Annual Report

2020
www.jftech.com.my

JF TECHNOLOGY BERHAD
Registration No. 200601027925 (747681-H)
Contents
Corporate Information 01
Corporate Structure 02
Group Financial Highlights 03
Management Discussion and Analysis 04
Sustainability Statement 08
Board of Directors’ Profile 20
Key Management Profile 23
Corporate Governance Overview Statement 25
Additional Compliance Information 38
Statement on Risk Management and Internal Control 40
Audit Committee Report 42
Statement of Directors’ Responsibility 45
Financial Statements 46
List of Properties 122
Analysis of Shareholdings 123
Notice of Annual General Meeting 125
Form of Proxy (Enc.)
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Corporate
Information
BOARD OF DIRECTORS COMPANY SECRETARIES AUDITORS
Datuk Phang Ah Tong Chua Siew Chuan Crowe Malaysia PLT
(Independent Non-Executive Chairman) Chartered Secretary Level 16, Tower C, Megan Avenue II
(SSM PC No. 201908002648) 12, Jalan Yap Kwan Seng
Dato’ Foong Wei Kuong (MAICSA 0777689)
50450 Kuala Lumpur
(Managing Director)
Wilayah Persekutuan
Chin Mun Yee Tel No.: 03-2788 9999
Datin Wang Mei Ling Chartered Secretary Fax No.: 03-2788 9998
(Executive Director) (SSM PC No. 201908002785)
(MAICSA 7019243) Website: www.crowe.com.my
Goh Kok Sing
(Executive Director)
REGISTERED OFFICE PRINCIPAL BANKERS
Dato’ Philip Chan Hon Keong Level 7, Menara Milenium Malayan Banking Berhad
(Independent Non-Executive Director) Jalan Damanlela AmBank (M) Berhad
Pusat Bandar Damansara Public Bank Berhad
Koay Kah Ee Damansara Heights
(Senior Independent Non-Executive
50490 Kuala Lumpur
Director)
Wilayah Persekutuan SOLICITORS
Tel No.: 03-2084 9000 Wong, Beh & Toh
Lew Jin Aun
(Independent Non-Executive Director) Fax No.: 03-2094 9940/2095 0292

LISTING
BUSINESS ADDRESS ACE Market of Bursa Malaysia
AUDIT COMMITTEE
Lot 6, Jalan Teknologi 3/6 Securities Berhad
Koay Kah Ee
(Chairman) Taman Sains Selangor 1
Kota Damansara
Datuk Phang Ah Tong 47810 Petaling Jaya STOCK NAME
Dato’ Philip Chan Hon Keong Selangor Darul Ehsan JFTECH
Lew Jin Aun Tel No.: 03-6140 8668
Fax No.: 03-6140 8998
Email: [email protected] STOCK CODE
NOMINATION COMMITTEE Website: www.jftech.com.my 0146
Datuk Phang Ah Tong
(Chairman)
REGISTRAR
Dato’ Philip Chan Hon Keong Securities Services
Koay Kah Ee (Holdings) Sdn. Bhd.
Lew Jin Aun Level 7, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
REMUNERATION COMMITTEE Damansara Heights
Koay Kah Ee 50490 Kuala Lumpur
(Chairman) Wilayah Persekutuan
Tel No.: 03-2084 9000
Datuk Phang Ah Tong Fax No.: 03-2094 9940/2095 0292
Dato’ Philip Chan Hon Keong Website: www.sshsb.com.my
Lew Jin Aun

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Corporate
Structure

JF TECHNOLOGY BERHAD
Registration No. 200601027925 (747681-H)

100% 100% 100% 100%

JF Microtechnology J Foong Technologies JF International JF Testsense
Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. Sdn. Bhd.
Registration No. 200501036039 Registration No. 199901007299 Registration No. 202001009861 Registration No. 202001019858
(718186-U) (482199-U) (1366181-H) (1376178-W)

100%
JFH Technologies (Kunshan) Co., Ltd

JF Technology Berhad (“JF Tech”) was incorporated in Malaysia on 18 September 2006 and listed on the ACE Market of
Bursa Malaysia Securities Berhad in year 2008.

JF Tech is principally an investment holding company with four (4) wholly-owned subsidiaries namely, JF Microtechnology
Sdn. Bhd., J Foong Technologies Sdn. Bhd., JF International Sdn. Bhd. and JF Testsense Sdn. Bhd.. JF International Sdn.
Bhd. is principally an investment holding company with one (1) wholly-owned subsidiary, namely JFH Technologies
(Kunshan) Co., Ltd which was incorporated in China on 11 August 2020.

The details of the subsidiaries of JF Tech as at the date of this Annual Report are summarised below:

Issued and Effective

Date/Place of Paid-up Share Equity
Companies Incorporation Capital Interest Principle Activities
RM %

JF Microtechnology Sdn. Bhd. 14-12-2005/ 2,200,000 100 Design, development, custom

Registration No. 200501036039 (718186-U) Malaysia manufacture and sale of
integrated circuit test sockets,
interconnect, test solutions, and
equipment for semi-conductor
and electronic assembly markets.

J Foong Technologies Sdn. Bhd. 29-04-1999/ 500,000 100 Manufacturing and trading
Registration No. 199901007299 (482199-U) Malaysia of electronic products and
components.

JF International Sdn. Bhd. 03-04-2020/ 2 100 Investment holding.

Registration No. 202001009861 (1366181-H) Malaysia

JF Testsense Sdn. Bhd. 22-07-2020/ 6,000,000 100 Test development engineering

Registration No. 202001019858 (1376178-W) Malaysia services, talent development and
sales of test interface solutions.

JFH Technologies (Kunshan) 11-08-2020/ Registered 100 Design, manufacture, sale and
Co., Ltd China Capital provision of technical support for
USD500,000 integrated circuits test contacting
solution.

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Group Financial
Highlights
2020 2019 2018 2017 2016
RM'000 RM'000 RM'000 RM'000 RM'000

Statements of Profit or Loss and

Other Comprehensive Income
Revenue 26,815 23,025 24,929 24,670 19,029
Profit before taxation (“PBT”) 8,058 3,206 583 6,964 1,172
Profit after taxation (“PAT”) 8,018 3,016 328 6,379 1,042

Statements of Financial Position

Share capital 21,253 21,253 21,000 12,600 12,600
Total assets 45,104 44,718 41,083 38,543 33,048
Total liabilities 6,837 13,419 12,800 7,978 8,862

Others
Earnings per share (sen) 3.82 1.44 0.16 3.04 0.50
Net assets per share (sen) 18.22 14.90 13.47 14.55 11.52

REVENUE (RM’000) PBT (RM’000)

26,815
24,670 24,929 8,058
23,025
6,964
19,029

3,206

1,172
583

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

PAT (RM’000) EARNINGS PER SHARE (SEN)

3.82

8,018
3.04

6,379

1.44
3,016

1,042 0.50
328 0.16

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

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Management Discussion
and Analysis
OPERATIONAL & FINANCIAL REVIEW

JF Technology Berhad (“JF Tech”, “the Group” or “the Company”) is a leading innovator and manufacturer of high
performance test contacting solutions for global integrated circuit makers. For financial year (“FYE”) 2020, JF Tech
posted its best annual revenue and net profit performance in the Group’s history despite the Covid-19 pandemic
and the resultant Movement Control Order (“MCO”).

Operationally, the disruptions as a result of the MCO were minimal to JF Tech as we only halted our operations
briefly in adherence to the MCO. The Group swiftly resumed our production upon obtaining approvals from the
authorities given our role as an important link in the global semi-conductor supply chain, supporting both our local
and overseas customers. JF Tech made adjustments to the production schedule and operations to ensure in strict
compliance with the standard operating procedures outlined by the authorities.

We delivered a remarkable set of results for FYE2020. The Group achieved a record turnover of RM26.82 million for
the financial year under review as compared to RM23.03 million in FYE2019. This represented an increase of 16%
year-on-year (“YoY”). The double-digit improvement was mainly driven by the robust demand from our customers.
In terms of revenue breakdown by segments, our test contacting solutions for automotive application and radio
frequency (“RF”) application each contributed 37% or RM9.92 million to total turnover while original equipment
manufacturing (“OEM”) and others division accounted for the remaining 26% or RM7.05 million in FYE2020.

Demand from the mobile devices and internet of things (“IoT”) under the RF segment, grew by a significant 98%
YoY. This proves that JF Tech is moving in the right direction as we are strategically positioned to benefit from the
upcoming adoption of 5G network devices.

For new projects in the financial year under review, the RF segment contributed the bulk of it at 48%, automotive
test socket solution contributed approximately 16% and the remaining 36% came from OEM and others.

Our efforts to diversify and expand our global presence continued to bear fruit. The Group’s export sales grew 24%
YoY to RM20.22 million in FYE2020 from RM16.30 million in FYE2019. In particular, export sales to China experienced
robust growth of 47% YoY and contributed RM9.21 million or 34% to total revenue in the financial year under review
as compared to RM6.25 million or 27% to turnover in FYE2019. This is the first time revenue from China overtook
contribution from Malaysia. The solid growth is also a testament to JF Tech’s capabilities, technical expertise as well
as quality products and services.

Sales of OEM products mainly to domestic customers, including leading test handler manufacturers, outsourced
semi-conductor assembly and test providers and major multinational semi-conductor manufacturer companies
in Malaysia were lower on a YoY basis.

Meanwhile, the top-line improvement was amplified in our earnings before interest, tax, depreciation and
amortisation (“EBITDA”), which soared 106% YoY to RM9.56 million in FYE2020 from RM4.64 million in FYE2019. This
translated into an EBITDA margin of 36% for the financial year under review versus 20% in the preceding year. This
was largely attributed to lower operating expenses incurred despite the increase in turnover.

More remarkably, the multiplier effect from the overall enhancement in performance continued to flow through
with profit before taxation (“PBT”) surging 151% YoY to RM8.06 million in FYE2020 versus RM3.21 million registered a
year ago. The larger-than-proportionate growth stemmed from gain in foreign exchange due to strengthening of
United States Dollar (USD) against Ringgit Malaysia (RM), compounded by lower legal fees incurred. Consequently,
PBT margin improved significantly to 30.1% in FYE2020 from 13.9% in FYE2019.

Profit after taxation (“PAT”) rose 166% YoY to RM8.02 million in FYE2020 from RM3.02 million a year ago as a result
of the factors mentioned above. The Group’s basic earnings per share (“EPS”) increased by similar quantum to 3.82
sen per share in the financial year under review from 1.44 sen in FYE2019.

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Management Discussion and Analysis

OPERATIONAL & FINANCIAL REVIEW (CONT’D)

2016 2017 2018 2019 2020 Y0Y change

RM'000 RM'000 RM'000 RM'000 RM'000 %
Revenue 19,029 24,670 24,929 23,025 26,815 16%
PBT 1,172 6,964 583 3,206 8,058 151%
PAT 1,042 6,379 328 3,016 8,018 166%
EPS (sen) 0.50 3.04 0.16 1.44 3.82 165%

2016 2017 2018 2019 2020 YoY change

RM'000 RM'000 RM'000 RM'000 RM'000 +/(-)
Total assets 33,048 38,543 41,083 44,718 45,104 +1%
Total liabilities 8,862 7,978 12,800 13,419 6,837 -49%
Retained earnings 2,843 9,222 7,030 10,046 17,014 +69%
Shareholders' equity 24,186 30,565 28,283 31,299 38,267 +22%

On balance sheet strength, the Group remained in a solid and healthy financial position. JF Tech continued to be
in a net cash position with net cash per share of RM5.74 as at end-June 2020, backed by net assets per share of
18.22 sen. The lean balance sheet yields great flexibility to the Group in terms of financing options to fund future
business growth and/or investments should any opportunities arise.

OPERATIONAL AND FINANCIAL RISKS

Operational Risks

(a) Competition Risk

The semi-conductor industry is highly competitive and subject to rapid technological changes and new
product developments. In order to maintain our strategic position within the industry, the Group continuously
uphold stringent criteria throughout our manufacturing processes and after sales service support. We
ensure that the test contacting solutions we provide are of the highest degree and subject to critical control
measures, ensuring a satisfied global customer base.

Our strong emphasis on rigorous quality control is to ensure that our products meet the customers’
requirements. Our quality assurance department provides continuous feedback to the assembly and
manufacturing process to improve our operations and provide customers with the best quality and reliable
products. The Group’s after sales service is critical to ensure our customers have a seamless experience due to
the highly customised nature of our products. Both subsidiaries of the Company, J Foong Technologies Sdn.
Bhd. and JF Microtechnology Sdn. Bhd. are certified with the latest ISO Quality System ISO9001:2015 which
includes risk managements in the Quality Management System.

The Group is actively pursuing new products and technological innovations to address the increasingly
sophisticated and ever-changing needs of our customers. We maintain our competitive edges within the
industry by leading in the field of innovation and development of state-of-the-art test contacting solutions.
The Group’s regular participations in overseas exhibitions provide us with an opportunity to understand the
latest market requirements and place the Company in the forefront of constant technological change.

The Group will continue to strengthen its market position and expand the customer base as we move up the
value chain within the industry.

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Management Discussion and Analysis

OPERATIONAL AND FINANCIAL RISKS (CONT’D)

Operational Risks (cont’d)

(b) Intellectual Property Risk

Due to the nature of our core business, extensive measures must be taken to minimise our exposure to
intellectual property risk. The Group places strong emphasis and allocate a large amount of resources toward
research and development of new products and enhancement of existing product range. As a result, the
Group leverages on our intellectual property and technological know-how to differentiate JF Tech from
competitors within the industry.

In order to mitigate intellectual property risk, the Group continues to submit applications for patents of new
product developments. In FYE2020, JF Tech has filed for ten (10) patents and was granted eleven (11) patents
in total. To-date, the Group is a proud owner of twenty-seven (27) patents while thirty-five (35) patents are
pending approval, which make us one of the most aggressive intellectual property owners in the region for
the semi-conductor test socket industry.

Moreover, all employees are required to sign a non-disclosure agreement to protect the Group’s interest.

(c) Dependence on Experienced Personnel and Shortage of Skilled Manpower Risk

JF Tech’s continued success is heavily dependent on the abilities and effort of its existing Directors, key
management and technical personnel.

The Group has participated in various career fairs organised by leading local universities to expand our
employee skillset. The Group has also established skill matrixes for training and development of our existing
workforce to prepare them for the future. Furthermore, the Group provides industrial trainings to students
from technical fields with the goal of identifying potential and developing their technical proficiency prior
to recruitment. In FYE2020, the Group recruited four (4) new skilled machinists and four (4) engineers to the
team.

(d) Financial Risk

The Group’s financial risk is set out under Note 34 to the Financial Statements in this Annual Report.

OUTLOOK GOING FORWARD

JF Tech is actively seeking opportunities to expand our presence within the semi-conductor industry and aims to
move up the global value chain in the near term. We are confident that we can leverage our expertise in the field
to complete the semi-conductor ecosystem in Malaysia with the introduction of our new subsidiaries.

We believe that providing a ‘one stop shop’ for test interface products and engineering services will not only enable
us to capture a new market segment but provide customers with an enhanced overall experience by eliminating
the need to engage with different suppliers. Providing additional product offerings will generate new revenue
streams for the Group while ensuring a more efficient release of test solutions to manufacturing, thereby increasing
efficiency and accountability. We are confident that this expansion will reignite the competitiveness of the semi-
conductor industry in Malaysia through our test engineering talent development resulting in the creation of high
value engineering roles.

We expect our new facility to be operational within the FYE2021 and will strategically increase our capability and
capacity of our production.

The Group continues to place utmost emphasis and commitment to expand our product line and capitalise on
existing trends in 5G network as well as opportunities in overseas markets. To-date, the Group owns twenty-seven
(27) patents in various countries such as the United States, Taiwan and Philippines with another thirty-five (35)
patents pending for approval.

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Management Discussion and Analysis

OUTLOOK GOING FORWARD (CONT’D)

Looking ahead, we are positive on our outlook. We believe we are in the right industry with the right skills. We
expect the demand for our high-performance test contacting solutions will continue to be on the rise along with
the increasing use of chips in various industries such as automotive, telecommunication or IoT including smart
appliances. This is evident by the strong demand for our products with higher RF testing capabilities during the
financial year under review. The trend will be even more robust with advent of 5G network. To prepare for the
future, we are reinventing ourselves at JF Tech to move up the semi-conductor value chain.

On balance, the Board of Directors (“Board”) is cautiously optimistic on the business prospects and expect FYE2021
to be a challenging year due to the outbreak of the Covid-19 pandemic. Nevertheless, we do see various pockets
of opportunities that JF Tech can capitalise on. We have been planting seeds of growth over the past few years
to build a solid foundation for our future. We are now ready to embark on our next phase of growth, which is the
reinvention of the Group. Barring any unforeseen circumstances, the Board anticipates the Group will achieve a
satisfactory performance for FYE2021.

DIVIDEND

In view of the Group’s financial performance and closure of the lawsuit, the Board has declared a final dividend of
1.5 sen per ordinary share for the FYE2020 as follows:

Final dividend for financial year ended 30 June 2020

Amount per share : 1.5 sen

Total dividend payable : RM3,386,243.78
Entitlement to dividend based on Record of Depositors as at : 11 September 2020
Payment date : 25 September 2020

The financial statements for the current financial period do not reflect this final dividend. Such dividend will be
accounted for in equity as an appropriation of retained earnings in next financial year ending 30 June 2021.

MESSAGE FROM BOARD AND MANAGEMENT

Premised on the above, the Board and Management are optimistic to meet the challenges for the coming years
and would deliver results to the shareholders and investors.

APPRECIATION

On behalf of the Board, we would like to express our sincere gratitude to our Management and staff at JF Tech for
their continuous commitment, hard work and contribution to the Group.

We would also like to thank all our other stakeholders including our valued customers, suppliers, business
associates, bankers, authorities and most importantly our esteemed shareholders for their unwavering support
and confidence to the Group.

Additionally, we are pleased to welcome Mr. Dillon Atma Singh, who joined JF Tech on 15 May 2020 as our Chief
Executive Officer. He brings with him a wealth of industry experience and we are confident that he will contribute
positively to the Group and lead JF Tech towards greater heights.

Last but not least, I wish to extend my heartfelt appreciation to the Board of JF Tech for your dedication, valuable
advice and service to the Board.

Thank you.

Dato’ Foong Wei Kuong

Managing Director

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Sustainability
Statement
SUSTAINABILITY AND OUR BUSINESS

JF Technology Berhad (“JF Tech”, or the “Group”) recognises that sustainability is at the core of the Group’s
practices as we pursue long-term value creation for our stakeholders. We continuously integrate sustainability
practices into our Group strategies and operations. All departments within the organisation collaborate and strive
towards a common goal of leveraging sustainability and integrate Economic, Environmental and Social (“EES”)
considerations into the Group operations.

The Group provides high performance test contacting solutions to validate integrated circuits (“IC”) that are
produced in billions utilised in smartphones, consumer wearable electronics, medical appliances, automotive solid-
state storage, military and the internet of things. Our strategic position as an international test contacting solution
provider and a public listed entity propels us to leverage our approach towards material sustainability matters.
We believe that strong corporate governance structure is crucial towards effective sustainability management
and our Board of Directors (“Board”)-level commitment towards this agenda fosters a culture of corporate social
responsibility.

Reporting Period

This sustainability statement outlines the Group’s approach towards achieving the stated EES goals and
management of sustainability matters for the period from 1 July 2019 to 30 June 2020 (“FYE 2020”).

Reporting Scope

The following shows the reporting scope of the annual report including JF Tech and its active subsidiaries which
are located in Malaysia:

JF TECHNOLOGY BERHAD

JF MICROTECHNOLOGY J FOONG TECHNOLOGIES JF INTERNATIONAL

SDN. BHD. SDN. BHD. SDN. BHD.

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Sustainability Statement

SUSTAINABILITY AND OUR BUSINESS (CONT’D)

Core Values

JF Tech’s core values represent the fundamental principles that we abide in the pursuit of individual and Group
greatness. These guiding principles dictate the Group attitude towards our daily operations and creates an
unwavering guide for our employees to consistently uphold.

“JF TECH” is acronym for:

J is Just be fair
F is Fiscal responsibility
T is Treat each other with respect
E is Energising innovation
C is Committed to a sense of ownership
H is Honest hard work

Mission Vision

Anticipating customer’s satisfaction and delivering To be the World No.1 provider of high performance test
superior products profitably and professionally by interface solutions by maximising values for employees,
continous improvement to our human resources customers and stakeholders.
productivity.

• Employees
• Fiscal Responsibility
• Innovation
• Quality Excellence
• Customer Experience

Sustainability Governance

Successful integration and effective management of sustainability within the Group requires having committed
leadership, clear direction, and strategic influence, all of which is achieved through a robust governance structure.
A strong governance structure helps the Group implement sustainability strategy across the business, ensure
accountability, oversight and review in the identification and management of sustainability matters.

The importance of governance sustainability in achieving our initiatives is well recognised by employees in the
Group. As such, the Group incorporates proper controls and approvals, reserved matters, accountability and long-
term objectives such as:

• to establish proper governance structure, control, monitor, evaluation and reporting features into the
management process;
• to include sustainability as an integral part of the strategic planning of the Group;
• to enhance sustainability efforts through regular updates of strategies, policies, procedures and provide
relevant trainings; and
• to assess regularly the impacts and outcomes of sustainability principles adopted by the Group.

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Sustainability Statement

SUSTAINABILITY AND OUR BUSINESS (CONT’D)

Sustainability Governance (cont’d)

The roles of each division within the governance structure are as follows:

Board:
The Board oversees the formation and implementation of the strategies.

Management Committee:
The management committee determines the strategies and action plans relating to sustainability matters that are
presented to the Board for approval.

Stakeholder Engagement

The Group believes that maintaining a good degree of communication with internal and external stakeholders is
essential to establish strong corporate governance. We actively engage with our stakeholders through multiple
channels of communication, enabling us to understand their expectations and obtain meaningful feedbacks on
their interests and needs. This helps us to identify and emphasise key sustainability matters in a timely manner.
A summary of the stakeholder groups, areas of interest, type of engagement, frequency and outcomes are listed
below: -

Stakeholder
Groups Areas of Interest Type of Engagement Frequency Outcomes
Investors/ - Business performance - Quarterly financial - Quarterly Provides constructive
Shareholders review reports feedback, improve
- Operation in compliance - Annual report - Annually relationship with
with applicable laws and shareholders and
regulations positive reputation
- Strategic plans - Corporate website - On-going amongst investors
- Investor engagement - Investor relationship - As required
channel
- Corporate - Regular meeting and - As required
announcement correspondence
- Information and - Feedback to media - As required
communication enquiries

Customers - Product quality and - Customer feedback - On-going Better awareness

performance of the Group’s
- Sustaining long-term - On-site visits - As required commitment
relationship to sustainability
- Operation in compliance - Customer audit - On-going and an improved
with applicable laws and understanding of our
standards policies, culture and
values

Employees - Health and safety - Training and - On-going Inclusiveness in

protocols development management
- Coronavirus (“Covid-19”) - Restraining and provision - On-going decision making to
standard operating of personal protective foster a safer and
procedures (“SOPs”) equipment (“PPE) more harmonious
compliance work environment
- Communication and - Formal meeting and - On-going
engagement discussion
- Working environment - Employee feedback and - Annually
briefing
- Career development and - Appraisal and - On-going
training performance review

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Sustainability Statement

SUSTAINABILITY AND OUR BUSINESS (CONT’D)

Stakeholder Engagement (cont’d)

Stakeholder
Groups Areas of Interest Type of Engagement Frequency Outcomes
Suppliers - Strategic partnership - Supplier evaluation - On-going Establish good long-
- Supplier performance - Regular meeting and - On-going term relationship
review correspondence with suppliers and
- Product and service - Site visit to suppliers’ - On-going maintain reliability
quality premises throughout the value
chain

Government - Regulatory compliance - Site visit and meeting - As required Compliance with
and Regulators - Supporting country’s - Participation in - As required regulations and
economy growth programmes organised ensure regular
by Government bodies operations permits

Community - Environment protection - Participation in local - On-going Maintain our

community activities promise towards
- Local community - Sponsorship and - On-going corporate social
activities involvement donations responsibility and
improve wellbeing
of individuals from
the charitable
organisation

Materiality Assessment
Materiality Matrix
The materiality matrix is used to identify the
Group’s important sustainability matters during the - Local Supply Chain - Employee
assessment. Applying materiality helps the Group - Whistle Blowing Development and
Policy Talent Management
identify what topics are most important to act on and - Anti-Bribery and - COVID-19 Health
High

report to stakeholders. In this respect, the materiality Corruption Policy and Safety Measures
- Pollution Control - Innovation,
assessment provides valuable information that may Automation and
positively or negatively influence the Group’s ability
Importance to External Stakeholders

Intellectual Property
to deliver our vision and strategy. Most importantly, it
reflects our impact on the EES dimensions. - Diversified - Occupational Safety
Customer Base and Health
- Contribution to - Commitment to
During FYE2020, the materiality matrix is included
Medium

Community quality
to illustrate the relative importance of sustainability - Healthy Work-Life - Code of Conduct
Practices and Ethics
matters to internal and external stakeholders. They - Energy Usage
are chosen and reviewed by the relevant divisional - Waste Management
management based on the on risks and opportunities
arising from the EES impacts of the organisation’s - Workforce Diversity - Emergency
operations and activities. Response Team
Low

These seventeen (17) material sustainability matters

are ranked highest in terms of their significance to the
Group and we have decided to place greater emphasis
on these matters in the Sustainability Statement. JF
Tech will continue to review the highlighted matters Low Medium High
and expand the depth and scope of our current Importance to Internal Stakeholders
reporting as we move forward.

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Sustainability Statement

ECONOMIC THRUST

1. Profitability

JF Tech aspires to combine strong and sustainable growth with good high profit margin to generate
extended value for our shareholders and continued positive long-term development. We believe that a
sustainable business performance enables us to create values to our stakeholders and enhance values to our
stakeholders, create opportunities for employee and contribute to the communities.

Our products are highly customised to the exact needs of our customers, adhering to electrical, mechanical
and dimensional precision. Our design know-how, technology and automation put us in the forefront of
the industry and are key comparative advantages to the Group’s success. The Group evaluates its impact on
economics condition of its stakeholders and on economic systems at local, national and global levels.

For details of our financial results, please refer to the Management Discussion and Analysis and the Audited
Financial Statements in this Annual Report.

2. Innovation, Automation and Intellectual Property

JF Tech is principally involved in the design, development, manufacture, marketing and sales of test contacting
solutions, which are highly customised to its customers’ needs and are patent-protected. The Group envisions
a sustainable future and fulfills it by continuously innovating, designing, manufacturing and marketing a
portfolio of test contacting solutions.

In FYE2020, we have filed for ten (10) patents and have been granted eleven (11) patents in total. The patents
granted were related to the invention of high frequency IC test contacting solutions used mainly for 5G/
RF/mmWave applications and also the invention of IC test contacting solutions for automotive/high power
applications. The Group’s wholly-owned subsidiary, JF Microtechnology Sdn. Bhd., has also received a
certificate of grant of a patent, titled “Kelvin Contact Assembly and Method of Installation Thereof”, from
the China National Intellectual Property Administration. The date of Grant and Publication of the Patent was
made on 30 June 2020 (filed on 21 February 2017) for a duration of twenty (20) years from the filing date of the
application.

To-date, the Group is a proud owner of twenty-seven (27) patents with another thirty-five (35) patents pending
approval. This makes us one of the most aggressive intellectual property owners in the region for the semi-
conductor test socket industry. The patents owned by the Group is essential to protect our intellectual property
rights that we have heavily invested towards and is the outcome of ongoing research and development
efforts by our in-house Design and Development team. This gives us an edge within the industry, and we
intend to maintain this advantage for the foreseeable future. The Group will continue to innovate and invest
to lead in the creation of intellectual properties for the growth of the industry and sustain a strong economic
performance in the long-term.

