annual report 2012 (1)
DESCRIPTION
ARTRANSCRIPT
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Contents
2 CorporateProfile
3 FinancialHighlights
4 Five-YearsFinancialSummary
5 CorporateStructure
6 CorporateInformation
7 BoardOfDirectors
8 ProfileOfDirectors
10 ExecutiveChairmansStatement
15 CorporateSocialResponsibility
17 AuditCommitteeReport
19 CorporateGovernanceStatement
26 StatementOnRiskManagementand
InternalControl
28 FinancialStatements
96 ListOfProperties
98 AnalysisOfShareholdings
101NoticeOfSixteenth
AnnualGeneralMeeting
FormOfProxy
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2 SUPERMAX CORPORATION BERHAD (420405-P)
Supermax Corporation Berhad is a leading international manufacturer,distributorandmarketerofhighqualitymedicalgloves.Established in1987, its founders started a trading business to distribute latex glovesand eventually ventured intomanufacturing of latex gloves in 1989.Today,theSupermaxGrouphasnine factoriesmanufacturingvarious typesof latexgloves,whichareexportedtoover155countriesaroundtheworld,suchastheUnitedStatesofAmerica,EuropeanUnion,MiddleEast,AsiaandSouthPacificcountries.
TheGrouphasreceivednumerousaccoladesandawardsovertheyears,includingTheEdgeBillionRinggitClubsinauguralCompanyoftheYearAwardin2010,ExportExcellence&BrandExcellenceintheIndustryExcellenceAwardsin2009and2008,SpecialAward&4thplacingintheprestigiousDeloittesTop50EnterpriseAwardMalaysiain2006,ExportExcellence&ProductExcellenceintheIndustryExcellenceAwardsin2003,theNationalProductivityCouncilAward in 1999 andAndersen Consulting Top 50 Enterprise inMalaysia in1998.Oneofthefounders,DatoSeriStanleyThaihimself,alsowon2veryprestigiousawardsin2010,i.e.MalaysiasErnst&YoungEntrepreneurofTheYearAward2010andMalaysiasCEOofTheYearAward2010.
Supermaxiswellrecognizedforitscommitmenttodeliverqualityproductsandservicetoitscustomers.TheseaccomplishmentstestifytotheGroupsrelentlesseffortsinenhancingproductivityinordertocompeteintheglobalmarket.
Corporate profile
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ANNUAL REPORT 2012 3
* Subject to shareholders approval at upcoming Annual General Meeting.
Revenue 997,374 1,021,358
Pre-taxprofit 137,306 112,132
After-taxprofit 121,412 104,051
Netassets 833,780 769,038
Totalassets 1,254,079 1,205,430
Paid-upcapital 340,077 170,039
Shareholdersequity 833,780 769,038
InterimDividend 13,583 10,202
FinalDividend 20,375* 11,903
Netassetspershare(inRM) 1.23 2.26
EarningsperordinaryshareofRM0.50each(inSen) 17.92 30.63
2012RM000
2011RM000
finanCial HigHligHts
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4 SUPERMAX CORPORATION BERHAD (420405-P)
Revenue(RM000)
DIvIDenD PAYOuT(RM000)
neT ASSeTS(RM000)
PRe-TAX PROFIT (RM000)
BASIC eARnInGS PeR SHARe(RM000)
SHAReHOLDeRS eQuITY(RM000)
Revenue 997,374 1,021,358 977,281 803,633 811,824
Pre-taxprofit 137,306 112,132 183,835 151,470 51,998
NetAssets 833,780 769,038 691,524 558,835 416,380
ShareholdersEquity 833,780 769,038 691,524 558,835 416,380
DividendPayout 33,958 22,105 25,490 29,636 8,621
BasicEarningspershare(sen) 17.9230.63 47.98 38.56 14.26
2012RM000
2011RM000
2010RM000
2009RM000
2008RM000
* Based on oridinary share of RM0.50 each.
997,
374
833,
780
137,
306
33,9
87
833,
780
17.8
6
five-years finanCial summary
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ANNUAL REPORT 2012 5
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90
100
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SupermaxGloveManufacturingSdnBhd(218698-T)
MaxterGloveManufacturingSdnBhd (229862-H)
SupermaxLatexProductsSdnBhd(34197-T)
SupermaxInternationalSdnBhd(551579-X)
SupermaxHealthcareIncorporated
SupermaxEnergySdnBhd(318117-P)
SupermaxDeutschlandGmbH
MaxwellGloveManufacturingBerhad (99472-X)(FormerlyknownasSpenserGloveManufacturingBerhad)
SupermaxGlobalLimited
SupermaxHealthcareCanadaIncorporated
SupermaxHealthcareLimited
WhiteOakGlobalProperty
SealPolymerLatexProductsSdnBhd(754360-X)
SPIGlovesSdnBhd(663072-X)
Corporate struCture
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6 SUPERMAX CORPORATION BERHAD (420405-P)
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(Independent Non-Executive Director)
shamsudin @ samad Bin Kassim(Independent Non-Executive Director)
rashid Bin Bakar(Independent Non-Executive Director)
audit Committee
gong Wooi teik, felixChairman, Independent Non-Executive Director
rashid Bin BakarMember, Independent Non-Executive Director
shamsudin @ samad Bin KassimMember, Independent Non-Executive Director
Company seCretaries
WongWaiFoong(MAICSA7001358)NgYenHoong(LS008016)
Corporate offiCe
supermax Corporation BerhadLot38,PutraIndustrialPark
BukitRahmanPutra47000SungaiBuloh
SelangorDarulEhsanTel:0361452328Fax:0361562191
registered offiCe
Level18,TheGardensNorthTowerMidValleyCityLingkaranSyedPutra59200KualaLumpurTel:03-22648888Fax:03-22822733
sHare registrar
TricorInvestorServicesSdn.Bhd.(118401V)Level17,TheGardensNorthTowerMidValleyCityLingkaranSyedPutra59200KualaLumpurTel:0322643883Fax:0322821886
prinCipal BanKers
