Annual Report 2012

Contents
Corporate Profile
17 Audit Committee Report
Five-Years Financial Summary
26 Statement On Risk Management and
Financial Highlights
19 Corporate Governance Statement
Corporate Structure
Board Of Directors
96 List Of Properties
6
8
Corporate Information
Profile Of Directors
10 Executive Chairmans Statement

15 Corporate Social Responsibility
Internal Control
28 Financial Statements
98 Analysis Of Shareholdings
101 Notice Of Sixteenth

Annual General Meeting

Form Of Proxy
Corporate Profile
upermax Corporation Berhad is a leading international manufacturer,

distributor and marketer of high quality medical gloves. Established in
1987, its founders started a trading business to distribute latex gloves
and eventually ventured into manufacturing of latex gloves in 1989. Today,
the Supermax Group has nine factories manufacturing various types of latex
gloves, which are exported to over 155 countries around the world, such as the
United States of America, European Union, Middle East, Asia and South Pacific
countries.
The Group has received numerous accolades and awards over the years, including
The Edge Billion Ringgit Clubs inaugural Company of the Year Award in 2010,
Export Excellence & Brand Excellence in the Industry Excellence Awards in
2009 and 2008, Special Award & 4th placing in the prestigious Deloittes Top 50
Enterprise Award Malaysia in 2006, Export Excellence & Product Excellence
in the Industry Excellence Awards in 2003, the National Productivity Council
Award in 1999 and Andersen Consulting Top 50 Enterprise in Malaysia in
1998. One of the founders, Dato Seri Stanley Thai himself, also won 2 very
prestigious awards in 2010, i.e. Malaysias Ernst & Young Entrepreneur of The
Year Award 2010 and Malaysias CEO of The Year Award 2010.
Supermax is well recognized for its commitment to deliver quality products and
service to its customers. These accomplishments testify to the Groups relentless
efforts in enhancing productivity in order to compete in the global market.
SUPERMAX CORPORATION BERHAD (420405-P)
Financial Highlights
2012
RM000
2011
RM000
Revenue
997,374
1,021,358
Pre-tax profit
137,306
112,132
After-tax profit
121,412
104,051
Net assets
833,780
769,038
1,254,079
1,205,430
Paid-up capital
340,077
170,039
Shareholders equity
833,780
769,038
Interim Dividend
13,583
10,202
Final Dividend
20,375*
11,903
Total assets
Net assets per share (in RM)

Earnings per ordinary share of RM0.50 each (in Sen)
1.23
2.26
17.92
30.63
* Subject to shareholders approval at upcoming Annual General Meeting.
ANNUAL REPORT 2012
Five-years financial summary

Revenue
PRE-TAX PROFIT
NET ASSETS
(RM000)
(RM000)
137,306
833,780
997,374
(RM000)
SHAREHOLDERS
EQUITY
(RM000)
BASIC EARNINGS
PER SHARE
(RM000)
2012
RM000
2010
RM000
2009
RM000
2008
RM000
Revenue
997,374 1,021,358
977,281
803,633
811,824
Pre-tax profit
137,306
112,132
183,835
151,470
51,998
Net Assets
833,780
769,038
691,524
558,835
416,380
Shareholders Equity
833,780
769,038
691,524
558,835
416,380
33,958
22,105
25,490
29,636
8,621
47.98
38.56
14.26
Dividend Payout
Basic Earnings per share (sen)
* Based on oridinary share of RM0.50 each.
2011
RM000
17.86
33,987
833,780
(RM000)
DIVIDEND PAYOUT
17.92 30.63
Corporate Structure
100
Supermax Glove Manufacturing Sdn Bhd (218698-T)
100
Maxter Glove Manufacturing Sdn Bhd (229862-H)
100
Seal Polymer Latex Products Sdn Bhd (754360-X)
100
Supermax Latex Products Sdn Bhd (34197-T)
100
Supermax Healthcare Incorporated
100
Supermax International Sdn Bhd (551579-X)
100
Supermax Energy Sdn Bhd (318117-P)
100
Maxwell Glove Manufacturing Berhad (99472-X)
90
(Formerly known as Spenser Glove Manufacturing Berhad)
100
SPI Gloves Sdn Bhd (663072-X)
Supermax Deutschland GmbH
100
Supermax Global Limited
100
Supermax Healthcare Limited
100
Supermax Healthcare Canada Incorporated
100
White Oak Global Property
ANNUAL REPORT 2012
Corporate Information
Board of Directors
Dato Seri Thai Kim Sim, Stanley
(Executive Chairman and Group Managing Director)
Datin Seri Tan Bee Geok, Cheryl
(Group Executive Director)
Dato Ting Heng Peng
(Independent Non-Executive Director)
Dato Dr. Tan Geok Swee @ Tan Chin Huat
(Non-Executive Director)
Gong Wooi Teik, Felix
Shamsudin @ Samad Bin Kassim
Rashid Bin Bakar
AUDIT COMMITTEE
Chairman, Independent Non-Executive Director
Rashid Bin Bakar
Member, Independent Non-Executive Director
Member, Independent Non-Executive Director
Company Secretaries
Wong Wai Foong (MAICSA 7001358)
Ng Yen Hoong (LS 008016)
Corporate Office
Supermax Corporation Berhad
Lot 38, Putra Industrial Park
Bukit Rahman Putra
47000 Sungai Buloh
Selangor Darul Ehsan
Tel: 03 6145 2328
Fax: 03 6156 2191
Registered Office
Level 18, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Tel: 03-2264 8888
Fax: 03-2282 2733
share Registrar
Tricor Investor Services Sdn. Bhd. (118401V)
Level 17, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Tel: 03 2264 3883
Fax: 03 2282 1886
Principal Bankers
The Royal Bank of Scotland Berhad (301923 - A)
HSBC Bank Malaysia Berhad (127776 - V)
Malayan Banking Berhad (3813 - K)
Oversea-Chinese Banking Corporation Ltd, Labuan Branch (940026C)
Auditors
Baker Tilly Monteiro Heng, AF0117
Chartered Accountants
22-1, Jalan Tun Sambanthan 3
50470 Kuala Lumpur
Tel : 03- 2274 8988
Fax : 03- 2260 1708
Stock Exchange Listing

Main Market of Bursa Malaysia Securities Berhad
Date of Listing : 2 August 2000
Stock Information
Code No. 7106
Name: SUPERMX
Board of directors
1. Dato Seri Thai Kim Sim, Stanley

(Executive Chairman and
Group Managing Director)
2. Datin Seri Tan Bee Geok, Cheryl
(Group Executive Director)
3. Shamsudin @ Samad Bin Kassim
5. Dato Dr. Tan Geok Swee @ Tan Chin Huat

6. Gong Wooi Teik, Felix
7. Rashid Bin Bakar
4. Dato Ting Heng Peng

ANNUAL REPORT 2012
Profile of directors
Executive Chairman and Group Managing Director
Aged 52, Malaysian
Appointed on 18 June 2000
Dato Seri Stanley Thai graduated from the University of Windsor, Ontario, Canada with
a Bachelor of Commerce degree (Hons) in 1982. Dato Seri Stanley Thai started his early
business training with Mulpha International Berhad before being appointed as the Chief
Executive Officer and Group Managing Director of Supermax Corporation Berhad on 18 June
2000. Dato Seri Stanley Thai was re-designated as Executive Chairman and Group Managing
Director on 27 September 2006. Dato Seri Stanley Thai is an experienced businessman
and has successfully secured business partnerships with distributions in North American,
Western Europe, Australia, New Zealand, Middle East and Latin American countries. Dato
Seri Stanley Thai has also been actively involved in overseas trade promotions and programs
organised by the Ministry of International Trade and Industry (MITI) and is a strong advocate
of the Made in Malaysia for the World program of Malaysia External Trade Development
Corporation (MATRADE) since 1983.
Group Executive Director
Aged 51, Malaysian
Datin Seri Cheryl Tan graduated with a Bachelor of Commerce degree (Hons) from University
of Windsor, Ontario, Canada. Datin Seri Cheryl Tan was appointed as an Executive Director
in Supermax Corporation Berhad on 18 June 2000 and she is the Chairperson of the
Remuneration Committee. Datin Seri Cheryl Tan received her early business training in credit
administration with a local financial institution. Datin Seri Cheryl Tan heads the finance,
operations and administration of the Supermax Group
Dato Ting Heng Peng
Independent Non-Executive Director
Aged 52, Malaysian
Dato Ting graduated from University of Windsor, Ontario, Canada with a Bachelor of
Commerce degree (Hons) in 1982. Upon graduation, he went to England where he read law at
the University of Essex. Dato Ting obtained his Bachelor of Law (Hons) in 1985. Following
Dato Tings admission as a barrister to Lincolns Inn, London in 1986, Dato Ting came
back to Malaysia and was called to the Malaysian Bar in 1987. Dato Ting has been in legal
practice as advocate and solicitor in the legal firm of Amin-Tan & Co from October 1987
until May 2007. Since 1 June 2007, Dato Ting is a Partner of Joseph Ting & Co. Dato Ting
is currently a member of the Remuneration Committee and Nomination Committee. Dato
Ting is also an Independent Non Executive Director of D.B.E. Gurney Resources Berhad as
well as an Audit Committee Member of CSF Group PLC, a company listed on London Stock
Exchange in Alternative Investment Market.
Non-Executive Director
Aged 62, Malaysian
Dato Dr. Tan, PhD in Business Administration, appointed as a Non-Executive Director of
Supermax Corporation Berhad on 18 June 2000 and he is the Chairman of the Nomination
Committee. Dato Tan is actively involved in event management and he is currently the
Chairman of MIFF (Malaysia International Furniture Fair), the biggest exhibition in ASEAN
region. He is also the Executive Advisor to the KL & Selangor Furniture Industry Association.
Profile of directors
Mr Gong Wooi Teik, Felix
Aged 62, Malaysian
Appointed on 28 December 2001
Mr Gong is a Fellow Member of The Institute of Chartered Accountants in England & Wales,
member of the Malaysian Institute of Accountants and Fellow Member of the Malaysian
Institute of Taxation. After qualifying as a Chartered Accountant in England in 1976, he
returned to Malaysia in early 1977 and worked for two of the big 4 Accounting Firms before
he started his own accounting firm in 1980. He is currently the Managing Partner of GEP
Associates, which is a member firm of AGN International. Mr Gong was appointed as an
Independent Non-Executive Director of Supermax Corporation Berhad on 28 December 2001
and he is the Chairman of the Audit Committee. He is also a Director of Nikko Electronics
Berhad (In Liquidation) and Cheetah Holdings Berhad.
Encik Shamsudin @ Samad Bin Kassim
Aged 66, Malaysian
Appointed on 18 July 2002
Encik Samad graduated with a Bachelors degree in Economics from University of Malaya in
1970. Subsequently, he obtained Master in Public and International Affairs from University
of Pittsburgh in 1979. He was appointed as an Independent Non Executive Director of
Supermax Corporation on 18 July 2002 and he is a member of the Audit Committee and
Nomination Committee. He is currently Director of Century Logistics Holdings Berhad,
Ingress Corporation Berhad, Kinsteel Berhad, BHS Industries Berhad, Perwaja Steel Berhad,
Multi-Code Electronic Industries (M) Berhad and Master Tec Holdings Berhad. He worked in
the Ministry of International Trade and Industry (MITI) and its agencies for fifteen years from
1985 and was Chief Executive Officer of SMIDEC since 1 January 2000 and left SMIDEC in
retirement on September 2001.
Encik Rashid Bin Bakar
54, Malaysian
Appointed on 18 July 2002
Encik Rashid holds a Master in Law from UKM and he is a graduate of UiTM with a Bachelor
of Law (Hons). Encik Rashid also has a Diploma in Syariah Law and Practice from UIAM and
Public Administration from UiTM. His business occupation is advocates and solicitors. He
was appointed as an Independent Non-Executive Director of Supermax Corporation Berhad
on 18 July 2002 and he is a member of the Audit Committee and Remuneration Committee.
Additional Information On The Board Of Directors

Family relationships with any director and / or major
shareholder
None of the Directors of the Company has family
relationships with any Director and/or major shareholder
with the exception of:1. Dato Seri Stanley Thai and Datin Seri Cheryl Tan are
husband and wife; and
2. Dato Dr. Tan Geok Swee @ Tan Chin Huat is the
brother of Datin Seri Cheryl Tan.
Conflict of interest
None of the Directors of the Company has any conflict of
interest with the Company.
List of convictions for offences within past 10 years other
than traffic offences
None of the Directors of the Company has been convicted
for offences within the past ten (10) years other than traffic
offences, if any.
Shareholdings in the Company and its subsidiaries
Details are set out on page 100 of the Annual Report
ANNUAL REPORT 2012
Executive Chairmans Statement
Dato Seri Stanley Thai
Executive Chairman
and Group Managing Director
10

It has been another eventful year for the Supermax
Group and somewhat a year of consolidation for the
Group. It has been a time to reflect on our strategy
and to put the pieces in place to facilitate our next
phase of growth. Notably, the Group has steppedup its refurbishment programme for its older lines
and more importantly its automation programme
for which RM65.8 million has been budgeted. The
interruptions to production caused by labour issues,
for example acute lack of workers when intake of
foreign labour is frozen and not to mention the
recent imposition of minimum wages, has prompted
the Group to accelerate its automation programme
in an effort to remain competitive. While the
automation process does lead to some downtime and
higher initial costs for now, it is a necessary move to
improve efficiency and productivity for the future.
Glove Industry Update
Raw material prices
(i) Natural rubber latex
The beginning of the year continued in much the way the year before it
ended, i.e. with volatility in the market for raw materials. January saw the
most volatility with natural rubber prices fluctuating between RM6.26 p/
kg wet and RM7.46 p/kg wet and with an upward bias that stretched right
through the first quarter of the year. This was likely due to the wintering
period coupled with some elements of speculation.
Since then, however, volatility had decreased and the price trend reversed
and gradually started to soften from the RM8 p/kg wet level to as low
as RM5.24 p/kg wet in August as the wintering period ended and strong
supply expansion over the last few years began to have an impact. High
prices in recent years had seen a ramp up in production capacity. Global
natural rubber production stood at 6.6 million tonnes in 1998, rising to 10.1
million tonnes in 2008 and then 11.0 million tonnes in 2011. Production is
estimated to surge further to 12.5 million tonnes in 2013 and 14.9 million
tonnes in 2014.
Aside from supply factors, the demand factors for rubber are also less than
supportive with the Eurozone crisis and slowdown in China curtailing the
demand. Demand from us rubber glove makers have also slowed as more
and more rubber glove producers switch their production capacity towards
nitrile gloves in tandem with the global demand.
Expect to see prices easing further from current levels as we progress
further into 2013.
ANNUAL REPORT 2012
11

(ii) Nitrile rubber latex
Nitrile latex prices have been rather depressed but relatively stable. Nitrile
latex suppliers had ramped up their production by at least 2-fold since 2010
and this had resulted in ample supply being available to buyers. In year
2012, there was additional new capacity of 250,000 mtw made available to
the market.
With supply of nitrile latex plentiful, rubber glove manufacturers do not
face any issues in securing their supply of nitrile latex. And this is despite
all glove manufacturers either building up new nitrile glove production
capacity or switching existing production capacity from natural rubber to
nitrile rubber. Nitrile prices have been trading at between USD 1,200 and
USD 1,400 for most of the year but we expect prices to move up as the
demand increases and mitigate the current oversupply situation.
Rubber Glove Demand
Global demand for rubber gloves continues to be robust. While demand growth
from the Eurozone countries in crisis may have moderated to some extent, this
has been more than made up for by the developing and emerging countries
in Asia, Africa, South America and also in Eastern Europe. These countries
continue to enjoy economic growth and with greater wealth comes greater health
and hygiene awareness and greater spending per capita on healthcare.
With the price of natural rubber latex having risen substantially over the past 2
years, 2 trends have emerged as a result:
i) shift in demand towards nitrile rubber gloves
ii) greater demand for lighter/thinner gloves
While converting existing natural rubber glove production lines to nitrile glove
lines were helpful in meeting the immediate demand for nitrile gloves, it was a
stop gap measure at best and had the unwanted drawback of additional downtime
which affected our utilisation rate. Therefore, the Management had taken the
decision to build entirely new lines to replace ageing lines in existing locations
as well as build new factories. These new facilities would have the flexibility
to switch between natural rubber and nitrile rubber glove production and would
also employ the latest in automation technology. While this may take a bit of
time, the Management believes that this will be time well spent.
12

Update on Supermax
Corporate Exercises
The Group carried out several corporate exercises and projects during the year.
They included:
(i) Bonus Issue
The Group had in November 2011 announced a bonus issue involving the
issuance of 340.1 million new ordinary shares of 50 sen each on a 1 for 1
basis and this exercise was completed in January 2012. This exercise was
very much in line with the Groups aim to reward its shareholders in tandem
with other efforts to enhance shareholders value including the revision of
dividend policy from 20% of profits to 30% of profits.
(ii) New Distribution HQ in Chicago, Illinois
We are also looking to further expand our business in the American continent
in a big way. Towards this objective, we have acquired a 6 h.a. piece of
land in Chicago, Illinois, to build our new national distribution headquarters
which will give us a total built-up area of 225,000 sq. ft. when completed in
2 phases.
Construction of Phase 1, the East Building, had already commenced in
August 2012. Phase 1 involves a build-to-suit 90,170 sq. ft. state-of-the-art
warehouse and distribution facility as well as 6,000 sq. ft. of office space for
the operations of the distribution headquarters. This phase is scheduled for
completion by mid-2013.
As part of the our corporate social responsibility and simply doing our
part for the environment, the Group has commissioned a green building
project for this new HQ whereby the design team will be pursuing a LEED
(Leadership in Energy & Environmental Design) Gold Certification from the
United States Green Building Council. The design features among others
roof insulation and insulated precast concrete panel walls, all-round LED
lighting, an on-site photovoltaic solar system to generate renewable power,
and a passive solar hot water heating system.
ANNUAL REPORT 2012
13

Financial Performance
The Group has performed creditably to achieve 16.7% profit growth over the
year before. And this was despite the challenging business environment with
the US and Europe mired in economic distress. This was also during a period of
intensive implementation of automation processes for all of the Groups plants
which invariably results in additional downtime and higher costs.
On the dividend front, the Company has paid out an interim 4% tax exempt
dividend for FYE2012 and the Board has proposed a final 6% tax exempt
dividend which is subject to shareholders approval at the upcoming Annual
General Meeting. This is largely in line with our revised dividend policy to pay
out 30% of Profit after Tax (from 20% previously) in order to further reward our
loyal and supportive shareholders.
Going Forward
It is our quest to always be aligned to market demands. While the global market
for gloves continues to grow, we need to grow along with it. Not only is the
market continuing to grow, there is at present an apparent demand shift towards
nitrile gloves and thinner gloves. And this is almost certainly because of cost/
price factors. We need to respond accordingly. Towards that end, we have
embarked on an expansion program to increase our nitrile capacity from our
current 6.9 billion pieces per annum to 12.3 billion pieces per annum. But due
to the ever-changing landscape for rubber gloves, we will be installing lines that
have the ability to switch between nitrile and natural rubber glove production
in the most efficient manner. This will give us the flexibility to move in tandem
with the market.
We will also continue to focus on building up the distribution end of our business
model. Our new, large and modern warehouse being built at our US office is just
one step in that direction. Besides the US, we will be building up our Canadian,
German, Brazilian and UK distribution arms and at the same time looking for
competent and reliable partners to establish joint ventures in other territories.
I am very excited about the on-going developments in the Company, from the
major refurbishment which is beginning to bear fruit; the 2 new factories being
built (Plant #10 and #11) that will enable us to be a bigger player in the nitrile
market; to the automation programme which will further enhance operational
efficiency and alleviate reliance on foreign labour; and the continued expansion
of our distribution capabilities. Supermax is poised to scale new heights!
Acknowledgement
I wish to express my sincere appreciation to the Board of Directors for their
full support over the years. I would also like to express my gratitude to all my
staff for their commitment, hard work and effort to improve the operational and
business aspects of the Company where possible. I would also like to thank all
our business associates for their continuous support.
Last but not least, I would like to thank all the Shareholders for their support and
belief in Supermax. It will be my commitment to further streamline and improve
the performance of the Company and to take it to the next level.
Thank you.
Dato Seri Stanley Thai
Founder, Executive Chairman and Group Managing Director
April 30, 2013
14
Corporate Social Responsibility

Biomass as an Alternative Environmentally Friendly Fuel Source
The Group has a Protect your Health, Protect the Environment philosophy the daily practice of which is encouraged and
instilled among all levels of its organisation. Among its major ongoing initiatives which emphasises environmental preservation
is the use of an alternative fuel source which is renewable and sustainable to fire its heating systems and for power generation.
With this in mind, the Group has implemented biomass systems at 3 of its factories. The fuel used is basically the waste from
the oil palm industry such as palm kernel shells and empty fruit bunches, and from the wood-based industry such as wood waste
from the furniture industry and even the tree trimmings from pruning work done by the local councils. The need for depleting
and non-renewable energy sources is therefore greatly reduced. The Group has spent close to RM20 million over the years to
build up and upgrade its biomass facilities.
Waste Water Management
Another ongoing green project undertaken by the Supermax Group is the treatment of wastewater. Wastewater from the
Supermax Groups manufacturing facilities is treated on site in effluent treatment plants utilising a chemical flocculation,
anaerobic digestion and activated sludge process. The Group collaborates closely with the Department of Environment to
conduct regular checks to ensure that the final discharge is clean and safe. This ensures that the environment surrounding
the Supermax Groups manufacturing facilities as well as the community living in the vicinity of the factories continue to be
healthy and vibrant. The Group has spent over RM7 million on this project.
Best Practices in the Workplace
Supermax places great emphasis on health and safety and making the Supermax workplace a conducive working environment
for its entire workforce. It currently holds ISO 9001:2008 apart from other quality management system certifications which
showcases its commitment to providing stakeholders an assurance of quality in fulfilling requirements whilst optimizing
environmental performance. Training and re-training of staff are conducted on a regular basis. Its policies are also non-bias in
nature, be they in terms of gender, ethnicity, etc.
Ongoing initiatives include

strict No child labour policy

equal employment opportunity in terms of gender and ethnicity across all levels of employment from the boardroom to the
factory floor
a change from 5 day working week typical of manufacturing concerns to alternate Saturdays and with a mind to amending
further to a 5-day week
encouraging a healthy lifestyle and building camaraderie among staff by providing support for sporting and social activities
ANNUAL REPORT 2012
15
Corporate Social Responsibility

Best Practices in the Marketplace
Supermax also recognises the importance of practising the highest standards of corporate governance throughout the Group
as a fundamental part of discharging its responsibilities to protect and enhance stakeholders value and has spared no effort to
ensure that the best practices are adopted and implemented wherever possible.
Supermax has largely ensured that all of Bursa Malaysias listing requirements are fully complied with such as timely reporting
of quarterly results and other announcements. Supermax also engages its stakeholders often as it holds analysts and investors
briefings on a regular basis and includes extensive disclosures on quantitative targets, objectives and performance data in its
presentations.
Best Practices in the Community
Supermax believes in giving back to the community and has over the years donated generously to many in their times of need.
On the international front, the Group had contributed to the relief efforts by donating medical gloves during the devastating
Katrina hurricane and Indian Ocean tsunami natural disasters, and on the local front to a dialysis centre and various places
of worship in cash and kind. We are also passionate about helping our youths achieve their academic dreams and have, in
collaboration with the Malaysian Rubber Export Promotion Council (MREPC) provided scholarships to needy students in the
past 2 years.
The Supermax Foundation was recently set up on 12 April 2013 and it will facilitate the Groups CSR efforts, with emphasis
on providing scholarships to needy students.
16
Audit Committee Report

