree in accounting or finance and at least three (3) years post qualification experience in accounting or finance; or
(d) must have at least seven (7) years’ experience being a chief financial officer of a corporation or having the function of being primarily responsible for the management of the financial affairs of a corporation.
(2) A majority of the Committee members must be Independent Directors.
(3) No alternate director is to be appointed as a member of the Committee.
(4) The members of the Committee shall elect a Chairman from among their number who shall be an Independent Director.
(5) The term of office and performance of the Committee and each of its members shall be reviewed by the Board at least once in every three (3) years.
(6) In the event of any vacancy in the Committee resulting in the non-compliance with subparagraphs 15.09(1) of the Listing Requirements, the vacancy must be filled within three (3) months.
17Jadi Imaging Holdings Berhad Annual Report 2013
Secretary
The Company Secretary shall be the Secretary of the Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it prior to each meeting.
The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Committee Members. The Committee Members may inspect the minutes of the Committee meeting at the Registered Office or such other place as may be determined by the Committee.
Duties and Functions
The functions and duties of the Committee shall be:
(1) To review the following and report the same to the Board of Directors:
(a) with the external auditor, the audit plan;(b) with the external auditor, his evaluation of the system of internal controls;(c) with the external auditor, his audit report;(d) the assistance given by the employees of the Company to the external auditors;(e) the adequacy of the scope, functions and resources of the internal audit functions and that it has
the necessary authority to carry out its work;(f) the internal audit programme and processes, the results of the internal audit programme,
processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;
(g) the risk management framework and through the Risk Management Committee, a sub-committee formed under the Committee who shall oversee and ensure the effective implementation of all risk management policies;
(h) the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusing particularly on:(i) changes in, or implementation of, major accounting policies and practices;(ii) significant and unusual events; and(iii) compliance with accounting standards and other legal requirements;
(i) any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;
(j) with management:(i) audit reports and management letter issued by the external auditors and the implementation
of audit recommendations;(ii) interim financial information; and(iii) assistance given by officers of the Company to the external auditors.
(k) the appointment and / or re-appointment of auditors, the nature and scope of the audit, the audit fee and any question of resignation or dismissal including recommending the nomination of person or persons as auditors;
(l) any letter of resignation from the external auditors of the Company;(m) whether there is reason (supported by grounds) to believe that the Company’s external auditors
were not suitable for re-appointment;(n) any allocation of options in accordance with the employees share scheme of the Company at
the end of the financial year; and(o) major findings of internal investigations and management’s response.
(2) To recommend the nomination of a person or persons as external auditors.
(3) To consider any other functions or duties as may be agreed to by the Committee and the Board.
AUDIT AND RISK MANAGEMENT COMMITTEE REPORT
18 Jadi Imaging Holdings Berhad Annual Report 2013
Authority
The Committee shall:
(1) have the authority to investigate any matter within its terms of reference;(2) have the resources which are required to perform its duties;(3) have full and unrestricted access to any information pertaining to the Company within its terms of
reference;(4) have direct communication channels with the external auditors and persons performing the internal
audit function or activity (if any);(5) be able to obtain independent professional or other advice within its terms of reference; and(6) be able to convene meetings with the external auditors, excluding the attendance of the executive
members of the committee, wherever deemed necessary.
Quorum and Attendance at Meeting
(1) The quorum for a meeting shall be two (2) members, provided that the majority of members present at the meeting shall be independent.
(2) Other Board members and employees may attend meetings at the invitation of the Committee.(3) The Committee may call for a meeting as and when required with reasonable notice as the Committee
Members deem fit.(4) All decisions at such meeting shall be decided by a show of hands on a majority of votes.(5) The external auditors have the right to appear at any meeting of the Committee and shall appear
before the Committee when required to do so by the Committee. The external auditors may also request a meeting if they consider it necessary.
Frequency of Meetings and Minutes
(1) Meetings shall be held not less than four (4) times a year. In addition, the Chairman may call a meeting of the Committee if a request is made by any Committee member, the Company’s Chairman or the internal or external auditors if they consider it necessary.
(2) The Minutes of each meeting shall be distributed to each member of the Board.
AUDIT AND RISK MANAGEMENT COMMITTEE REPORT
19Jadi Imaging Holdings Berhad Annual Report 2013
STATEMENT TO SHAREHOLDERSIn Relation To The Proposed Renewal Of 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 Authority for the Purchase by Jadi Imaging Holdings Berhad (“JADI” or the “Company”) of its own Ordinary Shares of RM0.10 Each (“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. RetainedProfitsandSharePremium
Based on the audited financial statements for the year ended 31 December 2013, the retained profits and share premium account of the Company stood at RM3,678,381 and RM7,621,974 respectively.
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.
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.
20 Jadi Imaging Holdings Berhad Annual Report 2013
STATEMENT TO SHAREHOLDERSIn Relation To The Proposed Renewal Of Authority For The Company To Purchase Its Own Ordinary Shares
5. Direct and Indirect Interests of the Directors and Substantial Shareholders (Cont’d) The direct and indirect interest of the Directors and Substantial Shareholders of JADI as at 3 April 2014 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 under the following scenarios:
Free Warrants Minimum Scenario: Assuming that none of the outstanding Free Warrants are exercised.
Maximum Scenario: Assuming the full exercise of 348,220,463 outstanding Free Warrants.
(a) EffectsoftheProposedRenewalonDirectors’Shareholdings
Minimum Scenario
Name Before Proposed Renewal After Proposed Renewal (i)
Direct Shareholding Indirect Shareholding Direct Shareholding Indirect ShareholdingNo. of No. of No. of No. of
Shares % Shares % Shares % Shares %
Liew Kim Siong (a) 12,774,259 1.809% 213,556,3541 30.241% 12,774,259 2.010% 213,556,3541 33.601%Eu Lan Eng (b) 35,663,470 5.050% – – 35,663,470 5.611% – –Liew Choon (c) 65,000 0.009% – – 65,000 0.010% – –Pathmarajah A/L R
Nagalingam 60,135 0.009% – – 60,135 0.009% – –Lim Yew Thoon 52,314 0.007% – – 52,314 0.008% – –Dr Gan Seng Neon 70,648 0.010% – – 70,648 0.011% – –Khoo Teng Keat – – – – – – – –
Maximum Scenario
Name Before Proposed Renewal After Proposed Renewal (i)
Direct Shareholding Indirect Shareholding Direct Shareholding Indirect ShareholdingNo. of No. of No. of No. of
Shares % Shares % Shares % Shares %
Liew Kim Siong (a) 19,162,665 1.817% 316,065,3311 29.976% 19,162,665 2.019% 316,065,3311 33.306%Eu Lan Eng (b) 51,738,654 4.907% – – 51,738,654 5.452% – –Liew Choon (c) 85,000 0.008% – – 85,000 0.009% – –Pathmarajah A/L R
Nagalingam 90,202 0.009% – – 90,202 0.010% – –Lim Yew Thoon 52,332 0.005% – – 52,332 0.006% – –Dr Gan Seng Neon 105,972 0.010% – – 105,972 0.011% – –Khoo Teng Keat – – – – – – – –
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 under the respective scenarios.1 Deemed interested by virtue of his shareholdings in LSI Holdings Sdn Bhd pursuant to Section
6A of the Companies Act, 1965 (“the Act”).(a) Liew Kim Siong holds 6,388,406 Free Warrants as at 3 April 2014.(b) Eu Lan Eng holds 16,075,184 Free Warrants as at 3 April 2014.(c) Liew Choon holds 20,000 Free Warrants as at 3 April 2014.
21Jadi Imaging Holdings Berhad Annual Report 2013
5. Direct and Indirect Interests of the Directors and Substantial Shareholders (Cont’d)
(b) EffectsoftheProposedRenewalonSubstantialShareholders’Shareholdings
Minimum Scenario
Name Before Proposed Renewal After Proposed Renewal (i)
Direct Shareholding Indirect Shareholding Direct Shareholding Indirect ShareholdingNo. of No. of No. of No. of
Shares % Shares % Shares % Shares %
LSI Holdings Sdn Bhd 213,556,3541 30.241% – – 213,556,3541 33.601% – –Liew Kim Siong (a) 12,774,259 1.809% 213,556,3541 30.241% 12,774,259 2.010% 213,556,3541 33.601%Ng Poh Imm – – 213,556,3541 30.241% – – 213,556,3541 33.601%Mega First Housing
Development Sdn Bhd 95,983,6002 13.592% – – 95,983,6002 15.102% – –
Mega First Corporation Bhd 61,462,000 8.703% 95,983,6002 13.592% 61,462,000 9.670% 95,983,6002 15.102%
Eu Lan Eng (b) 35,663,470 5.050% – – 35,663,470 5.611% – –
Maximum Scenario
Name Before Proposed Renewal After Proposed Renewal (i)
Direct Shareholding Indirect Shareholding Direct Shareholding Indirect ShareholdingNo. of No. of No. of No. of
Shares % Shares % Shares % Shares %
LSI Holdings Sdn Bhd 316,065,3311 29.976% – – 316,065,3311 33.306% – –Liew Kim Siong (a) 19,162,665 1.817% 316,065,3311 29.976% 19,162,665 2.019% 316,065,3311 33.306%Ng Poh Imm – – 316,065,3311 29.976% – – 316,065,3311 33.306%Mega First Housing
Development Sdn Bhd 113,114,3002 10.728% – – 113,114,3002 11.920% – –
Mega First Corporation Bhd 92,193,000 8.744% 113,114,3002 10.728% 92,193,000 9.715% 113,114,3002 11.920%
Eu Lan Eng (b) 51,738,654 4.907% – – 51,738,654 5.452% – –
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 under the respective scenarios.1 Deemed interested by virtue of his/her shareholdings in LSI Holdings Sdn Bhd pursuant to
Section 6A of the Act.2 Deemed interested by virtue of its shareholdings in Mega First Housing Development Sdn Bhd
pursuant to Section 6A of the Act.(a) Liew Kim Siong holds 6,388,406 Free Warrants as at 3 April 2014.(b) Eu Lan Eng holds 16,075,184 Free Warrants as at 3 April 2014.
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;
STATEMENT TO SHAREHOLDERSIn Relation To The Proposed Renewal Of Authority For The Company To Purchase Its Own Ordinary Shares
22 Jadi Imaging Holdings Berhad Annual Report 2013
6. Potential Advantages and Disadvantages of the Proposed Renewal (Cont’d)
(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 and/or share premium account 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. FinancialEffects
The financial effects of the Share Buy-Back under the Proposed Renewal are set out below:
(a) Share Capital
Minimum Scenario Maximum ScenarioNo. of Shares as at No. of Shares as at
03/04/2014 03/04/2014
Authorised Share Capital 2,000,000,000 2,000,000,000
Issued and paid-up share capital 706,308,449 706, 308,449
Upon full exercise of outstanding Free Warrants – 348,220,463
706,308,449 1,054,528,912Less:-Shares purchased amounting to ten per cent (10%) of issued and paid-up capital pursuant to Proposed Renewal
(70,630,845) (105,452,891)
Reduced issued and paid-up capital in the event that the purchased JADI Shares are cancelled
635,677,604 949,076,021
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.
(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.
STATEMENT TO SHAREHOLDERSIn Relation To The Proposed Renewal Of Authority For The Company To Purchase Its Own Ordinary Shares
23Jadi Imaging Holdings Berhad Annual Report 2013
7. FinancialEffects(Cont’d)
(c) Net Assets (“NA”)
The consolidated NA of the Company may increase or decrease depending on the number of JADI Shares purchased, the purchase prices of the JADI Shares, the effective cost of funding and the treatment of the JADI Shares purchased.
The Share Buy-Back will reduce the NA per JADI Share when the purchase price exceeds the NA per JADI Share at the time of purchase. On the other hand, the NA per JADI Share will increase when the purchase price is less than the NA per JADI Share at the time of purchase.
(d) Working capital
The Share Buy-Back pursuant to the Proposed Renewal would reduce funds available for working capital purposes of the Company, the quantum of which would depend on the purchase price, the actual number of JADI Shares purchased and any associated costs incurred in making the purchase.
(e) Dividend
The Proposed Renewal of Share 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 3 April 2014, LSI Holdings Sdn Bhd (“LSI”) and Liew Kim Siong collectively hold 32.05% of the voting issued and paid-up share capital of JADI.
Assuming that the Proposed Renewal is carried out in full and there is no exercise of the Free Warrants in a period of six (6) months, the collective shareholdings of the LSI and Liew Kim Siong will increase to 35.61% of the total voting issued and paid-up share capital of JADI. Further, assuming that the Proposed Renewal is carried out in full and the Free Warrants are exercised in full in a period of six (6) months, the collective shareholdings of the LSI and Liew Kim Siong will increase to 35.33% 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.
STATEMENT TO SHAREHOLDERSIn Relation To The Proposed Renewal Of Authority For The Company To Purchase Its Own Ordinary Shares
24 Jadi Imaging Holdings Berhad Annual Report 2013
9. Purchases Made in Last Financial Year
The Company did not undertake any Share Buy-Back during the financial year ended 31 December 2013.
10. Public Shareholding Spread
According to JADI’s Record of Depositors as at 3 April 2014, there were 4,465 public shareholders holding not less than 100 JADI Shares, with a total shareholding of 40.57% of the Company’s issued and paid-up share capital.
The public shareholding spread of the Company is expected to be reduced to 33.97% 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 and assuming no Free Warrant are exercised into new JADI Shares. 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.
STATEMENT TO SHAREHOLDERSIn Relation To The Proposed Renewal Of Authority For The Company To Purchase Its Own Ordinary Shares
25Jadi Imaging Holdings Berhad Annual Report 2013
STATEMENT ON CORPORATE GOVERNANCE
The Board of Jadi Imaging Holdings Berhad 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 paragraph 15.25 of the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board is pleased to provide a statement on the manner in which the Company has applied the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) comprised of eight (8) principles and twenty-six (26) corresponding Recommendations during the financial year.
1. BOARD OF DIRECTORS
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 has formalised a Code of Ethics and Conduct which would also facilitate whistle blowing. Summary of the Code of Ethics and Conduct forms part of the Board Charter.