TheRoyalBankofScotlandBerhad(301923-A)HSBCBankMalaysiaBerhad(127776-V)MalayanBankingBerhad(3813-K)Oversea-ChineseBankingCorporationLtd,LabuanBranch(940026C)
auditors
BakerTillyMonteiroHeng,AF0117CharteredAccountants22-1,JalanTunSambanthan350470KualaLumpurTel:03-22748988Fax:03-22601708
stoCK exCHange listing
MainMarketofBursaMalaysiaSecuritiesBerhadDateofListing:2August2000
stoCK information
CodeNo.7106Name:SUPERMX
Corporate information
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ANNUAL REPORT 2012 7
1.DatoSeriThaiKimSim,Stanley (Executive Chairman and Group Managing Director)
2.DatinSeriTanBeeGeok,Cheryl (Group Executive Director)
3.Shamsudin@SamadBinKassim (Independent Non-Executive Director)
4.DatoTingHengPeng (Independent Non-Executive Director)
5.DatoDr.TanGeokSwee@TanChinHuat (Non-Executive Director)
6.GongWooiTeik,Felix (Independent Non-Executive Director)
7.RashidBinBakar (Independent Non-Executive Director)
34 5 6 7
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12
34 5 6 7
Board of direCtors
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8 SUPERMAX CORPORATION BERHAD (420405-P)
dato seri thai Kim sim, stanley ExecutiveChairmanandGroupManagingDirectorAged 52, MalaysianAppointed on 18 June 2000
datin seri tan Bee geok, CherylGroupExecutiveDirectorAged 51, MalaysianAppointed on 18 June 2000
dato ting Heng pengIndependentNon-ExecutiveDirectorAged 52, MalaysianAppointed on 18 June 2000
dato dr. tan geok swee @ tan Chin HuatNon-ExecutiveDirectorAged 62, MalaysianAppointed on 18 June 2000
Dato Seri StanleyThai graduated from theUniversity ofWindsor,Ontario,CanadawithaBachelorofCommercedegree(Hons) in1982.DatoSeriStanleyThaistartedhisearlybusiness training withMulpha International Berhad before being appointed as the ChiefExecutiveOfficerandGroupManagingDirectorofSupermaxCorporationBerhadon18June2000.DatoSeriStanleyThaiwasre-designatedasExecutiveChairmanandGroupManagingDirector on 27 September 2006. Dato Seri Stanley Thai is an experienced businessmanand has successfully secured business partnerships with distributions in NorthAmerican,WesternEurope,Australia,NewZealand,MiddleEastandLatinAmericancountries.DatoSeriStanleyThaihasalsobeenactivelyinvolvedinoverseastradepromotionsandprogramsorganisedbytheMinistryofInternationalTradeandIndustry(MITI)andisastrongadvocateoftheMadeinMalaysiafortheWorldprogramofMalaysiaExternalTradeDevelopmentCorporation(MATRADE)since1983.
DatinSeriCherylTangraduatedwithaBachelorofCommercedegree(Hons)fromUniversityofWindsor,Ontario,Canada.DatinSeriCherylTanwasappointedasanExecutiveDirectorin Supermax Corporation Berhad on 18 June 2000 and she is the Chairperson of theRemunerationCommittee.DatinSeriCherylTanreceivedherearlybusinesstrainingincreditadministrationwith a local financial institution.Datin Seri CherylTan heads the finance,operationsandadministrationoftheSupermaxGroup
Dato Ting graduated from University of Windsor, Ontario, Canada with a Bachelor ofCommercedegree(Hons)in1982.Upongraduation,hewenttoEnglandwherehereadlawattheUniversityofEssex.DatoTingobtainedhisBachelorofLaw(Hons)in1985.FollowingDatoTings admission as a barrister toLincolns Inn,London in 1986,DatoTing camebacktoMalaysiaandwascalledtotheMalaysianBarin1987.DatoTinghasbeeninlegalpracticeasadvocateandsolicitor in the legalfirmofAmin-Tan&CofromOctober1987untilMay2007.Since1June2007,DatoTingisaPartnerofJosephTing&Co.DatoTingiscurrentlyamemberof theRemunerationCommitteeandNominationCommittee.DatoTingisalsoanIndependentNonExecutiveDirectorofD.B.E.GurneyResourcesBerhadaswellasanAuditCommitteeMemberofCSFGroupPLC,acompanylistedonLondonStockExchangeinAlternativeInvestmentMarket.
DatoDr.Tan,PhDinBusinessAdministration,appointedasaNon-ExecutiveDirectorofSupermaxCorporationBerhadon18June2000andheistheChairmanoftheNominationCommittee. Dato Tan is actively involved in event management and he is currently theChairmanofMIFF(MalaysiaInternationalFurnitureFair),thebiggestexhibitioninASEANregion.HeisalsotheExecutiveAdvisortotheKL&SelangorFurnitureIndustryAssociation.
profile of direCtors
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ANNUAL REPORT 2012 9
mr gong Wooi teik, felixIndependentNon-ExecutiveDirectorAged 62, MalaysianAppointed on 28 December 2001
encik shamsudin @ samad Bin Kassim IndependentNon-ExecutiveDirectorAged 66, MalaysianAppointed on 18 July 2002
encik rashid Bin BakarIndependentNon-ExecutiveDirector54, MalaysianAppointed on 18 July 2002
MrGongisaFellowMemberofTheInstituteofCharteredAccountantsinEngland&Wales,member of theMalaysian Institute ofAccountants and FellowMember of theMalaysianInstitute ofTaxation.After qualifying as a CharteredAccountant in England in 1976, hereturnedtoMalaysiainearly1977andworkedfortwoofthebig4AccountingFirmsbeforehestartedhisownaccountingfirmin1980.He iscurrently theManagingPartnerofGEPAssociates,which isamemberfirmofAGNInternational.MrGongwasappointedasanIndependentNon-ExecutiveDirectorofSupermaxCorporationBerhadon28December2001andheistheChairmanoftheAuditCommittee.HeisalsoaDirectorofNikkoElectronicsBerhad(InLiquidation)andCheetahHoldingsBerhad.