Members of Audit Committee
Mr Gong Wooi Teik, Felix
Chairman of Committee, Independent Non-Executive Director
Member of Committee, Independent Non-Executive Director
Member of Committee, Independent Non-Executive Director
Terms of Reference of Audit Committee
Constitution
The Board constitutes and establishes an audit committee with authority, responsibilities and specific duties as described below.
Composition
(1) The Audit Committee must be composed of no fewer than 3 non-executive directors, with a majority of them being independent
directors;
(2) All the Audit Committee members must be financially literate, with at least one member:(i) must be a member of the Malaysian Institute of Accountants; or
(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years working experience
and:
(a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or
(b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the
Accountants Act 1967; or
(iii) fulfils such other requirements as prescribed or approved by the Exchange;
(3) No alternate director shall be appointed as a member of the Audit Committee; and
(4) The members of the Audit Committee shall elect a Chairman from among themselves who shall be an Independent Director. The
Chairman of the Audit Committee should engage on a continuous basis with senior management, the head of internal audit and
the external auditors in order to be kept informed of matters affecting the company.
(5) All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the
Company. The Board must review the term of office and performance of the Audit Committee and each of its members at least
once every 3 years to determine whether the Audit Committee has carried out its duties in accordance with its terms of reference.
Duties and Responsibilities of the Audit Committee
The Audit Committee shall review and report the same to the Board on the following key matters:
(i) To review the appointment, resignation, conduct and audit plans of the Internal and External Auditors;
(ii) To review the assistance given by the employees of the Company to the external auditors and the internal auditors;
(iii) To review the quarterly results and year end financial statements, prior to the approval by the Board;
(iv) To review any related party transaction and conflict of interest situations that may arise within the Company or Group including
any transaction, procedure or course of conduct that raises questions of management integrity; and
(v) To oversee the Companys internal control structure to ensure operational effectiveness and efficiency, reduce risk of inaccurate
financial reporting, protect the Companys assets from misappropriation and encourage legal and regulatory compliance.
ANNUAL REPORT 2012
17
Audit Committee Report

Rights and Authority of the Audit Committee
In carrying out its duties and responsibilities, the Audit Committee will:(1) have the authority to investigate any matter within its terms of reference;
(2) have the resources which are required to perform its duties;
(3) have full and unrestricted access to any information pertaining to the Company;
(4) have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;
(5) be able to obtain independent professional or other advice and to invite outsiders with relevant experience and expertise to attend
the Audit Committee meetings (if required) and to brief the Audit Committee; and
(6) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors
and employees of the Company, whenever deemed necessary.
Attendance of meetings
Five (5) meetings were held during the financial year. The records of attendance are as follows: Name No. of Meetings Attended
5
Rashid Bin Bakar 4
4
Summary of Activities
The Audit Committee has discharged its duties as set out in its Terms of Reference. During the financial year, the activities undertaken
by the Audit Committee included the following :
1. Reviewed and recommended the quarterly financial results for Board approval;
2. Reviewed and recommended the audited financial statements for Board approval;
3. Considered the matters relating to corporate governance in compliance with the revamped Listing Requirement of Bursa
Malaysia Securities Berhad and the Malaysian Code on Corporate Governance;
4. Review and deliberation of significant risk areas, internal control and financial matters coming to the attention of the external
auditors in the course of their work.
Internal Audit Function
The Board considers the audit function to be an integral and important part of the governance process. The Internal Audit Department
carried out the internal audit function for Supermax Group during the financial year under review. The internal auditors conduct
reviews on systems of controls and the effectiveness of the processes which management has in place to identify, manage and control
proper conduct of business within the Group.
18
Corporate Governance Statement

The Board of Directors recognises the importance of practicing the highest standards of Corporate Governance throughout
the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders value and the financial
performance of Supermax Corporation Berhad.
With this in mind, measures and efforts have and shall be taken to ensure as far as practicable the adoption and implementation
of the Principles and Best Practices set out in the Malaysian Code on Corporate Governance (the Code) and in the Main
Market Listing Requirements (MMLR) of the Bursa Malaysia Securities Berhad (Bursa Securities).
Set out below is a description of how the Group has applied the Principles of the Code and how the Board of Directors has
complied with the Best Practices set out in the Code throughout the financial year ended 31 December 2012.
SECTION A THE BOARD OF DIRECTORS
Size and Composition of the Board
An experienced and effective Board consisting of members with a wide range of skills and experience from financial and
business backgrounds leads and controls the Group.
The Directors bring depth and diverse expertise to the leadership of the challenging and highly competitive glove business.
The Board continues to give close consideration to its size, composition and spread of experience and expertise. No individual
or group of individuals dominates the Boards decision making and the number of Directors reflects fairly the investment of the
shareholders. This is to ensure that issues of strategy, performance and resources are fully discussed and examined to take into
account long-term interest of stakeholders of the Company.
The Company continues to be led by the same board members with professional and business experience.
The Board comprises the Executive Chairman cum Group Managing Director, one Executive Director and five Non-Executive
Directors, four of whom are Independent Directors.
The Board has also identified Dato Ting Heng Peng as the senior independent non-executive director to whom concerns if any
may be conveyed.
In terms of the gender make-up of the Board, Datin Seri Tan Bee Geok, Cheryl, has been a vital member of the Board since
the year 2000 and her value as a woman member of the Board with her insights, leadership and incisiveness has not been lost
on the Board.
The profile of each Member of the Board is presented on pages 7 to 9 of this annual report.
Duties and Responsibilities of the Board
The responsibilities of the Board of Directors of the Company are as follows: Reviewing and adopting a strategic plan for the Company which will enhance the future growth of the Company;

Overseeing the conduct of the Companys business to evaluate whether the business is being properly managed;

Identifying principal risks of the business and ensure the implementation of appropriate systems to manage these risks; and
Reviewing the adequacy and the integrity of the Companys internal control systems and management information systems,
including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
ANNUAL REPORT 2012
19

Board Balance and Independence of Directors
The Board members have a wealth of experience as well as skills and knowledge, which are relevant to the Group. Although
the Chairman is jointly responsible for the Groups strategic business direction, the roles of the Chairman and Group
Managing Director are separate with clearly defined responsibilities to ensure the balance of power and authority. The Chairman
is primarily responsible for the orderly conduct and working of the Board whilst the Group Managing Director is responsible
for the overall operation of the business and the implementation of Board strategy and policy.
All the Independent Non Executive Directors are independent of Management and are free from any business or other
relationship that could materially interfere with the exercise of their independent judgment. They have the calibre to ensure that
the strategies proposed by the Management are fully deliberated and examined in the long-term interest of the Group, as well
as shareholders, employees and customers.
One of the recommendations of the Code states that the tenure of an independent director should not exceed a cumulative term
of 9 years. However, the Nomination Committee and the Board have upon their annual assessment, concluded that each of the
4 Independent Non-Executive Directors, Dato Ting Heng Peng, Gong Wooi Teik, Felix, Shamsudin @ Samad bin Kassim, and
Rashid bin Bakar, continue to demonstrate conduct and behaviour that are essential indicators of independence, and that each
of them continues to fulfill the definition of independence as set out in the MMLR. The length of their service on the Board
does not in any way interfere with their exercise of independent judgement and ability to act in the best interest of
Supermax Corporation Berhad.
Directors Code of Ethics
The Directors observe a code of ethics in accordance with the code of conduct expected of Directors in the Company Directors
Code of Ethics established by the Companies Commission of Malaysia.
Board Meetings and Supply of Information to the Board
During the financial year under review, six (6) board meetings were held. Details of the Directors attendance at these meetings
are as follows:Directors
1. Dato Seri Thai Kim Sim
2. Datin Seri Tan Bee Geok
3. Dato Dr. Tan Geok Swee @ Tan Chin Huat

4. Dato Ting Heng Peng
5. Gong Wooi Teik, Felix
6. Shamsudin @ Samad bin Kassim

7. Rashid bin Bakar
Total No. of
Meetings
Meetings
6
6
6
6
6
Attended
6
5
6
6
5
The Group Managing Director of the Company undertakes the responsibility to ensure that the agenda and full set of Board
papers (including qualitative information of the Company) for consideration are distributed well before each meeting of the
Board to ensure that the Directors have sufficient time to study them and be properly prepared for discussion and decision
making. Minutes of Board meetings are maintained.
All Directors of the Company whether in full Board or in their individual capacity, have access to all information within the
Company and to seek independent professional advice where necessary and in appropriate circumstances, in furtherance of
their duties.
The Directors have access to the advice and services of the Company Secretary who is responsible for ensuring the Board
meeting procedures are followed and that applicable rules and regulations are complied with.
20

New Appointment and re-election of Directors
The Nomination Committee established by the Board is responsible for assessing the nominee(s) for directorship and Board
Committee membership and thereupon submitting their recommendation to the Board for decisions.
Each Director must retire from office at least once in every three years and can offer himself/herself for re-election. Directors
who are appointed by the Board are subject to election by the shareholders at the next Annual General Meeting (AGM) held
following their appointment.
Nomination Committee
The Nomination Committee consists of the following:Chairman:

Members:


Dato Ting Heng Peng
(Independent Non Executive Director)
The duties and responsibilities of the Nomination Committee are as follows: a) To recommend to the Board of Directors, candidates for directorships to be filled by the Shareholders or the Board of
Directors;
b) To consider, in making its recommendations, candidates for directorships proposed by the Group Managing Director and,
within the bounds of practicability, by any other senior executive or any Director or Shareholder;
c) To recommend to the Board, Directors to fill the seats on the Board committees;
d) To assist the Board to annually review its required mix of skills and experience and other qualities, including core
competencies, which Non-Executive Directors should bring to the Board;
e) To assess the effectiveness of the Board of Directors as a whole and each individual Director/Committee of the Board; and
f) To consider and examine such other matters as the Nomination Committee considers as appropriate.
Directors Training
All the Directors of the Company have attended the Mandatory Accredition Programme (MAP) prescribed by Bursa Securities
for directors of public listed companies. The Directors will also attend various trainings to keep abreast with developments in
relation to the capital markets, relevant changes in laws and regulations and/or the business environment from time to time.
In 2012, the Directors attended the following seminars and briefings conducted by the regulatory authorities and members of
professional bodies, in order to stay abreast with the latest developments in the industry and to better enable them to fulfill their
responsibilities:Encik Shamsudin @ Samad Bin Kassim attended the following programs:
1) Role of Audit Committee in Assuring Audit Quality, Governance Program Institute of Accountants organized by Bursa Malaysia
2) Navigating Turbulence, MICPA-Bursa Malaysia Business Forum by Malaysian Institute of Certified Public Accountants
3) Audit Committee and Chief Audit Executive Forum: Enhancing Internal Audits Value by Institute of Internal Audit
Malaysia
Mr Gong Wooi Teik, Felix attended the following programs:
1) Implementing Audit Quality Control, organised by Malaysian Institute of Accountants
2) Auditors Risk Assessment Procedures, organized by Malaysian Institute of Accountants
3) Updates of the 2012 IFRS-Compliant MFRSs Preparing for Convergence to IFRSs organized by The Malaysian Institute
of Certified Public Accountants
ANNUAL REPORT 2012
21

SECTION B DIRECTORS REMUNERATION
Remuneration Committee
The Remuneration Committee consists of the following:Chairman:

Members:


(Executive Director)
Dato Ting Heng Peng
The duties and responsibilities of the Remuneration Committee are as follows:a) To review and assess the remuneration packages of the Executive Directors in all forms, with or without other independent
professional advice or other outside advice;
b) To ensure the levels of remuneration be sufficiently attractive and be able to retain Directors needed to run the Company successfully;
c) To structure the component parts of remuneration so as to link rewards to corporate and individual performance and to
assess the needs of the Company for talent at Board level at a particular time; and
d) To consider and examine such other matters as the Remuneration Committee considers appropriate.
The remuneration of the non-executive directors is determined in accordance with their experience and level of responsibilities
assumed. Non-executive directors are remunerated in the form of directors fees as approved by the shareholders.
The aggregate Directors remuneration paid or payable or otherwise made available to all Directors of the company during the
financial year are as follows:
Category
Executive Directors
Non-executive Directors
Fees
104,000
240,000
Salaries & other

emoluments
6,533,662
Benefit in
kind
-
134,360
The number of Directors of the Company whose income from the Company falling within the following bands are:
Executive Directors
Remuneration
RM 1,000,000 and above
Number
2
Non Executives Directors

Remuneration
RM 0 - RM 50,000
22
Number
5

ESOS Option Committee
The Company, with the approval of the shareholders during its Extraordinary General Meeting (EGM) held on 11 February 2003,
has implemented an ESOS (Employee Share Option Scheme) officially on 8 October 2003. Upon expiry of the ESOS on
7 October 2008, the ESOS was extended for a period of another 5 years.
An ESOS Option Committee was formed on 1 October 2003 to oversee the administration as well as to ensure proper
implementation of the ESOS according to the byelaws of the scheme. Currently the ESOS Option Committee comprises the
following members:
Chairman:
Members:

Datin Seri Tan Bee Geok, Cheryl; Kelly Wong; Connie Tan and Ivy Yee
SECTION C: SHAREHOLDERS
Dialogue with investors and shareholders
The AGM is the principal forum for dialogue with shareholders. At each AGM, the Board presents the progress and performance
of the business and shareholders are encouraged to participate in the questions and answers session.
SECTION D ACCOUNTABILITY AND AUDIT
Directors Responsibility Statements
The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which give a true
and fair view of the state of affairs of the Company and the Group as at the end of the financial year.
The Directors consider that in preparing the financial statements, the Group has used appropriate accounting policies,
consistently applied and supported by reasonable and prudent judgements and estimates, and that all applicable accounting
standards have been followed.
The Directors have responsibility for ensuring that the Company and the Group keep accounting records which disclose with
reasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the financial
statements comply with the Companies Act, 1965.
The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the
Company and the Group and to prevent and detect fraud and other irregularities.
Financial Reporting
The Directors are responsible for the preparation of the annual audited financial statements and ensure that the accounts and
other financial reports of the Company are prepared in accordance with Approved Accounting Standards and present a balanced
and comprehensive assessment of the Companys position and prospects, to all the shareholders.
The Companys Annual Report and quarterly announcements of results give an updated financial performance of the Company
periodically.
Audit Committee
The Audit Committee comprises three Independent Non-Executive Directors with Mr Gong Wooi Teik, Felix as the Chairman
of the Committee. The composition and Terms of Reference of the Audit Committee are also provided in this report.
The Audit Committee has explicit authority from the Board to investigate any matter and is given full responsibility within its
Term of Reference and necessary resources which it need to do so and full access to information. The Audit Committee also
meets twice a year with the External Auditors without the presence of the Executive Board members.
ANNUAL REPORT 2012
23

Risk Management and Internal Control
The Statement of Risk Management and Internal Control furnished on page 26 to 27 of the annual report provides an overview
of the systems of risk management and internal control within the Group.
Internal audit
The Company set up its Internal Audit Department on 8 December 2003. Internal auditors adopt a risk based approach in the
planning and conduct of its audits and focuses on the key areas of business risk.
The main responsibilities of the Internal Auditors are to:a) Assist in reviewing the adequacy, integrity and effectiveness of the Companys internal control system for the Board to
make an accurate Statement on Internal Control in the annual report;
b) Support the Audit Committee in evaluating the effectives of the existing internal control system, identify future requirements
and co-develop a prioritised action plan to further enhance the internal control system; and
c) Perform a risk assessment of the Company to identify the business processes within the Company that internal audit should
focus on.
Relationship with External Auditors
The Board ensures that there is transparent arrangement for the achievement of objectives and maintenance of professional
relationship with External Auditors.
OTHER INFORMATION REQUIRED BY THE MMLR OF BURSA SECURITIES
Share Buy-backs
During the financial year, the Company bought back a total of 1,002,000 of its ordinary shares of RM0.50 each which are listed
and quoted on the Main Market of Bursa Securities in the open market. The details of the shares bought back during the year
are as follows:
Monthly
Breakdown 2013
January
February
10,300
589,700
May
401,000
Total
1,002,000
December
24
No. of Shares Bought

Back
1,000
Purchased Price per Share

(RM)
Lowest
Highest
Average
2.140
2.140
2.140
2.120
1.820
1.980
1.820
2.150
1.890
1.980
2.150
Total Consideration Paid

(RM)
22,203.87
2.135
1,259,912.32
1.980
2,022.60
1.855
1.985
757,065.87
2,041,204.66

Options, Warrants or convertible Securities
There were no ESOS exercised during the financial year.
Depository Receipt (DR) Programme
During the financial year, the Company continues to be involved in a Sponsored Level-1 American Depositary Receipt (ADR)
Program, which is a program to facilitate the trading of Supermaxs shares by investors in the United States of America (the
US), which was declared effective by the Securities and Exchange Commission of the US on 20 December 2010.
The Bank of New York Mellon has been appointed as the depository bank for the ADR Program with Malayan Banking Berhad
as the custodian of Supermaxs shares in Malaysia for the ADR. The total number of shares that can be purchased under the
ADR shall not exceed 5% of the total issued and paid-up capital of Supermax at any point in time. As at 15 March 2013, the
total number of Supermax shares issued was 680,154,880.
As at 31 December 2012, there are no depository receipts issued against the Companys issued and paid-up capital.
The ADR program is anticipated to enhance the visibility of the Company in the US, as well as, to increase the awareness on
the Company among US brokers, analysts and investors as the ADR program provides an avenue for US investors to access
to Supermaxs shares, thereby allowing the Company to broaden its foreign shareholders base in addition to increasing its
shareholders diversity.
Imposition of Sanctions / Penalties
There were no sanctions and/ or penalties imposed on the Company or its subsidiaries, Directors or management by the relevant
regulatory bodies during the financial year.
Non audit fees
There is no non audit fee paid by the Company to the External Auditors for the financial year.
Variation in results for Profit estimate, forecast or projection
The Company did not make any release on the profit estimate, forecast or projections for the financial year. The variance
between the audited results (net profit after taxation) and the unaudited results announced to Bursa Securities is less than 10%.
Profit Guarantee
During the year, there were no profit guarantees given by the Company.
Material contracts
During the year under review, the Company and its subsidiaries did not enter into any material contracts involving Directors
and major shareholders interest.
Contract relating to loans
There were no contracts relating to loans entered into by the Company in respect of the abovesaid item.
Related Party Transactions
A list of the significant related party transactions between the Company and its subsidiaries, and between the Group and other
related parties including relevant Key Management personnel for the financial year ended 31 December 2012 is set out on pages
80 to 81 of the Annual Report.
Revaluation of landed properties
The Company does not have a revaluation policy on landed properties.
ANNUAL REPORT 2012
25
Statement on Risk Management and Internal Control

INTRODUCTION
The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of risk management and
internal control to safeguard the shareholders investments and the Groups assets.
The Board of Directors is committed to maintain a sound system of risk management and internal control in the Group. Set out
below is the Board of Directors Statement on Risk Management and Internal Control which has been prepared in accordance
with the Guidance for Directors of Public Listed Companies on the Statement on Risk Management and Internal Control.
RESPONSIBILITY OF THE BOARD
The Board of Directors (Board) is responsible for the adequacy and effectiveness of the Supermax Groups (the Group) risk
management and internal control system. The Board ensures that the system manages the Groups key areas of risk within an
acceptable risk profile to increase the likelihood that the Groups policies and business objectives will be achieved. The Board
continually reviews the system to ensure it provides a reasonable but not absolute assurance against material misstatement of
management and financial information and records or against financial losses or fraud.
The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group
and this process includes enhancing the risk management and internal control system as and when there are changes to the
business environment or regulatory guidelines.
Management assists the Board in the implementation of the Boards policies and procedures on risk and control by identifying
and assessing the risks faced, and in the design, operation and monitoring of suitable internal controls to mitigate and control
these risks.
The Board has received assurance from the Chief Executive Officer and the Chief Financial Officer that the Groups 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.
The Board is of the view that the risk management and internal control system in place for the year under review and up to the
date of issuance of the financial statements is adequate and effective to safeguard the shareholders investment, the interests of
customers, regulators and employees, and the Groups assets.
RISK MANAGEMENT FRAMEWORK
The Board of Directors is aware that a sound system of internal control should be embedded in the operations of the Group
and form part of its culture. This system should be capable of responding quickly to evolving risks to the business arising from
factors within the Group and changes in the business environment. It should include procedures for reporting immediately to
appropriate levels of management any significant control failings or weaknesses that are identified together with details of
corrective action being taken.
The Group has in place an ongoing process for identifying, monitoring and managing significant risks that may affect the
achievement of business objectives. This is done through our Quality Assurance Department and Operational Internal Audit
department.
Management is continuously reviewing potential risk areas through discussions held at monthly staff meetings. Where a
particular risk is identified, it will be monitored with counter measures taken to mitigate risk if possible.
26
Statement on Risk Management and Internal Control

OTHER KEY ELEMENTS OF RISK MANAGEMENT AND INTERNAL CONTROL
Apart from the above, the other key elements of the Groups internal control systems are as follows: a) Clearly documented internal policies and procedures including those that are ISO 9001:2008, ISO 13485:2003 and
ISO 13485:CMDCAS compliant are in place and regularly updated to reflect changing risk or resolve operational
deficiencies.
b) Regular and comprehensive information provided to Management for monitoring of performance against strategic plan,
covering all key financial and operational indicators.
c) On quarterly basis, Managing Director reviews with the Board on all issues covering strategy and performance of the
Group.
The overall system of internal control was satisfactory and has not resulted in any material losses, contingencies or uncertainties
that would require public disclosure.
Internal Review and Audit
The inhouse Internal Audit Department was established in 2003. The Internal Auditors review the internal controls on the
key activities of the Group on the basis of a detailed annual internal audit plan. The internal audit functions are to minimise
the Companys exposure to risk and problems. The Internal Auditors will continue to come up with proactive measures or
corrective actions to manage and mitigate potential business and operational risks. In the event of any unavoidable cases, the
Internal Auditors will do a thorough review and resolve the issues immediately.
Review of the Statement by External Auditors
The external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the annual report
of the Bank for the year ended 31 December 2012 and reported to the Board that nothing has come to their attention that causes
them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the
adequacy and effectiveness of the risk management and internal control system.
ANNUAL REPORT 2012
27
Financial
Statement
29 Directors Report 33 Statements of Financial Position
35 Statements of Comprehensive Income 36 Statement of Changes In Equity
37 Statements of Cash Flows 39 Notes to the Financial Statements
92 Supplementary Information on the Disclosure
of Realised and Unrealised Profits or Losses
93 Statement by Directors 93 Statutory Declaration

94 Independent Auditors Report
Directors Report
The directors hereby submit their report together with the audited financial statements of the Group and of the Company for the
financial year ended 31st December 2012.
PRINCIPAL ACTIVITIES
The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in
Note 22 to the financial statements. There have been no significant changes to the nature of these principal activities during the
financial year.
RESULTS

Group Company

RM RM

Net profit for the financial year
121,412,144
3,249,104

Attributable to:-
Owners of the parent
121,717,800
3,249,104
Non-controlling interest
(305,656)

121,412,144
3,249,104
DIVIDENDS
Dividends paid by the Company since the end of the previous financial year were as follows: RM
In respect of the financial year ended 31st December 2011:-
Final dividend of 3.5% per ordinary share of RM0.50, tax exempt, paid on 28th June 2012
11,885,189

