Annual Report 2016 - JAG Berhad · Annual Report 2016. Part 1 : CORPORATE ... Jalan Sungai Kayu Ara 32/37, Taman Berjaya, ... cathode-ray tubes and other activated glass or polychlorinated

JAG BERHAD (439230-A)

MODERN TECHNOLOGYTOWARDS ECOLOGY

A n n u a l R e p o r t 2 0 1 6

Part 1 : CORPORATE

Corporate Information 02Group Corporate Structure 03Abbreviations 04Technical Information Sheet 05Chairperson’s Statement 06Management Discussion & Analysis 09Profiles of the Board of Directors 13Profiles of Key Senior Management 16Statement on Corporate Governance 21Corporate Responsibility Statement 56Additional Compliance Information 63Audit Committee Report 65Statement on Risk Management and Internal Control 70Statement on Directors’ Responsibility for Preparing

the Financial Statements 74

Part 2 : FINANCIAL REPORTS

Directors’ Report 76Statement by Directors and Statutory Declaration 83Independent Auditors‘ Report 84Statements of Comprehensive Income 89Statements of Financial Position 90Statements of Changes in Equity 92Statements of Cash Flows 94Notes to the Financial Statements 97

Part 3 : LIST OF PROPERTIES

List of Properties 156

Part 4 : ANALYSIS OF SHAREHOLDINGS

Statistics of Shareholdings 157Analysis by Size of Shareholdings 157Substantial Shareholders 157Directors’ Shareholdings 157Top 30 Securities Account Holders (Ordinary Shares) 158

Part 5 : ANALYSIS OF WARRANTHOLDINGS

Statistics of Warrantholdings 159Analysis by Size of Warrantholdings 159Top 30 Securities Account Holders (Warrants) 160

Part 6 : NOTICE OF MEETING

Notice of 19th Annual General Meeting 161

Form of Proxy Enclosed

CONTENTS

JAG BERHAD (439230-A)2

BOARD OF DIRECTORS

Datin Tan Siew Ching (Stacey)Chairperson and Executive Director

Dato’ Ng Meow GiakExecutive Director

Roy Thean Chong YewIndependent Non-Executive Director

Datuk Md. Hassim Bin PardiIndependent Non-Executive Director

Ewe Chuan SengIndependent Non-Executive Director

AUDIT COMMITTEE

Roy Thean Chong Yew Chairman

Datuk Md. Hassim Bin PardiMember

Ewe Chuan SengMember

NOMINATION COMMITTEE

Ewe Chuan SengChairman

Roy Thean Chong YewMember


REMUNERATION COMMITTEE

Datuk Md. Hassim Bin PardiChairman



FORM OF LEGAL ENTITY

Incorporated in Malaysia on 14 July 1997 as a private limited companyConverted to a public limited company on 16 December 2002

COMPANY NUMBER

439230-A

STOCK EXCHANGE LISTING

Listed on ACE Market of Bursa Malaysia Securities Berhadon 28 July 2003Stock Code : 0024Stock Name : JAGSector : Industrial Products

COMPANY SECRETARIES

Chua Siew ChuanMAICSA 0777689

Cheng Chia PingMAICSA 1032514

SHARE REGISTRAR

Securities Services (Holdings)Sdn. Bhd.Level 7, Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara,Damansara Heights,50490 Kuala Lumpur,Wilayah PersekutuanTelephone no. : +603-2084 9000Facsimile no. : +603-2094 9940/

+603-2095 0292

REGISTERED OFFICE

Level 7, Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara,Damansara Heights,50490 Kuala Lumpur,Wilayah PersekutuanTelephone no. : +603-2084 9000Facsimile no. : +603-2094 9940/

+603-2095 0292

PRINCIPAL OFFICES

JAG BerhadD61-3A, Block D, Jaya One,72A, Jalan Universiti,46200 Petaling Jaya,Selangor Darul EhsanTelephone no. : +603-7954 8876Facsimile no. : +603-7954 7279Website : www.jagb.com.my

Jaring Metal Industries Sdn. Bhd.No. 7, Jalan Sungai Kayu Ara 32/37,Taman Berjaya, Seksyen 32,40460 Shah Alam,Selangor Darul EhsanTelephone no. : +603-5740 8823Facsimile no. : +603-5740 8912Website : www.jaringmetal.com

AUDITORS

Messrs. Russell Bedford LC & Company (AF 1237)Chartered Accountants10th Floor, Bangunan Yee Seng,15, Jalan Raja Chulan,50200 Kuala Lumpur,Wilayah PersekutuanTelephone no. : +603-2031 8223Facsimile no. : +603-2031 4223

PRINCIPAL BANKERS

AmBank (M) BerhadMalayan Banking BerhadPublic Bank BerhadUnited Overseas Bank (Malaysia) Berhad


JAG SYSTEMS SDN. BHD.(Company No. 297387-W)100%

JAG CAPITAL EQUITY SDN. BHD.(Formerly known as InfortechSoftware Sdn. Bhd.)(Company No. 206708-P)

100%

JAG LAND SDN. BHD.(Company No. 1130684-K)100%

100%

80% JAG NASMECH SDN. BHD.(Company No. 1130737-D)

JARING METAL INDUSTRIES SDN. BHD.(Company No. 425785-T)

Corporate Information

3ANNUAL REPORT 2016

BOARD OF DIRECTORS

Datin Tan Siew Ching (Stacey)Chairperson and Executive Director

Dato’ Ng Meow GiakExecutive Director

Roy Thean Chong YewIndependent Non-Executive Director

Datuk Md. Hassim Bin PardiIndependent Non-Executive Director

Ewe Chuan SengIndependent Non-Executive Director

AUDIT COMMITTEE

Roy Thean Chong Yew Chairman



NOMINATION COMMITTEE

Ewe Chuan SengChairman



REMUNERATION COMMITTEE

Datuk Md. Hassim Bin PardiChairman



FORM OF LEGAL ENTITY

Incorporated in Malaysia on 14 July 1997 as a private limited companyConverted to a public limited company on 16 December 2002

COMPANY NUMBER

439230-A

STOCK EXCHANGE LISTING

Listed on ACE Market of Bursa Malaysia Securities Berhadon 28 July 2003Stock Code : 0024Stock Name : JAGSector : Industrial Products

COMPANY SECRETARIES

Chua Siew ChuanMAICSA 0777689

Cheng Chia PingMAICSA 1032514

SHARE REGISTRAR

Securities Services (Holdings)Sdn. Bhd.Level 7, Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara,Damansara Heights,50490 Kuala Lumpur,Wilayah PersekutuanTelephone no. : +603-2084 9000Facsimile no. : +603-2094 9940/

+603-2095 0292

REGISTERED OFFICE

Level 7, Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara,Damansara Heights,50490 Kuala Lumpur,Wilayah PersekutuanTelephone no. : +603-2084 9000Facsimile no. : +603-2094 9940/

+603-2095 0292

PRINCIPAL OFFICES

JAG BerhadD61-3A, Block D, Jaya One,72A, Jalan Universiti,46200 Petaling Jaya,Selangor Darul EhsanTelephone no. : +603-7954 8876Facsimile no. : +603-7954 7279Website : www.jagb.com.my

Jaring Metal Industries Sdn. Bhd.No. 7, Jalan Sungai Kayu Ara 32/37,Taman Berjaya, Seksyen 32,40460 Shah Alam,Selangor Darul EhsanTelephone no. : +603-5740 8823Facsimile no. : +603-5740 8912Website : www.jaringmetal.com

AUDITORS

Messrs. Russell Bedford LC & Company (AF 1237)Chartered Accountants10th Floor, Bangunan Yee Seng,15, Jalan Raja Chulan,50200 Kuala Lumpur,Wilayah PersekutuanTelephone no. : +603-2031 8223Facsimile no. : +603-2031 4223

PRINCIPAL BANKERS

AmBank (M) BerhadMalayan Banking BerhadPublic Bank BerhadUnited Overseas Bank (Malaysia) Berhad


JAG SYSTEMS SDN. BHD.(Company No. 297387-W)100%

JAG CAPITAL EQUITY SDN. BHD.(Formerly known as InfortechSoftware Sdn. Bhd.)(Company No. 206708-P)

100%

JAG LAND SDN. BHD.(Company No. 1130684-K)100%

100%

80% JAG NASMECH SDN. BHD.(Company No. 1130737-D)

JARING METAL INDUSTRIES SDN. BHD.(Company No. 425785-T)

Group Corporate Structure


Abbreviations

Except where the context otherwise requires, the following definitions shall apply throughout this Annual Report:-

Abbreviations Description

AA Articles of Association, now also known as “Constitution” under the Act

ACE LR ACE Market Listing Requirements of Bursa Securities

AGM Annual General Meeting

Bursa Securities Bursa Malaysia Securities Berhad

FYE 2015 Financial year ended 31 December 2015

FYE 2016 Financial year ended 31 December 2016

JAG or the Company JAG Berhad

JAG Group or the Group JAG and its subsidiaries

JMI Jaring Metal Industries Sdn. Bhd.

LPD Latest practicable date: 31 March 2017

MFRS Malaysian Financial Reporting Standard

MCCG 2012 or the Code Malaysian Code on Corporate Governance 2012

SC Securities Commission Malaysia

The Act The Companies Act 2016

TOR Terms of Reference

5ANNUAL REPORT 2016

Technical Information Sheet

Technical Terms Description

DOE Department of Environment, an agency of Ministry of Natural Resources and Environment

E&E Electrical and electronic

E-Waste(s) E&E waste(s)

Ferrous Chemical compound that indicates the presence of iron

Non-ferrous Metals other than iron and alloys that do not contain an appreciable amount of iron

Scheduled Wastes Wastes that fall into the categories of waste listed in Malaysia’s First Schedule of the Environmental Quality (Scheduled Waste) Regulations 2005. Scheduled wastes can be categorised into five (5) types of wastes, which consist of:• metal or metal-bearing wastes;• wastes with inorganic constituents which may include metal and organic materials;• wastes with organic constituents which may contain metal or inorganic materials;• wastes that contain inorganic or organic materials; and• other wastes

Non-Scheduled Wastes

Wastes that do not fall into the categories of waste listed in Malaysia’s First Schedule of the Environmental Quality (Scheduled Waste) Regulations 2005. Non-scheduled wastes include wastes such as paper, plastic and glass

Licensed Scheduled Wastes

Categories of Scheduled Wastes where JMI is licensed to carry out recycling activities by the DOE – Please refer to Table A below for full listing

LME London Metal Exchange

Table A – Licensed Scheduled Wastes

Category Description

SW1 Metal and metal-bearing wastes

SW104 Dust, slag, dross or ash containing aluminium, arsenic, mercury, lead, cadmium, chromium, nickel, copper, vanadium, beryllium, antimony, tellurium, thallium or selenium excluding slag from iron and steel factory

SW110 Waste from E&E assemblies containing components such as accumulators, mercury-switches, glass from cathode-ray tubes and other activated glass or polychlorinated biphenyl capacitors, or contaminated with cadmium, mercury, lead, nickel, chromium, copper, lithium, silver, manganese or polychlorinated biphenyl

SW2 Wastes containing principally inorganic constituents which may contain metals and organic materials

SW202 Wastes catalysts

SW204 Sludges containing one or several metals including chromium, copper, nickel, zinc, lead, cadmium, aluminium, tin, vanadium and beryllium

SW206 Spent inorganic acids

SW3 Wastes containing principally organic constituents which may contain metals and inorganic materials

SW325 Uncured resin waste containing organic solvents or heavy metals including epoxy resin and phenolic resin

SW4 Wastes which may contain either inorganic or organic constituents

SW401 Spent alkalis containing heavy metals

SW410 Rags, plastics, papers or filters contaminated with Scheduled Wastes

SW411 Spent activated carbon excluding carbon from the treatment of potable water and processes of the food industry and vitamin production

SW414 Spent aqueous alkaline solution containing cyanide

SW422 A mixture of Scheduled and Non-Scheduled Wastes

SW423 Spent processing solution, discarded photographic chemicals or discarded photographic wastes


Chairperson’sStatementDear Valued Shareholders,

The 2016 financial year was certainly a year of turnaround for the Company, as we closed the financial year on a positive note, despite the slow start. During the year, our focus remained on delivering long-term and sustainable growth to our shareholders and stakeholders at large.

On behalf of the Board of Directors of the Company, I am pleased to present to you the Company’s Annual Report and Audited Consolidated Financial Statements for the FYE 2016.


7ANNUAL REPORT 2016

Chairperson’sStatementDear Valued Shareholders,

The 2016 financial year was certainly a year of turnaround for the Company, as we closed the financial year on a positive note, despite the slow start. During the year, our focus remained on delivering long-term and sustainable growth to our shareholders and stakeholders at large.

On behalf of the Board of Directors of the Company, I am pleased to present to you the Company’s Annual Report and Audited Consolidated Financial Statements for the FYE 2016.

Chairperson's Statementcont'd

ECONOMIC LANDSCAPE

Global economic activity continued to expand in 2016. The advanced economies experienced divergent growth trends, in part, driven by differences in the strength of private consumption amid cyclical and structural weaknesses. In Asia, economic activity was supported mainly by domestic demand.

Of importance, the external sector provided a small lift to growth in several economies, following consecutive quarters of negative growth. Financial market volatility increased due to concerns over major issues in the advanced economies, such as policy and political uncertainties following the outcome of the presidential election in the US and the UK’s vote to exit the EU. Overall, global monetary conditions remained very accommodative, against a backdrop of continued growth concerns with rising, but still low inflation.

The year 2016 also saw the commodity sector, except for crude palm oil (“CPO”) and metals such as tin and gold, reel under the pressure of lower prices, sluggish demand and global uncertainty. Nevertheless, prices recovered in the second half of the year, especially for CPO, tin and gold. Copper prices, which we are most reliant on, was relatively volatile throughout 2016. However, copper prices recovered in the fourth quarter of 2016, and this certainly augured well for us.

In 2016, global semiconductor sales grew by 12.3%, according to the Semiconductor Industry Association of the US. The semiconductor industry in Malaysia, which our business operations rely primarily on for the availability of E-Wastes, remained positive. Malaysia is currently the world’s leading location for semiconductor assembly and test operations, accounting for more than 12% of the world installed capacity.

In 2017, semiconductors are expected to continue spearheading the growth of the E&E industry in Malaysia and will continue to benefit from growing global demand in the usage of mobile devices, storage devices, optoelectronics and embedded technology. In fact, the global semiconductor market is expected to grow at a compound annual growth rate of about 15% from 2015 to 2019. Furthermore, Malaysia’s move to invest in and grow its digital economy as well as the impetus to develop Internet-of-Things technology will lead to a significant increase in E-Waste volume. As a result, the volume of E-Wastes will increase, which will positively impact the Group.

FINANCIAL PERFORMANCE

JAG recorded a profit after tax of RM2.06 million (FYE 2015: loss after tax of RM19.8 million) on the back of a turnover of RM93.6 million (FYE 2015: RM84.8 million) for its FYE 2016. The uptrend of commodity prices since June 2016 were the primary contributors to the Group’s improved results.

Earnings per share (basic) for the full year was 0.18 sen per share, while net assets per share as at 31 December 2016 was 10.86 sen.

CORPORATE DEVELOPMENTS

Diversification into Property Sector

In January 2017, the Company announced the diversification of the Group’s existing business to include property development and property investment, in line with JAG’s plan to diversify its sources of revenue while reducing its reliance on the waste management business. Approval for the said diversification was obtained from the Company’s shareholders in the Extraordinary General Meeting held on 3 March 2017.

JAG’s property development and property investment business will be spearheaded by its wholly-owned subsidiary company, JAG Land Sdn. Bhd. (“JAG Land”), which will oversee the Group’s property development project involving a freehold land measuring 13,489.5 square meters (3.33 acres) in Kg. Jawa, Klang. JAG Land acquired the land for RM9.77 million in August 2016.

This maiden property development project will be a three-phase mixed development which comprises shop-offices, office tower and residential apartments. Total gross development value of the development project is estimated to range between RM155 million to RM170 million (subjected to economic conditions) with an estimated gross development cost of RM135 million. This will translate into a gross development profit of between RM20 million to RM35 million.


CORPORATE SOCIAL RESPONSIBILITY (“CSR”) At JAG, we strongly believe that sustainable business practices will lead to sustainable business growth. At JAG, we aim to put in place processes that embrace the virtues of being a socially responsible corporate citizen comprehensively. As such, our commitment towards CSR is in line with Bursa Securities’ framework that centres on four (4) key pillars, namely Community, Environment, Marketplace and Workplace. The details have been further elaborated in our Corporate Responsibility Statement in page 56 of the annual report.

OUTLOOK

We expect the long-term prospects of our waste management business to remain bright. In addition, we believe our diversification into property development and property investment as well as coin-operated laundry business will enable the Group to expand our sources of revenue while at the same time, mitigate our exposure to fluctuations in commodity prices.

Prices of copper, in particular, is growing from strength to strength, and we expect this trend to continue moving forward. The current year-to-date average copper price stands at USD2.67 per l.b., 12.4% higher than fourth quarter average price for 2016, indicating a positive year ahead.Copper makes up more than 54% of what we extract and refine, enabling the Group to be in a unique position to benefit from strengthening copper prices. Additionally, the price of precious metals such as gold and silver are also increasing steadily. This has and will continue to contribute towards our performance.

All in all, the Board of Directors and the Senior Management Team intends to work cohesively to ensure that the Group will do its utmost to achieve a satisfactory performance for the financial year ending 31 December 2017.

Chairperson's Statementcont'd

APPRECIATION

On behalf of the Board of Directors, I would like to thank our shareholders, vendors, suppliers, business associates as well as policymakers, regulators and relevant Government agencies for their continued support.

My heartiest thanks goes out to our Board members for their expertise and guidance. We would also like to extend our deepest gratitude and appreciation for the loyalty, commitment, hard work and dedication of the management and the employees of the Group. Your co-operation and professional work ethics will be integral towards seeing the Group grows to greater heights of success.

Thank you.

Datin Tan Siew Ching Chairperson and Executive Director

9ANNUAL REPORT 2016

Management Discussion & Analysis

OVERVIEW

The Group business activities comprise waste management, coin operated laundry services, software solutions and maintenances, property development and investment holding through its subsidiaries.

The year of 2016 has been challenging, as the overall operating and business environment have been affected by the continued uncertainties in the global and local economies. Fluctuations of foreign exchange rate and volatility of commodity pricing being the main concerns and having the most impact on the Group.

FINANCIAL REVIEW

Despite the slowdown in the global and local economies, the Group reported an achievement of profit after tax of RM2.06 million (FYE 2015: loss after tax of RM19.8 million) on the back of a turnover of RM93.6 million (2015: RM84.8 million).

The total waste management segment (manufacturing and trading), Jaring Metal Industries Sdn Bhd (“JMI”) continued to be the major revenue and profit contributor in the Group via its contribution of 84.7% (FYE 2015: 98.3%) of total revenue and profit after tax of RM2.52 million (FYE 2015: loss after tax of RM19.3 million).

JAG Capital Equity Sdn Bhd (“JAGC”), an investment holding company involved in investment trading reported a revenue contribution of RM10.69 million, representing 11.42% of the Group revenue in the current financial year. While JAGC is ranked second in terms of revenue contribution, JAGC recorded a loss after tax of RM203,000 for the current financial year (FYE 2015: profit after tax RM1.03 million).

This is followed by JAG Nasmech Sdn Bhd (“JAGN”), which carried the business of coin operated laundry services marked in 2.5% (FYE 2015: 0.28%) of total revenue to the Group and profit after tax of RM336,000 (FYE 2015: loss after tax of RM68,000) and JAG Systems Sdn Bhd (“JAG System”) from the segment of proprietary solutions and software maintenance reported constant revenue of RM1.24 million in FYE 2016 and RM1.23 million in FYE 2015 resulted from stable client base and software maintenance. The revenue represents 1.32% and 1.45% of total revenue of the Group respectively.

As a result of the positive performance registered in FYE 2016, the Group’s total equity stood at RM124.3 million and net assets per share was 10.86 sen as compared to RM123.8 million and 10.82 sen posted in the previous financial year.

As at 31 December 2016, the Group is able to maintain a low gearing ratio at 0.13 and 0.11 for the FYE 2015. Besides that, the Group had also achieved basic earnings per share of 0.18 sen in the FYE 2016 compared to the FYE 2015 which recorded a basic loss per share of 1.80 sen.

OPERATIONAL AND SEGMENTAL REVIEW

TOTAL WASTE MANAGEMENT DIVISION

Industry waste and electronic waste (“E-Waste”) recovery has gained more focus in Malaysia recent years. The growth and longevity of population, coupled with increased environmental awareness combined with the efficient use of new technologies, resulted in increased waste management activities. Recycling diverts and converts waste from overloaded landfills to reusable components. As such, recycling is often viewed to be an important aspect of an efficient waste management system and therefore, created the demand for full recycling facilities and services.

Although this segment reported a slight decrease in revenue in FYE 2016 compared to FYE 2015, turnaround has been successfully achieved in the current financial year. The comeback was mainly due to the strengthened commodity prices namely copper, silver and other precious metals. The strengthening of the USD against the RM in last 2 quarters in FYE 2016 had a favourable impact to the Group as well as careful cost control on overheads without affecting the efficiencies of the operations.

In respect of the operations, JMI’s manufacturing plant is located in Taman Berjaya, Shah Alam, Selangor. JMI is also a recycling company with full recovery license from the Department of Environment (“DOE”) (license no: 001358) for its Scheduled Waste recycling facility.

JMI is of the view that Quality (in terms of operations and processes) is important as it lends credibility to JMI’s operations. Hence, JMI has obtained the following certifications:

i. ISO 9001:2008 certification for the trading, processing and recovery of ferrous, non-ferrous and precious metals;

ii. ISO 14001:2004 certification for the trading, processing and recovery of ferrous, non-ferrous and precious metals;

iii. ISO 9001:2008 certification of Total Waste Management system; and

iv. OHSAS 18001:2007 certification for the trading, processing and recovery of ferrous, non-ferrous and precious metals.


Management Discussion & Analysiscont'd

With the investment in waste management technology named as Electrowinning (“EMEW”) during the year, the production capacity and efficiencies improved simultaneously.

However, to remain being competitive in the waste management industry, sourcing for material or waste is the biggest challenge faced by the market players especially for full recovery plant licensed holders. This can be seen where many full recyclers are not able to operate at full capacity due to lack of supply and competition has led to stiff competition during bidding for industrial waste and E-Waste.

Based on the data from Malaysian Investment Development Authority (“MIDA”) in March 2017, the Electrical and Electronics (“E&E”) products industry has been the prime mover in the Malaysian economy for 2016 as it has been successful in attracting large amounts of foreign investment to Malaysia.

The success has been proven by exportation of E&E products totaled RM287.7 billion and accounted for 44.6% of the total value of manufacturing goods exported in year 2016. Nevertheless, a total of 107 E&E projects with investment of RM9.2 billion were approved in 2016. Of the total, 17 were new projects with investments of RM1.5 billion which 90 were expansion/diversification projects with investment amounting to RM7.7 billion. We believe that the expansion and development in the E&E industry will further fill the demand of the waste management.(Source: Malaysian Investment Performance Report 2016, MIDA)

In view of the positive outlook of the industry, we are confident on JMI’s future prospects. Therefore, with our investment in EMEW, we are keeping abreast with changes towards a more sustainable management system. Nevertheless, the continued strengthening of the USD against the RM and higher commodity prices have been favourable to our Group and thus have given us the confidence to strive for better achievement of the division for the year ahead.

SERVICES DIVISION – COIN OPERATED LAUNDRY SYSTEMS

The self-operated laundry model was introduced in Malaysia in the late 1990s. With the introduction of more efficient and cost saving machines in recent years, the self-operated laundry industry has been gaining popularity in the past few years.

JAGN began its journey with its first outlet in Putra Permai, Selangor in September 2015. The said outlet managed to achieve a break-even status within 3 months of operations.

Since thereon, a total of 9 outlets have been open and operated by JAGN in carefully identified dense populated area around Klang Valley as at 31 March 2017, all outlets have been equipped with 8 washers and 7 dryers except the Desa Petaling outlet which was equipped with 6 washers and 5 dryers. The number of equipment for each outlet was determined by our experienced sales and marketing team based on their market survey, observations and experience.

On the daily operations, the average number of usage of washer and dryer is 8.79 times per washer and 9.96 times per dryer. The number of cycle has therefore, generated total revenue of RM2.3 million in the FYE 2016 which represents 2.8% of the Group’s total revenue.

The business segment is very competitive and faces stiff competition from other operators. The barrier to entry became lower to new market entrants in recent year due to various cheaper entry packages such as lower grade machinery that have been offered in the market. The lower entrance level led to increase in market competition.

11ANNUAL REPORT 2016

JAGN’s competitive advantages include the following:

i) Cosy and colourful decoration which provides a comfortable, cheerful and relaxed atmosphere to user;

ii) We target corner units for our operations which provide more space for user;

iii) 24 hours operated CCTV, installation of spot light for brighter surrounding environment in all outlets in order to enhance the confident level of user on safety and security concern surrounding the outlets;

iv) Competitive pricing;v) Largest wash capacity is up to 27kg per wash;vi) Air cooler to offer a cooling environment from the

sweltering heat;vii) Free high speed WiFi enables customers to surf the

internet while waiting for the laundry;viii) Environmentally friendly laundry washer with ECO

Wash Technology which consumes less water;ix) Dual directional dryer which can save drying

energy by 20%; andx) Massage chairs to provide some comfort while

waiting for the laundry.

Presently we have nine (9) outlets and the management is actively searching and exploring a suitable location for the 10th outlet. JAGN expects to open the 10th outlet in the second half of year 2017.

The end result of a global HR Management System is that business leaders will have the ability to effectively drive best practices across the business areas and analyse the results of such best practices.


IT SERVICES DIVISION

Developing global talent will be a top priority to human resource (“HR”) practitioners in the future. The number of expatriates within businesses will continue to increase as our marketplace continues to expand beyond our shorefront. As a result the ability to effortlessly transfer employees across business units and seamlessly transition them into their new assignments so they can be productive is a priority as is the ability for organisations to report on employee data globally.

An integrated HR management enterprise system makes maintaining and reporting on employee data more efficient and streamlined and the manner in which employee data is processed becomes consistent. Employee development programs and skill repository can be more easily reported on and evaluated. Reward structures and job profiles can model one another. In addition, as opposed to entering an identity number into the system as an employee identifier, a global HR identification number may be entered so employees can keep the same personnel number throughout their employment with the company regardless of location.

In year 2016, JAG Systems focused on developing the atCom Human Resource Management Systems (“HRMS”) and atCom Financial Systems to Web based technologies solution. With the web based solutions available we have successfully implemented a new platform for JAG System’s existing customers, which allows the users to access the HRMS via web environment anytime and anywhere.

Besides, JAG Systems has also ventured into other emerging businesses such as content development, teaching training Certification and hosting Learning Management Systems. This complementing business portfolio allows the Company to grow its training and education division.

For 2016, JAG Systems worked with Malaysia Digital Economy Corporation (“MDec”) and British Computer Society Ltd (“BCS”), the Chartered Institute of IT U.K to provide Certification for Computational Thinking and Computer Science Teaching Certificate Program to lecturers from Institut Pendidikan Guru Malaysia (“IPGM”) and officer from Ministry of Education Malaysia (“MOE”).


In 2016, JAG has trained 130 participants in total for its pilot program and 100 participants were selected to go through the certification for BCS Computer Science Teaching Certification from U.K. This BCS Computer Science Teaching Certificate is for teachers who want to make a difference in learning in their classrooms. By developing their skills as a computing teacher, these participants received recognition for their competence and commitment.

From a financial perspective, JAG Systems reported steady revenue of RM1.24 million in FYE 2016 and RM1.23 million in FYE 2015. The segment’s loss after tax has been improved from RM346,000 in FYE 2015 to RM117,000 in FYE 2016, by excluding the inter-company transactions of management fees charged by the holding company of RM117,600, JAG Systems is currently in breakeven position for FYE 2016.

PROSPECTS & MOVING FORWARD

The medium term outlook for commodity prices and the foreign exchange rate remains positive in our view. Approximately 64% of the Group revenue is generated through export sales, therefore our continuing belief that the strengthening of the USD against the RM will benefit the Group as a whole.

Following the approval from shareholders in the Extraordinary General Meeting (“EGM”) held on 3 March 2017, the Group expects to diversify its existing business to include property development and property investment in 2017.


JAG Land Sdn Bhd (“JAGL”), a wholly-owned subsidiary of the Company, has undertaken a mixed development project in Klang which comprises shop-offices, office tower and residential apartments. The development project is expected to contribute a gross development profit of between RM20 million to RM35 million to be achieved progressively over the development period of the project from the sales of the shop-offices, office suites and residential apartments.

During FYE 2016, the Group invested RM14 million in property development expenditure which has been capitalized in the Statement of Financial Position where RM9.77 million represents the cost of acquisition of development land and remaining being the initial cost incurred for the project development such as market survey, development planning etc. The cost of land constitutes approximately 8% of the estimated gross development cost for the above-mentioned project which we are of the opinion is a good entry level for a property development project.

The development project is located in Taman Sentosa, Klang which is a mature mixed development area. In view of the future development plan surrounding the area such as the new expressway connecting to city center not far away from the site and a proposed Mass Rapid Transit (“MRT”) station within 15 minutes away, the management is optimistic of the future prospects of the development project. Besides, the Group targets to launch the project in the third quarter of year 2017.


Profiles of the Board of Directors

DATIN TAN SIEW CHING (STACEY)Chairperson and Executive DirectorMalaysian, aged 48, Female

Date of appointment as Director

: 15 March 2011

Length of service as director since listing on 28 July 2003(as at LPD)

: 6 years 0 months

Board Committee(s) served on

: Nil

Academic/Professional Qualification(s)

: Bachelor of Science (Honours) degree in Business Economics from the University of Salford in the United Kingdom

Present Directorship(s) in other Public Companies and Listed Companies

: Datin Tan Siew Ching (Stacey) (“Datin Stacey Tan”) does not hold any directorship in other public companies or public listed companies, but Datin Stacey Tan sits on the Board of several private companies.

Working experience:

Datin Stacey Tan possesses vast experience in various fields namely trading, retailing, information technology, education and training, interior design, refurbishment and contracting.

Time committed:

Datin Stacey Tan attended all the five (5) Board of Directors’ Meetings of the Company held in the FYE 2016.

DATO’ NG MEOW GIAKExecutive DirectorMalaysian, aged 45, Male


: 5 December 2013


: 3 years 3 months


: Nil


: Upper secondary education, Form 5 in Malaysia


: Dato’ Ng Meow Giak (“Dato’ Ng”) does not hold any other directorship in other public companies or public listed companies, but Dato’ Ng sits on the Board of several private companies.

Family relationship with any Director and/or major shareholder of the Company

: Dato’ Ng is a substantial shareholder of the Company effective from 10 December 2013.

He is the son of Madam Teh Chin Ching, as well as the brother to Dato’ Ng Aik Kee and Mr. Ng Yaw Long. All of them are substantial shareholders of the Company.

Working experience:

Dato’ Ng started his career in JMI from 1 January 1998 and has nineteen (19) years of experience in recycling and E-Waste recycling industry. Dato’ Ng is responsible for the overall business development activities of JMI which includes the review of sales strategies, review of contracts and maintaining good working relationships with customers.

Time committed:

Dato’ Ng attended four (4) out of five (5) Board of Directors’ Meetings of the Company held in the FYE 2016.


ROY THEAN CHONG YEWIndependent Non-Executive DirectorMalaysian, aged 45, Male


: 18 October 2010


: 6 years 5 months


: • Chairman of the Audit Committee• Member of the Nomination Committee• Member of the Remuneration Committee


: • Member of the Malaysian Institute of Certified Public Accountants (“MICPA”)

• Member of the Malaysian Institute of Accountants (“MIA”)

• Chartered Member of Institute of Internal Auditors of Malaysia (“CMIIA”)


: • Malaysia Steel Works (KL) Berhad, a public listed company.

Working experience:

Mr. Roy Thean Chong Yew (“Mr. Roy Thean”) started embarking on his career path in year 1994 with PKF Malaysia. After accumulating extensive working experience in his field, Mr. Roy Thean left PKF Malaysia as an Audit Manager in year 2003 to join a professional services firm, Russell Bedford Malaysia Business Advisory Sdn. Bhd. for another six (6) years, rising to the position of an Executive Director. He is at present in the commercial line, playing the role of an Executive Director of several private companies that is involved in project management activities.

Time committed:

Mr. Roy Thean attended all the five (5) Board of Directors’ Meetings of the Company held in the FYE 2016.