3. Code of Ethics and Conduct

Ethics, integrity, accountability, transparency and professionalism are rising to the forefront as mainstream
touchstones in the business environment. In keeping with the Group’s Code of Ethics and Conduct as outlined
in the Employee Handbook, relevant policies and mechanisms have been established to ensure employees
carry out business activities fairly, honestly, openly and in compliance with all applicable laws of the countries.
As part of our continued efforts to create awareness, talks and trainings are organised on a regular basis for all
levels of employees across departments.

The Code of Ethics and Conduct comprises the following main principles:

- to avoid conflict of interest;

- to avoid misuse and/or abuse of position;
- to ensure protection of assets and interests, confidentiality of information and to prevent misuse of
information gained through the Group’s operations, either for personal gain or for any purpose other
than that intended by the Group;
- to encourage reporting of unlawful or unethical behaviour; and
- to ensure compliance with policies, laws, rules and regulations.

JF Tech’s Code of Ethics and Conduct is available on our corporate website at www.jftech.com.my.

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Sustainability Statement

ECONOMIC THRUST (CONT’D)

4. Whistle Blowing Policy

At JF Tech, we expect our employees to convey high standards of professionalism and ethics in the conduct
of our operations across all divisions. As a measure of good corporate governance, we have established
the relevant policies that encourages legitimate concerns to be thoroughly investigated and addressed.
Employees will be able to raise concerns about illegal, unethical or questionable practices in confidence and
without the risk of reprisal.

The following actions are generally accepted as improper and reportable conduct of whistle blowing,
including but not limited to:

- any unlawful or illegal activities, whether criminal or breach in civil law;

- fraud, theft, embezzlement or dishonesty;
- corruption/bribery;
- bullying and harassment;
- breach of policies and/or procedures; and
- poor or unethical sales practices, including mis-selling

JF Tech’s Whistle Blowing Policy is available on our corporate website at www.jftech.com.my.

5. Anti-Bribery and Anti-Corruption Policy

Our Anti-Bribery and Anti-Corruption Policy provides a clear statement of the conduct that is expected of the
Group’s personnel. The Group has a zero-tolerance approach to all forms of bribery and corruption and shall
continuously conduct its business activities ethically, honestly and with high standards of integrity. Bribery
and corruption compromise business ethics and damage an organisation’s reputation. As such, the Group
strongly opposes any practice that improperly or illegally disrupts proper business conduct.

We have implemented procedures to promote awareness on the Code of Ethics and Conduct, Anti-Bribery
and Anti-Corruption Policy and Whistle Blowing Policy through formal briefings across all departments to
maintain fair dealing, integrity and honesty in the way we conduct our business. By doing so, we hope to
achieve transparency in our business practices and raise the standards where ethical conduct is concerned.
This awareness briefing and policies will be shared throughout the year

JF Tech’s Anti-Bribery and Anti-Corruption Policy is available on our corporate website at www.jftech.com.my.

6. Compliance with environmental laws and regulations

JF Tech is committed to the prevention of pollution and continuous improvement of overall environmental
performance. Our operations are in compliance with the environmental laws and regulations that are governed
and subject to heavy scrutiny. The following have been incorporated into our Group Environment Policy and
we are determined to carry out the actions progressively and constantly to accomplish the intended goals as
follows:

- to comply with applicable environmental legislation, regulations and other requirements;

- to foster employees’ and contractors’ awareness of environmental issues through training and active
information dissemination;
- to create an awareness of the Group Environment Policy within the Group and our stakeholders;
- to reduce consumption of non-renewable and non-recycled materials; and
- to provide safe and hygienic workplace and ensure all personnel are properly trained with the appropriate
safety procedures and control actions.

We are pleased to highlight that we have not been penalised for any environmental issues by any regulatory
authorities during FYE2020 (financial year ended 30 June 2019 (“FYE2019”):NIL). We have continuously and
regularly engage with Department of Environment (“DoE”) in ensuring that any issues raised by DoE are
addressed and steps are taken to ensure that the environmental issues are mitigated to an acceptable level.

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Sustainability Statement

ENVIRONMENTAL THRUST (CONT’D)

7. Pollution Control

We have a holistic approach towards incorporating sustainability practices into our daily activities. Metal
scraps generated from the production of test socket pins are fully recyclable. The Group’s operations do not
release harmful emissions into the air or discharge hazardous effluent into the drainage system. By their
nature, there are minimal industrial wastes generated from operations that go to the landfill. We aim to
operate sustainably by minimising waste and utilise resources efficiently throughout our production process.

8. Energy Usage

During FYE2020, our electricity consumption has increased marginally from approximately 0.981 million kWh
in FYE2019 to 0.986 million kWh. Our expenditure on energy consumption subsequently increased by 1%
from RM427,900 in FYE2019 to RM432,300 in FYE2020. The increase was mainly due to growth in production
output during FYE2020. Despite the slight increase in energy emission, we are convinced that our production
processes are increasingly more efficient and consumes less energy. By replacing some older machineries
with newer and more efficient machines into our production line, we aim to reduce our carbon footprint and
to be more environmentally friendly in our operations.

9. Waste Management

JF Tech is constantly finding ways to sustainably manage waste from production and this includes supporting
the prevention of waste generation and facilitating the reuse and safe recycling of waste materials. We are
committed to ensuring that waste is managed in an environmentally sound management system. Reducing
production wastage can reduce both the cost of raw materials and the cost of disposing waste created on
site. Disposal creates additional unwanted steps and creates inefficiency including source separation. Under
scheduled waste management, waste recovery for reuse and recycling can tremendously reduce the amount
of waste that is destined for disposal by landfills.

Our operations are in compliance with the Environmental Quality Act 1974 under the Environmental Quality
(Scheduled Waste) Regulations 2005.

Scheduled
3.11 metric tonne Wastes 3.40 metric tonne
FYE2020 FYE2019

Scheduled Wastes:
In FYE2020, we generated 3.11 metric tonne of scheduled waste, which was lower than the scheduled wastes
produced in FYE2019 of 3.40 metric tonne. We are proud of our efforts in reducing scheduled wastes by
improving our efficiency throughout our production process. This is a testament of our efforts in controlling
scheduled waste production by taking additional steps to reduce production faults and increase productivity.
Wastes produced from our production lines, such as Computer Numerically Controlled milling, wire cut and
laser cut machines, have been reduced during the year and we aim to maintain this trend in the years to
come.

Unscheduled Wastes:
We are continuously working towards a sustainable future by reducing our carbon footprint wherever
possible. This includes efforts to reduce, reuse and recycle material to limit wastes going into landfills. Our
employees are well aware of our initiative and have collectively helped to achieve our goal. Nonetheless, the
health and safety of our employees is our utmost priority especially during the Covid-19 pandemic. As a result,
we encourage the use of PPE throughout the workplace and no shortcuts are taken to reduce the usage
of PPE where necessary. While this increases disposable wastes volume, we are certain that the extensive
measures taken are necessary to maintain the wellbeing of our employees. Overall, we are still committed to
maintaining environmentally friendly practices throughout the workplace.

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Sustainability Statement

SOCIAL THRUST

JF Tech aims to provide a supportive, pleasant and healthy workplace for our employees, and to foster a caring
community within our working environment. We care for our employees and recognise that having good
staff relationship and a motivated workforce are crucial to our success. They are our partners in delivering and
maintaining products and services of the highest quality standards to our customers. We also place importance
on the safety and well-being of our employees, and we are committed to providing and maintaining a safe and
healthy environment.

10. Workforce Diversity and equal opportunities

JF Tech recognises our employees as highly valued individuals and important contributors to the Group’s
sustainability efforts. We strive to create the best working environment to ensure their talents are exploited at
their full potential which allows them to shine. We believe that we must take action to care for our employees
and ensure that they have a sense of belonging.

As at 30 June 2020, the total number of employees of the Group is 111. Our emphasis has and will always be to
hire local talent and support the local communities we operate in. We have young and performance driven
workforce with over 40% of our employees below the age of 30. Our diversity in terms of age, ethnicity and
locality shows that we aim to ensure that diversity and inclusion in the workplace is an essential part of our
business practice. We encourage gender equality where both women and men are treated with respect and
to have the same opportunities, rights and obligations. We endeavour to build a working environment that
helps employees thrive. Employment opportunities in JF Tech are equal to all applicants with due regard to
the diversity of skills, experience, age, ethnicity and gender in the workplace.

>50 : 14%

20-29 : 43% 40-49 : 18% Male: 59% Female: 41%

Age Gender
Group Diversity

30-39 : 25%

Foreign: 3%

Others: 16%
Malay: 40%

Indian: 3%
Non-local: 3% Workforce Local: 97% Ethnic
Locality Diversity

Chinese: 38%

We consider talent retention to be vital in sustaining business growth and maintaining competitiveness
in the marketplace. We strive to create job opportunities for local people. As at 30 June 2020, 97% of our
employees are Malaysians.

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J F Te ch n o l o gy Berh a d | Annua l Repor t 2020

Sustainability Statement

SOCIAL THRUST (CONT’D)

11. Employee Development and Talent Management

The Group’s human capital is developed and strengthened through investment in our people. Continuous
training and professional development programmes have helped to boost the technical knowledge and soft
skills of our employees, positioning them in good stead to elevate the performance standard quality, which is
necessary for the Group to meet the ever-changing needs of our customers. JF Tech is firmly committed to
developing staff to achieve their best and maximise their potential.

Newly recruited employees will undergo an orientation programme to help familiarise them with the culture
and background of the organisation. New employees will also go through on-the-job structured training
programme that is tailored to their respective roles. The Group carefully manages employees’ potential
and talent while recognising the importance in delivering value to our business operations through our
Performance Management Review system. Employees are nominated by the individual department heads
to attend internal and external training programmes. Each employee has an average of twelve (12) hours of
training throughout the financial year. For FYE2020, the Group spent a total of one thousand three hundred
and forty (1,340) hours of training for all employees comprising various programmes covering soft skills as well
as functional or technical skills, among others.

Internal and External Training by Hour(s):

External: 19% Soft Skills: 18%

Type of Type of
Training Training

Internal: 81% Technical Skills: 82%

The Group understands that the future lies in the hand of the younger generation of our workforce. In order
to create opportunities and to nurture younger talents, we continue to encourage students to intern with us
and gain first-hand experience of the industry, whilst preparing them for employment upon completion of
their studies. We are welcoming more interns to join the Group in the year ahead.

12. Occupational Safety and Health

The Group is committed to adopt the best industrial practices in providing a safe work environment meeting
or exceeding applicable legal and other requirements. We are also committed to the continual improvement
of Occupational Safety and Health performance. We adhere strongly to the following safety and health
principles:

- all injuries and ill-health can be prevented;

- all hazards can be controlled;
- working safely is a condition of employment;
- everyone is responsible for safety; and
- everyone will be communicated and trained to work safely.

Our Occupational Safety and Health Management (“OSH”) committee consist of key staff from various
departments, all of which have the main goal to safeguard, manage, discuss and report areas related to
safety, health and environment issue and performance. We conduct first aid training and annual fire drill to
be prepared for emergency events.

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Sustainability Statement

SOCIAL THRUST (CONT’D)

12. Occupational Safety and Health (cont’d)

Our aim is to avoid all incidents that put our employees at risk and to achieve zero fatalities. We are proud
to report that we have achieved this target during this financial year. Every incident, if any, is followed by a
thorough review of the cause and swift actions would be taken to eliminate the factors involved. All reviews
have been reinforced with continued efforts in the training and retraining on the use of appropriate protective
equipment in order to minimise risks in the future.

We are proud of the collective efforts of our OSH committee to ensure that there were no major safety or
health-related incidences at the workplace during the year.

13. COVID-19 Health and Safety Measures

The outbreak of the Covid-19 is a global pandemic that has hindered significant social and business activities
affecting the global population. In response to the widespread of the global pandemic, the Government of
Malaysia had announced on 16 March 2020, an imposition of the Movement Control Order (“MCO”) effective
from 18 March 2020 to 31 March 2020. However, this was further extended to 9 June 2020 following four (4)
subsequent extensions. The MCO imposed, among others, a general prohibition of mass movement and
gathering, travel restrictions and closure of all Government and private premises except those involved in
essential services. On 1 May 2020, the Government announced a partial easing of the MCO to allow most
economic sectors and businesses to reopen on 4 May 2020 subject to strict conditions and SOPs. Subsequently,
the Recovery Movement Control Order is effective 10 June 2020 through 31 August 2020, before being
extended further to 31 December 2020 recently.

In compliance with the Ministry of International Trade and Industry (“MITI”) guidelines, the Group was given
approval to resume operations to a maximum 50% of total capacity from 17 March 2020 provided that
employees follow strict SOPs. On 29 April 2020, the Group resumed operations to levels before the MCO
with full capacity as approved by MITI on 28 April 2020. Despite the ease in regulations, we continued to take
extensive measures to ensure the health and safety of our personnel. Additionally, we were also able to meet
backlogged orders and meet outstanding customer demands and orders as our operations returned to full
capacity.

Operations at JF Tech have quickly adapted to health and safety procedures issued in light of the Covid-19
pandemic. We have taken numerous Covid-19 precautionary measures as per MITI’s guidelines to prevent
the spread of the contagious disease and to ensure the health and safety of our employees. Our Covid-19
committee consisting of six (6) employees was formed to address any issues and concerns regarding the virus
and we have established an Emergency Response Protocol on Covid-19 management. We considered the
wellbeing of our employees with the utmost priority and have taken extensive measures to ensure this.

Our Covid-19 precautionary measures include:

- face mask supply at the main entrance and respective departments;

- provision of hand sanitiser, rubber gloves, and disinfection solutions;
- health screening and temperature records before entering into premise;
- social distancing throughout the workplace;
- daily disinfection of workplace and company vehicles;
- disinfection checklist; and
- Covid-19 safety procedures and awareness briefing.

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J F Te ch n o l o gy Berh a d | Annua l Repor t 2020

Sustainability Statement

SOCIAL THRUST (CONT’D)

14. Emergency Response Team

The table below outlines the role of the Emergency Response Team (“ERT”) in managing accidents or
emergencies at the workplace with regards to the Malaysian Mechanism of Disaster Management and the
Occupational Safety and Health Administration 1994.

Division No. of staff

Emergency Response Team Leader 1
Advisor 1
First Aid Team 7
Fire Fighting Team 8

Our ERT is an in-house group consisting of seventeen (17) people instituted by the organisation to deal with
emergency situation which may happen in our premise. Their primary roles are to respond to emergencies
to ensure proper personnel evacuation and safety, shut down building services and utilities, work with
responding civil authorities, protect and salvage property, and evaluate areas for safety prior to re-entry.

Emergency preparedness is crucial and will help to minimise human, property, and economic losses due to
any hazardous events.

15. Local Supply Chain

The Group’s business begins with developing and supplying high performance IC test contacting solution for
customers in the IC design center and subsequently our products are used in high volume IC manufacturing
testing. In order to support our long-term strategy of providing a wide range of high-performance test
contacting solution globally, it is crucial for our Group to establish a sustainable supply chain within the
country. This allows us to continuously maintain and monitor our production to the highest degree in a timely
manner. Therefore, through our vendor development programme, we actively engage with our approved
local vendors to ensure that they are developed to deliver our organisations the best quality and service
over the years. We are confident that maintaining this relationship with our suppliers will position the Group
better to move up the value chain in the near future.

As at 30 June 2020, the number of local vendors accounted for 83% of the total vendors of the Group.

16. Commitment to Quality

In fulfilling JF Tech’s vision to be the World’s No. 1 provider of high-performance test contacting solutions,
we achieved the ISO 9001:2015 Quality Management System certification from SGS (Malaysia) Sdn. Bhd.
for design, manufacturing and assembly of test contactors for semi-conductor applications. This is an
international standard that specifies the requirements for a quality management system where the Group:

- demonstrates its ability to consistently provide products and services that meet customer’s needs and
applicable statutory and regulatory requirements; and
- aims to enhance customer satisfaction through the effective application of the system, including
processes for improvement of the system and the assurance of conformity to customer and applicable
statutory and regulatory requirements.

The ISO 9001:2015 certificate is a testament that we continue to uphold a consistent quality standard for our
products. A comprehensive quality management system has been established to assure customers those
quality assurance policies and procedures are in place to address our product quality and reliability basis, as
well as improving our work efficiency.

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Sustainability Statement

SOCIAL THRUST (CONT’D)

16. Commitment to Quality (cont’d)

We have stringent quality controls throughout our operations. Our quality control practices involve various
stages of processes across departments. All our products are subject to in-depth monitoring and quality
control checks during different stages of production using sophisticated measurement methods and
laboratory equipment. We inspect our finished goods to ensure the products meet customers’ requirement
specifications and are free from defects at the time of delivery. We also ensure that delivery of our products
is consistently on-time. By adopting these stringent quality control practices, we are confident to sustain a
long-term relationship with our customers and build a strong reputation within the industry.

The total number of hour(s) spent on ISO 9001:2015 introduction and awareness training increased from
twelve (12) hours in FYE2019 to twenty-four (24) hours in FYE2020.

17. Healthy Work-life Practices

The Group encourages internal activities for employees to foster a pleasant work environment and maintain
a driven workforce. Staff activities are organised throughout the year to facilitate bonding among the
employees. These activities help improve the communication, productivity and morale at the work place.

We have organised a number of staff bonding activities including festive dinners and JF Tech’s 20th
Anniversary Celebration held at The Saujana Hotel.

18. Contribution to Community

JF Tech is committed to discharging its social responsibility through giving back to society and local
communities. Our engagement with communities aims to be holistic, collaborative and sustainable, resulting
ultimately in their empowerment.

During FYE2020, direct contributions to Semenanjung Orang Asli Educare Centre (“SEMOA”), a non-profit
charitable and non-governmental organisation, were made through donation of various electrical appliances
including refrigerators and washing machines to maintain and upkeep facilities at the SEMOA.

At the same time, the Group also provides numerous opportunities for students to undertake internship
programmes with the aim of supporting students from local universities and colleges in gaining practical
work experience. In FYE2020, the Group offered internships for students from universities, colleges and
polytechnics from different states of Malaysia, which have benefitted a total of eight (8) students.

MOVING FORWARD

The Group recognises the importance of being a responsible and sustainable organisation and that it goes beyond
measuring our financial performance. The Group is committed to this endeavour and we look forward to improving
and share further on our sustainability efforts in years to come.

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Board of
Directors’ Profile
Datuk Phang Ah Tong
Independent Non-Executive Chairman

Datuk Phang Ah Tong, male, aged 63, a Malaysian, was appointed as an Independent Non-Executive Chairman of
JF Technology Berhad (“JF Tech”) on 1 January 2018.

Datuk Phang obtained his Economics Degree from University of Malaya in 1981.

Datuk Phang had a distinguished career in the civil service of Malaysia, spanning 36 years in promoting foreign
and domestic investment. As the ex-Deputy Chief Executive Officer of the Malaysian Investment Development
Authority ("MIDA"), he has assisted to develop the manufacturing and services sectors in Malaysia.

Starting out in 1981 as an Economist in MIDA, Datuk Phang was the Assistant Trade Commissioner for MIDA
London and Director of MIDA New York. Upon returning to MIDA Headquarters, he was appointed as the Director
of Foreign Direct Investment ("FDI"), overseeing the promotion of global FDI into Malaysia.

Datuk Phang was also involved in organising and participating many Trade and Investment Missions overseas
led by either the Prime Minister or Ministers of International Trade and Industry. His distinguished contribution in
these capacities led to his appointment as the Deputy Chief Executive Officer of MIDA in 2013.

Datuk Phang played an active role in shaping the economic landscape of Malaysia through his involvements in the
formulation of the 1st Industrial Master Plan 1 (1986 - 1995) and the 11th Malaysian Plan for the manufacturing sector
and Economic Transformation Programme as well as the various industrial roadmaps and blueprints. This included
the Malaysian Aerospace Industry Blueprint 2030 and the Malaysian Solar PV Roadmap 2030.

Datuk Phang also provided insights in the development and implementation of various key business policies in
his roles as the Chairman of the Technical Committee on Expatriate Posts, Committee Member of the National
Committee on Investment and Committee for Disbursement and Coordination of Grant.

Datuk Phang also sits on the Board of Inari Amertron Berhad (a company listed on the Main Market of Bursa
Malaysia Securities Berhad [“Bursa Malaysia Securities”]), Apex Healthcare Berhad (a company listed on the
Main Market of Bursa Malaysia Securities), Jerasia Capital Berhad (a company listed on the Main Market of Bursa
Malaysia Securities) and United Overseas Bank (Malaysia) Bhd. (a non-listed public company) as an Independent
Non-Executive Director.

Datuk Phang is the Chairman of Novugen Pharma (Malaysia) and Oncogen Pharma (Malaysia) which are non-listed
companies and also a Chairman of Malaysia Automotive Robotics and IOT Institute (MARii) which is an agency
under Ministry of International Trade and Industry.

Datuk Phang is the Chairman of Nomination Committee and a member of Audit Committee and Remuneration
Committee of JF Tech.

Dato’ Foong Wei Kuong

Managing Director

Dato’ Foong Wei Kuong, male, aged 60, a Malaysian, was appointed as the Executive Chairman and Managing
Director of JF Tech on 18 January 2008. On 1 January 2018, Dato' Foong had been re-designated as Managing
Director of JF Tech.

Dato’ Foong is the co-founder of JF Tech Group. He started his career in 1980 as a Sales Representative when
he joined Preston Corporation Sdn. Bhd. Subsequently, he joined National Starch and Chemical Sdn. Bhd. as a
Sales Executive in 1984. He was promoted to Area Sales Manager in 1992 overseeing the sales team for Northern
Peninsular Malaysia. He was subsequently attached to PT Danako Mitra Adhesive, Indonesia (“PT Danako”) as a
Business Development Manager in 1994. Later in 1996, he was promoted to a Business Development Director of PT
Danako where he remained for two (2) years. In 1997, he was General Manager of PT National Starch and Chemical
Indonesia (“PT National”) overseeing the whole business unit of National Starch and Chemical USA. He left PT
National to join Merichem Sdn. Bhd. as an Executive Director in 1997. Then he left Merichem Sdn. Bhd. in 1999 and
incorporated J Foong Technologies Sdn. Bhd. (“J Foong”) in 1999 and JF Microtechnology Sdn. Bhd. (“JFM”) in 2005.
He is currently responsible for the overall visions and operational directions of JF Tech Group, and hence he also
identifies overall strategies for JF Tech Group.

Dato’ Foong is not a Director of any other public company and listed company.

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Board of Directors’ Profile

Datin Wang Mei Ling

Executive Director

Datin Wang Mei Ling, female, aged 63, a Malaysian, was appointed as an Executive Director of JF Tech on 18 January
2008.

Datin Wang obtained her LCCI Higher Accounting in 1984. In 1976, she started her career with Loh Piang Wong & Co
as an auditor. She subsequently joined Times Educational Corporation Sdn. Bhd. as an Accounts Assistant in 1979.
In 1981, she joined Syarikat Pembenaan Raya Sdn. Bhd. as an Accounts Supervisor. She left Syarikat Pembenaan
Raya Sdn. Bhd. to join Pati Ho Hup Sdn. Bhd. as an Accounts Executive in 1990 until 1994. In 1999, she founded
J Foong together with Dato’ Foong Wei Kuong and is instrumental in the day-to-day operations of J Foong as
an Administration and Finance Manager. She subsequently founded JFM together with Dato’ Foong Wei Kuong
in 2005 and is also active in the operations of JFM as a Finance Director. Currently, she also oversees the human
resources and general administrative activities of JF Tech Group.

Datin Wang is not a Director of any other public company and listed company.

Goh Kok Sing

Executive Director

Mr. Goh Kok Sing, male, aged 56, a Malaysian, was appointed as an Executive Director of JF Tech on 18 January 2008.

Mr. Goh started his career in 1983 as a Computer Engineer in NCR (M) Sdn. Bhd. Subsequently, he joined Henkel (M)
Sdn. Bhd. (previously known as Multicore Solders (M) Sdn. Bhd.) as a Regional Manager overseeing the Technical
division for Asia Pacific in 1991. During his twelve (12) years tenure there, he was responsible for providing technical
support to multinational customers and other printed circuit board assembly houses and manufacturers. He was
also involved in product and manufacturing process development. Following the accumulation of vast experience
in the industry, he left Henkel (M) Sdn. Bhd. in 2003 and founded his own business, Amtech Electronics, which was
subsequently converted into a private limited company, AMT Electronics Sdn. Bhd. in 2006. The major activities
of AMT Electronics Sdn. Bhd. are in electronic and printed circuit board designs, product development and
manufacturing of electronics controllers and sensors for the medical equipment. In July 2006, he was employed
as the Chief Technical Officer of J Foong, where he was instrumental in carrying out research and development
(“R&D”) of the products. Currently, he leads the technical team of JF Tech Group and is responsible for setting
overall technology direction and R&D efforts of JF Tech Group in line with the overall strategies of JF Tech Group.
He is also responsible for identifying new fields of research for future product development.

Mr. Goh is not a Director of any other public company and listed company.

Dato’ Philip Chan Hon Keong

Independent Non-Executive Director

Dato’ Philip Chan Hon Keong, male, aged 55, a Malaysian, was appointed as an Independent Non-Executive Director
of JF Tech on 18 January 2008.

Dato’ Philip Chan obtained his Bachelor of Economics Degree and Bachelor of Laws Degree from the University
of Sydney, Australia in 1989. He was admitted as an Advocate and Solicitor of the High Court of Malaya in 1990.
He commenced his practice in Messrs. Azalina, Chan & Chia in 1990 and was a Partner of the firm until 2000.
Subsequently, he joined Messrs. Skrine as a Partner in the Corporate division in January 2001 where he remained
until end of June 2019.

Dato’ Philip Chan is the Managing Director of Eksons Corporation Berhad (a company listed on the Main Market of
Bursa Malaysia Securities) with effect from 1 October 2019.

Dato’ Philip Chan is a member of the Nomination Committee, Audit Committee and Remuneration Committee of
JF Tech.

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Board of Directors’ Profile

Koay Kah Ee
Senior Independent Non-Executive Director

Mr. Koay Kah Ee, male, aged 61, a Malaysian, was appointed as an Independent Non-Executive Director of JF Tech
on 18 January 2008. He was subsequently re-designated as Senior Independent Non-Executive Director of JF Tech
on 21 October 2010.

Mr. Koay holds a Master in Business Administration (MBA) from University of Strathclyde, United Kingdom (“UK”).
He is a Fellow member of Chartered Institute of Management Accountants (CIMA), UK, fellow member of the
Australian Certified Practicing Accountants (CPA Australia), Chartered Accountant (CA) of the Malaysia Institute of
Accountants (MIA), Chartered Global Management Accountants (CGMA), member of the SOCSO Appellate Board
(JRKS) of Ministry of Human Resources Malaysia and a CIMA Global Membership Assessor. Currently, Mr. Koay is the
Group Finance Director of a company listed on the Main Market of Bursa Securities.

Mr. Koay sits on the Board of Ajinomoto (Malaysia) Berhad (a company listed on the Main Market of Bursa Malaysia
Securities) as an Independent Non-Executive Director, Tashin Holdings Berhad (a company listed on the ACE
Market of Bursa Malaysia Securities) as a Non-Independent Non-Executive Director and Eksons Corporation Berhad
(a company listed on the Main Market of Bursa Malaysia Securities) as an Independent Non-Executive Director

Mr. Koay is the Chairman of the Audit Committee and Remuneration Committee and a member of the Nomination
Committee of JF Tech.

Lew Jin Aun

Independent Non-Executive Director

Mr. Lew Jin Aun, male, aged 68, a Malaysian, was appointed as an Independent Non-Executive Director of JF Tech
on 2 January 2009.

Mr. Lew received his Bachelor of Mechanical Engineering (Honours) degree from University of Malaya in 1976. He
graduated with Distinction in Executive MBA program conducted by the University of Bath, UK in 1990.