Board Charter has been approved on 16 April 2013. Roles and responsibilities of directors are also included in the Board Charter. The details of the Board Charter and the Code of Ethics and Conduct are available for reference in the Group website at www.jadi.com.my.
Board Responsibility
The Board is responsible, amongst others, for establishing and communicating the strategic direction and corporate values of the Group, and supervising its affairs to ensure its success within the defined parameter of acceptable risks and effective control and in compliance with the relevant laws, regulations, guidelines and directives in the territories in which it operates. It reviews management performance, ensures that the necessary financial and human resources are available to meet the Group’s objectives. The details of such initiative are documented in the Chairman’s statement. The Board is also responsible for succession planning, including appointing and fixing the remuneration of, and where appropriate, replacing senior management. In relation to sustainability, the Board focus is on environmental sustainability and promotes the reuse and recycling of toner cartridges, is particularly mindful of the role that it can play in helping to protect the environment.
Composition Of The Board
The Board currently has seven (7) members, comprising the Executive Chairman, three (3) Independent Non-Executive Directors, one (1) Non-Independent Non-Executive Director and two (2) Executive Directors. This is in line with the Listing Requirements of Bursa Malaysia Securities Berhad which require at least two directors or one-third (1/3) of the Board members, whichever is the higher, to be Independent Directors.
The Board embraces diversity among its members and has ensured a good representation of the relevant skills and experience for the discharge of its duties. The Board has on 9 April 2002 appointed a female director well before the announcement of MCCG 2012. The Board has taken steps to ensure boardroom diversity. 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.
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.
26 Jadi Imaging Holdings Berhad Annual Report 2013
STATEMENT ON CORPORATE GOVERNANCE
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 and matters are deliberated with the active participation of the three (3) independent non-executive directors and a non-independent non-executive director. Therefore no single Board member can make decision on behalf of the Board unless duly authorised by the entire Board. In addition, the good size and balance of the Board composition also ensures that no individual or group of individuals can dominate its decision-making process. The MCCG 2012 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 is of the view that this recommendation is currently not necessary for reasons mentioned above. However, the Board shall evaluate the need to adopt this recommendation during the annual assessment of the Board.
As recommended in the MCCG 2012 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. The Board must justify and seek shareholder’s approval in the event it retains as an independent director, a person who has served in that capacity for more than nine (9) years. Presently, there is no independent director of the Group whose tenure has exceeded a cumulative term of nine (9) years.
The three independent non-executive directors of the Company, namely Mr. Lim Yew Thoon (email: billy.lim@etika-intl.com), Mr. Pathmarajah A/L R Nagalingam (email: pathma@siddha.com.my) and Dr. Gan Seng Neon (email: sengneon@hotmail.com) have been identified as the persons to whom concerns may be conveyed to.
The Directors’ Profiles are presented on pages 13 to 15 of this Annual Report.
Board Meetings and Supply of Information
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 December 2013 and they were attended by the following Directors:
Attendance At Board Meetings
Liew Kim Siong 5/5Executive Chairman / Group CEO
Eu Lan Eng 3/5Executive Director / General Manager
Liew Choon 5/5Executive Director / Assistant General Manager
Pathmarajah A/L R Nagalingam 5/5Independent Non-Executive Director
Lim Yew Thoon 4/5Senior Independent Non-Executive Director
Dr Gan Seng Neon 5/5Independent Non-Executive Director
Khoo Teng Keat 5/5Non-Independent & Non-Executive Director
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.
27Jadi Imaging Holdings Berhad Annual Report 2013
Scheduled Board meetings are structured with a preset agenda. Board papers providing mainly information on the financial performance of the Group as well as minutes of meetings are circulated prior to the Board meetings to give the Directors time to consider and deliberate on the issues to be raised at the Board meetings. The Directors have full access to senior management and the advice and services of the Company Secretaries, and they ensure that the Board proceedings are properly documented.
The Board ensures the Group has appropriate quarterly and annually disclosure standard operating procedures. The Board encourages the Group to leverage on information technology for effective dissemination of information.
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.
Directors’ 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 December 2013, the Directors attended the following seminars and training courses:
No. Name of Director Seminar / Training Courses Attended
1 Liew Kim Siong (a) Financial Excellence: Creating Financial Value Through Corporate Restructuring and M&A by Thomas Kessler from Clariden Global Executive Education
(b) Managing Business Risk by Shantini Devi D J Paul from Training.com Asia
2 Eu Lan Eng (a) Managing Business Risk by Shantini Devi D J Paul from Training.com Asia
3 Liew Choon (a) Understanding Business Performance Through Financial Statement by Hari Ramulu from Comfori Sdn Bhd
(b) Executing Effective Transformation Process by Boey Tak Kong from Bursatra
(c) Managing Business Risk by Shantini Devi D J Paul from Training.com Asia
4 Pathmarajah A/L (a) Persidangan Cukai Malaysia 2013 by MATA & MIA R Nagalingam (b) ICAA – MICPA Audit Forum: Quality Control in Practice by MICPA
(c) Seminar Percukaian Kebangsaan 2013 by Lembaga Hasil Dalam Negeri(d) 9th Tricor Tax & Corporate Seminar by Tricor Tax Services Sdn Bhd
5 Lim Yew Thoon (a) 9th Tricor Tax & Corporate Seminar by Tricor Tax Services Sdn Bhd(b) Financial Risk Management for Public Listed Companies(c) MIA International Accountants Conference 2013
6 Dr. Gan Seng Neon (a) Nominating Committee Program by Iclif Leadership and Governance Centre
(b) 9th Tricor Tax & Corporate Seminar by Tricor Tax Services Sdn Bhd
STATEMENT ON CORPORATE GOVERNANCE
28 Jadi Imaging Holdings Berhad Annual Report 2013
However, Mr. Khoo Teng Keat did not attend any training for the financial year ended 31 December 2013 due to his hectic schedule.
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.
Appointment and Re-election of Directors
The appointment of Directors 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.
In accordance with the Company’s Articles of Association, all Board members who are appointed by the Board shall be subject to election by shareholders at the first opportunity of their appointment. The Company’s Articles of Association also provide that at least one-third (1/3) of the Directors shall retire by rotation at each Annual General Meeting and that all Directors shall retire once every three (3) years. A retiring Director shall be eligible for re-election.
Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, there is no Director of the Company who is subject to such re-appointment.
Board Committees
The following principal Board Committees have been established to assist the Board in discharging its duties effectively:
• Audit and Risk Management Committee• 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.
(a) Audit and Risk Management Committee
The Board has established the Audit and Risk Management Committee to assist the Board in discharging its duties. The Audit and Risk Management Committee works closely with the external auditors and maintains a transparent professional relationship with them.
The report of the Audit and Risk Management Committee is set out on pages 16 to 19 of this Annual Report.
(b) Nomination Committee
The Nomination Committee has three members, all of whom are Independent Non-Executive Directors and meets as and when required.
STATEMENT ON CORPORATE GOVERNANCE
29Jadi Imaging Holdings Berhad Annual Report 2013
The members of the Nomination Committee are:
Lim Yew Thoon – Chairman(Senior Independent Non-Executive Director)
Dr. Gan Seng Neon(Independent Non-Executive Director)
Pathmarajah A/L R Nagalingam(Independent Non-Executive Director)
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 Nomination Committee also reviews the Board composition and balance as well as assesses the effectiveness of Board members and considers the Board’s succession planning. The Board considers that the current mix of skills, experiences and other qualities including core competencies of the executive directors and independent non-executive directors is sufficient for the discharge of its duties and responsibilities effectively.
During the financial year ended 31 December 2013, the Nomination Committee met twice (2) and the meetings were attended by all members. The Board performed 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.
(c) Remuneration Committee
The members of the Remuneration Committee are as follows:
Lim Yew Thoon – Chairman(Senior Independent Non-Executive Director)
Dr. Gan Seng Neon(Independent Non-Executive Director)
Liew Kim Siong(Executive Chairman/Group CEO)
The responsibility of the Remuneration Committee is to recommend to the Board the remuneration framework for the remuneration packages of each Executive Director. The policy that is practised for Directors’ remuneration by the Remuneration Committee is to provide remuneration packages necessary to attract, retain and motivate the Directors, and is reflective of the Directors’ experience and level of responsibilities. None of the Executive Directors participate in any way in determining their individual remuneration. The remuneration and entitlements of the Non-Executive Directors shall be a matter to be decided by the Board as a whole.
The Remuneration Committee met once (1) time during the year under review and the meeting was attended by all members.
STATEMENT ON CORPORATE GOVERNANCE
30 Jadi Imaging Holdings Berhad Annual Report 2013
Directors’ Remuneration
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.
Details of the remuneration of the Directors of the Company during the financial year ended 31 December 2013 are as follows:
Remuneration Amount (RM)Executive Non-Executive
Fees 97,500 147,500Salary, other remuneration and emoluments 1,375,478 11,000Benefits-in-kind (based on an estimated monetary value) 51,950 –Share-based payment – –
The aggregate remuneration paid to Directors by the Company during the year, analysed into bands of RM50,000, is as follows:
Range of Remuneration Number of DirectorsExecutive Non-Executive
< RM50,000 – 4RM150,001 – RM200,000 1 –RM400,001 – RM450,000 1 –RM900,001 – RM950,000 1 –
2. INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION
The Board recognises the need to inform shareholders and investors of all major developments of the Group on a timely basis. In addition to the mandatory reporting and public announcements of the Group’s quarterly results to the Bursa Malaysia Securities Berhad, regular discussions are held by management to keep investment analysts and fund managers abreast of key corporate developments and Group financial performance. Press releases and announcements for public dissemination are also made periodically to capture any significant corporate event or product launch of the Group that would be of interest to investors and members of the public.
The Annual General Meeting of the Company represents the principal forum for dialogue and interaction with all shareholders. At the Annual General Meeting, the Board encourages shareholders to participate in the question and answer session however for resolutions relating to defined situation and other substantive resolution, poll vote is encouraged to be carried out. The Directors, Chairman of the Audit and Risk Management Committee, and external auditors will be available to respond to the questions of shareholders during the Annual General Meeting.
STATEMENT ON CORPORATE GOVERNANCE
31Jadi Imaging Holdings Berhad Annual Report 2013
3. ACCOUNTABILITY AND AUDIT
Financial Reporting
In presenting the annual audited financial statements and quarterly announcements of results to shareholders, the Directors are responsible for presenting a balanced and understandable assessment of the Group’s position and prospects. The Audit and Risk Management Committee of the Board assists by scrutinising the information disclosed to ensure reasonableness and adequacy. A Statement by the Directors of their responsibilities in preparing the financial statements is set out on page 38 of this Annual Report.
Risk Management and Internal Control
The 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.
Relationship With The 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.
STATEMENT ON CORPORATE GOVERNANCE
32 Jadi Imaging Holdings Berhad Annual Report 2013
STATEMENT ON INTERNAL AUDIT FUNCTION
The Board of Jadi Imaging Holdings Berhad is pleased to present the Statement on the Internal Audit function for the financial year ended 31 December 2013.
The Group’s Internal Audit function, which is outsourced to a professional service firm, is an integral part of the assurance mechanism in ensuring that the Group systems of internal controls are adequate and effective. The Internal Audit function reports directly to the Audit and Risk Management Committee.
On an annual basis, an internal audit plan is tabled to the Audit and Risk Management Committee for review and approval, and the Internal Audit function executes the audits based on the approved plan. The results of the audit reviews are periodically reported to the Audit and Risk Management Committee. In addition, the Internal Audit function carries out follow up reviews to ensure that previously reported issues have been adequately addressed by Management and the results of such reviews are also periodically reported to the Audit and Risk Management Committee. Although a number of internal control weaknesses were identified, none of the weaknesses have resulted in any material losses that would require separate disclosure in this annual report.
The total professional fees incurred for the outsourcing of the Internal Audit function for the financial year ended 31 December 2013 was RM 45,000.
33Jadi Imaging Holdings Berhad Annual Report 2013
STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROLINTRODUCTION
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 December 2013, 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, 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 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.
During the financial year ended 31 December 2013, a Risk Management Committee (“RMC”) comprising one independent non-executive director (approved Chairman) and three (3) senior management staff was established by the Board with specific terms of reference. The RMC reports directly to the Audit and Risk Management Committee (“ARMC”). The RMC is in the process of enhancing the Group’s existing risk management practices and its activities are reported to the ARMC at their scheduled meeting.
The above-mentioned risk management practices of the Group serves as the on-going process used to identify, evaluate and managed significant risks for the year under review and up to the date of approval of this statement.
INTERNAL AUDIT FUNCTION
The Group’s internal audit function is outsourced to a professional service firm to assist the Board and Audit and Risk Management Committee in providing independent assessment on the adequacy, efficiency and effectiveness of the Group’s internal control system. They report directly to the Audit and Risk Management Committee.
During the financial year ended 31 December 2013, the internal audit function carried out audit reviews in accordance with the internal audit plan approved by the Audit and Risk Management Committee. The results of the audit reviews and the recommendations for improvement were presented to the Audit and Risk Management Committee at their quarterly meetings. In addition, follow up visits were also conducted to ensure that corrective action plans have been implemented in a timely manner and the results of the follow up reviews are also presented to the Audit and Risk Management Committee at their quarterly meetings.
Total professional fees paid for outsourcing of internal audit function for the year ended 31 December 2013 was RM45,000.
34 Jadi Imaging Holdings Berhad Annual Report 2013
STATEMENT ON RISK MANAGEMENTAND 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 organization 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) Certain operations of the Group are ISO 9001:2008 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 centralized 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.
At a meeting held on 16 April 2014, 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 16 April 2014.
35Jadi Imaging Holdings Berhad Annual Report 2013
MATERIAL CONTRACTS
There are no contracts which are or may be material which have been entered into by Jadi Imaging Holdings Berhad or its subsidiaries, involving directors’ and major shareholders’ interests, either still subsisting as at 31 December 2013 or, if not then subsisting, entered into since the end of the previous financial year.