DATUK MD. HASSIM BIN PARDIIndependent Non-Executive DirectorMalaysian, aged 64, Male


: 26 August 2011


: 5 years 7 months


: • Chairman of the Remuneration Committee

• Member of the Audit Committee

• Member of the Nomination Committee

Academic/ Professional Qualification(s)

: • Honours degree in Bachelor of Arts, University of Malaya

• Diploma of Public Administration, University of Malaya


: Nil

Working experience:

Datuk Md. Hassim Bin Pardi (“Datuk Md. Hassim”) has served the Malaysian Customs Department for thirty-four (34) years until August 2010, with last held position as the Assistant Director General of Customs. Out of the thirty-four (34) years’ tenure, he has held the position as the State Customs Director in the states of Perlis, Melaka and Sarawak for eleven (11) years.

Time committed:

Datuk Md. Hassim attended all the five (5) Board of Directors’ Meetings of the Company held in the FYE 2016.

Profiles of the Board of Directorscont'd


EWE CHUAN SENGIndependent Non-Executive DirectorMalaysian, aged 60, Male


: 13 August 2014


: 3 years and 2 months

Previous Appointment: 7 months03.11.2010 to 20.06.2011

Current Appointment: 2 year and 7 months13.08.2014 to present

Mr. Ewe Chuan Seng (“Mr. Ewe”) was once a Director of the Company in year 2010 for a period of seven (7) months and rejoined the Board on 13 August 2014 as an Independent Non-Executive Director.


: • Chairman of the Nomination Committee• Member of the Audit Committee• Member of the Remuneration Committee

Academic/ Professional Qualification(s)

: • Honours degree in Bachelor of Arts, Universiti Sains Malaysia

• LLB (Hons), University of East London • Certificate of Legal Practice (CLP) • Member of Chartered Institute

of Arbitrators (CIArb), United Kingdom


: Nil.

Profiles of the Board of Directorscont'd

Working experience:

Mr. Ewe joined the police force as an Assistant Superintendent of Police in February 1983 before joining the private sector as a Factory Manager and then a General Manager.

He joined Tan Cheong Leong & Sons Realty Sdn. Bhd. Group of Companies (with business activities in property development, property management and manufacturing) and rose to become its Group General Manager in charge of legal affairs and human resources.

Currently he is the senior partner in Messrs. Ewe Chong & Khoo since July 1999 to present.

Time committed:

Mr. Ewe attended all the five (5) Board of Directors’ Meetings of the Company held in the FYE 2016.

Notes:-

Save as disclosed above, none of the Directors has:-(a) any family relationship with any Director and/or major shareholder of the Company;(b) any conflict of interest with the Company; and(c) any conviction for offences (other than traffic offences) within the past five (5) years or any public sanction or penalty

imposed by the relevant regulatory bodies during the financial year.


Profiles of Key Senior Management

DATIN TAN SIEW CHING (STACEY)Chairperson and Executive DirectorMalaysian, aged 48, Female

[Please refer to page 13 for profile of Datin Stacey Tan]

DATO’ NG MEOW GIAKExecutive DirectorMalaysian, aged 45, Male

[Please refer to page 13 for profile of Dato’ Ng]

Ng Yaw Long, TonyOperation Director, Jaring Metal Industries Sdn. Bhd. (“JMI”)Malaysian, aged 41, Male

Date first appointed to the key senior management position

: 1 September 2000


: Mr. Ng Yaw Long (“Mr. Tony Ng”) graduated with a Bachelor of Business Information Systems in 1998 and subsequently a Master degree in Practicing Accounting in year 2000 from Monash University, Australia.


: Mr. Tony Ng does not hold any other directorship in other public companies or public listed companies, but he sits on the Board of several private companies.


: Mr. Tony Ng is a substantial shareholder of the Company effective from 10 December 2013.

He is the son of Madam Teh Chin Ching, as well as the brother to Dato’ Ng Aik Kee and Dato’ Ng Meow Giak. All of them are substantial shareholders of the Company.

Working experience:

Mr. Tony Ng joined the Company in 2000 as the Information Technology (“IT”) Manager managing IT, hardware and software systems. He was subsequently promoted in 2007 to be the Operation Director. Over the years, his job scope has grown to include overseeing various departments operations such as human resource, production, plant facilities, legal compliance, government affairs and administrations. With over 16 years of working experience in the metal recycling industry, Mr. Tony Ng has gained a wide knowledge in business operations and management.

Disclosure on Conflict of Interest and Convictions for Offences (if any):

He has no conflict of interest with the Company and has no convictions for any offences (other than traffic offences) within the past five (5) years, nor any public sanction or penalty imposed by regulatory bodies during the financial year.


Profiles of Key Senior Managementcont'd

Goh Chee HongFinance Manager, JMIMalaysian, aged 46, Male


: 17 May 2010


: Mr. Goh Chee Hong (“Mr. Goh”) obtained his ACCA qualification in the year 1998 and was admitted as an Associate of the ACCA in the same year.


: Mr. Goh does not hold any other directorship in other public companies or public listed companies.


: Mr. Goh has no family relationship with any director and/or major shareholder of the Company.

Working experience:

Prior to joining JMI, he was employed as an Assistant Manager in The Valiram Group (a luxury goods retailer), in charge of the inventory department, internal audit department and merchandising department.




Kek Beng SoonFinancial Controller, JAG BerhadMalaysian, aged 29, Male


: 1 November 2016


: Mr. Kek Beng Soon (“Mr. Kek”) graduated with Bachelor Degree and Advanced Diploma in Business Studies, Administration and Management from Tunku Abdul Rahman University College in 2011.


: Mr. Kek does not hold any other directorship in other public companies or public listed companies.


: Mr. Kek has no family relationship with any director and/or major shareholder of the Company.

Working experience:

Prior to joining the Group, Mr Kek started his career as an audit assistance executive with Russell Bedford LC & Comapny (“RBLC”), a medium tier audit firm in Malaysia rising to the position of assistant audit manager and left RBLC in 2016 to join the Group.

Whilst with RBLC, he was involved in several finance and accounting project such as Goods and Services Tax implementation project, MFRS implementation project, financial due diligence etc. Besides, he was also having vast experience in leading audit assignments of listed and private companies from various industries.






Ng Seng TeikProject Director, JAG Land Sdn. Bhd.Malaysian, aged 40, Male


: 2 November 2015


: Mr. Ng Seng Teik (“Mr. ST Ng”) graduated with Bachelor of Civil Engineering from University of Hertfordshire, United Kingdom in 1999.


: Mr. ST Ng does not hold any other directorship in other public companies or public listed companies.


: Mr. ST Ng has no family relationship with any director and/or major shareholder of the Company.

Working experience:

Mr. ST Ng currently heading the Group’s property development operations via the maiden property development project located in Taman Sentosa in Klang.

Prior to joining the Group, he began his career as a Geotechnical Engineer with a geologist firm in Malaysia. He was also involved in geotechnical design, analysis as well as failure investigation during his career path. Thereafter, he attached to 2 local property development companies and last position he held in that company was Head of Project Department where he was responsible for project development, planning and construction, property management and maintenance works.




Caryn Fan Mee MeeGeneral Manager, JAG Systems Sdn. Bhd.Malaysian, aged 38, Female


: 5 January 2015


: Ms. Caryn Fan Mee Mee (“Ms. Caryn Fan”) graduated with Master of Business Administration (“MBA”) strategic marketing in University of Southern Queensland.


: Ms. Caryn Fan does not hold any other directorship in other public companies or public listed companies.


: Ms. Caryn Fan has no family relationship with any director and/or major shareholder of the Company.

Working experience:

Prior to joining the Group, she has over 10 years’ experience in ICT industry both direct selling and channel sales, business development and project roles, with extensive and successful experience. In her previous tenure, she had single handedly setup an ICT training division with certified Partner like Microsoft, Cisco, Autodesk, IBM and Oracle.


She has no conflict of interest with the Company and has no convictions for any offences (other than traffic offences) within the past five (5) years, nor any public sanction or penalty imposed by regulatory bodies during the financial year.



Statement on Corporate Governance

The Board of Directors recognises that corporate governance is of paramount importance in ensuring the Company is managed in the best interest of the shareholders.

The Board is pleased to provide this statement which outlines an overview of the manner in which the Group has applied the principles and the extent of compliance with the best practices as advocated by the Malaysian Code on Corporate Governance 2012 under the stewardship of the Board, throughout the FYE 2016.

This statement also serves as a compliance with Rule 15.25 of the ACE LR of Bursa Securities.

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

1.1. Clear Functions Reserved for the Board and those Delegated to Management

Board of Directors (“the Board”)

The Board is responsible for the leadership, oversight and the long-term success of the Group. The Board fully understands their collective responsibilities in guiding the business activities of the Group in reaching an optimum balance of a sound and sustainable business operation with an optimal corporate governance framework in order to safeguard shareholders’ value.

The matters reserved for the Board’s decision are listed in the Board Charter of the Company, a copy of which is available on its corporate website (www.jagb.com.my).

As a summary, certain reserved items for the Board’s review include the approval of Group strategic plans, financial statements, dividend policy, risk management, significant acquisitions and disposals, investments in significant joint ventures, significant property transactions, significant capital expenditure, dividend payments and board appointments.

The Board has also delegated certain responsibilities to other Board Committees, which operate within clearly defined TOR. Standing committees of the Board include the Audit Committee (“AC”), Nomination Committee (“NC”), Remuneration Committee (“RC”) and Share Issuance Scheme Option Committee. Although specific powers are delegated to the Board Committees, the Board keeps itself abreast of the key issues and/or decisions made by the each Board Committee through the reports made by Chairman or representative of each committee and the tabling of Board Committee Minutes of the applicable period for notation by the Board. It is the general policy of the Company that all major decisions be considered by the Board as a whole.

Senior Management Team

The Chairperson and Executive Director (“CED”), Datin Tan Siew Ching is responsible for the day-to-day management and operations of the Group. She is assisted by the Senior Management Team, which consists of senior employees holding the following positions:-


Statement on Corporate Governancecont'd

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES cont'd

1.1. Clear Functions Reserved for the Board and those Delegated to Management cont'd

Board of Directors (“the Board”) cont'd

Datin Stacey Tan - Chairperson and Executive Director (Information Technology (“IT”) Services Division)

Dato’ Ng Meow Giak - Executive Director (Total Waste Management Division)Mr. Kek Beng Soon - Financial ControllerMr. Ng Yaw Long - Operation Director (Total Waste Management Division)Mr. Goh Chee Hong - Finance Manager (Total Waste Management Division)Ms. Fan Mee Mee - General Manager (IT Services Division)Mr. Ng Seng Teik - Project Director (Property Development Division)

The principal responsibilities of the Senior Management Team are as follows:-

• Developing, co-ordinating and implementing business and corporate strategies for the approval of the Board;

• Implementing the policies and decisions of the Board;

• Overseeing the day-to-day operations of the Group;

• To participate in various management committees or working committees for the effective discharge of duties and functions;

• Relevant member(s) of the Senior Management Team will be invited to attend Board and/or Board Committees meetings to advise and furnish the Board and/or Board Committees with information, reports, clarifications as and when required on the agenda items to be tabled to the Board and/or Board Committees, to enable the Board and/or Board Committees to arrive at a decision.

1.2. Clear Roles and Responsibilities

During the FYE 2016, the Board reviewed the sustainability, effectiveness and implementation of the strategic plans for the year and provided guidance and input to the Management. To ensure the effective discharge of its function and duties, the primary responsibilities of the Board include (but are not limited to) the following:-

(a) Reviewing and adopting strategic plan/business plan for the Company/Group

The Board plays an active role in reviewing the Company/Group’s strategic plan/business plan proposed by the Management.

For the FYE 2016, the Management had presented to the Board the following strategic initiatives:-

(i) Opening of “Bubblelab Laundry Arcade” under JAG Nasmech Sdn. Bhd. (“JAG Nasmech”)

As part of the joint venture agreement (“JVA”) commencing since financial year ended 31 December 2015 (“FYE 2015”), JAG Nasmech will open, manage and operate up to ten (10) twenty-four (24)-hour coin-operated (self-operated) laundrettes.




1.2. Clear Roles and Responsibilities cont'd

(a) Reviewing and adopting strategic plan/business plan for the Company/Group cont'd

(i) Opening of “Bubblelab Laundry Arcade” under JAG Nasmech Sdn. Bhd. (“JAG Nasmech”) cont'd

For FYE 2016, one (1) outlet has been opened in carefully identified and highly dense populated area in Klang Valley. In view thereof, as at 31 March 2017, a total of nine (9) outlets have been opened.

(ii) Proposed Diversification into Property Development and Property Investment via JAG Land Sdn. Bhd. (“JAG Land”)

The next strategic initiative proposed by Management would be the proposed diversification into property development and property investment (hereinafter referred to as “Proposed Diversification”) with the aim to expand the Group’s sources of revenue while at the same time, potentially provide an alternative source of income.

The Board reviewed and deliberated the Proposed Diversification at great length, as well as cross-examining Management’s underlying assumptions, prior to approving the same for adoption.

The Board noted the Proposed Diversification will be spearheaded by its wholly-owned subsidiary company, JAG Land Sdn Bhd (“JAG Land”), which will oversee the Group’s property development project involving a freehold land measuring 13,489.5 square meters (3.33 acres) in Kg. Jawa, Klang (“the Klang Land”). JAG Land had acquired the Klang Land for RM9.77 million in August, 2016.

At the Extraordinary General Meeting of the Company held on 3 March 2017, the Board received a resounding 100% approval from the shareholders and proxies present to proceed with the Proposed Diversification. In view thereof, JAG Land is in the process of preparing the submission of the building plans for the Klang Land in order to obtain the approvals of the relevant authorities.

In addition, the Board noted JAG Land is actively in the midst of exploring, discussing and negotiating with other parties for JAG Land to acquire more lands and/or to undertake other property development projects via joint ventures, the details of which have yet to be determined at this juncture.

(b) Overseeing the conduct of the Company/Group’s business

The Executive Chairperson, together with the Senior Management Team are responsible for the day-to-day management and operations of the Group.

The Board monitors the performance of Management on a regular basis vide the insertion of relevant agenda item in the Board Meetings.

As a matter of protocol, the Executive Directors will table an Operation Report on the Total Waste Management (“TWM”) Division and operation updates for JAG Nasmech Sdn. Bhd. at every Board Meeting for the Board’s notation.




(b) Overseeing the conduct of the Company/Group’s business cont'd

The Executive Directors are required to brief the Board on the operational performance of the Group which include key strategic initiatives, significant operational issues and challenges faced by the Management, on a quarterly basis.

Meanwhile, the Financial Controller and Finance Manager are required to present a report on the financial performance of the Group on a quarterly basis.

For FYE 2016, the Board has adopted a Group Management Services Policy, in order to formalise the basis as well as quantum of fees chargeable for provision of management, co-ordination and operational support services to designated active subsidiaries.

(c) Identification of principal risks and implementation of appropriate internal controls and mitigation measures

The AC has been entrusted by the Board to identify, evaluate, monitor and manage any relevant major risk faced by the Group so that the Group will achieve its business objectives.

The AC established a Risk Management Working Group (“RMWG”) to assist with the identification, evaluation and monitoring of principal risks in the FYE 31 December 2015.

The RMWG reports directly to the AC and is tasked with providing the AC with the recommendations on appropriate internal controls and mitigation measures in order to assist the AC with managing the principal risks identified.

The composition of the RMWG is as follows:-

Office Name and DesignationChairman Dato’ Ng Meow Giak (Executive Director of JAG Berhad and Head of TWM Division, JMI)Members • Mr. Ng Yaw Long (Operation Director, JMI)

• Mr. Goh Chee Hong (Finance Manager, JMI)• Ms. Ho Siew Lan (Human Resource Manager, JMI)• Mr. Loh Wan Leong (Plant Manager, JMI)• Mr. Ong Yew Liang (Production Manager, JMI)• Ms. Yeoh Siew Luan (Finance Manager, JAG Systems Sdn. Bhd.)• Ms. Fan Mee Mee (General Manager, JAG Systems Sdn. Bhd.)

JMI, a wholly-owned subsidiary of the Company and carrying on the core business of the Group, has adopted an Enterprise Risk Management (“ERM”) Framework and the following risks have been duly identified by the RMWG for JMI:-

• Strategic risks; • Human Resource risks; • Compliance risk; • Operational risks; • IT risks; and • Financial risks.





(c) Identification of principal risks and implementation of appropriate internal controls and mitigation measures cont'd

During the FYE 2016, the RMWG has drawn up a risk register for the Group as a tool for monitoring and reviewing the risk matters of the Group for the consideration of the AC. The AC and the Board have in turn, at their respective meetings held on 13 April 2016, approved the adoption of a Risk Register for the Group. The Board further noted that the risk register would also be updated and tabled to the AC for review on a quarterly basis or as and when it is required vide the email communications or meetings between the RMWG and the Heads of Department.

Notwithstanding with the establishment of RMWG, the Board as a whole remains responsible for all the actions of the AC with regards to the execution of the delegated role and this includes the outcome of the review and disclosure on key risks and internal control in the Company’s annual report.

(d) Succession Planning

The Board, through the NC, is responsible for the succession planning of the Directors of the Company and Group.

During FYE 2016, the Board adopted the Succession Planning Policy for the Group and Emergency Succession Contingency Plan for the Senior Management Team of the Group.

The Emergency Succession Contingency Plan has spelt out on the respective successors for different divisions within the Group in the absence of the members of the Senior Management Team.

During the fourth quarter of FYE 2016, the Company recruited a Financial Controller to head the Finance Department.

(e) Overseeing the development and implementation of a shareholder communications policy for the Company

The Board is aware of commitment to enhance long term shareholders’ value through regular communication with all its shareholders, regardless of individual or institutional investors (hereinafter referred to as “the Shareholders”.)

In consequence thereto, the Board had a Shareholders’ Communication Policy in place to provide guidance as well as ensuring a consistent approach towards the Company’s communication with the Shareholders.

(f) Reviewing the adequacy and the integrity of the Group’s internal control systems and management information systems

The Board has established key control processes to ensure there is a sound framework of reporting on internal controls and regulatory compliance. Details pertaining to the Group’s internal control system and its effectiveness are set out in the Statement on Risk Management and Internal Control of this Annual Report.





(f) Reviewing the adequacy and the integrity of the Group’s internal control systems and management information systems cont'd

The AC has been delegated by the Board to review the adequacy and integrity of the Group’s internal control systems and management information systems. The AC has in turn entrusted the outsourced Internal Auditors to carry out such tasks and the same be incorporated as part of the Internal Audit Plan of the year to be adopted. The outsourced Internal Auditors is required to report to the AC with their findings and recommendations on the status of the internal control system of the Group on a regular basis.

1.3. Code of Ethics and Conduct

The Board has adopted a Code of Ethics and Conduct which sets forth the values, expectations and standards of business ethics and conduct to guide the Board, the Management and employees of the Group. The Code of Ethics and Conduct is adopted to maintain the highest level of integrity and ethical conduct of the Board, Management and employees of the Group.

The Code of Ethics and Conduct is established to promote a corporate culture which engenders ethical conduct that permeates throughout the Company and Group. The guiding principles of the Code are as follow:-

(i) Show respect in the workplace:-

• Equal Opportunity • Anti-Harassment • Human Rights • Ensuring Workplace Health and Safety • Protection of Privacy • Use of Company’s Assets with Due Care • Leading by Example • Continuous Training and Development

(ii) Act with integrity in the marketplace:-

• Ensuring Products’ Quality, Safety and Reliability • Responsible Sales and Marketing Practices • JAG’s Customers • JAG’s Suppliers • Community Involvement • Environmental-Friendly Practices

(iii) Ensure ethics in business relationships:-

• Conflict of Interest • Anti-Corruption • Anti-Money Laundering • Insider Trading




1.3. Code of Ethics and Conduct cont'd

(iv) Ensure effective communication:-

• Corporate Disclosure • Spokesman • Whistleblowing

The Code of Ethics and Conduct will be reviewed biennially or as and when it is required to ensure the information remains relevant and appropriate.

A summary copy of this Code of Ethics and Conduct is available for viewing on the Company’s corporate website at www.jagb.com.my.

Handling of Reported Allegation(s)

The AC is responsible for the interpretation and supervision of the enforcement of the Code of Ethics and Conduct. The action to be taken by the Group in response to a report of concern under the Code of Ethics and Conduct will depend on the nature of the concern. The AC shall receive information on each report of concern and ensure that follow-up actions be taken accordingly.

Whistleblowing

Whistleblowing is a specific means by which an employee/officer or stakeholder can report or disclose through the following established channels, concerns about any violations of the Code of Ethics and Conduct, unethical behaviour, malpractices, illegal acts or failure to comply with regulatory requirements that is taking place/ has taken place/ may take place in the future.

The AC has been tasked with the review of whistleblowing reports either made through the Company following established communication and feedback channels or through other means.

Communication and Feedback Channels

Report(s) can be made in verbal or in writing/email and forwarded in a sealed envelope to the below mentioned designated person(s) labelling with a legend such as “To be opened by the AC Chairman/Head of Human Resources only” (where applicable):-

For matters relating to financial reporting, unethical or illegal conduct, one can report directly to the following designated person:-

(1) AC Chairman Mr. Roy Thean Chong Yew at email address: [email protected] or

For employment-related concerns, one can report directly to the following designated persons:-

(1) Executive Director (IT Services Division) Datin Stacey Tan at email address: [email protected]; or

(2) Executive Director (TWM Division) Dato’ Ng Meow Giak at email address: [email protected]

For FYE 2016, none of the designated persons have received any report or concerns vide the above mentioned communication and feedback channels.




1.4. Strategies to Promote Sustainability

The Board views the commitment to sustainability and Environmental, Social and Governance (“ESG”) performance as part of its broader responsibility to clients, shareholders and the communities in which it operates.

The Group recognises the importance of its corporate and social responsibility whilst pursuing its corporate goals. The Group continues to invest in its staff through continuous training to develop in-house capability and also a united workforce that assists in the Group realising its goals and objectives.

(A) Environmental Aspect - Health, Safety and Environmental Policy

The Board established a Health, Safety and Environmental Policy to ensure the Group operates its business activities with full commitment in achieving environmental, safety and health excellence under the following eight (8) broad principles:

• Comply with Malaysian environmental, safety and health laws and regulations in a cost effective manner;

• Commitment to continual improvement and prevention of pollution;

• To minimise any adverse impact of the Group’s operations on the environment, safety and health;

• To develop and implement effective and efficient waste management programs;

• Raise individual awareness in environmental, safety and health responsibilities through training, education and ownership awareness;

• To encourage periodic environmental, safety and health audits which will evaluate company’s conformance with its policy and standards and provide an action plan to respond to and correct any identified deficiencies in a prompt and efficient manner;

• Publish and make available realistic environmental, safety and health objectives and targets to meet Environmental, Safety and Health policy; and

• Ensure the Environmental, Safety and Health policy is available to the public upon request.

(B) Social Aspect - Corporate Responsibility (“CR”)

The Board recognises the importance of CR whilst pursuing its corporate goals. The Board believes that it can play a part in spreading the awareness on the importance of recycling in preserving the environment.

A summary of the corporate social responsibilities activities undertaken for the FYE 2016 is set out in the Corporate Responsibility Statement of this Annual Report.




1.4. Strategies to Promote Sustainability cont'd

(C) Governance Aspect - Quality, Environmental, Safety and Health Certifications

The Board strongly believes in maintaining the quality of its products and services, and the safety of its processes. As such, the Group has commenced the documentation of its standard operating procedures, which encompass all work processes.

JAG’s wholly-owned subsidiary, JMI, has received the following quality, environmental, safety and health certifications:-

Certification Scope of workISO 9001:2008 Trading, processing and recovery of ferrous, non-ferrous and precious metalsISO 14001:2004 Trading, processing and recovery of ferrous, non-ferrous and precious metalsISO 9001:2008 TWMOHSAS 18001:2007 Trading, processing and recovery of ferrous, non-ferrous and precious metals

Before procurement, JMI’s quality control (“QC”) team will inspect a sample of Scheduled Wastes to determine the composition of metals in the Scheduled Wastes, by employing the following methods in its laboratory:

• Fire assay; and • Inductively coupled plasma mass spectrometry (“ICP”).

Test Description

Fire assay A form of destructive test to determine the composition of Scheduled Wastes. This test is carried out to determine the quality and content of metals in the analysed substance.

ICP This test is carried out on samples of Scheduled Wastes to determine the quality and composition of metals in the sample.

(D) Operation Aspect - Business Continuity Plan

The Group recognises that as a going concern business, it is of utmost important to ensure critical services to be continually delivered to clients, notwithstanding any disaster or untoward incidents. The Senior Management Team plans to adopt a Business Continuity Plan with the following objectives in mind:-

• Plans, measures and arrangements to ensure the continuous delivery of critical services and products, which permits the organisation to recover its facility, data and assets.

• Identification of necessary resources to support business continuity, including personnel, information, equipment, financial allocations, legal counsel, infrastructure protection and accommodations.




1.5. Access to Information and Advice

In ensuring the effective functioning of the Board, all Directors have individual and independent access to the advice and support services of the company secretaries and external auditors and, may seek advice from the Management on issues under their respective purview.

For each Board meeting, Notice calling the meeting is issued at least seven (7) days in advance of the meeting and the Directors are provided at least three (3) days in advance of the meeting with the relevant agenda detailing the matters to be transacted at the meeting and the Board papers detailing the key issues so that the Directors have ample time to review and consider the relevant information.

The Directors may also interact directly with, or request further explanation, information or updates, on any aspect of the Company’s operations or business concerns from Management to enable the Board to discharge its duties in relation to the matters being deliberated.

Protocol for seeking of professional advisory services

Where applicable, the Directors whether as a full board or in their individual capacity, are encouraged to seek independent professional advice from the following parties:-

• For corporate and/or governance matters, the external company secretaries; • For audit and/or audit-related matters, any representatives of the audit engagement team of the

external auditors or the outsourced Internal Auditors; • For informal legal opinion or legal matters, Mr. Ewe Chuan Seng, the Independent Director who is

also a practising lawyer; • For any other specific issues where professional advice is required to enable the Board to discharge

its duties in connection with specific matters, the Board may proceed to do so, upon the approval of the Executive Chairperson, in relation to the quantum of fees to be incurred.

For FYE 2016, the Board sought advices from the external company secretaries, the external auditors and external professional consultants firms on property development matters. Other than the above, the Board has not sought any other independent professional advices.

1.6. Company Secretaries

The appointment and removal of the company secretaries is a matter for the Board. All Directors have unrestricted access to the advice and services of the company secretaries, who are responsible for ensuring that board procedures are followed and that applicable rules and regulations are complied with.

In performing their duties, the Company Secretaries carry out, amongst others, the following tasks:-

• Statutory duties as required under the Companies Act, 1965, the Companies Act 2016, ACE LR of Bursa Securities, Capital Market and Services Act, 2007;

• Facilitating and attending Board Meetings and Board Committees Meetings, respectively; • Ensuring that Board Meetings and Board Committees Meetings, respectively are properly convened

and the proceedings are properly recorded; • Ensuring timely communication of the Board level decisions to the Management for further action; • Ensuring that all appointments to the Board and/or Board Committees are properly made in

accordance with the relevant regulations and/or legislations; • Maintaining records for the purpose of meeting statutory obligations;




1.6. Company Secretaries cont'd

• Facilitating the provision of information as may be requested by the Directors from time to time on a timely manner and ensuring adherence to Board policies and procedures;

• Facilitating the conduct of the assessments to be undertaken by the Board and/or Board Committees as well as to compile the results of the assessments for the Board and/or Board Committees’ notation;

• Assisting the Board with the preparation of announcements for release to Bursa Securities and SC, where applicable; and

• Rendering advice and support to the Board and Management.

Both the company secretaries are members of the Malaysian Institute of Chartered Secretaries and Administrators (“MAICSA”) and are qualified to act as company secretary under Section 235(2)(a) of the Companies Act, 2016.

The brief profile of the company secretaries are as follows:-

(1) Ms. Chua Siew Chuan, FCIS

Ms. Chua has been elected as a Fellow Member of the MAICSA since 1997. She has more than 35 years of experience in handling corporate secretarial matters, with working knowledge of many industries and government services. She is the Immediate Past President of MAICSA and currently is the Chairman of the Technical & Professional Practice Committee and Deputy Chairman of the Membership Committee of MAICSA.

Ms. Chua is a Chartered Secretary by profession. She is the Managing Director of Securities Services (Holdings) Sdn. Bhd., a prominent corporate secretarial service provider in Malaysia. Ms. Chua is also the named company secretary for a number of public listed companies, public companies, private limited companies and societies.

Ms. Chua has been appointed as company secretary to the Group with effect from 25 January 2013.

(2) Mr. Cheng Chia Ping, ACIS

Mr. Cheng has been elected as an Associate Member of the MAICSA since 2012. He has more than 10 years of experience in handling corporate secretarial matters, with working knowledge of many industries and non-profit organisations.

Mr. Cheng is a Chartered Secretary by profession. He is a Manager (Corporate Secretarial) of Securities Services (Holdings) Sdn. Bhd., a prominent corporate secretarial service provider in Malaysia. Mr. Cheng is also the named company secretary for a number of public listed companies, public companies, private limited companies and societies.

Mr. Cheng has been appointed as company secretary to the Group with effect from 1 April 2014.

The Board is satisfied with the support rendered by the company secretaries to the Board in discharge of its roles and responsibility. The company secretaries play an advisory role to the Board on the Company’s contribution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations.




1.6. Company Secretaries cont'd

The company secretaries attend the meetings of the Board and the Board Committees and ensure that the meetings are properly convened and the deliberations at the meetings are well captured and minuted.

For FYE 2016, the Company Secretaries have attended the relevant continuous professional development programmes as required by MAICSA for practising company secretaries. The Board is satisfied with the performance and support rendered by the Company Secretaries to the Board in discharging its functions.

1.7. Board Charter

The Company has adopted a Board Charter which governs how the Company conducts its affairs. The Board Charter is applicable to all Directors of the Company and, amongst other things, provides that all Directors must avoid conflicts of interest between their private financial activities and their part in the conduct of company business.

The Board Charter sets out the authority, responsibilities, membership and operation of the Board of the Company, adopting principles of good corporate governance and practice, in accordance with applicable laws in Malaysia. The Board Charter entails the following:-

• Authority; • Role of Board; • Delegation to Committees; • Relationship with Management; • Board Responsibilities; and • Structure.

A full text copy of the Board Charter is available for viewing at the Company’s corporate website at www.jagb.com.my.

2. STRENGTHEN COMPOSITION

2.1. Size and Composition of the Board

The Board currently comprises five (5) members, three (3) of whom are Independent Non-Executive Directors (“INEDs”) and two (2) are the Executive Directors. The Independent Directors represent compliance with the requirement for one-third (1/3) Independent Directors on the Board, pursuant to Rule 15.02(1) of the ACE LR of the Bursa Securities and the adoption of the best practices set out in the Code.

The INEDs are all independent from the management and are free from any business or other relationships that could materially interfere with the exercise of their objectivity and independent judgement. Through the Directors’ Self and Peers Assessment of the Board Effectiveness Evaluation, the INEDs have indicated their satisfaction with the level of independence of each of their peers and their ability to act in the best interests of the Company in decision-making. The Directors have made valuable contributions to the Company through their business acumen and the application of a wide spectrum of knowledge and skills from their respective experiences.



2. STRENGTHEN COMPOSITION cont'd

2.1. Size and Composition of the Board cont'd

The members of the Board consist of professionals with calibre and entrepreneurs equipped with a mix of industry specific knowledge with broad business and commercial experience. This balance provides the strength that is needed to lead the Company to meet its objectives and to provide effective leadership to the Company in aspects of strategy and performance as well as to maintain high standards of governance, ensure there is sufficient check and balance and integrity in deciding matters relating to strategy, performance, internal controls, investor relations and human resource.

The Board is of the view that the current composition of the Board is appropriate, where no individual shall dominate the Board’s decision making. It reflects fairly the investment in the Company by the shareholders at large even though one (1) of the Board members namely Dato’ Ng Meow Giak is a major shareholder in the Company. In that respect, the interests of investors including the Company’s minority shareholders and the public are adequately served and protected. The profiles of each of the members of the Board are as set out in the Profiles of the Board of Directors of this Annual Report.

2.2. Board Committees

The Board has put in place the following Board Committees to assist in carrying out its fiduciary duties:-

• AC; • NC; • RC; and • Share Issuance Scheme Option Committee.

All of these committees have written TOR clearly outlining their objectives, duties and powers. The final decisions on all matters are determined by the Board as a whole.

2.2.1. AC

The membership of the AC is stated in the AC Report of this Annual Report. A summary of the works carried out by the AC to discharge their duties during the FYE 2016 is set out in the AC Report of this Annual Report.