EncikSamadgraduatedwithaBachelorsdegreeinEconomicsfromUniversityofMalayain1970.Subsequently,heobtainedMasterinPublicandInternationalAffairsfromUniversityof Pittsburgh in 1979. He was appointed as an Independent Non Executive Director ofSupermaxCorporationon18 July2002 andhe is amemberof theAuditCommittee andNomination Committee. He is currently Director of Century Logistics Holdings Berhad,IngressCorporationBerhad,KinsteelBerhad,BHSIndustriesBerhad,PerwajaSteelBerhad,Multi-CodeElectronicIndustries(M)BerhadandMasterTecHoldingsBerhad.HeworkedintheMinistryofInternationalTradeandIndustry(MITI)anditsagenciesforfifteenyearsfrom1985andwasChiefExecutiveOfficerofSMIDECsince1January2000andleftSMIDECinretirementonSeptember2001.
EncikRashidholdsaMasterinLawfromUKMandheisagraduateofUiTMwithaBachelorofLaw(Hons).EncikRashidalsohasaDiplomainSyariahLawandPracticefromUIAMandPublicAdministrationfromUiTM.Hisbusinessoccupationisadvocatesandsolicitors.HewasappointedasanIndependentNon-ExecutiveDirectorofSupermaxCorporationBerhadon18July2002andheisamemberoftheAuditCommitteeandRemunerationCommittee.
Family relationships with any director and / or major shareholder
None of the Directors of the Company has familyrelationshipswithanyDirector and/ormajor shareholderwiththeexceptionof:-
1. DatoSeriStanleyThaiandDatinSeriCherylTanare husbandandwife;and2. Dato Dr. Tan Geok Swee @ Tan Chin Huat is the brotherofDatinSeriCherylTan.
Conflict of interest
Noneof theDirectorsof theCompanyhasanyconflictofinterestwiththeCompany.
List of convictions for offences within past 10 years other than traffic offences
Noneof theDirectorsof theCompanyhasbeenconvictedforoffenceswithinthepastten(10)yearsotherthantrafficoffences,ifany.
Shareholdings in the Company and its subsidiaries
Detailsaresetoutonpage100oftheAnnualReport
additional information on the Board of directors
profile of direCtors
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10 SUPERMAX CORPORATION BERHAD (420405-P)
dato seri stanley thaiExecutive Chairmanand Group Managing Director
exeCutive CHairmans statement
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ANNUAL REPORT 2012 11
Ithasbeenanothereventfulyearfor theSupermaxGroupandsomewhatayearofconsolidationfortheGroup.Ithasbeenatimetoreflectonourstrategyand toput thepieces inplace to facilitateournextphaseofgrowth. Notably, theGrouphas stepped-up its refurbishment programme for its older linesand more importantly its automation programmeforwhichRM65.8millionhasbeenbudgeted.Theinterruptionstoproductioncausedbylabourissues,for example acute lack ofworkerswhen intake offoreign labour is frozen and not to mention therecentimpositionofminimumwages,haspromptedtheGroup to accelerate its automation programmein an effort to remain competitive. While theautomationprocessdoesleadtosomedowntimeandhigherinitialcostsfornow,itisanecessarymovetoimproveefficiencyandproductivityforthefuture.
glove industry update
raw material prices
(i) Natural rubber latex
Thebeginningof theyear continued inmuch theway theyearbefore itended,i.e.withvolatilityinthemarketforrawmaterials.Januarysawthemostvolatilitywithnatural rubberpricesfluctuatingbetweenRM6.26p/kgwetandRM7.46p/kgwetandwithanupwardbiasthatstretchedrightthroughthefirstquarteroftheyear.Thiswaslikelyduetothewinteringperiodcoupledwithsomeelementsofspeculation.
Sincethen,however,volatilityhaddecreasedandthepricetrendreversedand gradually started to soften from the RM8 p/kg wet level to as lowasRM5.24p/kgwet inAugustas thewinteringperiodendedandstrongsupplyexpansionoverthelastfewyearsbegantohaveanimpact. Highpricesinrecentyearshadseenarampupinproductioncapacity.Globalnaturalrubberproductionstoodat6.6milliontonnesin1998,risingto10.1milliontonnesin2008andthen11.0milliontonnesin2011.Productionisestimatedtosurgefurtherto12.5milliontonnesin2013and14.9milliontonnesin2014.
Asidefromsupplyfactors,thedemandfactorsforrubberarealsolessthansupportivewiththeEurozonecrisisandslowdowninChinacurtailingthedemand.Demandfromusrubberglovemakershavealsoslowedasmoreandmorerubbergloveproducersswitchtheirproductioncapacitytowardsnitrileglovesintandemwiththeglobaldemand.
Expect to see prices easing further from current levels as we progressfurtherinto2013.
exeCutive CHairmans statement
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12 SUPERMAX CORPORATION BERHAD (420405-P)
(ii) Nitrile rubber latex
Nitrilelatexpriceshavebeenratherdepressedbutrelativelystable.Nitrilelatexsuppliershadrampeduptheirproductionbyatleast2-foldsince2010and thishadresulted inamplesupplybeingavailable tobuyers. Inyear2012,therewasadditionalnewcapacityof250,000mtwmadeavailabletothemarket.