The directors proposed a final tax exempt dividend of 6% per ordinary share of RM0.50 amounting to RM20,374,586/- in
respect of the current financial year. The proposed dividend is subject to approval by the shareholders at the forthcoming
Annual General Meeting and has not been included as a liability in the financial statements.
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.
BAD AND DOUBTFUL DEBTS
Before the statements of comprehensive income and statements of financial position of the Group and of the Company were
made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts
and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and
adequate allowance had been made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad
debts or the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate
to any substantial extent.
CURRENT ASSETS
Before the statements of comprehensive income and statements of financial position of the Group and of the Company were
made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely to be
realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company
had been written down to an amount that they might be expected to be realised.
At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current
assets in the financial statements of the Group and of the Company misleading.
ANNUAL REPORT 2012
29
Directors Report
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances have arisen which render adherence to the existing
methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
At the date of this report, there does not exist:(i)
any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures
the liabilities of any other person, or
(ii)
any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year.
In the opinion of the directors, no contingent liabilities or other liabilities of the Group and of the Company have become
enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which,
will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due,
other than as disclosed in Note 32 to the financial statements.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financial
statements of the Group and of the Company that would render any amount stated in the financial statements misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company for the financial year were not, in the opinion of the directors,
substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event
of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the
Group and of the Company for the financial year in which this report is made.
ISSUE OF SHARES AND DEBENTURES
During the financial year, the issued and paid-up ordinary share capital of the Company has been increased from RM170,038,720/to RM340,077,440/- by way of the allotments of 340,077,440 ordinary shares of RM0.50 each pursuant to the bonus issue of
the Company on the basis of one bonus share for every one existing Companys shares held.
The new shares issued rank pari passu in all respects with the then existing ordinary shares of the Company.
The Company has not issued any debentures during the financial year.
TREASURY SHARES
Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists solely of the
acquisition costs of treasury shares.
The Company acquired 1,002,000 shares in the Company through purchases on the Bursa Malaysia Securities Berhad during
the financial year. The total amount paid to acquire the shares was RM2,041,204/- and this was presented as a component within
shareholders equity.
The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the
repurchase plan can be applied in the best interests of the Company and its shareholders. The repurchase transactions were
financed by internally generated funds. The shares repurchased are being held as treasury shares.
30
Directors Report
DIRECTORS
The directors in office since the date of the last report are:Dato Seri Thai Kim Sim
Datin Seri Tan Bee Geok
Dato Ting Heng Peng
Gong Wooi Teik
Rashid Bin Bakar
In accordance with the requirements of the Companies Act, 1965 in Malaysia and Article 88 of the Articles of Association of
the Company, Dato Ting Heng Peng and Gong Wooi Teik retired by rotation at the forthcoming Annual General Meeting and
being eligible, offer themselves for re-election.
DIRECTORS INTERESTS
According to the Register of Directors Shareholdings kept by the Company under Section 134 of the Companies Act, 1965 in
Malaysia, the interests of those directors who held office at the end of the financial year in shares and options in the Company
during the financial year ended 31st December 2012 are as follows:
Number of ordinary shares of RM0.50 each

At Alloted/ At

1.1.2012 bought Sold 31.12.2012
Company
Direct Interest
Dato Seri Thai Kim Sim
69,517,722
69,517,722
-
139,035,444
Datin Seri Tan Bee Geok
51,457,942
51,457,942
-
102,915,884
5,789,060
5,789,060
-
11,578,120
Dato Ting Heng Peng
2,111,000
2,111,000
-
4,222,000
Gong Wooi Teik
1,534,243
1,534,243
-
3,068,486
330,888
378,528
-
709,416
Rashid Bin Bakar
31,250
31,250
-
62,500

Indirect Interest
Dato Seri Thai Kim Sim*
51,457,942
51,457,942
-
102,915,884
Datin Seri Tan Bee Geok*
69,517,722
69,517,722
-
139,035,444

*
These are their spouses interest in the ordinary shares of the Company which shall be treated as their interest in the
ordinary shares of the Company pursuant to Section 134(12)(c) of the Companies Act, 1965 in Malaysia.
By virtue of their interests in shares of the Company, Dato Seri Thai Kim Sim and Datin Seri Tan Bee Geok are deemed to
have an interest in shares of all the subsidiary companies to the extent the Company has an interest in the subsidiary companies.
ANNUAL REPORT 2012
31
Directors Report
DIRECTORS BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit
(other than benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in
the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm
of which the director is a member, or with a company in which the director has a substantial financial interest.
Neither during nor at the end of the financial year was the Company a party to any arrangement whose object was 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.
AUDITORS
The auditors, Messrs Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.
On behalf of the Board,
DATO SERI THAI KIM SIM

Director
DATIN SERI TAN BEE GEOK

Director
Kuala Lumpur
Date: 26th April 2013
32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31ST DECEMBER 2012

31.12.2012 31.12.2011 1.1.2011
Note RM
RM
RM
Group
ASSETS
Non-current assets
Property, plant and equipment
3
446,847,853
402,200,291
387,911,758
Investment property
4
473,110
486,181
499,252
Prepaid land lease payments
5
4,551,846
4,615,975
4,680,102
Other investment
6
-
-
4,000,000
Investment in associates
7
209,874,119
228,357,681
193,521,643
Goodwill on consolidation
8
28,715,854
28,715,854
28,715,854
Deferred tax assets
9
-
-
960,990
Total non-current assets
690,462,782
664,375,982
620,289,599
Current assets
Inventories
Trade receivables
Other receivables
Other current assets
Amount owing by associates
Cash and bank balances
10
11
11
12
13
14
233,786,632
100,822,162
4,413,405
652,747
101,078,141
122,863,481
223,139,651
104,479,257
11,167,328
7,568,806
90,215,842
104,483,446
133,088,304
113,612,167
5,760,998
1,510,393
93,735,639
97,375,650
Total current assets
563,616,568
541,054,330
445,083,151
TOTAL ASSETS
1,254,079,350
1,205,430,312

1,065,372,750
EQUITY AND LIABILITIES

Equity attributable to owners of the parent
Share capital
15
340,077,440
170,038,720
170,038,720
Reserves
17
493,954,115
599,052,132
521,429,230


TOTAL EQUITY
834,031,555
(251,437)
833,780,118
769,090,852
(52,524)
769,038,328
691,467,950
55,716
691,523,666
Non-current liabilities
Loans and borrowings
18
115,187,503
140,464,445
140,529,016
Deferred tax liabilities
9
19,993,037
18,206,050
13,581,000
Total non-current liabilities

Current liabilities
135,180,540
158,670,495
154,110,016
Trade payables
Other payables
Tax payables
21
21
18

76,930,128
40,993,394
162,922,784
4,272,386
59,970,951
27,287,907
190,462,631
-
40,097,568
20,178,310
155,145,591
4,317,599
Total liabilities
420,299,232
Total current liabilities
TOTAL EQUITY AND LIABILITIES

285,118,692
1,254,079,350
277,721,489
436,391,984
1,205,430,312
219,739,068
373,849,084
1,065,372,750
The accompanying notes form an integral part of these financial statements.
ANNUAL REPORT 2012
33
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31ST DECEMBER 2012
31.12.2012 31.12.2011 1.1.2011

Note RM
RM
RM
Company
ASSETS
Non-current assets
Investment in subsidiaries
22
183,894,064
183,670,628
181,774,318
7
19,829,489
19,829,489
19,829,489
Total non-current assets
203,723,553
203,500,117
201,603,807
Current assets
Other receivables
11
233,248
226,998
269,876
Other current assets
12
37,723
51,092
56,911
Amount owing by subsidiaries
23
291,557,693
301,222,668
137,912,168
13
294,301
294,301
4,242,301
14
629,368
13,737,278
884,835
Total current assets
TOTAL ASSETS
292,752,333
496,475,886
315,532,337
519,032,454
143,366,091
344,969,898
EQUITY AND LIABILITIES

Equity attributable to
owners of the parent
Share capital
15
340,077,440
170,038,720
170,038,720
Reserves
17
47,791,465
228,507,474
80,845,026
TOTAL EQUITY
387,868,905
398,546,194
250,883,746
Non-current liability
18
79,505,900
104,560,500
82,574,555
Current liabilities
Other payables
21
52,995
83,260
269,844
Amount owing to a subsidiary
23
7,639,986
-
18
21,408,100
15,842,500
11,241,753
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
29,101,081
108,606,981
496,475,886
34
15,925,760
120,486,260
519,032,454
11,511,597
94,086,152
344,969,898
STATEMENTS OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31ST DECEMBER 2012

Group Company

2012 2011 2012 2011
Note
RM RM RM RM

Revenue
25
997,374,339
1,021,357,920
-
181,094,187
Other operating income
8,499,562
6,135,896
4,754,750
2,323,057
Changes in inventories in

finished goods and work in progress
(106,319,855)
55,903,456
-
Purchases
(605,399,316)
(852,231,915)
-
Directors remuneration
26
(7,132,082)
(5,428,040)
(372,500)
(371,000)
Staff costs
27
(54,598,882)
(53,179,478)
-
Depreciation and amortisation
of property, plant and equipment
3
(24,279,234)
(24,013,498)
-
Depreciation of investment property
4
(13,071)
(13,071)
-
Amortisation of prepaid lease
payments on leasehold land
5
(64,129)
(64,127)
-
Other operating expenses
27
(85,390,292)
(58,660,567)
(1,133,146)
(8,179,491)
Finance costs
28
(8,746,244)
(12,545,113)
-
Share in profits of associates
23,374,792
34,836,038
-
Interest income
29
-
34,682
-
1,882
Profit before taxation

Taxation
30
137,305,588
(15,893,444)
121,412,144
112,132,183
(8,080,823)
104,051,360
3,249,104
-
3,249,104
174,868,635
174,868,635
Other comprehensive (loss)/

income, net of tax:-
Foreign currency translation
(42,848,080)
664,725
-
-

(42,848,080)
664,725
-

Total comprehensive
income for the financial year
78,564,064
104,716,085
3,249,104
174,868,635
Profit attributable to:-
121,717,800
104,164,069
3,249,104
(305,656)
(112,709)
-
-

121,412,144
104,051,360
3,249,104
-

Total comprehensive income
attributable to:-
78,867,096
104,829,089
3,249,104
174,868,635
(303,032)
(113,004)
-
-

78,564,064
104,716,085
3,249,104
174,868,635

Earnings per ordinary share
attributable to owners of
the parent
Basic (sen per share)
31
17.92
30.63
Diluted (sen per share)
31
17.92
30.63
ANNUAL REPORT 2012
35
36
340,077,440
- (2,041,204) (42,559,562) 538,554,881 834,031,555
(251,437) 833,780,118
104,119
(11,885,189)
(2,041,204)
769,038,328
78,564,064
(76,257,765)
-
-
170,038,720
-
-
340,077,440
76,257,765
-
170,038,720
-
76,257,765
-
170,038,720
-
Balance at 31st December 2012

Transactions with owners:
Bonus shares issued
Dividends
24
Purchases of treasury shares
Balance at 1st January 2011

Transaction with owners:Dividends
24
(2,041,204)
-
-
(2,041,204)
-
-
-
-
49,832,669
(93,780,955)
(11,885,189)
-
152,249,709
3,249,104
(27,206,187)
4,587,261
174,868,635
387,868,905
(11,885,189)
(2,041,204)
398,546,194
3,249,104
(27,206,187)
250,883,746
174,868,635

Attributable to Owners of the Parent
Non-distributable Distributable
Issued Share Share Treasury
Retained Total
Company
Note
Capital
Premium
Shares
Profits
Equity
RM
RM
RM
RM
RM
Balance at 31st December 2011 170,038,720 76,257,765

-
291,142 522,503,225 769,090,852
(52,524)

-
-
- (42,850,704) 121,717,800 78,867,096
(303,032)
Transactions with owners:-
Incorporated of new subsidiaries
22
-
-
-
-
-
-
104,119
Bonus shares issued
170,038,720 (76,257,765)
-
- (93,780,955)
-
-
Dividends
24
-
-
-
- (11,885,189) (11,885,189)
-
Purchases of treasury shares

-
- (2,041,204)
-
- (2,041,204)
-
Balance at 1st January 2011 170,038,720

76,257,765
-
(373,878) 445,545,343 691,467,950
55,716 691,523,666
-
-
-
665,020 104,164,069 104,829,089
(113,004) 104,716,085
Transactions with owners:-
Incorporated of new subsidiaries
22
-
-
-
-
-
-
4,764
4,764
Dividends
24
-
-
-
- (27,206,187) (27,206,187)
- (27,206,187)

Attributable to Owners of the Parent
Non-distributable Distributable Non-
Issued Share Share Treasury Translation
Retained controlling Total
Group
Note
Capital
Premium
Shares
Reserve
Profits
Total
Interest
Equity
RM
RM
RM
RM
RM
RM
RM
RM
STATEMENTS OF CHANGES IN EQUITY
STATEMENTS OF CASH FLOWS

Group Company
2012
2011
2012
2011

RM
RM
RM
RM
CASH FLOWS FROM
OPERATING ACTIVITIES:Profit before taxation
137,305,588
112,132,183
3,249,104
174,868,635
Adjustments for:Deposit written off
928,000
-
-
Depreciation and amortisation expenses
24,356,434
24,090,696
-
Dividend income

-
-
-
(181,094,187)
Finance costs
8,746,244
12,545,113
-
Interest income
-
(34,682)
-
(1,882)
Net loss/(gain) on unrealised foreign exchange
6,553,925
(64,479)
600,537
7,483,000

(23,374,792)
(34,836,038)
-
Written off of investment in bond

-
4,000,000
-

Changes in working capital:Inventories
Trade receivables
Other receivables

Trade payables
Other payables
154,515,399
117,832,793
(10,646,981)
(3,214,353)
6,022,994
(10,862,299)
16,965,332
13,925,312
(90,051,347)
17,431,407
(4,895,165)
3,519,797
19,418,317
6,528,254
3,849,641
1,255,566
-
-
(6,250)
-
-
(30,265)
42,878
3,948,000
(186,584)

Tax paid
Tax refunded
Interest received

166,705,404
(3,395,784)
277,691
-
69,784,056
(13,702,045)
320,085
34,682
3,813,126
(39,793)
53,162
-
5,059,860
(16,799)
22,618
1,882
CASH FLOWS FROM

INVESTING ACTIVITIES:Advances to subsidiaries

Dividend received
Investment in subsidiaries
Purchase of property, plant and equipment
-
-
-
(69,151,524)
-
-
-
(38,133,486)
(38,133,486)
17,304,961
-
(223,436)
-
17,081,525
(163,310,500)
181,094,187
(1,896,310)
-
(11,885,189)
(8,746,244)
(494,165)
(27,206,187)
(12,545,113)
(1,233,018)
(11,885,189)
-
-
(27,206,187)
-
(3,180,765)
(27,451,585)
31,168,397
(22,145,945)
-
(20,089,600)
19,103,692
(22,098,302)
(2,041,204)
19,671,232
-
-
(2,041,204)
Net Operating Cash Flows
Net Investing Cash Flows

CASH FLOWS FROM
FINANCING ACTIVITIES:Dividends paid
Interest paid
Repayment of hire purchase payables, net
(Repayment)/drawdown of
industrial hire purchase, net
(Repayment)/drawdown of term loans, net
(Repayment)/drawdown of short
term borrowings, net
Purchase of treasury shares
Net Financing Cash Flows
163,587,311
(69,151,524)
(75,897,454)
56,436,778
(12,290,634)
3,826,495
(34,015,993)
5,067,561
15,887,377
(8,102,495)
ANNUAL REPORT 2012
37
STATEMENTS OF CASH FLOWS

Group Company
2012
2011
2012
2011

RM
RM
RM
RM
NET CHANGE IN CASH AND
CASH EQUIVALENTS
EFFECT OF FOREIGN
EXCHANGE RATE CHANGES
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE FINANCIAL YEAR
CASH AND CASH EQUIVALENTS AT THE
END OF THE FINANCIAL YEAR
ANALYSIS OF CASH AND
CASH EQUIVALENTS:-
18,538,333
6,012,658
(158,298)
12,852,443
1,095,138
63
104,483,446
97,375,650
13,737,278
884,835
122,863,481
104,483,446
629,368
13,737,278
122,863,481
104,483,446
629,368
13,737,278
38
(13,107,973)
Notes to the financial statements

1.
GENERAL INFORMATION
The Company is principally an investment holding company. The subsidiaries are principally involved in the manufacturing
and sales of latex gloves. There have been no significant changes to the nature of these principal activities during the
financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market
of the Bursa Malaysia Securities Berhad.
he registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed
T
Putra, 59200 Kuala Lumpur, Malaysia.
The principal place of business of the Company is located at Lot 38, Putra Industrial Park, Bukit Rahman Putra, 47000
Sungai Buloh, Selangor Darul Ehsan, Malaysia.
The financial statements are expressed in Ringgit Malaysia.
The financial statements of the Group and of the Company have been authorised for issue by the Board of Directors in
accordance with a resolution of the directors on 26th April 2013.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian
Financial Reporting Standards (MFRSs), International Financial Reporting Standards and the requirements of the
Companies Act, 1965 in Malaysia.
The financial statements of the Group and of the Company have been prepared under the historical cost basis, except
as disclosed in the significant accounting policies in Note 2.3.
The financial statements of the Group and of the Company for the financial year ended 31st December 2012 are the
first set of financial statements prepared in accordance with the MFRSs, including MFRS 1, First-time adoption of
MFRSs. In the previous financial year, the financial statements of the Group and the Company were prepared in
accordance with the Financial Reporting Standards (FRSs) in Malaysia.
The preparation of financial statements in conformity with MFRSs requires the use of certain critical accounting
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses
during the reporting period. It also requires directors to exercise their judgment in the process of applying the Groups
and the Companys accounting policies. Although these estimates and judgment are based on the directors best
knowledge of current events and actions, actual results may differ.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in Note 2.4.
2.2 New, Revised and Amendments/Improvements to Accounting Standards and IC Int
(a) Explanation of Transition to MFRSs
In conjunction with the planned convergence of FRSs with International Financial Reporting Standards as issued
by the International Accounting Standards Board on 1st January 2012, the Malaysian Accounting Standards
Board (MASB) had on 19th November 2011 issued a new MASB approved accounting standards, MFRSs
(MFRSs Framework) for application in the annual periods beginning on or after 1st January 2012.
ANNUAL REPORT 2012
39

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)
2.2 New, Revised and Amendments/Improvements to Accounting Standards and IC Int (Contd)
(a) Explanation of Transition to MFRSs (Contd)
The MFRSs Framework is mandatory for adoption by all Entities Other Than Private Entities for annual periods
beginning on or after 1st January 2012, with the exception of entities subject to the application of MFRS 141
Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate (Transitioning Entities). The
Transitioning Entities are given an option to defer adoption of the MFRSs framework to financial periods
beginning on or after 1st January 2014. Transitioning Entities also includes those entities that consolidate or
equity account or proportionately consolidate another entity that has chosen to continue to apply the FRSs
framework for annual periods beginning on or after 1st January 2012.
Accordingly, the Group and the Company which are not the Transitioning Entities have adopted the MFRSs
framework including MFRS 1 First-time adoption of MFRSs for the current financial year ended 31st December
2012.
MFRS 1 requires comparative information to be restated as if the requirements of MFRSs effective for annual
periods beginning on or after 1st January 2012 have always been applied, except when MFRS 1 allows certain
elective exemptions from such full retrospective application or prohibits retrospective application of some
aspects of MFRSs.
The Group and the Company have consistently applied the same accounting policies in their opening MFRSs
statements of financial position as at 1st January 2011 (date of transition) and throughout all years presented, as
if these policies had always been in effect.
As at 31st December 2011, all FRSs issued under the existing FRSs framework are equivalent to the MFRSs
issued under MFRSs framework except for differences in relation to the transitional provisions, the adoption of
MFRS 141 Agriculture and IC Int 15 Agreements for the Construction of Real Estate as well as differences in
effective dates contained in certain of the existing FRSs.
The adoption of the MFRSs for the current financial year did not result in any changes in accounting policies
and material adjustments to the Groups and the Companys statements of financial position, statements of
comprehensive income and statements of cash flows which are reported in accordance with the previous FRSs.
40

(b) New, revised and amendments/improvements to accounting standards and IC Int that are issued, but not
yet effective and have not been early adopted
The Group and the Company have not adopted the following new and revised MFRSs, amendments/
improvements to MFRSs, new IC Int and amendments to IC Int that have been issued as at the date of
authorisation of these financial statements but are not yet effective for the Group and the Company:

New MFRSs
MFRS 9
MFRS 10
MFRS 11
MFRS 12
MFRS 13
Effective for
financial periods
beginning on
or after
Financial Instruments
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurement
1st January 2015

1st January 2013
1st January 2013
1st January 2013
1st January 2013
Revised MFRSs
MFRS 119
MFRS 127
MFRS 128
Employee Benefits
Separate Financial Statements
Investments in Associates and Joint Ventures
1st January 2013

1st January 2013
1st January 2013
Amendments/Improvements to MFRSs
MFRS 1
First-time Adoption of Malaysian Financial Reporting Standards
MFRS 7
Financial Instruments: Disclosures
MFRS 10
Consolidated Financial Statements

MFRS 11
Joint Arrangements
MFRS 12
Disclosure of Interests in Other Entities

MFRS 101
Presentation of Financial Statements

MFRS 116
Property, Plant and Equipment
MFRS 127
Separate Financial Statements
MFRS 132
Financial Instruments: Presentation

MFRS 134
Interim Financial Reporting
New IC Int
IC Int 20
Stripping Costs in the Production Phase of a Surface Mine
Amendments to IC Int
IC Int 2
Members Shares in Co-operative Entities & Similar Instruments
1st January 2013

1st January 2013
1st January 2013 and
1st January 2014
1st January 2013
1st January 2014
1st July 2012 and
1st January 2013
1st January 2013
1st January 2014
1st January 2014
1st January 2013
1st January 2013
1st January 2013
ANNUAL REPORT 2012
41

yet effective and have not been early adopted (Contd)
A brief discussion on the above significant new and revised MFRSs, amendments/improvements to MFRSs,
new IC Int and amendments to IC Int are summarised below. Due to the complexity of these new standards, the
financial effects of their adoption are currently still being assessed by the Group and the Company.

MFRS 9 Financial Instruments

MFRS 9 specifies how an entity should classify and measure financial assets and financial liabilities.
This standard requires all financial assets to be classified based on how an entity manages its financial assets (its
business model) and the contractual cash flow characteristics of the financial assets. Financial assets are to be
initially measured at fair value. Subsequent to initial recognition, depending on the business model under which
these assets are acquired, they will be measured at either fair value or at amortised cost.
In respect of the financial liabilities, the requirements are generally similar to the former MFRS 139. However,
this standard requires that for financial liabilities designated as at fair value through profit or loss, changes in
fair value attributable to the credit risk of that liability are to be presented in other comprehensive income,
whereas the remaining amount of the change in fair value will be presented in the profit or loss.
MFRS 10 Consolidated Financial Statements and MFRS 127 Separate Financial Statements (Revised)
MFRS 10 replaces the consolidation part of the former MFRS 127 Consolidated and Separate Financial
Statements. The revised MFRS 127 will deal only with accounting for investment in subsidiaries, joint ventures
and associates in the separate financial statements of an investor and requires the entity to account for such
investments either at cost, or in accordance with MFRS 9.
MFRS 10 brings about convergence between MFRS 127 and IC Int 12 Consolidation-Special Purpose Entities,
which interprets the requirements of MFRS 10 in relation to special purpose entities. MFRS 10 introduces a
new single control model to identify a parent-subsidiary relationship by specifying that an investor controls an
investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. It provides guidance on situations
when control is difficult to assess such as those involving potential voting rights, or in circumstances involving
agency relationships, or where the investor has control over specific assets of the entity, or where the investee
entity is designed in such a manner where voting rights are not the dominant factor in determining control.
MFRS 11 Joint Arrangements

MFRS 11 supersedes the former MFRS 131 Interests in Joint Ventures. Under MFRS 11, an entity accounts
for its interest in a jointly controlled entity based on the type of joint arrangement, as determined based on an
assessment of its rights and obligations arising from the arrangement. There are two types of joint arrangement
namely joint venture or joint operation as specified in this new standard. A joint venture recognises its interest in
the joint venture as an investment and account for it using the equity method. The proportionate consolidation
method is disallowed in such joint arrangement. A joint operator accounts for the assets, liabilities, revenue and
expenses related to its interest directly.
MFRS 12 Disclosures of Interests in Other Entities
MFRS 12 is a single disclosure standard for interests in subsidiary companies, joint ventures, associated
companies and unconsolidated structured entities. The disclosure requirements in this MFRS are aimed at
providing standardised and comparable information that enable users of financial statements to evaluate the
nature of, and risks associated with, the entitys interests in other entities, and the effects of those interests on
its financial position, financial performance and cash flows.
42

yet effective and have not been early adopted (Contd)
MFRS 13 Fair Value Measurement
MFRS 13 defines fair value and sets out a framework for measuring fair value, and the disclosure requirements
about fair value. This standard is intended to address the inconsistencies in the requirements for measuring fair
value across different accounting standards. As defined in this standard, 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.
MFRS 128 Investments in Associates and Joint Ventures (Revised)
This revised MFRS 128 incorporates the requirements for accounting for joint ventures into the same accounting
standard as that for accounting for investments in associated companies, as the equity method was applicable
for both investments in joint ventures and associated companies. However, the revised MFRS 128 exempts the
investor from applying equity accounting where the investment in the associated company or joint venture is
held indirectly via venture capital organisations or mutual funds and similar entities. In such cases, the entity
shall measure the investment at fair value through profit or loss, in accordance with MFRS 9.
Amendments to MFRS10, MFRS12 and MFRS127 Investment Entities
These amendments introduce an exception to consolidation for investment entities. Investment entities are
entities whose business purpose is to invest funds solely for returns from capital appreciation, investment
income or both. The amendments require investment entities to measure particular subsidiaries at fair value
through profit or loss in accordance with MFRS 139 Financial Instruments: Recognition and Measurement
instead of consolidating them. In addition, the amendments also introduce new disclosure requirements related
to investment entities in MFRS 12 Disclosure of Interests in Other Entities and MFRS 127 Separate Financial
Statements.
2.3 Significant Accounting Policies
The following accounting policies have been used consistently in dealing with items which are considered material
in relation to the financial statements:
(a) Basis of Consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when
the Group has the ability to exercise its power to govern the financial and operating policies of an entity
so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are
exercisable are taken into account.