2.2.2. NC

For the FYE 2016, the NC comprises exclusively of INEDs and the composition of the NC is as follows:-

NC Designation Directorate

Number of NC Meetings attended/held in the FYE 2016

Ewe Chuan Seng Chairman IndependentNon-Executive Director

2/2

Roy Thean Chong Yew Member IndependentNon-Executive Director

2/2

Datuk Md. Hassim Bin Pardi Member IndependentNon-Executive Director

2/2




2.2. Board Committees cont'd

2.2.2. NC cont'd

The NC is governed by its TOR of NC which outlines its remit, duties and responsibilities.

a) Principal Duties and Responsibilities

The principal duties and responsibilities of the NC as defined in the TOR, including but not limited to the following:-

• To nominate and recommend to the Board, suitable candidates for directorships. In making such recommendations, to consider candidates proposed by the Executive Directors and within the bounds of practicability, by any other senior executives or any Director or Shareholder;

• To nominate and recommend to the Board, the nominees to fill seats on Board committees;

• To assist the Board in its annual review of its required mix of skills and experience and other qualities, including core competencies which non-executive directors should bring to the Board;

• To assist the Board in implementing an assessment programmes to assess the effectiveness of the Board as a whole, the committees of the Board and the individual director on an annual basis;

• To examine the size of the Board with a view to determine the impact of number upon its effectiveness;

• To develop criteria to assess independence and to assess on an annual basis, the independence of the INEDs and recommend the same to the Board; and

• To review training programmes for the Board and facilitate Board induction and training programmes.

b) Summary of Works

The following works were undertaken by the NC during the financial year under review:-

(i) Reviewed and confirmed the minutes of the NC Meeting held in year 2015;

(ii) Examined the size of the Board;

(iii) Reviewed the required mix of skills, experience and other qualities of the Board;

(iv) Conducted the evaluation to assess the effectiveness of the Board as a whole and Board Committees;

(v) Evaluated the contribution and performance of each individual Director;





2.2.2. NC cont'd

b) Summary of Works cont'd

(vi) Reviewed and recommended to the Board, the adoption of “Declaration by Independent Directors” to confirm the “independence” of the Independent Directors on an annual basis;

(vii) Assessed the suitability for the re-election of the Directors who will be retiring at the Eighteenth Annual General Meeting of the Company and recommended the same to the Board for approval;

(viii) Recommended to the Board of Directors, the adoption of succession planning policy for the Group; and

(ix) Reviewed the Emergency Succession Contingency Plan for Senior Management Term of the Group.

c) Protocols for Appointments of the Board

The NC has the responsibility to identify and select potential new Directors and to make recommendations to the Board for the appointment of Directors.

The NC reviews candidates for appointment as Directors based on the following criteria:-

• qualifications; • skills and competence; • functional knowledge; • experience; • background and character; • integrity and professionalism; • time commitment; • gender diversity; and • in the case of candidates for the position of INEDs, whether the test of independence

under the ACE LR is satisfied.

In its review of the candidates, the NC would also considered the overall composition of the Board and the combination of skills of existing Directors to ensure the selected candidate would help close any possible gaps in the Board. The recommendation of the NC will be submitted to the Board for its consideration and approval.

During the financial year under review, there was no new Director being appointed to the Board of the Company.

In addition, any shareholder may propose a candidate for election to the office of Director at any general meeting subject to Article 68 of the Articles of Association of the Company (“AA”). The election of a candidate for directorship proposed by a shareholder will be put to vote at a general meeting.

For the FYE 2016, there was no such proposal received by the Company.





2.2.2. NC cont'd

d) Protocols for Appointments to Board Committees

The review is conducted on an annual basis, and as and when the need arises, such as when a new Director is appointed. In determining the candidates for appointment to the Board Committees, various factors are considered by the NC, including but not limited to the following factors:-

• the needs of the particular Board Committees; • the results of the Board Effectiveness Evaluation for the Board Committees; • time commitment and availability; • regulatory requirements; and • best practices or governance practices.

e) Re-election of Directors

Pursuant to Article 67 of the AA, an election of Directors shall take place each year at its AGM where one-third (1/3) of the Directors who are longest in office shall retire, and, if eligible, may offer themselves for re-election. The NC is responsible for making recommendation to the Board on the eligibility of the Directors to stand for re-election at the AGM.

As such, pursuant to Article 67, the following Directors are to retire at the forthcoming Nineteenth AGM of the Company (hereinafter referred to as “the Retiring Directors”):-

• Dato’ Ng Meow Giak (“Dato’ Ng”); and • Mr. Roy Thean Chong Yew (“Mr. Roy Thean”).

Assessment on Retiring Directors

For Dato’ Ng, the NC has conducted the following assessment based on the criteria as prescribed by the ACE LR of Bursa Securities:-

• Character; • Experience; • Integrity and professionalism; and • Time commitment to discharge his roles.

The NC further considered the following additional criteria:-

• Results obtained from the Board Assessment Survey; • Supply of relevant and timely information to the Board; • Conduct of Board meetings for FYE 2016; and • Adequacy of functional knowledge as Executive Director overseeing the function of

TWM Division.





2.2.2. NC cont'd

e) Re-election of Directors cont'd

Assessment on Retiring Directors cont'd

For Mr. Roy Thean, the NC has conducted the following assessment based on the criteria as prescribed by the ACE LR of Bursa Securities:-

• Character; • Experience; • Integrity and professionalism; and • Time commitment to discharge his roles.

For Mr. Roy Thean, he has been subjected to further assessment by the NC as follows:-

• Satisfactory Test of Independence under the ACE LR of Bursa Securities; • Independence from members of the Board and Management; • Free from any business relationship and/or other relationship which could interfere with

the exercise of independent judgement; • Whether he has exercised his independent judgement and opinions in the Board and

Board Committees Meetings; and • Contribution made by him in his capacity as INED, AC Chairman and NC and RC member,

respectively.

Upon review, the NC were satisfied with the performance of the Retiring Directors. The Board has in turn concurred the same and resolved that both Dato’ Ng and Mr. Roy Thean be recommended to the shareholders for approval at the forthcoming Nineteenth AGM.

f) Annual Assessments of the Board

The NC conducted the following assessments annually:-

(i) Directors’ self and peers assessment

In conducting the assessment, the following main criteria were adopted by the NC:-

(i) Contribution to interaction; (ii) Quality of input; and (iii) Understanding of role.

Based on the assessment conducted for the FYE 2016, the NC was satisfied with the performance of the individual Board of Directors.





2.2.2. NC cont'd

f) Annual Assessments of the Board cont'd

(ii) Evaluation on the effectiveness of the Board of Directors and the Committees of the Board

In conducting the evaluation, the following main criteria were adopted by the NC:-

• Board structure; • Board operations; • Board roles and responsibilities; • Board chairperson’s roles and responsibilities; and • Executive directors’ role and responsibilities.

Based on the evaluation conducted for the FYE 2016, the NC was satisfied with the performance of the Board and Committees of the Board.

g) Board Diversity Policy

The Board affirms its commitment to boardroom diversity as a truly diversified Board can enhance the Board’s effectiveness, creativity and capacity to thrive in good times and weather tough times.

Bearing in mind that an appointment to the Board is a long term commitment to the Company, the Board has not set any short term target or measure for boardroom diversity but nevertheless works to ensure that there is no discrimination on the basis of, but not limited to, ethnicity, race, age, gender, nationality, political affiliation, religious affiliation, sexual orientation, marital status, education, physical ability or geographic region, during the recruitment of new Board members.

Despite the Board not having a formal Board Diversity Policy, the Board has indicated its commitment to boardroom diversity by the following appointments:-

Gender Diversity

Datin Stacey Tan, a female Executive Director, has been elected as the Chairperson to lead the Board.

Ethnicity Diversity

Datuk Md. Hassim, an INED of Malay ethnicity, has been elected as the Chairman of the RC, while also serving as a member of the AC and NC.

Age Diversity

The Board believes that the Directors with diverse age profile will be able to provide a different perspective and bring vibrancy to the Group’s strategy making process.

The age profile of the Directors were ranging from forties to sixties years of age, which underlies the Board’s commitment to age diversity at the Board level appointment.





2.2.3. RC

The members of the RC comprises exclusively of INEDs and the composition of the RC is as follows:-

RC Designation Directorate

Number of RC Meeting attended/held in the

FYE 2016Datuk Md. Hassim Bin Pardi Chairman Independent

Non-Executive Director1/1

Ewe Chuan Seng Member IndependentNon-Executive Director

1/1

Roy Thean Chong Yew Member IndependentNon-Executive Director

1/1

The RC met once during the financial year under review.

The RC is governed by its TOR of RC which outlines its remit, duties and responsibilities.


The principal duties and responsibilities of the RC as defined in the TOR, including but not limited to the following:-

• To review and assess the remuneration packages of the Executive Directors in all forms, with or without other independent professional advice or other outside advice;

• To ensure the levels of remuneration be sufficiently attractive and be able to retain Directors needed to run the Company successfully;

• To structure the component parts of remuneration so as to link rewards to corporate and individual performance and to assess the needs of the Company for talent at Board level at a particular time; and

• To recommend to the Board the remuneration packages of the Executive Directors.

b) Summary of Works

The following works were undertaken by the RC during the financial year under review:-

(i) Reviewed and confirmed the minutes of the RC Meeting held in year 2015;

(ii) Deliberated on the remuneration packages of the Executive Directors for FYE 2016 and recommended the same to the Board for approval; and

(iii) Reviewed the Directors’ fees for the financial year ended 31 December 2015 and recommended the same for the Board for approval.





2.2.3. RC cont'd

c) Directors’ Remuneration Policy

It is the Board’s duty to ensure that the level of remuneration is sufficient to attract and retain the Directors needed to run the Company successfully.

As enumerated in the Directors’ Remuneration Policy, the remuneration of each Director reflects the level of responsibility and commitment, which goes with Board membership.

The Executive Directors play no part in deciding their own remuneration and the respective Board members shall abstain from all discussions pertaining to their remuneration. The Executive Directors are not entitled to receive any meeting allowance for the Board and Board Committees Meetings they attended. The RC shall recommend the quantum of Directors’ fees for the financial year to the Non-Executive Directors (“NEDs”). The Board in turn shall review and recommended the same to the shareholders for approval at the next AGM.

Pursuant to the Directors’ Remuneration Policy, the Directors’ fees recommended by the RC and the Board for the FYE 2016 are as follows:-

Directors EntitlementNED Directors’ fees of RM2,000/- per month AC Chairman Additional Directors’ fees of RM1,000/- per month NC Chairman Additional Directors’ fees of RM500/- per month RC Chairman Additional Directors’ fees of RM500/- per month

For FYE 2016, the quantum of Directors’ fees recommended by the Board to the shareholders for approval at the Nineteenth AGM amounted to RM96,000/-.

Upon recommendation of the RC, the Board also approved a meeting allowance of RM300/- per meeting be accorded to the NEDs, based on actual attendance, whether in person or by way of tele-conferencing.

The details of the remuneration package for Executive Directors and Directors’ fee for the NED during the FYE 2016 are as follows:-

Company

Executive Directors

RMNEDRM

TotalRM

Directors’ fee - 96,000 96,000

Meeting Allowance - 12,600 12,600

Total - 108,600 108,600





2.2.3. RC cont'd

c) Directors’ Remuneration Policy cont'd

Group

Executive Directors

RMNEDRM

TotalRM

Directors’ fee - 96,000 96,000

Salary 483,840 - 483,840

Benefits-in-kind 69,550 - 69,550

Meeting Allowance - 12,600 12,600

Total 553,390 108,600 661,990

The details of remuneration/Directors’ fee for Directors of the Company received/receivable for the FYE 2016 by category and within the following bands are as shown below:-

Company

Range of Remuneration/Directors’ Fee Per Annum

No. of Director (Executive)

No. of Directors(Non-Executive)

Below RM50,000 - 3

RM50,001 to RM100,000 - -

RM100,001 to RM150,000 - -

Group

Range of Remuneration/Directors’ Fee Per Annum

No. of Directors(Executive)

No. of Directors(Non-Executive)

Below RM50,000 - 3

RM50,001 to RM100,000 - -

RM100,001 to RM150,000 - -

RM150,001 to RM200,000 - -

RM200,001 to RM250,000 2 -

RM250,001 to RM300,000 - -





2.2.4. Share Issuance Scheme Option Committee (“SIS Option Committee”)

The Company has established a share issuance scheme (“SIS”) of up to thirty per centum (30%) of the Company’s total issued share capital (excluding treasury shares, if any) at any one time during the duration of the SIS for the eligible persons of the Group (excluding dormant subsidiaries) who fulfil the eligibility criteria for participation in the SIS with effect from 1 July 2015 (“Eligible Persons”).

The SIS Option Committee, comprising an Executive Director and key management personnel has been formed to administer the SIS.

The composition of the SIS Option Committee is as follows:-

Name Position Office DesignationDato’ Ng Meow Giak Chairman Executive DirectorGoh Chee Hong Member Finance ManagerHo Siew Lan Member Human Resource Manager

The SIS Option Committee is governed by its TOR which outlines its remit, duties and responsibilities.


The SIS involve the granting of options (“SIS Options”) to the Eligible Persons, to subscribe for new ordinary shares in JAG (“JAG Shares” or “Shares”) in accordance with the bylaws governing the SIS (“Bylaws”). The SIS is administered by the SIS Option Committee which has been duly appointed and authorised by the Board during the FYE 2015.

The decision as to whether or not to stagger the allocation of the SIS Options over the duration of the SIS will be determined by the SIS Option Committee.

The aggregate number of SIS Options that may be offered and allocated to the Eligible Persons shall be determined at the sole and absolute discretion of the SIS Option Committee.

b) Summary of Works

The duties that discharged by SIS Option Committee during FYE 2016 are as follows:-

• Reported to the AC at every quarterly AC meeting whether there is any offer of SIS Options to the Eligible Persons.



3. REINFORCE INDEPENDENCE

3.1. Annual Assessment of Independence of Directors

The Board adopts the concept of independence in tandem with the definition of Independent Director in Rule 1.01 of the ACE LR of Bursa Securities through the assistance of the NC. The Board also carries out an annual assessment of the independence of its Independent Directors.

The Board considers that its Independent Directors provide an objective and independent views on various issues dealt with at the Board and Board Committees level. All INEDs are independent of management and free from any relationship. The Board is of the view that the current composition of Independent Directors fairly reflects the interest of minority shareholders in the Company through the Board representation.

The Board noted that Letters of Declaration has been executed by the following INEDs of the Company, confirming their independence pursuant to ACE LR of Bursa Securities as well as the MCCG 2012 and that the INEDs have undertaken to inform the Company immediately should there be any change which could interfere with the exercise of their independent judgement or ability to act in the best interest of the Company:-

• Mr. Roy Thean; • Datuk Md. Hassim Bin Pardi; and • Mr. Ewe Chuan Seng.

Based on the outcome of the Directors’ self and peer assessment, the evaluation on the effectiveness of the Board of Directors and the Committees of the Board, as well as the additional assessment on the independence of the Independent Directors, the Board is satisfied with the level of independence demonstrated by the INEDs and their ability to act in the best interest of the Company.

The Board considers that its INEDs provide an objective and independent views on various issues dealt with at the Board and Board Committees level. All Non-Executive Directors are independent of management and free from any relationship. The Board is of the view that the current composition of INEDs fairly reflects the interest of minority shareholders in the Company through the Board representation.

As for Mr. Roy Thean, an INED who is eligible for stand for re-election at the forthcoming Nineteenth AGM of the Company, the NC was satisfied that Mr. Roy Thean met the criteria for an independent director as prescribed under the ACE LR of Bursa Securities and as well as his ability to continue to bring independent and objective judgement to board deliberations and proposals.

The Board therefore recommends and supports the re-election of Mr. Roy Thean, the INED who retires in accordance with Article 67 of the Articles of Association of the Company at forthcoming Nineteenth AGM of the Company.

3.2. Tenure of Independent Directors

MCCG 2012 recommended that the tenure of an Independent Director should not exceed a cumulative terms of nine (9) years. Upon completion of the nine (9) years’ terms, an Independent Director may continue to serve on the Board subject to the Director’s re-designations as a Non-Independent Director.



3. REINFORCE INDEPENDENCE cont'd

3.2. Tenure of Independent Directors cont'd

Open Policy on Tenure of Service by INEDs

Whilst acknowledging the recommendation of the MCCG 2012, the Board subscribes to an open policy on the tenure of INEDs whereby there should not be an arbitrary tenure be imposed on the INEDs. The Board believes that the length of tenure of Independent Directors on the Board does not interfere with their objective and independent judgement or their ability to act in the best interest of the Company. In addition, the Board will take into consideration of the existing board composition viz-a-viz the commercial interest/ benefits of the Company.

In view thereof, the Board shall provide justifications and seek shareholders’ approval in the event it proposes to retain an Independent Director who has served the Board in that capacity for more than nine (9) years, upon the prior review and relevant recommendation from the NC.

The Board noted there are no Independent Directors whose tenure exceeds a cumulative term of nine (9) years in the Company thus far. Therefore, there is no such need for the Company to seek for shareholders’ approval on the said purpose at the forthcoming AGM of the Company.

3.3. Separation of Position of the Chairperson and Chief Executive Officer

The Board recognises the importance of having a clearly accepted division of power and responsibilities at the head of the Company to ensure a balance of power and authority. At present, the Company does not have a Chief Executive Officer but Executive Directors.

In view of the two distinct operating divisions of the Group which require separate set of leadership and management skills, the Board has resolved to maintain Datin Stacey Tan, the Executive Director and Chairperson as the most senior executive to report to the Board, notwithstanding the non-adherence to the Recommendation 3.4 of the MCCG 2012 but to the essential survival and business continuation of the Group.

As a mitigating measure pursuant to Recommendation 3.5 of the MCCG 2012 where the chair of the Board is not an Independent Director, a majority of the Board i.e. 60% of the Board consisted of INEDs.

As the second mitigating measure, there is a clear division of responsibilities between the Chairperson and Executive Director. Although the position of the Chairperson is assumed by Datin Tan Siew Ching (“Datin Stacey Tan”), an Executive Director at the moment, the Board has outlined the roles and responsibilities of the Chairperson of the Board through the Board Charter, which are distinct and separate from her roles and responsibilities as Executive Director/Head of IT Services Division, through a separate employment contract.

The current arrangement is to provide strong leadership with the ability to marshal the Board’s priorities objectively and to propel the Group to the next level while keeping a lean Board composition.

3.4. Board Composition and Balance

The Board noted the Recommendation 3.5 of the MCCG 2012 stating that the Board must comprise a majority of Independent Directors where the Chairperson of the Board is not an Independent Director.



3. REINFORCE INDEPENDENCE cont'd

3.4. Board Composition and Balance cont'd

At present, the Board comprises three (3) INEDs out of its five (5) members which complied with this recommendation. Although all the Directors have equal responsibilities for the Company and the Group’s operations, the role of the Independent Directors are particularly important in ensuring that the strategies proposed by the Executive Directors are deliberated on and have taken into account the interest, not only of the Company, but also that of the shareholders, employees, customers, suppliers and the community.

The Board structure ensures that no individual or group of individuals dominates the Board’s decision-making process. The composition of the Board provides an effective blend of entrepreneurship, business and professional expertise in general management, finance, corporate affairs, legal and technical areas of the industry in which the Group operates. The individuality and vast experience of the Directors in arriving at collective decisions at board level will ensure impartiality.

Notwithstanding the non-adherence to Recommendation 3.4 of the MCCG 2012, the Board is of the view the following justifications justify the departure from such recommendation:-

(i) That the separation of the positions of the Chairperson and the Executive Director together with the three (3) INEDs, provide further assurance that there is a balance of power and authority on the Board and effective stewardship/oversight of the Company in terms of strategies and business performance;

(ii) That pursuant to the evaluations on the effectiveness of the Board of Directors and the Committees of the Board conducted for the FYE 2016, the Board is satisfied with the mix of skills and board composition level;

(iii) That the Board recognised the need for an appropriate balance between Executive Directors who possess extensive direct experience and expertise in the core business activities of the Group, and Non-Executive Directors who have outstanding track records and reputation, and who were able to bring to the Board a broad range of general commercial expertise and experience, without imposing any financial or operational constraints to the Group in pursuit of its vision and mission; and

(iv) Where there is any conflict of interest and/or the involvement of directors’ interest pursuant to Section 221 of the Companies Act, 2016, the affected Directors will declare their interests and abstained from all deliberation and voting on the matters accordingly.

4. FOSTER COMMITMENT

4.1. Time Commitment

Board Protocol on Time Commitment

As a general rule, the Directors are expected to devote sufficient time and attention to the affairs of the Company/ Group.



4. FOSTER COMMITMENT cont'd

4.1. Time Commitment cont'd

Board Protocol on Time Commitment cont'd

The Board has in place the following protocols:-

(a) Attendance of Board and/or Board Committees Meetings

The Board requires its members to devote sufficient time to the workings of the Board, to effectively discharge their duties as Directors of the Company, and to use their best endeavours to attend meetings. This time-committed factor also forms one of the criteria for determining the quantum of the meeting allowance payable to the Board members.

During the FYE 2016, the Board had convened a total of five (5) Board of Directors’ Meetings for the purposes of deliberating on the Company’s quarterly financial results at the end of every quarter and discussing important matters which demanded immediate attention and decision-making. During the Board of Directors’ Meetings, the Board reviewed the operation and performance of the Company and other strategic issues that may affect the Company’s business. Relevant staff were invited to attend some of the Board of Directors’ Meetings to provide the Board with their views and clarifications on issues raised by the Directors.

The attendance record of each Director at Board Meetings during the financial year under review is as follows:-

Name of Directors

Total no.of Meetings held during Tenure of

Office

Total no.of Meetings

Attended% of

AttendanceDatin Stacey Tan 5 5 100Dato’ Ng Meow Giak 5 4 80Mr. Roy Thean 5 5 100Datuk Md. Hassim Bin Pardi 5 5 100Mr. Ewe Chuan Seng 5 5 100

The Board will also meet on an ad-hoc basis to deliberate urgent issues and matters that require expeditious Board direction or approval. In the intervals between quarterly Board meetings, any matters requiring urgent Board decisions and/or approval can be sought via circular resolutions which are supported with all the relevant information and explanations required for an informed decision to be made.

Meeting papers were prepared to provide relevant facts, analysis and recommendations for supporting the proposals to enable informed decision-making by the Board. The agenda and papers for meetings were furnished to the Directors and Board Committee members at least three (3) days in advance to enable them to prepare for the meetings.




4.1. Time Commitment cont'd

Board Protocol on Time Commitment cont'd

(a) Attendance of Board and/or Board Committees Meetings cont'd

The Board encourages constructive and healthy debate at all meetings. The Directors are given the chance to freely express their opinions or share information with their peers in the course of deliberation as a participative Board. Any Director/Board Committees’ member who has a direct or deemed interest in the subject matter to be deliberated shall abstain from deliberation and voting on the same during the meeting.

The company secretaries would ensure a quorum is present for all meetings and that such meetings are convened in accordance with the Articles of Association of the Company or relevant Board Committee’s TOR. The company secretaries record the proceedings of all meetings including pertinent issues, the substance of inquiries (if any) and responses thereto, members’ suggestions and the decisions made, as well as the rationale for those decisions. By doing so, the company secretaries keep the Board updated on the follow-up actions arising from the Board’s decisions and/or requests at subsequent meetings. The Board is therefore able to perform its fiduciary duties and fulfil its oversight role towards instituting a culture of transparency and accountability in the Company.

(b) Board Appointment in other Companies

Any Director is, while holding office, at liberty to accept other Board appointment(s) in other companies so long as the appointment is not in conflict with the Company’s business and does not affect the discharge of his duty as a Director of the Company.

Prior the acceptance of new Board appointment(s) in other companies, the Directors should notify the Executive Chairperson of the Board and/or the company secretaries in writing. The said notification should include an indication of time that will be spent on the new appointment.

For FYE 2016 and up to the date of this Statement, the company secretaries have not received such notification from any of the Directors of the Company.

(c) Annual Meeting Schedule

In facilitating the schedule of the Directors, the company secretaries will prepare and circulate in advance an annual meetings schedule at the last Board Meeting of the financial year, which includes all the proposed meetings dates for Board and Board Committees’ Meetings, as well as the AGM. Upon the concurrence by all the Board members, the annual meeting schedule will be adopted for the applicable financial year.

The annual meeting schedule for year 2017 was approved and adopted by the Board at the Board Meeting held on 11 November 2016.




4.2. Continuing Education and Training of Directors

In order for the enlarged JAG Group to remain competitive, the Board ensures that the Directors continuously enhance their skills and expand their knowledge to meet the challenges of the Board.

The Board has cultivated the following best practices:-

• All newly appointed Directors are required to attend the Mandatory Accreditation Programme as prescribed by the ACE LR of Bursa Securities within the stipulated timeframe;

• All Directors are encouraged to attend talks, training programmes and seminars to update their knowledge on the latest regulatory and business environment;

• The Directors may be requested to attend additional training courses according to their individual needs as a Director or member of Board Committees on which they serve;

• The Directors are briefed by the company secretaries on the letters issued by Bursa Securities at every Board Meeting.

All members of the Board have attended the Mandatory Accreditation Programme prescribed by Bursa Securities.

Upon assessing the training needs of the Directors, the Board recognised that continuing education would be the way forward in ensuring its members are continually equipped with the necessary skills and knowledge to meet the challenges ahead. As at the date of this Statement, the Board has participated in the following continuing education programmes:-

a) Datin Stacey Tan

No. Dates Description of Training Programmes1. 25/10/2016 Women on Board-The Business Case2. 25/10/2016 30% Club Malaysia Round Table Meeting 3. 08/12/2016 Anti-Corruption & Integrity-Foundation of Corporate Sustainability

b) Mr. Roy Thean

No. Dates Description of Training Programmes1. 26/04/2016 Share Capital At No Par Value, Share Buybacks and RPS2. 22/08/2016 Case Study Workshop for Independent Directors; “Rethinking -

Independent Directors: A New Frontier”3. 19/10/2016 Financial Reporting Workshop4. 25/10/2016 30% Club Malaysia Round Table Meeting 5. 16/11/2016 Amendments to Bursa Malaysia Listing Requirements




4.2. Continuing Education and Training of Directors cont'd

c) Dato’ Ng Meow Giak

No. Dates Description of Training Programmes1. 08/12/2016 Anti-Corruption & Integrity-Foundation of Corporate Sustainability

d) Datuk Md. Hassim Bin Pardi

No. Dates Description of Training ProgrammesNIL

e) Mr. Ewe Chuan Seng

No. Dates Description of Training ProgrammesNIL

Although Datuk Md. Hassim Bin Pardi and Mr. Ewe Chuan Seng were not able to attend any structured training programme during the financial year under review due to work commitments, they have not failed to gain updates through briefings by the Company Secretaries, Internal Auditors and External Auditors during the quarterly meetings, communications with other Directors, as well as daily work exposures.

In addition, the company secretaries and the external auditors update the Board on a regular basis the respective changes and amendments to regulatory requirements and laws and accounting standards to help Directors keep abreast of such developments.

The Board concluded that the Directors of the Company should be more proactive in participating in various continuing education programmes in the coming financial year ending 31 December 2017.

2017 Training Needs

In recognising the need to keep abreast with the fast changing business and regulatory environment, the Board has encouraged its members to attend at least one (1) continuing education programme, whereby it should be in relation to the ACE LR of Bursa Securities, Companies Act 2016 or corporate governance of a listed corporation.



5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1. Compliance with Applicable Financial Reporting Standards

The AC assist the Board to oversee the financial reporting process and the quality of its financial reporting by reviewing the information to be disclosed, to ensure completeness, accuracy and adequacy prior to endorsing the same to the Board for release to Bursa Securities and SC.

The AC has received assurance from the Financial Controller that the financial statements of the Group and of the Company for the FYE 2016 had been prepared in accordance with MFRS, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. Consequently, the AC has recommended the audited financial statement for the FYE 2016 of the Company to the Board for approval and the Board upon its review, has approved the same at the Board of Directors’ Meeting held on 17 April 2017.

The Board ensures that shareholders are presented with a clear, balanced, meaningful assessment of the Company’s financial performance and prospects through the issuance of the audited financial statements and quarterly announcements of financial results and vide corporate announcements on significant development in accordance with the ACE LR of Bursa Securities on a timely basis and in compliance with the applicable financial reporting standards.

5.2. Assessment of Suitability and Independence of External Auditors

For the FYE 2016, the AC has assessed the suitability and independence of external auditors by its formalised procedures vide an annual assessment of the suitability and independence of the external auditors.

In its assessment, the AC considered, inter alia, the following factors:-

For “suitability” assessment:-

• The external auditors have the adequate resources, skills, knowledge and experience to perform their duties with professional competence and due care in accordance with approved professional auditing standards and applicable regulatory and legal requirements;

• To the knowledge of the AC, the external auditors do not have any record of disciplinary actions taken against them for unprofessional conduct by the Malaysian Institute of Accountants (“MIA”) which has not been reversed by the Disciplinary Board of MIA;

• The external audit firm has the geographical coverage required to audit the Company;

• The external audit firm advises the AC on significant issues and new developments pertaining to risk management, corporate governance, financial reporting standards and internal controls on a timely basis;

• The external audit firm consistently meets the deadlines set by the Company;

• The level of quality control procedures in the external audit firm, including the audit review procedures;

• The external audit scope is adequate to cover the key financial and operational risks of the Company.



5. UPHOLD INTEGRITY IN FINANCIAL REPORTING cont'd

5.2. Assessment of Suitability and Independence of External Auditors cont'd

For “independence” assessment:-

• The engagement partner has not served for a continuous period of more than five (5) years with the Company;

• The AC receives written assurance from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements; and

• Tenure of the current external auditors.

Upon review, the AC noted Messrs. Russell Bedford LC & Company was appointed as the external auditors of the Company for the first time at the Fifteenth AGM of the Company held on 28 June 2013.

The AC noted for the FYE 2016, Messrs. Russell Bedford LC & Company, the external auditors of the Company confirmed that the engagement quality control reviewer and members of the engagement team in the course of their audits were and had been independent for the purpose of the audit in accordance with the terms of relevant professional and regulatory requirements.

Upon completion of its assessment, the AC was satisfied with Messrs. Russell Bedford LC & Company’s technical competency i.e. suitability and independence during the financial year under review and recommended to the Board the re-appointment of Messrs. Russell Bedford LC & Company as external auditors for the financial year ending 31 December 2017. The Board has in turn, has recommended the same for shareholders’ approval at the forthcoming Nineteenth AGM of the Company.

6. RECOGNISE AND MANAGE RISKS

6.1. Sound Framework to Manage Risks

The Group’s risk management system was updated with assistance of an independent professional firm appointed by the AC. The framework of the risk management encompasses the following key elements:-

• Risks identified were individually assessed and ranked as either high, medium or low based on its

magnitude of impact and likelihood of occurrence within the Group; and

• Individual risk profiles created from the above assessment were endorsed by the Board and subsequently cascaded to the senior management of the Group for implementation of action plans required to mitigate or maintain the risk impact of the Group at an acceptable level.

The risk management framework is regularly reviewed by the Management and relevant recommendations are made to the AC and Board for approval.

The internal controls are tested for effectiveness and efficiency in FYE 2016 via an independent outsourced internal audit function following risk-based approaches. The report of the internal audit is tabled for the AC’s review and comments, and the audit findings will then be communicated to the Board.



6. RECOGNISE AND MANAGE RISKS cont'd

6.1. Sound Framework to Manage Risks cont'd

Emergency Response Team (“ERT”)

As part of the Group’s Business Continuity Plan, JMI has set up an ERT Team, headed by Mr. WL Loh, the Plant Manager, and assisted by team leaders who will oversee the areas of fire-fighting, assembly coordinate, search and rescue, chemical spillage and first-aid.

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

6.2. Internal Audit Function

The Directors are responsible for the Group’s system of internal controls and its effectiveness. The principal aim of the system of internal controls is the management of financial and business risks that are significant to the fulfilment of the Company’s business objectives, which is to enhance the value of shareholders’ investment and safeguarding the Group’s assets.

The Group has appointed an independent professional service provider to carry out the internal audit function, namely Morison AAC Corporate Solutions Sdn. Bhd. (“Morison”). The outsourced internal auditors report directly to the AC, providing the Board with a reasonable assurance of adequacy of the scope, functions and resources of the internal audit function. The purpose of the internal audit function is to provide the Board, through the AC, assurance of the effectiveness of the system of internal control in the Group.

At the beginning of financial year, Morison would table a risk-based audit plan, together with the schedule of the audits to the AC for approval. The risk-based audit plan has been prepared by Morison based on their prior review of the financial report of the Group as well as the impact of different areas of the Group based on materiality of the numbers reported.

The internal controls are tested for effectiveness and efficiency by Morison. The report of the internal audit is tabled for the AC’s review and comments, and the audit findings will then be communicated to the Board. The outsourced internal auditors’ representative met up four (4) times with the AC in year 2016.

The internal audit review of the Group’s operations encompasses an independent assessment of the Company’s compliance with its internal controls and recommendations are made for further improvement.

Formal Assessment of Internal Auditors

For FYE 2016, the AC has assessed the performance of internal auditors vide an annual assessment of the suitability of the internal auditors.

In its assessment, the AC considered, inter alia, the following factors:-

• Understanding; • Charter and structure; • Skills and experiences; • Communication; and • Performance.