Over a career spanning of more than thirty (30) years in the semi-conductor industry, Mr. Lew has held several
positions of increasing responsibility in engineering, manufacturing and operations management as well as
Managing Director at Motorola Malaysia Sdn. Bhd. and STATSChipPAC Malaysia Sdn. Bhd. Currently, he serves as
Chairman of Selangor Human Resources Development Centre.

Mr. Lew is not a Director of any other public company and listed company.

Mr. Lew is a member of the Audit Committee, Nomination Committee and Remuneration Committee of JF Tech.

ADDITIONAL INFORMATION ON THE BOARD OF DIRECTORS

Conflict of Interest
None of the Directors have any conflict of interest with the Company.

Family Relationships with any Director and/or Major Shareholder

Save and except for Dato’ Foong Wei Kuong and Datin Wang Mei Ling who are husband and wife, none of the
other Directors have any family relationship with any Director or major shareholder of the Company.

Offences and Public Sanctions or Penalties imposed by Regulatory Bodies

None of the Directors have committed any offence within the past five (5) years other than traffic offences, if
any during the financial year. In addition, none of the Directors have any public sanction or penalty imposed by
regulatory bodies during the financial year.

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Key Management
Profile
Dillon A/L Atma Singh
Chief Executive Officer

Mr. Dillon A/L Atma Singh, male, aged 50, a Malaysian, joined JF Tech as Chief Executive Officer in 15 May 2020. He
is an industry veteran in the semi-conductor manufacturing industry in Malaysia with over 28 years of experience.

Mr. Dillon has held senior leadership positions as Senior Director in Renesas, a leading Japanese semi-conductor
company and prior to that Intersil (through its acquisition of Elantec Semiconductor), a leading American Power
Management semi-conductor company, managing its entire Asia Operations.

Mr. Dillon brings to JF Tech his wealth of semi-conductor Industry experience in Test Engineering, Test Interfacing
Technology, Operations and Strategic Management.

Mr. Dillon has a Bachelors Degree of Electrical Engineering Majoring in Communications from University Technology
Malaysia and a Masters of Business Administration from Maastricht School of Management (Netherlands).

Mr. Dillon does not hold any directorship in public companies and listed companies.

Mr. Dillon does not have any family relationship with any Director and/or major shareholder nor have any conflict of
interest with the Company. He has not been convicted of any offence within the last five (5) years other than traffic
offences, if any nor any public sanction or penalty imposed by the regulatory bodies during the financial year.

Goh Joo Hwa

Vice President, Global Sales & Marketing

Mr. Goh Joo Hwa, male, aged 49, a Malaysian, joined JF Tech as Sales and Marketing Manager in September 2008.
He was promoted to Sales Director in January 2012 and is currently the Vice President for Global Sales & Marketing,
leading our sales & marketing team and managing the global distribution network.

Mr. Goh graduated with a Master in Business Administration major in International Marketing from University of
Sunderland, United Kingdom (“UK”). He obtained his Bachelor of Engineering (Hons.) Electrical and Electronic
Engineering from the same university in 1995.

Mr. Goh started his career in 1996 as Test Engineer in ST Microelectronics Sdn. Bhd. in Muar, Johor Darul Takzim and
promoted to Chief Engineer in 1999 in-charge of engineering and maintenance at Automotive Power department
and led a team of approximately thirty-six (36) technicians and engineers. He later joined Avi-Tech Electronics Ltd;
a Singapore company based in Melaka as Sales Manager in 2000 overseeing the Malaysia business. In 2002, he was
promoted to Senior Sales Manager responsible for Malaysia, Philippines and Thailand for sales of burn-in products
and other semi-conductor capital test equipment. Subsequently he was transferred to Avi-Tech Electronics Ltd’s
headquarters based in Singapore as Senior Sales Manager in 2004 and was in-charge of worldwide sales of burn-in
products until 2008.

Mr. Goh does not hold any directorship in public companies and listed companies.

Mr. Goh does not have any family relationship with any Director and/or major shareholder nor have any conflict of
interest with the Company. He has not been convicted of any offence within the last five (5) years other than traffic
offences, if any nor any public sanction or penalty imposed by the regulatory bodies during the financial year.

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Key Management Profile

Shamal Mundiyath
Engineering Director, Design & Development and Test & Applications

Mr. Shamal Mundiyath, male, aged 40, an Indian nationality and holder of Malaysia Resident Pass, a pragmatic
engineer with a wealth of experience in design, engineering and technology.

Mr. Shamal joined JF Tech as a Mechanical Design Engineer in November 2010. Since then he has held many
roles such as Section Head, Engineering and Design & Development Manager. He was promoted to Engineering
Director in January 2017 and is currently leading a team of engineers in the Design & Development and Test &
Application departments.

Mr. Shamal is a Mechanical Engineer, graduated with a Master of Science (MSc) in Engineering and Manufacturing
Management from MS Ramaiah School of Advanced Studies, Bangalore, Coventry University (UK).

Prior to joining JF Tech, Mr. Shamal was attached to companies in the manufacturing related industries across
mould-making, high precision parts manufacturing, medical engineering, automotive and electronics.

Mr. Shamal does not hold any directorship in public companies and listed companies.

Mr. Shamal does not have any family relationship with any Director and/or major shareholder nor have any conflict
of interest with the Company. He has not been convicted of any offence within the last five (5) years other than
traffic offences, if any nor any public sanction or penalty imposed by the regulatory bodies during the financial
year.

Lee Eng Kiat

Group Manufacturing Manager, Assembly & Manufacturing

Mr. Lee Eng Kiat, male, aged 36, a Malaysian, is our Group Manufacturing Manager since 2017.

He graduated with a first-class honour Bachelor Degree in Mechanical Engineering from University of Malaya in
2008 and is currently pursuing his executive MBA program.

Mr Lee started his career in 2008 as a Mechanical Design Engineer in JF Tech. Over the last ten (10) years, he
has held several positions in JF Tech in various departments such Design Coordinator, Section Head, Tools &
Equipment, Production Manager and Manufacturing Manager. In these roles, he was involved in product and
manufacturing process development, manufacturing capacity expansion, kaizen and lean manufacturing
programs implementation and government regulations. Prior to assuming his current role, he was the Personal
Assistant (PA) to the Chief Executive Officer and Managing Director. In his current role as Group Manufacturing
Manager, he is primarily responsible for overseeing the end to end assembling and manufacturing value chain of
the group’s operations.

Mr. Lee does not hold any directorship in public companies and listed companies.

Mr. Lee does not have any family relationship with any Director and/or major shareholder nor have any conflict of
interest with the Company. He has not been convicted of any offence within the last five (5) years other than traffic
offences, if any nor any public sanction or penalty imposed by the regulatory bodies during the financial year.

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Corporate Governance
Overview Statement
The Board of Directors (“the Board”) of JF Technology Berhad (“the Company”) acknowledges the importance
of practising high standard of corporate governance throughout the Company and its subsidiaries (“Group”)
to protect and enhance long-term shareholders’ value and all stakeholders’ interests. With the principles and
recommendations as set out in the Malaysian Code on Corporate Governance (“MCCG”), the Board affirms their
commitments in ensuring a sound framework of best corporate governance practices is in place by managing the
affairs of the Group with transparency, integrity and accountability.

The Board is pleased to present the following Corporate Governance Overview Statement (“Statement”) that
describe the extent of how the Group has applied and complied the three (3) principles set out in the MCCG
throughout the financial year under review:

(a) Principle A: Board leadership and effectiveness;

(b) Principle B: Effective audit and risk management; and
(c) Principle C: Integrity in corporate reporting and meaningful relationship with stakeholders.

This Statement also serves as a compliance with Rule 15.25 of Bursa Malaysia Securities Berhad (“Bursa Malaysia
Securities”) ACE Market Listing Requirements (“ACE LR”) and shall be read together with the Corporate Governance
Report (“CG Report”) of the Company that provides detailed application for each practice as set out in the MCCG. The
CG Report can be downloaded from the Company’s website at www.jftech.com.my or through the announcement
published on the website of Bursa Malaysia Securities.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

1. BOARD RESPONSIBILITIES

Clear Functions of the Board and Management

The Board takes full responsibility for the overall performance of the Group by setting the strategic directions
and objectives, formulating the policies and executing the key strategic action plans. The Board regularly
review the Group’s business operations and maintains full and effective control over the management of the
Group.

The duties and responsibilities of the Board include determining the Company’s overall strategic plans and
performing periodic reviews of businesses and financial performance, as well as adopting practical risk
management and internal controls to implement a strong framework of internal controls of the Company.

The Board has also delegated certain responsibilities to other Board Committees, which operate within clearly
defined terms of reference to discharge its duties and responsibilities. Standing Committees of the Board
inclusive of Audit Committee, Nomination Committee and Remuneration Committee. The Board receives
reports at its meetings from the Chairman of each Board Committee on current activities and it is the general
policy of the Company that all major decisions be considered by the Board as a whole.

Clear Roles and Responsibilities

The Board reviewed the sustainability, effectiveness and implementation of the strategic plans for the financial
year under review and provided guidance and input to Management. To ensure the effective discharge of its
functions and duties, the principal responsibilities of the Board include the following:

• review and adopt strategic business continuity plans for the Company and the Group;
• oversee and monitor the conduct of the Group’s businesses and financial performance;
• review and adopt budgets and financial results of the Company and the Group, monitor compliance with
applicable accounting standards and the integrity and adequacy of financial information disclosures;
• identify principal risks and ensure the implementation of appropriate systems to manage these risks;
• review the adequacy and integrity of the Company’s and the Group’s internal control systems and
management information systems, including systems for compliance with applicable laws, regulations,
rules, directives and guidelines; and
• ensure a competent management by establishing policies for strengthening the performance of the
Group with a view to proactively build the business through innovation, initiative, technology, new
products and the development of its new business market.

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

1. BOARD RESPONSIBILITIES (CONT’D)

Strategies to Promote Sustainability

The Board views the commitment to sustainability and Environmental, Social and Governance 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 social responsibilities 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.

The Company’s activities on corporate social responsibilities for the financial year under review are disclosed
in a separate section of the Annual Report.

Chairman, Managing Director and Chief Executive Officer

The roles of the Chairman, Managing Director and Chief Executive Officer are held by three (3) different
individuals, namely Datuk Phang Ah Tong, Dato’ Foong Wei Kuong and Mr. Dillon A/L Atma Singh, respectively
where their responsibilities are segregated and clearly defined to ensure that there is an appropriate balance
of power and authority such that no one individual having the unfettered power of decision making.

The Chairman provides leadership and manages the interface between the Board and Management and
also ensures active participation from the Board for decision making whereas the Managing Director and
Chief Executive Officer are involved in the day-to-day management of the Group and primarily responsible
for contributing strategies and insights to enable the Group to achieve its goals and objectives efficiently.

Company Secretaries

The Company Secretaries of the Company are experienced and qualified to act as Company Secretaries
pursuant to Section 235 of the Companies Act 2016. The Company Secretaries play an important role
in ensuring adherence to the Board’s policies and procedures from time to time and work closely with
Management to facilitate and ensure that timely communication and information flow within the Board or
Board Committees.

The Board has unrestricted access to the advice and services of the Company Secretaries who are experienced,
competent and knowledgeable on the laws and regulations, as well as directives issued by the regulatory
authorities. The Company Secretaries provide guidance to the Board on the Directors’ obligations arising
from the rules and regulations including the MCCG and Bursa Malaysia Securities ACE LR.

The Directors are also empowered to seek independent professional advice from external consultants as they
may require, at the expense of the Company, to enable them to make well-informed decisions.

Access to Information and Advice

The Board is provided with appropriate information and comprehensive Board papers on a timely basis prior
to the Board meetings to enable the Directors to discharge their duties and responsibilities competently and
in a well-informed manner. Management is invited to attend the Board and Board Committees meetings and
to brief and provide explanations to the Directors and Board Committees members on the operations of the
Group.

The Board recognises the importance of reviewing and adopting a strategic plan and overseeing the conduct
of the businesses to ensure that the businesses are being properly managed. Presently, the performance of
the Group is reviewed by the Board in consideration of the quarterly financial results.

The proceedings and resolutions passed at each Board meeting are minuted and kept in the statutory
minutes book at the registered office of the Company.

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

1. BOARD RESPONSIBILITIES (CONT’D)

Demarcation of Responsibilities

(a) Board Charter

The Board has formalised and adopted a Board Charter, which sets out the roles, functions, composition,
operations and processes of the Board. The Board Charter provides guidance to the Board in relation
to the Board’s roles, duties, responsibilities and authorities which are in line with the principles of good
corporate governance. The Board Charter acts as a source of reference for Board members and senior
management, and the same is accessible to the public on the Company’s website at www.jftech.com.
my.

(b) Code of Ethics and Conduct

The Board is aware of the need to establish a corporate culture that would foster common goal of
achieving business profitability, whilst cultivating ethical business conducts. The Board has adopted
the Code of Ethics and Conduct which is in line and consistent with its stand under the Corporate
Vision, Mission, Core Pillars and Core Values. A copy of the Code of Ethics and Conduct is published in
the Company’s website at www.jftech.com.my.

(c) Whistle Blowing Policy

A Whistle Blowing Policy has been established to further enhance the Group’s commitment in
upholding and achieving integrity, transparency and accountability in conducting its business. The
Whistle Blowing Policy serves the purpose of providing an avenue to all the employees and members
of the public to raise concern, report or disclose any improper behaviour and conduct, miscarriage of
justice, damage to the environment or any act and action that could materially affects the reputation
of the Group as well as the interests of the stakeholders. The Whistle Blowing Policy is available on the
Company’s website at www.jftech.com.my.

(d) Anti-Bribery and Anti-Corruption Policy

Following the amendments to Section 17A of the Malaysian Anti-Corruption Commission (“MACC”) Act
2009 and Rule 15.28 of Bursa Malaysia Securities ACE LR that took effect from 1 June 2020, the Company
has established its Anti-Bribery and Anti-Corruption Policy that contains policies and guidelines relating
to standards and ethics that all employees are expected to adhere to in the course of their work and to
the public at large, as part of the Group’s commitment in combating bribery and corruption. A copy of the
Anti-Bribery and Anti-Corruption Policy is published in the Company’s website at www.jftech.com.my.

2. BOARD COMPOSITION

Composition and Board Balance

The Board currently comprises four (4) Independent Non-Executive Directors and three (3) Executive Directors.

The Independent Non-Executive Directors play a pivotal role in corporate accountability, which is reflected
in their membership of the various Board Committees and their attendance of meetings as detailed below
under Board meetings. The significant contributions of the Independent Non-Executive Directors in the
decision-making processes are evidenced in their participation as members of the various Committees of
the Board. In addition, the Independent Non-Executive Directors ensure that matters and issues brought
up to the Board are fully discussed and examined, considering the stakeholders’ interests in the Group. The
profiles of the members of the Board, as set out in this Annual Report, demonstrate the complement of skills
and experience that the Directors value add on issues of strategy, performance, control, resource allocation
and integrity.

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

2. BOARD COMPOSITION (CONT’D)

Annual Assessment of Independence of Directors

The Board adopts the concept of independence in tandem with the definition of Independent Non-Executive
Director in Rule 1.01 of Bursa Malaysia Securities ACE LR through the assistance of the Nomination Committee.
The assessment of the independence of each of its Independent Non-Executive Directors is undertaken
annually according to a set of criteria as prescribed by Bursa Malaysia Securities ACE LR.

The Board considers that its Independent Non-Executive Directors 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 Independent Non-Executive Directors fairly reflects the interest of minority shareholders in
the Company through the Board representation.

The Board is satisfied with the level of independence demonstrated by the Independent Non-Executive
Directors and their ability to act in the best interest of the Company.

Tenure of Independent Non-Executive Directors

Practice 4.2 of the MCCG states that the tenure of an Independent Non-Executive Director should not exceed
a cumulative term of nine (9) years. Upon completion of the nine (9) years’ term, an Independent Non-
Executive Director may continue to serve on the Board subject to the Director’s re-designation as a Non-
Independent Non-Executive Director.

If the Board intends to retain an Independent Non-Executive Director beyond nine (9) years’ term, it should
justify and seeks annual shareholders’ approval while if the Board continues to retain the Independent Non-
Executive Director beyond twelve (12) years’ term, the Board should seek annual shareholders’ approval
through a two-tier voting process.

The Company does not have a policy which limits the tenure of its Independent Non-Executive Directors to
nine (9) years.

The Nomination Committee had performed an annual review on the independency of the Independent Non-
Executive Directors by adopting the concept of independence in tandem with the definition of Independent
Non-Executive Director in Rule 1.01 of Bursa Malaysia Securities ACE LR.

At the time of writing this Statement, the tenure of the Independent Non-Executive Directors, namely Mr.
Lew Jin Aun has exceeded the cumulative term of nine (9) years whereas Dato’ Philip Chan Hon Keong and
Mr. Koay Kah Ee have exceeded the cumulative term of twelve (12) years.

Shareholders’ Approval for the Retention of Independent Non-Executive Directors

Both the Nomination Committee and the Board have assessed the independence of Dato’ Philip Chan Hon
Keong, Mr. Koay Kah Ee and Mr. Lew Jin Aun and were satisfied with the skills, contribution and independent
judgement they bring to the Board in facilitating decision-making processes of the Company. The Board is of
the view that there are significant advantages to be gained from long-serving Directors who not only possess
tremendous insight but also in-depth knowledge of the Group’s businesses and affairs. In view thereof, the
Board recommends and supports their retention as Independent Non-Executive Directors of the Company
which are tabled for shareholders’ approval at the forthcoming Annual General Meeting (“AGM”) of the
Company.

Key justifications for retaining them as Independent Non-Executive Directors are as follows:

(i) Dato’ Philip Chan Hon Keong, Mr. Koay Kah Ee and Mr. Lew Jin Aun have met the independence
guidelines as set out in Rule 1.01 of Bursa Malaysia Securities ACE LR;

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

2. BOARD COMPOSITION (CONT’D)

Shareholders’ Approval for the Retention of Independent Non-Executive Directors (cont’d)

Key justifications for retaining them as Independent Non-Executive Directors are as follows: (cont’d)

(ii) they did not have any conflict of interests with the Company and have not been entering nor is
expected to enter into contract(s), especially material contract(s) with the Company and/or its subsidiary
companies; and

(iii) they are familiar with the Group’s activities and corporate history and have been providing invaluable
contributions to the Board in their roles as Independent Non-Executive Directors.

Board Diversity

The Board acknowledges the importance of Board diversity, including gender, ethnicity, and age and business
experience, to the effective functioning of the Board.

The Board has not set a gender diversity target as of the reporting period. While it is important to promote
such diversity, the normal selection criteria of a Director based on effective blend of competencies, skills,
extensive experience and knowledge in areas identified by the Board should remain a priority so as not to
compromise on effectiveness in carrying out the Board’s functions and duties. Hence, the Board is committed
in ensuring that its composition not only reflects the diversity as recommended by the MCCG, as best as it
can, but also has the right mix of skills and balance to contribute to the achievement of the Company’s goal
and mission.

As of the date of this Statement, one (1) out of seven (7) of the Board members is female Director.

Nomination Committee

The Nomination Committee comprises exclusively of Independent Non-Executive Directors of the Company.
The Nomination Committee is established and maintained to ensure that there is a formal and transparent
procedure for the appointment of new Directors to the Board and new members to the Board Committees
and to assess the performance of the Directors, Board, Board Committees and members of the Board
Committees of the Company on an on-going basis. The current members of the Nomination Committee are
as follows:

Chairman : Datuk Phang Ah Tong (Independent Non-Executive Chairman)

(Re-designated as Chairman with effect from 1 September 2020)
Member : Dato’ Philip Chan Hon Keong (Independent Non-Executive Director)
(Re-designated as member with effect from 1 September 2020)
Member : Mr. Koay Kah Ee (Senior Independent Non-Executive Director)
Member : Mr. Lew Jin Aun (Independent Non-Executive Director)

During the financial year under review, one (1) meeting was held and attended by all members. The main
activities carried out by the Nomination Committee during the financial year under review are as follows:

• reviewed and assessed the effectiveness and composition of the Board and Board Committees and
contribution of each individual Director of the Company;
• reviewed and assessed the contribution and performance of the Audit Committee and each individual
Audit Committee member;
• reviewed and assessed the independence of the Independent Non-Executive Directors;
• reviewed the Directors who were due for re-election at the Company’s AGM to determine whether or
not to recommend for their re-election; and
• reviewed and assessed the tenure of the Independent Non-Executive Directors who have reached and
exceeded a cumulative term of nine (9) years and to recommend the retention of the Independent Non-
Executive Directors of the Company at the Company’s AGM in accordance with the MCCG.

The Nomination Committee also reviewed the size of the Board and had concluded that it was appropriate.

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

2. BOARD COMPOSITION (CONT’D)

Nomination Committee

(a) Appointment to the Board

In order to comply with good practice for the appointment of new Directors through a formal and
transparent procedure, the Nomination Committee, which comprises exclusively of Independent Non-
Executive Directors, is responsible for making recommendation relating to any new appointment to the
Board. Any new nomination received is put to the full Board for assessment and approval.

For appointment of new Directors, the Nomination Committee assesses the suitability of the candidates,
taking into consideration of the following:

• required mixed of skills, knowledge, expertise and experience;

• professionalism;
• integrity;
• competencies;
• time commitment; and
• in the case of candidates for the position of Independent Non-Executive Directors, the Nomination
Committee shall evaluate the candidates’ ability to discharge such responsibilities/functions as
expected from Independent Non-Executive Directors.

The proposed re-election of existing Directors who are seeking for re-election at the AGM are first
considered and evaluated by the Nomination Committee. Upon its evaluation, the Nomination
Committee will make recommendation on the proposal to the Board for approval. The Board makes the
final decision on the proposed re-election to be presented to the shareholders for approval.

The Board is entitled to the services of the Company Secretaries who ensure that all appointments are
properly made, that all necessary information are obtained from Directors, both for the internal records
and for the purposes of meeting statutory obligations, as well as obligations arising from Bursa Malaysia
Securities ACE LR or other regulatory requirements.

(b) Re-election of Directors

Re-election of Directors provides an opportunity for shareholders to renew their mandate conferred to
the Directors. In this respect, the Constitution of the Company provides that all Directors shall retire by
rotation once in every three (3) years or at least one-third (1/3) of the Board shall retire from the office but
shall be eligible to offer themselves for re-election at the AGM.

This requirement would be adhered to by the Board in every AGM.

Directors who are appointed by the Board are subject to re-election by the shareholders at the AGM
held following their appointments.

(c) Annual Assessment of the Board and Board Committees

The Directors and Committees are being assessed by the Nomination Committee through the following
annual assessments once every year:

(a) effectiveness of the Board as a whole and the Committees of the Board;
(b) contribution and performance of each individual Director;
(c) contribution and performance of the Audit Committee and each individual Audit Committee
member; and
(d) independence of Independent Non-Executive Directors.

The outcome of the abovementioned annual assessments is disclosed in the CG Report which is
available on the Company’s website at www.jftech.com.my.

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

2. BOARD COMPOSITION (CONT’D)

FOSTER COMMITMENT

Time Commitment

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.

Board Meetings

During the financial year under review, five (5) Board meetings were held with the presence of the Company
Secretary. Details of attendance by the Board members during this financial year are as set out below:

No. of meetings
Name of Directors attended
Datuk Phang Ah Tong 5/5
Dato’ Foong Wei Kuong 5/5
Datin Wang Mei Ling 5/5
Goh Kok Sing 5/5
Koay Kah Ee 5/5
Dato’ Philip Chan Hon Keong 5/5
Lew Jin Aun 5/5

Based on the above, all Directors have complied with the minimum 50% attendance requirement in respect
of Board meetings as stipulated in Bursa Malaysia Securities ACE LR. The Board and Board Committees
meetings for each of the financial year are scheduled before the end of the preceding financial year, to allow
the Directors and members of the Committees to organise and plan their activities ahead to ensure that they
are able to attend all meetings that have been scheduled for the following year.

All Directors have participated fully in the discussions during Board meetings. There is no Board dominance
by any individual and the Directors are free to express their views and opinions during the Board meetings.
In arriving at Board decisions, the view of the majority prevails at all times. In the same manner, the Directors
are also aware and observes the requirement that they do not participate in the deliberation on matters of
which they have a material personal interest, and abstain from voting in such matters.

Proceedings of, and resolutions passed at each Board meeting are documented in the minutes and signed by
the Chairman at the subsequent Board meeting. In between Board meetings, approvals on matters requiring
the sanction of the Board are sought by way of circular resolutions enclosing all relevant information to
enable the Board to make informed decisions. All circular resolutions approved by the Board will be tabled for
notation at the next Board meeting.

The Board also peruse the decisions deliberated by Board Committees through minutes of the Board
Committees. The Chairman of the Board Committees is responsible to inform the Directors at Board meetings
of any salient matter noted by the Board Committees and which require the Board’s notice, approval or
direction.

Directors’ Training

Continuous learning and training are part of the Directors’ development programme. The Directors recognise
the need to attend trainings to enable the Directors to discharge their duties effectively. All Directors had
attended the Mandatory Accreditation Programme. During the financial year under review, some of the
trainings and briefings attended by the Directors include:

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

2. BOARD COMPOSITION (CONT’D)

FOSTER COMMITMENT (CONT’D)

Directors’ Training (cont’d)

Directors Training attended

Datuk Phang Ah Tong - Innovation: Strategies to Grow an Apple
- Islamic Finance for Board
- Corporate Liability under Section 17A Talk of MACC Act 2009

Dato’ Foong Wei Kuong - US-China Trade War

- Digital Marketing
- 5G and Implications
- Employing Big Data

Datin Wang Mei Ling - Institute of Corporate Directors Malaysia Power Talk – Say on Pay:
What do Boards need to know

Koay Kah Ee - Technical Briefing, Recent Developments in Listing Requirements

- Integrated Reporting – Communicating Value Creation
- 2020 Budget Tax Seminar
- Corporate Liability Provision under the MACC Act 2009

Dato’ Philip Chan Hon Keong - Corporate Liability under Section 17A of MACC Act 2009

Goh Kok Sing - MACC Anti-Bribery and Anti-Corruption Act Training

Lew Jin Aun - Digital Marketing

- 5G and Implications
- Employing Big Data
- Managing Business in Crisis

The Board empowers the Directors to determine their own training requirements as they consider necessary
to enhance their knowledge as well as understanding of the Group’s businesses and operations.

3. REMUNERATION

Remuneration Committee

The Board had established the Remuneration Committee to review and recommend the appropriate level
of remuneration for the Executive Directors. The current members of the Remuneration Committee are as
follows:

Chairman : Koay Kah Ee (Senior Independent Non-Executive Director)

Member : Datuk Phang Ah Tong (Independent Non-Executive Chairman)
Member : Dato’ Philip Chan Hon Keong (Independent Non-Executive Director)
Member : Lew Jin Aun (Independent Non-Executive Director)

During the financial year under review, two (2) meetings were held and attended by all members. The main
activities carried out by the Remuneration Committee during the financial year under review are as follows:

• reviewed the car ownership programme of Executive Director;

• reviewed the remuneration packages for the Managing Director and Executive Directors for the financial
year ended 30 June 2020;
• reviewed the payment of Directors’ fees for the financial year ended 30 June 2019; and
• reviewed the benefits payable to the Non-Executive Directors from 5 December 2019 until the next AGM
of the Company to be held in year 2020.

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

3. REMUNERATION (CONT’D)

Directors’ Remuneration

The Remuneration Committee considers the principles recommended by MCCG in determining the Directors’
remuneration whereby, the Executive Directors’ remuneration is designed to link rewards to the Group’s and
individual’s performance whilst the remuneration of the Non-Executive Directors is determined in accordance
with their experience and the level of responsibilities assumed. Additionally, in ensuring that the Directors’
remuneration is in line with the market expectation and competition to retain and attract talents in the
Group, reference is made to the Directors’ remuneration offered by other public listed companies.

The Company has in place a Remuneration Policy for Directors and senior management which sets out the
criteria applied in recommending their remuneration packages.