36 Jadi Imaging Holdings Berhad Annual Report 2013
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 December 2013.
2. SHARE BUY-BACK
The Company did not undertake any share buy-back during the financial year ended 31 December 2013.
3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
During the financial year ended 31 December 2013, there were no options, warrants or convertible securities exercised.
4. AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”) PROGRAMME
The Company did not participate in any ADR or GDR Programme during the financial year.
5. SANCTION/PENALTIES IMPOSED
There were no public sanctions and/or penalties imposed on the Group and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2013.
6. NON-AUDIT FEES
During the financial year under review, there were no non-audit fees paid to external auditors of the Company.
7. VARIATION IN RESULTS
There was no material variance between the audited results for the financial year ended 31 December 2013 and the unaudited results previously announced by the Company.
8. PROFIT GUARANTEE
There was no profit guarantee given by the Company during the financial year ended 31 December 2013.
9. 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.
10. REVALUATION POLICY ON LANDED PROPERTIES
Land and buildings are revalued periodically, at least once in every five years.
37Jadi Imaging Holdings Berhad Annual Report 2013
STATEMENT ON DIRECTORS’ RESPONSIBILITYIn Respect Of The Preparation Of The Financial Statements
The Directors are responsible for ensuring that the financial statements of the Group are drawn up in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2013 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, 1965. 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.
38 Jadi Imaging Holdings Berhad Annual Report 2013
40 DIRECTORS’ REPORT
45 STATEMENT BY DIRECTORS
45 STATUTORY DECLARATION
46 INDEPENDENT AUDITORS’ REPORT
48 STATEMENTS OF FINANCIAL POSITION
50 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
51 STATEMENTS OF CHANGES IN EQUITY
53 STATEMENTS OF CASH FLOWS
55 NOTES TO THE FINANCIAL STATEMENTS
Statutory Financial
Statements
The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2013.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.
RESULTS
THE GROUP THE COMPANYRM RM
Profit after taxation for the financial year 2,023,315 3,752,036
Attributable to:Owners of the Company 2,023,315 3,752,036
DIVIDENDS
No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year.
ISSUES OF SHARES AND DEBENTURES
During the financial year,
(a) there were no changes in the authorised and issued and paid-up share capital of the Company; and
(b) there were no issues of debentures by the Company.
WARRANTS
The Company had on 13 October 2010, issued 348,251,380 2010/2015 warrants to all entitled shareholders of the Company on the basis of 1 free warrant for every 2 existing ordinary shares of RM0.10 each held in the Company. The warrants were listed on the Main Market of Bursa Malaysia Securities Berhad. The warrants are constituted under a Deed Poll executed on 27 September 2010, and each warrant entitles the registered holder the right at any time during the exercise period from 13 October 2010 to 12 October 2015 to subscribe in cash for one new ordinary share of RM0.10 each of the Company at an exercise price of RM0.17 each.
As at 31 December 2013, 348,220,463 warrants remained unexercised.
The terms of the warrants are detailed in Note 13 to the financial statements.
DIRECTORS’ REPORT
40 Jadi Imaging Holdings Berhad Annual Report 2013
WARRANTS (CONT’D)
The ordinary shares issued from the exercise of warrants shall rank pari passu in all respects with the existing issued ordinary shares of the Company except that they shall not be entitled to any dividends, distributions, rights, allotments and/or any other forms of distribution where the entitlement date precedes the relevant date of the allotment and issuance of the new shares arising from the exercise of warrants.
TREASURY SHARES
The shares purchased are being held as treasury shares in accordance with Section 67A of the Companies Act 1965 in Malaysia.
As at 31 December 2013, the Company held as treasury shares of a total of 119,672 of its 706,308,449 issued and fully-paid up ordinary shares. The treasury shares are held at a carrying amount of RM22,042.
Relevant details on the treasury shares are disclosed in Note 14 to the financial statements.
OPTIONS GRANTED OVER UNISSUED SHARES
During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.
BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that there are no known bad debts and that no allowance for impairment losses on receivables is required.
At the date of this report, the directors are not aware of any circumstances that would require the writing off of bad debts, or the allowance for impairment losses on receivables in the financial statements of the Group and of the Company.
CURRENT ASSETS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their value as shown in the accounting records of the Group and of the Company, 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 which would render the values attributed to the current assets in the financial statements misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
DIRECTORS’ REPORT
41Jadi Imaging Holdings Berhad Annual Report 2013
CONTINGENT AND OTHER LIABILITIES
The contingent liability is disclosed in Note 38 to the financial statements. 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 which secures the liabilities of any other person; or
(ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
No contingent 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 substantially affect the ability of the Group and of the Company to meet their obligations when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.
DIRECTORS
The directors who served since the date of the last report are as follows:-
LIEW KIM SIONGEU LAN ENGLIEW CHOON PATHMARAJAH A/L R NAGALINGAMLIM YEW THOON DR GAN SENG NEONKHOO TENG KEAT
DIRECTORS’ REPORT
42 Jadi Imaging Holdings Berhad Annual Report 2013
DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:-
NUMBER OF ORDINARY SHARES OF RM0.10 EACHAT 1.1.2013 BOUGHT SOLD AT 31.12.2013
Direct Interests:-LIEW KIM SIONG 12,774,259 - - 12,774,259 EU LAN ENG 35,663,470 - - 35,663,470 LIEW CHOON 65,000 - - 65,000 LIM YEW THOON 52,314 - - 52,314 PATHMARAJAH A/L R NAGALINGAM 60,135 - - 60,135 DR GAN SENG NEON 70,648 - - 70,648
Indirect Interest:-LIEW KIM SIONG (1) 213,556,354 - - 213,556,354
(1) Deemed interest through LSI Holdings Sdn. Bhd.
NUMBER OF WARRANTS 2010/2015 AT 1.1.2013 BOUGHT SOLD AT 31.12.2013
Direct Interests:-LIEW KIM SIONG 6,388,406 - - 6,388,406 EU LAN ENG 16,075,184 - - 16,075,184 LIEW CHOON 20,000 - - 20,000 LIM YEW THOON 18 - - 18 PATHMARAJAH A/L R NAGALINGAM 30,067 - - 30,067 DR GAN SENG NEON 35,324 - - 35,324
Indirect Interest:-LIEW KIM SIONG (1) 102,508,977 - - 102,508,977
(1) Deemed interest through LSI Holdings Sdn. Bhd.
By virtue of his interest in shares in the Company, Liew Kim Siong is deemed to have interests in shares in its related corporations during the financial year to the extent of the Company’s interest, in accordance with Section 6A of the Companies Act.
The other directors holding office at the end of the financial year had no interests in shares in the Company or its related corporations during the financial year.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.
DIRECTORS’ REPORT
43Jadi Imaging Holdings Berhad Annual Report 2013
DIRECTORS’ BENEFITS (CONT’D)
Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate other than the options granted to certain directors pursuant to the warrants issued by the Company.
AUDITORS
The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 16 APRIL 2014
Liew Kim Siong
Eu Lan Eng
DIRECTORS’ REPORT
44 Jadi Imaging Holdings Berhad Annual Report 2013
We, Liew Kim Siong and Eu Lan Eng, being two of the directors of Jadi Imaging Holdings Berhad, state that, in the opinion of the directors, the financial statements set out on pages 48 to 98 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company at 31 December 2013 and of their financial performance and cash flows for the financial year ended on that date.
The supplementary information set out in Note 40, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 16 APRIL 2014
Liew Kim Siong Eu Lan Eng
STATUTORY DECLARATION
I, Tan Wooi Hoo, being the officer primarily responsible for the financial management of Jadi Imaging Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 48 to 98 are, to the best of my knowledge and belief, 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 Tan Wooi Hoo, at Klang in thestate of Selangor Darul Ehsanon this 16 April 2014
Tan Wooi HooBefore Me
Goh Cheng Teak (No. B204)Commissioner of Oaths
STATEMENT BY DIRECTORS
45Jadi Imaging Holdings Berhad Annual Report 2013
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Jadi Imaging Holdings Berhad, which comprise the statements of financial position as at 31 December 2013 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 a summary of significant accounting policies and other explanatory information, as set out on pages 48 to 98.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 December 2013 and of their financial performance and 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 1965 in Malaysia.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:-
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which is indicated in Note 5 to the financial statements.
INDEPENDENT AUDITORS’ REPORT To The Members Of Jadi Imaging Holdings Berhad (Incorporated in Malaysia) (Company No : 526319 - P)
46 Jadi Imaging Holdings Berhad Annual Report 2013
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS (CONT’D)
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.
(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.
OTHER REPORTING RESPONSIBILITIES
The supplementary information set out in Note 40 on page 99 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
Crowe Horwath Lee Kok WaiFirm No : AF 1018 Approval No : 2760/06/14 (J)Chartered Accountants Chartered Accountant
16 April 2014
Kuala Lumpur
INDEPENDENT AUDITORS’ REPORT To The Members Of Jadi Imaging Holdings Berhad (Incorporated in Malaysia) (Company No : 526319 - P)
47Jadi Imaging Holdings Berhad Annual Report 2013
THE GROUP THE COMPANY 2013 2012 2013 2012
NOTE RM RM RM RM
ASSETS
NON-CURRENT ASSETSInvestment in subsidiaries 5 - - 82,075,945 78,303,950 Investment property 6 100,800 103,200 - - Property, plant and equipment 7 108,337,133 108,215,652 - - Other investment 8 50,000 50,000 - - Deferred tax asset 9 72,000 - - -
108,559,933 108,368,852 82,075,945 78,303,950
CURRENT ASSETSInventories 10 33,065,552 28,850,982 - - Trade receivables 11 10,253,969 10,362,022 - - Other receivables, deposits and
prepayments 12 2,062,032 1,930,481 1,500 1,500 Tax refundable 273,128 1,092,109 98,257 168,257 Cash and bank balances 4,607,094 7,549,656 24,435 9,781
50,261,775 49,785,250 124,192 179,538
TOTAL ASSETS 158,821,708 158,154,102 82,200,137 78,483,488
EQUITY AND LIABILITY
EQUITYShare capital 13 70,630,845 70,630,845 70,630,845 70,630,845 Treasury shares 14 (22,042) (22,042) (22,042) (22,042) Share premium 15 7,621,974 7,621,974 7,621,974 7,621,974 Foreign exchange reserve 16 3,897,553 1,077,762 - - Revaluation reserve 17 1,933,361 1,933,361 - - Retained profits/(Accumulated
losses) 41,104,176 39,080,861 3,678,381 (73,655)
TOTAL EQUITY 125,165,867 120,322,761 81,909,158 78,157,122
NON-CURRENT LIABILITIESLong-term borrowings 18 3,156,337 7,923,771 - - Deferred taxation 19 1,706,339 3,361,300 - -
4,862,676 11,285,071 - -
The annexed notes form an integral part of these financial statements.
STATEMENTS OF FINANCIAL POSITION At 31 December 2013
48 Jadi Imaging Holdings Berhad Annual Report 2013
THE GROUP THE COMPANY 2013 2012 2013 2012
NOTE RM RM RM RM
CURRENT LIABILITIESTrade payables 20 5,759,976 2,700,281 - - Other payables and accruals 21 3,564,498 3,979,149 72,983 108,714 Amount owing to subsidiaries 22 - - 91,696 95,152 Amount owing to directors 23 126,300 122,500 126,300 122,500 Provision for taxation 123,609 77,808 - - Short-term borrowings 24 19,218,782 19,666,532 - -
28,793,165 26,546,270 290,979 326,366
TOTAL LIABILITY 33,655,841 37,831,341 290,979 326,366
TOTAL EQUITY AND LIABILITY 158,821,708 158,154,102 82,200,137 78,483,488
NET ASSETS PER ORDINARY SHARE 28 0.18 0.17
The annexed notes form an integral part of these financial statements.
STATEMENTS OF FINANCIAL POSITION At 31 December 2013
49Jadi Imaging Holdings Berhad Annual Report 2013
THE GROUP THE COMPANY 2013 2012 2013 2012
NOTE RM RM RM RM
REVENUE 29 75,328,779 77,689,589 4,299,162 2,500,000
COST OF SALES (65,771,151) (68,104,849) - -
GROSS PROFIT 9,557,628 9,584,740 4,299,162 2,500,000
OTHER INCOME 990,616 754,607 - -
10,548,244 10,339,347 4,299,162 2,500,000
SELLING AND DISTRIBUTION EXPENSES (3,181,326) (3,595,115) - -
ADMINISTRATIVE EXPENSES (5,204,524) (5,934,796) (479,368) (522,649)
OTHER EXPENSES (663,478) (835,515) (67,758) (55,224)
FINANCE EXPENSES (900,588) (1,038,409) - -
PROFIT/(LOSS) BEFORE TAXATION 30 598,328 (1,064,488) 3,752,036 1,922,127
INCOME TAX EXPENSE 31 1,424,987 953,371 - -
PROFIT/(LOSS) AFTER TAXATION 2,023,315 (111,117) 3,752,036 1,922,127
OTHER COMPREHENSIVE INCOME:
Item that may be reclassified subsequently to profit or loss- foreign currency translation
differences 2,819,791 (805,881) - -
TOTAL COMPREHENSIVE INCOME/(EXPESES) FOR THE FINANCIAL YEAR 4,843,106 (916,998) 3,752,036 1,922,127
PROFIT/(LOSS) AFTER TAXATION ATTRIBUTABLE TO OWNERS OF THE COMPANY 2,023,315 (111,117) 3,752,036 1,922,127
TOTAL COMPREHENSIVE INCOME/(EXPENSES) ATTRIBUTABLE TO OWNERS OF THE COMPANY 4,843,106 (916,998) 3,752,036 1,922,127
EARNINGS/(LOSS) PER SHARE- Basic 32 0.29 (0.02) - Diluted 32 N/A N/A
The annexed notes form an integral part of these financial statements.