Investments in subsidiaries are measured in the Companys statement of financial position at cost less any
impairment losses, unless the investment is held for sale or distribution. The cost of investments includes
transaction costs.
The accounting policies of subsidiaries are changed when necessary to align them with the policies
adopted by the Group.
ANNUAL REPORT 2012
43

2.3 Significant Accounting Policies (Contd)
(a) Basis of Consolidation (Contd)
(ii) Accounting for Business Combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is
the date on which control is transferred to the Group.
The Group has changed its accounting policy with respect to accounting for business combinations.
From 1st January 2011, the Group has applied MFRS 3 Business Combination (Revised) in accounting
for business combinations. The change in accounting policy has been applied prospectively in accordance
with the transitional provisions provided by the standard and does not have impact on earnings per share.
For acquisition on or after 1st January 2011, the Group measures goodwill at the acquisition date as: The fair value of the consideration transferred; plus
The recognised amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the
acquiree; less
The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that
the Group incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or
loss.
For acquisition between 1st January 2006 and 1st January 2011, goodwill represents the excess of the
cost of the acquisition over the Groups interest in the recognised amount (generally fair value) of the
identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess was negative, a
bargain purchase gain was recognised immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group
incurred in connection with business combinations were capitalised as part of the cost of the acquitision.
For acquisition prior to 1st January 2006, goodwill represents the excess of the cost of the acquisition over
the Groups interest in fair values of the net identifiable assets and liabilities.
(iii) Accounting for Acquisition of Non-controlling Interest

44
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control
as equity transactions between the Group and its non-controlling interest holders. Any difference between
the Groups share of net assets before and after the change, and any consideration received or paid, is
adjusted to or against the Groups reserve.

(iv) Loss of Control

The Group applied MFRS 127 Consolidated and Separate Financial Statements (Revised) since the
beginning of the reporting period in accordance with the transitional provisions provided by the standard
and does not have impact on earnings per share. Upon the loss of control of a subsidiary, the Group
derecognises the assets and liabilities of the subsidiary, any non-controlling interest and the other
components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is
recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest
is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity
accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
In the previous financial years, if the Group retained any interest in the previous subsidiary, such interest
was measured at the carrying amount at the date that control was lost and this carrying amount would be
regarded as cost in initial measurement of the investment.
(v) Associates

Associates are entities, including unincorporated entities, in which the Group has significant influence, but
not control, over the financial and operating policies.
Investment in associates are accounted for in the consolidated financial statements using the equity
method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the
investments included transaction costs. The consolidated financial statements include the Groups share
of the profit or loss and other comprehensive income of the equity accounted associates, after adjustments
if any, to align the accounting policies with those of the Group, from the date that significant influence
commences until the date that significant influence ceases.
When the Groups share of losses exceeds its interest in an associate, the carrying amount of that interest
including any long-term investments is reduced to zero, and the recognition of further losses is discontinued
except to the extent that the Group has an obligation or has made payments on behalf of the investee.
Investment in associates are measured at the Companys statement of financial position at cost less
any impairment losses, unless the investment is classified as held for sale or distribution. The cost of
investments includes transaction costs.
(vi) Non-controlling Interest

Non-controlling interest at the end of the reporting period, being the equity in a subsidiary not attributable
directly or indirectly to the equity holders of the Company, are presented in the consolidated statement
of financial position and statement of changes in equity within equity, separately from equity attributable
to the owners of the Company. Non-controlling interest in the results of the Group is presented in the
consolidated statement of comprehensive income as an allocation of the profit or loss and the comprehensive
income for the year between non-controlling interest and the owners of the Company.
Since the beginning of the reporting period, the Group has applied MFRS 127 Consolidated and Separate
Financial Statements (Revised) where losses applicable to the non-controlling interest in a subsidiary are
allocated to the non-controlling interest even if doing so causes the non-controlling interest to have a deficit
balance. This change in accounting policy is applied prospectively in accordance with the transitional
provisions of the standard and does not have impact on earnings per share.
In the previous years, where losses applicable to the non-controlling interest exceed their interests in the
equity of a subsidiary, the excess, and any further losses applicable to the non-controlling interest, were
charged against the Groups interest except to the extent that the non-controlling interest had a binding
obligation to, and was able to make additional investment to cover the losses. If the subsidiary subsequently
reported profits, the Groups interest was allocated with all such profits until the non-controlling interests
share of losses previously absorbed by the Group had been recovered.
ANNUAL REPORT 2012
45

(vii) Transactions Eliminated on Consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity accounted associates are eliminated against the
investment to the extent of the Groups interest in the associates. Unrealised losses are eliminated in the
same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(b) Goodwill on Consolidation

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less
accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the
Groups cash-generating units that are expected to benefit from the synergies of the combination.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever
there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the
cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit.
Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss
is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent
periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating
unit is disposed of the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative fair values of the operations disposed of and the portion of the
cash-generating unit retained.
(c) Investments

Other investments are stated at cost less impairment losses, if any. The policy for the recognition and
measurement of impairment losses is in accordance with Note 2.3(n).
On disposal of an investment, the differences between net disposal proceeds and its carrying amount is
recognised in the profit or loss.
(d) Property, Plant and Equipment and Depreciation
46
All property, plant and equipment are initially stated at cost. After recognition as an asset, items of property,
plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses,
except for freehold land, factory building under construction and plant, machinery and equipment under
installation. The policy for the recognition and measurement of impairment losses is in accordance with Note
2.3(n).
Cost includes expenditure that is directly attributable to the acquisition of the asset. When significant parts of
an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
The cost of replacing part of an item of property, plant and equipment is included in the assets carrying amount
or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits
associated with the part will flow to the Company and its cost can be measured reliably. The carrying amount of
the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss as incurred.

(d) Property, Plant and Equipment and Depreciation (Contd)

Freehold land is not depreciated as it has an infinite life. Factory building under construction and plant,
machinery and equipment under installation are not depreciated until the assets are ready for their intended
use. Depreciation is provided on a straight-line basis so as to write off the depreciable amount of the following
assets over their estimated useful lives, as follows:-

Long leasehold land

Factory buildings

Plant, machinery and equipment

Moulds and tools

Electrical fittings and factory equipment

Office equipment, furniture and fittings

Renovation

Motor vehicles

Signboard
Cabin
Over the remaining

lease period of 63 years
2%
5%
5%
10%
5 33%
5 20%
10 20%
5 10%
15%
The residual values, useful lives and depreciation are reviewed and adjusted as appropriate at the end of the
reporting period.
The carrying amounts of items of property, plant and equipment are derecognised on disposal or when no future
economic benefits are expected from their use or disposal. Any gain or loss arising from the derecognition of
items of property, plant and equipment, determined as the difference between the net disposal proceeds, if any,
and the carrying amounts of the item, is included in profit or loss.
(e) Investment Properties

Investment properties are properties which are held either to earn rental income or for capital appreciation
or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost less accumulated depreciation and any accumulated
impairment losses. Building is depreciated on a straight line basis to write off the cost over its estimated useful
life at an annual rate of 2%.
Investment properties are derecognised on disposal when the investment properties are permanently withdrawn
from use and no future economic benefit is expected from its disposal arising from derecognition, determined
as the difference between any net disposal proceeds and the carrying amount of the investment properties, are
recongised in profit or loss.
(f)
Leases and Hire Purchase

(i) Finance Leases and Hire Purchase

Assets financed by finance leases and hire purchase arrangements which transfer substantially all the
risks and rewards of ownership to the Group are capitalised as property, plant and equipment, and the
corresponding obligations are treated as liabilities. The assets so capitalised are depreciated in accordance
with the accounting policy on property, plant and equipment.
ANNUAL REPORT 2012
47

(f)
Leases and Hire Purchase (Contd)

(i) Finance Leases and Hire Purchase (Contd)

Assets acquired by way of finance leases and hire purchase arrangements are stated at an amount equal
to the lower of their fair values and the present value of minimum lease payments at the inception of the
leases, less accumulated depreciation and impairment losses, if any. The policy for the recognition and
measurement of impairment losses is in accordance with Note 2.3(n) to the financial statements. The
corresponding liability is included in the statement of financial position as borrowings. In calculating the
present value of minimum lease payments, the discount factor used is the interest rate implicit in the lease,
when it is practicable to determine; otherwise, the Groups incremental borrowing rate is used. Property,
plant and equipment acquired under finance leases and hire purchase are depreciated over the shorter of
the estimated useful life of the asset and the lease term.
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability.
Finance costs, which represent the difference between the total leasing commitments and the fair value of
the assets acquired, are recognised as an expense in the profit or loss over the term of the relevant lease
so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each
accounting period.
(ii) Operating Leases

An operating lease is a lease other than a finance lease. Lease payments under operating lease are
recognised as an expense in the profit or loss on a straight line basis over the lease period.
(iii) Leases of Land and Buildings

In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made
are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative
fair values for leasehold interests in the land element and buildings element of the lease at the inception of
the lease. The up-front payment represents prepaid lease payment and is amortised on a straight-line basis
over the lease term.
(g) Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of inventories is measured based on
first-in first-out basis.
The cost of inventories comprises the costs of purchase, costs of conversion plus other costs incurred to bring
the inventories to their present locations and conditions. The costs of manufactured finished goods and workin-progress consist of raw materials, consumables, direct labour and a proportion of manufacturing overheads.
Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion
and the estimated costs necessary to make the sale.
(h) Financial Instruments
48
Financial instruments are recognised in the statements of financial position when, and only when, the Group
and the Company become a party to the contract provisions of the financial instrument.
A financial instrument is recognised initially, at its fair value, plus, in the case of a financial instrument not at
fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the
financial instrument.

(h) Financial Instruments (Contd)

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if,
and only if, it is not closely related to the economic characteristics and risks of the host contract and the host
contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded
derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the
host contract.
Financial assets are recognised in the statements of financial position when, and only when, the Group and the
Company become a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial
assets not at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and the
categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity
investments and available-for-sale financial assets.
(i) Financial Assets
Financial assets at fair value through profit or loss

Financial assets are classified as fair value through profit or loss if they are held for trading, including
derivatives, or are designated as such upon initial recognition.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair
value with the gain or loss recognised in profit or loss. Exchange differences, interest and dividend income
on financial assets at fair value through profit or loss are recognised as other gains or losses in the profit
or loss.
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market, trade and
other receivables and cash and cash equivalents are classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective
interest method. Gains and losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired, and through the amortisation process.
Held-to-maturity investments
Financial assets with fixed or determinable payments and fixed maturity that are quoted in an active
market and the Group have the positive intention and ability to hold the investment to maturity is classified
as held-to-maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity
investments are derecognised or impaired, and through the amortisation process.
ANNUAL REPORT 2012
49

(i) Financial Assets (Contd)

Available-for-sale financial assets

Available-for-sale are financial assets that are designated as available for sale or are not classified in any
of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value with the gain or loss
recognised in other comprehensive income, except for impairment losses, foreign exchange gains and
losses on monetary instruments and interest calculated using the effective interest method are recognised
in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income
is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is
derecognised.
I nvestments in equity instruments whose fair value cannot be reliably measured are measured at cost less
impairment loss.
(ii) Financial Liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into
and the definition of a financial liability.
Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position
when, and only when, the Group and the Company become a party to the contractual provisions of the
financial instrument. Financial liabilities are classified as either financial liabilities at fair value through
profit or loss or other financial liabilities.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit and loss.
Financial liabilities held for trading include derivatives entered into by the Group and the Company that
do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and
subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains
or losses on derivatives include exchange differences.
The Group and the Company has not designated any financial liabilities as at fair value through profit or
loss.
Other financial liabilities
The Groups and the Companys other financial liabilities include trade payables, other payables and loans
and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable transaction costs
and subsequently measured at amortised cost using the effective interest method. Borrowings are classified
as current liabilities unless the Company has an unconditional right to defer settlement of the liability for
at least 12 months after the end of the reporting period.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process.
50

(iii) Financial Guarantee Contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance
with the original or modified terms of a debt instrument.
Financial guarantee contracts are classified as deferred income and are amortised to profit or loss over the
contractual period or, upon discharge of the guarantee. When settlement of a financial guarantee contract
becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee
contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted
for as a provision.
(iv) Regular Way Purchase or Sale of Financial Assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms
require delivery of the asset within the time frame established generally by regulation or convention of the
marketplace concerned.
A regular way purchase or sale of financial asset is recognised and derecognised, as applicable, using trade
date accounting. Trade date accounting refers to: the recognition of an asset to be received and the liability to pay for it on the trade date; and
derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of
a receivable from the buyer for payment on the trade date.
(v) Derecognition
A financial asset is derecognised when the contractual right to receive cash flows from the asset has
expired or is transferred to another party without retaining control or substantially all risks and rewards
of the asset. On derecognition of a financial asset, the difference between the carrying amount and the
sum of the consideration received and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in profit or loss.
A financial liability is derecognised when the obligation specified in the contract is discharged or cancelled
or expires. On derecognition of a financial liability, the difference between the carrying amount and the
consideration paid is recognised in profit or loss.
(i) Provisions for Liabilities

Provision for liabilities are recognised when the Group has a present obligation (legal or constructive) as
a result of a past event, it is probable that an outflow of economic resources will be required to settle the
obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate.
If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the
provision is reversed. If the effect of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as a finance cost
ANNUAL REPORT 2012
51

(j)

Share Capital
Ordinary shares are recorded at the nominal value and the consideration in excess of nominal value of shares
issued, if any, is accounted for as share premium. Both ordinary shares and share premium are classified as
equity.
Dividends on ordinary shares are recognised as liabilities when proposed or declared before the end of the
reporting period. A dividend proposed or declared after the end of the reporting period, but before the financial
statements are authorised for issue, is not recognised as a liability at the end of the reporting period.
Costs incurred directly attributable to the issuance of the shares are accounted for as a deduction from share
premium, if any, otherwise it is charged to the profit or loss. Equity transaction costs comprise only those
incremental external costs directly attributable to the equity transaction which would otherwise have been
avoided.
(k) Treasury Shares

When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount
of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and
presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale,
issue and cancellation of treasury shares. When treasury shares are reissued by resale, the differences between
the sales consideration and the carrying amount is recognised in equity.
(l) Foreign Currency Translation

The individual financial statements of each entity in the Group are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The financial statements are
presented in Ringgit Malaysia (RM), which is the Companys functional currency and presentation currency.
(i) Foreign Currency Transaction
Transactions in foreign currencies are translated into RM at rates of exchange ruling at transaction dates.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are
translated into Ringgit Malaysia at the foreign exchange rates ruling at that date. Exchange differences
arising from the settlement of foreign currency transactions and from the translation of foreign currency
monetary assets and liabilities are included in the profit or loss.
Non-monetary items are measured in terms of historical cost in a foreign currency or translated using
the exchange rates as at the date of the initial transaction. Non-monetary items measured at fair value in
foreign currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in
the profit or loss for the period except for the differences arising on the translation of non-monetary items
in respect of which gains and losses are recognised directly in equity. Exchange differences arising from
such non-monetary items are also recognised directly in equity.
52

(l) Foreign Currency Translation
(ii) Financial Statements of Foreign Operation
For consolidation purposes, all assets and liabilities of foreign operations that have a functional currency
other than RM are translated at the exchange rate ruling at the end of the reporting period. Income and
expenses items are translated at exchange rate approximately those ruling on transactions dates.

All exchange differences arising from the translation of the financial statements of foreign operations
are dealt with through the exchange translation reserve account within other comprehensive income. On
the disposal of a foreign operation, the cumulative exchange translation reserves relating to that foreign
operation are recognised in the profit or loss as part of the gain or loss on disposal.
(m) Cash and Cash Equivalents

For the purpose of the statements of cash flows, cash and cash equivalents comprise of cash in hand, bank
balances, demand deposits and other 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. Cash and cash equivalents
are stated net of bank overdrafts and deposits pledged to the financial institution.
(n) Impairment

The Group and the Company assess at the end of each reporting period whether there is any objective evidence
that a financial asset is impaired.
(i) Impairment of Financial Assets

Trade and other receivables
To determine whether there is objective evidence that an impairment loss on financial assets have been
occurred, the Group and the Company consider factors such as the probability of insolvency or significant
delay in payments. For certain categories of financial assets, such as trade receivables, assets that are
assessed not to be impaired individually are subsequently assessed for impairment on a collective basis
based on similar characteristics. Objective evidence of impairment for a portfolio of receivables could
include the Groups and the Companys past experience of collecting payments, an increased in the
number of delayed payments in the portfolio past the average credit period and the observable changes in
national or local economic conditions that correlate with default on receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference between the
assets carrying amount and the present value of estimated future cash flows discounted at the financial
assets original effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables, where the carrying amount is reduced through the use of an
allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance
account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment loss was recognised, the previously recognised
impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised
cost at the reversal date. The amount of reversal is recognised in profit or loss.
ANNUAL REPORT 2012
53

(n) Impairment (Contd)
(i) Impairment of Financial Assets (Contd)
Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where
the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an
impairment loss on financial assets carried at cost had been incurred, the amount of the loss is measured
as the difference between the assets carrying amount and the present value of estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment losses are not
reversed in subsequent periods.
(ii) Impairment of Non-financial Assets

The Group assesses at the end of each reporting period whether there is an indication that an asset may be
impaired. If any such indication exists, or when an annual impairment assessment for an asset is required,
the Group makes an estimate of the assets recoverable amount.
An assets recoverable amount is the higher of an assets fair value less costs to sell and its value in use. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units (CGU)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds
its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised
in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill
allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the
unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in
other comprehensive income up to the amount of any previous revaluation.
An assessment is made at the end of each reporting period as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. A previously
recognised impairment loss is reversed only if there has been a change in the estimates used to determine
the assets recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued
amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not
reversed in a subsequent period.
(o) Revenue
(i) Sale of Goods
Revenue from sale of goods is recognised upon delivery of products and when the risks and rewards of
ownership have passed. Sale represents gross invoiced value of goods sold net of trade discounts and
allowances.
(ii) Dividend Income
Dividend income represents gross dividends from investments and is recognised when the shareholders
right to receive payment is established.
54

(p) Income Tax
The tax expense in the profit or loss represents the aggregate amount of current tax and deferred tax. Current tax
and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination
or items recognised directly in equity or other comprehensive income.
Current tax expense is the expected tax payable or receivable in respect of the taxable profit or loss for the
financial year and is measured using the tax rates that have been enacted or substantively enacted by the end of
the reporting period, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying
amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not
recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition
of assets or liabilities in a transaction that is not a business combination and that affects neither accounting
nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to apply to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of
the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets
and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each
reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be
realised.
A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profit or loss as
and when it is granted and claimed. Any unutilised portion of the tax incentive is recognised as a deferred tax
asset to the extent that it is probable that future taxable profits will be available against which the unutilised tax
incentive can be utilised.
(q) Borrowing Costs
Borrowing costs directly attributable to the acquisition and construction of development properties are
capitalised as part of cost of those assets, until such time as the assets are ready for their intended use or sale.
All other borrowing costs are charged to the profit or loss as an expense in the period in which they are incurred.
(r)
Employee Benefits
(i) Short Term Employee Benefits
Wages, salaries, social security contribution, bonuses and non-monetary benefits are accrued in the period
in which the associated services are rendered by the employees. Short term accumulating compensated
absences such as paid annual leave are recognised when services rendered by the employees that increase
their entitlement to future compensated absences. Short term non-accumulating compensated absences
such as sick leave are recognised when the absences occur.
(ii) Post-employment Benefits
The Group contributes to the Employees Provident Fund, the national defined contribution plan. The
contributions are charged to the profit or loss in the period to which the related service is performed. Once
the contributions have been paid, the Group has no further payment obligations.
ANNUAL REPORT 2012
55

(r)
Employee Benefits (Contd)

(iii) Share-based Compensation
The share option programme allows Groups employees to acquire shares of the Company. Prior to 1st
January 2006, share options granted to employees are not recognised as an employee cost. Following the
adoption of MFRS 2 Share-based Payment, the grant date fair value of share options granted to employees
is recognised as an employee expense, with a corresponding increase in equity, over the period in which
the employees unconditionally become entitled to the awards. The amount recognised as an expense is
adjusted to reflect the number of awards for which the related service and non-market vesting conditions
are expected to be met, such that the amount ultimately recognised as an expense is based on the number
of awards that meet the related service and non-market performance conditions at the vesting date.
For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based
payment is measured to reflect such conditions and there is no true-up for differences between expected
and actual outcomes.
The change in accounting policy is applied retrospectively only for those share options granted after 31st
December 2004 and have not vested as of 1st January 2006 as provided in the transitional provision of
MFRS 2. The amount recognised as an expense is adjusted to reflect the actual number of share options
that vest.
The fair value of employee share options is measured using the Black-Scholes model. Measurement inputs
include share price on measurement date, exercise price of the instrument, expected volatility (based on
weighted average historic volatility adjusted for changes expected due to publicly available information),
weighted average expected life of the instruments (based on historical experience and general option
holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds).
Service and non-market performance conditions attached to the transactions are not taken into account in
determining fair value.
(s) Earnings per Share

The Group presents basic and diluted earnings per share data for its ordinary shares (EPS).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by
weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive
potential ordinary shares, which comprise convertible notes, bonus issue and share options granted to employees.
(t) Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the
control of the Group.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group.
(u) Operating Segment
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 Groups other components. An operating segments operating results are reviewed regularly by the chief
operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions
about resources to be allocated to the segment and to assess its performance, and for which discrete financial
information is available.
56

2.4 Significant Accounting Estimation and Judgements
The preparation of the Groups financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of
contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates
could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability
affected in the future.
(a)
Judgements Made in Applying Accounting Policies

In the process of applying the Groups accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most significant effect on the amounts recognised in
the financial statements:(i) Operating Lease Commitment as lessee
The Group evaluated the lease arrangement for the leasehold land for the financial year ended 31st
December 2012 based on terms and conditions of the arrangement, whether the leasehold land are in
substance operating leases or finance leases.
Management judged that it does not retain all significant risks and rewards of the ownership of the
leasehold land, thus accounted for the contract as operating lease.
(b) Key Sources of Estimation Uncertainty