Upon completion of its assessment, the AC was satisfied with the outsourced Internal Auditor, Morison’s technical competency and audit independence during the financial year under review.



7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

7.1. Corporate Disclosure Procedures

The Company recognises the value of transparent, consistent and coherent communications with investment community consistent with commercial confidentiality and regulatory considerations.

The Company has also put in place a Corporate Disclosure Policy on confidentiality to ensure that confidential information is handled properly by the Directors, employees and relevant parties to avoid improper use of such information. The Board is mindful that information which is expected to be material must be announced immediately to Bursa Securities.

The Company is committed to ensure that communications to the investing public regarding the business, operations and financial performance of the Company are accurate, timely, factual, informative, consistent, broadly disseminated and where necessary, information filed with regulators is in accordance with applicable legal and regulatory requirements.

During the FYE 2016, the Company has engaged a professional public relations firm to manage and assist with the release of information to the public, in particular, press release and press interview.

7.2. Leverage on Information Technology for Effective Dissemination of Information

The Company’s corporate website provides a myriad of relevant information on the Company and is accessible by the public. It includes the announcements made by the Company to Bursa Securities and the annual reports of the Company. The Board discloses to the public all material information necessary for informed investment and takes reasonable steps to ensure that all shareholders enjoy equal access to such information.

Leveraging on its expertise at the IT Services Division, the Company has created dedicated sections to ensure more effective dissemination of information:-

• A dedicated “Investors” section which provides all relevant information on the Company and is accessible by the public. It includes the announcements made by the Company and Annual Reports. The Board discloses to the public all material information necessary for informed investment and takes reasonable steps to ensure that all shareholders enjoy equal access to such information.

• A dedicated “Press Centre” section which provides access to the press releases made by the Company, for ease of reference by the shareholders.

The Company’s corporate website is accessible at www.jagb.com.my.



8. STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

8.1. Shareholders’ Participation at General Meetings

The Company communicates regularly with the shareholders and investors through Annual Reports, quarterly financial reports and various announcements made to Bursa Securities as the Board acknowledges the importance of accurate and timely dissemination of information to its shareholders, potential investors and the public in general.

Several channels are used to disseminate information on a timely basis, such as:-

• The AGM which is used as the main forum of dialogue for shareholders to raise any issues pertaining to the Company;

• Annual Report, quarterly financial results and various announcements made to Bursa Securities; and

• The corporate website www.jagb.com.my which provide corporate information on the Group.

8.2. Poll Voting

The Board noted the Recommendation 8.2 of the Code states that the Board should encourage poll voting. In line with this recommendation, the Chairperson will inform the shareholders of their right to demand a poll vote at the commencement of the general meeting.

With the recent amendments to ACE LR of Bursa Securities, all of the resolutions set out in the Notices of General Meetings shall be voted by poll and it would be implemented for general meetings held on or after 1 July 2016.

The Board will consider and explore the suitability and feasibility of adopting electronic voting in coming years to facilitate greater shareholders participation at general meeting, and to ensure accurate and efficient outcomes of the poll voting process.

8.3. Shareholders’ Communication and Investor Relations

The Board is committed to on-going communication across its entire shareholder base, whether institutional investors, private or employee shareholders. This is achieved principally through annual and quarterly reports and the AGM and timely dissemination of information on significant company developments and price sensitive information in accordance with the ACE LR of Bursa Securities. All the Directors were present at the Eighteenth AGM of the Company held on 17 June 2016 to engage with the shareholders personally and proactively.

The proceedings of the AGM included the presentation of the Company’s operating and financial performances for the financial year under review, the presentation of financial statements to the shareholders, and a question and answer session in which the Chairperson of the AGM would invite shareholders to raise questions on the Company’s financial statements and other items for adoption at the AGM, before putting a resolution to vote. The Executive Directors ensure that sufficient opportunities are given to shareholders to raise issues relating to the affairs of the Company and that adequate responses are given.

The results of all the resolutions set out in the Notice of the AGM will be announced on the same day to Bursa Securities, which is accessible on the Bursa Securities’ website.



8. STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS cont'd

8.3. Shareholders’ Communication and Investor Relations cont'd

The Board ensures that full information of the Directors who are retiring at the AGM and willing to serve if re-elected are disclosed in the Notice of the AGM.

The explanatory notes facilitating full understanding and evaluation of issues involved in the proposed resolutions accompanying each item of special business is included in the Notice of the AGM.

Investor Relations (“IR”) activities

A summary of IR activities conducted for the FYE 2016 is listed below for information:-

Date Topic of IR activities Type of IR activities Audience29 February 2016 Press article entitled “JAG Berhad closes 2015

financial year amidst challenging backdrop”Press Release Public

17 June 2016 18th AGM of the Company Press Conference Invited Press18 August 2016 Press article entitled “JAG Berhad returns to

the black with positive Q2 results”Press Release Public

9. CONCLUSION

The Board is satisfied that for the FYE 2016, it complies substantially with the principles and recommendations of the MCCG 2012.

This Statement on Corporate Governance is made in accordance with the resolution passed by the Directors at the Board of Directors’ Meeting held on 17 April 2017.



The Group believes that a firm commitment to Corporate Responsibility (“CR”) activities forms the basis of good corporate citizenship and upholds the highest level of corporate governance.

Aligned with the Group’s business strategy, we endeavour to manage our business in a socially responsible manner. We strive to look after the interests of our key stakeholders – from shareholders, investors, customers, suppliers to employees, as well as the community where we operate.

Bursa Securities has defined “Corporate Social Responsibility” (“CSR”) as “open and transparent business practices that are based on ethical values and respect for the community, employees, the environment, shareholders. It is designed to deliver sustainable value to society at large.”

The Group has adopted the Bursa Securities’ CSR Framework which was launched in 2006 as a set of guidelines for Malaysian public listed companies who wish to practice CSR. The Group’s CSR framework covers the following four (4) areas:-

Workplace

Training and development Workplace diversity Healthy and safe working environment Employees’ well being

Community

Contribution to selected bodies Participation in community services

Environment

Reduce, Reuse and Recycling waste management programme

Marketplace

Whistleblowing Corporate disclosure practices Investor relations activities Dedicated sections at corporate website

A. WORKPLACE

With a constantly growing workforce and ever-evolving Information and Technology and Waste Recycling sectors, it is imperative that the Group continues to invest in its employees.

(a) Training and development

Training programmes, both internal and external, are organised to deliver an all-round training experience to our employees by upgrading their skill sets, job knowledge and competency level in achieving an overall increase in productivity.

Respect and considerations of our colleagues are the work culture of the Group. Training programmes and job rotations are in place for employees in assisting them to work towards their goals and aspirations.

Corporate Responsibility Statement


A. WORKPLACE cont'd

(a) Training and development cont'd

During FYE 2016, the employees had attended the following training/development programmes:-

Date Division Training Session

31 January 2016,20 October 2016 &29 October 2016

Laboratory Laboratory Induction Training (in house)

28 March 2016 -1 April 2016

Production Certified Environmental Professional in Bag Filter Operation (CePBFO)

31 March 2016 Laboratory Good Laboratory Practise (in house)21 April 2016 Project FMM Industrial Waste Management Conference

201623 April 2016 Production Dust Collector Filter Bag Performance Monitoring9 May 2016 - 10 May 2016 &1 June 2016 - 2 June 2016

Production & Laboratory Radiation Safety Refresher Course

31 May 2016 Security Fire Alarm Panel Reset & Handling Procedures (in house)

10 June 2016 &5 August 2016

Production & Admin ISO 9001 : 2015 Awareness

28 July 2016 Laboratory Safety Training for Chemical Laboratory Personnel6 August 2016 Head of Departments ISO 9001 : 2015 & ISO 14001 : 2015 Internal

Auditing13 August 2016 Production PPE Training (in house)13 August 2016 &8 October 2016

Production Spillage Drill & Response (in house)

13 August 2016 Production Chemical Safety & MSDS (in house)24 September 2016 Production Forklift Operators’ & Safety Training17 October 2016 -22 October 2016

Production Course for Certified Environmental Professionals in the Operation of Industrial Effluent Treatment System

25 October 2016 Head of Department Seminar Pengukuhan Akta Kualiti Alam Sekeliling 1974 Ke Arah Pematuhan Kendiri & Aplikasi Industri Hijau

26 October 2016 -27 October 2016

Project, Finance & Marketing

Accounting, Income Tax & GST for Property Development

19 November 2016 Production OHSAS 18001 Safety Requirement (in house)5 December 2016 -9 December 2016

Production Certified Environmental Professional in Scrubber Operation (CePSO)

Corporate Responsibility Statementcont'd


A. WORKPLACE cont'd

(a) Training and development cont'd

Team Building Event

A team building event was held on 7 & 8 October 2016 at Lexis Port Dickson, Seremban involving all level of employee (including the senior management) and relevant stakeholder of the Group. This program was designed to nurture teamwork skills and promote high levels of team performance. The theme of the program was “Team Transformation” to inspire all participants of the importance of teamwork. As a successful organisation, effective teams will make a big difference in achieving the company’s strategic goals. Strong, flexible, and productive teams will be the competitive edge to the Group in producing better results, achieve higher quality of service, lower costs for the organisation and better customers’ satisfaction.

With active involvement, high-performing teams can help elevate employee work performance, as well as their adaptability, quality, service and safety. The purpose of the event was to inculcate the following:-

• A shared mind-set and shared purpose towards achieving the team’s goals; • Participants’ immediate reflection and feedback on learning experience and activities; • More effective communication; • A motivated and energised work environment; • Better team performance and cohesiveness; • Participation in work teams and facilitation of team tasks; • Actions to develop and facilitate team cohesion; and • Effective liaison with stakeholders/internal customers, including management.

(b) Workplace Diversity

The Group embraces diversity at workplace and we do not allow room for any form of discrimination practice against people of different gender, age, ethnicity, nationality or marital status.

By employing a diverse workforce, the Group is able to have a better understanding of today’s dynamic market demographics. It has also enable the Group to tap into a pool of people from diverse backgrounds who can provide unique market insights or generate creative solutions, thereby increasing the Group’s competitiveness in today’s globalised and challenging economy.

Gender diversity

As at the LPD, the Group had achieved a ratio of 78:22 in the workforce of the Group in terms of Male/Female.



A. WORKPLACE cont'd

(b) Workplace Diversity cont'd Gender diversity cont'd

Workforce in terms of Gender in JAG Group

FEMALE22%

MALE78%

Age diversity

As at the LPD, 38% of our employees belong to the age group of between 26 to 36 with the next largest age group being those aged between 37 to 45 (%). The Group’s age demographics broadly reflected those of Malaysia where the younger age employees form the majority of the workforce.

Workforce in terms of Age in JAG Berhad

37-4528%

26-3638%

21-2513%

<213%>55

59%

46-5513%



A. WORKPLACE cont'd

(b) Workplace Diversity cont'd

Ethnicity diversity

As at the LPD, employees of Chinese ethnicity constituted the largest workforce of the Group at 43%, with the Malay ethnicity staff being the next largest workforce at 32%, followed by others ethnicity staff (foreigners) at 19%. Notwithstanding so, the Group’s Human Resources Department has been instructed to ensure a well balance hiring of staff during their recruitment process.

Workforce in terms of Ethinicity in JAG Group

INDIAN6%

MALAY32%

CHINESE43%

OTHERS19%

(c) Healthy and Safe working environment The Group continuously strive to provide a healthy and safe working environment for our employees.

Regular workplace inspection is one of the main duties of the Management to ensure work places are uncluttered, neat, tidy and safe. Fire and safety drills, as well as risk awareness campaigns are held regularly to ensure that employees are well prepared in the event of an emergency.

For FYE 2016, two (2) fire and safety drills were conducted:-

No. Date Events1. 3 June 2016 Fire/Evacuation Drill (in house)2. 26 August 2016 Fire/Evacuation Drill (in house)



A. WORKPLACE cont'd

(d) Employees’ well being

The Group, in promoting active and healthier lifestyles, introduced a weekly badminton session to encourage social interaction among the staff.

As a caring employer, the Group has accorded the following benefits to the employees:-

• Group insurance encompassing personal accident, life and medical for all level of staff; • Time-off of up to six (6) times per annum, at a limit of two (2) hours maximum per time-off; • Incentive allowances such as excellent attendance allowance, line leader allowance for production

staff and best attendance reward; • Token appreciation for life changing event such as first legal marriage, first three child birth as well as

retirement; • Paid study leave to encourage staff continuous self-development; and • Arrange for short term certificate study for admin staff to continue to enhance their work knowledge

under Human Resources Development Fund (“HRDF”) scheme.

For FYE 2016, the administrative staff have attended the following short term courses:-

Type of Courses Event DateSeminar HR Summit : Resource Skills & Competencies 2016 7 April 2016Bengkel Akta Kerja 1955, Akta Pampasan Pekerja 1952 & Akta Keselamatan Sosial 1969

12 April 2016

Finance for Non-Finance Managers 27 July 2016 - 28 July 2016

B. ENVIRONMENT

E-Waste Recycling

The Group believes it has a moral and social responsibility in reducing carbon footprint and contributes towards a greener environment.

The growth in the domestic consumption of E&E products have inevitably increased the amount of E-Waste in Malaysia. Being in the E-Waste recycling sector, the Group would play a vital role in reducing the E-Waste problems in Malaysia.

C. COMMUNITY

The Group recognises that the community plays an essential role in driving the success of its business.

In view thereof, the Group has made its contribution back to society a cornerstone of its CR activities. For FYE 2016, the Group was invited to sit in as one of the members of the Task Force under the scope E-Wastes collection and reporting guideline for “The Project for Development of Mechanism for Household E-Waste Management” spearheaded by Jabatan Alam Sekitar and Japan International Cooperation Agency (“JICA”). It was a collaboration between various stakeholders and government authorities and municipals, such as Suruhanjaya Komunikasi dan Multimedia Malaysia, Pihak Berkuasa Kerajaan Tempatan, Dewan Bandaraya Kuala Lumpur, Majlis Bandaraya Shah Alam, Majlis Perbandaran Petaling Jaya, Majlis Perbandaran Subang Jaya, Jabatan Pengurusan Sisa Pepejal Negara and Jabatan Perancang Bandar as well as trade associations.



D. MARKETPLACE

As a listed entity as well as an employer, the Group has an obligation to its shareholders and statutory obligations to the relevant authorities. In order to achieve our mission to be the leading company within Malaysia of the Total Waste Management, the Group has instituted several responsible marketplace practices to maintain the highest standards of integrity, fairness and transparency in our conduct of business.

(a) Corporate Disclosure Practices

The Group recognises the importance of timely and thorough dissemination of accurate and useful information relating to our operations to stakeholders. In this regard, we strictly adhere to the disclosure requirements of Bursa Securities and the Malaysian Accounting Standards Board. In fact, this Annual Report contains comprehensive information pertaining to the Group, while various disclosures on financial results provide stakeholders with the latest financial information on the Group.

(b) Investor relations activities

The Group organises regular investor relations activities to promote and develop a positive relationship with all our stakeholders via active two-way communication and to relay pertinent information to stakeholders in a transparent and consistent manner. Please refer to the Statement on Corporate Governance of this Annual Report for a summary of investor relations activities conducted for the FYE 2016.

(c) Dedicated sections at corporate website

Apart from the mandatory public announcements through Bursa Securities, the Group’s website at www.jagb.com.my provides the public with convenient and timely access to business updates, and financial and non-financial information. Furthermore, stakeholders are able to direct queries to the Group via this website.

The Company has created two (2) dedicated sections/notices to ensure more effective dissemination of information:-

• “Investor” section; and • “Press Centre” section.

CONCLUSION

The Group noted that Bursa Securities has always advocated CR as key to sustainability. The Group recognises the importance of sustainability and its increasing impact to the business. The Group is committed to understanding and implementing sustainable practices and to exploring the benefits to the business whilst attempting to achieve the right balance between the needs of the wider community, the requirements of shareholders and stakeholders and economic success.



The following information is provided in accordance with Rule 9.25 of the ACE LR as set out in Appendix 9C thereto.

1. Utilisation of Proceeds

The Company announced a private placement of up to 153,844,000 new ordinary shares on 4 March 2016 (“Private Placement”) and the listing of and quotation for the said shares were approved by Bursa Securities on 22 March 2016. On 2 September 2016, the Company announced a revision in the utilisation of proceeds to be raised from the Private Placement. On 9 September 2016 and 7 March 2017, Bursa Securities approved the applications for extensions of time by the Company until 21 March 2017 and 21 September 2017, respectively for the Company to complete the Private Placement.

Up to the LPD, the Company raised gross proceeds of RM3,003,000 for the placement of the 1st tranche of 28,600,000 ordinary shares at an issue price of RM0.105 per share. The details of the proceeds raised and the status of utilisation as at the LPD were as follows:

Status of utilisation

Amount utilised

RM

Amount unutilised

RM

Repayment of bank borrowings Pending 2,986,890 -Estimated expenses in relation to the Private Placement Pending 16,110 -

Total 3,003,000 -

2. Related Party Transactions of a Revenue or Trading Nature

Significant related party transactions of the Group for the FYE 2016 are disclosed in Note 29 to the Financial Statements of this Annual Report.

3. Audit and Non-Audit Fees

For the FYE 2016, Messrs. Russell Bedford LC & Company, the external auditors, has rendered certain audit and non-audit services to the Group, breakdown of which is listed as below for information:-

Company GroupAudit services rendered RM RM

Statutory audit for FYE 2016 42,400 121,400

Total: 42,400 121,400

Company GroupNon-audit services rendered RM RM

Review the Directors’ Statement on Risk Management and Internal Control for Annual Report 2016 4,000 4,000

Total: 4,000 4,000

4. Material Contracts Involving Interest of Directors, Chief Executive or Major Shareholders

There was no material contract entered into by the Group involving the interest of Directors, chief executive who is not a Director or major shareholders, either still subsisting as at the end of the financial year or entered into since the end of the previous financial year.

Additional Compliance Information


5. SIS Options

The Group has established and implemented the SIS with effect from 1 July 2015 and the SIS is governed by its By-Laws approved by the shareholders at an Extraordinary General Meeting held on 15 June 2015. The information in relation to the SIS, is as follows:-

Details Number of SIS Options

Total number of options or shares granted 177,091,200Total number of options exercised or shares vested 77,200,000Total options or shares outstanding 50,785,200

SIS Options Granted to the Directors and Chief Executive Number of SIS Options

Aggregate options or shares granted 35,796,300Aggregate options exercised or shares vested 18,000,000Aggregate options or shares outstanding 13,996,300

SIS Options Granted to the Directors and Senior Management

Number of SIS Options (During the Financial

Year)

Number of SIS Options (Since

Commencement of the scheme)

Aggregate maximum allocation applicable to directors and senior management in percentage 0% 60%

The actual percentage granted to them 0% 46%

Breakdown of the SIS Options offered to and exercised by, or shares granted to and vested in (if any) Non-Executive Directors (“NED”) pursuant to the SIS in respect of the FYE 2016 are as follows:-

Name of NED Amount of SIS Options GrantedAmount of SIS Options

Exercised/Shares Vested

Roy Thean Chong Yew 0 0Datuk Md. Hassim Bin Pardi 0 0Ewe Chuan Seng 0 0

Total: 0 0

Additional Compliance Informationcont'd


The Board presents the Audit Committee Report to provide insights on the discharge of the Audit Committee’s functions during the FYE 2016.

COMPOSITION

The current composition of the Audit Committee are as follows:

ChairmanMr. Roy Thean Chong Yew (Independent Non-Executive Director)

Members Datuk Md. Hassim Bin Pardi (Independent Non-Executive Director)Mr. Ewe Chuan Seng (Independent Non-Executive Director)

All of the members of the Audit Committee satisfied the test of independence under the ACE LR and also met the requirements of the MCCG 2012.

The Chairman of the Audit Committee, Mr. Roy Thean Chong Yew is an Independent Non-Executive Director. In this respect, the Company comply with Rule 15.10 of the ACE LR.

In addition, Mr. Roy Thean Chong Yew, is a member of the Malaysian Institute of Certified Public Accountants (“MICPA”), Malaysian Institute of Accountants (“MIA”) and a Chartered Member of Institute of Internal Auditors of Malaysia (“CMIIA”). In this respect, the Company complies with Rule 15.09(1)(c) of the ACE LR.

The performance of the Audit Committee and each of its members were reviewed by the Board on 25 February 2016 and is satisfied that they are able to discharge their functions, duties and responsibilities in accordance with the Terms of Reference of the Audit Committee, thereby supporting the Board in ensuring appropriate corporate governance standards within the Group.

MEETINGS

The Audit Committee held a total of five (5) meetings during the FYE 2016.

The details of attendance of the Audit Committee Meetings during the financial year were as below:-

MembersDate of

Appointment

Total no.of meetings

attended

Total no.of meetings held during

tenure of office %

Mr. Roy Thean Chong Yew 18.10.2010 5 5 100Datuk Md. Hassim Bin Pardi 26.08.2011 5 5 100Mr. Ewe Chuan Seng 13.08.2014 5 5 100

The lead audit partner of the external auditors responsible for the Group attended four (4) Audit Committee Meetings held in year 2016.

The external auditors were encouraged to raise with the Audit Committee any matters they considered important to bring to the Audit Committee’s attention. For FYE 2016, three (3) private sessions were held between the Audit Committee with the external auditors without the presence of the Executive Board members and staff.

Audit Committee Report


MEETINGS cont'd

The Chairman of the Audit Committee also sought information on the communication flow between the external auditors and the Management which was necessary to allow unrestricted access to information for the external auditors to effectively perform their duties.

Notices of the Audit Committee Meeting were sent to the Audit Committee Members at least one (1) week in advance. Upon that, the Company Secretaries will then compiled the relevant meeting papers for dissemination to the Audit Committee by email and/or hand.

All deliberations during the Audit Committee Meetings were duly minuted. Minutes of the Audit Committee Meetings were tabled for confirmation at every succeeding Audit Committee Meeting.

The Chairman of the Audit Committee presented the Audit Committee’s recommendations together with the respective rationale to the Board for approval of the annual audited financial statements and the unaudited quarterly financial results. As and when necessary, the Chairman of the Audit Committee would convey to the Board matters of significant concern raised by the internal or external auditors.

TERMS OF REFERENCE

In view of the recent amendments of the ACE LR of Bursa Securities, the TOR of the AC has been reviewed and revised by the AC and recommended the same to the Board of Directors’ approval for adoption. Accordingly, the revised TOR of the AC was approved by the Board of Directors on 13 April 2016.

The revised TOR of the AC is available for reference under “Investors” section of the Company’s website at www.jagb.com.my.

SUMMARY OF WORKS

During the FYE 2016, the summary of works undertaken by the Audit Committee comprised the followings:-

1. Overview of Financial Performance and Reporting

• Reviewed the unaudited quarterly financial results for the quarters ended 30 September 2016, 30 June 2016, 31 March 2016 and 31 December 2015 and recommended the same for the Board’s approval;

• Reviewed the financial performance and financial highlights of the Group;

• Reviewed the identified significant matters pursuant to Rule 15.12(1)(g)(ii) of the ACE Market Listing Requirements of Bursa Securities which took effect on 1 July 2016;

• Reviewed the draft audited financial statements for the financial year ended 31 December 2015 and recommended the same for the Board’s approval; and

• Reviewed the Group’s compliance with the accounting standards and relevant regulatory requirements.

Audit Committee Reportcont'd


SUMMARY OF WORKS cont'd

2. Oversight of External Auditors

• Reviewed the Audit Observations for the Group highlighted by the External Auditors for the financial year ended 31 December 2015;

• Received the Audit Progress Memorandum prepared by the External Auditors for the financial year ended 31 December 2015, covering updates of matters to highlight and significant outstanding information/documents from the audit field works;

• Reviewed the 2016 Audit Planning Memorandum prepared by the External Auditors, entailing mainly the overview of audit approach, scope of work, auditing developments, significant risks and areas of audit focus of the Group;

• Met three (3) times with the external auditors without the presence of the Executive Directors and Management;

• Reviewed the suitability and independence of the External Auditors vide a formalised “Assessment on External Auditors” and upon reviewed and being satisfied with the results of the said assessment, the same has been recommended to the Board for approval;

• Received and discussed with the External Auditors on the Illustrative Auditors’ Report as presented by the External Auditors;

• Discussed and reviewed with the External Auditors, the applicability and the impact of the new accounting standards and new financial reporting regime issued by the Malaysian Accounting Standards Board, and the scope of work and audit plan for the FYE 2016, including any significant issues and concerns arising from the audit; and

• Reviewed the audit fees for FYE 2016 prior to the Board’s approval.

3. Oversight of Internal Auditors

• Reviewed the risk-based Internal Audit Plan for the Group for FYE 2016 and approved for adoption of the same by the Group throughout FYE 2016;

• Reviewed the Internal Audit Reports for the financial year ended 31 December 2015 and FYE 2016 and assessed the internal auditors’ findings and the management’s responses and made the necessary recommendations to the Board of Directors for approval;

• Reviewed the progress updates on the follow-up review of the previous Internal Audit Reports;

• Reviewed the adequacy and performance of the internal audit function and its comprehensive coverage of the Group’s activities for the financial year ended 31 December 2015; and

• Reviewed and assessed the adequacy of the scope, functions, competency and resources of the outsourced internal auditors for the financial year ended 31 December 2015 and that they have the necessary authority to carry out their work.



SUMMARY OF WORKS cont'd

4. Oversight of Risk Management Working Group and Function

• Monitored the progress of establishment of Risk Register; and

• Receipt of updates from the Risk Management Working Group on the Risk Register on quarterly basis.

5. Oversight of Share Issuance Scheme (“SIS”)

• Review of the allocation of options pursuant to SIS (if any) on quarterly basis; and

• Verify any allocation of options pursuant to the SIS and/or Share Grant Scheme at the end of each financial year as being in compliance with the criteria disclosed to the employees.

6. Review of Related Party Transactions

• Reviewed any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions on management integrity at each Audit Committee quarterly meetings.

7. Oversight of Internal Control Matters

• Reviewed and confirmed the minutes of the Audit Committee Meetings;

• Reviewed the disclosures in Statement on Corporate Governance for the inclusion in the Annual Report 2015;

• Reviewed the disclosures in Audit Committee Report and Statement on Risk Management and Internal Control to be included in the Annual Report 2015; and

• Reviewed the revised Terms of Reference of the Audit Committee which incorporated the relevant amendments to the ACE Market Listing Requirements of Bursa Securities and recommended the same to the Board of Directors for approval for adoption.

The Board is satisfied that the Audit Committee has carried out their responsibilities and duties in accordance with the Audit Committee’s Terms of Reference.

INTERNAL AUDIT FUNCTION

(1) Appointment

The Group has appointed an outsourced internal audit service provider to carry out the internal audit function, namely Morison AAC Corporate Solutions Sdn. Bhd. Committee, providing the Board with a reasonable assurance of adequacy of the scope, functions and resources of the internal audit function. The purpose of the internal audit function is to provide the Board, through the Audit Committee, assurance of the effectiveness of the system of internal control in the Group.

The internal audit function is independent and performs audit assignments with impartiality, proficiency and due professional care.



INTERNAL AUDIT FUNCTION cont'd

(2) Summary of Internal Audit Works for FYE 2016

During the FYE 2016, the summary of works undertaken by the internal auditors comprised the followings:-

• Reviewed compliance with policies, procedures and standards, relevant external rules and regulations;

• Assessed the adequacy and effectiveness of the Group’s system of internal control and recommended appropriate actions to be taken where necessary;

• The internal audits performed met the objective of highlighting to the Audit Committee the audit findings which required follow-up actions by the Management, any outstanding audit issues which required corrective actions to be taken to ensure an adequate and effective internal control system within the Group, as well as any weaknesses in the Group’s internal control system;

• Ensured that those weaknesses were appropriately addressed and that recommendations from the internal audit reports and corrective actions on reported weaknesses were taken appropriately within the required timeframe by the Management; and

• Presentation of audit findings and corrective actions to be taken by Management in the quarterly Audit Committee Meetings.

For FYE 2016, the following areas of the Group have been successfully audited by Morison in accordance with the Risk-based Audit Plan adopted:-

Name of Audited Subsidiary Audit Area/ Function

Tabling of Internal Audit Report

JMI Operations Management• Production Department

First Quarter of 2016

JMI Procurement and Suppliers’ Evaluation• Purchase Department (Non-Inventory Item, Consumable

or Service)• Purchase Department - Business Development (Scrap

Metal Direct from Manufacturer)

Second Quarter of 2016

JAG Systems Sdn. Bhd. • Human Resource Management• Financial Management• Customer Service Department• Purchase Management• Overall Operations

Third Quarter of 2016

JMI • Inventory Management Fourth Quarter of 2016

(3) Total costs incurred for FYE 2016

The total cost incurred for the outsourced internal audit function of the Group for the FYE 2016 is amounted to RM29,000/- (2015: RM21,770/-).



This Statement on Risk Management and Internal Control by the Board on the Group is made pursuant to Rule 15.26(b) of the ACE LR and in accordance with the Principles and Recommendations relating to risk management and internal controls provided in the Code as well as the Guidelines for Directors of Public Listed Issuers - Statement on Risk Management and Internal Control.

The following statements outline the scope and nature of internal control system of the Group during the FYE 2016.

RESPONSIBILITY OF THE BOARD

The Board acknowledges its overall responsibility for safeguarding the shareholders’ investment and assets of the Group by implementing and maintaining a sound and effective risk management framework and internal control system.

The Board endeavours to fulfil its objectives vide an effective and efficient governance, risk management, financial, organisational, operational and compliance control. It is committed to provide a system that gives reasonable, though not absolute assurance against the occurrence of any material misstatements or losses, infringement against the laws or regulations or fraud.

The Management has undertaken review and assessment during FYE 2016 on the effectiveness, integrity and adequacy of the risk management framework and the internal control system of the Group. During the financial year under review, improvements to the internal control were implemented.

RISK MANAGEMENT

The Board is committed to operate a sound risk management framework that enables the operating activities to be carried out in such a manner that the risks taken would not lead to material losses and/or reputational damages to the Group.

Enterprise Risk Management (“ERM”) Framework

JMI, a key active subsidiary of the Company has put in place an ERM Framework and the following risks have been duly identified:-

• Strategic risks;• Human resource risks;• Compliance risks;• Operational risks;• Information technology (“IT”) risks; and• Financial risks.

During the financial year under review, Management maintained the existing internal control protocols in order to manage and mitigate against the abovementioned identified risks. Management has also represented to the Audit Committee that there were no changes that have materially affected, or are reasonably likely to materially affect the Group’s system of internal control and risk management with respect to its financial reporting.

The Board believes that risk management is essential for continued profitability and enhancement of shareholders’ value. The Board acknowledges the importance of the risk management system in identifying the principal risks exposed by the Group and ways of managing them at an acceptable level and that subsequently contribute to achieving the corporate goals of the Group.

Statement on Risk Management and Internal Control


RISK MANAGEMENT cont'd

Risk Management Working Group (“RMWG”)

The RMWG was established since third quarter of financial year ended 31 December 2015. The RMWG reports directly to the Audit Committee with the functions of performing risk identification, risk evaluation as well as making relevant recommendation for risk mitigation.

The RMWG met once in the FYE 2016 and maintained constant communication via email for discussion on matters concerning risk management.

The composition of the RMWG is as follows:-

ChairmanDato’ Ng Meow Giak (Executive Director of JAG Berhad and Head of Total Waste Management Division, JMI)

MembersMr. Ng Yaw Long (Operation Director, JMI)Mr. Goh Chee Hong (Finance Manager, JMI)Ms. Ho Siew Lan (Human Resource Manager, JMI)Mr. Loh Wan Leong (Plant Manager, JMI)Mr. Ong Yew Liang (Production Manager, JMI)Ms. Yeoh Siew Luan (Finance Manager, JAG Systems Sdn. Bhd.)Ms. Fan Mee Mee (General Manager, JAG Systems Sdn. Bhd.)

Summary of Works Undertaken by RMWG

• Drawn up the risk register of the Group and recommended the same to the Audit Committee for adoption.

• Assessed risk matters and reviewed the risk register of the Group on quarterly basis to ensure relevance to the Group.

• Presented updates of the development of risk matters of the Group to the Audit Committee at the Audit Committee Meetings on quarterly basis.

THE INTERNAL CONTROL PROCESSES

The Group’s internal control system consists of the following key processes:-

1. Authority and Responsibility

Certain responsibilities are delegated to the following Board Committees through clearly defined TOR which are reviewed periodically and/or when the need arises:-

• Audit Committee; • Nomination Committee; • Remuneration Committee; and • Share Issuance Scheme Option Committee.


cont'd


THE INTERNAL CONTROL PROCESSES cont'd

2. Internal Audit

Qualified and Independent Internal Auditors

The Group’s internal audit has been outsourced to an independent service provider. The Board has appointed Morison AAC Corporate Solutions Sdn. Bhd. (“Morison”), an established local accounting and business advisory practice provider in Malaysia. Prior to their appointment, the Audit Committee has considered the following criteria:-

• Length of establishment; • Core specialty area; • Industry reputation; • International affiliation; • Qualification and experience of engagement partner and team; and • Existing client base.