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For The Financial Year Ended 31 December 2013
50 Jadi Imaging Holdings Berhad Annual Report 2013
NON-DISTRIBUTABLE DISTRIBUTABLEFOREIGN
SHARE TREASURY SHARE EXCHANGE REVALUATION RETAINED TOTAL CAPITAL SHARES PREMIUM RESERVE RESERVE PROFITS EQUITY
THE GROUP RM RM RM RM RM RM RM
Balance at 1.1.2012 70,630,845 (22,042) 7,621,974 1,883,643 1,933,361 40,604,338 122,652,119
Loss after taxation for the financial year - - - - - (111,117) (111,117)
Other comprehensive income for the financial year:- foreign currency
translations - - - (805,881) - - (805,881)
Total comprehensive expenses for the financial year - - - (805,881) - (111,117) (916,998)
Contributions by and distributions to the owners of the Company:- Dividend paid - - - - - (1,412,360) (1,412,360)
Balance at 31.12.2012/1.1.2013 70,630,845 (22,042) 7,621,974 1,077,762 1,933,361 39,080,861 120,322,761
Profit after taxation for the financial year - - - - - 2,023,315 2,023,315
Other comprehensive income for the financial year:- foreign currency
translations - - - 2,819,791 - - 2,819,791
Total comprehensive income for the financial year - - - 2,819,791 - 2,023,315 4,843,106
Balance at 31.12.2013 70,630,845 (22,042) 7,621,974 3,897,553 1,933,361 41,104,176 125,165,867
The annexed notes form an integral part of these financial statements.
STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 December 2013
51Jadi Imaging Holdings Berhad Annual Report 2013
RETAINED PROFITS/
SHARE TREASURY SHARE (ACCUMULATED TOTAL CAPITAL SHARES PREMIUM LOSSES) EQUITY
THE COMPANY RM RM RM RM RM
Balance at 1.1.2012 70,630,845 (22,042) 7,621,974 (583,422) 77,647,355 Total comprehensive
income for the financial year - - - 1,922,127 1,922,127
Contributions by and distributions to the owners of the Company:- Dividend paid - - - (1,412,360) (1,412,360)
Balance at 31.12.2012/1.1.2013 70,630,845 (22,042) 7,621,974 (73,655) 78,157,122
Total comprehensive income for the financial year - - - 3,752,036 3,752,036
Balance at 31.12.2013 70,630,845 (22,042) 7,621,974 3,678,381 81,909,158
The annexed notes form an integral part of these financial statements.
STATEMENTS OF CHANGES IN EQUITY For The Financial Year Ended 31 December 2013
52 Jadi Imaging Holdings Berhad Annual Report 2013
THE GROUP THE COMPANY 2013 2012 2013 2012
RM RM RM RM CASH FLOWS FROM/(FOR)
OPERATING ACTIVITIESProfit/(Loss) before taxation 598,328 (1,064,488) 3,752,036 1,922,127
Adjustments for:-Depreciation of:
- investment property 2,400 2,400 - -- property, plant and equipment 11,079,808 10,003,324 - -
Interest expense 900,588 1,038,409 - -Inventories written down 896,070 2,124,985 - -Property written off - 277 - -Unrealised loss on foreign exchange 221,397 95,689 - -Gain on disposal of equipment - (89) - -Dividend income - - (4,299,162) (2,500,000)Interest income (89,779) (16,845) - -Reversal of inventories written down (2,134,843) (997,687) - -
Operating profit/(loss) before working capital changes 11,473,969 11,185,975 (547,126) (577,873)
(Increase)/Decrease in inventories (2,975,797) 3,301,506 - -Decrease/(Increase) in trade and other
receivables 235,077 (260,048) - 17,296Increase/(Decrease) in trade and other
payables 2,606,673 (4,756,534) (35,731) 16,012Decrease in derivative liabilities - (371,771) - -
CASH FROM/(FOR) OPERATIONS 11,339,922 9,099,128 (582,857) (544,565)Interest paid (900,588) (1,038,409) - -Income tax refunded/(paid) 562,808 (404,649) 70,000 -
NET CASH FROM/(FOR) OPERATING ACTIVITIES 11,002,142 7,656,070 (512,857) (544,565)
BALANCE CARRIED FORWARD 11,002,142 7,656,070 (512,857) (544,565)
The annexed notes form an integral part of these financial statements.
STATEMENTS OF CASH FLOWSFor The Financial Year Ended 31 December 2013
53Jadi Imaging Holdings Berhad Annual Report 2013
THE GROUP THE COMPANY 2013 2012 2013 2012
NOTE RM RM RM RM
BALANCE BROUGHT FORWARD 11,002,142 7,656,070 (512,857) (544,565)
CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES
Interest received 89,779 16,845 - -Dividend received - - 4,299,162 2,500,000Proceeds from disposal
of equipment - 2,770 - -Purchase of property,
plant and equipment (9,088,125) (16,532,197) - -Advances to subsidiaries - - (3,775,451) (549,813)
NET CASH (FOR)/FROM INVESTING ACTIVITIES (8,998,346) (16,512,582) 523,711 1,950,187
CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES
Drawdown of term loans 4,639,094 9,830,167 - -Dividend paid - (1,412,360) - (1,412,360)Repayment of hire purchase
obligations (143,096) (250,566) - -Net (repayment)/drawdown of
revolving credit (3,000,000) 7,500,000 - -Repayment of term loans (7,116,672) (4,281,850) - -Advances from directors 3,800 - 3,800 -
NET CASH(FOR)/FROM FINANCING ACTIVITIES (5,616,874) 11,385,391 3,800 (1,412,360)
NET (DECREASE)/INCREASE IN CASH AND BANK BALANCES (3,613,078) 2,528,879 14,654 (6,738)
EFFECTS OF FOREIGN EXCHANGE 670,516 (218,903) - -
CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 7,549,656 5,239,680 9,781 16,519
CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 4,607,094 7,549,656 24,435 9,781
The annexed notes form an integral part of these financial statements.
STATEMENTS OF CASH FLOWSFor The Financial Year Ended 31 December 2013
54 Jadi Imaging Holdings Berhad Annual Report 2013
1. GENERAL INFORMATION
The Company is a private company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office and principal place of business are at No. 1, Jalan Peguam U1/25A, Seksyen U1, Hicom Glenmarie Industrial Park, 40150 Shah Alam, Selangor Darul Ehsan.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 16 April 2014.
2. PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.
3. BASIS OF PREPARATION
The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.
3.1 During the current financial year, the Group has adopted the following new accounting standards and interpretations (including the consequential amendments, if any):-
MFRSs and IC Interpretations (Including The Consequential Amendments)
MFRS 10 Consolidated Financial StatementsMFRS 11 Joint ArrangementsMFRS 12 Disclosure of Interests in Other EntitiesMFRS 13 Fair Value MeasurementMFRS 119 (2011) Employee BenefitsMFRS 127 (2011) Separate Financial StatementsMFRS 128 Investments in Associates and Joint VenturesAmendments to MFRS 7: Disclosures - Offsetting Financial Assets and Financial LiabilitiesAmendments to MFRS 10, MFRS 11 and MFRS 12: Transition GuidanceAmendments to MFRS 101: Presentation of Items of Other Comprehensive IncomeIC Interpretation 20 Stripping Costs in the Production Phase of a Surface MineAnnual Improvements to MFRSs 2009 - 2011 Cycle
The adoption of the above accounting standards and interpretations (including the consequential amendments) did not have any material impact on the Group’s financial statements.
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
55Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
3. BASIS OF PREPARATION (CONT’D)
3.2 The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the current financial year:-
MFRSs and IC Interpretations (Including The Consequential Amendments) EffectiveDate
MFRS 9 (2009) Financial InstrumentsMFRS 9 (2010) Financial InstrumentsMFRS 9 Financial Instruments (Hedge Accounting and Amendments to
MFRS 7, MFRS 9 and MFRS 139)To be announced
by MASBAmendments to MFRS 9 and MFRS 7: Mandatory Effective Date of MFRS 9
and Transition DisclosuresAmendments to MFRS 10, MFRS 12 and MFRS 127 (2011): Investment
Entities1 January 2014
Amendments to MFRS 119: Defined Benefits Plans - Employee Contributions 1 July 2014Amendments to MFRS 132: Offsetting Financial Assets and Financial
Liabilities1 January 2014
Amendments to MFRS 136: Recoverable Amount Disclosures for Non-financial Assets
1 January 2014
Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting
1 January 2014
IC Interpretation 21 Levies 1 January 2014Annual Improvements to MFRSs 2010 - 2012 Cycle 1 July 2014Annual Improvements to MFRSs 2011 - 2013 Cycle 1 July 2014
The above accounting standards and interpretations (including the consequential amendments) are not relevant to the Group’s operations except as follows:-
MFRS 9 (2009), MFRS 9 (2010) & Amendments to MFRS 9 and MFRS 7: Mandatory Effective Date of MFRS 9 and Transition Disclosures
MFRS 9 (2009) introduces new requirements for the classification and measurement of financial assets. Subsequently, this MFRS 9 was amended in year 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition (known as MFRS 9 (2010) Generally, MFRS 9 replaces the parts of MFRS 139 that relate to the classification and measurement of financial instruments. MFRS 9 divides all financial assets into 2 categories - those measured at amortised cost and those measured at fair value, based on the entity’s business model for managing its financial assets and the contractual cash flow characteristics of the instruments. For financial liabilities, the standard retains most of the MFRS 139 requirement. An entity choosing to measure a financial liability at fair value will present the portion of the change in its fair value due to changes in the entity’s own credit risk in other comprehensive income rather than within profit or loss. There will be no financial impacts on the financial statements of the Group upon its initial application but may impact its future disclosure.
Amendments to MFRS 119: Employee Contributions
The amendments to MFRS 119 simplify the accounting treatment of contributions from employees and third parties to defined benefit plans. Contributions that are independent of the number of years of service shall be recognised as a reduction in the service cost in the period in which the related service is rendered. For contributions that are dependent on the number of years of service, the Group is required to attribute those contributions to periods of service using either based on the plan’s contribution formula or on a straight-line basis, as appropriate. There will be no financial impacts on the financial statements of the Group upon its initial application but may impact its future disclosure.
56 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
3. BASIS OF PREPARATION (CONT’D)
3.2 Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities
The amendments to MFRS 132 provide the application guidance for criteria to offset financial assets and financial liabilities. There will be no financial impacts on the financial statements of the Group upon its initial application but may impact its future disclosure.
Amendments to MFRS 136: Recoverable Amount Disclosures for Non-Financial Assets
The amendments to MFRS 136 remove the requirement to disclosure the recoverable amount when a cash-generating unit (CGU) contains goodwill or intangible assets with indefinite useful lives but there has been no impairment. There will be no financial impacts on the financial statements of the Group upon its initial application but may impact its future disclosure.
4. SIGNIFICANT ACCOUNTING POLICIES
(a) 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 accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts 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 the property, plant and equipment are based on commercial and production 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.
(ii) Income Taxes
There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises 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 period in which such determination is made.
(iii) 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.
57Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Critical Accounting Estimates And Judgements (Cont’d)
(iv) Write-down of 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.
(v) Impairment of Trade and Other 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 judgement 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 value of receivables.
(vi) Revaluation of Properties
Certain properties of the Group are reported at valuation which is based on valuations performed by independent professional valuers.
The independent professional valuers have exercised judgement 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 unexpected correlations can also materially affect these estimates and the resulting valuation estimates.
(vii) ClassificationBetweenInvestmentPropertiesandOwner-OccupiedProperties
The Group determines whether a property qualifies as an investment property, and has developed a 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.
58 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Critical Accounting Estimates And Judgements (Cont’d)
(viii) 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.
(ix) ClassificationofLeaseholdLand
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.
(x) Share-based Payments
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity investments at the date at which they are granted. The estimating of the fair value requires determining the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. This also requires determining the most appropriate inputs to the valuation model including the expected life of the option volatility and dividend yield and making assumptions about them.
(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.
(b) Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period.
Subsidiaries are entities (including structured entities) controlled by the Group. 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.
59Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b) Basis of Consolidation (Cont’d)
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 businesses 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 to 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 share 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 the equity attributable to owners of the Company. 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’ share of subsequent changes in equity.
(iii) 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.
(iv) 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.
60 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b) Basis of Consolidation (Cont’d)
(iv) Loss of Control (Cont’d)
Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for 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 MFRS 139 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
(c) Goodwill
Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period.
Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities at the date of acquisition is recorded as goodwill.
Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised as a gain in profit or loss.
(d) Functional and Foreign Currencies
(i) Functional and Presentation Currency
The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency.
The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional and presentation currency.
(ii) Transactions and Balances
Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss except for differences arising from the translation of available-for-sale equity instruments which are recognised in other comprehensive income.
61Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(d) Functional and Foreign Currencies (Cont’d)
(iii) Foreign Operations
Assets and liabilities of foreign operations are translated to Ringgit Malaysia at the rates of exchange ruling at the end of the reporting period. Revenues and expenses of foreign operations are translated at exchange rates ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity under the translation reserve. On the disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that particular foreign operation is reclassified from equity to profit or loss.
Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period.
(e) Financial Instruments
Financial instruments are recognised in the statements of financial position when the Group has become a party to the contractual provisions of the instruments.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.
Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.
A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.
Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.
(i) Financial Assets
On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.
• Financial Assets at Fair Value Through Profit or Loss
As at the end of the reporting period, there were no financial assets classified under this category.
• Held-to-maturity Investments
As at the end of the reporting period, there were no financial assets classified under this category.
62 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(e) Financial Instruments (Cont’d)
(i) Financial Assets (Cont’d)
• Loans and Receivables Financial Assets
Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
• Available-for-sale Financial Assets
Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories.
After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.
Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.
(ii) Financial Liabilities
All financial liabilities are initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.
(iii) Equity Instruments
Instruments classified as equity are measured at cost and are not remeasured subsequently.
(i) Ordinary Shares
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
63Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(e) Financial Instruments (Cont’d)
(iii) Equity Instruments (Cont’d)
(ii) Treasury Shares
When the Company’s own shares recognised as equity are bought back, the amount of the consideration paid, including all costs directly attributable, are recognised as a deduction from equity. Own shares purchased that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity. Where such shares are subsequently sold or reissued, any consideration received, net of any direct costs, is included in equity.