The Executive Directors concerned play no part in the decision on their own remuneration. Likewise, the
remuneration of the Independent Non-Executive Directors is a matter for the Board as a whole, with individual
Director abstaining from discussion of their own remuneration.

The details of remuneration of Directors of the Company comprising remuneration received/receivable from
the Company and its subsidiaries during the financial year ended 30 June 2020 are as follows:

(a) Company

Salaries
and other Benefit- EPF and
Name of Directors Fees emoluments Bonuses in-kind SOCSO Total
(RM) (RM) (RM) (RM) (RM) (RM)
Non-Executive Directors
Datuk Phang Ah Tong 36,000 7,000 - - - 43,000
Dato’ Philip Chan Hon Keong 27,600 7,000 - - - 34,600
Koay Kah Ee 33,600 7,000 - - - 40,600
Lew Jin Aun 27,600 7,000 - - - 34,600
Executive Directors
Dato’ Foong Wei Kuong - - - - - -
Datin Wang Mei Ling - - - - - -
Goh Kok Sing - - - - - -
Total 124,800 28,000 - - - 152,800

(b) Group

Salaries
and other Benefit-in- EPF and
Name of Directors Fees emoluments Bonuses kind SOCSO Total
(RM) (RM) (RM) (RM) (RM) (RM)
Non-Executive Directors
Datuk Phang Ah Tong 36,000 7,000 - - - 43,000
Dato’ Philip Chan Hon Keong 27,600 7,000 - - - 34,600
Koay Kah Ee 33,600 7,000 - - - 40,600
Lew Jin Aun 27,600 7,000 - - - 34,600
Executive Directors
Dato’ Foong Wei Kuong - 654,824 145,086 33,162 162,087 995,159
Datin Wang Mei Ling - 488,528 93,578 11,975 117,753 711,834
Goh Kok Sing - 121,500 24,310 11,975 20,755 178,540
Total 124,800 1,292,852 262,974 57,112 300,595 2,038,333

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Corporate Governance Overview Statement

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

3. REMUNERATION (CONT’D)

Remuneration of Top Five (5) Senior Management Staff

The top five (5) senior management’s remuneration component including Employees Provident Fund (EPF),
bonus, Social Security Organisation (SOCSO), allowance and benefit-in-kind in bands of RM50,000.00 is
disclosed in the CG Report which is available on the Company’s website at www.jftech.com.my or through
the announcement published on the website of Bursa Securities.

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

4. AUDIT COMMITTEE

Composition and Activities of Audit Committee

The composition and details of activities carried out by the Audit Committee during the financial year ended
30 June 2020 are set out in the Audit Committee Report of this Annual Report.

All the members of the Audit Committee are financially literate and have necessary skills, financial experience
and expertise to discharge their duties effectively. Other than overseeing the financial reporting and
performance of the Group, the Audit Committee also ensures that there is a proper co-ordination between
both of the Internal and External Auditors in order for the Audit Committee to be fully informed on any
significant financial matters that may impact the Group.

The qualification and experience of the individual Audit Committee member are further disclosed in the
Directors’ Profile of this Annual Report.

Compliance with Applicable Financial Reporting Standards

The Company’s Audited Financial Statements are prepared in accordance with the requirements of the
applicable approved accounting standards in Malaysia and the provisions of the Companies Act 2016.
The Board is responsible to ensure that the shareholders are provided with a balanced evaluation of the
Company’s financial performance, its position and its future prospects, through the issuance of the annual
Audited Financial Statements, quarterly financial reports and corporate announcements on significant
developments affecting the Company in accordance with Bursa Malaysia Securities ACE LR.

In this respect:

• management presented to the Audit Committee and the Board, details of the Company’s Financial
Statements which include amongst others, revenues and expenditures, for review of quarter-to-quarter
and year-to-date financial performance; and

• the Audit Committee discharged its function in reviewing the Financial Statements of the Company
with the assistance of the External Auditors, prior to recommendation of the same for the Board’s
approval and issuance to shareholders.

Cooling Period of a Former Key Audit Partner

The Board is aware of Practice 8.2 of the MCCG and there is a clause in the terms of reference of the Audit
Committee where a cooling-off period of at least two (2) years to be observed before the appointment of a
former key audit partner as a member of the Audit Committee.

None of the members of the Board were former key audit partner and the Board has no intention to appoint
any former key audit partner as a member of the Board.

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Corporate Governance Overview Statement

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (CONT’D)

4. AUDIT COMMITTEE (CONT’D)

Assessment of Sustainability and Independence of External Auditors

The Board vide the Audit Committee will conduct annual assessment of the suitability and independence of
External Auditors.

The Audit Committee has received assurance from Messrs. Crowe Malaysia PLT, the External Auditors of the
Company confirming that the firm, its engagement partner and the audit team’s independence, integrity
and objectivity complied with the relevant ethical, professional and regulatory requirements.

The Audit Committee is satisfied with Crowe Malaysia PLT’s technical competency and audit independence
during the financial year under review.

5. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK

Sound Framework to Manage Risks

The Board acknowledges its overall responsibility for maintaining a sound system of risk management
and internal controls to safeguard shareholders’ investment and the Group’s assets. However, the Board
recognises that such system is structured to manage rather than eliminate the possibility of encountering
risk of failure to achieve corporate objectives.

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

Internal Audit Function

The outsourced Internal Auditors, namely Tricor Axcelasia Sdn. Bhd. (formerly known as Axcelasia Columbus
Sdn. Bhd.) communicate regularly with and report directly to the Audit Committee. The internal audit
function conducts regular audit to review and provide assurance to the Audit Committee on the adequacy
and effectiveness of the Group’s risk management, control and governance processes. The outsourced
Internal Auditors’ representatives attended two (2) meetings of the Audit Committee for the financial year
ended 30 June 2020.

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

The Statement on Risk Management and Internal Control is set out on pages 40 to 41 of this Annual Report
to provide an overview of the state of risk management and internal control within the Group during the
financial year under review.

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Corporate Governance Overview Statement

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

6. COMMUNICATION WITH STAKEHOLDERS

Shareholders’ Communication and Investor Relations

The Board views the AGM as the primary forum to communicate with shareholders while the Extraordinary
General Meeting (“EGM”) is held as and when required. Shareholders will receive Annual Report and notice
of AGM, which are sent out at least twenty-eight (28) days before the date of the AGM. In addition, the
Notice of AGM/EGM will be advertised in the newspapers. The Board encourages shareholders to attend the
forthcoming AGM and undertakes to answer all questions raised by the shareholders.

The proceedings of the AGM include a question and answer session in which the Chairman of the AGM
would invite shareholders to raise questions on the Company’s Audited Financial Statements and other items
for approval at the AGM, before putting a resolution to vote. The Chairman of the AGM ensures that all the
Directors are able to attend the AGM and sufficient opportunities are given for 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 via Bursa
LINK, which is accessible on Bursa Malaysia Securities’ and the Company’s websites.

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.

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

Corporate Disclosure Policy

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

The Board has yet to formalise a Corporate Disclosure Policy. Nonetheless, the Board is committed in
ensuring that communications to the investing public regarding the businesses, operations and financial
performance of the Company are accurate, timely, factual, informative, consistent, broadly disseminated and
where necessary, information filed with regulators are in accordance with applicable legal and regulatory
requirements.

Leverage on Information Technology for Effective Dissemination of Information

The Company’s website provides all relevant information on the Company and is accessible by the public.

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

7. CONDUCT OF GENERAL MEETINGS

Shareholders’ Participation at General Meetings

The Board endeavours to provide timely and accurate disclosure of all material information of the Group to the
shareholders and investors. Where practicable, the Board is prepared to enter into a dialogue with institutional
shareholders. Currently, information is disseminated through various disclosures and announcements made
to Bursa Malaysia Securities. This information is also electronically published at Bursa Malaysia Securities’
website at http://www.bursamalaysia.com. The Company also maintain its website at www.jftech.com.my
containing essential corporate information about the Group and its products as well as announcements
made to Bursa Malaysia Securities for the access of the general public.

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Corporate Governance Overview Statement

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

(CONT’D)

7. CONDUCT OF GENERAL MEETINGS (CONT’D)

Poll Voting

Bursa Malaysia Securities ACE LR requires that any resolution set out in the notice of any general meeting,
or in any notice of resolution which may properly be moved and is intended to be moved at any general
meeting, is voted by poll for all general meetings from 1 July 2016 onwards.

The Company had conducted its voting on all resolutions at the 2019 AGM held on 4 December 2019 by poll.
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.

This Corporate Governance Overview Statement is made in accordance with a resolution of the meeting of the
Board of Directors on 29 September 2020.

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Additional Compliance
Information
OTHER INFORMATION REQUIRED BY BURSA MALAYSIA SECURITIES BERHAD ACE MARKET LISTING
REQUIREMENTS

Utilisation of Proceeds

The Company’s Private Placement exercise was completed upon subscription and listing of the 15,749,900
Placement Shares at RM3.20 per Placement Share on the ACE Market of Bursa Malaysia Securities Berhad on 4
September 2020. The gross proceeds raised from the Private Placement exercise were RM50.40 million and the
utilisation status is as set out below:

Actual
Proposed utilisation Status of
utilisation as at 29 Timeframe Balance as at utilisation
based on the September of utilisation 29 September as at 29
announcement 2020 based on the 2020 September
Notes Details of utilisation (RM’000) (RM’000) announcement (RM’000) 2020
Factory capacity 23,000 Nil Within 36 23,000 Unutilised
expansion months
Research and 4,000 Nil Within 24 4,000 Unutilised
development laboratory months
expansion
Setting up of new test 12,000 Nil Within 24 12,000 Unutilised
interface and services months
business unit
Purchase of input 5,000 Nil Within 60 5,000 Unutilised
materials and months
manufacturing
consumables
(a) Future working capital/ 13,820* Nil Within 60 6,049** Unutilised
investment months
(b) Estimated expenses in 350 350 Within 6 Nil Fully utilised
relation to the Private months
Placement exercise
Total 58,170 350 50,049

Notes:-

(a) The proceeds have been earmarked for future working capital use and/or investment purpose which the
Board of Directors (“Board”) has not decided on the exact details on the utilisation. The RM13.82 million
proceeds will be placed in interest-bearing fixed deposit accounts with licensed financial institution(s) or in
short-term money market instruments.
(b) The estimated expenses consist of professional fees, regulatory fees and other incidental expenses in relation
to the Private Placement exercise. Any variation in the actual amount of the expenses for the Private Placement
will be adjusted proportionately to/from the proceeds earmarked for the purchase of input materials and
manufacturing consumables.

* The amount was allocated based on the expected RM58.17 million of gross proceeds raised from the issuance
of up to 20,999,900 Placement Shares.

** The amount was allocated based on RM50.40 million raised from the issuance of 15,749,900 Placement Shares
listed on the ACE Market of Bursa Malaysia Securities Berhad on 4 September 2020.

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Additional Compliance Information

Audit and Non-Audit Fees

During the financial year under review, the amounts of audit and non-audit fees paid by the Company and the
Group to the External Auditors and their affiliated companies or firms are as follows:

Company Group
(RM’000) (RM’000)
Audit Fees 32,000 83,000
Non-Audit Fees 5,000 5,000

Material Contracts

There were no material contracts entered into by the Group involving Directors’ and major shareholders’ interests
either still subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the
previous financial year.

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Statement on Risk Management

and Internal Control
INTRODUCTION

The Board of Directors (“the Board”) of JF Technology Berhad (“the Company”) is committed towards maintaining
a sound system of internal control and risk management and is pleased to provide this Statement of Risk
Management and Internal Control (“this Statement”) which outlines the scope and nature of internal controls and
risk management of the Company and its subsidiaries (“the Group”) for the financial year ended 30 June 2020.

For the purpose of disclosure, this Statement is prepared pursuant to Rule 15.26 (b) of the ACE Market Listing
Requirements of Bursa Malaysia Securities Berhad and is guided by the Statement on Risk Management & Internal
Control : Guidelines for Directors of Listed Issuers.

RESPONSIBILITY FOR RISK MANAGEMENT AND INTERNAL CONTROL

The Board recognises that it is responsible for the Group’s system of risk management and internal control and for
reviewing its effectiveness whilst the role of Management is to implement Board policies on risk management and
control. The Board is committed to maintain the effective risk management practices, as it understands that such
practices are essential in the maintenance of a sound system of internal control.

However, in any system of internal controls, there are inherent limitations that may impede the achievement of the
Group’s business objectives. Therefore, the system of internal control can only provide reasonable assurance and
not absolute assurance against any material misstatement, losses and fraud.

The Board has received assurance from the Managing Director and Chief Financial Officer that the Group’s risk
management and internal control system is operating adequately and effectively in all material aspects, based on
the risk management and internal control system of the Group.

RISK MANAGEMENT FRAMEWORK

Throughout the financial year ended 30 June 2020 and up to the date of approval of the statement, the Board had
identified, evaluated and managed the significant risks faced by the Group by monitoring the Group’s operations
performance and profitability during the Board meetings. This serves as an on-going process of identifying,
assessing and managing risks faced by the Group. The Board, through its Audit Committee, reviews the results of
this process, including mitigating measures implemented by Management to address the key risks as identified.

This review mechanism is overseen by the Audit Committee. The process of risk management is also addressed
by compilation of risk profiles of each department in the Group. The risk action plans and internal controls that
Management has taken and/or is taking are documented in the minutes of the Audit Committee meetings.

KEY ELEMENTS OF INTERNAL CONTROL

The fundamental elements of internal controls that have been ingrained perpetually in the Group’s system of
internal control are:

i. Organisation structure defining the hierarchy structure of reporting lines;

ii. Limit of authority and approval facilitating delegation of authority;
iii. Compare actual result against budget to monitor and track the Company’s performance;
iv. ISO 9001:2015 Quality Management System forming the basis of operational procedures of the production
processes and a reference point to Management in furthering their improvement on their operating
procedures;
v. Clearly defined Terms of Reference of the Board Committee, i.e. Audit Committee, Nomination Committee
and Remuneration Committee;
vi. Regular Management and Operation meetings are conducted to ensure activities and risk mitigation actions
are executed; and
vii. There has been active participation by the Executive Directors in the day-to-day running of business
operations and regular dialogue and reporting to the Board of Directors.

The Board views that the existing level of system of internal control is reasonable to achieve the Group’s business
objectives. Nonetheless, the Board recognises that the system of internal control should be continuously improved
to be in line with the evolving business development. It should also be noted that the risk management systems
and system of internal control are only designed to manage rather than eliminate risks of failure to achieve the
business objectives. Therefore, these systems can only provide reasonable and not absolute assurance against
material misstatements, frauds and losses.

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Statement on Risk Management

and Internal Control

KEY ELEMENTS OF INTERNAL CONTROL (CONT’D)

The presence of the internal audit function supports this review mechanism and assists the Audit Committee in
conducting their review more effectively. Additionally, the Audit Committee also reviews the financial information
and reports produced by Management. This financial information and reports also include quarterly financial
results, annual report and Audited Financial Statements. In this respect, the Audit Committee, upon consultation
with Management, deliberates the integrity of the information and data before recommending to the Board for
presenting to the shareholders and public investors

INTERNAL AUDIT FUNCTION

The Group has outsourced its internal audit function to an independent internal audit service provider to carry
out reviews and assessment on the adequacy and integrity of the system of internal control of the Group. The
independent internal auditors report directly to the Audit Committee, who receives reports of issues and
recommendations arising from each review.

The scope of works of the internal audit function includes but not limited to the following:-

i. Review and assess the adequacy, efficiency and effectiveness of the Group’s internal control system;
ii. Review the extent of compliance of the Group with the policies, standard operating procedures and other
laws and regulations which possibly cause significant impact to the business operations of the Group;
iii. Report significant issues in relation to the operations and activities of the Group and make recommendations
for improvements in the internal audit reports to the Audit Committee;
iv. Conduct follow-up visits to ensure that all agreed corrective action plans are satisfactorily implemented by
the respective Management and reports the same to the Audit Committee; and
v. Highlight any irregularities to the Audit Committee.

During the financial year under review, there were no material losses incurred as a result of weaknesses in the
internal control system that would require disclosure in this Annual Report. The Board will continue to improve
and enhance the existing risk management and internal control system to ensure its adequacy and relevance in
safeguarding the shareholders’ interest and the Group’s assets.

The costs incurred for the internal audit function in respect of the financial year 2020 was RM34,400.00.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

Pursuant to Paragraph 15.23 of the Listing Requirements, the External Auditors have reviewed this Statement
on Risk Management and Internal Control for inclusion in this Annual Report. Their reviews were performed in
accordance with Malaysian Approved Standard on Assurance Engagements, ISAE 3000 (Revised), Assurance
Engagement Other than Audits or Reviews of Historical Financial Information and Audit and Assurance Practice
Guide 3: 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,
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 paragraph 41 and 42 of the Statement on Risk Management
and Internal Control: Guidelines for Directors of Listed Issuers to be set out, nor is factually inaccurate.

ADEQUACY AND EFFECTIVENESS OF THE GROUP’S RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

The Board is of the view that the risk management and internal control system is sound and adequate to safeguard
the Group’s operations and assets at the existing level of operations of the Group. No material weakness in the risk
management and internal control system has resulted and/or give rise to any material loss, contingency and/or
uncertainty during the financial year under review.

This Statement was made in accordance with the resolution of the meeting of the Board on 29 September 2020.

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Audit Committee
Report
The Board of Directors of JF Technology Berhad is pleased to present the Audit Committee Report and its activities
for the financial year ended 30 June 2020 (“FYE2020”).

COMPOSITION OF THE AUDIT COMMITTEE AND MEETINGS

During the FYE2020, the Audit Committee held a total of five (5) meetings. The present members of the Audit
Committee of the Company together with their attendance are set out below:

Name Designation Attendance

Koay Kah Ee Chairman/Senior Independent Non-Executive Director 5/5
Dato’ Philip Chan Hon Keong Member/Independent Non-Executive Director 5/5
Lew Jin Aun Member/Independent Non-Executive Director 5/5
Datuk Phang Ah Tong Member/Independent Non-Executive Director 5/5

All members of the Audit Committee have a working familiarity with finance and accounting practices. Mr. Koay
Kah Ee is a member of the Malaysian Institute of Accountants.

FORMATION

The Audit Committee was formed by the Board of Directors on 18 January 2008.

TERMS OF REFERENCE

The full terms of reference of the Audit Committee, outlining the Audit Committee’s composition, retirement and
resignation, proceeding of meetings, authorities, duties and responsibilities, is available on the Company’s website
at www.jftech.com.my.

SUMMARY OF ACTIVITIES DURING THE FYE2020

The activities undertaken by the Audit Committee in the discharge of its functions and duties during the FYE2020
are summarised as follows:

1) Financial Reporting

a) Reviewed the quarterly financial statements pertaining thereto and made recommendations to the
Board of Directors for approval of the same as follows:

Date of Meetings Review of Quarterly Financial Statements

23 August 2019 Fourth quarter results for the financial year ended 30 June 2019 (“FYE2019”)
29 November 2019 First quarter results for the FYE2020
21 February 2020 Second quarter results for the FYE2020
15 May 2020 Third quarter results for the FYE2020

The review was to verify that the Company’s quarterly results were prepared in accordance with:

• Malaysian Financial Reporting Standards;

• International Accounting Standards 34 - Interim Financial Reporting Standards;
• Disclosure provisions of Bursa Malaysia Securities Berhad ACE Market Listing Requirements
(“Bursa Securities ACE LR”); and
• Companies Act 2016.

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Audit Committee Report

SUMMARY OF ACTIVITIES DURING THE FYE2020 (CONT’D)

1) Financial Reporting (cont’d)

b) Reviewed and recommended to the Board of Directors in respect of the Audited Financial Statements
of the Company and the Group for the FYE2019 at its meeting held on 30 September 2019 and assessed
whether the aforesaid Audited Financial Statements of the Company and the Group for the FYE2019
presented a true and fair view of the Company’s financial position and performance and complied with
all the regulatory requirements.

2) External Audit

a) Reviewed and deliberated with the External Auditors at the meetings held on 23 August 2019 and 30
September 2019 on the Audit Completion Report for the FYE2019 and Audit Review Memorandum for
the FYE2019.

b) Reviewed the Audit Planning Memorandum for the FYE2020 presented by the External Auditors on 15
May 2020.

c) Deliberated and considered the significant accounting adjustments and auditing issues arising from
the final audit with the External Auditors. The Audit Committee also had two (2) private discussions with
the External Auditors without the presence of Management and Executive Directors to review on the
issues relating to the financial controls and operational efficiencies of the Company and its subsidiaries.

d) Crowe Malaysia PLT, the External Auditors declared their independence and confirmed that they were
not aware of any relationship between Crowe Malaysia PLT and the Group that, in their professional
judgement, might reasonably be thought to impair their independence.

e) Evaluated the performance of the External Auditors covering areas such as calibre, quality processes,
independence, audit team, audit scope and audit communication as well as the audit fees. Based on
the evaluation, the Audit Committee had recommended to the Board of Directors for approval, the
re-appointment of the External Auditors for the ensuring financial year of 30 June 2020 at its meeting
held on 30 September 2019.

3) Internal Audit

The Company has outsourced its internal audit function to Tricor Axcelasia Sdn. Bhd. (formerly known as
Axcelasia Columbus Sdn. Bhd.), an independent professional services firm, to assist the Audit Committee in
discharging its duties and responsibilities more effectively.

For the FYE2020, the internal audit function has successfully conducted the following audits in accordance
with their Internal Audit Plan for the FYE2020 which was approved by the Audit Committee:

Audit Activities Audit Entity

Assess the adequacy and effectiveness of the system of internal J Foong Technologies Sdn. Bhd.
control and compliance with the Group’s policies and procedures JF Microtechnology Sdn. Bhd.
over Research and Development
Assess the adequacy and effectiveness of the system of internal J Foong Technologies Sdn. Bhd.
control and compliance with the Group’s policies and procedures
over Inventory Management and Procurement

The Audit Committee reviewed the significant audit findings and recommendations in the Internal Auditors’
Reports to improve any weaknesses or non-compliance, and the respective Management’s responses thereto
during the meetings held on 29 November 2019 and 15 May 2020.

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Audit Committee Report

SUMMARY OF ACTIVITIES DURING THE FYE 2020 (CONT’D)

4) Risk Management Progress Report

The Audit Committee reviewed and deliberated on the Risk Management Reports for the period from
October 2019 to March 2020 and April 2020 to September 2020 which covered the Principal Risks (Strategic,
Project and Product Risks) and Non-Principal Risks (Operational and Financial Risks) of the Group during the
meetings held on 29 November 2019 and 15 May 2020, respectively.

5) Other Activities

a) Reviewed the related party transactions to ensure that it complies with Bursa Securities ACE LR.

b) Reviewed and recommended to the Board of Directors in respect of the Audit Committee Report and
Statement on Risk Management and Internal Control for inclusion in the 2019 Annual Report.

INTERNAL AUDIT FUNCTION

The Audit Committee is supported by an independent and adequately resourced internal audit function which has
been outsourced to a professional services firm. The Audit Committee is aware of the fact that an internal audit
function is essential to assist in obtaining the assurance it requires regarding the effectiveness of the system of
internal control.

The main role of the internal audit function is to review the effectiveness of the systems of internal control and this
is performed with impartiality, proficiency and due professional care.

During the FYE2020, the internal audit activities have been carried out according to the Internal Audit Plan which
has been approved by the Audit Committee. The cost incurred for the internal audit function in respect of the
FYE2020 amounted to RM34,400.00.

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Statement of
Directors’ Responsibility
IN RELATION TO THE FINANCIAL STATEMENTS

Pursuant to the Companies Act 2016, Bursa Malaysia Securities Berhad ACE Market Listing Requirements (“Bursa
Securities ACE LR”) and the applicable approved accounting policies, the Directors are required to ensure that the
financial statements prepared for each financial year give a true and fair view of the state of affairs of the Group and
the Company as at the financial year end and of the results and cash flows for that year then ended.

The Directors consider that in preparing the financial statements:

• the Group and the Company have used appropriate accounting policies which are consistently applied;

• reasonable and prudent judgements and estimates were made; and

• all applicable approved accounting standards in Malaysia have been followed.

The Directors are responsible for ensuring that the Group and the Company maintain accounting records that
disclose with reasonable accuracy the financial position of the Group and the Company which enable them to
ensure that the financial statements comply with the provisions of the Companies Act 2016, Bursa Securities ACE
LR and the applicable Malaysian Accounting Standard Board approved accounting standards in Malaysia.

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 fraud and other irregularities.

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Financial
Statements
Directors’ Report 47
Statement by Directors 52
Statutory Declaration 52
Independent Auditors’ Report 53
Statements of Financial Position 56
Statements of Profit or Loss and Other
Comprehensive Income 58
Statements of Changes in Equity 60
Statements of Cash Flows 62
Notes to the Financial Statements 64

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Directors’
Report
The Directors hereby submit their report and the audited financial statements of the Group and of the Company
for the financial year ended 30 June 2020.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries
are set out in Note 5 to the financial statements.

RESULTS

The The
Group Company
RM’000 RM’000

Profit after tax for the financial year 8,018 3,427

Attributable to:-
Owners of the Company 8,018 3,427
Non-controlling interests - -

8,018 3,427

DIVIDENDS

The Company paid a final dividend of 0.50 sen per ordinary share amounting to RM1,049,998 for the financial year
ended 30 June 2019 on 26 December 2019.

On 25 August 2020, the Company declared a final dividend of 1.50 sen per ordinary share amounting to RM3,386,244
in respect of the current financial year, paid on 25 September 2020, to shareholders whose names appeared in the
record of depositors on 11 September 2020. The financial statements for the current financial year do not reflect this
final dividend. Such dividend will be accounted for in equity as an appropriation of retained profits in the financial
year ending 30 June 2021.

RESERVES AND PROVISIONS

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

ISSUES OF SHARES AND DEBENTURES

During the financial year:-

(a) there were no changes in the issued and paid-up share capital of the Company; and

(b) there were no issues of debentures by the Company.

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Directors’ Report

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares
in the Company.

DIRECTORS

The names of directors of the Company who served during the financial year and up to the date of this report are
as follows:-

Dato’ Foong Wei Kuong

Datin Wang Mei Ling
Goh Kok Sing
Koay Kah Ee
Dato’ Philip Chan Hon Keong
Lew Jin Aun
Datuk Phang Ah Tong

The name of the director of the Company’s subsidiaries who served during the financial year and up to the date of
this report, not including those directors mentioned above, is as follows:-

Foong Mei Leng

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the
financial year in shares of the Company and its subsidiaries during the financial year are as follows:-

Number of Ordinary Shares
At At
1.7.2019 Bought Sold 30.6.2020

Direct Interests in the Company

Dato’ Foong Wei Kuong 104,965,522 - - 104,965,522

Datin Wang Mei Ling 22,425,645 - - 22,425,645
Goh Kok Sing 125,000 - - 125,000
Lew Jin Aun 1,666,666 - - 1,666,666
Koay Kah Ee 500,000 - - 500,000
Dato’ Philip Chan Hon Keong 333,333 - - 333,333
Datuk Phang Ah Tong 76,666 - - 76,666

Indirect Interests in the Company

Lew Jin Aun 833,333 - - 833,333

By virtue of Section 8 of the Companies Act 2016, Dato’ Foong Wei Kuong and Datin Wang Mei Ling are also
deemed interested in the shares of the subsidiaries to the extent that the Company has an interest

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Directors’ Report

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 remuneration received or due and receivable by
Directors shown in the financial statements, or the fixed salary of a full-time employee of the Company or related
corporations) 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 benefits which may be deemed to have arisen by virtue of the significant related party transactions
as disclosed in Note 31 to the financial statements.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements
whose object is to enable the Directors to acquire benefits by means of the acquisition of shares in or debentures
of the Company or any other body corporate.

DIRECTORS’ REMUNERATION

The details of the Directors’ remuneration paid or payable to the directors of the Company during the financial year
are disclosed in Note 24 to the financial statements.