Risk-Based Internal Audits

Morison has prepared a risk-based internal audit plan based on their review of the financial report of the Group and taking into consideration the impact of the different areas of the Group based on materiality of the numbers reported.

Through Morison, the effectiveness and efficiency of the Group’s risk management and internal control system were examined and evaluated in an independent capacity. Morison has assessed the Group’s compliance with policies and procedures as well as relevant laws and regulations. Morison then provided reports on issues relating to internal controls and the associated risks together with recommendations for appropriate actions to the Audit Committee.

Summary of Works Undertaken by the Internal Auditors

For FYE 2016, Morison had:-

• Carried out their activities in accordance with the scope of work.

• Presented their findings with the Audit Committee on quarterly basis and recommended corrective actions for the Management.

• Conducted follow-up review on their previous internal audit reports.

Adequacy of Scope, Functions, Competency and Resources of the Outsourced Internal Audit Functions

In the first quarter of FYE 2016, the Audit Committee had vide its assessment, assessed the adequacy of scope, functions, competency and resources of the outsourced internal audit function and that it has the necessary authority to carry out its work and the internal audit programme, 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 for the financial year ended 31 December 2015.

Based on the collated results of the above said assessment, the Audit Committee was of the view that the internal audit has added value to the Group by providing further assurance relating to risk management and fraud control and assessed the Internal Auditors’ performance as “Adequate”.

Statement on Risk Management and Internal Controlcont'd


THE INTERNAL CONTROL PROCESSES cont'd

3. Monitoring and Reporting

The Financial Controller in charge of the Group’s financial affairs is required to give assurance to the Audit Committee that adequate processes and controls are in place in the preparation of each quarterly financial statements, including consolidated condensed financial statements, and that appropriate accounting policies are adopted and applied consistently to give a true and fair view of the state of affairs of the Group and to ensure compliance with the Malaysian Financial Reporting Standards.

Upon review, the Audit Committee shall inform the Board on the assurance it received from the Financial Controller as well as the conclusion it made on the adequacy of processes and controls in place for effective financial reporting and disclosures to be made by the Company.

4. Staff Competency

It is part of the Company’s policies to ensure provision of constant training and development programmes to ensure that the employees are kept up-to-date with the necessary competencies to carry out their responsibilities towards achieving the Group’s objectives.

REVIEW OF THIS STATEMENT

Pursuant to Rule 15.23 of the ACE LR, the external auditors have reviewed this statement for inclusion in the 2016 Annual Report, in accordance with the Malaysian Approved Standard on Assurance Engagements, International Standard on Audit Engagement (“ISAE”) 3000 (Revised) – Assurance Engagements other than Audits or Reviews of Historical Financial Information and Recommended Practice Guide (“RPG”) 5 (Revised) – Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants.

Based on their review, the external auditors reported to the Board that nothing has come to their attention that causes them to believe that this statement is not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers to be set out, nor is the statement factually inaccurate.

RPG 5 (Revised) does not require the external auditors to, and they did not, consider whether this statement covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control systems including the assessment and opinion by the Board of Directors and management thereon. They are also not required to consider whether the process described to deal with material internal control aspects of any significant problems disclosed in the annual report will, in fact, remedy the problems.

CONCLUSION

The Board has received assurance from the Financial Controller and the Executive Director that the function of the Company’s risk management and internal control system for the financial year under review, and up to the date of approval of this statement, has been sound and sufficient, in all material aspects, based on the risk management model and internal control system adopted by the Group, safeguard the shareholders’ investments, the interests of customers, regulators, employees and other stakeholders, and the Group’s assets.

The Board members acknowledge that they are ultimately responsible for ensuring the proper implementation of appropriate internal control system even though this responsibility has been delegated to the Management.

This statement was approved by the Board on 17 April 2017.


cont'd


In accordance with the Companies Act 2016 and the applicable approved accounting standards, the Directors are required to prepare annual financial statements that give a true and fair view of the financial position and the results and cash flows of the Group and of the Company for that financial year then ended.

The Directors have reviewed the accounting policies to ensure that they are consistently applied throughout the financial year and are of the view that relevant approved accounting standards have been followed in the preparation of these financial statements. In cases where judgements and estimations were made, they were based on reasonableness and prudence.

The Directors have relied on the system of internal controls to ensure that the information generated for the preparation of the financial statements from the underlying accounting records are accurate and reliable.

The Directors are responsible for ensuring that the Company maintains accounting records which disclose with reasonable accuracy of the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with the provisions of the Companies Act 2016.

The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect frauds and other irregularities.

This Statement on Directors’ Responsibility for preparing the financial statements is approved by the Board of Directors on 17 April 2017.

Statement on Directors' Responsibility for Preparing the Financial Statements

Directors’ Report 76Statement by Directors and Statutory Declaration 83Independent Auditors’ Report 84Statements of Comprehensive Income 89Statements of Financial Position 90Statements of Changes in Equity 92Statements of Cash Flows 94Notes to the Financial Statements 97

FINANCIAL STATEMENTS


Directors’ Report

DIRECTORS’ REPORT

The directors submit their report and the audited financial statements of the Group and the Company for the financial year ended 31 December 2016.

PRInCIPal aCTIvITIES

The Company is principally an investment holding company and is also engaged in the business of computer software development, maintenance and support services. The details of the subsidiaries, including their principal activities, are disclosed in Note 12 to the financial statements.

FInanCIal RESulTSGroup Company

RM RM

Net profit/(loss) for the year attributable to:Owners of the Company 2,010,770 (170,331)Non controlling interest 48,101 -

2,058,871 (170,331)

In the opinion of the directors, the results of the operations of the Group and the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

DIvIDEnDS

No dividend has been paid or declared by the Company since the end of the previous financial year. The directors also do not recommend any dividend payment in respect of the current financial year.

RESERvES anD PROvISIOnS

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

ISSuE OF ShaRES anD DEbEnTuRES

The Company has not issued any shares and debentures during the financial year.


Directors’ Reportcont'd

WaRRanTS 2014/2019

The Company had on 15 August 2014 issued 324,904,271 free Warrants 2014/2019 in conjunction with its bonus issue of shares. The Warrants 2014/2019 are constituted by a Deed Poll dated 30 July 2014 (“Deed Poll”).

The salient features of the Warrants 2014/2019 are as follows:

(a) The issue date of the Warrants is on 15 August 2014 and the expiry date is on 14 August 2019. Any Warrants not exercised at the expiry date will lapse and cease to be valid for any purpose;

(b) Each Warrant entitles the registered holder the right to subscribe for one (1) new ordinary share of RM0.10 each in the Company at an exercise price of RM0.10 per ordinary share until the expiry of the exercise period;

(c) The exercise price and the number of Warrants are subject to adjustment in the event of alteration to the share capital of the Company in accordance with the provisions in the Deed Poll. However, no adjustment shall be made in any event whereby the exercise price would be reduced to below the par value of ordinary share in the Company;

(d) The Warrant holders are not entitled to participate in any distribution and/or offer of further securities in the Company (except for the issue of new warrants pursuant to adjustment as mentioned in item (c) above), unless and until such Warrant holders exercise their rights to subscribe for new ordinary shares; and

(e) The new ordinary shares to be issued upon exercise of the Warrants, shall upon issuance and allotment, rank pari passu with the then existing ordinary shares, except that they will not be entitled to dividends, rights, allotments and/or other distributions, declared by the Company which entitlement thereof precedes the allotment date of the new ordinary shares allotted pursuant to the exercise of the Warrants.

The movements in the Company’s Warrants 2014/2019 during the financial year are as follows:

Entitlement for ordinary shares of RM0.10 eachBalance at

1.1.2016 Issued Exercised ExpiredBalance at

31.12.2016‘000 ‘000 ‘000 ‘000 ‘000

Number of unexercised warrants 294,704 - - - 294,704

ShaRE ISSuanCE SChEME

The Company implemented a Share Issuance Scheme (“SIS”) which is governed by the SIS By-Laws and was approved by its shareholders at the Extraordinary General Meeting held on 15 June 2015.

The salient features of the SIS are as follows:

(a) The SIS was implemented on 1 July 2015 and is in force for a period of 5 years until 30 June 2020 in accordance with the terms of the SIS By-Laws;

(b) The total number of new shares to be offered pursuant to the SIS shall be subject to a maximum of 30% of the Company’s issued and paid up share capital (excluding treasury shares) at any one time;



ShaRE ISSuanCE SChEME cont'd

(c) Any employee of the Group shall be eligible to participate in the SIS and qualify for selection by the Option Committee if, as at the date of offer, such employee:

(i) is at least eighteen (18) years of age; (ii) is not an undischarged bankrupt nor subject to any bankruptcy proceedings; (iii) is employed on full-time basis and is on the payroll of a company in the Group, which is not dormant and

has not served a notice to resign or received a notice of termination; (iv) is confirmed in writing as a full time employee; and (v) falls within any other criteria that the Option Committee may from time to time determine at its absolute

discretion.

The allocation criteria of new ordinary shares comprised in the options to eligible employees shall be determined at the discretion of the Option Committee;

(d) The exercise price of SIS shall be based on the weighted average market price of the Company’s shares as shown in the Daily Official List of Bursa Malaysia Securities Berhad for the five (5) market days immediately preceding the date of offer with an allowance of a discount of not more than 10%, or at the par value of the Company’s share, whichever is higher;

(e) The new ordinary shares to be issued upon exercise of the SIS, shall upon allotment and issuance, rank pari passu with the then existing ordinary shares, except that they will not be entitled to dividends, rights, allotments and/or other distributions, declared by the Company which entitlement thereof precedes the allotment date of the new ordinary shares allotted pursuant to the exercise of the SIS; and

(f) The exercise price and the number of new ordinary shares comprised in the SIS are subject to adjustment in the event of alteration to the share capital of the Company in accordance with the provisions in the SIS By-Laws. However, no adjustment shall be made in any event whereby the exercise price would be reduced to below the par value of ordinary share in the Company.

The movements in the Company’s SIS are as follows:

Number of options over ordinary shares of RM0.10 each

Offer DateBalance at

1.1.2016 Granted Exercised LapsedBalance at

31.12.2016’000 ’000 ’000 ’000 ’000

1 July 2015 99,891 - - (49,106) 50,785



DIRECTORS The directors of the Company in office since the end of the previous financial year to the date of this report are: Datin Tan Siew ChingDatuk Md Hassim bin PardiDato’ Ng Meow GiakRoy Thean Chong YewEwe Chuan Seng

DIRECTORS’ InTERESTS In ShaRES

The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept under Section 59 of the Companies Act 2016, are as follows:

Number of ordinary shares of RM0.10 eachBalance as at

1.1.2016 Bought SoldBalance as at

31.12.2016

Shareholdings registered in the name of directors:

Datin Tan Siew Ching 43,555,133 - - 43,555,133Datuk Md Hassim bin Pardi - - - -Dato’ Ng Meow Giak 190,893,270 12,000,000 (28,000,000) 174,893,270Roy Thean Chong Yew - - - -Ewe Chuan Seng - - - -

Number of options over ordinary shares of RM0.10 eachBalance as at

1.1.2016 Granted Exercised LapsedBalance as at

31.12.2016

Share options registered in the name of directors:

Datin Tan Siew Ching 2,000,000 - - (2,000,000) -Datuk Md Hassim bin Pardi 600,000 - - (600,000) -Dato’ Ng Meow Giak 13,996,300 - - - 13,996,300Roy Thean Chong Yew 600,000 - - (600,000) -Ewe Chuan Seng 600,000 - - (600,000) -



DIRECTORS’ InTERESTS In ShaRES cont'd

Number of Warrants 2014/2019 over ordinary shares of RM0.10 each

Balance as at1.1.2016 Bought

Sold

Balance as at31.12.2016

Warrants registered in the name of directors:

Datin Tan Siew Ching 15,019,011 - - 15,019,011Datuk Md Hassim bin Pardi - - - -Dato’ Ng Meow Giak 44,765,023 - - 44,765,023Roy Thean Chong Yew - - - -Ewe Chuan Seng - - - -

None of the directors in the office at the end of the financial year had any interest in the shares of the related companies 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 the 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 except for any benefit which may be deemed to have arisen by virtue of the transactions between the Group and certain companies in which certain directors of a subsidiary have interests as disclosed in Note 29.1 to the financial statements.

The amount of remuneration paid to and receivable by the directors for their services to the Group and the Company during the financial year is as follows:

Group CompanyRM RM

Fees 96,000 96,000Remuneration other than fees 496,440 12,600Estimated money value of benefits other than in cash 69,550 -Amount of indemnity insurance effected for directors

(any one claim and in annual aggregation) 1,000,000 1,000,000

There were no arrangements during or at the end of the financial year, which had the object of enabling directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate other than those arising from the share options granted pursuant to the Share Issuance Scheme.



OThER STaTuTORy InFORMaTIOn

Before the financial statements of the Group and the Company were prepared, the directors took reasonable steps: (a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision

for doubtful debts and had satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written down to their expected realisable values.

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

(a) which would render the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and the Company inadequate to any substantial extent;

(b) which would render the values attributed to current assets in the financial statements of the Group and the Company misleading; and

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

In the interval between the end of the financial year and the date of this report: (a) no item, transaction or event of a material and unusual nature has arisen which, in the opinion of the directors,

would substantially affect the results of the operations of the Group and the Company for the financial year in which this report is made; and

(b) no charge has arisen on the assets of the Group and the Company which secures the liability of any other

person nor have any contingent liabilities arisen in the Group and the Company.

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

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, which would render any amount stated in the financial statements misleading.



auDITORS The auditors, Messrs Russell Bedford LC & Company, have indicated their willingness to continue in office.

The total remuneration paid to or receivable by the statutory auditors for the financial year were RM121,400 for the Group and RM42,400 for the Company.

Signed on behalf of the Boardin accordance with a resolution of the directors,

DaTO' nG MEOW GIaK

ROy ThEan ChOnG yEW

Kuala LumpurDated: 17 April 2017


The directors of JaG bERhaD state that, in the opinion of the directors, the accompanying financial statements are drawn up in accordance with the provisions of the Companies Act 1965 and the Malaysian Financial Reporting Standards, so as to give a true and fair view of the financial position of the Group and the Company as at 31 December 2016, and of their financial performance and their cash flows for the year ended on that date.

The supplementary information set out in Note 34, 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 on behalf of the Boardin accordance with a resolution of the directors,

DaTO' nG MEOW GIaK

ROy ThEan ChOnG yEW

Kuala LumpurDated: 17 April 2017

Statement by Directors

Statutory Declaration

I, DaTO' nG MEOW GIaK, being the director primarily responsible for the financial management of JAG BERHAD, do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements are correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by the )above named DATO' NG MEOW GIAK at )Kuala Lumpur in Wilayah Persekutuan on )17 April 2017 ) DaTO' nG MEOW GIaK

Before me,

COMMISSIONER FOR OATHS

MOHAN A. S. MANIAM (No. W710)

Kuala Lumpur, Wilayah Persekutuan


1. REpORt ON tHE AuDIt Of tHE fINANcIAL StAtEMENtS

1.1 Opinion

We have audited the accompanying financial statements which comprise the statements of financial position of the Group and of the Company as at 31 December 2016, and the related statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2016, and of their financial performance and their cash flows for the year then ended in accordance with the Companies Act 1965 (“CA 1965”) and the Malaysian Financial Reporting Standards.

1.2 Basis for opinion

We conducted our audit in accordance with the Approved Standards on Auditing in Malaysia and the International Standards on Auditing. Our responsibilities under those standards are further described in paragraph 1.6.

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

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

1.3 Key audit matters

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

1.3.1 Existence and valuation of inventories

As described in Note 2.2.2 and Note 15 in the financial statements, the Group carries inventories at the lower of cost and net relisable value. As at 31 December 2016, the Group held inventories of RM33,694,645 representing 22% of total assets of the Group.

The Group’s main raw materials contents – copper, gold and aluminum, also a key component of the Group’s finished goods, are subject to price volatility. Fluctuation in the price of copper, gold and aluminum can also lead to potential issues over the realisable value of the inventory balances, in particular if the historical cost of the inventories are higher than the net realisable value. In addition, due to the voluminous and nature of the inventories, management performs periodic inventory counts.

These, in combination with the significance of inventories as part of total assets, made us conclude that existence and valuation of inventories are a key audit matter of our audit.

Independent Auditors’ Report To the members of JAG Berhad(Incorporated in Malaysia)


1. REpORt ON tHE AuDIt Of tHE fINANcIAL StAtEMENtS cont'd

1.3 Key audit matters cont'd

1.3.1 Existence and valuation of inventories

How the matter was addressed in the audit

For the valuation of inventories, we tested a sample of inventory items to assess whether there were inventories which were sold with a consistent negative margin by evaluating recent sales invoices, and evaluated management’s assessment whether inventories should or should not be written down.

Our audit procedures to test the existence of the inventories mainly consist of understanding of the controls over the existence and movements of inventories, testing the relevant internal control procedures, specifically by testing the inventory cycle counts that are periodically performed by management and also testing the controls surrounding the movements of inventories. Throughout the year, we have attended a selection of inventory cycle counts to validate counts performed by management. We compared our count results with the results of the counts by management’s representatives.

The results from our testing were satisfactory.

1.3.2 Recoverability of trade and other receivables

The recoverability of trade and other receivables is a key audit matter in our audit as this involves management’s estimates in relation to credit risk exposure. The Group also has a significant number of receivable balances that are overdue, leading to the risk that the Group’s impairment for trade and other receivables is insufficient if the amounts are not recoverable.

How the matter was addressed in the audit

Our audit procedures included sending specific confirmations on a sample basis to confirm period end balances. We also verified post year end cash receipts against year end receivable balances, and tested the adequacy of the amount of impairment made by management by challenging the relevant assumptions and also taking into account historical data from the Group’s previous collections experience. We also considered the adequacy of the amount of impairment in the light of available evidence including the aging profile of receivables at year end and at the time of audit, the history of bad debt exposure and recent changes in payment profile.

Overall, the results of our evaluation of the Group’s impairment for trade and other receivables are consistent with management’s assessment.

1.4 Other information

Management is responsible for the other information. The other information comprises the information included in the Company’s directors’ report and annual report, but does not include the financial statements and our auditor’s report thereon. The annual report is expected to be made available to us after the date of this auditor’s report.

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

Independent Auditors’ Report To the members of JAG Berhad

(Incorporated in Malaysia) cont'd



1.4 Other information cont'd

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

If, based on the work performed, we conclude that there is a material misstatement of this other information, we are required to report the fact. We have nothing to report in regard to the directors’ report.

1.5 Responsibilities of management and those charged with governance for the financial statements

The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with CA 1965 and the Malaysian Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and/or its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

1.6 Auditors’ responsibilities for the audit of the financial statements

It is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report our opinion solely to you, as a body, in accordance with Section 266 of the Companies Act 2016, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the content of this report.

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

As part of an audit in accordance with the Approved Standards on Auditing in Malaysia and the International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

Independent Auditors’ Report To the members of JAG Berhad(Incorporated in Malaysia) cont'd



1.6 Auditors’ responsibilities for the audit of the financial statements cont'd

As part of an audit in accordance with the Approved Standards on Auditing in Malaysia and the International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: cont'd

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

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

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

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

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

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

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

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

Independent Auditors’ Report To the members of JAG Berhad

(Incorporated in Malaysia) cont'd


2. REpORt ON OtHER LEGAL AND REGuLAtORy REquIREMENtS

2.1 companies Act 1965

In accordance with the requirements of CA 1965, we also report on the following:

(a) In our opinion, the accounting and other records and the registers required by CA 1965 to be kept by the Company and by its subsidiaries have been properly kept in accordance with the provisions of CA 1965.

(b) 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 Group’s financial statements and we have received satisfactory information and explanations required by us for those purposes.

(c) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material in relation to the Group’s financial statements and did not include any comment made under Section 174(3) of CA 1965.

2.2 Bursa Malaysia Securities Berhad

The supplementary information set out in Note 34 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.

3. ENGAGEMENt pARtNER

The engagement partner on the audit resulting in this independent auditors’ report is Teoh Wuey Sze.

RuSSEll bEDFORD lC & COMPany AF 1237 CHARTERED ACCOUNTANTS

TEOh WuEy SZE 2831/01/18(J) CHARTERED ACCOUNTANT

Kuala Lumpur Date: 17 April 2017

Independent Auditors’ Report To the members of JAG Berhad(Incorporated in Malaysia) cont'd


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

Statements of Comprehensive IncomeFor the year ended 31 December 2016

Group CompanyNote 2016 2015 2016 2015

RM RM RM RM

Revenue 4 93,578,528 84,790,679 470,400 -Other operating income 1,142,035 2,447,878 8,387 14,949Direct costs (10,562,466) (420,532) - -Changes in inventories of finished goods and

work in progress 589,557 (1,751,655) - -Raw materials and consumables used (56,742,751) (66,284,692) - -Changes in inventories of trading merchandise (1,673,842) (3,907,971) - -Staff costs 5 (6,458,951) (20,509,329) (70,883) (200,040)Depreciation and amortisation (3,916,345) (4,041,967) (4,134) (8,316)Other operating expenses (12,756,868) (12,138,611) (572,122) (567,582)

profit/(Loss) from operations 3,198,897 (21,816,200) (168,352) (760,989)Finance costs (634,866) (598,652) - -

profit/(Loss) before tax 6 2,564,031 (22,414,852) (168,352) (760,989)Income tax expense 7 (505,160) 2,623,906 (1,979) -

Net profit/(loss) for the year 2,058,871 (19,790,946) (170,331) (760,989)

Other comprehensive income:Items that will not be reclassified subsequently

to profit or loss

Surplus on revaluation of freehold land and buildings - 9,513,288 - -Tax effects of revaluation reserve - (820,189) - -

Other comprehensive income for the year, net of tax - 8,693,099 - -

total comprehensive income/(loss) for the year 2,058,871 (11,097,847) (170,331) (760,989)

profit/(Loss) attributable to:Owners of the Company 2,010,770 (19,784,448) (170,331) (760,989)Non controlling interest 48,101 (6,498) - -

2,058,871 (19,790,946) (170,331) (760,989)

total comprehensive income/(loss) attributable to:Owners of the Company 2,010,770 (11,091,349) (170,331) (760,989)Non controlling interest 48,101 (6,498) - -

2,058,871 (11,097,847) (170,331) (760,989)

Earnings/(Loss) per share (sen)

- Basic 8 0.18 (1.80)


Statements of Financial PositionAs at 31 December 2016



RM RM RM RM

Non current assetsProperty, plant and equipment 9 78,457,145 80,114,301 9 4,143Land held for property development 10 14,059,496 - - -Intangible assets 11 104,704 105,528 - -Investment in subsidiaries 12 - - 96,975,271 98,465,410Other investments 13 - - - -Deferred tax assets 14 1,035,568 1,486,000 - -

93,656,913 81,705,829 96,975,280 98,469,553

current assets

Inventories 15 33,694,645 35,006,045 - -Trade receivables 16 8,992,925 13,925,171 - -Other receivables, deposits and prepayments 17 4,182,717 5,569,073 29,758,153 31,577,297Tax recoverable 2,849,141 2,661,600 - -Other investments 13 4,463,972 2,447,466 - -Fixed deposits with licensed banks 18 2,134,939 4,721,588 342,348 327,867Cash and bank balances 5,216,676 3,919,050 1,960,052 351,475

61,535,015 68,249,993 32,060,553 32,256,639

current liabilitiesTrade payables 19 5,045,218 7,181,843 - -Other payables and accruals 20 6,465,638 3,090,603 115,806 90,974Derivative liability 21 551,581 47,613 - -Short term borrowings 22 5,308,092 923,731 - -Hire purchase liabilities 23 265,372 587,153 - -Tax payable 1,979 - 1,979 -

17,637,880 11,830,943 117,785 90,974

Net current assets 43,897,135 56,419,050 31,942,768 32,165,665

Non current liabilities

Hire purchase liabilities 23 40,136 308,784 - -Deferred income 24 1,147,997 1,014,612 - -Term loan 25 10,130,503 11,076,269 - -Deferred tax liabilities 14 1,925,521 1,927,355 - -

(13,244,157) (14,327,020) - -

124,309,891 123,797,859 128,918,048 130,635,218



Statements of Financial PositionAs at 31 December 2016

cont'd


RM RM RM RM

Represented by:

Share capital 26 114,384,458 114,384,458 114,384,458 114,384,458Reserves 28 9,870,974 9,407,043 14,533,590 16,250,760

Equity attributable to owners of the company 124,255,432 123,791,501 128,918,048 130,635,218Non controlling interest 54,459 6,358 - -

total equity 124,309,891 123,797,859 128,918,048 130,635,218


The accompanying notes form an intergral part of the financial statements

Statements of Changes in EquityFor the year ended 31 December 2016

Share capital

Sharepremium

Revaluation reserve

Reverse acquisition

reserve

Share issuance scheme

(“SIS”) reserve

Retained profits

Equity attributable to owners of the

Company

non controlling

interest total equity

Group RM RM RM RM RM RM RM RM RM

At 1 January 2016 114,384,458 19,161,772 23,378,833 (72,050,600) 5,218,078 33,698,960 123,791,501 6,358 123,797,859

Transactions with owners

Grant of equity settled share options to employees pursuant to SIS

- Over recognition of share options expense in prior year - - - - (1,546,839) - (1,546,839) - (1,546,839)

SIS lapsed - - - - (1,095,064) 1,095,064 - - -

- - - - (2,641,903) 1,095,064 (1,546,839) - (1,546,839)

Net profit/Total comprehensive income for the year - - - - - 2,010,770 2,010,770 48,101 2,058,871

At 31 December 2016 114,384,458 19,161,772 23,378,833 (72,050,600) 2,576,175 36,804,794 124,255,432 54,459 124,309,891

At 1 January 2015 104,444,458 19,136,572 14,685,734 (72,050,600) - 49,611,584 115,827,748 - 115,827,748

Transactions with owners:

Shares issued by a subsidiary to non-controlling interest - - - - - - - 20,000 20,000

Dilution of interest in a subsidiary - - - - - 7,144 7,144 (7,144) -

Exercise of warrants 2,220,000 - - - - - 2,220,000 - 2,220,000

Grant of equity settled share options to employees pursuant to SIS - - - - 9,082,758 - 9,082,758 - 9,082,758

Exercise of share options pursuant to SIS 7,720,000 133,200 - - (3,864,680) 3,864,680 7,853,200 - 7,853,200

9,940,000 133,200 - - 5,218,078 3,871,824 19,163,102 12,856 19,175,958

Share issue expenses - (108,000) - - - - (108,000) - (108,000)

Net loss for the year - - - - - (19,784,448) (19,784,448) (6,498) (19,790,946)

Other comprehensive income for the year

- Surplus on revaluation of freehold land and buildings(net of tax) - - 8,693,099 - - - 8,693,099 - 8,693,099

Total comprehensive income/(loss) for the year - - 8,693,099 - - (19,784,448) (11,091,349) (6,498) (11,097,847)

At 31 December 2015 114,384,458 19,161,772 23,378,833 (72,050,600) 5,218,078 33,698,960 123,791,501 6,358 123,797,859



Statements of Changes in EquityFor the year ended 31 December 2016

cont'd

Share capitalShare

premium

Share issuance scheme

(“SIS”) reserve

Accumulated losses total

Company RM RM RM RM RM

At 1 January 2015 104,444,458 19,136,572 - (11,232,781) 112,348,249Transactions with owners:

Exercise of warrants 2,220,000 - - - 2,220,000Grant of equity settled share options to

employees pursuant to SIS - - 9,082,758 - 9,082,758Exercise of share options pursuant to SIS 7,720,000 133,200 (3,864,680) 3,864,680 7,853,200

9,940,000 133,200 5,218,078 3,864,680 19,155,958Share issue expenses - (108,000) - - (108,000)Net loss/Total comprehensive loss for

the year - - - (760,989) (760,989)

At 31 December 2015 114,384,458 19,161,772 5,218,078 (8,129,090) 130,635,218Transactions with owners:

Grant of equity settled share options to employees pursuant to SIS - - - - -

- Over recognition of share options expense in prior year - - (1,546,839) - (1,546,839)

SIS lapsed - - (1,095,064) 1,095,064 -

- - (2,641,903) 1,095,064 (1,546,839)Net loss/Total comprehensive loss for

the year - - - (170,331) (170,331)

At 31 December 2016 114,384,458 19,161,772 2,576,175 (7,204,357) 128,918,048



Statements of Cash FlowsFor the year ended 31 December 2016

Group Company2016 2015 2016 2015

RM RM RM RM

cash flows from/(used in) operating activities

Profit/(Loss) before tax 2,564,031 (22,414,852) (168,352) (760,989)Adjustments for :Allowance for doubtful debts 1,985,664 2,940,649 - -Allowance for doubtful debts no longer required - (600) - -Amortisation of club memberships 824 824 - -Bad debts written off 25,000 - - -Changes in fair value of derivative liability 503,968 47,613 - -Depreciation 3,915,521 4,041,143 4,134 8,316Deposits written off - 272,000 - -Dividend income (35,360) (84,630) - -Net fair value loss/(gain) on held for trading investments 376,529 (302,486) - -Gain on disposal of quoted share investments - (841,817) - -Loss/(Gain) on disposal of plant and equipment 865 (6,188) - -Gain on foreign exchange- unrealised (738,750) (898,648) - -Government grant income (131,192) (97,793) - -Income distributed from financial assets at fair value

through profit or loss (39,409) - - -Interest expense 634,866 598,652 - -Inventories written down - 32,060 - -Interest income (153,832) (169,550) (8,387) (14,949)Plant and equipment written off 297 2,336 - -Realised gain on foreign exchange - cash and cash

equivalents (22,938) (285,759) - -Grant of equity settled share options to employees

pursuant to SIS - current year - 9,082,758 - 96,840 - over recognition of share options expense in prior

year (1,546,839) - (56,700) -

Operating profit/(loss) before working capital changes 7,339,245 (8,084,288) (229,305) (670,782)Decrease in inventories 1,311,400 7,582,976 - -Increase in investments held for trading (1,705,126) - - -Decrease/(Increase) in trade and other receivables 5,060,622 3,168,521 1,316,684 (1,246)Increase/(Decrease) in trade and other payables 2,115,000 (3,974,031) 24,832 (22,935)



Statements of Cash FlowsFor the year ended 31 December 2016

cont'd

Group Company2016 2015 2016 2015

RM RM RM RM

cash generated from/(used in) operations 14,121,141 (1,306,822) 1,112,211 (694,963)Income tax paid (411,577) (1,197,165) - -Income tax refunded 169,453 - - -

Net cash from/(used in) operating activities 13,879,017 (2,503,987) 1,112,211 (694,963)

cash flows from/(used in) investing activities

Repayments from/(Advances to) subsidiaries - - 502,460 (11,075,092)Acquisition of a subsidiary - - - (2)Deposits paid for purchase of plant and equipment (31,725) (347,473) - -Dividends received 35,360 84,630 - -Government grant received 264,577 210,146 - -Increase in fixed deposits pledged (38,886) (38,500) - -Interest received 153,832 169,550 8,387 14,949Increase in land held for property development (13,650,445) - - -Proceeds from disposal of plant and equipment 47 120,564 - -Purchase of other investments (648,500) (1,303,163) - -Purchase of plant and equipment (3,315,846) (7,854,480) - -

Net cash (used in)/from investing activities (17,231,586) (8,958,726) 510,847 (11,060,145)

cash flows from/(used in) financing activities

Interest paid (846,444) (598,652) - -Proceeds from trade finance 4,000,000 3,592,553 - -Proceeds from term loan - 12,000,000 - -Proceeds from issuance of shares - 10,073,200 - 10,073,200Share issue proceeds from non controlling interest of a

subsidiary - 20,000 - -Share issue expenses - (108,000) - (108,000)Repayment of trade finance (4,000,000) (9,111,553) - -Repayment of term loans (893,670) (11,340,400) - -Repayment of hire purchase liabilities (590,429) (878,199) - -

Net cash (used in)/from financing activities (2,330,543) 3,648,949 - 9,965,200

Net (decrease)/increase in cash and cash equivalents (5,683,112) (7,813,764) 1,623,058 (1,789,908)cash and cash equivalents at beginning of year 7,397,494 14,925,499 679,342 2,469,250Effect of exchange differences 22,938 285,759 - -

cash and cash equivalents at end of year 1,737,320 7,397,494 2,302,400 679,342


Group Company2016 2015 2016 2015

RM RM RM RM

cash and cash equivalents comprise:Cash and bank balances 5,216,676 3,919,050 1,960,052 351,475Fixed deposits with licensed banks 2,134,939 4,721,588 342,348 327,867Bank overdraft (4,332,265) - - -

3,019,350 8,640,638 2,302,400 679,342Less: Fixed deposits pledged (1,282,030) (1,243,144) - -

1,737,320 7,397,494 2,302,400 679,342

Statements of Cash FlowsFor the year ended 31 December 2016cont'd



Notes to the Financial StatementsFor the year ended 31 December 2016

1. GENERAL INfORMAtION

The Company is principally an investment holding company and also engaged in the business of computer software development, maintenance and support services.