Where such shares are subsequently sold or reissued, any consideration received, net of any direct costs, is included in equity.
(iv) Derecognition
A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
(f) Investments in Subsidiaries
Investments 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 the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.
(g) Property, Plant and Equipment
Plant and equipment, are stated at cost less accumulated depreciation and impairment losses, if any.
Freehold land is stated at revalued amount less impairment losses recognised after the date of the revaluation. Freehold land is not depreciated. Freehold buildings are stated at revalued amount less accumulated depreciation and impairment losses recognised after the date of the revaluation.
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.
64 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(g) Property, Plant and Equipment (Cont’d)
Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-
Leasehold land over the lease period 50 yearsBuildings 2.5% to 5%Furniture, fittings and office equipment 20% to 33.3%Motor vehicles 20%Plant and machinery 10% to 20%Renovation 10%Tools and equipment 20%
The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Company is obligated to incur when the asset is acquired, if applicable.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profit or loss. The revaluation reserve included in equity is transferred directly to retained profits on retirement or disposal of the asset.
Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use and no further charge for depreciation is made in respect of these plant and equipment.
(h) Investment Property
Investment property is property held either to earn rental income or for capital appreciation or for both. Initially investment property is measured at cost including transaction costs. Subsequent to initial recognition, investment property is stated at fair value. Gains or losses arising from changes in the fair values of investment property is recognised in profit or loss in the year in which they arise.
Investment property is derecognised when it has either been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal.
On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss.
65Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(i) Impairment
(i) Impairment of Financial Assets
All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment.
An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and 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 original effective interest rate.
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 through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
(ii) Impairment of Non-Financial Assets
The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.
An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
(j) Assets Under Hire Purchase
Assets acquired under hire purchase are capitalised in the financial statements at the lower of the fair value of the leased assets and the present value of the minimum lease payments and, are depreciated in accordance with the policy set out in Note 4(g) above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are recognised in profit or loss over the period of the respective hire purchase agreements.
(k) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average basis, and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Cost of finished goods and work-in-progress includes the cost of materials, direct labour and an appropriate proportion of production overheads.
66 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(k) Inventories (Cont’d)
Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.
The change in the accounting estimate for inventories is in respect of the extension of the obsolescence period as a significant portion of its inventories has a recyclable period which extends beyond the original obsolescence period previously used as a basis to write down the value of inventories. The effect of the change is an increase in the profit before taxation of the Group by RM827,399 for the current financial year.
(l) Borrowing Costs
Borrowing costs, directly attributable to the acquisition and construction of property, plant and equipment are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.
All other borrowing costs are recognised in profit or loss as expenses in the period in which they are incurred.
(m) Income Taxes
Income taxes for the financial year comprise current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting period and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.
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 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.
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.
67Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(n) Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less.
(o) EmployeeBenefits
(i) Short-termBenefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Group.
(ii) DefinedContributionPlans
The Group’s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.
(iii) Share-based Payment Transactions
At grant date, the fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the actual number of share options that are expected to vest.
(p) Related Parties
A party is related to an entity (referred to as the “reporting entity”) if:-
(a) A person or a close member of that person’s family is related to a reporting entity if that person:-
(i) has control or joint control over the reporting entity;(ii) has significant influence over the reporting entity; or(iii) is a member of the key management personnel of the reporting entity or of a parent of the
reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:-
(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third
entity.(v) The entity is a post-employment benefit plan for the benefit of employees of either the
reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
(vi) The entity is controlled or jointly controlled by a person identified in (a) above.(vii) A person identified in (a)(ii) above has significant influence over the entity or is a member
of the key management personnel of the entity (or of a parent of the entity).
Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.
68 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(q) Contingent Liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.
(r) 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.
(s) Fair Value Measurements
Fair value is 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, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction 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’s 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.
For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:-
Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date;
Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3: Inputs are unobservable inputs for the asset or liability.
The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.
(t) Revenue Recognition
(i) Sale of Goods
Revenue is measured at fair value of the consideration received or receivable and is recognised upon delivery of goods and customers’ acceptance and where applicable, net of returns and trade discounts.
69Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(t) Revenue Recognition (Cont’d)
(ii) Interest Income
Interest income is recognised on an accrual basis.
(iii) Dividend Income
Dividend income is recognised on an accrual basis.
5. INVESTMENT IN SUBSIDIARIES
THE COMPANY 2013 2012
RM RM
Unquoted shares, at cost 33,824,000 33,824,000 Loan to a subsidiary 48,251,945 44,479,950
82,075,945 78,303,950
The loan to a subsidiary which forms part of the Company’s net investment in the subsidiary is unsecured, interest-free and settlement is neither planned nor likely to occur in the foreseeable future. As the amount is, in substance, a part of the Company’s net investment in the entity, it is stated at cost less impairment losses, if any.
Details of the subsidiaries are as follows:-
EffectiveEquity InterestCountry of
Name of Company Incorporation 2013 2012 Principal Activities% %
Jadi Imaging Technologies Sdn. Bhd.
Malaysia 100 100 Manufacturing and sale of toner.
Jadi Imaging Technologies (Suzhou) Sdn. Bhd.*
The People’s Republic of China
100 100 Manufacturing and sale of toner.
Jadi Imaging Solutions Sdn. Bhd. # Malaysia 100 100 Manufacturing and sale of toner.
Jadi Imaging Supplies (US), Inc.* United States of America
100 100 Dormant.
Jadi Chemicals Sdn. Bhd. # Malaysia 100 100 Manufacturing and sale of resin toner.
International Cartridge Supplies Sdn. Bhd. #
Malaysia 100 100 Dormant.
* not audited by Messrs. Crowe Horwath. # held through Jadi Imaging Technologies Sdn. Bhd.
70 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
6. INVESTMENT PROPERTY
THE GROUP 2013 2012
RM RM
Freehold apartment:-At cost 120,000 120,000
Accumulated depreciation:-At 1 January (16,800) (14,400) Depreciation charge during the financial year (2,400) (2,400)
At 31 December (19,200) (16,800)
100,800 103,200
The fair value of the investment property at the end of the reporting period was RM160,000 (2012 -
RM175,000).
7. PROPERTY, PLANT AND EQUIPMENT
THE GROUPNET CARRYING AMOUNT
EXCHANGE AT FLUCTUATION DEPRECIATION AT
1.1.2013 ADDITIONS TRANSFER DIFFERENCE CHARGE 31.12.2013 RM RM RM RM RM RM
Freehold land 16,300,355 - - - - 16,300,355 Leasehold
land 1,861,993 - - 192,441 (44,096) 2,010,338 Buildings 25,272,055 146,953 - 694,204 (842,522) 25,270,690 Furniture,
fittings and office equipment 909,577 103,316 - 21,018 (316,275) 717,636
Motor vehicles 528,256 - - 6,002 (229,894) 304,364 Plant and
machinery 47,077,063 8,461,582 14,554,763 1,178,429 (9,118,852) 62,152,985 Renovation 418,328 78,522 - 8,901 (98,863) 406,888 Tools and
equipment 1,293,262 297,752 - 12,169 (429,306) 1,173,877 Construction
work-in-progress 14,554,763 - (14,554,763) - - -
Total 108,215,652 9,088,125 - 2,113,164 (11,079,808) 108,337,133
71Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
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72 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
7. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
NET AT ACCUMULATED CARRYING
THE GROUP COST VALUATION DEPRECIATION AMOUNT RM RM RM RM
AT 31.12.2013
Freehold land - 16,300,355 - 16,300,355 Leasehold land 2,288,493 - (278,155) 2,010,338 Buildings 23,119,316 5,325,975 (3,174,601) 25,270,690 Furniture, fittings and office
equipment3,105,577 - (2,387,941) 717,636
Motor vehicles 1,379,234 - (1,074,870) 304,364 Plant and machinery 114,742,254 - (52,589,269) 62,152,985 Renovation 812,911 - (406,023) 406,888 Tools and equipment 3,447,006 - (2,273,129) 1,173,877
Total 148,894,791 21,626,330 (62,183,988) 108,337,133
AT 31.12.2012
Freehold land - 16,300,355 - 16,300,355 Leasehold land 2,096,052 - (234,059) 1,861,993 Buildings 22,404,133 5,200,000 (2,332,078) 25,272,055 Furniture, fittings and office
equipment2,982,057 - (2,072,480) 909,577
Motor vehicles 1,375,752 - (847,496) 528,256 Plant and machinery 90,547,479 - (43,470,416) 47,077,063 Renovation 725,488 - (307,160) 418,328 Tools and equipment 3,142,978 - (1,849,716) 1,293,262 Construction work-in-progress 14,554,763 - - 14,554,763
Total 137,828,702 21,500,355 (51,113,405) 108,215,652
(a) Included in the plant and equipment at the end of the reporting period were motor vehicles with a total net carrying amount of RM254,521 (2012 - RM458,138), which were acquired under hire purchase terms.
(b) The freehold land and buildings of the Group which were revalued on 13 October 2009 were stated at revalued amount at the end of the reporting period and were revalued by an independent professional valuer.
73Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
7. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
(c) Net carrying amount of freehold land and buildings, had these assets been carried at cost less accumulated depreciation, would have been as follows:-
THE GROUP 2013 2012
RM RM
Freehold land 15,210,191 15,210,191Buildings 3,662,610 3,669,091
8. OTHER INVESTMENT
This represents a golf club membership which is designated as available-for-sale financial assets and measured at fair value.
9. DEFERRED TAX ASSET
THE GROUP 2013 2012
RM RM
At 1 January - - Recognised in profit or loss (Note 31) 72,000 -
At 31 December 72,000 -
The components of the deferred tax liability and asset during the financial year prior to offsetting are as follows:-
THE GROUP 2013 2012
RM RM
Deferred tax liabilityTemporary differences on accelerated capital (1,530,000) -
Deferred tax assetUnabsorbed capital allowances 1,602,000 -
72,000 -
74 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
10. INVENTORIES
THE GROUP 2013 2012
RM RM
At cost:-Raw materials 17,175,114 11,136,216 Finished goods 15,635,471 17,242,588
32,810,585 28,378,804 At net realisable value:-
Work-in-progress 156,671 - Raw materials 46,937 69,318 Finished goods 51,359 402,860
254,967 472,178
33,065,552 28,850,982
Recognised in profit or loss:-Inventories recognised as cost of sales 61,616,356 68,118,873 Amount written down to net realisable value 896,070 2,124,985 Reversal of inventories written down in previous years (2,134,843) (997,687)
The reversal of inventories written down was in respect of inventories that were previously written down but realised sold above their carrying amount during the financial year.
11. TRADE RECEIVABLES
The Group’s normal credit terms for trade receivables range from 30 to 60 days. Other credit terms are assessed and approved on a case-by-case basis.
12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
THE GROUP THE COMPANY 2013 2012 2013 2012
RM RM RM RM
Other receivables 40,474 130,254 - - Deposits 278,819 666,057 1,500 1,500 Prepayments 1,742,739 1,134,170 - -
2,062,032 1,930,481 1,500 1,500
75Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
13. SHARE CAPITAL
THE COMPANY 2013 2012 2013 2012
NUMBER OF SHARES RM RM
ORDINARY SHARES OF RM0.10 EACH:-
AUTHORISED 2,000,000,000 2,000,000,000 2,000,000,000 2,000,000,000
ISSUED AND FULLY PAID-UP 706,308,449 706,308,449 70,630,845 70,630,845
Warrants
The Company had on 13 October 2010, issued 348,251,380 2010/2015 warrants to all entitled shareholders of the Company on the basis of 1 free warrant for every 2 existing ordinary shares of RM0.10 each held in the Company. The warrants were listed on the Main Market of Bursa Malaysia Securities Berhad. The warrants were constituted under a Deed Poll executed on 27 September 2010, and each warrant entitles the registered holder the right at any time during the exercise period from 13 October 2010 to 12 October 2015 to subscribe in cash for one new ordinary share of RM0.10 each of the Company at an exercise price of RM0.17 each.
As at 31 December 2013, 348,220,463 warrants remained unexercised.
The ordinary shares issued from the exercise of warrants shall rank pari passu in all respects with the existing issued ordinary shares of the Company except that they shall not be entitled to any dividends, distributions, rights, allotments and/or any other forms of distribution where the entitlement date precedes the relevant date of the allotment and issuance of the new shares arising from the exercise of warrants.
The main features of the warrants are as follows:-
(i) Each warrant will entitle the registered holder to subscribe for one (1) new ordinary share of par value of RM0.10 each in the Company at an exercise price of RM0.17 each subject to adjustment in accordance with the conditions stipulated in the Deed Poll;
(ii) The warrants may be exercised at any time on or before the maturity date falling five years (2010/2015) from the date of issue of the warrants on 13 October 2010. Warrants not exercised after the exercise period will thereafter lapse and cease to be valid;
(iii) The new shares to be issued pursuant to the exercise of the warrants shall, upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company in issue except that they will not be entitled to any dividends, rights, allotments and/or any other forms of distributions, the entitlement date of which is before the allotment and issuance of the new shares; and
(iv) The persons to whom the warrants have been granted have no rights to participate in any distribution and/or offer of further securities in the Company until/and unless warrant holders exercise their warrant for new shares.
76 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
14. TREASURY SHARES
The shares re-purchased are being held as treasury shares in accordance with Section 67A of the Companies Act 1965 in Malaysia.
The shares re-purchased 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 706,308,449 (2012 - 706,308,449) issued and fully paid-up ordinary shares as at the end of the reporting period, 119,672 (2012 - 119,672) ordinary shares are held as treasury shares by the Company. The treasury shares are held at a carrying amount of RM22,042 (2012 - RM22,042). None of the treasury shares were resold or cancelled during the financial year.
15. SHARE PREMIUM
The movements in the share premium of the Group and of the Company are as follows:-
THE GROUP AND THE COMPANY 2013 2012
RM RM
At 1 January/31 December 7,621,974 7,621,974
The share premium is not distributable by way of cash dividends and may be utilised in the manner as set out in Section 60(3) of the Companies Act 1965.