INDEMNITY AND INSURANCE COST

During the financial year, the amount of indemnity coverage and insurance premium paid for the directors of the
Group and of the Company were RM5,000,000 and RM15,000 respectively.

SUBSIDIARIES

The details of the Company’s subsidiaries are disclosed in Note 5 to the financial statements.

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the financial statements of the Group and of the Company were made out, the Directors took
reasonable steps:-

(i) to ascertain that action had been taken in relation to the writing off of bad debts and the making
of allowance for impairment losses on receivables, and satisfied themselves that there are no
known bad debts and that no allowance for impairment losses on receivables is required; and

(ii) to ensure that any current assets, which were unlikely to be realised in the ordinary course of
business, including their value as shown in the accounting records of the Group and of the
Company, have been written down to an amount which they might be expected so to realise.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the
financial year were not substantially affected by any item, transaction or event of a material and unusual
nature.

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Directors’ Report

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (CONT’D)

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(a) The Directors are not aware of any circumstances:-

(i) which would require the writing off of bad debts or render the amount of the allowance for
impairment losses on receivables in the financial statements of the Group and of the Company
inadequate to any material extent;

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

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

(b) In the opinion of the Directors:-

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect
substantially the results of the operations of the Group and of the Company for the financial year
in which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within
the period of twelve (12) months after the end of the financial year which will or may affect the
ability of the Group and of the Company to meet their obligations as and when they fall due.

(III) AS AT THE DATE OF THIS REPORT

(a) There are no charges on the assets of the Group and of the Company which have arisen since the end of
the financial year which secure the liabilities of any other person.

(b) 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 of the Group and of the
Company misleading.

SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

The significant event during the financial year is disclosed in Note 36 to the financial statements.

SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD

The significant events occurring after the reporting period are disclosed in Note 37 to the financial statements.

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Directors’ Report

AUDITORS

The auditors, Crowe Malaysia PLT, have expressed their willingness to continue in office.

The details of the auditors’ remuneration are disclosed in Note 24 to the financial statements.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 29 September 2020.

Dato’ Foong Wei Kuong Datin Wang Mei Ling

Director Director

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Statement by Directors
PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016

We, Dato’ Foong Wei Kuong and Datin Wang Mei Ling, being two of the directors of JF Technology Berhad, state
that, in the opinion of the Directors, the financial statements set out on pages 56 to 121 are drawn up in accordance
with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and
of the Company as of 30 June 2020 and of their financial performance and cash flows for the financial year ended
on that date.

Signed in accordance with a resolution of the Directors dated 29 September 2020.

Dato’ Foong Wei Kuong Datin Wang Mei Ling

Director Director

Statutory Declaration
PURSUANT TO SECTION 251(1)(b) OF THE COMPANIES ACT 2016

I, Datin Wang Mei Ling, being the Director primarily responsible for the financial management of JF Technology
Berhad, do solemnly and sincerely declare that the financial statements set out on pages 56 to 121 are, to the best
of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the declaration
to be true, and by virtue of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by the abovementioned

Datin Wang Mei Ling, NRIC Number: 570819-08-6194
at Kuala Lumpur
in the Federal Territory
on this 29 September 2020

Datin Wang Mei Ling

Before me:
Datin Hajah Raihela Wanchik (No. W-257)
Commissioner for Oaths

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Independent Auditors’ Report

TO THE MEMBERS OF JF TECHNOLOGY BERHAD
INCORPORATED IN MALAYSIA
Registration No: 200601027925 (747681 – H)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of JF Technology Berhad, which comprise the statements of financial
position as at 30 June 2020 of the Group and of the Company, and the statements of profit or loss and other
comprehensive income, statements of changes in equity and statements of cash flows of the Group and of
the Company for the financial year then ended, and notes to the financial statements, including a summary of
significant accounting policies, as set out on pages 56 to 121.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the
Group and of the Company as at 30 June 2020, and of their financial performance and their cash flows for the
financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial
Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards
on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for
the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilities

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the Group and of the Company for the current financial year. These matters were
addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined
that there are no key audit matters to be communicated in our report.

Information Other than the Financial Statements and Auditors’ Report Thereon

The directors of the Company are responsible for the other information. The other information comprises the
information included in the annual report, but does not include the financial statements of the Group and of the
Company and our auditors’ report thereon.

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

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

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

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Independent Auditors’ Report

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONT’D)

Responsibilities of the Directors for the Financial Statements

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

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing
the Group’s and 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 the directors either intend to liquidate the
Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s 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 in our auditors’ report to the
related disclosures in the financial statements of the Group and of the Company or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease
to continue as a going concern.

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Independent Auditors’ Report

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONT’D)

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

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

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

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

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

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

OTHER MATTERS

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

Crowe Malaysia PLT Ngiam Mia Teck

201906000005 (LLP0018817-LCA) & AF 1018 03000/07/2022 J
Chartered Accountants Chartered Accountant

Kuala Lumpur

29 September 2020

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Statements of
Financial Position
AT 30 JUNE 2020

The Group The Company

2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assets

Investments in subsidiaries 5 - - 17,801 17,801

Property, plant and equipment 6 15,161 20,450 32 32
Right-of-use assets 7 6,126 - - -

21,287 20,450 17,833 17,833

Current assets

Inventories 8 3,152 2,426 - -

Trade and other receivables 9 6,467 10,046 3,785 1,512
Amount owing by a subsidiary 10 - - 16 -
Current tax assets 201 47 - 1
Fixed deposit with a licensed bank 11 229 223 229 223
Cash and cash equivalents 12(d) 13,768 11,526 3,454 3,370

23,817 24,268 7,484 5,106

TOTAL ASSETS 45,104 44,718 25,317 22,939

EQUITY AND LIABILITIES

Equity attributable to owners

of the Company

Share capital 13 21,253 21,253 21,253 21,253

Reserves 14 17,014 10,046 3,961 1,584

TOTAL EQUITY 38,267 31,299 25,214 22,837

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

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Statements of Financial Position

AT 30 JUNE 2020

The Group The Company

2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

Non-current liabilities

Lease liabilities 15 1,112 - - -

Hire purchase payables 16 - 603 - -
Deferred income 17 1,434 1,637 - -
Deferred tax liabilities 18 915 898 - -

3,461 3,138 - -

Current liabilities

Trade and other payables 19 2,544 9,070 103 102

Current tax liabilities # - # -
Lease liabilities 15 630 - - -
Hire purchase payables 16 - 305 - -
Term loan 20 202 906 - -

3,376 10,281 103 102

TOTAL LIABILITIES 6,837 13,419 103 102

TOTAL EQUITY AND LIABILITIES 45,104 44,718 25,317 22,939

Note:
# - Amount below RM1,000

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

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Statements of Profit or Loss

and Other Comprehensive Income
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

The Group The Company

2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

Revenue 21 26,815 23,025 3,700 1,500

Cost of sales 22 (7,168) (6,279) - -

Gross profit 19,647 16,746 3,700 1,500

Other income 23 976 692 117 118

Administrative expenses 24 (11,565) (13,193) (389) (344)

Other expenses 25 (938) (994) # (1)

Profit from operations 8,120 3,251 3,428 1,273

Finance costs 26 (62) (45) - -

Profit before tax 8,058 3,206 3,428 1,273

Income tax expense 27 (40) (190) (1) -

Profit after tax 8,018 3,016 3,427 1,273

Other comprehensive income - - - -

Total comprehensive income 8,018 3,016 3,427 1,273

Profit after tax attributable to:-

Owners of the Company 8,018 3,016 3,427 1,273
Non-controlling interests - - - -

8,018 3,016 3,427 1,273

Total comprehensive income

attributable to:-
Owners of the Company 8,018 3,016 3,427 1,273
Non-controlling interests - - - -

8,018 3,016 3,427 1,273

Note:
# - Amount below RM1,000

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

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Statements of Profit or Loss

and Other Comprehensive Income
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

The Group
Note 2020 2019

Earnings per ordinary share (sen) 28

- Basic 3.82 1.44

- Diluted 3.82 1.44

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

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Statements of
Changes in Equity
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

Share Share Retained Total

capital premium earnings equity
The Group Note RM’000 RM’000 RM’000 RM’000

Balance as at 1 July 2018 21,000 253 7,030 28,283

Transfer of share premium to share capital 253 (253) - -

Profit after tax/Total comprehensive income - - 3,016 3,016

Balance as at 30 June 2019/1 July 2019 21,253 - 10,046 31,299

Profit after tax/Total comprehensive income - - 8,018 8,018

Distribution to owners of the Company:

- dividend paid by the Company 29 - - (1,050) (1,050)

Balance as at 30 June 2020 21,253 - 17,014 38,267

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

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Statements of Changes in Equity

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

Share Share Retained Total

capital premium earnings equity
The Company Note RM’000 RM’000 RM’000 RM’000

Balance as at 1 July 2018 21,000 253 311 21,564

Transfer of share premium to share capital 253 (253) - -

Profit after tax/Total comprehensive income - - 1,273 1,273

Balance as at 30 June 2019/ 1 July 2019 21,253 - 1,584 22,837

Profit after tax/Total comprehensive income - - 3,427 3,427

Distribution to owners of the Company:

- dividend paid by the Company 29 - - (1,050) (1,050)

Balance as at 30 June 2020 21,253 - 3,961 25,214

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

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Statements of Cash Flows

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

The Group The Company

2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(FOR) OPERATING

ACTIVITIES

Profit before tax 8,058 3,206 3,428 1,273

Adjustments for:-
Depreciation of property, plant and
equipment 1,110 1,385 # 1
Depreciation of right-of-use assets 356 - - -
Dividend income - - (3,700) (1,500)
Interest expenses 62 45 - -
Inventories written off 29 63 - -
Unrealised loss on foreign exchange # 36 - -
Property, plant and equipment written off # 2 - -
Amortisation of deferred income 17 (203) (206) - -
Gain on disposal of property, plant and
equipment (22) - - -
Gain on disposal of right-of-use asset (62) - - -
Interest income (220) (244) (117) (118)
Unrealised gain on foreign exchange (83) (46) - -

Operating profit/(loss) before working

capital changes 9,025 4,241 (389) (344)
Increase in inventories (755) (575) - -
Decrease/(Increase) in trade and other
receivables 3,604 (5,081) (73) 1
(Decrease)/Increase in trade and other
payables (6,994) 1,518 1 (1)
Increase in amount owing by a subsidiary - - (16) -

Cash generated from/(for) operating

activities 4,880 103 (477) (344)
Tax (paid)/refunded (177) 87 (#) (1)
Net cash from/(for) operating activities 4,703 190 (477) (345)

Note:
# - Amount below RM1,000

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

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Statements of Cash Flows

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS (FOR)/FROM INVESTING

ACTIVITIES

Dividend received - - 1,500 -

Increase in pledged fixed deposit with a
licensed bank (6) (7) (6) (7)
Interest received 220 244 117 118
Proceeds from disposal of property, plant
and equipment 24 - - -
Proceeds from disposal of right-of-use
assets 95 - - -
Purchase of property, plant and equipment 12(a) (422) (776) - -
Purchase of right-of-use assets 12(a) (175) - - -

Net cash (for)/from investing activities (264) (539) 1,611 111

CASH FLOWS FOR FINANCING ACTIVITIES

ACTIVITIES

Dividend paid 29 (1,050) - (1,050) -

Interest paid 12(b) (62) (45) - -
Repayment of lease liabilities 12(b) (439) - - -
Repayment of term loan 12(b) (704) (925) - -
Repayment of hire purchase 12(b) - (186) - -

Net cash for financing activities (2,255) (1,156) (1,050) -

Net increase/(decrease) in cash and cash

equivalents 2,184 (1,505) 84 (234)

Cash and cash equivalents at beginning

of financial year 11,526 12,976 3,370 3,604

Effects of exchange rate changes 58 55 - -

Cash and cash equivalents at end

of financial year 12(d) 13,768 11,526 3,454 3,370

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

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Notes to the
Financial Statements
30 JUNE 2020

1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the
ACE Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar
Damansara, Damansara Heights, 50490 Kuala Lumpur.

The principal place of business of the Company is located at Lot 6, Jalan Teknologi 3/6, Taman Sains Selangor
1, Kota Damansara, 47810 Petaling Jaya.

The financial statements for the financial year ended 30 June 2020 comprise the Company and its subsidiaries.
These financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional
currency. All financial information presented in RM has been rounded to the nearest thousand, unless
otherwise stated.

The financial statements were authorised for issue in accordance with a resolution of the Directors dated 29
September 2020.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding. The principal activities of the
subsidiaries are set out in Note 5 to the financial statements.

3. BASIS OF PREPARATION

The financial statements of the Group are prepared under the historical cost convention and modified to
include other bases of valuation as disclosed in other sections under significant accounting policies, and
in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting
Standards and the requirements of the Companies Act 2016 in Malaysia.

3.1 During the current financial year, the Group has adopted the following new accounting standards and/
or interpretations (including the consequential amendments, if any):-

MFRSs and/or IC Interpretations (Including The Consequential Amendments)

MFRS 16 Lease
IC Interpretation 23 Uncertainly Over Income Tax Treatments
Amendments to MFRS 9: Prepayment Features with Negative Compensation
Amendments to MFRS 119: Plan Amendment, Curtailment or Settlement
Amendments to MFRS 128: Long-term Interests in Associates and Joint Ventures
Annual Improvements to MFRS Standards 2015 – 2017 Cycles

The adoption of the above accounting standards and/or interpretations (including the consequential
amendments, if any) did not have any material impact on the Group’s financial statements other than
the new classification of leasehold land, motor vehicles and plant and machinery as right-of-use assets
as disclosed in Note 7 to the financial statements. The Group has adopted MFRS 16 using the modified
retrospective application and has not made any adjustment to the retained profits as at 1 July 2019 (date
of initial application) without restating any comparative information.

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Notes to the Financial Statements

30 JUNE 2020

3. BASIS OF PREPARATION (CONT’D)

3.2 The Group has not applied in advance the following accounting standards and/or interpretations
(including the consequential amendments, if any) that have been issued by the Malaysian Accounting
Standards Board (MASB) but are not yet effective for the current financial year:-

MFRSs and/or IC Interpretations (Including The Consequential

Amendments) Effective Date
MFRS 17 Insurance Contracts 1 January 2023*
Amendments to MFRS 3: Definition of a Business 1 January 2020
Amendments to MFRS 3: Reference to the Conceptual Framework 1 January 2022
Amendments to MFRS 4: Extension of the Temporary Exemption from At issue date of 17
Applying MFRS 9 August 2020
Amendments to MFRS 9, MFRS 139 and MFRS 7: Interest Rate Benchmark
Reform 1 January 2020
Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture Deferred
Amendments to MFRS 16: COVID-19-Related Rent Concessions 1 June 2020
Amendments to MFRS 17 Insurance Contracts 1 January 2023
Amendments to MFRS 101 and MFRS 108: Definition of Material 1 January 2020
Amendments to MFRS 101: Classification of Liabilities as Current or Non-
current 1 January 2023**
Amendments to MFRS 116: Property, Plant and Equipment – Proceeds before
Intended Use 1 January 2022
Amendments to MFRS 137: Onerous Contracts – Cost of Fulfilling a Contract 1 January 2022
Amendments to References to the Conceptual Framework in MFRS Standards 1 January 2020
Annual Improvements to MFRS Standards 2018 – 2020 1 January 2022

* The effective date has been deferred from annual reporting periods beginning on or after 1 January
2021 to 1 January 2023 pursuant to the amendments to MFRS 17 issued by the MASB, namely
‘Amendments to MFRS 17 Insurance Contracts’.

** The effective date has been deferred from annual reporting periods beginning on or after 1 January
2022 to 1 January 2023 pursuant to the amendments to MFRS 101 issued by the MASB, namely
‘Classification of Liabilities as Current or Non-current – Deferral of Effective Date’.

The adoption of the above accounting standards and/or interpretations (including the consequential
amendments, if any) is expected to have no material impact on the financial statements of the Group
upon their initial application.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Key Sources of Estimation Uncertainty

Management believes that there are no key assumptions made concerning the future, and other key
source 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 financial year other than as
disclosed below:-

(a) Depreciation of Property, Plant and Equipment and Right-Of-Use Assets

The estimates for the residual values, useful lives and related depreciation charges for the property,
plant and equipment and right-of-use assets are based on commercial factors which could change
significantly as a result of technical innovations and competitors’ actions in response to the market
conditions. The Group anticipates that the residual values of its property, plant and equipment
and right-of-use assets will be insignificant. As a result, residual values are not being taken into
consideration for the computation of the depreciable amount. Changes in the expected level of
usage and technological development could impact the economic useful lives and the residual
values of these assets, therefore future depreciation charges could be revised. The carrying amount
of property, plant and equipment and right-of-use assets as at the reporting date are disclosed in
Notes 6 and 7 to the financial statements.

(b) Write-down of Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving

inventories. These reviews require judgement and estimates. Possible changes in these estimates
could result in revisions to the valuation of inventories. The carrying amount of inventories as at the
reporting date is disclosed in Note 8 to the financial statements.

(c) Impairment of Trade Receivables

The Group uses the simplified approach to estimate a lifetime expected credit loss allowance
for all trade receivables. The Group develops the expected loss rates based on the payment
profiles of past sales and the corresponding historical credit losses, and adjusts for qualitative
and quantitative reasonable and supportable forward-looking information. If the expectation is
different from the estimation, such difference will impact the carrying values of trade receivables.
The carrying amounts of trade receivables as at the reporting period date are disclosed in Note 9
to the financial statements.

(d) Impairment of Non-Trade Receivables

The loss allowances for non-trade financial assets are based on assumptions about risk of default
and expected loss rates. The Group uses judgement in making these assumptions and selecting
appropriate inputs to the impairment calculation, based on the past payment trends, existing
market conditions as well as forward-looking estimates at the end of each reporting period. The
carrying amounts of the other receivables and amount owing by a subsidiary as at the reporting
date are disclosed in Notes 9 and 10 to the financial statements.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

Key Sources of Estimation Uncertainty (cont’d)

(e) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be
different from the initial estimate. The Group recognises tax liabilities based on its understanding
of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course
of business. Where the final outcome of these matters is different from the amounts that were
initially recognised, such difference will impact the income tax expense and deferred tax balances
in the year in which such determination is made. The carrying amount of current tax assets and
current tax liabilities of the Group and of the Company as at the reporting date are:-

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Current tax assets 201 47 - 1

Current tax liabilities # - # -

Note:
# - Amount below RM1,000

Critical Judgements Made in Applying Accounting Policies

Management believes that there are no instances of application of critical judgement in applying the
Group’s accounting policies which will have a significant effect on the amounts recognised in the
financial statements other than as disclosed below:-

Lease Term

Some leases contain extension options exercisable by the Group before the end of the non-cancellable
contract period. In determining the lease term, management considers all facts and circumstances
including the past practice and any cost that will be incurred to change the asset if an option to extend
is not taken. An extension option is only included in the lease term if the lease is reasonably certain to be
extended (or not terminated).

4.2 BASIS OF CONSOLIDATION

The consolidated financial statements include the financial statements of the Company and its
subsidiaries made up to the end of the reporting period.

Subsidiaries are entities (including structured entities, if any) controlled by the Group. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity. Potential voting rights
are considered when assessing control only when such rights are substantive. The Group also considers
it has de facto power over an investee when, despite not having the majority of voting rights, it has the
current ability to direct the activities of the investee that significantly affect the investee’s return.

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the
effective date on which control ceases, as appropriate.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.2 BASIS OF CONSOLIDATION (CONT’D)

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup
losses may indicate an impairment that requires recognition in the consolidated financial statements.
Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency
of accounting policies with those of the Group.

(a) Business Combinations

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

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

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

(b) Non-controlling Interests

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

(c) Changes in Ownership Interests in Subsidiaries Without Change of Control

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

(d) Loss of Control

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

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

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

Amounts previously recognised in other comprehensive income in relation to the former subsidiary
are accounted for in the same manner as would be required if the relevant assets or liabilities were
disposed of (i.e. reclassified to profit or loss or transferred directly to retained profits). The fair value
of any investments retained in the former subsidiary at the date when control is lost is regarded as
the fair value on initial recognition for subsequent accounting under MFRS 9 or, when applicable,
the cost on initial recognition of an investment in an associate or a joint venture.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.3 FUNCTIONAL AND FOREIGN CURRENCIES

(a) Functional and Presentation Currency

The individual financial statements of each entity in the Group are presented in the currency of the
primary economic environment in which the entity operates, which is the functional currency.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the
Company’s functional and presentation currency and has been rounded to the nearest thousand,
unless otherwise stated.

(b) Foreign Currency Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial
recognition, using the exchange rates at the transaction dates. Monetary assets and liabilities at the
end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets
and liabilities are translated using exchange rates that existed when the values were determined.
All exchange differences are recognised in profit or loss.

4.4 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised in the statements of financial position when the
Group has become a party to the contractual provisions of the instruments.

Financial instruments are classified as financial assets, financial liabilities or equity instruments in
accordance with the substance of the contractual arrangement and their definitions in MFRS 132.
Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported
as an expense or income. Distributions to holders of financial instruments classified as equity are
charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to
settle either on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially at its fair value (other than trade receivables without
significant financing component which are measured at transaction price as defined in MFRS 15 –
Revenue from Contracts with Customers at inception). Transaction costs that are directly attributable
to the acquisition or issue of the financial instrument (other than a financial instrument at fair value
through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate.
Transaction costs on the financial instrument at fair value through profit or loss are recognised
immediately in profit or loss.

Financial instruments recognised in the statements of financial position are disclosed in the individual
policy statement associated with each item.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.4 FINANCIAL INSTRUMENTS (CONT’D)

(a) Financial Assets

All recognised financial assets are measured subsequently in their entirety at either amortised
cost or fair value (through profit or loss, or other comprehensive income), depending on the
classification of the financial assets.

Debt Instruments

(i) Amortised Cost

The financial asset is held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest. Interest income is recognised by applying
the effective interest rate to the gross carrying amount of the financial asset. When the asset
has subsequently become credit-impaired, the interest income is recognised by applying the
effective interest rate to the amortised cost of the financial asset.

The effective interest method is a method of calculating the amortised cost of a financial
asset and of allocating interest income over the relevant period. The effective interest rate is
the rate that discounts estimated future cash receipts (including all fees and points paid or
received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts), excluding expected credit losses, through the expected life of the
financial asset or a shorter period (where appropriate).

(ii) Fair Value through Other Comprehensive Income

The financial asset is held for both collecting contractual cash flows and selling the financial
asset, where the asset’s cash flows represent solely payments of principal and interest.
Movements in the carrying amount are taken through other comprehensive income and
accumulated in the fair value reserve, except for the recognition of impairment, interest
income and foreign exchange difference which are recognised directly in profit or loss.
Interest income is calculated using the effective interest rate method.

(iii) Fair Value through Profit or Loss

All other financial assets that do not meet the criteria for amortised cost or fair value through
other comprehensive income are measured at fair value through profit or loss.

The Group reclassifies debt instruments when and only when its business model for managing
those assets change.

Equity Instruments

All equity investments are subsequently measured at fair value with gains and losses recognised in
profit or loss except where the Group has elected to present the subsequent changes in fair value
in other comprehensive income and accumulated in the fair value reserve at initial recognition.

The designation at fair value through other comprehensive income is not permitted if the equity
investment is either held for trading or is designated to eliminate or significantly reduce a
measurement or recognition inconsistency that would otherwise arise.

Dividend income from this category of financial assets is recognised in profit or loss when the
Group’s right to receive payment is established unless the dividends clearly represent a recovery of
part of the cost of the equity investments.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.4 FINANCIAL INSTRUMENTS (CONT’D)

(b) Financial Liabilities

(i) Financial Liabilities at Fair Value through Profit or Loss

Fair value through profit or loss category comprises financial liabilities that are either held for
trading or are designated to eliminate or significantly reduce a measurement or recognition
inconsistency that would otherwise arise. The changes in fair value of these financial liabilities
are recognised in profit or loss.

(ii) Other Financial Liabilities

Other financial liabilities are subsequently measured at amortised cost using the effective
interest method.

The effective interest method is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest rate
is the rate that exactly discounts estimated future cash payments (including all fees and
points paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts), through the expected life of the financial liability or
a shorter period (where appropriate).

(c) Equity Instruments

Equity instruments classified as equity are measured at cost and are not remeasured subsequently.

Ordinary shares are classified as equity and recorded at the proceeds received, net of directly
attributable transaction costs.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(d) Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights to the
cash flows from the financial asset expire or when it transfers the financial asset and substantially
all the risks and rewards of ownership of the asset to another entity. On derecognition of a financial
asset measured at amortised cost, the difference between the carrying amount of the asset and
the sum of the consideration received and receivable is recognised in profit or loss. In addition, on
derecognition of a debt instrument classified as fair value through other comprehensive income,
the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from
equity to profit or loss. In contrast, there is no subsequent reclassification of the fair value reserve
to profit or loss following the derecognition of an equity investment.

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 expired. 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.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.4 FINANCIAL INSTRUMENTS (CONT’D)

(e) 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 specific debtor fails to make payment when due
in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts are recognised initially as liabilities 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 or, when there is no specific contractual period,
recognised in profit or loss upon discharge of the guarantee. If the debtor fails to make payment
relating to a financial guarantee contract when it is due and the Group, as the issuer, is required to
reimburse the holder for the associated loss, the liability is measured at the higher of the amount
of the credit loss determined in accordance with the expected credit loss model and the amount
initially recognised less cumulative amortisation.

4.5 INVESTMENTS IN SUBSIDIARIES

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

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

Equity loan represents non-trade loan granted by the Company to a subsidiary for which settlement is
neither planned nor likely to occur in the foreseeable future and is intended to provide the subsidiary
with a long-term source of additional capital. It is, in substance, an addition to the Company’s investment
in the subsidiary and accordingly, is accounted as part of the investment in the subsidiary and measured
at cost.

4.6 PROPERTY, PLANT AND EQUIPMENT

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that
are directly attributable to the acquisition of the asset and other costs directly attributable to bringing
the asset to working condition for its intended use.

Subsequent to initial recognition, all property, plant and equipment are stated at cost less accumulated
depreciation and any impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,
as appropriate, only when the cost is incurred and it is probable that the future economic benefits
associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The
carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of
property, plant and equipment are recognised in profit or loss as incurred.

Depreciation on property, plant and equipment is charged to profit or loss (unless it is included in the
carrying amount of another asset) on a straight-line method to write off the depreciable amount of
the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset
becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates
used for this purpose are:-

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.6 PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Long-term leasehold land Not applicable (2019 – Over 99 years)

Building 50 years
Computer and software 25%
Furniture and fittings 10%
Motor vehicles 20%
Office equipment 10%
Plant and machinery 8 - 10%
Renovation 10%
Signboard 10%
Tools and equipment 10%

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at
the end of each reporting period to ensure that the amounts, method and periods of depreciation are
consistent with previous estimates and the expected pattern of consumption of the future economic
benefits embodied in the items of the property, plant and equipment. Any changes are accounted for
as a change in estimate.

When significant parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use. Any gain or loss arising from derecognition of the asset, being the
difference between the net disposal proceeds and the carrying amount, is recognised in profit or loss.

4.7 RESEARCH AND DEVELOPMENT EXPENDITURE

Research expenditure is recognised as an expense when it is incurred.

Development expenditure is recognised as an expense except that costs incurred on development

projects are capitalised as non-current assets to the extent that such expenditure is expected to
generate future economic benefits. Development expenditure is capitalised if, and only if, an entity can
demonstrate all of the following:-

(a) its ability to measure reliably the expenditure attributable to the asset under development;
(b) the product or process is technically and commercially feasible;
(c) its future economic benefits are probable;
(d) its intention to complete and the ability to use or sell the developed asset; and
(e) the availability of adequate technical, financial and other resources to complete the asset under
development.

Capitalised development expenditure is measured at cost less accumulated amortisation and

impairment losses, if any. Development expenditure initially recognised as an expense is not recognised
as assets in the subsequent period.