The Company is a public limited company, incorporated and domiciled in Malaysia, and is listed on the ACE Market of Bursa Malaysia Securities Berhad.

The registered office is located at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur.

The principal place of business is located at D61-3A, Block D, Jaya One, 72A, Jalan Universiti, 46200 Petaling Jaya, Selangor Darul Ehsan.

The financial statements were approved and authorised for issue by the board of directors on 17 April 2017.

2. pRINcIpAL AccOuNtING pOLIcIES

2.1 Statement of compliance

The financial statements of the Group and the Company have been prepared and presented in accordance with the provisions of the Companies Act 1965 and the Malaysian Financial Reporting Standards.

The financial statements also comply with the International Financial Reporting Standards as issued by the International Accounting Standards Board.

2.2 Basis of preparation of the financial statements

2.2.1Basisofaccounting

The financial statements of the Group and the Company have been prepared under the historical cost convention and any other bases described in the significant accounting policies as summarised below.

The Group has adopted the new and revised Malaysian Financial Reporting Standards (“MFRSs”) and IC Interpretations that become mandatory for the current reporting period. The adoption of these new and revised MFRSs and IC Interpretations does not result in significant changes in accounting policies of the Group.

The Group has not adopted the new standards, amendments to published standards and IC Interpretations that have been issued but not yet effective. These new standards, amendments to published standards and IC Interpretations do not result in significant changes in accounting policies of the Group upon their initial application other than the following:

i. MFRS 9 Financial Instruments (effective for financial periods beginning on or after 1 January 2018)

MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary measurement categories for financial assets: amortised cost, fair value through profit or loss and fair value through other comprehensive income (“OCI”). The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial assets. Investments in equity instruments are always measured at fair value through profit or loss with an irrevocable option at the inception to present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest.


Notes to the Financial StatementsFor the year ended 31 December 2016cont'd

2. pRINcIpAL AccOuNtING pOLIcIES cont'd

2.2 Basis of preparation of the financial statements cont'd

2.2.1Basisofaccountingcont'd

The Group has not adopted the new standards, amendments to published standards and IC Interpretations that have been issued but not yet effective. These new standards, amendments to published standards and IC Interpretations do not result in significant changes in accounting policies of the Group upon their initial application other than the following: cont'd

i. MFRS 9 Financial Instruments (effective for financial periods beginning on or after 1 January 2018) cont'd

For financial liabilities, there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss, unless this creates an accounting mismatch.

There is now a new expected credit losses model on impairment for all financial assets that replaces the incurred loss impairment model used in MFRS 139. The expected credit losses model is forward looking and eliminates the need for a trigger event to have occurred before credit losses are recognised.

ii. MFRS 15 Revenue from Contracts with Customers (effective for financial periods beginning on or after 1 January 2018)

MFRS 15 supersedes MFRS 118 Revenue and introduces a new principle of revenue recognition. The core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. MFRS 15 established the core principle of revenue recognition by applying the following five (5) steps:

1. Identify the contract(s) with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognise revenue when (or as) the entity satisfies a performance obligation

MFRS 15 also includes a cohesive set of disclosure requirements that would result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the Group’s contracts with customers.

iii. MFRS 16 Leases (effective for financial periods beginning on or after 1 January 2019)

The scope of MFRS 16 includes leases of all assets, with certain exceptions. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration.

MFRS 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance lease under MFRS 117. The standard includes two recognition exemptions for lessees – leases of low value assets and short term leases (i.e. leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e. the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e. the right of use asset).



cont'd



2.2.1Basisofaccountingcont'd

iii. MFRS 16 Leases (effective for financial periods beginning on or after 1 January 2019) cont'd

Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right of use asset. Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g. a change of lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right of use asset.

Lessor accounting is substantially unchanged. Lessors will continue to classify all leases using the same classification principle as in MRFS 117 and distinguish between two types of lease which is operating and finance leases.

Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2019 with early adoption permitted but not before the entity applies MFRS 15.

The Group is in the process of making an assessment of where the impact of the above new standards is expected to be in the period of initial application.

2.2.2Significantaccountingpolicies

Functionalandpresentationcurrency

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

Basisofconsolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.





2.2.2Significantaccountingpoliciescont'd

Basisofconsolidationcont'd

For each business combination, non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation are measured at the present ownership instruments’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. All other components of non-controlling interests shall be measured at their acquisition-date fair values, unless another measurement basis is required by MFRSs.

Any excess of the sum of their fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), over the net fair value of the acquiree’s net identifiable assets and liabilities is recorded as goodwill in the statement of financial position. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the profit or loss and the comprehensive income for the reporting period between non-controlling interests and the owners of the Company. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributable to owners of the parent.

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is loss. Subsequently, it is accounted for as equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.



cont'd




BusinessCombination-ReverseAcquisition

For business combination, one of the entities shall be identified as the acquirer. In a reverse acquisition, the legal acquirer is identified as the acquiree for accounting purposes. Consolidated financial statements prepared following a reverse acquisition are issued under the name of legal acquirer (accounting acquiree) but described as a continuation of the financial statements of the legal subsidiary (accounting acquirer), with one adjustment, which is to adjust retroactively the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. Comparative information presented in the consolidated financial statements is also retroactively adjusted to reflect the legal capital of the legal parent (accounting acquiree).

Revenueandincomerecognition

Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised upon delivery of goods and the risk and rewards of ownership have passed to the customers.

Revenue from services rendered is recognised when the services are rendered.

Revenue from sale of investments is recognised upon confirmation of transactions by the stockbrokers.

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

Interest income is recognised as it accrues (using the effective interest rate method) unless collectibility is in doubt.

Rental income is recognised as it accrues unless collectibility is in doubt.

Foreigncurrencies

Transactions in foreign currencies are measured in the functional currency of the Company and its subsidiaries and are recorded on initial recognition in the functional currency at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the reporting date. Non monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss.

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

2016 2015RM RM

United States Dollar 4.486 4.294Euro 4.720 4.690






Employeebenefits

(i) Short term benefits

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

(ii) Defined contribution plans

Obligations for contribution to defined contribution plans such as Employees Provident Fund are recognised as an expense in profit or loss as incurred.

(iii) Employee share option plans

Employees of the Group receive remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled transactions with the employees is measured by reference to the fair value of the options at the date on which the options are granted. This cost is recognised in profit or loss, with a corresponding increase in the share issuance scheme reserve over the vesting period. The cumulative expense recognised at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimates of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in the cumulative expense recognised at the beginning and end of the reporting period.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

In the Company’s separate financial statements, the grant of the share options to the subsidiaries employees is not recognised as an expense. Instead, the fair value of the share options measured at the grant date is accounted for as an increase to the investment in subsidiary undertakings, with a corresponding credit to the share issuance scheme reserve.

The share issuance scheme reserve is transferred to retained earnings upon expiry of the share options and upon exercise of options.

Incometax

Income tax on the profit or loss for the reporting period comprises 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 at the reporting date.

Deferred tax is provided for, using the ‘liability’ method, on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and 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 taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.



cont'd




Incometaxcont'd

Deferred tax is measured at the tax rates that are expected to apply in the reporting period when the asset is realised or the liability settled, based on tax rates that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in the profit or loss, except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised in equity or other comprehensive income respectively.

Deferred tax assets and liabilities are offset if there is legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity.

Impairmentofnonfinancialassets

The carrying amount of non financial assets subject to accounting for impairment are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs exceeds its recoverable amount. Impairment losses is recognised in profit or loss in the reporting period in which it arises, unless, the asset is carried at a revalued amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does not exceed the amount held in asset revaluation reserve for the same asset.

The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. The reversal is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.

Property,plantandequipmentanddepreciation Property, plant and equipment are stated at cost or valuation less accumulated depreciation and

impairment losses, if any.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.






Property,plantandequipmentanddepreciation cont'd

Gain or loss arising from the disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognised in profit or loss.

The Group adopted the revaluation method to measure its entire class of land and buildings. Freehold land and buildings are stated at revalued amount, which is the fair value at the date of the revaluation less any accumulated depreciation and impairment losses, if any. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Freehold land and buildings are revalued at a regular interval of every five (5) years with additional valuations in the interval years where market conditions indicate that the carrying amounts of the revalued buildings materially differ from the market value.

An increase arising from revaluation is recognised in other comprehensive income and accumulated in equity under revaluation reserve. Any decrease arising is first offset against the revaluation surplus on an earlier valuation in respect of the same property and thereafter charged to profit or loss.

A revaluation increase is recognised as income to the extent that it reverses a revaluation decrease of the same property previously charged as an expense. Upon the disposal of revalued assets, the amounts in revaluation reserve relating to those assets are transferred directly to retained profits.

Any accumulated depreciation and impairment losses as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

No depreciation is provided on freehold land. No depreciation is also provided on plant and machinery under construction until the asset is ready for its intended use.

Depreciation on other property, plant and equipment is calculated to write off the cost of the assets to its residual value on a straight line basis at the following annual rates based on their estimated useful lives:

Freehold buildings 2% Furniture, fittings, office and factory equipment 10% - 20% Motor vehicles 20% Plant and machinery 10% - 20% Renovation 10%

The residual values, useful lives and depreciation method are reviewed at each reporting date 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 plant and equipment.



cont'd




Landheldforpropertydevelopment

Land held for property development consists of land on which no significant development work has been undertaken other than earthwork, infrastructure work and professional fees incurred to put the land ready for development or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current assets and is stated at the lower of cost and net realisable value.

Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses.

Land held for property development is transferred to property development costs under current assets when development activities have commenced and where the development activities can be completed within the Group’s normal operating cycle.

Intangibleassets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and impairment losses, if any.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a straight line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each reporting date.

Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying amount may be impaired either individually or at the cash generating unit level. The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable.

Gain or loss arising from derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the asset and is recognised in profit or loss when the asset is derecognised.

i. Golf club memberships

Golf club memberships acquired which are determined to have an indefinite life are not amortised as management believes there is no foreseeable limit to the period over which their benefits can be utilised.

Other golf club memberships with finite useful life is amortised on a straight line basis over the finite useful life of 85 years.






Investmentinsubsidiaries

Subsidiary is a company controlled by the Company. Control exists when the Company has power over its investee, exposed or has rights to variable returns from its involvement with the investee, and has the ability to affect those returns through its power over the investee.

The Company’s investment in subsidiaries is stated at cost less impairment losses, if any.

Inventories Inventories comprising raw materials, work in progress, finished goods and trading merchandise are

stated at the lower of cost and net realisable value. Cost of inventories is determined on a first in, first out basis. Net realisable value represents the estimated selling prices less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

Cost of trading merchandise and raw materials comprises the cost of purchase plus the cost of bringing the inventories to their present location and condition. Cost of work in progress and finished goods comprise the cost of raw materials used, direct labour, other direct costs and appropriate production overheads.

Governmentgrants

Government grants related to assets are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated with the grant. Government grants that compensate the Group for the cost of an asset are recognised in profit or loss as other income on a systematic basis over the useful life of the asset.

Leases Assets acquired under leases or hire purchase which transfers substantially all the risks and rewards incident to

ownership of the assets are capitalised under property, plant and equipment. The assets and the corresponding lease obligations are recorded at their fair values or, if lower, at the present value of the minimum lease payments of the leased assets at the inception of the respective leases.

Finance costs, which represent the difference between the total lease commitments and the fair values of the assets acquired, are recognised in profit or loss over the term of the relevant lease periods so as to give a constant periodic rate of charge on the remaining balance of the obligations for each reporting period.

All other leases which do not meet such criteria are classified as operating leases. Lease payments under operating leases are recognised as an expense on a straight line basis over the terms of the relevant lease.



cont'd




Borrowingcosts

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of the asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the reporting period they are incurred. Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds.

Segmentinformation

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.

Financialinstruments

Financial instruments are recognised in the statement of financial position when the Group has become a party to the contractual provisions of the instrument.

A financial instrument is recognised initially at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as 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 legal enforceable right to offset and intends to settle either on a net basis or realise the asset and settle the liability simultaneously.

Financial assets are classified as either at fair value through profit or loss, loans and receivables, held to maturity investments, or available for sale, as appropriate. Financial liabilities are classified as either at fair value through profit or loss (derivative financial liabilities) or at amortised cost (borrowings and trade and other payables), as appropriate.

(i) Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.






Financialinstruments cont'd

(i) Financial assets at fair value through profit or loss cont'd

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

(ii) Loans and receivables

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

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

(iii) Available for sale financial assets Available for sale are financial assets that are designated as available for sale or are not

classified in any of the three preceding categories.

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

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

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



cont'd




Financialinstrumentscont'd

(iv) Payables

Payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. Payables are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(v) Derivative financial instruments

The Group enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risk.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value at the end of each reporting period. Any gains or losses arising from changes in fair value on derivatives during the reporting period that do not qualify for hedge accounting are recognised in profit or loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

A derivative is presented as a current asset or a current liability unless the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months.

(vi) Interest bearing borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(vii) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due. Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Company, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

(viii) Equity instruments

Equity instruments issued by the Company are recorded at the fair value of the proceeds received net of direct issue costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the reporting period in which they are approved.






Financialinstrumentscont'd

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.

Impairmentoffinancialassets

Financial assets, designated other than at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period.

(i) Loans and receivables

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increased in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

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

The carrying amount of the financial asset is reduced by the impairment loss directly or through the use of an allowance account. When a debtor becomes uncollectible, it is written off against the allowance account.

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



cont'd




Impairmentoffinancialassetscont'd

(ii) Available for sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available for sale financial assets are impaired.

If available for sale financial assets is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on available for sale equity investments are not reversed in profit or loss in the subsequent reporting periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income.

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Statementsofcashflows

Statements of cash flows are prepared using the indirect method.

Cash equivalents are short term, highly liquid investments that are readily convertible to known amount of cash and which are subject to insignificant risk of changes in value. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of fixed deposits pledged and bank overdraft.



3. cRItIcAL AccOuNtING EStIMAtES AND juDGMENtS

In the preparation of the financial statements, the directors are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Estimates and judgments are continually evaluated by the directors and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In the process of applying the Group’s accounting policies, which are described above, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.

Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period other than as follows:

(a) useful lives of property, plant and equipment

The Group reviews the estimated useful lives of property, plant and equipment at the end of each reporting period based on the factors that include asset utilisation, internal technical evaluation, technological changes, environmental and anticipated use of the assets. Changes in the expected level of use of the assets and the Group’s historical experience with similar assets after taking into account anticipated technological changes could impact the economic useful lives and the residual values of the assets. Therefore, future depreciation charges could be revised.

(b) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the trade and other receivables and default or significant delay in payments.

Where there is objective evidence of impairment, the impairment loss is determined based on the estimated future cash flows discounted at the financial asset’s original effective interest rate.



cont'd

4. REvENuE

Group Company2016 2015 2016 2015

RM RM RM RM

Management fees - - 470,400 -Manufacturing 75,820,647 78,947,374 - -Proprietary solutions and software maintenance 1,235,031 1,225,648 - -Trading of goods 3,402,187 4,379,439 - -Trading of shares 10,687,293 - - -Laundry services 2,328,870 238,218 - -Project management services 104,500 - - -

93,578,528 84,790,679 470,400 -

5. StAff cOStS

Group Company2016 2015 2016 2015

RM RM RM RM

Salaries, wages, bonus and allowances 7,113,885 10,210,087 125,310 103,200Defined contribution plan 576,880 866,467 2,016 -Share options expense - current year - 9,082,758 - 96,840 - over recognition of share options expense in

prior year (1,546,839) - (56,700) -Other employee related expenses 315,025 350,017 257 -

6,458,951 20,509,329 70,883 200,040



6. pROfIt/(LOSS) BEfORE tAx

Group Company2016 2015 2016 2015

RM RM RM RM

Profit/(Loss) before tax is arrived at after charging:Allowance for doubtful debts

- trade receivables 1,447,812 2,940,649 - -- other receivables 537,852 - - -

Auditors’ remuneration- statutory audit

- current year 121,400 98,000 42,400 36,000- under provision in prior years 8,000 7,880 - -

Amortisation of club memberships 824 824 - -Bad debts written off 25,000 - - -Changes in fair value of derivative liability 503,968 47,613 - -Depreciation 3,915,521 4,041,143 4,134 8,316Deposits written off - 272,000 - -Directors’ remuneration- directors of the Company

- fees 96,000 96,000 96,000 96,000- others 496,440 1,055,520 12,600 7,200

- directors of the subsidiary- others 494,020 1,048,320 - -

Incorporation fees - 4,600 - -Interest expense

- bank overdrafts 2,524 1,388 - -- bankers acceptance 12,487 20,787 - -- hire purchase 32,112 63,248 - -- term loan 587,743 513,229 - -

Inventories written down - 32,060 - -Loss on disposal of plant and equipment 865 - - -Loss on foreign exchange - realised 534,322 378,394 - -Net fair value loss on held for trading investments 376,529 - - -Plant and equipment written off 297 2,336 - -Rental of

- equipment 181,282 203,068 - -- premises 167,016 226,812 2,016 1,512- shoplot 681,600 - - -



cont'd

6. pROfIt/(LOSS) BEfORE tAx cont'd

Group Company2016 2015 2016 2015

RM RM RM RM

And crediting:Allowance for doubtful debts no longer required - 600 - -Dividend income from other investments (quoted

in Malaysia) 35,360 84,630 - -Net fair value gain on held for trading investments - 302,486 - -Gain on foreign exchange- unrealised 738,750 898,648 - -Gain on disposal of plant and equipment - 6,188 - -Gain on disposal on quoted share investments - 841,817 - -Government grant income 131,192 97,793 - -Income distributed from financial assets at fair

value through profit or loss 39,409 - - -Interest income from - current account 47,063 738 700 -- investment bank - 6,120 - -- fixed deposits 106,769 162,692 7,687 14,949Rental income from car wash 19,094 - - -Rental income from food stall 2,504 600 - -

The key management personnel of the Company whose remuneration is analysed as follows:

Group Company2016 2015 2016 2015

RM RM RM RM

Directors of the companyExecutive directors:

Salaries, bonus and allowances 432,000 936,000 - -Defined contribution plan 51,840 112,320 - -Benefits-in-kind 69,550 66,350 - -

553,390 1,114,670 - -

Non executive directors:Fees 96,000 96,000 96,000 96,000Salaries, bonus and allowances 12,600 7,200 12,600 7,200

108,600 103,200 108,600 103,200

Total directors’ remuneration 661,990 1,217,870 108,600 103,200



6. pROfIt/(LOSS) BEfORE tAx cont'd

The number of directors of the Company where total remuneration (including benefits in kind) during the reporting period falls within the following bands is analysed as follows:

2016 2015RM RM

Executive directors:RM200,001 to RM250,000 2 -RM550,001 to RM600,000 - 2

Non executive directors:Below RM50,000 3 3

7. INcOME tAx ExpENSE

Group Company2016 2015 2016 2015

RM RM RM RM

Estimated income tax payable

- current year (53,567) (20,000) (1,979) -- under provision in prior years (2,995) (413,214) - -

(56,562) (433,214) (1,979) -Deferred taxation (Note 14)

- current year (532,447) 3,104,888 - -- over/(under) provision in prior years 83,849 (47,768) - -

(448,598) 3,057,120 - -

(505,160) 2,623,906 (1,979) -



cont'd

7. INcOME tAx ExpENSE cont'd

A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory income tax rate to income tax expense at the effective income tax rate is as follows:

Group Company2016 2015 2016 2015

RM RM RM RM

Profit/(Loss) before tax 2,564,031 (22,414,852) (168,352) (760,989)

Taxation at statutory tax rate of 24% (2015: 25%) (615,400) 5,603,500 40,404 190,200Expenses not deductible for tax purposes (216,994) (2,697,912) (121,563) (120,600)Income not subject to tax 366,100 24,200 - -Utilisation of previously unrecognised deferred tax

asset 79,180 233,700 79,180 -Deferred tax assets not recognised (198,900) (78,600) - (69,600)(Under)/Over provision in prior years- income tax expense (2,995) (413,214) - -- deferred tax 83,849 (47,768) - -

Income tax expense for the year (505,160) 2,623,906 (1,979) -

8. BASIc EARNINGS/(LOSS) pER SHARE

Basic earnings/(loss) per ordinary share is calculated based on the net profit/(loss) attributable to ordinary shareholders and weighted average number of ordinary shares in issue as follows:

Group2016 2015

RM RM

Net profit/(loss) attributable to ordinary shareholders 2,010,770 (19,784,448)

Group2016 2015

Weighted average number of ordinary shares in issue 1,143,844,587 1,100,065,409

Basic earnings/(loss) per ordinary share (sen) 0.18 (1.80)



8. BASIc EARNINGS/(LOSS) pER SHARE cont'd

8.1 Diluted earnings per share

Diluted earnings per share are not presented in the financial statements as at 31 December 2016 as the fair value of the ordinary shares of the Company during the reporting period approximates the exercise price of the warrants and share options. These potential ordinary shares have a diluted effect only if the fair value of the ordinary shares during the reporting period exceeds the exercise price of these potential ordinary shares.

As at 31 December 2015, diluted loss per share is not presented in the financial statements as there is an anti dilutive effect on loss per share.

9. pROpERty, pLANt AND EquIpMENt

freehold land (at

valuation)

freehold buildings

(at valuation)

furniture, fittings, office

and factory equipment

Motor vehicles

plant and machinery

plant and machinery

under construction Renovation total

Group RM RM RM RM RM RM RM RM

cost (unless otherwise indicated)

At 1 January 2015 32,236,734 20,654,754 5,013,948 7,874,269 14,744,088 - 1,222,458 81,746,251

Additions - - 1,926,396 375,894 4,173,736 873,516 1,955,963 9,305,505

Disposals - - (6,752) (437,742) - - - (444,494)

Reclassification - (4,440,659) 31,000 - - - 4,409,659 -

Revaluations 7,700,000 1,170,705 - - - - - 8,870,705

Write offs - - (12,505) - - - - (12,505)

At 31 December 2015 39,936,734 17,384,800 6,952,087 7,812,421 18,917,824 873,516 7,588,080 99,465,462

Additions - - 721,733 - 606,351 - 931,490 2,259,574

Disposals - - (4,559) - - - - (4,559)

Write offs - - (3,579) - - - - (3,579)

Reclassification - - - - 873,516 (873,516) - -

At 31 December 2016 39,936,734 17,384,800 7,665,682 7,812,421 20,397,691 - 8,519,570 101,716,898



cont'd

9. pROpERty, pLANt AND EquIpMENt cont'd

freehold land (at

valuation)

freehold buildings

(at valuation)

furniture, fittings, office

and factory equipment

Motor vehicles

plant and machinery

plant and machinery

under construction Renovation total

Group RM RM RM RM RM RM RM RM

Accumulated depreciation

At 1 January 2015 - 392,329 2,612,418 5,328,542 7,225,134 - 734,465 16,292,888

Charge for the year - 313,990 543,550 1,018,247 1,274,302 - 891,054 4,041,143

Disposals - - (2,461) (327,657) - - - (330,118)

Write offs - - (10,169) - - - - (10,169)

Reclassification - (7,086) 52 - - - 7,034 -

Revaluations - (642,583) - - - - - (642,583)

At 31 December 2015 - 56,650 3,143,390 6,019,132 8,499,436 - 1,632,553 19,351,161

Charge for the year - 359,464 599,578 579,202 1,574,378 - 802,899 3,915,521

Disposals - - (3,647) - - - - (3,647)

Write offs - - (3,282) - - - - (3,282)

At 31 December 2016 - 416,114 3,736,039 6,598,334 10,073,814 - 2,435,452 23,259,753

carrying amount

At 31 December 2016 39,936,734 16,968,686 3,929,643 1,214,087 10,323,877 - 6,084,118 78,457,145

At 31 December 2015 39,936,734 17,328,150 3,808,697 1,793,289 10,418,388 873,516 5,955,527 80,114,301




furniture, fittings and equipment

computer and printers Renovation total

Company RM RM RM RM

costAt 1 January 2015/31 December 2015/

31 December 2016 7,449 35,482 39,609 82,540

Accumulated depreciationAt 1 January 2015 6,878 35,477 27,726 70,081Charge for the year 394 - 7,922 8,316

At 31 December 2015 7,272 35,477 35,648 78,397Charge for the year 174 - 3,960 4,134

At 31 December 2016 7,446 35,477 39,608 82,531

carrying amountAt 31 December 2016 3 5 1 9

At 31 December 2015 177 5 3,961 4,143

9.1 At the reporting date:

(i) The property, plant and equipment of the Group which have been charged as collaterals to secure the banking facilities and term loan referred to in Note 22 are as follows:

Group2016 2015

RM RM

At carrying amountFreehold land 39,000,000 39,000,000Freehold buildings 16,648,036 17,000,000

55,648,036 56,000,000 (ii) Plant and equipment under hire purchase arrangements are:

Group2016 2015

RM RM

At carrying amountMotor vehicles 753,127 1,591,585



cont'd


9.2 During the reporting period, cash payments made to purchase plant and equipment are as follows:

Group2016 2015

RM RM

Total additions 2,259,574 9,305,505Payments for other payables brought forward 1,106,272 -Additions through:- hire purchase arrangements - (265,900)- other payables - (1,106,272)- deposits paid in previous reporting period (50,000) (78,853)

Cash payments 3,315,846 7,854,480 9.3 Revaluation

The freehold land and buildings of the Group were revalued on 12 October 2015 and 8 March 2016 by the directors based upon valuations carried out by independent professional valuers using the fair value method which is determined by reference to open market values on an existing use basis. Details of valuation techniques and inputs are disclosed in Note 33.

The revaluation surplus net of tax was credited to other comprehensive income and shown in revaluation reserve as explained in Note 28.

Had the freehold land and buildings been carried at historical cost, the carrying amount of the freehold land and buildings that would have been included in the financial statements of the Group as at reporting date would be as follows:

Group2016 2015

RM RM

Freehold land 18,166,036 18,166,036Freehold buildings 16,900,662 17,276,517

35,066,698 35,442,553



10. LAND HELD fOR pROpERty DEvELOpMENt

Group2016 2015

RM RM

At beginning of year - -Additions during the year:

Freehold land – at cost 9,773,668 -Development expenditure 4,285,828 -

14,059,496 -

At end of year 14,059,496 -

10.1 During the reporting period, cash payments made to purchase land held for property development are as follows:

2016 2015RM RM

Total additions 14,059,496 -Less: Deposit paid in previous reporting period (197,473) -

Interest on borrowings capitalised (211,578) -

Cash payments 13,650,445 -

11. INtANGIBLE ASSEtS

Group2016 2015

RM RM

Golf club membershipAt costAt beginning/end of year 108,000 108,000

Accumulated amortisationAt beginning of year 2,472 1,648Charge for the year 824 824

At end of year 3,296 2,472

carrying amount 104,704 105,528



cont'd

12. INvEStMENt IN SuBSIDIARIES

Company2016 2015

RM RM

Unquoted shares at cost At beginning of year 100,207,998 91,222,078Share options granted pursuant to SIS- current year - 8,985,918- over recognition of share options granted pursuant to SIS in prior year (1,490,139) -Acquisition of a subsidiary - 2

At end of year 98,717,859 100,207,998

Accumulated impairment lossesAt beginning/end of year 1,742,588 1,742,588

Carrying amount 96,975,271 98,465,410

The details of the subsidiaries are as follows:

Subsidiaries of the companycountry of

incorporationGroup’s effective interest

principal activities2016 2015

JAG Systems Sdn Bhd Malaysia 100% 100% Computer software development, marketing, maintenance and support services

JAG Capital Equity Sdn Bhd (formerly known as Infortech Software Sdn Bhd)

Malaysia 100% 100% Investment trading company

Jaring Metal Industries Sdn Bhd Malaysia 100% 100% Recycling and manufacturing activities of extraction, production and refinery of ferrous, non-ferrous and precious metals via the recovery and reclamation of industrial and electronic waste and the trading of ferrous and non-ferrous metals

JAG Land Sdn Bhd Malaysia 100% 100% Buy, sell, rent and operate self-owned or leased real estate land, property development and project management

Subsidiary of jaring Metal Industries Sdn Bhd

JAG Nasmech Sdn Bhd Malaysia 80% 80% Operating twenty-four (24)hour coin-operated laundry business



12. INvEStMENt IN SuBSIDIARIES cont'd

Acquisition of subsidiaries and additional subscription of shares in a subsidiary

In the previous reporting period:

(a) On 6 February 2015, the Company incorporated a wholly-owned subsidiary, JAG Land Sdn Bhd (“JAGL”) by subscribing for 2 ordinary shares of RM1.00 each representing 100% of the issued and paid-up share capital of JAGL. JAGL’s intended activity is to buy, sell, rent and operate self-owned or leased real estate land.

(b) On 13 February 2015, a subsidiary of the Company, Jaring Metal Industries Sdn Bhd (“JMI”), acquired 2 ordinary shares of RM1.00 each representing 100% of the issued and paid up share capital of JAG Nasmech Sdn Bhd (“JAGN”), a company incorporated in Malaysia, for a total cash consideration of RM2. Upon acquisition, JAGN became a wholly-owned subsidiary of JMI. JAGN is principally involved in operating twenty four (24) hour coin-operated laundry business. The reason for the acquisition is to expand into the launderette business.

On 29 October 2015, JMI further subscribed for additional 79,998 ordinary shares of RM1.00 each in JAGN

for a cash consideration of RM79,998. Upon the subscription, where new ordinary shares were also issued to non controlling interest, JMI’s equity interest in JAGN decreased from 100% to 80%. This resulted in an increase in equity attributable to JMI of RM7,144.

13. OtHER INvEStMENtS

Group2016 2015

RM RM

Non current assetsAvailable for sale financial assets:Unquoted shares at cost

Ordinary shares 250,000 250,000Irredeemable convertible preference shares 650,000 650,000

900,000 900,000

Accumulated impairment lossesAt beginning/end of year 900,000 900,000

Carrying amount - -

current assetsFinancial assets at fair value through profit or lossHeld for trading- equity instruments (quoted in Malaysia) 3,815,472 2,447,466Designated at fair value through profit or loss- unquoted funds in Malaysia at fair value upon initial recognition 648,500 -

4,463,972 2,447,466



cont'd

13. OtHER INvEStMENtS cont'd

The investment in unquoted mutual funds relate to portfolio of money market fund investments placed with licensed financial institution. These funds aim to provide a regular stream of monthly income through direct investment in short term money market instruments and other fixed income instruments. The funds objective is to maintain its net assets per unit at a prescribed rate so that there shall be a minimum fluctuation to the fair value of the investments. These investments could be redeemed for cash from the funds within a short notice period.

The method and assumptions applied in determining the fair value of the unquoted funds are disclosed in Note 33.

14. DEfERRED tAx (ASSEtS)/LIABILItIES

Group2016 2015

RM RM

At beginning of year 441,355 2,678,286Recognised in profit or loss (Note 7)

- current year 532,447 (3,104,888) - (over)/under provision in prior years (83,849) 47,768

448,598 (3,057,120)Recognised in other comprehensive income - current year - 820,189

At end of year 889,953 441,355

Group2016 2015

RM RM

Gross:Deferred tax assets (3,624,490) (3,940,700)Deferred tax liabilities 4,514,443 4,382,055

889,953 441,355Presented after appropriate offsetting as follows:Deferred tax assets 1,035,568 1,486,000

Deferred tax liabilities 1,925,521 1,927,355



14. DEfERRED tAx (ASSEtS)/LIABILItIES cont'd

Deferred tax liabilities of the Group are in respect of the following:

Group2016 2015

RM RM

Tax effects of:Excess capital allowances over related depreciation of property, plant and

equipment 2,411,612 2,170,100Revaluation reserve 1,925,521 1,927,355Unrealised gain on foreign exchange 177,300 212,000Other temporary differences - 72,600

4,514,433 4,382,055

The analysis of unrecognised deductible temporary differences, unused tax losses and unused tax credits is as follows:

Group Gross tax effects

2016 2015 2016 2015RM RM RM RM

Net fair value losses on held for trading investment 376,500 - 90,000 -

Derivative liability 551,600 - 132,400 -Unabsorbed capital allowances 1,643,500 6,469,000 394,100 1,552,500Unutilised business losses 11,608,500 10,574,000 2,786,090 2,537,800Allowance for doubtful debts 4,921,800 2,941,700 1,181,200 706,000Unabsorbed reinvestment allowances 2,617,000 3,170,800 628,100 761,000

21,718,900 23,155,500 5,211,890 5,557,300Less: Deferred tax assets recognised (15,103,700) (16,420,000) (3,624,490) (3,940,700)

Deferred tax assets not recognised 6,615,200 6,735,500 1,587,400 1,616,600



cont'd

14. DEfERRED tAx (ASSEtS)/LIABILItIES cont'd

Company Gross tax effects

2016 2015 2016 2015RM RM RM RM

Unabsorbed capital allowances 1,568,000 1,568,000 376,000 376,000Unutilised business losses 2,515,000 3,120,800 604,000 749,000

Deferred tax assets not recognised 4,083,000 4,688,800 980,000 1,125,000

Portion of the deferred tax assets of the Group and the Company have not been recognised as it is not probable that taxable profit will be available in the foreseeable future to utilise these tax benefits.