With supply of nitrile latex plentiful, rubber glovemanufacturers donotfaceanyissuesinsecuringtheirsupplyofnitrilelatex.Andthisisdespiteall glove manufacturers either building up new nitrile glove productioncapacityorswitchingexistingproductioncapacityfromnaturalrubbertonitrilerubber.NitrilepriceshavebeentradingatbetweenUSD1,200andUSD1,400 formostof theyearbutweexpectprices tomoveupas thedemandincreasesandmitigatethecurrentoversupplysituation.
rubber glove demand
Globaldemandforrubberglovescontinuestoberobust.WhiledemandgrowthfromtheEurozonecountriesincrisismayhavemoderatedtosomeextent,thishas beenmore thanmade up for by the developing and emerging countriesinAsia,Africa,SouthAmerica and also inEasternEurope. These countriescontinuetoenjoyeconomicgrowthandwithgreaterwealthcomesgreaterhealthandhygieneawarenessandgreaterspendingpercapitaonhealthcare.
Withthepriceofnaturalrubberlatexhavingrisensubstantiallyoverthepast2years,2trendshaveemergedasaresult:
i)shiftindemandtowardsnitrilerubberglovesii)greaterdemandforlighter/thinnergloves
Whileconvertingexistingnaturalrubbergloveproductionlinestonitrileglovelineswerehelpfulinmeetingtheimmediatedemandfornitrilegloves,itwasastopgapmeasureatbestandhadtheunwanteddrawbackofadditionaldowntimewhichaffectedourutilisationrate.Therefore,theManagementhadtakenthedecisiontobuildentirelynewlinestoreplaceageinglinesinexistinglocationsaswellasbuildnewfactories.Thesenewfacilitieswouldhavetheflexibilitytoswitchbetweennaturalrubberandnitrilerubbergloveproductionandwouldalsoemploythelatestinautomationtechnology.Whilethismaytakeabitoftime,theManagementbelievesthatthiswillbetimewellspent.
exeCutive CHairmans statement
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ANNUAL REPORT 2012 13
update on supermax
Corporate exercises
TheGroupcarriedoutseveralcorporateexercisesandprojectsduringtheyear.Theyincluded:
(i) Bonus Issue
TheGrouphadinNovember2011announcedabonusissueinvolvingtheissuanceof340.1millionnewordinarysharesof50seneachona1for1basisandthisexercisewascompletedinJanuary2012.ThisexercisewasverymuchinlinewiththeGroupsaimtorewarditsshareholdersintandemwithotherefforts toenhanceshareholdersvalue including therevisionofdividendpolicyfrom20%ofprofitsto30%ofprofits.
(ii) New Distribution HQ in Chicago, Illinois
WearealsolookingtofurtherexpandourbusinessintheAmericancontinentin abigway. Towards thisobjective,wehave acquired a6h.a. pieceoflandinChicago,Illinois,tobuildournewnationaldistributionheadquarterswhichwillgiveusatotalbuilt-upareaof225,000sq.ft.whencompletedin2phases.
Construction of Phase 1, the East Building, had already commenced inAugust2012.Phase1involvesabuild-to-suit90,170sq.ft.state-of-the-artwarehouseanddistributionfacilityaswellas6,000sq.ft.ofofficespacefortheoperationsofthedistributionheadquarters.Thisphaseisscheduledforcompletionbymid-2013.
As part of the our corporate social responsibility and simply doing ourpart for the environment, the Group has commissioned a green buildingprojectforthisnewHQwherebythedesignteamwillbepursuingaLEED(LeadershipinEnergy&EnvironmentalDesign)GoldCertificationfromtheUnitedStatesGreenBuildingCouncil. Thedesign featuresamongothersroof insulation and insulated precast concrete panelwalls, all-roundLEDlighting,anon-sitephotovoltaicsolarsystemtogeneraterenewablepower,andapassivesolarhotwaterheatingsystem.
exeCutive CHairmans statement
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14 SUPERMAX CORPORATION BERHAD (420405-P)
financial performance
TheGrouphasperformedcreditably toachieve16.7%profitgrowthover theyearbefore.And thiswasdespite the challengingbusiness environmentwiththeUSandEuropemiredineconomicdistress.ThiswasalsoduringaperiodofintensiveimplementationofautomationprocessesforalloftheGroupsplantswhichinvariablyresultsinadditionaldowntimeandhighercosts.
On the dividend front, theCompanyhas paid out an interim4% tax exemptdividend for FYE2012 and the Board has proposed a final 6% tax exemptdividendwhich is subject to shareholders approval at the upcomingAnnualGeneralMeeting.Thisislargelyinlinewithourreviseddividendpolicytopayout30%ofProfitafterTax(from20%previously)inordertofurtherrewardourloyalandsupportiveshareholders.
going forward
Itisourquesttoalwaysbealignedtomarketdemands.Whiletheglobalmarketforglovescontinues togrow,weneed togrowalongwith it.Notonly is themarketcontinuingtogrow,thereisatpresentanapparentdemandshifttowardsnitrileglovesandthinnergloves.Andthisisalmostcertainlybecauseofcost/price factors. We need to respond accordingly. Towards that end, we haveembarkedon an expansionprogram to increaseournitrile capacity fromourcurrent6.9billionpiecesperannumto12.3billionpiecesperannum.Butduetotheever-changinglandscapeforrubbergloves,wewillbeinstallinglinesthathavetheabilitytoswitchbetweennitrileandnaturalrubbergloveproductioninthemostefficientmanner.Thiswillgiveustheflexibilitytomoveintandemwiththemarket.