The development expenditure is amortised on a straight-line method over a period of 5 years when the
products are ready for sale or use. In the event that the expected future economic benefits are no longer
probable of being recovered, the development expenditure is written down to its recoverable amount.

The amortisation method, useful life and residual value are reviewed, and adjusted if appropriate, at the
end of each reporting period.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.8 IMPAIRMENT

(a) Impairment of Financial Assets

The Group recognises a loss allowance for expected credit losses on investments in debt
instruments that are measured at amortised cost and trade receivables.

The expected credit loss is estimated as the difference between all contractual cash flows that are
due to the Group in accordance with the contract and all the cash flows that the Group expects to
receive, discounted at the original effective interest rate.

The amount of expected credit losses is updated at each reporting date to reflect changes in credit
risk since initial recognition of the respective financial instrument. The Group always recognises
lifetime expected credit losses for trade receivables using the simplified approach. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Group’s
historical credit loss experience and are adjusted for forward-looking information (including time
value of money where appropriate).

For all other financial instruments, the Group recognises lifetime expected credit losses when
there has been a significant increase in credit risk since initial recognition. However, if the credit
risk on the financial instrument has not increased significantly since initial recognition, the
Group measures the loss allowance for that financial instrument at an amount equal to 12-month
expected credit losses.

The Group recognises an impairment gain or loss in profit or loss for all financial instruments with
a corresponding adjustment to their carrying amount through a loss allowance account, except
for investments in debt instruments that are measured at fair value through other comprehensive
income, for which the loss allowance is recognised in other comprehensive income and
accumulated in the fair value reserve, and does not reduce the carrying amount of the financial
asset in the statement of financial position.

(b) Impairment of Non-financial Assets

The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not
apply, are reviewed at the end of each reporting period for impairment when there is an indication
that the assets might be impaired. Impairment is measured by comparing the carrying values
of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its
recoverable amount, the asset is written down to its recoverable amount and an impairment loss
shall be recognised. The recoverable amount of an assets is the higher of the asset’s fair value less
costs to sell and its value-in-use, which is measured by reference to discounted future cash flow
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset. Where it is not possible to estimate the recoverable amount of
an individual asset, the Group estimates the recoverable amount of the cash-generating unit to
which the asset belongs.

An impairment loss is recognised in profit or loss.

When there is a change in the estimates used to determine the recoverable amount, a subsequent
increase in the recoverable amount of an asset is treated as a reversal of the previous impairment
loss and is recognised to the extent of the carrying amount of the asset that would have been
determined (net of amortisation and depreciation) had no impairment loss been recognised. The
reversal is recognised in profit or loss immediately.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.9 LEASES

The Group assesses whether a contract is or contains a lease, at the inception of the contract. The Group
recognises a right-of-use asset and corresponding lease liability with respect to all lease arrangements in
which it is the lessee, except for low value assets and short-term leases with 12 months or less. For these
leases, the Group recognises the lease payments as an operating expense on a straight-line method
over the term of the lease unless another systematic basis is more representative of the time pattern in
which economic benefits from the leased assets are consumed.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use assets and the associated lease liabilities are presented as a separate line item in the
statements financial position.

The right-of-use asset is initially measured at cost. Cost includes the initial amount of the corresponding
lease liability adjusted for any lease payments made at or before the commencement date, plus any
initial direct costs incurred, less any incentives received.

The right-of-use asset is subsequently measured at cost less accumulated depreciation and any
impairment losses, and adjusted for any remeasurement of the lease liability. The depreciation starts
from the commencement date of the lease. If the lease transfers ownership of the underlying asset to
the Group or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase
option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Otherwise,
the Group depreciates the right-of-use asset to the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term. The estimated useful lives of the right-of-use assets are determined
on the same basis as those property, plant and equipment.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing rate.

The lease liability is subsequently measured at amortised cost using the effective interest method. It is
remeasured when there is a change in the future lease payments (other than lease modification that
is not accounted for as a separate lease) with the corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recognised in profit or loss if the carrying amount has been
reduced to zero.

Accounting Policies Applied Until 30 June 2019

(a) Finance Leases

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and
rewards incidental to ownership. Upon initial recognition, the leased asset is measured at an
amount equal to the lower of its fair value and the present value of the minimum lease payments.
Subsequent to initial recognition, the asset is accounted for in accordance with the accounting
policy applicable to that asset. The corresponding liability is included in the statement of financial
position as hire purchase payables.

Minimum lease payments made under finance leases are apportioned between the finance costs
and the reduction of the outstanding liability. The finance costs, which represent the difference
between the total leasing commitments and the fair value of the assets acquired, are recognised
in the profit or loss and allocated over the lease term so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each accounting period.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.9 LEASES (CONT’D)

Accounting Policies Applied Until 30 June 2019 (cont’d)

(b) Operating Leases

All leases that do not transfer substantially to the Group all the risks and rewards incidental to
ownership are classified as operating leases and, the leased assets are not recognised on the
statement of financial position of the Group.

Payments made under operating leases are recognised as an expense in the profit and loss on
straight-line method over the term of the leases. Lease incentives received are recognised as a
reduction of rental expense over the lease term on a straight-line method. Contingent rentals are
charged to profit and loss in the reporting period in which they are incurred.

4.10 INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-
in, first-out method and comprises the purchase price, production costs and incidentals incurred in
bringing the inventories to their present location and condition.

Net realisable value represents the estimated selling price less the estimated costs of completion and
the estimated costs necessary to make the sale.

4.11 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, and short-term,
highly liquid investments that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value with original maturity periods of three months or less. For the
purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.

4.12 PROVISIONS

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result
of past events, when it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are
reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where
the effect of the time value of money is material, the provision is the present value of the estimated
expenditure required to settle the obligation. The unwinding of the discount is recognised as interest
expense in profit or loss.

4.13 EMPLOYEE BENEFITS

(a) Short-term Benefits

Wages, salaries, paid annual leave and bonuses are measured on an undiscounted basis and
are recognised in profit or loss in the period in which the associated services are rendered by
employees of the Group.

(b) Defined Contribution Plans

The Group’s contributions to defined contribution plans are recognised in profit or loss in the
period to which they relate. Once the contributions have been paid, the Group has no further
liability in respect of the defined contribution plans.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.14 INCOME TAXES

(a) Current Tax

Current tax assets and liabilities are expected amount of income tax recoverable or payable to the
taxation authorities.

Current taxes are measured using tax rates and tax laws that have been enacted or substantively
enacted at the end of the reporting period and are recognised in profit or loss except to the extent
that the tax relates to items recognised outside profit or loss (either in other comprehensive
income or directly in equity).

(b) Deferred Tax

Deferred tax are recognised using the liability method for all temporary differences other than
those that arise from goodwill or from the initial recognition of an asset or liability in a transaction
which is not a business combination and at the time of the transaction, affects neither accounting
profit nor taxable profit.

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

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and
unused tax credits to the extent that it is probable that future taxable profits will be available
against which the deductible temporary differences, unused tax losses and unused tax credits can
be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting
period and reduced to the extent that it is no longer probable that the related tax benefits will be
realised.

Current and deferred tax items are recognised in correlation to the underlying transactions either in
profit or loss, other comprehensive income or directly in equity. Deferred tax arising from a business
combination is adjusted against goodwill or negative goodwill.

Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes
relate to the same taxable entity (or on different tax entities but they intend to settle current tax assets
and liabilities on a net basis) and the same taxation authority.

4.15 CONTINGENT LIABILITIES

A contingent liability is a possible obligation that arises from past events and whose existence will only
be confirmed by the occurrence of one or more uncertain future events not wholly within the control
of the Group. It can also be a present obligation arising from past events that is not recognised because
it is not probable that an outflow of economic resources will be required or the amount of obligation
cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements, unless
the probability of outflow of economic benefits is remote. When a change in the probability of an outflow
occurs so that the outflow is probable, it will then be recognised as a provision.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.16 OPERATING SEGMENTS

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

4.17 EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share is calculated by dividing the consolidated profit or loss attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the reporting period, adjusted for own shares held.

Diluted earnings per ordinary share is determined by adjusting the consolidated profit or loss
attributable to ordinary shareholders of the Company and the weighted average number of ordinary
shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

4.18 BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalised as part of the cost of those assets, until such time as the assets are
ready for their intended use or sale. The capitalisation of borrowing costs is suspended during extended
periods in which active development is interrupted.

All other borrowing costs are recognised in profit or loss as expenses in the period in which they are
incurred.

4.19 FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price
is directly observable or estimated using a valuation technique. The measurement assumes that the
transaction takes place either in the principal market or in the absence of a principal market, in the most
advantageous market. For non-financial asset, the fair value measurement takes into account a market
participant’s ability to generate economic benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset in its highest and best use.

For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as
follows:-

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability
that the entity can access at the measurement date;

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

Level 3: Inputs are unobservable inputs for the asset or liability.

The transfer of fair value between levels is determined as of the date of the event or change in
circumstances that caused the transfer.

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Notes to the Financial Statements

30 JUNE 2020

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.20 REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue from contracts with customers is measured based on the consideration specified in a contract
with a customer in exchange for transferring goods or services to a customer net of sales and service
tax, returns, rebates and discounts. The Group recognises revenue when (or as) it transfers control over
a product or service to customer. An asset is transferred when (or as) the customer obtains control of
the asset. Depending on the substance of the contract, revenue is recognised when the performance
obligation is satisfied, which may be at a point in time or over time.

Sales of Electronic Products, Components and Test Probes

Revenue from sale of goods is recognised when the Group has transferred control of the goods to
the customer, being when the goods have been delivered to the customer and upon its acceptance.
Following delivery, the customer has full discretion over the manner of distribution and price to sell the
goods, and bears the risks of obsolescence and loss in relation to the goods.

A receivable is recognised when the goods are delivered as this is the point in time that the consideration
is unconditional because only the passage of time is required before the payment is due.

4.21 REVENUE FROM OTHER SOURCES AND OTHER OPERATING INCOME

(a) Interest Income

Interest income is recognised on an accrual basis using the effective interest method.

(b) Dividend Income

Dividend income from investment is recognised when the right to receive dividend payment is
established.

(c) Government Grants

Government grants are recognised at their fair value when there is reasonable assurance that they
will be received and all conditions attached will be met.

Grants that compensate the Group for expenses incurred are recognised in profit or loss on a
systematic basis over the period necessary to match them with the related expenses which they
are intended to compensate for. These grants are presented as a deduction in reporting the related
expenses in profit or loss.

Grants that compensate the Group for the cost of an asset are recognised as deferred grant income
in the statement of financial position and are amortised to profit or loss on a systematic basis over
the expected life of the related asset.

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Notes to the Financial Statements

30 JUNE 2020

5. INVESTMENTS IN SUBSIDIARIES

The Company
2020 2019
RM’000 RM’000

Unquoted shares, at cost 10,901 10,901

Equity loan to a subsidiary 6,900 6,900
17,801 17,801

Equity loan to a subsidiary is unsecured, interest-free and has no fixed terms of repayment.

The details of the subsidiaries are as follows:-

Principal
Place of
Business/ Percentage of Issued
Country of Share Capital
Name of Subsidiaries Incorporation Held by Parent Principal Activities
2020 2019

J Foong Technologies Malaysia 100% 100% Manufacturing and trading of

Sdn. Bhd. electronic product components.

JF Microtechnology Malaysia 100% 100% Design, development, custom

Sdn. Bhd. manufacture and sale of integrated
circuit test sockets, interconnect,
test solutions and equipment for
the semi- conductor and electronic
assembly markets.

JF International Sdn. Bhd. ^ Malaysia 100% - Investment holding

Note:
^ - This subsidiary was not audited during the financial year.

On 3 April 2020, the Company incorporated a wholly-owned subsidiary known as JF International Sdn. Bhd.
with an issued and paid-up capital of RM2 comprising two (2) ordinary shares.

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Notes to the Financial Statements
30 JUNE 2020

6. PROPERTY, PLANT AND EQUIPMENT

1.7.2019
As Initial Balance
previously application As Written as at
The Group reported of MFRS 16 restated Additions Disposals off 30.6.2020
2020 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

Long-term leasehold land 4,601 (4,601) - - - - -

Building 11,997 - 11,997 - - - 11,997
Computer and software 1,306 - 1,306 176 (8) (3) 1,471
Furniture and fittings 545 - 545 5 - (4) 546
Motor vehicles 1,969 (1,095) 874 - (169) - 705
Office equipment 486 - 486 17 (4) (4) 495
Plant and machinery 9,765 (460) 9,305 556 - - 9,861
Renovation 287 - 287 - - - 287
Signboard 34 - 34 - - - 34
Tools and equipment 2,146 - 2,146 136 - - 2,282

33,136 (6,156) 26,980 890 (181) (11) 27,678

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Notes to the Financial Statements

30 JUNE 2020

6. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

1.7.2019
As Initial Balance
previously application As Depreciation Written as at
The Group reported of MFRS 16 restated charges Disposals off 30.6.2020
2020 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation

Long-term leasehold land 543 (543) - - - - -

Building 2,393 - 2,393 240 - - 2,633
Computer and software 1,163 - 1,163 76 (8) (3) 1,228
Furniture and fittings 490 - 490 11 - (4) 497
Motor vehicles 1,389 (537) 852 9 (169) - 692
Office equipment 351 - 351 31 (2) (4) 376
Plant and machinery 3,896 (9) 3,887 589 - - 4,476
Renovation 169 - 169 20 - - 189
Signboard 2 - 2 # - - 2
Tools and equipment 1,358 - 1,358 134 - - 1,492

11,754 (1,089) 10,665 1,110 (179) (11) 11,585

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Notes to the Financial Statements

30 JUNE 2020

6. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Balance Balance
as at as at
The Group 1.7.2019 Disposal 30.6.2020
2020 RM’000 RM’000 RM’000

Accumulated impairment losses

Plant and machinery 759 - 759

Tools and equipment 173 - 173

932 - 932

Balance Balance
as at Written as at
The Group 1.7.2018 Additions off 30.6.2019
2019 RM’000 RM’000 RM’000 RM’000

Cost

Long-term leasehold land 4,601 - - 4,601

Building 11,997 - - 11,997
Computer and software 1,272 61 (27) 1,306
Furniture and fittings 537 8 (#) 545
Motor vehicles 1,862 110 (3) 1,969
Office equipment 486 18 (18) 486
Plant and machinery 8,867 898 - 9,765
Renovation 257 30 - 287
Signboard 34 - - 34
Tools and equipment 1,960 190 (4) 2,146

31,873 1,315 (52) 33,136

Note:
# - Amount below RM1,000

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Notes to the Financial Statements

30 JUNE 2020

6. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Balance Balance
as at Depreciation Written as at
The Group 1.7.2018 charges off 30.6.2019
2019 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation

Long-term leasehold land 497 46 - 543

Building 2,153 240 - 2,393
Computer and software 1,104 86 (27) 1,163
Furniture and fittings 454 36 - 490
Motor vehicles 1,166 225 (2) 1,389
Office equipment 330 38 (17) 351
Plant and machinery 3,331 565 - 3,896
Renovation 145 24 - 169
Signboard 2 # - 2
Tools and equipment 1,237 125 (4) 1,358

10,419 1,385 (50) 11,754

Balance Balance
as at as at
The Group 1.7.2018 Disposal 30.6.2019
2019 RM’000 RM’000 RM’000

Accumulated impairment losses

Plant and machinery 759 - 759

Tools and equipment 173 - 173

932 - 932

Note:
# - Amount below RM1,000

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Notes to the Financial Statements

30 JUNE 2020

6. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Balance Balance
as at as at
The Company 1.7.2019 Addition 30.6.2020
2020 RM’000 RM’000 RM’000

Cost

Computer and software 20 - 20

Furniture and fittings 2 - 2
Signboard 34 - 34

56 - 56

Balance Balance
as at Depreciation as at
The Company 1.7.2019 charges 30.6.2020
2020 RM’000 RM’000 RM’000

Accumulated depreciation

Computer and software 20 - 20

Furniture and fittings 2 - 2
Signboard 2 # 2

24 # 24

Balance Balance
as at as at
The Company 1.7.2018 Addition 30.6.2019
2019 RM’000 RM’000 RM’000

Cost

Computer and software 20 - 20

Furniture and fittings 2 - 2
Signboard 34 - 34

56 - 56

Note:
# - Amount below RM1,000

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Notes to the Financial Statements

30 JUNE 2020

6. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Balance Balance
as at Depreciation as at
The Company 1.7.2018 charges 30.6.2019
2019 RM’000 RM’000 RM’000

Accumulated depreciation

Computer and software 20 - 20

Furniture and fittings 1 1 2
Signboard 2 # 2

23 1 24

Note:
# - Amount below RM1,000

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Carrying amount

Long-term leasehold land - 4,058 - -

Building 9,364 9,604 - -
Computer and software 243 143 - -
Furniture and fittings 49 55 - -
Motor vehicles 13 580 - -
Office equipment 119 135 - -
Plant and machinery 4,626 5,110 - -
Renovation 98 118 - -
Signboard 32 32 32 32
Tools and equipment 617 615 - -

15,161 20,450 32 32

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Notes to the Financial Statements

30 JUNE 2020

6. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(a) In the previous financial year, the net carrying amount of property, plant and equipment of the Group
held under hire-purchase arrangements were as follows:-

The Group
2019
Carrying amount RM’000

Motor vehicles 558

Plant and machinery 451

1,009

(b) The long-term leasehold land and a building of a subsidiary have been charged to a financial institution
for a term loan facility granted to the Group as disclosed in Note 20 to the financial statements.

The Group
2020 2019
RM’000 RM’000

Long-term leasehold land - 4,058

Building 9,364 9,604

9,364 13,662

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Notes to the Financial Statements

30 JUNE 2020

7. RIGHT-OF-USE ASSETS

1.7.2019
As Initial Balance
previously application As as at
The Group reported of MFRS 16 restated Additions Disposal 30.6.2020
2020 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

Long-term leasehold land - 4,601 4,601 - - 4,601

Motor vehicles - 1,095 1,095 625 (182) 1,538
Plant and machinery - 460 460 823 - 1,283

- 6,156 6,156 1,448 (182) 7,422

1.7.2019
As Initial Balance
previously application As Depreciation as at
The Group reported of MFRS 16 restated charges Disposal 30.6.2020
2020 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation

Long-term leasehold land - 543 543 46 - 589

Motor vehicles - 537 537 246 (149) 634
Plant and machinery - 9 9 64 - 73

- 1,089 1,089 356 (149) 1,296

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Notes to the Financial Statements

30 JUNE 2020

7. RIGHT-OF-USE ASSETS (CONT’D)

The Group
2020
RM’000

Analysed by:-
Cost 7,422
Accumulated depreciation (1,296)

6,126

The comparative information is not presented as the Group has applied MFRS 16 using the modified
retrospective approach.

(a) The Group has lease contracts for long-term leasehold land, motor vehicles and plant and machinery
used in its operations. Their lease terms are as below:-

The Group
2020

Long-term leasehold land 99 years

Motor vehicles 5 years
Plant and machinery 3 years

(b) The Group also has leases with lease terms of 12 months or less and leases of office equipment with low
value. The Group has applied the ‘short-term lease’ and ‘lease of low value assets’ recognition exemptions
for these leases.

(c) The Group has several lease contracts that include extension and termination options. These options are
negotiated by management to provide flexibility in managing the portfolio of leased assets and align
with the Group’s business needs. Management exercises judgement in determining whether these
extension and termination options are reasonably certain to be exercised.

(d) The leasehold land of the Group has been pledged to a licensed bank as security for a term loan facility
granted to the Group as disclosed in Note 20 to the financial statements.

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Notes to the Financial Statements

30 JUNE 2020

8. INVENTORIES

The Group
2020 2019
RM’000 RM’000

At cost

Raw materials 1,327 789

Work-in-progress 278 264
Finished goods 1,547 1,372

3,152 2,425
At net realisable value

Raw materials # 1

3,152 2,426

Recognised in profit or loss:-

Inventories recognised as cost of sales 1,054 872
Amount written off 29 63

Note:
# - Amount below RM1,000

9. TRADE AND OTHER RECEIVABLES

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Trade receivables
Third parties 6,047 3,418 - -

Other receivables, deposits

and prepayments
Other receivables 79 - 79 -
Deposits 116 6,462 1 -
Prepayments 222 156 5 12
Staff advances 3 10 - -
Dividend receivable - - 3,700 1,500

420 6,628 3,785 1,512

6,467 10,046 3,785 1,512

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Notes to the Financial Statements

30 JUNE 2020

9. TRADE AND OTHER RECEIVABLES (CONT’D)

Trade receivables are non-interest bearing and the normal credit terms granted by the Group range from 30
to 90 days (2019: 30 to 90 days) from date of invoice. They are recognised at their original invoice amounts
which represent their fair values on initial recognition.

In the previous financial year, included in deposits was an amount of approximately RM6,260,000 being
funds deposited into the trust account of a lawyer in The United States of America in respect of the damages
awarded to the plaintiff as disclosed in Note 35 to the financial statements. The funds had been transferred
from the trust account to the plaintiff during the financial year.

(a) The foreign currency exposure profile of trade and other receivables is as follows:-

The Group
2020 2019
RM’000 RM’000

United States Dollar 4,286 8,825

Chinese Renminbi - 9

(b) Information on financial risks of trade and other receivables are disclosed in Note 34 to the financial
statements.

10. AMOUNT OWING BY A SUBSIDIARY

The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount
owing is to be settled in cash.

11. FIXED DEPOSIT WITH A LICENSED BANK

(a) The fixed deposit with a licensed bank of the Company at the end of the reporting period bore an
effective interest rate of 3.15% (2019: 3.15%) per annum. The fixed deposit has a maturity period of 30 days
(2019: 30 days).

(b) The fixed deposit of the Company at the end of the reporting period is pledged to a licensed bank as
security for banking facilities granted to a subsidiary.

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Notes to the Financial Statements

30 JUNE 2020

12. CASH FLOW INFORMATION

(a) The cash disbursed for the purchase of property, plant and equipment and the additions of right-of-use
assets is as follows:-

The Group
2020 2019
RM’000 RM’000

Property, plant and equipment

Cost of property, plant and equipment purchased (Note 6) 890 1,315

Less: Amount financed through hire purchase (Note 12(b)) - (539)
Less: Other payables – amounts not yet due for payment (468) -

422 776

The Group
2020 2019
RM’000 RM’000

Right-of-use assets

Cost of right-of-use assets acquired (Note 7) 1,448 -

Less: Addition of new lease liabilities (Note 12(b)) (1,273) -

175 -

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Notes to the Financial Statements

30 JUNE 2020

12. CASH FLOW INFORMATION (CONT’D)

(b) The reconciliations of liabilities arising from financing activities are as follows:-

Hire
Purchase Lease Term
Payables Liabilities Loan Total
The Group RM’000 RM’000 RM’000 RM’000

2020

At 1 July 2019:
- as previously reported 908 - 906 1,814
- effects on adoption of MFRS 16 (908) 908 - -

- as restated - 908 906 1,814

Changes in Financing Cash Flows

Repayment of principal - (439) (704) (1,143)

Repayment of interest - (60) (2) (62)

- (499) (706) (1,205)

Non-cash Changes

Acquisition of new leases (Note 12(a)) - 1,273 - 1,273

Interest expenses recognised in profit
or loss - 60 2 62

- 1,333 2 1,335

At 30 June 2020 - 1,742 202 1,944

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J F Te ch n o l o gy Berh a d | Annua l Repor t 2020

Notes to the Financial Statements

30 JUNE 2020

12. CASH FLOW INFORMATION (CONT’D)

(b) The reconciliations of liabilities arising from financing activities are as follows:- (cont’d)

Hire
Purchase Term
Payables Loan Total
The Group RM’000 RM’000 RM’000

2019

At 1 July 2018 555 1,831 2,386

Changes in Financing Cash Flows

Repayment of principal (186) (925) (1,111)

Repayment of interests (24) (21) (45)

(210) (946) (1,156)

Non-cash Changes

New hire purchase (Note 12(a)) 539 - 539

Interest expenses recognised in profit or loss 24 21 45

563 21 584

At 30 June 2019 908 906 1,814

(c) The total cash outflows for leases as a lessee are as follows:-

The Group
2020
RM’000

Payment of short-term leases 79

Payment of low value assets 7
Interest paid on lease liabilities 60
Payment of lease liabilities 439

585

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Notes to the Financial Statements

30 JUNE 2020

12. CASH FLOW INFORMATION (CONT’D)

(d) The cash and cash equivalents comprise the following:-

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Cash in hand 16 8 # #
Bank balances 4,653 4,152 133 110

Cash and bank balances 4,669 4,160 133 110

Short-term funds:
- M
 oney market unit trust funds in
Malaysia 9,099 7,366 3,321 3,260

Cash and cash equivalents 13,768 11,526 3,454 3,370

Money market unit trust funds represent investments in highly liquid money market instruments, which
are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in
value.

(e) The foreign currency exposure profile of cash and cash equivalents is as follows:-

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

United States Dollar 2,604 2,124 - -

(f) Information on financial risks of cash and cash equivalents are disclosed in Note 34 to the financial
statements.

Note:
# - Amount below RM1,000

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Notes to the Financial Statements

30 JUNE 2020

13. SHARE CAPITAL

The Group/The Company

2020 2019
Number Number
Of Shares Of Shares
’000 RM’000 ’000 RM’000

Issued and Fully Paid-Up

Ordinary Shares
At 1 July 2019/2018 210,000 21,253 210,000 21,000
Transfer from share premium account - - - 253

At 30 June 2020/2019 210,000 21,253 210,000 21,253

(i) The holders of ordinary shares are entitled to receive dividends as and when declared by the Company,
and are entitled to one vote per ordinary share at meetings of the Company. The ordinary shares have
no par value.

(ii) In the previous financial year, included in share capital was share premium amounting to approximately
RM253,000 that was utilised in accordance with Section 618(3) of the Companies Act 2016 on or before
30 January 2019 (twenty-four (24) months from the commencement of Section 74 of the Companies Act
2016).

14. RESERVES

In the previous financial year, included in reserves was a share premium of approximately RM253,000 that
was transferred to share capital.

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Notes to the Financial Statements

30 JUNE 2020

15. LEASE LIABILITIES

The Group
2020
RM’000

At 1 July:
- as previously reported -
- initial application of MFRS 16 908
- as restated 908
Additions (Note 12(a)) 1,273
Interest expenses recognised in profit and loss (Note 26) 60
Repayment of principal (439)
Repayment of interest expenses (60)

At 30 June 1,742

Analysed by:-

Current liabilities 630

Non-current liabilities 1,112

1,742

The comparative information is not presented as the Group has applied MFRS 16 using the modified
retrospective approach.

Certain lease liabilities of the Group are secured by the Group’s motor vehicles and plant and machinery
under the hire purchase arrangements as disclosed in Note 7 to the financial statements, with the lease
terms ranging from 2 to 5 years and bear effective interest rates ranging from 2.85% to 5.87% per annum.

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Notes to the Financial Statements

30 JUNE 2020

16. HIRE PURCHASE PAYABLES

The Group
2019
RM’000

Minimum hire purchase payments:

- not later than one (1) year 341
- later than one (1) year but not later than five (5) years 633
Total minimum hire purchase payments 974
Less: Future interest charges (66)

Present value of hire purchase payments 908

Analysed by:-

Current liabilities 305

Non-current liabilities 603

908

(a) The hire purchase payables have been represented as ‘lease liabilities’ as shown in Note 15 to the
financial statements following the application of MFRS 16 by the Group using the modified retrospective
approach.

(b) In the previous financial year, the hire purchase payables of the Group were secured by the Group’s
motor vehicles and plant and machinery under finance leases as disclosed in Note 6(a) to the financial
statements. The hire purchase arrangements were expiring from 1 to 4 years.

(c) In the previous financial year, the hire purchase payables of the Group bore effective interest rates
ranging from 2.85% to 5.87% per annum. The interest rates were fixed at the inception of the hire
purchase arrangement.