16. FOREIGN EXCHANGE RESERVE
The foreign exchange reserve arose from the translation of the financial statements of its foreign subsidiary and is not distributable by way of dividends.
17. REVALUATION RESERVE
The revaluation reserve represents the surplus arising from the revaluation of the freehold land and buildings and is not distributable by way of cash dividends.
18. LONG-TERM BORROWINGS
THE GROUP 2013 2012
RM RM
Hire purchase payables (Note 25) 38,784 188,384 Term loans (Note 27) 3,117,553 7,735,387
3,156,337 7,923,771
77Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
19. DEFERRED TAXATION
THE GROUP 2013 2012
RM RM
At 1 January 3,361,300 4,529,711 Recognised in profit or loss (Note 31) (1,654,961) (1,168,411)
At 31 December 1,706,339 3,361,300
The components of the deferred tax assets and liabilities during the financial year prior to offsetting are as follows:-
THE GROUP 2013 2012
RM RM
Deferred tax assets:-Unrealised foreign exchange losses 56,000 56,000 Unabsorbed capital allowances 1,778,000 594,000 Unutilised reinvestment allowances 2,956,000 2,881,000
4,790,000 3,531,000
Deferred tax liabilities:-Revaluation of properties 244,000 253,000 Accelerated capital allowances 6,252,339 6,639,300
6,496,339 6,892,300
1,706,339 3,361,300
20. TRADE PAYABLES
The normal trade credit terms granted to the Group range from 30 to 90 days.
21. OTHER PAYABLES AND ACCRUALS
THE GROUP THE COMPANY2013 2012 2013 2012
RM RM RM RM
Other payables 2,719,092 2,599,932 8,993 18,714 Accruals 845,406 1,379,217 63,990 90,000
3,564,498 3,979,149 72,983 108,714
22. AMOUNT OWING TO SUBSIDIARIES
The amount owing is non-trade in nature, unsecured, interest-free and is repayable upon demand. The amount owing is to be settled in cash.
78 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
23. AMOUNT OWING TO DIRECTORS
The balance represents unsecured interest-free advances and payments made on behalf. The amount owing is repayable within the next twelve months and is to be settled in cash.
24. SHORT-TERM BORROWINGS
THE GROUP 2013 2012
RM RM
Bills payable 4,741,374 -Hire purchase payables (Note 25) 149,600 143,096
Revolving credit (Note 26) 10,303,210 13,000,000
Term loans (Note 27) 4,024,598 6,523,436
19,218,782 19,666,532
The bills payable is secured by a corporate guarantee issued by the Company.
25. HIRE PURCHASE PAYABLES
THE GROUP 2013 2012
RM RM
Minimum hire purchase payments:- not later than one year 155,256 155,250- later than one year and not later than two years 38,784 155,250- later than two years and not later than five years - 38,796
194,040 349,296Future finance charges (5,656) (17,816)
Present value of hire purchase payables 188,384 331,480
Current (Note 24):- not later than one year 149,600 143,096
Non-current (Note 18):- later than one year and not later than two years 38,784 149,876- later than two years and not later than five years - 38,508
Total non-current portion 38,784 188,384
Total 188,384 331,480
79Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
25. HIRE PURCHASE PAYABLES (CONT’D)
The Group has hire purchase contracts for certain motor vehicles as disclosed in Note 7 to the financial statements. There are no restrictions imposed on the Group by the hire purchase arrangements and the Group has not entered into any arrangements for contingent rent payments.
Included in the hire purchase payables is an amount of RM188,384 (2012 - RM331,480) which is secured by a corporate guarantee issued by the Company.
26. REVOLVING CREDIT
THE GROUP 2013 2012
RM RM
Principal outstanding (Note 24)- Revolving credit 1 - 1,500,000- Revolving credit 2 - 1,500,000- Revolving credit 3 5,000,000 5,000,000- Revolving credit 4 5,303,210 5,000,000
10,303,210 13,000,000
Revolving credits 3 and 4 are rolled over automatically and are secured by a corporate guarantee issued by the Company.
27. TERM LOANS
THE GROUP 2013 2012
RM RM
Current portion (Note 24):- repayable not later than one year 4,024,598 6,523,436
Non-current portion (Note 18):- repayable later than one year and not later than two years 3,117,553 4,250,218- repayable later than two years and not later than five years - 3,485,169
Total non-current portion 3,117,553 7,735,387
Total 7,142,151 14,258,823
The term loans are secured by a corporate guarantee issued by the Company.
80 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
27. TERM LOANS (CONT’D) The repayment terms of the term loans are as follows:-
Number of Monthly Commencement The GroupAmount OutstandingTerm Monthly Instalment Date of
Loan Instalments Amount Repayment 2013 2012 RM RM RM
1 36 75,938 December 2010 - 750,4242 36 80,500 November 2010 - 805,0003 36 33,188 November 2010 - 286,7104 36 194,445 February 2011 892,848 2,652,5505 36 15,125 March 2011 30,250 211,7506 36 277,778 December 2012 6,219,053 9,552,389
7,142,151 14,258,823
28. NET ASSETS PER ORDINARY SHARE
The net assets per ordinary share is calculated based on the Group’s net asset value of RM125,165,867 (2012 - RM120,322,761) attributable to ordinary shares divided by the number of ordinary shares in issue (excluding treasury shares) at the end of the reporting period of 706,188,777 (2012 - 706,188,777) shares.
29. REVENUE
Revenue represents:-
THE GROUP THE COMPANY2013 2012 2013 2012
RM RM RM RM
Sales of goods 75,328,779 77,689,589 - - Dividend income - - 4,299,162 2,500,000
75,328,779 77,689,589 4,299,162 2,500,000
81Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
30. PROFIT/(LOSS) BEFORE TAXATION
Profit/(Loss) before taxation is arrived at after charging/(crediting):-
THE GROUP THE COMPANY2013 2012 2013 2012
RM RM RM RM
Audit fee:- current financial year 98,029 109,120 24,000 49,500- (over)/underprovision in the
previous financial year (17,500) 6,300 (25,500) (4,800)Depreciation of:
- investment property 2,400 2,400 - -- property, plant and equipment 11,079,808 10,003,324 - -
Directors’ fee 245,000 245,000 245,000 245,000Directors’ non-fee emoluments:
- salaries, wages, bonuses and allowances 1,238,582 1,187,629 - -
- defined contribution plan 136,896 134,440 - -- other benefits 62,950 42,000 11,000 6,950
Interest expense:- bills payable 12,799 - - -- revolving credit 482,238 437,671 - -- hire purchase 12,160 19,752 - -- term loans 393,391 580,986 - -
Inventories written down 896,070 2,124,985 - -(Gain)/Loss on foreign exchange:
- realised (843,972) (334,849) 20,098 -- unrealised 221,397 95,689 - -
Realised gain on derivatives - (225,866) - -Rental of property 100,100 99,250 - -Staff costs:
- salaries, wages, bonuses and allowances 6,725,879 7,046,651 - -
- defined contribution plan 578,474 746,289 - -- other benefits 299,013 317,560 - -
Property written off - 277 - -Dividend income - - (4,299,162) (2,500,000)Interest income (89,779) (16,845) - -Gain on disposal of equipment - (89) - - Reversal of inventories written down (2,134,843) (997,687) - -
82 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
31. INCOME TAX EXPENSE
THE GROUP THE COMPANY2013 2012 2013 2012
RM RM RM RM
Current tax expense:- for current financial year 309,839 219,628 - - - overprovision in the previous
financial year (7,865) (4,588) - -
301,974 215,040 - -
Deferred tax expense (Note 9 and 19):- for current financial year (337,961) (1,736,411) - - - underprovision in the previous
financial year (1,389,000) 568,000 - -
(1,726,961) (1,168,411) - -
(1,424,987) (953,371) - -
A reconciliation of income tax expense applicable to the profit/(loss) before taxation at the statutory tax rate to income tax expense at the effective tax rate of the Group and of the Company is as follows:-
THE GROUP THE COMPANY2013 2012 2013 2012
RM RM RM RM
Profit/(Loss) before taxation 598,328 (1,064,488) 3,752,036 1,922,127
Tax at the statutory tax rate of 25% 150,000 (266,000) 938,000 481,000
Tax effects of:-Deferred tax asset not recognised
during the financial year 1,250 - - - Non-deductible expenses 468,628 1,033,217 137,000 144,000 Non-taxable income - (1,075,000) (625,000) Tax exempt income under
pioneer status (648,000) (511,000) - - (Over)/Underprovision in the
previous financial year:- income tax (7,865) (4,588) - - - deferred taxation (1,389,000) 568,000 - -
Utilisation of tax allowances during the financial year - (1,773,000) - -
Income tax reversal for the financial year (1,424,987) (953,371) - -
83Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
31. INCOME TAX EXPENSE (CONT’D)
Subject to agreement with the tax authorities, the Group has unabsorbed capital allowances, unutilised tax losses and unutilised reinvestment allowances of RM13,519,000 (2012 - RM2,376,000), RM17,000 (2012 - RM12,000) and RM11,822,000 (2012 - RM11,212,000) available at the end of the reporting period to be carried forward for offset against future taxable business income.
A subsidiary of the Group, namely Jadi Imaging Solutions Sdn Bhd, had on 12 February 2010 been granted Pioneer Status incentive under the Promotion of Investments Act 1986 by the Ministry of International Trade and Industry Malaysia which qualifies the subsidiary for 70% exemption from income tax on its statutory income from pioneer activities for five years from 1 July 2009 to 30 June 2014.
32. EARNINGS/(LOSS) PER SHARE
The basic earnings/(loss) per share is arrived at by dividing the Group’s profit/(loss) attributable to shareholders of RM2,023,315 (2012 - loss of RM111,117) by the following weighted average number of ordinary shares in issue (net of treasury shares), computed as follows:-
THE GROUP 2013 2012
RM RM
Profit/(Loss) attributable to owners of the Company 2,023,315 (111,117)
Weighted average number of ordinary shares:-Issued ordinary shares at 1 January 706,308,449 706,308,449 Effect of treasury shares held (119,672) (119,672)
Weighted average number of ordinary shares at 31 December 706,188,777 706,188,777
Basic earnings/(loss) per share (sen) 0.29 (0.02)
Weighted average number of ordinary shares for basic earnings/(loss) per share 706,188,777 706,188,777
Effect of dilution upon exercise of warrant - -
Fully diluted weighted average number of ordinary shares at 31 December 706,188,777 706,188,777
Diluted earnings/(loss) per share (sen) N/A N/A
The diluted earnings/(loss) per share at the end of the reporting period is not presented as the assumed conversion of warrants would be unlikely as the average market price for the share is below the warrant exercise price.
84 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
33. FOREIGN CURRENCY RATES
The principal closing foreign exchange rates used (expressed on the basis of one unit of foreign currency to RM equivalent) for the translation of the foreign currency balances at the end of the reporting period are as follows:-
THE GROUP AND THE COMPANY 2013 2012
RM RM
Chinese Renminbi 0.54 0.49 100 Japanese Yen 3.12 3.56 United States Dollar 3.28 3.06
34. SIGNIFICANT RELATED PARTY DISCLOSURES
(a) Identities of related parties
The Group has related party relationships with:-
(i) its subsidiaries; and(ii) the directors and key management personnel.
(b) In addition to the information disclosed elsewhere in the financial statements, the Group and the Company carried out the following transactions with the related parties during the financial year:
THE GROUP THE COMPANY2013 2012 2013 2012
RM RM RM RM
Dividend income from a subsidiary - - 4,299,162 2,500,000
Key management personnel compensation:
- short-term employee benefits 1,524,928 1,454,619 97,500 97,500
35. DIRECTORS’ REMUNERATION
The aggregate amounts of emoluments received and receivable by directors of the Group and of the Company during the financial year were as follows:-
THE GROUP THE COMPANY2013 2012 2013 2012
RM RM RM RM
Executive directors:- fee 97,500 97,500 97,500 97,500 - salaries, bonus and defined
contribution plan 1,375,478 1,322,069 - - - benefits-in-kind 51,950 35,050 - -
Non-executive directors:- fee 147,500 147,500 147,500 147,500 - other emoluments 11,000 6,950 6,950 6,950
1,683,428 1,609,069 251,950 251,950
85Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
35. DIRECTORS’ REMUNERATION (CONT’D)
Details of directors’ emoluments of the Company received/receivable for the financial year in bands of RM50,000 are as follows:
THE COMPANY NUMBER OF DIRECTORS
2013 2012
Executive directors:- RM100,001 - RM150,000 - 1 - RM150,001 - RM200,000 1 - - RM350,001 - RM400,000 - 1 - RM400,001 - RM450,000 1 - - RM900,001 - RM950,000 1 1
3 3 Non-executive directors:- Below RM50,000 4 4
7 7
36. CAPITAL COMMITMENTS
THE GROUP 2013 2012
RM RM
Approved and contracted for:-- acquisition of plant and equipment 277,759 2,463,758 - construction of factory - 305,304
37. 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.
Business segments
The Group comprises the following main business segments:-
(i) Manufacturing Manufacturing and sale of toner(ii) Investment holding Investment of companies
Geographical segments
The Group comprises the following principal geographical areas:-
(i) Malaysia Manufacturing and sale of toner Investment of companies(ii) Overseas Manufacturing and sale of toner
86 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
37. OPERATING SEGMENTS (CONT’D)
Geographical segments (Cont’d)
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.