Wewillalsocontinuetofocusonbuildingupthedistributionendofourbusinessmodel.Ournew,largeandmodernwarehousebeingbuiltatourUSofficeisjustonestepinthatdirection.BesidestheUS,wewillbebuildingupourCanadian,German,BrazilianandUKdistributionarmsandatthesametimelookingforcompetentandreliablepartnerstoestablishjointventuresinotherterritories.
Iamveryexcitedabouttheon-goingdevelopmentsintheCompany,fromthemajorrefurbishmentwhichisbeginningtobearfruit;the2newfactoriesbeingbuilt(Plant#10and#11)thatwillenableustobeabiggerplayerinthenitrilemarket; to theautomationprogrammewhichwill furtherenhanceoperationalefficiencyandalleviaterelianceonforeignlabour;andthecontinuedexpansionofourdistributioncapabilities.Supermaxispoisedtoscalenewheights!
acknowledgement
Iwish to expressmysincereappreciation to theBoardofDirectors for theirfullsupportovertheyears.Iwouldalsoliketoexpressmygratitudetoallmystafffortheircommitment,hardworkandefforttoimprovetheoperationalandbusinessaspectsoftheCompanywherepossible.Iwouldalsoliketothankallourbusinessassociatesfortheircontinuoussupport.
Lastbutnotleast,IwouldliketothankalltheShareholdersfortheirsupportandbeliefinSupermax.ItwillbemycommitmenttofurtherstreamlineandimprovetheperformanceoftheCompanyandtotakeittothenextlevel.
Thankyou.
dato seri stanley thaiFounder, Executive Chairman and Group Managing DirectorApril 30, 2013
exeCutive CHairmans statement
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ANNUAL REPORT 2012 15
Biomass as an alternative environmentally friendly fuel sourCe
TheGrouphasaProtectyourHealth,ProtecttheEnvironmentphilosophythedailypracticeofwhichisencouragedandinstilledamongalllevelsofitsorganisation.Amongitsmajorongoinginitiativeswhichemphasisesenvironmentalpreservationistheuseofanalternativefuelsourcewhichisrenewableandsustainabletofireitsheatingsystemsandforpowergeneration.
Withthisinmind,theGrouphasimplementedbiomasssystemsat3ofitsfactories.Thefuelusedisbasicallythewastefromtheoilpalmindustrysuchaspalmkernelshellsandemptyfruitbunches,andfromthewood-basedindustrysuchaswoodwastefromthefurnitureindustryandeventhetreetrimmingsfrompruningworkdonebythelocalcouncils.Theneedfordepletingandnon-renewableenergysourcesisthereforegreatlyreduced.TheGrouphasspentclosetoRM20millionovertheyearstobuildupandupgradeitsbiomassfacilities.
Waste Water management
Another ongoing green project undertakenby theSupermaxGroup is the treatment ofwastewater.Wastewater from theSupermaxGroupsmanufacturing facilities is treated on site in effluent treatment plants utilising a chemical flocculation,anaerobicdigestion and activated sludgeprocess.TheGroup collaborates closelywith theDepartment ofEnvironment toconduct regularchecks toensure that thefinaldischarge is cleanandsafe.Thisensures that theenvironment surroundingtheSupermaxGroupsmanufacturingfacilitiesaswellasthecommunitylivinginthevicinityofthefactoriescontinuetobehealthyandvibrant.TheGrouphasspentoverRM7milliononthisproject.
Best praCtiCes in tHe WorKplaCe
SupermaxplacesgreatemphasisonhealthandsafetyandmakingtheSupermaxworkplaceaconduciveworkingenvironmentforitsentireworkforce.ItcurrentlyholdsISO9001:2008apartfromotherqualitymanagementsystemcertificationswhichshowcases its commitment to providing stakeholders an assurance of quality in fulfilling requirements whilst optimizingenvironmentalperformance.Trainingandre-trainingofstaffareconductedonaregularbasis.Itspoliciesarealsonon-biasinnature,betheyintermsofgender,ethnicity,etc.
Ongoinginitiativesinclude
strictNochildlabourpolicy equalemploymentopportunityintermsofgenderandethnicityacrossalllevelsofemploymentfromtheboardroomtothe
factoryfloor achangefrom5dayworkingweektypicalofmanufacturingconcernstoalternateSaturdaysandwithamindtoamending
furthertoa5-dayweek encouragingahealthylifestyleandbuildingcamaraderieamongstaffbyprovidingsupportforsportingandsocialactivities
Corporate soCial responsiBility
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16 SUPERMAX CORPORATION BERHAD (420405-P)
Best praCtiCes in tHe marKetplaCe
SupermaxalsorecognisestheimportanceofpractisingthehigheststandardsofcorporategovernancethroughouttheGroupasafundamentalpartofdischargingitsresponsibilitiestoprotectandenhancestakeholdersvalueandhassparednoefforttoensurethatthebestpracticesareadoptedandimplementedwhereverpossible.
SupermaxhaslargelyensuredthatallofBursaMalaysiaslistingrequirementsarefullycompliedwithsuchastimelyreportingofquarterlyresultsandotherannouncements.Supermaxalsoengagesitsstakeholdersoftenasitholdsanalystsandinvestorsbriefingsonaregularbasisandincludesextensivedisclosuresonquantitativetargets,objectivesandperformancedatainitspresentations.
Best praCtiCes in tHe Community
Supermaxbelievesingivingbacktothecommunityandhasovertheyearsdonatedgenerouslytomanyintheirtimesofneed.Ontheinternationalfront,theGrouphadcontributedtothereliefeffortsbydonatingmedicalglovesduringthedevastatingKatrinahurricaneandIndianOceantsunaminaturaldisasters,andonthelocalfronttoadialysiscentreandvariousplacesofworship incashandkind.Wearealsopassionateabouthelpingouryouthsachievetheiracademicdreamsandhave, incollaborationwiththeMalaysianRubberExportPromotionCouncil(MREPC)providedscholarshipstoneedystudentsinthepast2years.