17. DEFERRED INCOME

The Group
2020 2019
RM’000 RM’000

Balance as at 1 July 2019/2018 1,637 1,843

Recognised in profit or loss (Note 23) (203) (206)

Balance as at 30 June 2020/2019 1,434 1,637

The Group received government grants in relation to the purchase of property, plant and equipment. The
grants are being amortised over the useful lives of the property, plant and equipment.

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Notes to the Financial Statements

30 JUNE 2020

18. DEFERRED TAX LIABILITIES

(a) The deferred tax liabilities are made up of the following:-

The Group
2020 2019
RM’000 RM’000

Balance as at 1 July 2019/2018 898 967

Recognised in profit or loss (Note 27) 17 (69)

Balance as at 30 June 2020/2019 915 898

(b) The deferred tax (assets)/liabilities are attributable to the following:-

The Group
2020 2019
RM’000 RM’000

Deferred tax assets:-

Unutilised capital allowances (42) -
Unutilised tax losses (71) (63)

(113) (63)

Deferred tax liabilities:-

Accelerated capital allowances over depreciation 1,009 958
Others 19 3

1,028 961

915 898

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Notes to the Financial Statements

30 JUNE 2020

19. TRADE AND OTHER PAYABLES

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Trade payables

Third parties 233 156 - -

Other payables and accruals

Other payables 773 799 2 2
Accruals 1,478 1,851 101 100
Deposits 50 - - -
Provision for damages (Note 35) - 6,260 - -
Sales and service tax payable 10 4 - -

2,311 8,914 103 102

2,544 9,070 103 102

(a) Trade payables are non-interest bearing and the normal credit terms granted to the Group range from
30 to 60 days (2019: 30 to 60 days) from date of invoice.

(b) The foreign currency exposure profile of trade and other payables is as follows:-

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

United States Dollar 106 6,928 - -

(c) Information on financial risks of trade and other payables are disclosed in Note 34 to the financial
statements.

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Notes to the Financial Statements

30 JUNE 2020

20. TERM LOAN

The term loan was drawn down by a subsidiary of the Group. The term loan of the Group at the end of the
reporting period bore an effective interest rate of 3.72% (2019: 4.72%) per annum.

Term loan of the Group is secured by:-

(i) a first party charge over the long-term leasehold land and building of a subsidiary as disclosed in Notes
6 and 7 to the financial statements; and

(ii) a corporate guarantee of the Company.

Information on financial risks of borrowings is disclosed in Note 34 to the financial statements.

21. REVENUE

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Revenue from Contracts with Customers

Sale of electronic products, components and
test probes 26,815 23,025 - -

Revenue from Other Sources

Dividend income from a subsidiary - - 3,700 1,500

22. COST OF SALES

The Group
2020 2019
RM’000 RM’000

Included in cost of sales are:-

Depreciation of property, plant and equipment 722 689

Depreciation of right-of-use assets 65 -
Inventories written off 29 63
Rental of premises - 38
Lease expenses:
- short-term leases 39 -
- low value assets 3 -

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Notes to the Financial Statements

30 JUNE 2020

23. OTHER INCOME

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Included in other income are:-

Amortisation of deferred income 203 206 - -

Gain on disposal of property, plant plant
and equipment 22 - - -
Gain on disposal of right-of-use asset 62 - - -
Interest income from:
- fixed deposit 6 7 6 7
- short-term funds 214 237 111 111
Gain on foreign exchange:
- realised 363 178 - -
- unrealised 83 46 - -

24. ADMINISTRATIVE EXPENSES

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Included in administrative expenses are:-

Auditors’ remuneration:
- audit fee 83 81 32 30
- non audit fee 5 5 5 5
Directors’ remuneration:
- fees 125 125 125 125
- emoluments other than fees 1,857 1,572 28 23
Rental of premises - 44 - -
Lease expenses:
- short-term leases 40 - - -
- low value assets 4 - - -

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Notes to the Financial Statements

30 JUNE 2020

25. OTHER EXPENSES

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Included in other expenses are:-

Depreciation of property, plant and equipment 388 696 # 1
Depreciation of right-of-use assets 291 - - -
Property, plant and equipment written off # 2 - -
Loss on foreign exchange:
- realised 259 260 - #
- unrealised # 36 - -

Note:
# - Amount below RM1,000

26. FINANCE COSTS

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Interest expenses:
- lease liabilities 60 - - -
- hire purchase - 24 - -
- term loan 2 21 - -

62 45 - -

27. INCOME TAX EXPENSE

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Current tax:
- for the financial year 2 247 1 -
- underprovision in the previous financial year 21 12 - -
23 259 1 -

Deferred tax (Note 18):

- relating to origination and reversal of
temporary differences 17 (69) - -

40 190 1 -

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Notes to the Financial Statements

30 JUNE 2020

27. INCOME TAX EXPENSE (CONT’D)

A subsidiary was granted Pioneer Status under the Promotion of Investments Act 1986, for a period of five (5)
years which commenced from 1 April 2006 to 31 March 2011, as an incentive for the production of interconnect
and integrated circuit test socket. The Pioneer Status was extended for another five (5) years which
commenced from 1 April 2011 and expired on 31 March 2016. The subsidiary has been granted an extension of
Pioneer Status commencing from 1 April 2016 to 31 March 2021.

The salient terms of the Pioneer Status are as follows:-

(i) the subsidiary is granted 100% tax exemption on business income;

(ii) unabsorbed pioneer capital allowances can be carried forward to the post pioneer period; and

(iii) unabsorbed pioneer losses can be carried forward to the post pioneer period.

A reconciliation of income tax expense applicable to the profit before taxation at the statutory tax rate to
income tax expense at the effective tax rate of the Group and of the Company is as follows:-

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Profit before tax 8,058 3,206 3,428 1,273

Tax at statutory tax rate of 24% (2019: 24%) 1,934 769 823 305

Tax effects in respect of:-

Non-allowable expenses 433 669 66 55
Non-taxable income (73) (80) (888) (360)
Tax-exempt income from Pioneer Status (2,275) (1,180) - -

19 178 1 -
Underprovision in the previous financial year:
- current tax 21 12 - -

40 190 1 -

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2019: 24%) of the estimated
assessable profit for the financial year.

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Notes to the Financial Statements

30 JUNE 2020

28. EARNINGS PER ORDINARY SHARE

(a) Basic earnings per ordinary share

Basic earnings per ordinary share for the financial year is calculated by dividing the profit after tax
attributable to owners of the Company by the weighted average number of ordinary shares outstanding
during the financial year.

The Group
2020 2019

Earnings for the financial year attributable to equity holders

of the parent (RM’000) 8,018 3,016

Weighted average number of ordinary shares in issue (’000) 210,000 210,000

Basic earnings per ordinary share (sen) 3.82 1.44

(b) Diluted earnings per ordinary share

The diluted earnings per ordinary share is the same as the basic earnings per ordinary share as there is
no dilutive potential ordinary shares outstanding at the end of the reporting period.

29. DIVIDEND

The Group/The Company

2020 2019
RM’000 RM’000

Final single tier dividend of 0.50 sen per ordinary share in respect of the
previous financial year, paid on 26 December 2019 1,050 -

On 25 August 2020, the Company declared a final dividend of 1.50 sen per ordinary share amounting to
RM3,386,244 in respect of the current financial year, paid on 25 September 2020, to shareholders whose names
appeared in the record of depositors on 11 September 2020. The financial statements for the current financial
year do not reflect this final dividend. Such dividend will be accounted for in equity as an appropriation of
retained profits in the financial year ending 30 June 2021.

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Notes to the Financial Statements

30 JUNE 2020

30. EMPLOYEE BENEFITS

The Group The Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Salaries and allowances 6,725 6,414 - -

Defined contribution plan 947 831 - -
Other employee benefits 2,095 1,553 28 23

9,767 8,798 28 23

Included in employee benefits of the Group and of the Company are Directors’ other emoluments amounting
to RM1,857,000 (2019: RM1,572,000) and RM28,000 (2019: RM23,000) respectively.

31. RELATED PARTY DISCLOSURES

(a) Identities of Related Parties

Parties are considered to be related to the Group if the Group or the Company has the ability, directly or
indirectly, to control or jointly control the party or exercise significant influence over the party in making
financial and operating decisions, or vice versa, or where the Group or the Company and the party are
subject to common control.

In addition to the information detailed elsewhere in the financial statements, the Group has related
party relationships with its directors, key management personnel and entities within the same group of
companies.

(b) Related Party Transactions and Balances

Other than those disclosed elsewhere in the financial statements, the Group and the Company also
carried out the following significant transactions with the related parties during the financial year:-

2020 2019
Company RM’000 RM’000

Dividend received/receivable from a subsidiary 3,700 1,500

The abovementioned related party transactions were carried out based on negotiated terms and
conditions that were mutually agreed with respective related parties.

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Notes to the Financial Statements

30 JUNE 2020

31. RELATED PARTY DISCLOSURES (CONT’D)

(c) Compensation of Key Management Personnel

The key management personnel of the Group and of the Company include executive directors, non-
executive directors of the Company and certain members of senior management of the Company.

The key management personnel compensation during the financial year are as follows:-

The Group The Company

2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Executive Directors:
Short-term employee benefits:
- salaries and allowances 1,533 1,309 - -
- defined contribution plan 296 240 - -
- others 57 66 - -

Non-executive Directors:
Short-term employee benefits:
- allowances 28 23 28 23
- fee 125 125 125 125

Other Key Management Personnel:

Short-term employee benefits:
- salaries and allowances 1,172 1,003 - -
- defined contribution plan 144 123 - -
- others 87 75 - -

Total 3,371 2,964 153 148

The estimated monetary value of benefits-in-kind received by the Directors other than in cash from the
Group amounted to RM57,112 (2019: RM65,820).

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Notes to the Financial Statements

30 JUNE 2020

32. SEGMENTAL INFORMATION

(a) Segmental information

The revenue from external customers in Malaysia amounted to approximately RM6,595,000 (2019:
approximately RM6,722,000), and the total revenue from external customers from other countries
amounted to approximately RM20,220,000 (2019: RM16,303,000).

Segment analysis has not been prepared as the Group’s business is focused only in manufacturing
and trading of electronic products, components and test probes, including production, packaging,
marketing and distribution of its products principally in Malaysia, and this forms the focus of the Group’s
internal reporting systems.

The chief operating decision maker reviews the business performance of the Group as a whole and
management monitors the operating results of its business for the purpose of making decisions on
resources allocation and performance assessment.

(b) Geographical information

For the purpose of disclosing geographical information, revenue is based on the geographical location
of customers from which the sales transactions originated.

2020 2019
Revenue from external customers RM’000 RM’000

Malaysia 6,595 6,722

China 9,213 6,250
United States 2,866 2,580
Taiwan 1,667 2,143
Philippines 2,505 1,698
Others 3,969 3,632

Total 26,815 23,025

The Group does not have any non-current assets that are located in countries other than Malaysia.

(c) Information about major customers

Revenue from transactions with major customers who accounted for 10% or more of the Group’s revenue
are as follows:-

Revenue
2020 2019
RM’000 RM’000

Customer A 3,572 4,766

Customer B - 3,003

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Notes to the Financial Statements

30 JUNE 2020

33. FINANCIAL INSTRUMENTS

(a) Capital Management

The primary objective of the Group’s capital management is to ensure that entities of the Group would
be able to continue as going concerns while maximising the return to shareholders through the
optimisation of the debt and equity ratio.

The Group manages its capital structure and make adjustments to it, in light of changes in economic
conditions. In order to maintain or adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares.

There was no change in the Group’s approach to capital management during the financial year.

The Group is not subject to any externally imposed capital requirements.

The Group monitors capital using a gearing ratio, which is net debt divided by equity. The Group
includes within net debt, loans and borrowings, less cash and cash equivalents. Capital represents
equity attributable to the owners of the parent.

The Group manages its capital based on debt-to-equity ratio. The debt-to-equity ratio of the Group at
the end of the reporting period is not presented as its cash and cash equivalents exceeded the total
loans and borrowings.

(b) Classification of Financial Instruments

2020 2019
The The The The
Group Company Group Company
RM’000 RM’000 RM’000 RM’000

Financial Assets

Amortised Cost
Trade and other receivables 6,126 3,779 3,418 1,500
Fixed deposit with a licensed bank 229 229 223 223
Cash and bank balances 4,669 133 4,160 110
Amount owing by a subsidiary - 16 - -
11,024 4,157 7,801 1,833

Mandatorily at Fair Value Through

Profit or Loss
Short-term funds 9,099 3,321 7,366 3,260

Financial Liability

Amortised Cost
Lease liabilities 1,742 - - -
Hire purchase payables - - 908 -
Term loan 202 - 906 -
Trade and other payables 2,484 103 2,806 102
4,428 103 4,620 102

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Notes to the Financial Statements

30 JUNE 2020

33. FINANCIAL INSTRUMENTS (CONT’D)

(c) Gains or Losses Arising from Financial Instruments

2020 2019
The The The The
Group Company Group Company
RM’000 RM’000 RM’000 RM’000

Financial Assets

Amortised Cost
Net gains/(losses) recognised in
profit or loss 206 6 (58) 7

Mandatorily at Fair Value Through

Profit or Loss
Net gains recognised in profit or loss 214 111 237 111

Financial Liability

Amortised Cost
Net (losses)/gain recognised in
profit or loss (75) - 52 -

(d) Fair Value Information

The fair values of the financial asset and financial liabilities of the Group and of the Company which are
maturing within the next 12 months approximated their carrying amounts due to the relatively short-
term maturity of the financial instruments. These fair values are determined by discounting the relevant
cash flows at rates equal to the market rate plus appropriate credit rating, when necessary. The fair
values are included in level 2 of the fair value hierarchy.

Fair Value Fair Value

of Financial of Financial
Instruments Instruments
Carried at Not Carried
Fair Value at Fair Value Total Fair Carrying
Level 2 Level 2 Value Amount
RM’000 RM’000 RM’000 RM’000

The Group

2020
Financial Asset
Short-term funds 9,099 - 9,099 9,099

Financial Liability
Term loan - 202 202 202

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Notes to the Financial Statements

30 JUNE 2020

33. FINANCIAL INSTRUMENTS (CONT’D)

(d) Fair Value Information (cont’d)

Fair Value Fair Value

of Financial of Financial
Instruments Instruments
Carried at Not Carried
Fair Value at Fair Value Total Fair Carrying
Level 2 Level 2 Value Amount
RM’000 RM’000 RM’000 RM’000

The Group

2019
Financial Asset
Short-term funds 7,366 - 7,366 7,366

Financial Liabilities
Hire purchase payables - 901 901 908
Term loan - 906 906 906

The Company

2020
Financial Asset
Short-term funds 3,321 - 3,321 3,321

2019
Financial Asset
Short-term funds 3,260 - 3,260 3,260

The fair values, which are for disclosure purposes, have been determined using the following basis:-

(i) The fair value of the Group’s term loan that carry floating interest rates approximated their carrying
amounts as they are repriced to market rates on or near the reporting date.

(ii) In the previous financial year, the fair value of hire purchase payables were determined by
discounting the relevant cash flows using current market interest rate for similar instrument at
the end of the reporting period. The interest rate used to discount the estimated cash flows was
4.81%.

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Notes to the Financial Statements

30 JUNE 2020

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The financial risk management objective of the Group is to optimise value creation for shareholders whilst
minimising the potential adverse impact arising from fluctuations in foreign currency exchange and interest
rates and the unpredictability of the financial markets.

The Group operates within an established risk management framework and clearly defined guidelines
that are regularly reviewed by the Board of Directors and does not trade in derivative financial instruments.
Financial risk management is carried out through risk review programmes, internal control systems, insurance
programmes and adherence to the Group’s financial risk management policies. The Group is exposed mainly
to credit risk, liquidity and cash flow risk, interest rate risk and foreign currency risk. Information on the
management of the related exposures is detailed below.

(a) Credit risk

Cash deposits and trade receivables may give rise to credit risk which requires the loss to be recognised
if a counterparty fails to perform as contracted. The counterparties on trade receivables are mainly
reputable multinational organisations. It is the policy of the Group to monitor the financial standing of
these counterparties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.

The primary exposure of the Group to credit risk arises through its trade receivables. The trading terms
of the Group with its customers are mainly on credit, except for certain new customers, where deposits
in advance are normally required. The credit period is generally for a period of one (1) month, extending
up to three (3) months for major customers. Each customer has a maximum credit limit and the Group
seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overdue balances
are reviewed regularly by senior management.

The Company provides financial guarantee to financial institutions for credit facilities granted to a
subsidiary. The Company monitors the results of this subsidiary regularly and repayments made by the
subsidiary.

(i) Credit risk concentration profile

The Group determines concentration of credit risk by monitoring its trade receivables on an
ongoing basis.

As at 30 June 2020, other than the amounts owing by one (1) (2019: two (2)) major customers of the
Group constituting 13% (2019: 22%) of total trade receivables of the Group, there is no significant
concentration of credit risk.

(ii) Exposure to credit risk

At the end of the reporting period, the maximum exposure of the Group to credit risk is represented
by the carrying amount of each class of financial assets recognised in the statements of financial
position.

In addition, the Company’s maximum exposure to credit risk also includes corporate guarantees
provided to its subsidiary as disclosed under the ‘Maturity analysis’ of item (b) below, representing
the outstanding banking facilities of the subsidiary as at the end of the reporting period. As at
the end of the reporting period, there was no indication that the subsidiary would default on
repayment.

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Notes to the Financial Statements

30 JUNE 2020

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(a) Credit risk (cont’d)

(iii) Assessment of impairment losses

At each reporting date, the Group assesses whether any of the financial assets at amortised cost
are credit impaired.

The gross carrying amounts of financial assets are written off when there is no reasonable
expectation of recovery (i.e the debtor does not have assets or sources of income to generate
sufficient cash flows to repay the debt) despite the fact that they are still subject to enforcement
activities.

Trade Receivables

The Group applies the simplified approach to measure expected credit losses which using a
lifetime expected loss allowance for all trade receivables.

To measure the expected credit losses, trade receivables have been grouped based on shared
credit risk characteristics and the days past due.

The Group considers any receivables having financial difficulty or with significant balances
outstanding for more than 1 year, are deemed credit impaired.

The expected loss rates are based on the payment profiles of sales over a period of 12 months
from the measurement date and the corresponding historical credit losses experienced within
this period. The historical loss rates are adjusted to reflect current and forward-looking information
on macroeconomic factors affecting the ability of the customer to settle their debts.

The information about the exposure to credit risk and the loss allowances calculated under MFRS
9 for trade receivables is summarised below:-

Gross Collective Carrying

Amount Impairment Amount
The Group RM’000 RM’000 RM’000

2020

Current (not past due) 4,119 - 4,119

1 to 30 days past due 892 - 892
31 to 60 days past due 552 - 552
61 to 90 days past due 350 - 350
121 to 150 days past due 134 - 134

6,047 - 6,047

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Notes to the Financial Statements

30 JUNE 2020

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(a) Credit risk (cont’d)

(iii) Assessment of impairment losses (cont’d)

Trade Receivables (cont’d)

Gross Collective Carrying

Amount Impairment Amount
The Group RM’000 RM’000 RM’000

2019

Current (not past due) 3,224 - 3,224

1 to 30 days past due 185 - 185
31 to 60 past due 9 - 9

3,418 - 3,418

Other Receivables

The Group applies the 3-stage general approach to measure expected credit losses for other
receivables. No expected credit loss is recognised on these balances as it is negligible.

Fixed Deposit with a Licensed Bank, Cash and Bank Balances

The Group considers these banks and financial institutions have low credit risks. Therefore, the
Group is of the view that the loss allowance is immaterial and hence, it is not provided for.

Amount Owing by A Subsidiary

The Company applies the 3-stage general approach to measure expected credit losses for amount
owing by a subsidiary. No expected credit loss is recognised on this balance as it is negligible.

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Notes to the Financial Statements

30 JUNE 2020

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(b) Liquidity and cash flow risk

The Group actively manages its operating cash flows and the availability of funding to ensure all financing,
repayment and funding needs are met. Due to the dynamic nature of the underlying business, the
Group aims at maintaining flexibility in funding by keeping committed credit lines available. In liquidity
risk management strategy, the Group measures and forecasts its cash commitments and maintains a
level of cash and cash equivalents deemed adequate to finance the Group’s activities.

Maturity analysis

The following table below sets out the maturity profile of the financial liabilities at the end of the
reporting period based on contractual undiscounted repayment obligations.

Contractual
Carrying Undiscounted Within 1 to 5
Amount Cash Flows 1 year years
The Group RM’000 RM’000 RM’000 RM’000

2020

Non-derivative Financial Liabilities

Trade and other payables 2,484 2,484 2,484 -
Term loan 202 202 202 -
Lease liabilities 1,742 1,874 704 1,170

Total undiscounted financial liabilities 4,428 4,560 3,390 1,170

2019

Non-derivative Financial Liabilities

Trade and other payables 2,806 2,806 2,806 -
Term loan 906 906 906 -
Hire purchase payables 908 974 341 633

Total undiscounted financial liabilities 4,620 4,686 4,053 633

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Notes to the Financial Statements

30 JUNE 2020

34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(b) Liquidity and cash flow risk (cont’d)

Maturity analysis (cont’d)

Contractual
Undiscounted
Carrying Cash Flows Within
Amount 1 year
The Company RM’000 RM’000 RM’000

2020

Non-derivative Financial Liabilities

Other payables 103 103 103
Financial guarantee contracts in relation to corporate
guarantee given to subsidiaries - 1,257 1,257

Total undiscounted financial liabilities 103 1,360 1,360

2019

Non-derivative Financial Liabilities

Other payables 102 102 102
Financial guarantee contracts in relation to corporate
guarantee given to a subsidiary - 1,350 1,350

Total undiscounted financial liabilities 102 1,452 1,452

The contractual undiscounted cash flows represent the outstanding credit facilities of the subsidiary
at the end of the reporting period. The financial guarantees have not been recognised in the financial
statements since their fair value on initial recognition were not material.

(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the financial instruments of the
Group would fluctuate because of changes in market interest rates.

The exposure of the Group in interest rates risk arises primarily from interest bearing financial asset
and financial liabilities. The Group does not use derivative financial instruments to hedge its risk but
regularly reviews its debt portfolio to enable it to source low interest funding.

Sensitivity analysis for interest rate risk

Any reasonably possible change in the interest rates of floating rate term loans at the end of the reporting
period does not have material impact on the profit after taxation and other comprehensive income of
the Group and of the Company and hence, no sensitivity analysis is presented.

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Notes to the Financial Statements

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34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument would
fluctuate because of changes in foreign exchange rates.

The Group is exposed to foreign currency risk on transactions and balances that are denominated in
currencies other than Ringgit Malaysia. The currency giving rise to this risk is primarily United States
Dollar (‘USD’).

It is not the Group’s policy to enter into foreign exchange contracts in managing its foreign exchange
risk resulting from cash flows on transactions denominated in foreign currency as transactions
denominated in foreign currency are minimal.

Information regarding foreign currency exposure is disclosed in Notes 9(a), 12(e) and 19(b) to the financial
statements.

Sensitivity analysis for foreign currency risk

The following table details the sensitivity analysis to a reasonably possible change in the foreign
currencies at the end of the reporting period, with all other variables held constant:-

The Group
2020 2019
RM’000 RM’000
Profit after Profit after
tax tax

USD/RM - strengthened by 5% +258 +153

- weakened by 5% -258 -153

(e) Equity price risk

The Group does not have any quoted investments and hence is not exposed to equity price risk.

35. MATERIAL LITIGATION

On 20 June 2014, an action for patent infringement (“Compliant”) was filed against JF Technology Berhad,
JF Microtechnology Sdn. Bhd. and J Foong Technologies Sdn. Bhd. (collectively referred as “the Group” and
“Defendant”) by Johnstech International Corp. (“JTI”) in the United States District Court for the Northern
District of California, Case No.:5:14-cv-02864-PSG. In this action, JTI asserts claims of infringement of United
States Patent No. 7,059,866 (“the ‘866 Patent”), entitled “Integrated Circuit Test Contact to Test Apparatus”,
in connection with test contact products sold under the brand name ZIGMA (collectively referred as “the
Complaint”).

On 5 August 2014, the Group had officially accepted the suit following the appointment of a local Intellectual
Property (“IP”) consultant and lawyers in United States, namely Advanz Fidelis Sdn. Bhd. and Nixon Peabody
LLP (“US Lawyers”) respectively.

The amount of claim was not indicated in the Complaint. In view thereof, the Group could not ascertain the
maximum exposure to liabilities in relation to the Complaint.

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Notes to the Financial Statements

30 JUNE 2020

35. MATERIAL LITIGATION (CONT’D)

As United States patent laws do not apply outside the United States, the manufacture, use, sale, and offering
for sale of the ZIGMA products outside the United States are not affected by this case. In addition, JTI has not
to date taken the necessary steps to pursue any judicial or customs restrictions on the Group’s activities in
the United States, there is no current credible threat that this case will disrupt the Group’s activities inside the
United States. The litigation process, including appeals, is expected to last approximately two to three years
or more before the final outcome is known.

On 3 October 2014, the Group had through its US Lawyers filed the motion to dismiss and related papers in
the court. On 12 November 2014, the Court dismissed the Complaint against J Foong Technologies Sdn. Bhd.
for lack of jurisdiction and also dismissed JTI’s claim for inducement of infringement due to insufficiency of
the allegations regarding the specific intent required for inducement. Subsequently, on 15 April 2015, the
Court dismissed the Complaint against JF Technology Berhad for lack of jurisdiction and dismissed without
prejudice JTI’s claim for inducement of infringement.

Both parties had therefore filed their respective amended complaints again. The discovery process is still
ongoing and pending from the Court for further direction. JTI filed their reply claim construction brief and this
closes the briefing on claim construction. Case Management Conference was held on 24 June 2015. The claim
constructions tutorial and hearing were held on 29 September 2015 and 8 October 2015 respectively. Both
parties worked to finalise a selection of expert witness candidates who were available and clear of conflicts.
Mediation between both parties was held about 45-60 days after the 8 October 2015 claim construction
hearing.

Claim constructions tutorial and hearing were completed as per schedule. Deposition on the relevant
witnesses from the Company were conducted and completed in Kuala Lumpur on 5 November 2015 whilst the
deposition on JTI’s witnesses were conducted in United States from 11 to 13 November 2015. On 8 August 2016,
the Court has granted summary judgement to Johnstech in regards of the counter claims on defamation.

On 12 August 2016, the Court ordered summary judgement on its finding that there is no literal infringement
of the said patent. However, the Court refused to order summary judgement on the issue of infringement
under the doctrine of equivalents and on inducement, and it also deferred its ruling on willfulness.

The Court ordered that these issues go to trial. The trial was heard from 19 September 2016 to 27 September
2016. On 27 September 2016, the jury returned a verdict that all 4 claims of the JTI’866 Patent were infringed
by Zigma product. The jury awarded damages of USD636,807 against Defendant. The Group was informed
by its attorneys in the United States that the jury verdicts regarding wilfulness and obviousness are advisory
only, as these are issues the Court will decide.

The presiding judge, Judge Donato, indicated that he would not enter a final judgement in the case until
after all post-trial motions are resolved and ordered JTI and the Defendant to meet and confer on a proposed
schedule for such motions. The proposed schedule was filed by 4 October 2016. It was anticipated that it may
be early 2017 when the post-trial are decided and final judgement is entered. The damages award will not be
required to be paid until final judgement is entered, at the soonest.

Judge Donato had ordered parties to participate in another mandatory mediation before the hearing on the
post-trial motions. Both parties attended the mediation hearing before Judge Conley on 14 November 2016
and there was no final judgement entered.

Judge Donato had another mandatory mediation with both parties on 18 May 2017 and there was no final
judgement entered yet. He had ordered both the Plantiff and Defendant to submit and exchange the post-
trial motions and responses on the briefings to Judge Donato latest by 13 July 2017.

The post-trial motions were heard on 26 April 2018, and on 19 June 2018, the motion was dismissed by the
Court, and the jury verdict finding infringement against the Defendant was sustained.