15. INvENtORIES

Group2016 2015

RM RM

At cost:

Trading merchandise 659,369 633,188Raw materials 16,981,408 18,908,546Work in progress 1,450,116 1,008,319Finished goods 14,603,752 11,301,690

33,694,645 31,851,743At fair value less costs to sell:

Finished goods - 3,154,302

- 3,154,302

33,694,645 35,006,045

Amount of inventories recognised as an expense 57,827,036 71,944,318



16. tRADE REcEIvABLES

Group Company2016 2015 2016 2015

RM RM RM RM

Third parties 13,432,355 17,021,289 25,000 25,000Amount due from a company in which a director

has interest 104,500 - - -Amount due from a subsidiary - - - 1,306,439

13,536,855 17,021,289 25,000 1,331,439Less: Allowance for doubtful debts (4,543,930) (3,096,118) (25,000) (1,331,439)

8,992,925 13,925,171 - - The Group’s normal trade credit terms range from 30 days to 90 days (2015: 30 days to 90 days). Other credit

terms are assessed and approved on a case by case basis.

The following table provides information on the trade receivables credit risk exposure:

Group Company2016 2015 2016 2015

RM RM RM RM

Not impaired or past due 1,619,324 4,006,669 - -1 - 30 days past due not impaired 986,366 827,771 - -31 - 60 days past due not impaired 88,041 826,395 - -More than 60 days past due not impaired 6,299,194 8,264,336 - -

8,992,925 13,925,171 - -Impaired 4,543,930 3,096,118 25,000 1,331,439

13,536,855 17,021,289 25,000 1,331,439 Trade receivables that are neither past due nor impaired are credit worthy debtors with good payment records

with the Group.

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments.

These receivables are not secured by any collateral or credit enhancements.



cont'd

16. tRADE REcEIvABLES cont'd

The movements in the allowance for doubtful debts accounts for trade receivables that are individually impaired at reporting date is as follows:

Group Company2016 2015 2016 2015

RM RM RM RM

At beginning of year 3,096,118 156,069 1,331,439 1,331,439Allowance during the year 1,447,812 2,940,649 - -Allowance no longer required - (600) - -Transfer to other receivables - - (1,306,439) -

At end of year 4,543,930 3,096,118 25,000 1,331,439

17. OtHER REcEIvABLES, DEpOSItS AND pREpAyMENtS

Group Company2016 2015 2016 2015

RM RM RM RM

Advance payment to suppliers 2,770,684 3,498,896 - -Amount due from a company in which a director

of the Company has an interest (Note 17.1) 7,127 7,127 90,564 90,564Amount due from a company in which certain

directors of a subsidiary have an interest (Note 17.2) - 7,382 - -

Amount due from subsidiaries (Note 17.3) - - 32,062,500 32,564,960Deposits paid for purchase of plant and

equipment 131,725 150,000 - -Deposits paid for purchase of land held for

development - 197,473 - -Goods and services tax receivables 800,460 631,654 - -Others 1,116,777 1,182,745 4,101 14,346

4,826,773 5,675,277 32,157,165 32,669,870Less: Allowance for doubtful debts (Note 17.4) (644,056) (106,204) (2,399,012) (1,092,573)

4,182,717 5,569,073 29,758,153 31,577,297



17. OtHER REcEIvABLES, DEpOSItS AND pREpAyMENtS cont'd

17.1 Amount due from a company in which a director of the company has an interest

Group Company2016 2015 2016 2015

RM RM RM RM

Unsecured interest free advances receivable on demand 7,127 7,127 90,564 90,564

Less: Allowance for doubtful debts (7,127) (7,127) (90,564) (90,564)

- - - -

17.2 Amount due from a company in which certain directors of a subsidiary have an interest

The amount due from a company in which certain directors of a subsidiary have an interest represents unsecured interest free advances receivable on demand.

17.3 Amount due from subsidiaries

The amount due from subsidiaries represents:

Company2016 2015

RM RM

Unsecured interest free advances receivable on demand 32,062,500 32,564,960Less: Allowance for doubtful debts (2,308,448) (1,002,009)

29,754,052 31,562,951

17.4 Allowance for doubtful debts The movements in the allowance for doubtful debts accounts for other receivables that are individually

impaired at reporting date are as follows:

Group Company2016 2015 2016 2015

RM RM RM RM

At beginning of year 106,204 106,204 1,092,573 1,092,573Allowance during the year 537,852 - - -Transfer from trade receivables - - 1,306,439 -

At end of year 644,056 106,204 2,399,012 1,092,573

Other receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments.

These receivables are not secured by any collateral or credit enhancements.



cont'd

18. fIxED DEpOSItS WItH LIcENSED BANKS

Fixed deposits of the Group amounting to RM1,282,030 (2015: RM1,243,144) have been pledged with a licensed bank to secure the banking facilities referred to in Note 22.

19. TRaDE PayablES

Group2016 2015

RM RM

Amount due to companies in which certain directors of a subsidiary have an interest 7,166 40,229

Third parties 5,038,052 7,141,614

5,045,218 7,181,843

The normal trade credits granted to the Group, including those from related parties, range from 15 days to 60 days (2015: 15 days to 60 days).

20. OtHER pAyABLES AND AccRuALS

Group Company2016 2015 2016 2015

RM RM RM RM

Advance payment from customers 4,362,233 716,961 - -Advance billing to customers 62,776 65,596 - -Amount due to a corporate shareholder of a

subsidiary for purchase of plant and equipment - 1,106,272 - -Other payables and accruals 2,040,629 1,201,774 115,806 90,974

6,465,638 3,090,603 115,806 90,974

21. DERIvAtIvE LIABILIty

Group2016 2015

RM RM

Derivative held for trading at fair value through profit or loss- forward foreign exchange sale contracts 551,581 47,613

The Group uses forward currency contracts to manage some of the transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for periods consistent with foreign currency transaction exposure. Such derivative does not qualify for hedge accounting.



21. DERIvAtIvE LIABILIty cont'd

Forward currency contracts are used to hedge the Group’s sales denominated in United States Dollar for which firm commitments existed at the reporting date, extending to March 2017.

During the reporting period, the Group recognised a loss of RM503,968 (2015: RM47,613) arising from fair value changes of derivative liabilities. The fair value changes are attributable to changes in foreign exchange rate. The method and assumptions applied in determining the fair value of derivatives are disclosed in Note 33.

The notional principal amounts of the outstanding forward foreign exchange sale contracts as at 31 December 2016 were RM9,087,248 (2015: RM1,028,650).

22. SHORt tERM BORROWINGS

Group2016 2015

RM RM

Secured:Bank overdraft 4,332,265 -Term loan – current portion (Note 25) 975,827 923,731

5,308,092 923,731

The effective interest rates are as follows:

Group2016 2015

% %

Bank overdraft 10.15 -Term loan 5.48 5.48

The above banking facilities, including term loan, are secured by way of:

Group carrying amount

2016 2015RM RM

Property, plant and equipment (Note 9) 55,648,036 56,000,000Fixed deposits with licensed banks (Note 18) 1,282,030 1,243,144

The banking facilities, including term loan, are also secured by way of joint and several guarantees by certain directors of a subsidiary and corporate guarantee by the Company.



cont'd

23. HIRE puRcHASE LIABILItIES

Group2016 2015

RM RM

Total outstanding 314,822 934,859Less: interest in suspense (9,314) (38,922)

Principal outstanding 305,508 895,937Amount due within one year (265,372) (587,153)

Non current portion 40,136 308,784

Group2016 2015

RM RM

The non current portion of the hire purchase obligations is payable as follows:Later than 1 year and not later than 2 years 40,136 262,332Later than 2 years and not later than 5 years - 46,452

40,136 308,784 The effective interest rate of the hire purchase obligations is 5.08% (2015: 5.11%) per annum.

24. DEfERRED INcOME

Group2016 2015

RM RM

At beginning of year 1,014,612 902,259Grants received 264,577 210,146Grants income recognised (131,192) (97,793)

At end of year 1,147,997 1,014,612 This represents a government grant for the acquisition of plant and machinery for the production of high grade

non-ferrous metals from industrial waste.



25. tERM LOAN

Group2016 2015

RM RM

Amount outstanding 11,106,330 12,000,000Less: Portion due within one year (Note 22) (975,827) (923,731)

Non current portion 10,130,503 11,076,269

The non current portion of long term loan is payable as follows:Later than 1 year and not later than 2 years 1,030,666 977,517Later than 2 years and not later than 5 years 3,452,727 3,274,676Later than 5 years 5,647,110 6,824,076

10,130,503 11,076,269

The term loan is secured as disclosed in Note 22.

26. SHARE cApItAL

Group and company2016 2015 2016 2015

No. of ordinary

shares of

No. of ordinary

shares of

RM RM

RM0.10 each RM0.10 each

Authorised:At beginning/end of year 2,500,000,000 2,500,000,000 250,000,000 250,000,000

Issued and fully paid:At beginning of year 1,143,844,587 1,044,444,587 114,384,458 104,444,458

Issued for:

- exercise of SIS - 77,200,000 - 7,720,000- exercise of warrants - 22,200,000 - 2,220,000

- 99,400,000 - 9,940,000

At end of year 1,143,844,587 1,143,844,587 114,384,458 114,384,458

Warrants 2014/2019

The Company had on 15 August 2014 issued 324,904,271 free Warrants 2014/2019 in conjunction with its bonus issue of shares. The Warrants 2014/2019 are constituted by a Deed Poll dated 30 July 2014 (“Deed Poll”).



cont'd

26. SHARE cApItAL cont'd

Warrants 2014/2019 cont'd

The salient features of the Warrants 2014/2019 are as follows:

(a) The issue date of the Warrants is on 15 August 2014 and the expiry date is on 14 August 2019. Any Warrants not exercised at the expiry date will lapse and cease to be valid for any purpose;

(b) Each Warrant entitles the registered holder the right to subscribe for one (1) new ordinary share of RM0.10 each in the Company at an exercise price of RM0.10 per ordinary share until the expiry of the exercise period;

(c) The exercise price and the number of Warrants are subject to adjustment in the event of alteration to the share capital of the Company in accordance with the provisions in the Deed Poll. However, no adjustment shall be made in any event whereby the exercise price would be reduced to below the par value of ordinary share in the Company;

(d) The Warrant holders are not entitled to participate in any distribution and/or offer of further securities in the Company (except for the issue of new warrants pursuant to adjustment as mentioned in item (c) above), unless and until such Warrant holders exercise their rights to subscribe for new ordinary shares; and

(e) The new ordinary shares to be issued upon exercise of the Warrants, shall upon issuance and allotment, rank pari passu with the then existing ordinary shares, except that they will not be entitled to dividends, rights, allotments and/or other distributions, declared by the Company which entitlement thereof precedes the allotment date of the new ordinary shares allotted pursuant to the exercise of the Warrants.

The movements in the Company’s Warrants 2014/2019 during the reporting period are as follows:

Entitlement for ordinary shares of RM0.10 eachBalance at

1.1.2016 Issued Exercised ExpiredBalance at

31.12.2016‘000 ‘000 ‘000 ‘000 ‘000

Number of unexercised warrants 294,704 - - - 294,704

27. SHARE ISSuANcE ScHEME

The Company implemented a Share Issuance Scheme (“SIS”) which is governed by the SIS By-Laws and was approved by its shareholders at the Extraordinary General Meeting held on 15 June 2015.

The salient features of the SIS are as follows:

(a) The SIS was implemented on 1 July 2015 and is in force for a period of 5 years until 30 June 2020 in accordance with the terms of the SIS By-Laws;

(b) The total number of new shares to be offered pursuant to the SIS shall be subject to a maximum of 30% of the Company’s issued and paid up share capital (excluding treasury shares) at any one time;



27. SHARE ISSuANcE ScHEME cont'd

The salient features of the SIS are as follows: cont'd

(c) Any employee of the Group shall be eligible to participate in the SIS and qualify for selection by the Option Committee if, as at the date of offer, such employee:

(i) is at least eighteen (18) years of age; (ii) is not an undischarged bankrupt nor subject to any bankruptcy proceedings; (iii) is employed on full-time basis and is on the payroll of a company in the Group, which is not dormant

and has not served a notice to resign or received a notice of termination; (iv) is confirmed in writing as a full time employee; and (v) falls within any other criteria that the Option Committee may from time to time determine at its

absolute discretion.

The allocation criteria of new ordinary shares comprised in the options to eligible employees shall be determined at the discretion of the Option Committee;

(d) The exercise price of SIS shall be based on the weighted average market price of the Company’s shares as shown in the Daily Official List of Bursa Malaysia Securities Berhad for the five (5) market days immediately preceding the date of offer with an allowance of a discount of not more than 10%, or at the par value of the Company’s share, whichever is higher;

(e) The new ordinary shares to be issued upon exercise of the SIS, shall upon allotment and issuance, rank pari passu with the then existing ordinary shares, except that they will not be entitled to dividends, rights, allotments and/or other distributions, declared by the Company which entitlement thereof precedes the allotment date of the new ordinary shares allotted pursuant to the exercise of the SIS; and

(f) The exercise price and the number of new ordinary shares comprised in the SIS are subject to adjustment in the event of alteration to the share capital of the Company in accordance with the provisions in the SIS By-Laws. However, no adjustment shall be made in any event whereby the exercise price would be reduced to below the par value of ordinary share in the Company.

The movements in the Company’s SIS are as follows:

Number of options over ordinary shares of RM0.10 each

Offer DateBalance at

1.1.2016 Granted Exercised LapsedBalance at

31.12.2016’000 ’000 ’000 ’000 ’000

1 July 2015 99,891 - - (49,106) 50,785



cont'd

27. SHARE ISSuANcE ScHEME cont'd

The following table illustrates the number (“No.”) and weighted average exercise prices (“WAEP”) of, and movements in, share options during the reporting period:

Group Group 2016 2015

No. WaEP No. WaEP’000 RM ’000 RM

Outstanding at 1 January 99,891 0.10 - -- Granted - 0.10 177,091 0.10- Exercised - 0.10 (77,200) 0.10- Lapsed (49,106) 0.10 - 0.10

Outstanding at 31 December 50,785 0.10 99,891 0.10

Exercisable at 31 December 50,785 0.10 99,891 0.10 The weighted average fair value of options granted in the previous reporting period was RM0.0513.

The weighted average share price at the date of exercise of the options exercised in the previous reporting period was RM0.10.

The fair value of the share options granted under the SIS is estimated at the grant date using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the instruments were granted.

The following table lists the inputs to the option pricing model for share options granted in the previous reporting period:

13 August 2015

1 September 2015

23 September 2015

Dividend yield (%) - - -Expected volatility (%) 52.381 59.321 59.378Risk-free interest rate (% per annum) 3.97 3.93 3.75Expected life of option (days) 1,784 1,768 1,743Weighted average share price (RM) 0.1192 0.091 0.1012

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome. No other features of the option was incorporated into the measurement of fair value.

The fair value of the share options granted on 23 September 2015 was derived based on the expected life of option of 1,743 days instead of 282 days (being the actual life of the share options) which resulted in over recognition of share issuance scheme reserve of RM1,546,839 in the Group and the Company and share options expense of RM1,546,839 and RM56,700 in the Group and the Company respectively.



28. RESERvES

Group Company2016 2015 2016 2015

RM RM RM RM

Retained profits/(Accumulated losses) 36,804,794 33,698,960 (7,204,357) (8,129,090)Non-distributable

Revaluation reserve (Note 28.1) 23,378,833 23,378,833 - -Reverse acquisition reserve (Note 28.2) (72,050,600) (72,050,600) - -Share issuance scheme reserve (Note 28.3) 2,576,175 5,218,078 2,576,175 5,218,078Share premium (Note 28.4) 19,161,772 19,161,772 19,161,772 19,161,772

(26,933,820) (24,291,917) 21,737,947 24,379,850

9,870,974 9,407,043 14,533,590 16,250,760

28.1 Revaluation reserve

The revaluation reserve represents revaluation surplus arising from freehold land and buildings. The revaluation reserve is used to record increase in the fair value of freehold land and buildings and decreases to the extent that such decrease relates to an increase on the same asset previously recognised in other comprehensive income.

28.2 Reverse acquisition reserve

Reverse acquisition reserve arose from the reverse acquisition of the Company by Jaring Metal Industries Sdn Bhd in 2013.

28.3 Share issuance scheme reserve

Share issuance scheme reserve represents the equity settled share options granted to employees. The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity settled share options, and is reduced by the expiry or exercise of the share options.

28.4 Share premium

Share premium arose from the following, net of share issue expenses of RM Nil (2015: RM108,000):

Group and company2016 2015

RM RM

At beginning of year 19,161,772 19,136,572Increased during the year- Exercise of SIS - 133,200Less: Share issue expenses - (108,000)

At end of year 19,161,772 19,161,772



cont'd

29. SIGNIfIcANt RELAtED pARty DIScLOSuRES

29.1 Related party transactions

Group Companytype of 2016 2015 2016 2015

transactions RM RM RM RM

Significant transactions with related parties are as follows:

With a company in which certain directors of a subsidiary have interests

Barrel & Drum (M) Sdn Bhd Purchases 54,447 49,063 - -

Cahaya Mutlak Sdn Bhd Project management fee income 104,500 - - -

With a corporate shareholder of a subsidiary

Bubblelab Laundry Sdn Bhd Purchase ofplant and

equipment 374,723 2,210,821 - -

Purchases 16,643 - - -

Collection fee expense 26,951 7,213 - -

Maintenancefee expense 135,203 9,587 - -

With subsidiariesJAG Land Sdn Bhd Management

fee income - - 117,600 -

JAG Capital Equity Sdn Bhd (formerly known as Infortech Software Sdn Bhd)

Management fee income

- - 117,600 -

JAG Systems Sdn Bhd Management fee income - - 117,600 -

Jaring Metal Industries Sdn Bhd

Management fee income - - 117,600 -



29. SIGNIfIcANt RELAtED pARty DIScLOSuRES cont'd

29.2 Related party balances



Individually significant outstanding balances arising from transactions (other than normal trade transactions) are as follows:

financial assetsWith a company in which

certain directors of a subsidiary have an interest

Jaring Metal Industries (Johor) Sdn Bhd Advances - 7,382 - -

With a company in which a director of the Company has an interest

Constellar (M) Sdn Bhd Advances 7,127 7,127 90,564 90,564

Allowance fordoubtful debts (7,127) (7,127) (90,564) (90,564)

- - - -



cont'd

29. SIGNIfIcANt RELAtED pARty DIScLOSuRES cont'd

29.2 Related party balances cont'd



financial assets cont'dWith subsidiariesJaring Metal Industries Sdn

Bhd Advances - - 25,283,122 25,850,527

JAG Systems Sdn Bhd Advances - - 2,512,599 2,987,859

Allowance fordoubtful debts - - (1,306,439) -

- - 1,206,160 2,987,859

JAG Land Sdn Bhd Advances - - 127,040 1,978,913

JAG Capital Equity Sdn Bhd (formerly known as Infortech Software Sdn Bhd) Advances - - 4,139,739 1,747,661

Allowance fordoubtful debts - - (1,002,009) (1,002,009)

- - 3,137,730 745,652

financial liabilityWith a corporate

shareholder of a subsidiary

Bubblelab Laundry Sdn Bhd Purchase ofplant and

equipment - 1,106,272 - -

29.3 compensation of key management personnel

The key management personnel comprises mainly executive directors of the Company whose remuneration is disclosed in Note 6.



30. cOMMItMENtS

Group2016 2015

RM RM

capital commitmentsCapital expenditure not provided for in the financial statements are as follows:Authorised but not contracted for - 9,990,045Authorised and contracted for 5,609,582 -

5,609,582 9,990,045

Analysed as follows:Plant and machinery - 313,850Land held for development 5,609,582 9,676,195

5,609,582 9,990,045

31. SEGMENt INfORMAtION

For management purposes, the Group is organised into business units based on their nature of activity, and has six reportable operating segments as follows:

Manufacturing - Recycling and manufacturing activities of extraction, production and refinery of ferrous, non-ferrous and precious metals via the recovery and reclamation of industrial and electronic waste

Trading - Trading of ferrous and non-ferrous metals

Services - Operating twenty-four (24) hour coin-operated laundry business

Proprietary solutions and software maintenance

- Computer software development, maintenance and supportservices

Investment - Investment holding and trading company

Property development - Buy, sell, rent and operate self-owned or leased real estate land, property development and project management

Management monitors the operating results of its business units as well as relying on the segment information as disclosed below for the purpose of making decision about resource allocation and performance assessment.

Comparative information for 2015 have been restated due to the change in the composition of the reportable segment of the Group.



cont'd

31. SEGMENt INfORMAtION

31.1 Business segment

The following table provides an analysis of Group’s revenue, results, assets, liabilities and other information by business segment.

2016 Manufacturing trading Services

proprietary solutions

and software maintenance Investment

property development total Elimination consolidated

RM RM RM RM RM RM RM RM RM

Revenue

External revenue 75,820,647 3,402,187 2,328,870 1,235,031 10,687,293 104,500 93,578,528 - 93,578,528

Inter-segment revenue - - - - 470,400 - 470,400 (470,400) -

Total revenue 75,820,647 3,402,187 2,328,870 1,235,031 11,157,693 104,500 94,048,928 (470,400) 93,578,528

Results

Profit/(Loss) from operations before interest income 2,458,590 1,028,004 410,528 (148,499) (384,708) (474,775) 2,889,140 155,925 3,045,065

Interest income 366,279 - 3,727 43,156 17,680 12,318 443,160 (289,328) 153,832

Profit/(Loss) from operations 2,824,869 1,028,004 414,255 (105,343) (367,028) (462,457) 3,332,300 (133,403) 3,198,897

Finance costs (805,644) (36,150) (77,750) - - (4,650) (924,194) 289,328 (634,866)

Profit/(Loss) before tax 2,019,225 991,854 336,505 (105,343) (367,028) (467,107) 2,408,106 155,925 2,564,031

Income tax expense (465,701) (20,897) (1,000) (11,823) (5,739) - (505,160) - (505,160)

Net profit/(loss) for the year 1,553,524 970,957 335,505 (117,166) (372,767) (467,107) 1,902,946 155,925 2,058,871

2015

Revenue

External customers 78,947,374 4,379,439 238,218 1,225,648 - - 84,790,679 - 84,790,679

Results

(Loss)/Profit from operations before interest income (20,104,854) (1,270,478) (68,208) (400,075) 247,506 (389,641) (21,985,750) - (21,985,750)

Interest income 62,620 - - 85,861 21,069 - 169,550 - 169,550

(Loss)/Profit from operations (20,042,234) (1,270,478) (68,208) (314,214) 268,575 (389,641) (21,816,200) - (21,816,200)

Finance costs (566,811) (30,875) - - - (966) (598,652) - (598,652)

(Loss)/Profit before tax (20,609,045) (1,301,353) (68,208) (314,214) 268,575 (390,607) (22,414,852) - (22,414,852)

Income tax expense 2,511,590 144,983 - (32,667) - - 2,623,906 - 2,623,906

Net (loss)/profit for the year (18,097,455) (1,156,370) (68,208) (346,881) 268,575 (390,607) (19,790,946) - (19,790,946)



31. SEGMENt INfORMAtION cont'd

31.1 Business segment cont'd




propertydevelopment total Elimination consolidated


Assets and liabilities

Segment assets 144,433,033 3,341,189 4,020,912 1,320,315 36,034,982 14,349,711 203,500,142 (48,308,214) 155,191,928

Segment liabilities 55,716,935 - 3,653,615 2,924,206 4,263,581 15,207,423 81,765,760 (50,883,723) 30,882,037

Other information

Capital expenditure on property plant and equipment 1,217,773 45,215 974,549 18,620 - 3,417 2,259,574 - 2,259,574

Depreciation and amortisation 2,776,143 714,731 341,173 46,119 4,134 34,045 3,916,345 - 3,916,345

Non-cash items other than depreciation and amortisation

Allowance for doubtful debts 1,981,169 - - 4,495 - - 1,985,664 - 1,985,664

Changes in fair value of derivative liability 503,968 - - - - - 503,968 - 503,968

Bad debts written off - - - 25,000 - - 25,000 - 25,000

Net fair value loss on held for trading investments - - - - 376,529 - 376,529 - 376,529

Plant and equipment written off 297 - - - - - 297 - 297

Unrealised gain on foreign exchange (738,750) - - - - - (738,750) - (738,750)

Government grant income (131,192) - - - - - (131,192) - (131,192)



cont'd


31.1 Business segment cont'd




propertydevelopment total Elimination consolidated


Assets and liabilities

Segment assets 138,207,306 3,761,006 3,126,508 3,241,149 33,062,712 1,727,618 183,126,299 (33,170,477) 149,955,822

Segment liabilities 51,101,293 - 3,094,716 4,460,813 861,842 2,118,223 61,636,887 (35,478,924) 26,157,963

Other information

Capital expenditure on property, plant and equipment 6,194,842 337,447 2,575,133 27,649 - 170,434 9,305,505 - 9,305,505

Depreciation and amortisation 2,859,655 1,070,434 48,235 44,507 8,316 10,820 4,041,967 - 4,041,967

Non-cash items other than depreciation and amortisation

Allowance for doubtful debts 2,940,649 - - - - - 2,940,649 - 2,940,649

Changes in fair value of derivative liability 47,613 - - - - - 47,613 - 47,613

Deposits written off - - - - - 272,000 272,000 - 272,000

Net fair value gain on held for trading investments - - - - (302,486) - (302,486) - (302,486)

Inventories written down 32,060 - - - - - 32,060 - 32,060

Plant and equipment written off 2,336 - - - - - 2,336 - 2,336

Unrealised gain on foreign exchange (898,648) - - - - - (898,648) - (898,648)




31.2 Geographical segments

In presenting information on the basis of geographical segments, segment revenue is based on geographical location of customers. Segment assets are based on the geographical location of the assets.

Group

Geographical information RevenueNon-current

assets2016 RM RM

Malaysia 30,301,610 92,621,345China 35,097,063 -Japan 20,149,360 -Others 8,030,495 -

93,578,528 92,621,345

Group

Geographical information RevenueNon-current

assets2015 RM RM

Malaysia 30,136,473 80,219,829China 33,078,325 -Japan 21,575,881 -

84,790,679 80,219,829

Non current assets information presented above consist of property, plant and equipment, land held for development and intangible assets as presented in the statements of financial position.

31.3 customers segment information

Revenue from transactions with major customers arising from manufacturing segment that individually accounted for 10 percent or more of the Group’s revenue are summarised below:

Group2016 2015

RM RM

Customer A 32,056,197 30,989,026Customer B 19,422,381 21,575,881

51,478,578 52,564,907



cont'd

32. fINANcIAL INStRuMENtS, fINANcIAL RISKS AND cApItAL RISK MANAGEMENt

32.1 categories of financial instruments

The following table sets out the financial instruments as at the reporting date:

Group Company2016 2015 2016 2015

RM RM RM RM

financial assetsFair value through profit or loss:- other investments 4,463,972 2,447,466 - -

Loans and receivables:- trade and other receivables 9,472,773 15,016,221 29,758,153 31,577,297- cash and bank balances and fixed deposits 7,351,615 8,640,638 2,302,400 679,342

21,288,360 26,104,325 32,060,553 32,256,639

financial liabilitiesAmortised cost:- hire purchase liabilities (fixed rate) 305,508 895,937 - -- trade and other payables (non interest

bearing) 7,085,847 9,489,889 115,806 90,974- borrowings (floating rate) 15,438,595 12,000,000 - -Fair value through profit or loss:- derivative liability 551,581 47,613 - -

23,381,531 22,433,439 115,806 90,974

32.2 financial risk management policies and objectives

The Group’s overall financial risk management programme seeks to minimise potential adverse effects of financial performance of the Group.

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

There has been no change in the Group’s exposure to these financial risks or the manner in which it manages and measures the risk.

foreign exchange risk management

The Group transacts business in various currencies, and therefore is exposed to foreign exchange risk. Foreign currency denominated assets and liabilities together with expected cash flows from highly probable purchases and sales give rise to foreign exchange exposures.



32. fINANcIAL INStRuMENtS, fINANcIAL RISKS AND cApItAL RISK MANAGEMENt cont'd

32.2 financial risk management policies and objectives

foreign exchange risk management cont'd

The net unhedged financial assets and financial liabilities of the Group that are not denominated in their functional currencies are as follows:

Net financial Assets/(Liabilities) Held in Non-functional currencies

functional currency of the Group

united States Dollar

RMEuro

RMtotal

RM

2016Ringgit Malaysia 3,569,795 134,824 3,704,619

2015Ringgit Malaysia 6,010,838 25,282 6,036,120

The following table details the sensitivity to a 10% increase and decrease in the relevant foreign currencies against the functional currency of the Group. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items adjusted at the reporting period end for a 10% change in foreign currency rates. If the relevant foreign currencies strengthen by 10% against the functional currency of the Group, profitability before tax will increase/decrease by:

Group Company2016 2015 2016 2015

RM RM RM RM

United States Dollar (551,745) 601,084 - -Euro 13,482 2,528 - -

The opposite applies if the relevant foreign currencies weaken by 10% against the functional currency of the Group.

Interest rate risk management

The Group’s primary interest rate risk relates to interest bearing debts. The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. The information on maturity dates and effective interest rates of financial liabilities are disclosed in their respective notes.

The sensitivity analysis below have been determined based on the exposure to interest rates for banking facilities at the reporting date. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the possible change in interest rates.



cont'd


32.2 financial risk management policies and objectives cont'd

Interest rate risk management cont'd If interest rates had been 50 basis points higher or lower and all other variables were held constant,

the Group’s and the Company’s profitability before tax would decrease/increase by RM77,200 (2015: RM60,000) and RM Nil (2015: RM Nil) respectively.

credit risk management

Credit risk refers to the risk that a counterparty will default on its obligations resulting in financial loss to the Group. The Group’s credit risk is primarily attributable to its trade and other receivables and cash and bank balances. Credit risks are minimised and monitored via strictly limiting the Group’s associations to business partners with high creditworthiness. For other financial assets including cash and bank balances, the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group’s exposure and the credit ratings of its counterparties are continuously monitored on an on ongoing basis via the Group’s management reporting procedures. This represents the Group’s maximum exposure to credit risk.

At reporting date, there were no significant concentrations of credit risk other than the following:

Group Company2016 2015 2016 2015

RM RM RM RM

Amount due from a subsidiary - - 25,283,122 25,850,527Amount due from one customer (2015: one

customer) 5,241,250 4,189,292 - -

5,241,250 4,189,292 25,283,122 25,850,527

Management believes that the sound financial standing of its subsidiary and customer substantially mitigates the Group’s exposure to credit risk.

The Company provides unsecured financial guarantees to a licensed bank in respect of banking facilities granted to a subsidiary. Accordingly, the Company is contingently liable to the extent of credit facilities utilised by the subsidiary. The Company monitors on an ongoing basis the results of the subsidiary and repayments made by the subsidiary. The maximum exposure to credit risk amounts to RM11,106,330 (2015: RM12,000,000) representing the outstanding banking facilities of the subsidiary as at reporting date. The fair value of the financial guarantees provided for its subsidiary is not expected to be material as the total borrowings of the subsidiary are collateralised against the subsidiary’s freehold land and buildings and fixed deposits with the licensed bank. Further, the probability of the subsidiary defaulting on the credit facilities is remote. Accordingly, the financial guarantee has not been recognised.





Market price risk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group is exposed to equity price risk arising from its investment in quoted equity instruments. The

quoted equity instruments are listed on the Bursa Malaysia Securities Berhad and is classified as held for trading financial assets.

Management of the Group monitors the equity instruments on a portfolio basis. Material instruments within the portfolio are managed on an individual basis and all buy and sell decisions are by the executive directors.

The effect of a 10% strengthening in the specified stock prices at the end of the reporting period with all other variables held constant would have increased the profitability before tax of the Group as follows:

Group2016 2015

RM RM

Entities listed on:Bursa Malaysia Securities Berhad 381,547 244,747

A 10% weakening in specified stock prices would have equal but opposite effect on profitability of the Group.

Liquidity risk management

The Group maintains sufficient cash and bank balances, and internally generated cash flows to finance its activities. The Group finances its operations by a combination of equity and bank borrowings. In addition, the Group has available banking facilities to meet its liquidity and working capital requirements.