TheSupermaxFoundationwasrecentlysetupon12April2013anditwillfacilitatetheGroupsCSRefforts,withemphasisonprovidingscholarshipstoneedystudents.
Corporate soCial responsiBility
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ANNUAL REPORT 2012 17
Audit Committee RepoRt
membeRs of Audit Committee
mr Gong Wooi teik, felix Chairman of Committee, Independent Non-Executive Director
encik Rashid bin bakar Member of Committee, Independent Non-Executive Director
encik shamsudin @ samad bin Kassim 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.
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18 SUPERMAX CORPORATION BERHAD (420405-P)
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
Gong Wooi Teik, Felix 5Rashid Bin Bakar 4Shamsudin @ Samad Bin Kassim 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.
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ANNUAL REPORT 2012 19
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.
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20 SUPERMAX CORPORATION BERHAD (420405-P)
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 total no. of meetingsmeetings Attended
1. Dato Seri Thai Kim Sim 6 6
2. Datin Seri Tan Bee Geok 6 6
3. Dato Dr. Tan Geok Swee @ Tan Chin Huat 6 54. Dato Ting Heng Peng 6 6
5. Gong Wooi Teik, Felix 6 6
6. Shamsudin @ Samad bin Kassim 6 57. Rashid bin Bakar 6 4
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.
CoRpoRAte GoveRnAnCe stAtement
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ANNUAL REPORT 2012 21
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: Dato Dr. Tan Geok Swee @ Tan Chin Huat (Non-Executive Director)Members: Dato Ting Heng Peng (Independent Non-Executive Director) Encik Shamsudin @ Samad Bin Kassim (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; andf) 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 Malaysia2) Navigating Turbulence, MICPA-Bursa Malaysia Business Forum by Malaysian Institute of Certified Public Accountants3) 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 Accountants2) Auditors Risk Assessment Procedures, organized by Malaysian Institute of Accountants3) Updates of the 2012 IFRS-Compliant MFRSs Preparing for Convergence to IFRSs organized by The Malaysian Institute
of Certified Public Accountants
CoRpoRAte GoveRnAnCe stAtement
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22 SUPERMAX CORPORATION BERHAD (420405-P)
seCtion b diReCtoRs RemuneRAtion
Remuneration Committee
The Remuneration Committee consists of the following:-
Chairman: Datin Seri Tan Bee Geok, Cheryl (Executive Director)Members: Dato Ting Heng Peng (Independent Non-Executive Director) Encik Rashid Bin Bakar (Independent Non-Executive Director)
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; andd) 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 feessalaries & other
emolumentsBenefit in
kindExecutive Directors 104,000 6,533,662 -Non-executive Directors 240,000 134,360 -
The number of Directors of the Company whose income from the Company falling within the following bands are:
executive directorsRemuneration numberRM 1,000,000 and above 2
non executives directorsRemuneration numberRM 0 - RM 50,000 5
CoRpoRAte GoveRnAnCe stAtement
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ANNUAL REPORT 2012 23
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: Dato Seri Thai Kim Sim, StanleyMembers: Datin Seri Tan Bee Geok, Cheryl; Kelly Wong; Connie Tan and Ivy Yee
seCtion C: sHAReHoLdeRs
dialogue with investors and shareholdersThe 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.
CoRpoRAte GoveRnAnCe stAtement
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24 SUPERMAX CORPORATION BERHAD (420405-P)
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
no. of shares bought back
purchased price per share(Rm)
total Consideration paid (Rm)
Lowest Highest AverageJanuary 10,300 2.140 2.140 2.140 22,203.87February 589,700 2.120 2.150 2.135 1,259,912.32May 401,000 1.820 1.890 1.855 757,065.87December 1,000 1.980 1.980 1.980 2,022.60Total 1,002,000 1.820 2.150 1.985 2,041,204.66
CoRpoRAte GoveRnAnCe stAtement
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ANNUAL REPORT 2012 25
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.
CoRpoRAte GoveRnAnCe stAtement
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26 SUPERMAX CORPORATION BERHAD (420405-P)
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.
stAtement on RisK mAnAGement And inteRnAL ContRoL
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ANNUAL REPORT 2012 27
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.
stAtement on RisK mAnAGement And inteRnAL ContRoL
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finAnCiAL stAtement29 Directors Report 33 Statements of Financial Position
35 Statements of Comprehensive Income 36 Statement of Changes In Equity37 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 Declaration94 Independent Auditors Report
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ANNUAL REPORT 2012 29
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:- RMIn 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.
diReCtoRs RepoRt
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30 SUPERMAX CORPORATION BERHAD (420405-P)
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.
diReCtoRs RepoRt
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ANNUAL REPORT 2012 31
diReCtoRs
The directors in office since the date of the last report are:-
Dato Seri Thai Kim SimDatin Seri Tan Bee GeokDato Ting Heng Peng Dato Dr. Tan Geok Swee @ Tan Chin HuatGong Wooi TeikShamsudin @ Samad Bin KassimRashid 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 Dato Dr. Tan Geok Swee @ Tan Chin Huat 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 Shamsudin @ Samad Bin Kassim 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.