PG. 118
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Notes to the Financial Statements

30 JUNE 2020

35. MATERIAL LITIGATION (CONT’D)

In its judgement on 19 June 2018, the Court also made an order permanently enjoining the Defendant from
infringing or inducing the infringement of the United States Patent No. 7,059,866, (“US’866 Patent”) until the
expiration of the patent, by:-

1. Making, using, offering to sell or importing into the United States any product that infringes the US’s
Patent, including the Zigma product, and those no more colorably different from the Zigma product
(“Enjoined Products”); and

2. Assisting others in advertising, marketing, promoting, licensing, designing, making, using, offering to
sell, importing into the United States, any Enjoined Products.

In its order, the Court also retains its jurisdiction to enforce, modify, extend or dissolve this injunction and
to decide all disputes about whether a specific product or feature is more than colorably different from the
Zigma product.

The Court had made an order dated 6 August 2018 awarding JTI damages in the sum of USD1,514,429 and
refusing JTI’s motion for attorney’s fees to be paid to JTI.

The Defendant had given instructions to its US counsel to appeal against the judgement of the Court and, if
necessary, to apply for a stay of enforcement of the judgement.

The Group had made a provision of damages for the amount of USD1,514,429, equivalent to RM6,114,507 as
at 30 June 2018. Subsequently, the Group had transferred the sum of money to the US lawyer, Kilpatrick
Townsend & Stockton LLP.

The Defendant’s US lawyer had filed an appellant’s response and reply brief to the United States Court of
Appeals for the Federal Circuit on 11 January 2019 and had an oral argument on 10 July 2019.

The United States Court of Appeals for the Federal Circuit had issued an order affirming the judgement in
all respects of the District Court’s decision on 19 June 2018 and dismissing the Defendant’s appeal and JTI’s
cross-appeal on 16 July 2019. With this order, the case had now officially come to an end.

On 3 December 2019, the District Judge granted JTI’s Motion for pre-judgement and post-judgement interest
of USD175,212, equivalent to RM775,786.

The Group had made a provision of the interest as at 30 September 2019 and subsequently the Group made
payment in December 2019.

36. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

The outbreak of Coronavirus Disease 2019 (COVID-19) in early 2020 has affected the business and economic
environments of the Group. The government and various private corporations have taken different measures
to prevent the spread of the virus such as travel bans, quarantines, closures of non-essential services, social
distancing and home quarantine requirements which impacted consumers’ spending pattern and the
Group’s operation directly or indirectly. Given the widespread nature of the outbreak and the unpredictability
of future development of COVID-19, the Group is unable to quantify the potential impact COVID-19 pandemic
on the Group’s 2021 financial statements reliably at this juncture.

PG. 119
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Notes to the Financial Statements

30 JUNE 2020

37. SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD

(a) On 22 July 2020, the Company had incorporated a wholly-owned subsidiary known as JF Testsense Sdn.
Bhd. (“JFT”) with an issued and paid-up share capital of RM2 comprising two (2) ordinary shares.

Subsequently, JFT increased its issued and paid-up share capital from two (2) ordinary shares to
approximately RM6,000,000 by allotment of 5,999,998 ordinary shares on 7 September 2020. The
Company subscribed for the additional equity in JFT to retain its 100% equity interest.

(b) On 11 August 2020, JF International Sdn. Bhd., a wholly-owned subsidiary of the Company, had
incorporated a wholly-owned subsidiary known as JFH Technology (Kunshan) Co., Ltd. with a registered
capital of USD500,000.

(c) On 2 September 2020, the Company increased its issued and paid-up share capital from approximately
RM21,253,000 to approximately RM71,651,000 by issuance of 15,749,900 new ordinary shares at RM3.20
each for a cash consideration of approximately RM50,398,000.

The new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of the
Company.

38. INITIAL APPLICATION OF MFRS 16

The Group has adopted MFRS 16 retrospectively from 1 July 2019 and has not restated the comparative
information as permitted under the specific transition provisions in the standard. The Group has applied MFRS
16 only to contracts that were previously identified as leases under MFRS 117 ‘Leases’ and IC Interpretation
4 ‘Determining Whether an Arrangement Contains a Lease’. Therefore, MFRS 16 has been applied only to
contracts entered into or changed on or after 1 July 2019.

At 1 July 2019, for leases that were classified as finance leases, the Group has recognised the carrying amount
of the leased assets as the carrying amount of the right-of-use assets and the lease liabilities as at the date of
initial application.

As a result, the Group did not make any adjustments to its retained profits upon the transition to MFRS 16 at
1 July 2019 other than the reclassification of certain balances in the Group’s statement of financial position on
that date.

PG. 120
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Notes to the Financial Statements

30 JUNE 2020

39. COMPARATIVE FIGURES

The following figures have been reclassified to conform with the presentation of the current financial year:-

As
Previously As
Reported Restated
RM’000 RM’000

The Group
Consolidated Statements of Financial Position (Extract):-

Non-current Liabilities
Borrowings 603 -
Hire purchase payables - 603

Current Liabilities
Borrowings 1,211 -
Hire purchase payables - 305
Term loan - 906

PG. 121
J F Te ch n o l o gy Berh a d | Annua l Repor t 2020

List of
Properties
Net book Age of
Name of registered owner: Description/ Year of value Area building Date of
No. Lot. No. /Postal address Existing use Tenure Expiry RM'000 (sq. ft.) (Year) revaluation

1. JF Microtechnology 2-storey office 99 years 2106 13,375 92,783 11 18

Sdn. Bhd. cum factory/ Leasehold September
H.S. (D) 241029, PT No. Corporate (86 years)* 2007 §
PT9918, Headquarters
Mukim of Pekan Baru & factory
Sungai Buloh,
District of Petaling, State of
Selangor

Bearing postal address:

Lot No. 6, Jalan Teknologi
3/6, Taman Sains Selangor
1, Kota Damansara, 47810
Petaling Jaya, Selangor
Darul Ehsan

Notes:
* Balance of leasehold tenure
§ Date of acquisition

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Analysis of
Shareholdings
AS AT 18 SEPTEMBER 2020

Total Number of Issued Shares : 225,749,585 Ordinary Shares

Class of Shares : Ordinary shares
Number of Shareholders : 2,871
Voting Rights : One (1) vote per ordinary share on a poll

DISTRIBUTION OF SHAREHOLDINGS

No. of No. of
Size of Holdings Shareholders % Shares %
1-99 133 4.63 5,281 0.00
100-1,000 762 26.54 510,245 0.23
1,001-10,000 1,392 48.48 5,987,229 2.65
10,001-100,000 453 15.78 15,635,312 6.93
100,001-11,287,478 (*) 128 4.46 82,273,684 36.44
11,287,479 and above (**) 3 0.11 121,337,834 53.75
Total 2,871 100.00 225,749,585 100.00

Remark: * Less than 5% of issued shares

** 5% and above of issued shares

SUBSTANTIAL SHAREHOLDERS

Direct Indirect
No. of No. of
No. Name Shares % Shares %
1. Dato’ Foong Wei Kuong 104,965,522 46.50 - -
2. Datin Wang Mei Ling 22,425,645 9.93 - -

DIRECTORS’ SHAREHOLDINGS

No. of Shares
No. Name Direct (%) Indirect (%)
1. Dato’ Foong Wei Kuong 104,965,522 46.50 - -
2. Datin Wang Mei Ling 22,425,645 9.93 - -
3. Datuk Phang Ah Tong 76,666 0.03 - -
4. Goh Kok Sing 125,000 0.06 - -
5. Dato’ Philip Chan Hon Keong 308,333 0.14 - -
6. Koay Kah Ee 500,000 0.22 - -
7. Lew Jin Aun 1,666,666 0.74 333,333* 0.15

Note:-
* Disclosure pursuant to Section 59 of the Companies Act 2016 in regards to his spouse’s shareholdings in the
Company.

CHIEF EXECUTIVE’S SHAREHOLDING

No. of Shares
No. Name Direct (%) Indirect (%)
1. Dillion A/L Atma Singh 75,500 0.03 - -

PG. 123
J F Te ch n o l o gy Berh a d | Annua l Repor t 2020

Analysis of Shareholdings
AS AT 18 SEPTEMBER 2020

TOP THIRTY SECURITIES ACCOUNT HOLDERS

No. Name Shareholdings %

1. Dato’ Foong Wei Kuong 82,819,823 36.69
2. Datin Wang Mei Ling 22,425,645 9.93
3. AMSEC Nominees (Tempatan) Sdn. Bhd. 16,092,366 7.13
Pledged Securities Account – Ambank (M) Berhad for Dato’ Foong
Wei Kuong (Smart)
4. Sim Ah Yoong 7,738,333 3.43
5. Kok Kean Loon 7,461,366 3.31
6. Maybank Nominees (Tempatan) Sdn. Bhd. 6,053,333 2.68
Pledged Securities Account for Dato’ Foong Wei Kuong
7. Chong Toh Wee 3,821,000 1.69
8. Universal Trustee (Malaysia) Berhad 2,918,600 1.29
- TA Dynamic Absolute Mandate
9. Amanahraya Trustees Berhad 2,723,900 1.21
- PMB Shariah Aggressive Fund
10. Low Wan Choon 2,294,433 1.02
11. HSBC Nominees (Asing) Sdn. Bhd. 2,266,500 1.00
Exempt An for Credit Suisse (SG BR-TST-ASING)
12. Lew Jin Aun 1,666,666 0.74
13. Oon Soon Keat 1,553,300 0.69
14. Tam Juat Hong 1,428,800 0.63
15. AllianceGroup Nominees (Tempatan) Sdn. Bhd. 1,400,000 0.62
Pledged Securities Account for Chew Chi Hong (8080970)
16. Affin Hwang Nominees (Tempatan) Sdn. Bhd. 1,309,133 0.58
Pledged Securities Account for Kok Kean Loon
17. SRM Integration (Malaysia) Sdn. Bhd. 1,250,500 0.55
18. Universal Trustee (Malaysia) Berhad 1,128,733 0.50
- TA Islamic Fund
19. TASEC Nominees (Tempatan) Sdn. Bhd. 1,125,834 0.50
Exempt An for TA Investment Management Berhad (Clients)
20. Maybank Nominees (Tempatan) Sdn. Bhd. 1,027,966 0.46
- Lim Yoke Cho
21. CGS-CIMB Nominees (Tempatan) Sdn. Bhd. 1,000,000 0.44
Pledged Securities Account for Chai Lee Lee (MY2254)
22. Kenanga Nominees (Tempatan) Sdn. Bhd. 950,900 0.42
- Hiew Kem Chon (PCS)
23. T.O.Lim Holdings Sdn. Bhd. 946,000 0.42
24. Chok Kwok Zhi 891,833 0.40
25. Chow Hong Lit 880,000 0.39
26. CGS-CIMB Nominees (Tempatan) Sdn. Bhd. 830,000 0.37
Pledged Securities Account for Ng Kok Weng (MY2166)
27. Sureshraj A/L Krishnan 820,000 0.36
28. Affin Hwang Nominees (Asing) Sdn. Bhd. 744,533 0.33
Exempt An for DBS Vickers Securities (Singapore) Pte. Ltd. (Clients)
29. Hor Lee Chen 742,000 0.33
30. I.S.E.T Engineering Sdn. Bhd. 700,000 0.31

PG. 124
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Notice of
Annual General Meeting
NOTICE IS HEREBY GIVEN that the Fourteenth Annual General Meeting of the Company shall be held at Green 3,
Golf Wing, Tropicana Golf & Country Resort Berhad, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410
Petaling Jaya, Selangor Darul Ehsan on Thursday, 3 December 2020 at 9:00 a.m. for the following purposes:

AG EN DA

1. To receive the Audited Financial Statements for the financial year ended 30 June (Please refer
2020 together with the Reports of the Directors and the Auditors thereon. Note 1)

2. To approve the payment of Directors’ fees amounting to RM124,800.00 for the Resolution 1
financial year ended 30 June 2020.

3. To approve an amount of up to RM30,000.00 as benefits payable to the Non- Resolution 2

Executive Directors from 4 December 2020 until the next Annual General Meeting
of the Company to be held in 2021.

4. To re-elect the following Directors who shall retire pursuant to Clause 117 of the
Company’s Constitution and being eligible, have offered themselves for re-election:

(a) Dato’ Foong Wei Kuong Resolution 3

(b) Dato’ Philip Chan Hon Keong Resolution 4

5. To re-appoint Messrs. Crowe Malaysia PLT as Auditors of the Company until the Resolution 5
conclusion of the next Annual General Meeting and to authorise the Directors to fix
their remuneration.

6. As Special Business:

To consider and, if thought fit, with or without any modifications, to pass the
following resolutions as ordinary resolutions:

(a) ORDINARY RESOLUTION NO. 1 Resolution 6

- AUTHORITY TO ISSUE SHARES PURSUANT TO THE COMPANIES ACT 2016

“THAT subject always to the Companies Act 2016 (“the Act”), the Constitution of the
Company and the approvals from Bursa Malaysia Securities Berhad (“Bursa Malaysia
Securities”) and any other relevant governmental and/or regulatory authorities, the
Directors be and are hereby empowered pursuant to the Act, to issue and allot
shares in the capital of the Company from time to time at such price and upon such
terms and conditions, for such purposes and to such person or persons whomsoever
the Directors may in their absolute discretion deem fit provided always that the
aggregate number of shares issued pursuant to this resolution does not exceed
twenty per centum (20%) of the total number of issued shares of the Company
for the time being as empowered by Bursa Malaysia Securities pursuant to Bursa
Malaysia Berhad’s letter dated 16 April 2020 to grant additional temporary relief
measures to listed issuers; AND THAT the Directors be and are also empowered to
obtain the approval for the listing of and quotation for the additional shares so issued
on Bursa Malaysia Securities; AND FURTHER 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.”

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Notice of Annual General Meeting

6. As Special Business: (cont’d)

(b) ORDINARY RESOLUTION NO. 2 Resolution 7

- R
 ETENTION OF MR. LEW JIN AUN AS INDEPENDENT NON-EXECUTIVE
DIRECTOR

“THAT approval be and is hereby given to retain Mr. Lew Jin Aun as an Independent
Non-Executive Director of the Company until the conclusion of the next Annual
General Meeting, who has served as an Independent Non-Executive Director of the
Company for a cumulative term of more than nine (9) years in accordance with the
Malaysian Code on Corporate Governance.”

(c) ORDINARY RESOLUTION NO. 3 Resolution 8

- R
 ETENTION OF DATO’ PHILIP CHAN HON KEONG AS INDEPENDENT NON-
EXECUTIVE DIRECTOR

“THAT subject to the passing of Resolution 4, approval be and is hereby given to

retain Dato’ Philip Chan Hon Keong as an Independent Non-Executive Director of
the Company until the conclusion of the next Annual General Meeting, who has
served as an Independent Non-Executive Director of the Company for a cumulative
term of more than twelve (12) years in accordance with the Malaysian Code on
Corporate Governance.”

(d) ORDINARY RESOLUTION NO. 4 Resolution 9

- R
 ETENTION OF MR. KOAY KAH EE AS INDEPENDENT NON-EXECUTIVE
DIRECTOR

“THAT approval be and is hereby given to retain Mr. Koay Kah Ee as an Independent
Non-Executive Director of the Company until the conclusion of the next Annual
General Meeting, who has served as an Independent Non-Executive Director of the
Company for a cumulative term of more than twelve (12) years in accordance with
the Malaysian Code on Corporate Governance.”

7. To transact any other ordinary business for which due notice have been given.

By Order of the Board

CHUA SIEW CHUAN (SSM PC NO. 201908002648) (MAICSA 0777689)

CHIN MUN YEE (SSM PC NO. 201908002785) (MAICSA 7019243)
Company Secretaries

Kuala Lumpur
15 October 2020

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Notice of Annual General Meeting

Explanatory Notes:

1) Approval for the payment of benefits payable to the Non-Executive Directors

The Directors’ benefits comprise the meeting allowances payable to the Non-Executive Directors. In
determining the estimated total Directors’ benefits, the size of the Board of Directors (“Board”) and Board
Committees and the number of meetings estimated to be held were taken into consideration.

2) Authority to issue shares pursuant to the Companies Act 2016 (“Act”)

The proposed adoption of the Ordinary Resolution No. 1 is for the purpose of granting a renewed general
mandate and empowering the Directors of the Company, pursuant to the Act, to issue and allot new shares
in the Company from time to time (“General Mandate”) provided that the aggregate number of shares issued
pursuant to the General Mandate does not exceed twenty per centum (20%) of the total number of issued
shares of the Company for the time being. The General Mandate, unless revoked or varied by the Company in
a general meeting, will expire at the conclusion of the next Annual General Meeting (“AGM’) of the Company.

As at the date of this Notice, the Company had issued 15,749,900 new ordinary shares at RM3.20 per share,
representing 7.5% of the total number of issued shares of the Company pursuant to the mandate granted
to the Directors at the Thirteenth AGM held on 5 December 2019 (“Private Placement”). Details of the total
proceeds raised from the Private Placement and utilisation are disclosed under Additional Compliance
Information of the Annual Report.

As part of the initiative from Bursa Malaysia Securities Berhad (“Bursa Malaysia Securities”) to aid and facilitate
listed issuers in sustaining their business or easing their compliance with Bursa Malaysia Securities’ rules,
amid the unprecedented uncertainty surrounding the recovery of the COVID-19 outbreak and Movement
Control Order imposed by the Government, Bursa Malaysia Securities had vide Bursa Malaysia Berhad’s letter
dated 16 April 2020 granted several additional relief measures to listed corporations, amongst others, listed
corporations are allowed to seek a higher general mandate under Rule 6.04 of Bursa Malaysia Securities ACE
Market Listing Requirements (“ACE LR”) of not more than 20% of the total number of issued shares (excluding
treasury shares) for issue of new securities (“20% General Mandate”).

This 20% General Mandate may be utilised by listed corporations to issue new securities until 31 December
2021 and thereafter, the 10% general mandate will be reinstated.

After having considered all aspects of the 20% General Mandate, the Board is of the opinion that the seeking
of the 20% General Mandate would be in the best interests of the Company and its shareholders, on the
following basis:

• the 20% General Mandate would provide the Company and its subsidiaries with financial flexibility to
raise capital expeditiously for its operations, future expansion and business development;
• the 20% General Mandate would allow the Company to raise equity capital promptly rather than the
more costly and time-consuming process by obtaining shareholders’ approval in a general meeting
should the need for capital arise;
• other financing alternatives such as debt financing may incur interest burden to the Company and its
subsidiaries; and
• the 20% General Mandate provides the Company with the capability to capture any capital raising and/
or prospective investment opportunities when they are identified.

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Notice of Annual General Meeting

Explanatory Notes: (cont’d)

3) Retention as Independent Non-Executive Directors (“Independent Directors”) of the Company pursuant

to the Malaysian Code on Corporate Governance (“MCCG”)

a) The proposed adoption of the Ordinary Resolution No. 2 is to retain Mr. Lew Jin Aun (“Mr. Lew”) as an
Independent Director of the Company.

Mr. Lew was appointed as an Independent Director of the Company on 2 January 2009, and has,
therefore served as Independent Director for a cumulative term of more than nine (9) years as at the
date of this Notice. The Nomination Committee of the Company has assessed the independence of all
Independent Directors including Mr. Lew and recommended to retain him as an Independent Director
of the Company. The Board endorsed the Nomination Committee’s recommendation and is of the view
that his retention as Independent Director of the Company is in the best interest of the Company.

b) The proposed adoption of the Ordinary Resolution No. 3 is to retain Dato’ Philip Chan Hon Keong (“Dato’
Philip”) as an Independent Director of the Company.

Dato’ Philip was appointed as an Independent Director of the Company on 18 January 2008, and has,
therefore served as Independent Director for a cumulative term of more than twelve (12) years as at the
date of this Notice. The Nomination Committee of the Company has assessed the independence of
all Independent Directors including Dato’ Philip and recommended to retain him as an Independent
Director of the Company. The Board endorsed the Nomination Committee’s recommendation and is
of the view that his retention as Independent Director of the Company is in the best interest of the
Company.

c) The proposed adoption of the Ordinary Resolution No. 4 is to retain Mr. Koay Kah Ee (“Mr. Koay”) as an
Independent Non-Executive Director of the Company.

Mr. Koay was appointed as an Independent Director of the Company on 18 January 2008, and has,
therefore served as Independent Director for a cumulative term of more than twelve (12) years as at the
date of this Notice. The Nomination Committee of the Company has assessed the independence of all
Independent Directors including Mr. Koay and recommended to retain him as an Independent Director
of the Company. The Board endorsed the Nomination Committee’s recommendation and is of the view
that his retention as Independent Director of the Company is in the best interest of the Company.

Notes:

1. The Agenda item No. 1 is meant for discussion only. The provisions of Section 340(1)(a) of the Act do not require
a formal approval of the shareholders for the Audited Financial Statements for the financial year ended 30
June 2020. Hence, this Agenda item is not put forward for voting.

2. In respect of deposited securities, only members whose names appear in the Record of Depositors on 26
November 2020 (General Meeting Record of Depositors) shall be eligible to attend the Meeting.

3. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies
to attend, participate, speak and vote in his stead. Where the member appoints two (2) proxies in relation to
a Meeting, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be
represented by each proxy.

4. A proxy need not be a member of the Company and a member may appoint any person to be his proxy. There
shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting
shall have the same rights as the member to attend, participate, speak and vote at the Meeting.

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the
Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit
to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus
account it holds.

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Notice of Annual General Meeting

Notes: (cont’d)

6. The instrument appointing a proxy shall be in writing under the hand of the member or of his attorney duly
authorised in writing or, if the member is a corporation, under its common seal or under the hand of an
officer or attorney duly authorised.

7. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is
signed or a notary certified copy of that power or authority, shall be deposited at the Registered Office of
the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights,
50490 Kuala Lumpur, Wilayah Persekutuan not less than forty-eight (48) hours before the time appointed for
holding the Meeting or adjourned Meeting.

Public Health Preventive Measures

a) In light of the recent COVID-19 outbreak pandemic, we would appreciate the attendees take all necessary
precautions and preventive as directed by our Ministry of Health Malaysia before attending the Meeting.

b) If you are unwell with sore throat, fever, cough, loss of smell/taste or breathing difficulty, your attendance in
person at the Meeting will be denied. You are hereby strongly advised and encouraged to submit your Form
of Proxy prior to the Fourteenth AGM of the Company.

c) To safeguard the health and safety of shareholders, proxies and invited guests who may be attending the
Fourteenth AGM in person, the Company will also implement the following precautionary measures for the
Fourteenth AGM:

• attendees will have to go through a compulsory body temperature screening and will be required to
provide his/her health declaration during the registration process, specifically to facilitate the Company
in preventing any potential spread of COVID-19;
• attendees with a body temperature of above 37.5°C or experiencing any symptoms of being unwell as
stated above, will be prohibited from entering the Meeting Room and are highly encouraged to proceed
with medical screening immediately; and
• the attendees who have a travel history to certain countries/regions in the specified period preceding
the Fourteenth AGM, as announced by the Ministry of Health, must not attend the Fourteenth AGM
in person, and instead are strongly encouraged to appoint Chairman of the Meeting as their proxy to
attend and vote on their behalf.

d) The attendees are strongly advised:

• to wear face mask before attending and throughout the Meeting; and
• to maintain a good personal hygiene and use hand sanitiser whenever required.

e) You may consider appointing Chairman of the Meeting as your proxy to attend and vote on your behalf at the
forthcoming Fourteenth AGM of the Company.

PG. 129
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 Form of Proxy
JF TECHNOLOGY BERHAD No. of shares held CDS Account No.
[Registration No. 200601027925 (747681-H)]

Telephone No. Email address

*I/We (NRIC/Passport No. /Company No.

of

being a *member/members of JF TECHNOLOGY BERHAD, hereby appoint

(1) Name of Proxy : NRIC/Passpost No. :

Address :
Email Address : Tel No. :

(2) Name of Proxy : NRIC/Passpost No. :

Address :
Email Address : Tel No. :

or failing *him/her, *the Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf, at the
Fourteenth Annual General Meeting of the Company, to be held at Greens 3, Golf Wing, Tropicana Golf & Country Resort
Berhad, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Thursday,
3 December 2020 at 9:00 a.m., or at any adjournment thereof.

Please indicate with an “X” in the spaces provided below as to how you wish your votes to be cast. In the absence of
specific directions, your proxy will vote or abstain at his/her discretion.

1. To receive the Audited Financial Statements for the financial year ended 30 June 2020 together with the Reports of
the Directors and the Auditors thereon.
No. Resolutions For Against
2. To approve the payment of Directors’ fees amounting to RM124,800.00 for the financial year
ended 30 June 2020. (Resolution 1)
3. To approve an amount of up to RM30,000.00 as benefits payable to the Non-Executive Directors
from 4 December 2020 until the next Annual General Meeting of the Company to be held in
2021. (Resolution 2)
4(a). To re-elect Dato’ Foong Wei Kuong, who shall retire pursuant to Clause 117 of the Company’s
Constitution and being eligible, has offered himself for re-election. (Resolution 3)
4(b). To re-elect Dato’ Philip Chan Hon Keong, who shall retire pursuant to Clause 117 of the
Company’s Constitution and being eligible, has offered himself for re-election. (Resolution 4)
5. To re-appoint Messrs. Crowe Malaysia PLT as Auditors of the Company until the conclusion
of the next Annual General Meeting and to authorise the Directors to fix their remuneration.
(Resolution 5)
As Special Business:
6(a). Authority to issue shares pursuant to the Companies Act 2016. (Resolution 6)
6(b). Retention of Mr. Lew Jin Aun as an Independent Non-Executive Director. (Resolution 7)
6(c). Retention of Dato’ Philip Chan Hon Keong as an Independent Non-Executive Director.
(Resolution 8)
6(d). Retention of Mr. Koay Kah Ee as an Independent Non-Executive Director. (Resolution 9)

Dated this day of 2020 For appointment of two proxies, percentage of

shareholdings to be represented by the proxies:
No. of Percentage
shares (%)
Signature/Seal Proxy 1

* Strike out whichever is not applicable Proxy 2

Total 100
 Fold this flap for sealing

Notes:
1. The Agenda item No. 1 is meant for discussion only. The provision of Section 340(1)(a) of the Act do not require a formal approval of the
shareholders for the Audited Financial Statements for the financial year ended 30 June 2020. Hence, this Agenda item is not put forward for
voting.
2. In respect of deposited securities, only members whose names appear in the Record of Depositors on 26 November 2020 (General Meeting
Record of Depositors) shall be eligible to attend the Meeting.
3. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend, participate,
speak and vote in his stead. Where the member appoints two (2) proxies in relation to a Meeting, the appointments shall be invalid unless
he specifies the proportions of his shareholdings to be represented by each proxy.
4. A proxy need not be a member of the Company and a member may appoint any person to be his proxy. There shall be no restriction as to
the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to attend,
participate, speak and vote at the Meeting.
5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial
owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee
may appoint in respect of each omnibus account it holds.
6. The instrument appointing a proxy shall be in writing under the hand of the member or of his attorney duly authorised in writing or, if the
member is a corporation, under its common seal or under the hand of an officer or attorney duly authorised.
7. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notary certified copy
of that power or authority, shall be deposited at the Registered Office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat
Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than forty-eight (48) hours before the time
appointed for holding the Meeting or adjourned Meeting.

Then fold here

AFFIX
STAMP

The Company Secretaries

JF TECHNOLOGY BERHAD
[Registration No. 200601027925 (747681-H)]

Level 7, Menara Milenium

Jalan Damanlela, Pusat Bandar Damansara
Damansara Heights
50490 Kuala Lumpur
Wilayah Persekutuan

1st fold here

JF TECHNOLOGY BERHAD
Registration No. 200601027925 (747681-H)

Lot 6, Jalan Teknologi 3/6

Taman Sains Selangor 1
Kota Damansara
47810 Petaling Jaya
Selangor, Malaysia.
Tel: 603-6140 8668
Fax: 603-6140 8998

www.jftech.com.my