(a) By Business Segments
2013 MANUFACTURINGINVESTMENT
HOLDING ELIMINATION GROUP RM RM RM RM
REVENUERevenue from external
customers 97,139,359 - (21,810,580) 75,328,779Dividend income - 4,299,162 (4,299,162) -
Consolidated revenue 97,139,359 4,299,162 (26,109,742) 75,328,779
RESULTSSegment results 2,612,105 (547,126) (655,842) 1,409,137Interest income 89,779 - - 89,779
2,701,884 (547,126) (655,842) 1,498,916Interest expense (900,588)Income tax expense 1,424,987
Consolidated profit after taxation 2,023,315
ASSETSSegment assets # 209,690,496 82,101,880 (133,315,796) 158,476,580Unallocated assets 345,128
Consolidated total assets 158,821,708
LIABILITIESSegment liabilities * 97,700,411 290,976 (88,540,613) 9,450,774Unallocated liabilities 24,205,067
Consolidated total liabilities 33,655,841
OTHER INFORMATIONReversal of inventories
written down (2,134,843) - - (2,134,843)Inventories written down 896,070 - - 896,070Capital expenditure 9,088,125 - - 9,088,125Depreciation of: - investment property 2,400 - - 2,400- property, plant and
equipment 11,079,808 - - 11,079,808Dividend income - (4,299,162) 4,299,162 -
87Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
37. OPERATING SEGMENTS (CONT’D)
(a) By Business Segments (Cont’d)
2012 MANUFACTURINGINVESTMENT
HOLDING ELIMINATION GROUP RM RM RM RM
REVENUERevenue from external
customers 90,156,995 - (12,467,406) 77,689,589Dividend income - 2,500,000 (2,500,000) -
Consolidated revenue 90,156,995 2,500,000 (14,967,406) 77,689,589
RESULTSSegment results 719,548 1,977,351 (2,727,000) (30,101)Interest income 16,845 - - 16,845
736,393 1,977,351 (2,727,000) (13,256)Interest expense (1,038,409)Unallocated expenses (12,823)Income tax expense 953,371
Consolidated loss after taxation (111,117)
ASSETSSegment assets # 184,393,006 78,315,231 (105,646,244) 157,061,993Unallocated assets 1,092,109
Consolidated total assets 158,154,102
LIABILITIESSegment liabilities * 68,002,468 326,366 (61,526,904) 6,801,930Unallocated liabilities 31,029,411
Consolidated total liabilities 37,831,341
OTHER INFORMATIONReversal of inventories
written down (997,687) - - (997,687)Inventories written down 2,124,985 - - 2,124,985Capital expenditure 16,532,197 - - 16,532,197Depreciation of: - investment property 2,400 - - 2,400- property, plant and
equipment 10,003,324 - - 10,003,324Dividend income - (2,500,000) 2,500,000 -
88 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
37. OPERATING SEGMENTS (CONT’D)
(b) By Geographical Segments
REVENUESOUTH EAST
ASIAEAST ASIA
SOUTH ASIA
SOUTH AMERICA OTHERS TOTAL
RM RM RM RM RM RM
2013 12,225,652 18,874,340 13,284,205 15,063,714 15,880,868 75,328,770
2012 12,581,288 19,576,088 12,291,453 11,582,459 21,658,301 77,689,589
2013 MALAYSIA OVERSEAS GROUP RM RM RM
ASSETSSegment assets # 122,841,101 35,635,479 158,476,580Unallocated assets 345,128 - 345,128
Total assets 123,186,229 35,635,479 158,821,708
Capital expenditure 9,068,822 19,303 9,088,125
2012
ASSETSSegment assets # 122,903,416 34,158,577 157,061,993Unallocated assets 1,092,109 - 1,092,109
Total assets 123,995,525 34,158,577 158,154,102
Capital expenditure 16,212,973 319,224 16,532,197
# Segment assets comprise total current and non-current assets, less tax refundable.* Segment liabilities comprise total current and non-current liabilities, less bank borrowings and
tax payable.
38. CONTINGENT LIABILITY - UNSECURED
THE COMPANY 2013 2012
RM RM
Corporate guarantees given by the Company to licensed banks for banking facilities granted to a subsidiary 22,118,263 27,590,303
89Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39. FINANCIAL INSTRUMENTS
The Group’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
(a) Financial Risk Management Policies
The policies in respect of the major areas of treasury activity are as follows:-
(i) Market Risks
(i) Foreign Currency Risk
The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk are disclosed in Note 33 to the financial statements. Foreign currency risk is monitored closely and managed to an acceptable level.
UNITED CHINESE JAPANESE STATES RINGGIT
THE GROUP RENMINBI YEN DOLLAR MALAYSIA TOTAL 2013 RM RM RM RM RM
Financial assetsTrade receivables 2,870,312 - 7,370,891 12,766 10,253,969 Other receivables and
deposits 128,535 - - 190,758 319,293 Cash and bank balances 1,202,300 255,541 2,157,801 991,452 4,607,094
4,201,147 255,541 9,528,692 1,194,976 15,180,356
Financial liabilitiesTrade payables 135,219 538,330 3,999,273 1,087,154 5,759,976 Other payables and accruals 231,900 292,499 (25,233) 3,065,332 3,564,498 Amount owing to directors - - - 126,300 126,300 Bills payable - 247,193 3,856,391 637,790 4,741,374 Hire purchase payables - - - 188,384 188,384 Revolving credit - - 5,303,210 5,000,000 10,303,210 Term loans - - - 7,142,151 7,142,151
367,119 1,078,022 13,133,641 17,247,111 31,825,893
Net financial assets/(liabilities) 3,834,028 (822,481) (3,604,949) (16,052,135) (16,645,537)
Less: Net financial (assets)/liabilities denominated in the entity’s functional currencies (3,834,028) - - 16,052,135 12,218,107
Currency exposure - (822,481) (3,604,949) - (4,427,430)
90 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risks (Cont’d)
(i) Foreign Currency Risk (Cont’d)
UNITED CHINESE JAPANESE STATES RINGGIT
THE GROUP RENMINBI YEN DOLLAR MALAYSIA TOTAL 2012 RM RM RM RM RM
Financial assetsTrade receivables 2,029,477 - 8,244,543 88,002 10,362,022 Other receivables and
deposits 62,905 - - 733,406 796,311Cash and bank balances 2,045,683 1,291,351 2,944,549 1,268,073 7,549,656
4,138,065 1,291,351 11,189,092 2,089,481 18,707,989
Financial liabilitiesTrade payables 43,535 994,909 1,189,150 472,687 2,700,281 Other payables and accruals 907,678 - 668,546 2,402,925 3,979,149 Amount owing to directors - - - 122,500 122,500 Hire purchase payables - - - 331,480 331,480 Revolving credit - - 5,000,000 8,000,000 13,000,000 Term loans - - - 14,258,823 14,258,823
951,213 994,909 6,857,696 25,588,415 34,392,233
Net financial assets/(liabilities) 3,186,852 296,442 4,331,396 (23,498,934) (15,684,244)
Less: Net financial (assets)/liabilities denominated in the entity’s functional currencies (3,186,852) - - 23,498,934 20,312,082
Currency exposure - 296,442 4,331,396 - 4,627,838
91Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risks (Cont’d)
(i) Foreign Currency Risk (Cont’d)
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:-
THE GROUP2013 2012
Increase/(Decrease)
Increase/(Decrease)
RM RMEffectsonprofitaftertaxation
Japanese Yen:- strengthened by 5% 14,822 (14,823)- weakened by 5% (14,822) 14,823
United States Dollar:- strengthened by 5% (180,247) (216,570)- weakened by 5% 180,247 216,570
(ii) 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. Any surplus funds of the Group will be placed with licensed financial institutions to generate interest income.
Information relating to the Company’s exposure to the interest rate risk of the financial liabilities is disclosed in Note 39(a)(iii) to the financial statements
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:-
THE GROUP2013 2012
Increase/(Decrease)
Increase/(Decrease)
RM RMEffectsonprofitaftertaxationIncrease of 100 basis points (bp) (174,454) (242,488)Decrease of 100 bp 174,454 242,488
92 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risks (Cont’d)
(iii) Equity Price Risk
The Company does not have any quoted investments and hence is not exposed to equity price risk.
(ii) Credit Risk
The Group’s exposure to credit risk or the risk of counterparties defaulting, arises mainly from 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 Group 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 other 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 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.
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 (including amount owing by related companies) by geographical region is as follows:-
THE GROUP2013 2012
RM RM
Brazil 2,411,055 1,555,057 China 3,388,313 2,345,600 India 896,301 1,442,713 Indonesia 713,923 - Others 1,863,216 1,338,271 Russia - 1,363,941 United States 436,899 650,402 Vietnam 544,262 1,666,038
10,253,969 10,362,022
93Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(ii) Credit Risk (Cont’d)
Ageing analysis
The ageing analysis of the Group’s trade receivables (including amount owing by related companies, trade in nature) at the end of the reporting period is as follows:-
THE GROUP CARRYING AMOUNT 2013 2012
RM RM
Not past due 8,887,883 8,805,064
Past due:- less than 3 months 1,128,913 1,538,668 - 3 to 6 months 52,660 7,512 - over 6 months 184,513 10,778
10,253,969 10,362,022
At the end of the 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 collective impairment allowance is determined based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience.
Trade receivables that are past due but not impaired
The Group believes that no impairment allowance is necessary in respect of these trade receivables. They are substantially companies with good collection track record and no recent history of default.
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. Any receivables having significant balances past due or more than 60 days, which are deemed to have higher credit risk, are monitored individually.
(iii) Liquidity Risk
Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.
94 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(iii) Liquidity Risk (Cont’d)
The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payment computed based on the rate at the end of the reporting period):-
WEIGHTED AVERAGE CONTRACTUAL LATER
EFFECTIVE CARRYING UNDISCOUNTED WITHIN 2 - 5 THAN THE GROUP RATE AMOUNT CASH FLOWS 1 YEAR YEARS 5 YEARS 2013 % RM RM RM RM RM
Trade payables - 5,759,976 5,759,976 5,759,976 - - Other payables and
accruals- 3,564,498 3,564,498 3,564,498 - -
Amount owing to directors
- 126,300 126,300 126,300 - -
Bills payable 2.2 4,741,374 4,767,452 4,767,452 - - Hire purchase
payables4.7 188,384 194,040 155,256 38,784 -
Term loans 4.8 7,142,151 7,467,061 4,270,511 3,196,550 - Revolving credit 3.7 10,303,210 10,398,515 10,398,515 - -
31,825,893 32,277,842 29,042,508 3,235,334 -
2012
Trade payables - 2,700,281 2,700,281 2,700,281 - - Other payables and
accruals- 3,979,149 3,979,149 3,979,149 - -
Amount owing to directors
- 122,500 122,500 122,500 - -
Hire purchase payables
4.7 331,480 349,296 155,250 155,250 38,796
Term loans 4.5 14,258,823 15,103,579 7,025,499 4,501,930 3,576,150 Revolving credit 3.8 13,000,000 13,006,120 13,006,120 - -
34,392,233 35,260,925 26,988,799 4,657,180 3,614,946
95Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39. FINANCIAL INSTRUMENTS (CONT’D)
(a) Financial Risk Management Policies (Cont’d)
(iii) Liquidity Risk (Cont’d)
CONTRACTUALCARRYING UNDISCOUNTED WITHIN
THE COMPANY AMOUNT CASH FLOWS 1 YEAR 2013 RM RM RM
Other payables and accruals 72,983 72,983 72,983 Amount owing to directors 126,300 126,300 126,300 Amount owing to subsidiaries 91,696 91,696 91,696
290,979 290,979 290,979
2012
Other payables and accruals 108,714 108,714 108,714 Amount owing to directors 122,500 122,500 122,500 Amount owing to subsidiaries 95,152 95,152 95,152
326,366 326,366 326,366
(b) Capital Risk Management
The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholder 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 its shareholders or issuing new shares.
The Group manages its capital based on debt-to-equity ratio. The Group’s strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents.
The debt-to-equity ratio of the Group as at the end of the reporting period was as follows:-
THE GROUP 2013 2012
RM RM
Hire purchase payables 188,384 331,480 Bills payable 4,741,374 - Term loans 7,142,151 14,258,823 Revolving credit 10,303,210 13,000,000
22,375,119 27,590,303 Less : Cash and bank balances (4,607,094) (7,549,656)
Net debt 17,768,025 20,040,647
Total equity 125,165,867 120,322,761
Debt-to-equity ratio 0.14 0.17
96 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39. FINANCIAL INSTRUMENTS (CONT’D)
(b) Capital Risk Management (Cont’d)
Under the requirement of Bursa Malaysia Guidance Note No. 17/2005, the Company is required to maintain its shareholders’ equity equal to or not less than the 25% of the issued and paid-up share capital (excluding treasury shares) and such shareholders’ equity is not less than RM17.7 million (2012 - RM17.7 million). The Company has complied with this requirement.
(c) ClassificationofFinancialInstruments
THE GROUP THE COMPANY 2013 2012 2013 2012
RM RM RM RM
Financial Assets
Available-for-sale financial assets
Other investment, at fair value 50,000 50,000 - -
Loans and receivables financial assets
Trade receivables 10,253,969 10,362,022 - - Other receivables and
deposits 319,293 796,311 1,500 1,500 Cash and bank balances 4,607,094 7,549,656 24,435 9,781
15,180,356 18,707,989 25,935 11,281
Financial Liabilities
Other financial liabilitiesTrade payables 5,759,976 2,700,281 - - Other payables and accruals 3,564,498 3,979,149 72,983 108,714 Amount owing to directors 126,300 122,500 126,300 122,500 Amount owing to subsidiaries - - 91,696 95,152 Bills payable 4,741,374 - - - Hire purchase payables 188,384 331,480 - - Term loans 7,142,151 14,258,823 - - Revolving credit 10,303,210 13,000,000 - -
31,825,893 34,392,233 290,979 326,366
97Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
39.
FIN
AN
CIA
L IN
STR
UM
EN
TS (C
ON
T’D
)
(d)
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ets
and
finan
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onth
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--
-18
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188,
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188,
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-#
-#
7,14
2,15
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RM
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330,
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# Th
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13.