The key assumption concerning the future and other key sources of estimation uncertainty at the end of the
reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are as stated below:(i) Useful Lives of Property, Plant and Equipment
The Group estimates the useful lives of property, plant and equipment based on the period over which the
assets are expected to be available for use. The estimated useful lives of property, plant and equipment are
reviewed periodically and are updated if expectations differ from previous estimates due to physical wear
and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets.
In addition, the estimation of the useful lives of property, plant and equipment are based on internal
technical evaluation and experience with similar assets. It is possible, however, that future results of
operations could be materially affected by changes in the estimates brought about by changes in factors
mentioned above. The amounts and timing of recorded expenses for any period would be affected by
changes in these factors and circumstances. A reduction in the estimated useful lives of the property, plant
and equipment would increase the recorded expenses and decrease the non-current assets.
(ii) Impairment of Investment in Subsidiaries and Associates
The Group tests investment in subsidiaries, associates and other investment for impairment annually in
accordance with its accounting policy. More regular reviews are performed if events indicate that this is
necessary.
Significant judgement is required in the estimation of the present value of future cash flows generated
by the subsidiaries, associates and other investment which involve uncertainties and are significantly
affected by assumptions used and judgement made regarding estimates of future cash flows and discount
rates. Changes in assumptions could significantly affect the results of the Groups tests for impairment of
investment in subsidiaries, associates and other investment.
The management determined the recoverable amount of the investment in subsidiaries, associates and other
investment based on the individual assets value in use and the probability of the realisation of the assets.
The present value of the future cash flows to be generated by the asset is the assets value in use, and it is
assumed to be the same as the net worth of the asset as at the end of the reporting period. An impairment loss
is recognised immediately in the profit or loss if the recoverable amount is less than the carrying amount.
ANNUAL REPORT 2012
57

2.4 Significant Accounting Estimation and Judgements (Contd)
(b) Key Sources of Estimation Uncertainty (Contd)
(ii) Impairment of Investment in Subsidiaries and Associates (Contd)
In view of the above, the management are in the opinion that no impairment is required for the investment
in subsidiaries and associates as at the end of the reporting period.
(iii) Impairment of Non-current Assets
The Group reviews the carrying amount of its non-current assets, which include property, plant and
equipment and investment property, to determine whether there is an indication that those assets have
suffered an impairment loss in accordance with relevant accounting policies on the respective category of
non-current assets. Independent professional valuers to determine the carrying amount of these assets will
be procured when the need arise.
(iv) Impairment of Loans and Receivables
The Group assesses at the end of each reporting period whether there is any objective evidence that a
financial asset is impaired. To determine whether there is objective evidence of impairment, the Group
considers factors such as the probability of insolvency or significant financial difficulties of the debtor and
default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated
based on historical loss experience for assets with similar credit risk characteristics. The carrying amount
of the Groups loans and receivables at the end of the reporting period is disclosed in Note 11 to the
(v) Deferred Tax Assets
Deferred tax assets are recognised for all unutilised tax losses, unabsorbed capital allowances and
deductible temporary differences to the extent that it is probable that taxable profit will be available against
which the losses and capital allowances can be utilised. Significant managements judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level
of future taxable profits together with future tax planning strategies. The total carrying value of recognised
tax losses, capital allowances and temporary difference of the Group was RM Nil (31.12.2011: RM Nil;
1.1.2011: RM960,990/-).
(vi) Net Realisable Values of Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These
reviews require judgements and estimates. Possible changes in these estimates could result in revisions to
the valuations of inventories.
(vii) Goodwill
The Group tests goodwill for impairment annually in accordance with its accounting policy. More regular
reviews are performed if events indicate that this is necessary.
Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash-generating
unit to which goodwill has been allocated. The value-in-use calculation requires the management to
estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate
in order to calculate the present value.
The carrying amount of goodwill at the end of the reporting period is RM28,715,854/- (31.12.2011:
RM28,715,854/-; 1.1.2011: RM28,715,854/-). Details of the impairment assessment are disclosed in Note
8 to the financial statements.
58
At 1st January
2012
- 21,387,754
- 193,518,399
- 6,965,293 5,458,484 6,392,675 2,491,427 6,406,492
- 242,620,524
Charge for the
financial year
- 1,966,284
- 19,753,652
- 422,754 870,444
450,572
571,066 241,312 3,150
24,279,234
Written off
-
-
-
-
-
-
-
-
- (841,279)
-
(841,279)
Exchange
differences
-
(51,097)
-
-
-
-
(2,098)
(6,727)
(735) (19,991)
-
(80,648)
At 31st December
2012
- 23,302,941
- 213,272,051
- 7,388,047 6,326,830 6,836,520 3,061,758 5,786,534 3,150 265,977,831

Net book value
at 31st December
2012
53,769,908 102,046,115 18,159,900 212,306,312 26,480,363 12,500,790 5,956,841 1,979,330 12,387,143 1,201,301 59,850 446,847,853
Accumulated
depreciation
At 31st December
2012
53,769,908 125,349,056 18,159,900 425,578,363
26,480,363 19,888,837 12,283,671 8,815,850 15,448,901 6,987,835 63,000 712,825,684

Plant,

machinery
Office
Factory Plant,
and Electical equipment,

buildings machinery
equipment
fittings and furniture
Freehold Factory
under
and
under Mould
factory
and Motor
Group
land
buildings construction equipment installation and tools equipment
fittings
Renovation vehicles Cabin
Total
RM RM RM RM RM RM
RM RM RM
RM
RM RM

Cost
At 1st January 2012
47,695,863 126,379,823
1,025,000 402,047,535
8,557,750 19,596,217 11,060,210 8,144,255 12,444,479 7,869,683
- 644,820,815
Additions
407,420
683,126 17,134,900
8,501,095 32,952,346
292,620 1,227,805
684,472 7,204,740
- 63,000
69,151,524
Written off
-
-
-
-
-
-
-
-
- (841,279)
-
(841,279)
Exchange
differences
- (246,268)
-
-
-
-
(4,344)
(12,877)
(1,318) (40,569)
-
(305,376)
Reclassification
5,666,625 (1,467,625)
- 15,029,733 (15,029,733)
-
-
- (4,199,000)
-
-
-
3. PROPERTY, PLANT AND EQUIPMENT
ANNUAL REPORT 2012
59
60
At 31st December
2011
- 21,387,754
- 193,518,399
- 6,965,293 5,458,484 6,392,675 2,491,427 6,406,492 242,620,524

Net book value at
31st December
2011
47,695,863 104,992,069 1,025,000 208,529,136 8,557,750 12,630,924 5,601,726 1,751,580 9,953,052 1,463,191 402,200,291

1st January 2011 35,916,534 107,100,915
780,000 207,960,354 10,067,705 11,586,527 5,609,674 2,303,417 5,016,894 1,569,738 387,911,758
At 31st December
2011
47,695,863 126,379,823 1,025,000 402,047,535 8,557,750 19,596,217 11,060,210 8,144,255 12,444,479 7,869,683 644,820,815

Accumulated
depreciation
At 1st January
2011
- 19,015,763
- 174,087,976
- 6,546,168 4,674,090 5,912,231 2,155,553 6,160,182 218,551,963
Charge for the
financial year
- 2,333,610
- 19,430,423
-
419,125
782,973
480,751
335,322
231,294 24,013,498
Disposal
-
-
-
-
-
-
-
(5,337)
-
-
(5,337)
Exchange
differences
-
38,381
-
-
-
-
1,421
5,030
552
15,016
60,400
Plant,

machinery
Office
Factory Plant,
and Electical equipment,

buildings machinery
equipment
fittings and
furniture
Freehold Factory
under
and
under Mould
factory
and Motor
Group
land
buildings construction equipment installation
and tools equipment
fittings
Renovation
vehicles
Total

RM RM RM RM RM RM RM RM RM RM
RM

Cost
At 1st January 2011 35,916,534 126,116,678
780,000 382,048,330 10,067,705 18,132,695 10,283,764 8,215,648 7,172,447 7,729,920 606,463,721
Additions
11,779,329
78,166
245,000 6,460,318 12,203,542 1,463,522
598,573
273,380 4,922,365
109,291 38,133,486
Disposal
-
-
-
-
-
-
-
(5,337)
-
-
(5,337)
Exchange
differences
-
184,979
-
-
-
-
3,263
9,241
990
30,472
228,945
Reclassification
-
-
- 13,538,887 (13,713,497)
-
174,610
(348,677)
348,677
-
-
3. PROPERTY, PLANT AND EQUIPMENT

3. PROPERTY, PLANT AND EQUIPMENT (Contd)
(a) Included under property, plant and equipment are freehold land, buildings and certain plant and machinery which are
charged as security for the long-term loans, overdraft and other credit facilities of the Group as disclosed in Note 18
to the financial statements.
(b) In previous financial year, the Group purchased motor vehicle with an aggregate cost of RM109,291/- by means of
hire purchase. The cash outflow on purchase of motor vehicle amounted to RM10,291/-.
(c) The net book value of plant and equipment held under hire purchase payables is RM222,198/- (31.12.2011:
RM240,587/-; 1.1.2011: RM Nil).
(d) The net book value of motor vehicles held under hire purchase payables is RM1,107,697/- (31.12.2011:
RM1,263,944/-; 1.1.2011: RM1,300,822/-).
(e) The net book value of plant, machinery and equipment under industrial hire purchase is RM39,230,607/- (31.12.2011:
RM37,755,763/-; 1.1.2011: RM Nil).
(f) The remaining purchase consideration for the acquisition of factory buildings under construction and plant, machinery
and equipment under installation is disclosed as capital commitments in Note 33 to the financial statements.
4. INVESTMENT PROPERTY
Group

2012

RM
Cost
At 1st January/31st December
551,537
2011
RM
551,537
Accumulated depreciation
At 1st January
Charge for the financial year
65,356
13,071
52,285
13,071
Carrying amount
At 31st December
473,110
486,181
Consists of:Freehold office building
473,110
486,181
At 31st December
78,427
65,356
At 1.1.2011, carrying amount of investment property is RM499,252/-.

Rental income from investment property during the financial year is RM30,760/- (2011: RM24,196/-).
The market value of the freehold office building is estimated by the directors at RM741,000/- (31.12.2011: RM555,750/-;
1.1.2011: RM555,750/-) based on market information for similar properties.
ANNUAL REPORT 2012
61

5. PREPAID LAND LEASE PAYMENTS
Group

2012

RM
Cost
At 1st January
5,283,684
2011
RM
5,283,684
Amortisation
At 1st January
Amortisation for the financial year
667,709
64,129
603,582
64,127
Carrying amount
At 31st December
4,551,846
4,615,975
Consists of:Leasehold land with period of:Less than 50 years

More than 50 years
485,704
4,066,142
503,559
4,112,416
At 31st December
731,838
4,551,846
667,709
4,615,975
At 1.1.2011, carrying amount of prepaid land lease payments is RM4,680,102/-.

All the prepaid land lease payments are charged to credit facilities granted to the Group as disclosed in Note 18 to financial
statements.
6. OTHER INVESTMENT
Group

2012 2011

RM RM
Held to maturity
Unquoted bond in Malaysia, at cost
At 1st January
-
4,000,000
Written off
-
(4,000,000)
At 31st December
7. INVESTMENT IN ASSOCIATES

Group
Unquoted shares, outside Malaysia
Less: Disposal #
Share of post-acquisition result, net of dividend received
Exchange differences

Company
Unquoted shares, outside Malaysia
Less: Disposal #
At 31st December
#
62
31.12.2012
RM
20,218,962
-
231,513,511
(41,858,354)
31.12.2011
RM
20,218,962
-
208,138,719
-
209,874,119
228,357,681
19,829,489
-
19,829,489
-
19,829,489
19,829,489
1.1.2011
RM
20,218,962
(389,473)
173,692,154
-
193,521,643
20,218,962
(389,473)
19,829,489
On 24th March 2010, the Company has disposed of its 33% equity interest in Medirite Supermax (Australia) Pty Ltd
for a total cash consideration of RM303,148/-.

7. INVESTMENT IN ASSOCIATES (Contd)
The summarised financial information of the associates is as follows:

31.12.2012

RM
Total assets
Total liabilities
469,219,815
(52,653,018)
31.12.2011
RM
535,060,561
(96,006,237)
503,354,270
(105,356,519)
359,802,724
334,959,041
Net assets
416,566,797
439,054,324
Profit for the financial year
46,749,584
69,672,076
Revenue
342,558,152
1.1.2011
RM
397,997,751
82,151,894
Details of the associates are as follows:-
Name of Companies
Country of
Incorporation
Supermax Brasil Importadora #
Brazil
Supermax Europe NC/SA #**

Supermax Canada Inc. #**
Effective Equity Interest
31.12.2012 31.12.2011
%
%
50
50
Belgium
50
Canada
50
1.1.2011
%
Principal Activities
50
Marketing, importing and

distributing latex gloves
50
50

50
50

Audited by audit firms other than Baker Tilly Monteiro Heng.
** The management financial statements of these associate companies were used in the preparation of the consolidated
8.
GOODWILL ON CONSOLIDATION
Group

2012

RM
At 1st January/31st December
28,715,854
2011
RM
28,715,854
Goodwill arising from business combination has been allocated to cash-generating unit (CGU) for impairment testing
purpose. The carrying amount of goodwill has been allocated to the investment in Maxwell Glove Manufacturing Berhad.
The recoverable amount of the CGU is determined based on value in use calculations using cash flow projections on
financial budgets approved by directors covering a five-year period. The pretax discount rate applied to the cash flow
projections and the forecasted growth rates used to extrapolate cash flows beyond the five year period are 4.26% and
5.00% (31.12.2011: 3.84% and 5.00%, 1.1.2011: 3.74% and 5.00%) respectively.
ANNUAL REPORT 2012
63

8.
GOODWILL ON CONSOLIDATION (Contd)

The calculation of value in use for this CGU is most sensitive to the following assumptions:(a) Budgeted growth margin Gross margin is based on average values achieved in the three years preceding the start
of the budget period. The anticipated growth rate for gross margin is projected to be minimal.
(b) Growth rates The forecasted growth rates are based on directors past experience in the glove manufacturing
industry that the CGU operates in.
(c) Pre-tax discount rate Discount rate reflects the current market assessment of the risks specific to the CGU. This
is the benchmark used by directors to assess operating performance and to evaluate future investment proposals. In
determining appropriate discount rate for the CGU, regard has been given to the yield on a five-year government
bond at the beginning of the budgeted year.
(d) There is no significant fluctuation in the price of raw material.
The value assigned to the key assumptions represents directors assessment of future trends in the glove manufacturing
industry and are based on both external sources and internal sources (historical data).
Sensitivity to changes in assumptions
Directors believe that no reasonable possible changes in any of the key assumptions above will cause the carrying values
of the CGU to materially exceed its recoverable amount.
9. DEFERRED TAX ASSETS/(LIABILITIES)

Group

2012

RM
Deferred tax assets
At 1st January
-
Transfer to profit or loss (Note 30)
-
At 31st December

At 1st January
Transfer to profit or loss (Note 30)
18,206,050
1,786,987
At 31st December
19,993,037
2011
RM
960,990
(960,990)
-
13,581,000
4,625,050
18,206,050
The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as
follows:-
64

9. DEFERRED TAX ASSETS/(LIABILITIES) (Contd)
The components and movements of deferred tax assets and liabilities during the financial year prior to offsetting are as
follows:

Group
Deferred tax assets
Unabsorbed capital
allowances
Unrealised foreign exchange
Unused investment tax
allowances
Unused reinvestment
allowances
Unutilised tax losses
At 1st
January
2011
RM
Recognised
in the profit
or loss
RM
At 31st
December
2011
RM
7,954,032
566,478
(2,761,936)
1,283,563
5,192,096
1,850,041
46,000
(46,000)
11,416,787
89,667
20,072,964
(113,349)
1,445,909
11,303,438
1,535,576

Unrealised foreign exchange
32,677,704
15,270
(12,620,010)
32,692,974
(191,813)
Recognised
in the profit
or loss
RM
(5,107,133)
(1,850,041)
At 31st
December
2012
RM
84,963
-
-
(1,422,916)
-
9,880,522
1,535,576
19,881,151
(8,380,090)
11,501,061
3,468,497
1,925,730
36,146,201
1,941,000
(4,714,565)
(1,878,538)
31,431,636
62,462
(5,586,040)
(18,206,050)
(1,786,987)
(19,993,037)
5,394,227
38,087,201
(6,593,103)
Group

31.12.2012
31.12.2011

RM
RM
Presented after appropriate offsetting as follows:Deferred tax assets
-
-
(19,993,037)
(18,206,050)

(19,993,037)
(18,206,050)
31,494,098
1.1.2011
RM
960,990
(13,581,000)
(12,620,010)
10. INVENTORIES
Group

31.12.2012
31.12.2011

RM
RM
At cost
Raw materials
23,801,240
19,914,959
Consumables
15,531,106
14,754,897
Work-in-progress
91,237,180
89,046,620
Finished goods
103,217,106
99,423,175

233,786,632
223,139,651
1.1.2011
RM
20,822,364
12,983,344
70,984,157
28,298,439
133,088,304
ANNUAL REPORT 2012
65

11. TRADE AND OTHER RECEIVABLES
Group
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
Trade receivables
101,256,028
104,578,437
113,711,347
Trade receivables, net
100,822,162
104,479,257
113,612,167
Less: Allowance for impairment
Other receivables
Other receivables
Deposits
(433,866)
3,778,923
(99,180)
9,626,182
4,187,910
1,541,146
1,573,088
105,235,567
115,646,585
119,373,165
Total trade and other receivables
105,235,567
115,646,585
119,373,165
Amount owing by associates (Note 13)
101,078,141
90,215,842
93,735,639
Add:
Cash and bank balances (Note 14)
Total loans and receivables
634,482
(99,180)
4,413,405
122,863,481
11,167,328
5,760,998
104,483,446
97,375,650
329,177,189
310,345,873
310,484,454
Other receivables
233,248
226,998
269,876
Total other receivables
233,248
226,998
269,876
291,557,693
301,222,668
137,912,168
Company
Other receivables
Add:
Amount owing by subsidiaries (Note 23)
Amount owing by associates (Note 13)
Cash and bank balances (Note 14)
Total loans and receivables
294,301
629,368
292,714,610
294,301
4,242,301
13,737,278
884,835
315,481,245
143,309,180
(a) Trade Receivables

The credit period granted on sales of goods ranges from 30 to 120 days (31.12.2011: 30 to 120 days;
1.1.2011: 30 to 120 days).
Analysis of trade receivables by currency:31.12.2012

RM
Canadian
Euro
Ringgit Malaysia
United States Dollar
66
1,661,807
Group
31.12.2011
RM
1.1.2011
RM
-
1,377,788
1,529,103
909,551
97,534,189
102,701,776
112,472,969
248,378
100,822,162
248,378
104,479,257
229,647
113,612,167

11. TRADE AND OTHER RECEIVABLES (Contd)
(a) Trade Receivables
Ageing analysis of trade receivables: Group

31.12.2012
31.12.2011

RM
RM
1.1.2011
RM
Neither past due nor impaired
89,013,679
94,123,466
108,120,886

Impaired
11,808,483
433,866
10,355,791
99,180
5,491,281
99,180
1 to 30 days past due not impaired

More than 30 days past due not impaired
153,152
11,655,331
101,256,028
213,474
10,142,317
452,244
5,039,037
104,578,437
113,711,347
Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy receivables with good payment records
with the Group. None of the Groups trade receivables that are neither past due nor impaired have been renegotiated
during the financial year.
Receivables that are past due but not impaired
Based on historical default rates, the Group believes that no allowance for impairment in respect of trade receivables
that are past due. These receivables are mainly arising from trade receivables that have a good credit record with the
Group.
The trade receivables that are past due but not impaired are unsecured in nature.
Receivables that are impaired
The Groups trade receivables that are impaired at the end of reporting period are as follows:
Group

31.12.2012
31.12.2011

RM
RM
Individually impaired
Trade receivables
Less: Allowance for impairment
433,866
(433,866)
1.1.2011
RM
99,180
(99,180)
99,180
(99,180)
- - -
Movements in the allowance for impairment account are as follows: Group

2012

RM
At 1st January
Allowance for the financial year
At 31st December
99,180
334,686
433,866
2011
RM
99,180
-
99,180
ANNUAL REPORT 2012
67

11. TRADE AND OTHER RECEIVABLES (Contd)
(b) Deposits
Included in deposits is an amount of RM928,000/- (31.12.2011: RM928,000/-; 1.1.2011: RM928,000/-) representing
deposit paid by Maxwell Glove Manufacturing Berhad (MGMB) in 2004 to a third party (Vendor) for purchase
of lands. The purchase of lands was not approved by the Securities Commission in 2004.
During the financial year ended 2007, MGMB filed a legal suit against the Vendor pursuant to the terms of the Sale
& Purchase Agreement to recover the full sum of RM928,000/- paid. Judgment was granted by the Court in favour
of MGMB on 25th October 2007 (said Judgement). The Vendor filed an appeal and a stay of execution against the
said Judgment.
On 11th December 2008, the Court dismissed the Vendors application for stay of execution with costs.
The Vendor subsequently filed a Notis Usul to the Court of Appeal on 21st January 2009. The Court of Appeal has
granted a stay of execution pending hearing of Vendors appeal but has instructed Vendor to deposit the judgement
sum of RM928,000/- into a joint account of the solicitors of the Vendor and MGMB. On 14th October 2009, the Court
of Appeal had allowed the Appeal with costs whereupon the said Judgement was set aside. The Court of Appeal has
further ordered that the fixed deposit of RM928,000/- in the Solicitors joint account is to be released to the Vendor.
The matter proceeded with full trial on 24th and 25th February 2011 at the Taiping High Court. After full trial, the
Taiping High Court dismissed MGMBs claim with costs on 28th April 2011. On 11th May 2011, the Company has
exercised its automatic right of appeal to the Court of Appeal against the decision.
As at the end of the report period, the grounds of decision of the Taiping High Court have not been published and
MGMBs appeal to the Court of Appeal is pending with no date fixed as of yet. Allowance for loss in respect of the
deposit has been made in the current years financial statements.
12. OTHER CURRENT ASSETS

Group
Prepayments
Tax recoverable

Company
Tax recoverable
31.12.2012
RM
36,104
616,643
31.12.2011
RM
233,175
7,335,631
1.1.2011
RM
744,340
766,053
652,747
7,568,806
1,510,393
37,723
51,092
56,911
13. AMOUNT OWING BY ASSOCIATES

Amount owing by associates arose mainly from trade transactions with repayment term of 120 days (31.12.2011: 120
days; 1.12011: 120 days).
Analysis of amount owing by associates by currency:

Group
Ringgit Malaysia

Company
68
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
-
101,078,141
-
90,215,842
10,465
93,725,174
294,301
294,301
4,242,301
101,078,141
90,215,842
93,735,639

14. CASH AND BANK BALANCES

Group
Fixed deposits with licensed banks
Cash in hand and at bank

Company
Cash in hand and at bank
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
-
122,863,481
-
104,483,446
695,701
96,679,949
122,863,481
104,483,446
97,375,650
629,368
13,737,278
884,835
In previous financial year, fixed deposits bear interest at rates ranging from 2.45% to 3.5% per annum and have an average
maturity of 30 days.
Analysis of cash and bank balances by currency:

Group
Canadian
Euro
Ringgit Malaysia

Company
Ringgit Malaysia
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
491,808
1,594,611
16,416,746
104,360,316
-
2,337,139
28,081,661
74,064,646
2,528,601
20,545,145
74,301,904
122,863,481
104,483,446
97,375,650
618,870
10,498
13,726,100
11,178
884,835
-
629,368
13,737,278
884,835
15. SHARE CAPITAL

Group and Company

2012
Number Number

of shares
of shares
Unit
RM Unit
Ordinary shares of RM0.50 each
Authorised:At the beginning/end of the financial year
Issued and fully paid:At the beginning of the financial year
Issued during the financial year
- bonus issue
At the end of the financial year
2011
RM
1,000,000,000
500,000,000
1,000,000,000
500,000,000
340,077,440
170,038,720
340,077,440
170,038,720
340,077,440
170,038,720
680,154,880
340,077,440
340,077,440
170,038,720
On 31st January 2012, the Company issued 340,077,440 ordinary shares of RM0.50 each pursuant to the bonus issue
exercise on the basis of one bonus share for every one existing Companys share held.
ANNUAL REPORT 2012
69

16. SHARE PREMIUM

Group and Company

2012 2011

RM RM
At 1st January
Bonus issue
At 31st December
76,257,765 76,257,765
(76,257,765)
- 76,257,765
17. RESERVES