diReCtoRs RepoRt
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32 SUPERMAX CORPORATION BERHAD (420405-P)
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 simDirector
dAtin seRi tAn bee GeoKDirector
Kuala LumpurDate: 26th April 2013
diReCtoRs RepoRt
-
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 RmGroupAssetsnon-current assetsProperty, 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 - - 4,000,000Investment in associates 7 209,874,119 228,357,681 193,521,643Goodwill on consolidation 8 28,715,854 28,715,854 28,715,854Deferred tax assets 9 - - 960,990
total non-current assets 690,462,782 664,375,982 620,289,599
Current assetsInventories 10 233,786,632 223,139,651 133,088,304Trade receivables 11 100,822,162 104,479,257 113,612,167Other receivables 11 4,413,405 11,167,328 5,760,998Other current assets 12 652,747 7,568,806 1,510,393Amount owing by associates 13 101,078,141 90,215,842 93,735,639Cash and bank balances 14 122,863,481 104,483,446 97,375,650
total current assets 563,616,568 541,054,330 445,083,151totAL 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 15 340,077,440 170,038,720 170,038,720Reserves 17 493,954,115 599,052,132 521,429,230
834,031,555 769,090,852 691,467,950Non-controlling interest (251,437) (52,524) 55,716
totAL eQuitY 833,780,118 769,038,328 691,523,666
non-current liabilities Loans and borrowings 18 115,187,503 140,464,445 140,529,016Deferred tax liabilities 9 19,993,037 18,206,050 13,581,000
total non-current liabilities 135,180,540 158,670,495 154,110,016Current liabilities
Trade payables 21 76,930,128 59,970,951 40,097,568Other payables 21 40,993,394 27,287,907 20,178,310Loans and borrowings 18 162,922,784 190,462,631 155,145,591Tax payables 4,272,386 - 4,317,599
total current liabilities 285,118,692 277,721,489 219,739,068total liabilities 420,299,232 436,391,984 373,849,084totAL eQuitY And LiAbiLities 1,254,079,350 1,205,430,312 1,065,372,750
The accompanying notes form an integral part of these financial statements.
-
34 SUPERMAX CORPORATION BERHAD (420405-P)
ConsoLidAted stAtement of finAnCiAL position AS AT 31ST DECEMBER 2012
31.12.2012 31.12.2011 1.1.2011 note Rm Rm RmCompany Assetsnon-current assets Investment in subsidiaries 22 183,894,064 183,670,628 181,774,318Investment in associates 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 11 233,248 226,998 269,876Other current assets 12 37,723 51,092 56,911Amount owing by subsidiaries 23 291,557,693 301,222,668 137,912,168Amount owing by associates 13 294,301 294,301 4,242,301Cash and bank balances 14 629,368 13,737,278 884,835
total current assets 292,752,333 315,532,337 143,366,091totAL Assets 496,475,886 519,032,454 344,969,898
EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 15 340,077,440 170,038,720 170,038,720Reserves 17 47,791,465 228,507,474 80,845,026
totAL eQuitY 387,868,905 398,546,194 250,883,746
non-current liability Loans and borrowings 18 79,505,900 104,560,500 82,574,555
Current liabilities Other payables 21 52,995 83,260 269,844Amount owing to a subsidiary 23 7,639,986 - -Loans and borrowings 18 21,408,100 15,842,500 11,241,753
total current liabilities 29,101,081 15,925,760 11,511,597total liabilities 108,606,981 120,486,260 94,086,152totAL eQuitY And LiAbiLities 496,475,886 519,032,454 344,969,898
The accompanying notes form an integral part of these financial statements.
-
ANNUAL REPORT 2012 35
stAtements of CompReHensive inComeFOR 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 137,305,588 112,132,183 3,249,104 174,868,635 Taxation 30 (15,893,444) (8,080,823) - -
Net profit for the financial year 121,412,144 104,051,360 3,249,104 174,868,635
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:- Owners of the parent 121,717,800 104,164,069 3,249,104 - Non-controlling interest (305,656) (112,709) - -
121,412,144 104,051,360 3,249,104 - total comprehensive income attributable to:- Owners of the parent 78,867,096 104,829,089 3,249,104 174,868,635 Non-controlling interest (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
The accompanying notes form an integral part of these financial statements.
-
36 SUPERMAX CORPORATION BERHAD (420405-P)
stAtements of CHAnGes in eQuitYFOR THE FINANCIAL YEAR ENDED 31ST DECEMBER 2012
At
tribu
table
to ow
ners
of th
e par
ent
non-
distri
butab
le d
istrib
utab
le
non-
i
ssued
shar
e sh
are
trea
sury
tr
ansla
tion
Retai
ned
co
ntro
lling
total
Gro
up
N
ote
Cap
ital
P
rem
ium
Sh
ares
R
eser
ve
Pro
fits
Tot
al
Inte
rest
E
quit
y
Rm
Rm
Rm
Rm
Rm
Rm
Rm
Rmba
lance
at 1s
t Jan
uary
2011
17
0,03
8,72
0 7
6,25
7,76
5
-
(
373,
878)
4
45,5
45,3
43
691
,467
,950
5
5,71
6 69
1,52
3,66
6to
tal co
mpre
hens
ive in
come
-
-
- 66
5,02
0 10
4,16
4,06
9 10
4,82
9,08
9 (1
13,0
04)
104,
716,
085
tran
sacti
ons w
ith ow
ners:
-
In
corp
orat
ed o
f ne
w s
ubsi
diar
ies
22
-
-
-
-