98 Jadi Imaging Holdings Berhad Annual Report 2013
NOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 31 December 2013
40. DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES
The breakdown of the retained profits/(accumulated losses) of the Group and of the Company as at the end of the reporting period into realised and unrealised profits/losses are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:-
THE GROUP THE COMPANY 2013 2012 2013 2012
RM RM RM RM
Total retained profits/(accumulated losses):
- realised 41,941,091 41,158,094 3,678,381 (73,655) - unrealised (1,855,736) (3,587,936) - -
40,085,355 37,570,158 3,678,381 (73,655)
Add: Consolidation adjustment 1,018,821 1,510,703 - -
At 31 December 41,104,176 39,080,861 3,678,381 (73,655)
99Jadi Imaging Holdings Berhad Annual Report 2013
LIST OF PROPERTIES
Registered owner LocationDescription/Existing use
Date ofcertificateof fitness
Approximateage of
buildingyears/Tenure
Land area/Built-up area
(sq. ft.)
Auditednet book
value as at31.12.2013(RM’000)
Jadi Imaging TechnologiesSdn. Bhd.
No. 1 Jalan Peguam U1/25AHicom-Glenmarie Industrial ParkSeksyen U1, 40150 Shah AlamSelangor
Head office,toner factory
7 April 1995 18 years/Freehold
67,518/ 50,186
8,467
Jadi Imaging Technologies Sdn. Bhd.
No. 211 Tingkat 1Block 1Jalan Pegawai U1/33Pangsapuri Sri KerjayaSeksyen U1, 40150 Shah AlamSelangor
Apartment forforeign workers
1 August 2001 12 years/ Freehold
855 101
Jadi Imaging Technologies Sdn. Bhd.
No. 3 Jalan Peguam U1/25Hicom-Glenmarie Industrial ParkSeksyen U1, 40150 Shah AlamSelangor
Toner factory, R & D Centre
28 February 2002
18 years/Freehold
45,833/24,921
5,169
Jadi Imaging TechnologiesSdn. Bhd.
GM3626 Lot 719, Mukim KaparTempat Sungai DuaDaerah KlangSelangor
Toner factory,R & D lab,
R & D Centre
17 June2011
3 years/Freehold
257,278/123,128
20,801
Jaid Imaging Technologies (Suzhou) Co., Ltd.*
Block No. 41059South of Xiasheng RoadSuzhou Industrial ParkSuzhou, Jiangsu 215000People’s Republic of China
Toner factory, office
20 January 2009
5 years/Tenure of 50
years
191,502/64,300
7,133
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
100 Jadi Imaging Holdings Berhad Annual Report 2013
ANALYSIS OF SHAREHOLDINGSAs at 3 April 2014
Authorised Share Capital : RM200,000,000 comprising 2,000,000,000 ordinary shares of RM0.10 eachIssued and Paid-Up Share Capital : RM70,630,844.90 comprising 706,308,449 ordinary shares of RM0.10 eachClass of Shares : Ordinary shares of RM0.10 eachNumber of Shareholders : 6,233
ANALYSIS OF SHAREHOLDINGS
Holdings No. of holders Total holdings %
1 - 99 1,727 82,595 0.011100 - 1,000 403 130,277 0.0181,001 - 10,000 1,370 7,801,071 1.10410,001 - 100,000 2,269 78,935,636 11.177100,001 - 35,309,437* 460 212,573,774 30.10135,309,438 and above** 4 406,665,424 57.585
Total 6,233 706,188,777 100.000
Notes:* less than 5% of issued shares** 5% and above of issued shares
SUBSTANTIAL SHAREHOLDERS
Direct IndirectShareholders No. of shares % No. of shares %
LSI Holdings Sdn Bhd 213,556,3541 30.240 – –Liew Kim Siong 12,774,259 1.808 213,556,3541 30.240Ng Poh Imm – – 213,556,3541 30.240Mega First Housing Development Sdn Bhd 95,983,6002 13.591 – –Mega First Corporation Berhad 61,462,000 8.703 95,983,6002 13.591Eu Lan Eng 35,663,470 5.050 – – Notes:1 Deemed interested by virtue of his/her shareholdings in LSI Holdings Sdn Bhd pursuant to Section 6A of the
Companies Act, 19652 Deemed interested by virtue of its shareholdings in Mega First Housing Development Sdn Bhd pursuant to
Section 6A of the Companies Act, 1965
DIRECTORS’ SHAREHOLDINGS
Direct IndirectDirectors No. of shares % No. of shares %
Liew Kim Siong 12,774,259 1.808 213,556,3541 30.240Eu Lan Eng 35,663,470 5.050 – –Liew Choon 65,000 0.009 – –Lim Yew Thoon 52,314 0.007 – –Pathmarajah A/L Nagalingam 60,135 0.008 – –Dr. Gan Seng Neon 70,648 0.010 – –Khoo Teng Keat – – – –
Notes:1 Deemed interested by virtue of his/her shareholdings in LSI Holdings Sdn Bhd pursuant to Section 6A of the
Companies Act, 1965
101Jadi Imaging Holdings Berhad Annual Report 2013
LIST OF THIRTY (30) LARGEST REGISTERED SHAREHOLDERS
NameNo. of
shares heldPercentage
(%)
1. LSI Holdings Sdn Bhd 184,536,116 26.131 2. Mega First Housing Development Sdn Bhd 95,983,600 13.591 3. Mega First Corporation Berhad 61,462,000 8.703 4. Eu Lan Eng 30,955,991 4.3835. LSI Holdings Sdn Bhd 29,020,238 4.1096. Liew Kim Siong 12,774,259 1.8087. JF Apex Nominees (Tempatan) Sdn Bhd
Pledged securities Account for Teo Siew Lai (Margin)12,149,859 1.720
8. Teo Kwee Hock 11,118,186 1.5749. Won Tian Loong 8,321,777 1.17810. Liew Kim Foong 7,751,442 1.09711. Md. Shah Bin Abu Hasan 6,860,000 0.97112. Citigroup Nominees (Asing) Sdn Bhd
UBS AG Singapore for Keen Capital Investments Limited5,800,000 0.821
13. Won Bau Khim 5,015,333 0.71014. Leong Oow Lai 4,888,296 0.69215. Yeow Lan Soon @ Ngeow Lan Sang 4,434,429 0.627 16. Eu Lan Eng 3,460,379 0.490 17. Dato’ Chong Weng Choy 2,467,974 0.349 18. Md. Shah Bin Abu Hasan 1,942,700 0.27519. JF Apex Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chan Kheng Hoe (STA 1)1,654,024 0.234
20. Maybank Securities Nominees (Asing) Sdn BhdPledged Securities Account for Wiegelmann Wolfgang
1,572,425 0.222
21. KTL Selangor Sdn Bhd 1,513,888 0.214 22. Eew Sze Chieh & Yew Sze Kiat 1,433,148 0.202 23. Public Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Yap Kau Tee (E-KPG)1,300,000 0.184
24. Goh Ten Fook 1,267,100 0.17925. Eu Lan Eng 1,247,100 0.17626. Chan Chai Bee 1,159,364 0.16427. CIMSEC Nominees (Tempatan) Sdn Bhd
CIMB Bank for Tay Hock Soon (MY1055)1,150,000 0.162
28. HLB Nominees (Tempatan) Sdn BhdPledged Securities Account for Hong Chooi Kim
1,138,000 0.161
29. Lee Kam Ying 1,088,385 0.15430. Lee Gze Ing 1,038,000 0.146
Total 504,504,013 71.427
ANALYSIS OF SHAREHOLDINGSAs at 3 April 2014
102 Jadi Imaging Holdings Berhad Annual Report 2013
ANALYSIS OF WARRANT HOLDINGSAs at 3 April 2014
Number of Warrant issued : 348,220,463Number of Warrant holders : 5,435
ANALYSIS OF WARRANT HOLDINGS
Holdings No. of holders Total holdings %
1 - 99 2,125 70,254 0.020100 - 1,000 399 196,669 0.0561,001 - 10,000 1,410 6,442,667 1.85010,001 - 100,000 1,179 42,209,337 12.121100,001 - 17,411,022* 320 166,061,559 47.68817,411,023 and above** 2 133,239,977 38.263
Total 5,435 348,220,463 100.000
Notes:* less than 5% of issued warrants** 5% and above of issued warrants
SUBSTANTIAL WARRANT HOLDERS
Direct IndirectShareholders No. of shares % No. of shares %
LSI Holdings Sdn Bhd 102,508,9771 29.437 – –Liew Kim Siong 6,388,406 1.834 102,508,9771 29.437Ng Poh Imm – – 102,508,9771 29.437Mega First Housing Development Sdn Bhd 17,130,7002 4.919 – –Mega First Corporation Berhad 30,731,000 8.825 17,130,7002 4.919
Notes:1 Deemed interested by virtue of his/her warrant holdings in LSI Holdings Sdn Bhd pursuant to Section 6A of
the Companies Act, 19652 Deemed interested by virtue of its warrant holdings in Mega First Housing Development Sdn Bhd pursuant to
Section 6A of the Companies Act, 1965
DIRECTORS’ WARRANT HOLDINGS
Direct IndirectDirectors No. of shares % No. of shares %
Liew Kim Siong 6,388,406 1.834 102,508,9771 29.437Eu Lan Eng 16,075,184 4.616 – –Liew Choon 20,000 0.005 – –Lim Yew Thoon 18 0.000 – –Pathmarajah A/L R Nagalingam 30,067 0.008 – –Dr. Gan Seng Neon 35,324 0.010 – –Khoo Teng Keat – – – –
Notes:1 Deemed interested by virtue of his/her warrant holdings in LSI Holdings Sdn Bhd pursuant to Section 6A of
the Companies Act, 1965
103Jadi Imaging Holdings Berhad Annual Report 2013
LIST OF THIRTY (30) LARGEST REGISTERED WARRANT HOLDERS
NameNo. of
warrants heldPercentage
(%)
1. LSI Holdings Sdn Bhd 92,268,058 26.497 2. Mega First Corporation Berhad 30,731,000 8.825 3. Mega First Housing Development Sdn Bhd 17,130,700 4.9194. Eu Lan Eng 15,377,995 4.416 5. LSI Holdings Sdn Bhd 10,240,919 2.9406. Liew Kim Siong 6,388,406 1.8347. Leong Oow Lai 4,059,348 1.1658. Kenanga Nominees (Tempatan) Sdn Bhd
Koh Boon Poh (EM1-D88)4,000,000 1.148
9. Maybank Nominees (Asing) Sdn BhdPledged Securities Account for Choo Bennie
4,000,000 1.148
10. Won Tian Loong 3,851,338 1.10611. Doong Amooi @ Doong Chong Lian 2,626,631 0.75412. Wong Khee Sang @ Wong Kow Choi 2,566,000 0.73613. Maybank Nominees (Tempatan) Sdn Bhd
Siet Hieng Ung2,120,440 0.608
14. Won Bau Khim 2,000,066 0.57415. Goh Ten Fook 2,000,000 0.57416. Yeow Lan Soon @ Ngeow Lan Sang 1,998,314 0.57317. Ding Tiong Sew 1,750,000 0.50218. Maybank Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chew Thian Kay1,450,014 0.416
19. Adrian Goh Sim Han 1,450,000 0.41620. Phang Yee Onn 1,298,500 0.37221. Selvamani A/L Muthusamy 1,296,400 0.37222. Dato’ Chong Weng Choy 1,233,987 0.35423. Lim Leng Bung 1,200,000 0.344 24. Lim Kwee Ching 1,162,500 0.333 25. HLIB Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Lim Loon Yeow (CCTS)1,160,000 0.333
26. Gooi Thuan Swee 1,060,800 0.30427. Kwong Yen San 1,002,777 0.28728. JF Apex Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Teo Siew Lai (Margin)1,000,029 0.287
29. RHB Capital Nominees (Tempatan) Sdn BhdPledged Securities Account for Phoa Boon Ting (CEB)
1,000,000 0.287
30. Chong Wai Lin 950,000 0.272
Total 218,374,222 62.696
ANALYSIS OF WARRANT HOLDINGSAs at 3 April 2014
104 Jadi Imaging Holdings Berhad Annual Report 2013
PROXY FORM
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 Thirteenth Annual General Meeting of the Company to be held at Mauna Lani B Room, Holiday Inn Glenmarie Kuala Lumpur, 1 Jalan Usahawan U1/8, Seksyen U1, 40250 Shah Alam, Selangor Darul Ehsan on Tuesday, 20 May 2014 at 10.00 a.m. and at any adjournment thereof, to vote as indicated below:-
Ordinary Business FOR AGAINSTOrdinary Resolution 1
Re-election of Mr. Liew Kim Siong as Director pursuant to Article 123 of the Company’s Articles of Association
Ordinary Resolution 2
Re-election of Ms. Eu Lan Eng as Director pursuant to Article 123 of the Company’s Articles of Association
Ordinary Resolution 3
Re-election of Mr. Liew Choon as Director pursuant to Article 123 of the Company’s Articles of Association
Ordinary Resolution 4
Payment of Directors’ fees for the financial year ended 31 December 2013
Ordinary Resolution 5
Re-appointment of Messrs Crowe Horwath as Auditors
Special BusinessOrdinary Resolution 6
Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965
Ordinary Resolution 7
Proposed Renewal of Share Buy-Back Authority
(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 ____________________ 2014 ______________________________________ Signature of Member(s) or/ Common Seal Notes:-(i) A proxy need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A
member shall be entitled to appoint a person, whether a member or not, as his proxy to attend and vote at a meeting of the Company. If the proxy is not a member, he need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.
(ii) A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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.
(vii) 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 Articles of Association 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 14 May 2014 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend this meeting.
JADI IMAGING HOLDINGS BERHAD (526319-P)(Incorporated in Malaysia)
No. of ordinary shares held CDS Account No.
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The Company SecretaryJADI IMAGING HOLDINGS BERHAD (526319-P)
No. 1, Jalan Peguam U1/25A, Seksyen U1Hicom-Glenmarie Industrial Park40150 Shah AlamSelangor Darul Ehsan MALAYSIA
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JADI IMAGING HOLDINGS BERHAD(Company No. 526319-P)
No. 1, Jalan Peguam U1/25A, Seksyen U1,Hicom-Glenmarie Industrial Park,40150 Shah Alam, Selangor, Malaysia.
Tel : (603) 7804 0333 Fax : (603) 7804 3211
www.jadi.com.my
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Annual R
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(Company No. 526319-P)
annual report
2013