Group
Non-distributable reserves:Share premium (Note 16)
Translation reserve
Treasury shares

Distributable reserve:Retained earnings

Company
Non-distributable reserves:Share premium (Note 16)
Treasury shares

Distributable reserve:Retained earnings
31.12.2012
RM
-
(42,559,562)
(2,041,204)
31.12.2011
RM
1.1.2011
RM
76,257,765
291,142
-
76,257,765
(373,878)
-
(44,600,766)
76,548,907
75,883,887
538,554,881
522,503,225
445,545,343
493,954,115
-
(2,041,204)
(2,041,204)
49,832,669
47,791,465
599,052,132
521,429,230
76,257,765
-
76,257,765
-
76,257,765
152,249,709
228,507,474
76,257,765
4,587,261
80,845,026
(a) Translation Reserve

Translation reserve arose from the exchange differences on the translation of foreign operations.
(b) Retained Earnings
Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with
the Finance Act 2007 which was gazetted on 28th December 2007, companies shall not be entitled to deduct tax on
dividend paid, credited or distributed to its shareholders, and such dividend will be exempted from tax in the hands
of the shareholders (single tier system). However, there is a transitional period of six years, expiring on 31st
December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances.
Companies also have an irrevocable option to disregard the tax credits under Section 108 of the Income Tax Act,
1967 (Section 108 balance) and opt to pay dividends under the single tier system. The change in the tax legislation
also provides for the Section 108 balance to be locked-in as at 31st December 2007.
The Company did not elect for the irrevocable option to disregard the Section 108 balance. Accordingly, during the
transitional period, the Company may utilise the Section 108 balance as at 31st December 2012 to distribute cash
dividend payments to ordinary shareholders as defined under Finance Act 2007.
Subject to the agreement of the Inland Revenue Board, the Company has:(i) tax exempt account amounting to approximately RM36,367,863/- (31.12.2011: RM36,289,009/-; 1.1.2011:
RM24,280,000/-) available for distribution out of tax exempt dividends; and
(ii) sufficient tax credits under Section 108 of the Income Tax Act, 1967 to frank the payment of net dividends
amounting to approximately RM253,606/- (31.12.2011: RM253,606/-; 1.1.2011: RM253,606/-) out of its profits.
70

17. RESERVES (Contd)
(c) Treasury shares
Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists solely
of the acquisition costs of treasury shares.
The Company acquired 1,002,000 shares in the Company through purchases on the Bursa Malaysia Securities Berhad
during the financial year. The total amount paid to acquire the shares was RM2,041,204/- and this was presented as
a component within shareholders equity.
The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe
that the repurchase plan can be applied in the best interests of the Company and its shareholders. The repurchase
transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares.
18. LOANS AND BORROWINGS

Maturity
Group
Current
Secured:Bankers acceptance
Export credit refinancing
Hire purchase payables (Note 19)
Industrial hire purchase (Note 20)
Term loans
2013
2011
2013
2013
2013
31.12.2012
RM
129,449,275
-
144,104
7,246,506
26,082,899
31.12.2011
RM
151,740,149
-
493,656
6,291,941
31,936,885
1.1.2011
RM
126,092,114
5,668,000
1,329,307
22,056,170

Non-current
Secured:Hire purchase payables (Note 19)
2014
Industrial hire purchase (Note 20)
2016
Term loans
2017
162,922,784
190,462,631
155,145,591
32,077
20,741,126
94,414,300
176,690
24,876,456
115,411,299
574,057
139,954,959
Total loans and borrowings
278,110,287
330,927,076
295,674,607
115,187,503
140,464,445
140,529,016
Company
Current
Secured:Term loans
2013
21,408,100
15,842,500
11,241,753
Non-current
Secured:Term loans
2016
79,505,900
104,560,500
82,574,555
Total loans and borrowings
100,914,000
120,403,000
93,816,308
As of 31st December 2012, the Group has bank overdraft and other credit facilities totalling RM343,591,000/- (31.12.2011:
RM354,180,000/-; 1.1.2011: RM162,556,000/-) obtained from local licensed banks. These borrowings bear interest at
rates ranging from 1.12% to 8.10% (31.12.2011: 2.33% to 6.25%; 1.1.2011: 3.77% to 6.64%) per annum. The secured
credit facilities of the Group are secured by a negative pledge, a debenture over the assets and legal charge over factories
of a subsidiary company.
ANNUAL REPORT 2012
71

18. LOANS AND BORROWINGS (Contd)
The Groups term loans are as follows:(i) A ten years term loan of RM5,000,000/- secured by a charge over certain pieces of land of a subsidiary company
with carrying values of RM7,802,576/- (31.12.2011: RM7,802,576/-; 1.1.2011: RM7,804,852/-) and a corporate
guarantee from the Company. The loan is repayable by 121 monthly instalments of RM61,770/- each commencing
one month after full drawdown;
(ii) Two ten years term loans totalling RM9,400,000/- which are secured by first and second fixed charges over a factory,
land and building of a subsidiary company with a carrying value of RM16,097,082/- (31.12.2011: RM16,494,730/-;
1.1.2011: RM16,891,977/-), a negative pledge over the assets of the subsidiary company and a corporate guarantee
from the Company. The loans are repayable by equal monthly instalments commencing February 2003;
(iii) A seven years term loan of RM1,500,000/- secured by a charge over a piece of freehold land, factory building and
machinery of a subsidiary company with a carrying value of RM3,907,706/- (31.12.2011: RM3,907,706/-; 1.1.2011:
RM3,907,706/-), a debenture over the fixed and floating assets of a subsidiary company and a corporate guarantee
from the Company. The loan is repayable by 84 monthly instalments commencing January 2004. This term loan had
been fully settled in the year 2011;
(iv) A seven years term loan drawdown in three stages amounting to RM14,621,901/- secured together with the loan as
disclosed in (iii) above, by a charge over a piece of freehold land, factory building and machinery of a subsidiary
company with a carrying value of RM3,907,706/- (31.12.2011: RM3,907,706/-; 1.1.2011: RM3,907,706/-), a
debenture over the fixed and floating assets of a subsidiary company and a corporate guarantee from the Company.
The loan is repayable by 84 monthly instalments commencing one month after drawdown. This term loan had been
fully settled during the financial year; and
(v) An unsecured term loan of RM40,000,000/- granted under a Primary Collateralised Loan Obligation Transaction
Facility Agreement in 2007. The term loan has a maturity period not exceeding five (5) years commencing from the
date of drawdown and is repayable in one lump sum upon maturity. This term loan had been fully settled during the
financial year.
These term loans bear interest at rates ranging from 3.40% to 8.10% (31.12.2011: 3.50% to 7.80%; 1.1.2011: 3.50% to
8.96%) per annum.
On 13th January 2011, the Company entered into a Facility Agreement with Overseas-Chinese Banking Corporation
Limited for a term loan facility in US Dollar of up to an aggregate principal amount of USD40,000,000/- (approximately
RM118,978,000/-). The term loan is secured by corporate guarantee and indemnity for USD40,000,000/- together with
interest accruing and all monies payable under the Facility from a subsidiary of the Company. The term loan bears an
interest of 0.65% plus the Banks prevailing cost of fund per annum. The term loan shall be repaid in twenty quarterly
principal repayment with the first instalment being payable on the date falling three months from the date of the first
utilisation on 19th May 2011.
On 9th April 2012, the Group entered into a Facility Agreement with Overseas-Chinese Banking Corporation Limited for
a term loan facility in US Dollar of up to an aggregate principal amount of USD33,690,000/-. The term loan is secured
by corporate guarantee and indemnity for USD33,690,000/- together with interest accruing and all monies payable
under the Facility from the Company. During the financial year, drawdown of term loan amounting to USD3,023,278/(approximately RM9,601,933/-). The term loan bears an interest of 0.65% plus the Banks prevailing cost of fund per
annum. The term loan shall be repaid in twenty quarterly principal repayment with the first instalment being payable on
the date falling three months from the date of the first utilisation on 3rd July 2012.
72

18. LOANS AND BORROWINGS (Contd)
Analysis of borrowings by currency:

Group
Ringgit Malaysia

Company
Ringgit Malaysia
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
128,420,982
149,689,305
196,940,131
133,986,945
248,358,299
47,316,308
278,110,287
330,927,076
295,674,607
-
100,914,000
-
120,403,000
46,500,000
47,316,308
100,914,000
120,403,000
93,816,308
19. HIRE PURCHASE PAYABLES

Group

31.12.2012
31.12.2011

RM
RM
Minimum hire purchase payments:- not later than one year
154,074
527,210
- later than one year but not later than five years
31,477
186,853

Less: Future finance charges
Analysis of present value of hire purchases payables:Current

- not later than one year
Non-current
1.1.2011
RM
1,408,814
609,346
185,551
(9,370)
714,063
(43,717)
2,018,160
(114,796)
144,104
493,656
1,329,307
32,077
176,690
574,057
176,181
176,181
670,346
670,346
1,903,364
1,903,364
Interest rates on the hire purchase payables for the financial year ranging from 2.78% to 6.25% (31.12.2011: 2.50% to
3.00%; 1.1.2011: 3.40% to 6.54%) per annum.
20. INDUSTRIAL HIRE PURCHASE

Group

31.12.2012
31.12.2011

RM
RM
Minimum hire purchase payments:- not later than one year
8,674,707
7,907,609
22,467,686
27,545,505

Less: Future finance charges

Analysis of present value of industrial hire purchases:Current
- not later than one year
Non-current
31,142,393
(3,154,761)
1.1.2011
RM
35,453,114
(4,284,717)
27,987,632
31,168,397
7,246,506
6,291,941
20,741,126
24,876,456
27,987,632
31,168,397
Interest rate on the industrial hire purchase for the financial year is at 6.25% (31.12.2011: 6.25%; 1.1.2011: Nil) per annum.
ANNUAL REPORT 2012
73

21. TRADE AND OTHER PAYABLES

Group
Trade payables
31.12.2012
RM
31.12.2011
RM
1.1.2011
RM
76,930,128
59,970,951
40,097,568
Other payables
Other payables
Deposits received from customers
Accruals
18,651,447
15,276,858
7,065,089
5,862,692
12,651,441
8,773,774
1,320,488
8,732,601
10,125,221
117,923,522
87,258,858
60,275,878
Total trade and other payables

Add:
Loans and borrowings (Note 18)
117,923,522
87,258,858
60,275,878
278,110,287
330,927,076
295,674,607
31.12.2011
RM
1.1.2011
RM
Total financial liabilities carried at amortised cost

Company
Other payables
Other payables
Accruals
Total other payables
Add:
Amount owing to a subsidiary (Note 23)
Loans and borrowings (Note 18)
Total financial liabilities carried at amortised cost
40,993,394
396,033,809
31.12.2012
RM
27,287,907
418,185,934
20,178,310
355,950,485
27,995
25,000
61,260
22,000
247,844
22,000
7,639,986
100,914,000
-
120,403,000
93,816,308
52,995
108,606,981
83,260
120,486,260
269,844
94,086,152
(a) Trade Payables

The credit period granted to the Group for trade purchases ranges from 30 to 60 days (31.12.2011: 30 to 60 days;
1.1.2011: 30 to 60 days).
Analysis of trade payables by currency:
Group

31.12.2012
31.12.2011

RM
RM
Euro
Ringgit Malaysia

-
42,969,148
33,960,980
76,930,128
1,286,121
29,615,641
29,069,189
59,970,951
1.1.2011
RM
30,461,746
9,635,822
40,097,568
(b) Other Payables

Other payables which mainly arose from other operating expenses payable, are interest free and are repayable on
demand.
(c) Deposits Received from Customers
Deposits received from customers are denominated in United States Dollar.
74

22. INVESTMENT IN SUBSIDIARIES

Group and Company

2012
2011

RM
RM
Unquoted shares, at cost
At 1st January
183,670,628
181,774,318
Addition
223,436
1,896,310
At 31st December
183,894,064
183,670,628
(a) On 7th January 2011, the Company has incorporated a 100% owned subsidiary, Supermax Global Limited, a
company incorporated in Bermuda, comprising 5,000 issued and fully paid up capital of USD1/- each at par for cash
consideration of USD5,000/- (RM15,248/-);
(b) On 30th December 2011, the Company has incorporated a 100% owned subsidiary, Supermax Healthcare Limited,
a company incorporated in United Kingdom, comprising 1 issued and fully paid up capital of GBP1/- each at par for
cash consideration of GBP1/- (RM5/-);
(c) In previous financial year, the Company has increased its investment in Supermax Healthcare Incorporated and
Supermax Deutschland GmbH amounting to RM1,838,179/- and RM42,878/- respectively;
(d) On 1st January 2012, the Company has incorporated a 100% owned subsidiary, White Oak Global Property, a
company incorporated in United States of America, comprising 5,000 issued and fully paid up capital of USD1/- each
at par for cash consideration of USD5,000/- (RM15,201/-); and
(e) On 1st July 2012, the Company has incorporated a 67% owned subsidiary, Supermax Healthcare Canada Incorporated,
a company incorporated in Canada, comprising 100,000 issued and fully paid up capital of CDN1/- each at par for
cash consideration of CDN67,000/- (RM208,235/-).
ANNUAL REPORT 2012
75
76
Malaysia
Maxter Glove Manufacturing Sdn. Bhd.
Malaysia
Germany
Bermuda
Supermax Energy Sdn. Bhd.
Supermax Deutschland GmbH**
Supermax Global Limited**
Malaysia
United States of America
Canada
100
100
67
100
100
90
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
31.12.2011
%
100
90
100
100
100
100
100
100
100
1.1.2011
%
Effective Equity Interest
31.12.2012
%
Trading and exporting latex gloves
Property holding
Marketing, importing and distributing latex gloves
Generation of biomass energy
Pre-operating
Manufacturing and sale of latex gloves
Manufacturing and sale of latex gloves
M anufacturing and sale of latex gloves
Trading and exporting latex gloves
Principal Activities
* Audited by audit firms other than Baker Tilly Monteiro Heng.

** The audited financial statements and auditors report for the financial year were not available. However, the financial statements of the subsidiaries used for consolidation
purposes were reviewed by Baker Tilly Monteiro Heng.
Seal Polymer Latex Products Sdn. Bhd.
Indirect subsidiaries
White Oak Global Property**
Supermax Healthcare Canada Incorporated*
United Kingdom
Malaysia
Supermax International Sdn. Bhd.
Supermax Healthcare Limited**
Malaysia
Maxwell Glove Manufacturing Berhad*
United States of America
Malaysia
Supermax Glove Manufacturing Sdn. Bhd.
Supermax Healthcare Incorporated**
Malaysia
Country of
Incorporation
Supermax Latex Products Sdn. Bhd.
Direct subsidiaries
Name of Companies
22. INVESTMENT IN SUBSIDIARIES (Contd)

23. AMOUNT OWING BY/(TO) SUBSIDIARIES
Amount owing by/(to) subsidiaries are unsecured, interest free and are repayable on demand
24. DIVIDENDS

Group and Company

2012
2011

RM
RM
Recognised during the financial year:Final dividend of 3.5% per ordinary share of RM0.50,
tax exempt, for year 2011 (2010: 5%)
11,885,189
8,501,932
Interim dividend of 6% per ordinary share of RM0.50,
tax exempt, for year 2011
-
10,202,323
Interim dividend of 5% per ordinary share of RM0.50,
tax exempt, for year 2010
-
8,501,932

11,885,189
27,206,187
The directors proposed a final tax exempt dividend of 6% per ordinary share of RM0.50 amounting to RM20,374,586/- in
respect of the current financial year. The proposed dividend is subject to approval by the shareholders at the forthcoming
Annual General Meeting and has not been included as a liability in the financial statements.
25. REVENUE
Group
2012
2011

RM
RM
2012
RM
Company
2011
RM
Sale of gloves
Dividend income:-
997,374,339
1,021,357,920
181,094,187
- Subsidiaries
997,374,339
1,021,357,920
181,094,187
181,094,187
26. DIRECTORS REMUNERATION

The details of the directors remuneration during the financial year are as follows: Group
2012
2011

RM
RM
Executive directors of the Company:-
2012
RM
Company
2011
RM
- fees
- other emoluments
104,000
6,653,722
104,000
5,063,540
104,000
7,000
104,000
6,500
- fees
- other emoluments
240,000
134,360
240,000
20,500
240,000
21,500
240,000
20,500

Non-executive directors of the Company:-
6,757,722
374,360
7,132,082
5,167,540
260,500
5,428,040
111,000
261,500
372,500
110,500
260,500
371,000
The number of directors of the Company whose total remuneration during the financial year fell within the following
bands is analysed below:-
ANNUAL REPORT 2012
77

26. DIRECTORS REMUNERATION (Contd)
2012
2011
Non- Non Executive Executive Executive Executive
Director Director Director Director
Range of Remuneration (RM)
RM0 - RM50,000
RM1,000,000 and above
-
2
5
-
-
2
5
-
Key management personnel of the Group and of the Company comprise of executive directors of the Company.
Included in other emoluments are contributions made by the Group to the Employees Provident Fund of RM458,640/(2011: RM840,000/-).
27. OTHER OPERATING EXPENSES
Other operating expenses had been arrived at:
Group Company
2012
2011
2012
2011

RM
RM
RM
RM
After charging:Auditors remuneration
- current year
147,800
144,400
25,000
22,000
- prior year
400
1,700
-
- other
-
8,000
-
Deposit written off
928,000
-
-
Net loss on foreign exchange
- realised
-
1,399,223
-
- unrealised
6,553,925
-
600,537
7,483,000
Rental of office equipment
8,907
10,964
-
Rental of plant and machinery
5,120
5,100
-
Staff costs
- salaries, wages and bonuses
52,006,592
50,470,141
-
- Employees Provident Fund
1,658,605
1,749,511
-
- other related staff costs
1,053,745
959,826
-
Written off of investment in bond
-
4,000,000
-
And crediting:Net gain on foreign exchange
- realised
- unrealised
OFCL gain
Rental income
(6,757,532)
-
-
(32,660)
-
(64,479)
(300,964)
(26,195)
(4,753,031)
-
-
-
(2,069,463)
-
28. FINANCE COSTS

Interest expenses on:- bankers acceptance
- hire purchases
- industrial hire purchases
- term loans
- others

78
2012
RM
Group
2,421,068
33,020
1,353,133
4,935,812
3,211
8,746,244
2011
RM
3,420,265
508,369
887,084
7,725,887
3,508
12,545,113

29. INTEREST INCOME

Group Company
2012
2011
2012
2011

RM
RM
RM
RM
Income from fixed-term deposits
34,682
1,882
30. TAXATION

Group Company
2012
2011
2012
2011

RM
RM
RM
RM
Income tax
- current year
- over/(under) accrual in prior years
(14,106,457)
(3,257,594)
762,811
(2,494,783)
-
-
- current year
- over accrual in prior year
(11,538,079)
9,751,092
(12,269,019)
6,682,979
-
-
(15,893,444)
(8,080,823)

Deferred tax (Note 9)
(11,893,612)
(2,212,845)
(1,786,987)
(5,586,040)
The income tax is calculated at Malaysian statutory rate of 25% of the estimated assessable profit for the fiscal year.
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax
expense at the effective income tax rate of the Group and of Company is as follows:
Group Company
2012
2011
2012
2011

RM
RM
RM
RM
Profit before taxation
Taxation at applicable tax rate of 25%

Tax effects arising from:- effects of tax rates in foreign jurisdications
- income not subject to tax
- tax effects of share in profits of associates
- expenses not deductible for tax purposes
- double deduction
- utilisation of reinvestment allowances
- deferred tax assets not recognised
- over/(under) accruals in prior years:- income tax
- deferred tax
Tax expense for the financial year
137,305,588
(34,326,397)
112,132,183
(28,033,046)
21,921
4,641,468
5,843,698
(1,048,098)
3,724
2,946,558
(1,514,565)
-
3,948,364
8,709,010
(2,484,828)
27,036
2,306,851
-
(2,212,845)
9,751,092
762,811
6,682,979
(15,893,444)
(8,080,823)
3,249,104
(812,276)
-
1,188,688
-
(376,412)
-
-
-
174,868,635
(43,717,159)
45,854,311
(2,137,152)
-
-
-
The amount of temporary difference for which no deferred tax assets have been recognised is as follows:
Group Company
2012
2011
2012
2011

RM
RM
RM
RM
Unrealised loss on foreign exchange
3,086
(6,061,349)
Potential deferred tax assets not recognised
(1,514,565)
(6,058,263)
-
-
-
-
ANNUAL REPORT 2012
79

31. EARNINGS PER ORDINARY SHARE
(a) Basic Earnings Per Share

2012
RM
Group
2011
RM
Net profit attributable to owners of the parent
121,717,800
104,164,069
Number of shares in issue as of 1st January

Effect of:- treasury shares held
- bonus shares issued during the financial year
340,077,440
340,077,440
(813,838)
340,077,440
Weighted average number of ordinary shares in issue

Basic earnings per ordinary share of RM0.50 (sen)
679,341,042
17.92
340,077,440
30.63
The basic earnings per ordinary share is calculated by dividing the consolidated net profit attributable to equity
owners of the Company by the weighted average number of ordinary shares in issue during the financial year.
(b) Diluted Earnings Per Share
The basic and diluted earnings per share are equal as the Group has no dilutive potential ordinary shares outstanding
as at 31st December 2012.
32. CONTINGENT LIABILITIES UNSECURED
(a) As of 31st December 2012, the Company is contingently liable in respect of guarantees given mainly for credit
facilities totalling RM221,259,000/- (31.12.2011: RM233,476,000/-; 1.1.2011: RM223,174,000/-) granted by local
licensed banks to the subsidiaries. Accordingly, the Company is contingently liable to the extent of the facilities
utilised.
(b) As of 31st December 2012, the Company is contingently liable to the extent of RM13,972,415/- (31.12.2011:
RM12,349,371/-; 1.1.2011: RM11,630,344/-) in respect of bank guarantees issued in favour of various third parties.
The bank guarantees are secured over the corporate guarantee of the Company and subsidiary companies
33. CAPITAL COMMITMENTS

Approved and contracted for but not provided in the financial statements
- purchases of property, plant and equipment
2012
RM
Group
72,000,000
2011
RM
14,100,000
34. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) Identification of Related Parties
Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party
or exercise significant influence over the party in making financial and operational decisions, or vice versa, or where
the Group and the party are subject to common control. Related parties may be individuals or other entities.
Related parties of the Group include:(i) Direct subsidiaries;
(ii) Indirect subsidiary;
(iii) Associates; and
(iv) Key management personnel which comprise persons (including the directors of the Company) having the
authority and responsibility for planning, directing and controlling the activities of the Company directly or
indirectly.
80

34. SIGNIFICANT RELATED PARTY TRANSACTIONS (Contd)
(b) Significant Related Party Transactions and Balances
During the financial year, the significant related party transactions are as follows:

Associates
Sales of goods
2012
RM
Group
156,367,114
2011
RM
154,125,336
35. SEGMENT REPORTING

During the previous financial year, the Group adopted MFRS 8 Operating Segments. MFRS 8 requires the identification
of operating segments on the basis of internal reports that are regularly reviewed by the Groups chief operating decision
maker in order to allocate resources to the segments and assess their performance.
General Information
The information reported to the Groups chief operating decision maker to make decisions about resources to be allocated
and for assessing their performance is based on the nature of the products and services, and has three reportable operating
segments as follows:(a) Investment holding
(b) Manufacturing of gloves
(c) Trading of gloves
Except as above, no other operating segment has been aggregated to form the above reportable operating segments.
Measurement of Reportable Segments
Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the
consolidated financial statements. Segment profit or loss is profit earned or loss incurred by each segment without
allocation of depreciation and amortisation, finance cost, income from other investment, share of profit of associates
and income tax expense. There are no significant changes from prior financial year in the measurement methods used to
determine reported segment profit or loss.
All the Groups assets are allocated to reportable segments other than deferred tax assets.
All the Groups liabilities are allocated to reportable segments other than deferred tax liabilities.
ANNUAL REPORT 2012
81
82
-
-
-
3,249,104
(23,818,245)
(8,746,244)
(15,810,840)
136,197,594
1,034,041,036
(72,597)
-
(179,259)
7,699,500
906,013,704
(465,592)
-
96,655
62,371
4,248,925
-
-
-
(175,095)
(946,929,326)
16,427,478
Consolidated total liabilities
420,299,232
400,306,195
19,993,037
528,180
Liabilities
Segment liabilities
108,606,981
573,802,065
309,049,017
31,531,825
(622,683,693)
Unallocated segment liabilities
52,195,866
69,151,524
Other information
Addition to property, plant and equipment
1,254,079,350
1,044,205,231
209,874,119
Assets
Segment assets
476,646,397
974,051,354
362,452,974
38,132,263
(807,077,757)
Consolidated total assets
121,412,144
23,374,792
(24,356,434)
(8,746,244)
(15,893,444)
147,033,474
997,374,339