-
-
4
,764
4,
764
Div
iden
ds
24
-
-
-
-
(27
,206
,187
) (
27,2
06,1
87)
- (2
7,20
6,18
7)
balan
ce at
31st
dece
mber
2011
1
70,0
38,7
20
76,
257,
765
-
291
,142
5
22,5
03,2
25
769
,090
,852
(
52,5
24)
769,
038,
328
total
comp
rehe
nsive
inco
me
-
-
-
(42,
850,
704)
1
21,7
17,8
00
78,
867,
096
(
303,
032)
7
8,56
4,06
4 tr
ansa
ction
s with
owne
rs:-
Inco
rpor
ated
of
new
sub
sidi
arie
s
22
-
-
-
-
-
-
1
04,1
19
104
,119
B
onus
sha
res
issu
ed
170,
038,
720
(
76,2
57,7
65)
-
-
(93,
780,
955)
-
-
-
D
ivid
ends
24
-
-
-
-
(11,
885,
189)
(
11,8
85,1
89)
-
(1
1,88
5,18
9)P
urch
ases
of
trea
sury
sha
res
-
-
(
2,04
1,20
4)
-
-
(2,
041,
204)
-
(2,
041,
204)
balan
ce at
31st
dece
mber
2012
34
0,07
7,44
0
-
(
2,04
1,20
4)
(42
,559
,562
) 5
38,5
54,8
81
834
,031
,555
(
251,
437)
8
33,7
80,1
18
At
tribu
table
to ow
ners
of th
e par
ent
no
n-dis
tribu
table
di
stribu
table
issue
d sha
re
shar
e tr
easu
ry
Retai
ned
total
Com
pany
N
ote
Cap
ital
P
rem
ium
Sh
ares
P
rofit
s E
quit
y
Rm
Rm
Rm
Rm
Rm
balan
ce at
1st J
anua
ry 20
11
17
0,03
8,72
0 76
,257
,765
-
4,58
7,26
1 25
0,88
3,74
6to
tal co
mpre
hens
ive in
come
- -
- 17
4,86
8,63
5 17
4,86
8,63
5tr
ansa
ction
with
owne
rs:-
Div
iden
ds
24
-
-
-
(27,
206,
187)
(2
7,20
6,18
7)
balan
ce at
31st
dece
mber
2011
170,
038,
720
76,2
57,7
65
- 15
2,24
9,70
9 39
8,54
6,19
4to
tal co
mpre
hens
ive in
come
-
-
-
3,24
9,10
4
3,24
9,10
4tr
ansa
ction
s with
owne
rs:B
onus
sha
res
issu
ed
17
0,03
8,72
0
(76,
257,
765)
-
(9
3,78
0,95
5)
-D
ivid
ends
24
-
-
-
(1
1,88
5,18
9)
(11,
885,
189)
Pur
chas
es o
f tr
easu
ry s
hare
s
-
-
(2,0
41,2
04)
-
(2
,041
,204
)
balan
ce at
31st
dece
mber
2012
340,
077,
440
-
(2
,041
,204
)
49,8
32,6
69
387,
868,
905
The
acc
ompa
nyin
g no
tes
form
an
inte
gral
par
t of
thes
e fi
nanc
ial s
tate
men
ts.
-
ANNUAL REPORT 2012 37
stAtements of CAsH fLoWsFOR THE FINANCIAL YEAR ENDED 31ST DECEMBER 2012
Group Company 2012 2011 2012 2011 Rm Rm Rm RmCAsH fLoWs fRomopeRAtinG ACtivities:-Profit before taxation 137,305,588 112,132,183 3,249,104 174,868,635Adjustments 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 Share in profits of associates (23,374,792) (34,836,038) - - Written off of investment in bond - 4,000,000 - -
154,515,399 117,832,793 3,849,641 1,255,566Changes in working capital:- Inventories (10,646,981) (90,051,347) - - Trade receivables (3,214,353) 17,431,407 - - Other receivables 6,022,994 (4,895,165) (6,250) 42,878 Amount owing by associates (10,862,299) 3,519,797 - 3,948,000 Trade payables 16,965,332 19,418,317 - - Other payables 13,925,312 6,528,254 (30,265) (186,584)
166,705,404 69,784,056 3,813,126 5,059,860Tax paid (3,395,784) (13,702,045) (39,793) (16,799)Tax refunded 277,691 320,085 53,162 22,618Interest received - 34,682 - 1,882
net operating Cash flows 163,587,311 56,436,778 3,826,495 5,067,561
CAsH fLoWs fRominvestinG ACtivities:-Advances to subsidiaries - - 17,304,961 (163,310,500)Dividend received - - - 181,094,187Investment in subsidiaries - - (223,436) (1,896,310)Purchase of property, plant and equipment (69,151,524) (38,133,486) - -
net investing Cash flows (69,151,524) (38,133,486) 17,081,525 15,887,377
CAsH fLoWs fRomfinAnCinG ACtivities:-Dividends paid (11,885,189) (27,206,187) (11,885,189) (27,206,187)Interest paid (8,746,244) (12,545,113) - -Repayment of hire purchase payables, net (494,165) (1,233,018) - -(Repayment)/drawdown of industrial hire purchase, net (3,180,765) 31,168,397 - -(Repayment)/drawdown of term loans, net (27,451,585) (22,145,945) (20,089,600) 19,103,692(Repayment)/drawdown of short term borrowings, net (22,098,302) 19,671,232 - -Purchase of treasury shares (2,041,204) - (2,041,204) -
net financing Cash flows (75,897,454) (12,290,634) (34,015,993) (8,102,495)
The accompanying notes form an integral part of these financial statements.
-
38 SUPERMAX CORPORATION BERHAD (420405-P)
stAtements of CAsH fLoWsFOR THE FINANCIAL YEAR ENDED 31ST DECEMBER 2012
Group Company 2012 2011 2012 2011 Rm Rm Rm Rm
net CHAnGe in CAsH And CAsH eQuivALents 18,538,333 6,012,658 (13,107,973) 12,852,443EFFECT OF FOREIGN EXCHANGE RATE CHANGES (158,298) 1,095,138 63 -CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 104,483,446 97,375,650 13,737,278 884,835
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 122,863,481 104,483,446 629,368 13,737,278
ANALYSIS OF CASH AND CASH EQUIVALENTS:-
Cash and bank balances 122,863,481 104,483,446 629,368 13,737,278
The accompanying notes form an integral part of these financial statements.
-
ANNUAL REPORT 2012 39
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.
The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed 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.
-
40 SUPERMAX CORPORATION BERHAD (420405-P)
notes to tHe finAnCiAL stAtements
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 equiva