The following tables detail the remaining contractual maturity for non-derivative financial liabilities. The

tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay.



cont'd



Liquidity risk management cont'd

contractual cash flows (including interest payments)

Groupcarryingamount total

On demandor within

1 year

Within1 to

2 years

Within2 to

5 years

Morethan

5 years2016 RM RM RM RM RM RM

Derivative liability 551,581 551,581 551,581 - - -Non interest bearing

debts 7,085,847 7,085,847 7,085,847 - - -Interest bearing debts 15,438,595 18,694,373 6,180,390 1,560,000 4,680,000 6,273,983Hire purchase

liabilities 305,508 314,822 273,903 40,919 - -

23,381,531 26,646,623 14,091,721 1,600,919 4,680,000 6,273,983

2015Non interest bearing

debts 9,489,889 9,489,889 9,489,889 - - -Interest bearing debts 12,000,000 15,633,983 1,560,000 1,560,000 4,680,000 7,833,983Hire purchase

liabilities 895,937 934,859 614,867 273,153 46,839 -

22,385,826 26,058,731 11,664,756 1,833,153 4,726,839 7,833,983

contractual cash flows

(including interest payments)

carryingamount total

On demandor within

1 yearCompany RM RM RM

2016Non interest bearing debts 115,806 115,806 115,806

2015Non interest bearing debts 90,974 90,974 90,974




32.3 capital structure and equity The Group manages its capital to ensure that entities in the Group will be able to continue as going

concern while providing an adequate return to stakeholders through the optimisation of the debt and equity balance.

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

The Group monitors capital on the basis of the debt-to-adjusted capital ratio. This ratio is calculated as net debt divided by adjusted capital. Net debt is calculated as total debt (as shown in the statements of financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity and reserves that are managed as capital.

During the reporting period ended 31 December 2016, the Group’s and the Company’s strategy were unchanged from 31 December 2015 which is to maintain the debt-to-adjusted capital ratio at a level deemed appropriate considering business, economic and investment conditions. The debt-to-adjusted capital ratios at 31 December 2016 and 31 December 2015 were as follows:

Group Company2016 2015 2016 2015

RM RM RM RM

Total debts 15,744,103 12,895,937 - -Less: Cash and bank balances and fixed

deposits (7,351,615) (8,640,638) (2,302,400) (679,342)

Net debt/(cash) 8,392,488 4,255,299 (2,302,400) (679,342)

Total equity/Adjusted capital 124,309,891 123,797,859 128,918,048 130,635,218

Debt-to-adjusted capital ratio (times) 0.07 0.03 N/A N/A

33. fAIR vALuE MEASuREMENtS

33.1 financial instruments not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The carrying amounts of cash and cash equivalents, trade and other receivables and payables, and other liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments.

The fair values of the Group’s borrowings and hire purchase liabilities approximates their carrying amount. Term loan is a floating rate instrument that is re-priced to market interest rates on or near reporting date. Hire purchase liabilities approximates their carrying amount as these instruments were entered with interest rates which are reasonable approximation of the market interest rates on or near reporting date.



cont'd

33. fAIR vALuE MEASuREMENtS cont'd

33.2 financial instruments and non financial assets carried at fair value

fair value hierarchy

The Group categorises fair value measurements using a fair value hierarchy that is dependent on the valuation inputs used as follows:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. prices) or indirectly (i.e. derived from prices); and

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table provides an analysis of each class of assets and liabilities measured at fair value at the end of the reporting period:

Group 2016

fair value measurements at the end of the reporting period usingLevel 1 Level 2 Level 3 total

RM RM RM RM

Recurring fair value measurementsfinancial asset:Other investmentsQuoted shares 3,815,472 - - 3,815,472Unquoted mutual funds - - 648,500 648,500

financial liability:Derivative liabilityForward foreign exchange sale

contracts - 551,581 - 551,581



33. fAIR vALuE MEASuREMENtS cont'd

33.2 financial instruments and non financial assets carried at fair value cont'd

fair value hierarchy cont'd

Group 2015

fair value measurements at the end of the reporting period usingLevel 1 Level 2 Level 3 total

RM RM RM RM

Non recurring fair value measurements

Non financial assets:Property, plant and equipmentFreehold land and buildings - 57,264,884 - 57,264,884

Recurring fair value measurementsfinancial asset:Other investmentsQuoted shares 2,447,466 - - 2,447,466

financial liability:Derivative liabilityForward foreign exchange sale

contracts - 47,613 - 47,613

There were no transfers between these levels of fair values in the current and previous reporting periods.

valuation techniques used to derive Level 2 fair values

The fair values of freehold land and buildings have been derived using the sales comparison approach. Sales prices of comparable freehold land and buildings in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot.

Fair value of the forward currency contracts are valued using a valuation technique with market observable inputs. The most frequently applied valuation techniques include forward pricing models which incorporates various inputs including foreign exchange spot and forward rates.

valuation techniques used to derive Level 3 fair values

The fair value of the unquoted mutual funds are determined by reference to the net assets per unit of the funds.



cont'd

34. SuppLEMENtARy INfORMAtION – BREAKDOWN Of REtAINED pROfItS/AccuMuLAtED LOSSES INtO REalISED anD unREalISED

The breakdown of the retained profits/accumulated losses of the Group and of the Company as at 31 December 2016 into realised and unrealised is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group Company2016 2015 2016 2015

RM RM RM RM

Total retained profits/(accumulated losses) of the Company and its subsidiaries- realised 36,955,997 32,939,181 (7,204,357) (8,129,090)- unrealised (151,203) 759,779 - -

Retained profits/(Accumulated losses) as per financial statements 36,804,794 33,698,960 (7,204,357) (8,129,090)


List of PropertiesAs at 31 March 2017

No. Location AddressDescription/ Existing use tenure

Approximate Age of

Building (years)

Land & Build-up Area (square meter)

carrying Amount (RM)

Date of Acquisition/ Revaluation

1 Selangor H.S.(D) 58833,No. PT58258,Daerah dan Mukim Klang,Negeri SelangorNo. 23,Jalan Sungai Rasau 32/29,Berjaya Park, Seksyen 32,40460 Shah Alam,Selangor

Residential.A doublestorey terracehouse used asaccommodationfor JMI’semployees.

Freehold 11 Land area130square meters

Built-up 173.9square meters

126,225 2 March 2006

2 Selangor H.S.(D) 57925 PT57329, Mukim and Daerah Klang,Negeri SelangorLot 7, Jalan Sungai KayuAra 32/37, Taman Berjaya, Seksyen 32,40460 Shah Alam,Selangor

Industry. JMI’sheadquarterscomprisinga two storeyadministrativeoffice, 3 unitsof detachedfactories, a guard house and a Tenaga NasionalBerhad (“Tnb”) substation

Freehold 15 Land area 19,426 square meters

Built-up 8,321square meters

Land 22,000,000

Building 9,738,034

17 March 2016

(Date of Revaluation)

3 Johor GRN 234632,Lot 45043,Mukim Senai,Daerah Kulaijaya,Negeri Johor

Industrial/ Enterprise.A vacant landintended tobe used as acollection centre.

Freehold Note:The landis vacant

Land area 4,045square meters

936,734 13 July 2010

4 Selangor H.S(D) 58834,No. PT58259,Daerah dan Mukim Klang,Negeri Selangor,No. 21,Jalan Sungai Rasau 32/29,Berjaya Park, Seksyen 32,40460 Shah Alam,Selangor

Residential. A doublestorey terracehouse used asaccommodationfor JMI’semployees.

Freehold 6 Land area 130square meters

Built-up 173.9square meters

192,500 16 March 2011

5 Selangor H.S (D)57924,No. PT57328,Mukim dan Daerah Klang,Negeri Selangor,No. 9, Jalan Sungai KayuAra 32/37,Taman Berjaya, Seksyen 32,40460 Shah Alam,Selangor

Industry. A single storey detachedfactory for receiving store operation, anannexed 3-storey administrative office building with laboratory facility, two guard houses and a TNB substation.

Freehold 3 Land area 10,619 square meters

Built-up6,851square meters

Land 17,000,000

Building 6,825,000

2 November 2015

(Date of Revaluation)


Statistics of ShareholdingsAs at 31 March 2017

Total Issued Share Capital : RM117,387,458.70 comprising 1,172,444,587 ordinary shares Class of Shares : Ordinary shares Voting Rights : One vote per ordinary share

analySIS by SIZE OF ShaREhOlDInGS as per the Record of Depositors

Size of HoldingsNo. of

Holders %No. of

Ordinary Shares %

1 - 99 178 3.54 8,206 0.00100 - 1,000 124 2.47 54,703 0.001,001 - 10,000 856 17.02 5,610,624 0.4810,001 - 100,000 2,954 58.74 135,005,766 11.51100,001 - 58,622,228 * 913 18.15 603,112,316 51.4458,622,229 and above ** 4 0.08 428,652,972 36.56

total: 5,029 100.00 1,172,444,587 100.00

Notes:-

* Less than 5% of issued holdings** 5% and above of issued holdings

SubSTanTIal ShaREhOlDERS based on the Register of Substantial Shareholders as at 31 March 2017

No. of Ordinary Shares No. Name Direct Interest % Indirect Interest %

1. Dato’ Ng Meow Giak 170,093,270 14.51 - -2. Ng Yaw Long 131,892,614 11.25 - -3. NKK Capital Sdn. Bhd. 134,700,051 11.49 - -4. Teh Chin Ching 99,167,037 8.46 - -5. Dato’ Ng Aik Kee 66,539,300 5.67 134,700,051 (1) 11.49

Remark:(1) DeemedinterestedbyvirtueofhisinterestinNKKCapitalSdn.Bhd.pursuanttoSection8oftheCompaniesAct2016.

DIREctORS’ SHAREHOLDINGS in the company, or in a related corporation (including number and percentage)based on the Register of Directors’ Shareholdings as at 31 March 2017

No. of Ordinary SharesName of Directors Direct Interest % Indirect Interest %

Datin Tan Siew Ching 43,555,133 3.71 - -Dato’ Ng Meow Giak 170,093,270 14.51 - -Roy Thean Chong Yew - - - -Datuk Md. Hassim Bin Pardi - - - -Ewe Chuan Seng - - - -


Statistics of ShareholdingsAs at 31 March 2017cont'd

tOp 30 SEcuRItIES AccOuNt HOLDERS (ORDINARy SHARES) as per Record of Depositors as at 31 March 2017

No. NameNo. of

Ordinary Shares %

1. NKK CAPITAL SDN. BHD. 134,700,051 11.492. DATO’ NG MEOW GIAK 114,893,270 9.803. NG YAW LONG 108,392,614 9.254. TEH CHIN CHING 70,667,037 6.035. AMSEC NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNT-AMBANK(M)BERHADFORDATO’NGAIKKEE39,200,000 3.34

6. LEE FU-CHIEN 38,500,200 3.287. KENANGA NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORDATO’NGMEOWGIAK33,000,000 2.81

8. TEOW CHEE POH 28,600,000 2.449. AMSEC NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNT-AMBANK(M)BERHADFORTEHCHINCHING28,500,000 2.43

10. JF APEX NOMINEES (TEMPATAN) SDN. BHD.-PLEDGEDSECURITIESACCOUNTFORDATO’NGMEOWGIAK

27,000,000 2.30

11. AMSEC NOMINEES (TEMPATAN) SDN. BHD.-PLEDGEDSECURITIESACCOUNT-AMBANK(M)BERHADFORNGYAWLONG

23,500,000 2.00

12. DATIN TAN SIEW CHING 22,765,000 1.9413. DATIN TAN SIEW CHING 20,790,133 1.7714. M & A NOMINEE (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORDATO’NGAIKKEE12,000,000 1.02

15. KENANGA NOMINEES (TEMPATAN) SDN. BHD.-PLEDGEDSECURITIESACCOUNTFORDATO'NGAIKKEE

10,539,300 0.90

16. FUNG KIM HENG 6,000,000 0.5117. JOEL OW YANG 5,410,000 0.4618. SU PEK FUANG 5,230,000 0.4519. ONG SAY KIAT 4,650,000 0.4020. RHB CAPITAL NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORCHOONGFOONGMING4,600,000 0.39

21. MAYBANK NOMINEES (TEMPATAN) SDN. BHD.-PLEDGEDSECURITIESACCOUNTFORGANCHEONGPOON

3,600,000 0.31

22. SIN SAW PHENG 3,000,000 0.2623. LOH YUN CHYI 2,949,500 0.2524. PUBLIC NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORPHUNGJEEKIONG@PHUNGJEECHIANG2,700,000 0.23

25. PUBLIC NOMINEES (TEMPATAN) SDN. BHD.-PLEDGEDSECURITIESACCOUNTFORKHOCHONGYAU

2,513,300 0.21

26. HO SIA SENG 2,400,000 0.2027. LOH YUN CHYI 2,260,000 0.1928. KENANGA NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORLANKOKPING@LIMKOKPING2,000,000 0.17

29. NG KWANG HUA 2,000,000 0.1730. RHB CAPITAL NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORTEEHOPENG2,000,000 0.17

total: 764,360,405 65.17


Statistics of WarrantholdingsAs at 31 March 2017

Description : Warrants 2014/2019Total Outstanding Warrants : 294,704,271Maturity Date : 14 August 2019Number of Warrantholders : 2,631

analySIS by SIZE OF WaRRanThOlDInGS as per the Record of Depositors

Size of WarrantholdingsNo. of

Warrant Holders %No. of

Warrants %

1 - 99 71 2.70 2,817 0.00100 - 1,000 196 7.45 124,834 0.041,001 - 10,000 811 30.82 5,321,700 1.8110,001 - 100,000 1,097 41.70 51,645,105 17.52100,001 - 14,735,212 * 454 17.25 195,344,792 66.2914,735,213 and above ** 2 0.08 42,265,023 14.34

total: 2,631 100.00 294,704,271 100.00

Notes:-

* Less than 5% of issued holdings** 5% and above of issued holdings


Statistics of WarrantholdingsAs at 31 March 2017cont'd

tOp 30 SEcuRItIES AccOuNt HOLDERS (WARRANtS) as per the Record of Depositors as at 31 March 2017

No. Name of Warrantholders No. of Warrants %

1. DATO’ NG MEOW GIAK 26,265,023 8.912. MAYBANK NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORTAICHEEMENG16,000,000 5.43

3. LIM ENG HOCK 6,000,000 2.044. PUBLIC NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORFOONGHONBENG5,816,000 1.97

5. TAY YONG CHUEN 5,230,000 1.776. NG KUI TAI 4,000,000 1.367. JOEL OW YANG 3,950,000 1.348. AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORTANBOONHUAT2,670,400 0.91

9. AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD.-PLEDGEDSECURITIESACCOUNTFORTEHPOOSENG

2,000,000 0.68

10. PEK ENG LAM 2,000,000 0.6811. TENG POK SANG @ TENG FOOK SANG 2,000,000 0.6812. ONG CHAI HONG 1,930,000 0.6513. CHEH KEAT MOOI 1,700,000 0.5814. AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORCHEHKAHMUN1,600,000 0.54

15. HLIB NOMINEES (TEMPATAN) SDN. BHD.-PLEDGEDSECURITIESACCOUNTFORTANBOONHAY

1,370,000 0.46

16. LOW CHEE MENG 1,325,000 0.4517. TAN MON KEE 1,300,000 0.4418. ABDUL HANIFF BIN SULAIMAN 1,250,000 0.4219. CHEW AH CHAY 1,231,900 0.4220. SJ SEC NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORNGKAWEE1,160,000 0.39

21. LOH YUN CHYI 1,155,000 0.3922. TEE MEI LIAN 1,146,000 0.3923. LOK WEI SEONG 1,140,000 0.3924. LAM WENG PENG 1,137,000 0.3925. TAN NGEE HIONG 1,117,500 0.3826. MAYBANK NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORONGKOKSIN1,100,000 0.37

27. PUBLIC NOMINEES (ASING) SDN. BHD.-PLEDGEDSECURITIESACCOUNTFORTANCHEEWEE

1,090,000 0.37

28. NG KIM MEN 1,051,000 0.3629. KENANGA NOMINEES (TEMPATAN) SDN. BHD.

-PLEDGEDSECURITIESACCOUNTFORJULIANCHEAHWAIMENG1,050,000 0.36

30. LEE YEN LANG 1,030,000 0.35

total: 99,814,823 33.87


Notice of 19th Annual General Meeting

nOTICE IS hEREby GIvEn ThaT the 19th Annual General Meeting of the Company will be held at Permai 1, 1st Floor, Kota Permai Golf and Country Club, No. 1, Jalan 31/100A, Kota Kemuning, Section 31, 40460 Shah Alam, Selangor Darul Ehsan on Wednesday, 14 June 2017 at 10:00 a.m. for the transaction of the following business:-

a G E n D a

Ordinary Business

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2016 together with the Reports of the Directors and Auditors thereon.

2. To re-elect Dato' Ng Meow Giak, a Director who retires in accordance with Article 67 of the Company’s Articles of Association, and being eligible, has offered himself for re-election.

3. To re-elect Roy Thean Chong Yew, a Director who retires in accordance with Article 67 of the

Company’s Articles of Association, and being eligible, has offered himself for re-election.

4. To re-appoint Messrs. Russell Bedford LC & Company as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Board of Directors of the Company to determine their remuneration.

5. To approve the payment of Directors’ fees amounting to RM96,000/- in total for the financial year ended 31 December 2016.

6. To approve the Directors’ fees payable to the Directors of the Company of up to RM115,200/- for the financial year ending 31 December 2017.

Special Business

To consider and, if thought fit, to pass the following as Ordinary Resolutions:-

7. ORDInaRy RESOluTIOn - pAyMENt Of BENEfIt pAyABLE tO tHE DIREctORS uNDER SEctION 230(1)(B) Of

tHE cOMpANIES Act 2016

“THAT the benefits payable to the Directors up to an amount of RM38,000/- for the period from 1 January 2017 until the next Annual General Meeting of the Company in year 2018 pursuant to Section 230(1)(b) of the Companies Act 2016, be and is hereby approved for payment.”

8. ORDInaRy RESOluTIOn - AutHORIty tO ISSuE SHARES puRSuANt tO SEctIONS 75 AND 76 Of tHE cOMpANIES

Act 2016

“THAT pursuant to Sections 75 and 76 of the Companies Act 2016, and subject to the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the Company, at any time to such persons and upon such terms and conditions and 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 ten per centum (10%) of the total number of issued shares of the Company for the time being and 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;

(RefertoNote8)

Resolution1

Resolution2

Resolution3

Resolution4

Resolution5

Resolution6

Resolution7


Notice of 19th Annual General Meetingcont'd

AND THAT such authority shall commence immediately upon the passing of this Resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

9. To transact any other business that may be transacted at an Annual General Meeting, due notice of which shall have been given in accordance with the Companies Act 2016 and the Articles of Association of the Company.

by ORDER OF ThE bOaRD

cHuA SIEW cHuAN (MAIcSA 0777689)cHENG cHIA pING (MAIcSA 1032514)Company Secretaries

Kuala Lumpur28 April 2017

Notes:

(A) InformationforShareholders/Proxies

1. For the purpose of determining amemberwho shall be entitled to attend this 19thAnnualGeneralMeeting, theCompany shall be requestingBursaMalaysiaDepositorySdn.Bhd. inaccordancewithArticle47(f)of theArticlesofAssociationoftheCompanyandSection34(1)ofSecuritiesIndustry(CentralDepositories)Act,1991(“SICDA”) to issue aGeneralMeetingRecordofDepositorsasat7 June2017.Onlyadepositorwhosenameappearson theRecordofDepositorsasat7 June2017 shallbeentitled toattend the saidmeetingorappointproxies toattendand/or speakand/orvoteonhis/herbehalf.

2. AmemberentitledtoattendandvoteattheAnnualGeneralMeetingisentitledtoappointaproxy/proxieswhomaybutneednotbeamember/membersof theCompany.Aproxyneedsnotbeamember.Thereshallbeno restrictionastothequalificationoftheproxy.AproxyappointedtoattendandvoteatameetingoftheCompanyshallhavethesamerightsasthemembertospeakatthemeeting.

3. Amember shall not, subject toNotes (4)and (5)below,beentitled toappointmore than two (2)proxies toattendandvoteattheAnnualGeneralMeeting.Whereamemberappointstwo(2)proxies,theappointmentshallbeinvalidunlessthememberspecifiestheproportionofhis/hershareholdingtoberepresentedbyeachproxy.

4. WhereamemberoftheCompanyisanauthorisednomineeasdefinedundertheSICDA,itmayappointnotmorethantwo(2)proxiesinrespectofeachsecuritiesaccountitholdswhichiscreditedwithordinarysharesoftheCompany.

5. Where amember of the Company is an exempt authorised nominee holding ordinary shares in the Company formultiplebeneficialownersinone(1)securitiesaccount(“omnibusaccount”)asdefinedunderSICDAwhichisexemptedfromcompliancewiththeprovisionsofsubsection25A(1)ofSICDA,thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.

6. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointerorhisattorneydulyauthorisedinwriting. In theevent theappointer is a corporation, the instrumentappointingaproxymustbeeitherunder theappointer’sCommonSealorunderthehandofitsofficerorattorneydulyauthorised.

7. The instrumentappointingaproxyand thepowerofattorneyorotherauthority (ifany),underwhich it is signedoranotarially certified copy thereof,mustbedepositedat theofficeof theCompany’s ShareRegistrar, i.e. SecuritiesServices (Holdings) Sdn.Bhd.at Level7,MenaraMilenium, JalanDamanlela,PusatBandarDamansara,DamansaraHeights,50490KualaLumpur,WilayahPersekutuan,notlessthanforty-eight(48)hoursbeforethetimesetforholdingtheAnnualGeneralMeetingoranyadjournmentthereof.



ExplanatoryNotestoOrdinaryBusiness:-

(B) AuditedFinancialStatementsforthefinancialyearended31December2016

8. ThisAgenda item ismeant fordiscussiononly,as theprovisionofSection340(1)(a)of theCompaniesAct2016doesnotrequireaformalapprovalfortheAuditedFinancialStatementsfromtheshareholders.Therefore,thisAgendaitemisnotputforwardforvoting.

(C) Resolutions1and2-Re-electionofDirectors

9. IndeterminingtheeligibilityoftheDirectorstostandforre-electionattheforthcoming19thAnnualGeneralMeeting,theNominatingCommittee (“NC”)considering the requirementsunderRule2.20Aof theACEMarketListingRequirements(“ACELR”)ofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)Dato'NgMeowGiakandMr.RoyTheanChongYewforthere-electionasDirectorspursuanttoArticle67oftheArticlesofAssociationoftheCompany(“RetiringDirectors”). TheBoardhasconductedaseparateassessmentandsatisfiedwiththe independenceofMr.RoyTheanChongYew,theIndependentNon-ExecutiveDirector,thereforetheyrecommendedthesamebetabledtotheshareholdersforapprovalattheforthcoming19thAnnualGeneralMeetingoftheCompanyunderResolutions1and2respectively.

AlltheRetiringDirectorshaveconsentedtotheirre-election,andabstainedfromdeliberationandvotinginrelationtotheirindividualre-electionattheNCMeeting,whereapplicableandBoardofDirectors’Meeting,respectively.

(D) Resolution3-Re-appointmentofAuditors

10. The Audit Committee (“AC”) have assessed the suitability and independence of the External Auditors andrecommended the re-appointment ofMessrs. Russell Bedford LC&Companyas ExternalAuditors of theCompanyfor thefinancialyearending31December2017.TheBoardhas in turnreviewedtherecommendationof theACandrecommendedthesamebetabledtotheshareholdersforapprovalattheforthcoming19thAnnualGeneralMeetingoftheCompanyunderResolution3.

(E) Resolutions4and5-PaymentofDirectors’Fees

11. TheProposedDirectors’ fees for thefinancial year ended31December2016wasRM96,000/- (2015:RM96,000/-)comprisesthefollowing:-

Directors’FeesFinancialYearEnded31December2016

Non-ExecutiveDirectors RM24,000/-perpersonperannum

AuditCommitteeChairman AdditionalRM12,000perannum

NominationCommitteeChairman AdditionalRM6,000perannum

RemunerationCommitteeChairman AdditionalRM6,000perannum

TheResolution4, if approved,will authorise thepaymentofDirectors’ feespursuant toArticle74of theArticlesofAssociationoftheCompany.

TheProposedDirectors’feespayabletotheDirectorsoftheCompanyforthefinancialyearending31December2017shallbeuptoRM115,200/-only,comprisesthefollowing:-

Directors’FeesFinancialYearEnding

31December2017

Non-ExecutiveDirectors RM28,800/-perpersonperannum

AuditCommitteeChairman AdditionalRM14,400perannum

NominationCommitteeChairman AdditionalRM7,200perannum

RemunerationCommitteeChairman AdditionalRM7,200perannum

TheResolution5,ifapproved,willauthorisetheDirectors’feespayabletotheDirectorsforthefinancialyearending31December2017pursuanttoArticle74oftheArticlesofAssociationoftheCompany.



ExplanatoryNotestoSpecialBusiness:

(F) Resolution6-PaymentofBenefitsPayabletotheDirectors

12. UnderResolution6,thebenefitspayabletotheDirectorspursuanttoSection230(1)(b)oftheCompaniesAct,2016hasbeenreviewedbytheRemunerationCommitteeandtheBoardofDirectorsoftheCompany,whichrecognisesthatthebenefitspayable is in thebest interestof theCompanyand inaccordancewithDirectors’RemunerationPolicyof theCompany for theapplicableperiodofbetween1 January2017 to thenextAnnualGeneralMeetingof theCompanyin year 2018. The benefits comprised solely of meeting allowance, which will only be accorded based on actualattendanceofmeetingsbytheDirectors:-

FinancialYearEnding31December2017

MeetingAllowancesforNon-ExecutiveDirectors RM500/-permeeting

(G) Resolution7-AuthoritytoIssueSharespursuanttoSections75and76oftheCompaniesAct2016

13. TheCompanywishes to renew themandateon theauthority to issue sharespursuant toSections75and76of theCompaniesAct2016at the19thAnnualGeneralMeetingof theCompany (hereinafter referred toas the “GeneralMandate”).

TheCompanyhadbeengrantedageneralmandatebyitsshareholdersatthelastAnnualGeneralMeetingoftheCompanyheldon17June2016(hereinafterreferredtoasthe“PreviousMandate”).

Pursuant to the PreviousMandate, the Company has undertaken a private placement exercise whichfirst trancheof 28,600,000newordinary shareswhichwere issuedat the issuedprice of RM0.105perplacementshareandwas listedon29March2017.Theproceeds raised fromthesaidprivateplacementexercisewasRM3,003,000/-.

Thedetailsofutilisationoftheproceedsfromtheabovementionedcorporateexercisewereasfollow:-

Statusofutilisation Amountutilised Amountunutilised

RM RM

Repaymentofbankborrowings Pending 2,986,890 -

EstimatedexpensesinrelationtothePrivatePlacement Pending 16,110 -

Total 3,003,000 -

ThepurposetoseektheGeneralMandate istoenabletheDirectorsoftheCompanyto issueandallotsharesatanytime to suchpersons in theirabsolutediscretionwithout conveningageneralmeetingas itwouldbebothtimeandcost-consuming toorganiseageneralmeeting. This authorityunless revokedor variedby theCompany ingeneralmeeting,willexpireatthenextAnnualGeneralMeeting.TheproceedsraisedfromtheGeneralMandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,includingbutnotlimitedtofurtherplacingofshares,forpurposeoffundingfutureinvestmentproject(s),workingcapitaland/oracquisitions.

*I/We, Company No./NRIC No. (fullnameasperNRIC/CertificateofIncorporationincapitalletters)

of (full address)

being a member of JaG bERhaD hereby appoint (fullnameasperNRICincapitalletters)

NRIC No. *and/or failing him/her, (fullnameasperNRICincapitalletters)

NRIC No. or failing *him/herthe Chairperson of the Meeting as *my/our proxy, to vote for *me/us on *my/our behalf at the 19th Annual General Meeting (“aGM”) of the Company to be held at Permai 1, 1st Floor, Kota Permai Golf and Country Club, No. 1, Jalan 31/100A, Kota Kemuning, Section 31, 40460 Shah Alam, Selangor Darul Ehsan on Wednesday, 14 June 2017 at 10:00 a.m. and at any adjournment thereof, on the following resolutions referred to in the Notice of 19th AGM.

*My/Our proxy(ies) *is/are to vote as indicated below:-

Ordinary Business For AgainstOrdinary Resolution 1 To re-elect Dato' Ng Meow Giak as Director (Article67)Ordinary Resolution 2 To re-elect Roy Thean Chong Yew as Director(Article67)Ordinary Resolution 3 To re-appoint Messrs. Russell Bedford LC & Company as Auditors

of the Company and to authorise the Board of Directors to determine their remuneration

Ordinary Resolution 4 To approve payment of Directors’ fees for the financial year ended 31 December 2016

Ordinary Resolution 5 To approve the Directors’ fees payable for the financial year ending 31 December 2017

Special BusinessOrdinary Resolution 6 To approve the benefits payable to the Directors for the period

from 1 January 2017 until the next AGM in year 2018Ordinary Resolution 7 Authority to issue shares pursuant to Sections 75 and 76 of the

Companies Act 2016

(Please indicatewithan“X” in theappropriateboxagainsteachResolutionhowyouwishyourvote tobe cast. Ifno specificdirectionastohowtheproxyshallvote,theproxyshallvoteashe/shethinksfitor,athis/herdiscretion,abstainfromvoting.)

Signed this day of , 2017

Signature(s)/Common Seal of member(s)

For appointment of two (2) proxies, percentage of shareholdings to be represented by the proxies

No. of shares percentageProxy 1Proxy 2Total 100%

Number of shares held

cDS account no.

FORM OF PROXY

1st FoldHere

FoldThis FlapForSealing

ThenFoldHere

Affix Stamp

JaG bERhaD(Company No. 439230-A)

c/o Securities Services (Holdings) Sdn. Bhd.Share RegistrarLevel 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurWilayah Persekutuan

NOtES:1. For thepurposeofdeterminingamemberwho shallbeentitled toattend this19thAnnualGeneralMeeting, theCompany shallbe requestingBursa

MalaysiaDepositorySdn.Bhd.inaccordancewithArticle47(f)oftheArticlesofAssociationoftheCompanyandSection34(1)ofSecuritiesIndustry(CentralDepositories)Act,1991(“SICDA”)toissueaGeneralMeetingRecordofDepositorsasat7June2017.OnlyadepositorwhosenameappearsontheRecordofDepositorsasat7June2017shallbeentitledtoattendthesaidmeetingorappointproxiestoattendand/orspeakand/orvoteonhis/herbehalf.

2. AmemberentitledtoattendandvoteattheAnnualGeneralMeetingisentitledtoappointaproxy/proxieswhomaybutneednotbeamember/membersoftheCompany.Aproxyneedsnotbeamember.Thereshallbenorestrictionastothequalificationoftheproxy.AproxyappointedtoattendandvoteatameetingoftheCompanyshallhavethesamerightsasthemembertospeakatthemeeting.

3. Amembershallnot,subjecttoNotes(4)and(5)below,beentitledtoappointmorethantwo(2)proxiestoattendandvoteattheAnnualGeneralMeeting.Whereamemberappoints two (2)proxies, theappointmentshallbe invalidunless thememberspecifies theproportionofhis/hershareholding toberepresentedbyeachproxy.

4. WhereamemberoftheCompanyisanauthorisednomineeasdefinedundertheSICDA, itmayappointnotmorethantwo(2)proxies inrespectofeachsecuritiesaccountitholdswhichiscreditedwithordinarysharesoftheCompany.

5. WhereamemberoftheCompanyisanexemptauthorisednomineeholdingordinarysharesintheCompanyformultiplebeneficialownersinone(1)securitiesaccount(“omnibusaccount”)asdefinedunderSICDAwhichisexemptedfromcompliancewiththeprovisionsofsubsection25A(1)ofSICDA,thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.

6. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointerorhisattorneydulyauthorisedinwriting.Intheeventtheappointerisacorporation,theinstrumentappointingaproxymustbeeitherundertheappointer’sCommonSealorunderthehandofitsofficerorattorneydulyauthorised.

7. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority(ifany),underwhichitissignedoranotariallycertifiedcopythereof,mustbedepositedattheofficeoftheCompany’sShareRegistrar,i.e.SecuritiesServices(Holdings)Sdn.Bhd.atLevel7,MenaraMilenium,JalanDamanlela,PusatBandarDamansara,DamansaraHeights,50490KualaLumpur,WilayahPersekutuan,notlessthanforty-eight(48)hoursbeforethetimesetforholdingtheAnnualGeneralMeetingoranyadjournmentthereof.

* Delete if not applicable

w w w . j a g b . c o m . m y


D61-3A, Block D, Jaya One,72A, Jalan Universiti, 46200 Petaling Jaya,

Selangor Darul Ehsan, Malaysia

Tel: 03-7954 8876Fax: 03-7954 7279

Email: [email protected]

Documents

Annual Report 2016 - JAG Berhad · Annual Report 2016. Part 1 : CORPORATE ... Jalan Sungai Kayu Ara 32/37, Taman Berjaya, ... cathode-ray tubes and other activated glass or polychlorinated