Finance costs
Income tax expense
Results
Segment results
Total revenue
35. SEGMENT REPORTING (Contd)

Investing
Group
Holding Manufacturing Trading Others Eliminations Consolidated
2012
RM
RM RM RM RM RM
Revenue
External sales
-
243,010,599
805,382,017
-
-
1,048,392,616
Inter-segment sales
-
791,030,437
100,631,687
4,248,925
(946,929,326)
(51,018,277)
(23,596,125)
(12,147,465)
23,304
(7,817,724)
103,523,351
1,013,608,500
(13,468)
(397,648)
9,496
(245,823)
15,928,565
890,807,447
540,042
(481,103)
-
-
(17,276)
4,312,922
-
-
-
-
(180,961,439)
(1,068,465,136)
14,500
Consolidated total liabilities
436,391,984
418,185,934
18,206,050
37,834
Liabilities
Segment liabilities
120,486,260
628,722,852
395,807,174
11,800,682
(738,631,034)
Unallocated segment liabilities
38,081,152
38,133,486
Other information
Addition to property, plant and equipment
1,205,430,312
977,072,631
228,357,681
Assets
Segment assets
499,202,965
939,138,237
442,729,255
18,803,836
(922,801,662)
Consolidated total assets
104,051,360
34,836,038
(24,090,696)
(12,545,113)
34,682
(8,080,823)
113,897,272
1,021,357,920
-
-
1,882
-
174,866,753
Results
Segment results

Finance costs
Interest income
Income tax expense
181,094,187
Total revenue
35. SEGMENT REPORTING (Contd)

Investing
Group
Holding Manufacturing Trading Others Eliminations Consolidated
2011

RM RM RM RM RM RM
Revenue
External sales
-
326,403,133
694,954,787
-
-
1,021,357,920
Inter-segment sales
181,094,187
687,205,367
195,852,660
4,312,922 (1,068,465,136)
-
ANNUAL REPORT 2012
83

35. SEGMENT REPORTING
Geographical segments
The Group operates predominantly in Malaysia and accordingly, the segment assets and capital additions are located in
Malaysia.
The following is an analysis of the Groups sales by geographical market according to the continents:

America
Europe
Asia/Australia
Africa
2012
RM
558,529,630
279,264,815
89,763,690
69,816,204
2011
RM
602,601,173
285,980,218
71,495,054
61,281,475
36. FAIR VALUE OF FINANCIAL INSTRUMENTS

(a) Determination of Fair Value
The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are
reasonable approximation of fair value:
Financial assets (current)
Trade and other receivables
Amount owing by/(to) subsidiaries
Financial liabilities (current)
Trade and other payables
Note
11
23
13
14
21
18
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due
to their short term nature or that they are floating rate instruments that are re-priced to market interest rates or near
the end of the reporting period.
(b) Fair Value Hierarchy
As the financial assets and liabilities of the Group and the Company are not carried at fair value by any valuation
method, the fair value hierarchy analysis is not presented.
37. FINANCIAL RISK MANAGEMENT AND OBJECTIVE
The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments.
The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk.
The following sections provide details regarding the Groups and the Companys exposure to the above-mentioned
financial risks and the objectives, policies and processes for the management of these risks.
(a) Credit Risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. The Groups exposure to credit risk arises primarily from trade and other receivables.
For other financial assets (including other investment and cash and bank balances), the Group and the Company
minimise credit risk by dealing exclusively with high credit rating counterparties. The management has a credit
policy in place to monitor and minimise the exposure of default. Credit evaluations are performed on all customers
requiring credit over certain amount.
84

37. FINANCIAL RISK MANAGEMENT AND OBJECTIVE (Contd)
(a) Credit Risk (Contd)
As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.
The financial guarantees have not been recognised as it is not practicable to make a reliable estimate due to the
uncertainties of timing, costs and eventual outcome.
At the end of the reporting period, it was not probable that the counterparty to the financial guarantee contract will
claim under the contract. Consequently, the fair value for the corporate guarantees is RM Nil.
Information regarding credit enhancements for trade receivables is disclosed in Note 11 to the financial statements.
Financial assets that are neither past due nor impaired
Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 11 to the
financial statements. Deposits with banks and other financial institutions and investment securities are placed with
or entered into with reputable financial institutions or companies with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding trade and other receivables that are either past due or impaired is disclosed in Note 11 to the
(b) Liquidity Risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due
to shortage of funds. The Groups and the Companys exposure to liquidity risks arises primarily from mismatched
of the maturities of financial assets and liabilities. The Groups and the Companys objective is to maintain a balance
between continuity of funding and flexibility through the use of stand-by credit facilities.
The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to
ensure that all financing, repayment and funding needs are met. As part of its overall prudent liquidity management,
the Group and the Company maintains sufficient levels of cash or cash convertible investments to meet its working
capital requirements.
Maturity analysis
The table below summarises the maturity profile of the Groups and the Companys liabilities at the end of the
reporting period based on contractual undiscounted repayment obligations.
ANNUAL REPORT 2012
85
86
355,950,485
60,275,878
295,674,607
1.1.2011
Financial liabilities
418,185,934
87,258,858
330,927,076
31.12.2011
396,033,809
117,923,522
278,110,287
31.12.2012
356,065,281
60,275,878
295,789,403
422,514,368
87,258,858
335,255,510
399,197,940
117,923,522
281,274,418
215,500,976
60,275,878
155,225,098
279,370,711
87,258,858
192,111,853
282,284,477
117,923,522
164,360,955
140,564,305
-
140,564,305
143,143,657
-
143,143,657
116,913,463
-
116,913,463

(b) Liquidity Risk (Contd)

Contractual On Demand More

Carrying
undiscounted
or Within
1-5
than

amounts
cash flows
1 Year
Years
5 Years
Group RM RM RM RM RM
94,086,152
269,844
93,816,308
1.1.2011
Financial liability
Other payables
120,486,260
83,260
120,403,000
31.12.2011
Financial liability
Other payables
108,606,981
94,086,152
269,844
93,816,308
120,486,260
83,260
120,403,000
108,606,981
11,511,597
269,844
11,241,753
15,925,760
83,260
15,842,500
29,101,081
82,574,555
-
82,574,555
104,560,500
-
104,560,500
79,505,900

(b) Liquidity Risk (Contd)

Contractual On Demand More

Carrying
undiscounted
or Within
1-5
than

amounts
cash flows
1 Year
Years
5 Years
Company
RM RM RM RM RM
31.12.2012
Other payables
52,995
52,995
52,995
-
Amount owing by a subsidiary
7,639,986
7,639,986
7,639,986
-
100,914,000
100,914,000
21,408,100
79,505,900
-
ANNUAL REPORT 2012
87

(c) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of the Groups and the Companys financial
instruments will fluctuate because of changes in market interest rates.
The Groups and the Companys exposure to interest rate risk arises primarily from their loans and borrowings. The
Group does not hedge its investment in fixed rate debt securities as they have active secondary or resale markets
to ensure liquidity. The investments in financial assets are mainly short term in nature and they are not held for
speculative purposes.
The Group and the Company manage the net exposure to interest rate risks by maintaining sufficient lines of credit
to obtain acceptable lending costs and by monitoring the exposure to such risks on an ongoing basis. Management
does not enter into interest rate hedging transactions since it considers that the cost of such instruments outweigh the
potential risk of interest rate fluctuation.

Effective
Interest
Group
Rate

%
88
Within
1 Year
RM
1 -5
Years
RM
>5
Years Total
RM
RM
31.12.2012
Bankers acceptances
Hire purchase payables
Industrial hire purchase
Term loans (floating rate)
2.32
4.52
6.25
5.75
129,449,275
144,104
7,246,506
26,082,899
-
32,077
20,741,126
94,414,300
-
-
-
-
129,449,275
176,181
27,987,632
120,497,199
31.12.2011
Bankers acceptances
Industrial hire purchase
2.33
2.75
6.25
5.65
151,740,149
493,656
6,291,941
31,936,885
-
176,690
24,876,456
115,411,299
-
-
-
-
151,740,149
670,346
31,168,397
147,348,184
1.1.2011
Financial asset
Fixed deposits placed with
a licensed bank
2.45
695,701
695,701
Bankers acceptances
Export credit refinancing
3.77
3.80
4.74
6.64
126,092,114
5,668,000
1,329,307
22,056,170
-
-
574,057
139,954,959
-
-
-
-
126,092,114
5,668,000
1,903,364
162,011,129

(c) Interest Rate Risk (Contd)

Effective
Interest
Group
Rate

%
Within
1 Year
RM
1 -5
Years
RM
>5
Years Total
RM
RM
31.12.2012
1.90
21,408,100
79,505,900
100,914,000
31.12.2011
6.75
15,842,500
104,560,500
120,403,000
1.1.2011
5.13
11,241,753
82,574,555
93,816,308
Sensitivity analysis for interest rate

At the end of the reporting period, if interest rates had been 1% lower/higher, with all other variables held constant,
the Groups profit net of tax and the Companys profit net of tax would have been RM2,779,341/- (31.12.2011:
RM3,302,567/-; 1.1.2011: RM2,930,755/-) and RM1,009,140/- (31.12.2011: RM1,204,030/-; 1.1.2011: RM938,163/-)
higher/lower respectively, arising mainly as a result of a lower/higher of interest expenses from predetermined rate of
borrowings. The assumed movement in basis points for interest rate sensitivity is based on the currently observable
market environment.
(d) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates.
The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency
other than the respective functional currencies of Group entities, primarily United States Dollars (USD) and Euro
Dollar (Euro). The foreign currencies in which these transactions are denominated are mainly USD.
The Group and the Company ensure that the net exposure to this risk is kept to an acceptable level by buying or
selling foreign currencies at spot rates where necessary to address short-term imbalances. Management does not
enter into currency hedging transactions since it considers that the cost of such instruments outweigh the potential
risk of exchange rate fluctuations.
The financial assets and financial liabilities of the Group that are not denominated in the functional currencies are
disclosed in respective notes to the financial statements.
Sensitivity analysis for foreign currency
The following table demonstrates the sensitivity of the Groups profit net of tax to a reasonably possible change in
the exchange rates of Euro and USD against the functional currency of the Company, with all other variables held
constant.
ANNUAL REPORT 2012
89

(d) Foreign Currency Risk (Contd)
Group

2012
2011

RM
RM

Profit/(loss) Profit/(loss)

for the year for the year
EUR/RM

USD/RM

- strengthened 3% (2011: 3%)

- weakened 3% (2011: 3%)
- strengthened 3% (2011: 3%)
- weakened 3% (2011: 3%)
89,172
(89,172)
3,571,908
(3,571,908)
77,404
(77,404)
411,309
(411,309)
(e) Market Price Risk

Market price risk is the risk that the fair value or future cash flows of the Groups financial instruments will fluctuate
because of changes in market price (other than interest or exchange rates).
The Group has in place policies to manage the Groups exposure to fluctuations in the selling price of the Groups
products and purchase prices of the key raw materials used in the operations. The management conducts constant
survey of the global market price and trend in order to determine the selling price.
38. CAPITAL MANAGEMENT
The primary objective of the Groups capital management is to ensure that it maintains a strong credit rating and healthy
capital ratio in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended
31st December 2012 and 31st December 2011.
The Group monitors capital using a gearing ratio, which is total debts divided by total capital plus total debts. The Groups
policy is to keep the gearing ratio between 20% to 40%. The Group includes within total debts, trade and other payables
and loans and borrowings. Capital includes equity attributable to the owners of the parent.
The gearing ratio of the Group is as follows:
Note
Group
21
18
Total debts
Capital and total debts
Gearing ratio
Company
21
18
117,923,522
278,110,287
396,033,809
834,031,555
31.12.2011
RM
1.1.2011
RM
87,258,858
330,927,076
60,275,878
295,674,607
418,185,934
769,090,852
355,950,485
691,467,950
1,230,065,364
1,187,276,786
1,047,418,435
52,995
100,914,000
83,260
120,403,000
269,844
93,816,308
32.2%
35.2%
34.0%
Total debts
100,966,995
120,486,260
94,086,152
387,868,905
398,546,194
250,883,746
Capital and total debts
Gearing ratio
90
31.12.2012
RM
488,835,900
20.7%
519,032,454
23.2%
344,969,898
27.3%

38. CAPITAL MANAGEMENT (Contd)
The Group is required to maintain a minimum Consolidated Total Equity of RM480 million, a minimum Consolidated
Earnings before Interest, Tax, Depreciation and Amortisation to Consolidated Interest Expense of 3.0 to 1.0 and a
maximum Consolidated Debt to Consolidated Total Equity of 0.75 to 1.0 to comply with two bank covenants, failing
which, the bank may call an event of default. The Group had complied with these covenants.
The Group is also required to comply with the disclosure and necessary capital requirements as prescribed in the Main
Market Listing Requirements of Bursa Malaysia Securities Berhad.
ANNUAL REPORT 2012
91
SUPPLEMENTARY INFORMATION ON THE DISCLOSURE

OF REALISED AND UNREALISED PROFITS OR LOSSES
On 25th March 2010, Bursa Malaysia Securities Berhad (Bursa Malaysia) issued a directive to all listed issuers pursuant
to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers
to disclose the breakdown of the retained profits or accumulated losses as at the end of the reporting period, into realised and
unrealised profits and losses.
On 20th December 2010, Bursa Malaysia further issued guidance on the disclosure and the format required.
Pursuant to the directive, the amounts of realised and unrealised profits or losses included in the retained profits of the Group
and the Company as at 31st December 2012 are as follows:
Group Company
2012
2011
2012
2011

RM
RM
RM
RM
Total retained profits/(accumulated
losses) of the Company and its subsidiaries
- realised
370,889,056
383,349,265
49,232,132
144,766,709
- unrealised
(13,439,112)
(18,270,529)
600,537
7,483,000

Add:
Share of retained profits of associates
- realised
357,449,944
365,078,736
49,832,669
152,249,709
239,200,473
208,528,192
Total retained profits
538,554,881
522,503,225
49,832,669
152,249,709
Total retained profits as per

statements of financial position
538,554,881
522,503,225
49,832,669
152,249,709

Consolidation adjustments
596,650,417
(58,095,536)
573,606,928
(51,103,703)
49,832,669
-
152,249,709
-
The determination of realised and unrealised profits is based on Guidance of Special Matter No. 1, Determination of Realised and
Unrealised Profits and Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements,
issued by the Malaysian Institute of Accountants on 20th December 2010.
The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirements stipulated in
the directive of Bursa Malaysia and should not be applied for any other purposes.
92
STATEMENT BY DIRECTORS
We, DATO SERI THAI KIM SIM and DATIN SERI TAN BEE GEOK, being two of the directors of Supermax Corporation
Berhad, do hereby state that in the opinion of the directors, the accompanying financial statements set out on pages 6 to 86
are properly drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirement of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial
position of the Group and of the Company as at 31st December 2012 and of the financial performance and cash flows of the
Group and of the Company for the financial year then ended.
The supplementary information set out on page 87 has been prepared in accordance with the Guidance of Special Matter No. 1,
Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities
Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.
On behalf of the Board,
...........................................................
DATO SERI THAI KIM SIM
Director
...........................................................
Director
Kuala Lumpur
Statutory declaration
I, DATIN SERI TAN BEE GEOK, being the director primarily responsible for the financial management of Supermax
Corporation Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements
set out on pages 6 to 86, and the supplementary information set out on page 87 are correct, and I make this solemn declaration
conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, l960.
.......................................................
Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 26th April 2013.
Before me,
......................................................
ZULKIFLA MOHD DAHLIM
Commissioner for Oaths (W 541)
Kuala Lumpur
ANNUAL REPORT 2012
93
INDEPENDENT AUDITORS REPORT
TO THE MEMBERS OF SUPERMAX CORPORATION BERHAD

Report on the Financial Statements
We have audited the financial statements of Supermax Corporation Berhad, which comprise the statements of financial position
as at 31st December 2012 of the Group and of the Company, and the statements of comprehensive income, statements of
changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a
summary of significant accounting policies and other explanatory information, as set out on pages 6 to 86.
Directors Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in
accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal controls as the directors determine
are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the
Companys preparation of financial statements that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at
31st December 2012 and of their financial performance and cash flows for the financial year then ended in accordance with the
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies
Act, 1965 in Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:(a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965, in Malaysia to be
kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with
the provisions of the Companies Act, 1965 in Malaysia.
(b) Other than those subsidiaries without the auditors reports as disclosed in Note 22 to the financial statements, we have
considered the financial statements and the auditors reports of the remaining subsidiaries of which we have not acted as
auditors, which are indicated in Note 22 to the financial statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys financial
statements are in a form and content appropriate and proper for the purposes of the preparation of the financial statements
of the Group and we have received satisfactory information and explanations required by us for those purposes.
(d) Other than those subsidiaries without the auditors reports as disclosed in Note 22 to the financial statements, the audit
reports on the financial statements of the remaining subsidiaries did not contain any qualification or any adverse comment
made under Section 174(3) of the Companies Act, 1965 in Malaysia.
94
INDEPENDENT AUDITORS REPORT
TO THE MEMBERS OF SUPERMAX CORPORATION BERHAD

Other Reporting Responsibilities
The supplementary information set out in page 87 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad
and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information
in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the
Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute
of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary
information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia
Securities Berhad.
Other Matters
1.
As stated in Note 2.1 to the financial statements, Supermax Corporation Berhad adopted the Malaysian Financial Reporting
Standards on 1st January 2012 with a transition date of 1st January 2011. These standards were applied retrospectively by
the directors to the comparative information in these financial statements, including the statements of financial position
as at 31st December 2011 and 1st January 2011, and the statements of comprehensive income, statements of changes in
equity and statements of cash flows for the financial year ended 31st December 2011 and its related disclosures. We were
not engaged to report on the restated comparative information and it is unaudited. Our responsibilities as part of our audit
of the financial statements of the Group and of the Company for the financial year ended 31st December 2012 have, in
these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1st January
2012 do not contain misstatements that materially affect the financial position as at 31st December 2012 and the financial
performance and cash flows for the financial year then ended.
2.
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents of
this report.
Baker Tilly Monteiro

No. AF 0117
Chartered Accountants
Heng Ji Keng
No. 578/05/14 (J/PH)
Chartered Accountant
Kuala Lumpur
ANNUAL REPORT 2012
95
List of Properties
held by the group as at 31st December 2012

The leasehold land and building are valued at cost with subsequent improvement and additions valued at cost as appropriate.
No revaluation exercise has been carried out and these properties continue to be stated at their existing carrying amounts less
accumulated depreciation where applicable. The Directors have not adopted a policy of regular revaluation of these properties.
Location
1. Lot 42, Jalan BRP9/2B, Putra

Industrial Park
Bukit Rahman Putra,
Sungai Buloh,
2. Lot 6070, Mukim of Kapar, District

of Kelang,
3. Lot 38, Jalan BRP 9/2B Putra
Industrial Park,
Bukit Rahman Putra,
Sungai Buloh,
4. Lot No. 5128,
Mukim of Kapar,
District of Kelang,
5. Lot 512 & Lot 1784,

Mukim of Ijok,
District of Kuala Selangor, Selangor
Darul Ehsan
6.

Suite No. 708,

6th Floor (Level 7),
Menara Atlas, (Tower A),
Plaza Pantai, Off Jalan Pantai Baru
Kuala Lumpur
7. Lot 6068, Mukim of Kapar, District

of Kelang,
8. Lot 55 Jalan Industri 13 Kaw.
Perindustrian Kelemak 78000 Alor
Gajah, Melaka
Existing
Use
Age of
Building
Land Area/
(Build-up
Area)
Tenure
Net Book
Value
(RM)
Factory cum
office building
14 years
1.5 acres/
(36,600sq ft)
Freehold
7,693,780
Land and
Factory cum
Office Building
11 years
5.0063 acres/
(127,861sq ft)
Freehold
36,333,562
Factory cum
office building
7 years
5.6337 acres
Freehold
20,262,282
Land and
Building
8 years
4.6875 acres
Freehold
10,602,494
Agricultural
Land (pending
conversion to
industrial land)
Stratified
office lot
10 years
Land and
Building
6 years
Land and
Building
Industrial Land
9. Lot 72706 Jalan Lahat,
Kawasan Perindustrian Bukit Merah,
31500 Lahat, Perak Darul Ridzuan
Single story
HS(D)KA 70399 Lot 72706 Mukim
factory
Hulu Kinta, District Kinta,
with annexed
Perak Darul Ridzuan
two-story office
buildings
10. PN 123155, Lot 207171, Mukim
Hulu Kinta, District Kinta, Perak
Darul Ridzuan
11. PN 123156, Lot 207172 Mukim

Darul Ridzuan
96
Lot 512: 3.8438 Lot 512-freehold

acres
Lot 1784 Lot 1784: 1.98
leasehold
acres
99 years
(Exp:3.8.2057)
1,235 sq ft
Freehold
473,832
5.00625 acres
Freehold
18,077,872
18,408 sq m
Leasehold 99 years
(Exp:18.6.2088)
4,375,517
26,688sq m
19 years
679,790
18,534sq m
Land and
building
639sq m
Land and
building
465sq m
Leasehold
60 years
13.01.2037
Leasehold
90 years
15.11.2083
Leasehold
90 years
15.11.2083
458,327
9,538,087
277,208
188,712
List of Properties
held by the group as at 31st December 2012
Location
Existing
Use
12. PN 123161, Lot 207177 Mukim

Darul Ridzuan
Land Area/
(Build-up
Area)
Tenure
Net Book
Value
(RM)
Land and
building
465sq m
201,377
Land and
building
650sq m
Leasehold
90 years
15.11.2083
14. HS(D) 11530, PT 11574 Mukim

Asam Kumbang, District Larut &
Matang, Perak Darul Ridzuan
Industrial land
15,054sq m
815,337
Industrial land
16,187sq m
Leasehold
99 years
07.12.2097
16. PT 11574 & PT 11575 Jalan

Logam 7, Kawasan Perindustrian
Kamunting Raya, 34600 Kamunting
Raya, Mukim Asam Kumbang,
Perak Darul Ridzuan
Single story
factory
with annexed
two-story office
buildings
17,636sq m
Leasehold
99 years
07.12.2097
13,803,807
20,260sq m
Freehold
15,377,841
18. HS(D) 143519 PT 207093, Lot

72314 Mukim Hulu Kinta, District
Kinta, Perak Darul Ridzuan
Industrial Land
9,359sq m
2,155,673
Land and building

Single storey
semidetached
factory
465sq m
Leasehold
99 years
19.05.2104
Leasehold
90 years
Exp: 15.11.2083
217,560
Land and building

Single storey
semidetached
factory
465sq m
Leasehold
90 years
Exp: 15.11.2083
217,560
Land and building

Single storey
semidetached
factory
465sq m
Leasehold
90 years
Exp: 15.11.2083
217,560
Land and building

Single storey
semidetached
factory
465sq m
Leasehold
90 years
Exp: 15.11.2083
217,560
Industrial Land
148,930sq m
Freehold
17,926,953
Land
20,234sq m
Freehold
6,098,400
Land
20,209sq m
Freehold
6,091,082
13. PN 123162, Lot 207178 Mukim

Darul Ridzuan
15. HS(D) 11531, PT 11575 Mukim

Asam Kumbang, District Larut &
Matang, Perak Darul Ridzuan
17. Lot 6069, Mukim Kapar, Daerah

Klang, Negeri Selangor
19. PN 123157, Lot 207173, Mukim

Darul Ridzuan
20. PN 123158, Lot 207174, Mukim

Darul Ridzuan
21. PN 123159, Lot 207175, Mukim
Darul Ridzuan
22. PN 123160, Lot 207176, Mukim
Darul Ridzuan
23. HS(D) 129442 PT 62957 Mukim
Kapar, District of Kelang Selangor
Darul Ehsan
24. Geran No. 45720 Lot No. 6059,

Mukim Kapar, Daerah Klang Negeri
Selangor
25. Geran No. 45719 Lot No. 6058,
Mukim Kapar, Daerah Klang Negeri
Selangor
Land and office

cum factory
warehouse
Age of
Building
11 years
Leasehold
90 years
15.11.2083
257,203
Leasehold
99 years
07.12.2097
876,699
ANNUAL REPORT 2012
97
Analysis of Shareholdings
as at 26 April 2013
Authorised Share Capital

Issued and Fully Paid-up
Class of Shares
Voting Rights
:
:
:
:
RM 500,000,000.00
RM 170,038,720.00
Ordinary Shares of RM 0.50 each
1 vote per Ordinary Share
Size of Holdings No. of Holders

1-99
100-1,000
1,001-10,000
10,001-100,000
100,001-33,957,643 (*)
33,957,644 and above (**)
Total
229
1,608
7,997
2,530
359
2
12,725
% No. of Shares
1.799
12.636
62.844
19.882
2.821
0.015
100.000
7,479
11,.198,388
38,088,718
75,016,546
322,890,421
241,951,328
679,152,880
%
0.001
0.176
5.608
11.045
47.543
35.625
100.000
* less than 5% of issued shares
** 5% and above of issued shares

LIST OF TOP 30 HOLDERS AS AT 26 APRIL 2013
98
No.
Name
Holdings
1.
Thai Kim Sim
139,035,444
20.471
2.
Tan Bee Geok
102,915,884
15.153
3.

HSBC Nominees (Asing) Sdn Bhd

NTGS LDN For Skagen Kon-Tiki Verdipapirfond
30,573,600
4.501
4.

Citigroup Nominees (Tempatan) Sdn Bhd

Employees Provident Fund Board
22,791,300
3.355
5.


HSBC-FS For The Navis Asia Navigator Master Fund
19,628,200
2.890
6.


Exempt AN for JPMorgan Chase Bank, National Association (Norges BK)
16,429,300
2.419
7.
Tan Geok Swee @ Tan Chin Huat
11,578,120
1.704
8.


Exempt AN for JPMorgan Chase Bank, National Association (U.K.)
11,039,700
1.625
9.

Amanahraya Trustees Berhad

Public Islamic Select Treasures Fund
8,904,500
1.311
10.

Citigroup Nominees (Asing) Sdn Bhd

CBNY for Dimensional Emerging Markets Value Fund
7,153,500
1.053
11.


Emplyees Provident Fund Board (AM INV)
7,000,000
1.030
12.


Exempt AN for Amerrican International Assurance Berhad
6,259,300
0.921
13.

Cartaban Nominees (Asing) Sdn Bhd

BBH (LUX) SCA for Fidelity Funds Malaysia
6,029,500
0.887
as at 26 April 2013
No.
Name
Holdings
14.


Exempt AN for JPMorgan Chase Bank, National Association (Netherlands)
4,550,000
0.669
15.
Ho Han Seng
4,500,000
0.662
16.


HSBC-FS for NIIF Public Equities
3,977,000
0.585
17.
East Point Ventures Sdn Bhd
3,600,004
0.530
18.

Maybank Nominees (Tempatan) Sdn Bhd

Etiqa Insurance Berhad (Life Non-Par FD)
3,546,000
0.522
19.


CBNY for DFA Emerging Markets Small Cap Series
3,267,500
0.481
20.


Etiqa Insurance Berhad (Sharehldrs FD)
3,212,000
0.472
21.
Gong Wooi Teik
3,068,486
0.451
22.


CBNY for Emerging Market Core Equity Portfolio DFA Investment Dimensions Group Inc
2,803,050
0.412
23.


BNY Brussels for CI Asian Tiger Fund
2,749,100
0.404
24.


SEB Lux for ABB Capital Selection Asian Smaller Companies Fund
2,735,100
0.402
25.


Exempt AN for JPMorgan Chase Bank, National Association (Australia)
2,603,800
0.383
26.


State Street Australia Fund REMG for Retail Employees Superannuation Trust
2,518,600
0.370
27.


Exempt AN for RBC Investor Services Trust (Clients Account)
2,359,000
0.347
28.


Pledged Securities Account for Ting Heng Peng (14570MZ0406)
2,276,000
0.335
29.

Hong Leong Assurance Berhad

as Beneficial Owner (Unitlinked GF)
2,026,900
0.298
30.


Exempt AN for The Bank of New York Mellon (Mellon ACCT)
2,022,450
0.297
ANNUAL REPORT 2012
99
as at 26 April 2013
LIST OF DIRECTORS SHAREHOLDINGS AS PER THE REGISTER OF DIRECTORS SHAREHOLDINGS AS

AT 26 APRIL 2013
Directors Direct
Dato Ting Heng Peng
Gong Wooi Teik
Rashid Bin Bakar
139,035,444
102,915,884
4,222,000
11,578,120
3,068,486
709,416
62,500
%^ Indirect
20.46
15.14
0.62
1.70
0.45
0.104
0.009
102,915,884 (a)
139,035,444 (b)
-
-
-
-
-
%^
15.15
20.47
-
Note:
1. (a) & (b) Deemed interest through the shares held by spouse in pursuance of Section 6A(4) of the Companies Act, 1965.
2. The issued and paid up capital as at 26 April 2013 was RM340,077,440.00 divided into 680,154,880 ordinary shares of
RM0.50 each.
3. The ordinary shares of RM1.00 each was subdivided into ordinary shares of RM0.50 each on 20 March 2007.
LIST OF SUBSTANTIAL SHAREHOLDERS SHAREHOLDINGS AS PER THE REGISTER OF SUBSTANTIAL
SHAREHOLDERS SHAREHOLDINGS AS AT 26 APRIL 2013
Indirect Holdings
Names Direct Holdings
(excluding bare trustees)
No
%^ No
%^
139,035,444
102,915,884
20.46
15.14
102,915,884 (a)
139,035,444 (b)
15.15
20.47
Note:
1. (a) & (b) Deemed interest through the shares held by spouse in pursuance of Section 6A(4) of the Companies Act, 1965.
2. The issued and paid up capital as at 26 April 2013 was RM340,077,440.00 divided into 680,154,880 ordinary shares of
RM0.50 each.
100
Notice of Sixteenth Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Sixteenth Annual General Meeting of the Company will be held at the Ballroom,
Lower Ground Floor, Eastin Hotel, 13, Jalan 16/11, Pusat Dagang Seksyen 16, 46350 Petaling Jaya, Selangor Darul
Ehsan on Friday, 31 May 2013 at 10.00 a.m., for the following purposes:ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 December 2012 and the
Reports of Directors and Auditors thereon.
(SEE NOTE 2)
2. To approve a final tax-exempt dividend of 6.0% per share in respect of the financial year ended
31 December 2012.
(Resolution 1)
3. To approve payment of the Directors Fees of RM430,000 for the year ended 31 December 2012.
(Resolution 2)
4. To re-elect the following Directors who retire pursuant to Article 88 of the Companys Articles of
Association:a) Datin Seri Tan Bee Geok
b) Dato Dr Tan Geok Swee @ Tan Chin Huat
c) Encik Rashid Bin Bakar
5. To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company and to authorise the
Board of Directors to fix their remuneration.
(Resolution 3)
(Resolution 4)
(Resolution 5)
(Resolution 6)
SPECIAL BUSINESS
To consider and, if thought fit, to pass the following Ordinary Resolutions:6. ORDINARY RESOLUTION

AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE
COMPANIES ACT, 1965

THAT, subject always to the Companies Act, 1965, Articles of Association of the Company and
approval of any other governmental and/or regulatory bodies, where such approval is required, the
Directors be and are hereby authorised and empowered pursuant to Section 132D of the Companies
Act, 1965 to allot and issue shares in the Company, at any time and upon such terms and conditions
and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the
aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of
the issued and paid-up share capital of the Company for the time being 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 the Bursa Malaysia Securities Berhad and that authority shall continue in force until
the conclusion of the next Annual General Meeting of the Company.
7. ORDINARY RESOLUTION

PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS
OWN SHARES

[SEE NOTE 3(a)]

(Resolution 7)
[SEE NOTE 3(b)]

(Resolution 8)
THAT, subject to the Companies Act, 1965, the Articles of Association of the Company, the Listing
Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) for the Main Market
(LR) and the approval of such relevant government and/or regulatory authorities where necessary,
the Company be and is hereby authorised to purchase its own ordinary shares of RM0.50 each
(Shares) on the Main Market of Bursa Securities (Proposed Share Buy-Back) at any time, upon
such terms and conditions as the Directors shall in their discretion deem fit and expedient in the best
interest of the Company provided that:-
ANNUAL REPORT 2012
101

(a) The aggregate number of Shares in the Company which may be purchased and/or held by the
Company shall not exceed ten per centum (10%) of the prevailing issued and paid-up share
capital of the Company at the time of purchase subject to any amount as may be determined
by Bursa Securities from time to time and compliance with the public shareholding spread
requirements as stipulated in Paragraph 8.02(1) of the LR;
(b) The maximum funds to be allocated by the Company for the purpose of purchasing the Shares
shall not exceed the Companys latest audited retained profits and/or share premium accounts;
(c) The authority conferred by this resolution will be effective immediately from the passing of
this ordinary resolution until:
(i) the conclusion of the next Annual General Meeting (AGM) at which time shall lapse
unless by ordinary resolution passed at the meeting, the authority is renewed, either
unconditionally or subject to conditions; or
(ii) the expiration of the period within which the next AGM after that date is required by law
to be held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in a
general meeting;
whichever occurs first; and
(d) Upon the purchase by the Company of its own Shares, the Board of Directors of the Company
(Board) be and is hereby authorised to:(i)
cancel all or part of the Shares purchased pursuant to the Proposed Share Buy-Back
(Purchased Shares); and/or
(ii) retain all or part of the Purchased Shares as treasury shares; and/or
(iii) distribute the treasury shares as share dividends to the Companys shareholders for the
time being; and/or
(iv) resell the treasury shares on Bursa Securities.
AND THAT authority be and is hereby given to the Board to take all such steps as are necessary
or expedient to implement, finalise and give full effect to and to implement the Proposed Share
Buy-Back with full powers to assent to any conditions, modifications, revaluations, variations and/
or amendments (if any) as may be required or imposed by the relevant authorities from time to time
and to do all such acts and things as the Board may deem fit and expedient in the best interest of the
Company.
8. ORDINARY RESOLUTION

CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS
102
[SEE NOTE 3(c)]
8.1 THAT, approval be and is hereby given to Dato Ting Heng Peng who has served as an
Independent Non-Executive Director of the Company for a cumulative term of more than nine
years, to continue to act as an Independent Non-Executive Director of the Company.
(Resolution 9)
8.2 THAT, approval be and is hereby given to Mr. Gong Wooi Teik who has served as an
Independent Non-Executive Director of the Company for a cumulative term of more than nine
years, to continue to act as an Independent Non-Executive Director of the Company.
(Resolution 10)
8.3 THAT, approval be and is hereby given to Encik Shamsudin @ Samad Bin Kassim who has
served as an Independent Non-Executive Director of the Company for a cumulative term of
more than nine years, to continue to act as an Independent Non-Executive Director of the
Company.
(Resolution 11)
8.4 THAT subject to the passing of Resolution 5 above, approval be and is hereby given to
Encik Rashid Bin Bakar who has served as an Independent Non-Executive Director of the
Company for a cumulative term of more than nine years, to continue to act as an Independent
Non-Executive Director of the Company.
(Resolution 12)

9. SPECIAL RESOLUTION
PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

THAT the amendments to the Companys Articles of Association as set out in Appendix I
(Proposed Amendments) on page 106 of the 2012 Annual Report be and are hereby approved and
adopted.
AND THAT the Board of Directors of the Company be and is hereby authorised to do all such
acts, deeds and things as are necessary and/or expedient in order to give full effect to the Proposed
Amendments with full powers to assent to any conditions, modifications and/or amendments as may
be required by any relevant authorities.
[SEE NOTE 3(d)]

(Resolution 13)
10. To transact any other business of which due notice has been given.
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT
NOTICE IS ALSO HEREBY GIVEN THAT subject to the approval of the members at the Sixteenth Annual General Meeting
to be held on 31 May 2013, a final tax-exempt dividend of 6% per share in respect of the financial year ended 31 December 2012,
will be paid on 18 June 2013.
The entitlement date for the dividend is 7 June 2013.
A depositor shall qualify for entitlement to the dividend only in respect of:(a) Shares transferred into the Depositors Securities Account before 4.00 p.m. on 7 June 2013 in respect of transfers; and
(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia
Securities Berhad.
BY ORDER OF THE BOARD

WONG WAI FOONG (MAICSA 7001358)
NG YEN HOONG (LS 008016)
Secretaries
Kuala Lumpur
Date: 8 May 2013
ANNUAL REPORT 2012
103

Notes:
1. Appointment of Proxy
a) For the purpose of determining a member who shall entitle to attend this meeting, the Company shall be requesting Bursa Malaysia
Depository Sdn. Bhd. in accordance with Article 46(f) of the Companys Articles of Association to issue a General Meeting Record of
Depositors as at 23 May 2013. Only depositor whose name appears on the Record of Depositors as at 23 May 2013 shall be entitled
to attend, speak and vote at the meeting or appoint proxies to attend, speak and vote on his/her behalf.
b) A Member shall be entitled to be present and to vote on any question either personally or by proxy, or as proxy for another Member at
any general meeting, or upon a poll and to be reckoned in a quorum in respect of any fully paid-up shares and any share upon which
call due and payable to the Company shall have been paid. The proxy need not be a Member of the Company and Section 149(1)(b)
of the Companies Act, 1965 shall not apply. Where a Member appoints two or more proxies, the proxies shall not be valid unless the
Member specifies the proportion of his/her shareholdings to be represented by each proxy.
c) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991,
it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to credit
of the said securities account.
d) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial
owners in one securities account (omnibus account), there is no limit to the number of proxies which the exempt authorised nominee
may appoint in respect of each omnibus account it holds.
e) The instrument appointing a proxy shall be in writing under the hands of the appointer or of his attorney duly authorised in writing or,
if the appointer is a corporation under its common seal, or the hand of its attorney duly authorised. An instrument appointing a proxy
to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointer.
f) The instrument appointing a proxy together with the power of the attorney (if any) shall be left at the Registered Office of the Company
situated at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur at least forty-eight
(48) hours before the time appointed for holding the meeting, i.e. on or before 10.00 am, Wednesday, 29 May 2013, otherwise the
person so named shall not be entitled to vote in respect thereof.
2. Audited financial statements for the financial year ended 31 DECEMBER 2012
The Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal
approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting by shareholders
of the Company.
3. Explanatory Notes to Special Business
a) AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

The proposed Resolution 7 is the renewal of the mandate obtained from the members at the last Annual General Meeting (the
previous mandate). The previous mandate was not utilised and accordingly no proceeds were raised.
The proposed Resolution 7, if passed, would provide flexibility to the Directors to undertake fund raising activities, including but not
limited to further placement of shares for the purpose of funding the Companys current and/or future investment project(s), working
capital, repayment of borrowings and/or acquisition(s), by the issuance of shares in the Company to such persons at any time as the
Directors may deem fit provided that the aggregate number of shares issued pursuant to the mandate does not exceed 10% of the
issued and paid-up share capital of the Company for the time being, without having to convene a general meeting. This authority,
unless revoked or varied by the Company in a general meeting will expire at the conclusion of the next Annual General Meeting of the
Company.
b) PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES
104
The proposed Resolution 8, if passed, will empower the Company to purchase up to ten percent (10%) of the issued and paid-up
ordinary share capital of the Company through Bursa Malaysia Securities Berhad.
For further information, please refer to the Statement to Shareholders dated 8 May 2013.

c) CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS

Pursuant to the Malaysian Code on Corporate Governance 2012, the Board of Directors has via the Nomination Committee assessed
the Independence of Dato Ting Heng Peng, Mr. Gong Wooi Teik, Encik Shamsudin @ Samad Bin Kassim and Encik Rashid Bin Bakar
who each has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years, and
recommended them to continue to act as Independent Non-Executive Directors of the Company based on the following justifications:(i)
each of them fulfills the criteria of an Independent Director pursuant to the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad;
(ii) each of them is familiar with the Companys business operations as he has been with the Company for more than 9 years;
(iii) each of them has devoted sufficient time and attention to his responsibilities as an Independent Non-Executive Director of the
Company; and
(iv) each of them has exercised due care during his tenure as an Independent Director of the Company and carried out his duty in the
interest of the Company and shareholders.

The proposed Resolutions 9, 10, 11 and 12, if passed, will enable Dato Ting Heng Peng, Mr. Gong Wooi Teik, Encik Shamsudin @
Samad Bin Kassim and Encik Rashid Bin Bakar to continue in office as Independent Non-Executive Directors.
d) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY (PROPOSED AMENDMENTS)

The proposed Resolution 13, if passed, will approve the amendments to the Articles of Association of the Company. The Proposed
Amendments will bring the Articles of Association of the Company to be in line with the amendments to the Listing Requirements of
the Main Market of Bursa Malaysia Securities Berhad.
Please refer to Appendix I on page 106 of the 2012 Annual Report for full details of the Proposed Amendments.
ANNUAL REPORT 2012
105
Appendix I
The Articles of Association of Supermax Corporation Berhad are proposed to be amended in the following manner:
Article Existing Provision
Amended Provision
46(a)
Every notice calling a general meeting shall specify the place and day and
hour of the meeting and there shall appear with reasonable prominence in
every such notice a statement that a Member entitled to attend and vote is
entitled to appoint up to 2 proxies to attend and vote instead of him.
Every notice calling a general meeting shall

specify the place and day and hour of the
meeting and there shall appear with reasonable
prominence in every such notice a statement that
a Member entitled to attend and vote is entitled
to appoint a proxy to attend and vote instead of
him. Where a member of the Company is an
authorised nominee as defined under the Central
Depositories Act, it may appoint at least one
proxy in respect of each securities account it
holds with ordinary shares of the Company
standing to the credit of the said securities
account.
(i) Where a member of the Company is an authorised nominee as defined

under the Central Depositories Act, it may appoint up to 2 proxies in
respect of each securities account it holds with ordinary shares of the
Company standing to the credit of the said securities account.
(ii) Where a Member of the Company is an exempt authorised nominee
which holds ordinary shares in the Company for multiple beneficial
owners in one securities account (omnibus account), there shall
be no limit to the number of proxies which the exempt authorised
nominee may appoint in respect of each omnibus account it holds.

61(a)
A Member shall be entitled to be present and

to vote on any question either personally or
by proxy, or as proxy for another Member at
any general meeting, or upon a poll and to be
reckoned in a quorum in respect of any fully
paid-up shares and any share upon which call
due and payable to the Company shall have
been paid. The proxy need not be a Member
of the Company and if not a Member he need
not be a qualified legal practitioner, an approved
Company auditor or a person approved by the
Registrar. No member shall be entitled to vote
or be recognised in a quorum in respect of any
shares upon which any call or other sum so due
and payable shall be unpaid.
61(b)
A Member may appoint more than 2 proxies to A Member may appoint up to 2 proxies, where a Member appoints 2 proxies,
attend at the same meeting, where a Member the proxies shall not be valid unless the Member specifies the proportion of
appoints two or more proxies, the proxies shall his shareholding to be represented by each proxy.
not be valid unless the Member specifies the
proportion of his shareholding to be represented
by each proxy.
137
ALTERATION OF ARTICLES
The Company shall not delete, amend or add
any to any of the existing Articles, which
have previously been approved by the Stock
Exchange, unless prior written approval has been
sought and obtained from the Stock Exchange
for such deletion, amendment or addition.
106
An exempt authorised nominee refers to an authorised nominee

defined under the Securities Industry (Central Depositories) Act 1991
(Central Depositories Act) which is exempted from compliance
with the provisions of subsection 25A(1) of Central Depositories Act.
A Member shall be entitled to be present and to vote on any question either

personally or by proxy, or as proxy for another Member at any general
meeting, or upon a poll and to be reckoned in a quorum in respect of any
fully paid-up shares and any share upon which call due and payable to the
Company shall have been paid. No member shall be entitled to vote or be
recognised in a quorum in respect of any shares upon which any call or other
sum so due and payable shall be unpaid. For any proxy appointed, there shall
be no restriction as to the qualification of the proxy and the proxy shall have
the same rights as the member to speak at the meeting.
The existing Article 137 to be deleted in its entirety.
Form of Proxy
I/We
(Full Name in Capital Letters)
of
NRIC / Company No
(Full Address)
being a member(s) of SUPERMAX CORPORATION BERHAD (Company No.: 420405-P) hereby appoint
NRIC No
of
(Full Address)
or failing him/her,
NRIC No
of
(Full Address)
or failing him/her, the Chairman as *my/our proxy to vote for *me/us and on *my/our behalf at the Sixteenth Annual General Meeting of the
Company to be held at the Ballroom, Lower Ground Floor, Eastin Hotel, 13, Jalan 16/11, Pusat Dagang Seksyen 16, 46350 Petaling Jaya,
Selangor Darul Ehsan on Friday, 31 May 2013 at 10.00 am and at any adjournment thereof.
The proxy is to vote in the manner indicated below, with an X in the appropriate spaces. If no specific direction as to voting is given, the proxy
will vote or abstain from voting at his/her discretion.
NO.
RESOLUTIONS
1.
To approve a final tax-exempt dividend of 6.0% per share in respect of the

financial year ended 31 December 2012.
2.
To approve payment of the Directors Fees of RM430,000 for the year ended 31
December 2012.
3.
FOR
AGAINST
To re-elect Datin Seri Tan Bee Geok who retires by rotation as a Director of the
Company pursuant to Article 88 of the Companys Articles of Association.
4.
To re-elect Dato Dr Tan Geok Swee @ Tan Chin Huat who retires by rotation
as a Director of the Company pursuant to Article 88 of the Companys Articles
of Association.
5.
To re-elect Encik Rashid Bin Bakar who retires by rotation as a Director of the
Company pursuant to Article 88 of the Companys Articles of Association.
6.
To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company

and to authorise the Board of Directors to fix their remuneration.
7.
To grant authority to allot and issue shares in general pursuant to Section 132D
of the Companies Act, 1965.
8.
To approve the Proposed Renewal of Authority for the Company to purchase

its own ordinary shares on Bursa Malaysia Securities Berhad up to 10% of the
Issued and Paid up Share Capital.
9.
To approve Dato Ting Heng Peng to continue to act as an Independent NonExecutive Director.
10.
To approve Mr. Gong Wooi Teik to continue to act as an Independent NonExecutive Director.
11.
To approve Encik Shamsudin @ Samad Bin Kassim to continue to act as an

Independent Non-Executive Director.
12.
To approve Encik Rashid Bin Bakar to continue to act as an Independent NonExecutive Director.
13.
To approve the Proposed Amendments to the Articles of Association of the

Company.
Signed this
day of
2013
Number of shares held
Signature Shareholder or Common Seal
Number of shares held:

If more than 1 proxy, please specify number of shares represented by each proxy
Name of Proxy 1:
Name of Proxy 2:
CDS Account No.
* Delete if not applicable
Telephone no. (During office hours)

Annual Report 2012

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Annual Report 2012

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Contents

17 Audit Committee Report

Five-Years Financial Summary

26 Statement On Risk Management and

19 Corporate Governance Statement

10 Executive Chairmans Statement

Annual General Meeting

upermax Corporation Berhad is a leading international manufacturer,

SUPERMAX CORPORATION BERHAD (420405-P)

Net assets per share (in RM)

* Subject to shareholders approval at upcoming Annual General Meeting.